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HomeMy WebLinkAbout98.062514 Board Meeting Agenda ONLINE.pdf Orange County Sanitation District Wednesday, June 25, 2014 and oxwce cuDNIY 6:30 P.M. Orange County Santiation District SWTATION DU MU Board Room Financing Corporation Off 10844 Ellis Avenue Regular Meeting of the Fountain Valley, CA 92708 Board of Directors (714) 593-7130 Loa 1854-z014 AGENDA INVOCATION AND PLEDGE OF ALLEGIANCE: (David Shawver, City of Stanton) ROLL CALL & DECLARATION OF QUORUM: PUBLIC COMMENTS: If you wish to speak, please complete a Speaker's Form (located at the table outside of the Board Room) and give it to the Clerk of the Board. Speakers are requested to limit comments to three minutes. SPECIAL PRESENTATIONS: • Presentation of the "Large Plant Safety Award" from California Water Environment Association • Commendation of Troy Edgar, Board Chair REPORTS: The Chair and the General Manager may present verbal reports on miscellaneous matters of general interest to the Directors. These reports are for information only and require no action by the Directors. 06IM14 OCSD Board of Directors Agenda Page 1 of 8 CLAIMS: DIRECTORS: Pursuant to Government Code Section 84308, you are required to disclose any campaign contribution greater than $250 received in the past twelve months from any party seeking a contract with OCSD. This requires that you identify the contributor by name. Further, you may not participate in the decision making process to award a contract to such party. For reference, you are directed to the Register of Warrants as to all current contractorsIvendors with OCSD. For the specifics of Government Code Section 84308,please see your Director's Handbook or call the office of General Counsel. 1. Ratify payment of claims of the District, by roll call vote, as follows: Claims Paid for the Period Ending: 05/15/14 05/31/14 Totals $ 7,499,200.11 $ 8,246,245.83 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 Any items withdrawn from the Consent Calendar for separate discussion will be considered in the regular order of business. 2. Approve minutes for the Regular Board Meeting held on May 28, 2014. 3. A. Receive and file Addendum No. 3 to the Collection System Improvement Plan Program Environmental Impact Report for additional project analysis supporting the Santa Ana Trunk Sewer Rehabilitation, Project No. 1-17; and B. Receive and file bid tabulation and recommendation; and C. Award a construction contract to Charles King Company, Inc., Project No. 1-17, for a total amount not to exceed $2,619,188; and D. Approve a contingency of$235,727 (9%). 4. Approve Reimbursement Agreement with the City of Tustin for the construction of a portion of the Orange County Sanitation District's Gisler-Redhill System Improvements, Reach B, Contract No. 7-37, for an amount not to exceed $300,000 to be paid to the City of Tustin, in a form approved by Special Counsel. 5. A. Receive and file bid tabulation and recommendation; and B. Award a construction contract to Archer Western Construction, Inc. for Plant No. 1 Primary Treatment, Project No. P1-124, for a total amount not to exceed $5,513,891; and C. Approve a contingency of$551,389 (10%). 06/25M4 OCSD Board of Directors Agenda Page 2 of 8 NON-CONSENT: 6. A. Motion to read Ordinance No. OCSD46, by title only and waive reading of said entire Ordinance; and B. Adopt Ordinance No. OCSD46, entitled "An Ordinance of the Board of Directors of the Orange County Sanitation District amending Section 2.03 of Article II of Ordinance No. OCSD41 concerning rebates and refunds of Sanitary Sewer Service Charges."; and C. Direct the Clerk of the Board to publish a summary of the Ordinance as required by law. OPERATIONS COMMITTEE: 7. Approve minutes for the Committee Meeting held on June 4, 2014. 8. A. Approve a Professional Consultant Services Agreement with Brown & Caldwell to provide construction support services for Santa Ana Trunk Sewer Rehabilitation, Project No. 1-17, for an amount not to exceed $188,724; and B. Approve a contingency of$18,872 (10%). 9. A. Approve a Professional Consultant Services Agreement with Corrpro Companies, Inc. for Corrosion Management Staffing Support Services, Specification CS-2014-60013D, for the period of July 1, 2014 through June 30, 2015, for a total annual amount not to exceed $541,096, with four one- year renewable options; and B. Approve a contingency of$54,110 (10%). 10. A. Award a contract to the lowest responsive and responsible bidder, Bowcon Company Inc., for Repairs of Dewatering Building at P2, Project No. FR12-001, for a total amount not to exceed $175,280; and B. Approve a contingency of$35,000 (20%). 11. A. Approve a Professional Consultant Services Agreement with Carollo Engineers, Inc. to provide construction support services for Plant No. 1 Primary Treatment, Project No. P1-124, for an amount not to exceed $451,910; and B. Approve a contingency of$45,190 (10%). 06IM14 OCSD Board of Directors Agenda Page 3 of 8 12. A. Approve a Professional Design Services Agreement with HDR to provide engineering design services for Administrative Facilities Implementation Planning, Project No. SP-194, for an amount not to exceed $729,597; and B. Approve a contingency of$36,480 (5%). 13. Approve out-of-country travel for Orange County Sanitation District (Sanitation District) employees (Construction Inspector or Engineer) to witness factory testing of centrifuges in connection with Sludge Dewatering and Odor Control at Plant No. 1, Project P1-101, and all travel, lodging, and per diem costs in accordance with the Sanitation District's travel policy. ADMINISTRATION COMMITTEE - CONSENT: 14. Approve minutes for the Committee Meeting held on June 11, 2014. 15. Adopt Resolution No. OCSD 14-06, Establishing Use Charges for the FY 2014- 15 Pursuant to the Wastewater Treatment and Disposal Agreement with the Santa Ana Watershed Project Authority. 16. Adopt Resolution No. OCSD 14-07, Establishing the Annual Appropriations Limit for Fiscal Year 2014-15, for the District in accordance with the Provisions of Division 9 of Title 1 of the California Government Code. 17. A. Adopt Resolution No. OCSD 14-08, Authorizing the execution and delivery by the District of an Installment Purchase Agreement, a Trust Agreement, an Escrow Agreement and a Continuing Disclosure Agreement in connection with the execution and delivery of Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2014A, authorizing the execution and delivery of such Revenue Obligations evidencing principal in an aggregate amount of not to exceed $225,000,000, approving a Notice of Intention to Sell, authorizing the distribution of an Official Notice Inviting Bids and an Official Statement in connection with the offering and sale of such Revenue Obligations and authorizing the execution of necessary documents and related actions; and B. That the Orange County Sanitation District Financing Corporation approve the documents supporting and authorizing the Revenue Obligations in an aggregate amount not to exceed $225,000,000. O& WU OCSD Board of Directors Agenda Page 4 of 8 18. A. Reject the apparent low bid submitted by Office Supply Inc. as deemed non-responsive in accordance with specification requirements for Purchase of Cisco Parts, Specification No. E-2014-616BD; and B. Approve a Purchase Order Agreement with Presidio Networked Solutions, the lowest responsive and responsible bidder, for Purchase of Cisco Parts, Specification No. E-2014-61613D, for an amount not to exceed $435,587; and C. Approve a contingency of$21,780 (5%). 19. Approve proposed Operating, Capital, Debt/COP Service and Self-Insurance Budgets for FY 2014-15 and 2015-16 as follows: 2014-15 2015-16 Net Operations, Maintenance &Working Capital $152,500,120 $155,004,500 Worker's Compensation Self Insurance 700,000 700,000 General Liability and Property Self-Insurance 1,501,200 1,611,200 Net Capital Improvement Program 186,485,000 206,087,000 Debt/COP Service 86,070,000 86,714,000 Long-Term Debt Reduction 125,000,000 - Intra-District Joint Equity Purchase/Sale(l) 2,152,000 1,115,000 TOTAL E554.408.320 $451.231.700 (')Cash to Revenue Area 14 (RA14) in exchange for capital assets to Consolidated Revenue Area 15 (RA15). 06IM14 OCSD Board of Directors Agenda Page 5 of 8 ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION The members of the Orange County Sanitation District Board of Directors are each being compensated$212.50 for the Board Meeting, there is no additional compensation for the Financing Corporation Meeting. CALL TO ORDER: Board of Directors, Orange County Sanitation District Financing Corporation. ROLL CALL: APPROVAL OF MINUTES: If no corrections or amendments are made, the minutes for the meeting held on September 25, 2013, will be deemed approved and be so ordered by the Chair. ACTION ITEM: Adopt Resolution No. FC-21, entitled "A Resolution of the Board of Directors of the Orange County Sanitation District Financing Corporation Authorizing the Execution and Delivery by the Corporation of an Installment Purchase Agreement and a Trust Agreement in Connection with the Execution and Delivery of Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2014A, Authorizing the Execution and Delivery of Such Revenue Obligations Evidencing Principal in an Aggregate Amount of not to Exceed $225,000,000 and Authorizing the Execution of Necessary Documents and Related Actions." (See Agenda Report for Item No. 18) Adjourn, Board of Directors, Orange County Sanitation District Financing Corporation. O& WU OCSD Board of Directors Agenda Page 6 of 8 STEERING COMMITTEE: 20. Approve minutes for the Steering Committee Meeting held on May 25, 2014. LEGISLATIVE AND PUBLIC AFFAIRS SPECIAL COMMITTEE: 21. Receive and file the minutes of the June 9, 2014 meeting of the Legislative and Public Affairs Special Committee. AB1234 REPORTS (IF ANY): DIRECTORS: Pursuant to Government Code section 53232.3(d), Directors must provide a brief report on any meetings attended at the District's expense. CLOSED SESSION: During the course of conducting the business set forth on this agenda as a regular meeting of the Board, the Chair may convene the Board in closed session to consider matters of pending real estate negotiations, pending or potential litigation, or personnel matters, pursuant to Government Code Sections 54956.8, 54956.9, 54957 or 54957.6, as noted. Reports relating to (a) purchase and sale of real property, (b) matters of pending or potential litigation; (c) employment actions or negotiations with employee representatives; or which are exempt from public disclosure under the California Public Records Act, may be reviewed by the Board during a permitted closed session and are not available for public inspection. At such time as the Board takes final action on any of these subjects, the minutes will reflect all required disclosures of information. Convene in closed session. (1) CONFER WITH LABOR NEGOTIATORS (Government Code Section 54957.6) Agency Designated Representatives: Steve Filarsky, James Ruth, James Herberg, Robert Ghirelli, Jeff Reed, and Richard Spencer. Employee Organizations: 4 • Supervisors and Professionals Group; and • International Union of Operating Engineers, Local 501; and • Orange County Employees Association (OCEA); and • Unrepresented Employees Reconvene in regular session. 06IM14 OCSD Board of Directors Agenda Page 7 of 8 Consideration of action, if any, on matters considered in closed session. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: ADJOURNMENT: Adjourn the Board meeting until the Special Board Meeting on June 27, 2014 at 11:00 a.m. to be held at Jurupa Community Services District. Accommodations for the Disabled: Meeting Rooms are wheelchair accessible. If you require any special disability related accommodations, please contact the Orange County Sanitation District Clerk of the Board's office at (714) 593-7130 at least 72 hours prior to the scheduled meeting. Requests must specify the nature of the disability and the type of accommodation requested. Aoenda Posting: In accordance with the requirements of California Government Code Section 54954.2,this agenda has been posted outside the main gate of the Sanitation District's Administration Building located at 10844 Ellis Avenue, Fountain Valley, California, not less than 72 hours prior to the meeting date and time above. All public records relating to each agenda item, including any public records distributed less than 72 hours prior to the meeting to all,or a majority of the Board of Directors,are available for public inspection in the office of the Clerk of the Board. NOTICE TO DIRECTORS: To place items on the agenda for the Committee Meeting, items must be submitted to the Clerk of the Board 14 days before the meeting. Made E.Ayala Clerk of the Board (714)593-7130 mavalaD.ocsd.com For any questions on the agenda,Committee members may contact staff at General Manager Jim Herberg (714)593-7300 iherbergfrpomd.com Assistant General Manager Bob Ghirelli (714)593-7400 rohirelli0ocsd.com Director of Engineering Rob Thompson (714)593-7310 rthomoson(Wocsd.com Director of Facility Support Services Nick Arhontes (714)593-7210 namontes(diocsd.com Director of Finance and Lorenzo Tyner (714)593-7550 ItvnentDoced.com Administrative Services Director of Human Resources Jeff Reed (714)593-7144 ireed(&.ocsd.cem Director of Operations&Maintenance Ed Tomes 714 593-7080 etorres ocsd.com 06/2514 OCSD Board of Directors Agenda Page 8 of 8 BOARD OF DIRECTORS Meeting Dare I i T%1.,f Dir. AGENDA REPORT Item Number Item Number Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: PAYMENT OF CLAIMS OF THE ORANGE COUNTY SANITATION DISTRICT GENERAL MANAGER'S RECOMMENDATION Ratify Payment of Claims of the District by Roll Call Vote. CONFLICT OF INTEREST NOTIFICATION Pursuant to Government Code Section 84308, you are required to disclose any campaign contribution greater than $250 received in the past twelve months from any party to a contract involving the Orange County Sanitation District. Further, you may not participate in the decision making process to award a contract to such party. For reference, you are directed to the Register of Warrants as to all current contractors/vendors with the District. In general, you must disclose the basis of the conflict by identifying the name of the firm or individual who was the contributor. For the specifics of Government Code Section 84308, please see your Director's Handbook or call the office of General Counsel. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION N/A ATTACHMENTS The following attachment(s) are attached in hard copy and may be viewed on-line at the OCSD website (mi w.ocsd.coml with the complete agenda package and attachments: 1. Copies of Claims Paid reports from 5/1/14— 5/15/14 and 5/16/14 — 5/31/14 Page 1 of 1 Claims Paid From 5/1114 to W15/14 Vendor Warrant No. Amount Description Amounts Payable Warrants Absolute Standards,Inc. 64781 235.00 Laboratory Services&Supplies AccuStandard 64951 399.01 Laboratory Services&Supplies A-Check America,Inc. 1756 624.00 Human Resources Services ACORN MEDIA 64]82 121.68 Mina,Equipment,Parts,Accessories&Services Advanced Cooling Technologies 64783 469.W Repair If Maintenance Services and/or Supplies AECOM Technical Services,Inc. 64936 37,424.49 Professional Services/Engineering Design Services Aerotek 64952 180.00 Professional Services/Temporary,Services Agilenl Technologies,Inc, 64184 665.85 Laboratory Services&Supplies Ago Industrei So CalSweeping 64895 980.00 Street Sweeping Services Air Liquids America Corp. 64185 1,019.76 Laboratory Services&Supplies Air Liquids America Corp. 64953 5,273.98 Laboratory Services&Supplies Air Liquids America Specialty Gases LLC 64954 243.98 Laboratory Services&Supplies Air Liquids Industrial U.S.,LP 64786 12,628.52 Laboratory Services&Supplies Air Liquids Industrial U.S..LP 64955 71376.65 Laboratory Services&Supplies Airgas Safety,Inc. 1757 7,173.36 Safety,Security,Health Equipment,Supplies,and Services Airgas USA,LLC 1741 1,446.12 Laboratory Services&Supplies Airgas USA,LLC 1758 950.15 Laboratory Services&Supplies American Express WE Related Svcs Co..I 64956 3,395.94 Purchasing Card Program for Miscellaneous Travel Expenses AMERICAN INSTITUTE OF FISHERY RESEARCH 64187 40.00 Professional Organicamons Meefing/Raining/Membership AMERICAN PUBLIC WORKS ASSOCIATION 64957 3,650.00 Professional Organizations Mea4ngtTmininWMembemhipPmfessional Services-LegalR American Training Resources,Inc. 64788 1,079.15 Safety,Security,Heath Equipment,Supplies,and Services Amlech Elevator Services 64956 2,63500 Miscellaneous Services Anantkumar R.Amin 64928 360.00 Meetinglrraining Expense Reimbursement AppleOne Employment Service 1742 919.60 Professional Services/Terromary Services AppleOne Employment Service 1759 919.60 Professional Services/temporary Services Applied lnduamI Technology 64189 56.16 Repair&Maintenance Services and/or Supplies Applied Industial Technology 64959 2,106.01 Repair&Maintenance Services and/or Supplies AT&T Mobility II,L.L.C. 64192 629.02 Telecommunications AT&T Mobility II,L.L.C. 64961 267.48 Telecommunications AT&T Universal Biller 64191 3,505.28 Telecommunications Awards&Trophies Company "%2 84.58 Awards and Framing Services Bank of New York Mellon Treat 64940 25,158.16 Professional Services-Financial BARBOZA&ASSOCIATES,A LAW CORP. "%3 2,537.00 Professional Services-Legal Battery Systems,Inc. 64193 1,376.78 Repair&Maintenance Services and/or Supplies BC Wide Rope&Rigging 64194 5,472.50 Tools It Supplies BC Wife Rep.&Rigging 64964 750.00 Tools&Supplies Bee Man Pest Control,Inc. 64195 185.00 Pest Control Services BELLA'S KITCHEN 64196 378.00 O&M Manager Leadership Retreat Lunch Black&Veatch Corporation 64197 1,954.99 Professional Services/Engineering Design Services BLX Group "1 2,250.00 Professional Financial Services Boss Innovation&Marketing Inc Si 69.08 Safety,Security,Health Equipment,Supplies,and Services Brea 9 Owner LLC 64198 2,500.00 Miscellaneous Services Brermig Pacific,Inc. 64199 21,754.66 Chemicals,WatedWastewater Treatment Brenntag Pacific,Inc. "1 19,039.72 Chemicals,Water/Wastewater Treatment Brithinee Electric 64800 8,701.62 Electrical/Electronic Equipment,Paris&Repairs California Dept.of Child Support "1 2,56(1 Judgments Payable California Relocation Services,Inc. Si 180.00 Miscellaneous Services-MovinglReloca0on California Relocation Services,Inc. "1 180.00 Miscellaneous Services-MovinglRelocation California Water Technologles 64802 19,420.98 Chemicals Cameron Compression Systems 64803 308.03 Repair&Maintenance Services anchor Supplies Cavanaugh Machine Works U804 1,647.00 Repair&Maintenance Services and/or Supplies CCH Incorporated 65080 461.00 Books&Publications Chem Search U805 401.83 Repair&Maintenance Services and/or Supplies City of Hu nlington Beach W44 11,616.04 Water Use City of Huntington Beach 65004 11.08 Water Use EX frvRipnr Page 1 of 7 wror oa Claims Paid From 5/1114 to 5415/14 Vendor Warrant No. Amount Description City of Newport Beach 64942 39,112.83 Water Use CLEAR EDGE FILTRATION,INC. W06 20,828.78 Miscellaneous Parts and Supplies Cole-Parmer Instrument Co. 64807 32.97 Laboratory Services&Supplies Connell ChevrolehGEO 64970 226.53 Autos,Trucks&Marine Equipment,Parts,Accessories&Services Consolidated Electrical Distributors 64971 3,016.12 ElectricallElectio nic Equipment,Pads&Repairs Constellation Newenergy Gas Division LLC 84808 17,971.14 Natural Gas Consumers Pipe&Supply Go, 1743 2,739.80 Repair&Maintenance Services and/or Supplies Consumers Pipe&Supply Co. 1760 702.18 Repair&Maintenance Services and/or Supplies Cooperative Personnel Services 64810 284.00 Human Resources Services Cooperative Personnel Services 64975 9]].90 Human Resources Services Codech Engineering M09 5,719.04 Repair&Maintenance Services and/or Supplies COUNTY OF ORANGE-AUDITOR-CONTROLLER 64111 77,804.10 Professional Service-Biosolids Management COUNTY OF ORANGE-AUDITOR-CONTROLLER 64943 77,811.79 PhAessional Service-Biosolids Management County of Orange-Health Care Agency 64712 26,007.50 Governmental Agency Fees&Charges County of Orange Auditor Compeller 64972 210.00 Governmental Agency Fees&Charges County of Orange Auditor Controller 64973 192.W Governmental Agency Fees&Charges County of Orange Auditor Controller 64974 1,157.12 Governmental Agency Fees&Charges Court Order 65012 2,179.38 Judgments Payable Court Omer 65051 108.00 Judgments Payable Court Order 65082 912.W Judgments Payable CS-AMSCO 64976 1,053.16 Repair&Maintenance Services and/or Supplies CSI Services,Inc. 64971 3,420.00 Professional Services Curley Wholesale Electric "at1 1,126.51 ElectricallElectronic Equipment,Pads&Repairs Curt V.Shelp 65092 108.97 MeetinglFraining Expense Reimbursement CWEA Membership 64812 296.00 Professional Organizations Meeting/Training/Membeship CWEA Membership 64978 296.00 Professional Organisations Meeting/Training/Membership David M.Chafe 65084 858.16 MeetinglTraining Expanse Reimbursement DDB Engineering,Inc. 64813 6,815.40 Professional Services-Advocacy DEKEN POWER INC. 64814 624.0 Repair&Maintenance Services and/or Supplies DEKEN POWER INC. 64979 419.44 Repair&Maintenance Services and/or Supplies Deland Products,Inc. 64815 394.14 Facilities,Maintenance.Services&Supplies Desert Pumps&Parts,Inc. 64816 263.07 Repair&Maintenance Services and/or Supplies Designer Stroh Embroidery 64817 4,424.12 Public Outreach Supplies Designer Stitch Embroidery 64980 631.68 Public Outreach Supplies Detection Instruments Corporation 64981 583.70 Electrical Electronic Equipment,Pads&Repairs Detector Technology 64818 1,281 Laboratory Services&Supplies Dunn-Edeards Corporation 64819 152.88 Facilities,Maintenance.Services&Supplies Duro-Sense Corporation 64982 806.56 Elechical/Electronic Equipment,Parts&Repairs ELAP(Environmental Lab Accredltion Pgm) 64983 4,619.00 Lab Certification Electrabond U820 1,026.00 Repair&Maintenance Services and/or Supplies Embark Consulting,LLC 64821 3,109.40 Professional Santini Serves Maintenance Support Embed Performance LLC U984 189.00 Repair&Maintenance Services and/or Supplies Employee Benefits Specialists,Inc. 64944 815,836.08 Reimbursed Prepaid Employee Medical&Dependent Care Employee Benefits Specialists,Inc. U985 11,882.11 Reimbursed Prepaid Employee Medical&Dependent Care Employment Development Dept. 64986 1,457.00 Unemployment Insurance Enchanter,Inc. U822 1,200.00 Vessel Services-Monitoring Vessel Nerissa ENS Resources,Inc. 64823 5,912.97 Professional Services-Federal Advocacy Environmental Engineering&Contacting U824 2,000.00 Professional ServlcaroSpecialty Course Audits Environmental Resource Associates 64825 396.18 Laboratory Services&Supplies Environmental Resource Center 64826 640.81 Safety,Security,Health Equipment,Supplies,and Services Excel Door&Gate Co.,Inc. 64827 6,650.00 Repair&Maintenance Services antllor Supplies Express Lane Lab 1745 4,202.71 Safety,Security,Health Equipment,Supplies,and Services Facility Process Solutions Consulting 64988 3,712.20 Professional Services/Bionickling Filter Inspection Services Frankest Company U828 152.18 Janitor&Household Service&Supplies Faviola Miranda 65088 149.19 Meetingntraining Expanse Reimbursement Fkdex Corporation U829 242.94 Freight Services EXHIBITA nrvzl6nr Page 2 of 7 611.e14 Claims Paid From 5/1114 to W15/14 Vendor Warrant No. Amount Description Fisher Scientific 64830 2,875.22 Laboratory Services&Supplies Fisher Scientfic 64989 2,320.55 Laboratory Services&Supplies Fountain Valley AAA Auto Spa 64831 993.06 Autos,Trucks&Marina Equipment,Parts,Accessories&Services Franklin Covey 64990 22.92 Office Supplies Frye Electronics bidet t5.30 Computers,Software/Hardware Ganahl Lumber Company W32 16.33 Facilities,Maintenance,Services&Supplies Ganahl Lumber Company 64892 375.61 Facilities,Maintenance,Services&Supplies Gerardo Amestua 65083 340.00 Meefing/rraining Expense Reimbursement Gierlich-Mitchell,Inc. 6IS33 3,474.89 Repair&Maintenance Services and/or Supplies Global Environmental Netal Inc. W34 825.00 Safety,Security,Health Equipment,Supplies,and Services Global Environmental Network Inc. 6IS93 2,400.00 Safety,Security,Health Equipment,Supplies,and Services Golden State Overnight Delivery Service W35 224.64 Courier Services Golden State Overnight Delivery Service 6IS94 53.38 Courier Services Golden State Water Company W36 125.89 Water Use Golden West Window Service 6IS37 2,082.00 Facilities,Maintenance,Services&Supplies Golden West Window Service 64995 2,040.00 Facilities,Maintenance,Services&Supplies Grainger,Inc. 64838 1,662.18 Repair&Maintenance Services and/or Supplies Grainger,Inc. 64996 2,693.32 Repair&Maintenance Services and/or Supplies Graybar Electric Company 64839 215.33 Electrical/Electronic Equipment,Parts&Repairs Grayth r Electric Company 64997 382.12 Electrical/Electronic Equipment,Parts&Repairs Guidance Software,Inc. 64998 14,312.25 Computer Applications&Sarni Hach Company "Silo 17,410.57 Laboratory Services&Supplies Hach Company 64841 2,121.67 Laboratory Services&Supplies Hach Company 64999 325.85 Laboratory Services&Supplies Hach Company 65000 9,537.35 Laboratory Services&Supplies Harrington Industrial Plastics,Inc. 64842 509.15 Repair&Maintenance Services and/or Supplies Hi Standard Automotive,L.L.C. 65001 1,487.80 Autos,Trucks&Marina Equipment,Parts.Accessories&Services Highmark 64843 3,452.35 Safety,Security,Health Equipment,Supplies,and Services Hill Brothers 1739 279,678.29 Chemicals,Water/Wastewster Treatment Home Depot 65002 942.35 Miscellaneous Parts and Supplies Hub Auto Supply 65003 262.94 Autos,Trucks&Marina Equipment,Parts,Accessories&Services Huts,Michael R 64933 300.00 Meefinglrraining Expense Reimbursement Hydrotex 64845 3,854.12 Autoa,Trucks&Marina Equipment,Parts,Accessories&Services ID Enhancements,Inc. 65006 2,513.00 Safety,Security,Health Equipment,Supplies,and Services INDOFF INC. 65006 2,031.61 Office Furniture Industrial Distribution Group 64846 62.11 Repair&Maintenance Services and/or Supplies Industrial Distribution Group 65007 3,076.19 Repair&Maintenance Services and/or Supplies Inplars Sales,L.L.C. 64847 282.72 Repair&Maintenance Services and/or Supplies Insight Public Sector,Inc. 64113 84,304.69 Computers,Software/Hardware Insight Public Sector,Inc. 65008 9,597.74 Computers,Software/Hardware Intl.Union of Oper.Eng.AFL CIO Local 65009 4,591.60 Dues Deductions Iranian Parts&Services 65010 133.57 Repair&Maintenance Services and/or Supplies IRVINE KOREAN CULTURAL FESTIVAL 6,tM8 250.00 Public Outreach Supplies James D.Hedberg U932 1,002.79 MeetinglDalning Expense Reimbursement Jamison Engineering Contractors,Inc. W50 4,660.00 Professional Services/Construction Support Services Jamison Engineering Contractors,Inc. 65011 15,825.94 Professional Services/Construction Support Services Jays Catering W51 609.h6 Catering Services JE Phillips Company,Inc. "Sih) 2,710.80 Repair&Maintenance Services and/or Supplies Johnstone Supply 64852 133.80 Repair&Maintenance Services and/or Supplies JWC Environmental LLC 65013 4,587.84 Repair&Maintenance Services and/or Supplies Keenan&Associates-Remit 64853 3,316.74 Professional Sewices/Workers Compensation Program Keith W.Cdscuol. 65085 340.00 Merl ingiTioning Expense Reimbursement Kimins Water Solutions 1754 63,394.31 Chemicals,WaterMastewster Treatment KIMCO STAFFING SERVICES 65014 1,080.00 Professional Services/remporery Services Labasre,Inc. 64945 41,135.62 Repair&Maintenance Services and/or Supplie Laura A.Terri 65089 120.00 Meetinglrralning Expense Reimbursement EXHIBITA nhm6nr Page 3 of 7 61I.N4 Claims Paid From 5/1114 to 5115114 Vendor Warrant No. Amount Description Laws Brisbois Bisgaard&Smith W54 662.40 Professional Services-Legal LIBERTY PIPELINE SERVICES,LLC 65015 11,625.00 Professional Services-DOT Program Training Liebed Cassidy 64855 101300.00 Professional Services/Employee Relations Lillestrand and Associates W56 2,258.45 Professional Services Lillestrand and Associates 65016 2,094.61 Professional Services Lionakis 65017 760.40 Professional Serviced'Architectural and Landscaping Consulting Services Lerman Education Services M57 339.00 Professional Organization Meefing/Training/Membership Lynde-Ordway Company,Inc. 65018 80.23 Computer Applications&Services Magnus Pacific Corporation 64180 482,082.50 Construction Mail Dispatch,LLC 65019 330.12 Mail Delivery Service Malcolm Pirnie Inc. 64839 25,699.74 Construction Malcolm Pirnie,Inc. 64858 1,452.20 Professional ServiceslEngineering Design Services Mallory Safely And Supply,LLC 65020 4,821.34 Small Tools MANAGEMENT PARTNERS,INC. 64859 1,500.00 Meefingaraining Registration Mandic Motors M60 165.00 Autm,Trucks&Marina Equipment,Parts,Accessories&Services Mark A.Esquer 64931 493.00 MeefinglDaining Expense Reimbursement Matheson TO Gas,Inc. 65021 2,199.96 Laboratory Services&Supplies Matthew T.Worthy 64936 148.00 Meefing/Training Expense Reimbursement MCBain Instruments 65022 495.00 Repair&Maintenance Services-Microscope MCJunkin Red Man Corporation 65023 2,479.39 Repair&Maintenance Services and/or Supplies MCM&d.'Cam Supply Co. "Ni 591.62 Repair&Maintenance Services and/or Supplies McMaster-Can Supply Co. 65024 26.61 Repair&Maintenance Services and/or Supplies Mesa Consolidated Water District 65025 29.45 Water Use Mesa International Technologies,Inc. 65026 835.00 Repair&Maintenance Services and/or Supplies Mike Bubalo Construction Co.,Inc. 64179 840,2P.85 Construction MIL SPEC HEAT TREATING,INC. 65027 192.50 Repairs&Maintenance Services Mine Safety Appliance 1746 14,362.76 Electrical/Electronic Equipment,Pads&Repairs Mission Abrasive&Janitorial Supplies 65028 29.17 Janitorial&Household Services&Supplies MOSS ADAMS 65029 11,000.00 Security Computer Assessment Services MTM Recognition Corporation 65030 442.04 Service Awards Neal Supply Co. 64662 496.80 Repair&Maintenance Services and/or Supplies NetworkFleet Inc. "W3 423.61 Software Maintenance Agreement NetworkFleel,Inc. 65031 3,952.08 Software Maintenance Agreement OCB Reprographics 64790 3,539.29 PrintinglReprographics Services OCB Reprographics 64960 3,465.49 Printing/Reprographics Services OCEA 65032 653.25 Dues Deductible Office Depot 64864 1,251.89 Office Supplies Ofies Depot 65033 1,456.39 Office Supplies Office Team 64865 991.70 Professional Sewices/Temporery Services Ofce Team 65034 91 Professional Services/temporary Services Oi Corporation 64866 624.93 Laboratory Services&Supplies Olin Corporation U867 13,449.74 Chemicals,WaterlWastewater Treatment Olin Corporation 65035 11,422.67 Chemicals,Water/Wasbander Treatment OneSource Distributors,Inc. U868 245.43 Electrical/Electronic Equipment,Parts&Repairs OneSouroe Distributors,Inc. 65036 SN4.22 Electrical/Electronic Equipment,Pads&Repairs Orange County Auto Parts U869 262.70 Truck Supplies Orange County Auto Parts 65037 15.23 Truck Supplies Orange County Sandal District U937 1,393.92 Petty Cash Expense Orange County Sheriff 65039 640.16 Judgments Payable Orange County United Way 65040 40.00 Employee Contributions Orange County Vector Control District 65041 233.55 Pest Control Pacific Mechanical Supply 1747 322.05 Repair&Maintenance Services and/or Supplies Pacific Mechanical Supply 1761 417.31 Repair&Maintenance Services and/or Supplies Parkhouse Tire,Inc. U871 441.67 Autos,Trucks&Marine Equipment,Paris,Accessories&Services Paula M.Williams 64935 741.40 Meeting/Daining Expanse Reimbursement Peace Officers Council of CA U872 2,346.00 Dues Deductions,Supervisors&Professionals EXHIBITA nrvzl6nr Page 4 of 7 61101 Claims Paid From 5/1114 to 5115/14 Vendor Warrant No. Amount Description Peace Officers Council of CA 65042 2,093.00 Dues Deductions,Supervisors&Professionals Pencco,Inc. 64873 10,852.58 Chemicals Pencco,Inc. 65043 10,807.04 Chemicals Performance Pipeline Technologies 64946 25,959.69 Professional Services/CCTV InspectioNSeuerline Cleaning PHILADELPHIA MIXING SOLUTIONS,LTD. 64874 4,536.16 Repair&Maintenance Services and/or Supplies PL Hawn Company,Inc. 65044 43.93 Repair&Maintenance Services and/or Supplies Polydyne,Inc, 1740 27,160.07 Chemicals,WaterMastewater Treatment Polydyne,Inc. 1755 61,030.64 Chemicals,Waled Wastewater Treatment Praxair Distribution,Inc. 64875 306.91 Laboratory Services&Supplies Prima Public Risk Management Assoc. 65045 670.00 Professional Organizations Meeting/Raining/Membership Primrose Ice Co., Inc. 64876 210.00 Water&Ice Services Primrose Ice Co.,Inc. 65046 131.25 Water&Ice Services Proven Work Injury Canter 65047 485.00 Medical Services Projects Partners 65048 1,400.00 Professional Services/rempomry Employment Services Prudential Cleanrcom Services 64817 365.48 Uniforms Prudential Cleamroom Services 65049 182.74 Uniforms Prudential Overall Supply 1748 1,585.40 Uniforms Psomas 64878 310.76 Professional Services-Geographic Information System O Air-Calk.Div.Pump Engineering 65050 458.00 Repair&Maintenance Services and Supplies Rainbow Disposal Co. 64879 238.10 Waste Disposal Rainbow Deposit Co. 65052 3,260.90 Waste Disposal RANDSTAD TECHNOLOGIES,L.P. 65053 8,131 Software Raymond Handling Solutions,Inc. 64880 64.00 Material Handling Tools&Equipment Red Wing Shoes 65054 ISSAS Safety,Security,Health Equipment,Supplies,and Services Regents of the University of Calk. 64881 12,751.58 Meefingri-mining Registration Postek Corp. 1749 1,552.98 Laboratory Services&Supplies Restek Corp. 1762 481.44 Laboratory Services&Supplies RMC Water and Environment 64882 16,612.06 Professional Services RMC Water and Environment 65055 B,641.31 Professional Services Robyn A.Wilcox 64934 17(1 Meefing/rraining Expense Reimbursement Rodney L.Collins 64930 175.00 MeetinglTraining Expanse Reimbursement PIT CONTRACTOR CORP 65056 4,640.00 Repair&Maintenance Services and/or Supplies Ryan Heroo Products Corp. 64883 938.43 Repair&Maintenance Services and/or Supplies S.S.Mechnical Corporation 65090 10,762.80 Construction Sancon Engineering,Inc. 64947 39,850.00 Repair&Maintenance Services and/or Supplies BARBS 65091 305.00 Professional Organizations Meeting/Raining/Membership SCAMIT 64884 15.00 Professional Services SCAQMD 64885 50[1 Governmental Agency Fees&Charges Schwing Bioset 1750 176.28 Repair&Maintenance Services and/or Supplies Sea Bird Electronics,Inc. 64887 2,170.00 Electrical/Electronic Equipment,Parts Is Repairs Sea Bird Electronics,Inc. 65057 1,337.34 ElectricapEledronic Equipment,Pads&Repairs Shamrock Supply Co.,Inc. 64888 397.55 Repair&Maintenance Services and/or Supplies Shamrock Supply Co.,Inc. 65058 2,211.78 Repair&Maintenance Services and/or Supplies Sharesquared,Inc. 64889 5,712.33 Computer Applications&Services Shawn R.May 65087 1%.00 Meding/Tmining Expense Reimbursement Shlmadzu Scientific Instruments Inc. 6491 49,680.00 Laboratory Soviets&Supplies Shureluck Sales&Engineering W90 644.98 Repair&Maintenance Services antllor Supplies Shureluck Sales It Engineering 65059 424.17 Repair&Maintenance Services and/or Supplies Siemens Energy,Inc. 64]]4 25,559.33 Repair&Maintenance Services antllor Supplies Siemens Technology M891 1,884.64 Air Conditioner Automation System Siemens Water Technologies Corp. 17" 1,523.84 Repair&Maintenance Services anchor Supplies SIERRA TRANSPORT INC. U892 16,952.44 Professional Service-Blosolids Management Smith Pipe&Supply,Inc. W93 50.05 Facilities,Maintenance,Services&Supplies Snafa-On Equipment U894 1,081.22 Repair&Maintenance Services and/or Supplies South Coast Air Quality Management Dist. 65060 15,929.40 Governmental Agency Fees&Charges South Coast Environmental Co. 64886 1,513.35 Professional Services-At Quality Monitoring nrvzlgnr Page 5 of 7 EXwlprzp A Claims Paid From 5/1114 to 5115/14 Vendor Warrant No. Amount Description South Coast Shipyard,Inc. 64896 1,940.20 Autos,Trucks&Marine Equipment,Parts,Accessories&Services Southern California Academy of Sciences 64897 60.00 Registration Southem California Edison 64175 82,135.98 Utilities Southland Envelope Company,Inc. 64898 446.15 Office Supplies SST Benefits Consu ling&Insurance Saw 65061 5,500.00 Professional Services Stantec Consulting Services,Inc. 64899 17,571.00 Professional Services/Surveying Staples 64900 1,457.48 Office Supplies State of California 65062 40.00 Governmental Agency Fees&Charges STEAMX.LLC 65063 340.79 Repairs&Maintenance Services Strategic Hadvane 64949 32,378.40 Computers,SoftvarelHardware&Managed Services Sunset Industrial Parts 65064 212.61 Repair&Maintenance Services and/or Supplies Synagro West,Inc. 64950 583,002.74 Biosolids Management TELEDYNE INSTRUMENTS,INC. 65065 202.89 Laboratory Services&Supplies Teledyned8CO 64901 590.76 Laboratory Services&Supplies TeslAmerica Ontario 1751 4,405.00 Laboratory Services&Supplies Thatcher Company Of California 64776 29,019.44 Chemicals,Waten Wastevrater Treatment The Orange County Register 64870 1,340.00 Notices&Ads The Orange County Register 65038 6,692.00 Notices&Ads Thomas S.Handy 65086 300.00 Meefingri-muning Expense Reimbursement Thompson Industrial Supply,Inc. 1752 1,190.61 Repair&Maintenance Services and/or Supplies Thompson Industrial Supply,Inc. 1763 14,068.33 Repair&Maintenance Services and/or Supplies Timor Construction 64902 5,2W.00 Facilities,Maintenance,Services&Supplies Tanya Lock&Safe Service&Sales 64903 45.36 Repair&Maintenance Services and/or Supplies Tonys Lock&Safe Service&Sales 65066 858.27 Repair&Maintenance Services and/or Supplies Toronto Research Chemicals 65067 450.00 Laboratory Services&Supplies Toymsend Public Affairs 64904 7,500.00 Professional Services-State Legislative Advocacy Trans U.S.Inc 64905 5,401.00 Repair&Maintenance Services and/or Supplies TRIMBLE NAVIGATION 64906 6,257.24 Navigational GPS Units TRIMBLE NAVIGATION 65068 9,392.76 Navigational GPS Units Trcemner Inc., 65069 179.25 Repair&Maintenance Services and Supplies Tropical Plaza Nursery,Inc. 64907 12,8P.% Landscape Maintenance Services TSI Inc 64908 2,099.65 Safety,Security,Heath Equipment,Supplies,and Services Tule RanchhMagan Faons 64117 311,002.76 Blowhole Management TW Telecom Holdings,Inc. 64909 9,487.11 Telecommunications Tyro Wheels One Planet 64910 879.93 Autos,Trucks&Marina Equipment,Parts,Accessories&Services UC Regents 65070 105.00 Professional Organizations Mooting/Training/Membership Underground Service Ned of So.Calif 65071 1,887.00 Professional Services-Dig Alert Notification Service United Parcel Service 64911 246.84 Freight Services United Parcel Service 65072 844.28 Freight Services United Power Service,Inc. 65073 157.00 ElecVIcaliElectronic Equipment,Paris&Repairs US Equipment Co.,Inc. 64912 4,492.72 Repair&Maintenance Services anchor Supplies V&A Consulting Engineers U913 10,935.00 Professional Services Valin Corporation 1753 8,226.81 Repair&Maintenance Services anchor Supplies Valve Automaton&Controls U914 2,258.36 Repair&Maintenance Services and/or Supplies Valve Automation&Controls 65074 13,55620 Repair&Maintenance Services anchor Supplies Verbal Ink 65075 152.75 Human Resources Services Vauban Wireless 64915 4].11 Telecommunications Verne's Plumbing U916 175.00 Plumbing Services&Supplies Village Nurseries 64917 103.29 Repair&Maintenance Services anchor Supplies Village Nurseries 65076 349.70 Repair&Maintenance Services and/or Supplies Vision Internet Providers,Inc 64918 3%.00 Professional Servicesi Design Services Voyager Fleet Systems,Inc. U778 25,129.95 Autos,Trucks&Marine Equipment,Parts,Accessories&Services MR Scientific Products 64919 531.68 Laboratory Services&Supplies Waters Corporation U920 1,838.36 Laboratory Services&Supplies Waxie Sanitary Supply 64921 1,439.34 Janitor&Household Service&Supplies Waxie Sanitary Supply 65077 299.18 Janitor&Household Service&Supplies EXHIBITA In210/1r Page 6 of 7 51101m, Claims Paid From 5/1114 to 5115/14 Vendor Warrant No. Amount Description West Coast Arboi Inc. 64922 600.00 Landscape Maintenance Services West Coast SWtchgear,Inc. 64923 13,365.00 Electrical/Electronic Equipment,Pads&Repairs West Lite Supply Company,Inc. 65078 68.04 Electrical/Electronic Equipment,Paris&Repairs White Star Pools 64924 310.00 Repair&Maintenance Services and/or Supplies Wilmington Instrument Co.,Inc. 65079 997.42 Instrument Parts&Supplies Workforce Software,Inc. 64925 6,400.00 Computer Applications and Services Xylem Water Solutions 65081 1,868.40 Repair&Maintenance Services and/or Supplies Yale/Chase Materials Handling,Inc. 64926 695.50 Electrical/Electronic Equipment,&Electric Cart Pans&Repairs Yeah Choi 64929 115.00 Mee6ng/Training Expanse Reimbursement Yorba Linda Water District 64927 50.61 Utilities Total Accounts Payable-Warrants $ 5.1 A 032.44 Payroll Disbursements Employee Paychecks 53081 - 53109 $ 5,330.50 Interim Payroll-AREA(5/l/14) Employee Paychecks 53115 - 53161 88,502.85 Biweekly Payroll(5/14/14) Employee Paychecks 53162 767.34 Interim Payroll-Intent resignation(518114) Employee Paychecks 56163 - 56164 4,970.68 Interim Payroll-Retirement,Resignation(5115114) Employee Paychecks 53165 251.21 Interim Payroll-Retirement,Resignation-Accrual Payouts(5/15/14) Employee Paychecks 56166 - M220 ll,342.26 Interim Payroll-Tax Calc&Holiday Comp Adjustments(5115114) Direct Deposit Statements 354120-354316 33,211.00 Interim Payroll-ARBA(5/l/14) Direct Deposit Statements 354317-354910 1,391 Biweekly Payroll(5/14/14) Total Payroll Disbursements $ 1,542,336.40 'Caen nu,neea 5 311 0-5 3114 nee din pan,pennd. ^Gap in sequence(531 m 561)due m e,mr In emedng check nuMM,., Wire Transfer Payments OCSD Payroll Taxes&Contributions $ 782,657.34 Biweekly Payroll(5/14/14) Union Bank of California 70,173.93 Workers Compensation Services(5/6/14) Total Wire Transfer Payments $ 1152831.27 Total Claims Paid 5101/14-5/15114 $ 7,499,200.11 EXHIBITA 11 a101h Page 7 of 611MO14 Claims Paid From W1 Wib to 5/31/14 Vendor Warrant No. Amount Description Accounts Payable Warrants Absolute Standards,Inc. 65111 161 Laboratory Services&Supplies ACORN MEDIA 65112 325.76 Minor Equipment,Parts,Accessories&$ervices Air&Waste Management Assoc. 65113 3,950.00 Professional Organization&Meeting/fmining Registration Air Liquids America Specially Gases LLC 65114 538.63 Laboratory Services&Supplies Air Liquids Industrial U.S.,LP 65115 15,192.84 Laboratory Services&Supplies Air Liquids Industrial U.S.,LP 65292 10,147.17 Laboratory Services&Supplies All Safety, Inc. 1767 221.56 Safety,Security,Health Equipment,Supplies,and Services All Safety, Inc. 1781 15,067.12 Safety,Security,Health Equipment,Supplies,and Services All USA,LLC 1768 2,807.06 Laboratory Services&Supplies Alhambra Foundry Co.,Ltd. 65116 7,076.16 Repair&Maintenance Services and/or Supplies American Integrated Services,Inc. 65093 26,684.55 Grit&Screenings Disposal American Integrated Services,Inc. 65281 27,468.80 Grit&Screenings Disposal American Water Works Assoc./JJaler Oualit 65294 244.00 Professional Organizations Meetng/Raining/Membership/Meeting Registration Analysts,Inc. 65295 111.97 Repair&Maintenance Services and/or Supplies Applei Employment Service 1782 919.60 Professional ServicesTempori Services Applied Industrial Technology 65117 161 Repair&Maintenance Services and/or Supplies Argus-Hazco 65296 2,070.75 Repair&Maintenance Services and/or Supplies AT&T Mobility II,L.L.C. 65120 7.50 Telecommunications AT&T Teleconference Services 65121 T1.92 Telecommunications ATCC:Amer.Type Culture Collect 65122 694.50 Laboratory Services&Supplies Atlantic Richfield Co.#1905 65119 1,019.02 Refund-Duplicate Payment Assents&Trophies Company 65123 47.52 Awards and Framing Services AWSI 65124 57.00 Professional Services-DOT Program Administration Battery Specialties 65125 98.28 Batteries,Various Bavco 65126 329.24 Repair&Maintenance Services and/or Supplies Bee Man Pest Control,Inc. 65127 175.00 Pest Control Services Bell Pipe&Supply Co. 65128 1,393.20 Repair&Maintenance Services and/or Supplies Bell Pipe&Supply Co. 65297 1,369.74 Repair&Maintenance Services and/or Supplies Brand Scaffold Rental&Erection Inc 65298 1,950.28 Miscellaneous Services Brenner-Fiedler&Assoc,Inc. 65130 1,808.37 Laboratory Services&Supplies Breading Pacific,Inc. 65131 15,740.26 Chemicals,WaterMastewater Treatment Brown&Caldwell 65095 47,545.93 Professional Services/Engineering Design Services Brown&Caldwell 65282 245,656.92 Professional Services/Engineering Design Services Buchi Corporation 65299 332.77 Repair&Maintenance Services and/or Supplies Burlington Safety Laboratory of CA,Inc. 65300 402.50 Safety,Security,Health Equipment,Supplies,and Services California Dept.of Child Support 65301 2,493.89 Judgments Payable California Recreation Company 65302 3,587.53 Boat Slip Rental-Nerissa Ocean Monitoring Vessel California Water Technologies 65132 14,741.49 Chemicals California Water Technologles 65303 19,832.69 Chemicals Camali Corp. 65133 9,253.66 Repair&Maintenance Services antllor Supplies Cambridge Isotope Labs 65304 514.60 Laboratory Services&Supplies Cameron Compression Systems 65134 12,317.47 Repair&Maintenance Services and/or Supplies Camillo Engineers 65135 7,050.80 Professional Services Camillo Engineers 65136 9,265.81 Professional ServiceslEngineering Design Services CDW Government,Inc. 65305 4,995.00 Computers,SoftwarefHardware Cemtek Environmental,Inc. 65137 4,291.67 CEMS Maintenance Agreement Charles King Company,Inc. 65291 762,242.00 Construction CHIPOTLE MEXICAN GRILL,INC#1641 65139 100.00 Refund Overpayment Chris A.Stacklin 65406 1,850.23 MeetinglRalning Expense Reimbursement CINTAS FIRE PROTECTION 65306 582.33 Fire Extinguisher Supplies&Services City of Fountain Valley 65096 71,863.36 Water Use City of Fountain Valley 65140 5,073.59 Permits City of Fountain Valley 65141 2,434.02 Permits City of Fountain Valley 65142 1,465.37 Permits EXHIBIT B nrv'ile r Page 1 of 7 enoncv Claims Paid From W16/14 to 5/31/14 Vendor Warrant No. Amount Description City of Fountain Valley 65143 1,822.30 Permits City of Fountain Valley 65144 2,470.21 Permits City of Fountain Valley 65145 6,888.45 Permits City of Fountain Valley 65146 4,514.17 Permits City of Fountain Valley 65147 6,115.75 Permits City of Fountain Valley 65148 4,597.W Permits City of Fountain Valley 65149 448.57 Permits City of Fountain Valley 65150 727.59 Permits City of Fountain Valley 65151 6,979.50 Permits City of Newport Beach 65350 178.89 Water Use Clean Energy 65152 1,632.74 CNG Fueling Station ServiceslSupplies CLEAR EDGE FILTRATION,INC. 65307 11,798.98 Miscellaneous Parts and Supplies Coinable.Com 65153 3,840.00 Safety,Security,Health Equipment,Supplies,and Services Columbia Analytical Services 65293 990.00 Laboratory Services&Supplies Connell ChevmleAGEO 65308 623.27 Autos,Trucks&Marina Equipment,Parts,Accessories&Services Constructive Community Relations 65154 17,933.64 Construction Outreach Consumers Pipe&Supply Co. 1769 16.38 Repair&Maintenance Services and/or Supplies Controlled Motion Solutions 65155 579.43 Repair&Maintenance Services and/or Supplies COOLANT MANAGEMENT SERVICES 65156 1,394.35 Repair&Maintenance Services and/or Supplies Comer Bakery Caf2(CBC) 65309 185.63 Catering Services CORRPRO Companies,Inc. 65283 29,725.50 Professional Services/Tempomry Services County of Orange Auditor Controller 65158 735.00 Governmental Agency Fees&Charges County of Orange Auditor Compeller 65159 720.00 Governmental Agency Fees&Charges County of Orange Auditor Controller 65160 645.00 Governmental Agency Fees&Charges County of Orange Auditor Compeller 65161 225.00 Governmental Agency Fees&Charges County of Orange Auditor Controller 65162 1,215.00 Governmental Agency Fees&Charges County of Orange Auditor Controller 65163 1,065.00 Governmental Agency Fees&Charges County of Orange Auditor Controller 65164 ]58.3] Governmental Agency Fees&Charges County of Orange Auditor Controller 65165 148.50 Governmental Agency Fees&Charges County of Orange Auditor Controller 65310 1,440.00 Governmental Agency Fees&Charges County of Orange Auditor Controller 65311 1,560.00 Governmental Agency Fees&Charges County of Orange Auditor Controller 65312 780.00 Governmental Agency Fees&Charges County of Orange Auditor Controller 65313 945.00 Governmental Agency Fees&Charges County of Orange Auditor Controller 65314 930.00 Governmental Agency Fees&Charges County of Orange Auditor Controller 65315 1'3%.00 Governmental Agency Fees&Charges County of Orange Auditor Controller 65316 69.00 Governmental Agency Fees&Charges County Wholesale Electric Co. 65166 195.89 Electrical/Electronic Equipment,Parts&Repairs Court Order 65341 2,179.38 Judgments Payable Court Order 65368 108.00 Judgments Payable Court Order 65391 912.50 Judgments Payable CR&R,Inc. 65317 3,784.99 Waste Disposal CSI Services,Inc. 65318 1,140.00 Professional Services CSUF Auxillary Services Comombon 65167 19,979.25 Prefessional Organizations Meeting/Training/Membership(Demographics) Culligan of Orange County 65168 59.55 Repair&Maintenance Services and/or Supplies CWEA Membership 65169 90.00 Prefessional Organizations Meeting/Training/Membership CWEA Membership 65319 888.00 Professional Organizations MeeOng/Tralning/Membership David Wheeler Pest Control,Inc. 65320 1,260.00 Pest Control Services Dd.Phuong 65403 712.45 MeeBnglTralning Expense Reimbursement Demsey,Filliger&Associates 65170 7,000.00 Prefessional Services Desert Pumps&Pan,Inc. 65321 10,378.76 Repair&Maintenance Services and/or Supplies Designer Stood Embroidery 65171 4,850.38 Public Outreach Supplies Detection Instruments Corporation 65322 461 Electrical/Electronic Equipment,Parts&Repairs Dindo A.Carrillo 65393 611.30 Meefmg7raining Expanse Reimbursement Donald A.Hawthorne 65399 904.06 Martini Expense Reimbursement Duane T.Smith 65217 300.00 Meelingaraining Expense Reimbursement EXHIBIT B nrvzlonr Page 2 of 7 enonav Claims Paid From W16/14 to 5/31/14 Vendor Warrant No. Amount Description Dudek&Associates,Inc. 65172 5,415.03 Professional Services/Engineering Design Services Electrabond 65323 8,208.00 Repair&Maintenance Services and/or Supplies Elected Numence 65324 1,490.30 Eleconcel/Electronic Equipment,Parts&Repairs Employee Benefits Specialists,Inc. 65173 775.50 Reimbursed Prepaid Employee Medical It Dependent Care Employee Benefits Specialists,Inc. 65325 11,524.96 Reimbursed Prepaid Employee Medical&Dependent Care ENFOTECH&CONSULTING,INC. 65284 40,278.94 Software Environ Strategy Consultants, Inc. 65174 2,000.00 Professional Services-Quarterly Sampling of Groundwster Monitoring Wells in the Auto Environmental Express,Inc. 65326 3,350.53 Laboratory Services&Supplies Environmental Resource Associates 65175 2,403.07 Laboratory Services&Supplies Erica T.Jarvis 65400 375.28 MeefingRraining Expense Reimbursement Emng Irrigation 65176 1,366.45 Irrigation Repair&Maintenance Services and/or Supplies Excel Door&Gate Co.,Inc. 65327 110.00 Repair&Maintenance Services and/or Supplies F.H.Pumps 65177 8,972.39 Pump Supplies Faviola Miranda 65401 149.19 Meefing/Training Expense Reimbursement Fedex Corporation 65178 32.50 Freight Services Ferguson Enterprises,Inc. 65179 54.16 Repair&Maintenance Services and/or Supplies Filarsky&Waft.L.L.P. 65180 652.50 Prof.Services-SPMT Labor Negotiation Meetings&Special Services First American ComiNic 65157 236.00 Software Maintenance Agreement Fisher Scienfific 65181 7,308.52 Laboratory Services&Supplies Fisher Scientific 65328 79.60 Laboratory Services&Supplies Fresno First Bank-Acct 1ON13315 65108 37,637.50 Construction,Retention FUSES UNLIMITED 65329 37.95 Miscellaneous Fuses Ganahl Lumber Company 65330 Si Facilities,Maintenance,Services&Supplies Gilbert G.Barela 65266 190.00 MeefingRraining Expense Reimbursement Gina A.Tetsch 65406 1,348.20 MeefingRraining Expense Reimbursement Golden West Window Service 65331 4,620.00 Facilities,Maintenance,Services&Supplies Grainger,Inc. 65182 609.34 Repair&Maintenance Services and/or Supplies Graybar Electric Company 65183 252.74 Electrical/Electronic Equipment,Parts&Repairs Gregg J.Dala ing 65270 272.70 MeafingRraining Expanse Reimbursement Guarantee Records Management 65184 1,291.90 Professional Services-Document Storage&Shredding HDR Engineering,Inc. 65097 193,822.38 Professional Services/Engineering Design Services Highmark 65332 634.09 Safety,Security,Health Equipment,Supplies,and Services Hill Brothers 1779 61,231.25 Chemicals,Water/Wastevreter Treatment Hills Boat Service,Inc. 65333 1,012.61 Autos,Tracks&Marine Equipment,Parts,Accessories&Services Home Depot 65185 154.71 Miscellaneous Parts and Supplies Horil Technology 65334 5'140.86 Laboratory Services&Supplies Hub Auto Supply 65186 665.72 Autos,Trucks&Marina Equipment,Parts,Accessories&Services Hub Auto Supply 65336 327.72 Autos,Trucks&Marine Equipment,Parts,Accessories&Services Industrial Distribution Group 65187 68.30 Repair&Maintenance Services and/or Supplies Industrial Electric Machinery LLC 65336 275.46 Repair&Maintenance Services and/or Supplies Industrial Threaded Products,Inc. 1770 106.92 Repair&Maintenance Services antllor Supplies INTERNATIONAL METALS 65188 415.80 Metal Intl.Union of Opeo Eng.AFL CIO Local 65337 4,614.01 Dues Deductions Intratek Computer,Inc. 65338 239.20 NetworklServer/Printer Maintenance Services Invensys Systems,Inc. 1771 2,503.04 Electrical/Electronic Equipment,Pads&Repairs Irvine Ranch Water District 65189 9.85 Water Use ISA 65285 45,580.00 Professional Organizations Meeting/Training/Membership ISEC,Inc. 65339 1,587.00 Laboratory Services&Supplies ITT CANNON 65190 995.83 Refund Overpayment JACOBS PROJECT MANAGEMENT CO. 65286 114,656.95 Professional Services/Tempomry Services Jamison Engineering Contractors,Inc. 65287 45,203.16 Professional Services/Construction Support Services Jays Catering 65191 1,1T1.20 Catering Services JeBrey T.Reed 65276 425.62 Meating/Training Expanse Reimbursement Johnstone Supply 65192 6,012.50 Repair&Maintenance Services and/or Supplies Johnstone Supply 65340 226.15 Repair&Maintenance Services and/or Supplies EXHIBIT B nrvzlpnr Page 3 of 7 e ldI Claims Paid From W16/14 to 5/31/14 Vendor Warrant No. Amount Descripfion Joscelynn M.GadAnskl 65397 945.90 MaebngRraining Expanse Reimbursement JP Morgan Chase Bank,NA 65098 73,642.19 Purchasing Card Program for Miscellaneous Parts and Supplies KELLV PAPER 65193 7,913.95 Office Supplies KELLV PAPER 65342 838.35 Office Supplies Karl Water SolNion. 1764 28,743.47 Chemicals,Water/Wastewater Treatment Kemim Water Solutions 1780 35,267.25 Chemicals,WaterlWashmater Treatment Ken H.Wong 65407 340.00 Meefingrrraining Expanse Reimbursement Kevin R.Peckham 65275 230.00 Mee0ng/rraining Expense Reimbursement Koff&Associates,Inc. 65194 2,504.00 Professional ServicaslComp&Class Study IA Testing 65343 81.00 Safety,Security,Health Equipment,Supplies,and Services Levee Bdsbois BisgaaM&Smith 65344 1,794.00 Professional Services-Legal Lexis-Next. 65195 84.00 Books&Publications On-Line Liberty Mutual Claims 65196 9,229.74 Insurance Lillestrand and Associates 65197 10,073.80 Professional Services Lubrication Engineers,Inc. 65198 1,008.28 Repair&Maintenance Services and/or Supplies Mallory Safety And Supply,LLC 65199 13,028.52 Small Tools Mallory Safety And Supply,LLC 65345 20,626.70 Small Tools Marc A.Larson 65273 340.00 Meefing/rraining Expense Reimbursement Marvac Electronics 65200 31.09 ElectricallElectronic Equipment,Parts&Repairs Matheson Tri Gas,Inc. 65201 1,865.88 Laboratory Services&Supplies McMaster-Cart Supply Co. 65202 3,256.67 Repair&Maintenance Services and/or Supplies McMaster-Can Supply Ca. 65346 548.16 Repair&Maintenance Services and/or Supplies Mesa International Technologies,Inc. 65203 386.80 Repair&Maintenance Services and/or Supplies Michael Von Winckelmann 65278 598.01 Meefing/rraining Expense Reimbursement Moore Industries International 65347 1,446.57 Electrical Part.&Supplies Moore Medical Inc. 1783 374.13 Medical Supplies MSC Industrial Supply Co. 65204 154.46 Repair&Maintenance Services and/or Supplies MTM Recognition Corporation 65206 399.28 Service Awards MVI Architects 65348 1,165.46 CFCC Refund NASSCO/PACP 65349 900.00 Professional Organisations Meeting/Training/Membership Neal Supply Co. 65206 1,009.26 Repair&Maintenance Services and/or Supplies Neopost USA Inc. 65207 63.54 Equipment Lease/Postage Meter Newark Electronics 65208 69.90 ElectricallElectronic Equipment,Parts&Repaire Nexus Is,Inc. 65099 96,350.14 Electricals Electronic Equipment&Parts-IT Nicholas J.Arhontes 65265 811.46 Meefing/Training Expanse Reimbursement Northern Tool&Equipment 65129 393.51 Electrical Pans&Supplies NRG Engine Services,L.L.C. 65209 5,678.41 Repair&Maintenance Services and/or Supplies OCB Reprographics 65118 869.60 PrintinglReprographics Services OCFA 65351 643.50 Dues Deductible Office Depot 65210 1,297.74 Office Supplies Office Depot 65352 4.32 Office supplies Office Team 65353 999.20 Professional Services/rempomry Services Olin Corporation 65211 6,797.84 Chemicals,Water/Wastemter Treatment Olin Corporation 65354 2,279.67 Chemicals,WmerMastewater Treatment Omega Industrial Supply,Inc. 65212 2,375.67 Janitor&Household Service&Supplies OneSoume Distributors,Inc. 65355 8,128.92 Electrlcali Electronic Equipment,Paris&Repairs Orange County Auto Parts 65356 66.88 Truck Supplies Orange County Sanitation District 65279 1,489.29 Petty Cash Expense Orange County Sheriff 65357 640.76 Judgments Payable Orange County United Way 65358 40.00 Employee Contributions Pacific Mechanical Supply 1172 716.00 Repair&Maintenance Services and/or Supplies Pacific Mechanical Supply 17M 542.06 Repair&Maintenance Services and/or Supplies Parker Hannifin Corporation 65358 315.59 Repair&Maintenance Services and/or Supplies Parker Supply Company 1773 985.34 Miscellaneous Parts and Supplies Parkhouse Tire, Inc. 65214 1,597.48 Autos,Trucks&Marine Equipment,Parts,Accessories&Services EXHIBIT B nhrzipnr Page 4 of 7 611.mk Claims Paid From W16/14 to 5/31/14 Vendor Warrant No. Amount Description Parkhouse Tire,Inc. 65360 3,804.89 Autos,Trucks&Marine Equipment,Parts,Accessories&Services Portion Video Productions 65215 369.05 Miscellaneous Services PBS&J 65094 126,793.43 Professional ServiceslEngineering Design Services Peace Officers Council of CA 65361 2,093.00 Dues Deductions,Supervisors&Professionals Pill Inc. 65216 16,261.80 Chemicals Pencco,Inc. 65362 16,211.59 Chemicals People and Processes,Inc. 65217 4,995.00 Professional Organizations MeetingRraining/Membership Performance Pipeline Technologies 65218 2,450.00 Professional ServiceslCCTV InspectionlSeuerline Cleaning Peter H.Brown 65392 300.00 Meeting/Training Expanse Reimbursement PL Hawn Company,Inc. 65219 1,829.06 Repair&Maintenance Services and/or Supplies Plumbera Depot,Inc. 65220 972.00 Repair&Maintenance Services and/or Supplies Polydyne,Inc. 1765 28,973.06 Chemicals,WaterMasnewatar Treatment Polydyne,Inc, 1785 16,261.85 Chemicals,WaterlWastewater Treatment Pourer Bros.Machine,Inc. 65221 2,831.22 Repair&Maintenance Services and/or Supplies Praxair Distribution,Inc. 65222 774.67 Laboratory Services&Supplies Primrose Ice Co.,Inc. 65223 236.25 Water&Ice Services Primrose Ice Co..Inc. 65363 13125 Water&Ice Services Process Instruments&Controls,LLC 65364 2,779.77 ElectricaVElecnronic Equipment,Pads&Repairs Project Management Ine6Me 65365 164.00 Professional Oganizations Meefing/Training/Membemhip Projects Partners 65224 7,543.64 Professional ServicesRempomry Employment Services Propipe Professional Pipe Services 1766 63,403.56 Professional Services/CCTV Sewerine Inspections Prudential Cleanroom Services 65225 182.74 Uniforms Prudential Cleanroom Services 65366 182.74 Uniforms Prudential Insurance Company of America 65288 48,517.95 Benefits Prudential Overall Supply 1774 1,482.79 Uniforms Prudential Oveall Supply 1786 3,005.07 Uniforms Pump Action 65367 10,229.42 Oil Filters Pumping Solutions,Inc. 65226 12,000.85 Repair&Maintenance Services and/or Supplies Pure Air Filtration.LLC 65100 110,391.00 Repair&Maintenance Services and/or Supplies Rabobank,Escrow AcotlF2]22955]3 65106 45,406.10 Construction Reliastar 65369 3,526.55 Voluntary Employee Life&Cancer Insurance Real Corp. 1787 3,90l Laboratory Services&Supplies RF MacDonald Co. 65227 253.47 Repair&Maintenance Services and/or Supplies Robert M.Bell 65268 248.17 Meefing/Daining Expense Reimbursement Robert M.Moms 65402 300.00 Meeting/Training Expense Reimbursement Rodney L.Collins 65396 140.00 MeetingRraining Expense Reimbursement Ronald C.Cortez 65396 712.45 Meeting/Training Expense Reimbursement Rotork Controls,Inc. 65370 288.44 Electrical/Electronic Equipment,Pads&Repairs Roy J.Reynolds 65404 543.11 Meeting?raining Expanse Reimbursement Royale Cleaners 65228 27.30 Miscellaneous Services Royale Cleaners 65371 24.40 Miscellaneous Services San Dlego/Orange Fuld System Technologl 65229 1,205.82 Repair&Maintenance Services and/or Supplies San DiegWOmnge Fluid System Technologi 65372 181.15 Repair&Maintenance Services and/or Supplies BARBS 65280 140.00 Professional Organizations MeeOngRralning/Membership SC Fuels 65230 4,317.16 Fuel and Lubricants SC Fuels 65373 8,461.31 Fuel and Lubricants Secuntas Security Services USA,Inc. 65101 30,270.48 Safety,Security,Health Equipment,Supplies,and Services Shamrock Supply Co.,Inc. 65232 2,702.67 Repair&Maintenance Services and/or Supplies Shamrock Supply Co.,Inc. 65374 Sl Repair&Maintenance Services anchor Supplies Shimadzu Scientific Instruments Inc. 65233 209.]8 Laboratory Services&Supplies Shureluck Sales&Engineering 65375 746.61 Repair&Maintenance Services and/or Supplies Same Instruments,Inc. 65234 637.19 Repair&Maintenance Services and/or Supplies Sigma-Alddch,Inc. 65235 247.63 Laboratory Services&Supplies So.Cal Gas Company 65236 1,651 Utilities So.Cal Gas Company 65376 14,254.66 Utilities EXHIBIT B nhnr6nr Page 5 of 7 61'onpv Claims Paid From 5116/14 to 5/31/14 Vendor Warrant No. Amount Description South Coast Air Quality Management Dist. 65237 150.00 Governmental Agency Fees&Charges South Coast Air Quality Management Dist. 65377 1,426.74 Governmental Agency Fees&Charges Southern California Edison 65238 1,235.35 Utilities Southern California Edison 65289 282,339.01 Utilities Southern Counties Lubricants 65239 2,962.93 Fuel and Lubricants Sparklett-Dallas 65240 3,158.40 Miscellaneous Services SPEXCeniprep, Inc. 65241 5&22 Laboratory Services&Supplies Square D Company 65231 4,485.00 Computer Applications and Services St Croix Sensory,Inc. 65242 1,23225 Olfactomelry Testing Services St Croix Sensory,Inc. 65378 739.35 Olfactometry Testing Services Standard Automation and Control 65379 5,570.00 Computer Applications&Services Staples 65243 776.79 Office Supplies Stericycle Inc 65380 413.25 Service Agreement Steve Grande 65398 148.00 MeetingRraining Expense Reimbursement Stratus Environmental,Inc. 65244 96.63 Refund Overpayment Stuart A.Jenkins 65272 170.00 Meeting/Training Expense Reimbursement Summit Steel 1775 3,508.11 Repair&Maintenance Services and/or Supplies Summit Steel 1788 795.37 Repair&Maintenance Services and/or Supplies Synagro West,Inc. 65102 147,500.98 I icardids Management Systea Scientific,L.L.C. 65138 206.26 Laboratory Services&Supplies Tektronix Inc 65245 195.00 Instrument Repairs&Calibration Services TesUvnerica Ontario 1776 904.00 Laboratory Services&Supplies TestAmerica Ontario 1789 600.00 Laboratory Services&Supplies Thatcher Company Of California 65103 36,914.72 Chemicals,WaterlWastesater Treatment The Nelac Institute 65381 495.00 Professional Organizations Meeting/Training/Membership The Orange County Register 65213 5,844.00 Notices&Ads Thompson Industrial Supply,Inc. 1777 2,309.82 Repair&Maintenance Services and/or Supplies Thompson Industrial Supply,Inc. 1790 5,421.26 Repair&Maintenance Services and/or Supplies TOXGUARD FLUID TECHNOLOGIES 65247 6,884.17 Professional Services-Legal Trans U.S.Inc 65248 13,384.03 Repair&Maintenance Services and/or Supplies Tule RanchlMagan Farms 65104 279,782.84 Blasi Management Ten Wheels One Planet 65249 930.36 Autce,Trucks&Marine Equipment,Parts,Accessories&Services Tyler T.Hoang 65271 1,141.55 MeetingRraining Expense Reimbursement Ultra Scientific 65250 548.55 Laboratory Services&Supplies Umesh N.Mondry 65274 150.00 MeetingRraining Expense Reimbursement Union Bank of California 65251 2,267.44 Banking Services United Parcel Service 65252 331.54 Freight Services United Parcel Service 65382 455.74 Freight Services US Equipment Co.,Inc. 65253 307.74 Repair&Maintenance Services and/or Supplies US Peroxide,L.L.C. 65105 45,757.24 Chemicals,WatedWastember Treatment US Peroxide,L.L.C. 65290 26,935.86 Chemicals,Water/Wastevreter Treatment V&A Consulting Engineers 65383 1,575.00 Prof esslabel Services Vapex Products,Inc. 65254 15,732.59 ElectricaVElectronic Equipment,Pads&Repairs Vaughans Industrial Repair Co Inc 65255 4,998.61 Repair&Maintenance Services and/or Supplies Verbs/ink 65256 858.75 Human Resources Services Verne's Plumbing 65257 3,010.00 Plumbing Services&Supplies Verne's Plumbing 65384 860.00 Plumbing Services&Supplies Veterinary Pet Insurance Company 65385 858.61 Employee Voluntary Benefits Vossler&Company 65258 2,443.91 Repair&Maintenance Services anchor Supplies MR Scientific Products 65259 171.72 Laboratory Services&Supplies MR Scientific Products 65386 3,445.46 Laboratory Services&Supplies Water Environment Federation 65260 202.00 Professional Organizations Meeflng/Tralning/Membership Water Environment Federation 65387 653.00 Professional Organizations MeetingRraining/Membership Waters Corporation 65261 476.48 Laboratory Services&Supplies Waxie Sanitary Supply 65262 116.33 Janitor&Household Service&Supplies EXHIBIT B nN2101n Page 6 of 7 anomie Claims Paid From W16/14 to 5/31/14 Vendor Warrant No. Amount Description Wesley G.Bauer,II 65267 269.0 Maet ngRraining Expanse Reimbursement West Lite Supply Company,Inc. 65263 504.94 Electrical/Electronic Equipment,Pads&Repairs West Lite Supply Company,Inc. 65388 75.37 Electrical/Electronic Equipment,Parts&Repairs WESTERN TOOL&SUPPLY,CO. 65389 3,396.02 Small Tools William D.Cassidy 65269 116.00 Professional Organizations Meeting/Training/Membership William D.Cassidy 65394 945.08 Professional Organizations Meeting/Training/Membership Wilmington Instrument Co.,Inc. 65390 676.72 Instrument Parts&Supplies Xerox Corporation 1778 129.43 Computers,Software/Hardware&Managed Services Yale/Chase Materials Handling,Inc. 65264 112.26 Electrical/Electronic Equipment,&Electric Cart Pads&Repairs Total Accounts Payable-Warrants $ 4,053,597.90 Payroll Disbursements Employee Paychecks 56221 - M249 $ 5,771.38 Interim Payroll-OCERS(5116/14) Employee Paychecks 562N - M279 69,818.15 Biweekly Payroll(5/28/14) Employee Paychecks 562M 56284 1,954.22 Interim Payroll-Intern Tenn Adj.(SOV14) Employee Paychecks 56285 1,503.04 Interim Payroll-Issue Ck for 5/28 PR(5/27/14) Employee Paychecks 562M - M308 3,865.50 Interim Payroll-AREA(5130114) Employee Paychecks 5009 679.04 Interim Payroll-Paid trisected hours(5/29/14) Direct Deposit Statements 354911 -355480 1,387,374.16 Biweekly Payroll(5/28/14) Direct Deposit Statements 355481 -355678 34,676.00 Interim Payroll-ARBA(5/30/14) Total Payroll Disbursements $ 1,505,641.49 0 Wire Transfer Payments OCSD Payroll Taxes&Contributions $ 782,725.69 Biweekly Payroll(5/28/14) W.M.Lyles 862,715.90 Construction P1-1011PP16(5/23/14) W.M.Lyles 715,112.W Construction P2-89/PP17(523(14) W.M.Lyles 326,453.25 Construction P1-112P2-101/PP4(523/14) Total Wire Transfer Payments $ 2,687,007.34 Total Claims Paid 5/16114-5131/14 $ 8,246,245,83 EXHIBIT B 0nrzi0nr Page 7 of 7 611pn1iv ITEM NO. 2 Orange County Sanitation District MINUTES BOARD MEETING May 28, 2014 1 SANITgTj�y Q ? ¢ e� o � Fcl�N HE ENv���� Administration Building 10844 Ellis Avenue Fountain Valley, California 92708-7018 0 512 812 01 4 Minutes of Board Meeting Page 1 of 13 ROLL CALL A regular meeting of the Board of Directors of the Orange County Sanitation District was held on May 28 2014, at 6:35 p.m., in the Administration Building. Chair Troy Edgar delivered the invocation and led the Pledge of Allegiance. The Clerk of the Board declared a quorum present as follows: ACTIVE DIRECTORS ALTERNATE DIRECTORS X Troy Edgar, Chair Richard Murphy X Tom Beamish, Vice Chair Rose Espinoza X David Benavides Sal Tinajero X Joe Carchio Dave Sullivan Steven Choi X Christina Shea X Keith Curry Rush Hill X Tyler Diep AI Krippner X James M. Ferryman Bob Ooten X Gene Hernandez John Anderson X Steven Jones Kris Beard Peter Kim X Gerard Goedhart X Lucille Kring Jordan Brandman X Michael Levitt Gordon Shanks X Brett Murdock Roy Moore X Steve Nagel Michael Vo X Prakash Narain Doug Bailey X Scott Nelson Constance Underhill X Janet Nguyen Shawn Nelson X John Nielsen Allan Bernstein X Brad Reese Greg Mills X Gregory Sebourn Jan Flory David Shawver Carol Warren X Fred Smith Steve Berry X Teresa Smith Mark Murphy X John Withers Douglas Reinhart STAFF MEMBERS PRESENT: Jim Herberg, General Manager; Bob Ghirelli, Assistant General Manager; Rob Thompson, Director of Engineering, Nick Arhontes, Director of Facilities Support Services; Lorenzo Tyner, Director of Finance & Administrative Services; Jeff Reed, Director of Human Resources; Maria E. Ayala, Clerk of the Board; Angela Brandt; Jennifer Cabral; Jim Colston; Gregg Deterding; Norbert Gaia; Ted Gerber; Mark Kawamoto; Kelly Lore Andrew Nau; Roya Sohanaki; Paul Spassoff; and Paula Zeller. OTHERS PRESENT: Brad Hogin, General Counsel and Bob Ooten (Alternate Director) 05/25/2014 Minutes of Board Meeting Page 2 of 13 SPECIAL PRESENTATIONS: Chair Troy Edgar and General Manager Jim Herberg presented Certificates of Commendation to the following agencies and their respective representatives as appreciation for their agency's collaborative work with the District over the last 60 years: National Water Research Institute - Jim Ferryman, NWRI Chairman Southern California Coastal Water Research Project- Ken Schiff, Deputy Director Rob Thompson, Director of Engineering presented 20 year service awards to Mark Kawamoto, Engineer and Paul M. Spassoff, Office Assistant. PUBLIC COMMENTS: None. REPORTS: General Manager Herberg reported on the following information: Informative Legislative Cards; Newport construction project; Award for fleet services, OCSD ranked 13" in North America; this month's Community outreach efforts - we hosted 14 groups including a delegation from Korea; and Honor Walk recipients who were approved by the Steering Committee. Chair Edgar reported on the following: OCSD/SAWPA Joint Policy Committee update and the upcoming Chino Basin Desalter tour; OCSD Honor Walk nominees: former employees Michael Heinz and Marshall Fairres and two previous Board Members, Steve Anderson, and Jim Silva; and the General Manager's Performance evaluation to be discussed at the next Steering Committee Meeting. Chair Edgar announced that when he steps down as Chair of the Board next month he will also be stepping off the Board. ELECTIONS: General Counsel Brad Hogin facilitated the election. 1. MOVED, SECONDED, AND DULY CARRIED: 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). 05/29/2014 Minutes of Board Meeting Page 3 of 13 Chair Troy Edgar nominated Tom Beamish as Board Chair to be effective July 1, 2014. Director Reese seconded. There were no further nominations. AYES: Beamish; Benavides; Carchio; Edgar; Ferryman; Goedhart (Alternate) Hernandez; Jones; Kring; Levitt; Murdock; Nagel; Narain; Nelson; Nguyen; Nielsen; Reese; Sebourn; Shea (Alternate); F. Smith; T. Smith and Withers. NOES: None ABSTENTIONS: None ABSENT: Curry; Diep and Shawver 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). Vice-Chair Tom Beamish nominated John Nielsen as Board Vice-Chair to be effective July 1, 2014. Director Ferryman seconded. There were no further nominations. AYES: Beamish; Benavides; Carchio; Edgar; Ferryman; Goedhart (Alternate) Hernandez; Jones; Kring; Levitt; Murdock; Nagel; Narain; Nelson; Nguyen; Nielsen; Reese; Sebourn; Shea (Alternate); F. Smith; T. Smith and Withers. NOES: None ABSTENTIONS: None ABSENT: Curry; Diep and Shawver 05/29/2014 Minutes of Board Meeting Page 4 of 13 RATIFICATION OF PAYMENT OF CLAIMS: 2. MOVED, SECONDED, AND DULY CARRIED: Ratify payment of claims of the District, by roll call vote, as follows: Claims Paid for the Period Ending: 04/15/14 04/30/14 Totals $ 6,412,873.43 $ 12,774,929.70 AYES: Beamish; Benavides; Carchio; Edgar; Ferryman; Goedhart (Alternate) Hernandez; Jones; Kring; Levitt; Murdock; Nagel; Narain; Nelson; Nguyen; Nielsen; Reese; Shea (Alternate); F. Smith; and Withers. NOES: None ABSTENTIONS: Nguyen; Nielsen; Sebourn and T. Smith ABSENT: Curry; Diep and Shawver CONSENT CALENDAR: 3. MOVED, SECONDED, AND DULY CARRIED: Approve minutes for the Regular Board Meeting held on April 23, 2014. AYES: Beamish; Benavides; Carchio; Edgar; Ferryman; Goedhart (Alternate) Hernandez; Jones; Kring; Levitt; Murdock; Nagel; Narain; Nelson; Nguyen; Nielsen; Reese; Sebourn; Shea (Alternate); F. Smith; T. Smith and Withers. NOES: None ABSTENTIONS: None ABSENT: Curry; Diep and Shawver 4. MOVED, SECONDED, AND DULY CARRIED: A. Receive and file bid tabulation and recommendation; and B. Award a construction contract to W.M. Lyles, Co. for Activated Sludge Facility 2 Aeration Basin Effluent Splitter Box Modification, Contract No. P1-102A, for a total amount not to exceed $273,908; and C. Approve a contingency of$54,782 (20%). 05/29/2014 Minutes of Board Meeting Page 5 of 13 AYES: Beamish; Benavides; Carchio; Edgar; Ferryman; Goedhart (Alternate) Hernandez; Jones; Kring; Levitt; Murdock; Nagel; Narain; Nelson; Nguyen; Nielsen; Reese; Sebourn; Shea (Alternate); F. Smith; T. Smith and Withers. NOES: None ABSTENTIONS: None ABSENT: Curry; Diep and Shawver 5. MOVED, SECONDED, AND DULY CARRIED: Adopt Resolution No. OCSD 14-05, authorizing Financial and Legal Commitment of Funding Agreement and Related Documents for Funding under the U.S. Bureau of Reclamation, Water 2025, directing staff to apply for a grant up to $450,000 for the Effluent Reuse Study, Project No. SP-173. AYES: Beamish; Benavides; Carchio; Edgar; Ferryman; Goedhart (Alternate) Hernandez; Jones; Kring; Levitt; Murdock; Nagel; Narain; Nelson; Nguyen; Nielsen; Reese; Sebourn; Shea (Alternate); F. Smith; T. Smith and Withers. NOES: None ABSTENTIONS: None ABSENT: Curry; Diep and Shawver OPERATIONS COMMITTEE: 6. MOVED, SECONDED, AND DULY CARRIED: Approve minutes for the Committee Meeting held on May 7, 2014. AYES: Beamish; Benavides; Carchio; Edgar; Ferryman; Goedhart (Alternate) Hernandez; Jones; Kring; Levitt; Murdock; Nagel; Narain; Nelson; Nguyen; Nielsen; Reese; Sebourn; Shea (Alternate); F. Smith; T. Smith and Withers. NOES: None ABSTENTIONS: None ABSENT: Curry; Diep and Shawver O6 B12014 Minutes of Board Meeting Page 6 of 13 7. MOVED, SECONDED, AND DULY CARRIED: Approve a three-year Memorandum of Understanding with California State University, Fullerton Auxiliary Services Corporation for Operation of the Center for Demographic Research, for the period July 1, 2014 through June 30, 2017, for a total amount not to exceed $239,344. AYES: Beamish; Benavides; Carchio; Edgar; Ferryman; Goedhart (Alternate) Hernandez; Jones; Kring; Levitt; Murdock; Nagel; Narain; Nelson; Nguyen; Nielsen; Reese; Sebourn; Shea (Alternate); F. Smith; T. Smith and Withers. NOES: None ABSTENTIONS: None ABSENT: Curry; Diep and Shawver 8. MOVED, SECONDED, AND DULY CARRIED: A. Terminate the agreement of May 1, 2007, between OCSD and SCCWRP, which provided use of OCSD laboratory facilities; and B. Direct the General Manager of OCSD to notify the Executive Director of SCCWRP of the decision to terminate this agreement effective three months from the date of the notice. AYES: Beamish; Benavides; Carchio; Edgar; Ferryman; Goedhart (Alternate) Hernandez; Jones; Kring; Levitt; Murdock; Nagel; Narain; Nelson; Nguyen; Nielsen; Reese; Sebourn; Shea (Alternate); F. Smith; T. Smith and Withers. NOES: None ABSTENTIONS: None ABSENT: Curry; Diep and Shawver 9. MOVED, SECONDED, AND DULY CARRIED: A. Approve Change Order No. 2 to Purchase Order 104627-OB to Olin Chlor Alkali Products, for the Purchase of sodium hypochlorite, Specification No. C-2012-536 authorizing a unit price increase of $0.05 per gallon for a new total unit price of$0.489/gallon delivered, plus applicable sales tax, for the 05/29/2014 Minutes of Board Meeting Page 7 of 13 period beginning September 1, 2014 through August 31, 2015, and for all subsequent contract renewal periods; and B. Approve a 10% annual unit price contingency. AYES: Beamish; Benavides; Carchio; Edgar; Ferryman; Goedhart (Alternate) Hernandez; Jones; Kring; Levitt; Murdock; Nagel; Narain; Nelson; Nguyen; Nielsen; Reese; Sebourn; Shea (Alternate); F. Smith; T. Smith and Withers. NOES: None ABSTENTIONS: None ABSENT: Curry; Diep and Shawver 10. MOVED, SECONDED, AND DULY CARRIED: A. Award a Contract to Polydyne Inc. for the purchase of Cationic Polymer, Specification No. C-2013-59113D, for a unit price of $2.425 per active pound delivered for Solution Polymer (WE-192) plus applicable sales tax, and $2.225 per active pound delivered for Mannich Polymer (C-331) plus applicable sales tax, and $2.929 per active pound delivered for Emulsion Polymer (WE-1233) plus applicable sales tax, and $2.643 per active pound delivered for Emulsion Polymer (WE-1328) plus applicable sales tax, for a total estimated amount of $1,650,100 for the period July 1, 2014 through June 30, 2015, with four one-year renewal options; and B. Approve a 10% annual unit price contingency. AYES: Beamish; Benavides; Carchio; Edgar; Ferryman; Goedhart (Alternate) Hernandez; Jones; Kring; Levitt; Murdock; Nagel; Narain; Nelson; Nguyen; Nielsen; Reese; Sebourn; Shea (Alternate); F. Smith; T. Smith and Withers. NOES: None ABSTENTIONS: None ABSENT: Curry; Diep and Shawver 05/29/2014 Minutes of Board Meeting Page 8 of 13 11. MOVED, SECONDED, AND DULY CARRIED: A. Approve Amendment No. 6 to the Professional Design Services Agreement with Tetra Tech, Inc., providing for additional engineering services for Gisler-Redhill System Improvements, Reach B, Contract No. 7-37, for an additional amount of$416,000 increasing the total amount not to exceed $1,475,479; and B. Approve a contingency increase for an additional amount of$73,774 (5%). AYES: Beamish; Benavides; Carchio; Edgar; Ferryman; Goedhart (Alternate) Hernandez; Jones; Kring; Levitt; Murdock; Nagel; Narain; Nelson; Nguyen; Nielsen; Reese; Sebourn; Shea (Alternate); F. Smith; T. Smith and Withers. NOES: None ABSTENTIONS: None ABSENT: Curry; Diep and Shawver ADMINISTRATION COMMITTEE - CONSENT: 12. MOVED, SECONDED, AND DULY CARRIED: Approve minutes for the Committee Meeting held on May 14, 2014. AYES: Beamish; Benavides; Carchio; Edgar; Ferryman; Goedhart (Alternate) Hernandez; Jones; Kring; Levitt; Murdock; Nagel; Narain; Nelson; Nguyen; Nielsen; Reese; Sebourn; Shea (Alternate); F. Smith; T. Smith and Withers. NOES: None ABSTENTIONS: None ABSENT: Curry; Diep and Shawver 13. MOVED, SECONDED, AND DULY CARRIED: Approve not-to-exceed numbers as follows, with the understanding that the 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: A. Excess liability insurance - $390,224; and B. Excess workers compensation insurance - a rate of $0.3408 per $100 of payroll (estimated premium at $223,000); and 05/29/2014 Minutes of Board Meeting Page 9 of 13 C. Property and Boiler & Machinery combined - $705,830. AYES: Beamish; Benavides; Carchio; Edgar; Ferryman; Goedhart (Alternate) Hernandez; Jones; Kring; Levitt; Murdock; Nagel; Narain; Nelson; Nguyen; Nielsen; Reese; Sebourn; Shea (Alternate); F. Smith; T. Smith and Withers. NOES: None ABSTENTIONS: None ABSENT: Curry; Diep and Shawver 14. MOVED, SECONDED, AND DULY CARRIED: A. Authorize the General Manager to enter into contracts for Temporary Employment Services (Specification No.CS-2009421BD) for a one-year period (July 1, 2014 through June 30, 2015), for a total amount not to exceed $550,000 per year, with a 5% annual aggregate escalation factor, with four one-year renewal options; and B. Authorize the General Manager to add or delete such firms as necessary to meet work requirements as identified by the Human Resources Department. AYES: Beamish; Benavides; Carchio; Edgar; Ferryman; Goedhart (Alternate) Hernandez; Jones; Kring; Levitt; Murdock; Nagel; Narain; Nelson; Nguyen; Nielsen; Reese; Sebourn; Shea (Alternate); F. Smith; T. Smith and Withers. NOES: None ABSTENTIONS: None ABSENT: Curry; Diep and Shawver ADMINISTRATION COMMITTEE - NON-CONSENT: 15. MOVED, SECONDED, AND DULY CARRIED: A. Introduce Ordinance No. OCSD-46, entitled "An Ordinance of the Board of Directors of the Orange County Sanitation District amending Section 2.03 of Article II of Ordinance No. OCSD41 concerning rebates and refunds of Sanitary Sewer Service Charges." 05/29/2014 Minutes of Board Meeting Page 10 of 13 AYES: Beamish; Benavides; Carchio; Edgar; Ferryman; Goedhart (Alternate) Hernandez; Jones; Kring; Levitt; Murdock; Nagel; Narain; Nelson; Nielsen; Reese; Sebourn; Shea (Alternate); F. Smith; T. Smith and Withers. NOES: Nguyen ABSTENTIONS: None ABSENT: Curry; Diep and Shawver MOVED, SECONDED, AND DULY CARRIED: B. Motion to read Ordinance No. OCSD46 by title only and waive reading of said entire Ordinance on May 28, 2014; and C. Set June 25, 2014 as the date for the second reading and adoption of Ordinance No. OCSD-46; and D. Direct the Clerk of the Board to publish summaries of the Ordinance as required by law. AYES: Beamish; Benavides; Carchio; Edgar; Ferryman; Goedhart (Alternate) Hernandez; Jones; Kring; Levitt; Murdock; Nagel; Narain; Nelson; Nielsen; Reese; Sebourn; Shea (Alternate); F. Smith; T. Smith and Withers. NOES: Nguyen ABSTENTIONS: None ABSENT: Curry; Diep and Shawver STEERING COMMITTEE: 16. MOVED, SECONDED, AND DULY CARRIED: Approve minutes for the Steering Committee Meeting held on April 23, 2014. AYES: Beamish; Benavides; Carchio; Edgar; Ferryman; Goedhart (Alternate) Hernandez; Jones; Kring; Levitt; Murdock; Nagel; Narain; Nelson; Nguyen; Nielsen; Reese; Sebourn; Shea (Alternate); F. Smith; T. Smith and Withers. 05/29/2014 Minutes of Board Meeting Page 11 of 13 NOES: None ABSTENTIONS: None ABSENT: Curry; Diep and Shawver 17. MOVED, SECONDED, AND DULY CARRIED: Authorize the General Manager or his designee to vote on behalf of the Orange County Sanitation District in support of the California Association of Sanitation Agencies' new bylaws via ballot due on June 16, 2014. AYES: Beamish; Benavides; Carchio; Edgar; Ferryman; Goedhart (Alternate) Hernandez; Jones; Kring; Levitt; Murdock; Nagel; Narain; Nelson; Nguyen; Nielsen; Reese; Sebourn; Shea (Alternate); F. Smith; T. Smith and Withers. NOES: None ABSTENTIONS: None ABSENT: Curry; Diep and Shawver LEGISLATIVE AND PUBLIC AFFAIRS SPECIAL COMMITTEE: 18. MOVED, SECONDED, AND DULY CARRIED: Receive and file the minutes of the May 12, 2014 meeting of the Legislative and Public Affairs Special Committee. AYES: Beamish; Benavides; Carchio; Edgar; Ferryman; Goedhart (Alternate) Hernandez; Jones; Kring; Levitt; Murdock; Nagel; Narain; Nelson; Nguyen; Nielsen; Reese; Sebourn; Shea (Alternate); F. Smith; T. Smith and Withers. NOES: None ABSTENTIONS: None ABSENT: Curry; Diep and Shawver Chair Edgar presented a brief update to the Board on Legislative matters including: Advisability of rebranding the Sanitation District to emphasize "clean water" rather"waste water" and District Governance Bill SB946. Director Curry arrived at 7:10 p.m. 05/29/2014 Minutes of Board Meeting Page 12 of 13 AB 1234 REPORTS: Director Ferryman reported on his recent meetings as part of the following Boards: • SARFPA; OCCOG; and NWRI. CLOSED SESSION CONVENED IN CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTIONS: 54956.9(d)(1)(2)(4)) The Board convened in closed session at 7:14 p.m. to discuss five items. Confidential minutes of the Closed Session have been prepared in accordance with the above Government Code Sections and are maintained by the Clerk of the Board in the Official Book of Confidential Minutes of Board and Committee Closed Meetings. Director Janet Nguyen left the meeting at 7:27 p.m. RECONVENED IN REGULAR SESSION: The Committee reconvened in regular session at 7:51 p.m. Consideration of action, if any, on matters considered in closed session. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: Chair Edgar thanked staff for the great job they did with the State to the District event. He also asked everyone to try to make it to the Honor Walk Ceremony prior to next month's Board Meeting. ADJOURNMENT: The Chair adjourned the meeting at 7:52 p.m., until the next Regular Board Meeting on June 25, 2014 at 6:30 p.m. Kelly A. Lore, Secretary Pro Tem 05/29/2014 Minutes of Board Meeting Page 13 of 13 BOARD OF DIRECTORS Meeting Date TOBA.MDir. Ofi/25/14 AGENDA REPORT ItemNumber Item Numbe 3 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: SANTA ANA TRUNK SEWER REHABILITATION, PROJECT NO. 1-17 GENERAL MANAGER'S RECOMMENDATION A. Receive and file Addendum No. 3 to the Collection System Improvement Plan Program Environmental Impact Report for additional project analysis supporting the Santa Ana Trunk Sewer Rehabilitation, Project No. 1-17; B. Receive and file bid tabulation and recommendation; C. Award a construction contract to Charles King Company, Inc., Project No. 1-17, for a total amount not to exceed $2,619,188; and D. Approve a contingency of$235,727 (9%). SUMMARY The purpose of this project is to rehabilitate the Santa Ana Trunk Sewer located in the cities of Santa Ana and Costa Mesa. The Santa Ana Trunk Sewer was constructed in 1952. The upstream end of the Santa Ana Trunk Sewer begins at the intersection of Alton Avenue and Bristol Street in Santa Ana and the downstream end discharges into Orange County Sanitation District (Sanitation District) Plant No. 1 in Fountain Valley. The sewer is primarily within the Alton Avenue right-of-way; however, there are segments within Ellis Avenue, Orange County Flood Control (including the Santa Ana River), 405 freeway, railroad right-of-way, and Costa Mesa's Business District. The pipe consists of approximately 5,600 linear feet of 42-inch and 11,700 linear feet of 48-inch diameter unlined reinforced concrete pipe. This project will rehabilitate about 1,000 feet of the Santa Ana Trunk Sewer. The remaining portions are in good condition and will be re-evaluated every five years. Brown & Caldwell completed the plans and specifications for Santa Ana Trunk Sewer Rehabilitation, Project No. 1-17, in November 2013. The Sanitation District advertised for bids on February 19, 2014. Two sealed bids were received on April 24, 2014. The bids were evaluated in accordance with the Sanitation District's policies and procedures. Charles King Company, Inc. was deemed the lowest responsive, responsible bidder. Page 1 of 3 Staff recommends awarding a construction contract to Charles King Company, Inc., for Santa Ana Trunk Sewer Rehabilitation, Project No. 1-17, for a total amount not to exceed $2,619,188. Summary information on the bid opening for Santa Ana Trunk Sewer Rehabilitation, Project No. 1-17, is as follows: Project Budget $ 7,519,000 Construction Contract Budget $ 2,969,156 Engineer's Estimate $ 2,647,333 Lowest Responsive, Responsible Bid $ 2,664,188 High Bid $ 3,349,830 Bidder Amount of Bid Charles King Company, Inc. $ 2,664,188 Steve P. Rados $ 3,349,830 PRIOR COMMITTEE/BOARD ACTIONS None. ADDITIONAL INFORMATION The Sanitation District has designated the following item by specific brand or trade name pursuant to Public Contract Code §3400 (c)(3) in order to obtain a necessary item that is only available from one source. Item Specification Section T-Lock 06620 Plastic Liner (Polyvinyl Chloride) CEQA Santa Ana Trunk Sewer Rehabilitation, Project No. 1-17, is within the scope of the Program Environmental Impact Report (PEIR) for the Collection System Improvement Plan, SCH# 2006101018, certified in June 2007. Pursuant to CEQA Guidelines section 15168(c)(4), the Sanitation District has prepared an addendum to the PEIR to cover sections that needed further analyzes; air quality and greenhouse gas emissions which was not included in the original PEIR. After reviewing the facts and analyzing the circumstances, staff has determined that these issue areas are of no substantial change since the certification of the Final PEIR for the Collection System Improvement Plan. Page 2 of 3 BUDGET/PURCHASING ORDINANCE COMPLIANCE This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted (FY2013-14 Update, Page A-7, Item 2) and the budget is sufficient for the recommended action. Date of Approval Contract Amount Contingency 06/25/14 $2,619,188 $235,727(9%) ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (wwwocsd.com) with the complete agenda package and attachments: • Addendum to the Program Environmental Impact Report for the Collections System Improvement Plan • Construction Contract RT:MD:dm:gc Page 3 of 3 ADDENDUM TO FINAL PROGRAM ENVIRONMENTAL IMPACT REPORT COLLECTION SYSTEM IMPROVEMENT PLAN ORANGE COUNTY SANITATION DISTRICT(MARCH 2O07) SCH#2006101018 SANTA ANA TRUNK SEWER REHABILIATION PROJECT (PROJECT NO. 1-17) 1.0 INTRODUCTION 1.1 Project Description The Santa Ana Trunk Scwcr(SATS)consists of rehabilitating of a section of the existing Santa Ana Trunk Sewer from Bristol Street in Santa Ana to OCSD's Rcclamation Plant No. 1 in Fountain Valley. Cured-in-place pipe (CIPP)is the recommcndcd lining method and existing manholes will be used without the need for insertion pits and associated excavation and repaving requirements. A Condition Assessment Report (CAR) indicated that rehabilitation of the existing siphons underlying the Santa Ana River,the Greenville Banning Channel,and the Santa Ana Gardens Channel,will not be necessary as originally mentioned in the PEIR. Manhole rehabilitation is to be extended to 39 structures and individual improvements for each manhole were identified. Based on the results of the CAR and an additional pipe coring investigation, the first phase of rehabilitation of the SATS and associated manholes,siphons,and junction structures was refined further during the final design phase of the project. The first phase of rehabilitation of the SATS pipeline and associated structures includes the following: 1. Construction of a new diversion at the Sunflower and Cadillac Avenue intersection to convey flow from SATS to the Sunflower Interceptor (SI). Note that this diversion will be used for gravity flow bypassing that will facilitate future OCSD Operations and Maintenance(O&M) processes as well as construction of item 4 and rehabilitation of manhole SAN 0045 discussed below. 2. Rehabilitation of 16 circular manholes. 3. Rehabilitation of six junction structures 4. Rehabilitation of approximately 1,000 linear feet of 48-inch SATS line using cured-in-place pipe (CIPP). Minor excavation of about 1 foot immediately around the manholes will be required for replacement of the frames and covers at all manholes and junction structures (total of 22 frames and covers). In addition, the area above two junction structures will require excavation of approximately 1,600 cubic feet of material. The new diversion structure and junction structure at the Sunflower and Cadillac Avenue intersection will result in the excavation of approximately 14,000 cubic feet of material in an existing right of way with various utility crossings. 1.2 Purpose and Scope The California Environmental Quality Act (CEQA) requires public agencies to analyze and consider the environmental consequences of their decisions to approve development projects over which they exercise discretion. CEQA achieves this objective by requiring agencies to prepare Environmental Impact Reports (EIRs) for projects with the potential to cause significant impacts on the physical environment. EIRs are public documents that assess environmental effects related to the planning, construction, and operation of a project,and indicate ways to reduce or avoid possible environmental damage. An EIR also discloses growth-inducing impacts, effects found not to be 1 April 2014 significant,significant cumulative impacts,and significant impacts that cannot be avoided,if any.The purpose of an EIR is to inform.EIRs are not policy documents that recommend project approval or denial. As lead agency, the Orange County Sanitation District (OCSD) prepared a Program Environmental Impact Report (PEIR) for the OCSD Collection System Improvement Plan in compliance with the California Environmental Quality Act (CEQA) (Public Resources Code, section 21000 et seq.) and the State CEQA Guidelines (California Code of Regulations, Section 15000 et seq.,as amended). In accordance with the State CEQA Guidelines,the Draft PEIR was prepared and distributed to public agencies and the general public by the OCSD on March 15,2007, for a 45-day public review period. A Notice of Availability (NOA) for public review was posted at the Orange County Clerk's Office, a public notice was published in the Orange County Register on March 16, 2007, and a Notice of Completion(NOC)was filed with the State Clearinghouse of the Governor's Office of Planning and Research. The notices included a list of locations where the document was available for public review. Public comments on the Draft PEIR were also solicited at a public hearing that was held on April 3, 2007. No substantive comments on content of the Draft PEIR or significant environmental issues related to the proposed Plan were raised at the public hearing. On August 22, 2007, the County Board of Supervisors certified the PEIR, made findings, adopted a Statement of Overriding Considerations,adopted a Mitigation Monitoring and Reporting Program,and approved the Collection System Improvement Plan, Sob No. 7-61. The OCSD filed the Notice of Determination on August 23, 2007. The Project was one of 19 Collection System improvement projects analyzed in the PEIR (PEIR, p. 2-2.). The Project is therefore a subsequent activity within the scope of the PEIR. (CEQA Guidelines § 15168). Subsequent activities in a PEIR must be examined in light of the PEIR to determine whether an additional environmental document must be prepared. (CEQA Guidelines§ 15168(c).) Public Resources Code Section 21166 limits the ability of an agency to require an additional EIR,once one has been certified for a project. Section 21166 provides as follows: 21166. Subsequent or Supplemental Impact Report;Conditions. When an environmental impact report has been prepared for a project pursuant to this division, no subsequent or supplemental environmental impact report shall be required by the lead agency or by any responsible agency,unless one or more of the following events occurs: (a) Substantial changes are proposed in the project which will require major revisions of the environmental impact report. (b) Substantial changes occur with respect to the circumstances under which the project is being undertaken which will require major revisions in the environmental impact report. (c) New information, which was not known and could not have been known at the time the environmental impact report was certified as complete,becomes available. The CEQA Guidelines further refine the circumstances under which a supplemental or subsequent EIR may be required.Guidelines Section 15162 provides as follows: 15162. Subsequent EIRs and Negative Declarations. (a)When an EIR has been certified or negative declaration adopted for a project,no subsequent EIR shall be prepared for that project unless the lead agency determines,on the basis of substantial evidence in the light of the whole record,one or more of the following: (I) Substantial changes are proposed in the project which will require major revisions of the previous EIR or negative declaration due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects; (2) Substantial changes occur with respect to the circumstances under which the project is undertaken which will require major revisions of the previous EIR or negative declaration due to the 2 April 2014 involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects;or (3) New information of substantial importance, which was not known and could not have been known with the exercise of reasonable diligence at the time the previous EIR,was certified as complete or the negative declaration was adopted,shows any of the following: (A) The project will have one or more significant effects not discussed in the previous PEIR or negative declaration; (B) Significant effects previously examined will be substantially more severe than shown in the previous PEIR; (C) Mitigation measures or alternatives previously found not to be feasible would in fact be feasible and would substantially reduce one or more significant effects of the project, but the project proponents decline to adopt the mitigation measure or alternative;or (D)Mitigation measures or alternatives which are considerably different from those analyzed in the previous PEIR would substantially reduce one or more significant effects on the environment, but the project proponents decline to adopt the mitigation measure or alternative. In reviewing the Project details, OCSD staff identified two topics that merit evaluation since certification of the PEIR. These are: (1) short-term, project-specific air quality impacts; and (2) greenhouse gas emissions impacts. After reviewing the facts and analyzing the circumstances, OCSD staff has determined that none of the circumstances described in Public Resources Code Section 21166 as implemented by CEQA Guidelines Section 15162 have occurred. Staff has prepared this addendum, and the initial study prepared concurrently with this addendum,to discuss these issues and document the basis for this determination. The initial study is attached hereto as Appendix A. 2.0 AIR QUALITY The OCSD Collection System Improvement Plan PEIR described the existing air quality regarding the following regulated pollutants: ozone (03), carbon monoxide (CO), suspended particulate matter (PM10), nitrogen oxides (NOx), sulfur dioxide (SOr), lead, and reactive organic gases (ROG). The project site is located in the Orange County portion of the South Coast Air Basin (SCAB). Table 2-1 shows the pollutants and associated attainment status for SCAB. Orange County is designated as a federal and state non-attainment area for 03,PMiu, and PMrs, maintenance for CO,and an attainment area for SO,NOt,and lead. An Air Quality and Climate Change Technical Memorandum for the Project is included as Appendix B to this Addendum to provide technical support for the following analysis. 2.1 Regulatory Setting The South Coast Air Quality Management District(SCAQMD)is the regional agency responsible for the regulation and enforcement of Federal, State, and local air pollution control regulations in the SCAB. The SCAQMD has the responsibility of ensuring that Federal and State ambient air quality standards are achieved,maintained and enforced in the SCAB. SCAQMD rules and regulations require that any equipment that emits or controls air contaminants be permitted prior to construction,installation, or operation(Permit to Construct or Permit to Operate).The SCAQMD also has visible emissions, nuisance, and fugitive dust regulations which are applicable to the Project during construction activities. These specific regulations include SCAQMD Rule 401 (Visible Emissions); SCAQMD Rule 402 (Nuisance); and SCAQMD Rule 403 (Fugitive Dust). The intent of these rules is to limit the amount of visible emissions and fugitive dust generated from emission sources and to ensure emitted pollutants do not cause a public nuisance. SCAQMD Rule 403 provides control measures to reduce overall fugitive dust emissions from construction activities. Based on the description of the construction activities for the Project,the amount of soil to be excavated, and the acreage of the disturbed areas,the Project does not classify as a "large operation."However, to minimize fugitive dust emissions, feasible fugitive dust control measures as stated in the applicable rules would be implemented as Applicant Proposed Measures(APMs)to reduce potential impacts to off-site receptors(SCAQMD, 2009a).PEIR Mitigation Measure 3.2-2 also addresses fugifive dust emissions. 3 April 2014 2.2 Methodology Construction emissions from the operation of diesel-fueled off-road equipment were estimated by multiplying peak daily usage by equipment-specific emission factors. Horsepower-based composite factors,with built-in load factors, were utilized to estimate peak daily emissions. The emission factors were obtained from the SCAQMD's website (SCAQMD 2011) and represent the fleet-wide average emission factors during 2013 within the SCAB. Criteria pollutant emissions from on-road motor vehicles were estimated using California Air Resource Board's (CARB) On-Road EMFAC2011 mobile source emission factors,obtained from the EMFAC2011 model output. Peak daily emissions include both onsite and offsite emissions; onsite emission are generated by sources within the footprint of the project site; offsite emission are generated by sources such as vendor haul trips due to import or export of construction materials. 2.3 Significance of Impacts Air quality impacts during construction of the Project are presented in Table 2-1 below. Peak daily construction emissions are summarized and are also compared to the established SCAQMD regional mass daily emission thresholds and localized significance thresholds(LSTs)for construction. Table la: Peak Daily Criteria Pollutant Summary(lb/clay) Criteria Pollutants, Iblda Equipment Type ROG CO NOX SOX PM10 PM2.5 Onsde Offroad Equipment 1.24 7.36 10.13 0.02 0.49 0.45 Onroad Equipment 0.03 0.19 0.15 0.00 0.01 0.01 Offsite Onroad Equipment 0.16 1.46 0.29 0.00 0.02 0.02 Ritiliforial Intriact Evaluation Total Daily Emissions 1.42 9.01 10.57 0.02 0.52 0.47 Regional Thresholds 75 550 too 150 150 55 Exceed Regional Thresholds (YIN)? No No No No No No Localized Impact Evaluation Total Daily Offsite Emission t 0.16 1.46 0.29 0.00 0.02 0.02 Localized Significance Thresholds 647 92 4 3 Exceed LST Y/N ? No No No No No No 1.0114 conversion b CO2 based an global w ming xAenbal GWP d21. 2.4 Application of CEQA Guidelines Would the project conflict with or obstruct implementation of the applicable air quality plan? Air emissions in the SCAB are regulated by the SCAQMD. Pursuant to the federal Clean Air Act (CAA), the SCAQMD is required to reduce emissions of criteria pollutants for which the SCAB is in non-attainment. Strategies to achieve these emission reductions are developed in SCAQMD's Air Quality Management Plan(AQMP) for the region. Chapter 3 of the AQMP states,"future emissions forecasts are based on demographic and economic growth projections provided by the Southern California Association of Governments (SCAG)P The Project will not conflict with or obstruct implementation of any applicable air quality plans or regulations because project emissions 4 April 2014 are below established thresholds as noted in the Table IA. The regions currently exceeds standards for ozone and PM2,5, the most significant sources of these pollutants are vehicle and other mobile source emissions. No new impacts associated with the implementation of an air quality plan would occur. Would the project violate any air quality standard or contribute substantially to an existing or projected air quality violation? The South Coast region is currently in non-attainment with air quality standards for ozone and PMt,s.The Project is not expected to result in significantly increased air emissions. Based on this air quality analysis,potential emissions from truck traffic associated with this project would represent insignificant sources of pollutants contributing to the overall PMi 5 emissions. Nonetheless,because the South Coast wished is a nonattainment area for PMr,s,mitigation should be employed to minimize particulate emissions during rehabilitation operations. Mitigation Measures 3.2-1 and 3.2-2 from the PEIR are specific to air quality. No new impacts associated with the violation of air quality standards would occur. Would the project result in a cumulatively considerable net increase of any criteria pollutant for which the project region is non-attainment under an applicable federal or state ambient air quality standard (including releasing emissions,which exceed quantitative thresholds for ozone precursors)? In evaluating the activities described in the certified PEIR OCSD had concluded that short-term cumulative impacts related to air quality would remain significant after mitigation. When combined with construction of the reasonably foreseeable future projects, construction emissions we anticipated to exceed significance thresholds for NO,. Because air emissions typically are considered on a regional basis, any project being constructed in the general vicinity of the proposed collection system improvement projects during the same construction timeframe likely would contribute to potentially significant cumulative air quality impacts. Nonetheless, Mitigation Measures 3.2-1 and 3.2-2 in PEIR are still incorporated into the Project. No new impacts associated with a cumulative net increase of criteria pollutants would occur. Would the project expose sensitive receptors to substantial pollutant concentrations? Sensitive receptors in the Project area include a business complex, a residential track,two churches, a school, and a park. As stated in the PEIR,the temporary increase in emissions of criteria air pollutants during construction would not be expected to exceed SCAQMD-established air quality thresholds for the Project. Emissions associated with operational activities would be minimal and are not anticipated to result in long-term operational impacts that conflict with SCAQMD-established air quality standards. Therefore,the Project would not have a significant impact to sensitive receptors during construction or operation. Would the project create objectionable odors affecting a substantial number ofpeople? The Project would be expected to create some objectionable odors as a result of modification of the existing sewer lines. Currently, OCSD investigates and tracks all odor complaints, performing cleaning and/or repairs as appropriate, and would continue this practice. As part of its operational activity, OCSD injects sodium hydroxide, hydrogen peroxide, ferrous chloride, and magnesium hydroxide at various locations in the collection system to control odor. Construction contractors are required to follow a site-specific odor control plan to minimize odors during rehabilitation activities. Odor control could include monitoring, ventilating, chemical application, material containment limiting atmospheric exposure, and activity staging to minimize odor impacts. Therefore, impacts associated with the creation of objectionable odors affecting a substantial number of people would be considered less than significant. 2.4.1 SUMMARY OF PROJECT COMPARISON TO PEIR FINDINGS Is there substantial evidence in the record revealing that there have been substantial changes proposed in the project which will require major revisions of the previous PEIR due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects with respect to air quality? 5 April 2014 Based on the foregoing analysis and project information, the initial study prepared concurrently with this Addendum,there is no evidence that the changes to the Project require a major change to the certified OCSD PEIR. The Project would not result in any new significant environmental impact or a substantial increase in the severity of impacts from those described in the certified OCSD PEIR. Is there substantial evidence in the record revealing that there have been substantial changes with respect to the circumstances under which the project is undertaken which will require major revisions of the previous PEIR due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects as a result of recent developments with respect to the regulatory environment on air quality? No. Based on the foregoing analysis and project information in the initial study prepared concurrently with this Addendum, there is no evidence suggesting that there have been substantial changes to the circumstances under which the project is undertaken as discussed in the PEIR- Is there substantial evidence in the record revealing that there is new information of substantial importance related to the recent developments relating to the regulatory environment an issues of air quality, which was not known and could not have been known with the exercise of reasonable diligence at the time the previous PEIR was certified that shows: (1) the project will have one or more significant effects not discussed in the PEIR, (2) significant effects previously shown will be substantially more severe that shown in the previous PEIR, (3) mitigation measure or alternatives previously found to be infeasible would in fact be feasible, or (4) there are considerably different mitigation measures or alternatives from those analyzed in the previous PEIR that would substantially reduce one or more significant effects? This Addendum and the initial study have analyzed all available relevant information and has determined that there is no new information of substantial importance, that was unknown and could not have been known with the exercise of reasonable diligence at the time the OCSD PEIR was certified indicating that: (1) the Project would have one or more significant effects not discussed in the PEIR, (2) significant effects previously examined will be substantially more severe than shown in the PEIR„ (3) mitigation measures or alternatives previously found not to be feasible would in fact be feasible, or (4) mitigation measures or alternatives considerably different from those analyzed in the PEIR would substantially reduce one or more significant effects. 3.0 GLOBAL CLIMATE CHANGE The certified PEIR did not contain a greenhouse gas (GHG) emissions analysis, as it was not industry practice in 2007 to routinely perform such an analysis. Since that time, however, analysis of GHG's is now required, and new checklist questions were approved for inclusion in the CEQA Guidelines as of March 18, 2010. Therefore, GHG emissions are now considered in the environmental analysis for the Project.This analysis is undertaken to determine if the Project would result in adverse impacts in relation to GHG emissions. An Air Quality and Climate Change Technical Memorandum for the Project is included in Appendix B of this Addendum to provide technical support for the following analysis. Global climate change refers to changes in average climatic conditions on Earth as a whole, including temperature, wind patterns, precipitation and storms. Global temperatures are moderated by naturally occurring atmospheric gases, including water vapor, carbon dioxide (CO2), methane(CH4) and nitrous oxide(N20). These gases allow solar radiation (sunlight) into the Earth's atmosphere, but prevent radiative heat from escaping, thus wanting the Earth's atmosphere. Global climate change attributable to the emission of greenhouse gases ("GHG") (mainly CO2, CH4 and N20) generated by human activity is currently one of the most important and widely debated scientific, economic and political issues in the United States.Historical records indicate that global climate changes have occurred in the past due to natural phenomena(such as during previous ice ages). Some data indicate that the current global conditions differ from past climate changes in rate and magnitude.These data have led political leaders to take actions designed to reduce GHG emissions generated by human activity. 6 April 2014 Carbon dioxide is the most abundant GHG. GHGs are the result of both natural and human activity. Forest fires, decomposition, industrial processes, landfills, and consumption of fossil fuels for power generation, transportation, heating, and cooking are the primary sources of GHG emissions. According to the California Energy Commission (CEC), emissions from fossil fuel consumption represent approximately 81 percent of GHG emissions and transportation creates 41 percent of GHG emissions in California. The scientific understanding of the fundamental processes responsible for global climate change has improved over the past decade, and predictive capabilities are advancing. However, there remain significant uncertainties, for example,in predictions of local effects of climate change,occurrence of extreme weather events,effects of aerosols, changes in clouds,shifts in the intensity and distribution of precipitation,and changes in oceanic circulation. Due to the complexity of the Earth's climate system,the uncertainty surrounding climate change may never be completely eliminated. Because of these uncertainties, there continues to be significant debate with respect to the appropriate actions to limit and/or respond to climate change. In addition, it is impossible to link a single development project with future specific climate change impacts. 3.1 Regulatory Setting 3.1.1 FEDERAL PLANS,POLICIES,REGULATIONS,AND LAWS The U.S. Environmental Protection Agency(EPA) is the Federal agency responsible for implementing the Federal Clean Air Act(CAA).The Supreme Court of the United States rated on April 2,2007 that COx is an air pollutant as defined under the CAA, and that EPA has the authority to regulate emissions of GHCs. However, there are no Federal regulations or policies regarding GHG emissions that are directly applicable to the Project or that require additional analysis for compliance with the regulations listed below. 3.1.2 STATE PLANS,POLICIES,REGULATIONS,AND LAWS The California Air Resources Board(CARB) is the agency responsible for coordination and oversight of state and local air pollution control programs.Various statewide and local initiatives to reduce the state's contribution to GHG emissions have raised awareness that, even though the various contributors to, and consequences of, global climate change are not yet fully understood, global climate change is under way, and there is a real potential for severe, adverse environmental,social,and economic effects in the long term Assembly Bill 1493 In 2002, then-Governor Gray Davis signed AB 1493, which required that ARB develop and adopt, by January 1, 2005,regulations that achieve"the maximum feasible reduction of GHGs emitted by passenger vehicles and light- duty trucks and other vehicles determined by ARB to be vehicles whose primary use is noncommercial personal transportation in the state." To meet the requirements of AB 1493, in 2004 ARB approved amendments to the California Code of Regulations(CCR)adding GHG emissions standards to California's existing standards for motor vehicle emissions. These amendments require automobile manufacturers to meet fleet-average GHG emissions limits for all passenger can, light-duty trucks within various weight criteria, and medium-duty passenger vehicle weight classes (i.e, any medium-duty vehicle with a gross vehicle weight (GV W) rating less than 10,000 pounds that is designed primarily for the transportation of persons),beginning with the 2009 model year.For passenger cars and light-duty trucks with a loaded vehicle weight(LV W)of 3,750 pounds or less,the GHG emission limits for the 2016 model year are approximately 37 percent lower than the limits for the first year of the regulations, the 2009 model year. For light-duty trucks with LV W of 3,751 pounds to GV W of 8,500 pounds, as well as medium-duty passenger vehicles,GHG emissions will be reduced approximately 24 percent between 2009 and 2016. On January 24, 2011, the U.S. Department of Transportation (DOT), the EPA and the state of California announced a single timefiame for proposing fuel economy and greenhouse gas standards for model year 2017-2025 cars and light-duty trucks.The standards require these vehicles to meet an estimated combined average emissions level of 250 grams of carbon dioxide per mile in model year 2016,which is equivalent to 35.5 miles per gallon. Executive Order 5-3-05 7 April 2014 In 2005, in recognition of California's vulnerability to the effects of climate change, Governor Schwarzenegger established Executive Order S-3-05,which sets forth a series of target dates by which statewide emission of GHGs would be progressively reduced, as follows; by 2010,reduce GHG emissions to 2000 levels;by 2020,reduce GHG emissions to 1990 levels;and by 2050,reduce GHG emissions to 80 percent below 1990 levels. Assembly Bill 32 In September 2006,Governor Arnold Schwarzenegger signed AB 32,the California Global Warming Solutions Act of 2006.AB 32 establishes regulatory,reporting,and market mechanisms to achieve quantifiable reductions in GHG emissions and a cap on statewide GHG emissions.AB 32 requires that statewide GHG emissions be reduced to 1990 levels by 2020. In December 2007,ARE approved the 2020 emission limit(1990 level) of 427 million metric tons (MMT) CO2e. The goal requires that California reduce COw emissions by 169 million metric tons (MMT), or approximately 30%,from the state's projected 2020 emissions level of 596 MMT of CO2c under a business-as-usual scenario. Executive Order S-1-07 Executive Order S-1-07,which was signed by Governor Schwarzenegger in 2007, proclaims that the transportation sector is the main source of GHG emissions in California,at over 40 percent of statewide emissions. It establishes a goal that the carbon intensity of transportation fuels sold in California should be reduced by a minimum of 10 percent by 2020.This order also directed ARB to determine if this Low Carbon Fuel Standard could be adopted as a discrete,early-action measure after meeting the mandates in AB 32.ARB adopted the Low Carbon Fuel Standard on April 23,2009. Senate Bill 97 SB 97, signed August 2007, acknowledges that climate change is a prominent environmental issue that requires analysis under CEQA. This bill directs the California Office of Planning and Research (OPR)to prepare, develop, and transmit to the Resources Agency guidelines for the feasible mitigation of GHG emissions or the effects of GHG emissions, as required by CEQA by July 1, 2009. The California Natural Resources Agency is required to certify or adopt those guidelines by January 1, 2010. On April 13, 2009, the California Office of Planning and Research submitted to the Secretary for Natural Resources its proposed amendments to the state CEQA Guidelines for GHG emissions, as required by SB 97. On December 30, 2009, the Natural Resources Agency adopted the proposed CEQA Guidelines amendments,as required by SB 97.The amendments became effective March 18,2010. 3.1.3 REGIONAL AND LOCAL PLANS,POLICIES,REGULATIONS,AND LAWS The SCAQMD monitors air quality within the project area and SCAB,which includes Orange County and portions of Los Angeles, Riverside, and San Bernardino counties. SCAB is bounded by the Pacific Ocean to the west; the San Gabriel, San Bernardino and San Jacinto Mountains to the north and east;and the San Diego County line to the south. The SCAQMD also has jurisdiction over the Salton Sea Air Basin and a portion of the Mojave Desert in Riverside County. SCAQMD has not adopted any rules or regulations specific to global climate change or GHG emissions that are applicable to the Project. 3.2 Methodology GHG emissions generated by the Project would predominantly be in the form of carbon dioxide (Cod and would occur primarily due to combustion sources including construction equipment and on- and off-road vehicle trips. GHG emissions from construction equipment were quantified using spreadsheets populated with horsepower-based composite emission factors, with built-in load factors. The emission factors were obtained from the SCAQMD's website (SCAQMD 2011) and represent the fleet-wide average emission factors during 2014 within the SCAB. GHG emissions from on-road motor vehicles were estimated using CARB's On-Road EMFAC2011 mobile source emission factors,obtained from the EMFAC2011 model output. 3.3 Significance of Impacts The previously certified PEIR did not contain an analysis of global climate change and GHG emissions. As mentioned earlier, amendments to the State CEQA Guidelines for climate change analyses became effective in March 2010. Therefore, climate change analyses were not necessarily required or included in environmental documents prior to this time. 8 April2014 There are currently two interim significance thresholds for GHG emissions, established by SCAQMD and CARB. The SCAQMD adopted an interim threshold of 10,000 metric tons of carbon dioxide equivalent per year (MTCOte/yr) for industrial projects, including both stationary and mobile source-related emissions (with construction impacts amortized over a 30-year period, plus operational impacts). The CARR interim threshold, which has been proposed but not yet been adopted, is 7,000 MTCOte/yr for non-transportation GHG emission sources, and includes interim performance standard requirements for construction equipment(which have yet to be defined). The SCAQMD interim threshold for industrial projects has been used for this analysis because it applies to mobile source emissions,which is the emission source for the Project construction activities. The analysis quantifies the annual GHG emissions that will result from project-related mobile sources during construction, and compares them to SCAQMD's Interim CEQA GHG Significance Threshold of 10,000 MTCO2e/yr.The SCAQMD's interim threshold may be used to evaluate climate change impacts from GHG emissions generated during construction and operation from stationary and transportation-related sources for proposed projects undergoing CEQA review, as described in the Draft Guidance Document — Interim CEQA Greenhouse Gas(GHG)Significance Threshold(SCAQMD 2008). As presented in Table 3-1, GHG emissions generated during construction would increase as a result of the proposed activities described above. However, the incremental increase would be less than 64.3 metric tons of carbon dioxide equivalents per year(MTCO2e/yr)and therefore would be less than significant. Source i Core Emissions Total Project CO,Emissions During Construction,MTCOze/Pro'ect 1 64.3 Amortized Construction GHG over a 30- ear period),MTCO2e/30- 2.1 SCAQMD Interim GHG Threshold for Industrial Projects 1 10,000 Would the project exceed the SCAQMD interim threshold? No Notes: 1. Dmiled emission calculafions are presented in Attachment 1. Somme: MMeledb Rands AbuShsban,2013 3.4 Application of CEQA Guidelines Would the project generate greenhouse gas emissions, either directly or indirectly, that may have a significant impact on the environment? Implementation of the Project would generate greenhouse gases through the construction and routine maintenance of the Project. GHG emissions from the Project would specifically arise from the temporary direct sources, such as motor vehicles and construction related diesel equipment. Emissions from these sources were estimated using the CaIEEMod model based on default emission factors and land use consumption and generation rates. Emissions of greenhouse gases are presented in terms of metric tons of CO2 equivalents (MTCO2e). CO2e is the combination of all greenhouse gas impacts when normalized by comparing the effects of the impacts of each individual gas to that of a reference gas(CO2). This metric allows for the representation of greenhouse gas impacts as a single number. Table 3-1 shows the estimated GHG emissions with respect to the Project. It should be noted that the mitigation measures identified in the certified Air Quality section of the PEIR serve to reduce fugitive dust pollutants and would not reduce GHG emissions. As such, the GHG emissions identified in Table 3-1 reflect the estimated emissions without the incorporation of mitigation identified in the certified PEER. Based on these calculations, the Project would result in emissions of 64.3 MT CO2e/year and,therefore,would be below the SCAQMD's screening-level threshold. Rehabilitation construction and operation of the Project GHG emissions would be well below screening thresholds.The impact of the Project would be less than significant and no mitigation is required. Would the project conflict with any applicable plan,policy,or regulation adopted for the purpose of reducing the emissions ofgreenhouse gases? 9 April 2014 The County Board of Supervisors adopted a countywide energy and environmental policy (Policy No. 3.045) to provide guidelines for development, implementation, and enhancement of energy-conservation and environmental programs within the County.AB 32 established the goal of reducing GHG emissions in California to 1990 levels by 2020. The proposed SCAQMD screening-level thresholds are designed such that a 90 percent capture rate is achieved. This 90 percent capture rate means that 90 percent of all development projects would need to incorporate some form of emission reductions in order to reduce emissions. These rates are established to be compliant with the AB 32 threshold of reducing GHG emissions to 1990 levels by 2020. The Project's GHG emissions would be below all screening-level thresholds, and thus would not conflict with AB 32 and Policy No. 3.045. Because the Project is compliant with the SCAQMD screening tables and would comply with all regulatory requirements related to GHG emissions, the Project would not conflict with plans, policies or regulations adopted to reduce emissions of greenhouse gases. The impact of the Project would be less than significant and no mitigation is required. 4.0 BASIS FOR DECISION TO PREPARE AN ADDENDUM CEQA Guidelines Section 15164 explains when an addendum to an EIR shall be prepared: 15164. Addendum to an EIR or Negative Declaration. (a) The lead agency or a responsible agency shall prepare an addendum to a previously certified EIR if some changes or additions are necessary but none of the conditions described in Section 15162 calling for preparation of a subsequent EIR have occurred. (b) An addendum to an adopted negative declaration may be prepared if only minor technical changes or additions are necessary or none of the conditions described in Section15162 calling for the preparation of a subsequent EIR or negative declaration have occurred. (c) An addendum need not be circulated for public review but can be included in or attached to the final EIR or adopted negative declaration. (d) The decision-making body shall consider the addendum with the final EIR or adopted negative declaration prior to making a decision on the project. (e) A brief explanation of the decision not to prepare a subsequent EIR pursuant to Section 15162 should be included in an addendum to a PEIR,the lead agency's required findings on the project,or elsewhere in the record.The explanation most be supported by substantial evidence." 5.0 DETERMINATION Based on the information and analysis in this Addendum, and the initial study prepared concurrently with this Addendum,pursuant to Section 15162 of the State CEQA Guidelines the OCSD has determined that 1. There are no substantial changes to the Project that will require major revisions to the PEIR due to the involvement of new significant environmental effects or a substantial increase in the severity of significant impacts previously identified in the PEIR; 2. Substantial changes have not occurred in the circumstances under which the Project is being undertaken that will require major revisions of the PEIR due ro the involvement of new significant environmental effects or a substantial increase in the severity of significant impacts previously identified in the PEIR;and 10 April 2014 3. There is no new information of substantial importance which was not known and could not have been known at the time the PEIR was certified that shows any of the following: a) The Project will have one or more new significant effects not discussed in the PEIR; b) Significant effects previously examined will be substantially more severe than shown in the PEIR; c) Mitigation measures or alternatives previously found not to be feasible would in fact be feasible, and would substantially reduce one or more significant effects of the Project;or d) Mitigation measures or alternatives which are considerably different from those analyzed in the PEIR would substantially reduce one or more significant effects on the environment. 6.0 ORGANIZATIONS AND PERSONS CONSULTED 6.1 Preparers Orange County Sanitation District(Lead Agency) Engineering Department Randa AbuShaban Associate Engineer(Air Quality specialist) Daisy Covartubias Senior Staff Analysts 7.0 REFERENCES Orange County Sanitation District,March,2007. Program Environmental Impact Report, Collection System Improvement Plan. Prepared by Integrated Program Management Systems(IPMS) AECOM, 2013. Balboa Trunk Sewer Rehabilitation Project Air Quality and GHG Impact Analysis Tech Memo. Prepared by AECOM 11 April 2014 APPENDIX A CEQA Initial Study 12 April2014 Project 1-17:SATS Rehabilitation • Condition Assessment Report Appendix B Discussion of Environmental Checklist A Program Environmental Impact Report(PEIR)was completed on the Orange County Sanitation District (OCSD)Collection System Improvement Plan (Plan) in 2007. Pursuant to California Environmental Quality Act(CEQA)Section 15168(c), as Plan projects are to be implemented like the Santa Ana Trunk Sewer Rehabilitation Project(Project),these subsequent activities must be examined in light of the PER to determine whether any new environmental effects will occur. If pursuant to CEQA Guidelines Section 15162, a later activity would have new effects that were not examined in the PEIR,a new initial study would need to be prepared Ieadingto either an EIR or a negative declaration. If pursuant to CEQA Guidelines Section 15162, no new effects could occur or no new mitigation measures would be required,the later activity may be approved as being within the scope of the project covered by the PEIR, and no new environmental document would be required. Project Description In the PEIR,the Project was described as rehabilitation of a section of the existing Santa Ana Trunk Sewer from Bristol Street in Santa Ana to OCSD's Reclamation Plant No. 1 in Fountain Valley.The scope of the Project included rehabilitation of about 33 concrete manholes,and about 17,000 feet of unlined 42-,48-,and 66-inch-diameter concrete pipe.A liner would be installed in the pipe by either slip lining, cured-in-place pipe(CIPP),or modified cross-section liner.Sewer lining would either be installed through existing manholes with no excavation,or through the use of insertion pits where limited excavation would be required along the alignment. During preliminary design of the Project, as represented in the Condition Assessment Report(CAR),there has been some refinement of design details.The start and end points of the Project remained unchanged, but CIPP was the recommended lining method and existing manholes would be used without the need for insertion pits and associated excavation and repaving requirements. Rehabilitation of the existing siphons underlying the Santa Ana River,the Greenville Banning Channel, and the Santa Ana Gardens Channel,will not be necessary. Manhole rehabilitation was to be extended to 39 structures and individual improvements for each manhole were identified. Based on the results of the CAR and an additional pipe coring investigation,the first phase of rehabilitation of the SATS and associated manholes,siphons,and junction structures was refined further during the final design phase of the project. The first phase of rehabilitation of the SATS pipeline and associated structures includes the following: 1. Construction of a new diversion at the Sunflower and Cadillac Avenue intersection to convey flow from SATS to the Sunflower Interceptor(SI). Note that this diversion will be used for gravity flow bypassing that will facilitate future OCSD Operations and Maintenance (0&M) processes as well as construction of item 4 and rehabilitation of manhole SAN 0045 discussed below. 2. Rehabilitation of 16 circular manholes. 3. Rehabilitation of sixjunction structures 4. Rehabilitation of approximately 1,000 linear feet of 48-inch SATS line using cured-in-place pipe (CIPP). - B-i 1-17 En—nmen[al Cheoklin 48.14 tlou Project 1-17:SATS Rehabilitation • Condition Assessment Report Appendix B Minor excavation of about 1 foot immediately around the manholes will be required for replacement of the frames and covers at all manholes and junction structures(total of 22 frames and covers). In addition,the area above two junction structures will require excavation of approximately 1,600 cubic feet of material The new diversion structure and junction structure at the Sunflower and Cadillac Avenue intersection will result in the excavation of approximately 14,000 cubic feet of material in an existing right of way with various utility crossings. Pumped flow bypassing is not anticipated to be necessary for completion of this work. Checklist Format and Conclusions Each resource category in the Environmental Checklist is discussed below.The structure of the discussion is divided into three sections:a summary of the PER evaluation, a summary of the checklist review, and a conclusion whether new environmental effects not examined in the PER have been identified.All feasible mitigation measures from the PER have been incorporated into the project design pursuant to CEQA Guidelines Section 15168(c). Based on the Environmental Checklist review, no new effects have been identified and OCSD can approve the Project as being within the scope of the Project as covered in the PER An Addendum to the PER will be prepared accordingly. C B-2 1-17 En—nmental CM1eoklist 48.14 Jonx Project 1-17:SATS Rehabilitation • Condition Assessment Report Appendix H A. Aesthetics Significance Criteria LessThan Resource Category/ Potentially Significant with LessThan Significance Criteria Significant Mitigation Significant No Impact Impact Incorporated Impact Would the Project: 1. Have a substantial adverse effect an a memo vista? ❑ ❑ ❑ 0 2. Substantially damage scenic resources,including,but not limited to, trial mck,outcroppings,and Mature buildings within a state or ❑ ❑ ❑ ❑p County scenic highway or County-designated scenic mad? 3. Substantially degrade the existing visual share orqualiry of the site ❑ ❑ ❑ 159 and its surroundings that are open to all av; d. Croatia a new soume of substantial light or glare that would adversely ❑ ❑ ❑ 0 affect day or nigbtdme views in the area? PEIR The Initial Study for the Plan (Initial Study,September 2006)determined the plan would not have any significant aesthetic impacts.Accordingly,the PER did not address aesthetic impacts. Checklist Review The proposed Project is a short-term construction activity within the pipeline right-of-way with no permanent above-ground features. No significant aesthetic impacts will occur. New Environmental Effects None. e e B-3 1-17 Environmental Choi 08.10 Jonx Project 1-17:SATS Rehabilitation • Condition Assessment Report Appendix B B. Agriculture and Forest Resources Significance Criteria Potentially LessThan Resource Category/ Significant with LessThan Significance Criteria Significant Mitigation Significant No Impact Impact Incorporated Impact Would the Project: 1. Convert Prime Farmland,Unique Farmland,or Farmland of Statewide Importance(Farmland),as shown on the maps prepared pursuant ❑ ❑ ❑ IR the Farmland Mapping and Monitoring Program of the California Resources Agency,to non-agrioultural use? 2. Comilla with existing zoning for agricultuml use,or a Williamson Act ❑ ❑ ❑ Oa contral l7 3. Conflict with"sung mining for,or cause morning of,forest land(as defined in Public Resources Code section 122201 or timberland(as ❑ ❑ ❑ 0 defined in Public Resources Code section 4526)? 4. Result in the loss of forest land or conversion of forest land to non- ❑ ❑ ❑ 19 forest use? 5. Involve other changes in the existing environment,which,due to their location or nature,could result in conversion of Farmland,to non- ❑ ❑ ❑ 0 agria0ural use or conversion of forest land to non-forest use? PEIR The Initial Study for the Plan determined no significant agricultural impacts will occur. Accordingly,the PER did not address agricultural impacts. Checklist Review The proposed Project will occur within the pipeline right-of-way in an urbanized environment. No agricultural orforest resource impacts will occur. New Environmental Effects None. BJ 1-17 Environmental Choi 48.14 Jonx Project 1-17:SATS Rehabilitation • Condition Assessment Report Appendix S C. Air Quality Significance Criteria LessThan Resource Category/ Potentially Significant with LessThan Significance Criteria Significant Mitigation Significant No Impact Impact Incorporated Impact Would the Project: 1. Conflict with or obstruct implementation of the applicable air quality ❑ ❑ ❑ 159 plan? 2. Violate any air quality standard or contribute substantially to an ❑ ® ❑ ❑ existing or projected air quality violation? 3. Result in a cumulatively considerable net increase of any criteria pollutant forwhich the project region is non-attainment under an applicable federal or state ambient air quality standard(including ❑ 17 ❑ ❑ releasing emissions,which exceed quantitative thresholds foromne precursors)? 4. &pose sensitive receptorsto substantial pollutantconcentrations? ❑ ❑ ® ❑ 5. Create objectionable odors affecting a substantial number of people? ❑ ❑ ® 1 ❑ PEIR The PEIR addressed air quality and odor impacts.Air quality construction impacts were evaluated for excavation,sewer installation, and paving relative to compliance with criteria pollutant emission thresholds from the South Coast Air Quality Management District(SCAQMD). For the proposed Project, the PER assumed sewer lining by either sliplining, CIPP, or modified cross-section liner and that lining can be installed through existing manholes with no excavation or insertion pits with excavation.The PER determined that criteria pollutant emissions for the Project would be below the significance thresholds but when grouped with three other Plan projects assumed to be constructed in 2008 (Raiff and Bristol Street, District 6,and Bayside projects)with the proposed Project,the threshold for oxides of nitrogen (NOx)would be exceeded (128 Ibs/day versus a threshold of 100 Ibs/day). Even with mitigation, constructed related NO.emissions would be significant and unavoidable. Operational air quality inputs from routine sewer line maintenance activities were less than significant. Mitigation measures were identified and incorporated into the PER. The PER determined that each of the Plan projects would be expected to create some objectionable odors as a result of sewer line modification but the impact would be less than significant. OCSD uses chemical addition to control odor, and the Project contractor would follow a site-specific odor control plan during construction,which would include monitoring,ventilating, chemical application, material containment limiting atmospheric exposure, and activity staging. Checklist Review Since 2007, OCSD's projected implementation schedule for various Plan projects has changed.The proposed Project will be constructed in 2013, not 2008, and two other Plan projects(Miller-Holder and Browning Sewer projects)would occur at the same time, not three. Based on data in the PER, maximum daily NOx emissions would be reduced from 128 to 93 Ibs/day, which is below the SCAQMD threshold of 100 Ibs/day. There may be some localized increase in odor levels when the manholes are opened during pipeline rehabilitation,wastewater diversion,and when the manholes are repaired but the effect should be B-5 1-17 Environmental Chocklis, 08.10 Jorx Project 1-17:SATS Rehabilitation • Condition Assessment Report Appendix B minimal and not affect a substantial number of people. During recent manhole inspection activities, when manhole covers were removed, odors were reportedly minimal and not an issue. Duringthe Project, as described in the PEIR,the Contractor will be required to implement necessary controls for odor abatement. No significant odor impacts will occur. New Environmental Effects None.The significant unavoidable NO„impact will be reduced to less than significant with mitigation. D. Biological Resources Significance Criteria Potentially LessTham Resource Category/ Significant with LessThan Significanoe Criteria Significant mitigation Significant No Impact Impact Incorporated Impact Would the Project: 1. Have a substantial adverse effect,either directly or through habitat modifications,on any species identified as a candidate,sensitive,or special status species in local or regional plans,policies or regulations, ❑ ❑ ❑ ❑p or by the California Department of Fish&Game or U.S.Fish and Wildlife Services? 2. Have a substantial adverse effect on any riparian habilmorother sensitive natural community identified in local or regional plans, ❑ ❑ ❑ policies,regulations,or by the California Department of Fish and Game 19 or U.S.Fish and Wildlife Service? 3. Have a substantial adverse effect on federally protected wetlands as defined by Section 404 of the Clean Water Act(including,but not ❑ ❑ ❑ limited to,marsh,vernal pool,coastal,etc.)through direct removal, 19 filling,hydrological interruption,or other means? 4. Interfere substantially with the movement of any native resident or migratory fish or wildlife species or with established native resident or ❑ ❑ ❑ migratory wildlife corridors,or impede the use of native wildlife nursery sites? 5. Conflict with any local policies or ordinances protecting biological ❑ ❑ ❑ resources,such as a tree preservation policy or ordinance? 6. Confiict with provisions of an adopted Habitat Conservation Plan, Natural Community Conservation Plan,or other approved local, ❑ ❑ regional,or state habffat conservation plan? PEIR The PEIR evaluated biological resources within Orange County and the OCSD service area, noting that the service area comprises predominantly densely urbanized, residential, commercial, and industrial developments.The project construction activities will be located approximately 120 feet from the Santa Ana River,approximately 20 feet from the Greenville Banning Channel,and approximately 30 feet from the Santa Ana Gardens Channel. Potential impacts to biological resources would be largely limited to areas of naturalized habitat and tidal estuarine communities which are associated with several of the Plan projects, but not the proposed Project. In those more sensitive areas, mitigation is provided to address special status species and jurisdictional habitats such as wetlands. a a B-6 1-17 Envlmnmental Cheoklisr 48.14 Jou Project 1-17:SATS Rehabilitation • Condition Assessment Report Appendix B Checklist Review The Project alignment has not changed from that presented in the PER. Rehabilitation will occur within the pipeline right-of-way in an urbanized environment. No areas of natural habitat exist within or nearthe Project alignment that would support sensitive natural communities such as riparian habitat or wetlands; associated candidate,sensitive,orspecial-status species; or areasthatwould serve as wildlife movement corridors. Surface water courses typically have sensitive biological resources associated with them, butfor the proposed Project alignmentthe Santa Ana River is channelized with vertical walls and both the Greenville Banning Channel and Santa Ana Gardens Channel are within concrete culverts. No biological impacts will occur. New Environmental Effects None. E. Cultural Resources Significance Criteria Potentially LessThan Resource Category/ Significantwith LessThan Significance Criteria Significant miti 9'tion Significant No Impact Impact Incorporated Impact Would the Project: 1. Cause a substantial adverse change in the significance ofa historical O O Os resource as defined in§15064.59 2. Cause a substantial adverse change in the significance ofan 0 11 0 IN archaeological resource pursuanito§15064.59 3. Directly or indirectly destroy a unique paleontological resource orsite gq or unique geologic feature of paleontological orcultural value? 11 4. Disturb any human remains,including those interred outside offormal 0 0 0 119 cametodes? PEIR The PEIR provided an overview of archaeological and paleontological resources within Orange County and the OCSD service area. Four general areas of archaeological sensitivity and five general areas of paleontological sensitivity were identified within the OCSD Service area.The proposed Project is along the northern fringe of the Lower Santa Ana River Mouth Archaeological Area but not near sensitive paleontological areas. For Plan projects within these sensitive areas,the PER recommended additional resource investigations during preliminary design and procedures to follow if resources are encountered during excavation. Checklist Review The proposed Project is minimally intrusive.As discussed above,deeper excavations will be performed for construction of the new diversion and junction structures, but they will be over the existing pipeline alignment which likely contains varying amounts of imported fill deposited when the pipeline was installed in the 1950s. No cultural resource impacts will occur as the work is taking place over previously disturbed areas. B-7 1-17 Envlmnmental Checklla-48.14 Jou Project 1-17:SATS Rehabilitation • Condition Assessment Report Appendix B New Environmental Effects None.The limited excavations forjunction structure rehabilitation and the new diversion and junction structures will be over the pipeline and mostly within the existing right-of-way,other excavations will be shallow,therefore the risk of encountering cultural resources is negligible and no new effects will occur. F. Geology and Soils Significance Criteria Potentially LessThan Len Than Resource Category Significant with Significance Criteria Significant mitigation Significant No Impact Impact Incorporated Impact Would the Project: 1. Expose people or structures to potential substantial adverse effects, including the risk of loss,injury,or death involving: a. Rupture of known earthquake fault,as delineated on the most recent Alquist-Pdolo Earthquake Fault Zoning Map issued by the State Geologist for the area or based on other substantial evidence ❑ © ❑ ❑ of a known fault? Refer to Division of Mines and Geology Special Publication 42. b. Strongseismic ground shaking? ❑ ® ❑ ❑ c. Seismic-related ground failure,including liquefaction? ❑ p ❑ ❑ d. Landslides? ❑ ❑ ® ❑ 2. Result in substantial soil erosion,silta0on,changes in topography and the loss of topsoil or unstable soil conditions from excavation,grading ❑ ❑ ® ❑ orfll? 3. Be located on a geologic unit or soil Mat is unstable,or Mat would become unstable as a result of the project,and potentially result in on. ❑ ® ❑ ❑ or off-site landslide,lateral spreading,subsidence,liquefaction or collapse? 4. Be located on expansive soil,as defined in Table 161 of Me uniform ❑ ❑ ® ❑ Building Code(2001),creating substantial risks to life or property? 5. Have soils incapable of adequately supporting the use of septic tanks or alternative wastewater disposal systems where sewers are not ❑ ❑ ❑ 0 available for the disposal of wastewater? PER The PER addressed issues associated with seismicity and ground shaking, liquefaction, and settlement. It was noted that impacts would be less than significant if pipeline design and construction are in accordance with current engineering practices, including California Building Code, OCSD specifications and requirements,and all applicable seismic engineering guidelines. Furthermore,the PER indicated that pipeline rehabilitation would be likely to improve the seismic reliability of the existing pipelines. B-B 1-17 Envbonmental Checklist 48.14 Jonx Project 1-17:SATS Rehabilitation • Condition Assessment Report Appendix B Checklist Review Pipeline rehabilitation will improve this segment of the Santa Ana Trunk Sewer. Project excavations will be minimal and not to depth,they will conform to all applicable engineering standards and practices for worker and property protection. Excavations greater than 5 feet deep must conform to Cal OSHA requirements for worker safety. Geotechnical evaluations were performed during the condition assessment phase of the project,and then supplemented that data with an additional geotechnical investigation in the area of the diversion/junction structure during the final design phase. The geotechnical recommendations were considered in the project design, and both of these investigations were incorporated into the Contract Documents GR Attachment B-01. New Environmental Effects None. G. Greenhouse Gas Emissions Significance Criteria Potentially LessThan Resource Category Significant with LessThan Significance,Criteria Significant Mitigation Significant No Impact Impact Incorporated Impact Would the Project: 1. Generate greenhouse gas emissions,either directly or indirectly,that ❑ ❑ ❑ 1 may have a significant impacton the environment? 2. Conflict with any applicable plan,policy,or regulation of an agency adopted for the purpose of reducing the emissions of greenhouse ❑ ❑ ❑ fill gal PEIR No analysis. Checklist Review The greenhouse gas(GHG) emission resource category became a CEQA requirement of Initial Studies and EIRs on January 1, 2010,after the PER was prepared and certified.According to Steve Smith, Program Supervisor of the CEQA Section for the SCAQMD(August 4, 2011),current SCAQMD guidance is for CEQA documents to quantify and analyze GHG construction emissions. However, because the proposed Project is tiering off a PEIR that was prepared and certified before development of such guidance,there is no requirement to address GHG emissions as a new issue. Nonetheless, in order to fully analyze and disclose the Project's potential environmental consequences, OCSD has analyzed the Project's potential GHG emissions impacts.The project would not emit GHG above the significance threshold of 10,000 metric tons per year.The impact would be less than significant.An Addendum to the PEIR will be prepared accordingly. New Environmental Effects None. B-9 1-17 Environmental Choi 48.14 Jonx Project 1-17:SATS Rehabilitation • Condition Assessment Report Appendix B H. Hazards and Hazardous Materials Significance Criteria Potentially LessThan Resource Category Significant with LessThan Significance Criteria Significant mitigation Significant No Impact Impact Incorporated Impact Would the Project: 1. Create a significant hazard to the public or the environment though the ❑ ® ❑ ❑ routine transport,use,or disposal of hazardous materials? 2. Create a significant hazard to the public,or the environment through reasonably foreseeable upset and accident condifershoolving the ❑ IN ❑ ❑ release of hazardous materials into the environment or risk explosion? 3. Emit hazardous emissions or handle hazardous or acutely hazardous materials,substances,orwaste within one-quarter mile of an existing ❑ ® ❑ ❑ or proposed school? d. Be located on a site which is included on a list ofhazardousmaterials 99 sites compiled pursuant to Government Code Section 65962.5 and,as ❑ ❑ ❑ a result.would it create a significant hazard to the public orthe environment? 5. Fora project located within an airport land use plan or,where such plan has not been adapted,within 2 miles of a public airport,would theIN ❑ ❑ ❑ project result in a safety hazard for people residing or working in the project area? 6. Fora project within the vicinity of a private airship,would the project result in a safety hazard for people residing orworking in the project ❑ ❑ ❑ 99 area? 7. Impair implementation of or physically interfere with an adopted ❑ ® ❑ ❑ emergency response plan or emergency evacuation plan? B. &pose people or structures to significant risk of loss,injury or death involving wild land fires,including where wild lands are adjacent to ❑ ❑ ❑ 99 urbanized areas or where residences are intermixed with wild lands? PER The PEIR recognized that operation of the collection system improvements would include use of hazardous materials for odor and corrosion control.Accordingly,the PER addressed hazards associated with the transportation,storage, accidental spill, and improper disposal of hazardous materials.The risk of encountering areas of contamination during excavation activities was also addressed. The use and storage of hazardous materials is regulated by local fire departments,Certified Uniform Program Agencies (CUPAs), and OSHA. Procedures would be followed to ensure proper handling and storage of hazardous materials to reduce the potential for spills and would include filing a Hazardous Materials Inventory and Business Emergency Plan with the Orange County Fire Authority for storage, equipping chemical delivery trucks with equipment to adequately contain and clean up any spill, and safety equipment and procedures for operation and maintenance workers. In the event of a spill, containment and cleanup would occur in conformance with the spill response and waste disposal procedures identified in the Material Safety Data Sheets and in the Business Emergency Plan. Disposal of hazardous waste generated as part of construction or operation activities would occur at a properly B-1O 1-17 Envbonmental Checklist 08.10 Jocx Project 1-17:SATS Rehabilitation • Condition Assessment Report Appendix B permitted facility in accordance with fed amland state laws. During design, a database screening would be completed to identify known contamination sites along the alignment which could impact excavation activities and applicable regulatory requirements would be followed to address areas of contamination. Checklist Review A record search was performed for contaminated sites by searching the following databases: htto://geotracker.swrcb.m.gov and DTSC's Cortese List. The database screenings yielded only a total of 5 open sites within one mile radius of the excavation area; however,the closest site was nearly 0.5 miles southwest of the excavation area and does not pose any risk to the excavation activities of this project due to this distance.Other traditional hazardous materials such as gasoline, diesel, oil, and paint would be used during construction but these would be properly handled as described in the PER. New Environmental Effects None. I. Hydrology and Water Quality Significance Criteria Resource Category Significant with Significance Criteria Significant mitigation Significant No Impact Impact Incorporated Impact Would the Project: I. Violate any water quality standards orwaste discharge requirements? ❑ 0 ❑ ❑ 2. Substantially deplete groundwater supplies or interfere substantially with groundwater recharge such that Mere would be a net deficit in aquifervolume or a lowering of Me local groundwater table level(e.g., ❑ ❑ ❑ 0 the production rate of preexisting nearby wells would drop to a level which would not support existing land uses or planned uses for which permits have been granted)? 3. Substantially alter the existing drainage pattern of the site or area, including through the alteration of the course of a stream or river,ina ❑ ❑ ❑ lia manner that would result in substantial erosion or siltation on or off site? 4. Substantially alter Me existing drainage pattern of Me site or area, including through the alteration of the course of a stream or river,or ❑ ❑ ❑ 0 substantially increase the rate or amount of surface mnoff in a manner that would result in flooding on or off site? 5. Create or contribute mnoffwaterwhich would exceed the capacity of existing or planned stmmwater drainage systems or provide substantial ❑ ❑ ❑ 101 addffional sources of polluted mnoff? fi. Otherwise substantially degrade water quality? ❑ ® ❑ ❑ 7. Place housing within a 100-year flood hazard area as mapped on federal Flood Hazard Boundary or Flood Insurance Rate Map or other ❑ ❑ ❑ 129 flood hazard delineation map? B. Place within a 100-year flood hazard area structures that would ❑ ❑ ❑ 0 impede or redirect flood flows? 9. Expose people or structures to a significant dsk of loss,injury or death involving funding as a result of the failure of a levee or dam,or ❑ ❑ ❑ 19 inundation by seiche,tsunami,or mudflm? B-11 1-17 Envlmnmental Checklls-4.9.14 Jonx Project 1-17:SATS Rehabilitation • Condition Assessment Report Appendix B PEIR Because construction activities would involve soil disturbance such as excavation and soil stockpiling, the PER addressed increased stormwater erosion and sedimentation to surface waters.The use of heavy equipment could also result in the addition of petroleum hydrocarbons,oils, and grease to stormwater flowing across areas of construction. For projects of less than 1 acre of disturbance, mitigation includes development and implementation of a Stormwater Pollution Control Plan with best management practices to prevent or minimize the introduction of sediments or pollutants into surface waters.The PER also recognized the possible need for construction dewatering activities and the requirement to comply with RWQCB regulations that govern such dischargers. Checklist Review Appropriate controls for addressing water quality impacts were addressed in the PER.The Project area is tributary to the Greenville Banning Flood Control Channel which joins the Santa Ana River about 5 miles downstream. It should be noted that minimal soil disturbance activities are associated with the Project and that the construction schedule (March 2013 to December 2013) is anticipated to avoid the bulk of the rainyseason,thus minimizingthe risk of pollutants Ieavingthe construction site with stormwater. New Environmental Effects None. J. Land Use and Planning Significance Criteria Potentially LessThan Resource Category/ Significantwith LessThan Significance,Criteria Significant Mitigation Significant No Impact Impact Incorporated Impact Would the Project: 1. Physically divide an established community? ❑ ❑ ❑ ❑p 2. Conflictwith any applicable land use plan,policy,orregulation ofan agency with jurisdiction overthe project(including,but not limited to, the general plan,specific plan,local coastal program,orzoning ❑ ® ❑ ❑ ordinance)adopted forthe purpose of avoiding ormitigatingan environmental effect? 3. Conflict with any applicable habitat conservation plan or natural ❑ ❑ ❑ communityconsewMion plan? B-12 1-17 Environmental Checklist 08.10 Jonx Project 1-17:SATS Rehabilitation • Condition Assessment Report Appendix B PEIR The PEIR addressed conflicts with any applicable land use plan, policy,or regulation of an agency with jurisdiction over project adopted for the purpose of avoiding or mitigating an environmental effect. Land uses along the proposed Project alignment were identified as commercial, industrial, residential, agricultural,transportation, utilities,two schools, and a place of worship.Various land use compatibility issues were analyzed. Mitigation measures identified in the PER included providing notices of construction to adjacent property owners, coordinating with local officials to maintain 24-hour emergency access, minimizing access to driveways,and use of appropriate signage. Checklist Review Land use and planning impacts were appropriately addressed in the PER. New Environmental Effects None. K. Mineral Resources Significance Criteria Potentially LessThan Resource Category/ Significantwith LessThan Significance Criteria Significant Mitigation Significant No Impact Impact Incorporated Impact Would the Project: 1. Result in the loss of availability of a known mineral resource Mat would El ❑ El 0 be of valueto the region and the residents of the state? 2. Result in the ion of availability of a locally Important mineral resource recovery site delineated on a local general plan,specific plan or other ❑ ❑ ❑ 99 land use plan? PEIR The Initial Study determined the Plan would no mineral resource impacts.Accordingly,the PER did not address this resource category. Checklist Review No impacts will occur. New Environmental Effects None. B-13 1-17 Environmental Checklist 08.10 Jonx Project 1-17:SATS Rehabilitation • Condition Assessment Report Appendix S L. Noise Significance Criteria LessThan Resource Category/ Potentially Significant with LessThan Significance Criteria Significant Mitigation Significant No Impact Impact Incorporated Impact Would the Project: 1. Exposure of persons to or generation of noise levels in excess of standards established in the local general plan or noise ordinance,or ❑ Rl ❑ ❑ applicable standards of ether agencies? 1 2. Exposure of persons to,or generation of,excessive groundbome ❑ ❑ 0 ❑ vibration or groundbome noise levels? 3. A wilstimdal permanent increase in ambient noise levels in the project ❑ ❑ ❑ fill vicinity above levels existing without the project? 4. Asubstantial temporary or periodic increase in ambient noise levels in ❑ ® ❑ ❑ the project vicinity above levels existing without the project? 5. For a project located within an airport land use plan or,where such plan has not been adopted,within 2 miles of a public airport or public ❑ ❑ ❑ use airport,would the project expose people residing or working in the 159 project area to excessive noise levels? 6. Fora project within the vicinity of a private airstrip,would the project expose people residing or working in the project area to excessive noise ❑ ❑ ❑ fill levels? PEIR The PER addressed construction and operational noise generation and vibration. Operational noise impacts were less than significant. Mitigation for construction impacts included compliance with applicable codes of local jurisdiction, noise monitoring and reporting,and use of noise reduction measures.While these measures would be effective,the PER concluded that in some instances construction-related noise impacts could be disruptive and could conflict with city noise ordinances, resulting in a significant unavoidable construction-related noise impact.The PER also recommended that during project-level review, specific areas susceptible to groundborne vibration be identified and appropriate safeguards employed. Checklist Review The proposed Project utilizes CIPP,which is a minimally invasive technology,with minimal excavations, and can be completed quickly—generally,a typical 1,000-to 1,500-foot pipeline segment can be completed within one week.Compliance with local city noise ordinances,together with other mitigation identified in the PEIR, should result in construction noise impacts less than that described in the PEIR. Similarly, because of the nature of construction activities, any increased vibration should be minimal and restricted to the immediate excavation site without affecting adjacent land uses. In addition,the diversion structure which requires the greatest amount of excavation for this project is not in an area of sensitive receptors. Noise requirements are included in the specifications in the Contract Documents. New Environmental Effects Construction-related noise and vibration levels should be less than that discussed in the PER because the scope of work has been reduced. B-14 1-17 Environmental Choi 48.14.d rr Project 1-17:SATS Rehabilitation • Condition Assessment Report Appendix S M. Population and Housing Significance Criteria Resource Category Significant with Significance Criteria Significant mitigation Significant No Impact Impact Incorporated Impact Would the Project: 1. Cumulatively exceed official regional or local population projections? ❑ ❑ ❑ 0 2. Substantially change the demographics in the area? ❑ ❑ ❑ ❑p 3. Induce substantial population growth in an area,either directly(for example,by proposing new homes and business)or Indirectly(for ❑ ❑ ❑ 0 example,through extension of made or other i nfmstructure)? A. Substantially alter thelocation,distribution,or density of the area's ❑ ❑ ❑ 159 population? 5. Displace substantial numbers of existing housing,necessitating the ❑ ❑ ❑ fla construction of replacement housing elsewhere? 6. Displace substantial numbers of people,necessitating the construction ❑ ❑ ❑ 1511 of replacement housing elsewhere? 7. Conflict with adopted housing elements? ❑ ❑ ❑ 0 PEIR The PER addressed growth inducing impacts of the Plan and determined them to be less than Significant. Checklist Review The rehabilitation of the Santa Ana Trunk Sewer will not result in an increase in capacity.The CIPP process will actually result in a minimal decrease in capacity as the inside diameter of the trunk sewer will be reduced on the order of 1 to 2 inches from the original pipe diameter. However, as detailed in Technical Memorandum No. 3 of the Condition Assessment Report, updated hydraulic modelingand analysis of this condition indicatesthe pipeline will still meetthe hydraulic design criteria for ultimate 2030 flow conditions and thereby be consistent with OCSD's Master Plan. No population or housing impacts will occur. New Environmental Effects None. B-15 1-17 Environmental Checklist 08.10 Jonx Project 1-17:SATS Rehabilitation • Condition Assessment Report Appendix S N. Public Services Significance Criteria LessThan Resource Category/ Potentially Significant with LessThan Significance Criteria Significant Mitigation Significant No Impact Impact Incorporated Impact Would the Project: 1. Result in substantial adverse physical impacts associated with the provision of new or physically altered governmental facilities,the construction of which would cause significant environmental impacts, in order to maintain acceptable service ratios,response times,or other performance objectives for any of the public services: a. Fire protection? ❑ ® ❑ ❑ It. Police protection? ❑ © ❑ ❑ c. Schools? ❑ ® ❑ ❑ d. Parks? ❑ ® ❑ ❑ e. Electric poweror natural gas? 1 ❑ © ❑ ❑ I. Communication? ❑ ® ❑ ❑ g. ether public faNllOes? ❑ ® ❑ ❑ PEIR The PEIR addressed potential impacts to fire, police, and emergency medical services from construction of the proposed sewer improvement projects.A series of mitigation measures were identified to offset project impacts, including a traffic control plan,advance notice to service providers,construction site controls,and measures to identify and protect utilities during excavation. Impacts were less than significant with mitigation incorporated. Checklist Review Standard controls have been included in the Project to mitigate public service impacts. New Environmental Effects None. B-16 1-17 Environmental Choi 08.10 Jonx Project 1-17:SATS Rehabilitation • Condition Assessment Report Appendix S 0. Recreation Significance Criteria Potentially LessThan Resource Category/ Significant with LessThan Significance Criteria Significant Mitigation Significant No Impact Impact Incorporated Impact Would are Project: 1. Increase the use of existing neighborhood and regional parks or other recreational faclllfies such thatsubstantial physical deterioration of ❑ ❑ ❑ ❑R the facility would occur or be accelem@tl? 2. Include RCreabonal facilities or require the construction of recreational facilities which might have an adverse physical effect on the ❑ ❑ ❑ 119 environment? PEIR The Initial Study for the Plan determined no significant recreational impacts will occur.Accordingly,the PER did not address this resource category. Checklist Review The Project involves rehabilitation of the Santa Ana Trunk Sewer mostly within the existing right-of-way using CIPP. No recreational impacts will occur.The Project's effect on the bicycle path bordering Alton Avenue is discussed in Section P,Transportation/Traffic. New Environmental Effects None. B-17 1-17 Environmental Choi 08.10 Jonx Project 1-17:SATS Rehabilitation • Condition Assessment Report Appendix e P. Transportation/Traffic Significance Criteria LessThan -Categmyl y gnificant with Significant No Impact Resource Potentiall Si LessThan Signifificance Criteria Significant Mitigation Impact Incorporated Impact Would the Project: 1. Exceed the capacity of the existing circulation system,based on an applicable measure of effectiveness(as designated in a general plan policy,ordinance,etc.),taking into account all relevant components of ❑ NI 1-1 El circulation system,including but not limited to intersectons, streets,highways and freeways,pedestrian and bicycle paths,and masstransit? 2. Conflict with an applicable congestion management pmgmm, including but not limited to level of service standards and travel ❑ ® ❑ ❑ demand measures,or other stands rds established by the county congestion management agency for designated roads or highways? 3. Result in a change in air,mil or water-borne traffic patterns,including either an increase in traffic levels or a change in location that results in ❑ ❑ ® ❑ substantial safety risks? 4. Substantially increase hazards due to a design feature(e.g.,sharp curves or dangemus intersections)or incompatible uses(e.g.farm ❑ ❑ ® ❑ equipmenq? 5. Result in inadequate emergency access? ❑ ® ❑ ❑ 6. Conflict with adopted policies,plans,or programs supporting ❑ ❑ ❑ alternative tmnsportabon(e.g.,bus turnouts,bicycle racks)? PEIR The PEIR analyzed the traffic impacts associated with the various construction methods for the collection system improvement projects, noting that limited lane closures would be anticipated, impacts to circulation routes would be short term, and affected roadways would be restored to fully operational conditions.A series of mitigation measures were identified to address traffic issues.The main ones are implementation of approved traffic control plans and compliance with encroachment permit conditions issued by the appropriate local jurisdiction.The PER concluded that even with implementation of available mitigation measures,transportation and traffic impacts would remain significant and unavoidable. Checklist Review The proposed Project includes several construction activities that could impact traffic(including manhole rehabilitation),the CIPP process and the need to utilize some of these structures as insertion manholes, and activities to construct the new diversion and junction structures at the Sunflower and Cadillac intersection. The Santa Ana Trunk Sewer to be rehabilitated extends about 17,500 feet;this phase of the project involves rehabilitation of only 1,000 feet. From OCSD Plant 1 to Alton Avenue,the sewer crosses I-405 (no rehabilitation of this segment),and several local streets. However,this sewer segment is primarily within parking lots of commercial/industrial land uses.The remaining trunk sewer alignment extends along Alton Avenue to Bristol Street. In this segment,there is a 75-foot-wide railroad right-of-way,a 6- foot-wide bicycle path, a 3-to 4-foot-wide raised median which overlies the trunk sewer, and Alton B-18 1-17 Envlmnmental Checklls-48.14 Jou Project 1-17:SATS Rehabilitation • Condition Assessment Report Appendix B Avenue which has segments of two and three lanes.This pipeline segment also crosses several local roadways. Preliminary design has begun to address these activities relative to traffic impacts.There is considerable flexibility to minimize traffic impacts from rehabilitation activities. Insertion manholes, where CIPP would be initiated for a given pipeline segment would not be located in the travelled way. Along Alton Avenue,the CIPP process would infringe onto the bicycle path and one half of the first lane of Alton Avenue. In the immediate areas this would require temporary closure of a given segment of the bicycle path and redirection of pathway users, and temporary closure of a segment of the first lane of Alton Avenue.Two schools and a church exist along Alton Avenue but these are along the opposite side of the street from the trunk sewer alignment. All these issues will require consideration in traffic mitigation planning as design proceeds. Of the total 22 manholes to be rehabilitated along the trunk sewer alignment,3 are located in the following roadways: Hyland Avenue and the intersection of Alton Avenue with Forest Avenue and Bristol Street. A series of manholes exist along the median bordering Alton Avenue where OCSD already has access. Manhole rehabilitation is a short-term activity requiring access for limited durations over a several day period. New Environmental Effects None.The proposed Project will utilize appropriate mitigation measures outlined in the PER Preliminary design of the Project suggests a reduction of traffic impacts discussed in the PER because the scope of work for this segment of the project has been reduced.As a result,traffic impacts are considered to be less than significant with mitigation incorporated from the PER B-19 1-17 Environmental Cheoklin 08.10 Jonx Project 1-17:SATS Rehabilitation • Condition Assessment Report Appendix B Q. Utilities and Service Systems Significance Criteria Potentially LessThan Resource Category/ Significant with Ll Significance Criteria Significant Mitigation Significant No Impact Impact Incorporated Impact Would the Project: 1. Exceed wastewatertreatment requirements of the applicable Regional ❑ ❑ ❑ 1 Water Quality Control Board? 2. Require or result in the constroction of new water or wastewater treatment facilities or expansion of existing facilities,the construction ❑ ❑ ❑ 159 of which could cause significant environmental effects? 3. Require or result in the construction of new stommater drainage facilities or expansion of existing facilities,the construction ofwhich ❑ ❑ ❑ 159 could cause significant environmental effects? 4. Rave sufficient water supplies available to serve the project from existing entitlements and resources,or are new or expanded ❑ ❑ ❑ 159 entitlements needed? 5. Result in a determination by the wastewatertreatment providerwhich serves or may serve the project that R has adequate capacityto serve ❑ ❑ ❑ the projects projected demand in addition to Me provider's existing 119 commitments? fi. Be served by a landfill with sufficient permitted capacity to ❑ ❑ ❑ 111 accommodate the projects solid waste disposal needs? 7. Complywith federal,state,and local statues and regulations related to ❑ ❑ ❑ 0 wild waste? PEIR The Initial Study for the Plan determined no significant utilities and service system impacts will occur. Accordingly,the PER did not address this resource category. Checklist Review The proposed Project will occur within the pipeline right-of-way in an urbanized environment.A utility search was performed alongthe entire alignment duringthe preliminary design and all utilities were incorporated onto the plan and profiles. During design,the limited areas of excavation were potholed for utilities, positively located, and field verified bythe utility owner. Final drawings were sentto utility agencies to verify locations. All final plans bid documents reflect known utility locations. Utility requirements are included in the specifications in the Contract Documents New Environmental Effects None. e e B-20 1-17 Environmental Cneoklist 48.14 Jonx Project 1-17:SATS Rehabilitation • Condition Assessment Report Appendix S R. Mandatory Findings of Significance Significance Criteria Resource Category/ otentially Significant with Lessl Significanum Criteria Significant Mitigation Significant No Impact Impact Incorporated Impact Would the Project: 1. Does the project have the potential to degrade the quality of the environment,substantially reduce the habitat of a fish or wildlife species,cause a fish or wildlife population to crap below self - sustaining levels,threaten to eliminate a plant or animal community, ❑ ❑ ❑ ❑. reduce the number or restrict the range of a rare or endangered plant or animal or eliminate imports hit examples ofthe major periods of California history or prehistory? 2. Does the project have impacts that am individually limited,but cumulatively considerable?("Cumulatively considerable"means that the incremental effects of a project are considerable when viewed In ❑ 0 ❑ ❑ connection with the effects of past projects,the effects of current projects,and the effects of probable future projects)? 3. Does the project have environmental effects which will cause substantial adverse effects on human beings,either directly or ❑ ® ❑ ❑ indirectly' PEIR The PEIR determined that rehabilitation of the Santa Ana Trunk Sewer pipeline segment would not have biological or cultural resource impacts.The PER concluded that construction-related NOx emissions, construction-related noise,and construction-related road closures would be significant and unavoidable, and these conclusions would remain in the context of reasonably foreseeable future projects identified for the study area.Standard construction mitigation measures would reduce adverse effects to human beings to less-than-significant levels. Checklist Review CIPP is a minimally intrusive rehabilitation technology which will be used within the existing Santa Ana Trunk Sewer alignment in an urbanized environment. Construction-related NOx emissions for the proposed Project and for the Plan projects to be constructed concurrently would be below the SCAQMD significance criteria because one less project would be constructed in the same year as that assumed in the PER. Owing to the minimal excavation in the existing pipeline right-of-way, noise impacts should be less from that projected and the Project would not require road closures.Standard construction measures would be used to mitigate public health and safety impacts. It is anticipated that any reasonably foreseeable projects near the Project alignment would have to comply with the appropriate level of mitigation. New Environmental Effects None.Air quality, noise, and traffic impacts would be less than those discussed in the PEIR. B-21 1-17 Environmental Choi 08.10 Jonx APPENDIX B Air Quality and Greenhouse Gas Emissions 13 Apri12014 Santa Ana Trunk Sewer Rehabilitation Project Air Quality and GHG Impact Summary January 14,2014 Introduction The Santa Ana Trunk Sewer(SATS) consist of rehabilitating of a section of the existing Santa Ana Trunk Sewer from Bristol Street in Santa Ana to OCSD's Reclamation Plant No. 1 in Fountain Valley. Cured-in-place pipe (CIPP)is the recommended lining method and existing manholes will be used without the need for insertion pits and associated excavation and repaving requirements. A Condition Assessment Report (CAR) indicated that rehabilitation of the existing siphons underlying the Santa Ana River,the Greenville Banning Channel,and the Santa Ana Gardens Channel,will not be necessary as originally mentioned in the PEIR. Manhole rehabilitation is to be extended to 39 structures and individual improvements for each manhole were identified. Based on the results of the CAR and an additional pipe coring investigation, the first phase of rehabilitation of the SATS and associated manholes,siphons,and junction structures was refined further during the final design phase of the project. The first phase of rehabilitation of the SATS pipeline and associated structures includes the following: 1. Construction of a new diversion at the Sunflower and Cadillac Avenue intersection to convey flow from SATS to the Sunflower Interceptor (So. Note that this diversion will be used for gravity flow bypassing that will facilitate future OCSD Operations and Maintenance (O&M) processes as well as construction of item 4 and rehabilitation of manhole SAN 0045 discussed below. 2. Rehabilitation of 16 circular manholes. 3. Rehabilitation of six junction structures 4. Rehabilitation of approximately 1,000 linear feet of 48-inch SATS line using cured-in-place pipe (CIPP). Minor excavation of about 1 foot immediately around the manholes will be required for replacement of the frames and covers at all manholes and junction structures (total of 22 frames and covers). In addition, the area above two junction structures will require excavation of approximately 1,600 cubic feet of material. The new diversion structure and junction structure at the Sunflower and Cadillac Avenue intersection will result in the excavation of approximately 14,000 cubic feet of material in an existing right of way with various utility crossings. Air Quality Impact Summary Construction emissions from the operation of diesel-fueled off-road equipment were estimated by multiplying peak daily usage by equipment-specific emission factors.Horsepower-based composite factors,with built-in load factors, were utilized to estimate peak daily emissions.The emission factors were obtained from the South Coast Air Quality Management District's website(SCAQMD 2011)and represent the fleet-wide average emission factors during 2013 within the South Coast Air Basin(SCAB).Criteria pollutant emissions from on-road motor vehicles were estimated using CARB's On-Road EMFAC2011 mobile source emission factors, obtained from the EMFAC2011 model output. Peak daily emissions include both onsite and offsite emissions; owite emission are generated by sources within the footprint of the project area; offsite emission are generated by sources such as vendor haul trips due to import or export of construction materials. Air quality impacts during construction of the proposed project are presented in Table 1 below. Peak daily construction emissions are summarized and are also computed to the established SCAQMD regional mass daily emission thresholds and localized significance thresholds(LSTs)for construction. 14 April 2014 DailyTable 1: Peak Criteria Pollutants, Ib/da Equipment Type ROG CO NOX SOX PM10 PM2.5 Onsite Offroad Equipment 1.24 7.36 10.13 0.02 0.49 0.45 Onroad Equipment 0.03 0.19 0.15 0.00 0.01 0.01 Offsite Onroad Equipment _ 0.16 1.46 0.29 0.00 0.02 0.02 Regional Impact Evaluation Total Daily Emissions 1.42 9.01 10.57 0.02 0.52 0.47 Regional Thresholds 75 550 100 150 150 55 Exceed Re ional Thresholds Y/N ? No No No No No No Localized Impact Evaluation Total Daily Offsite Emission 0.16 1.46 0.29 0.00 0.02 0.02 Localized Significance Thresholds 647 92 4 3 Exceed LST(YIN)? No No No No No No As presented in Table 1,regional and localized air quality impacts would not exceed the SCAQMD's thresholds of significance.Therefore,impacts would be less than significant. Greenhouse Gas Impact Summary GHG emissions generated by the proposed project would predominantly be in the form of carbon dioxide(CO2)and would occur primarily due to combustion sources including construction equipment and on- and off-road vehicle trips. GHG emissions from construction equipment were quantified using spreadsheets populated with horsepower- based composite emission factors,with built-in load factors. The emission factors were obtained from the SCAQMD's website (SCAQMD 2011) and represent the fleet-wide average emission factors during 2013 within the SCAB. GHG emissions from on-road motor vehicles were estimated using CARB's On-Road EMFAC2011 mobile source emission factors, obtained from the EMFAC2011 model output. TABLE 2: GHG EMISSIONS IMPACT ANALYSIS' Source COae Emissions Total Project COre Emissions During Construction,MTCOie/Project 64.3 Amortized Construction GHG(over a 30- earperiod),MTCO2c/30-yr 2.1 SCAQMD Interim GHG Threshold for Industrial Projects 10,000 Would the project exceed the SCAQMD interim threshold? No Not.: 2. Derailed emission calculations am presented In Attechtaeat 1. Source: Modeled b Randa AbuSl aban,2013 15 April 2014 As presented in Table 2, greenhouse gas(GHG)emissions generated during construction would increase as a result of the proposed activities described above. However,the incremental increase would be less than 2.1 metric tons of carbon dioxide equivalent per year(MTCO2e/yr)and therefore would be leas than significant. 16 April2014 PART A CONTRACT AGREEMENT C-CA-071913 TABLE OF CONTENTS CONTRACT AGREEMENT SECTION - 1 GENERAL CONDITIONS..................................................................1 SECTION -2 MATERIALS AND LABOR.................................................................4 SECTION -3 PROJECT..........................................................................................4 SECTION -4 PLANS AND SPECIFICATONS ........................................................5 SECTION -5 TIME OF COMMENCEMENT AND COMPLETION ..........................5 SECTION -6 TIME IS OF THE ESSENCE .............................................................5 SECTION -7 EXCUSABLE DELAYS......................................................................6 SECTION -8 EXTRA WORK...................................................................................6 SECTION -9 CHANGES IN PROJECT...................................................................7 SECTION - 10 LIQUIDATED DAMAGES FOR DELAY.............................................7 SECTION - 11 CONTRACT PRICE AND METHOD OF PAYMENT.........................7 SECTION - 12 SUBSTITUTION OF SECURITIES IN LIEU OF RETENTION OF FUNDS ..............................................................................................9 SECTION - 13 COMPLETION.................................................................................10 SECTION - 14 CONTRACTOR'S EMPLOYEES COMPENSATION.......................10 SECTION - 15 SURETY BONDS ............................................................................12 SECTION - 16 INSURANCE....................................................................................13 SECTION - 17 RISK AND INDEMNIFICATION.......................................................23 SECTION - 18 TERMINATION................................................................................23 SECTION - 19 WARRANTY....................................................................................23 SECTION -20 ASSIGNMENT.................................................................................24 SECTION -21 RESOLUTION OF DISPUTES ........................................................24 SECTION -22 SAFETY& HEALTH........................................................................25 SECTION -23 NOTICES.........................................................................................25 C-CA-071913 CONTRACT AGREEMENT ORANGE COUNTY SANITATION DISTRICT PROJECT NO. 1.17 SANTA ANA TRUNK SEWER REHABILITATION THIS AGREEMENT is made and entered into, to be effective, this June 25, 2014, by and between Charles King Company Inc., hereinafter referred to as"CONTRACTOR" and the Orange County Sanitation District, hereinafter referred to as "OCSD". WITNESSETH That for and in consideration of the promises and agreements hereinafter made and exchanged, OCSD and CONTRACTOR agree as follows: SECTION-1 GENERAL CONDITIONS CONTRACTOR certifies and agrees that all the terms, conditions and obligations of the Contract Documents as hereinafter defined, the location of the job site, and the conditions under which the Work is to be performed have been thoroughly reviewed, and enters into this Contract based upon CONTRACTOR's investigation of all such matters and is in no way relying upon any opinions or representations of OCSD. It is agreed that this Contract represents the entire agreement. It is further agreed that the Contract Documents are each incorporated into this Contract by reference, with the same force and effect as if the same were set forth at length herein, and that CONTRACTOR and its Subcontractors, if any, will be and are bound by any and all of said Contract Documents insofar as they relate in any part or in any way, directly or indirectly, to the Work covered by this Contract. A. Contract Documents Order of Precedence "Contract Documents" refers to those documents identified in the definition of"Contract Documents" in the General Conditions—Definitions. C-CA-071913 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION CONFORMED Page 1 of 26 1. In the event of a conflict between one Contract Document and any of the other Contract Documents, the provisions in the document highest in precedence shall be controlling. The order of precedence of the Contract Documents is as follows: a. Supplemental Agreements—the last in time being the first in precedence b. Addenda issued prior to opening of Bids—the last in time being the first in precedence c. Contract Agreement d. Permits and other regulatory requirements e. Special Provisions f. General Conditions (GC) g. Notice Inviting Bids and Instruction to Bidders h. Geotechnical Baseline Report(GBR), if attached as a Contract Document I. Plans and Specifications—in these documents the order of precedence shall be: i. Specifications (Divisions 01-17) ii. Plans H. General Requirements (GR) iv. Standard Drawings and Typical Details j. CONTRACTOR'S Bid 2. In the event of a conflict between terms within an individual Contract Document, the conflict shall be resolved by applying the following principles as appears applicable: a. Figured dimensions on the Contract Documents shall govern. Dimensions not specified shall be as directed by the ENGINEER. Details not shown or specified shall be the same as similar parts that are shown or specified, or as directed. Full-size details shall take precedence over scale Drawings as to C-CA-071913 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION CONFORMED Page 2 of 26 shape and details of construction. Specifications shall govern as to material and workmanship. b. The Contract Documents calling for the higher quality material or workmanship shall prevail. Materials or Work described in words, which so applied, have a well known technical or trade meaning shall be deemed to refer to such recognized standards. In the event of any discrepancy between any Drawings and the figures thereon, the figures shall be taken as correct. C. Scale Drawings, full-size details, and Specifications are intended to be fully complementary and to agree. Should any discrepancy between Contract Documents come to the CONTRACTOR's attention, or should an error occur in the efforts of others, which affect the Work, the CONTRACTOR shall notify the ENGINEER, in writing, at once. In the event any doubts or questions arise with respect to the true meaning of the Contract Documents, reference shall be made to the ENGINEER whose written decision shall be final. If the CONTRACTOR proceeds with the Work affected without written instructions from the ENGINEER, the CONTRACTOR shall be fully responsible for any resultant damage or defect. d. Anything mentioned in the Specifications and not indicated in the Plans, or indicated in the Plans and not mentioned in the Specifications, shall be of like effect as if indicated and mentioned in both. In case of discrepancy in the Plans or Specifications, the matter shall be immediately submitted to OCSD's ENGINEER, without whose decision CONTRACTOR shall not adjust said discrepancy save only at CONTRACTOR's own risk and expense. The decision of the ENGINEER shall be final. C-CA-071913 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION CONFORMED Page 3 of 26 In all matters relating to the acceptability of material, machinery or plant equipment; classifications of material or Work; the proper execution, progress or sequence of the Work; and quantities interpretation of the Contract Documents, the decision of the ENGINEER shall be final and binding, and shall be a condition precedent to any payment under the Contract, unless otherwise ordered by the Board of Directors. B. Definitions Capitalized terms used in this Contract are defined in the General Conditions, Definitions. Additional terms may be defined in the Special Provisions. SECTION—2 MATERIALS AND LABOR CONTRACTOR shall furnish, under the conditions expressed in the Plans and Specifications, at CONTRACTOR'S own expense, all labor and materials necessary, except such as are mentioned in the Specifications to be furnished by OCSD, to construct and complete the 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. SECTION-3 PROJECT The Project is described as: PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION C-CA-071913 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION CONFORMED Page 4 of 26 SECTION-4 PLANS AND SPECIFICATONS The Work to be done is shown in a set of Plans and Specifications entitled: PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION 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 303 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 15 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 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, C-CA-071913 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION CONFORMED Page 5 of 26 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—S EXTRA WORK The Contract Price as set forth in Section 11, includes compensation for all Work performed by CONTRACTOR, unless CONTRACTOR obtains a Change Order signed by a designated representative of OCSD specifying the exact nature of the Extra Work and the amount of extra compensation to be paid all as more particularly set forth in Section 9 hereof and the General Conditions, "Request for Change (Changes at CONTRACTOR's Request)", "OWNER Initiated Changes", and "Contract Price Adjustments and Payments". 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. C-CA-071913 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION CONFORMED Page 6 of 26 SECTION — 9 CHANGES IN PROJECT OCSD may at any time, without notice to any Surety, by Change Order, make any changes in the Work within the general scope of the Contract Document, including but not limited to changes: 1. In the Specifications (including Drawings and designs); 2. In the time, method or manner of performance of the Work; 3. In OCSD-furnished facilities, equipment, materials, services or site; or 4. Directing acceleration in the performance of the Work. No change of period of performance or Contract Price, or any other change in the Contract Documents, shall be binding until the Contract is modified by a fully executed Change Order. All Change Orders shall be issued in accordance with the requirements set forth in the General Conditions, "Request for Change (Changes at CONTRACTOR's Request)" and "OWNER Initiated Changes". SECTION — 10 LIQUIDATED DAMAGES FOR DELAY Liquidated Damages shall be payable in the amounts and upon the occurrence of such events or failure to meet such requirements or deadlines as provided in the Special Provisions, "Liquidated Damages and Incentives." SECTION—11 CONTRACT PRICE AND METHOD OF PAYMENT A. OCSD agrees to pay and the CONTRACTOR agrees to accept as full consideration for the faithful performance of this Contract, subject to any additions or deductions as provided in approved Change Orders, the sum of Two Million Six Hundred Nineteen Thousand One Hundred Eighty Eight Dollars ($2,619,188)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 C-CA-071913 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION CONFORMED Page 7 of 26 not limited to Sections entitled "Mobilization Payment Requirements" and "Payment Itemized Breakdown of Contract Lump Sum Prices"), there shall be paid to the CONTRACTOR an initial Net Progress Payment for mobilization. OCSD shall issue at the commencement of the job a schedule which shows: 1. A minimum of one payment to be made to the CONTRACTOR for each successive four(4)week period as the Work progresses, and 2. The due dates for the CONTRACTOR to submit requests for payment to meet the payment schedule. After the initial Net Progress Payment, and provided the CONTRACTOR submits the request for payment prior to the end of the day required to meet the payment schedule, the CONTRACTOR shall be paid a Net Progress Payment on the corresponding monthly payment date set forth in the schedule. Payments shall be made on demands drawn in the manner required by law, accompanied by a certificate signed by the ENGINEER, stating that the Work for which payment is demanded has been performed in accordance with the terms of the Contract Documents, and that the amount stated in the certificate is due under the terms of the Contract. Payment applications shall also be accompanied with all documentation, records, and releases as required by the Contract, Exhibit A, Schedule of Prices, and General Conditions, "Payment for Work—General". The Total amount of Progress Payments shall not exceed the actual 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. C-CA-071913 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION CONFORMED Page 8 of 26 B. As used in this Section, the following defined terms shall have the following meanings: 1. "Net Progress Payment' means a sum equal to the Progress Payment less the Retention Amount and other qualified deductions (Liquidated Damages, stop payment notices, etc.). 2. "Progress Payment' means a sum equal to: a. the value of the actual Work completed since the commencement of the Work as determined by OCSD; b. plus the value of material suitably stored at the worksite, treatment plant or approved storage yards subject to or under the control of OCSD since the commencement of the Work as determined by OCSD; C. less all previous Net Progress Payments; d. less all amounts of previously qualified deductions; e. less all amounts previously retained as Retention Amounts. 3. "Retention Amount'for each Progress Payment means the percentage of each Progress Payment to be retained by OCSD to assure satisfactory completion of the Contract. The amount to be retained from each Progress Payment shall be determined as provided in the General Conditions—"Retained Funds; Substitution of Securities." SECTION-12 SUBSTITUTION OF SECURITIES IN LIEU OF RETENTION OF FUNDS Pursuant to Public Contract Code Section 22300 at seq., the CONTRACTOR may, at its sole expense, substitute securities as provided in General Conditions—"Retained Funds; Substitution of Securities." C-CA-071913 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION CONFORMED Page 9 of 26 SECTION-13 COMPLETION Final Completion and Final Acceptance shall occur at the time and in the manner specified in the General Conditions, "Final Acceptance and Final Completion", "Final Payment" and Exhibit A- Schedule of Prices. Upon receipt of all documentation, records, and releases as required by the Contract from the CONTRACTOR, OCSD shall proceed with the Final Acceptance as specified in General Conditions. SECTION-14 CONTRACTOR'S EMPLOYEES COMPENSATION A. Davis-Bacon Act: CONTRACTOR will pay and will require all Subcontractors to pay all employees on said 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. 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 C-CA-071913 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION CONFORMED Page 10 of 26 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. ADDrentices: Sections 1777.5, 1777.6, 1777.7 of the Labor Code of the State of California, regarding the employment of apprentices are applicable to this Contract and the CONTRACTOR shall comply therewith if the prime contract involves Thirty Thousand Dollars ($30,000.00) or more. E. Workday: In the performance of this Contract, not more than eight(8) hours shall constitute a day's work, and the CONTRACTOR shall not require more than eight(8) hours of labor in a day from any person employed by him hereunder except as provided in paragraph (B)above. CONTRACTOR shall conform to Article 3, Chapter 1, Part 7 (Section 1810 at sea.)of the Labor Code of the State of California and shall forfeit to OCSD as a penalty, the sum of Twenty-five Dollars ($25.00)for each worker employed in the execution of this Contract by CONTRACTOR or any Subcontractor for each calendar day during which any worker is C-CA-071913 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION CONFORMED Page 11 of 26 required or permitted to labor more than eight(6) 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. Record of Wailes: Inspection: CONTRACTOR agrees to maintain accurate payroll records showing the name, address, social security number, work classification, straight-time and overtime hours worked each day and week, and the actual per diem wages paid to each journeyman, apprentice, worker or other employee employed by it in connection with the Project and agrees to require that each of its Subcontractors do the same. All payroll records shall be certified as accurate by the applicable CONTRACTOR or Subcontractor or its agent having authority over such matters. CONTRACTOR further agrees that its payroll records and those of its Subcontractors shall be available to the employee or employee's representative, the Division of Labor Standards Enforcement, and the Division of Apprenticeship Standards and shall comply with all of the provisions of Labor Code Section 1776, in general. Penalties for non- compliance with the requirements of Section 1776 may be deducted from Project payments per the requirements of Section 1776. SECTION— 15 SURETY BONDS CONTRACTOR shall, before entering upon the performance of this Contract, furnish Bonds approved by OCSD's General Counsel—one in the amount of one hundred percent(100%)of the Contract amount, to guarantee the faithful performance of the Work, and the other in the amount of one hundred percent (100%)of the Contract amount to guarantee payment of all C-CA-071913 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION CONFORMED Page 12 of 26 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 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 C-CA-071913 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION CONFORMED Page 13 of 26 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 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 C-CA-071913 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION CONFORMED Page 14 of 26 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: Fifteen Million Dollars ($15,000,000) per occurrence and a general aggregate limit of Twenty Million Dollars (20,000,000)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 Fifteen Million Dollars ($15,000,000) per occurrence and a general aggregate limit of Twenty Million Dollars (20,000,000)which shall be in effect at all times during the warranty period set forth in the Warranty section herein, and as set forth in the General Conditions, "Warranty(CONTRACTOR's Guarantee)", plus any additional extension or continuation of time to said warranty period that may be required or authorized by said provisions. C. Broad Form Property Damage, expressly including damage arising out of explosion, collapse, or underground damage. d. Contractual Liability, expressly including the indemnity provisions assumed under this Contract. e. Separation of Insured Clause, providing that coverage applies separately to each insured, except with respect to the limits of liability. f. Independent CONTRACTOR's Liability. To the extent first dollar coverage, including defense of any claim, is not available to OCSD or any other additional insured because of any SIR, deductible, or any other form of self insurance, CONTRACTOR is obligated to assume responsibility of insurer until the deductible, SIR or other condition of C-CA-071913 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION CONFORMED Page 15 of 26 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 Fifteen Million Dollars ($15,000,000)and a general aggregate limit of Fifteen Million Dollars (15,000,000)for bodily injury, personal injury and property damage; Or alternatively, (2) Fifteen Million Dollars ($15,000,000) per person for bodily injury and Five Million Dollars ($5,000,000) per accident for property damage. 3. Umbrella Excess Liability: The minimum limits of general liability and automobile liability insurance required, as set forth above, shall be provided for either in a single policy of primary insurance or a combination of policies of primary and umbrella excess coverage. Excess liability coverage shall be issued with limits of liability which, when combined with the primary insurance, will equal the minimum limits for general liability and automobile liability. C-CA-071913 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION CONFORMED Page 16 of 26 4. Worker's Compensation/EmDlover'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 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. C-CA-071913 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION CONFORMED Page 17 of 26 5. Pollution Liability Insurance: CONTRACTOR shall purchase and maintain insurance for pollution liability covering bodily injury, property damage (including loss of use of damaged property or property that has not been physically injured or destroyed), cleanup costs, and defense costs (including costs and expenses for investigation, defense, or settlement of claims). Coverage shall carry limits of at least One Million Dollars ($1,000,000) Dollars and shall apply to sudden and non-sudden pollution conditions (including sewage spills), both at the site or needed due to migration of pollutants from the site, resulting from the escape or release of smoke, vapors, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials, or other irritants, contaminants or pollutants. If CONTRACTOR provides coverage written on a claims-made basis, OCSD has the right to approve or reject such coverage in its own discretion. If written on a claims- made basis, the CONTRACTOR warrants that any retroactive date applicable to coverage under the policy precedes the effective date of this Contract, and that continuous coverage will be maintained, or an extended discovery period will be exercised, for a period of two years beginning from the time that the Project under this Contract is completed. B. Deductibles and Self-Insured Retentions Any deductibles or self-insured retentions must be declared to and approved by OCSD. At the option of OCSD, either: the Insurer shall reduce or eliminate such deductibles or self- insured retentions as respects OCSD, its Directors, officers, agents, CONSULTANTS, and employees; or CONTRACTOR shall provide a financial guarantee satisfactory to OCSD guaranteeing payment of losses and related investigations, claim administration, and defense expenses. C-CA-071913 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION CONFORMED Page 18 of 26 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. 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 C-CA-071913 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION CONFORMED Page 19 of 26 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. 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 worker's 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 and the Additional Parties 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 and the Additional Parties before Work commences. C-CA-071913 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION CONFORMED Page 20 of 26 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. The Additional Parties are Cambridge Park Association and Cannon Sunflower Properties, and shall named as Additional Insureds with primary coverage and notice of cancellation as described elsewhere in this Section 16, with the same forms as described herein. Documents sent to them shall be addressed to: Cambridge Park Association JD Property Management 3520 Cadillac Avenue, #B Costa Mesa, CA 92626-1419 Cannon Sunflower Properties 51712'" Street Santa Monica, CA 90402-2907 Subject: Project No. 1-17, Santa Ana Trunk Sewer Rehabilitation APN(s): 139-661-24 and 25 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 all Subcontractors' policies, Certificate of Liability and mandatory endorsements effecting coverage. Upon request, CONTRACTOR must furnish OCSD with the above referenced required documents. C-CA-071913 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION CONFORMED Page 21 of 26 G. Required Forms and Endorsements 1. Required ACORD Form a. Certificate of Liability Form 25-S (7/97) 2. Required Insurance Services Office, Inc. Endorsements (when alternative forms are shown, they are listed in order of preference) In the event any of the following forms are cancelled by Insurance Services Office, Inc. (ISO), or are updated, the ISO replacement form or equivalent must be supplied. a. Commercial General Liability Form CG-0001 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 5. Pollution Liability Endorsements OCSD shall be named as the Loss Payee in the policy or by endorsement. There shall be a Separation of Insured Clause or endorsement, providing that coverage applies separately to each insured, except with respect to the limits of liability. There shall also be an endorsement or policy language containing a waiver of subrogation rights on the part of the insurer. OCSD, its directors, officers, agents, CONSULTANTS and employees and all public agencies from whom permits will be obtained as well as their directors, officers, C-CA-071913 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION CONFORMED Page 22 of 26 agents, and employees shall be included as insureds under the policy. Any additional insured endorsement shall contain language at least as broad as the coverage language contained in ISO form CG 20 10 11 85 or alternatively in both CG 20 10 10 01 and CG 20 37 10 01 together. SECTION—17 RISK AND INDEMNIFICATION All Work covered by this Contract done at the site of construction or in preparing or delivering materials to the site shall be at the risk of CONTRACTOR alone. CONTRACTOR shall save, indemnify, defend, and keep OCSD and others harmless as more specifically set forth in General Conditions, "General Indemnification". SECTION-18 TERMINATION This Contract may be terminated in whole or in part in writing by OCSD in the event of substantial failure by the CONTRACTOR to fulfill its obligations under this Agreement, or it may be terminated by OCSD for its convenience provided that such termination is effectuated in a manner and upon such conditions set forth more particularly in General Conditions, "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 C-CA-071913 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION CONFORMED Page 23 of 26 Completion' that the completed Work is free from all defects due to faulty materials, equipment or workmanship and that it shall promptly make whatever adjustments or corrections which may be necessary to cure any defects, including repairs of any damage to other parts of the system resulting from such defects. OCSD shall promptly give notice to the CONTRACTOR of observed defects. In the event that the CONTRACTOR fails to make adjustments, repairs, corrections or other work made necessary by such defects, OCSD may do so and charge the CONTRACTOR the cost incurred. The CONTRACTOR's warranty shall continue as to any corrected deficiency until the later of(1)the remainder of the original one-year warranty period; or(2)one year after acceptance by OCSD of the corrected Work. The Performance Bond and the Payment Bond shall remain in full force and effect through the guarantee period. The CONTRACTOR's obligations under this clause are in addition to the CONTRACTOR's other express or implied assurances under this Contract, including but not limited to specific 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. C-CA-071913 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION CONFORMED Page 24 of 26 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. 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: Charles King Company Inc. 2841 Gardena Avenue Signal Hill, CA 90755 Copy to: Debra King, President Charles King Company Inc. 2841 Gardena Avenue Signal Hill, CA 90755 C-CA-071913 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION CONFORMED Page 25 of 26 IN WITNESS WHEREOF, the parties hereto have executed this Contract Agreement as the date first hereinabove written. CONTRACTOR: Charles King Company Inc. 2841 Gardena Avenue Signal Hill, CA 90755 By Printed Name Its CONTRACTOR's State License No. 738236 (Expiration Date—07/31/15) OCSD: Orange County Sanitation District By Chair, Board of Directors By Maria E. Ayala Clerk of the Board By Marc Dubois Contracts, Purchasing and Materials Management Division Manager C-CA-071913 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION CONFORMED Page 26 of 26 EXHIBIT A SCHEDULE OF PRICES C-EXA-071012 TABLE OF CONTENTS EXHIBIT A SCHEDULE OF PRICES EXA-1 BASIS OF COMPENSATION ..............................................................................1 EXA-2 PROGRESS PAYMENTS....................................................................................1 EXA-3 RETENTION AND ESCROW ACCOUNTS .........................................................1 EXA-4 STOP PAYMENT NOTICE ..................................................................................3 EXA-5 PAYMENT TO SUBCONTRACTORS..................................................................3 EXA-6 PAYMENT OF TAXES.........................................................................................3 EXA-7 FINAL PAYMENT ................................................................................................4 EXA-8 DISCOVERY OF DEFICIENCIES BEFORE AND AFTER FINAL PAYMENT.....5 ATTACHMENT 1 CERTIFICATION FOR REQUEST FOR PAYMENT........................7 ATTACHMENT 2 SCHEDULE OF PRICES ...........................................................8 C-EXA-071012 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 PROGRESS PAYMENTS Progress payments will be made in accordance with all applicable terms and conditions of the Contract Documents, including, but not limited to: 1. Contract Agreement—Section 11 —"Contract Price and Method of Payment;" 2. General Conditions—"Payment—General"; 3. General Conditions—"Payment—Applications for Payment"; 4. General Conditions—"Payment— Mobilization Payment Requirements;" 5. General Conditions—"Payment— Itemized Breakdown of Contract Lump Sum Prices"; 6. General Conditions—"Contract Price Adjustments and Payments"; 7. General Conditions—"Suspension of Payments"; 8. General Conditions—"OCSD's Right to Withhold Certain Amounts and Make Application Thereof"; and 9. General Conditions—"Final Payment." EXA-3 RETENTION AND ESCROW ACCOUNTS A. Retention: OCSD shall retain a percentage of each progress payment to assure satisfactory completion of the Work. The amount to be retained from each progress payment shall be determined as provided in General Conditions— "Retained Funds; Substitution of Securities". In all contracts between CONTRACTOR and its Subcontractors and/or Suppliers, the retention may not exceed the percentage specified in the Contract Documents. C-EXA-071012 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION 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-071012 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION 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-071012 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION 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 fled in connection with the Work. Prior progress payments shall be subject to correction in OCSD's review of the application for Final Payment. Claims filed with the application for Final Payment must be otherwise timely under the Contract and applicable law. 3. Within a reasonable time, OCSD will review the CONTRACTOR'S application for Final Payment. Any recommended changes or corrections will then be forwarded to the CONTRACTOR. Within ten (10) calendar days after receipt of recommended changes from OCSD, the CONTRACTOR will make the changes, or list Claims that will be filed as a result of the changes, and shall submit the revised application for Final Payment. Upon C-EXA-071012 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION 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 fled with the initial or any revised application for Final Payment, and no Claims remain unsettled within thirty (30) calendar days after Final Acceptance of the Work by OCSD, and agreements are reached on all issues regarding the application for Final Payment, OCSD, in exchange for an executed release, satisfactory in form and substance to OCSD, will pay the entire sum found due on the approved application for Final Payment, including the amount, if any, allowed on settled Claims. 5. The release from the CONTRACTOR shall be from any and all Claims arising under the Contract, except for Claims that with the concurrence of OCSD are specifically reserved, and shall release and waive all unreserved Claims against OCSD and its officers, directors, employees and authorized representatives. The release shall be accompanied by a certification by the CONTRACTOR that: a. It has resolved all Subcontractors, Suppliers and other Claims that are related to the settled Claims included in the Final Payment; b. It has no reason to believe that any party has a valid claim against the CONTRACTOR or OCSD which has not been communicated in writing by the CONTRACTOR to OCSD as of the date of the certificate; c. All warranties are in full force and effect, and; d. The releases and the warranties shall survive Final Payment. 6. If any claims remain open, OCSD may make Final Payment subject to resolution of those claims. OCSD may withhold from the Final Payment an amount not to exceed one hundred fifty percent (150%)of the sum of the amounts of the open claims, and one hundred twenty-five percent (125%) of the amounts of open stop payment notices referred to in article entitled stop payment notices herein. 7. The CONTRACTOR shall provide an unconditional waiver and release on final payment from each Subcontractor and Supplier providing Work under the Contract(per Civil Code Section 8138) and an unconditional waiver and release on final payment on behalf of the CONTRACTOR (per Civil Code Section 8138)within thirty (30)days of receipt of Final Payment. EXA-B 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; 2. The previously-accepted Work did not in fact conform to the Contract requirements, or; C-EXA-071012 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION CONFORMED Page 5 of 8 3. A previous payment or portion thereof for Work was improperly made. OCSD also shall not be stopped from demanding and recovering damages from the CONTRACTOR, as appropriate, under any of the foregoing circumstances as permitted under the Contract or applicable law. C-EXA-071012 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION CONFORMED Page 6 of 8 ATTACHMENTI CERTIFICATION FOR REQUEST FOR PAYMENT I hereby certify under penalty of perjury as follows: That the claim for payment is in all respects true, correct; that the services mentioned herein were actually rendered and/or supplies delivered to OCSD in accordance with the Contract. I understand that it is a violation of both the federal and California False Claims Ads to knowingly present or cause to be presented to OCSD a false claim for payment or approval. A claim includes a demand or request for money. It is also a violation of the False Claims Ads to knowingly make use of a false record or statement to get a false claim paid. The term "knowingly" includes either actual knowledge of the information, deliberate ignorance of the truth or falsity of the information, or reckless disregard for the truth or falsity of the information. Proof of specific intent to defraud is not necessary under the False Claims Acts. I understand that the penalties under the Federal False Claims 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-071012 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION CONFORMED Page 7 of 8 ATTACHMENT SCHEDULE OF PRICES See next pages for Bid Submittal Forms (Charles King Company Inc.): BF-14 Schedule of Prices, Page 30—38. C-EXA-071012 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION CONFORMED Page 8 of 8 Bid Submitted By: C'harlp.%Kinli Cci Tne (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 OCSO 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 of 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. Note 2:Additive Bid Items will be used to determine the lowest Responsive, Responsible Bidder.Additive items will not be included as part of the initial award amount. In the event that OCSD elects to add any or all of the Additive Bid Items, it will do so via change order(s). Refer to Part C—SPECIAL PROVISIONS. All Work in the Contract Documents shall be included in Base Bid Items. The Additive Bid Items are for Work either not specifically shown or in excess of quantities shown in the Contract Documents. The Contractor shall provide a unit price and extended total price for each Additive Bid Item. Bidders shall accurately reflect the cost to perform the Work. OCSO may reject unbalanced Bids. Refer to Part 2—INSTRUCTIONS TO BIDDERS. C-BF-122013 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION Page 30 of 38 Bid Submitted By: Ci &V hts kf VCQ CAD S/. (Name of Firm) EXHIBIT A SCHEDULE OF PRICES BASE BID ITEMS (Refer to Note 1 in the Instructions): It.. Descrtption Unit of Appmx Unit Price Extended Price No. Measurement Qty 1. Mobilization: The amount for this Bid Item shall not exceed 4%of the Total Amount of Bid and shall be in conformance with the Contract Documents_ Lump Sum 1 $ for the lump sum price of.. 12[ OQ Q t'e All amounts included in this Bid Item greater than the allowable maximum = payment of 4%of the Total Amount of Bid shall be paid under the Bid Item "Demobilization". 2. Field Office: Allowance for all labor, equipment and materials required for a field office for the duration of the Project in conformance with the Contract Allowance 1 = $ 15,000.00 Documents for the lump sum price of... 3. Staging Area: Allowance for all labor,equipment and materials required for a staging and materials storage area for the duration of the Project in Allowance 1 = $ 25,000.00 conformance with the Contract Documents. 4. Stormwater Pollution Control Plan (SWPCP): Furnish all labor, equipment and materials to prepare the Stonn Water Pollution Control Plan (SWPCP), provide implementation and monitoring, and permit and fees Lump Sum 1 = $ I 21�o u required to complete the Work, in conformance with the Contract 1 Documents for the lump sum price of... 5. Permits:Allowance for permits, City of Costa Mesa, City of Santa Ana, and Costa Mesa Sanitary District inspection fees, and all other charges required Allowance 1 = $ 10,000m to complete the Work, in conformance with the Contract Documents. C-BF-122013 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION - ADDENDUM NO. 1 Page 31 of 38 Bid Submitted By:C ay 1-05 [<I Vk 9 Co ,YI/IG. (Name of Firm) EXHIBIT A SCHEDULE OF PRICES (continued) kNeo. Urlt of Descrlptlov Measurement AQ(y% Unit Price Extended Price B. Traffic Control: Furnish all labor for traffic regulation measures including all provision of all required traffic flagmen, barricades,traffic cones, Lump Sum 1 = $ 7� 5.00 00 electronic and painted signals in conformance with the Contract Document f for the lump sum price of... 7. Temporary Odor Control: Furnish all labor, materials, and odor monitoring equipment necessary to perform odor control and document Lump Sum 1 = $�'/ G 50 n O 00 mitigation of odors during the Contract Work in conformance with the Contract Documents for the lump sum price of... 8. Temporary Handling of Sewage Flow: Furnish all labor, materials and equipment necessary for temporary handling of sewage flow in Lump Sum 1 = $ C rJ q o 0 0O conformance with the Contract Documents for the lump sum price of... f f 9. Dewatering: Furnish all labor, materials and equipment necessary for dewatering during construction in conformance with the Contract Lump Sum 1 = $ //q o 0 Documents for the lump sum price of... f ®� 10. Rehabilitation of Existing Unlined Manholes: Furnish all labor, materials and equipment necessary to rehabilitate seven(7)existing unlined circular pp manholes including concrete removal up to 1-1/2-inches, surface Each 7 x $15 5 ao = $ 109,50000 preparation, coating requirements, and testing in conformance with the f Contract Documents for the unit price of... C-BF-122013 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION ADDENDUM NO.1 Page 32 of 38 Bid Submitted Bya N IQ.VI'CS Kl blQ Co ,WLL - (Name of Firm) EXHIBIT A SCHEDULE OF PRICES (continued) Item Description Unit of Appmx Unit Price Extended Price No. Measurement Dly 11. Rehabilitation of Existing Lined Manholes: Furnish all labor, materials $ and equipment necessary to rehabilitate ten (10)existing lined circular manholes including concrete removal up to 1-1/2-inches,surface Each 10 x $���OQo = I 17 O DO o0 preparation, coating requirements, and testing in conformance with the / / Contract Documents for the unit price of... 12. Rehabilitation of Existing Junction Structures: Furnish all labor, materials and equipment necessary to rehabilitate two(2)existing junction structures located on either side and adjacent to the 405 Freeway including accessing Manholes SAN 0035 and SAN 0045 by excavation and removal Each 2 x $ _ $2CC I [ �o OD of top of existing junction structures and installation of new HOPE pipe and I�1/ (Q�° `�l r manhole riser in conformance with the Contract Documents for the unit price of... 13. Rehabilitation of Existing Siphon Structures: Furnish all labor, materials and equipment necessary to rehabilitate two(2)existing siphon junction structures including inlet access Manholes SAN 0120 and SAN 0190 and Each 2 x "/. _ $ 19. //iQ 00 outlet access Manholes SAN 0115 and SAN 0185 using PVC co-liner systems, in conformance with the Contract Documents for the unit price Of... C-BF-122013 PROJECT NO, 1-17 SANTA ANA TRUNK SEWER REHABILITATION ADDENDUM NO.1 Page 33 of 38 Bid Submitted By:�j1ak Ir5 h( " L ,p G (Name of Firm) EXHIBIT A SCHEDULE OF PRICES ' (continued) it. Description Unit of Approx Unit Price Extended Price No. Measurement @y 14, Construct New Diversion and Sunflower Junction Structures: Furnish all labor, materials and equipment necessary to construct the new diversion structure and new Sunflower junction structure including all associated appurtenances including approximately 60 linear feet of new 48-inch diameter PVC lined reinforced concrete pipe(RCP)pipe connecting the Lump Sum 1 = $ 7 00000 new structures located within the City of Costa Mesa's right-of-way and r OCSD's temporary and permanent pipeline easements in the vicinity of Sunflower Avenue and Cadillac Avenue in conformance with the Contract Documents for the lump sum price of... 15. Costa Mesa Sanitary District(CMSD)related 12-inch VCP sewer work: Furnish all labor, materials, and equipment necessary to construct new CMSD manhole and approximately 20 linear feet of 12-inch diameter VCP connecting to new the Sunflower junction structure; repair manhole base of Lump Sum 1 = $jC 1' 60o 0o existing CMSD manhole; and abandonment of approximately 60 feet of 1 existing CMSD 12-inch diameter sewer in conformance with the Contract Documents for the lump sum price of... 16. Rehabilitate Existing 48-Inch diameter unlined RCP with CIPP: Furnish �� ""�� all labor, materials, and equipment necessary to rehabilitate approximately = (� d 911 feet of existing unlined 48-inch diameter RCP in conformance ✓Lump Sum i $ with the 6, Contract Documents for the lump sum price of... 17. New AC Pavement Restoration,Repair,and Resurfacing: Fumish all labor, materials and equipment necessary for all new pavement, Square resurfacing, repair, and restoration of excavated or damaged areas, Feet 2,400 x $z' 00 = $ C• /1 /OO 00 including inspection and acceptance by the permit requirements, in T conformance with the Contract Documents for the unit price of... C-BF-122013 PROJECT NO, 1-17 SANTA ANA TRUNK SEWER REHABILITATION ADDENDUM NO. 1 Page 34 of 38 Bid Submitted By:C/ `"J rC5 k.l blld Ct .J✓W (Name of Firm) EXHIBIT A SCHEDULE OF PRICES (continued) ttem Description Unit of Approx Una Price Extended Price No. Measurement Qty 18. Restore Landscape, Hardscape, and Irrigation: Furnish all labor, materials, and equipment necessary for restoring landscape, hardsoape - including curb, gutters, sidewalks, and irrigation systems disturbed during Lump Sum 1 _ $ �� I QO p J the Contract Work in conformance with the Contract Documents for the I 1 lump sum price of... 19. Unsuitable Material/Contaminated Soil Transport and Disposal: Furnish all labor, materials,and equipment necessary for hauling and disposal of wet excavated soils with high levels of Volatile Organic Compounds(VOC)and Total Petroleum Hydrocarbons(TPH)contaminants that must be excavated, handled, and treated in strict compliance with Tons 20 x $I g p dO — $ 3 &o©°D SCAQMD Rule 1166, including the requirement that all unsuitable r excavated soils shall be disposed offske at a facility licensed to receive petroleum-contaminated wastes, in conformance with the Contract Documents for the unit price of. 20. Shoring and Bracing: Furnish all labor, equipment and materials required to provide sheeting, shoring and bracing for protection of life and limb in Lump Sum 1 = $ 1 QQO oO trenches, open excavations and confined spaces, in conformance with the l / Contract Documents for the lump sum price of... C-BF-122013 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION ADDENDUM NO. 1 Page 35 of 38 Bid Submitted By:C.Lt/.�vILS �� L1G Co -J iM IName of Firm) EXHIBIT A SCHEDULE OF PRICES (continued) Item neacriptlon Unitm App. Unit Price Extended Price No. Measurement Qty 21. Removal of Existing Manhole and Replace with completely new 72- inch manhole in accordance with OCSD Standard Detail S-49(greater than 12'to 15'depth): Furnish all labor, materials, and equipment necessary to remove existing manhole and replace with new manhole structure including excavation, demolition, disposal, shoring, dewatering, Each 1 x $�a/q po UU additional traffic control temporary handling of sewage and bypass 1 1 pumping, constmcting manhole including base, shaft, cones, grade rings, frame and cover, concrete collar, etc., backfilling, and pavement restoration in conformance with the Contract Documents for the unit price of... 22. Additional Heavy Cleaning of Sewer: Fumish all labor, materials and equipment necessary for additional heavy cleaning of existing 48-inch diameter RCP sewer prior to CIPP work in accordance with NASSCO Linear Feet 911 x $ requirements,in conformance with the Contract Documents for the unit price of... 23. OCSD Directed Potholing: Furnish all labor, materials, and equipment necessary for potholing for utilities as directed by OCSD complete in place Each 5 x $' O° _ $ Q d 0 0 in conformance with the Contract Documents for the unit price of... r {r 24. Set Up for Chemical Grout Injection Into Pipe Joints: Furnish all labor, materials and equipment necessary to set up for chemical grout injection p 00 into pipe joints in conformance with the Contract Documents for the unit Each 1 x $ 75.o°0 = $ price of.. C-BF-122013 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION ADDENDUM NO. i Page 36 of 38 Bid Submitted By:('k6LV I.'ZiS �j t A Ct Tj - (Name of Firm) EXHIBIT A SCHEDULE OF PRICES (continued) aem Descnptien Unit of Apo. Unit Price extended Price No. Measurement Dry 25. Chemical Grout Injection into Pipe Joints: Furnish all labor, materials and equipment necessary to inject chemical grout into pipe joints to stop 00 infiltration in conformance with the Contract Documents for the unit price Gallons 50 x $30 p°O $ �� 000 Of... 26. All other portions of the Work Except for the Work of Items No.1 through 25 and Item No.27: Furnish all labor, materials, and equipment necessary to complete all other portions of the Contract Work,except for Lump Sum 1 = $ the Contract Work specified in Items No. 1 through 25 and Item No.27 in D J V conformance with the Contract Documents for the lump sum price of... 27. Demobilization: The amount for this Bid Item shall not be less than 1e/of the Total Amount of Bid and shall include but not be limited to the acceptance of Work by OCSD,final cleanup and restoration of the staging area to its original condition, submittal and acceptance of as-built drawings, o 0 completion of all items on final punch list,final cleanup and processing of Lump Sum 1 = $ Z50 final progress payment request, in conformance with the Contract / Documents for a lump sum price of... All amounts greater than 4%which were included in Bid Item 1 Mobilization shall be paid under this Demobilization Bid Item. SUBTOTAL BASE BID ITEMS NO.1 THROUGH NO. 27 (AWARD AMOUNT) $ C-BF-122013 PROJECT NO. 1-17 SANTA ANA TRUNK SEWER REHABILITATION ADDENDUM NO. 1 Page 37 of 38 Bid Submitted By: IC6 KL—T-C.n • J (Name of Firm) EXHIBIT A SCHEDULE OF PRICES (continued) ADDITIVE BID ITEMS(Refer to Note 2 in the Instructions): Item DescriptionUnit of App.. Unit Price Extended Price No. Measurement Dry 2B. Additional Hydrophilic Grout Injection: Furnish all labor, materials and equipment necessary to inject additional hydrophilic grout into manholes or Gallons 50 x $go000 006 00 structures to stop infiltration, in conformance with the Contract Documents i for the unit price of... SUBTOTAL ADDITIVE BID ITEM NO. 28 TOTAL AMOUNT OF BID (BASISOFAWARD) IMPORTANT NOTICE TO BIDDERS: ' Bid Items No. 1 through No.27 togetherwith Additive Bid Item No.28 will be used to determine the lowest, responsive, responsible Bidder. Additive Bid Item No. 28 will not be included as part of the award amount. In the event OCSD elects to add any of the Additive Bid Item(s), it will do so via Change Order(s). Refer to the SPECIAL PROVISIONS Section entitled ADDITIVE BID ITEMS. All Work in the Contract Documents shall be included in Bid Items No. 1 through No. 27 above. The Additive Bid Item is for Work either not specifically shown or in excess of quantities shown in the Contract Documents. The Contractor shall provide a unit price and extended total price for each Additive Bid Item. C-BF-122013 PROJECT NO.1-17 SANTA ANATRUNK SEWER REHABILITATION ADDENDUM NO. 1 Page 38 of 38 BOARD OF DIRECTORS Meeting Date I To Bd.of Dir. — Ofi/25/14 AGENDA REPORT Henn Number Hem Number q Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: GISLER-REDHILL SYSTEM IMPROVEMENTS, REACH B, CONTRACT NO. 7-37 GENERAL MANAGER'S RECOMMENDATION Approve Reimbursement Agreement with the City of Tustin for the construction of a portion of the Orange County Sanitation District's Gisler-Redhill System Improvements, Reach B, Contract No. 7-37, for an amount not to exceed $300,000 to be paid to the City of Tustin, in a form approved by Special Counsel. SUMMARY The City of Tustin (City) is constructing Warner Avenue between Redhill Avenue and Tustin Ranch Road, which includes the improvement of the Warner Avenue/Redhill Intersection. Upon completion of the improvements, the City of Tustin has indicated that no construction will be allowed within the intersection. The Orange County Sanitation District (Sanitation District) is also currently designing the Gisler-Redhill System Improvements, Reach B, a segment which passes through the Redhill/Warner Avenue intersection. The proposed Reimbursement Agreement with the City provides that the City's Contractor for the Warner Avenue Extension, Phase 2, Street Improvement Project, will also construct a portion of the Sanitation District's Gisler-Redhill System Improvements, Reach B, Sewer Project simultaneously. Performing the work in this manner will minimize public impact and save costs. The Sanitation District will reimburse the City for an amount not to exceed $300,000 to cover construction and administrative costs, as well as any change orders associated with the Sanitation District's Sewer Project. PRIOR COMMITTEE/BOARD ACTIONS December 2011 - Approved Amendment No. 1 to the Reimbursement Agreement with the City of Tustin for the construction of an additional portion of the Orange County Sanitation District's Gisler-Redhill System Improvements, Reach B, Contract No. 7-37, for an additional amount of $150,000, increasing the total amount not to exceed $375,000, to be paid to the City of Tustin, in a form approved by General Counsel. Page 1 of 2 May 2011 — (1) Approved a Reimbursement Agreement with the City of Irvine for the construction of a portion of the Orange County Sanitation District's Gisler-Redhill System Improvements, Reach B, Contract No. 7-37, for an amount not to exceed $150,000 to be paid to the City of Irvine, in a form approved by General Counsel. (2)Approved a Reimbursement Agreement with the City of Tustin for the construction of a portion of the Orange County Sanitation District's Gisler-Redhill System Improvements, Reach B, Contract No. 7-37, for an amount not to exceed $225,000 to be paid to the City of Tustin, in a form approved by General Counsel; and, (3) Approved a Reimbursement Agreement with the City of Tustin for conducting sewer repairs for the Newport Avenue/SR55 Northbound Ramp Reconfiguration Project, for an amount not to exceed $55,000 to be paid to the Orange County Sanitation District, in a form approved by General Counsel. March 2011 - Approved a Reimbursement Agreement with the Irvine Ranch Water District (IRWD) for construction of a portion of the Gisler-Redhill Trunk Improvements, Reach "B," Contract No. 7-37, for an amount not to exceed $450,000, in a form approved by General Counsel. ADDITIONAL INFORMATION Throughout the course of the design of this project, the Sanitation District has been working cooperatively with the City of Irvine, City of Tustin, and Irvine Ranch Water District to design and construct this new sewer while minimizing impacts to the busy streets in this service area. Through this cooperative effort, effective solutions have been developed to phase construction of portions of this line using the existing City of Irvine, City of Tustin, and Irvine Ranch Water District construction contracts. CEQA This project was included in the 1999 Strategic Plan Program EIR, certified on October 27, 1999. A Notice of Determination was filed on October 29, 1999. BUDGET/PURCHASING ORDINANCE COMPLIANCE This recommendation complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted (FY2013-14 Update, Page A-7, Item 30), 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 and attachments: Reimbursement Agreement RT:HK:dm:gc Page 2 of 2 REIMBURSEMENT AGREEMENT BETWEEN THE ORANGE COUNTY SANITATION DISTRICT AND CITY OF TUSTIN FOR THE GISLER RED HILL SYSTEM IMPROVEMENTS OCSD CONTRACT No. 7-37 THIS REIMBURSEMENT AGREEMENT("Agreement')is made and entered into on this 25m day of June, 2014 ("Effective Date")between the: ORANGE COUNTY SANITATION DISTRICT, a County Sanitation District ("OCSD"); AND CITY OF TUSTIN, a municipal corporation, ("City")- OCSD and City are sometimes hereinafter individually referred to as "Party" and hereinafter collectively referred to as "Parties." WHEREAS,OCSD is a duly organized County Sanitation District existing pursuant to the County Sanitation District Act,California Health and Safety Code section 4700 etseg.,providing for the ownership,operation,and maintenance of wastewater collection,treatment,and disposal facilities within Orange County,California; and WHEREAS,the City is a municipal corporation duly organized and validly existing under the laws of the State of California; and WHEREAS,OCSD desires to build or have built a portion of its Gisler-Redhill System Improvements Reach B project ("OCSD Project") located in Red Hill Avenue, in the City of Tustin, as shown on Exhibit A; and WHEREAS, the City is constructing its Warner Avenue Extension, Phase 2, Street Improvement(CIP 70202)("City Project")aportion of which is located along Red Hill Avenue in the City of Tustin("City's Project Area"); WHEREAS,the OCSD Project is within the City's Project Area; WHEREAS,the City has already engaged the services of a contractor for the construction of the City Project; WHEREAS,OCSD and the City desire to perform the OCSD Project and City Project in a manner that minimizes the impacts to the environment,the public,and surrounding community; "32a08a2459.1 1 1010563.1 WHEREAS,OCSD and City,in order to minimize traffic and construction impacts,intend by this Agreement to provide for the City's contractor to construct the portion of the OCSD Project that is within the City's Project Area, and for OCSD to reimburse the City for those construction costs; and WHEREAS, the Parties desire to enter into this Agreement to establish the duties and obligations of each respective Party for the completion of the OCSD Project and the City Project. NOW THEREFORE,based on the recitals and the mutual covenants and promises herein, the City and OCSD agree as follows: Section 1. Recitals. The recitals above are deemed true and correct,and are hereby incorporated in this Section as though fully set forth herein. Section 2. Elements of Agreement OCSD and the City shall work cooperatively together so the OCSD Project and the City Project can be constructed in a manner that minimizes the costs and impacts to the public.The specific terms and conditions governing the elements of this Agreement are set forth hereinafter. Section 3. Citv's Specific Obligations Relating to OCSD Project. A. Upon OCSD's written authorization, the City shall have its contractor proceed with the OCSD Project in strict conformance with the plans and specifications approved pursuant to Section 4.A.,below. B. City shall be responsible for administering the construction contract and the construction of the OCSD Project. C. City shall be responsible for compliance with the California Environmental Quality Act("CEQA")(Pub.Resources Code,Section 21000 et seq.)for all activities associated with City Project and City shall be the Lead Agency for purposes of CEQA for the City Project. D. City shall require from its construction contractor a Faithful Performance Bond,a Labor and Materials Payment Bond,and a one-year warranty for the OCSD Project.Such bonds and warranty shall comply with the City's General Provisions Section 24 "Contract Bonds" (see attached Exhibit B . E. City shall promptly inform OCSD of any proposed change orders to the construction contract that affect the OCSD Project Copies of proposed change orders affecting OCSD will be provided to OCSD within five(5)working days of submission to City.All change orders shall be subject to OCSD's approval if and to the extent OCSD's improvements are affected thereby. OCSD shall not unreasonably withhold its approval to such change orders. F. City shall famish and deliver to OCSD all as-built redlined contractor's plans of OCSD Project and copies of any additional project-related documents requested by OCSD at no cost to OCSD. 4832a08a2459.1 2 1010563.1 Section 4. OCSD's Specific Obligations Relating to OCSD Project. A. OCSD shall(i)be responsible for the design and preparation of the plans and specifications for the OCSD Project;(ii)obtain City's approval of the plans and specifications for the OCSD Project; and (iii) obtain all required permits for the construction of the OCSD Project and easements related thereto. B. OCSD shall be responsible for compliance with CEQA for all activities associated with the OCSD Project and OCSD shall be the Lead Agency for purposes of CEQA. C. Upon obtaining City's approval of the plans and specifications for the OCSD Project, and after OCSD accepts the City contractor's proposal of estimated costs and expenses for the construction of the OCSD Project ("Contractor's Proposal") and OCSD gives City authorization to proceed with the work,OCSD will deposit with City an amount equal to the Contractor's Proposal plus a four percent(4%)administrative fee to cover City staff time("OCSD Deposit"). In no event shall the amount of the OCSD Deposit exceed Three Hundred Thousand Dollars($300,000),except as may be authorized by change order in accordance with Section 3.E or otherwise approved by OCSD in writing ("OCSD Project Cost Cap"). A final accounting of the reimbursement owing from OCSD to City will be made upon completion and acceptance of OCSD's Project by OCSD. OCSD's reimbursement of costs shall not include costs and services for the design and construction of City's Project. D. OCSD shall have the sole and absolute discretion to approve all aspects of the design and construction of the OCSD Project, as well as construction change orders related thereto,but OCSD shall not unreasonably withhold its approval of change orders. OCSD shall assign a Resident Engineer to oversee change orders, if any. E. OCSD shall provide construction inspection and support services for the OCSD Project. OCSD shall inspect construction of the OCSD Project as it deems necessary to assure compliance with the approved Plans and Specifications, including shop drawing review, requests for information and clarifications, material inspection, surveying, geotechnical testing and recommendations, specialty inspections, permit compliance, construction meetings, and design changes thereof.OCSD shall promptly notify City if any portion of the work appears not to conform to the Plans and Specifications, and shall work with the City on all items associated with the OCSD Project's construction. F. OCSD shall prepare its own record drawings. Section 5. Indemnification. A. Except as set forth in Section S.C.below,City shall indemnify,defend and hold OCSD, its elected and appointed officials, its officers,agents, employees, and consultants harmless from any and all actions, suits, claims, liability or expense for death, injury, loss, or damage to persons or property(collectively"Claims")arising out of any act or omission by City, its officers,agents,employees or consultants,with respect to the construction or undertaking of the OCSD Project or City Project,except in those instances where such Claims are solely caused by any act,omission, or negligence of OCSD, its officers, agents, employees or consultants. 49323080-2459.1 3 1010563.1 B. Except as set forth in Section S.C.below,OCSD shall indemnify,defend and bold City,its elected and appointed officials,its officers,agents,employees,and consultants, harmless from any and all Claims arising out of any act or omission by OCSD,its officers,agents, employees or consultants,with respect to the construction or undertaking of the OCSD Project,as a result of or in connection with the maintenance and operation of the OCSD Project,except in those instances where such Claims are solely caused by any act,omission,or negligence of City, its officers, agents,employees, or consultants. C. Neither City nor OCSD shall be obligated under Section 5.A or 5.B to defend, indemnify or hold harmless the other against Claims arising solely out of an act or omission by either Parry's consultant or contractor in connection with the construction, maintenance or operation of the OCSD Project and/or City Project. The Parties shall, in any contract with a contractor or consultant working on the OCSD Project and/or City Project,require that contractor or consultant to indemnify,defend,and hold harmless both the City and OCSD in connection with any Claims arising out of or relating to the construction, maintenance or operation of the OCSD Project and/or City Project and obtain insurance consistent with Section 6. At least 10 days prior to the commencement of construction of the OCSD Project,the City shall provide OCSD with proof of the contractor's indemnity and insurance, including providing endorsements or policies evidencing compliance with the requirements of Section 6. Section 6. Insurance. The City shall require its contractor to maintain insurance policies in compliance with the City's General Provisions Section 7-3"Liability Insurance"(see Exhibit C) during all times of the construction projects. OCSD shall be named as an additional insured on each liability insurance policy. The City shall not allow its contractor or subcontractor(s) to commence the work covered by this Agreement until such insurance is obtained in accordance with the requirements of this Section. Section 7. Term. This Agreement shall commence on the Effective Date, and be in full force and effect until the specified obligations of both Parties have been fulfilled or the Agreement is tenuinated. Section 8. Notices. All notices or other communications required or permitted hereunder shall be in writing and shall be personally delivered or sent by overnight courier or U.S. mail or by electronic transmission, and shall be deemed received upon the earlier of (i)the date of delivery to the address of the person to receive such notice if delivered personally or by messenger or overnight courier; (it) three business days after the date of posting by the United States Post Office if by mail; or(iii)when sent if given by electronic transmission. Any notice, request, demand, direction, or other communication sent by electronic transmission must be confirmed within 48 hours by letter mailed or delivered.Notices or other communications shall be addressed as follows: To OCSD: Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, CA 92708-7018 Attention: Clerk of the Board 48323080-2459.1 4 1010563.1 Facsimile: (714)962-5018 To CITY: City of Tustin 300 Centennial Way Tustin, CA 92780 Attention: Director of Public Works/City Engineer Facsimile: (714) 734-8991 Section 9. Jurisdiction. In the event of a dispute regarding performance or interpretation of this Agreement,the venue for any action to enforce or interpret this Agreement shall lie in the Superior Court of California for Orange County. Section 10. No Third Party Beneficiaries. This Agreement is entered into by and for the OCSD and the City, and nothing herein is intended to establish rights or interests in individuals or entities not a party hereto. Section 11. Force Majeure. Except for the payment of money, neither Party shall be liable for any delays or other non-performance resulting from circumstances or causes beyond its reasonable control,including without limitation,fire or other casualty,Act of God,strike or labor dispute, war or other violence, acts of third parties, or any law, order, or requirement of any governmental agency or authority. Section 12. Governing Law. This Agreement shall be governed by the laws of the State of California. Section 13. Entire Agreement.This Agreement constitutes the entire understanding and agreement between the Parties and supersedes all previous negotiations and agreements between the Parties pertaining to the City's construction of, and OCSD's reimbursement to the City for, the OCSD Project described in this Agreement. Section 14. Waiver.A waiver of a breach of the covenants,conditions,or obligations under this Agreement by either Party shall not be construed as a waiver of any succeeding breach of the same or other covenants, conditions, or obligations of this Agreement. Section 15. Modification. Except for change orders approved in accordance with Section 3.E., any alteration,change,or modification of this Agreement shall be in the form of a written amendment, which shall be signed by both Parties. Section 16. Severability.If any term or portion of this Agreement is held to be invalid, illegal,or otherwise unenforceable by a court of competentjurisdiction,the remaining provisions of this Agreement shall continue in full force and effect. Section 17. Agreement Execution and Authorization. Each of the undersigned represents and warrants that they are duly authorized to execute and deliver this Agreement and that such execution is binding upon the entity on whose behalf they are executing this Agreement. This Agreement may be executed in counterparts. "32a08a2459.1 5 1010563.1 The Parties are signing this Agreement as of the Effective Date. ORANGE COUNTY SANITATION DISTRICT By: James D. Herberg,General Manager APPROVED AS TO FORM: Lewis,Brisbois, Bisgaard& Smith,LLP By: Claire Hervey tollins, Special Counsel CITY OF TUSTIN By: Elwyn A. Murray,Mayor ATTEST: Jeffrey C. Parker,City Clerk APPROVED AS TO FORM: By David E. Kendig, City Attorney 4832-3080-2459.1 6 1010563.1 I I I I I I IH NEW MANHOLE NEW OCSD TRUNK SEWER I I I I I II II IIIu NEW MANHOLE 4 - EXIST 27" INTERCEPTOR SEWER NEW MANHOLE I I EXIST 24"TRUNK SEWER o I RIGHT OF WAY m I TS - - - - - -- - - - - - - - - -__--- _ 67 — SI - - - - - - - - - - - — - - - ` T _ = W�- - — - --17a -ji m - A PH - -- ------- -- 1-4 -30 - t —1-36-- ------ - 134 T - - - - - - - — — — - - - - - - - - -�-' -- - - - - _ 9 7-�W$ -- T T -- TT T ASP I o RIGHT OF WAY � o_ a I 'B 2001STREET CENTERLINE n O M I � n � N m rii o w � GISLER-RED HILL SYSTEM IMPROVEMENTS REACH B a w SCALE: 1 " = 40' zy `� z ORANGE COUNTY w SANITATION DISTRICT TETRA TECH REDHILL AND WARNER INTERSECTION EXHIBIT N 4 0 40 80 NEW TRUNK SEWER IMPROVEMENTS A o w a a EXHIBIT 2-4 CONTRACT BONDS Both the Faithful Performance Bond and the labor and Materials Payment Bond shag each be for not less than one hundred percent(iW%)of the total contract amount. Bonds shall be of the fort attached to Section C and secured from a surety company duly authorized to issue such bonds in the State of California and shall be subject to the approval and acceptance of the City Council and City Attorney. The Labor and Materials Payment Bond and the Faithful Performance Bond shall remain in force unfit one (1) year after the date of recordation of the Notice of Completion. Additionally, the Contractor shall concurrently submit, with the bonds, a certified copy of the most recent Certificate of Authority issued to the bonding Company by the California Insurance Commissioner. "32-10W2459.1 Exhibit B 1010565A EMUDLI r 7-3 LIABILI INSURANCE Peak:Liability and Fromm,Damaoes. Contractor shall take out and maintain during the Fife of the contract, commercial general liability, automobile 4abitty and worket's compensation insurance. The amount of the commercial general liability and automobile insurance shall not be less than the following: Single limit coverage applying to bodily and personal injury liability,and property damage: $2 000,000.00. The following insurer endorsements are required it not part of the policy: 1. The City of Tustin, its elective and appointive boards, officers, agents and ' employees named as additional insureds in the policy as to the work being performed under the contract; I 2. The coverage is primary and no other insurance carried by the City of Tusfin will be called upon to contribute to a loss under this Coverage; 1 3. The policy covers blanket contractual liability; f 4. The policy limits or liability are provided on an occurrence basis; 5. The policy covers broad forth property damage liability; B. The policy covers personal injury as well as bodily injury liability; 7. The policy covers explosion,collapse,and underground hazards; B. The policy covers products and completed operations; 9. The policy covers use of norwwner automobiles;and 10. The coverage shall not be cancelled or terminated unless thirty (30) days wdtien notice is given to the City of Tusfin. 11, Insurers shall be authorized to do business in the State by the Department of Nsurance and shall meet the following qualifications: A.M. Best's Key Rating of Grade A and Class VII (seven) (if an Admitted insurer),and Grade A-of better and Class X(ten)or better(it offered by a Surplus Line Broker), is acceptable. Workers compensation insurance rated Grade B-or better and Class VII (seven)a better,or offered by the State Compensation Fund,is acceptable. 12. The worker's compensation and employer's fiabtkty insurance policies shah contain a waiver of subrogation in favor of the City. Comractof shall provide to this City within ten (10) working days after the date of notice of award of the contract evidence of fhe aforementioned insurance with insurer endorsements, which must meet the requirements of this Article. An ACord Certificate will be accepted solety n� as evidence of the name of the insurers and the amounts of insurance. Failure to comply with these mquiremems vrill result in annulment of fhe award, fodeelure of the proposal guarantee,and the City will pursue award to the next qualified responsive bidder. Contractor is advised that insurance requirements are non-negotiable and City will not consider waving insurance requiremants. There are no exceptons. BOARD OF DIRECTORS Meeting Data TOBA.of Dlr. O6/26/14 AGENDA REPORT ItemNumber Item Numbar — s Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: PLANT NO. 1 PRIMARY TREATMENT, PROJECT NO. P1-124 GENERAL MANAGER'S RECOMMENDATION A. Receive and file bid tabulation and recommendation; and B. Award a construction contract to Archer Western Construction, Inc. for Plant No. 1 Primary Treatment, Project No. P1-124, for a total amount not to exceed $5,513,891; and C. Approve a contingency of$551,389 (10%). SUMMARY Plant No. 1 Primary Treatment, Project No. P1-124, will replace the existing primary sludge pumps at Primary Clarifiers (PC) 16-31 East, and will resolve various operation, maintenance, corrosion, and safety issues throughout this facility. The Orange County Sanitation District (Sanitation District) advertised for bids on February 19, 2014. Eight sealed bids were received on April 17, 2014. The bids were evaluated in accordance with the Sanitation District's policies and procedures. Archer Western Construction, Inc. was deemed the lowest responsive, responsible bidder. Staff recommends awarding a construction contract to Archer Western Construction, Inc. for Plant No. 1 Primary Treatment, Project No. P1-124, for a total amount not to exceed $5,531,891. Summary information on the bid opening for Plant No. 1 Primary Treatment, Project No. P1-124, is as follows: Project Budget $11,535,000 Construction Contract Budget $ 7,000,000 Engineer's Estimate $ 6,940,050 Lowest Responsive, Responsible Bid $ 5,513,891 High Bid $ 7,189,312 Page 1 of 2 Bidder Amount of Bid Archer Western Construction, Inc. $ 5,513,891 C.W. Roan Construction Company $ 5,836,000 Steve P. Rados, Inc. $ 6,284,188 J.F. Shea Construction $ 6,652,557 KANA Engineering Group, Inc. $ 6,712,068 Shimmick Construction Company, Inc. $ 6,720,000 WM Lyles Co. $ 6,808,694 PCL Construction, Inc. $ 7,189,312 PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION N/A CEQA A Notice of Exemption was filed and recorded with the County of Orange on August 31, 2012. BUDGET/PURCHASING ORDINANCE COMPLIANCE This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted (Line item: FY2013-14 Update, Page A-9). Project contingency funds will not be used for this construction contract. Date of Approval Contract Amount Continnencv 06/25/14 $5,513,891 $551,389(10%) ATTACHMENT The following attachment(s) maybe viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package: • Construction Contract RT:EY:dm:gc Page 2 of 2 PART A CONTRACT AGREEMENT C-CA-071913 TABLE OF CONTENTS CONTRACT AGREEMENT SECTION - 1 GENERAL CONDITIONS..................................................................1 SECTION -2 MATERIALS AND LABOR.................................................................4 SECTION -3 PROJECT..........................................................................................4 SECTION -4 PLANS AND SPECIFICATONS ........................................................5 SECTION -5 TIME OF COMMENCEMENT AND COMPLETION ..........................5 SECTION -6 TIME IS OF THE ESSENCE .............................................................5 SECTION -7 EXCUSABLE DELAYS......................................................................6 SECTION -8 EXTRA WORK...................................................................................6 SECTION -9 CHANGES IN PROJECT...................................................................7 SECTION - 10 LIQUIDATED DAMAGES FOR DELAY.............................................7 SECTION - 11 CONTRACT PRICE AND METHOD OF PAYMENT.........................7 SECTION - 12 SUBSTITUTION OF SECURITIES IN LIEU OF RETENTION OF FUNDS ..............................................................................................9 SECTION - 13 COMPLETION.................................................................................10 SECTION - 14 CONTRACTOR'S EMPLOYEES COMPENSATION.......................10 SECTION - 15 SURETY BONDS ............................................................................12 SECTION - 16 INSURANCE....................................................................................13 SECTION - 17 RISK AND INDEMNIFICATION.......................................................21 SECTION - 18 TERMINATION................................................................................21 SECTION - 19 WARRANTY....................................................................................21 SECTION -20 ASSIGNMENT.................................................................................22 SECTION -21 RESOLUTION OF DISPUTES ........................................................22 SECTION -22 SAFETY& HEALTH........................................................................23 SECTION -23 NOTICES.........................................................................................23 C-CA-071913 CONTRACT AGREEMENT ORANGE COUNTY SANITATION DISTRICT PROJECT NO. P1-124 PLANT NO. 1 PRIMARY TREATMENT UPGRADES THIS AGREEMENT is made and entered into, to be effective, this June 25, 2014, by and between Archer Western Construction, LLC, hereinafter referred to as "CONTRACTOR" and the Orange County Sanitation District, hereinafter referred to as "OCSD". WITNESSETH That for and in consideration of the promises and agreements hereinafter made and exchanged, OCSD and CONTRACTOR agree as follows: SECTION-1 GENERAL CONDITIONS CONTRACTOR certifies and agrees that all the terms, conditions and obligations of the Contract Documents as hereinafter defined, the location of the job site, and the conditions under which the Work is to be performed have been thoroughly reviewed, and enters into this Contract based upon CONTRACTOR's investigation of all such matters and is in no way relying upon any opinions or representations of OCSD. It is agreed that this Contract represents the entire agreement. It is further agreed that the Contract Documents are each incorporated into this Contract by reference, with the same force and effect as if the same were set forth at length herein, and that CONTRACTOR and its Subcontractors, if any, will be and are bound by any and all of said Contract Documents insofar as they relate in any part or in any way, directly or indirectly, to the Work covered by this Contract. A. Contract Documents Order of Precedence "Contract Documents" refers to those documents identified in the definition of"Contract Documents" in the General Conditions—Definitions. C-CA-071913 PROJECT NO.P1-124 PLANT NO. I PRIMARY TREATMENT UPGRADES CONFORMED Page 1 of 24 1. In the event of a conflict between one Contract Document and any of the other Contract Documents, the provisions in the document highest in precedence shall be controlling. The order of precedence of the Contract Documents is as follows: a. Supplemental Agreements—the last in time being the first in precedence b. Addenda issued prior to opening of Bids—the last in time being the first in precedence c. Contract Agreement d. Permits and other regulatory requirements e. Special Provisions f. General Conditions (GC) g. Notice Inviting Bids and Instruction to Bidders h. Geotechnical Baseline Report(GBR), if attached as a Contract Document I. Plans and Specifications—in these documents the order of precedence shall be: i. Specifications (Divisions 01-17) ii. Plans H. General Requirements (GR) iv. Standard Drawings and Typical Details j. CONTRACTOR'S Bid 2. In the event of a conflict between terms within an individual Contract Document, the conflict shall be resolved by applying the following principles as appears applicable: a. Figured dimensions on the Contract Documents shall govern. Dimensions not specified shall be as directed by the ENGINEER. Details not shown or specified shall be the same as similar parts that are shown or specified, or as directed. Full-size details shall take precedence over scale Drawings as to C-CA-071913 PROJECT NO. P1-124 PLANT NO. 1 PRIMARY TREATMENT UPGRADES CONFORMED Page 2 of 24 shape and details of construction. Specifications shall govern as to material and workmanship. b. The Contract Documents calling for the higher quality material or workmanship shall prevail. Materials or Work described in words, which so applied, have a well known technical or trade meaning shall be deemed to refer to such recognized standards. In the event of any discrepancy between any Drawings and the figures thereon, the figures shall be taken as correct. C. Scale Drawings, full-size details, and Specifications are intended to be fully complementary and to agree. Should any discrepancy between Contract Documents come to the CONTRACTOR's attention, or should an error occur in the efforts of others, which affect the Work, the CONTRACTOR shall notify the ENGINEER, in writing, at once. In the event any doubts or questions arise with respect to the true meaning of the Contract Documents, reference shall be made to the ENGINEER whose written decision shall be final. If the CONTRACTOR proceeds with the Work affected without written instructions from the ENGINEER, the CONTRACTOR shall be fully responsible for any resultant damage or defect. d. Anything mentioned in the Specifications and not indicated in the Plans, or indicated in the Plans and not mentioned in the Specifications, shall be of like effect as if indicated and mentioned in both. In case of discrepancy in the Plans or Specifications, the matter shall be immediately submitted to OCSD's ENGINEER, without whose decision CONTRACTOR shall not adjust said discrepancy save only at CONTRACTOR's own risk and expense. The decision of the ENGINEER shall be final. C-CA-071913 PROJECT NO.P1-124 PLANT NO. 1 PRIMARY TREATMENT UPGRADES CONFORMED Page 3 of 24 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. SECTION-3 PROJECT The Project is described as: PROJECT NO. P1-124 PLANT NO. 1 PRIMARY TREATMENT UPGRADES C-CA-071913 PROJECT NO. P1-124 PLANT NO. 1 PRIMARY TREATMENT UPGRADES CONFORMED Page 4 of 24 SECTION-4 PLANS AND SPECIFICATONS The Work to be done is shown in a set of Plans and Specifications entitled: PROJECT NO. P1-124 PLANT NO. 1 PRIMARY TREATMENT UPGRADES 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 720 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 15 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 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, C-CA-071913 PROJECT NO.P1-124 PLANT NO. I PRIMARY TREATMENT UPGRADES CONFORMED Page 5 of 24 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—S EXTRA WORK The Contract Price as set forth in Section 11, includes compensation for all Work performed by CONTRACTOR, unless CONTRACTOR obtains a Change Order signed by a designated representative of OCSD specifying the exact nature of the Extra Work and the amount of extra compensation to be paid all as more particularly set forth in Section 9 hereof and the General Conditions, "Request for Change (Changes at CONTRACTOR's Request)", "OWNER Initiated Changes", and "Contract Price Adjustments and Payments". 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. C-CA-071913 PROJECT NO. P1-124 PLANT NO. 1 PRIMARY TREATMENT UPGRADES CONFORMED Page 6 of 24 SECTION — 9 CHANGES IN PROJECT OCSD may at any time, without notice to any Surety, by Change Order, make any changes in the Work within the general scope of the Contract Document, including but not limited to changes: 1. In the Specifications (including Drawings and designs); 2. In the time, method or manner of performance of the Work; 3. In OCSD-furnished facilities, equipment, materials, services or site; or 4. Directing acceleration in the performance of the Work. No change of period of performance or Contract Price, or any other change in the Contract Documents, shall be binding until the Contract is modified by a fully executed Change Order. All Change Orders shall be issued in accordance with the requirements set forth in the General Conditions, "Request for Change (Changes at CONTRACTOR's Request)" and "OWNER Initiated Changes". SECTION — 10 LIQUIDATED DAMAGES FOR DELAY Liquidated Damages shall be payable in the amounts and upon the occurrence of such events or failure to meet such requirements or deadlines as provided in the Special Provisions, "Liquidated Damages and Incentives." SECTION—11 CONTRACT PRICE AND METHOD OF PAYMENT A. OCSD agrees to pay and the CONTRACTOR agrees to accept as full consideration for the faithful performance of this Contract, subject to any additions or deductions as provided in approved Change Orders, the sum of Five Million Five Hundred Thirteen Thousand Eight Hundred Ninety One Dollars ($5,513,891) 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 C-CA-071913 PROJECT NO.P1-124 PLANT NO. I PRIMARY TREATMENT UPGRADES CONFORMED Page 7 of 24 not limited to Sections entitled "Mobilization Payment Requirements" and "Payment Itemized Breakdown of Contract Lump Sum Prices"), there shall be paid to the CONTRACTOR an initial Net Progress Payment for mobilization. OCSD shall issue at the commencement of the job a schedule which shows: 1. A minimum of one payment to be made to the CONTRACTOR for each successive four(4)week period as the Work progresses, and 2. The due dates for the CONTRACTOR to submit requests for payment to meet the payment schedule. After the initial Net Progress Payment, and provided the CONTRACTOR submits the request for payment prior to the end of the day required to meet the payment schedule, the CONTRACTOR shall be paid a Net Progress Payment on the corresponding monthly payment date set forth in the schedule. Payments shall be made on demands drawn in the manner required by law, accompanied by a certificate signed by the ENGINEER, stating that the Work for which payment is demanded has been performed in accordance with the terms of the Contract Documents, and that the amount stated in the certificate is due under the terms of the Contract. Payment applications shall also be accompanied with all documentation, records, and releases as required by the Contract, Exhibit A, Schedule of Prices, and General Conditions, "Payment for Work—General". The Total amount of Progress Payments shall not exceed the actual 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: C-CA-071913 PROJECT NO. P1-124 PLANT NO. 1 PRIMARY TREATMENT UPGRADES CONFORMED Page 8 of 24 1. "Net Progress Payment" means a sum equal to the Progress Payment less the Retention Amount and other qualified deductions (Liquidated Damages, stop payment notices, etc.). 2. "Progress Payment' means a sum equal to: a. the value of the actual Work completed since the commencement of the Work as determined by OCSD; b. plus the value of material suitably stored at the worksite, treatment plant or approved storage yards subject to or under the control of OCSD since the commencement of the Work as determined by OCSD; C. less all previous Net Progress Payments; d. less all amounts of previously qualified deductions; e. less all amounts previously retained as Retention Amounts. 3. "Retention Amount'for each Progress Payment means the percentage of each Progress Payment to be retained by OCSD to assure satisfactory completion of the Contract. The amount to be retained from each Progress Payment shall be determined as provided in the General Conditions—"Retained Funds; Substitution of Securities." SECTION-12 SUBSTITUTION OF SECURITIES IN LIEU OF RETENTION OF FUNDS Pursuant to Public Contract Code Section 22300 et seq., the CONTRACTOR may, at its sole expense, substitute securities as provided in General Conditions—"Retained Funds; Substitution of Securities." C-CA-071913 PROJECT NO.P1-124 PLANT NO. 1 PRIMARY TREATMENT UPGRADES CONFORMED Page 9 of 24 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. 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 C-CA-071913 PROJECT NO. P1-124 PLANT NO. 1 PRIMARY TREATMENT UPGRADES CONFORMED Page 10 of 24 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. ADDrentices: Sections 1777.5, 1777.6, 1777.7 of the Labor Code of the State of California, regarding the employment of apprentices are applicable to this Contract and the CONTRACTOR shall comply therewith if the prime contract involves Thirty Thousand Dollars ($30,000.00) or more. E. Workday: In the performance of this Contract, not more than eight(8) hours shall constitute a day's work, and the CONTRACTOR shall not require more than eight(8) hours of labor in a day from any person employed by him hereunder except as provided in paragraph (B)above. CONTRACTOR shall conform to Article 3, Chapter 1, Part 7 (Section 1810 at sea.)of the Labor Code of the State of California and shall forfeit to OCSD as a penalty, the sum of Twenty-five Dollars ($25.00)for each worker employed in the execution of this Contract by CONTRACTOR or any Subcontractor for each calendar day during which any worker is C-CA-071913 PROJECT NO.P1-124 PLANT NO. I PRIMARY TREATMENT UPGRADES CONFORMED Page 11 of 24 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. Record of Waces: Inspection: CONTRACTOR agrees to maintain accurate payroll records showing the name, address, social security number, work classification, straight-time and overtime hours worked each day and week, and the actual per diem wages paid to each journeyman, apprentice, worker or other employee employed by it in connection with the Project and agrees to require that each of its Subcontractors do the same. All payroll records shall be certified as accurate by the applicable CONTRACTOR or Subcontractor or its agent having authority over such matters. CONTRACTOR further agrees that its payroll records and those of its Subcontractors shall be available to the employee or employee's representative, the Division of Labor Standards Enforcement, and the Division of Apprenticeship Standards and shall comply with all of the provisions of Labor Code Section 1776, in general. Penalties for non- compliance with the requirements of Section 1776 may be deducted from Project payments per the requirements of Section 1776. SECTION— 15 SURETY BONDS CONTRACTOR shall, before entering upon the performance of this Contract, furnish Bonds approved by OCSD's General Counsel—one in the amount of one hundred percent(100%) of the Contract amount, to guarantee the faithful performance of the Work, and the other in the amount of one hundred percent (100%)of the Contract amount to guarantee payment of all C-CA-071913 PROJECT NO. P1-124 PLANT NO. 1 PRIMARY TREATMENT UPGRADES CONFORMED Page 12 of 24 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 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 C-CA-071913 PROJECT NO.P1-124 PLANT NO. 1 PRIMARY TREATMENT UPGRADES CONFORMED Page 13 of 24 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 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 C-CA-071913 PROJECT NO. P1-124 PLANT NO. 1 PRIMARY TREATMENT UPGRADES CONFORMED Page 14 of 24 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: Six Million Dollars ($6,000,000) per occurrence and a general aggregate limit of Six Million Dollars ($6,000,000)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 Six Million Dollars ($6,000,000) per occurrence and a general aggregate limit of Six Million Dollars ($6,000,000)which shall be in effect at all times during the warranty period set forth in the Warranty section herein, and as set forth in the General Conditions, "Warranty(CONTRACTOR's Guarantee)", plus any additional extension or continuation of time to said warranty period that may be required or authorized by said provisions. C. Broad Form Property Damage, expressly including damage arising out of explosion, collapse, or underground damage. d. Contractual Liability, expressly including the indemnity provisions assumed under this Contract. e. Separation of Insured Clause, providing that coverage applies separately to each insured, except with respect to the limits of liability. f. Independent CONTRACTOR's Liability. To the extent first dollar coverage, including defense of any claim, is not available to OCSD or any other additional insured because of any SIR, deductible, or any other form of self-insurance, CONTRACTOR is obligated to assume responsibility of insurer until the deductible, SIR or other condition of C-CA-071913 PROJECT NO.P1-124 PLANT NO. I PRIMARY TREATMENT UPGRADES CONFORMED Page 15 of 24 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 Five Million Dollars ($5,000,000) and a general aggregate limit of Five Million Dollars ($5,000,000)for bodily injury, personal injury and property damage; Or alternatively, (2) Five Million Dollars ($5,000,000) per person for bodily injury and 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 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. Worker's Compensation/Employer's Liability: CONTRACTOR shall provide such Worker's Compensation Insurance as required by the Labor Code of the State of C-CA-071913 PROJECT NO. P1-124 PLANT NO. 1 PRIMARY TREATMENT UPGRADES CONFORMED Page 16 of 24 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 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. 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 C-CA-071913 PROJECT NO.P1-124 PLANT NO. 1 PRIMARY TREATMENT UPGRADES CONFORMED Page 17 of 24 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. 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 C-CA-071913 PROJECT NO. P1-124 PLANT NO. 1 PRIMARY TREATMENT UPGRADES CONFORMED Page 18 of 24 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. 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. D. Verification of Coverage CONTRACTOR shall furnish OCSD with original certificates and mandatory endorsements affecting coverage. Said policies and endorsements shall conform to the requirements C-CA-071913 PROJECT NO.P1-124 PLANT NO. 1 PRIMARY TREATMENT UPGRADES CONFORMED Page 19 of 24 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. E. 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 all Subcontractors' policies, Certificate of Liability and mandatory endorsements effecting coverage. Upon request, CONTRACTOR must furnish OCSD with the above referenced required documents. F. Required Forms and Endorsements 1. Required ACORD Form a. Certificate of Liability Form 25-S (7/97) 2. Required Insurance Services Office, Inc. Endorsements (when alternative forms are shown, they are listed in order of preference) In the event any of the following forms are cancelled by Insurance Services Office, Inc. (ISO), or are updated, the ISO replacement form or equivalent must be supplied. a. Commercial General Liability Form CG-0001 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 C-CA-071913 PROJECT NO. P1-124 PLANT NO. 1 PRIMARY TREATMENT UPGRADES CONFORMED Page 20 of 24 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". 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. C-CA-071913 PROJECT NO.P1-124 PLANT NO. 1 PRIMARY TREATMENT UPGRADES CONFORMED Page 21 of 24 The CONTRACTOR guarantees for a period of at least one (1) year from the date of Final Acceptance of the Work, pursuant to the General Conditions, "Final Acceptance and Final Completion' that the completed Work is free from all defects due to faulty materials, equipment or workmanship and that it shall promptly make whatever adjustments or corrections which may be necessary to cure any defects, including repairs of any damage to other parts of the system resulting from such defects. OCSD shall promptly give notice to the CONTRACTOR of observed defects. In the event that the CONTRACTOR fails to make adjustments, repairs, corrections or other work made necessary by such defects, OCSD may do so and charge the CONTRACTOR the cost incurred. The CONTRACTOR's warranty shall continue as to any corrected deficiency until the later of(1)the remainder of the original one-year warranty period; or(2)one year after acceptance by OCSD of the corrected Work. The Performance Bond and the Payment Bond shall remain in full force and effect through the guarantee period. The CONTRACTOR's obligations under this clause are in addition to the CONTRACTOR's other express or implied assurances under this Contract, including but not limited to specific 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 C-CA-071913 PROJECT NO. P1-124 PLANT NO. 1 PRIMARY TREATMENT UPGRADES CONFORMED Page 22 of 24 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. SECTION — 23 NOTICES Any notice required or permitted under this Contract may be given by ordinary mail at the address set forth below. Any parry 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: Archer Western Construction, LLC 9915 Mira Mesa Blvd., Ste. 230 San Diego, CA 92131 Copy to: Daniel P. Walsh, President Archer Western Construction, LLC 9915 Mira Mesa Blvd., Ste. 230 San Diego, CA 92131 C-CA-071913 PROJECT NO.P1-124 PLANT NO. 1 PRIMARY TREATMENT UPGRADES CONFORMED Page 23 of 24 IN WITNESS WHEREOF, the parties hereto have executed this Contract Agreement as the date first hereinabove written. CONTRACTOR: Archer Western Construction, LLC 9915 Mira Mesa Blvd., Ste. 230 San Diego, CA 92131 By Printed Name Its CONTRACTOR's State License No. 978992 (Expiration Date— 11/30/2014) OCSD: Orange County Sanitation District By Chair, Board of Directors By Maria Ayala Clerk of the Board By Marc Dubois Contracts, Purchasing and Materials Management Division Manager C-CA-071913 PROJECT NO. P1-124 PLANT NO. 1 PRIMARY TREATMENT UPGRADES CONFORMED Page 24 of 24 EXHIBIT A SCHEDULE OF PRICES C-EXA-071012 TABLE OF CONTENTS EXHIBIT A SCHEDULE OF PRICES EXA-1 BASIS OF COMPENSATION ..............................................................................1 EXA-2 PROGRESS PAYMENTS....................................................................................1 EXA-3 RETENTION AND ESCROW ACCOUNTS .........................................................1 EXA-4 STOP PAYMENT NOTICE ..................................................................................3 EXA-5 PAYMENT TO SUBCONTRACTORS..................................................................3 EXA-6 PAYMENT OF TAXES.........................................................................................3 EXA-7 FINAL PAYMENT ................................................................................................4 EXA-8 DISCOVERY OF DEFICIENCIES BEFORE AND AFTER FINAL PAYMENT.....6 ATTACHMENT 1 CERTIFICATION FOR REQUEST FOR PAYMENT........................7 ATTACHMENT 2 SCHEDULE OF PRICES ...........................................................8 C-EXA-071012 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 PROGRESS PAYMENTS Progress payments will be made in accordance with all applicable terms and conditions of the Contract Documents, including, but not limited to: 1. Contract Agreement—Section 11 —"Contract Price and Method of Payment;" 2. General Conditions—"Payment—General"; 3. General Conditions—"Payment—Applications for Payment"; 4. General Conditions—"Payment— Mobilization Payment Requirements;" 5. General Conditions—"Payment— Itemized Breakdown of Contract Lump Sum Prices"; 6. General Conditions—"Contract Price Adjustments and Payments"; 7. General Conditions—"Suspension of Payments"; 8. General Conditions—"OCSD's Right to Withhold Certain Amounts and Make Application Thereof"; and 9. General Conditions—"Final Payment." EXA-3 RETENTION AND ESCROW ACCOUNTS A. Retention: OCSD shall retain a percentage of each progress payment to assure satisfactory completion of the Work. The amount to be retained from each progress payment shall be determined as provided in General Conditions— "Retained Funds; Substitution of Securities". In all contracts between CONTRACTOR and its Subcontractors and/or Suppliers, the retention may not exceed the percentage specified in the Contract Documents. C-EXA-071012 PROJECT NO. Pi-124 PLANT NO. 1 PRIMARY TREATMENT UPGRADES 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-071012 PROJECT NO.Pi-124 PLANT NO. 1 PRIMARY TREATMENT UPGRADES 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-071012 PROJECT NO. Pi-124 PLANT NO. 1 PRIMARY TREATMENT UPGRADES 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 fled in connection with the Work. Prior progress payments shall be subject to correction in OCSD's review of the application for Final Payment. Claims filed with the application for Final Payment must be otherwise timely under the Contract and applicable law. 3. Within a reasonable time, OCSD will review the CONTRACTOR'S application for Final Payment. Any recommended changes or corrections will then be forwarded to the CONTRACTOR. Within ten (10) calendar days after receipt of recommended changes from OCSD, the CONTRACTOR will make the changes, or list Claims that will be filed as a result of the changes, and shall submit the revised application for Final Payment. Upon C-EXA-071012 PROJECT NO.Pi-124 PLANT NO. 1 PRIMARY TREATMENT UPGRADES 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 fled with the initial or any revised application for Final Payment, and no Claims remain unsettled within thirty (30) calendar days after Final Acceptance of the Work by OCSD, and agreements are reached on all issues regarding the application for Final Payment, OCSD, in exchange for an executed release, satisfactory in form and substance to OCSD, will pay the entire sum found due on the approved application for Final Payment, including the amount, if any, allowed on settled Claims. 5. The release from the CONTRACTOR shall be from any and all Claims arising under the Contract, except for Claims that with the concurrence of OCSD are specifically reserved, and shall release and waive all unreserved Claims against OCSD and its officers, directors, employees and authorized representatives. The release shall be accompanied by a certification by the CONTRACTOR that: a. It has resolved all Subcontractors, Suppliers and other Claims that are related to the settled Claims included in the Final Payment; b. It has no reason to believe that any party has a valid claim against the CONTRACTOR or OCSD which has not been communicated in writing by the CONTRACTOR to OCSD as of the date of the certificate; c. All warranties are in full force and effect, and; d. The releases and the warranties shall survive Final Payment. 6. If any claims remain open, OCSD may make Final Payment subject to resolution of those claims. OCSD may withhold from the Final Payment an amount not to exceed one hundred fifty percent (150%)of the sum of the amounts of the open claims, and one hundred twenty-five percent (125%) of the amounts of open stop payment notices referred to in article entitled stop payment notices herein. 7. The CONTRACTOR shall provide an unconditional waiver and release on final payment from each Subcontractor and Supplier providing Work under the Contract(per Civil Code Section 8138) and an unconditional waiver and release on final payment on behalf of the CONTRACTOR (per Civil Code Section 8138)within thirty (30)days of receipt of Final Payment. C-EXA-071012 PROJECT NO. Pi-124 PLANT NO. 1 PRIMARY TREATMENT UPGRADES CONFORMED Page 5 of 8 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; 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-071012 PROJECT NO.Pi-124 PLANT NO. I PRIMARY TREATMENT UPGRADES CONFORMED Page 6 of 8 ATTACHMENTI CERTIFICATION FOR REQUEST FOR PAYMENT I hereby certify under penalty of perjury as follows: That the claim for payment is in all respects true, correct; that the services mentioned herein were actually rendered and/or supplies delivered to OCSD in accordance with the Contract. I understand that it is a violation of both the federal and California False Claims Ads to knowingly present or cause to be presented to OCSD a false claim for payment or approval. A claim includes a demand or request for money. It is also a violation of the False Claims Ads to knowingly make use of a false record or statement to get a false claim paid. The term "knowingly" includes either actual knowledge of the information, deliberate ignorance of the truth or falsity of the information, or reckless disregard for the truth or falsity of the information. Proof of specific intent to defraud is not necessary under the False Claims Acts. I understand that the penalties under the Federal False Claims 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-071012 PROJECT NO. Pi-124 PLANT NO. 1 PRIMARY TREATMENT UPGRADES CONFORMED Page 7 of 8 ATTACHMENT SCHEDULE OF PRICES See next pages for Bid Submittal Forms (Archer Western Construction, LLC) BF-14 Schedule of Prices, Pages 29-30 C-EXA-071012 PROJECT NO.Pi-124 PLANT NO. I PRIMARY TREATMENT UPGRADES CONFORMED Page 8 of 8 Bid Submitted By: archer Neste= constrection LLC (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 aoolicable sales taxes, state and/or federal, and any other special taxes, patent rights or realties 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. C-BF-122013 PROJECT NO.Pt-124 PLANT NO. 1 PRIMARY TREATMENT UPGRADES Page 29 of 30 Bid Submitted By: Archer western construction nna (Name of Firm) EXHIBIT A SCHEDULE OF PRICES BASE BID ITEMS (Refer to Note 1 in the Instructions) Rom Description Unit of APproc Unk Price prim No. Measurement city 1. Mobilization: Mobilization in conformance with the Contract Documents for the lump sum price of... Lump Sum 1 = $ �� . 2. All Other Portions of the Work except for the Work of Items No. 1 and _ . Furnish all labor, equipment and materials necessary to complete an other portions of the Work, except for the Work specified in Items No. 1 and Lump Sum 1 3, in conformance with the Contract Documents for a lump sum price of... 3. Demobilization: Demobilization shall include but not be limited to the acceptance of Work by OCSD, completion of all items on final punch list, Lump Sum 1 = $SS 000.E final cleanup and processing of final progress payment request, in f conformance with the Contract Documents for a lump sum price of.. SUBTOTAL BASE BID ITEMS NO. 1 THROUGH NO. 3 (AWARD AMOUNT) $ S 5713 891,00 C-BF-122013 PROJECT NO. P1-124 PLANT NO. 1 PRIMARY TREATMENT UPGRADES Page 30 of 30 BOARD OF DIRECTORS NeeUng Dare TOBA.Of Dir. -- O6/25/14 AGENDA REPORT Item Number Item Numbe 6 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: ORDINANCE NO. OCSD-46 AMENDING SECTION 2.03 OF ARTICLE II OF ORDINANCE NO. OCSD-41 CONCERNING REBATES AND REFUNDS OF SANITARY SEWER SERVICE CHARGES. GENERAL MANAGER'S RECOMMENDATION A. Motion to read Ordinance No. OCSD-46, by title only and waive reading of said entire Ordinance; and B. Adopt Ordinance No. OCSD-46, entitled "An Ordinance of the Board of Directors of the Orange County Sanitation District amending Section 2.03 of Article II of Ordinance No. OCSD-41 concerning rebates and refunds of Sanitary Sewer Service Charges."; and C. Direct the Clerk of the Board to publish a summary of the Ordinance as required by law. SUMMARY Ordinance No. OCSD-41 establishes the District's Sanitary Sewer Service Charges. Section 2.03 of Ordinance No. OCSD41 establishes exemptions to the charges and provides procedures for District customers to request adjustments to the charges applicable to their properties in the form of rebates. Ordinance No. OCSD-41 further provides procedures for seeking refunds for amounts incorrectly paid or charged. Proposed Ordinance No. OCSD46 restates Section 2.03 and adds definitions to more clearly define the difference between rebates and refunds, and to shorten the limitations period pertaining to rebates. PRIOR COMMITTEE/BOARD ACTIONS May 2014 - Introduction of Ordinance No. OCSD-46 March 2013—Adoption of Ordinance No. OCSD-41 Page 1 of 2 ADDITIONAL INFORMATION In 2013, as part of its rate adjustment process, the District sent notices to approximately 550,000 parcel owners, including nearly 50,000 non-residential property owners. These notices include information on how parcels owners can apply for a rebate or refund. The notice states: "Non-residential users that have substantially lower than average water use are eligible for a reduced charge. If you think you qualify, please visit our website, www.ocsd.com, to obtain a claim forms for a rebate or refund." In addition to the notices, this information is permanently posted on the District's website. Proposed Ordinance No. OCSD-46 revises Section 2.03 of Ordinance No. OCSD-41 as follows: • It defines "Rebates" as the difference between the original service charge paid by a property owner and the recalculated service charge for the property based on water use. The District's service rates for different property uses are based on the average water use of the properties, which directly correlates to sewer use on the properties. For example, vacant properties pay 0% of the established rate; Golf courses pay 41% of the established rate per thousand square feet of improvements; and coin operated car washes pay 151% of the established rate per thousand square feet of improvements. The property uses classifications are based on the property use codes provided by the County Assessor or by site inspections performed by staff. If the property owner can prove that the actual water usage on the property does not have a direct correlation to its sewer usage, the property owner may apply for a rebate, which will allow the District to adjust the charges assessed to it. • It defines "Refunds" as the difference between the original service charge paid by a property owner and the corrected service charge when the original charge was billed erroneously. Refunds are different from "rebates" because they do not take into account actual water consumption. Refunds are simply requests for reimbursement of erroneously paid charges due to incorrect billing information. • It shortens the period for requesting rebates from four years to two years from the date that the roll is submitted to the County Auditor/Controller. This effectively limits rebates to the current fiscal year and one fiscal year back. Rebates are subject to the California Tort Claims Act, which authorizes the District to limit the time within which to submit a claim for a rebate to one year. • It provides that rebates or additional adjustments to service charges are not available when a rebate or adjustment has already been granted in a prior fiscal year. • It clarifies that a "year" is a fiscal year consistent with the established annual charges and the District's fiscal year, commencing on July 1. Page 2 of 2 • Claims for refunds will continue to be limited to four years because this period is governed by other State statutes that establish four years as the limitations period for seeking refunds. The revisions to Section 2.03 of Ordinance No. OCSD-41 are shown in redlines in the attached proposed Ordinance No. OCSD-46. CEQA N/A BUDGET/PURCHASING ORDINANCE COMPLIANCE Ordinance No. OCSD-46 is expected to reduce rebate requests to the District thereby saving processing costs. ATTACHMENT The following attachment(s) are attached in hard copy and may be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package: • Redline Version Draft Ordinance No. OCSD-46 • Draft Ordinance No. OCSD-46 • Ordinance No. OCSD41 Page 3 of 2 ORDINANCE NO. OCSD-XX AN ORDINANCE OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT AMENDING SECTION 2.03 OF ARTICLE II OF ORDINANCE NO. OCSD-41 CONCERNING REBATES AND REFUNDS OF SANITARY SEWER SERVICE CHARGES. WHEREAS, the Board of Directors adopted Ordinance No. OCSD-41 on March 27, 2013, establishing revised sewer service charges; and WHEREAS, the Board of Directors wishes to revise Section 2.03 of Article II of Ordinance No. OCSD41 to more clearly define the difference between rebates and refunds, and adjust the limitations period pertaining to rebates. NOW, THEREFORE, the Board of Directors of the Orange County Sanitation District does hereby ORDAIN: Section I. Section 2.03 of Article II of Ordinance No. OCSD41 is hereby amended as follows: Section 2.03. A. Exemptions. It is the intent of the District that the legal owner(s) of parcels of real property, otherwise subject to the levy and payment of the Sewer Service Charges, as prescribed herein, be relieved, in whole or in part, from the payment of said charges, in certain circumstances and under conditions prescribed herein, and be entitled to either a rebate or a refund with respect to charges paid, as more specifically set forth in Subparagraphs 2.03E and 2.03C below, provided an inequity is established or a billing error is proven, as specified in Subparagraphs 2.03E or 2.03C. B. Application for Rebate. (1) A "rebate" is the difference between the original service charge paid by a property owner and the recalculated service charge for the property based on water use as provided herein. (2) Any property owner, or legally recognized authorized representative of the property owner, may apply to the District for a rebate of Sewer Service Charges paid to the District by establishing that an unfair valuation of the property has been made by the District. An applicant for a rebate must establish, by proof satisfactory to the General Manager of the District, or his/her designee, that an inequity exists between the amount of the charge paid and the amount of wastewater discharged to the District's system, resulting in an unfair valuation. Satisfactory proof shall establish that either: (4a) The principal water use is agricultural or horticultural; or 1 991039.3 (2b) The property is devoted to any other use wherein the amount of wastewater discharged to the District's system is significantly less on a regular basis than the amount that would normally be expected to be discharged by the class of property in question. (3) Satisfactory proof shall include, but not be limited to, documentation showing actual water usage for each billing cycle during the entire period for which the rebate is sought. (4) The amount of any rebate shall not reduce the charge payable by any property owner, whose property is connected to the District's system, to less than the single family residential charge shown on the applicable Table attached hereto. (5) Once a rebate or adjustment to a service charge is granted, additional rebates or adjustments will not be granted in the same year unless the property was vacant for the entire year. C. Application for Refund. (1) A "refund" is the difference between the original service charge Paid by a property owner and the corrected service charge when the original charge was billed erroneously. (2) Any property owner (as used herein, includes any person who paid the sewer service charges), or legally recognized authorized representative of the property owner, may apply to the District for a refund of Sewer Service Charges paid to the District by establishing that the amount paid was pursuant to an error in the amount billed or the amount paid. The applicant for a refund must submit proof satisfactory to the General Manager of the District, or his/her designee, that a billing error has been made by the District, or the County Tax Collector. Such proof shall include, but not be limited to, proof that: (4a) The owner's parcel of property is not connected to the District's system; or (2b) The property has not been classified in the proper property use classification code; or (3c) A clerical error has been made. D. Limitations Period. Raven P n Tnxnt on Cricip Sect'o g SON and 5097 (1) Applications for rebates shall be deemed a claim and be governed by the provisions of California 2 991039.3 Government Code Sections 935 at seq., and shall be presented to the District as provided in the Government Tort Claims Act, Government Code Sections 915 at seq., not later than four-(4)-years-two (21 years after the submission of the roll to the County Auditor/Controller, and the claim for rebate may only be made with respect to amounts paid or payable under such property tax bill. A claim for rebate is not deemed a claim for refund, and California Revenue & Taxation Code Sections 5096 and 5097 are not applicable. (2) Applications for refunds shall be deemed to be governed by the provisions of California Revenue &Taxation Code Sections 5096 and 5097. (3) Consistent with Section 2.04, a "year' for purposes of this Section 2.03 commences on July 1 for all annual Sewer Service Charges, based on the District's fiscal year. E. Determination. All applications for rebates or refunds of the Sewer Service Charge will be determined by the General Manager of the District, or his/her designee, who, based on the submitted proof, may grant a full or partial rebate or refund. F. Administrative Fee. At the time of filing the application for rebate or refund, the property owner shall pay District an administrative fee for the processing of such application. The amount of the fee shall be equal to the total of all fees and charges imposed on the District by any other public entity, such as the Orange County Tax Collector, the Orange County Auditor, or the Orange County Recorder, in connection with the rebate or refund. Section II. Severabiliri. If any provision of this Ordinance, or the application to any person or circumstances is held invalid by order of Court, the remainder of the Ordinance, or the application of such provision to other persons or other circumstances, shall not be affected. Section III. Certification and Publication. The Clerk of the Board shall certify to the adoption of this Ordinance, and shall cause a summary to be published in a newspaper of general circulation within 15 days as required by law. PASSED AND ADOPTED at a regular meeting of the Board of Directors of the Orange County Sanitation District held on , 2014. Chair of the Board of Directors Orange County Sanitation District ATTEST: 3 991039.3 Clerk of the Board Orange County Sanitation District Bradley R. Hogin, General Counsel Orange County Sanitation District 4 991039.3 ORDINANCE NO. OCSD-46 AN ORDINANCE OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT AMENDING SECTION 2.03 OF ARTICLE II OF ORDINANCE NO. OCSD-41 CONCERNING REBATES AND REFUNDS OF SANITARY SEWER SERVICE CHARGES. WHEREAS, the Board of Directors adopted Ordinance No. OCSD-41 on March 27, 2013, establishing revised sewer service charges; and WHEREAS, the Board of Directors wishes to revise Section 2.03 of Article II of Ordinance No. OCSD-41 to more clearly define the difference between rebates and refunds, and adjust the limitations period pertaining to rebates. NOW, THEREFORE, the Board of Directors of the Orange County Sanitation District does hereby ORDAIN: Section 1. Section 2.03 of Article II of Ordinance No. OCSD-41 is hereby amended as follows: Section 2.03. A. Exemptions. It is the intent of the District that the legal owner(s) of parcels of real property, otherwise subject to the levy and payment of the Sewer Service Charges, as prescribed herein, be relieved, in whole or in part, from the payment of said charges, in certain circumstances and under conditions prescribed herein, and be entitled to either a rebate or a refund with respect to charges paid, as more specifically set forth in Subparagraphs 2.03E and 2.03C below, provided an inequity is established or a billing error is proven, as specified in Subparagraphs 2.03B or 2.03C. B. Application for Rebate. (1) A "rebate" is the difference between the original service charge paid by a property owner and the recalculated service charge for the property based on water use as provided herein. (2) Any property owner, or legally recognized authorized representative of the property owner, may apply to the District for a rebate of Sewer Service Charges paid to the District by establishing that an unfair valuation of the property has been made by the District. An applicant for a rebate must establish, by proof satisfactory to the General Manager of the District, or his/her designee, that an inequity exists between the amount of the charge paid and the amount of wastewater discharged to the District's system, resulting in an unfair valuation. Satisfactory proof shall establish that either: OCSD-46-1 (a) The principal water use is agricultural or horticultural; or (b) The property is devoted to any other use wherein the amount of wastewater discharged to the District's system is significantly less on a regular basis than the amount that would normally be expected to be discharged by the class of property in question. (3) Satisfactory proof shall include, but not be limited to, documentation showing actual water usage for each billing cycle during the entire period for which the rebate is sought. (4) The amount of any rebate shall not reduce the charge payable by any property owner, whose property is connected to the District's system, to less than the single family residential charge shown on the applicable Table attached hereto. (5) Once a rebate or adjustment to a service charge is granted, additional rebates or adjustments will not be granted in the same year unless the property was vacant for the entire year. C. Application for Refund. (1) A "refund" is the difference between the original service charge paid by a property owner and the corrected service charge when the original charge was billed erroneously. (2) Any property owner (as used herein, includes any person who paid the sewer service charges), or legally recognized authorized representative of the property owner, may apply to the District for a refund of Sewer Service Charges paid to the District by establishing that the amount paid was pursuant to an error in the amount billed or the amount paid. The applicant for a refund must submit proof satisfactory to the General Manager of the District, or his/her designee, that a billing error has been made by the District, or the County Tax Collector. Such proof shall include, but not be limited to, proof that: (a) The owner's parcel of property is not connected to the District's system; or (b) The property has not been classified in the proper property use classification code; or (c) A clerical error has been made. OCSD-46-2 D. Limitations Period. (1) Applications for rebates shall be deemed a claim and be governed by the provisions of California Government Code Sections 935 et seq., and shall be presented to the District as provided in the Government Tort Claims Act, Government Code Sections 915 at seq., not later than two (2) years after the submission of the roll to the County Auditor/Controller, and the claim for rebate may only be made with respect to amounts paid or payable under such property tax bill. A claim for rebate is not deemed a claim for refund, and California Revenue & Taxation Code Sections 5096 and 5097 are not applicable. (2) Applications for refunds shall be deemed to be governed by the provisions of California Revenue &Taxation Code Sections 5096 and 5097. (3) Consistent with Section 2.04, a "year" for purposes of this Section 2.03 commences on July 1 for all annual Sewer Service Charges, based on the District's fiscal year. E. Determination. All applications for rebates or refunds of the Sewer Service Charge will be determined by the General Manager of the District, or his/her designee, who, based on the submitted proof, may grant a full or partial rebate or refund. F. Administrative Fee. At the time of filing the application for rebate or refund, the property owner shall pay District an administrative fee for the processing of such application. The amount of the fee shall be equal to the total of all fees and charges imposed on the District by any other public entity, such as the Orange County Tax Collector, the Orange County Auditor, or the Orange County Recorder, in connection with the rebate or refund. Section 2. Severability. If any provision of this Ordinance, or the application to any person or circumstances is held invalid by order of Court, the remainder of the Ordinance, or the application of such provision to other persons or other circumstances, shall not be affected. Section 3. Certification and Publication. The Clerk of the Board shall certify to the adoption of this Ordinance, and shall cause a summary to be published in a newspaper of general circulation within 15 days as required by law. Section 4: This Ordinance shall be effective sixty (60) days after adoption. PASSED AND ADOPTED at a regular meeting of the Board of Directors of the Orange County Sanitation District held on , 2014. OCSD-46-3 Chair of the Board of Directors Orange County Sanitation District ATTEST: Clerk of the Board Orange County Sanitation District Bradley R. Hogin, General Counsel ` Orange County Sanitation District OCSD-46-4 ORDINANCE NO. OCSD41 AN ORDINANCE OF THE BOARD OF DIRECTORS OF ORANGE COUNTY SANITATION DISTRICT AMENDING AND RESTATING ORDINANCE NO. OCSD-35 CONCERNING SANITARY SEWER SERVICE CHARGES AND REPEALING ORDINANCE NO. OCSD-35. ADOPTING REVISED TABLE A RE RESIDENTIAL USER FEES AND REVISED TABLE B PROPERTY USE CLASSIFICATIONS WHEREAS, The former County Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California (the "Predecessor Districts"), were nine individual County Sanitation Districts, organized pursuant to the County Sanitation District Act (California Health & Safety Code Section 4700 at seq.). By action of the Board of Directors of the Predecessor Districts, pursuant to specific legislation enacted by the California State Legislature in 1996, an application was submitted to the Orange County Local Agency Formation Commission to legally consolidate the nine Predecessor Districts into one single Sanitation District for all purposes. The application was approved, with an effective date of July 1, 1998; and WHEREAS, As of July 1, 1998, the Predecessor Districts ceased to exist, and one single consolidated County Sanitation District, known as the Orange County Sanitation District ("District"), came into existence in place of the Predecessor Districts. The District was formed to carry on the functions of the Predecessor Districts; and WHEREAS, The District, as part of its maintenance and updating of its Master Plan, undertook a comprehensive evaluation and study of its operational and financial needs for the next 20 years, including: a detailed assessment of all types and categories of users; the demands on the system and capacity needs of the system to provide necessary service to the multiple categories of users; the total costs of the existing and future facilities in the system; and alternate methodologies for establishing fair and equitable charges to connect to and gain access to the system. These comprehensive planning, engineering, and financial studies led to the development of an updated Comprehensive 20-year Master Plan of Capital Facilities, entitled "1999 Strategic Plan" ("Master Plan"). WHEREAS, The Master Plan, setting forth and identifying the required future development of District Facilities, including financial projections for providing sewer service to all properties within the District's service area, was approved and adopted by the Board of Directors on October 27, 1999 by OCSD Resolution No. 99-21, with updates adopted in 2002 and 2006, following a noticed public hearing, and in compliance with the provisions of the California Constitution and all other applicable laws; and WHEREAS, The Board of Directors approved the Capital Improvement Program ("CIP") Validation Study for Fiscal year 2003-04 and the Secondary Treatment Peer Review, which resulted in the development of a Capital WS&5-6RH:pj:201660A420/05 1 OCSD-ADB 4/25/07 910662.1 Improvement Program that provides for the implementation of secondary treatment standards, thereby improving effluent quality in a reasonably short period of time, consistent with the goals and policies of the Board of Directors, the member agencies, and the public, while also providing for the construction of necessary improvements to accommodate projected increased flows and the rehabilitation and refurbishment of existing facilities; and WHEREAS, pursuant to Health and Safety Code section 5471, the Board of Directors is authorized to prescribe, revise and collect fees, tolls, rates, rentals or other charges for services and facilities furnished by the District in connection with its sewerage system; and WHEREAS, on February 27, 2008, the Board of Directors of the District adopted Ordinance No. OCSD-35, establishing annual Sanitary Sewer Service Charges; and WHEREAS, on January 23, 2013, the Board of Directors was presented with and has reviewed the District's Wastewater Revenue and Rate Study dated January 2013 prepared by Carollo Engineers, on file with the District, which independently found that the proposed increases in the regional sewer service charges were reasonable based on an evaluation of the District's revenue needs, projected reserve balances and user rate structure; and WHEREAS, for purposes of ensuring that the District has sufficient revenues and reserves to meet the District's obligations and operations, it is the intent, by the adoption of this Ordinance, to establish annual regional sewer service charges; and WHEREAS, Section 21080(b)(8) of the Public Resources Code states that "the establishment, modification, structuring, or approval of rates, tolls, fares, or other charges by public agencies which the public agency finds are for the purpose of (A) meeting operating expenses, including employee wage rates and fringe benefits, (B) purchasing or leasing supplies, equipment, or materials, (C) meeting financial reserve needs and requirements, (D) obtaining funds for capital projects necessary to maintain service within existing service areas, or (E) obtaining funds necessary to maintain those intracity transfers as are authorized by city charter" is not subject to CEQA; and WHEREAS, Section 15273(a) of the California Code of Regulations states that "CEQA does not apply to the establishment, modification, structuring, restructuring, or approval of rates, tolls, fares, or other charges by public agencies which the public agency finds are for the purpose of: (1) Meeting operating expenses, including employee wage rates and fringe benefits, (2) Purchasing or leasing supplies equipment, or materials, (3) Meeting financial reserve needs and requirements, (4) Obtaining funds for capital projects, necessary to maintain service within existing service areas, or (5) Obtaining funds necessary to maintain such intra-city transfers as are authorized by city charter"; and WS&5-6RH:pj:201W0:0920/05 2 OCSD-ADB 4/25/07 910662.1 WHEREAS, pursuant to Article XIIID, section 6, of the California Constitution, Notice of the Public Hearing regarding the proposed regional sewer service charges, which included the date, time, and location of the public hearing, as well as the charges, fees, and rates proposed for imposition, was mailed no less than 45 days prior to the public hearing by the District to the record owner of each identified parcel upon which the charge is proposed for imposition; and WHEREAS, pursuant to Health and Safety Code sections 4766 and 5473, the Board of Directors is authorized to elect to have the proposed regional sewer service charges collected on the tax roll in the same manner, by the same persons, and at the same time as, together with and not separately from, its general taxes; and WHEREAS, pursuant to Health and Safety Code section 5473.1, on March 11, 2013, and again on March 18, 2013, Notice of the Public Hearing regarding the proposed regional sewer services charges and the election to have such charges collected on the tax role, which included the date, time and location of the hearing, was published in The Orange County Register, a newspaper of general circulation within the District published in the county where the District is located; and WHEREAS, on Wednesday, March 27, 2013 at 6:30 P.M., in the District's Boardroom on the first floor of its Administration Building located at 10844 Ellis Avenue, Fountain Valley, California, the District held a properly noticed public hearing in order to receive and consider comments, including objections, concerning the proposed regional sewer service charges and the election to have such charges collected on the tax roll; and WHEREAS, the Board of Directors has carefully reviewed the Wastewater Revenue and Rate Study dated January 2013, and has considered the public and Board comments, and the oral and written presentation by the District's staff and consultants made at the March 27, 2013 public hearing, as well as any written public comments. NOW, THEREFORE, the Board of Directors of the Orange County Sanitation District does hereby ORDAIN: Section I. Adopt Regional Sewer Service Charges TABLE OF CONTENTS ARTICLE I: FINDINGS Section 1.01 Findings ARTICLE II: SEWER SERVICE CHARGES Section 2.01. Purpose and Scope Section 2.02. Annual Sewer Service Charge Section 2.03. WS&5-6RH:py201W0:N20/05 3 OCSD-ADB 4/25/07 910662.1 A. Exemptions B. Application for Rebate C. Application for Refund D. Limitation Period E. Determination F. Administrative Fee Section 2.04. Annual Charge Based on Fiscal Year Section 2.05. Method of Collection Section 2.06. Credit for Industrial Permittees Section 2.07. Open-Air Facilities Table A Annual Sewer Service Charges for Residential Users Table B Annual Sewer Service Charges Property Use Classifications ARTICLE III: MISCELLANEOUS Section 3.01. Application of Ordinance Section 3.02. Exceptions Section 3.03. Out of Area Sewer Service Agreements ARTICLE I FINDINGS Section 1.01. Findings. Based upon substantial evidence presented to the Board of Directors, the Board of Directors of District hereby adopts the following Findings supporting the amounts of charges and fees adopted pursuant to this Ordinance. The Board of Directors hereby finds: A. That the regional sewer service charges and the annual adjustments to the regional sewer service charges (collectively referred hereafter as the "Sewer Service Charges") as established herein is appropriate and ensures adequate revenues to finance the improvements and programs necessary to implement secondary treatment standards, accommodate increased flows, rehabilitate and refurbish existing facilities, and retire any necessary or prudent debt incurred to finance such improvements in a reasonable manner and over a reasonable period of time. B. That the revenues derived under the provisions of this Ordinance will be used for the acquisition, construction, reconstruction, maintenance, and operation of the sewage collection, wastewater treatment and disposal facilities of the District, together with costs of administration and provisions for necessary reserves. C. That the financial requirements of the District, as shown in reports prepared by Staff and Consultants relating to the Master Plan and the Capital Improvement Plan, are based on current, reliable information, and further, that data relating to population projections, wastewater flow, and capital facilities' needs are expected to be realized in each year as described in the reports. WS&5-BRH:py201660:N20/05 4 OCSD-ADB 4/25/07 910662.1 D. That the owners or occupants of properties, upon which all fees and charges established by this Ordinance are levied, discharge wastewater to the District's collection, treatment and disposal facilities. The costs of operating and maintaining said facilities have constantly increased due in part to increased regulatory requirements to upgrade the treatment process. E. That the need for upgraded and improved treatment of all wastewater collection, treatment and disposal facilities is required to protect the public health and safety, and to preserve the environment without damage. F. That the Sewer Service Charges established by this Ordinance are reasonably related to, and do not exceed the cost of providing sewer services, and shall herein be levied on each parcel to allow the District to recover the reasonable costs to provide a service to individual properties which have been improved for different types of uses. G. That the basis for the respective charge is not based on potential or future use, but rather, is based upon the request of the owner of property or a structure thereon, for the benefit of him/her/itself, or the occupants of the property, to receive a service for actual use, consumption, and disposal of water to the District's system in lieu of disposal by other means. H. That the revenues derived from the Sewer Service Charges shall not be used for any purpose other than that for which the charge is imposed. I. That the Sewer Service Charges established by this Ordinance are not imposed as a condition of approval of a development project, as defined in California Government Code Section 66001, and do not exceed the proportional cost to provide the sewer service for which the fee is levied, as provided in Government Code Sections 66013 and 66016 and California Constitution Article MID. J. That the Sewer Service Charges adopted herein are established upon a reasonable basis between the fees charged each customer and the service and facilities provided to each customer of the District, a portion of which are necessary to replace the loss of ad valorem property taxes to the State General Fund as a result of state legislative action on September 2, 1992, and in subsequent years. K. That the Sewer Service Charges adopted herein will not result in an expansion of facilities to provide for growth within outside the existing service area. The adoption of these Sewer Service Charges will not result in any specific project, nor result in a direct physical change in the environment. L. That the Board of Directors is adopting the Sewer Service Charges herein to (i) meet operating expenses, (ii) purchase or lease supplies, equipment, or materials, (iii) meet financial reserve needs and requirements, and (iv) obtain funds for capital projects necessary to maintain service within existing service areas. Therefore, the Board finds and determines, based upon substantial evidence, that the establishment of the Sewer Service Charges are WS&S-BRH:pj:201660:04/20/05 5 OCSD-ADB 4/25/07 910662.1 statutorily exempt from CEQA, pursuant to Section 21080(b)(8) of the Public Resources Code and Section 15273(a) of the California Code of Regulations. M. That all fees and charges established herein have been approved by the District's Board of Directors at a noticed public meeting, all in accordance with applicable provisions of law. ARTICLE II SEWER SERVICE CHARGES Section 2.01. Purpose and Scope. The purpose of this Ordinance is to establish Sewer Service Charges required to be paid by property owners for the services and facilities furnished by the District in connection with its sanitation treatment works and sewage collection system. Revenues derived under the provisions of this Ordinance shall be used for (i) the acquisition, construction, reconstruction, maintenance, and operation of the wastewater collection, treatment and disposal facilities of the District, (ii) to repay principal and interest on debt instruments, or (iii) to repay federal and state loans issued for the construction and reconstruction of said sewerage facilities, together with costs of administration and provisions for necessary reserves. Section 2.02. Annual Sewer Service Charge. Commencing with the effective date of this Ordinance, the owner of each parcel of real property located within the District which is improved with structures designed for residential, commercial, or industrial use and which, at the request of the owner or the owners predecessor-in-interest, is connected to the District's sewerage system, shall pay an annual Sewer Service Charge based on the respective class of users, in the sum or sums, as set forth in Tables A and B of this Ordinance, below, and incorporated by reference herein. The annual Sewer Service Charges for residential users are set forth in Table A. The applicable single family residential rate shown in Table A is multiplied by the applicable percentage figure shown on Table B with respect to the particular use classification to arrive at the annual Sewer Service Charge rate per 1,000 square feet or per unit. The annual Sewer Service Charges are dependent upon the respective classifications of property use, determined by reference to Table B. Section 2.03. A. Exemptions. It is the intent of the District that the legal owner(s) of parcels of real property, otherwise subject to the levy and payment of the Sewer Service Charges, as prescribed herein, be relieved, in whole or in part, from the payment of said charges, in certain circumstances and under conditions prescribed herein, and be entitled to either a rebate or a refund with respect to charges paid, as more specifically set forth in Subparagraphs 2.03B and 2.03C below, provided an inequity is established or a billing error is proven, as specified in Subparagraphs 2.03B or 2.03C. B. Application for Rebate. Any property owner, or legally recognized authorized representative of the property owner, may apply to the District for a rebate of Sewer Service Charges paid to the District by establishing that an unfair valuation of the property has been made by the WS&S-BRH:py201660:N20/05 6 OCSD-ADB 4/25/07 910662.1 District. An applicant for a rebate must establish, by proof satisfactory to the General Manager of the District, or his/her designee, that an inequity exists between the amount of the charge paid and the amount of wastewater discharged to the District's system, resulting in an unfair valuation. Satisfactory proof shall establish that either: (1) The principal water use is agricultural or horticultural; or (2) The property is devoted to any other use wherein the amount of wastewater discharged to the District's system is significantly less on a regular basis than the amount that would normally be expected to be discharged by the class of property in question. Satisfactory proof shall include, but not be limited to, documentation showing actual water usage for each billing cycle during the entire period for which the rebate is sought. The amount of any rebate shall not reduce the charge payable by any property owner, whose property is connected to the District's system, to less than the single family residential charge shown on the applicable Table attached hereto. C. Aoolication for Refund. Any property owner (as used herein, includes any person who paid the sewer service charges), or legally recognized authorized representative of the property owner, may apply to the District for a refund of Sewer Service Charges paid to the District by establishing that the amount paid was pursuant to an error in the amount billed or the amount paid. The applicant for a refund must submit proof satisfactory to the General Manager of the District, or his/her designee, that a billing error has been made by the District, or the County Tax Collector. Such proof shall include, but not be limited to, proof that: (1) The owner's parcel of property is not connected to the District's system; or (2) The property has not been classified in the proper property use classification code; or (3) A clerical error has been made. D. Limitations Period. Applications for refunds shall be deemed to be governed by the provisions of California Revenue & Taxation Code Sections 5096 and 5097. Applications for rebates shall be deemed a claim and be governed by the provisions of California Government Code Sections 935 et seq., and shall be presented to the District as provided in the Government Tort Claims Act, Government Code Sections 915 at seq., not later than four (4) years after the submission of the roll to the County Auditor/Controller, and the claim for rebate may only be made with respect to amounts paid or payable under such property tax bill. A claim for rebate is not deemed a claim for refund, and California Revenue & Taxation Code Sections 5096 and 5097 are not applicable. WS&S-BRH:pj:201660:04120/05 7 OCSD-ADB 4/25/07 910662.1 E. Determination. All applications for rebates or refunds of the Sewer Service Charge will be determined by the General Manager of the District, or his/her designee, who, based on the submitted proof, may grant a full or partial rebate or refund. F. Administrative Fee. At the time of filing the application for rebate or refund, the property owner shall pay District an administrative fee for the processing of such application. The amount of the fee shall be equal to the total of all fees and charges imposed on the District by any other public entity, such as the Orange County Tax Collector, the Orange County Auditor, or the Orange County Recorder, in connection with the rebate or refund. Section 2.04. Annual Charge Based on Fiscal Year. The Sewer Service Charges established by this Ordinance shall be effective as of July 1 of each year, as set forth in Tables A and B, attached hereto, for the District's fiscal year, and shall remain in effect until such time as the rates adopted herein are changed by District Ordinance. There shall be no proration of such charges in any fiscal year. Section 2.05. Method of Collection. A. Pursuant to the authority granted by California Health & Safety Code Sections 4766 and 5473, and except as otherwise provided in Subparagraph 2.0513 below, all Sewer Service Charges established herein shall be collected on the County Tax Roll in the same manner, by the same persons, and at the same time as, together with, and not separately from, its general taxes. The County Tax Collector is authorized and hereby ordered to make said collections in accordance with the terms and conditions of agreements between the County of Orange and the District. B. In the event District determines that, due to billing or payment error, or to inequity in the amount billed, a property owner (or person who paid the tax) has underpaid annual Sewer Service Charges payable to District, District, within four (4) years after the date of mailing of the tax bill, may: (1) collect the amount of any deficiency directly on the County Tax Roll; (2) off-set the amount of any deficiency against any amounts that District determines is owing, by District, to the property owner, as a rebate or refund under this Ordinance; or (3) submit, directly to the property owner, a bill for the amount of any deficiency, which shall be due and payable within thirty (30) days of the invoice date and which, if not paid, shall become a lien on said property. Section 2.06. Credit for Industrial Permittees. A credit shall be allowed to all dischargers permitted pursuant to Article 3 of District Ordinance No. OCSD-40, as amended, in an amount equal to the annual Sewer Service Charge established by Section 2.02 of this Ordinance. WS&S-BRH:pj:201660:N20/05 8 OCSD ADB 4/25/07 910662.1 Section 2.07 Open-Air Facilities. Sewer Service Charges for open- air facilities will be based on annual attendance records. Open-Air facilities will pay a rate per million gallons based upon the related sewage flow, Biochemical Oxygen Demand ("BOD") and Suspended Solids ("SS") charge for single family residences. The usage per attendee will be 15 gallons. WS&S-6RH:pj:201W0:09120/05 g OCSD-ADB 4/25/07 910662.1 TABLE A ANNUAL SEWER SERVICE CHARGES RESIDENTIAL USERS FISCAL YEAR 2013-14 2014-15 2015-16 2016-17 2017-18 SFR* $308.00 $316.00 $323.00 $331.00 $339.00 MFR $215.60 $221.20 $226.10 $231.70 $237.30 SFR = SINGLE FAMILY RESIDENTIAL MFR = MULTI FAMILY RESIDENTIAL * The SFR fee is the minimum sewer service charge any user must pay. All properties located within Revenue Area No. 14 pay no annual sewer service charges. District costs relating to providing service to these properties are billed by the District directly to the Irvine Ranch Water District, the local agency providing the local sewer service. WS&S-6RH:pj:201 WO:0920/05 10 OCSD-ADB 4/25/07 910662.1 TABLE B ANNUAL SEWER SERVICE CHARGES PROPERTY USE CLASSIFICATIONS Percentage of SFR Assessor Use Code Description Per 1.000 SF or Unit 1 Vacant Land Parcel 0% 5 Common Area Parcel 0% 6 "Hold" Parcel 0% 8 Equivalent to Vacant 0% 121 Parcel of Minimal or No Value 0% 122 Subsurface Parcels 0% 124 Oil/Mineral Rights 0% 125 Mineral Rights Equipment 0% 126 Vacant Comm. Area-IMP Alloc. 0% 201 Homeowners Exemption Addl. 0% 666 Unassigned Vacant 0% 777 Septic Tank Property 0% 112 Steel Building 7% 113 Mini-Warehouse 7% 58 Nurseries (Plants) 10% 100 Drive-In Theater 10% 44 Lumber/Constr. Material Yard 17% 71 Parking Garage 17% 72 Paved Parking Lot 17% 110 Warehouse— Single Tenant 17% 111 Warehouse—Multi Tenant 17% 115 Recreational Vehicle Storage 17% 116 Truck Terminal 17% 33 Church Buildings 20% 94 Department Store 23% 95 Discount Store 23% 96 Unattached Single Store 23% 97 Strip Store 23% 74 Recreational Vehicle Park 27% 36 Financial Buildings 27% 40 Health Club 29% 68 High Rise Office 30% 225 United States Post Office 35% 21 Automobile Dealership 41% 22 Auto Repair Shop 41% 23 Automotive Service 41% 24 Used Car Lot 41% 39 Golf Course 41% 57 Motorcycle/Small Vehicle Building 41% 83 Automotive Service Station 41% WS&S-6RH:pj:201660:N120/05 11 OCSD-ADB 4/25/07 910662,1 TABLE B (CONTINUED) ANNUAL SEWER SERVICE CHARGES PROPERTY USE CLASSIFICATIONS Percentage of SFR Assessor Use Code Description Per 1,000 SF or Unit 84 Marine Service Station 41% 86 Combin:Service Station/Convenience 41% 65 Single Office Bldgs. to 3 Stories 41% 66 Small Office Center 41% 67 Office Complex 41% 69 Converted Residence to Office 41% 7 Mobile Home 50% 55 Mobile Home Park 50% 107 Light Industrial—Single Tenant 50% 108 Light Industrial—Multi Tenant 50% 109 Research and Development 50% 114 Industrial Park 50% 37 Fraternal Buildings 51% 101 Unattached Theater 51% 26 Airport and Related Buildings 53% 45 Marinas 53% 88 Low Flow Center 53% 3 Two or More Residences 70% 10 Duplex Only 70% 11 Triplex Only 70% 12 04-Units Only 70% 13 5 to 16 Units 70% 14 17 to 25 Units 70% 15 26 to 40 Units Only 70% 16 41-99 Units Only 70% 17 100 or More Units 70% 18 Developed with a Mix of Forms 70% 63 Low Rise Retirement Building 70% 64 High Rise Retirement Building 70% 56 Low Demand Hotel/Motel 70% 81 Pre-Schools, Nursery or Care 82% 82 Private Schools 82% 98 Store with Offices or Living Quarter 82% 99 Store with Office Upstairs 82% 118 Governmental Use Vacant/Develop. 82% 19 SFR with 1 or 2 rental units 85% 34 Dormitory 97% 42 Hospital 97% 43 High Demand Hotel/Motel 97% 0 Conversion-C/1, Rural PC 100% 2 One Residence 100% WS&5-6RH:pj:201 W0:0920/05 12 OCSD-ADB 4/25/07 910662.1 TABLE B (CONTINUED) ANNUAL SEWER SERVICE CHARGES PROPERTY USE CLASSIFICATIONS Percentage of SFR Assessor Use Code Description Per 1,000 SF or Unit 4 Miscellaneous Improvement 100% 85 Comb. Sew. Stn./Restaurant 100% 103 Chemical Tank and Bulk Storage 100% 104 Food Processing Plant 100% 105 Cold Storage Plant 100% 106 Factory 100% 119 Public Utility 100% 120 Water Mutual or Company 100% 888 Conversion-Composite Prop. 100% 32 Cemetery& Related Buildings 101% 38 Funeral Home 101% 60 Nursing Home 102% 61 Convalescent Hospitals 102% 62 Converted Res. Used as Nursing 102% 28 Bowling Alleys 112% 92 Skating Rinks 112% 50 Single Medical Bldgs. to 3 Stories 124% 51 Small Medical Center 124% 52 Medical Center Complex 124% 53 High Rise Medical 124% 54 Converted Residence to Medical 124% 89 Average Flow Center 139% 20 Amusement Parks 144% 35 Entertainment Center 144% 73 Recreation 144% 30 Coin Operated Car Wash 151% 47 Supermarket 151% 48 Convenience Market 151% 224 Nightclub 200% 90 High Flow Center 226% 76 Restaurant—Low Demand 300% 77 Restaurant—Coffee Shop 600% 78 Restaurant—Dinner House 600% 79 Restaurant—Conversion from SF 600% 29 Conventional Car Wash 796% 223 Laundromat 1,800% NOTE: Multiply the Table A Single Family Residential Rate by the percentage figure above in order to determine the rate per 1,000 square feet for the commercial or industrial user. WS&S-6RH:pj:201660:04120/05 13 OCSD-ADB 4/25/07 910662.1 ARTICLE III MISCELLANEOUS Section 3.01. Application of Ordinance. The provisions of this Ordinance shall be in addition to (i) the provisions of the District's Wastewater Discharge Regulations for use of District's sewage facilities, including provisions for payment of charges or fees related thereto; (ii) District's ordinance establishing Fees Concerning Annexations of Territory to the District; (!it) District's ordinance establishing Local Sewer Service Fees, where applicable, and (iii) any other District Ordinances and Resolutions not in conflict herewith. Section 3.02. Exceptions. The provisions of this Ordinance shall apply to all owners of properties within the District, including those properties otherwise deemed exempt from payment of taxes or assessments by provisions of the State Constitution or statute, including properties owned by other public agencies or tax-exempt organizations, except as expressly provided herein. Section 3.03 Out of Area Sewer Service Agreements. Pursuant to Health and Safety Code Section 4742.1, the District is empowered to contract for the handling, treatment or disposal by the district of sewage or industrial wastes originating within the district or county or within areas outside of the district or county when, in the judgment of the District Board, it is for the best interest of the district to do so. In exercise of such power, the District may, from time to time, enter into Out-of-Area Sewer Service Agreements. These Out-of-Area Sewer Service Agreements will establish fees and charges relative to the services provided by the District for each individual agreement. Section II. Severabilitv. If any provision of this Ordinance, or the application to any person or circumstances is held invalid by order of Court, the remainder of the Ordinance, or the application of such provision to other persons or other circumstances, shall not be affected. Section III. Effective Date. This Ordinance shall take effect July 1, 2013. Section IV. Repeal. Ordinance No. OCSD-35 is repealed in its entirety effective June 30, 2013. Section V. Certification and Publication. The Clerk of the Board shall certify to the adoption of this Ordinance, and shall cause a summary to be published in a newspaper of general circulation within 15 days as required by law. WS&5-6RH:pj:201 W0:0920/05 14 OCSD-ADB 4/25/07 910662.1 PASSED AND ADOPTED by a vote of not less than two-thirds of the Board of Directors of the Orange County Sanitation District at a Regular Meeting held on March 27, 2013. TROY E15GAI CHAIR, BOA OF DIRECTORS ORANGE COUNTY SANITATION DISTRICT ATTEST: G �1 MARIA IE. AYALA CLERK OF THE BOARD ORANGE COUNTY SANITATION DISTRICT APPROVED AS TO FORM: 9- BRADLEY R. FrOGIN, GEN COUNSEL wsas-BRH:pj:201660:0420ros 15 DCSD-ADB 4125/07 91066E STATE OF CALIFORNIA ) )SS. COUNTY OF ORANGE ) I, MARIA E. AYALA, Clerk of the Board of the Orange County Sanitation District, do hereby certify that the above and foregoing Ordinance No. OCSD-41 was passed and adopted at a regular meeting of said Board on the 271" day of March, 2013, by the following vote, to wit: AYES: Troy Edgar, Chair; John Anderson; Tom Beamish; David Benavidez; Keith Curry; Jim Ferryman; Steve Jones; Lucille Kring; Michael Levitt, Brett Murdock; John Nielsen; Brad Reese; Joe Shaw; David Shawver; Fred Smith, Teresa Smith, Constance Underhill (Alternate); and John Withers. NOES: Steven Choi; Tyler Diep; Peter Kim, Mark McCurdy (Alternate); Prakash Narain; Janet Nguyen; and Greg Sebourn. ABSENT: None. IN WITNESS WHEREOF, I have hereunto set my hand this 271" day of March, 2013. Maria It. Ayala Clerk of the Board Orange County Sanitation District RESOLUTION NO. OCSD 13-05 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT DIRECTING THE COUNTY TAX COLLECTOR-TREASURER TO INCLUDE REGIONAL SANITARY SEWER SERVICE CHARGES ON THE TAX ROLL FOR FISCAL YEARS 2013-2014 THROUGH 2O17-2018. The Board of Directors of the Orange County Sanitation District("District") does hereby find: A. On March 27, 2013, the Board of Directors adopted Ordinance No. OCSD-41,An Ordinance of the Board of Directors of Orange County Sanitation District Amending and Restating Ordnance No. OCSD-35 Concerning Sanitary Sewer Service Charges and Repealing Ordinance No. OCSD-35; Adopting Revised Table A RE Residential User Fees and Revised Table B Property Use Classifications. B. By adoption of Ordinance No. OCSD41, the Board of Directors elected to adopt, impose, and collect rates and charges for regional sanitary sewer services provided by the District and correspondingly established procedures related thereto. C. California Health & Safety Code section 5473 provides that such charges, as adopted by District Ordinance No. OCSD-41, may be collected on the County tax roll in the same manner, by the same persons, and at the same time as, together with, and not separate from, Its general taxes. D. The charges established by Ordinance No. OCSD-41 reflect an allocation of the costs of operation and maintenance, such that the charges do not exceed the estimated reasonable costs to provide the wastewater collection, treatment, and disposal services and facilities, and the revenues received are not used for any other purpose. E. Pursuant to California Constitution Article XIIID (Proposition 218), sanitary sewer service charges constitute charges for property-related services. The sanitary sewer service charges set by Ordinance No. OCSD-41 comply with the provisions of Article XIIID, in that they do not exceed the cost to the District to provide the service and facilities. F. The District provided notice as required by Health and Safety Code section 5473.1, and held a public hearing on March 27, 2013, at which time the Board received and considered all comments and protests related to the collection of the fees on the tax roll. NOW, THEREFORE, the Board of Directors of Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE, AND ORDER: 916112.1 1 Section 1: That the rates and charges set forth in Ordinance No. OCSD41 are affirmed herein by the Board of Directors, as consistent with the findings hereinabove stated, for Fiscal Years 2013-2014 through 2017-2018, in the following amounts: Annual Sanitary Sewer Service User Fees Residential Users FISCAL YEAR 2013-14 2014-15 2015-16 2016-17 2017-18 SFR $308.00 $316.00 $323.00 $331.00 $339.00 MFR $215.60 $221.20 $226.10 $231.70 $237.30 SFR = Single Family Residential MFR = Multi-Family Residential All properties located within Revenue Area 14 pay no annual sewer service charges. District costs relating to providing service to these properties are billed by OCSD directly to the Irvine Ranch Water District, the local agency providing the local sewer service. Section : That pursuant to California Health & Safety Code Section 5473, the Board hereby elects and directs the County Tax Collector-Treasurer to include regional sanitary sewer service charges, as adopted by Ordinance No. OCSD41, on the tax roll, in the same manner, by the same persons and at the same time as, together with, and not separately from, the general taxes; and that such regional sanitary sewer service charges be included in the annual property tax bills for Fiscal Years 2013-2014 through 2017-2018. Section 3: That pursuant to California Health & Safety Code Section 5473, this Resolution shall remain in full force and effect until amended or repealed, or until such time as the rates of sanitary sewer service charges, as established by Ordinance No. OCSD41, are changed by increasing the annual rate. Section 4: That the General Manager, or his designee, be, and is hereby authorized and directed, to execute any necessary documents or agreements to effect the order set forth in Section 2 herein. Section 5: That the provisions of any Resolution(s) previously adopted by the Orange County Sanitation District that are in direct conflict with the provisions of this Resolution No. 13-05 are hereby superseded. Section . That the General Manager, or his designee, is hereby authorized to forward a copy of this Resolution to the Orange County Tax Collector-Treasurer. 916112.1 2 PASSED AND ADOPTED at a regular meeting held March 27, 2013. l Troy Edgar Chair, Orange Cou t Sanitation District ATTEST: Maria At ala Clerk of the Board 916112.1 3 ITEM NO. 7 MINUTES OF THE OPERATIONS COMMITTEE Engineering, Operations & Maintenance, and Facilities Support Services Orange County Sanitation District A regular meeting of the Operations Committee of the Orange County Sanitation District was held on June 4, 2014, at 5:04 p.m. at the District's Administrative Office. Director Shawver led the Flag Salute. A quorum was declared present, as follows: Operations Directors Present: Staff Present: John Nielsen, Chair Jim Herberg, General Manager Brett Murdock, Vice-Chair Bob Ghirelli, Assistant General Manager Keith Curry Rob Thompson, Director of Engineering Steve Jones Nick Arhontes, Director of Facilities Support Lucille Kring Services Michael Levitt Ed Torres, Director of Operations & Maintenance Steve Nagel Lorenzo Tyner, Director of Finance & Greg Sebourn Administrative Services David Shawver Jeff Reed, Director of Human Resources Fred Smith Maria Ayala, Clerk of the Board Constance Underhill (Alternate) Jennifer Cabral Troy Edgar, Board Chair Jim Colston Tom Beamish, Board Vice-Chair Dean Fisher Norbert Gaia Al Garcia Operations Directors Absent: Ted Gerber Kathy Millea Mike Puccio Roya Sohanaki Others Present: Brad Hogin, General Counsel Bob Ooten (Alternate Director) PUBLIC COMMENTS: No public comments. REPORT OF COMMITTEE CHAIR: Committee Chair Nielsen did not provide a report. 05/07/2014 Operations Committee Minutes Page 1 d 6 REPORT OF GENERAL MANAGER General Manager, Jim Herberg, reported that OCSD's state legislative lobbyist, Heather Stratman, informed him earlier today that the District's bill, SB 946, has passed the Local Government committee and that it would be moving forward to the Assembly floor for approval. CONSENT CALENDAR: 1. MOVED, SECONDED, and DULY CARRIED: Approve Minutes of May 7, 2014, Operations Committee meeting. AYES: Beamish, Curry, Edgar, Kring, Levitt, Murdock, Nagel, Nielsen, Seboum, Shawver, F. Smith and Underhill (Alternate) NOES: None ABSTENTIONS: None ABSENT: Jones 2. MOVED, SECONDED, and DULY CARRIED: Recommend to the Board of Directors to: A. Approve a Professional Consultant Services Agreement with Brown & Caldwell to provide construction support services for Santa Ana Trunk Sewer Rehabilitation, Project No. 1-17, for an amount not to exceed $188,724; and B. Approve a contingency of$18,872 (10%). AYES: Beamish, Curry, Edgar, Kring, Levitt, Murdock, Nagel, Nielsen, Seboum, Shawver, F. Smith and Underhill (Alternate) NOES: None ABSTENTIONS: None ABSENT: Jones 06/04/2014 Operations Committee Minutes Page 2 of 6 3. MOVED, SECONDED, and DULY CARRIED: Recommend to the Board of Directors to: A. Approve an Agreement with Corrpro Companies, Inc., for Corrosion Management Staffing Support Services, Specification CS-2014-6006D, for the period July 1, 2014 through June 30, 2015, for a total annual amount not to exceed $541,096, with four one-year renewable options; and B. Approve a contingency of$54,109.60 (10%). AYES: Beamish, Curry, Edgar, Kring, Levitt, Murdock, Nagel, Nielsen, Seboum, Shawver, F. Smith and Underhill (Alternate) NOES: None ABSTENTIONS: None ABSENT: Jones 4. MOVED, SECONDED, and DULY CARRIED: Recommend to the Board of Directors to: A. Award a contract to the lowest responsive and responsible bidder, Bowcon Company Inc., for Repairs of Dewatering Building at P2, Project No. FR12-001, for a total amount not to exceed $175,280; and B. Approve a contingency of$35,000 (20%). AYES: Beamish, Curry, Edgar, Kring, Levitt, Murdock, Nagel, Nielsen, Seboum, Shawver, F. Smith and Underhill (Alternate) NOES: None ABSTENTIONS: None ABSENT: Jones 06/04/2014 Operations Committee Minutes Page 3 of 6 5. MOVED, SECONDED, and DULY CARRIED: Recommend to the Board of Directors to: A. Approve a Professional Consultant Services Agreement with Carollo Engineers, Inc. to provide construction support services for Plant No. 1 Primary Treatment, Contract No. P1-124 for an amount not to exceed $451,910; and B. Approve a contingency of$45,190 (10%). AYES: Beamish, Curry, Edgar, Kring, Levitt, Murdock, Nagel, Nielsen, Seboum, Shawver, F. Smith and Underhill (Alternate) NOES: None ABSTENTIONS: Sebourn ABSENT: Jones 6. MOVED, SECONDED, and DULY CARRIED: Recommend to the Board of Directors to: A. Approve a Professional Design Services Agreement with HDR to provide engineering design services for Administrative Facilities Implementation Planning, Project No. SP-194, for an amount not to exceed $729,597; and B. Approve a contingency of$72,960 (10%). AYES: Beamish, Curry, Edgar, Kring, Levitt, Murdock, Nagel, Nielsen, Seboum, Shawver, F. Smith and Underhill (Alternate) NOES: None ABSTENTIONS: None ABSENT: Jones 06/04/2014 Operations Committee Minutes Page 4 of 6 7. MOVED, SECONDED AND DULY CARRIED: Recommend to the Board of Directors to: Approve out-of-country travel for two Orange County Sanitation District employees to witness factory testing of centrifuges in connection with Sludge Dewatering and Odor Control at Plant No. 1, Project P1-101, and all travel, lodging, and per diem costs in accordance with the Sanitation District's travel policy. AYES: Beamish, Curry, Edgar, Kring, Levitt, Murdock, Nagel, Nielsen, Seboum, Shawver, F. Smith and Underhill (Alternate) NOES: None ABSTENTIONS: None ABSENT: Jones INFORMATION ITEMS: Director Jones arrived to the meeting at 5:18 p.m. 8. Collections System Nick Arhontes, Director of Facility Support Services Department, gave a PowerPoint presentation on the Sanitation District's Collection Facilities. The presentation included information on: sewer spill statistics, odor complaints, regulatory compliance, sewage conditioning, etc. 9. Pretreatment Program and Industrial Permitting Roya Sohanaki, Engineering Supervisor, gave a PowerPoint presentation on the Overview of OCSD's Pretreatment Program. The presentation included information on: regulatory and compliance information, managing the sources of pollutants, effectiveness of source control, etc. The Committee had questions regarding violations, revenues, cost(s) of program, protocols and policies, etc. Staff responded to the questions accordingly. 10. Review proposed Budgets for FY 2014-15 and 2015-16 Lorenzo Tyner, Director of Finance and Administrative Services, gave a brief PowerPoint presentation on the proposed FY 14-15 and FY 15-16 Two-Year Budget plan. The budget book and executive summary were distributed to the 06/04/2014 Operations Committee Minutes Page 5 of 6 Committee. Key points of Mr. Tyner's presentation included: revenues, debt service, cash flows, reduction of liabilities, etc. Mr. Herberg highlighted the pages in the budget book with the capital improvement projects and detailed pertinent information. DEPARTMENT HEAD REPORT: None. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: Committee Chair Nielsen thanked OCSD staff for being present at the Tustin Chili Cook-Off event this past weekend. ADJOURNMENT At 6:23 p.m., Committee Chair Nielsen declared the meeting adjourned to the next scheduled meeting of Wednesday, July 2, 2014 at 5:00 p.m. Submitted by, Maria E. Ayala, Clerk of the Board 06/04/2014 Operations Committee Minutes Page 6 of 6 OPERATIONS COMMITTEE Meeting Dare TOBA.Of DIr. 06/04/14 O6/25/14 AGENDA REPORT Item Number Item Number z B Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: SANTA ANA TRUNK SEWER REHABILITATION, PROJECT NO. 1-17 GENERAL MANAGER'S RECOMMENDATION A. Approve a Professional Consultant Services Agreement with Brown & Caldwell to provide construction support services for Santa Ana Trunk Sewer Rehabilitation, Project No. 1-17, for an amount not to exceed $188,724; and B. Approve a contingency of$18,872 (10%). SUMMARY The purpose of this project is to rehabilitate the Santa Ana Truck Sewer located in the Cities of Santa Ana and Costa Mesa. Brown & Caldwell has satisfactorily furnished engineering services for the design of Santa Ana Trunk Sewer Rehabilitation, Project No. 1-17, and their engineering support services during construction will provide continuity through the completion of the project. The proposed engineering services during construction will be provided on an as- needed basis and will include reviewing submittals, responding to Contractor's requests for information, reviewing and preparing design changes, preparing record drawings, and assisting in the closeout of the project. Staff negotiated with Brown & 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. Staff recommends awarding a Professional Consultant Services Agreement with Brown & Caldwell for an amount not to exceed $188,724, and approving a contingency of$18,872 (10%). PRIOR COMMITTEE/BOARD ACTIONS November 2012 — Approved a Professional Design Services Agreement with Brown & Caldwell for engineering design services for Santa Ana Trunk Sewer Rehabilitation, Project No. 1-17, for an amount not to exceed $457,475, and approved a contingency of $45,747 (10%). Page 1 of 2 June 2012 - Authorized staff to enter into negotiations with Brown & Caldwell for the Santa Ana Trunk Sewer Rehabilitation, Project No. 1-17, providing for engineering design services. July 2010 - Approved a Professional Design Services Agreement with Brown & Caldwell for Santa Ana Trunk Sewer Rehabilitation, Project No. 1-17, providing for engineering design services for an amount not to exceed $801,850 and approved a contingency of $80,185 (10%). ADDITIONAL INFORMATION N/A CEQA Santa Ana Truck Sewer Rehabilitation, Project No. 1-17, is within the scope of the Program Environmental Impact Report (PEIR) for the Collection System Improvement Plan, SCH# 2006101018, certified in June 2007. Pursuant to CEQA Guidelines section 15168(c)(4), the Sanitation District prepared an addendum to the PEIR to cover sections that needed further analyzes; air quality and greenhouse gas emissions which was not included in the original PER. After reviewing the facts and analyzing the circumstances, staff has determined that these issue areas are of no substantial changes since the certification of the Final PEIR for the Collection System Improvement Plan. The Board adopted Addendum No. 2 to the Collections PEIR for project 5-60 on March 26, 2014. BUDGET/PURCHASING ORDINANCE This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted (FY2013-14 Update, Page A-7, Item 2) and the budget is sufficient for the recommended action. Date of Aooroval Contract Amount Contingency 06/25/14 $188,724 $18,782 (10%) ATTACHMENT The following attachment(s) maybe viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package: Professional Consultant Services Agreement RT:MD:dm:gc Page 2 of 2 PROFESSIONAL CONSULTANT SERVICES AGREEMENT THIS AGREEMENT, is made and entered into to be effective the 25" day of June, 2014 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 Santa Ana Trunk Sewer Rehabilitation, Project No. 1-17; 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-44 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 June 25, 2014, the Board of Directors, by Minute Order, accepted the recommendation of the Operations Committee to approve this Agreement between the SANITATION DISTRICT and CONSULTANT. NOW, THEREFORE, in consideration of the promises and mutual benefits, which will result to the parties in carrying out the terms of this Agreement, it is mutually agreed as follows: 1. SCOPE OF WORK CONSULTANT agrees to furnish necessary professional and technical services to accomplish those project elements outlined in the Scope of Work attached hereto as "Attachment A", and by this reference made a part of this Agreement. A. The CONSULTANT shall be responsible for the professional quality, technical accuracy, completeness, and coordination of all design, drawings, specifications, and other services furnished by the CONSULTANT under this Agreement, including the work performed by its Subconsultants. Where approval by the SANITATION DISTRICT is indicated, it is understood to be conceptual approval only and does not relieve the CONSULTANT of responsibility for complying with all laws, codes, industry standards and liability for damages caused by errors, omissions, noncompliance with industry standards, and/or negligence on the part of the CONSULTANT or its Subconsultants. B. CONSULTANT is responsible for the quality of work prepared under this Agreement and shall perform its work in accordance with engineering standards in effect for clarity, uniformity, and completeness. PCSA PROJECT NO. 1-17 Revised 04M14 SANTA ANA TRUNK SEWER REHABILITATION Page 1 of 17 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 30 calendar days during which the SANITATION DISTRICT shall perform appropriate acceptance tests. CONSULTANT shall correct any discrepancies or errors detected and reported within the acceptance period at no additional cost to the SANITATION DISTRICT. E. All professional services performed by the CONSULTANT, including but not limited to all drafts, data, correspondence, proposals, reports, and estimates compiled or composed by the CONSULTANT, pursuant to this Agreement, are for the sole use of the SANITATION DISTRICT, its agents and employees. Neither the documents nor their contents shall be released to any third parry without the prior written consent of the SANITATION DISTRICT. This provision does not apply to information that (a)was publicly known, or otherwise known to the CONSULTANT, at the time that it was disclosed to the CONSULTANT by the SANITATION DISTRICT, (b)subsequently becomes publicly known to the CONSULTANT other than through disclosure by the SANITATION DISTRICT. 2. COMPENSATION Total compensation shall be paid to CONSULTANT for services in accordance with the following provisions: A. Total Compensation Total compensation shall be in an amount not to exceed One Hundred Eighty Eight Thousand Seven Hundred Twenty Four Dollars ($188,724). 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'B"- Fee Proposal Form and Labor Hour/Cost Matrix, and Attachment"C"—Subconsultant 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 PCSA PROJECT NO. 1-17 Revised 042214 SANTA ANA TRUNK SEWER REHABILITATION Page 2 of 17 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"B"- Fee Proposal Form and Labor Hour/Cost Matrix, and Attachment"C"—Subconsultant Proposal. D. Profit Profit for CONSULTANT and Subconsultants shall be a percentage of consulting services fees (Burdened Labor and Overhead). When the consulting or subconsulting services amount is $250,000 or less, the maximum Profit shall be 10%. Between $250,000 and $2,500,000, the maximum Profit shall be limited by a straight declining percentage between 10% and 5%. For consulting or subconsulting services fees with a value greater than $2,500,000, the maximum Profit shall be 5%. Addenda shall be governed by the same maximum Profit percentage after adding consulting services fees. As a portion of the total compensation to be paid to CONSULTANT and Subconsultants, the SANITATION DISTRICT shall pay profit for all services rendered by CONSULTANT and Subconsultants for this project according to Attachment"B"- Fee Proposal Form and Labor Hour/Cost Matrix, and Attachment"C"—Subconsultant Proposal. E. Subconsultants 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"—Subconsultant 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"B" - Fee Proposal Form and Labor Hour/Cost Matrix, and Attachment"C"—Subconsultant 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 PCSA PROJECT NO. 1-17 Revised 042214 SANTA ANA TRUNK SEWER REHABILITATION Page 3 of 17 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. 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. 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 PCSA PROJECT NO. 1-17 Revised 042214 SANTA ANA TRUNK SEWER REHABILITATION Page 4 of 17 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 staled 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 PCSA PROJECT NO. 1-17 Revised 042214 SANTA ANA TRUNK SEWER REHABILITATION Page 5 of 17 used a false record or statement to conceal, avoid, or decrease an obligation to the SANITATION DISTRICT; ore) is a beneficiary of an inadvertent submission of a false claim to the SANITATION DISTRICT, and fails to disclose the false claim to the SANITATION DISTRICT within a reasonable time after discovery of the false claim. 5. PREVAILING WAGES To the extent CONSULTANT intends to employ employees who will perform work during the design and preconstruction phases of a construction contract, as more specifically defined under Labor Code Section 1720, CONSULTANT shall be subject to prevailing wage requirements with respect to such employees. 6. DOCUMENT OWNERSHIP—SUBSEQUENT CHANGES TO PLANS AND SPECIFICATIONS A. Ownership of Documents for the Professional Services performed. All documents, including but not limited to, original plans, studies, sketches, drawings, computer printouts and disk files, and specifications prepared in connection with or related to the Scope of Work or Professional Services, shall be the property of the SANITATION DISTRICT. The SANITATION DISTRICT's ownership of these documents includes use of, reproduction or reuse of and all incidental rights, whether or not the work for which they were prepared has been performed. The SANITATION DISTRICT ownership entitlement arises upon payment or any partial payment for work performed and includes ownership of any and all work product completed prior to that payment. This Section shall apply whether the CONSULTANT's Professional Services are terminated: a) by the completion of the Agreement, or b) in accordance with other provisions of this Agreement. Notwithstanding any other provision of this paragraph or Agreement, the CONSULTANT shall have the right to make copies of all such plans, studies, sketches, drawings, computer printouts and disk files, and specifications. B. CONSULTANT shall not be responsible for damage caused by subsequent changes to or uses of the plans or specifications, where the subsequent changes or uses are not authorized or approved by CONSULTANT, provided that the service rendered by CONSULTANT was not a proximate cause of the damage. 7. INSURANCE A. General i. Insurance shall be issued and underwritten by insurance companies acceptable to the SANITATION DISTRICT. ii. Insurers must have an "A-" Policyholder's Rating, or better, and Financial Rating of at least Class Vill, or better, in accordance with the most current A.M. Best's Guide Rating. However, the SANITATION DISTRICT will accept State Compensation Insurance Fund, for the required policy of Workers Compensation Insurance subject to the SANITATION DISTRICT's option to require a change in insurer in the event the State Fund financial rating is PCSA PROJECT NO. 1-17 Revised 042214 SANTA ANA TRUNK SEWER REHABILITATION Page 6 of 17 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. !it. 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. 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 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. PCSA PROJECT NO. 1-17 Revised 042214 SANTA ANA TRUNK SEWER REHABILITATION Page 7 of 17 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 acts or omissions of CONSULTANT during the course of performing services under the term of this Agreement. Said coverage shall be evidenced by either a new policy evidencing no gap in coverage or by separate extended "tail" coverage with the present or new carrier. In the event the present policy of insurance is written on an "occurrence" basis, said policy shall be continued in full force and effect during the term of this Agreement or until completion of the services provided for in this Agreement, whichever is later. In the event of termination of said policy during this period, new coverage shall be obtained for the required period to insure for the prior acts of CONSULTANT during the course of performing services under the term of this Agreement. CONSULTANT shall provide to the SANITATION DISTRICT a certificate of insurance in a form acceptable to the SANITATION DISTRICT indicating the deductible or self-retention amounts and the expiration date of said policy, and shall provide renewal certificates not less than ten (10)days prior to the expiration of each policy term. G. Proof of Coverage The CONSULTANT shall furnish the SANITATION DISTRICT with original certificates and amendatory endorsements effecting coverage. Said policies and endorsements shall conform to the requirements herein stated. All certificates PCSA PROJECT NO. 1-17 Revised 042214 SANTA ANA TRUNK SEWER REHABILITATION Page 8 of 17 and endorsements are to be received and approved by the SANITATION DISTRICT before work commences. The SANITATION DISTRICT reserves the right to require complete, certified copies of all required insurance policies, including endorsements, effecting the coverage required, at any time. The following are approved forms that must be submitted as proof of coverage: • Certificate of Insurance ACORD Form 25 (5/2010)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 (5/2010)shall state the required thirty (30) days' written notification. The policy shall not terminate, nor shall it be cancelled, 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. 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. PCSA PROJECT NO. 1-17 Revised 042214 SANTA ANA TRUNK SEWER REHABILITATION Page 9 of 17 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, except for Errors & 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 reveals its Errors& Omissions/Professional Liability limits beyond that required above. 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 PCSA PROJECT NO. 1-17 Revised 042214 SANTA ANA TRUNK SEWER REHABILITATION Page 10 of 17 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 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. PCSA PROJECT NO. 1-17 Revised 042214 SANTA ANA TRUNK SEWER REHABILITATION Page 11 of 17 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: Sarah L. Strader, Senior Contracts Administrator Copy: Martin A. Dix, Project Manager Notices shall be mailed to CONSULTANT at: Brown and Caldwell 18200 Von Kerman Avenue Suite 400 Irvine, CA 92612 Attention: Melissa Ingalsbe, PE, PIMP 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. PCSA PROJECT NO. 1-17 Revised 042214 SANTA ANA TRUNK SEWER REHABILITATION Page 12 of 17 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 PCSA PROJECT NO. 1-17 Revised 042214 SANTA ANA TRUNK SEWER REHABILITATION Page 13 of 17 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. PCSA PROJECT NO. 1-17 Revised 042214 SANTA ANA TRUNK SEWER REHABILITATION Page 14 of 17 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. 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. PCSA PROJECT NO. 1-17 Revised 042214 SANTA ANA TRUNK SEWER REHABILITATION Page 15 of 17 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 PROJECT NO. 1-17 Revised 042214 SANTA ANA TRUNK SEWER REHABILITATION Page 16 of 17 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 Chair, Board of Directors Date By Maria E. Ayala Date Clerk of the Board By Marc Dubois Date Contracts, Purchasing and Materials Management Division Manager Attachments: Attachment"A"—Revised Scope of Work Attachment'B"—Fee Proposal Form and Labor Hour/Cost Matrix Attachment"C"—Subconsultant Proposal Attachment"D"—Allowable Direct Costs SLS:yp EDMS:003989108 PCSA PROJECT NO. 1-17 Revised 04M14 SANTA ANA TRUNK SEWER REHABILITATION Page 17 of 17 OPERATIONS COMMITTEE Meeting pate To BA.of M. 06,09/19 O6/26/14 AGENDA REPORT Item Item Number 3 9 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: AWARD OF CORROSION MANAGEMENT STAFFING SUPPORT SERVICES SPECIFICATION NO. CS-2014-60OBD GENERAL MANAGER'S RECOMMENDATION A. Approve a Professional Consultant Services Agreement with Corrpro Companies, Inc. for Corrosion Management Staffing Support Services, Specification CS-2014-60013D, for the period of July 1, 2014 through June 30, 2015, for a total annual amount not to exceed $541,096, with four one-year renewable options; and B. Approve a contingency of $54,110 (10%). SUMMARY The Orange County Sanitation District (Sanitation District) uses outside consultants to support the Corrosion Management Program on Capital Improvement and Maintenance projects during the planning, design, and construction of facilities both inside the plants and in the collection system. Corrosion Management support includes identifying corrosion risks, performing condition assessments, and preparing evaluations and reports. The current Professional Consultant Services Agreement expires on June 30, 2014 and staff conducted a Request for Proposals in March 2014. The Sanitation District received two proposals, however, one was deemed nonresponsive. Staff recommends awarding a Professional Consultant Services Agreement to Corrpro Companies, Inc., for an amount not to exceed $541,096, with four one-year renewable options. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION The objective of Corrosion Management Program is to implement and maintain a comprehensive program to manage corrosion of the Sanitation District's assets. Implementing and maintaining a comprehensive Corrosion Management program includes identifying corrosion risks, performing condition assessments, developing alternative evaluations, and creating support documents to implement the preferred alternative. The ultimate goal of Corrosion Management is life extension and to reduce life-cycle costs for the Sanitation District's assets, while maintaining an acceptable level of service. Page 1 of 2 The Sanitation District solicited proposals for this work utilizing online bidding in April 2014. Twelve vendors were notified directly and an additional nine vendors downloaded the bid documents from the online bidding billboard. The Sanitation District received two proposals from Corrpro Companies, Inc., and Trident Environmental and Engineering, Inc. A five-member staff panel reviewed, evaluated, and ranked the proposals based upon the following categories: qualifications of the firm, staffing and project organization, and cost. Staff reviewed and ranked the proposals on April 30, 2014. The proposal from Trident Environmental and Engineering, Inc. was deemed non-responsive. The proposal from Corrpro Companies, Inc. was deemed responsive and responsible, and the cost proposal to be fair and reasonable. Staff recommends awarding a Professional Consultant Services Agreement to Corrpro Companies, Inc. for an amount not to exceed $541,096, with four one-year renewable options. CEQA This is not a project as defined by CEQA and therefore does not require CEQA action. BUDGET/PURCHASING ORDINANCE COMPLIANCE This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted under Corrosion Management, SP-68-1. (FY2012-13-2013-14-Line item: Section 8, Page 85). Project contingency funds will not be used for this agreement. Date of Approval Contract Amount Contincencv 06/25/14 $541,096 $54,110 (10%) ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (wwwocsd.com) with the complete agenda package: PCSA Agreement DK:sa:gc Page 2 of 2 PROFESSIONAL CONSULTANT SERVICES AGREEMENT Corrosion Management Staffing Support Services Specification No. CS-2014-60OBD 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 CORRPRO with a principal business at 10260 Matern Place, Santa Fe Springs, California 90670 (hereinafter referred to as"Consultant") collectively referred to as the"Parties". WITNESSETH WHEREAS, based on Consultant's expertise and experience, OCSD wishes to temporarily engage Consultant to provide staffing support services for corrosion management ("Services") as described in Exhibit"A"; and WHEREAS, OCSD's General Manager has determined the outsourcing of said Services is in the best interest of OCSD; and WHEREAS, on June 25, 2014, the Board of Directors of OCSD, by minute order, authorized execution of this Agreement between OCSD and Consultant; and WHEREAS, OCSD has chosen Consultant to conduct Services in accordance with Ordinance No. OCSD44; and NOW, THEREFORE, in consideration of the mutual promises and mutual benefits exchanged between the Parties, the Parties mutually agree as follows: 1. Introduction 1.1 This Agreement and all exhibits hereto (called the "Agreement") is made by OCSD and Consultant. The Terns and Conditions herein exclusively govern the purchase of Services as described in the Scope of Work. 1.2 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" Scope of Work Exhibft"B" Best and Final Offer from Consultant, dated May 12, 2014 Exhibit"C" Response and Cost Proposal from Consultant, dated April 18, 2014 1.3 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. 1.4 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. 1.5 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. Orange County Sanitation Distact 1 of 10 Specification No. CS-2014-60OBD 1.6 The term "days", when used in the Agreement, shall mean calendar days, unless otherwise noted as workdays. 1.7 The term 'Workday". OCSD 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 Thursday between the hours of 8AM and 4PM (exception is Operations staff who maintain plant operations 2417 and work a rotated 12-hour shift) and shall conform to OCSD work schedules. OCSD review periods shall not include legally observed holidays as listed in Section 5.4 of Exhibit "A". 1.8 Work Hours: The work required under this Agreement shall be done in accordance with Section 5.3 of Exhibit "A". All work shall be coordinated through the OCSD Project Manager, Doug Kanis or his designee. All hours worked must have prior approval by the OCSD Project Manager and all timecards must be signed by the OCSD Project Manager or his designee. 1.9 Consultant shall provide OCSD with all required premiums and/or overtime work at no charge beyond the prices provided in Exhibit"K 1.10 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. Scope of Work Subject to the terms of this Agreement, Consultant shall perform the Services identified in Exhibit "A". Consultant warrants that all of its Services shall be performed in a competent, professional and satisfactory manner. 3. Modifications to Scone 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. 4. Compensation Compensation to be paid by OCSD to Consultant for the Services provided under this Agreement shall be a total amount not to exceed Five Hundred Forty-one Thousand Ninety-six and 00100 Dollars ($541,096.00). 5. Payment and Inyoicina 5.1 Consultant shall be paid monthly by OCSD upon approval of invoices by OCSD Project Manager, Doug Kanis or his designee, for Services rendered as outlined in Exhibit"A". OCSD, at its sole discretion, shall be the determining party as to whether the Services have been satisfactorily completed. 5.2 Invoices shall be emailed by Consultant to OCSD Accounts Payable at APStaff(DOCSD.com and "INVOICE" the Purchase Order number and, Doug Kanis, shall be referenced in the subject line. 6. 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. 7. Commencement and Term The Services to be provided by Consultant under this Agreement shall commence on July 1, 2014, and continue through June 30, 2015. Orange County Sanitation District 2 of 10 Specification No. CS-2014-6008D 8. Renewals 8.1 OCSD may exercise the option to renew the Agreement for up to four (4) one-year periods based upon the criteria set forth in the specifications, Exhibit "A", under the terms and conditions contained herein. OCSD shall make no obligation to renew nor give reason if it elects not to renew. 8.2 Renewal may be made through the OCSD Purchase Order Process. & Extensions The Tenn of this Agreement may be extended only by written instrument signed by both Parties. 10. Performance Time is of the essence in the performance of the provisions hereof. 11. Termination 11.1 OCSD reserves the right to terminate this Agreement for its convenience, with or without cause in whole or in part, at any time, by written notice from OCSD, (delivered by certified mail return receipt requested) of intent to terminate. Upon receipt of a termination notice, Consu�.tant shall immediately discontinue all work under this Agreement (unless the notice directs otherw'.se). 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. 11.2 OCSD 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. 11.3 OCSD 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. 11.4 All 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. 12. Indemnification and Hold Harmless Provision Consultant shall assume all responsibility for damages to property and/or injunes to persons, including accidental death, welch may arise out of or be caused by Service Provider's services under this Agreement, or by its subcontractor or by anyone directly or indirectly employed by Consultant, and whether such carnage 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 irdemnify, protect, defend and hold harmless OCSD, its elected and appointed officials, officers, agerts and employees, from and against any and all claims, liabilities, damages or expenses of ary natire.. including attorneys' fees: (a) for injury to or death of any person or damage to oropeny or Intererence wit'r the use of property, arising out of or in connection with Consultant's cerformance ender tre Agreement, and/or (b) on account of use of any copyrighted or uncooyrgi'.ec material composition, or process, or any patented or unpatented invention, article or apo once, furrlsl-ed or used under the Agreement, and/or(c) on account of any goods Orange County Samracor Dismct 3 of 10 Specification No. CS-2014-60OBD and services provided under this Agreement. This indemnification provision shall apply to any ads 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, Consultant's 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. 11 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, located in 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. 14. Key Personnel Key Personnel, as provided in Exhibits "B" and "C", 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. I& Confidentiality and Non-Disclosure 15.1 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. 15.2 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. 15.3 Consultant further agrees to maintain in confidence and not to disclose to any person, firth, or corporation any data, information, technology, or material developed or obtained by Consultant during the term of this Agreement. 15.4 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. Orange County Sanitation District 4 of 10 Specification No. CS-2014-600BD 15.5 The provisions of this Section shall survive termination or expiration of this Agreement and shall continue for so long as the material remains confidential. 16. 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 protects and/or use of incomplete documents without spec written authorization by the Consultant will be at OCSD's sole risk and without liability to Consultant. Consultant shall ensure that a'.. its subcontractors shall provide for assignment to OCSD of any documents or materials prepared by them. 17. Ownership of Intellectual Property 17.1 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. 17.2 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 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. 17.3 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. 17.4 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. 18. No Solicitation of Employees Or Subcontractors 18.1 Consultant agrees that it 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 Consultant became aware as a result of Consultant's Services to OCSD. 18.2 Consultant acknowledges that OCSD's employees are critical to its business. Consultant agrees not to employ or otherwise engage OCSD's employees or subcontractors during the term of this Agreement and for a period of one (1) year following 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 5 of 10 Specification No. CS-2014-6008D 19. Independent Contractor Canacity 19.1 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. 19.2 Consultant shall act independently and not as an officer or employee of OCSD. OCSD assumes no liability for Consultant's action and performance, nor assumes responsibility for taxes, funds, pay-e its or other commitments, implied or expressed, by or for Consultant. 19.3 Consultant shall no: 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. 19.4 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. 19.5 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 indemnities OCSD for any claims, losses, costs, fees, liabilities, damages or penalties suffered by OCSD arising out of Consultant's breach of this provision. 19.6 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 misclassified Consultant for tax purposes. 20. Licenses, Permits Consultant represents and warrants to OCSD that it has obtained all licenses, permits, qualification 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. 21. 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 tradelprofession. Consultant agrees to comply with all applicable Federal, State and local laws and regulations. 22. 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. 23. Nonexclusive Agreement This Agreement is not exclusive to Consultant. OCSD reserves the right to enter into similar or like agreements with other companies. Orange County Sanitation District 6 of 10 Specification No. CS-2014-600BD 24. Right to Review Services. Facilities. and Records 24.1 OCSD 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. 24.2 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. 24.3 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. 25. 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. 26. 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. 27. Waiv r 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. 28. Remedies In addition to other remedies available in law or equity, if the Consultant fails to make delivery of the goods or Services or repudiates its obligations under this Agreement, or if OCSD rejects the goods or Services or revokes acceptance of the goods or Services, OCSD may (1) cancel the Agreement; (2) recover whatever amount of the purchase price OCSD has paid, and/or(3) "cover" by purchasing, or contracting to purchase, substitute goods or Services for those due from Consultant. In the event OCSD elects to "cover" as described in (3), OCSD shall be entitled to recover from Consultant as damages the difference between the cost of the substitute goods or Services and the contract price, together with any incidental or consequential damages. 29. Governinq 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. 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. Orange County Sanitation District 7 of 10 Specification No. CS-20146008D 31. Dispute Resolution 31.1 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. 31.2 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. 32. Damage to OCSD's Pronertv Any OCSD property damaged by Consultant will be subject to repair or replacement by Consultant at no cost to OCSD. 33. 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 Standards and Human Resources Policies found at: OCSD.com, "Doc Central" (bottom of page), under"Safety'. 34. 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. 35. Conflict of Interest and Reporting 35.1 Consultant shall at all times avoid conflict of interest or appearance of conflict of interest in performance of this Agreement. 35.2 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. 36. 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 Disbfct 8 of 10 Specification Ho. CS-2014-"BD 37. Third Party Rights Nothing in this Agreement shall be construed to give any rights or benefits to anyone other than OCSD and Consultant. 38. 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 or for any amount which may become due to Consultant or to its successor, or for breach of any obligation of the terms of this Agreement. 39. 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. 40. Read and Understood By signing this Agreement, Consultant represents that he has read and understood the terms and conditions of the Agreement. 41. 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 Distinct 9 of 10 Specification No. CS-2014-60OBD 42. 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: Clarice M. Marcin Senior Contracts Administrator Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, CA 92708-7018 Consultant: CORRPRO Each party shall provide the other party written notice of any change in address as soon as practicable. IN WITNESS WHEREOF, the Parties hereto have hereunto set their hands the day and year indicated below. ORANGE COUNTY SANITATION DISTRICT Dated: By: Chair Board of Directors Dated: By: Clerk of the Board Dated: By: Contracts/Purchasing Manager CORRPRO Dated: By: Print Name and Title of Officer IRS Employer's I.D. Number Orange County Sanitation D&nct f0 of 10 Specification No. CS-2014-60OBD OPERATIONS COMMITTEE Meeting Date TOBd.of Dll. 06/04/14 O6/25/14 AGENDA REPORT Item Number Item Nu bar 4 10 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Nick Arhontes, P.E., Director of Facilities Support Services SUBJECT: REPAIRS OF DEWATERING BUILDING AT P2, PROJECT NO. FR12-001 GENERAL MANAGER'S RECOMMENDATION A. Award a contract to the lowest responsive and responsible bidder, Bowcon Company Inc., for Repairs of Dewatering Building at P2, Project No. FR12-001, for a total amount not to exceed $175,280; and B. Approve a contingency of$35,000 (20%). SUMMARY This project performs several structural repairs to extend the life of the 33 year old Dewatering Building at P2 until the facility can be replaced. The work also includes replacement of biosolids belt filter press platform base plates and anchor bolts. It also replaces and/or repairs other corroded steel elements. We advertised for bids on March 6, 2014. Seven sealed bids were received on April 21, 2014. The bids were evaluated in accordance with our policies and procedures. Bowcon Company Inc. was deemed the lowest responsive, responsible bidder. The estimated duration of this project is 150 calendar days. A 20% contingency is being proposed due to unforeseen conditions such as additional deteriorated concrete and steel that may be discovered during demolition. Summary information on the bid opening for Repairs of Dewatering Building at P2, Project No. FR12-001 is as follows: Engineer's Estimate $370,000.00 Bidder Amount of Bid Bowcon Company Inc. $175,280.00 ODC Engineering and Technology $182,700.00 O'Connell Engineering and Construction Inc. $220,000.00 Kaveh Engineering and Construction Inc. $274,870.00 Tharsos Inc. $279,403.00 Mode Engineering $395,000.00 Green Building Corporation $398,000.00 PRIOR COMMITTEE/BOARD ACTIONS N/A Page 1 of 2 ADDITIONAL INFORMATION A report prepared by maintenance staff from the 0&M Department on February 6, 2012 provided a detailed assessment of the condition of existing deteriorated concrete, corroded steel, and aluminum structural members at the facility. After added detailed inspection, deteriorated concrete was found in numerous additional locations. In some areas the concrete is failed and pieces have fallen off, exposing steel reinforcing bars to corrosion. If allowed to continue, this could result in structural weakening of the building. In other locations, the aluminum catwalk supports along the north interior side of the building are severely corroded which could affect use of the catwalks for required maintenance of the equipment. CEQA A Notice of Exemption has been filed for this work on March 14, 2014. This project is categorically exempt from CEQA under section 15302 (c) — replacement or reconstruction of existing utility systems and/or facilities involving negligible or no expansion of capacity. BUDGET/PURCHASING ORDINANCE COMPLIANCE This request complies with authority levels of the OCSD's Purchasing Ordinance (Ordinance Article 7, Section 7.01B). This repair will be funded through the Small Capital Replacement /Rehabilitation Project SP-34 (Budget Update Fiscal Year 2012- 2013 and 2013-2014 Misc. & Support Projects; Section 8 — Page 111). This Small Capital fund is used to pay for capital repairs and/or direct replacements. The SP-34 budget is adequate to cover this project. Date of Approval Contract Amount Continaencv 06/25/14 $175,280 $35,000 ATTACHMENT The following attachment(s)may be viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package and attachments: • Service Contract (7 pages) ME:JF:eh Page 2 of 2 SERVICE CONTRACT Repairs of Dewatering Building at P2 Project No. FR12-001 THIS CONTRACT 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 Bowcon Company, Inc. with a principal business at 1348 La Mirada Drive, Suite A, San Marcos, CA 92078 (hereinafter referred to as "Contractor") collectively referred to as the "Parties". WITNESSETH WHEREAS, OCSD desires to retain the services of Contractor to make repairs of the Dewatering building at OCSD Plant Number 2"Services"; and WHEREAS, OCSD has chosen Contractor to conduct Services in accordance with Ordinance No. OCSD-44; and WHEREAS, on June 25, 2014, the Board of Directors of OCSD, by minute order, authorized execution of this Agreement between OCSD and Contractor, and WHEREAS, Contractor is qualified by virtue of experience, training, and education and expertise to accomplish such Services, NOW THEREFORE, in consideration of the promises and mutual benefits exchanged between the Parties, it is mutually agreed as follows: 1. Introduction 1.1 This Contract and all exhibits hereto (called the "Contract') is made by OCSD and Contractor. The Terms and Conditions herein exclusively govern the purchase of Services as described in the Scope of Work, attached hereto and incorporated herein by reference as Exhibit "A". 1.2 Exhibits to this Contract are incorporated by reference and made a part of this Contract as though fully set forth at length herein. Exhibits to this Contract are as follows in order of precedence: Exhibit"A" Scope of Worklrechnical Specifications as modified by Addendum No.2 to the Notice Inviting Bids Exhibit"B" Bid from Contractor submitted April 21, 2014 Exhibit"C" Acknowledgement of Insurance Requirements Exhibit"D" Payment (Labor and Material) and Performance Bonds 1.3 In the event of any conflict or inconsistency between the provisions of this Contract and any of the provisions of the exhibits hereto, the provisions of this Contract shall in all respects govern and control. 14 The provisions of this Contract may be amended or waived only by a writing executed by authorized representatives of both Parties hereto. 1.5 The various headings in this Contract are inserted for convenience only and shall not affect the meaning or interpretation of this Contract or any Paragraph or provision hereof. Orange County Sanitation District 1 Of 9 Project No. FR12-001 1.6 The term "days", when used in the Contract, shall mean calendar days, unless otherwise noted as business days. 1.7 The term "hours", when used in this Contract, shall be as defined in Exhibit"A". 1.8 Contractor shall provide OCSD with all required premiums and/or overtime work at no charge beyond the price provided under"Compensation" below. 1.9 Except as expressly provided otherwise, OCSD accepts no liability for any expenses, losses, or action incurred or undertaken by Contractor as a result of work performed in anticipation of purchases of said services by OCSD. 2. Compensation Compensation for this project shall not exceed the total amount of One Hundred Seventy-five Thousand Two Hundred Eighty and 00/00 Dollars ($175,280.00). 3. Payments Payments shall be made upon approval by OCSD Project Manager, John Falkenstein or his designee, of invoices submitted monthly for Services completed as described in Exhibit "A". OCSD, at its sole discretion, shall be the determining party as to whether the Services have been satisfactorily completed. 4. Invoices 4.1 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. Invoices shall include the Purchase Order Number. 4.2 Invoices shall be emailed by Contractor to OCSD Accounts Payable at APStaff(oDOCSD.com and reference the following in the subject line: "INVOICE", the Purchase Order number, the Project Manager, John Falkenstein and FR10-018. 5. Audit Rights Contractor agrees that, during the term of this Contract 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 Contractor relating to the invoices submitted by Contractor pursuant to this Contract. 6. Scope of Work Subject to the terms of this Contract, Contractor shall perform the Services identified in Exhibit "A". Contractor shall perform said Services in accordance with generally accepted industry and professional standards. 7. 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. 6. Performance Time is of the essence in the performance of this Contract and the provisions hereof. 9. Contract Term The Services provided under this Contract shall be completed within 150 days from the date of notice to proceed. 10. Termination 10.1 OCSD reserves the right to terminate this Contract for its convenience, with or without cause, in whole or in part, at any time, by written notice from OCSD of intent to terminate. Upon receipt of a termination notice, Contractor shall immediately discontinue all work under this Contract (unless the notice directs otherwise). OCSD shall thereafter, within thirty (30) days, pay Contractor for work performed (cost and fee) to the date of termination. Contractor Orange County Sanitation District 2 of 9 Pmject No. FR12-001 expressly waives any claim to receive anticipated profits to be earned during the uncompleted portion of this Contract. Such notice of termination shall terminate this Contract and release OCSD from any further fee, cost or claim hereunder by Contractor other than for work performed to the date of termination. 10.2 OCSD reserves the right to terminate this Contract immediately upon OCSD's determination that Contractor is not meeting specification requirements, if the level of service is inadequate, or any other default of this Contract. 10.3 OCSD may also immediately cancel for default of this Contract in whole or in part by written notice to Contractor: • if Contractor becomes insolvent or files a petition under the Bankruptcy Act; or • if Contractor sells its business; or • if Contractor breaches any of the terms of this Contract; or • if total amount of compensation exceeds the amount authorized under this Contract. 10A All OCSD property in the possession or control of Contractor shall be returned by Contractor to OCSD upon demand, or at the termination of this Contract, whichever occurs first. 11. Insurance Contractor and all subcontractors shall purchase and maintain, throughout the life of this Contract and any periods of warranty or extensions, insurance in amounts equal to the requirements set forth in the signed Acknowledgement of Insurance Requirements (attached hereto and incorporated herein as Exhibit "C"). Contractor shall not commence work under this Contract until all required insurance is obtained in a forth acceptable to OCSD, nor shall Contractor allow any subcontractor to commence service pursuant to a subcontract until all insurance required of the subcontractor has been obtained. Failure to maintain required insurance coverage shall result in termination of this Contract. 12. Bonds 12.1 Contractor shall, before entering upon the performance of this Contract, furnish bonds (attached hereto in Fxh cif D") approved by OCSD's General Counsel - one in the amount of one hundred percent (100%) of the Contract price bid, to guarantee the faithful performance of the work, and the other in the amount of one hundred percent (100%) of the Contract price bid, to guarantee pay:Tent of all claims for labor and materials furnished. This Contract shall not become effective unt I 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 and must be maintained throughout the fife of the project and during the warranty period. Contractor is hereby noted that it is required that the person executing the Bonds must have on file with the County Clerk, County of Orange, a Power of Attorney and authorization to execute said Bonds for and on behalf of the corporate surety. The purpose of this requirement is to hsure that the provisions of Code of Civil Procedure Section 995.630 requiring such acthcr'ty to be on file with the Orange County Clerk are satisfied in order for the OCSD and its officers to approve the bond. 13. Indemnification and Hold Harmless Provision Contractor 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 Contractors services under this Contract, or by its subcontractor or by anyone directly or indirectly employed by Contractor, and whether such damage or injury shall accrue or be discovered before or after the termination of the Contract. Except as to the sole active negligence of or willful misconduct of OCSD, Contractor shall indemnify, protect, ce'end 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 Orange Countl Sa.ma,'iao District 3 of 9 Pircl No. FR12-001 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 Contractor's performance under the Contract, 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 Contract, and/or (c) on account of any goods and services provided under this Contract. This indemnification provision shall apply to any acts or omissions, willful misconduct, or negligent misconduct, whether active or passive, on the part of Contractor of or anyone employed by or working under Contractor. To the maximum extent permitted by law, Contractor's 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. Contractor agrees to provide this defense immediately upon written notice from OCSD, and with well qualified, adequately insured, and experienced legal counsel acceptable to OCSD 14. Safety Standards and Human Resources (HRI Polie/es OCSD requires all contractors and service providers 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 Contractor is required to follow the most stringent regulatory requirement at no cost to OCSD. Contractor and all their employees and subcontractors, shall adhere to all applicable OCSD Safety Standards and Human Resources Policies found at: OCSD.com, "Doc Central" (bottom of page), under Safety". 15. Warrarrt/es 15.1 In addition to the Warranties stated in Section A-3, Technical Specifications, Exhibit "A", the following shall apply: 15.1.1 Manufacturer's standard warranty shall apply. All manufacturer warranties will begin at date of completion of this Contract. 15.1.2 Contractor's warranty: If, within the 12-month period following completion of its Services, OCSD informs Contractor that any part of the Services fails to meet the standards required under this Contract, Contractor shall, within the time agreed to by OCSD and Contractor, take all such actions as are necessary to correct or complete the noted deficiency(ies) at Contractor's sole expense. 16. 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 Contract. 17. Familiarity with Work By executing this Contract, Contractor 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 Contract. Should Contractor 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 Contractor's risk, until written instructions are received from OCSD. Orange County Sanitation Distnct 4 of 9 Project No. FR12-001 18. Freight(F.O.B. Destination) Contractor assumes full responsibility for all transportation, transportation scheduling, packing, handling, insurance, and other services associated with delivery of all products deemed necessary under this Contract. 19. Regulatory Reguirements Contractor shall perform all work under this Contract in strict conformance with applicable federal, state, and local regulatory requirements including, but not limited to, 40 CFR 122, 123, 124, 257, 258, 260, 261, and 503, Title 22, 23, and California Water Codes Division 2. 20. Licenses, Permits. Ordinances and Regulations Contractor represents and warrants to OCSD that it has obtained all licenses, permits, qualification 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 Contract will be paid by Contractor. 21. Apolicable Laws and Regulations Contractor shall comply with all applicable federal, state, and local laws, rules, and regulations. Contractor also agrees to indemnify and hold harmless from any and all damages and liabilities assessed against OCSD as a result of Contractor's noncompliance therewith. Any permission required by law to be included herein shall be deemed included as a part of this Contract whether or not specifically referenced. 22. Public Contracts Law Contractor's Employees Compensation 22.1 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. 22.2 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 preva'.!ing rate for legal holiday and overtime work in the locality in which the work is to be performec for each craft or type of work needed to execute this contract, and copies of the same are on f'.e 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 fi'ie cop'.as of the prevailing rate of per diem wages at its principal office and at each job site, which snail be made available to any interested party upon request. 22.3 Forfeiture For Violation - Contractor shall, as a penalty to OCSD, forfeit fifty dollars ($50.00) for each calendar day or portion thereof for each worker paid (either by the Contractor or any scbcortractor 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. 22.4 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 or twenty (20) working days or more; or if contracts of specialty contractors not bidding for work through the general or prime Contractor are two thousand dollars ($2,000.00) or more or five (5)working days or more. Orange County Sanitation District 5 of 9 Pnyeot No. FR12-001 22.5 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 19.2 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. 22.6 Record of Waoes: Inspection - Contractor agrees to maintain accurate payroll records showing the name, address, social security number, work classification, straight-time and overtime hours worked each day and week, and the actual per diem wages paid to each journeyman, apprentice, worker or other employee employed by it in connection with the project and agrees to require that each of its subcontractors do the same. All payroll records shall be certified as accurate by the applicable Contractor or subcontractor or its agent having authority over such matters. Contractor further agrees that its payroll records and those of its subcontractors shall be available to the employee or employee's representative, the Division of Labor Standards Enforcement, and the Division of Apprenticeship Standards and shall comply with all of the provisions of Labor Code Section 1776, in general. Penalties for noncompliance with the requirements of Section 1776 may be deducted from project payments per the requirements of Section 1776. 23. South Coast Air Quality Manaaement Districts (SCAQMD) Requirements It is Contractor's responsibility that all equipment furnished and installed be in accordance with the latest rules and regulations of the South Coast Air Quality Management District (SCAQMD). All contract work practices, which may have associated emissions such as sandblasting, open field spray painting or demolition of asbestos containing components or structures, shall comply with the appropriate rules and regulations of the SCAQMD. 24. Govemina Law This Contract 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 Contract or the performance thereof. 25. Breach The waiver of either party of any breach or violation of, or default under, any provision of this Contract, shall not be deemed a continuing waiver by such party of any other provision or of any subsequent breach or violation of this Contract or default thereunder. Any breach by Contractor 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. 26. Remedies In addition to other remedies available in law or equity, if the Contractor fails to make delivery of the goods or Services or repudiates its obligations under this Contract, or if OCSD rejects the goods or Services or revokes acceptance of the goods or Services, OCSD may (1) cancel the Contract; (2) recover whatever amount of the purchase price OCSD has paid, and/or (3) "cover" by purchasing, or contracting to purchase, substitute goods or Services for those due from Contractor. In the event OCSD elects to 'cover as described in (3), OCSD shall be entitled to recover from Contractor as damages the difference between the cost of the substitute goods or Services and the contract price, together with any incidental or consequential damages. Orange County Sanitation District 6 of 9 Project No. FR12-001 27. Dispute Resolution 27.1 In the event of a dispute as to the construction or interpretation of this Contract, 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 aftemate dispute resolution process. 27.2 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 Calfomia 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 arbitrators decision and award shall be subject to review for errors of fact or law in the Superior Court for the County of Orange, with a right of appeal from anyjudgment issued therein. 28. Attomev'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 Contract, the prevailing party shall be entitled to reasonable attorneys fees, costs and necessary disbursements in addition to any other relief to which he may be entitled. 29. Survival The provisions of this Contract dealing with Payment, Warranty, Indemnity, and Forum for Enforcement, shall survive termination or expiration of this Contract. 30. Severability If any section, subsection, or provision of this Contract, or any agreement or instrument contemplated hereby, or the application of such section, subsection, or provision is held invalid, the remainder of this Contract or instrument in the application of such section, subsection or provision to persons or circumstances other than those to which R is held invalid, shall not be affected thereby, unless the effect of such invalidity shall be to substantially frustrate the expectations of the Parties. 31. Damage to OCSD's Property Any of OCSD's property damaged by Contractor, any subcontractors or by the personnel of either will be subject to repair or replacement by Contractor at no cost to OCSD. 32. Disclosure Contractor agrees not to disclose, to any third parry, data or information generated from this project without the prior written consent from OCSD. 33. Independent Contractor The legal relationship between the parties hereto is that of an independent contractor, and nothing herein shall be deemed to make Contractor an OCSD employee. During the performance of this Agreement, Contractor and its officers, employees, and agents shall act in an independent capacity and shall not act as OCSD's officers, employees, or agents. Contractor and its officers, employees, and agents shall obtain no rights to any benefits which accrue to OCSD's employees. 34. Limitations upon Subcontracdna and Assignment Contractor shall not delegate any duties nor assign any rights under this Contract without the prior written consent of OCSD. Any such attempted delegation or assignment shall be void. Orange County Sanitation District 7 of 9 Project No. FR12-Wl 35. Third Party Rights Nothing in this Contract shall be construed to give any rights or benefits to anyone other than OCSD and Contractor. 36. Non-Liability of OCSO Officers and Employees No officer or employee of OCSD shall be personally liable to Contractor, or any successor-in-interest, in the event of any default or breach by OCSD or for any amount which may become due to Contractor or to its successor, or for breach of any obligation for the terms of this Agreement. 37. Read and Understood By signing this Contract, Contractor represents that he has read and understood the terms and conditions of the Contract. 39. Authority to Execute The persons executing this Contract on behalf of the Parties warrant that they are duly authorized to execute this Contract and that by executing this Contract, the Parties are formally bound. 39. Entire Contract This Contract 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 8 of 9 Project No. FR12-001 40. Notices All notices under this Contract 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. 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: Clarice M. Marcin Senior Contracts Administrator Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, CA 92708-7018 Contractor: Bowcon Company, Inc. Each party shall provide the other party written notice of any change in address as soon as practicable. IN WITNESS WHEREOF, intending to be legally bound, the Parties hereto have caused this Contract to be signed by the duly authorized representatives. ORANGE COUNTY SANITATION DISTRICT Dated: By: Chair Board of Directors Dated: By: Clerk of the Board Dated: By: Contracts/Purchasing Manager BOWCON COMPANY, INC. Dated: By Print Name and Title of Officer IRS Employer's I.D. Number Orange County Sanitation District 9 of 9 Project No. FR12-001 OPERATIONS COMMITTEE Meeting Dare TOBA.Of DIr. 06/04/14 O6/25/14 AGENDA REPORT Item Number Item Number s 11 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: PLANT NO. 1 PRIMARY TREATMENT UPGRADES, PROJECT NO. P1-124 GENERAL MANAGER'S RECOMMENDATION A. Approve a Professional Consultant Services Agreement with Carollo Engineers, Inc. to provide construction support services for Plant No. 1 Primary Treatment, Project No. P1-124, for an amount not to exceed $451,910; and B. Approve a contingency of$45,190 (10%). SUMMARY The Plant No. 1 Primary Treatment Upgrades, Project No. P1-124, will replace the existing primary sludge pumps at Primary Clarifiers (PC) 16-31 East, and will resolve various operation, maintenance, corrosion, and safety issues throughout this facility. Carollo Engineers, Inc. (Carollo) has satisfactorily provided architectural and engineering services for this project. Carollo's engineering support services are needed during the construction phase to provide continuity through the completion of the project. The proposed services will be provided on an as-needed basis and will include reviewing submittals, answering Contractor's requests for information, reviewing design changes, assisting in commissioning activities, providing training, preparing Operations Manual and Procedures (OMaP), preparing record drawings, and assisting in closeout of the project. Staff negotiated with Carollo 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 to provide commissioning support, conduct training, prepare OMaP, and prepare record drawings. Based on this review, staff determined the negotiated fee to be fair and reasonable for these services. Staff recommends awarding a Professional Consultant Services Agreement with Carollo for an amount not to exceed $451,910 and approving a contingency of$45,190 (10%). Page 1 of 2 PRIOR COMMITTEE/BOARD ACTIONS January 2013 —Approve a Professional Design Services Agreement with Carollo Engineers, Inc. to provide engineering design services for Plant No. 1 Primary Treatment Upgrades, Project No. P1-124, for an amount not to exceed $676,983; and, approve a contingency of$67,698 (10%). ADDITIONAL INFORMATION N/A CEQA A Notice of Exemption was filed and recorded on August 31, 2012. BUDGET/PURCHASING ORDINANCE COMPLIANCE This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted (Line item: FY 2013-14 Update, Page A-9) and the budget is sufficient for the recommended action. Date of ADDroval Contract Amount Contingency 06/25/14 $451,910 $45,190 (10%) ATTACHMENT The following attachment(s) maybe viewed on-line at the OCSD websife (www.ocsd.com) with the complete agenda package: Professional Consultant Services Agreement RT:EY:dm:gc Page 2 of 2 PROFESSIONAL CONSULTANT SERVICES AGREEMENT THIS AGREEMENT, is made and entered into to be effective the 25" day of June, 2014 by and between the ORANGE COUNTY SANITATION DISTRICT, hereinafter referred to as "SANITATION DISTRICT", and CAROLLO ENGINEERS, INC., for purposes of this Agreement hereinafter referred to as "CONSULTANT'. WITNESSETH: WHEREAS, the SANITATION DISTRICT desires to engage a CONSULTANT to provide Construction Support Services for Plant No. 1 Primary Treatment Upgrades, Project No. P7-124; 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-44 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 June 25, 2014 the Board of Directors, by Minute Order, accepted the recommendation of the Operations Committee pursuant to SANITATION DISTRICT Board of Directors' Ordinance No. OCSD-44 to approve this Agreement between the SANITATION DISTRICT and CONSULTANT. NOW, THEREFORE, in consideration of the promises and mutual benefits, which will result to the parties in carrying out the terms of this Agreement, it is mutually agreed as follows: 1. SCOPE OF WORK CONSULTANT agrees to furnish necessary professional and technical services to accomplish those project elements outlined in the Scope of Work attached hereto as "Attachment A", and by this reference made a part of this Agreement. A. The CONSULTANT shall be responsible for the professional quality, technical accuracy, completeness, and coordination of all design, drawings, specifications, and other services furnished by the CONSULTANT under this Agreement, including the work performed by its Subconsultants. Where approval by the SANITATION DISTRICT is indicated, it is understood to be conceptual approval only and does not relieve the CONSULTANT of responsibility for complying with all laws, codes, industry standards and liability for damages caused by errors, omissions, noncompliance with industry standards, and/or negligence on the part of the CONSULTANT or its Subconsultants. B. CONSULTANT is responsible for the quality of work prepared under this Agreement and shall ensure that all work is performed to the standards of best engineering practice for clarity, uniformity, and completeness. PCSA PROJECT NO.P1-124 Revised 042214 PLANT NO. 1 PRIMARY TREATMENT UPGRADES 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. The SANITATION DISTRICT shall arrange for access to and make all provisions for CONSULTANT to enter upon public and private property as required for CONSULTANT to perform services hereunder. E. 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 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. F. 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. G. The services performed by the CONSULTANT are intended solely for the benefit of the SANITATION DISTRICT. No person or entity not a signatory to this Agreement shall be entitled to rely on the CONSULTANT's performance of its services hereunder and no right to assert a claim against the CONSULTANT by assignment of indemnity rights or otherwise shall accrue to a third party as a result of this Agreement or the performance of the CONSULTANT's services hereunder. H. The CONSULTANT has no control over the cost of labor, materials, equipment, or services furnished by others, or over their methods of determining prices of other competitive bidding or market conditions, practices or bidding strategies. CONSULTANT shall use best engineering practices, along with CONSULTANT's experience and judgment, utilizing current local costs of labor, materials, equipment or services, to prepare cost estimates. CONSULTANT cannot and PCSA PROJECT NO.P1-124 Revised 042214 PLANT NO. 1 PRIMARY TREATMENT UPGRADES Page 2 of 18 does not guarantee that proposals, bids or actual Project construction, operation and/or lifecycle costs will not vary from cost estimates prepared by CONSULTANT. 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 Four Hundred Fifty One Thousand Nine Hundred Ten Dollars ($451,910). Total compensation to CONSULTANT including burdened labor (salaries plus benefits), overhead, profit, direct costs, and Subconsultanl(s)fees and costs shall not exceed the sum set forth in Attachment"C"—Summary of Costs. 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"C'—Summary of Costs. 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"C'—Summary of Costs. PCSA PROJECT NO.P1-124 Revised 042214 PLANT NO. 1 PRIMARY TREATMENT UPGRADES Page 3 of 18 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"—Summary of Costs. 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"—Summary of Costs. 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"—Summary of Costs. 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. 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. PCSA PROJECT NO.P1-124 Revised 042214 PLANT NO. 1 PRIMARY TREATMENT UPGRADES Page 4 of 18 4. PAYMENT A. Monthly Invoice: CONSULTANT shall include in its monthly invoice, a detailed breakdown of costs associated with the performance of any corrections or revisions of the work for that invoicing period. CONSULTANT shall allocate costs in the same manner as it would for payment requests as described in this Section of the Agreement. CONSULTANT shall warrant and certify the accuracy of these costs and understand that submitted costs are subject to Section 11 -AUDIT PROVISIONS. B. CONSULTANT may submit monthly or periodic statements requesting payment for those items included in Section 2- COMPENSATION hereof in the format as required by the SANITATION DISTRICT. Such requests shall be based upon the amount and value of the work and services performed by CONSULTANT under this Agreement and shall be prepared by CONSULTANT and accompanied by such supporting data, including a detailed breakdown of all costs incurred and project element work performed during the period covered by the statement, as may be required by the SANITATION DISTRICT. Upon approval of such payment request by the SANITATION DISTRICT, payment shall be made to CONSULTANT as soon as practicable of one hundred percent (100%)of the invoiced amount on a per-project-element basis. If the SANITATION DISTRICT determines that the work under this Agreement or any specified project element hereunder, is incomplete and that the amount of payment is in excess of: i. The amount considered by the SANITATION DISTRICT's Director of Engineering to be adequate for the protection of the SANITATION DISTRICT; or ii. The percentage of the work accomplished for each project element. He may, at his discretion, retain an amount equal to that which insures that the total amount paid to that date does not exceed the percentage of the completed work for each project element or the project in its entirety. 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. PCSA PROJECT NO.P1-124 Revised 042214 PLANT NO. 1 PRIMARY TREATMENT UPGRADES Page 5 of 18 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. PREVAILING WAGES To the extent CONSULTANT intends to employ employees who will perform work during the design and preconstruction phases of a construction contract, as more specifically defined under Labor Code Section 1720, CONSULTANT shall be subject to prevailing wage requirements with respect to such employees. 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 PCSA PROJECT NO.P1-124 Revised 042214 PLANT NO. 1 PRIMARY TREATMENT UPGRADES Page 6 of 18 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, 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. PCSA PROJECT NO.P1-124 Revised 042214 PLANT NO. 1 PRIMARY TREATMENT UPGRADES Page 7 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 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. 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 Three Million Dollars ($3,000,000) 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 PCSA PROJECT NO.P1-124 Revised 042214 PLANT NO. 1 PRIMARY TREATMENT UPGRADES Page 8 of 18 no gap in coverage or by separate extended "tail" coverage with the present or new carrier. In the event the present policy of insurance is written on an occurrence" basis, said policy shall be continued in full force and effect during the term of this Agreement or until completion of the services provided for in this Agreement, whichever is later. In the event of termination of said policy during this period, new coverage shall be obtained for the required period to insure for the prior acts of CONSULTANT during the course of performing services under the term of this Agreement. CONSULTANT shall provide to the SANITATION DISTRICT a certificate of insurance in a form acceptable to the SANITATION DISTRICT indicating the deductible or self-retention amounts and the expiration date of said policy, and shall provide renewal certificates not less than ten (10)days prior to the expiration of each policy term. G. Proof of Coverage The CONSULTANT shall furnish the SANITATION DISTRICT with original certificates and amendatory endorsements effecting coverage. Said policies and endorsements shall conform to the requirements herein stated. All certificates and endorsements are to be received and approved by the SANITATION DISTRICT before work commences. The SANITATION DISTRICT reserves the right to require complete, certified copies of all required insurance policies, including endorsements, effecting the coverage required, at any time. The following are approved forms that must be submitted as proof of coverage: • Certificate of Insurance ACORD Form 25(5/2010) 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 PROJECT NO.P1-124 Revised 042214 PLANT NO. 1 PRIMARY TREATMENT UPGRADES Page 9 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, 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, except for Workers Compensation and Errors and Omissions/Professional Liability Insurance, 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, except for Workers Compensation and Errors and Omissions/Professional Liability Insurance, 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 PROJECT NO.P1-124 Revised 042214 PLANT NO. 1 PRIMARY TREATMENT UPGRADES Page 10 of 18 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 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 PROJECT NO.P1-124 Revised 042214 PLANT NO. 1 PRIMARY TREATMENT UPGRADES Page 11 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: Sarah L. Strader, Senior Contracts Administrator Copy: Eros Yong, Project Manager PCSA PROJECT NO.P1-124 Revised 042214 PLANT NO. 1 PRIMARY TREATMENT UPGRADES Page 12 of 18 Notices shall be mailed to CONSULTANT at: CAROLLO ENGINEERS, INC. 3150 Bristol Street Suite 500 Costa Mesa, CA 92626 Attention: Douglas J. Lanning, 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. ACCESS The SANITATION DISTRICT shall arrange for access to and make all provisions for CONSULTANT to enter upon public and private property as required for CONSULTANT to perform services hereunder. 17. 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. PCSA PROJECT NO.P1-124 Revised 042214 PLANT NO. 1 PRIMARY TREATMENT UPGRADES Page 13 of 18 18. 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. 19. 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. 20. 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. 21. 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. 22. 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). 23. 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 PCSA PROJECT NO.P1-124 Revised 042214 PLANT NO. 1 PRIMARY TREATMENT UPGRADES Page 14 of 18 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. 24. 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. PCSA PROJECT NO.P1-124 Revised 042214 PLANT NO. 1 PRIMARY TREATMENT UPGRADES Page 15 of 18 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. 25. 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. 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 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. PCSA PROJECT NO.P1-124 Revised 042214 PLANT NO. 1 PRIMARY TREATMENT UPGRADES Page 16 of 18 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. PCSA PROJECT NO.P1-124 Revised 042214 PLANT NO. 1 PRIMARY TREATMENT UPGRADES 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: CAROLLO ENGINEERS, INC. By Date Printed Name &Title ORANGE COUNTY SANITATION DISTRICT By Chair, Board of Directors Date By Maria E. Ayala Clerk of the Board Date By Marc Dubois Date Contracts, Purchasing and Materials Management Division Manager Attachments: Attachment"A"—Scope of Work Attachment"B"—Cost Matrix Attachment"C"—Summary of Costs Attachment"D"—Allowable Direct Costs Attachment"E"—Not Attached SLS:yp EDMS:003987847 PCSA PROJECT NO.P1-124 Revised 042214 PLANT NO. 1 PRIMARY TREATMENT UPGRADES Page 18 of 18 OPERATIONS COMMITTEE Meeting Date Tolsd.olDir. 06/04/14 06/25/14 AGENDA REPORT em Number Item Number s z Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: ADMINISTRATIVE FACILITIES IMPLEMENTATION PLANNING, PROJECT NO. SP-194 GENERAL MANAGER'S RECOMMENDATION A. Approve a Professional Design Services Agreement with HDR Architecture, Inc. to provide engineering design services for Administrative Facilities Implementation Planning, Project No. SP-194, for an amount not to exceed $729,597; and B. Approve a contingency of$36,480 (5%). SUMMARY In November 2013, the results of the Administrative Facilities Master Plan were presented to the Board of Directors. This Administrative Facilities Master Plan highlighted that the continued rehabilitation of the aging administrative facilities is not the most economical long-term solution, nor does it provide an efficient grouping of staff, many of which are spread across the treatment plant in temporary trailer offices. Creating an effective replacement strategy appears to be the most efficient and cost- effective, long-term strategy to manage the administrative facility assets. The Board of Directors established a budget and authorized the General Manager to issue a Request for Proposal and negotiate a Professional Services Agreement to prepare an Administrative Facilities Implementation Plan which shall develop a plan to replace the Administration Building, Human Resources Building, Laboratory, Fleet Services, and temporary office trailers at Plant No. 1. An estimated total of approximately 140,000 square feet of new facility construction is planned. The Orange County Sanitation District (Sanitation District) advertised a Request for Qualifications and short-listed four firms to receive the Request for Proposal; two proposals were received. Based on the overall qualifications and expertise, staff recommends awarding a Professional Services Design Agreement to HDR Architecture Inc. (HDR)for an amount not to exceed $729,597. Page 1 of 4 PRIOR COMMITTEE/BOARD ACTIONS November 2013 — Established a budget in the amount of$800,000, authorized issuance of a Request for Proposal for architectural and engineering services, and authorized negotiation of a Professional Services Agreement for the Administrative Facilities Implementation Plan. ADDITIONAL INFORMATION General The project will develop a siting evaluation, LEED certification analysis, concept design, phasing plan and schedule, contracting strategy recommendation, cost analysis with cash flow, space requirements and utilization, work space configuration and size rules, function group locations, site security and parking requirements, permit requirements, and demolition requirements for replaced structures. The evaluation and selection process is based on procedures pursuant to the California Government Code requiring the Sanitation District to select "the best qualified firm' for architectural and engineering services and to negotiate a "fair and reasonable" fee with that firm. This solicitation used a two-step process to select the most qualified firm; a Request for Qualifications followed by a Request for Proposal. A two-step process was used to determine interest and select the firms with the best qualifications and expertise to receive the Request for Proposal. Reauest for Qualifications A Request for Qualifications which outlined the Consultant's Scope of Work for this project was advertised on December 20 and December 27, 2013, in the Orange County Register. Furthermore, an email notification was sent to all engineering Consultants registered in the Sanitation District vendor database in the categories of Architecture and Architecture & Engineering. Seven Statements of Qualifications were received on February 4, 2014. A Staff Evaluation Committee consisting of four representatives from Engineering and one member from the Orange County Water District reviewed and scored each of the Statements of Qualifications in accordance with the evaluation process set forth in Sanitation District Board of Directors' Ordinance No. OCSD-44. A representative from the Contracts Administration Division participated in the evaluation process as a non- voting member. The Statement of Qualifications was evaluated according to the following criteria: (1) qualifications of firm/staff; (2) expertise in the design of laboratories; (3) expertise in the design of office buildings; and (4) expertise in services for life-cycle cost analysis and implementation planning. Page 2 of 4 After reviewing and scoring the seven Statements of Qualifications, the top four Consultant firms were selected to receive the Request for Proposal. The firms submitting a Statement of Qualifications were AECOM, The Austin Company, HDR, HH Framer Architects, HOK, LPA, Inc., and RNL. AECOM, HDR, HOK, and LPA were selected as the most qualified architects/engineers for this project to receive the Request for Proposal based on their Statement of Qualifications. Request for Proposal: A Request for Proposal which describes the Consultant's Scope of Work required for this project was mailed to the short-list of fines on March 21, 2014. As a result, two proposals were received on April 17, 2014. HOK and HDR submitted proposals. LPA, Inc. and AECOM declined our Request for Proposal. A Staff Evaluation Committee consisting of four representatives from Engineering reviewed and ranked each of the proposals in accordance with the evaluation process set forth in Sanitation District Board of Directors' Ordinance No. OCSD-44. A representative from the Contracts Administration Division participated in the evaluation process as a non- voting member. The proposals were evaluated according to the following criteria: (1) project understanding and approach; and (2) project team and staff qualifications. After reviewing and scoring the proposals, the two Consultant firms were ranked according to the score achieved. The Evaluation Committee interviewed the two proposing firms to meet the proposed key team members and further evaluate the firms' proposals. Pursuant to the results of the interview, the Evaluation Committee selected HDR as the top-ranked firm as shown in Table 1. TABLE 1 PROPOSAL EVALUATION* Consultant HDR HOK Evaluator Reviewer A 1 2 Reviewer B 1 2 Reviewer C 1 2 Reviewer D 1 2 Overall Ranking 1 2 Proposal Fee $755,708 NA Negotiated Fee $729,597 NA Proposal * Based on scores after interview HDR was ranked highest by all four members of the Evaluation Committee based on their understanding of the challenges of the project, a clear and efficient approach for generating an Implementation Plan that addresses Sanitation District's goals, and a streamlined and highly qualified project team. Page 3 d 4 Both proposals were accompanied by a sealed fee proposal estimate. The fee proposal estimate of the highest ranked firm was not opened until the proposals were evaluated and a top-ranked firm was selected in accordance with Sanitation District Ordinance No. OCSD44. Staff conducted negotiations with HDR to clarify the requirements of the Scope of Work and their proposed work effort. During the negotiation meeting, the project Scope of Work, level of effort, and assumptions were discussed and clarified as required for the completion of the Scope of Work for the project. As a result of these negotiations, HDR submitted a revised not-to-exceed budget of$729,597. Based on the above, staff determined the final cost proposal to be fair and reasonable for the Scope of Work and recommends awarding the Professional Design Services Agreement to HDR for an amount not to exceed $729,597. CEQA Notice of Exemption was filed on January 15, 2014. BUDGET/PURCHASING ORDINANCE COMPLIANCE This complies with the authority levels in the Sanitation District's Purchasing Ordinance. This item has been budgeted by a Board of Directors action in November 2013 and the project budget is sufficient for the recommended action. Date of Approval Contract Amount Contincencv 06/25/14 $729,597 $36,480 (5%) 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 WS:dm:gc Page 4 of 4 PROFESSIONAL DESIGN SERVICES AGREEMENT THIS AGREEMENT, is made and entered into to be effective the 25" day of June, 2014 by and between the ORANGE COUNTY SANITATION DISTRICT, hereinafter referred to as "SANITATION DISTRICT", and HDR ARCHITECTURE, INC., for purposes of this Agreement hereinafter referred to as "CONSULTANT'. WITNESSETH: WHEREAS, the SANITATION DISTRICT desires to engage a CONSULTANT for Administrative Facilities Implementation Planning, Project No. SP-194; and to provide Design services for developing an implementation plan to determine the design criteria, contracting method, building number and size for the replacement of administrative facilities at Plant No. 1 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 June 25, 2014 the Board of Directors, by Minute Order, accepted the recommendation of the Operations Committee to approve this Agreement between the SANITATION DISTRICT and CONSULTANT. NOW, THEREFORE, in consideration of the promises and mutual benefits, which will result to the parties in carrying out the terms of this Agreement, it is mutually agreed as follows: 1. SCOPE OF WORK CONSULTANT agrees to furnish necessary professional and technical services to accomplish those project elements outlined in the Scope of Work attached hereto as Attachment"A", and by this reference made a part of this Agreement. A. The CONSULTANT shall be responsible for the professional quality, technical accuracy, completeness, and coordination of all design, drawings, specifications, and other services furnished by the CONSULTANT under this Agreement, including the work performed by its Subconsultants. Where approval by the SANITATION DISTRICT is indicated, it is understood to be conceptual approval only and does not relieve the CONSULTANT of responsibility for complying with all laws, codes, industry standards and liability for damages caused by errors, omissions, noncompliance with industry standards, and/or negligence on the part of the CONSULTANT or its Subconsultants. B. CONSULTANT is responsible for the quality of work prepared under this Agreement. CONSULTANT shall ensure that all work is performed to that standard of professional care customary to consultants of similar qualification performing services in California on projects of the same or similar complexity. PDSA PROJECT NO.SP-194 Revised 123113 ADMINISTRATIVE FACILITIES IMPLEMENTATION PLANNING Page 1 of 18 CONSULTANT shall respond to all comments, suggestions, and recommendations on the SANITATION DISTRICT's review comment sheets (i.e. DS1, DS2 and DS3). All written comments from the SANITATION DISTRICT, or its agent, 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 reasonable 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. 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 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 industry 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. PDSA PROJECT NO.SP-194 Revised 123113 ADMINISTRATIVE FACILITIES IMPLEMENTATION PLANNING Page 2 of 18 F. 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 provisions set forth below. The CONSULTANT recommended for award shall provide to the SANITATION DISTRICT, if available, an audit performed by another public agency which determines an acceptable overhead rate. This audit should be within twelve months of the proposal due date. Certified payrolls should be included to verify each proposed staff person's hourly rates. All Subconsultants will be required to provide the same information as the CONSULTANT. This information shall be provided by the recommended CONSULTANT and it's subconsultants within three (3) business days after notification. A. Total Compensation Total compensation shall be in an amount not to exceed Seven Hundred Twenty Nine Thousand Five Hundred Ninety Seven Dollars ($729,597). 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. PDSA PROJECT NO.SP-194 Revised 123113 ADMINISTRATIVE FACILITIES IMPLEMENTATION PLANNING Page 3 of 18 D. Profit Profit for CONSULTANT and Sub-consultants shall be a percentage of consulting services fees (Burdened Labor and Overhead). When the consulting or subconsulting services amount is $250,000 or less, the maximum Profit shall be 10%. Between $250,000 and $2,500,000, the maximum Profit shall be limited by a straight declining percentage between 10% and 5%. For consulting or subconsulting services fees with a value greater than $2,500,000, the maximum Profit shall be 5%. Addenda shall be governed by the same maximum Profit percentage after adding consulting services fees. As a portion of the total compensation to be paid to CONSULTANT and Subconsultants, the SANITATION DISTRICT shall pay profit for all services rendered by CONSULTANT and Subconsultants for this project according to Attachment"E"- Fee Proposal. E. Subconsultants For any Subconsultant whose fees for services are greater than or equal to $100,000 (excluding out-of-pocket costs), CONSULTANT shall pay to Subconsultant total compensation in accordance with the Subconsultant amount specified in Attachment"E"- Fee Proposal. For any Subconsultant whose fees for services are less than $100,000, CONSULTANT may pay to Subconsultant total compensation on an hourly-rate basis 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. 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. PDSA PROJECT NO.SP-194 Revised 123113 ADMINISTRATIVE FACILITIES IMPLEMENTATION PLANNING Page 4 of 18 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 constitutes an express waiver by CONSULTANT of its right to compensation for any amount in excess of the authorized not-to-exceed. 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. PDSA PROJECT NO.SP-194 Revised 123113 ADMINISTRATIVE FACILITIES IMPLEMENTATION PLANNING Page 5 of 18 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 which shall not be unreasonably withheld, CONSULTANT will be paid the unpaid balance of any money due for such work, including any retained percentages relating to this portion of the work. E. Upon satisfactory completion of the work performed hereunder and prior to final payment under this Agreement for such work, or prior settlement upon termination of this Agreement, and as a condition precedent thereto, CONSULTANT shall execute and deliver to the SANITATION DISTRICT a release of all claims against the SANITATION DISTRICT arising under or by virtue of this Agreement other than such claims, if any, as may be specifically exempted by CONSULTANT from the operation of the release in stated amounts to be set forth therein. F. Pursuant to the California False Claims Act(Government Code Sections 12650- 12655), any CONSULTANT that knowingly submits a false claim to the SANITATION DISTRICT for compensation under the terms of this Agreement may be held liable for treble damages and up to a $10,000 civil penalty for each false claim submitted. This Section shall also be binding on all Subconsultants. A CONSULTANT or Subconsultant shall be deemed to have submitted a false claim when the CONSULTANT or Subconsultant: a) knowingly presents or causes to be presented to an officer or employee of the SANITATION DISTRICT a false claim or request for payment or approval; b) knowingly makes, uses, or causes to be made or used a false record or statement to get a false claim paid or approved by the SANITATION DISTRICT; c) conspires to defraud the SANITATION DISTRICT by getting a false claim allowed or paid by the SANITATION DISTRICT; d) knowingly makes, uses, or causes to be made or used a false record or statement to conceal, avoid, or decrease an obligation to the SANITATION DISTRICT; or e) is a beneficiary of an inadvertent submission of a false claim to the SANITATION DISTRICT, and fails to disclose the false claim to the SANITATION DISTRICT within a reasonable time after discovery of the false claim. PDSA PROJECT NO.SP-194 Revised 123113 ADMINISTRATIVE FACILITIES IMPLEMENTATION PLANNING Page 6 of 18 5. PREVAILING WAGES To the extent CONSULTANT intends to employ employees who will perform work during the design and preconstruction phases of a construction contract, as more specifically defined under Labor Code Section 1720, CONSULTANT shall be subject to prevailing wage requirements with respect to such employees. 6. DOCUMENT OWNERSHIP—SUBSEQUENT CHANGES TO PLANS AND SPECIFICATIONS A. Ownership of Documents for the Professional Services performed. All documents, including but not limited to, original plans, studies, sketches, drawings, computer printouts and disk files, and specifications prepared in connection with or related to the Scope of work or Professional Services, shall be the property of the SANITATION DISTRICT. The SANITATION DISTRICT's ownership of these documents includes use of, reproduction or reuse of and all incidental rights, whether or not the work for which they were prepared has been performed. The SANITATION DISTRICT ownership entitlement arises upon payment or any partial payment for work performed and includes ownership of any and all work product completed prior to that payment. This Section shall apply whether the CONSULTANT's Professional Services are terminated: a) by the completion of the Agreement, or b) in accordance with other provisions of this Agreement. Notwithstanding any other provision of this paragraph or Agreement, the CONSULTANT shall have the right to make copies of all such plans, studies, sketches, drawings, computer printouts and disk files, and specifications. B. CONSULTANT shall not be responsible for damage caused by subsequent changes to or uses of the plans or specifications, where the subsequent changes or uses are not authorized or approved by CONSULTANT, provided that the service rendered by CONSULTANT was not a proximate cause of the damage. 7. INSURANCE A. General i. Insurance shall be issued and underwritten by insurance companies acceptable to the SANITATION DISTRICT. ii. Insurers must have an "A-" Policyholder's Rating, or better, and Financial Rating of at least Class Vill, or better, in accordance with the most current A.M. Best's Guide Rating. However, the SANITATION DISTRICT will accept State Compensation Insurance Fund, for the required policy of 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 Contractor to substitute any insurer whose rating drops below the levels herein specified. Said substitution shall occur within 20 days of written notice to Contractor, by the SANITATION DISTRICT or its agent. PDSA PROJECT NO.SP-194 Revised 123113 ADMINISTRATIVE FACILITIES IMPLEMENTATION PLANNING Page 7 of 18 iii. Coverage shall be in effect prior to the commencement of any work under this Agreement. B. General Liability The CONSULTANT shall maintain during the life of this agreement, including the period of warranty, Commercial General Liability Insurance written on an occurrence basis providing the following minimum limits of liability coverage: One Million Dollars ($1,000,000) per occurrence with One Million Dollars ($1,000,000)aggregate. Said insurance shall include coverage for the following hazards: Premises-Operations, blanket contractual liability (for this Agreement), products liability/completed operations (including any product manufactured or assembled), broad form property damage, blanket contractual liability, independent contractors liability, personal and advertising injury, mobile equipment, 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 endorsements). 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 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. PDSA PROJECT NO.SP-194 Revised 123113 ADMINISTRATIVE FACILITIES IMPLEMENTATION PLANNING Page 8 of 18 F. Errors and Omissions/Professional Liability CONSULTANT shall maintain in full force and effect, throughout the term of this Agreement, standard industry form professional negligence errors and omissions insurance coverage in an amount of not less than Two Million Dollars ($2,000,000)with limits in accordance with the provisions of this Paragraph. If the policy of insurance is written on a "claims made" basis, said policy shall be continued in full force and effect at all times during the term of this Agreement, and for a period of five (5) years from the date of the completion of the services hereunder. In the event of termination of said policy during this period, CONSULTANT shall obtain continuing insurance coverage for the prior acts or omissions of CONSULTANT during the course of performing services under the term of this Agreement. Said coverage shall be evidenced by either a new policy evidencing no gap in coverage or by separate extended "tail" coverage with the present or new carrier. In the event the present policy of insurance is written on an "occurrence" basis, said policy shall be continued in full force and effect during the term of this Agreement or until completion of the services provided for in this Agreement, whichever is later. In the event of termination of said policy during this period, new coverage shall be obtained for the required period to insure for the prior acts of CONSULTANT during the course of performing services under the term of this Agreement. CONSULTANT shall provide to the SANITATION DISTRICT a certificate of insurance in a form acceptable to the SANITATION DISTRICT indicating the deductible or self-retention amounts and the expiration date of said policy, and shall provide renewal certificates not less than ten (10)days prior to the expiration of each policy term. G. Proof of Coverage The CONSULTANT shall furnish the SANITATION DISTRICT with original certificates and amendatory endorsements effecting coverage. Said policies and endorsements shall conform to the requirements herein stated. All certificates and endorsements are to be received and approved by the SANITATION DISTRICT before work commences. If the SANITATION DISTRICT becomes reasonably concerned about whether CONSULTANT is complying with these insurance requirement then SANITATION DISTRICT may require certified copies of all required insurance policies with confidential & proprietary information redacted, including endorsements, effecting the coverage required, at any time. The following are approved forms that must be submitted as proof of coverage: PDSA PROJECT NO.SP-194 Revised 123113 ADMINISTRATIVE FACILITIES IMPLEMENTATION PLANNING Page 9 of 18 • Certificate of Insurance ACORD Form 25-S(7/97)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-S (7/97)shall state the required thirty(30) days' written notification. The policy shall not terminate, nor shall it be cancelled, nor the coverage reduced until thirty(30) days after written notice is given to the SANITATION DISTRICT except for nonpayment of premium, which shall require not less than ten (10) days written notice to the SANITATION DISTRICT. Should there be material changes in coverage or an increase in deductible or SIR amounts, the CONSULTANT shall send to the SANITATION DISTRICT a certified letter which includes a description of the changes in coverage and/or any increase in deductible or SIR amounts. The certified letter must be sent to the attention of Contracts Administration, Div. 230, and shall be received by the SANITATION DISTRICT not less than thirty (30) days prior to the effective date of the change(s) if the change would reduce coverage or increase deductibles or SIR amounts or otherwise reduce or limit the scope of insurance coverage provided to the SANITATION DISTRICT. I. Primary Insurance All liability policies shall contain a Primary and Non Contributory Clause. Any other insurance maintained by the SANITATION DISTRICT shall be excess and not contributing with the insurance provided by CONSULTANT. PDSA PROJECT NO.SP-194 Revised 123113 ADMINISTRATIVE FACILITIES IMPLEMENTATION PLANNING Page 10 of 18 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 General and Automobile Liability policies shall have a provision that defense costs for all insureds and additional insureds are paid in addition to and do not deplete any policy limits. N. Subconsultants The CONSULTANT shall be responsible to establish insurance requirements for any Subconsultant hired by the CONSULTANT. The insurance shall be in amounts and types reasonably sufficient to deal with the risk of loss involving the Subconsultant's operations and work. 8. SCOPE CHANGES In the event of a change in the scope of the proposed project, requested by SANITATION DISTRICT, the parties hereto shall execute an addendum to this Agreement setting forth with particularity all terms of the new Agreement, including but not limited to any additional CONSULTANT's fees. 9. PROJECT TEAM AND SUBCONSULTANTS CONSULTANT shall provide to SANITATION DISTRICT, prior to execution of this Agreement, the names and full description of all Subconsultants and CONSULTANT's project team members anticipated to be used on this project by CONSULTANT. CONSULTANT shall include a description of the scope of work to be done by each Subconsultant and each CONSULTANT's project team member. CONSULTANT shall include the respective compensation amounts for CONSULTANT and each PDSA PROJECT NO.SP-194 Revised 123113 ADMINISTRATIVE FACILITIES IMPLEMENTATION PLANNING Page 11 of 18 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 which shall not be unreasonably withheld. 10. PROFESSIONAL REGISTRATION The CONSULTANT's personnel are comprised of registered architects, engineers and a staff of specialists and draftsmen in each department. The firm itself is not a registered engineer and architect, but represents and agrees that wherever in the performance of this Agreement requires the services of a registered engineer and architect. Such services hereunder will be performed under the direct supervision of registered engineers and architects. 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. PDSA PROJECT NO.SP-194 Revised 123113 ADMINISTRATIVE FACILITIES IMPLEMENTATION PLANNING Page 12 of 18 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: Wendy Sevenandt, Project Manager Notices shall be mailed to CONSULTANT at: HDR ARCHITECTURE, INC. 251 South Lake Avenue Suite 1000 Pasadena, CA 91101-3020 Attention: Amy Williams, Managing Principal 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.SP-194 Revised 123113 ADMINISTRATIVE FACILITIES IMPLEMENTATION PLANNING Page 13 of 18 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 he may be entitled. 20. PROGRESS REPORTS Monthly progress reports shall be submitted for review by the tenth day of the following month and must include as a minimum: 1) current activities, 2)future activities, 3) potential items that are not included in the Scope of Work, 4) concerns and possible delays, 5) percentage of completion, and 6) budget status. 21. REPRESENTATIONS CONSULTANT shall perform its services in accordance with generally accepted industry and professional standards for clarity, uniformity, and completeness. 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, PDSA PROJECT NO.SP-194 Revised 123113 ADMINISTRATIVE FACILITIES IMPLEMENTATION PLANNING Page 14 of 18 CONSULTANT shall, within the time prescribed by the SANITATION DISTRICT, take all such actions as are reasonably 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.SP-194 Revised 123113 ADMINISTRATIVE FACILITIES IMPLEMENTATION PLANNING Page 15 of 18 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 Department and may be considered in future CONSULTANT selection processes. 25. CLOSEOUT When the SANITATION DISTRICT determines that all Work authorized under the Agreement is fully complete and that the SANITATION DISTRICT requires no further work from CONSULTANT, or the Agreement is otherwise terminated or expires in accordance with the terms of the Agreement, the SANITATION DISTRICT shall give the Consultant written notice that the Agreement will be closed out. CONSULTANT shall submit all outstanding billings, Work submittals, deliverables, reports or similarly related documents as required under the Agreement within thirty (30)days of receipt of notice of Agreement closeout. Upon receipt of CONSULTANT'S submittals, the SANITATION DISTRICT shall commence a closeout audit of the Agreement and will either: 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. PDSA PROJECT NO.SP-194 Revised 123113 ADMINISTRATIVE FACILITIES IMPLEMENTATION PLANNING Page 16 of 18 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. PDSA PROJECT NO.SP-194 Revised 123113 ADMINISTRATIVE FACILITIES IMPLEMENTATION PLANNING 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: HDR ARCHITECTURE, INC. By Date Printed Name &Title ORANGE COUNTY SANITATION DISTRICT By Chair, Board of Directors Date By Maria E. Ayala Clerk of the Board Date By Marc Dubois Date Contracts, Purchasing and Materials Management Division Manager Attachments: Attachment"A"—Scope of Work Attachment"B"—Not Attached Attachment"C"— Not Attached Attachment"D"—Allowable Direct Costs Attachment"E"—Fee Proposal Attachment"F"— Not Attached Attachment"G"— Not Attached Attachment"H"— Not Attached Attachment"I"—Cost Matrix& Summary Attachment"J"— Not Attached Attachment"K"—Hourly Rate Schedule for Minor Subconsultant NKD:yp EDMS:003990439 PDSA PROJECT NO.SP-194 Revised 123113 ADMINISTRATIVE FACILITIES IMPLEMENTATION PLANNING Page 18 of 18 BOARD OF DIRECTORS MeetMg Date TOBA.of Dir. 06/04/14 O6/25/14 AGENDA REPORTItemNumber Item rv3mbar 1 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: SLUDGE DEWATERING AND ODOR CONTROL AT PLANT NO. 1, PROJECT NO. P1-101 GENERAL MANAGER'S RECOMMENDATION Approve out-of-country travel for Orange County Sanitation District (Sanitation District) employees (Construction Inspector or Engineer) to witness factory testing of centrifuges in connection with Sludge Dewatering and Odor Control at Plant No. 1, Project P1-101, and all travel, lodging, and per diem costs in accordance with the Sanitation District's travel policy. SUMMARY Three dewatering centrifuges will be tested at the factory in Germany between August and September, 2014, and three thickening centrifuges will be tested at the factory between November and December, 2014. These tests are required per the P1-101 Construction Contract Documents before shipment and delivery of the centrifuges. Staff requests approval for two trips, one employee per trip, to travel to Germany for the purpose of witnessing Contract required centrifuges factory testing. All six centrifuges will be tested at the factory and two separate trips are required to witness one dewatering centrifuge and one thickening centrifuge. The factory acceptance test consists of an operational test, material construction certification, dye penetration test, decanter rotor balancing test, visual check of centrifuge design, vibration and noise measurement test, and check of completeness for shipment and delivery. The cost for all six centrifuges including auxiliary equipment for fabrication, delivery, installation, and commissioning is approximately $22.3M. This item is within the project budget. PRIOR COMMITTEE/BOARD ACTIONS November 2012 - Awarded a construction contract to W.M. Lyles Company for Sludge Dewatering and Odor Control at Plant No. 1, Project No. P1-101, for a total amount not to exceed $126,908,300. Page 1 of 3 June 2012 - Approved Equipment Pre-Selection Agreement with GEA Westfalia Separator, Inc. (Factory located in Germany), for a total amount not to exceed $14,665,007, in a form approved by General Counsel. July 2010 - Adopted Resolution No. OCSD 10-10. A Resolution of the Board of Directors of the Orange County Sanitation District, making findings pursuant to Public Contract Code Section 3400 in support of the Sole Source Specification of Thickening and Dewatering Centrifuges. ADDITIONAL INFORMATION The key components of the new sludge dewatering and odor control project at Plant No. 1 are the centrifuge systems. The individual components of the systems, as well as the combined components together, are factory tested to ensure that the specified performance and quality requirements have been met at the factory prior to installation in the field. Factory test results aid in identifying potential problems prior to shipment and delivery, and prevent delays associated with installation, startup, and commissioning of the centrifuges. The estimated cost of each employee for out-of-country travel is $5,000. Sludge Dewatering and Odor Control at Plant No. 1, Project No. P1-101, replaces existing solids and dewatering odor control systems and installs sludge thickening systems at Plant No. 1. The Sanitation District needs this project for the following reasons: 1. Additional capacity to thicken and dewater sludge due to conversion of Plant No. 1 to full secondary treatment and increased flows to support expansion of the Ground Water Replinishment System (GWRS). 2. Existing sludge dewatering facilities that were built in the late 1970s and early 1980S have to be replaced because they have reached the end of their useful life. 3. The new facilities will increase biosolids cake dryness to reduce biosolids management costs. 4. The new facilities will improve sludge thickening to optimize use of existing digesters by increasing existing capacity and eliminate the need to construct new digesters. 5. Manage site constraints at Plant No. 1 by building compact solids treatment facilities and facilitate future expansion. This project will reduce operational costs by an estimated $3.62M annually and has a lower 25-year life cycle cost compared to the Sanitation District's existing process/technology. Page 2 of 3 BUDGET/PURCHASING ORDINANCE COMPLIANCE This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted. (Line item: FY2013-14 Section A-9, Item 54) and the budget is sufficient for the recommended action. ATTACHMENT N/A RC:dm:gc Page 3 of 3 ITEM NO. 14 MINUTES OF THE REGULAR MEETING OF THE ADMINISTRATION COMMITTEE Orange County Sanitation District Wednesday, June 11, 2014, at 5:30 P.M. A regular meeting of the Administration Committee of the Orange County Sanitation District was held on June 11, 2014, at 5:35 p.m., in the Sanitation District's Administration Building. Committee Chair Reese led the Flag Salute. A quorum was declared present, as follows: COMMITTEE MEMBERS PRESENT: STAFF PRESENT: Brad Reese, Chair Jim Herberg, General Manager David Benavides Bob Ghirelli, Assistant General Manager Joe Carchio Lorenzo Tyner, Director of Finance Steven Choi & Administrative Services Tyler Diep Jeff Reed, Director of Human Resources Peter Kim Rob Thompson, Director of Engineering Prakash Narain Ed Torres, Director of Operations and Janet Nguyen Maintenance Robert Ooten (Alternate) Kelly Lore, Administrative Assistant Teresa Smith Rich Castillon Troy Edgar, Board Chair Jim Colston Tom Beamish, Board Vice-Chair Norbert Gaia John Withers, Vice-Chair Al Garcia Ted Gerber COMMITTEE MEMBERS ABSENT: Laurie Klinger Roya Sohanaki Gene Hernandez Rich Spencer Christine Stanford Mary Sue Thompson Mike White OTHERS PRESENT: Brad Hogin, General Counsel Jeff Mosher, NWRI PUBLIC COMMENTS: None. REPORT OF COMMITTEE CHAIR: Committee Chair Reese did not provide a report. O6/11/2014 Administration Committee Minutes Page 1 of 6 REPORT OF GENERAL MANAGER: General Manager, Jim Herberg, did not provide a report. REPORT OF DIRECTOR OF FINANCE AND ADMINISTRATIVE SERVICES: Director of Finance and Administrative Services, Lorenzo Tyner did not provide a report. CONSENT CALENDAR: 1. MOVED, SECONDED, AND DULY CARRIED: Approve Minutes of the May 14, 2014 Administration Committee Meeting. AYES: Beamish, Carchio, Choi, Diep, Edgar, Narain, Ooten (Alternate), and Reese NOES: None ABSTENTIONS: Kim ABSENT: Benavides, Hernandez, Nguyen, Smith and Withers 2. MOVED, SECONDED, AND DULY CARRIED: Recommend to the Board of Directors to: Adopt Resolution No. OCSD 14-XX, Establishing Use Charges for the FY 2014- 15 Pursuant to the Wastewater Treatment and Disposal Agreement with the Santa Ana Watershed Project Authority. AYES: Beamish, Carchio, Choi, Diep, Edgar, Kim, Narain, Ooten (Alternate), and Reese NOES: None ABSTENTIONS: None ABSENT: Benavides, Hernandez, Nguyen, Smith and Withers 0&11/2014 Administration Committee Minutes Page 2 of 6 3. MOVED, SECONDED, AND DULY CARRIED: Recommend to the Board of Directors to: Adopt Resolution No. OCSD 14-XX, Establishing the Annual Appropriations Limit for Fiscal Year 2014-15, for the District in accordance with the Provisions of Division 9 of Title 1 of the California Government Code. AYES: Beamish, Carchio, Choi, Diep, Edgar, Ooten (Alternate), Kim, Narain, and Reese NOES: None ABSTENTIONS: None ABSENT: Benavides, Hernandez, Nguyen, Smith and Withers 4. MOVED, SECONDED, AND DULY CARRIED: Recommend to the Board of Directors to: A. Adopt Resolution No. OCSD14-XX, authorizing the execution and delivery by the District of an Installment Purchase Agreement, a Trust Agreement, an Escrow Agreement and a Continuing Disclosure Agreement in connection with the execution and delivery of Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2014A, authorizing the execution and delivery of such Revenue Obligations, evidencing principal in an aggregate amount of not to exceed $225,000,000, approving a Notice of Intention to Sell, authorizing the distribution of an Official Notice Inviting Bids and an Official Statement in connection with the offering and sale of such Revenue Obligations and authorizing the execution of necessary documents and related actions; and B. That the Orange County Sanitation District Financing Corporation approve the documents supporting and authorizing the Revenue Obligations in an aggregate amount not to exceed $225,000,000. AYES: Beamish, Carchio, Choi, Diep, Edgar, Kim, Narain, Ooten (Alternate), and Reese NOES: None ABSTENTIONS: None ABSENT: Benavides, Hernandez, Nguyen, Smith and Withers 0&11/2014 Administration Committee Minutes Page 3 of 6 NON-CONSENT CALENDAR: 5. Lorenzo Tyner, Director of Finance and Administrative Services briefly explained this item to the Committee. MOVED, SECONDED, AND DULY CARRIED: Recommend to the Board of Directors to: A. Reject the apparent low bid submitted by Office Supply Inc. as deemed non-responsive in accordance with specification requirements for Purchase of Cisco Parts, Specification No. E-2014-616BD; and B. Approve a Purchase Order Agreement with Presidio Networked Solutions, the lowest responsible and responsible bidder, for Purchase of Cisco Parts, Specification No. E-2014-616BD, for an amount not to exceed $435,587; and C. Approve a contingency of$21,780 (5%). AYES: Beamish, Carchio, Choi, Diep, Edgar, Kim, Narain, Ooten (Alternate) and Reese NOES: None ABSTENTIONS: None ABSENT: Benavides, Hernandez, Nguyen, Smith and Withers Director Benavides was out of the room and returned at 5:38 p.m. Director Nguyen arrived at 5:38 p.m. Committee Vice-Chair Withers arrived at 5:41 p.m. 6. Lorenzo Tyner, Director of Finance and Administrative Services, gave a brief PowerPoint presentation on the proposed FY 2014-15 and FY 2015-16 Budget. Key points of Mr. Tyner's presentation included: revenues, debt service, cash flows, reduction of liabilities, etc. He responded to questions from the Committee. MOVED, SECONDED, AND DULY CARRIED: Recommend to the Board of Directors to: Approve proposed Operating, Capital, Debt/COP Service and Self-Insurance Budgets for FY 2014-15 and 2015-16. 0&11/2014 Administration Committee Minutes Page 4 of 6 AYES: Beamish, Benavides, Carchio, Choi, Diep, Edgar, Kim, Narain, Nguyen, Ooten (Alternate), Reese, and Withers NOES: None ABSTENTIONS: None ABSENT: Hernandez and Smith Director Nguyen stated that while she supports the budget, for the record, she does not support the increase to sewer service fee assumptions that are made in the budget of 2014-15 and 2015-16. INFORMATION ITEMS: 7. Collections Systems Nick Arhontes, Director of Facility Support Services Department, gave a PowerPoint presentation on the Sanitation District's Collection Facilities. The presentation included information on: sewer spill statistics, odor complaints, regulatory compliance, sewage conditioning, etc. Director Smith arrived at 5:50 p.m. The Committee had questions regarding: detection of gases, dry weather diversions, food waste digestion, waste contracts, maintenance of manhole covers and storm drain screening. Staff responded accordingly to questions. Director Nguyen left the meeting at 6:20 p.m. 8. Pretreatment Program and Industrial Permitting Rob Thompson, Director of Engineering introduced Roya Sohanaki, Engineering Supervisor who provided a PowerPoint presentation on the Overview of OCSD's Pretreatment Program. The presentation included information on: regulatory and compliance information, managing the sources of pollutants, effectiveness of source control, etc. Director Diep left the meeting at 6:30 p.m. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: Director Withers stated he attended a meeting of the Orange County Business Council Infrastructure Committee recently and commended the presentation made by General Manager Jim Herberg and Director of Engineering, Rob Thompson who were there representing the District. 0&11/2014 Administration Committee Minutes Page 5 of 6 Director Kim asked if there was an update on labor negotiations; to which Jeff Reed, Director of Human Resources, stated that there is intent to agendize the item at the June Board meeting. Director Choi informed the Committee that he had been in Spain for a week with the Energy Coalition. ADJOURNMENT: Committee Chair Reese declared the meeting adjourned at 6:40 p.m., to the next regularly scheduled meeting of July 9, 2014. Submitted by: Kelly A. Lore Administrative Assistant O6/11/2014 Administration Committee Minutes Page 6 of 6 ADMINISTRATION COMMITTEE Meeting Date T1.1 Of Dir. 06/11/I, 6/25/14 Item AGENDA REPORT Number Item Number 2 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: SANTA ANA WATERSHED PROJECT AUTHORITY (SAWPA) RESOLUTION GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 14-06 entitled; "A Resolution of the Board of Directors of Orange County Sanitation District Establishing Use Charges for the 2014-15 Fiscal Year Pursuant to the Wastewater Treatment and Disposal Agreement with the Santa Ana Watershed Project Authority ("SAWPA"). SUMMARY Currently, OCSD invoices Santa Ana Watershed Project Authority on a quarterly basis for the wastewater discharge we receive from the SARI line. Annually, the rates for flow, biochemical oxygen demand (BOD), and total suspended solids (TSS) are calculated based upon the fiscal year budget for treatment and disposal costs and the 1996 Wastewater Treatment and Disposal agreement. The rates calculated for each constituent for FY 2014-15 for wastewater discharge are: FLOW $182.74 BOD $290.16 TSS $404.60 The FY 2014-15 rates are a 12.39% increase, 16.34% increase and a 9.30% increase respectively. In January 2013, OCSD completed a rate study that updated the allocation parameters between discharge constituents and the change in equivalent usage per EDU for each constituent. The rate model changes have been implemented in the calculation of SAWPA's O&M rates for the 14-15 fiscal year. These rates are separate from the rates charged for additional capacity purchases by SAWPA. Over the last year, OCSD staff has provided SAWPA staff preliminary information regarding these increases and officially communicated the exact figures in May 2014. PRIOR COMMITTEE/BOARD ACTIONS June - 2013 - Adopted Resolution No OCSD 13-11 Establishing Use Charges for the FY 2013-14 Pursuant to the Wastewater Treatment and Disposal Agreement with the Santa Ana Watershed Project Authority. June - 2012 - Adopted Resolution No OCSD 12-08 Establishing Use Charges for the FY 2012-13 Pursuant to the Wastewater Treatment and Disposal Agreement with the Santa Ana Watershed Project Authority. Page 1 of 2 June - 2011 - Adopted Resolution No OCSD 11-08 Establishing Use Charges for the FY 2011-12 Pursuant to the Wastewater Treatment and Disposal Agreement with the Santa Ana Watershed Project Authority. June - 2010 - Adopted Resolution No OCSD 10-09 Establishing Use Charges for the FY 2010-11 Pursuant to the Wastewater Treatment and Disposal Agreement with the Santa Ana Watershed Project Authority. June - 2009 - Adopted Resolution No OCSD 09-08 Establishing Use Charges for the FY 2009-10 Pursuant to the Wastewater Treatment and Disposal Agreement with the Santa Ana Watershed Project Authority. June - 2008 - Adopted Resolution No OCSD 08-09 Establishing Use Charges for the FY 2008-09 Pursuant to the Wastewater Treatment and Disposal Agreement with the Santa Ana Watershed Project Authority. June - 2007 - Adopted Resolution No OCSD 07-15 Establishing Use Charges for the FY 2007-08 Pursuant to the Wastewater Treatment and Disposal Agreement with the Santa Ana Watershed Project Authority. ADDITIONAL INFORMATION N/A CEQA N/A BUDGET/PURCHASING ORDINANCE COMPLIANCE N/A ATTACHMENT The following attachment(s) are included in hard copy and may also he viewed on-line at the OCSD wehsite(www.ocsd.coml with the complete agenda package: Draft Resolution No. OCSD 14-06 Page 2 of 2 RESOLUTION NO. OCSD 14-06 A RESOLUTION OF THE BOARD OF DIRECTORS OF ORANGE COUNTY SANITATION DISTRICT ESTABLISHING USE CHARGES FOR THE 2014-15 FISCAL YEAR PURSUANT TO THE WASTEWATER TREATMENT AND DISPOSAL AGREEMENT WITH THE SANTA ANA WATERSHED PROJECT AUTHORITY ("SAWPA") WHEREAS, the Board of Directors has approved the Wastewater Treatment and Disposal Agreement with the SANTA ANA WATERSHED PROJECT AUTHORITY ("SAWPA"); and, WHEREAS, said agreement provides for payment of Disposal Costs for the measured and sampled Flow of Wastewater discharged from SAWPA's SARI Service Area to Districts' facilities; and, WHEREAS, said agreement provides for adjustment of said Disposal Costs on an annual basis. NOW, THEREFORE, The Board of Directors of the Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE, AND ORDER: Section 1. That pursuant to Section C4 of the Wastewater Treatment and Disposal Agreement, the 2014-15 fiscal year charges for Disposal Costs are hereby established as follows: For Flow: $ 182.74 per million gallons of flow For Biochemical Oxygen Demand: $ 290.16 per thousand pounds For Total Suspended Solids: $ 404.60 per thousand pounds OCSD 14-06-1 PASSED AND ADOPTED at a regular meeting of the Board of Directors held June 25, 2014. Troy Edgar Chairman of the Board ATTEST: Maria E. Ayala Clerk of the Board OCSD 14-06-2 STATE OF CALIFORNIA ) ss COUNTY OF ORANGE ) I, Maria E. Ayala, Clerk of the Board of Directors of the Orange County Sanitation District, do hereby certify that the foregoing Resolution No. OCSD 14-06 was passed and adopted at a regular meeting of said Board on the 25th day of June 2014, by the following vote, to wit: AYES: None. NOES: None. ABSTENTIONS: None. ABSENT: None. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of Orange County Sanitation District this 25th day of June, 2014. Maria E. Ayala Clerk of the Board of Directors Orange County Sanitation District OCSD 14-06-3 ADMINISTRATION COMMITTEE Neeting Date T1.1 of Dir. 06/11/14 6/26/14 AGENDA REPORT Item Number Item Nu bar 3 16 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: GANN APPROPRIATIONS LIMIT FOR FISCAL YEAR 2014-15 GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 14-07 entitled; "A Resolution of the Board of Directors of the Orange County Sanitation District Establishing the Annual Appropriations Limit for Fiscal Year 2014-15, for the District in accordance with the Provisions of Division 9 of Title 1 of the California Government Code." SUMMARY This routine annual action adopts a resolution establishing the spending limit for "proceeds of taxes" in accordance with Article XIII B of the Constitution of the State of California (Section 7910 of the Government Code). The Sanitation District's annual appropriations are well below the limit. In 1979, Proposition 4 (the Gann Initiative) was approved adding Article All B to the State Constitution. The provisions of this article place limits on the amount of revenue that can be appropriated by all entities of government. This initiative was designed to constrain government expenditures by placing an annual limit on jurisdictions' revenue and appropriation growth. The Appropriation Limit is based on actual appropriations during the 1978-1979 fiscal year, as increased each year using specified population and inflationary growth factors. This annual allowance growth is linked to changes in population and cost of living. The passage of Proposition 111 in June 1990 amended Article XIIIB, making changes in the base year upon which the appropriations limit is based, establishing new cost of living factors and new population factors for use by local governments, and increasing appropriations not subject to the limit (primarily qualified capital outlay projects). The financial constraints of Article XIII B apply to the State, all cities, counties, special districts and all other political subdivisions. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION N/A Page 1 of 2 CEQA N/A BUDGET/PURCHASING ORDINANCE COMPLIANCE N/A ATTACHMENTS The following attachment(s) are included in hard copy and may also be viewed on-line at the OCSD website(www.ocsd.coml with the complete agenda package: • Draft Resolution No. OCSD 14-07 Page 2 of 2 RESOLUTION NO. OCSD 14-07 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT ESTABLISHING THE ANNUAL APPROPRIATIONS LIMIT FOR FISCAL YEAR 2014-15 FOR THE DISTRICT IN ACCORDANCE WITH THE PROVISIONS OF DIVISION 9 OF TITLE 1 OF THE CALIFORNIA GOVERNMENT CODE WHEREAS, Article XIII B of the Constitution of the State of California as proposed by the Initiative Measure approved by the people at the special statewide election held on November 6, 1979, provides that the total annual appropriations limit of each local government agency shall not exceed the appropriations limit of such entity for the prior year, adjusted for changes in the cost of living and population, except as otherwise specifically provided for in said Article; and, WHEREAS, the State Legislature added Division 9 (commencing with Section 7900) to Title 1 of the Government Code of the State of California to implement Article XIII B of the California Constitution; and, WHEREAS, Section 7910 of the Government Code provides that each year the governing body of each local jurisdiction shall, by resolution, establish its appropriations limit for the following fiscal year pursuant to Article XIII B at a regularly-scheduled meeting or a noticed special meeting and that fifteen (15) days prior to such meeting, documentation used in the determination of the appropriations limit shall be available to the public; and, WHEREAS, Section 7902 (a) of the Government Code sets forth the method for determining the appropriations limit for each local jurisdiction for the 2014-15 fiscal year; and, WHEREAS, the Board of Directors wishes to establish the appropriations limit for fiscal year 2014-15 for the District. NOW, THEREFORE, the Board of Directors of the Orange County Sanitation District DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1: That it is hereby found and determined that the documentation used in the determination of the appropriations limit for the Orange County Sanitation District, for fiscal year 2014-15, was available to the public in the Finance Department of said District at least fifteen (15) days prior to this date. OCSD 14-07-1 Section 2: That the appropriations limit for fiscal year 2014-15 for the Orange County Sanitation District, as established in accordance with Section 7902(b) of the California Government Code is $91,302,000 which sum is within the maximum authorized spending limitation for fiscal year 2014-15. Section 3: That the Board of Directors of the Orange County Sanitation District, has determined that the percent change in California per capita personal income from the preceding year would be the cost of living factor to be used and the weighted average population change of the cities within the District would be the population factor to be used in calculating the Orange County Sanitation District's appropriations limit for the Fiscal Year 2014-15. Section 4: The determination of the appropriation limit is based upon the best and most complete information available at this time. The District reserves the right to review and re-establish a new and different limit in the event that it subsequently determines that a modification of the limitation amount is appropriate. PASSED AND ADOPTED at a regular meeting of the Board of Directors held June 25, 2014. Troy Edgar Chairman of the Board ATTEST: Maria E. Ayala Clerk of the Board OCSD 14-07-2 STATE OF CALIFORNIA ) ss COUNTY OF ORANGE ) I, Maria E. Ayala, Clerk of the Board of Directors of the Orange County Sanitation District, do hereby certify that the foregoing Resolution No. OCSD 14-07 was passed and adopted at a regular meeting of said Board on the 25th day of June 2014, by the following vote, to wit: AYES: None. NOES: None. ABSTENTIONS: None. ABSENT: None. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of Orange County Sanitation District this 25th day of June, 2014. Maria E. Ayala Clerk of the Board of Directors Orange County Sanitation District OCSD 14-07-3 ADMINISTRATION COMMITTEE Neeting Date T1.1 of Dir. 06/11/14 6/25/14 AGENDA REPORT Item Number Item Nu bar a v Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: WASTEWATER REFUNDING REVENUE OBLIGATIONS, SERIES 2014A GENERAL MANAGER'S RECOMMENDATION A. Adopt Resolution No. OCSD 14-08 entitled; "A Resolution of the Board of Directors of the Orange County Sanitation District authorizing the execution and delivery by the District of an Installment Purchase Agreement, a Trust Agreement, an Escrow Agreement, and a Continuing Disclosure Agreement in connection with the execution and delivery of Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2014A, authorizing the execution and delivery of such Revenue Obligations evidencing principal in an aggregate amount of not to exceed $225,000,000, approving a Notice of Intention to Sell, authorizing the distribution of an Official Notice Inviting Bids and an Official Statement in connection with the offering and sale of such Revenue Obligations and authorizing the execution of necessary documents and related actions"; and B. That the Orange County Sanitation District Financing Corporation approve the documents supporting and authorizing the Revenue Obligations in an aggregate amount not to exceed $225,000,000. SUMMARY On December 20, 2007, the Sanitation District issued $300,000,000 of Certificates of Participation, Series 2007B (2007B COPS) to finance certain improvements to the Wastewater System. The 2007B COPs are fixed rate obligations. The outstanding amount of COP Series 2007B is currently $267.3 million. In April 2014, the Administration Committee and the Board authorized the General Manager to pursue a fixed rate refunding of a portion of the 2007E COPS. Approval of the recommended actions and the associated legal documents will enable staff to complete the refunding process. PRIOR COMMITTEE/BOARD ACTIONS September - 2013: Adopted Resolution No. OCSD 13-14, authorizing the execution and delivery by the Orange County Sanitation District of an Installment Purchase Agreement, a Trust Agreement and a Continuing Disclosure Agreement in connection with the Page 1 of 4 execution and delivery of Orange County Sanitation District Revenue Refunding Certificate Anticipation Notes, Series 2013A, authorizing the execution and delivery of such Notes evidencing principal in an aggregate amount of not to exceed $135,000,000, approving a Notice of Intention to Sell, authorizing the distribution of an Official Notice Inviting Bids and an Official Statement in connection with the offering and sale of such Notes and authorizing the execution of necessary documents and related actions. April - 2014: Authorized the General Manager to issue new fixed rate Certificates of Participation (COP), to be referred to as Wastewater Refunding Revenue Obligations, in an amount sufficient to refund up to $267.3 million of COP Series 2007B. ADDITIONAL INFORMATION The Sanitation District currently has ten series of debt issuances outstanding in the par amount of $1.23 billion. The following table lists each issuance, the outstanding amount, and the interest rate mode. utstairount. Interest Rate Par Am Mode eries 2013A CANS(4) $ 129,625,000 Fixed Rate (one-year) eries 2012B Refunding(2) 66,395,000 Fixed Rate eries 2012A Refunding(3) 100,645,000 Fixed Rate eries 2011A Refunding(3x3) 130,345,000 Fixed Rate eries 2010C(a) 157,000,000 Fixed Rate eries 2010A(5) 80,000,000 Fixed Rate eries 2009A Refunding(3) 184,090,000 Fixed Rate eries 2008B Refunding(6) 25,585,000 Fixed Rate eries 2007B(5) 267,255,000 Fixed Rate eries 2007A Refunding(3) 92,385,000 Fixed Rate Total : $1,233,325,000 (1) As of June 1,2014 (2) Refunded a portion of Series 20M (3) Refunded a portion of Series 2003 (4) Series 2013A are fixed one-year certificate of anticipation notes(CANS),that refunded the Series 2012C CANS,that refunded the Series 2011E CANS,that refunded the 2010E CANS,that refunded the Series 2009E CANS,that refunded the 2008C CANS that were issued to refund the Series 2006 Daily Variable Rate that were supported by a weak liquidity facility bank. (5) New money debt issue (6) Series 2008B refunded the Series 1993 Synthetic Variable-to-Fixed Rate Debt issues that were supported by a weakening insurance provider. Series 1993 refunded a portion of the Series"B'COPs. Page 2 of 4 Legal Authorization and Approvals The Board of Directors and the Financing Corporation will each be required to adopt separate Resolutions to complete this refunding. A Financing Corporation is required by the structure of the Revenue Obligations and was formed in April 2000 solely to satisfy this need. The Board of Directors of the Corporation is the same as the Board of Directors of the Sanitation District and the Corporation meets after an adjournment of the OCSD Board. The OCSD Resolution authorizes the execution and delivery of certain legal documents and the execution and delivery of Wastewater Refunding Revenue Obligations, Series 2014A, evidencing principal in an aggregate amount of not to exceed $225,000,000 all as spelled out in the title as follows: "A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT AUTHORIZING THE EXECUTION AND DELIVERY BY THE DISTRICT OF AN INSTALLMENT PURCHASE AGREEMENT, A TRUST AGREEMENT, AN ESCROW AGREEMENT AND A CONTINUING DISCLOSURE AGREEMENT IN CONNECTION WITH THE EXECUTION AND DELIVERY OF ORANGE COUNTY SANITATION DISTRICT WASTEWATER REFUNDING REVENUE OBLIGATIONS, SERIES 2014A, AUTHORIZING THE EXECUTION AND DELIVERY OF SUCH REVENUE OBLIGATIONS EVIDENCING PRINCIPAL IN AN AGGREGATE AMOUNT OF NOT TO EXCEED $225,000,000, APPROVING A NOTICE OF INTENTION TO SELL, AUTHORIZING THE DISTRIBUTION OF AN OFFICIAL NOTICE INVITING BIDS AND AN OFFICIAL STATEMENT IN CONNECTION WITH THE OFFERING AND SALE OF SUCH REVENUE OBLIGATIONS AND AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND RELATED ACTIONS." The Resolution of the Corporation is somewhat shorter and simpler. It authorizes three actions that are similarly enumerated in the title as follows: "A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION AUTHORIZING THE EXECUTION AND DELIVERY BY THE CORPORATION OF AN INSTALLMENT PURCHASE AGREEMENT AND A TRUST AGREEMENT IN CONNECTION WITH THE EXECUTION AND DELIVERY OF ORANGE COUNTY SANITATION DISTRICT WASTEWATER REFUNDING REVENUE OBLIGATIONS, SERIES 2014A, AUTHORIZING THE EXECUTION AND DELIVERY OF SUCH REVENUE OBLIGATIONS EVIDENCING PRINCIPAL IN AN AGGREGATE AMOUNT OF NOT TO EXCEED $225,000,000 AND AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND RELATED ACTIONS." Page 3 of 4 Timeline Since the proposed refunding is a fixed-rate debt issuance, staff is proposing to issue the refunding through a competitive sale because it is the most expeditious way to access the market and it is expected to provide the lowest interest cost for this given structure. ➢ Rating Agency discussions ➢ Board approval of legal and disclosure June documents ➢ Financing Corporation approval of legal and disclosure documents ➢ Publish Notice of Intention to Sell July ➢ Marketing and Sale through a Competitive Sale Process August ➢ Closing ➢ Begin debt administration All costs involved with the refunding, including costs for Public Resources Advisory Group, serving as Financial Advisor, and Fulbright & Jaworski, serving as Special Counsel and Disclosure Counsel, will be paid from the proceeds of the new refunding issue. CEQA N/A BUDGET/PURCHASING ORDINANCE COMPLIANCE N/A ATTACHMENTS The following attachment(s) are included in hard copy and may also be viewed on-line at the OCSD website(www.ocsd.coml with the complete agenda package: • Draft Resolution No. OCSD 14-08 • Draft Corporation Resolution No. FC-21 • Draft Trust Agreement • Draft Installment Purchase Agreement • Draft Escrow Agreement • Draft Continuing Disclosure Agreement • Draft Preliminary Official Statement • Draft Official Notice Inviting Bids • Draft Notice of Intention to Sell Page 4 of 4 RETURN TO AGENDA RESOLUTION NO. OCSD 14-08 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT AUTHORIZING THE EXECUTION AND DELIVERY BY THE DISTRICT OF AN INSTALLMENT PURCHASE AGREEMENT, A TRUST AGREEMENT, AN ESCROW AGREEMENT, AND A CONTINUING DISCLOSURE AGREEMENT IN CONNECTION WITH THE EXECUTION AND DELIVERY OF ORANGE COUNTY SANITATION DISTRICT WASTEWATER REFUNDING REVENUE OBLIGATIONS, SERIES 2014A, AUTHORIZING THE EXECUTION AND DELIVERY OF SUCH REVENUE OBLIGATIONS EVIDENCING PRINCIPAL IN AN AGGREGATE AMOUNT OF NOT TO EXCEED $225,000,000, APPROVING A NOTICE OF INTENTION TO SELL, AUTHORIZING THE DISTRIBUTION OF AN OFFICIAL NOTICE INVITING BIDS AND AN OFFICIAL STATEMENT IN CONNECTION WITH THE OFFERING AND SALE OF SUCH REVENUE OBLIGATIONS AND AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND RELATED ACTIONS WHEREAS, to refinance the acquisition, construction and installation of certain improvements to its wastewater system (the "Prior Project"), the Orange County Sanitation District (the "District") has heretofore purchased the Prior Project from the Orange County Sanitation District Financing Corporation (the "Corporation"), and the Corporation has heretofore sold the Prior Project to the District, for the installment payments (the "Prior Installment Payments") made by the District pursuant to the Installment Purchase Agreement, dated as of August 1, 2000 (the "Prior Installment Purchase Agreement"), each by and between the District and the Corporation; WHEREAS, to provide the funds necessary to finance the Prior Project, the District caused the execution and delivery of the Orange County Sanitation District Certificates of Participation, Series 2007E (the "Prior Certificates"), evidencing direct, undivided fractional interests in the Prior Installment Payments; WHEREAS, the District desires to refinance the Prior Project by paying and prepaying the remaining Prior Installment Payments, and the interest thereon to the date of prepayment, thereby causing the remaining Prior Certificates to be prepaid; WHEREAS, to provide the funds necessary to pay and prepay a portion of the remaining Prior Installment Payments, the District and the Corporation desire that the Corporation purchase the Prior Project from the District and the District sell the Prior Project to the Corporation, and that the District then purchase the Prior Project from the Corporation and the Corporation sell the Prior Project to the District, for the installment payments (the "Installment Payments") to be made by the District pursuant to an Installment Purchase Agreement by and between the District and the Corporation (such Installment Purchase Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Installment Purchase Agreement"); Q622386.3 WHEREAS, the Corporation intends to assign without recourse certain of its rights under and pursuant to the Installment Purchase Agreement to MUFG Union Bank, N.A., as trustee (the "Trustee"), pursuant to a Trust Agreement by and among the Trustee, the Corporation and the District (such Trust Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Trust Agreement"); WHEREAS, in consideration of such assignment and the execution and delivery of the Trust Agreement, the Trustee intends to execute and deliver the Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2014A (the 'Revenue Obligations"), evidencing direct, undivided fractional interests in the Installment Payments, and the interest thereon; WHEREAS, the District desires to provide for the public sale of the Revenue Obligations; WHEREAS, a form of the Notice of Intention to Sell to be published in connection with the public offering and sale of the Revenue Obligations has been prepared (such Notice of Intention to Sell, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Notice of Intention to Sell"); WHEREAS, a form of the Official Notice Inviting Bids to be distributed in connection with the public offering and sale of the Revenue Obligations has been prepared (such Official Notice Inviting Bids, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Notice Inviting Bids"); WHEREAS, a form of the Preliminary Official Statement to be distributed in connection with the public offering of the Revenue Obligations has been prepared (such Preliminary Official Statement in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Preliminary Official Statement'); WHEREAS, Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended ('Rule 15c2-12"), requires that the underwriter thereof must have reasonably determined that the District has undertaken in a written agreement or contract for the benefit of the holders of the Revenue Obligations to provide disclosure of certain financial information and certain material events on an ongoing basis; WHEREAS, to cause such requirement to be satisfied, the District desires to enter into a Continuing Disclosure Agreement with the Trustee (such Continuing Disclosure Agreement in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Continuing Disclosure Agreement'); WHEREAS, to cause such requirement to be satisfied, the District desires to enter into a Escrow Agreement with MUFG Union Bank, N.A., as escrow agent (such Escrow Agreement in the form presented to this meeting, with such changes, insertions Q6223863 OCSD 14-08-2 and omissions as are made pursuant to this Resolution, being referred to herein as the "Escrow Agreement'); WHEREAS, there have been prepared and submitted to this meeting forms of: (a) the Installment Purchase Agreement; (b) the Trust Agreement; (c) the Notice of Intention to Sell; (d) the Notice Inviting Bids; (e) the Preliminary Official Statement; (f) the Continuing Disclosure Agreement; and (g) the Escrow Agreement; WHEREAS, all acts, conditions and things required by the Constitution and laws of the State of California to exist, to have happened and to have been performed precedent to and in connection with the consummation of the financing authorized hereby do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the District is now duly authorized and empowered, pursuant to each and every requirement of law, to consummate such financing for the purpose, in the manner and upon the terms herein provided; NOW, THEREFORE, the Board of Directors of the District DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1. All of the recitals herein contained are true and correct and the Board of Directors of the District (the 'Board") so finds. Section 2. The Installment Purchase Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth herein, be and the same is hereby approved. The Chair of the Board, and such other member of the Board as the Chair may designate, the General Manager of the District, the Director of Finance and Administrative Services of the District, and such other officers of the District as the Director of Finance and Administrative Services may designate (the "Authorized Officers") are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the Installment Purchase Agreement in the form submitted to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Installment Purchase Agreement by such Authorized Officer; provided, however, that such changes, insertions and omissions shall not result in an aggregate principal amount of Installment Payments in excess of $225,000,000, shall not result in a true interest cost for the w62238e3 OCSD 14-08-3 Installment Payments in excess of 5.0% and shall not result in a final Installment Payment later than February 1, 2037. Section 3. The Trust Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the Trust Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Trust Agreement by such Authorized Officer. Section 4. The execution and delivery of Revenue Obligations evidencing principal in an aggregate amount of not to exceed $225,000,000, payable in the years and in the amounts, and evidencing principal of and interest on the Installment Payments as specified in the Trust Agreement as finally executed, are hereby authorized and approved. Section 5. The prepayment of all or a portion of the remaining principal components of the Prior Installment Payments, and the interest components thereof to the dates of prepayment, and the Prior Certificates evidencing interests therein, as determined by any Authorized Officer, is hereby authorized and approved. Section 6. The form of Notice of Intention to Sell, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, with such changes, insertions and omissions therein as may be approved by an Authorized Officer, is hereby approved, and the use of the Notice of Intention to Sell in connection with the offering and sale of the Revenue Obligations is hereby approved. The Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the District, to cause the Notice of Intention to Sell to be published once in The Bond Buyer (or in such other financial publication generally circulated throughout the State of California or reasonably expected to be disseminated among prospective bidders for the Revenue Obligations as an Authorized Officer shall approve as being in the best interests of the District) at least five days prior to the date set for the opening of bids in the Notice Inviting Bids, with such changes, insertions and omissions therein as an Authorized Officer may require or approve, such requirement or approval to be conclusively evidenced by such publishing of the Notice of Intention to Sell. Section 7. The Notice Inviting Bids, in substantially the form submitted to this meeting and made a part hereof as though set forth herein, with such changes, insertions and omissions therein as may be approved by an Authorized Officer, be and the same is hereby approved, and the use of the Notice Inviting Bids in connection with the offering and sale of the Revenue Obligations is hereby authorized and approved. The terms and conditions of the offering and sale of the Revenue Obligations shall be as specified in the Notice Inviting Bids. Bids for the purchase of the Revenue Obligations shall be received at the time and place set forth in the Notice Inviting Bids. The Authorized Officers are each hereby authorized and directed, for and in the name Q6223863 OCSD 14-08-4 and on behalf of the District, to accept the bid for the Revenue Obligations with the lowest true interest cost, or to reject all bids therefor, in accordance with the terms of the Notice Inviting Bids. Section 8. The Preliminary Official Statement, in substantially the form presented to this meeting and made a part hereof as though set forth in full herein, with such changes, insertions and omissions therein as may be approved by an Authorized Officer, is hereby approved, and the use of the Preliminary Official Statement in connection with the offering and sale of the Revenue Obligations is hereby authorized and approved. The Authorized Officers are each hereby authorized to certify on behalf of the District that the Preliminary Official Statement is deemed final as of its date, within the meaning of Rule 15c2-12 (except for the omission of certain information permitted by Rule 15c2-12 to be omitted). The Authorized Officers are each hereby authorized and directed to furnish, or cause to be furnished, to prospective bidders for the Revenue Obligations a reasonable number of copies of the Preliminary Official Statement. Section 9. The preparation and delivery of a final Official Statement (the "Official Statement'), and its use in connection with the offering and sale of the Revenue Obligations, be and the same is hereby authorized and approved. The Official Statement shall be in substantially the form of the Preliminary Official Statement, with such changes, insertions and omissions as may be approved by an Authorized Officer, such approval to be conclusively evidenced by the execution and delivery thereof. The Authorized Officers are, and each of them is, hereby authorized and directed to execute the final Official Statement and any amendment or supplement thereto, for and in the name of the District. Section 10. The Continuing Disclosure Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the Continuing Disclosure Agreement in the form submitted to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Continuing Disclosure Agreement by such Authorized Officer. Section 11. The Escrow Agreement, in substantially the forth submitted to this meeting and made a part hereof as though set forth herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the Escrow Agreement in the form submitted to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Escrow Agreement by such Authorized Officer. Section 12. The Authorized Officers are, and each of them hereby is, authorized and directed to execute and deliver any and all documents and instruments and to do and cause to be done any and all acts and things necessary or proper for Q6223863 OCSD 14-08-5 carrying out the execution and delivery of the Revenue Obligations and the transactions contemplated by the notices, agreements and documents referenced in this Resolution. Section 13. All actions heretofore taken by the officers and employees of the District with respect to the execution, delivery and sale of the Revenue Obligations, or in connection with or related to any of the agreements or documents referenced in this Resolution, are hereby approved, confirmed and ratified. Section 14. This Resolution shall take effect immediately upon its adoption. PASSED AND ADOPTED at a regular meeting held on June 25, 2014. Troy Edgar Chairman of the Board Orange County Sanitation District ATTEST: Maria E. Ayala Clerk of the Board Orange County Sanitation District APPROVED: Brad Hogin General Counsel Orange County Sanitation District Q6223863 OCSD 14-08-6 STATE OF CALIFORNIA ) ss COUNTY OF ORANGE ) I, Maria E. Ayala, Clerk of the Board of Directors of the Orange County Sanitation District, do hereby certify that the foregoing Resolution No. OCSD 14-08 was passed and adopted at a regular meeting of said Board on the 25t^ day of June, 2014, by the following vote, to wit: AYES: NOES: ABSTENTIONS: ABSENT: IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of Orange County Sanitation District this 251" day of June, 2014. Maria E. Ayala Clerk of the Board Orange County Sanitation District Q622386.3 RETURN TO AGENDA RESOLUTION NO. FC-21 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION AUTHORIZING THE EXECUTION AND DELIVERY BY THE CORPORATION OF AN INSTALLMENT PURCHASE AGREEMENT AND A TRUST AGREEMENT IN CONNECTION WITH THE EXECUTION AND DELIVERY OF ORANGE COUNTY SANITATION DISTRICT WASTEWATER REFUNDING REVENUE OBLIGATIONS, SERIES 2014A, AUTHORIZING THE EXECUTION AND DELIVERY OF SUCH REVENUE OBLIGATIONS EVIDENCING PRINCIPAL IN AN AGGREGATE AMOUNT OF NOT TO EXCEED $225,000,000 AND AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND RELATED ACTIONS. WHEREAS, to refinance the acquisition, construction and installation of certain improvements to its wastewater system (the "Prior Project"), the Orange County Sanitation District (the "District") has heretofore purchased the Prior Project from the Orange County Sanitation District Financing Corporation (the "Corporation"), and the Corporation has heretofore sold the Prior Project to the District, for the installment payments (the "Prior Installment Payments") made by the District pursuant to the Installment Purchase Agreement, dated as of August 1, 2000 (the "Prior Installment Purchase Agreement"), by and between the District and the Corporation; WHEREAS, to provide the funds necessary to refinance the Prior Project, the District caused the execution and delivery of the Orange County Sanitation District Certificates of Participation, Series 2007B (the "Prior Certificates"), evidencing direct, undivided fractional interests in the related Prior Installment Payments; WHEREAS, the District desires to refinance the Prior Project by paying and prepaying the remaining Prior Installment Payments, and the interest thereon to the date of prepayment, thereby causing the remaining Prior Certificates to be prepaid; WHEREAS, to provide the funds necessary to pay and prepay the remaining Prior Installment Payments, the District and the Corporation desire that the Corporation purchase the Prior Project from the District and the District sell the Prior Project to the Corporation, and that the District then purchase the Prior Project from the Corporation and the Corporation sell the Prior Project to the District, for the installment payments (the "Installment Payments") to be made by the District pursuant to an Installment Purchase Agreement by and between the District and the Corporation (such Installment Purchase Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Installment Purchase Agreement"); FC-21-1 WHEREAS, the Corporation intends to assign without recourse certain of its rights under and pursuant to the Installment Purchase Agreement to MUFG Union Bank, N.A., as trustee (the "Trustee"), pursuant to a Trust Agreement by and among the Trustee, the Corporation and the District (such Trust Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Trust Agreement"); WHEREAS, in consideration of such assignment and the execution and delivery of the Trust Agreement, the Trustee intends to execute and deliver the Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2014A (the "Revenue Obligations"), evidencing direct, undivided fractional interests in the Installment Payments, and the interest thereon; WHEREAS, there have been prepared and submitted to this meeting forms of: (a) the Installment Purchase Agreement; and (b) the Trust Agreement; WHEREAS, all acts, conditions and things required by the Constitution and laws of the State of California to exist, to have happened and to have been performed precedent to and in connection with the consummation of the actions authorized hereby do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the Corporation is now duly authorized and empowered, pursuant to each and every requirement of law, to consummate such actions for the purpose, in the manner and upon the terms herein provided; NOW, THEREFORE, the Board of Directors of the Corporation DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1. All of the recitals herein contained are true and correct and the Board of Directors of the Corporation (the "Board") so finds. Section 2. The Installment Purchase Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth herein, be and the same is hereby approved. The President of the Corporation, the Vice-President of the Corporation, the Treasurer of the Corporation and the Secretary of the Corporation, and such other officers of the Corporation as the President may designate (the "Authorized Officers") are, and each of them is, hereby authorized and directed, for and in the name of the Corporation, to execute and deliver the Installment Purchase Agreement in the form submitted to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Installment Purchase Agreement by such Authorized Officer; provided, however, that such changes, insertions and omissions shall not result in an aggregate principal amount of Installment Payments in excess of $225,000,000, shall not result in a true interest cost for the Installment Payments in excess of 5.0% and shall not result in a final Installment Payment later than February 1, 2037. Q62230.3 2 Section 3. The Trust Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the Corporation, to execute and deliver the Trust Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Trust Agreement by such Authorized Officer. Section 4. The execution and delivery of Revenue Obligations evidencing principal in an aggregate amount of not to exceed $225,000,000, payable in the years and in the amounts, and evidencing direct, undivided fractional interests in the Installment Payments, and the interest thereon, as specified in the Trust Agreement as finally executed, are hereby authorized and approved. Section 5. The officers and agents of the Corporation are, and each of them hereby is, authorized and directed to execute and deliver any and all documents and instruments and to do and cause to be done any and all acts and things necessary or proper for carrying out the execution and delivery of the Revenue Obligations and the transactions contemplated by the agreements or documents referenced in this Resolution. Section 6. All actions heretofore taken by the officers and agents of the Corporation with respect to the execution, delivery and sale of the Revenue Obligations, or in connection with or related to any of the agreements or documents referenced in this Resolution, are hereby approved, confirmed and ratified. Section 7. This Resolution shall take effect immediately upon its adoption. Q6223%.3 3 PASSED AND ADOPTED at a meeting held on June 25, 2014. President, Orange County Sanitation District Financing Corporation ATTEST: Clerk of the Board, Orange County Sanitation District Financing Corporation APPROVED: General Counsel, Orange County Sanitation District Financing Corporation Q6223%.3 4 STATE OF CALIFORNIA ) ss COUNTY OF ORANGE ) I, Maria E. Ayala, Clerk of the Board of Directors of the Orange County Sanitation District Financing Corporation, do hereby certify that the foregoing Resolution No. FC- was passed and adopted at a regular meeting of said Board on the 25t" day of June, 2014, by the following vote, to wit: AYES: NOES: ABSTENTIONS: ABSENT: IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of Orange County Sanitation District Financing Corporation this 25" day of June, 2014. Clerk of the Board of Directors Orange County Sanitation District Financing Corporation Q6223%.3 RETURN TO AGENDA Fulbright&Jaworski LLP—Draft 06/12/14 TRUST AGREEMENT by and among MUFG UNION BANK,N.A., as Trustee, ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION and ORANGE COUNTY SANITATION DISTRICT Dated as of August 1,2014 Relating to $[PAR AMOUNT] Orange County Sanitation District Wastewater Refunding Revenue Obligations Series 2014A 40622376.4 TABLE OF CONTENTS Page ARTICLE I DEFINITIONS; EQUAL SECURITY Section1.01. Definitions........................................................................................................2 Section 1.02. Definitions in Installment Purchase Agreement..............................................9 Section1.03. Equal Security..................................................................................................9 ARTICLE H TERMS AND CONDITIONS OF REVENUE OBLIGATIONS Section 2.01. Preparation and Delivery of Revenue Obligations ..........................................9 Section 2.02. Denomination, Medium and Dating of Revenue Obligations .........................9 Section 2.03. Payment Dates of Revenue Obligations; Interest Computation.................... 10 Section 2.04. Form of Revenue Obligations........................................................................ 10 Section 2.05. Execution of Revenue Obligations and Replacement Certificates. The Revenue Obligations shall be executed by the Trustee by the manual signature of an authorized signatory of the Trustee....................................... 10 Section 2.06. Transfer and Payment of Revenue Obligations; Exchange of Revenue Obligations..................................................................................................... 11 Section 2.07. Revenue Obligation Registration Books........................................................ 11 Section 2.08. Temporary Revenue Obligations................................................................... 11 Section 2.09. Revenue Obligations Mutilated, Lost,Destroyed or Stolen.......................... 12 Section 2.10. Book-Entry System........................................................................................ 12 ARTICLE III PROCEEDS OF REVENUE OBLIGATIONS Section 3.01. Delivery of Revenue Obligations................................................................... 14 Section 3.02. Deposit of Proceeds of Revenue Obligations ................................................ 15 Section 3.03. Costs of Issuance Fund.................................................................................. 15 ARTICLE IV PREPAYMENT OF REVENUE OBLIGATIONS Section 4.01. Optional Prepayment..................................................................................... 15 Section4.02. Reserved......................................................................................................... 15 Section 4.03. Selection of Revenue Obligations for Optional Prepayment......................... 15 Section 4.04. Notice of Prepayment .................................................................................... 16 Section 4.05. Partial Prepayment of Revenue Obligations.................................................. 17 Section 4.06. Effect of Prepayment..................................................................................... 17 ARTICLE V ASSIGNMENT AND PLEDGE; FUNDS AND ACCOUNTS Section 5.01. Assignment and Pledge.................................................................................. 17 Section 5.02. Installment Payment Fund............................................................................. 18 406223/6.4 i TABLE OF CONTENTS (continued) Page Section5.03. Reserved......................................................................................................... 18 Section 5.04. Investment of Moneys.................................................................................... 18 Section 5.05. Brokerage Confirmations............................................................................... 19 ARTICLE VI COVENANTS Section 6.01. Compliance with Trust Agreement................................................................ 19 Section 6.02. Compliance with Installment Purchase Agreement.......................................20 Section 6.03. Compliance with Master Agreement.............................................................20 Section 6.04. Observance of Laws and Regulations............................................................20 Section6.05. Other Liens.....................................................................................................20 Section 6.06. Prosecution and Defense of Suits ..................................................................20 Section 6.07. Accounting Records and Statements.............................................................20 Section 6.08. Tax Covenants ...............................................................................................21 Section 6.09. Continuing Disclosure ...................................................................................24 Section 6.10. Further Assurances.........................................................................................24 ARTICLE VH DEFAULT AND LIMITATIONS OF LIABILITY Section 7.01. Action upon Event of Default........................................................................24 Section 7.02. Other Remedies of the Trustee ......................................................................25 Section7.03. Non-Waiver....................................................................................................25 Section 7.04. Remedies Not Exclusive................................................................................25 Section 7.05. Application of Amounts After Default..........................................................26 Section 7.06. Trustee May Enforce Claims Without Possession of Revenue Obligations.....................................................................................................26 Section 7.07. Limitation on Suits.........................................................................................27 Section 7.08. No Liability by the Corporation to the Owners.............................................27 Section 7.09. No Liability by the District to the Owners.....................................................27 Section 7.10. No Liability of the Trustee to the Owners.....................................................27 ARTICLE VI THE TRUSTEE Section 8.01. Employment of the Trustee; Duties...............................................................28 Section 8.02. Removal and Resignation of the Trustee.......................................................28 Section 8.03. Compensation said Indemnification of the Trustee........................................29 Section 8.04. Protection of the Trustee................................................................................30 ARTICLE IX AMENDMENT OF OR SUPPLEMENT TO TRUST AGREEMENT Section 9.01. Amendment or Supplement...........................................................................31 Section 9.02. Disqualified Revenue Obligations.................................................................32 40622376.4 ii TABLE OF CONTENTS (continued) Page Section 9.03. Endorsement or Replacement of Revenue Obligations After Amendment or Supplement...........................................................................32 Section 9.04. Amendment by Mutual Consent....................................................................32 ARTICLE X DEFEASANCE Section 10.01. Discharge of Revenue Obligations and Trust Agreement.............................33 Section 10.02. Unclaimed Moneys........................................................................................34 ARTICLE XI MISCELLANEOUS Section 11.01. Benefits of Trust Agreement..........................................................................34 Section 11.02. Successor Deemed Included in all References to Predecessor......................35 Section 11.03. Execution of Documents by Owners.............................................................35 Section 11.04. Waiver of Personal Liability..........................................................................35 Section 11.05. Acquisition of Revenue Obligations by District............................................35 Section 11.06. Content of Certificates...................................................................................35 Section 11.07. Funds and Accounts.......................................................................................36 Section 11.08. Article and Section Headings, Gender and References.................................36 Section 11.09. Partial Invalidity.............................................................................................37 Section 11.10. California Law...............................................................................................37 Section11.11. Notices...........................................................................................................37 Section 11.12. Effective Date ................................................................................................38 Section 11.13. Execution in Counterparts..............................................................................38 EXHIBIT A—FORM OF REVENUE OBLIGATION 60622316.E 111 TRUST AGREEMENT THIS TRUST AGREEMENT (this "Trust Agreement'), dated as of August 1, 2014, is made by and among MUFG UNION BANK,N.A., a national banking association organized and existing under the laws of the United States of America, as trustee(the "Trustee"),the ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION, a nonprofit public benefit corporation organized and existing under the laws of the State of California (the "Corporation"), and the ORANGE COUNTY SANITATION DISTRICT, a county sanitation district organized and existing under the laws of the State of California(the "District'). WITNESSETH: WHEREAS, to refinance the acquisition, construction and installation of certain improvements to its wastewater system (the "Prior Project'), the District has heretofore purchased the Prior Project from the Corporation, and the Corporation has heretofore sold the Prior Project to the District, for the installment payments (the "Prior Installment Payments") made by the District pursuant to the Installment Purchase Agreement, dated as of August 1, 2000 (the"Prior Installment Purchase Agreement'),by and between the District and the Corporation; WHEREAS, to provide the funds necessary to refinance the Prior Project, the District caused the execution and delivery of the Orange County Sanitation District Certificates of Participation, Series 2007B (the "Prior Certificates"), evidencing direct, undivided fractional interests in the related Prior Installment Purchase Agreement and the related Prior Installment Payments; WHEREAS, the District desires to refinance a portion of the Prior Project (the "Project') by prepaying a portion of the remaining Prior Installment Payments, and the interest thereon to the date of prepayment, thereby causing a portion of the Prior Certificates to be retired; WHEREAS,to provide the funds necessary to pay and prepay a portion of the remaining Prior Installment Payments, the District and the Corporation desire that the Corporation purchase the Prior Project from the District and the District sell the Prior Project to the Corporation, and that the District then purchase the Prior Project from the Corporation and the Corporation sell the Prior Project to the District, for the installment payments (the "Installment Payments") to be made by the District pursuant to the Installment Purchase Agreement, dated the date hereof(the "Installment Purchase Agreement'); WHEREAS, the Corporation proposes to assign without recourse certain of its rights under and pursuant to the Installment Purchase Agreement to the Trustee; WHEREAS, in consideration of such assignment and the execution and delivery of this Trust Agreement, the Trustee has agreed to execute and deliver Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2014A (the "Revenue Obligations"), which are certificates of participation, evidencing direct, undivided fractional interests in the Installment Purchase Agreement and the related Installment Payments,and the interest thereon; Q6223/6.4 WHEREAS, a portion of the proceeds of the Revenue Obligations will be used to prepay a portion of the Prior Installment Payments; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and delivery of this Trust Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and deliver this Trust Agreement; NOW, THEREFORE, in consideration of the promises and of the mutual agreements and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,the parties hereto do hereby agree as follows: ARTICLE I DEFINITIONS; EQUAL SECURITY Section 1.01. Definitions. Except as provided in Section 1.02 hereof or unless the context otherwise requires, the terms defined in this Section shall for all purposes hereof and of any amendment hereof or supplement hereto and of the Revenue Obligations and of any certificate, opinion, request or other document mentioned herein or therein have the meanings defined herein, the following definitions to be equally applicable to both the singular and plural forms of any of the terms defined herein: "Authorized Corporation Representative"means the President,the Vice President, the Treasurer and the Secretary of the Corporation, and any other Person authorized by the President of the Corporation to act on behalf of the Corporation under or with respect to this Trust Agreement. "Authorized Denominations"means $5,000 and integral multiples thereof. "Authorized District Representative" means the General Manager of the District, the Director of Finance and Administrative Services of the District, the Controller of the District and any other Person authorized by the Director of Finance and Administrative Services of the District to act on behalf of the District under or with respect to this Trust Agreement. "Beneficial Owners" means those individuals, partnerships, corporations or other entities for which the Participants have caused the Depository to hold Book-Entry Certificates. "Book-Entry Certificates" means the Revenue Obligations registered in the name of the nominee of DTC, or any successor securities depository for the Revenue Obligations, as the Owner thereof pursuant to the terms and provisions of Section 2.10 hereof. "Business Day" means a day other than (a) Saturday or Sunday, (b)a day on which banking institutions in the city in which the Principal Office is located are authorized or required by law to be closed, and (c)a day on which the New York Stock Exchange is authorized or obligated by law or executive order to be closed. Q6223/6.4 2 "Cede & Co." means Cede & Co., the nominee of DTC, and any successor nominee of DTC with respect to the Revenue Obligations. "Certificate Year" means each twelve-month period beginning on February 2 in each year and extending to the next succeeding February 1, both dates inclusive, except that the first Certificate Year shall begin on the Closing Date and end on February 1,2015. "Closing Date"means August. 2014. "Code" means the Internal Revenue Code of 1986. "Continuing Disclosure Agreement" means the Continuing Disclosure Agreement, dated as of the date hereof, by and between the District and Digital Assurance Certification LLC, as originally executed and as it may from time to time be amended in accordance with the terms thereof. "Corporation' means the Orange County Sanitation District Financing Corporation, a nonprofit public benefit corporation organized and existing under the laws of the State. "Costs of Issuance" means all the costs of executing and delivering the Revenue Obligations, including, but not limited to, all printing and document preparation expenses in connection with this Trust Agreement, the Installment purchase Agreement, the Revenue Obligations and any preliminary official statement and final official statement pertaining to the Revenue Obligations, fees of a financial advisor, rating agency fees, market study fees, legal fees and expenses of counsel with respect to the execution and delivery of the Revenue Obligations, the initial fees and expenses of the Trustee and its counsel and other fees and expenses incurred in connection with the execution and delivery of the Revenue Obligations, to the extent such fees and expenses are approved by the District. "Costs of Issuance Fund" means the fund by that name established in accordance with Section 3.03 hereof. "Depository" means the securities depository acting as Depository pursuant to Section 2.10 hereof. "District" means the Orange County Sanitation District, a county sanitation district organized and existing under the laws of the State, and any successor thereto. "DTC"means The Depository Trust Company,New York,New York and its successors. "Escrow Agent"means MUFG Union Bank,N.A. and its successor or assign. "Escrow Agreement" means the Escrow Agreement, dated as of August 1, 2014, between the Escrow Agent and the District. "Escrow Fund" means the escrow fund established under the Escrow Agreement and held by the Escrow Agent. w622376.4 3 "Event of Default" shall have the meaning set forth in Section 6.01 of the Installment Purchase Agreement. "Government Obligations" means any of the following which are noncallable by the issuer thereof except to the extent not permitted by the laws of the State as an investment for the moneys to be invested therein at the time of investment: (i) (a) direct general obligations of the United States of America, (b)obligations the payment of the principal of and interest on which are unconditionally guaranteed as to the full and timely payment by the United States of America, or (c) any fund or other pooling arrangement whose assets consist exclusively of the obligations listed in clause(a) or (b) of this clause(i) and which is rated at least `P-1" by Moody's; provided that, such obligations shall not include unit investment trusts or mutual fund obligations; (ii) advance refunded tax-exempt obligations that (a) are rated by Moody's and S&P, (b) are secured by obligations specified in clause(i), (c) me tax-exempt because they are secured by obligations specified in clause (i), and (d) have the same ratings as the obligations specified in clause (i); (iii) bonds, debentures or notes issued by any of the following federal agencies: Federal Farm Credit Bank, Federal Home Loan Mortgage Corporation or Fannie Mae; provided, that such bonds, debentures or notes shall be the senior obligations of such agencies (including participation certificates) and have the same ratings by Moody's and S&P as the obligations specified in clause(i); and (iv) bonds, debentures or notes issued by any Federal agency hereafter created by an act of Congress, the payment of the principal of and interest on which are unconditionally guaranteed by the United States of America as to the full and timely payment; provided, that, such obligations shall not include unit investment trusts or mutual fund obligations. "Installment Payment Fund" means the fund by that name established in accordance with Section 5.02 hereof. "Installment Payments" means the Installment Payments required to be made by the District pursuant to Section 3.02 of the Installment Purchase Agreement. `Installment Purchase Agreement' means the Installment Purchase Agreement, dated as of the date hereof, by and between the District and the Corporation, as originally executed and as it may from time to time be amended in accordance with the provisions thereof. "Interest Account" means the account by that name within the Installment Payment Fund established in accordance with Section 5.02 hereof. "Interest Payment Date" means February 1 and August 1 of each year, commencing February 1,2015. 406223/6.4 4 "Letter of Representations"means the letter of the District delivered to and accepted by the Depository on or prior to the delivery of the Revenue Obligations as Book-Entry Certificates setting forth the basis on which the Depository serves as depository for such Book-Entry Certificates, as originally executed or as it may be supplemented or revised or replaced by a letter to a substitute Depository. "Master Agreement" means the Master Agreement for District Obligations, dated as of August 1, 2000,by and between the District and the Corporation, as originally executed and as it may from time to time be amended or supplemented in accordance with the terms thereof. "Moody's" means Moody's Investors Service, a corporation organized and existing under the laws of the State of Delaware, its successors and assigns, except that if such corporation shall no longer perform the function of a securities rating agency for any reason, the term "Moody's" shall be deemed to refer to any other nationally recognized securities rating agency selected by the District. "Nominee" means the nominee of the Depository, which may be the Depository, as determined from time to time pursuant to Section 2.10 hereof. "Opinion of Counsel" means a written opinion of Fulbright& Jaworski LLP or any other counsel of recognized national standing in the field of law relating to municipal bonds, appointed and paid by the District. "Outstanding," when used as of any particular time with reference to Revenue Obligations, means (subject to the provisions of Section 9.02 hereof) all Revenue Obligations except (a)Revenue Obligations previously canceled by the Trustee or delivered to the Trustee for cancellation, (b) Revenue Obligations paid or deemed to have been paid within the meaning of Section 10.01 hereof, and(c) Revenue Obligations in lieu of or in substitution for which other Revenue Obligations shall have been executed and delivered by the Trustee pursuant to Section 2.09 hereof. "Owner" means any Person who shall be the registered owner of any Outstanding Revenue Obligation as indicated in the registration books of the Trustee required to be maintained pursuant to Section 2.07 hereof. "Participants" means those broker-dealers, banks and other financial institutions from time to time for which the Depository holds Book-Entry Certificates as securities depository. "Participating Underwriter" has the meaning ascribed thereto in the Continuing Disclosure Agreement. Q6223/6.4 5 "Permitted Investments"means any of the following, except to the extent not permitted by the laws of the State as an investment for the moneys to be invested therein at the time of investment: (1) Government Obligations; (2) Bonds, debentures, notes, participation certificates or other evidences of indebtedness issued, or the principal of and interest on which are unconditionally guaranteed, by the Federal Intermediate Credit Bank, the Federal Home Loan Bank System, the Government National Mortgage Association or any other agency or instrumentality of or corporation wholly owned by the United States of America when such obligations are backed by the full faith and credit of the United States for the full and timely payment of principal and interest; (3) Obligations of any state of the United States or any political subdivision thereof, which at the time of investment are rated "Aa3" or higher by Moody's and "AA-" or higher by S&P; or which are rated by Moody's "VMIG 1" or better and by S&P "A-1+" or better with respect to commercial paper, or "VMIG 1" and "SP-111 , respectively, with respect to municipal notes; (4) Bank time deposits evidenced by certificates of deposit, deposit accounts, and bankers' acceptances, issued by any bank, trust company or national banking association insured by the Federal Deposit Insurance Corporation (including the Trustee); provided that (a) such bank, trust company or national banking association be rated "Aa3" or better by Moody's and "AA-" or better by S&P; and (b)the aggregate of such bank time deposits and bankers' acceptances issued by any bank, trust company or banking association does not exceed at any one time 10% of the aggregate of the capital stock, surplus and undivided profits of such bank, trust company or banking association and that such capital stock, surplus and undivided profits shall not be less than $15,000,000; (5) Repurchase agreements with any bank, trust company or national banking association insured by the Federal Deposit Insurance Corporation(including the Trustee), with subsidiaries (of a parent company), provided the obligations of the subsidiary under the agreement we unconditionally guaranteed by the parent, or with any government bond dealer recognized as a primary dealer by the Federal Reserve Bank of New York, which agreements are fully and continuously secured by a valid and perfected first priority security interest in obligations described in paragraph(1) or (2) of this definition, provided that either such bank, trust company or national banking association which (or senior debt or claims paying ability of the financial entity's guarantor) is rated, at the time of investment,"Aa3"or better by Moody's and"AA-" or better by S&P; (6) Repurchase agreements with maturities of not more than one year entered into with financial institutions such as banks or trust companies organized under state law or national banks or banking associations (including the Trustee), insurance companies or government bond dealers reporting to, trading with, and recognized as a primary dealer by, the Federal Reserve Bank of New York and a member of the Securities Investor Q6223/6.4 6 Protection Corporation or with a dealer or parent holding company that is rated, at the time of investment, or whose long-term debt obligations (or senior debt or claims paying ability of the financial entity's guarantor) are rated, at the time of investment, "Aa3" or better by Moody's and"AA-"or better by S&P,provided such repurchase agreements are in writing, secured by obligations described in paragraphs (1) and (2) of this definition having a fair market value, exclusive of accrued interest, at least equal to the amount invested in the repurchase agreements and in which the Trustee has a perfected first lien in, and retains possession of, such obligations free from all third party claims; (7) Investment agreements, forward purchase agreements and reserve fund put agreements with any corporation, including banking or financial institutions, or agreements entered into with subsidiaries (of a parent company), provided the obligations of the subsidiary under the agreement are unconditionally guaranteed by the parent, the corporate debt of which (or senior debt or claims paying ability of the financial entity's guarantor) is rated, at the time of investment, "Aa3" or better by Moody's and "AA-" or better by S&P; (8) Guaranteed investment contracts or similar funding agreements issued by insurance companies, provided that either the long term corporate debt of such insurance company, at the time of investment, is rated, at the time of investment, "Aa3" or better by Moody's and "AA-" or better by S&P or which agreements are fully and continuously secured by a valid and perfected first priority security interest in obligations described in paragraph(1) or (2) of this definition, or that the following conditions are met: (a)the market value of the collateral is maintained at levels acceptable to Moody's and S&P, (b)the Trustee or a third party acting solely as agent for the Trustee has possession of the collateral, (c)the Tmstee has a perfected first priority security interest in the collateral, (d)the collateral is free and clear of third-party liens, and (e)failure to maintain the requisite collateral level will require the Trustee to liquidate collateral; (9) Corporate commercial paper rated"P-1"or better by Moody's and"A-1+" or better by S&P at the time of investment; (10) Taxable government money market portfolios which are rated"AAAm"or "AAAm-G" by S&P and "P-l"by Moody's (including funds for which the Trustee or an affiliate provides investment advice or similar services); and (11) Deposits with the Local Agency Investment Fund of the State, as may otherwise be permitted by law. "Person" means an individual, corporation, limited liability company, firm, association, partnership, trust, or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof. "Prepayment Account"means the account by that name within the Installment Payment Fund established in accordance with Section 5.02 hereof. "Principal Account" means the account by that name within the Installment Payment Fund established in accordance with Section 5.02 hereof. Q622376.4 7 "Principal Office" means the Trustee's principal corporate trust office in Los Angeles, California. "Principal Payment Date"means a date on which an Installment Payment evidenced by the Revenue Obligations becomes due and payable. "Prior Certificates" means the District's Certificates of Participation, Series 2007B. "Prior Trust Agreement" means the Trust Agreement, dated as of December 1, 2007, by and among the Prior Trustee, the Corporation and the District, as amended and supplemented, pursuant to which the Prior Certificates were executed and delivered. "Prior Trustee" means MUFG Union Bank, N.A., formerly known as Union Bank of California,N.A., as trustee under the Prior Trust Agreement. "Project" has the meaning ascribed thereto in the recitals hereto. "Record Date"means, with respect to the interest payable on any Interest Payment Date, the 15th day of the calendar month immediately preceding such Interest Payment Date, whether or not such day is a Business Day. "Revenue Obligations" means the Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2014A, executed and delivered by the Trustee pursuant hereto, which are certificates of participation, evidencing direct, undivided fractional interests in the Installment Purchase Agreement and the related Installment Payments, and the interest thereon. "S&P" means Standard & Poor's Ratings Services, a Standard & Poor's Financial Services LLC business, its successors and assigns, except that if such entity shall no longer perform the functions of a securities rating agency for any reason, the term "S&P" shall be deemed to refer to any other nationally recognized securities rating agency selected by the District. "State"means the State of California. "Trust Agreement" means this Trust Agreement, dated as of August 1, 2014, by and among the Trustee, the Corporation and the District, as originally executed and delivered and as it may from time to time be amended or supplemented in accordance with the provisions hereof. "Trustee" means MUFG Union Bank, N.A., a national banking association duly organized and existing under the laws of the United States of America, or any other bank or trust company which may at any time be substituted in its place as provided in Section 8.02 hereof. "Written Certificate"and"Written Request"mean(a)with respect to the Corporation, a written certificate or written request, respectively, signed in the name of the Corporation by an Authorized Corporation Representative, and (b)with respect to the District, a written certificate or written request, respectively, signed in the name of the District by an Authorized District Representative. Any such certificate or request may, but need not, be combined in a single Q6223/6.4 8 instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument. Section 1.02. Definitions in Installment Purchase Agreement. Except as otherwise herein defined and unless the context otherwise requires, the terms defined in the Installment Purchase Agreement shall for all purposes hereof and of any amendment hereof or supplement hereto and of any report or other document mentioned herein have the meanings defined therein, such definitions to be equally applicable to both the singular and plural forms of any of the terms defined therein. With respect to any defined term which is given a different meaning under this Trust Agreement than under the Installment Purchase Agreement, as used herein it shall have the meaning given herein. Section 1.03. Equal Security. In consideration of the acceptance of the Revenue Obligations by the Owners, this Trust Agreement shall be deemed to be and shall constitute a contract between the Trustee and the Owners to secure the full and final payment of the interest and principal evidenced by the Revenue Obligations which may be executed and delivered hereunder, subject to each of the agreements, conditions, covenants and terms contained herein; and all agreements, conditions, covenants and terms contained herein required to be observed or performed by or on behalf of the Trustee shall be for the equal and proportionate benefit, protection and security of all Owners without distinction, preference or priority as to security or otherwise of any Revenue Obligations over any other Revenue Obligations by reason of the number or date thereof or the time of execution or delivery thereof or for any cause whatsoever, except as expressly provided herein or therein. ARTICLE II TERMS AND CONDITIONS OF REVENUE OBLIGATIONS Section 2.01. Preparation and Delivery of Revenue Obligations. The Trustee is hereby authorized, upon the Written Request of the District, to execute and deliver the Revenue Obligations in the aggregate principal amount of $[PAR AMOUNT] evidencing the aggregate principal amount of the Installment Payments and each evidencing a direct, fractional undivided interest in the Installment Payments, and the interest thereon. The Installment Payments evidenced by each Revenue Obligation shall constitute the principal evidenced thereby and the interest on such Installment Payments shall constitute the interest evidenced thereby. The Revenue Obligations shall be numbered,with or without prefixes, as directed by the Trustee. Section 2.02. Denomination. Medium and Dating of Revenue Obligations. The Revenue Obligations shall be designated "Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2014A" and shall be prepared in the form of fully registered Revenue Obligations, without coupons, in Authorized Denominations and shall be payable in lawful money of the United States of America. The Revenue Obligations shall be dated as of the Closing Date. Each Revenue Obligation shall evidence interest from the Interest Payment Date next preceding its date of execution to which interest has been paid in full, unless such date of execution shall be after a Record Date and on or prior to the following Interest Payment Date, in which case such Revenue Q622376.4 9 Obligation shall evidence interest from such Interest Payment Date, or unless such date of execution shall be on or prior to January 15, 2015, in which case such Revenue Obligation shall represent interest from the Closing Date. Notwithstanding, the foregoing, if, as shown by the records of the Trustee, interest evidenced by the Revenue Obligations shall be in default, each Revenue Obligation shall evidence interest from the last Interest Payment Date to which such interest has been paid in full or duly provided for. Section 2.03. Payment Dates of Revenue Obligations: Interest Computation. (a)Method and Place of Payment. The principal evidenced by the Revenue Obligations shall become due and payable, subject to prior prepayment, on February 1 of the years, in the amounts,and shall evidence interest accruing at the rates per annum set forth below: Principal Payment Date Principal Interest (February 1) Component Rate Except as otherwise provided in the Letter of Representations, payments of interest evidenced by the Revenue Obligations shall be made to the Owners thereof(as determined at the close of business on the Record Date next preceding the related Interest Payment Date)by check or draft of the Trustee mailed to the address of each such Owner as it appears on the registration books maintained by the Trustee pursuant to Section 2.07 hereof, or to such other address as may be furnished in writing to the Trustee by each such Owner. Except as otherwise provided in the Letter of Representations, payment of principal and prepayment premium, if any, evidenced by the Revenue Obligations, on their stated Principal Payment Dates or on prepayment in whole or in part prior thereto, shall be made only upon presentation and surrender of the Revenue Obligations at the Principal Office. (b) Computation oflnterest. The interest evidenced by the Revenue Obligations shall be payable on each Interest Payment Date to and including their respective Principal Payment Dates or prepayment prior thereto, and shall represent the sum of the interest on the Installment Payments coming due on the Interest Payment Dates in each year. The principal evidenced by the Revenue Obligations shall be payable on their respective Principal Payment Dates in each year and shall represent the Installment Payments coming due on the Principal Payment Dates in each year. Interest evidenced by the Revenue Obligations shall be computed on the basis of a 360-day year consisting of twelve 30-day months. Q622376.4 10 Section 2.04. Form of Revenue Obligations. The Revenue Obligations shall be in substantially the form of Exhibit A hereto, with necessary or appropriate insertions, omissions and variations as permitted or required hereby. Section 2.05. Execution of Revenue Obligations and Replacement Certificates. The Revenue Obligations shall be executed by the Trustee by the manual signature of an authorized signatory of the Trustee. The Trustee shall deliver replacement Revenue Obligations in the manner and as contemplated by this Article. Such replacement Revenue Obligations shall be executed as herein provided and shall be in Authorized Denominations. Section 2.06. Transfer and Payment, Exchange or Cancellation of Revenue Obligations. Each Revenue Obligation is transferable by the Owner thereof, in person or by his attorney duly authorized in writing, at the Principal Office, on the registration books maintained by the Trustee pursuant to the provisions of Section 2.07 hereof,upon surrender of such Revenue Obligation for cancellation accompanied by delivery of a duly executed written instrument of transfer in a form acceptable to the Trustee. The Trustee may treat the Owner of any Revenue Obligation as the absolute owner of such Revenue Obligation for all purposes, whether or not the principal or interest evidenced by such Revenue Obligation shall be overdue, and the Trustee shall not be affected by any knowledge or notice to the contrary; and payment of the interest and principal evidenced by such Revenue Obligation shall be made only to such Owner, which payments shall be valid and effectual to satisfy and discharge the liability evidenced by such Revenue Obligation to the extent of the sum or sums so paid. Whenever any Revenue Obligation shall be surrendered for transfer, the Trustee shall execute and deliver a new Revenue Obligation or Revenue Obligations evidencing principal in the same aggregate amount and having the same stated Principal Payment Date. The Trustee shall require the payment by any Owner requesting such transfer of any tax or other governmental charge required to be paid with respect to such transfer. Each Revenue Obligation may be exchanged at the Principal Office for Revenue Obligations evidencing principal in a like aggregate principal amount having the same stated Principal Payment Date in such Authorized Denominations as the Owner thereof may request. The Trustee shall require the payment by the Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. Whenever in this Indenture provision is made for the cancellation by the Trustee of any Bonds, the Trustee shall destroy such Bonds and deliver a certificate of such destruction to the District. Section 2.07. Revenue Obligation Registration Books. The Trustee shall keep at its Principal Office sufficient books for the registration and transfer of the Revenue Obligations, which books shall be available for inspection and copying by the District at reasonable hours and under reasonable conditions; and upon presentation for such purpose the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer the Revenue Obligations on such books as hereinabove provided. Q622376.4 1 I Section 2.08. Temporary Revenue Obligations. The Revenue Obligations may be initially delivered in temporary form exchangeable for definitive Revenue Obligations when ready for delivery, which temporary Revenue Obligations shall be printed, lithographed or typewritten, shall be of such denominations as may be determined by the Trustee, shall be in fully registered form and shall contain such reference to any of the provisions hereof as may be appropriate. Every temporary Revenue Obligation shall be executed and delivered by the Trustee upon the same conditions and terms and in substantially the same manner as definitive Revenue Obligations. If the Trustee executes and delivers temporary Revenue Obligations, it shall prepare and execute definitive Revenue Obligations without delay, and thereupon the temporary Revenue Obligations may be surrendered at the Principal Office in exchange for such definitive Revenue Obligations, and until so exchanged such temporary Revenue Obligations shall be entitled to the same benefits hereunder as definitive Revenue Obligations executed and delivered hereunder. Section 2.09. Revenue ObBeations Mutilated, Lost, Destroyed or Stolen. If any Revenue Obligation shall become mutilated, the Trustee, at the expense of the Owner thereof, shall execute and deliver a new Revenue Obligation evidencing a like principal amount and having the same stated Principal Payment Date and number in exchange and substitution for the Revenue Obligation so mutilated, but only upon surrender to the Trustee of the Revenue Obligation so mutilated. Every mutilated Revenue Obligation so surrendered to the Trustee shall be canceled by it. If any Revenue Obligation shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee, and if such evidence is satisfactory to the Trustee and indemnity satisfactory to the Trustee shall be given, the Trustee, at the expense of the Owner thereof, shall execute and deliver a new Revenue Obligation evidencing a like principal amount and having the same stated Principal Payment Date, numbered as the Trustee shall determine, in lieu of and in substitution for the Revenue Obligation so lost, destroyed or stolen. The Trustee may require payment of a sum not exceeding the actual cost of preparing each new Revenue Obligation executed and delivered by it under this Section and of the expenses which may be incurred by it under this Section. Any Revenue Obligation executed and delivered under the provisions of this Section in lieu of any Revenue Obligation alleged to be lost, destroyed or stolen shall be equally and proportionately entitled to the benefits hereof with all other Revenue Obligations executed and delivered hereunder, and the Trustee shall not be required to treat both the original Revenue Obligation and any replacement Revenue Obligation as being Outstanding for the purpose of determining the amount of Revenue Obligations which may be executed and delivered hereunder or for the purpose of determining any percentage of Revenue Obligations Outstanding hereunder, but both the original and replacement Revenue Obligation shall be treated as one and the same. Notwithstanding any other provision of this Section, in lieu of executing and delivering a new Revenue Obligation for a Revenue Obligation which has been lost, destroyed or stolen and which evidences principal that is then payable, the Trustee may make payment of such Revenue Obligation to the Owner thereof if so instructed by the District. Section 2.10. Book-Entry System. (a) The Revenue Obligations shall be initially executed and delivered as Book-Entry Certificates, and the Revenue Obligations for each stated Principal Payment Date shall be in the form of a separate single fully registered Revenue Obligation (which may be typewritten). Upon initial execution and delivery, the ownership of each Revenue Obligation shall be registered in the registration books maintained by the Trustee 40622376.4 12 in the name of the Nominee, as nominee of the Depository. Payment of principal or interest evidenced by any Book-Entry Certificate registered in the name of the Nominee shall be made on the applicable Interest Payment Date by wire transfer of New York clearing house or equivalent next day funds or by wire transfer of same day funds to the account of the Nominee. Such payments shall be made to the Nominee at the address which is, on the Record Date, shown for the Nominee in the registration books maintained by the Trustee. (b) With respect to Book-Entry Certificates, the District, the Corporation and the Trustee shall have no responsibility or obligation to any Participant or to any Person on behalf of which such a Participant holds an interest in such Book-Entry Certificates. Without limiting the immediately preceding sentence, the District, the Corporation and the Trustee shall have no responsibility or obligation with respect to (i)the accuracy of the records of the Depository, the Nominee or any Participant with respect to any ownership interest in Book-Entry Certificates, (ii)the delivery to any Participant or any other Person, other than an Owner as shown in the registration books maintained by the Trustee, of any notice with respect to Book-Entry Certificates, including any notice of prepayment, (iii)the selection by the Depository and its Participants of the beneficial interests in Book-Entry Certificates to be prepaid in the event Revenue Obligations are prepaid in part, (iv) the payment to any Participant or any other Person, other than an Owner as shown in the registration books maintained by the Trustee, of any amount with respect to principal, premium, if any, or interest evidenced by Book-Entry Certificates, or(v)any consent given or other action taken by the Depository as Owner. (c) The District, the Corporation and the Trustee may treat and consider the Person in whose name each Book-Entry Certificate is registered in the registration books maintained by the Trustee as the absolute Owner of such Book-Entry Certificate for the purpose of payment of principal, prepayment premium, if any, and interest evidenced by such Revenue Obligation, for the purpose of selecting any Revenue Obligations, or portions thereof, to be prepaid, for the purpose of giving notices of prepayment and other matters with respect to such Revenue Obligation, for the purpose of registering transfers with respect to such Revenue Obligation, for the purpose of obtaining any consent or other action to be taken by Owners and for all other purposes whatsoever, and the District, the Corporation and the Trustee shall not be affected by any notice to the contrary. (d) Reserved. (e) The Trustee shall pay all principal, premium, if any, and interest evidenced by the Revenue Obligations to the respective Owner, as shown in the registration books maintained by the Trustee, or his respective attorney duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the obligations with respect to payment of principal, premium, if any, and interest evidenced by the Revenue Obligations to the extent of the sum or sums so paid. No Person other than an Owner, as shown in the registration books maintained by the Trustee, shall receive a Revenue Obligation evidencing principal, premium, if any, and interest evidenced by the Revenue Obligations. Upon delivery by the Depository to the Owners, the Trustee and the District of written notice to the effect that the Depository has determined to substitute a new nominee in place of the Nominee, and subject to the provisions herein with respect to Record Dates, the word Nominee in this Trust Agreement shall refer to such nominee of the Depository. w622376.4 13 (f) To qualify the Book-Entry Certificates for the Depository's book-entry system, the District shall execute and deliver to the Depository a Letter of Representations. The execution and delivery of a Letter of Representations shall not in any way impose upon the Corporation,the District or the Trustee any obligation whatsoever with respect to Persons having interests in such Book-Entry Certificates other than the Owners, as shown on the registration books maintained by the Trustee. Such Letter of Representations may provide the time, form, content and manner of transmission, of notices to the Depository. In addition to the execution and delivery of a Letter of Representations by the District, the District, the Corporation and the Trustee shall take such other actions, not inconsistent with this Trust Agreement, as are reasonably necessary to qualify Book-Entry Certificates for the Depository's book-entry program. (g) If the District determines that it is in the best interests of the Beneficial Owners that they be able to obtain certificated Revenue Obligations and that such Revenue Obligations should therefore be made available and notifies the Depository and the Trustee of such determination, the Depository will notify the Participants of the availability through the Depository of certificated Revenue Obligations. In such event, the Trustee shall transfer and exchange certificated Revenue Obligations as requested by the Depository and any other Owners in appropriate amounts. In the event (i)the Depository determines not to continue to act as securities depository for Book-Entry Certificates, or(ii)the Depository shall no longer so act and gives notice to the Trustee of such determination, then the District shall discontinue the Book- Entry system with the Depository. If the District determines to replace the Depository with another qualified securities depository, the District shall prepare or direct the preparation of a new single, separate, fully registered Revenue Obligation for each stated Principal Payment Date of such Book-Entry Certificates, registered in the name of such successor or substitute qualified securities depository or its nominee. If the District fails to identify another qualified securities depository to replace the Depository, then the Revenue Obligations shall no longer be restricted to being registered in the registration books maintained by the Trustee in the name of the Nominee, but shall be registered in whatever name or names the Owners transferring or exchanging such Revenue Obligations shall designate, in accordance with the provisions of Sections 2.06 and 2.09 hereof. Whenever the Depository requests the District to do so, the District will cooperate with the Depository in taking appropriate action after reasonable notice (i)to make available one or more separate certificates evidencing the Book-Entry Certificates to any Participant having Book-Entry Certificates credited to its account with the Depository, and (ii)to arrange for another securities depository to maintain custody of certificates evidencing the Book-Entry Certificates. (h) Notwithstanding any other provision of this Trust Agreement to the contrary, if DTC is the sole Owner of the Revenue Obligations, so long as any Book-Entry Certificate is registered in the name of the Nominee, all payments of principal, premium, if any, and interest evidenced by such Revenue Obligation and all notices with respect to such Revenue Obligation shall be made and given, respectively, as provided in the Letter of Representations or as otherwise instructed by the Depository. (i) In connection with any notice or other communication to be provided to Owners pursuant to the Trust Agreement by the District, the Corporation or the Trustee, with respect to any consent or other action to be taken by Owners, the Trustee shall establish a record date for 40622376.4 14 such consent or other action and give the Depository notice of such record date not less than 15 calendar days in advance of such record date to the extent possible. Notice to the Depository shall be given only when DTC is the sole Owner of the Revenue Obligations. ARTICLE III PROCEEDS OF REVENUE OBLIGATIONS Section 3.01. Delivery of Revenue Obligations. The Trustee is hereby authorized to execute the Revenue Obligations and deliver the Revenue Obligations to the original purchaser thereof upon receipt of a Written Request of the District and upon receipt of the net proceeds of sale thereof. Section 3.02. Deposit of Proceeds of Revenue Obligations. The net proceeds received by the Trustee from the sale of the Revenue Obligations in the amount of $ (which amount includes the security deposit for the Revenue Obligations in the amount of$ on deposit with the Trustee) shall be deposited or transferred by the Trustee as follows: (a) the Trustee shall deposit in the Costs of Issuance Fund the amount of$ , and (b) the Trustee shall transfer to the Escrow Agent for deposit in the Escrow Fund established under the Escrow Agreement the amount of$ from the proceeds of the Revenue Obligations, to apply, together with other available monies released from the Prior Trust Agreement, to the payment and prepayment of a portion of the installment payments related to the Prior Certificates as provided in the Escrow Agreement. Section 3.03. Costs of Issuance Fund. The Trustee shall establish and maintain a separate special fund to be held by the Trustee (mown as the Costs of Issuance Fund. There shall be deposited in the Costs of Issuance Fund on the Closing Date the amount required to be deposited therein pursuant to Section 3.02 hereof. The Trustee shall disburse moneys from the Costs of Issuance Fund on such dates and in such amounts as we necessary to pay Costs of Issuance, in each case upon the Written Request of the District staring the Person to whom payment is to be made, the amount to be paid, the purpose for which the obligation was incurred and that such payment is a proper charge against the Costs of Issuance Fund. On the date that is six months after the Closing Date, the Trustee shall transfer any amounts then remaining in the Costs of Issuance Fund to the Installment Payment Fund. Upon such transfer, the Costs of Issuance Fund shall be closed. ARTICLE IV PREPAYMENT OF REVENUE OBLIGATIONS Section 4.01. Optional Prepayment. The Revenue Obligations with stated Principal Payment Dates prior to February 1, 2025 are not subject to optional prepayment prior to their stated Principal Payment Dates. The Revenue Obligations with stated Principal Payment Dates on or after February 1, 2025 are subject to optional prepayment prior to their stated Principal Payment Dates, on any date on or after February 1, 2024, in whole or in part, in Authorized Q622376.4 15 Denominations, from and to the extent of prepaid Installment Payments paid pursuant to Section 4.01 of the Installment Purchase Agreement or from any other source of available funds, any such prepayment to be at a price equal to the principal evidenced by the Revenue Obligations to be prepaid, plus accrued interest evidenced thereby to the date fixed for prepayment,without premium. Section 4.02. Reserved. Section 4.03. Selection of Revenue Oblieations for Optional Prepayment. Whenever less than all the Outstanding Revenue Obligations are to be prepaid on any one date pursuant to Section 4.01 hereof, with respect to optional prepayment of Revenue Obligations, the Trustee shall select the Revenue Obligations to be prepaid among Revenue Obligations with different Principal Payment Dates as directed in a Written Request of the District. Whenever less than all the Outstanding Revenue Obligations with the same stated Principal Payment Date are to be prepaid on any one date pursuant to Section 4.01 hereof, the Trustee shall select the Revenue Obligations with such Principal Payment Date to be prepaid as directed in a Written Request of the District, or at the discretion of the District by lot in any manner that the Trustee deems fair and appropriate, which decision shall be final and binding upon the District and the Owners. The Trustee shall promptly notify the District in writing of the numbers of the Revenue Obligations so selected for prepayment on such date. For purposes of such selection, any Revenue Obligation may be prepaid in part in Authorized Denominations. Section 4.04. Notice of Prepayment. When prepayment of Revenue Obligations is authorized pursuant to Section 4.01, the Trusteeshall give notice, at the expense of the District, of the prepayment of the Revenue Obligations. The notice of prepayment shall specify (a) the Revenue Obligations or designated portions thereof(in the case of prepayment of the Revenue Obligations in part but not in whole) which are to be prepaid, (b)the date of prepayment, (c) the place or places where the prepayment will be made, including the name and address of any paying agent, (d)the prepayment price, (e)the CUSIP numbers assigned to the Revenue Obligations to be prepaid, (f) the numbers of the Revenue Obligations to be prepaid in whole or in part and, in the case of any Revenue Obligation to be prepaid in part only, the principal evidenced by such Revenue Obligation to be prepaid, and (g) the interest rate and stated Principal Payment Date of each Revenue Obligation to be prepaid in whole or in part. Such notice of prepayment shall further state that on the specified date there shall become due and payable upon each Revenue Obligation or portion thereof being prepaid the prepayment price and that from and after such date interest evidenced thereby shall cease to accrue and be payable. With respect to any notice of prepayment of Revenue Obligations pursuant to Section 4.01 hereof, unless at the time such notice is given the Revenue Obligations to be prepaid shall be deemed to have been paid within the meaning of Section 10.01 hereof, such notice shall state that such prepayment is conditional upon receipt by the Trustee, on or prior to the date fixed for such prepayment, of moneys sufficient to pay for the prepayment price of the Revenue Obligations to be prepaid, and that if such moneys shall not have been so received said notice shall be of no force and effect and the District shall not be required to prepay such Revenue Obligations. If a notice of prepayment of Revenue Obligations contains such a condition and such moneys are not so received, the prepayment of Revenue Obligations as described in the conditional notice of prepayment shall not be made and the Trustee shall, within a reasonable time after the date on which such prepayment was to occur, give notice to the persons and in the manner in which the 40622376.4 16 notice of prepayment was given,that such moneys were not so received and that there shall be no prepayment of Revenue Obligations pursuant to such notice of prepayment. The Trustee shall, at least 20 but not more than 60 days prior to any prepayment date, give notice of prepayment to the respective Owners of Revenue Obligations designated for prepayment by first-class mail, postage prepaid, at their addresses appearing on the registration books maintained by the Trustee as of the close of business on the day before such notice of prepayment is given. The actual receipt by the Owner of any notice of such prepayment shall not be a condition precedent to prepayment, and neither failure to receive such notice nor any defect therein shall affect the validity of the proceedings for the prepayment of such Revenue Obligations or the cessation of interest evidenced thereby on the date fixed for prepayment. A certificate by the Trustee that notice of prepayment has been given to Owners as herein provided shall be conclusive as against all parties, and no Owner whose Revenue Obligation is called for prepayment may object thereto or object to the cessation of interest evidenced thereby on the fixed prepayment date by any claim or showing that said Owner failed to actually receive such notice of prepayment. Section 4.05. Partial Prepayment of Revenue Obligations. Upon surrender of any Revenue Obligation prepaid in part only, the Trustee shall execute and deliver to the Owner thereof a new Revenue Obligation or Revenue Obligations evidencing the unprepaid principal with respect to the Revenue Obligation surrendered. Section 4.06. Effect of Prepayment. If notice of prepayment has been duly given as aforesaid and moneys for the payment of the prepayment price of the Revenue Obligations to be prepaid are held by the Tmstee, then on the prepayment date designated in such notice, the Revenue Obligations so called for prepayment shall become payable at the prepayment price specified in such notice; and from and after the date so designated, interest evidenced by the Revenue Obligations so called for prepayment shall cease to accrue, such Revenue Obligations shall cease to be entitled to any benefit or security hereunder and the Owners of such Revenue Obligations shall have no rights in respect thereof except to receive payment of the prepayment price thereof The Trustee shall, upon surrender for payment of any of the Revenue Obligations to be prepaid, pay such Revenue Obligations at the prepayment price thereof, and such moneys shall be pledged to such payment. All Revenue Obligations prepaid pursuant to the provisions of this Article shall be canceled by the Trustee and shall not be redelivered. ARTICLE V ASSIGNMENT AND PLEDGE; FUNDS AND ACCOUNTS Section 5.01. Assignment and Pledge. The Corporation hereby transfers, conveys and assigns to the Trustee, for the benefit of the Owners, all of the Corporation's rights, title and interest in and to the Installment Purchase Agreement (excepting its rights to indemnification thereunder), including the right to receive Installment Payments, and the interest thereon, from the District and the right to exercise any remedies provided therein in the event of a default by Q6223/6.4 17 the District thereunder. The Trustee hereby accepts said transfer, conveyance and assignment, solely in its capacity as Trustee, for the benefit of the Owners, subject to the provisions of this Trust Agreement All Installment Payments, and the interest thereon, shall be paid directly by the District to the Trustee, and if received by the Corporation at any time shall be deposited by the Corporation with the Trustee immediately upon the receipt thereof. To secure the respective rights of the Owners to the payments required to be made thereto as provided herein, the Corporation and the District hereby irrevocably pledge to the Trustee, for the benefit of the Owners, all of their right, title and interest, if any, in and to all amounts on deposit from time to time in the funds and accounts established hereunder. This pledge shall constitute a first lien on the amounts on deposit in such funds and accounts. Section 5.02. Installment Payment Fund. (a)The Trustee shall establish and maintain the Installment Payment Fund until all required Installment Payments, and the interest thereon, are paid in full pursuant to the Installment Purchase Agreement and until the first date upon which the Revenue Obligations we no longer Outstanding. The Trustee shall deposit in the Installment Payment Fund all Installment Payments, and the interest thereon, paid by the District and received by the Trustee. The moneys in the Installment Payment Fund shall be held in trust by the Trustee for the benefit of the Owners and shall be used and disbursed only for the purposes and uses herein authorized. (b) The Trustee shall transfer the amounts on deposit in the Installment Payment Fund, at the times and in the manner hereinafter provided, to the following respective accounts within the Installment Payment Fund, each of which the Trustee hereby agrees to establish and maintain until all required Installment Payments, and the interest thereon, are paid in full pursuant to the Installment Purchase Agreement and until the first date upon which the Revenue Obligations are no longer Outstanding. The moneys in each of such accounts shall be held in trust by the Trustee for the benefit of the Owners and shall be used and disbursed only for the purposes and uses herein authorized. (i) Interest Account. The Trustee, on each Interest Payment Date, shall deposit in the Interest Account that amount of moneys representing the interest on the Installment Payments coming due on such Interest Payment Date. Moneys in the Interest Account shall be used by the Trustee for the purpose of paying the interest evidenced by the Revenue Obligations when due and payable. (ii) Principal Account. The Trustee, on each Principal Payment Date, shall deposit in the Principal Account that amount of moneys representing the Installment Payments coming due on such Principal Payment Date. Moneys in the Principal Account shall be used by the Trustee for the purpose of paying the principal evidenced by the Revenue Obligations when due and payable. (iii) Prepayment Account. The Trustee, on the prepayment date specified in the Written Request of the District filed with the Trustee at the time that any prepaid Installment Payment is paid to the Trustee pursuant to the Installment Purchase Agreement, shall deposit in the Prepayment Account that amount of moneys representing such prepaid Installment Payment, the accrued interest thereon to the prepayment date Q622376.4 18 and any premium payable with respect thereto. The Trustee shall deposit in the Prepayment Account any other amounts made available by the District that the District, pursuant to a Written Request of the District, instructs the Trustee to apply to the prepayment of Revenue Obligations pursuant to Section 4.01 hereof. Moneys in the Prepayment Account shall be used by the Trustee for the purpose of paying the interest, premium, if any, and principal evidenced by the Revenue Obligations to be prepaid pursuant to Section 4.01 hereof. Section 5.03. Reserved. Section 5.04. Investment of Moneys. Except as otherwise provided herein, all moneys in any of the funds or accounts established pursuant to this Trust Agreement shall be invested by the Trustee solely in Permitted Investments, as directed by the District pursuant to a Written Request of the District at least two (2) Business Days prior to the making of such investment. Moneys in all funds and accounts held by the Trustee shall be invested in Permitted Investments maturing not later than the date on which it is estimated that such moneys will be required for the purposes specified in this Trust Agreement. Absent timely written direction from the District, the Trustee shall invest any funds held by it in Permitted Investments described in clause (10) of the definition thereof. Permitted Investments that are registerable securities shall be registered in the name of the Trustee. All interest, profits and other income received from the investment of moneys in any fund or account established pursuant to this Trust Agreement shall be retained therein. Permitted Investments acquired as an investment of moneys in any fund or account established under this Trust Agreement shall be credited to such fund or account. For the purpose of determining the amount in any fund, all Permitted Investments credited to such fund shall be valued by the Trustee at the market value thereof, such valuation to be performed not less frequently than semiannually on or before each January 15 and July 15. The Trustee or an affiliate may act as principal or agent in the making or disposing of any investment. The Trustee shall sell or present for redemption any Permitted Investment whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or account to which such Permitted Investment is credited, and the Trustee shall not be liable or responsible for any loss resulting from any investment made or sold pursuant to this Section. For purposes of investment, the Trustee may commingle moneys in any of the funds and accounts established hereunder. The Trustee is hereby authorized, in making or disposing of any investment permitted by this Section, to deal with itself (in its individual capacity) or with any one or more of its affiliates, whether or not such affiliate is acting as an agent of the Trustee or for any third Person or dealing as principal for its own account Section 5.05. Brokerage Confirmations. The Trustee shall furnish the District periodic cash transaction statements which include detail for all investment transactions effected by the Trustee or brokers selected by the District. Upon the District's election and request, the Trustee shall provide the District online access to such statements. The District waives the right to receive brokerage confirmations of securities transactions effected by the Trustee as they Q6223/6.4 19 occur,to the extent permitted by law. The District further understands that trade confirmations for securities transactions effected by the Trustee will be available upon request and at no additional cost and other trade confirmations may be obtained from the applicable broker ARTICLE VI COVENANTS Section 6.01. Compliance with Trust Agreement. The Trustee will not execute or deliver any Revenue Obligations in any manner other than in accordance with the provisions hereof, and the Corporation and the District will not suffer or permit any default by them to occur hereunder, but will faithfully comply with, keep, observe and perform all the agreements, conditions, covenants and terms hereof required to be complied with, kept, observed and performed by them. Section 6.02. Compliance with Installment Purchase Agreement. The Corporation and the District will faithfully comply with, keep, observe and perform all the agreements, conditions, covenants and terms contained in the Installment Purchase Agreement required to be complied with, kept, observed and performed by them and, together with the Trustee, will enforce the Installment Purchase Agreement against the other party thereto in accordance with its terms. Section 6.03. Compliance with Master Agreement. The Corporation and the District will faithfully comply with, keep, observe and perform all the agreements, conditions, covenants and terns contained in the Master Agreement required to be complied with, kept, observed and performed by them and,together with the Trustee,will enforce the Master Agreement against the other party thereto in accordance with its terms. Section 6.04. Observance of Laws and Regulations. The Corporation and the District will faithfully comply with, keep, observe and perform all valid and lawful obligations or regulations now or hereafter imposed on them by contract, or prescribed by any law of the United States of America or of the State, or by any officer, board or commission having jurisdiction or control, as a condition of the continued enjoyment of each and every franchise, right or privilege now owned or hereafter acquired by them, including their right to exist and cart'on their respective businesses,to the end that such franchises, rights and privileges shall be maintained and preserved and shall not become abandoned, forfeited or in any manner impaired. Section 6.05. Other Liens. None of the Trustee, the Corporation or the District shall create or suffer to be created any pledge of or lien on the amounts on deposit in any of the funds or accounts created hereunder, other than the pledge and lien hereof. Section 6.06. Prosecution and Defense of Suits. The District will defend against every action, suit or other proceeding at any time brought against the Trustee or any Owner upon any claim arising out of the receipt, deposit or disbursement of any of the Installment Payments, or the interest thereon, or involving the rights of the Trustee or any Owner hereunder; provided, however, that the Trustee or any Owner at its or his election may appear in and defend any such action, suit or other proceeding. Q6223/6.4 20 Section 6.07. Accounting Records and Statements. The Trustee will keep proper accounting records in which complete and correct entries shall be made of all transactions made by the Trustee relating to the receipt, deposit and disbursement of the Installment Payments, and the interest thereon, and such accounting records shall be available for inspection by the Corporation and the District at reasonable hours and under reasonable conditions. The Trustee shall not be obligated to provide an accounting for any fund or account that (a) has a balance of $0.00 and (b)has not had any activity since the last reporting date. The Trustee will, upon written request, make copies of the foregoing available to any Owner (at the expense of such Owner). Section 6.08. Tax Covenants. (a) Special Definitions. When used in this Section, the following terms shall have the following meanings: "Bond Counsel" means Fulbright& Jaworski LLP or any other counsel of recognized national standing in the field of law relating to municipal bonds, appointed and paid by the District. "Computation Date" has the meaning set forth in section 1.148-1(b) of the Tax Regulations. "Computation Period' means, initially, that period commencing on the date of the execution and delivery of the Revenue Obligations and concluding on the initial Computation Date and,thereafter, each period commencing on the day next following a Computation Date and concluding on the immediately succeeding Computation Date. "Gross Proceeds" of any issue of governmental obligations means any proceeds as defined in section 1.148-1(b) of the Tax Regulations (referring to sales, investment and transferred proceeds) of that issue, and any replacement proceeds as defined in section 1.148- 1(c)of the Tax Regulations, of that issue. "Investment"has the meaning set forth in section 1.148-1(b)of the Tax Regulations. "Nonpurpose Investment"means any investment property, as defined in section 148(b) of the Code, in which Cross Proceeds of an issue are invested and that is not acquired to carry out the governmental purposes of that issue. "Opinion of Bond CounseP' means a written opinion of Fulbright&Jaworski LLP or any other counsel of recognized national standing in the field of law relating to municipal bonds, appointed and paid by the District. "Prior Issue" shall refer to the Prior Certificates (but in the case of any of the foregoing executed and delivered for multiple purposes, only to the portion thereof allocable pursuant to section 1.148-9(b)(4) of the Tax Regulations to other than refunding purposes). Q622376.4 21 "Proceeds," with respect to an issue of governmental obligations, has the meaning set forth in has the meaning set forth in section 1.148-1(b) of the Tax Regulations (referring to sales, investment and transferred proceeds,but not replacement proceeds). "Rebate Amount"has the meaning set forth in section 1.148-1(b) of the Tax Regulations. "Tar Regulations" means the United States Treasury Regulations promulgated pursuant to sections 103 and 141 through 150 of the Code. "Yield" of (i) any Investment has the meaning set forth in section 1.148-5 of the Tax Regulations and (ii) in respect of the Revenue Obligations has the meaning set forth in section 1.148-4 of the Tax Regulations. (a) Exclusion of Interest from Gross Income. The District will take all actions necessary to establish and maintain the exclusion pursuant to section 103(a) of the Code of interest on the Revenue Obligations from the gross income of the owners thereof for federal income tax purposes, and will not use, permit the use of, or omit to use Gross Proceeds of the Revenue Obligations or any other amounts (or any property the acquisition, construction or improvement of which is to be refinanced directly or indirectly with Gross Proceeds) in a manner that if made or omitted, respectively, would cause the interest on any Revenue Obligation to fail to be excluded pursuant to section 103(a) of the Code from the gross income of the owners thereof for federal income tax purposes. Without limiting the generality of the foregoing, unless and until the Trustee receives a written Opinion of Bond Counsel to the effect that failure to comply with such covenant will not adversely affect the exclusion pursuant to section 103(a) of the Code of interest on any Revenue Obligation from the gross income of the owner thereof, the District shall comply with this covenant and each of the specific covenants in this Section. (b) No Private Use or Private Payments. Except as would not cause any Revenue Obligation to become a "private activity bond" within the meaning of section 141 of the Code and the Tax Regulations and rulings thereunder, the District shall at all times prior to the payment and cancellation of the last of the Revenue Obligations to be retired: (i) exclusively own, operate and possess all property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with Gross Proceeds of the Revenue Obligations and not use or permit the use of such Gross Proceeds (including all contractual arrangements with terms different than those applicable to the general public) or any property acquired, constructed or improved with such Gross Proceeds or the Gross Proceeds of the Prior Issue in any activity carried on by any person or entity (including the United States or any agency, department and instrumentality thereof) other than a state or local government, unless such use is solely as a member of the general public; and (ii) does not directly or indirectly impose or accept any charge or other payment by any person or entity who is treated as using Gross Proceeds of the Revenue Obligations or of the Prior Issue, or any property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with such Gross Proceeds, other than taxes of general application within the jurisdiction of the Q622376.4 22 District or interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes. (c) No Private Loan. Except as would not cause any Revenue Obligation to become a"private activity bond"within the meaning of section 141 of the Code and the Tax Regulations and rulings thereunder, the District shall not use of Gross Proceeds of the Revenue Obligations to make or finance loans to any person or entity other than a state or local government. For purposes of the foregoing covenant, such Gross Proceeds are considered to be `loaned" to a person or entity if. (i) property acquired, constructed or improved with such Gross Proceeds is sold or leased to such person or entity in a transaction that creates a debt for federal income tax purposes; (ii) capacity in or service from such property is committed to such person or entity under a take-or-pay, output or similar contract or arrangement; or (iii) indirect benefits of such Gross Proceeds, or burdens and benefits of ownership of any property acquired, constructed or improved with such Gross Proceeds, are otherwise transferred in a transaction that is the economic equivalent of a loan. For purposes of this covenant, the District will treat any transaction constituting a loan of Gross Proceeds of the Prior Issue as resulting in a loan of Gross Proceeds of the Revenue Obligations. (d) Not to Invest at Higher Yield. Except as would not cause any Revenue Obligation to become an"arbitrage bond"within the meaning of section 148 of the Code and the Tax Regulations and rulings thereunder, the District will not, at any time prior to the final cancellation of the last Revenue Obligation to be retired, directly or indirectly invest Gross Proceeds of the Revenue Obligations in any Investment, if as a result of that investment the yield of any Investment acquired with Gross Proceeds of the Revenue Obligations, whether then held or previously disposed of, would materially exceed the yield of the Revenue Obligations within the meaning of said section 148. (e) Not Federally Guaranteed. Except to the extent such action or failure to act would not pursuant to section 149(b) of the Code and the Tax Regulations and rulings thereunder, adversely affect the exclusion pursuant to section 103(a) of interest on the Revenue Obligations from the gross income of the owners thereof for federal income tax purposes, the District will not take or omit to take any action that would cause any Revenue Obligation to be "federally guaranteed" within the meaning of section 149(b) of the Code and the Tax Regulations and rulings thereunder. (f) Information Report. The District will timely file any information necessary to the exclusion pursuant to section 103(a) of the Code of interest on the Revenue Obligations required by section 149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other form and in such place as the Secretary of the Treasury may prescribe. (g) Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of the Code and the Tax Regulations and rulings thereunder, the District will not at any time prior to the final cancellation of the last of the Revenue Obligations to be retired, enter into any transaction that reduces the amount required to be paid to the United States pursuant to section 148(f) of the Code because such transaction results in a smaller profit or a larger loss than would have resulted if the transaction had been at arm's length and had the yield on the Revenue Obligations not been relevant to either party. w622376.4 23 (h) Revenue Obligations Satisfy Section 149(g). The District represents that neither the Prior Issue nor the Revenue Obligations are or will become "hedge bonds" within the meaning of section 149(g) of the Code. Without limitation of the foregoing, with respect to the Prior Issue, (i)(A) on the date of issuance of that issue the District reasonably expected (based upon its own knowledge and upon representations made by other governmental persons upon the issuance of those obligations) that within the three-year period commencing on such date no less than 85% of the spendable proceeds of that issue would be expended for the governmental purposes thereof and (B) the District believes and represents that at no time has more than 50% of the proceeds of that issue been invested in Nonpurpose Investments having a substantially guaranteed yield for a period of four years or more, and with respect to the application of Proceeds of the Revenue Obligations other than for refunding purposes, (ii)(A) the District will not deliver the Revenue Obligations unless on the date of the issuance of the Revenue Obligations it reasonably expects that within the three-year period commencing on such date of issuance at least 85% of such spendable proceeds of the Revenue Obligations will be expended for the governmental purpose of the Revenue Obligations and(B) at no time will more than 50% of such spendable proceeds of the Revenue Obligations be invested in Nonpurpose Investments having a substantially guaranteed yield for a period of four years or more. (i) Elections. The District hereby directs and authorizes any Authorized Representative to make elections permitted or required pursuant to the provisions of the Code or the Tax Regulations, as such Authorized Representative (after consultation with Bond Counsel) deems necessary or appropriate in connection with the Revenue Obligations, in the Tax Certificate(as defined below)or similar or other appropriate certificate, form or document. 0) Tax Certificate. The District agrees to execute and deliver in connection with the execution and delivery of the Revenue Obligations a Tax Certificate as to Arbitrage and the Provisions of Sections 141-150 of the Internal Revenue Code of 1986, or similar document containing additional representations and covenants pertaining to the exclusion of interest with respect to the Revenue Obligations from the gross income of the owners thereof for federal income tax purposes (the "Tax Certificate"), which representations and covenants are incorporated as though expressly set forth herein. Section 6.09. Continuine Disclosure. The District will comply with and carry out all of the provisions of the Continuing Disclosure Agreement applicable to it. Notwithstanding any other provision of this Trust Agreement, failure of the District to comply with the Continuing Disclosure Agreement shall not be considered an Event of Default; provided, however, the Trustee at the request of any Participating Underwriter or the Owners of at least 25% aggregate principal amount of Outstanding Revenue Obligations and upon being indemnified to its reasonable satisfaction, shall, or any Owner or Beneficial Owner of Revenue Obligations may take such actions as may be necessary and appropriate to compel performance, including seeking mandate or specific performance by court order. The Trustee is authorized and directed to execute the acceptance and acknowledgement of the Continuing Disclosure Agreement. Section 6.10. Further Assurances. The District will promptly execute and deliver or cause to be executed and delivered all such other and further assurances, documents or instruments and promptly do or cause to be done all such other and further things as may be Q622376.4 24 necessary or reasonably required in order to carry out the purposes and intentions of this Trust Agreement and for preserving and protecting the rights and interests of the Owners. ARTICLE VII DEFAULT AND LIMITATIONS OF LIABILITY Section 7.01. Action upon Event of Default. An Event of Default under the Installment Purchase Agreement shall constitute an Event of Default hereunder and an Event of Default under the Master Agreement shall constitute an Event of Default hereunder. The Trustee may give notice, as assignee of the Corporation, of an Event of Default under the Installment Purchase Agreement to the District, and shall do so if directed to do so by the Owners of not less than 5%of the aggregate principal evidenced by Revenue Obligations then Outstanding. In each and every case during the continuance of an Event of Default, the Trustee may and, at the direction of the Owners of not less than a majority of the aggregate principal evidenced by Revenue Obligations then Outstanding, shall, upon notice in writing to the District and the Corporation (a)exercise any of the remedies granted to the Corporation under the Installment Purchase Agreement, (b) exercise any of the remedies granted to the Trustee under the Master Agreement, and (c)take whatever action at law or in equity may appear necessary or desirable to enforce its rights pursuant to this Trust Agreement, the Installment Purchase Agreement or the Master Agreement or to protect and enforce any of the rights vested in the Trustee or the Owners by this Trust Agreement, the Revenue Obligations, the Installment Purchase Agreement or the Master Agreement, either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement or for the enforcement of any other legal or equitable right, including any one or more of the remedies set forth in Section 7.02 hereof. Section 7.02. Other Remedies of the Trustee. Subject to the provisions of Section 7.01 hereof, the Trustee shall have the right: (a) by mandamus or other action or proceeding or suit at law or in equity to enforce its rights against the Corporation or the District or any member, director, officer or employee thereof, and to compel the Corporation or the District or any such member, director, officer or employee to perform or carry out its or his or her duties under law and the agreements and covenants required to be performed by it or him or her contained herein; (b) by suit in equity to enjoin any acts or things which are unlawful or violate the rights of the Trustee; or (c) by suit in equity upon the happening of any Event of Default hereunder to require the Corporation and the District to account as the trustee of an express trust. Section 7.03. Non-Waiver. A waiver of any default or breach of duty or contract by the Trustee or the Owners shall not affect any subsequent default or breach of duty or contract or impair any rights or remedies on any such subsequent default or breach of duty or contract. No delay or omission by the Trustee or the Owners to exercise any right or remedy accruing upon any default or breach of duty or contract shall impair any such right or remedy or shall be construed to be a waiver of any such default or breach of duty or contract or an acquiescence Q622376.4 25 therein, and every right or remedy conferred upon the Trustee or the Owners by law or by this Article may be enforced and exercised from time to time and as often as the Trustee shall deem expedient. If any action, proceeding or suit to enforce any right or to exercise any remedy is abandoned or determined adversely to the Trustee or any Owner, then subject to any adverse determination,the Trustee, such Owner,the Corporation and the District shall be restored to their former positions, rights and remedies as if such action, proceeding or suit had not been brought or taken. Section 7.04. Remedies Not Exclusive. Subject to the provisions of Section 7.01 hereof, no remedy herein conferred upon or reserved to the Trustee is intended to be exclusive of any other remedy, and each such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing in law or in equity or by statute or otherwise and may be exercised without exhausting and without regard to any other remedy conferred by any law. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent or subsequent assertion or employment of any other appropriate right or remedy. Section 7.05. Auolication of Amounts After Default. All damages or other payments received by the Trustee for the enforcement of any rights and powers of the Trustee under this Article shall be deposited into the Installment Payment Fund and as soon as practicable and thereafter applied: (a) to the payment of all amounts due the Trustee under Section 8.03 hereof; (b) unless the unpaid Installment Payments, and the interest thereon, shall have become, and shall remain, immediately due and payable pursuant to the Master Agreement: (i) to the payment of all amounts then due for interest evidenced by the Revenue Obligations, in respect of which, or for the benefit of which, money has been collected (other than Revenue Obligations which have become payable prior to such Event of Default and money for the payment of which is held by the Trustee), ratably without preference or priority of any kind, according to the amounts of interest evidenced by such Revenue Obligations due and payable; and (ii) to the payment of all amounts then due for principal evidenced by the Revenue Obligations, in respect of which, or for the benefit of which, money has been collected (other than Revenue Obligations which have become payable prior to such Event of Default and money for the payment of which is held by the Trustee), ratably without preference or priority of any kind, according to the amounts of principal evidenced by such Revenue Obligations due and payable. (c) if the unpaid Installment Payments, and the interest thereon, shall have become, and shall remain, immediately due and payable pursuant to the Master Agreement, to the payment of all amounts then due for principal and interest evidenced by the Revenue Obligations and, if the amount available therefor shall not be sufficient to pay in full the whole amount so due and unpaid, then to the payment thereof ratably, without preference or priority of principal 40622376.4 26 over interest, or of interest over principal, or of any installment of interest over any other installment of interest, or of any Revenue Obligation over any other Revenue Obligation, to the persons entitled thereto without any discrimination or preference. Section 7.06. Trustee May Enforce Claims Without Possession of Revenue Obligations. All rights of action and claims under this Trust Agreement or the Revenue Obligations may be prosecuted and enforced by the Trustee without the possession of any of the Revenue Obligations or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Owners of the Revenue Obligations in respect of which such judgment has been recovered. Section 7.07. Limitation on Suits. No Owner shall have any right to institute any proceeding,judicial or otherwise,with respect to this Trust Agreement, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (a) such Owner shall have previously given written notice to the Trustee of a continuing Event of Default hereunder, (b)the Owners of not less than a majority of the aggregate principal evidenced by Revenue Obligations then Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder, (c) such Owner or Owners shall have afforded to the Trustee indemnity reasonably satisfactory to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request, (d)the Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall have failed to institute any such proceedings, and (e)no direction inconsistent with such written request shall have been given to the Trustee during such 60-day period by the Owners of a majority of the aggregate principal evidenced by Revenue Obligations then Outstanding; it being understood and intended that no one or more Owners of Revenue Obligations shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Trust Agreement to affect, disturb or prejudice the rights of any other Owner of Revenue Obligations, or to obtain or seek to obtain priority or preference over any other Owner or to enforce any right under this Trust Agreement, except in the manner herein provided and for the equal and ratable benefit of all the Owners of Revenue Obligations. Section 7.08. No Liability by the Corporation to the Owners. Except as expressly provided herein, the Corporation shall not have any obligation or liability to the Owners with respect to the payment when due of the Installment Payments, and the interest thereon, by the District, or with respect to the performance by the District of the other agreements and covenants required to be performed by it contained in the Installment Purchase Agreement, the Master Agreement or herein, or with respect to the performance by the Trustee of any right or obligation required to be performed by it contained herein. Section 7.09. No Liability by the District to the Owners. Except for the payment when due of the Installment Payments, and the interest thereon, and the performance of the other agreements and covenants required to be performed by it contained in the Installment Purchase Agreement, the Master Agreement or herein, the District shall not have any obligation or liability to the Owners with respect to this Trust Agreement or the preparation, execution, delivery or Q622376.4 27 transfer of the Revenue Obligations or the disbursement of the Installment Payments, and the interest thereon, by the Trustee to the Owners, or with respect to the performance by the Trustee of any right or obligation required to be performed by it contained herein. Section 7.10. No Liability of the Trustee to the Owners. Except as expressly provided herein, the Trustee shall not have any obligation or liability to the Owners with respect to the payment when due of the Installment Payments, and the interest thereon, by the District, or with respect to the performance by the Corporation or the District of the other agreements and covenants required to be performed by them, respectively contained in the Installment Purchase Agreement or herein. ARTICLE VIII THE TRUSTEE Section 8.01. Employment of the Trustee: Duties. The Corporation and the District hereby appoint and employ the Trustee to receive, deposit and disburse the Installment Payments, and the interest thereon, to prepare, execute, deliver and transfer the Revenue Obligations and to perform the other functions contained herein, all in the manner provided herein and subject to the conditions and terms hereof. By executing and delivering this Trust Agreement, the Trustee accepts the appointment and employment hereinabove referred to and accepts the rights and obligations of the Trustee provided herein, subject to the conditions and terns hereof. Other than when an Event of Default hereunder has occurred and is continuing,the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Trust Agreement, and no implied covenants or obligations shall be read into this Trust Agreement against the Trustee. In case an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Trust Agreement, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs. Section 8.02. Removal and Resismatlun of the Trustee. The Corporation and the District may, by an instrument in writing, remove the Trustee inifially a party hereto and any successor thereto unless an Event of Default shall have occurred and then be continuing, and shall remove the Trustee initially a party hereto and any successor thereto if at any time (a)requested to do so by an instrument or concurrent instruments in writing signed by the Owners of a majority of the aggregate principal evidenced by the Revenue Obligations at the time Outstanding (or their attorneys duly authorized in writing), or (b)the Trustee shall cease to be eligible in accordance with the following sentence,and shall appoint a successor Trustee. The Trustee shall be a bank having trust powers or a trust company in good standing in or incorporated under the laws of the United States or any state thereof, having (or if such bank or trust company is a member of a bank holding company system, its parent bank holding company shall have) a combined capital and surplus of at least $75,000,000, and be subject to supervision or examination by federal or state banking authorities. If such bank or trust company publishes a report of condifion at least annually, pursuant to law or to the requirements of any supervising or examining authority above refered to, then for the purposes of this Section the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. Q622376.4 28 The Trustee may at any time resign by giving written notice of such resignation to the Corporation and the District and by giving notice, by first class mail, postage prepaid, of such resignation to the Owners at their addresses appearing on the registration books maintained by the Trustee. Upon receiving such notice of resignation, the Corporation and the District shall promptly appoint a successor Trustee by an instrument in writing; provided, however, that in the event the District and the Corporation do not appoint a successor Trustee within 30 days following receipt of such notice of resignation, the resigning Trustee may, at the expense of the District, petition the appropriate court having jurisdiction to appoint a successor Trustee. Any resignation or removal of a Trustee and appointment of a successor Trustee shall become effective only upon acceptance of appointment by the successor Trustee. Any successor Trustee appointed under this Trust Agreement shall signify its acceptance of such appointment by executing and delivering to the District and the Corporation and to its predecessor Trustee a written acceptance thereof, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named Trustee herein;but,nevertheless, at the written request of the District or of the successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Trustee all the right, title and interest of such predecessor Trustee in and to any property held by it under this Trust Agreement and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Any corporation, association or agency into which the Trustee may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer its corporate trust business and assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation or transfer to which it is a party, provided that such entity meets the combined capital and surplus requirements of this Section, ipso facto, shall be and become successor trustee under this Trust Agreement and vested with all the trusts, powers, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any instrument or any further act, deed or conveyance on the part of any of the parties hereto, anything herein to the contrary notwithstanding. Section 8.03. Compensation and Indemnification of the Trustee. The District shall from time to time, subject to any written agreement then in effect with the Trustee, pay the Trustee reasonable compensation for all its services rendered hereunder and reimburse the Trustee for all its reasonable advances and expenditures (which shall not include "overhead expenses" except as such expenses are included as a component of the Trustee's stated annual fees or disclosed transaction fees) hereunder, including but not limited to advances to and reasonable fees and reasonable expenses of accountants, agents, appraisers, consultants or other experts, and counsel not directly employed by the Trustee but an attorney or firm of attorneys retained by the Trustee, employed by it in the exercise and performance of its rights and obligations hereunder; provided, however, that the Trustee shall not have any lien for such compensation or reimbursement against any moneys held by it in any of the funds or accounts established hereunder. The Trustee may take whatever legal actions are lawfully available to it directly against the Corporation or the District. 40622376.4 29 Except as otherwise expressly provided herein, no provision of this Trust Agreement shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers hereunder. The District, to the extent permitted by law, agrees to indemnify and save the Trustee, its directors, officers, employees and agents harmless against any liabilities which it may incur in the exercise and performance of its powers and duties hereunder or any other document related to this Trust Agreement, including but not limited to costs and expenses incurred in defending against any claim or liability,which are not due to its negligence or willful misconduct. Section 8.04. Protection of the Trustee. The Trustee shall be protected and shall incur no liability in acting or proceeding in good faith upon any affidavit, bond, certificate, consent, notice, request, requisition, resolution, statement, waiver or other paper or document which it shall in good faith believe to be genuine and to have been adopted, executed or delivered by the proper party or pursuant to any of the provisions hereof, and the Trustee shall be under no duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument, but may accept and rely upon the same as conclusive evidence of the truth and accuracy of such statements. The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Trust Agreement at the request or direction of any of the Owners of the Revenue Obligations pursuant to this Trust Agreement, unless such Owners shall have offered to the Trustee security or indemnity, reasonably satisfactory to the Trustee, against the reasonable costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. The Trustee may consult with counsel, who may be counsel to the Corporation or the District, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect to any action taken or suffered by it hereunder in good faith in accordance therewith. The Trustee shall not be responsible for the sufficiency of the Revenue Obligations or the Installment Purchase Agreement, or of the assignment made to it hereunder, or for statements made in the preliminary or final official statement relating to the Revenue Obligations. The Trustee shall not be required to take notice or be deemed to have notice of any default or Event of Default hereunder, except failure of any of the payments to be made to the Trustee required to be made hereunder or under the Installment Purchase Agreement, unless the Trustee shall be specifically notified in writing of such default or Event of Default by the District, the Corporation or the Owners of not less than 5% of the aggregate principal evidenced by the Revenue Obligations then Outstanding. Whenever in the administration of its rights and obligations hereunder the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter(unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a Written Certificate of the District or a Written Certificate of the Corporation, and such certificate shall be full warrant to the Trustee for any action taken or suffered under the provisions hereof upon the faith thereof, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as it deems reasonable. w622376.4 30 The Trustee may buy, sell, own, hold and deal in any of the Revenue Obligations and may join in any action which any Owner may be entitled to take with like effect as if the Trustee were not a party hereto. The Trustee, either as principal or agent, may also engage in or be interested in any financial or other transaction with the Corporation or the District, and may act as agent, depository or trustee for any committee or body of Owners or of owners of obligations of the Corporation or the District as freely as if it were not the Trustee hereunder. The Trustee may, to the extent reasonably necessary, execute any of the trusts or powers hereof and perform any rights and obligations required of it hereunder by or through agents, attorneys or receivers, and shall be entitled to advice of counsel concerning all matters of trust and its rights and obligations hereunder, and the Trustee shall not be answerable for the negligence or misconduct of any such agent, attorney or receiver selected by it with reasonable care; provided, however, that in the event of any negligence or misconduct of any such attorney, agent or receiver, the Trustee shall diligently pursue all remedies of the Trustee against such agent, attorney or receiver. The Trustee shall not be liable for any error of judgment made by it in good faith unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts. The Trustee shall not be answerable for the exercise of any trusts or powers hereunder or for anything whatsoever in connection with the funds established hereunder, except only for its own willful misconduct, negligence or breach of an obligation hereunder. The Trustee may, on behalf of the Owners, intervene in any judicial proceeding to which the Corporation or the District is a party and which, in the opinion of the Trustee and its counsel, affects the Revenue Obligations or the security therefor, and shall do so if requested in writing by the Owners of at least 5% of the aggregate principal evidenced by Revenue Obligations then Outstanding, provided the Trustee shall have no duty to take such action unless it has been indemnified to its reasonable satisfaction against all risk or liability arising from such action. ARTICLE IX AMENDMENT OF OR SUPPLEMENT TO TRUST AGREEMENT Section 9.01. Amendment or Suuolement. This Trust Agreement and the rights and obligations of the Corporation, the District, the Owners and the Trustee hereunder may be amended or supplemented at any time by an amendment hereof or supplement hereto which shall become binding when the prior written consents of the Owners of a majority of the aggregate principal evidenced by the Revenue Obligations then Outstanding, exclusive of Revenue Obligations disqualified as provided in Section 9.02 hereof, are filed with the Trustee. No such amendment or supplement shall (i) extend the stated Principal Payment Date of any Revenue Obligation or reduce the rate of interest evidenced thereby or extend the time of payment of such interest or reduce the amount of principal evidenced thereby or change the prepayment terns and provisions or the provisions regarding delivery of notice of prepayment without the prior written consent of the Owner of each Revenue Obligation so affected, (ii)reduce the percentage of Owners whose consent is required for the execution of any amendment hereof or supplement hereto without the prior written consent of the Owners of all Revenue Obligations then Outstanding, (iii)modify any of the rights or obligations of the Trustee without the prior written w622376.4 31 consent of the Trustee, or (iv)amend this Section without the prior written consent of the Owners of all Revenue Obligations then Outstanding. (a) This Trust Agreement and the rights and obligations of the Corporation, the District, the Owners and the Trustee hereunder may also be amended or supplemented at any time by an amendment hereof or supplement hereto which shall become binding upon execution, without the written consents of any Owners, but only to the extent permitted by law and only for any one or more of the following purposes: (i) to add to the agreements, conditions, covenants and terms required by the Corporation or the District to be observed or performed herein other agreements, conditions, covenants and terms thereafter to be observed or performed by the Corporation or the District, or to surrender any right or power reserved herein to or conferred herein on the Corporation or the District; (ii) to make such provisions for the purpose of curing any ambiguity or of correcting, curing or supplementing any defective provision contained herein or in regard to questions arising hereunder which the Corporation or the District may deem desirable or necessary and not inconsistent herewith; or (iii) for any other reason, provided such amendment or supplement does not adversely affect the rights or interests of the Owners. Section 9.02. Disaualifted Revenue Obligations. Revenue Obligations owned or held by or for the account of the District (but excluding Revenue Obligations held in any pension or retirement fund of the District) shall not be deemed Outstanding for the purpose of any consent or other action or any calculation of Outstanding Revenue Obligations provided in this Article, and shall not be entitled to consent to or take any other action provided in this Article, and the Trustee may adopt appropriate regulations to require each Owner, before his consent provided for herein shall be deemed effective, to reveal if the Revenue Obligations as to which such consent is given are disqualified as provided in this Section. Section 9.03. Endorsement or Reolacement of Revenue Obligations After Amendment or Supplement. After the effective date of any action taken as hereinabove provided in this Article, the Trustee may determine that the Revenue Obligations may bear a notation by endorsement in form approved by the Trustee as to such action, and in that case upon demand of the Owner of any Outstanding Revenue Obligation and presentation of such Revenue Obligation for such purpose at the Principal Office a suitable notation as to such action shall be made on such Revenue Obligation. If the Trustee shall receive an Opinion of Counsel advising that new Revenue Obligations modified to conform to such action are necessary, modified Revenue Obligations shall be prepared, and in that case upon demand of the Owner of any Outstanding Revenue Obligations such new Revenue Obligations shall be exchanged at the Principal Office without cost to each Owner for Revenue Obligations then Outstanding upon surrender of such Outstanding Revenue Obligations. w62237e.4 32 Section 9.04. Amendment by Mutual Consent. The provisions of this Article shall not prevent any Owner from accepting any amendment as to the particular Revenue Obligations owned by such Owner,provided that due notation thereof is made on such Revenue Obligations. ARTICLE X DEFEASANCE Section 10.01. Discharge of Revenue Obligations and Trust Agreement. (a)If the Trustee shall pay or cause to be paid or there shall otherwise be paid (i)to the Owners of all Outstanding Revenue Obligations the interest and principal evidenced thereby at the times and in the manner stipulated herein and therein, and (ii)all other amounts due hereunder and under the Installment Purchase Agreement, then such Owners shall cease to be entitled to the pledge of and lien on the amounts on deposit in the funds and accounts established hereunder, as provided herein, and all agreements and covenants of the Corporation,the District, and the Trustee to such Owners hereunder shall thereupon cease, terminate and become void and shall be discharged and satisfied. (b) Any Outstanding Revenue Obligation shall be deemed to have been paid within the meaning and with the effect expressed in this Section when the whole amount of the principal, premium, if any, and interest evidenced by such Revenue Obligation shall have been paid or when (i)in case said Revenue Obligation or portion thereof has been selected for prepayment in accordance with Section 4.03 hereof prior to its stated Principal Payment Date, the District shall have given to the Trustee irrevocable instructions to give, in accordance with the provisions of Section 4.03 hereof, notice of prepayment of such Revenue Obligation, or portion thereof, (ii) there shall be on deposit with the Trustee, moneys, or Government Obligations, or any combination thereof, the principal of and the interest on which when due, and without any reinvestment thereof,will provide moneys which shall be sufficient to pay when due the principal, premium, if any, and interest evidenced by such Revenue Obligation and due and to become due on or prior to the prepayment date or its stated Principal Payment Date, as the case may be, and (iii)in the event the stated Principal Payment Date of such Revenue Obligation will not occur, and said Revenue Obligation is not to be prepaid, within the next succeeding 60 days, the District shall have given the Trustee irrevocable instructions to give notice, as soon as practicable in the same manner as a notice of prepayment given pursuant to Section 4.03 hereof, to the Owner of such Revenue Obligation, or portion thereof, stating that the deposit of moneys or Government Obligations required by clause (ii) of this subsection has been made with the Trustee and that said Revenue Obligation, or portion thereof, is deemed to have been paid in accordance with this Section and stating such Principal Payment Date or prepayment date upon which moneys are to be available for the payment of the principal, premium, if any, and interest evidenced by said Revenue Obligation, or portion thereof. Neither the moneys nor the Government Obligations deposited with the Trustee pursuant to this Section nor principal or interest payments on any such Government Obligations shall be withdrawn or used for any purpose other than, and shall be held in trust for and pledged to, the payment of the principal, premium, if any, and interest evidenced by said Revenue Obligation, or portions thereof If payment of less than all of the Revenue Obligations is to be provided for in the manner and with the effect expressed in this Section, the Trustee or the District, as w622376.4 33 applicable, shall select such Revenue Obligations, or portions thereof, in the manner specified in Section 4.03 hereof for selection for prepayment of less than all of the Revenue Obligations, in the principal amounts designated to the Trustee by the District. (c) After the payment of all the interest, prepayment premium, if any, and principal evidenced by all Outstanding Revenue Obligations and all other amounts due hereunder and under the Installment Purchase Agreement as provided in this Section, the Trustee shall execute and deliver to the Corporation and the District all such instruments as may be necessary or desirable to evidence the discharge and satisfaction of this Trust Agreement, the Trustee shall pay over or deliver to the District all moneys or securities held by it pursuant hereto which are not required for the payment of the interest, prepayment premium, if any, and principal evidenced by such Revenue Obligations and all other amounts due hereunder and under the Installment Purchase Agreement. (d) Prior to any defeasance becoming effective under this Article, the District shall cause to be delivered (i)an executed copy of a report, addressed to the Trustee and the District, in form and in substance acceptable to the District, of a nationally recognized certified public accountant, or firm of such accountants, verifying that the Government Obligations and cash, if any, satisfy the requirements of clause (ii) of subsection(b) of this Section (a "Verification"), (ii) a copy of the escrow deposit agreement entered into in connection with such defeasance, which escrow deposit agreement shall provide that no substitution of Government Obligations shall be permitted except with other Government Obligations and upon delivery of a new Verification and no reinvestment of Govenunent Obligations shall be permitted except as contemplated by the original Verification or upon delivery of a new Verification, and(iii) a copy of an Opinion of Counsel, dated the date of such defeasance and addressed to the Trustee and the District, in form and in substance acceptable to the District, to the effect that such Revenue Obligations have been paid within the meaning and with the effect expressed in this Trust Agreement, and all agreements and covenants of the Corporation, the District and the Trustee to the Owners of such Revenue Obligations under this Trust Agreement have ceased, terminated and become void and have been discharged and satisfied. Section 10.02. Unclaimed Moneys. Any moneys held by the Trustee in trust for the payment and discharge of the interest or principal evidenced by any of the Revenue Obligations which remain unclaimed for two years after the date when such interest or principal evidenced by such Revenue Obligations have become payable, if such moneys were held by the Trustee at such date, or for two years after the date of deposit of such moneys if deposited with the Trustee after the date when the interest and principal evidenced by such Revenue Obligations have become payable, shall be repaid by the Trustee to the District as its absolute property free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Owners shall look only to the District for the payment of the interest and principal evidenced by such Revenue Obligations. Q622376.4 34 ARTICLE XI MISCELLANEOUS Section 11.01. Benefits of Trust Agreement. Nothing contained herein, expressed or implied, is intended to give to any Person other than the Corporation, the District, the Trustee and the Owners any claim, remedy or right under or pursuant hereto, and any agreement, condition, covenant or term required herein to be observed or performed by or on behalf of the Corporation or the District shall be for the sole and exclusive benefit of the Trustee and the Owners. Section 11.02. Successor Deemed Included in all References to Predecessor. Whenever the Corporation, the District or the Trustee, or any officer thereof, is named or referred to herein, such reference shall be deemed to include the successor to the powers, duties and functions that are presently vested in the Corporation, the District or the Trustee, or such officer, and all agreements, conditions, covenants and terms required hereby to be observed or performed by or on behalf of the Corporation, the District or the Trustee, or any officer thereof, shall bind and inure to the benefit of the respective successors thereof whether so expressed or not. Section 11.03. Execution of Documents by Owners. Any declaration, request or other instrument which is permitted or required herein to be executed by Owners may be in one or more instruments of similar tenor and may be executed by Owners in person or by their attorneys appointed in writing. The fact and date of the execution by any Owner or his attorney of any declaration, request or other instrument or of any writing appointing such attomey may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state or territory in which he purports to act that the Person signing such declaration, request or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution duly sworn to before such notary public or other officer, or by such other proof as the Trustee may accept which it may deem sufficient. The ownership of any Revenue Obligations and the amount, payment date, number and date of owning the same may be proved by the registration books maintained by the Trustee pursuant to the provisions of Section 2.07 hereof. Any declaration, request or other instrument in writing of the Owner of any Revenue Obligation shall bind all future Owners of such Revenue Obligation with respect to anything done or suffered to be done by the Corporation, the District or the Trustee in good faith and in accordance therewith. Section 11.04. Waiver of Personal Liability. Notwithstanding anything contained herein to the contrary, no member, officer or employee of the District or the Corporation shall be individually or personally liable for the payment of any moneys, including without limitation,the interest or principal evidenced by the Revenue Obligations, but nothing contained herein shall relieve any member, officer or employee of the District or the Corporation from the performance w622376.4 35 of any official duty provided by any applicable provisions of law, by the Installment Purchase Agreement or hereby. Section 11.05. Acquisition of Revenue Obligations by District. All Revenue Obligations acquired by the District, whether by purchase or gift or otherwise, shall be surrendered to the Trustee for cancellation. Section 11.06. Content of Certificates. Every Written Certificate of the District and every Written Certificate of the Corporation with respect to compliance with any agreement, condition, covenant or term contained herein shall include (a)a statement that the Person making or giving such certificate has read such agreement, condition, covenant or tern and the definitions herein relating thereto, (b)a brief statement as to the nature and scope of the examination or investigation upon which the statements contained in such certificate are based, (c) a statement that, in the opinion of the signer, the signer has made or caused to be made such examination or investigation as is necessary to enable the signer to express an informed opinion as to whether or not such agreement, condition, covenant or term has been complied with, and (d)a statement as to whether, in the opinion of the signer, such agreement, condition, covenant or tern has been complied with. Any Written Certificate of the District and any Written Certificate of the Corporation may be based, insofar as it relates to legal matters, upon an Opinion of Counsel, unless the Person making or giving such certificate knows that the Opinion of Counsel with respect to the matters upon which each Person's certificate may be based, as aforesaid, is erroneous, or in the exercise of reasonable care should have known that the same was erroneous. Any Opinion of Counsel may be based, insofar as it relates to factual matters, upon information which is in the possession of the District or the Corporation upon a representation by an officer or officers of the District or the Corporation, as the case may be, unless the counsel executing such Opinion of Counsel knows that the representation with respect to the matters upon which such counsel's opinion may be based, as aforesaid, is erroneous, or in the exercise of reasonable care should have known that the same was erroneous. Section 11.07. Funds and Accounts. Any fund or account required to be established and maintained herein by the Trustee may be established and maintained in the accounting records of the Trustee either as an account or a fund, and may, for the purposes of such accounting records, any audits thereof and any reports or statements with respect thereto, be treated either as an account or a fund, but all such records with respect to all such funds and accounts shall at all times be maintained in accordance with sound accounting practice and with due regard for the protection of the security of the Revenue Obligations and the rights of the Owners. The Trustee may establish such funds and accounts as it deems necessary to perform its obligations hereunder. Trustee may commingle any of the moneys held by it hereunder for investment purposes only; provided, however, that the Trustee shall account separately for the moneys in each fund or account established pursuant to this Trust Agreement. Section 11.05. Article and Section Headings. Gender and References. The singular form of any word used herein, including the terns defined in Section 1.01 hereof, shall include w622376.4 36 the plural, and vice versa, unless the context otherwise requires. The use herein of a pronoun of any gender shall include correlative words of the other genders. The headings or titles of the several Articles and Sections hereof and the table of contents appended hereto shall be solely for convenience of reference and shall not affect the meaning, construction or effect hereof. All references herein to "Articles," "Sections," subsections or clauses are to the corresponding Articles, Sections, subsections or clauses hereof, and the words "hereby," "herein," "hereof," "hereto," "herewith," "hereunder" and other words of similar import refer to this Trust Agreement as a whole and not to any particular Article, Section, subsection or clause thereof. Section 11.09. Partial Invalidity. If any one or more of the agreements, conditions, covenants or terms required herein to be observed or performed by or on the part of the Corporation, the District or the Trustee shall be contrary to law, then such agreement or agreements, such condition or conditions, such covenant or covenants or such term or terms shall be null and void to the extent contrary to law and shall be deemed separable from the remaining agreements, conditions, covenants and terms hereof and shall in no way affect the validity hereof or of the Revenue Obligations, and the Owners shall retain all the benefit,protection and security afforded to them under any applicable provisions of law. The Corporation, the District and the Trustee hereby declare that they would have executed this Trust Agreement, and each and every Article, Section, paragraph, subsection, sentence, clause and phrase hereof and would have authorized the execution and delivery of the Revenue Obligations pursuant hereto irrespective of the fact that any one or more Articles, Sections, paragraphs, subsections, sentences, clauses or phrases hereof or the application thereof to any Person or circumstance may be held to be unconstitutional, unenforceable or invalid. Section 11.10. California Law. This Trust Agreement shall be governed by and construed in accordance with the laws of the State. Section 11.11. Notices. Any written notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication to be given hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely: If to the District: Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, California 92708 Attention: Director of Finance and Administrative Services If to the Corporation: Orange County Sanitation District Financing Corporation c/o Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, California 92708 Attention: Treasurer w622376.4 37 If to the Trustee: MUFG Union Bank,N.A. 633 West Fifth Street 24th Floor Los Angeles, California 90071 Attention: Corporate Trust Services Fax: 213-972-5694 Email: timothv.millerAunionbank.com AccountAdministration-CorporateTrustAa ionbank.com Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if personally served or delivered, upon delivery, (b) if given by electronic communication, e.g. facsimile or telecopier, upon the sender's receipt of an appropriate written acknowledgment, (c)if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, (d)if given by overnight courier,with courier charges prepaid, 24 hours after delivery to said overnight courier, or (e)if given by any other means, upon delivery at the address specified in this Section. Section 11.12. Effective Date. This Trust Agreement shall become effective upon its execution and delivery. Section 11.13. Execution in Counterparts. This Trust Agreement may be simultaneously executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. [Remainder of page intentionally left blank.] w622376.4 38 IN WITNESS WHEREOF,the parties hereto have caused this Trust Agreement to be executed by their respective officers thereunto duly authorized, all as of the day and year first written above. ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION By: Treasurer ORANGE COUNTY SANITATION DISTRICT By: Chair of the Board of Directors (SEAL) Attest: By: Clerk of the Board of Directors MUFG UNION BANK,N.A., as Trustee By: Authorized Officer w622376.4 39 EXHIBIT A FORM OF REVENUE OBLIGATION No. R— •*•$•*• Unless this Revenue Obligation is presented by an authorized representative of The Depository Trust Company to the Trustee for registration of transfer, exchange or payment, and any Revenue Obligation executed and delivered is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the Registered Owner hereof, Cede&Co.,has an interest herein. ORANGE COUNTY SANITATION DISTRICT WASTEWATER REFUNDING REVENUE OBLIGATION SERIES 2014A Such revenue obligations are certificates of participation evidencing direct,undivided fractional interests in the Installment Purchase Agreement,dated as of August 1,2014,by and between the Orange County Sanitation District and the Orange County Sanitation District Financing Corporation and the related Installment Payments,and the interest thereon. PRINCIPAL PAYMENT DATE INTEREST RATE DATED DATE CUSIP February 1, August. 2014 REGISTERED OWNER: Cede&Co. PRINCIPAL AMOUNT: DOLLARS THIS IS TO CERTIFY that the Registered Owner of this Revenue Obligation (this "Revenue Obligation"), as identified above, is the owner of a direct, fractional undivided interest in certain installment payments ("Installment Payments"), and the interest thereon,payable under and pursuant to the Installment Purchase Agreement, dated as of August 1, 2014 (the "Installment Purchase Agreement'), by and between the Orange County Sanitation District (the "District'), a county sanitation district organized and existing under the laws of the State of California, and the Orange County Sanitation District Financing Corporation (the "Corporation"), a nonprofit public benefit corporation organized and existing under the laws of the State of California. Certain of the rights of the Corporation under the Installment Purchase Agreement, including the right to receive the Installment Payments, and the interest thereon, have been assigned without recourse by the Corporation to MUFG Union Bank,N.A., a national banking association duly organized and existing under the laws of the United States of America, as trustee (the "Trustee") under the Trust Agreement, dated as of August 1, 2014 (the "Trust Agreement'),by and among the Trustee, the District and the Corporation. Capitalized undefined terms used herein shall have the meanings ascribed thereto in the Trust Agreement. 40622376.4 A-1 The District has executed and delivered the Master Agreement for District Obligations, dated as of August 1, 2000 (the "Master Agreement'), by and between the District and the Corporation, pursuant to which the District establishes and declares the conditions and terms upon which obligations such as the Installment Purchase Agreement, and the Installment Payments and the interest thereon, will be incurred and secured. This Revenue Obligation is one of the duly authorized Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2014A (the "Revenue Obligations") evidencing principal in the aggregate amount of $[PAR AMOUNT], executed pursuant to the terms of the Trust Agreement. The Revenue Obligations evidence direct, fractional undivided interests in the Installment Payments, and the interest thereon, payable under the Installment Purchase Agreement. The Revenue Obligations are executed and delivered to refinance certain improvements to the wastewater collection, treatment and disposal facilities of the District (the "Wastewater System") and to pay the costs of issuance incurred in connection therewith and to pay certain other related costs. The Installment Payments, and the interest thereon, are to be paid by the District pursuant to the Installment Purchase Agreement in consideration for the purchase of certain improvements to the Wastewater System and for the other agreements and obligations undertaken by the Corporation under the Installment Purchase Agreement and the Trust Agreement. The income and revenue received by the District from the operation of the Wastewater System remaining after the payment of maintenance and operation or ownership costs of the Wastewater System (as more fully described in the Installment Purchase Agreement, the "Net Revenues") are, pursuant to the Master Agreement, pledged to the payment of the Senior Obligations and Reimbursement Obligations with respect to Senior Obligations (as such terms are defined in the Master Agreement). The Installment Purchase Agreement constitutes a Senior Obligation and, as such, shall be subject to the provisions of the Master Agreement, and shall be afforded all of the advantages, benefits, interests and security afforded Senior Obligations pursuant to the Master Agreement. The Installment Purchase Agreement is payable on a parity with the other existing Senior Obligations. The District may at any time incur Senior Obligations in addition to existing Senior Obligations and the Installment Purchase Agreement payable from Net Revenues as provided in the Master Agreement on a parity with all other Senior Obligations theretofore incurred,but only subject to the conditions and upon compliance with the procedures set forth in the Master Agreement. The District is not required to advance any moneys derived from any source of income other than Net Revenues and the other funds provided in the Installment Purchase Agreement for the payment of the Installment Payments, and the interest thereon, and other payments required to be made by it under the Installment Purchase Agreement, or for the performance of any agreements or covenants required to be performed by it contained therein. The obligation of the District to pay the Installment Payments, and the interest thereon, and other payments required to be made by it under the Installment Purchase Agreement is a special obligation of the District Q622396.4 A-2 payable, in the manner provided in the Installment Purchase Agreement, solely from such Net Revenues and other funds provided for therein, and does not constitute a debt of the District or of the State of California, or of any political subdivision thereof, in contravention of any constitutional or statutory debt limitation or restriction. Reference is hereby made to the Master Agreement, the Installment Purchase Agreement and to the Trust Agreement and any and all amendments thereof and supplements thereto for a description of the terms under which the District's obligation to pay the Installment Payments, and the interest thereon, is incurred, the Revenue Obligations are executed and delivered, the provisions with regard to the nature and extent of the Net Revenues, and the rights of the Owners of the Revenue Obligations. All of the terms of the Master Agreement, the Installment Purchase Agreement and the Trust Agreement are hereby incorporated herein. The Trust Agreement constitutes a contract among the District, the Corporation and the Trustee for the benefit of the Owners of the Revenue Obligations, to all the provisions of which the Owner of this Revenue Obligation,by acceptance hereof, agrees and consents. The Registered Owner of this Revenue Obligation is entitled to receive, subject to the terms of the Trust Agreement and any right of prepayment as provided herein or therein, on the Principal Payment Date set forth above, upon presentation and surrender of this Revenue Obligation at the principal corporate trust office of the Trustee in Los Angeles, California (the `Principal Office"),the Principal Amount specified above, evidencing the Owner's interest in the Installment Payments coming due on the Principal Payment Date, and to receive on February I and August 1 of each year, commencing on February 1, 2015 (each an "Interest Payment Date"), interest accrued thereon at the Interest Rate specified above, computed on the basis of a 360-day year consisting of twelve 30-day months, until said Principal Amount is paid in full, evidencing the Registered Owner's interest in the interest evidenced by the Installment Payments coming due on each of said dates. This Revenue Obligation shall evidence interest from the Interest Payment Date next preceding its date of execution to which interest has been paid in full, unless such date of execution shall be after the 15th day of the month next preceding an Interest Payment Date, whether or not such day is a business day (each such date, a "Record Date"), and on or prior to the following Interest Payment Date, in which case this Revenue Obligation shall evidence interest from such Interest Payment Date, or unless such date of execution shall be on or prior to the first Record Date, in which case this Revenue Obligation shall evidence interest from the Dated Date specified above. Notwithstanding the foregoing, if, as shown by the records of the Trustee, interest evidenced by the Revenue Obligations shall be in default, this Revenue Obligation shall evidence interest from the last Interest Payment Date to which interest has been paid in full or duly provided for. Payments of interest evidenced by the Revenue Obligations shall be made to the Owners thereof(as determined at the close of business on the Record Date next preceding the related Interest Payment Date) by check or draft of the Trustee mailed to the address of each such Owner as it appears on the registration books maintained by the Trustee pursuant to the Trust Agreement, or to such other address as may be famished in writing to the Trustee by such Owner. Payment of principal and prepayment premium, if any, evidenced by the Revenue Obligations, on their stated principal payment dates or on prepayment in whole or in part prior 40622376.4 A-3 thereto, shall be made only upon presentation and surrender of the Revenue Obligations at the Principal Office. All such amounts are payable in lawful money of the United States of America. The Revenue Obligations are authorized to be executed and delivered in the form of fully registered certificates in denominations of$5,000 or any integral multiple thereof("Autorized Denominations"). This Revenue Obligation may be transferred or exchanged by the Registered Owner hereof, in person or by his attorney duly authorized in writing, at the Principal Office,but only in the manner, subject to the limitations and upon payment of the charges provided in the Trust Agreement. The Trustee shall not be required to transfer or exchange any Revenue Obligation during the period commencing on the date five days before the date of selection of Revenue Obligations for prepayment and ending on the date of mailing of notice of such prepayment, nor shall the Trustee be required to transfer or exchange any Revenue Obligation or portion thereof selected for prepayment from and after the date of mailing the notice of prepayment thereof. The Trustee may treat the Registered Owner hereof as the absolute owner hereof for all purposes, whether or not the principal or interest evidenced by this Revenue Obligation shall be overdue, and the Trustee shall not be affected by any knowledge or notice to the contrary; and payment of the principal and interest evidenced by this Revenue Obligation shall be made only to such Registered Owner, which payments shall be valid and effectual to satisfy and discharge the liability evidenced by this Revenue Obligation to the extent of the sum or sums so paid. The Revenue Obligations are subject to prepayment prior to their stated Principal Payment Dates in accordance with the Trust Agreement. To the extent and in the manner permitted by the terms of the Trust Agreement, the Trust Agreement and the rights and obligations of the Corporation, the District, the Owners and the Trustee under the Trust Agreement may be amended or supplemented at any time by an amendment or supplement thereto which shall become binding when the prior written consents of the Owners of a majority of the aggregate principal evidenced by the Revenue Obligations then outstanding, exclusive of Revenue Obligations disqualified as provided under the Trust Agreement, are filed with the Trustee. No such supplement or amendment shall (a)extend the stated Principal Payment Date of any Revenue Obligation or reduce the rate of interest evidenced thereby or extend the time of payment of such interest or reduce the amount of principal evidenced thereby or change the prepayment terms and provisions or the provisions regarding delivery of notice of prepayment without the prior written consent of the Owner of each Revenue Obligation so affected, (b)reduce the percentage of Owners whose consent is required for the execution of any amendment of or supplement to the Trust Agreement without the prior written consent of the Owners of all Revenue Obligations then outstanding, (c)modify any of the rights or obligations of the Trustee without the prior written consent of the Trustee, or (d)amend the amendment provisions of the Trust Agreement without the prior written consent of the Owners of all Revenue Obligations then outstanding. 40622376.4 A-4 To the extent and in the manner permitted by the terms of the Trust Agreement, the Trust Agreement and the rights and obligations of the Corporation, the District, the Owners and the Trustee under the Trust Agreement may also be amended or supplemented at any time by an amendment or supplement thereto which shall become binding upon execution, without the written consents of any Owners,but only to the extent permitted by law and only(a)to add to the agreements, conditions, covenants and terns required by the Corporation or the District to be observed or performed under the Trust Agreement other agreements, conditions, covenants and terms thereafter to be observed or performed by the Corporation or the District, or to surrender any right or power reserved therein to or conferred therein on the Corporation or the District, and which in either case shall not adversely affect the rights or interests of the Owners, (b)to make such provisions for the purpose of curing any ambiguity or of correcting, curing or supplementing any defective provision contained in the Trust Agreement or in regard to questions arising thereunder which the Corporation or the District may deem desirable or necessary and not inconsistent therewith or (c) for any other reason, provided such amendment or supplement does not adversely affect the rights or interests of the Owners. THE DISTRICT HAS CERTIFIED that all acts, conditions and things required by the statutes of the State of California and by the Trust Agreement to exist, to have happened and to have been performed precedent to and in connection with the execution and delivery of this Revenue Obligation do exist, have happened and have been performed in regular and due time, form and manner as required by law, and that the Trustee is duly authorized to execute and deliver this Revenue Obligation. IN WITNESS WHEREOF, this Revenue Obligation has been executed by the manual signature of an authorized signatory of the Trustee as of the date set forth below. Date: August_, 2014 MUFG UNION BANK,N.A., as Trustee By: Authorized Officer 40622376.4 A-$ ASSIGNMENT For value received, the undersigned do(es) hereby sell, assign and transfer unto the within-mentioned Revenue Obligation and hereby irrevocably constitute(s) and appoint(s) attorney, to transfer the same on the books of the Trustee with full power of substitution in the premises. Dated: Note: The signature(s)on this Assignment must correspond with the narne(s) as written on the face of the within registered Revenue Obligation in every particular, without alteration or enlargement or any change whatsoever. Tax I.D. #: Signature Guaranteed: Now: Signature(s)must be guaranteed by an eligible Note: The signature(s)on this Assignment must correspond guarantor. with the name(s)as written on the face of the within Revenue Obligation in every particular without alteration or enlargement or any change whatsoever. 40622376.4 A-6 Fulbright& Jaworski LLP—Draft 06/12/14 RETURN TO AGENDA INSTALLMENT PURCHASE AGREEMENT by and between ORANGE COUNTY SANITATION DISTRICT and ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION Dated as of August 1, 2014 Relating to $[PAR AMOUNT] Orange County Sanitation District Wastewater Refunding Revenue Obligations Series 2014A Q622381.4 TABLE OF CONTENTS Page ARTICLE I DEFINITIONS.................................................................................................2 Section 1.01. Definitions............................................................................................2 Section 1.02. Definitions in Master Agreement and Trust Agreement......................3 ARTICLE II PURCHASE OF PROJECT BY,AND SALE THEREOF TO,THE CORPORATION; PAYMENT OF PURCHASE PRICE...............................4 Section 2.01. Acquisition of the Project....................................................................4 Section 2.02. Payment of Purchase Price...................................................................4 ARTICLE IH PURCHASE OF PROJECT BY,AND SALE THEREOF TO,THE DISTRICT; INSTALLMENT PAYMENTS...................................................4 Section 3.01. Purchase and Sale of Project................................................................4 Section 3.02. Installment Payments...........................................................................4 Section3.03. Reserved...............................................................................................6 Section 3.04. Obligation Absolute.............................................................................6 Section 3.05. Nature of Agreement............................................................................6 ARTICLE IV PREPAYMENT OF INSTALLMENT PAYMENTS.....................................6 Section 4.01. Prepayment of Installment Payments...................................................6 Section4.02. Notice...................................................................................................7 Section 4.03. Discharge of Obligations.....................................................................7 ARTICLE COVENANTS .................................................................................................7 Section 5.01. Compliance with Master Agreement...................................................7 Section 5.02. Compliance with Installment Purchase Agreement.............................7 Section 5.03. Protection of Security and Rights........................................................7 Section 5.04. hidemnification of Corporation........................................................... 8 Section 5.05. Further Assurances............................................................................... 8 ARTICLE VI EVENTS OF DEFAULT AND REMEDIES OF THE CORPORATION............................................................................................. 8 Section 6.01. Events of Default................................................................................. 8 Section 6.02. Remedies on Default............................................................................9 Section6.03. Non-Waiver..........................................................................................9 Section 6.04. Remedies Not Exclusive......................................................................9 ARTICLE VII AMENDMENTS ........................................................................................... 10 Section 7.01. Amendments...................................................................................... 10 60622381.E _i_ TABLE OF CONTENTS (continued) Page ARTICLE VIII MISCELLANEOUS...................................................................................... 11 Section 8.01. Liability of District Limited............................................................... 11 Section 8.02. Limitation of Rigbts........................................................................... 11 Section8.03. Assignment ........................................................................................ 11 Section8.04. Notices............................................................................................... 11 Section 8.05. Successor Is Deemed Included in all References to Predecessor...... 12 Section 8.06. Waiver of Personal Liability.............................................................. 12 Section 8.07. Article and Section Headings, Gender and References..................... 12 Section 8.08. Partial Invalidity................................................................................. 12 Section 8.09. Governing Law.................................................................................. 13 Section 8.10. Execution in Counterparts.................................................................. 13 EXHIBIT A DESCRIPTION OF PROJECT........................................................A-1 60622381.E -11- INSTALLMENT PURCHASE AGREEMENT THIS INSTALLMENT PURCHASE AGREEMENT (this "Installment Purchase Agreement'), dated as of August 1, 2014, is by and between the ORANGE COUNTY SANITATION DISTRICT, a county sanitation district organized and existing under the laws of the State of California (the "District'), and the ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION, a nonprofit public benefit corporation organized and existing under the laws of the State of California(the"Corporation"). WITNESSETH: WHEREAS, to refinance the acquisition, construction and installation of certain improvements to its wastewater system (the `Prior Project'), the District has heretofore purchased the Prior Project from the Corporation, and the Corporation has heretofore sold the Prior Project to the District, for the installment payments (the `Prior Installment Payments") made by the District pursuant to the Installment Purchase Agreement, dated as of August 1, 2000 (the`Prior Installment Purchase Agreement'),by and between the District and the Corporation; WHEREAS, to provide the funds necessary to refinance the Prior Project, the District caused the execution and delivery of the Orange County Sanitation District Certificates of Participation, Series 2007B (the "Prior Certificates"), evidencing direct, undivided fractional interests in the related Prior Installment Payments; WHEREAS,the District desires to refinance a portion of the Prior Project(the "Project') by prepaying a portion of the remaining Prior Installment Payments, and the interest thereon to the dates of prepayment, thereby causing a portion of the remaining Prior Certificates to be prepaid; WHEREAS, to provide the funds necessary to pay and prepay the remaining Prior Installment Payments, the District and the Corporation desire that the Corporation purchase the Prior Project from the District and the District sell the Prior Project to the Corporation, and that the District then purchase the Prior Project from the Corporation and the Corporation sell the Prior Project to the District, for the installment payments (the "Installment Payments") to be made by the District pursuant to this Installment Purchase Agreement; WHEREAS, pursuant to the Master Agreement for District Obligations, dated as of August 1, 2000,by and between the District and the Corporation,the District has established and declared the conditions and terms upon which obligations such as this Installment Purchase Agreement, and the Installment Payments, and the interest thereon, are to be incurred and secured; WHEREAS, the Corporation proposes to assign without recourse certain of its rights under and pursuant to this Installment Purchase Agreement to MUFG Union Bank, N.A., as trustee(the"Trustee"); Q622381.4 WHEREAS, in consideration of such assignment and the execution and delivery of the Trust Agreement, dated as of the date hereof, by and among the Trustee, the Corporation and the District, the Trustee has agreed to execute and deliver the Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2014A (the "Revenue Obligations"), evidencing direct, undivided fractional interests in the Installment Payments, and the interest thereon,payable hereunder; WHEREAS, a portion of the proceeds of the Revenue Obligations will be used to prepay certain of the Prior Installment Payments; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and delivery of this Installment Purchase Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Installment Purchase Agreement; NOW, THEREFORE, in consideration of the covenants and provisions herein set forth and for other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged,the parties hereto do hereby agree as follows: ARTICLE I DEFINITIONS Section 1.01. Definitions. Except as provided in Section 1.02 hereof or unless the context otherwise requires, the terms defined in this Section shall for all purposes hereof and of any amendment hereof or supplement hereto and of any report or other document mentioned herein or therein have the meanings defined herein, the following definitions to be equally applicable to both the singular and plural forms of any of the terms defined herein: "Business Day" means a day other than (a) Saturday or Sunday, (b) a day on which banking institutions in the city in which the Principal Office is located are authorized or required by law to be closed, and (c) a day on which the New York Stock Exchange is authorized or obligated by law or executive order to be closed. "Closing Date"means August_, 2014. "Corporation" means the Orange County Sanitation District Financing Corporation, a nonprofit public benefit corporation organized and existing under the laws of the State, and any successor thereto. "District" means the Orange County Sanitation District, a county sanitation district organized and existing under and by virtue of the laws of the State, and any successor thereto. "Event of Default"means an event described in Section 6.01 hereof. "Installment Payments" means the Installment Payments required to be made by the District pursuant to Section 3.02 hereof. w622381.4 2 "Installment Payment Dates"means each February 1, commencing February 1,20 . "Installment Purchase Agreement" means this Installment Purchase Agreement, dated as of August 1, 2014, by and between the District and the Corporation, as originally executed and as it may from time to time be amended or supplemented in accordance with the terms hereof. "Interest Payment Date" means February 1 and August 1 of each year, commencing February 1,2015. "Master Agreement" means the Master Agreement for District Obligations, dated as of August 1, 2000, by and between the District and the Corporation, as originally executed and as it may from time to time be amended or supplemented in accordance with the terms thereof. "Person" means an individual, corporation, limited liability company, firm, association, partnership, trust, or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof. "Principal Office" means the Trustee's principal corporate trust office in Los Angeles, California. "Project" means the improvements to the Wastewater System, as described in Exhibit A hereto. "Revenue Obligations" means the Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2014A, executed and delivered by the Trustee, which are certificates of participation, evidencing direct, undivided fractional interests in the Installment Payments, and the interest thereon, executed and delivered under and pursuant to the Trust Agreement. "Trust Agreement" means the Trust Agreement, dated as of August 1, 2014, by and among the Trustee, the Corporation and the District, as originally executed and as it may from time to time be amended or supplemented in accordance with its terns. "Trustee" means MUFG Union Bank, N.A., a national banking association duly organized and existing under the laws of the United States of America, or any other bank or trust company which may at any time be substituted in its place as provided in the Trust Agreement. Section 1.02. Definitions in Master Agreement and Trust Agreement. Except as otherwise herein defined and unless the context otherwise requires, the terms defined in the Master Agreement or the Trust Agreement shall for all purposes hereof and of any amendment hereof or supplement hereto and of any report or other document mentioned herein have the meanings defined therein, such definitions to be equally applicable to both the singular and plural forms of any of the terms defined therein. With respect to any defined term which is given a different meaning under this Installment Purchase Agreement than under the Master Agreement or the Trust Agreement, as used herein it shall have the meaning given herein. w622381.4 3 ARTICLE II PURCHASE OF PROJECT BY,AND SALE THEREOF TO,THE CORPORATION; PAYMENT OF PURCHASE PRICE Section 2.01. Acquisition of the Protect. The District represents and warrants that it is the sole and exclusive owner of the Project. The Corporation hereby purchases from the District, and the District hereby sells to the Corporation, a portion of the Project equal to $ as described in Exhibit A hereto in accordance with the provisions of this Installment Purchase Agreement. All right, title and interest in and to such portion of the Project shall immediately vest in the Corporation on the Closing Date without further action on the part of the Corporation or the District. Section 2.02. Payment of Purchase Price. On the Closing Date, the Corporation shall pay to the District, as the purchase price of the applicable portion of the Project specified in Section 2.01, the amount of$ , which amount shall be paid from the proceeds of the Revenue Obligations. ARTICLE IU PURCHASE OF PROJECT BY,AND SALE THEREOF TO,THE DISTRICT; INSTALLMENT PAYMENTS Section 3.01. Purchase and Sale of Protect. The District hereby purchases from the Corporation, and the Corporation hereby sells to the District, the Project in accordance with the provisions of this Installment Purchase Agreement. All right, title and interest in and to the Project shall immediately vest in the District on the Closing Date without further action on the part of the District or the Corporation. Section 3.02. Installment Payments. The District shall, subject to any rights of prepayment provided in Article W hereof, pay to the Corporation, solely from Net Revenues and from no other sources, the purchase price of the Project in Installment Payments, with interest thereon, as provided herein. The Installment Payments and the interest thereon shall be payable on the Business Day immediately preceding each of the Installment Payment Dates in the amounts and at the interest rates per annum set forth in the following schedule: w622381.4 4 Interest on Payment Installment Installment Interest Date Payment Payment Total Rate 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 The Installment Payments shall accrue interest from the Closing Date, at the rates set forth above, payable on the Interest Payment Dates in each year. Such interest shall accrue on the basis of a 360-day year consisting of twelve 30-day months. Each Installment Payment, and each payment of interest thereon, shall be deposited with the Trustee, as assignee of the Corporation, no later than the Business Day next preceding the Installment Payment Date or Interest Payment Date on which such Installment Payment or payment of interest is due, in lawful money of the United States of America, in immediately available funds. If and to the extent that, on any such date, there are amounts on deposit in the Installment Payment Fund established under the Trust Agreement, or in any of the accounts therein, which amounts are not being held for the payment of specific Revenue Obligations, such amounts shall be credited against the Installment Payment, or payment of interest thereon, as applicable, due on such date. Section 3.03. Reserved. Section 3.04. Oblisation Absolute. The obligation of the District to make the Installment Payments, and payments of interest thereon, and other payments required to be made by it under this Article, solely from Net Revenues, is absolute and unconditional, and until such time as the Installment Payments, payments of interest thereon, and such other payments shall have been paid in full (or provision for the payment thereof shall have been made pursuant to 40622381.4 5 Article IV), the District shall not discontinue or suspend any Installment Payments, or payments of interest thereon, or other payments required to be made by it hereunder when due, whether or not the Project or any part thereof is operating or operable or has been completed, or its use is suspended, interfered with, reduced or curtailed or terminated in whole or in part, and such Installment Payments, payments of interest thereon, and other payments shall not be subject to reduction whether by offset or otherwise and shall not be conditional upon the performance or nonperformance by any party of any agreement for any cause whatsoever. Section 3.05. Nature of Agreement. This Installment Purchase Agreement constitutes a Senior Obligation and, as such, shall be subject to the provisions of the Master Agreement and shall be afforded all of the advantages, benefits, interests and security afforded Senior Obligations pursuant to the Master Agreement. ARTICLE IV PREPAYMENT OF INSTALLMENT PAYMENTS Section 4.01. Prepayment of Installment Payments. (a) The Installment Payments shall be subject to prepayment prior to their respective Installment Payment Dates as provided in Article IV of the Trust Agreement. (b) The District may prepay, from any source of available funds, all or any portion of the Installment Payments by depositing with the Trustee moneys or securities as provided, and subject to the terms and conditions set forth, in Article X of the Trust Agreement sufficient to pay such Installment Payments, and the interest thereon, when due or to pay such Installment Payments, and the interest thereon, through a specified date on which the District has a right to prepay such Installment Payments pursuant to subsection(a) of this Section, and to prepay such Installment Payments on such prepayment date, at a prepayment price determined in accordance with subsection(a)of this Section. (c) If less than all of the Installment Payments are prepaid then, as of the date of such prepayment pursuant to subsection (a) of this Section, or the date of a deposit pursuant to subsection (b) of this Section, the schedule of Installment Payments shall be recalculated to take such prepayment into account. Section 4.02. Notice. The District shall give written notice to the Trustee specifying the date on which the prepayment will be made prior to making any prepayment pursuant to this Article, which date shall be not less than 25 nor more than 60 days from the date such notice is given to the Trustee,unless such time period shall be waived by the Trustee. Section 4.03. Discharge of Obligadons. If all Installment Payments, and the interest thereon, shall be paid as and when due in accordance with the terms hereof, or prepaid in accordance with Section 4.01 hereof, and if all Revenue Obligations shall be fully paid, or provision therefor made in accordance with Article X of the Trust Agreement, and the Trust Agreement shall be discharged by its terms,then all agreements, covenants and other obligations of the District hereunder shall thereupon cease, terminate and become void and be discharged and satisfied. w622381.4 6 ARTICLE V COVENANTS Section 5.01. Compliance with Master Aareement. The District will faithfully observe and perform all the agreements, conditions, covenants and terns contained in the Master Agreement required to be observed and performed by it and will not cause, suffer or permit any default to occur thereunder. Section 5.02. Compliance with Installment Purchase Aareement. The District will punctually pay the Installment Payments, and interest thereon, and other payments required to be made by it hereunder in strict conformity with the terms hereof, and will faithfully observe and perform all the agreements, conditions, covenants and terms contained herein required to be observed and performed by it, will not cause, suffer or permit any default to occur hereunder and will not terminate this Installment Purchase Agreement for any cause including, without limiting the generality of the foregoing, any acts or circumstances that may constitute failure of consideration, destruction of or damage to the Project, commercial frustration of purpose, any change in the tax or other laws of the United States of America or of the State or any political subdivision of either or any failure of the Corporation to observe or perform any agreement, condition, covenant or tern contained herein required to be observed and performed by it, whether express or implied, or any duty, liability or obligation arising out of or connected herewith or the insolvency, or deemed insolvency, or bankruptcy or liquidation of the Corporation or any force majeure, including acts of God, tempest, storm, earthquake, war, rebellion, riot, civil disorder, acts of public enemies, blockade or embargo, strikes, industrial disputes, lock outs, lack of transportation facilities, fire, explosion, or acts or regulations of governmental authorities. Section 5.03. Protection of Security and Rights. The District will preserve and protect the security hereof and the rights of the Trustee, as assignee of the Corporation, to the Installment Payments, and interest thereon, and other payments required to be made by the District hereunder and will warrant and defend such rights against all claims and demands of all Persons. Section 5.04. Indemnification of Corporation. To the extent permitted by law, the District hereby agrees to indemnify and hold the Corporation and its members and officers harmless against any and all liabilities which might arise out of or are related to the Project, this Installment Purchase Agreement or the Revenue Obligations, and the District further agrees to defend the Corporation and its members and officers in any action arising out of or related to the Project,this Installment Purchase Agreement or the Revenue Obligations. Section 5.05. Further Assurances. The District will adopt, deliver, execute and make any and all further assurances, instruments and resolutions as may be reasonably necessary or proper to carry out the intention or to facilitate the performance hereof and for the better assuring and confirming unto the Corporation, or unto the Trustee, as assignee of the Corporation, the rights and benefits provided herein to the Corporation, or to the Trustee, as assignee of the Corporation. w622381.4 7 ARTICLE VI EVENTS OF DEFAULT AND REMEDIES OF THE CORPORATION Section 6.01. Events of Default. The following shall be Events of Default under this Installment Purchase Agreement, and "Event of Default' shall mean any one or more of the following events: (a) if default shall be made by the District in the due and punctual payment of or on account of any Senior Obligation as the same shall become due and payable; (b) if default shall be made by the District in the performance of any of the agreements or covenants required herein, in the Trust Agreement or in the Master Agreement to be performed by it (other than as specified in (a) above), and such default shall have continued for a period of 30 days after the District shall have been given notice in writing of such default by the Corporation or the Trustee; provided, however, that the party or parties giving such notice may agree in writing to a reasonable extension of such period prior to the expiration of such 30 day period and, provided further, that if the District shall proceed to take curative action which, if begun and prosecuted with due diligence, cannot be completed within such a period of 30 days, then such period shall be increased without such written extension to such extent as shall be necessary to enable the District to diligently complete such curative action and such default shall not become an Event of Default for so long as shall be necessary to diligently complete such curative action; or (c) if the District shall file a petition or answer seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if a court of competent jurisdiction shall approve a petition filed with or without the consent of the District seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if under the provisions of any other law for the relief or aid of debtors any court of competent jurisdiction shall assume custody or control of the District or of the whole or any substantial part of its property. Section 6.02. Remedies on Default. Upon the occurrence of an Event of Default, the Trustee,as assignee of the Corporation, shall have the right: (a) by mandamus or other action or proceeding or suit at law or in equity to enforce its rights against the District and to compel the District to perform and carry out its duties under applicable law and the agreements and covenants required to be performed herein; (b) by suit in equity to enjoin any acts or things which we unlawful or violate the rights of the Trustee, as assignee of the Corporation; (c) by suit in equity to require the District to account as the trustee of an express trust; and to have a receiver or receivers appointed for the Wastewater System and of the issues, earnings, income, products and profits thereof, pending such proceedings, with such powers as the court making such appointment shall confer. w622381.4 8 Section 6.03. Non-Waiver. Nothing in this Article or in any other provision hereof shall affect or impair the obligation of the District, which is absolute and unconditional, to pay the Installment Payments, and the interest thereon, to the Trustee, as assignee of the Corporation, at the respective due dates from the Net Revenues and the other funds herein committed for such payment, or shall affect or impair the right of the Trustee, as assignee of the Corporation, which is also absolute and unconditional, to institute suit to enforce such payment by virtue of the contract embodied herein. A waiver of any default or breach of duty or contract by the Trustee, as assignee of the Corporation, shall not affect any subsequent default or breach of duty or contract or impair any rights or remedies on any such subsequent default or breach of duty or contract. No delay or omission by the Trustee, as assignee of the Corporation,to exercise any right or remedy accruing upon any default or breach of duty or contract shall impair any such right or remedy or shall be construed to be a waiver of any such default or breach of duty or contract or an acquiescence therein, and every right or remedy conferred upon the Trustee, as assignee of the Corporation, by applicable law or by this Article may be enforced and exercised from time to time and as often as shall be deemed expedient by the Trustee, as assignee of the Corporation. If any action,proceeding or suit to enforce any right or exercise any remedy is abandoned or determined adversely to the Trustee, as assignee of the Corporation, the District and the Trustee, as assignee of the Corporation, shall be restored to their former positions, rights and remedies as if such action,proceeding or suit had not been brought or taken. Section 6.04. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee, as assignee of the Corporation, is intended to be exclusive of any other remedy, and each such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing in law or in equity or by statute or otherwise and may be exercised without exhausting and without regard to any other remedy conferred by law. ARTICLE VII AMENDMENTS Section 7.01. Amendments. (a) This Installment Purchase Agreement and the rights and obligations of the District, the Corporation and the Tmstee, as assignee of the Corporation, may be amended or modified from time to time and at any time by a written amendment hereto executed by the District, the Corporation and the Trustee, as assignee of the Corporation, with the written consent of the Owners of a majority of the aggregate principal evidenced by Revenue Obligations then Outstanding. No such amendment shall (i) extend the payment date of any Installment Payment or reduce the amount of any Installment Payment, or the interest rate applicable thereto, without the prior written consent of the Owner of each affected Revenue Obligation, or (ii)reduce the percentage of Owners of the Revenue Obligations whose consent is required to effect any such amendment or modification, without the prior written consent of the Owners of all Revenue Obligations then Outstanding. (b) This Installment Purchase Agreement and the rights and obligations of the District, the Corporation and the Trustee, as assignee of the Corporation, may be amended or w622381.4 9 modified from time to time and at any time by a written amendment hereto executed by the District, the Corporation and the Trustee, as assignee of the Corporation, without the written consents of any Owners of the Revenue Obligations, but only to the extent permitted by law and only for any one or more of the following purposes: (i) to add to the agreements, conditions, covenants and terms required by the District, the Corporation or the Trustee, as assignee of the Corporation, to be observed or performed herein other agreements, conditions, covenants and terms thereafter to be observed or performed by the District,the Corporation or the Trustee, as assignee of the Corporation, or to surrender any right or power reserved herein to or conferred herein on the District,the Corporation or the Trustee,as assignee of the Corporation; (ii) to make such provisions for the purpose of curing any ambiguity or of conecfing, curing or supplementing any defective provision contained herein or in regard to questions arising hereunder which the District,the Corporation or the Trustee, as assignee of the Corporation, may deem desirable or necessary and not inconsistent herewith; and (iii) to make such other changes herein or modifications hereto as the District, the Corporation or the Trustee, as assignee of the Corporation, may deem desirable or necessary, and which shall not materially adversely affect the interests of the Owners of the Revenue Obligations. ARTICLE VIU MISCELLANEOUS Section 8.01. Liability of District Limited. Notwithstanding anything contained herein to the contrary,the District shall not be required to advance any moneys derived from any source of income other than Net Revenues and the other funds provided herein for the payment of the Installment Payments, and the interest thereon, and other payments required to be made by it hereunder, or for the performance of any agreements or covenants required to be performed by it contained herein. The District may, however, but in no event shall be obligated to, advance moneys for any such purpose so long as such moneys are derived from a source legally available for such purpose and may be legally used by the District for such purpose. The obligation of the District to pay the Installment Payments, and the interest thereon, and other payments required to be made by it hereunder is a special obligation of the District payable, in the manner provided herein, solely from Net Revenues and other funds provided for herein, and does not constitute a debt of the District or of the State, or of any political subdivision thereof, in contravention of any constitutional or statutory debt limitation or restriction. Neither the faith and credit nor the taxing power of the District or the State, or any political subdivision thereof, is pledged to the payment of the Installment Payments, or the interest thereon, or other payments required to be made hereunder. Section 8.02. Limitation of Rights. Nothing in this Installment Purchase Agreement expressed or implied is intended or shall be construed to give to any Person other than the w622381.4 10 District, the Corporation and the Trustee, as assignee of the Corporation, any legal or equitable right, remedy or claim under or in respect of this Installment Purchase Agreement or any covenant, condition or provision therein or herein contained, and all such covenants, conditions and provisions are and shall be held to be for the sole and exclusive benefit of the District, the Corporation and the Trustee, as assignee of the Corporation. Section 8.03. Assignment. The District and the Corporation hereby acknowledge the transfer, conveyance and assignment by the Corporation to the Trustee of all of the Corporation's rights, title and interest in and to this Installment Purchase Agreement (excepting its rights to indemnification hereunder), including the right to receive Installment Payments, and the interest thereon, from the District,pursuant to the Trust Agreement. Section 8.04. Notices. Any written notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication to be given hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely: If to the District: Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, California 92708 Attention: Director of Finance and Administrative Services If to the Corporation: Orange County Sanitation District Financing Corporation c/o Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, California 92708 Attention: Treasurer If to the Trustee: MUFG Union Bank,N.A. 120 South San Pedro Street, Suite 400 Los Angeles, California 90012 Attention: Corporate Trust Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if personally served or delivered, upon delivery, (b) if given by electronic communication, whether by facsimile or telecopier, upon the sender's receipt of an appropriate answerback or other written acknowledgment, (c) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, (d) if given by overnight courier, with courier charges prepaid, 24 hours after delivery to said overnight courier, or (e) if given by any other means,upon delivery at the address specified in this Section. Section 8.05. Successor Is Deemed Included in all References to Predecessor. Whenever the District or the Corporation is named or referred to herein, such reference shall be deemed to include the successor to the powers, duties and functions that are presently vested in the District or the Corporation, and all agreements and covenants required hereby to be w622381.4 11 performed by or on behalf of the District or the Corporation shall bind and inure to the benefit of the respective successors thereof whether so expressed or not. Section 8.06. Waiver of Personal Liability. No official, officer or employee of the District shall be individually or personally liable for the payment of the Installment Payments, or the interest thereon, or other payments required to be made by the District hereunder, but nothing contained herein shall relieve any official, officer or employee of the District from the performance of any official duty provided by any applicable provisions of law or hereby. Section 8.07. Article and Section Headings. Gender and References. The headings or titles of the several Articles and Sections hereof and the table of contents appended hereto shall be solely for convenience of reference and shall not affect the meaning, construction or effect hereof, and words of any gender shall be deemed and construed to include all genders. All references herein to "Articles," "Sections" and other subsections or clauses are to the corresponding articles, sections, subsections or clauses hereof; and the words "hereby,""herein," "hereof," "hereto," "herewith' and other words of similar import refer to this Installment Purchase Agreement as a whole and not to any particular Article, Section, subdivision or clause hereof. Section 8.08. Partial Invalidity. If any one or more of the agreements or covenants or portions thereof required hereby to be performed by or on the part of the District or the Corporation shall be contrary to law, then such agreement or agreements, such covenant or covenants or such portions thereof shall be null and void and shall be deemed separable from the remaining agreements and covenants and portions thereof and shall in no way affect the validity hereof. Section 8.09. Governing Law. This Installment Purchase Agreement shall be construed and govemed and construed in accordance with the laws of the State. Section 8.10. Execution in Counternarts. This Installment Purchase Agreement may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. w622381.4 12 IN WITNESS WHEREOF,the parties hereto have executed this Installment Purchase Agreement by their officers thereunto duly authorized as of the day and year first written above. ORANGE COUNTY SANITATION DISTRICT By: Chair of the Board of Directors (SEAL) Attest: By: Clerk of the Board of Directors ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION By: Treasurer w622381.4 13 EXHIBIT A DESCRIPTION OF PROJECT [to be revised] The Project is consists of the acquisition, construction and installation of certain improvements to the Wastewater System, including the acquisition, construction and installation of improvements to the District's collection system, two wastewater treatment plants, and Ocean Outfall systems, including the following Project components: Magnolia Trunk Sewer Trickling Filters at Plant 2 Ellis Avenue Pump Station Sludge Digester at Plant 1 Rocky Point Pump Station Sludge Dewatering at Plant 1 and 2 Bitter Point Pump Station Rehabilitation of Solids Storage Bitter Point Force Main Rehabilitation Silos C & D at Plant 2 Euclid Relief Improvements -Headworks at Plant 2 Digester Rehabilitation at Plant 2 Primary Treatment System Rehabilitation at Plant 2 Cable Tray Improvements at Plant 1 and 2 New Secondary Treatment System at Plant 1 Rehabilitation of Odor Control Facilities A portion of the Project in the amount of$ shall be sold and purchased as described in Article II of this Installment Purchase Agreement. w622381.4 A-1 RETURN TO AGENDA Fulbright& 4aworshi LLP—Draft 06/ /14 ESCROW AGREEMENT by and between ORANGE COUNTY SANITATION DISTRICT and MUFG UNION BANK N.A., as Escrow Agent and Prior Trustee Dated as of August 1, 2014 Orange County Sanitation District Certificates of Participation Series 2007B 40622539E ESCROW AGREEMENT THIS ESCROW AGREEMENT (this "Escrow Agreement'), dated as of August 1, 2014, is by and between the ORANGE COUNTY SANITATION DISTRICT, a county sanitation district organized and existing under the laws of the State of California (the "District'), and MUFG UNION BANK, N.A., a national banking association organized and existing under the laws of the United States of America, as escrow agent (the "Escrow Agent") and as trustee under the Prior Trust Agreement referenced below(the"Prior Trustee"). WITNESSETH: WHEREAS, to finance the acquisition, construction and installation of certain improvements to its wastewater system (the "Prior Project'), the District has heretofore purchased the Prior Project from the Orange County Sanitation District Financing Corporation (the "Corporation"), and the Corporation has heretofore sold the Prior Project to the District, for the installment payments (the "Prior Installment Payments") to be made by the District pursuant to the Installment Purchase Agreement, dated as of December 1, 2007 (the "Prior Installment Purchase Agreement'),by and between the District and the Corporation; WHEREAS, to provide the funds necessary to finance the Prior Project, the District caused the execution and delivery of the Orange County Sanitation District Certificates of Participation, Series 2007B (the "Prior Certificates"), evidencing direct, undivided fractional interests in the related Prior Installment Payments, pursuant to the Trust Agreement, dated as of December 1, 2014 (the "Prior Trust Agreement"), by and among the Prior Trustee, formerly known as Union Bank of California,N.A., the Corporation and the District; WHEREAS, the District has determined to refinance the Prior Project by paying and prepaying a portion of the remaining principal components of the Prior Installment Payments (the "Refunded Installment Payments"), and the interest components thereof to the date of prepayment, thereby causing a portion of the currently outstanding Prior Certificates to be prepaid(the"Refunded Certificates"); WHEREAS, to provide the funds necessary to pay and prepay the Refunded Installment Payments, the District has caused to be executed and delivered the Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2014A (the "Revenue Obligations"), evidencing principal in the aggregate amount of$ , pursuant to the Trust Agreement, dated as of August 1, 2014, by and among MUFG Union Bank,N.A., as trustee, the Corporation and the District; WHEREAS, in accordance with the Prior Trust Agreement, the prepayment of the Refunded Installment Payments will be applied to the payment of principal and interest evidenced by the Refunded Certificates to and including February 1, 2017 (the `Prepayment Date") and to the prepayment of the outstanding Refunded Certificates on the Prepayment Date at a prepayment price equal to the principal amount thereof plus accrued interest thereon,without premium(the `Prepayment Price"),pursuant to this Escrow Agreement; 40622539E NOW THEREFORE, in consideration of the premises and of the mutual agreements and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows: Section 1. Definitions. Unless otherwise defined herein, capitalized terns used herein shall have the meanings ascribed to such terns in the Prior Trust Agreement. Section 2. The Escrow Fund. (a) There is hereby established a fund (the "Escrow Fund") to be held as an irrevocably pledged escrow by the Escrow Agent, which the Escrow Agent shall keep separate and apart from all other funds of the District and the Escrow Agent and to be applied solely as provided in this Escrow Agreement. Pending application as provided in this Escrow Agreement, amounts on deposit in the Escrow Fund are hereby pledged solely to the payment of the principal and interest evidenced by the Refunded Certificates to and including the Prepayment Date and the payment of the Prepayment Price on the Prepayment Date, which amounts shall be held in trust by the Escrow Agent for the Owners of the Refunded Certificates. (b) The Prior Trustee is hereby instructed to [release] [liquidate] $ [of the investments] held in the Reserve Fund established under Section 5.03 of the Prior Trust Agreement(the "Prior Reserve") for deposit in the Escrow Fund. As reflected in the report of the nationally recognized firm of independent certified public accountants delivered in connection herewith, upon the execution and delivery of the Revenue Obligations,there shall be deposited in the Escrow Fund $ received from the proceeds of the sale of the Revenue Obligations and $ from the Prior Reserve and the subaccounts held in the Installment Payment Fund for the Refunded Certificates in the amount of$ for a total of$ (c) The District has determined or caused to be determined that upon the deposit of moneys pursuant to Section 2(b) hereof, the moneys on deposit in the Escrow Fund will be invested in the Government Obligations specified in Schedule I hereto which, together with the uninvested cash specified in said Schedule I shall be sufficient to make the payments required by Section 4 hereof. Section 3. Use of Moneys in Escrow Fund. (a) The Escrow Agent hereby acknowledges deposit of the moneys described in Section 2(b) hereof and agrees to invest such moneys credited to the Escrow Fund in the Government Obligations specified in Schedule I hereto. (b) The Owners of the Refunded Certificates shall have a first and exclusive lien on the moneys and Government Obligations credited to the Escrow Fund until such moneys and Government Obligations are used and applied as provided in this Escrow Agreement and the Prior Trust Agreement to pay principal and interest evidenced by the Refunded Certificates to and including the Prepayment Date and to prepay in full then outstanding Refunded Certificates on the Prepayment Date. (c) The Escrow Agent shall not be held liable for investment losses resulting from compliance with the provisions of this Escrow Agreement. 40622539E 3 Section 4. Payment of Refunded Certificates. From the uninvested money and proceeds of maturing Government Obligations held in the Escrow Fund, the Escrow Agent shall apply such amounts to the payment of the principal and interest evidenced by the Refunded Certificates to and including the Prepayment Date and to the payment of the Prepayment Price of the Refunded Certificates on the Prepayment Date, all as set forth in Schedule II hereto. To the extent that the amount on deposit in the Escrow Fund on the Prepayment Date is in excess of the amount necessary to make the required payments with respect to the Refunded Certificates, such excess shall be transferred to the Trustee for deposit in the Installment Payment Fund established under the Prior Trust Agreement. Section 5. Irrevocable Instructions to Mail Notices. The District hereby irrevocably instructs the Prior Trustee to give notice [within five business days of delivery of the Revenue Obligations] of defeasance of the Refunded Certificates to the Owners thereof and to Assured Guaranty Municipal Corp., as successor to Financial Security Assurance Inc., substantially in the form set forth in Exhibit A hereto. The District hereby designates the Refunded Certificates for prepayment on the Prepayment Date and hereby irrevocably instructs the Prior Trustee, to give, in accordance with the provisions of Section 4.04 of the Prior Trust Agreement, notice of prepayment of such Refunded Certificates to the Owners thereof, substantially in the form set forth in Exhibit B hereto. Section 6. Performance of Duties; Acknowledgement with Respect to Irrevocable Instructions. The Escrow Agent hereby agrees to perform the duties set forth herein and agrees that the irrevocable instructions to the Escrow Agent herein provided are in a form satisfactory to it. Section 7. Substitution of Government Obligations. (a) Upon the written direction of the District, subject to the conditions and limitations set forth in paragraph (c) below, the Escrow Agent shall sell, transfer and request the redemption of or otherwise dispose of the initial Government Obligations held in and credited to the Escrow Fund; provided that, subject to paragraph (c) below, there are substituted therefor and delivered to the Escrow Agent other Government Obligations as hereinafter provided. (b) Upon the written direction of the District, subject to the conditions and limitations set forth in paragraph (c) below, the Escrow Agent shall reinvest cash balances in the Escrow Fund in Government Obligations; provided, that any such securities purchased pursuant to this paragraph (b) shall mature (1) on the next Interest Payment Date for any of the Refunded Certificates or(2) as on such other date or dates necessary to meet the requirements of Section 4 hereof, as certified by a nationally recognized firm of independent certified public accountants. (c) The District, by this Escrow Agreement, hereby covenants and agrees that it will not request the Escrow Agent to exercise any of the powers described in paragraph (a) or (b) above in any manner, which if such exercise of powers had been reasonably expected on the date of delivery of the Refunded Certificates, would cause any of the Refunded Certificates to be arbitrage bonds within the meaning of section 103(c) of the Internal Revenue Code of 1986 (the "Code"), and the regulations thereunder in effect on the date of such request and applicable to obligations issued on the date of such Refunded Certificates. Any purchase of substitute securities by the Escrow Agent shall be accomplished in accordance with paragraph (a) above to 40622539E 4 the extent such purchases are to be made with the proceeds derived from the sale, transfer, redemption or other disposition of the Government Obligations. Such sale, transfer, redemption or other disposition of the Government Obligations and such substitution may be effected only by a simultaneous transaction and only if(i)a nationally recognized firm of independent certified public accountants shall certify that (a) such substitute securities, together with the Government Obligations and cash which will continue to be held in the Escrow Fund, will mature in such principal amounts and earn interest in such amounts and at such times so that sufficient moneys will be available from such maturing principal and interest to pay, as the same become due, all principal,premium and interest payable with respect to the Refunded Certificates which have not previously been paid, and (b) the amounts and dates of the anticipated payments by the Escrow Agent of the principal, premium and interest payable with respect to the Refunded Certificates will not be diminished or postponed thereby, (ii) the Escrow Agent shall have received an opinion of nationally recognized bond counsel to the effect that the sale, transfer, redemption or other disposition and substitution of the Government Obligations does not cause interest on either the Revenue Obligations or the Refunded Certificates to be subject to federal income taxation under relevant provisions of the Code and the regulations thereunder in effect on the date of such sale, transfer, redemption or other disposition and substitution and applicable to obligations issued on the date of execution and delivery of the Revenue Obligations. Section 8. Escrow Agent's Authority to Make Investments. Except as expressly provided in Sections 3 and 7 hereof, the Escrow Agent shall have no power or duty to invest any funds held under this Escrow Agreement. The Escrow Agent shall have no power or duty to transfer or otherwise dispose of the moneys held hereunder except as provided herein. Section 9. Indemnity. To the extent permitted by law, the District hereby assumes liability for, and hereby agrees to indemnify, protect, save and keep harmless the Escrow Agent and its respective successors, assigns, agents, employees and servants, from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including reasonable legal fees, expenses and disbursements) of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, the Escrow Agent at any time in any way relating to or arising out of the execution, delivery and performance of this Escrow Agreement, the establishment hereunder of the Escrow Fund, the acceptance of the moneys deposited therein, and any payment, transfer or other application of moneys by the Escrow Agent in accordance with the provisions of this Escrow Agreement; provided, however, that the District shall not be required to indemnify the Escrow Agent against the Escrow Agent's own negligence or willful misconduct or the negligence or willful misconduct of the Escrow Agent's respective successors, assigns, agents and employees or the material breach by the Escrow Agent of the terms of this Escrow Agreement. In no event shall the District or the Escrow Agent be liable to any person by reason of the transactions contemplated hereby other than to each other as set forth in this Section. The indemnities contained in this Section shall survive the termination of this Escrow Agreement. Section 10. Responsibilities of Escrow Agent. The Escrow Agent makes no representation as to the sufficiency of the funds deposited in accordance with Section 2(b) and invested pursuant to Section 3(a) and earnings thereof, if any, to accomplish the prepayment of the Refunded Certificates pursuant to the Prior Trust Agreement or to the validity of this Escrow Agreement as to the District and, except as otherwise provided herein, the Escrow Agent shall 40622533A 5 incur no liability in respect thereof. The Escrow Agent shall not be liable in connection with the performance of its duties under this Escrow Agreement except for its own negligence, willful misconduct or default, and the duties and obligations of the Escrow Agent shall be determined by the express provisions of this Escrow Agreement. The Escrow Agent may consult with counsel, who may or may not be counsel to the District, and in reliance upon the written opinion of such counsel shall have full and complete authorization and protection in respect of any action taken, suffered or omitted by it in good faith in accordance therewith. Whenever the Escrow Agent shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering, or omitting any action under this Escrow Agreement, such matter (except the matters set forth herein as specifically requiring a certificate of a nationally recognized firm of independent certified public accountants or an opinion of counsel of recognized standing in the field of law relating to municipal bonds) may be deemed to be conclusively established by a written certification of the District. The Escrow Agent undertakes to perform only such duties as are expressly set forth in this Agreement and no implied duties, covenants or obligations shall be read into this Agreement against the Escrow Agent. The Escrow Agent may resign by giving written notice to the District, and upon receipt of such notice the District shall promptly appoint a successor Escrow Agent. If the District does not appoint a successor Escrow Agent within thirty (30) days of receipt of such notice, the resigning Escrow Agent may petition a court of competent jurisdiction for the appointment of a successor Escrow Agent, which court may thereupon, upon such notice as it shall deem proper, appoint a successor Escrow Agent. Upon acceptance of appointment by a successor Escrow Agent, the resigning Escrow Agent shall transfer all amounts held by it in the Escrow Fund to such successor Escrow Agent and be discharged of any further obligation or responsibility hereunder. Section 11. Amendments. The District and the Escrow Agent may (but only with the consent of the Owners of all of the Refunded Certificates) amend this Escrow Agreement or enter into agreements supplemental to this Escrow Agreement. Section 12. Term. This Escrow Agreement shall commence upon its execution and delivery and shall terminate on the date upon which the Refunded Certificates have been paid in accordance with this Escrow Agreement. Section 13. Compensation. The District shall from time to time pay or cause to be paid to the Escrow Agent the agreed upon compensation for its services to be rendered hereunder, and reimburse the Escrow Agent for all of its reasonable advances in the exercise and performance of its duties hereunder; provided, however, that under no circumstances shall the Escrow Agent be entitled to any lien whatsoever on any moneys or obligations in the Escrow Fund for the payment of fees and expenses for services rendered or expenses incurred by the Escrow Agent under this Escrow Agreement or otherwise. Section 14. Severability. If any one or more of the covenants or agreements provided in this Escrow Agreement on the part of the District or the Escrow Agent to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenants or 40622539E 6 agreements shall be null and void and shall be deemed separate from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Escrow Agreement. Section 15. Counterparts. This Escrow Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as an original but all of which shall constitute and be but one and the same instrument. Section 16. Governing Law. This Escrow Agreement shall be construed under the laws of the State of California. 40622539E 7 IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as of the date first above written. MUFG UNION BANK,N.A., as Escrow Agent and Prior Trustee By: Authorized Officer ORANGE COUNTY SANITATION DISTRICT By: Lorenzo Tyner,Director of Finance and Administrative Services 40622539E SCHEDULE I INITIAL GOVERNMENT OBLIGATIONS IN ESCROW FUND [See attached.] 40622533.4 I-1 SCHEDULED PAYMENT REQUIREMENTS OF THE REFUNDED CERTIFICATES ISee attached.] 40622539E II-1 EXHIBIT A NOTICE OF DEFEASANCE ORANGE COUNTY SANITATION DISTRICT CERTIFICATES OF PARTICIPATION SERIES 2007B Principal Payment Date CUSIP (February 1) Interest Rate Principal Outstanding Number* NOTICE IS HEREBY GIVEN that on August _, 2014, the Orange County Sanitation District (the "District') caused there to be deposited with MUFG Union Bank, N.A., as escrow agent (the "Escrow Agent"), pursuant to an Escrow Agreement, dated as of August 1, 20149 by and between the District and the Escrow Agent, proceeds of its Wastewater Refunding Revenue Obligations, Series 2014A, together with other available monies, which will be sufficient (i) to pay the principal and interest evidenced by the District's Certificates of Participation, Series 2007B (the "Refunded Certificates")to and including February 1, 2017 (the`Prepayment Date") and (ii) to pay all of the principal evidenced by the Refunded Certificates, plus accrued interest evidenced thereby to the Prepayment Date, without premium (the "Prepayment Price"), on the Prepayment Date. Thus, on the Prepayment Date there will become due and payable with respect to each of the Refunded Certificates the Prepayment Price thereof, and from and after such Prepayment Date, the interest evidenced thereby shall cease to accrue and be payable. The Escrow Agent is obligated to pay or cause to be paid to the Owners of the Refunded Certificates all sums due thereon, but only from moneys deposited with the Escrow Agent as described in this paragraph. Neither the District nor the Escrow Agent shall have any responsibility for any defect in the CUSIP numbers that appear in this defeasance notice. The CUSIP numbers have been assigned by an independent service for convenience of reference, and neither the District nor the Escrow Agent shall not be liable for any inaccuracy in such number. Dated: 2014 By: MUFG Union Bank,N.A., as Trustee on behalf of the Orange County Sanitation District 40622539E A-1 EXHIBIT B NOTICE OF PREPAYMENT ORANGE COUNTY SANITATION DISTRICT CERTIFICATES OF PARTICIPATION SERIES 2007B Principal Payment Date CUSIP (February 1) Interest Rate Principal Outstanding Number* NOTICE IS HEREBY GIVEN that the Orange County Sanitation District Certificates of Participation, Series 2007B, in the maturities and principal amounts specified above (the "Refunded Certificates") are hereby subject to prepayment on February 1, 2017 (the "Prepayment Date") at a price equal to the principal evidenced by the Refunded Certificates,plus accrued interest evidenced thereby to the Prepayment Date, without premium (the "Prepayment Price"). On the Prepayment Date there will become due and payable with respect to each of the Refunded Certificates the Prepayment Price thereof, and from and after such Prepayment Date, the interest evidenced thereby shall cease to accrue and be payable. The Refunded Certificates shall be surrendered at the address of MUFG Union Bank,N.A., as Trustee, set forth below. Dated: 20 By: MUFG Union Bank,N.A., as Trustee on behalf of the Orange County Sanitation District Notice * The District and Trustee shall not be responsible for the use of the CURD numbers selected, nor is any representation made as to their correctness indicated in the notice or as printed on any certificate. They are included solely for the convenience of the Securityholders. 40622539E B-I RETURN TO AGENDA APPENDIX B THE COUNTY OF ORANGE—ECONOMIC AND DEMOGRAPHIC INFORMATION The County is bordered on the north by Los Angeles County, on the east by Riverside County,on the southeast by San Diego County and on the west and southwest by the Pacific Ocean. Approximately 42 miles of ocean shoreline provide beaches,marinas and other recreational areas for use by residents and visitors. The climate in the County is mild,with an average annual rainfall of 13 inches. Population The County is the third most populous county in the State and the sixth most populous in the nation. TABLE B-1 COUNTY OF ORANGE,STATE OF CALIFORNIA AND UNITED STATES POPULATION GROWTH(o State of United States Year Orange Court California of America 2004 2,956,461 35,558,419 293,045,739 2005 2,957,404 35,795,255 295,753,151 2006 2,952,610 35,979,208 298,593,212 2007 2,957,307 36,226,122 301,579,895 2008 2,988,541 35,580,371 304,374,846 2009 3,023,265 36,961,664 307,006,550 2010 3,017,089 37,318,481 308,745,538 2011 3,043,964 37,578,616 311,800,000 2012 3,090,132 38,041,430 313,914,040 2013 3,114,363 38,332,521 316,128,839 As of�h year,except 2010 data as of April 1,2010. Source: United States Statistics—Population Estimates Program,Population Division, U.S. Census Bureau. Public Schools(Elementary and Secondary) Public instruction in the County is provided by twelve elementary school districts, three high school districts and twelve unified (combined elementary and high school) districts. For the 2012-13 academic year, the Ingest district in the County,the Santa Ana Unified School District,reported a student enrollment of 57,410. Public school enrollment for the academic calendar years 2008-09 through 2012-13 is presented in Table B-2. Enrollment data for 2013-14 has not yet been released. TABLE B-2 COUNTY OF ORANGE PUBLIC SCHOOL ENROLLMENT 2008-09 2009-10 2010-11 2011-12 2012-13 Total Enrollment 504,136 502,239 502,895 502,205 501,801 Source: California Department of Education,Data Quest Report, 405769N.4 B-1 Colleges and Universities The County has a number of top-rated, college-level educational institutions, including the University of California at Irvine and California State University at Fullerton, several private colleges, universities and law schools and four community college districts. Employment The following table summarizes the historical numbers of workers in the County over the period 2009 through 2013 by industry. TABLE B-3 COUNTY OF ORANGE INDUSTRY EMPLOYMENT AND LABOR FORCE-ANNUAL AVERAGE"' 2009 2010 2011 2012 2013 Farm 3,800 3,800 3,000 2,700 2,700 Natural Resources and Mining 500 500 500 500 500 Construction 74,200 67,100 70,800 71,300 80,700 Manufacturing 154,800 150,400 156,300 157,800 157,300 Wholesale Trade 79,400 77,600 77,000 76,700 79,800 Retail Trade 142,300 140,100 141,300 142,200 146,400 Transportation,Warehousing Utilities 27,800 26,700 27,400 27,700 27,300 Information 27,300 24,800 24,000 24,200 25,500 Financial Activities 105,100 103,500 107,500 108,100 111,000 Professional and Business Services 240,200 243,500 250,100 255,900 268,600 Educational and Health Services 152,100 155,500 162,300 163,400 183,100 Leisure and Hospitality 169,100 168,600 177,900 180,500 185,800 Other Services 47,600 42,200 43,700 44,300 46,000 Government 156,600 152,300 148,300 147,800 147,500 Total(" 1,375,900 1,357,400 1,390,000 1,403,000 1,462,200 Totalories. These categories do not represent all employment categories. Source: California Employment Development Department. 405769M.4 B-2 Major Employers The following table lists the major employers in the County for 2013. TABLE B-4 COUNTY OF ORANGE MAJOR EMPLOYERS 2013 Number of Employees Employer Name (Fall and Part-Time) Walt Disney Company 25,000 University of California,Irvine 22,253 County of Orange 17,500 St.Joseph Health System 12,062 Boeing Company 6,890 Kaiser Permanente 6,040 Bank of America Corp. 6,000 Memorial Care Health System 5,635 Target Corp. 5,400 Hoag Memorial Hospital Presbyterian 4,986 Source: Orange County Business Journal, 2013 for all employers other than the County, number of County employees,provided by the County Budget Office(number offilled positions). 40516904.4 B-3 Labor Force,Employment and Unemployment Table B-5 summarizes the labor force, employment and unemployment figures over the period 2009 through 2013 for the County and the State. TABLE B-5 COUNTY OF ORANGE AND STATE OF CALIFORNIA LABOR FORCE,EMPLOYMENT AND UNEMPLOYMENT YEARLY AVERAGE Year and Area Labor Force Employment Unemployment Unemplovment Rate 2009 Orange County 1,589,600 1,448,800 140,700 8.9% California 18,215,700 16,151,100 2,064,600 11.3 2010 Orange County 1,592,500 1,441,500 151,000 9.5 California 18,330,500 16,063,500 2,267,000 12.4 2011 Orange County 1,596,200 1,456,800 139,400 8.7 California 18,407,900 16,249,600 2,168,300 11.8 2012 Orange County 1,613,600 1,491,600 122,000 7.6 California 18,519,900 16,589,700 1,929,300 10.4 2013 Orange County 1,610,900 1,510,600 100,400 6.2 California 18,596,800 16,933,300 1,633,300 8.9 Source: California Employment Development Department. 40576904.4 B-4 Personal Income and other Demographic Information Table B-6 summarizes the personal income, per capita personal income, median family income, public school enrollment and unemployment rate for the County of Orange. TABLE B-6 COUNTY OF ORANGE DEMOGRAPHIC INFORMATION^') Total Personal Per Capita Median Public Fiscal Income Personal Family School Unemployment Year (in millions) Income Income Enrollmenttn Rate 2006-07 $1,572,271 $43,402 $59,928 503,955 3.9% 2007-08 1,604,113 43,852 61,017 503,225 5.3 2008-09 1,564,389 42,325 71,73521 504,136 8.9 2009-10 Not Available Not Available Not Available 502,239 9.5 2010-11 Not Available Not Available Not Available 502,895 8.8 2011-12 Not Available Not Available Not Available 502,205 7.6 2012-13 Not Available Not Available Not Available p The Ora�anitation District serves approximately 81%of the County population in approximately 479 Square miles,or approximately 60%of the County of Orange's area. (3)U.S.Census Bureau. (n)California Department of Education,Educational Demographics Unit. Source: State of California,Employment Development Department,unless otherwise noted. 40516904.4 B-5 Taxable Sales Table B-7 summarizes the annual volume of taxable transactions in the County from 2007 and 2008. TABLE B-7 COUNTY OF ORANGE TAXABLE TRANSACTIONS 2007 and 2008tt1 (in Thousands) Tvoe of Business 2007 2008 Apparel stores group $ 2,217,996 $ 2,340,116 General merchandise group 5,856,810 5,493,287 Food stores group 1,815,201 1,745,903 Eating and drinking groups 5,296,863 5,245,480 Household group 2,079,957 1,900,543 Building material group 2,798,938 2,370,154 Automotive group 7,366,864 5,804,517 Service stations 4,102,725 4,626,596 All other retail stares group 7A52.8731'1 6.242.035p1 RETAIL STORES TOTALS $38,988,227 $35,768,595 Business and Personal Services 2,968,831 2,828,005 All Other Outlets 15.336.413 15,010229 TOTAL ALL OUTLETS $57,293,471 $53,606,829 Figur2010,es 2011 and 2012 are set forth in Table B-8 due to changes in the categorization of the types of business. Source: California State Board ofEgualization. 40576904.4 B-6 Table B-8 summarizes the accrued volume of taxable transactions in the County in 2009 through 2012. Annual figures for 2013 are unavailable. Note that commencing in 2009, the categorization of the types of business was changed from previous years. TABLE B-8 COUNTY OF ORANGE TAXABLE TRANSACTIONS 2009 through 2012tr1 (in Thousands) Type of Business 2009 2010 2011 2012 Motor vehicles and parts dealers $ 4,902,480 $ 5,244,266 $ 5,777,582 $ 6,551,466 Furniture and home furnishings stores 850,889 869,868 909,455 965,018 Electronics and appliance stores 1,978,869 2,058,383 2,319,992 2,536,415 Bldg.maul.and garden equipment and supplies 2,039,686 2,112,467 2,267,363 2,351,574 Food and beverage stores 1,894,642 1,911,192 1,990,893 2,056,803 Health and personal care stores 784,067 824,719 894,003 948,220 Gas stations 3,383,678 3,801,651 4,826,228 5,063,762 Clothing and clothing accessories stores 2,742,626 2,923,680 3,164,857 3,510,757 Sporting goods,hobby,book and music stores 1,074,579 1,075,996 1,101,159 1,133,702 General merchandise stores 4,376,154 4,527,201 4,771,143 5,026,911 Miscellaneous store retailers 1,625,880 1,611,739 1,656,162 1,738,855 Nonstore retailers 484,692 481,563 459,841 635,707 Food services and drinking places 5,024,379 5,109,383 5,449,117 5,853.267 TOTAL RETAIL AND FOOD SERVICES $31,162,619 $32,552,107 $35,587,795 $38,372,456 All Other Outlets 14,550,164 15,115,073 16,143.344 16,858.156 TOTAL ALL OUTLETS $45,712,784 $47,667,179 $51,731,139 $55,230,612 2013 gmfies unavailable. Source: California State Board ofEgualization. Building Permits The total valuation of building permits issued in the County reached $4.1 billion in 2013. Table B-9 provides a summary of residential building permit valuations and the number of new dwelling units authorized in the County during the period 2008 through 2013. 405169a4.4 B-7 TABLE B-9 COUNTY OF ORANGE BUILDING PERMIT ACTIVITY 2008 through 2013 ($in Thousands) 2009 2010 2011 2012 2013 Valuation: Residential $ 855,193 $1,029,407 $1,238,932 $1,554,904 $2,596,543 Non-Residential 952,480 1,151,929 1,299,352 1,271,035 1,578,467 Total $1,807,673 $2,181,336 $2,538,284 $2,825,939 $4,175,010 New Housine Units: Single Family 1,376 1,553 1,890 2,438 3,889 Multiple Family 824 1 538 2 928 3 725 6 564 Total 2,200 3,091 4,818 6,163 10,453 Source: Consoucdon Indiva y Research Board; CHFI CIRB for 2012 and 2013. Water Supply Maintaining the County's water supply is the responsibility of the Orange County Water District ("OCWD"), manager of the County's groundwater basin, and the Municipal Water District of Orange County ("MWDOC"), the County's largest manager of imported water. More than 60% of the County's water is from local groundwater sources; the rest is imported. The County's natural underground reservoir is sufficient to carry it through temporary shortfall periods, but local supplies alone cannot sustain the present population. Recreation and Tourism The County is a tourist center in Southern California because of the broad spectmm of amusement parks and leisure, recreational and entertainment activities that it offers. These tourist attractions are complimented by the year-round mild climate. Along the County's Pacific Coast shoreline are five state beaches and parks, five municipal beaches and five County beaches. There are two small-craft docking facilities in Newport Harbor, a third located at Sunset Beach and a fourth at Dana Point. Other major recreational and amusement facilities include Disneyland, Disney's California Adventure,Knott's Berry Farm and the Spanish Mission of San Juan Capistrano. Also located within the County are the Anaheim Convention Center, Edison International Field of Anaheim, Honda Center, Orange County Performing Arts Center, Verizon Wireless Amphitheater and the Art Colony at Laguna Beach with its annual art festival. The Anaheim Convention Center is located adjacent to Disneyland. It is situated on 53 acres and is one of the largest convention centers on the West Coast. Table B-10 summarizes the number of conventions held in the County,as well as attendance for the period 2008 through 2012. "5169N.d B-8 TABLE B-10 COUNTY OF ORANGE CONVENTION ACTIVITY Year Conventions Attendance 2008 766 1,224,586 2009 584 1,292,179 2010 576 1,171,626 2011 476 973,071 2012 488 1,230,812 2013 489 1,085,643 Source.: Anahei WOrange County Visitor and Convention Bureau. Transportation The County has access to excellent roads,rail,air and sea transportation. The Santa Ana Freeway (Interstate 5)provides direct access to downtown Los Angeles and connects with the San Diego Freeway (Interstate 405) southeast of the City of Santa Ana, providing a direct link with San Diego. The Garden Grove Freeway (State 22) and the Riverside Freeway (State 91) provide east-west transportation, linking the San Diego Freeway, Santa Ana Freeway and the Newport Freeway(State 55). The Newport Freeway provides access to certain beach communities. Drivers in the County have access to two toll road systems of the Transportation Corridor Agencies. The San Joaquin Toll Road (73) runs from Costa Mesa to San Juan Capistrano connecting to the 405 and 5 interstate freeways. The Eastern and Foothill Toll Roads (241, 261 and 133) connect the County to the 91 freeway in the north and the 5 freeway, City of Irvine other South County cities,as well as Laguna Canyon Road. The Transportation Corridor Agencies are planning to extend 241 to connect to the 5 freeway near San Clemente. Rail freight service is provided by the Burlington Northern Santa Fe Railway and the Union Pacific Railroad Company. Amtrak provides passenger service to San Diego to the south, Riverside and San Bernardino Counties to the east, and Los Angeles and Santa Barbara to the north. Metro Link provides passenger service to San Bernardino and Riverside counties to the east,the City of Oceanside to the south and Los Angeles County to the north. Bus service is provided by Greyhound Bus Lines. The Orange County Transportation Authority provides bus service between most cities in the County. Most interstate common carrier truck lines operating in California serve the County. The John Wayne Airport, owned and operated by the County, is the only commercial service airport in the County. It is approximately thirty-five miles south of Los Angeles, between the cities of Coast Mesa, Irvine, Newport Beach and Santa Ana. Major airlines, including Alaska, Aloha, America West, American, Continental, Delta, Frontier, Northwest, Southwest and United fly from the airport to major cities throughout the country. In 2010,more than 8 million passengers were served. In 1993, the Defense Base Realignment and Closure Commission directed the closure of Marine Corps Air Station (MCAS) El Toro ("El Toro" or "the base") effective July 1999. The County was designated the Local Redevelopment Authority(`T,RA") for development of a Community Reuse Plan to guide future development of the former MCAS El Toro. In 1994, Orange County voters narrowly approved Measure A which zoned the property for use as an international airport. This touched off a multi-year legal and political battle that ended when 58%of Orange County voters approved Measure W, the Orange County Central Park and Nature Preserve Initiative, on March 5, 2002. Measure W repeals 40576904.4 B-9 Measure A and amends the County General Plan to prohibit aviation uses and limit future development for the unincorporated portion of El Toro to park, open space, nature preserve and education and compatible uses. The day after Measure W was approved, the Department of the Navy issued a press release stating that disposal of the former Base would be accomplished by means of a public auction. The City of Irvine responded by developing the Great Park Plan for El Toro. The City of Irvine was approved by the Local Agency formation Commission("LAFCO")to annex to the City the property that comprises the former MCAS El Toro. In light of the passage of Measure W,the County has discontinued all work related to the planning or development of a commercial airport at El Toro. Natural Disasters; Seismic Activity Natural disasters, including floods, fires and earthquakes, have been experienced in the County. Seismic records spanning the past half century and historic records dating from the 1700s through the early 1900s indicate that the County is a seismically active area. The State Office of Emergency Services indicates that significant tremors are likely to occur in several fault zones during the next 50 to 100 years, including a tremor of 7.0 on the Richter scale within the Newport-Inglewood fault system. The chance of a Richter 7.0 earthquake occurring is estimated to be I to 2% in any year. For this reason, local building codes require that structures be designed to withstand the expected accelerations for the area without collapsing or suffering severe structural damage. Maps published by the State Department of Conservation indicate that portions of the County may be subject to the risk of earthquake-induced landslides or liquefaction. 40516904.4 B-10 RETURN TO AGENDA Fulbright&Jaworsld LLP—Draft of 06/09/14 PRELIMINARY OFFICIAL STATEMENT DATED JULY_,2014 NEW ISSUE—BOOK-ENTRY-ONLY RATINGS: S&P: " Fitch: (See"RATINGS"herein) In the opinion of Forthright&Jaworski LIP, Los Angeles, California, Special Counsel, under existing statutes, regulations, rulings and court decisions, and assuming compliance with the tax covenants described herein, the interest component of each Installment Payment, and the allocable portion thereof distributable in respect of any Revenue Obligation, is excluded pursuant to section 103(a)of the Internal Revenue Code of 1986 from the gross income of the owners thereof for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax.It is also the opinion of Special Counsel that under existing law the interest component of each Installment Payment, and the allocable portion thereof distributable in respect of any Revenue Obligation, is exempt from personal income taxes of the State of California. See, however, "TAXMATTERS"herein. [District Logo] $55,000,000* [DAC Logo] ORANGE COUNTY SANITATION DISTRICT WASTEWATER REFUNDING REVENUE OBLIGATIONS SERIES 2014A Dated: Date of Delivery Due: as shown on the inside cover The $85,000,000* Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2014A (the "Revenue Obligations") are certificates of participation that evidence direct, fractional undivided interests of the Owners thereof in certain Installment payments(the"Installment Payments"),and the interest thereon, to be made by the Orange County Sanitation District (the "Districts pursuant to the Installment Purchase Agreement, dated as of August 1, 2014 (the"Installment Purchase Agreement"), by and between the District and the Orange County Sanitation District Financing Corporation (the "Corporation"). Pursuant to the Master Agreement for District Obligations, dated as of August 1, 2000 (the "Master Agreement'),by and between the District and the Corporation,the District has established conditions and terms upon which obligations such as the Installment Payments,and the interest thereon,will be incurred and secured. Installment Payments under the Installment Purchase Agreement are payable solely from Net Revenues(as more fully described in the Master Agreement, the `Net Revenues") as provided in the Installment Purchase Agreement, consisting primarily of all income and revenue received by the District from the operation or ownership of the Wastewater System of the District (the "Wastewater System") remaining after payment of Maintenance and Operation Costs, as further described in "SECURITY AND SOURCES OF PAYMENT FOR THE REVENUE OBLIGATIONS"herein. The Installment Purchase Agreement provides that the obligation of the District to pay the Installment Payments, and payments of interest thereon, and certain other payments required to be made in accordance with the Installment Purchase Agreement, solely from Net Revenues, is absolute and unconditional. See `SECURITY AND SOURCES OF PAYMENT FOR THE REVENUE OBLIGATIONS"herein. The proceeds of the Revenue Obligations will be used to(i)prepay and retire a portion of the District's Certificates of Participation, Series 2007B, currently outstanding in the aggregate principal amount of $267,255,000 and (ii)pay the costs incurred in connection with the execution and delivery of the Revenue Obligations. See"REFUNDING PLAN"herein. Interest evidenced by the Revenue Obligations will be payable semiannually on February 1 and August 1 of each year,commencing on February 1,2015. See"THE REVENUE OBLIGATIONS"herein. The Revenue Obligations initially will be delivered only in book-entry form and will be registered in the name of Cede&Co., as nominee of The Depository Trust Company,New York, New York("DTC"), which will act as securities depository for the Revenue Obligations. Individual purchases of the Revenue Obligations will be Preliminary,subject to change. 40576905.5 made in book-entry form only. Purchasers of Revenue Obligations will not receive physical certificates representing their ownership interests in the Revenue Obligations purchased. The Revenue Obligations will be delivered in denominations of$5,000 and any integral multiple thereof Payments of principal and interest evidenced by the Revenue Obligations are payable directly to DTC by MUFG Union Bank,N.A.,as trustee(the "Trustee"). Upon receipt of payments of such principal and interest, DTC will in turn distribute such payments to the beneficial owners of the Revenue Obligations. See APPENDIX E—`BOOK-ENTRY SYSTEM"herein. THE OBLIGATION OF THE DISTRICT TO PAY THE INSTALLMENT PAYMENTS, AND THE INTEREST THEREON, AND OTHER PAYMENTS REQUIRED TO BE MADE BY IT UNDER THE INSTALLMENT PURCHASE AGREEMENT IS A SPECIAL OBLIGATION OF THE DISTRICT PAYABLE, IN THE MANNER PROVIDED IN THE INSTALLMENT PURCHASE AGREEMENT, SOLELY FROM NET REVENUES AND OTHER FUNDS PROVIDED FOR IN THE INSTALLMENT PURCHASE AGREEMENT, AND DOES NOT CONSTITUTE A DEBT OF THE DISTRICT OR OF THE STATE OF CALIFORNIA, OR OF ANY POLITICAL SUBDIVISION THEREOF, IN CONTRAVENTION OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF CALIFORNIA, OR ANY POLITICAL SUBDIVISION THEREOF, IS PLEDGED TO THE PAYMENT OF THE INSTALLMENT PAYMENTS, OR THE INTEREST THEREON, OR OTHER PAYMENTS REQUIRED TO BE MADE UNDER THE INSTALLMENT PURCHASE AGREEMENT. SEE`SECURITY AND SOURCES OF PAYMENT FOR THE REVENUE OBLIGATIONS"HEREIN. This cover page contains information intended for quick reference only. It is not a summary of this issue. Investors must read the entire Official Statement to obtain information essential to making an informed investment decision. BIDS FOR THE PURCHASE OF THE REVENUE OBLIGATIONS WILL BE RECEIVED BY THE DISTRICT UNTIL I1:00 A.M.NEW YORK TIME ON JULY 8,2014 UNLESS POSTPONED OR CANCELLED AS SET FORTH IN THE OFFICIAL NOTICE INVITING BIDS. The Revenue Obligations are offered when, as and if executed and delivered and received by , as the Initial Purchaser, subject to the approval of Fulbright&Jaworski LLP, Los Angeles, California, a member of Norton Rose Fulbright, Special Counsel and Disclosure Counsel to the District, and certain other conditions. Certain legal matters will be passed upon for the District and the Corporation by Woodruff, Spradlin &Smart, a Professional Corporation, Costa Mesa, California. Public Resources Advisory Group, Los Angeles, California, has served as financial advisor to the District in connection with the execution and delivery of the Revenue Obligations. It is anticipated that the Revenue Obligations in definitive form will be available for delivery through the book-entry facilities of DTC on or about August 2014, Dated: July—,2014 40576905.5 MATURITY SCHEDULE Principal Interest CUSW February 1 Amount Rate Yield Price (Base No. f CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by Standard &Poor's Financial Services LLC on behalf of The American Bankers Association. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services. None of the District,the Initial Purchaser or the Financial Advisor is responsible for the selection or correctness of the CUSIP numbers set forth herein. 40576905.5 [MAP] 40576905,5 ORANGE COUNTY SANITATION DISTRICT Board of Directors Troy Edgar—(Chair)—Los Alamitos Tom Beamish—(Vice Chair)—La Habra Lucille KringAnaheim Teresa Smith—Orange Brett Murdock—Brea Scott Nelson—Placentia Fred Smith—Buena Park David Benavides Santa Ana Prakash NarainCypress Michael Levitt—Seal Beach Steve Nagel—Fountain Valley David Shawver—Stanton Gregory Sebounn Fullerton John Nielsen—Tustin Steve Jones—Garden Grove Brad Reese— Villa Park Joe Carchio—Huntington Beach Gene Hernandez—Yorba Linda Steven Choi—Irvine James M. Ferryman Costa Mesa Sanitary District Peter Kim—La Palma John Withers—Irvine Ranch Water District Keith Curry—Newport Beach Tyler Diep—Midway City Sanitary District Janet Nguyen Member of the Orange County Board of Supervisors Executive Management of the District James Herberg, General Manager Robert P. Ghirelli,D.Env.,Assistant General Manager Lorenzo Tyner,Director of Finance and Administrative Services Ed Torres,Director of Operations and Maintenance Nick Arhontes,Director of Facilities Support Services Robert Thompson,Director of Engineering Jeff Reed,Director of Human Resources Soecial Services Special Counsel and Disclosure Counsel Fulbright&Jaworski LLP (a member of Norton Rose Fulbright) Los Angeles,California District General Counsel Bradley R.Hogin Woodruff, Spradlin& Smart,a Professional Corporation Costa Mesa,California Financial Advisor Public Resources Advisory Group Los Angeles,California Trustee Verification Agent MUFG Union Bank,N.A. Causey Demgen&Moore Inc. Los Angeles,California Denver,Colorado 40576905.5 This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Revenue Obligations by any person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale. The information set forth herein has been provided by the Orange County Sanitation District (the "District') and other sources that are believed by the District to be reliable. No dealer,broker, salesperson or other person has been authorized to give any information or to make any representations other than those contained in this Official Statement. If given or made, such other information or representations must not be relied upon as having been authorized by the District,the Corporation or the Initial Purchaser in connection with any reoffering. This Official Statement is not to be construed as a contract with the purchasers of the Revenue Obligations. Statements contained in this Official Statement which involve estimates, projections, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of facts. The information and expressions of opinion herein are subject to change without notice and neither delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the District or the Corporation since the date hereof This Official Statement is submitted with respect to the sale of the Revenue Obligations referred to herein and may not be reproduced or used, in whole or in part, for any other purpose, unless authorized in writing by the District. All summaries of the documents and laws are made subject to the provisions thereof and do not purport to be complete statements of any or all such provisions. Preparation of this Official Statement and its distribution have been duly authorized and approved by the District and the Corporation. In connection with the offering of the Revenue Obligations, the Initial Purchaser in connection with any reoffering may over-allot or effect transactions which stabilize or maintain the market price of the Revenue Obligations at a level above that which might otherwise prevail in the open market. Such stabilizing,if commenced,may be discontinued at any time. The Initial Purchaser in connection with any reoffering may offer and sell the Revenue Obligations to certain dealers, institutional investors and others at prices lower than the public offering prices stated on the inside cover page hereof and such public offering prices may be changed from time to time by the Initial Purchaser. Certain statements included or incorporated by reference in this Official Statement constitute forward-looking statements. Such statements are generally identifiable by the terminology used such as "plan,""expect,""estimate,""budget"or other similar words. The achievement of certain results or other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results,performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. 40576905.5 TABLE OF CONTENTS Page INTRODUCTION......................................................................................................................... 1 General............................................................................................................................... 1 TheDistrict........................................................................................................................2 Security and Sources of Payment for the Revenue Obligations........................................2 Continuing Disclosure.......................................................................................................3 Miscellaneous ....................................................................................................................3 REFUNDING PLAN.....................................................................................................................4 ESTIMATED SOURCES AND USES OF FUNDS.....................................................................4 THE REVENUE OBLIGATIONS................................................................................................ 5 General............................................................................................................................... 5 Prepayment Provisions....................................................................................................... 5 SECURITY AND SOURCES OF PAYMENT FOR THE REVENUE OBLIGATIONS............7 InstallmentPayments.........................................................................................................7 Available Funds of the District.......................................................................................... 8 NetRevenues..................................................................................................................... 8 Rate Stabilization Account.............................................................................................. 10 Allocation of Revenues.................................................................................................... 10 RateCovenant.................................................................................................................. 10 Limitations on Issuance of Additional Obligations......................................................... 11 Insurance.......................................................................................................................... 13 Allocation of Installment Payments................................................................................. 13 THEDISTRICT........................................................................................................................... 15 Background...................................................................................................................... 15 Organization and Administration..................................................................................... 16 Services............................................................................................................................ 17 ServiceArea..................................................................................................................... 17 Employees........................................................................................................................ 18 RetirementPlan................................................................................................................ 19 Other Post-Employment Benefits....................................................................................21 RiskManagement............................................................................................................21 ExistingFacilities.............................................................................................................21 Permits, Licenses and Other Regulations ........................................................................23 District Planning and Capital Improvement Program.....................................................24 Groundwater Replenishment System...............................................................................25 Preferred Level of Treatment...........................................................................................26 BiosolidsManagement.....................................................................................................26 UrbanRunoff...................................................................................................................27 Integrated Emergency Response Program.......................................................................28 Five-Year Strategic Planning...........................................................................................29 40576905.5 -i- TABLE OF CONTENTS (continued) Page DISTRICT REVENUES..............................................................................................................30 SewerService Charges ....................................................................................................30 AdditionalRevenues........................................................................................................33 Wastewater Treatment History........................................................................................34 Customers ........................................................................................................................34 AssessedValuation..........................................................................................................36 Tax Levies and Delinquencies........................................................................................37 BudgetaryProcess............................................................................................................38 Reserves...........................................................................................................................39 Summaryof Operating Data............................................................................................40 Projected Operating Data.................................................................................................42 Management's Discussion and Analysis of Operating Data............................................44 Investment of District Funds............................................................................................45 FINANCIAL OBLIGATIONS....................................................................................................45 ExistingIndebtedness......................................................................................................45 AnticipatedFinancings ....................................................................................................46 Direct and Overlapping Bonded Debt..............................................................................46 THECORPORATION................................................................................................................46 LIMITATIONS ON TAXES AND REVENUES........................................................................47 Article XIIIA of the California Constitution...................................................................47 Legislation Implementing Article XIIIA.........................................................................47 Article XIIIB of the California Constitution....................................................................48 Proposition IA and Proposition 22..................................................................................49 Article XIIIC and Article XIIID of the California Constitution......................................50 Other Initiative Measures.................................................................................................52 LEGALMATTERS.....................................................................................................................52 FINANCIAL ADVISOR.............................................................................................................52 ABSENCE OF LITIGATION.....................................................................................................52 FINANCIAL STATEMENTS.....................................................................................................53 TAXMATTERS..........................................................................................................................53 VERIFICATION OF MATHEMATICAL COMPUTATIONS..................................................56 CONTINUING DISCLOSURE...................................................................................................56 RATINGS....................................................................................................................................57 PURCHASE AND REOFFERING............................................................................................. 57 MISCELLANEOUS....................................................................................................................57 405]6905.5 _ ii_ TABLE OF CONTENTS PBPC APPENDIX A - COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE ORANGE COUNTY SANITATION DISTRICT FOR FISCAL YEAR ENDED TUNE 30,2013.............................................................................A-1 APPENDIX B - THE COUNTY OF ORANGE-ECONOMIC AND DEMOGRAPHIC INFORMATION....................................................................................................B-1 APPENDIX C - SUMMARY OF PRINCIPAL LEGAL DOCUMENTS........................................C-1 APPENDIX D - FORM OF CONTINUING DISCLOSURE AGREEMENT..................................D-1 APPENDIX E - BOOK-ENTRY SYSTEM......................................................................................E-1 APPENDIX F - FORM OF APPROVING OPINION OF SPECIAL COUNSEL............................F-1 40576905.5 -i- OFFICIAL STATEMENT $85,000,000` ORANGE COUNTY SANITATION DISTRICT WASTEWATER REFUNDING REVENUE OBLIGATIONS SERIES 2014A INTRODUCTION This introduction contains only a brief summary of certain of the terms of the Revenue Obligations being offered and a brief description of the Official Statement. All statements contained in this introduction are qualified in their entirety by reference to the entire Official Statement. References to, and summaries of,provisions of the Constitution and laws of the State of California (the "State') and any documents referred to herein do notpurport to be complete and such references are qualified in their entirety by reference to the complete provisions. All capitalized terms used in this Official Statement and not otherwise defined herein have the meanings set forth in the Trust Agreement the Installment Purchase Agreement and the Master Agreement (each, as hereinafter defined). See APPENDIX C— "SUMMARYOFPRINCIPAL LEGAL DOCUMENTS—Definitions"h ere in. General This Official Statement, including the cover page and all appendices hereto, provides certain information concerning the sale and delivery of$85,000,000 aggregate principal amount of the Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2014A (the "Revenue Obligations"), which are certificates of participation evidencing direct,fractional undivided interests in certain installment payments (the `Installment Payments") and the interest thereon, to be made by the Orange County Sanitation District (the "District') pursuant to the Installment Purchase Agreement, dated as of August 1, 2014 (the`Installment Purchase Agreement),by and between the District and the Orange County Sanitation District Financing Corporation(the"Corporation'). Unless the context clearly indicates to the contrary, a reference herein to either of the Installment Purchase Agreement or the Revenue Obligations is intended to refer to the corresponding interest in the Installment Purchase Agreement. Pursuant to the Master Agreement for District Obligations, dated as of August 1, 2000 (the "Master Agreement'), by and between the District and the Corporation, the District has established and declared the conditions and terns upon which obligations such as the Installment Purchase Agreement, and the Installment Payments and the interest thereon, will be incurred and secured. Installment Payments under the Installment Purchase Agreement are payable solely from Net Revenues (as defined hereinafter) as provided in the Installment Purchase Agreement, consisting primarily of all income and revenue received by the District from the operation or ownership of the Wastewater System of the District (the "Wastewater System") remaining after payment of Maintenance and Operation Costs, as further described in "SECURITY AND SOURCES OF PAYMENT FOR THE REVENUE OBLIGATIONS" herein. The Revenue Obligations are to be executed and delivered pursuant to a Trust Agreement, dated as of August 1, 2014 (the "Trust Agreement'), by and among the District, the Corporation and MUFG Union Bank,N.A., as trustee(the "Trustee'). Proceeds from the sale of the Revenue Obligations will be Preliminary,subject to change. 40576905.5 used to (i)purchase and retire a portion of the District's Certificates of Participation, Series 2007B, currently outstanding in the aggregate principal amount of $267,255,000 (collectively, the "Refunded Certificates")and(it)pay the costs incurred in connection with the execution and delivery of the Revenue Obligations. See"REFUNDING PLAN"herein. The Revenue Obligations will be executed and delivered in the form of fully registered certificates of participation, dated as of the date of initial delivery thereof and will mature on February 1 in each such year as set forth on the inside cover page hereof. Interest evidenced by the Revenue Obligations will be payable semiannually on February 1 and August 1 of each year, commencing on February 1, 2015. See "THE REVENUE OBLIGATIONS" herein. The Revenue Obligations initially will be delivered only in book-entry form and will be registered in the time of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC),, which will act as securities depository for the Revenue Obligations. The Revenue Obligations will be delivered in denominations of $5,000 and any integral multiple thereof. So long as the Revenue Obligations are in the DTC book-entry system, the interest, principal, purchase price and prepayment premiums, if any, due with respect to the Revenue Obligations will be payable by the Trustee, or its agent, to DTC or its nominee. DTC, in tutu, will make payments pursuant to its procedures as described under APPENDIX E — "BOOK—ENTRY SYSTEM"herein. The District The District is a public agency responsible for regional wastewater collection, treatment and disposal. The District is the sixth largest wastewater discharger in the United States. The District provides service to an area with a population of approximately 2.5 million people in the northern and central portion of the County of Orange (the "County"), in a service area of approximately 479 square miles, treating an average of 200 million gallons per day(`mg/d")of wastewater in Fiscal Year 2012-13. See"THE DISTRICT,""DISTRICT REVENUES"and"FINANCIAL OBLIGATIONS"herein. Security and Sources of Payment for the Revenue Obligations The Revenue Obligations, which are certificates of participation, evidence direct, fractional undivided interests in the Installment Payments, and the interest thereon, paid by the District pursuant to the Installment Purchase Agreement. The obligation of the District to pay the Installment Payments and the interest thereon and other payments required to be made by it under the Installment Purchase Agreement is a special obligation of the District payable, in the manner provided under the Installment Purchase Agreement, solely from Net Revenues, and other funds as provided in the Installment Purchase Agreement. Net Revenues generally consist of all income and revenue received by the District from the operation or ownership of the Wastewater System remaining after payment of Maintenance and Operation Costs, all as further provided in the Master Agreement. The Installment Purchase Agreement constitutes a Senior Obligation and, as such, is subject to the provisions of the Master Agreement and is afforded all of the advantages, benefits, interests and security afforded Senior Obligations pursuant to the Master Agreement. The District currently has Outstanding Senior Obligations payable from Net Revenues on a parity with the Installment Payments under the Installment Purchase Agreement. See "ESTIMATED SOURCES AND USES OF FUNDS," "FINANCIAL OBLIGATIONS — Existing Indebtedness" and "THE DISTRICT"herein and APPENDIX C—"SUMMARY OF PRINCIPAL LEGAL DOCUMENTS— Master Agreement"attached hereto.The District has no Subordinate Obligations currently outstanding. Pursuant to the Master Agreement, the District will,to the extent permitted by law, fix,prescribe and collect fees and charges for the services and facilities of the Wastewater System which will be at least 0576905.5 2 sufficient to yield during each Fiscal Year (a)Net Revenues equal to 125% of Debt Service on Senior Obligations for such Fiscal Year and (b)Net Operating Revenues equal to 100% of Debt Service on all Obligations for such Fiscal Year. The District may make adjustments from time to time in such fees and charges and may make such classification thereof as it deems necessary,but shall not reduce the fees and charges then in effect unless the Revenues and Net Revenues from such reduced fees and charges will at all times be sufficient to meet the requirements of the Master Agreement. See "SECURITY AND SOURCE OF PAYMENT FOR THE REVENUE OBLIGATIONS—Rate Covenant"herein. The obligation of the District to pay the Installment Payments and the interest thereon,and other payments required to be made by it under the Installment Purchase Agreement is a special obligation of the District payable, in the manner provided in the Installment Purchase Agreement, solely from Net Revenues and other funds provided for in the Installment Purchase Agreement,and does not constitute a debt of the District or of the State, or of any political subdivision thereof, in contravention of any constitutional or statutory debt limitation or restriction. Neither the faith and credit nor the taxing power of the District or the State or any political subdivision thereof, is pledged to the payment of the Installment Payments, or the interest thereon, or other payments required to be made under the Installment Purchase Agreement. The Installment Purchase Agreement constitutes a Senior Obligation and, as such, is subject to the provisions of the Master Agreement and is afforded all of the advantages, benefits, interests and security afforded Senior Obligations pursuant to the Master Agreement. See"SECURITY AND SOURCES OF PAYMENT FOR THE REVENUE OBLIGATIONS"herein. Continuing Disclosure The District has covenanted for the benefit of holders and beneficial owners of the Revenue Obligations (a)to provide certain financial information and operating data(the"Annual Report")relating to the District and the property in the District not later than eight months after the end of the District's Fiscal Year (which currently would be March 1), commencing with the report for the 2013-14 Fiscal Year, and (b)to provide notices of the occurrence of certain enumerated events. The specific nature of the information to be contained in the Annual Report or the notices of enumerated events is set forth in the Continuing Disclosure Agreement. See "CONTINUING DISCLOSURE" herein and APPENDIX D —"FORM OF CONTINUING DISCLOSURE AGREEMENT." Miscellaneous The descriptions herein of the Trust Agreement, the Master Agreement, the Installment Purchase Agreement, the Continuing Disclosure Agreement and any other agreements relating to the Revenue Obligations are qualified in their entirety by reference to such documents. Copies of the Trust Agreement, the Master Agreement and the Installment Purchase Agreement me on file and available for inspection at the corporate trust office of MUFG Union Bank, N.A., Los Angeles, California Attention: Corporate Trust. 0576905.5 3 REFUNDING PLAN A portion of the net proceeds of from the sale of the Revenue Obligations, together with other available moneys,will be used to prepay a portion of the remaining installment payments (the"Refunded Installment Payments") to be made by the District pursuant to the Installment Purchase Agreement, dated as of December 1, 2007, by and between the District and the Corporation, which was executed and delivered in connection with the Refunded Certificates. The Refunded Certificates were executed and delivered on December 20, 2007 in the original aggregate principal amount of$300,000,000, of which $_is currently outstanding. Pursuant to the terms of the Trust Agreement, dated as December 1,2007 (the"2007 Trust Agreement"),by and among the District,the Corporation and MUFG Union Bank,N.A., as successor trustee thereunder, the prepayment of the Refunded Certificates will be effected by depositing a portion of the proceeds of the Revenue Obligations,together with other available moneys,in an escrow fund(the"Escrow Fund")to be created and established under the Escrow Agreement,dated as of August 1, 2014, by and between the District and MUFG Union Bank, N.A., as escrow agent thereunder. The District will cause the Escrow Fund deposit to be invested in Government Obligations (as defined in the 2007 Trust Agreement). The Government Obligations will be scheduled to mature in such amounts and at such times and will pay principal and interest at such rates as to provide amounts sufficient to pay principal and interest with respect to the Refunded Certificates due and payable through February 1, 2017 and to pay on February 1, 2017 (the "Prepayment Date") the principal with respect to the Refunded Certificates at a prepayment price equal to the principal amount thereof(the "Prepayment Price"),without premium. See"VERIFICATION OF MATHEMATICAL COMPUTATIONS"herein. The amounts deposited in the Escrow Fund will be held in trust solely for the Refunded Certificates and will not be available to pay the principal and interest evidenced by the Revenue Obligations or any obligations other than the Refunded Certificates. ESTIMATED SOURCES AND USES OF FUNDS The estimated sources and uses of funds in connection with the execution and delivery of the Revenue Obligations are presented below. Sources Principal Amount of Revenue Obligations $ Reserve Release [Net] Premium Total Sources $ Uses Deposit to Escrow Fund $ Initial Purchaser's Discount Costs of Issuances.. Total Uses $ Costs-of Issuance nclude,among other things,fees and expenses of rating agencies,verification agent, Special Counsel and Disclosure Counsel,and the initial fees of the Trustee. 0576905.5 4 THE REVENUE OBLIGATIONS General The Revenue Obligations will be prepared in the form of fully registered certificates of participation in denominations of$5,000 and any integral multiple thereof. The Revenue Obligations will be dated as of the date of initial delivery thereof and will mature on February 1 in such years as set forth on the inside cover page hereof. Interest evidenced by the Revenue Obligations will be payable semiannually on February 1 and August 1 of each year, commencing on February 1, 2015. The Revenue Obligations initially will be delivered only in book-entry form and will be registered in the name of Cede &Co., as nominee of The Depository Trust Company, New York, New York("DTC"),which will act as securities depository for the Revenue Obligations. Individual purchases of the Revenue Obligations will be made in book-entry form only. Purchasers of Revenue Obligations will not receive physical certificates representing their ownership interests in the Revenue Obligations purchased. The interest evidenced by the Revenue Obligations shall be payable on each Interest Payment Date to and including their respective Principal Payment Dates or prepayment prior thereto, and shall represent the sum of the interest on the Installment Payments coming due on the Interest Payment Dates in each year. The principal evidenced by the Revenue Obligations shall be payable on their respective Principal Payment Dates in each year and shall represent the Installment Payments coming due on the Principal Payment Dates in each year. Each Revenue Obligation shall evidence interest from the Interest Payment Date next preceding its date of execution to which interest has been paid in full,unless such date of execution shall be after a Record Date and on or prior to the following Interest Payment Date,in which case such Revenue Obligation shall evidence interest from such Interest Payment Date, or unless such date of execution shall be on or prior to January 15, 2015, in which case such Revenue Obligation shall represent interest from its date of initial delivery. Notwithstanding, the foregoing, if, as shown by the records of the Trustee, interest evidenced by the Revenue Obligations shall be in default, each Revenue Obligation shall evidence interest from the last Interest Payment Date to which such interest has been paid in full or duly provided for. Interest evidenced by the Revenue Obligations shall be computed on the basis of a 360-day year consisting of twelve 30-day months. See APPENDIX C — "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS—Trust Agreement." Payments of principal and interest evidenced by the Revenue Obligations are payable directly to DTC by MUFG Union Bank, N.A., as trustee. Upon receipt of payments of such principal and interest, DTC will in turn distribute such payments to the beneficial owners of the Revenue Obligations. So long as the Revenue Obligations are held in the DTC book-entry system,the interest, principal,purchase price and prepayment premiums, if any, due with respect to the Revenue Obligations will be payable by the Trustee, or its agent,to DTC or its nominee. DTC,in turn,will make payments pursuant to its procedures as described under APPENDIX E—"BOOK-ENTRY SYSTEM"herein. Prepayment Provisions Optional Prepayment The Revenue Obligations with stated Principal Payment Dates prior to February 1, 2025 are not subject to optional prepayment prior to their stated Principal Payment Dates. The Revenue Obligations with stated Principal Payment Dates on or after February 1, 2025 me subject to optional prepayment prior to their stated Principal Payment Dates, on any date on or after February 1, *Preliminary,subject to change. "506905.5 5 2024, in whole or in part, in Authorized Denominations, from and to the extent of prepaid Installment Payments paid pursuant to the Installment Purchase Agreement or from any other source of available funds, any such prepayment to be at a price equal to the principal evidenced by the Revenue Obligations to be prepaid,plus accrued interest evidenced thereby to the date fixed for prepayment,without premium. Selection of Revenue Obligations for Prepayment Whenever less than all the Outstanding Revenue Obligations are to be prepaid on any one date pursuant to provisions of the Trust Agreement with respect to optional prepayment of Revenue Obligations, the Trustee shall select the Revenue Obligations to be prepaid among Revenue Obligations with different Principal Payment Dates as directed in a Written Request of the District. Whenever less than all the Outstanding Revenue Obligations with the same stated Principal Payment Date we to be prepaid on any one date in accordance with the Trust Agreement, the Trustee shall select the Revenue Obligations with such Principal Payment Date to be prepaid as directed in a Written Request of the District, or at the discretion of the District by lot in any manner that the Trustee deems fair and appropriate, which decision shall be final and binding upon the District and the Owners. The Trustee shall promptly notify the District in writing of the numbers of the Revenue Obligations so selected for prepayment on such date. For purposes of such selection, any Revenue Obligation may be prepaid in part in Authorized Denominations. Notice of Prepayment When prepayment of Revenue Obligations is authorized pursuant to the Trust Agreement, the Trustee shall give notice, at the expense of the District, of the prepayment of the Revenue Obligations. The notice of prepayment shall specify(a) the Revenue Obligations or designated portions thereof(in the case of prepayment of the Revenue Obligations in part but not in whole)which are to be prepaid, (b)the date of prepayment, (c)the place or places where the prepayment will be made, including the time and address of any paying agent, (d)the prepayment price, (e)the CUSIP numbers assigned to the Revenue Obligations to be prepaid, (f)the numbers of the Revenue Obligations to be prepaid in whole or in part and, in the case of any Revenue Obligation to be prepaid in part only, the principal evidenced by such Revenue Obligation to be prepaid, and (g)the interest rate and stated Principal Payment Date of each Revenue Obligation to be prepaid in whole or in part. Such notice of prepayment shall further state that on the specified date there shall become due and payable upon each Revenue Obligation or portion thereof being prepaid the prepayment price and that from and after such date interest evidenced thereby shall cease to accrue and be payable. With respect to any notice of optional prepayment of Revenue Obligations, unless at the time such notice is given the Revenue Obligations to be prepaid shall be deemed to have been paid within the meaning of the Trust Agreement, such notice shall state that such prepayment is conditional upon receipt by the Trustee, on or prior to the date fixed for such prepayment, of moneys sufficient to pay for the prepayment price of the Revenue Obligations to be prepaid, and that if such moneys shall not have been so received said notice shall be of no force and effect and the District shall not be required to prepay such Revenue Obligations. In the event a notice of prepayment of Revenue Obligations contains such a condition and such moneys are not so received, the prepayment of Revenue Obligations as described in the conditional notice of prepayment shall not be made and the Trustee shall,within a reasonable time after the date on which such prepayment was to occur, give notice to the persons and in the mariner in which the notice of prepayment was given, that such moneys were not so received and that there shall be no prepayment of Revenue Obligations pursuant to such notice of prepayment. The Trustee shall,at least 20 but not more than 60 days prior to any prepayment date, give notice of prepayment to the respective Owners of Revenue Obligations designated for prepayment by first-class mail, postage prepaid, at their addresses appearing on the registration books maintained by the Trustee as of the close of business on the day before such notice of prepayment is given. 0576905.5 6 The actual receipt by the Owner of any notice of such prepayment shall not be a condition precedent to prepayment, and neither failure to receive such notice nor any defect therein shall affect the validity of the proceedings for the prepayment of such Revenue Obligations or the cessation of interest evidenced thereby on the date fixed for prepayment. Effect of Prepayment. If notice of prepayment has been duly given as aforesaid and moneys for the payment of the prepayment price of the Revenue Obligations to be prepaid are held by the Trustee, then on the prepayment date designated in such notice,the Revenue Obligations so called for prepayment shall become payable at the prepayment price specified in such notice; and from and after the date so designated,interest evidenced by the Revenue Obligations so called for prepayment shall cease to accrue, such Revenue Obligations shall cease to be entitled to any benefit or security hereunder and the Owners of such Revenue Obligations shall have no rights in respect thereof except to receive payment of the prepayment price thereof. The Trustee shall, upon surrender for payment of any of the Revenue Obligations to be prepaid, pay such Revenue Obligations at the prepayment price thereof, and such moneys shall be pledged to such payment. SECURITY AND SOURCES OF PAYMENT FOR THE REVENUE OBLIGATIONS Installment Payments Pursuant to the Installment Purchase Agreement, the Project will be reacquired by the District from the Corporation. The District has covenanted to, subject to any rights of prepayment under the Installment Purchase Agreement, pay to the Corporation, solely from Net Revenues and from no other sources, the Purchase Price in Installment Payments, with interest thereon, as provided in the Installment Purchase Agreement. Pursuant to the Master Agreement, the District has established and declared the conditions and terms upon which obligations such as the Installment Purchase Agreement, and the Installment Payments and the interest thereon payable under the Installment Purchase Agreement, will be incurred and secured. The obligation of the District to make the Installment Payments, and payments of interest thereon,and other payments required to be made by it under the Installment Purchase Agreement, solely from Net Revenues,is absolute and unconditional,and until such time as the Installment Payments, payments of interest thereon, and such other payments shall have been paid in full (or provision for the payment thereof shall have been made pursuant to the Installment Purchase Agreement), the District has covenanted that it will not discontinue or suspend any Installment Payments when due,whether or not the Project or any part thereof is operating or operable or has been completed, or its use is suspended, interfered with, reduced or curtailed or terminated in whole or in part, and such Installment Payments, payments of interest thereon, and other payments shall not be subject to reduction whether offset or otherwise and shall not be conditional upon the performance or nonperformance by any party of any agreement or any cause whatsoever. The District's obligation to make Installment Payments from Net Revenues is on a parity with the District's obligation to make payments with respect to its Outstanding Senior Obligations. See "Net Revenues" below. Pursuant to the Trust Agreement, the Corporation has assigned to the Trustee for the benefit of the Owners of the Revenue Obligations substantially all of its rights, title and interest in and to the Installment Purchase Agreement, including its right to receive Installment Payments and the interest thereon. The District has certain Existing Senior Obligations Outstanding payable from Net Revenues on a parity with the Installment Payments under the Installment Purchase Agreement. The tern "Existing Senior Obligations" as used in this Official Statement refers to the Installment Purchase Agreements relating to the District's Outstanding Senior Obligations, as set forth on Table 16 under the caption "FINANCIAL OBLIGATIONS—Existing Indebtedness"herein. The term`Senior Obligations" as used in this Official Statement refers to the Existing Senior Obligations and to any additional Senior Obligations, such as the Installment Purchase Agreement, that may be made payable on a parity basis to 0576905.5 the Installment Payments as provided in the Master Agreement. Senior Obligations, together with any Subordinate Obligations payable on a subordinate basis to the Installment Payments incurred as provided in the Master Agreement, are referred to collectively as the "Obligations" The District has no Subordinate Obligations currently outstanding. See "FINANCIAL OBLIGATIONS — Existing Indebtedness" herein and APPENDIX C "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS Master Agreement"attached hereto. The obligation of the District to pay the Installment Payments, and the interest thereon, and other payments required to be made by it under the Installment Purchase Agreement and Master Agreement, is a special obligation of the District payable, in the manner provided in the Installment Purchase Agreement, solely from Net Revenues and other funds provided for in the Installment Purchase Agreement, and does not constitute a debt of the District, the State or any political subdivision thereof,in contravention of any constitutional or statutory debt limitation or restriction. Neither the faith and credit nor the taxing power of the District, the State or any political subdivision thereof, is pledged to the payment of the Installment Payments, or the interest thereon, or other payments required to be made under the Installment Purchase Agreement. The Installment Purchase Agreement constitutes a Senior Obligation and, as such, is subject to the provisions of the Master Agreement and is afforded all of the advantages, benefits, interests and security afforded Senior Obligations pursuant to the Master Agreement. See"SECURITY AND SOURCES OF PAYMENT FOR THE REVENUE OBLIGATIONS" herein. Available Funds of the District As Senior Obligations under the Master Agreement, the Installment Payments are payable from and secured by a pledge of Net Revenues. Should Net Revenues prove insufficient, the Installment Purchase Agreement further provides that the Installment Payments are payable from any other lawfully available funds of the District. The primary lawfully available funds of the District are its reserve funds, other than trustee-held amounts required to be in any Obligation Reserve Fund securing certain of the District's Senior Obligations, as described in the Master Agreement. At June 30, 2013, the District's Debt Service Required Reserves totaled $135 million, of which $53.1 million were trustee-held amounts in Obligation Reserve Funds as required under the Master Agreement. See APPENDIX C — "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS — Master Agreement" attached hereto. District reserve fonds are maintained in accordance with the District's reserve policy. See "DISTRICT REVENUES — Reserves." Available reserves at June 30, 2012 and June 30, 2013 were approximately $608 million and $_million, respectively. See"DISTRICT REVENUES—Reserves,'-- Summary of Operating Data"and'—Projected Operating Data." Net Revenues The District is obligated to make Installment Payments solely from Net Revenues as provided in the Master Agreement, which consist of Revenues remaining after payment of costs paid by the District for maintaining and operating the Wastewater System ("Maintenance and Operation Costs"). Revenues are defined in the Master Agreement to mean, for any period, all income and revenue received by the District during such period from the operation or ownership of the Wastewater System, determined in accordance with generally accepted accounting principles, including all fees and charges received during such period for the services of the Wastewater System, investment income received during such period (but only to the extent that such investment income is generally available to pay costs with respect to the Wastewater System, including Maintenance and Operation Costs), Net Proceeds of business interruption insurance received during such period, ad valorem taxes received during such period,payments under the Agreement Acquiring Ownership Interests, Assigning Rights and Establishing Obligations, entered into on February 13, 1986,and amendment No. 1 thereto dated December 10, 1986(the"IRWD Agreement"), "506905.5 8 by and between predecessor County Sanitation District No. 14 of Orange County and the Irvine Ranch Water District (the "IRWD") received during such period and all other money received during such period howsoever derived by the District from the operation or ownership of the Wastewater System or arising from the Wastewater System (including any standby or availability charges), but excluding (a)Capital Facilities Capacity Charges, (b)payments received under Financial Contracts, and (c)refundable deposits made to establish credit and advances or contributions in aid of construction (which, for purposes of the Master Agreement, shall not include payments under the IRWD Agreement); provided, however, that (i)Revenues shall be increased by the amounts, if any, transferred during such period from the Rate Stabilization Account to the Revenue Account and shall be decreased by the amounts, if any, transferred during such period from the Revenue Account to the Rate Stabilization Account, and(ii)Revenues shall include Capital Facilities Capacity Charges collected during such period to the extent that such Capital Facilities Capacity Charges could be properly expended on a Capital Facilities Capacity Charge Eligible Project for which the proceeds of Subject Obligations were used or are available to be used. Any Federal Subsidy payments received by the District will constitute Revenues as defined in the Master Agreement. See"DISTRICT REVENUES—Additional Revenues"herein. The District's obligation to make the Installment Payments from its Net Revenues is on a parity with the District's obligation to make payments with respect to its other outstanding obligations described as Senior Obligations and all Reimbursement Obligations with respect to Senior Obligations,as provided in the Master Agreement. The Installment Purchase Agreement constitutes a Senior Obligation and, as such, is subject to the provisions of the Master Agreement and is afforded all of the advantages, benefits, interests and security afforded Senior Obligations pursuant to the Master Agreement. Pursuant to the Master Agreement, the District pledges all Net Revenues to the payment of the Senior Obligations and Reimbursement Obligations with respect to Senior Obligations, and the Net Revenues will not be used for any other purpose while any of the Senior Obligations or Reimbursement Obligations with respect to Senior Obligations remain unpaid; provided, however, that out of the Net Revenues there may be apportioned such sums for such purposes as are expressly permitted by the Master Agreement. This pledge constitutes a first lien on the Net Revenues for the payment of the Senior Obligations and Reimbursement Obligations with respect to Senior Obligations. The tern"Senior Obligations"generally means all revenue bonds or notes(including bond anticipation notes and commercial paper)of the District authorized, issued,executed and delivered under and pursuant to applicable law,the Installment Purchase Agreement, and all other contracts (including financial contracts) or leases of the District authorized and executed by the District under and pursuant to applicable law, including, without limitation, installment, lease or other payments which are, in accordance with the provisions of the Master Agreement, payable from Net Revenues on a parity with the payments under the Master Agreement. The District may at any time incur Subordinate Obligations payable on a subordinate basis to the Installment Payments as provided in the Master Agreement; provided, however, that prior to incurring such Subordinate Obligations, the District shall have determined that the incurrence thereof will not materially adversely affect the District's ability to comply with the requirements of the Master Agreement. The District may at any time incur Reimbursement Obligations with respect to Subordinate Obligations. For a description of the District's Outstanding Senior Obligations and Subordinate Obligations, see "FINANCIAL OBLIGATIONS Existing Indebtedness" herein. There are currently no Subordinate Obligations or Reimbursement Obligations with respect to Subordinate Obligations outstanding. The District may, in connection with the incurrence of Subordinate Obligations, pledge Net Revenues to the payment of Subordinate Obligations and Reimbursement Obligations with respect to Subordinate Obligations; provided, however, that such pledge, and any lien created thereby, shall be junior and subordinate to the pledge of, and lien on,Net Revenues for the payment of Senior Obligations and Reimbursement Obligations with respect to Senior Obligations. a0506905.5 9 Rate Stabilization Account To avoid fluctuations in its fees and charges of the Wastewater System, from time to time the District may deposit in the Rate Stabilization Account from Net Revenues such amounts as the District deems necessary or appropriate. From time to time, the District may also transfer moneys from the Rate Stabilization Account to the Revenue Account to be used by the District, first to pay all Maintenance and Operations Costs as and when the same shall be due and payable. In addition, any such amount transferred from the Rate Stabilization Account to the Revenue Account by the District is included as Revenues for any period,but such transferred amount is excluded from determining Operating Revenues for any period. Revenues will be decreased by the amounts, if any,transferred from the Revenue Account to the Rate Stabilization Account. There me presently no funds in the Rate Stabilization Account. Allocation of Revenues To carry out and effectuate the pledge of Net Revenues under the Master Agreement as described above, the District agrees and covenants that all Operating Revenues received by the District will be deposited when and as received in the Revenue Account. Additionally, amounts may, from time to time as the District deems necessary or appropriate, be transferred from the Rate Stabilization Account and deposited in the Revenue Account,as described above under'—Rate Stabilization Account'above. The District will pay from the Revenue Account all Maintenance and Operations Costs (including amounts reasonably required to be set aside in contingency reserves for Maintenance and Operations Costs, the payment of which is not immediately required)as and when the same shall be due and payable. After having paid, or having made provisions for the payment of, Maintenance and Operations Costs, the District shall set aside and deposit or transfer, as the case may be, from the Revenue Account such amounts at such times as provided in the Master Agreement in the following order of priority: (1) Senior Obligation Payment Account; (2) Senior Obligation Reserve Fonds (the Revenue Obligations are not secured by any Reserve Fund); (3) Subordinate Obligation Payment Account; (4) Subordinate Obligation Reserve Funds;and (5) Rate Stabilization Account. Amounts required or permitted to be deposited or transferred as described in items 2, 3, 4 and 5 above, shall not be so deposited or transferred unless the District shall have determined that there will be sufficient Net Revenues available to make the required deposits or transfers on the dates on which such deposits or transfers are required to be made as described above. So long as the District has determined that Net Revenues will be sufficient to make all of the deposits or transfers required to be made pursuant to items 1, 2, 3, 4 and 5 above, on the dates on which such deposits or transfers are required to be made, Net Revenues on deposit in the Revenue Account may from time to time be used for any purpose for which the District funds may be legally applied. For additional information, see APPENDIX C — "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS Master Agreement" Rate Covenant Pursuant to the Master Agreement, the District will, to the extent permitted by law, fix,prescribe and collect fees and charges for the services of the Wastewater System which will be at least sufficient to 0576905.5 10 yield during each Fiscal Year(a)Net Revenues equal to 125%of Debt Service on Senior Obligations for such Fiscal Year and (b)Net Operating Revenues equal to 100% of Debt Service on all Obligations for such Fiscal Year. The District may make adjustments from time to time in such fees and charges and may make such classification thereof as it deems necessary, but will not reduce the fees and charges then in effect unless the Revenues and Net Revenues from such reduced fees and charges will at all times be sufficient to meet the requirements of the Master Agreement. In addition, the District has covenanted in the Master Agreement to prepare and adopt an annual budget for the Wastewater System for each Fiscal Yew. Such budget will set forth in reasonable detail the Revenues anticipated to be derived in such Fiscal Year and the expenditures anticipated to be paid or provided for therefrom in such Fiscal Year, including, without limitation, the amounts required to pay or provide for the payment of the Obligations during such Fiscal Year, the amounts required to pay or provide for the payment of Maintenance and Operations Costs during such Fiscal Year and the amounts required to pay or provide for the payment of all other claims or obligations required to be paid from Revenues in such Fiscal Year,and will show that Revenues and Net Revenues will be at least sufficient to satisfy the requirements of the Master Agreement. On or before September 1 of each Fiscal Year, the District will file with the Trustee a copy of the adopted budget for such Fiscal Year. See APPENDIX C "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS Master Agreement" for additional information. The District has an established reserve policy with eight separate reserve fund categories. Over the next ten years,the year ending reserve total for each year is projected not to fall below$520 million as indicated in the District's ten-year cash flow forecast for Fiscal Years 2012-13 through 2021-22. At its election, the District may use umestdcted reserves to help satisfy the rate covenant described above. See "DISTRICT REVENUES Reserves"herein. Limitations on Issuance of Additional Obligations Senior Obligations The District may at any time incur Senior Obligations in addition to the Existing Senior Obligations payable from Net Revenues as provided in the Master Agreement on a parity with all other Senior Obligations theretofore incurred but only subject to the following conditions under the Master Agreement: (1) Upon the incurrence of such Senior Obligations, no Event of Default will be continuing under the Master Agreement;and (2) Subject to the provisions of the Master Agreement, the District will have received either one of the following: (i) A Written Certificate of the District certifying that, for a 12 consecutive calendar month period during the 24 consecutive calendar month period ending in the calendar month prior to the incurrence of such Senior Obligations (which 12 consecutive calendar month period will be specified in such certificate or certificates): (A) Net Revenues,as shown by the books of the District,will have amounted to at least 125% of Maximum Annual Debt Service on all Senior Obligations to be outstanding immediately after the incurrence of such Senior Obligations,and (B) Net Operating Revenues,as shown by the books of the District,will have amounted to at least 100% of Maximum Annual Debt Service on all 0576905.5 11 Obligations to be outstanding immediately after the incurrence of such Senior Obligations. For purposes of demonstrating compliance with the foregoing,Net Revenues and Net Operating Revenues may be adjusted for(x)any changes in fees and charges for the services of the Wastewater System which have been adopted and are in effect on the date such Senior Obligations are incurred, but which, during all or any part of such 12 consecutive calendar month period, were not in effect, (y)customers added to the Wastewater System subsequent to such 12 consecutive calendar month period but prior to the date such Senior Obligations are incurred, and (z) the estimated change in available Net Revenues and Net Operating Revenues which will result from the connection of existing residences or businesses to the Wastewater System within one year following completion of any project to be funded or any system to be acquired from the proceeds of such Senior Obligations;or fill A certificate or certificates from one or more Consultants which, when taken together, project that, for each of the two Fiscal Years next succeeding the incurrence of such Senior Obligations: (A) Net Revenues will amount to at least 125% of Maximum Annual Debt Service on all Senior Obligations to be outstanding immediately after the incurrence of such Senior Obligations,and (B) Net Operating Revenues will amount to at least 100% of Maximum Annual Debt Service on all Obligations to be outstanding immediately after the incurrence of such Senior Obligations. For purposes of demonstrating compliance with the foregoing,Net Revenues and Net Operating Revenues may be adjusted for(x) any changes in fees and charges for the services of the Wastewater System which have been adopted and are in effect on the date such Senior Obligations are incurred or will go into effect prior to the end of such two Fiscal Yew period, (y) customers expected to be added to the Wastewater System prior to the end of such two Fiscal Year period, and (z) the estimated change in available Net Revenues and Net Operating Revenues which will result from the connection of existing residences or businesses to the Wastewater System within one year following completion of any project to be funded or any system to be acquired from the proceeds of such Senior Obligations. For purposes of preparing the certificate or certificates described above,the Consultant may rely upon financial statements prepared by the District that have not been subject to audit by an independent certified public accountant if audited financial statements for the period are not available. See, also "FINANCIAL OBLIGATIONS — Existing Indebtedness" herein. The District is not required to comply with the provisions described above in paragraph(2) if the Senior Obligations being incurred are Short-Term Obligations excluded from the calculation of Assumed Debt Service pursuant to clause (H) of the definition thereof See APPENDIX C "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS—Definitions"herein. The determination of Net Revenues for use in the calculation described above is more fully described in APPENDIX C — "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS — Master 0576905.5 12 Agreement — Senior Obligations" attached hereto. The District is not required to comply with the provisions described in paragraph (2) above for such portion of Senior Obligations incurred for the purpose of providing funds to refund or refinance Senior Obligations if (i)upon such refunding or refinancing, debt service on such refunded or refinanced Obligations, or debt service on bonds, notes or other obligations of an entity other than the District,the debt service on which is payable from Obligation Payments for such Obligations (the "Related Bonds"), will no longer be included in the calculation of Assumed Debt Service either because such Obligations, or the Related Bonds of such Obligations, will have been paid in full or because such debt service is disregarded pursuant to clause (L) of the definition of Assumed Debt Service, and (ii)Assumed Debt Service in each Fiscal Year for the portion of such Senior Obligations incurred for the purpose of providing funds to refund or refinance such Obligations is less than or equal to 105% of Assumed Debt Service in such Fiscal Year for such Obligations being refunded or refinanced (assuming for such purposes that debt service on such refunded or refinanced Obligations, or debt service on the Related Bonds of such Obligations, is not disregarded pursuant to clause (L) of the definition of Assumed Debt Service). See APPENDIX C "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS—Master Agreemena"attached hereto for additional information. The District may at any time incur Reimbursement Obligations with respect to Senior Obligations. Subordinate Obligations. The District may at any time incur Subordinate Obligations upon satisfaction of the conditions provided in the Master Agreement. See APPENDIX C—"SUMMARY OF PRINCIPAL LEGAL DOCUMENTS Master Agreement"herein for a description of such conditions. There are currently no Subordinate Obligations outstanding. Insurance The District will procure and maintain or cause to be procured and maintained casualty insurance on the Wastewater System with responsible insurers, or provide self- insurance (which may be provided in the form of risk-sharing pools), in such amounts and against such risks (including accident to or destruction of the Wastewater System) as are usually covered in connection with facilities similar to the Wastewater System. The District will procure and maintain such other insurance which it will deem advisable or necessary to protect its interests and the interests of the Corporation. See "TILE DISTRICT Risk Management" and APPENDIX C "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS Master Agreement"herein. Allocation of Installment Payments Set forth in Table l are the principal and interest payments on the Revenue Obligations. Also set forth me the payments due on Existing Senior Obligations,including the Refunded Certificates. [Remainder of page intentionally left blank.] 0576905.5 13 Table 1 Payments Relating to the Revenue Obligations and Existing Senior Obligations of the District Fiscal Year Installment Payments Other Ending Relating to Revenue Obligations Senior Obligationst1)(2) June 30 Principal Interest Principal Interest Total 2015 $ 27,875,000 $ 58,025,730 $ 85,900,730 2016 29,405,000 57,014,106 86,419,106 2017 35,575,000 55,645,119 91,220,119 2018 33,170,000 54,116,919 87,286,919 2019 32,735,000 52,985,169 85,720,169 2020 34,370,000 51,351,269 85,721,269 2021 36,005,000 49,718,069 85,723,069 2022 37,035,000 47,959,819 84,994,819 2023 38,730,000 46,264,629 84,994,629 2024 40,360,000 44,634,229 84,994,229 2025 42,190,000 42,798,759 84,988,759 2026 43,840,000 41,153,641 84,993,641 2027 46,185,000 39,154,941 85,339,941 2028 48,195,000 37,105,266 85,300,266 2029 50,290,000 34,964,091 85,254,091 2030 53,415,000 32,727,566 86,142,566 2031 66,320,000 30,369,241 96,689,241 2032 79,140,000 27,737,519 106,877,519 2033 94,955,000 24,027,586 118,982,586 2034 54,700,000 19,648,306 74,348,306 2035 57,170,000 16,930,482 74,100,482 2036 59,760,000 14,087,710 73,847,710 2037 51,610,000 11,113,614 62,723,614 2038 34,290,000 8,325,855 42,615,855 2039 35,920,000 6,395,648 42,315,648 2040 24,575,000 4,375,150 28,950,150 2041 20,805,000 2,912,640 23,717,640 2042 12,430,000 1,581,120 14,011,120 2043 9,795,000 785,600 10,580,600 2044 2,480,000 158,720 2,638,720 Total $1,233,325,000 $914,068,508 $2,147,393,508 Th�tends to refinance its Revenue Refunding Certificate Anticipation Notes,Series 2013A("2013A Notes')on or before their maturity on October 16,2014. Assumes principal is amortized from 2022 through 2036 and an interest rate of 3%per mums.See"FINANCIAL OBLIGATIONS—Recent and Anticipated Financings"herein. het Includes payments with respect to the Refunded Certificates,which are to be purchased and retired with the proceeds of the Revenue Obligations. See`REFUNDING PLAN'herein. 0576905.5 14 THE DISTRICT Background The Orange County Sanitation District is a public agency responsible for regional wastewater collection, treatment and disposal. The District is the sixth largest wastewater discharger in the United States. The District provides service to an area with a population of approximately 2.5 million people in the northern and central portion of the County by treating an average of 200 mg/d of wastewater in Fiscal Year 2012-13. The District serves approximately 81% of the County population in approximately 479 square miles,or approximately 60%of the County's area. The service area which comprises the District was originally formed in 1954 pursuant to the County Sanitation District Act, as amended, Section 4700 et seq. of the Health and Safety Code of the State. The District's service area originally consisted of seven independent special districts in the County which were each responsible for matters relating to their individual districts. These special districts were jointly responsible for the treatment and disposal facilities which they each used. The seven independent districts were successors to the Joint Outfall Sewer Organization, which was formed in 1923 among the Cities of Anaheim, Santa Ana, Fullerton, and Orange, and the sanitary districts of Placentia, Buena Park, La Habra, and Garden Grove. The Joint Outfall Sewer Organization constructed a treatment plant and outfall in the early 1920s to serve its members. It was reorganized in 1947 and 1948 into seven county sanitation districts — District Nos. 1, 2, 3, 5, 6, 7 and 11. These prior districts were formed based on engineers' analyses of the gravity flows in the service area. District No. 13 was formed in 1985 and District No. 14 was added in 1986. These districts were co-participants in a Joint Agreement which provided for the joint construction,ownership,and operation of the prior districts'joint facilities. In April 1998, at the request of the Board of Directors of the District (the`Board of Directors"), the Board of Supervisors of the County of Orange (the "County Board") passed Resolution No. 98-140 approving the consolidation of the then existing nine special districts into a new, single sanitation district, to be known as the Orange County Sanitation District. This action was designed to simplify governance structures, reduce the size of the Board of Directors, ease administrative processes, streamline decision- making and consolidate accounting and auditing processes. The consolidation was effective on July 1, 1998. Pursuant to the Resolution and Government Code Section 57500, the prior districts transferred and assigned all of their powers, rights, duties, obligations, functions and properties to the District, and the District assumed all obligations of the prior districts which were several and not joint including, without limitation, their obligations to repay the then outstanding certificates of participation. The boundaries of the nine predecessor special districts were initially used by the District to delineate separate revenue areas (the"Revenue Areas") for budgeting and accounting purposes and in order to facilitate the imposition of fees and charges imposed by the District. See "DISTRICT REVENUES — Sewer Service Charges"herein. The District is managed by the Board of Directors, whose members are appointed by 25 member cities and agencies which are serviced by the District. The District is responsible for construction and maintenance of a major portion of the wastewater collection, treatment and disposal facilities within its boundaries. Revenue Area No. 7 is responsible for approximately 170 miles of local sewers in its service area, whereas local sanitary districts, water districts and cities are responsible for local sewers in the remainder of the District's service area. 0576905.5 15 Organization and Administration The District is independent of and overlaps other political jurisdictions. There are many governmental entities, including the County, that operate within the District's jurisdiction. These entities are exclusively responsible for the administration of their own fiscal affairs,and the District is not entitled to operating surpluses of,or responsible for operating deficits of,any of the other entities. The 25-member Board of Directors is composed of representatives from 21 cities, unincorporated areas of the County and three special districts, including mayors of cities, members of city councils, directors of independent special districts and one member from the County Board. Several board committees, made up of members of the Board of Directors, consider topics for action by the Board of Directors and make recommendations to the Board of Directors. The Chair and the Vice Chair of the Board of Directors are elected every yew by a majority of the Board of Directors, and serve at the pleasure of the majority of the Board of Directors. The District has a general manager, outside general counsel, and administrative and operating staff, with offices located at Reclamation Plant No. 1 in Fountain Valley, California. The District currently employs an administrative and operating staff of approximately 600 under the direction of its General Manager,James Heiberg. James Herberg, P.E. is the General Manager of the District and has served in this capacity since April 2013. During his 20 years with the District,he has held the positions of Assistant General Manager, Director of Engineering, and Director of Operations and Maintenance. Mr. Herberg has more than 27 years of experience in the water and wastewater industries, including six years at the Orange County Water District with whom the District has partnered on the Groundwater Replenishment System project. Robert P. Ghirelli, D.Env. is the Assistant General Manager of the District, and has served in that capacity since July 2006. Dr. Ghirelli previously served as Director of Technical Services for the District since his joining the District in 1998. Prior to joining the District, Dr. Ghirelli served forjust over a year as managing principal of the Los Angeles office of a national environmental consulting firm, and served 20 years in supervisory positions with the State Water Resources Control Board and Regional Water Quality Control Boards, including 13 years serving as Executive Officer of the California Regional Water Quality Control Board,Los AngelesiVentura Region. Lorenzo Tyner is the District's Director of Finance and Administrative Services. In September 2005, Mr. Tyner joined the District with approximately 20 years of public finance and budgeting experience,most recently serving as the Los Angeles Unified School District Budget Director and Deputy Chief Financial Officer. Mr. Tyner previously worked in large government organizations including the City of Los Angeles and the Los Angeles County Metropolitan Transportation Authority and with private sector companies IBM Global Services and TRW Space and Defense. Ed Torres is the District's Director of Operations and Maintenance for the District. He has served the District since 1991. Prior to joining the District, Mr. Torres served in a professional capacity for the California State University System and TRW Electronics and Defense Sector. Mr. Torres has more than 25 years of public and private sector experience in protecting public health and the environment. Nick Arhontes, P.E. is the District's Director of Facilities Support Services and has served the District since 1988. Mr. Arhontes has more than 30 yens of experience managing various engineered systems in the private and public sectors regionally,nationally,and internationally. 0576905.5 16 Robert Thompson, P.E. is the District's Director of Engineering. He has worked for the district since 1995. Mr. Thompson has served has served as manager in several departments with OCSD, including Information Technology, Operations and Maintenance,and Engineering. He has had a lead role in creating and maintaining engineering,programming,tagging and asset standards for the District. Jeff Reed is the District's Director of Human Resources. He has worked for the District since 1987. Mr. Reed serves as the District's Employee Relations Officer, administering to employer-employee relations between the District and its local public employee organizations. In addition to human resources,Mr. Reed has served the District in leadership roles in both safety and operations. Services The District owns and operates regional wastewater collection, treatment, and disposal facilities for the metropolitan area in the northern and central portion of the County. The District receives wastewater from the collection systems of the cities, sanitary districts and unincorporated areas of the County located within the District. See"THE DISTRICT—Service Areas"herein. Generally, local agency systems collect wastewater from residential and industrial customers and convey the wastewater to District trunk sewer pipelines for conveyance to the District's wastewater treatment plants. The District's staff is responsible for operating and maintaining the District's infrastructure, although some work is performed by external contractors. Currently, the District has established supply contracts for all chemicals necessary to the operation and maintenance of the facilities of the District. The District has sufficient standby systems in the event of equipment failures or system outages. Service Area The map on the inside cover of this Official Statement shows the District's boundaries and selected cities located within the District. District boundaries were originally established in 1947 and 1948 based on drainage basins. As the existing cities have grown and new areas have incorporated, city limits have come to overlap District boundaries. The District currently serves an approximately 479 square-mile area including 23 of the County's 34 cities and various unincorporated areas of the County. The District serves a population of approximately 2.5 million residents. 0576905.5 17 Set forth in Table 2 below is the estimated populations of cities and unincorporated areas served by the District as of January 1,2014. Table 2 Estimated Populations of Cities and Unincorporated Areas Served by the Orange County Sanitation District As of January 1,2014 citv Population Anaheim 348,305 Brea 42,397 Buena Park 82,344 Costa Mesa 111,846 Cypress 48,886 Fountain Valley 56,702 Fullerton 140,131 Garden Grove 173,953 Huntington Beach 195,999 Irvine 242,651 La Habra 61,717 La Palma 15,896 Los Alamitos 11,729 Newport Beach 86,874 Orange 139,279 Placentia 52,094 Santa Ana 331,953 Seal Beach 24,591 Stanton 38,963 Tustin 78,360 Villa Park 5,935 Westminster 91,652 Yorba Linda 67.069 Cities Subtotal ft 2,449,326 Unincorporated Areas(estimated)(z) 72,095 Total 2 521 421 Demogr�i Research esea ch Rp h Unit,State of Califomia Department of Finance. o) Center for Demographic Research,Califomia State University,Fullerton. Employees [update paragraph before posting) As of April 21, 2014, the District had a total of 581 employees. The majority of District employees are represented by recognized employee organizations, which include the following: the Orange County Employees Association ("OCEA"), representing administrative/clerical,technical services and engineering employees since 1979, the International Union of Operating Engineers—Local 501 ("Local 501"), representing operations and maintenance employees since October 1985, and the Supervisory and Professional Management Group (SPMT or S&P), representing employees within the Supervisor Group and Professional Group since 1991. The total number of represented employees as of April 21, 2014 was 543, and is broken down as follows: 98 employees represented by OCEA, 194 employees represented by Local 501, and 251 employees represented by the SPMT. The contractual agreements between District and the Supervisor Group and a0576905.5 18 Professional Group were renegotiated in 2010 and expired on June 30,2013. The District is continuing to bargain with the Supervisor Group and Professional Group to reach agreement. The contractual agreements between OCEA and District and the Local 501 and District were renegotiated in 2011 and expired on June 30, 2014. The terms of the existing contractual agreements will continue until renegotiation of the arrangements between the District and OCEA and Local 501, respectively, are completed. Historically, the District has experienced positive and collaborative working relationships with each organization and has not endured any work stoppages since the early 1980s. Retirement Plan The District participates in the Orange County Employees Retirement System ("OCERS'), a cost-sharing multiple-employer defined benefit pension plan, which is governed and administered by a nine-member Board of Retirement. OCERS was established in 1945 under the provisions of the County Employees Retirement Law of 1937,and provides members with retirement,death,disability,and cost of- living benefits. All full-time and part-time District employees participate in OCERS. Contributions are based on an OCERS actuarial-determined rate structure and age at time of employment; contributions are deducted on a pre-tax basis. Most employees do not pay into Social Security with the exception of 1.45% of gross income, which is paid into the Medicare portion of Social Security. The meant of the retirement allowance is based upon the member's age at retirement,the member's"final compensation"as defined in Section 31462 of the Retirement Law of 1937, the total years of service under OCERS, and the employee's classification as a Plan B, G, H, or U member. Plan U applies to all full-time and part-time employees hired on or after January 1, 2013. Plan B applies to supervisor and professional employees hired on or after October 1, 2010, Local 501 employees hired on or after July 1, 2011 and OCEA employees hired on or after August 1, 2011. Plan G applies to employees hired before September 21, 1979. Plan H applies to employees hired on or after September 21, 1979 and prior to the eligibility dates for Plan B or Plan U. Plan G and H provide 2.5% of final compensation per year of service at age 55. Plan B provides 1.667% of final compensation per year of service at age 57.5, and Plan U provides 2%at 62. "Final compensation"is the highest consecutive 12 months of compensation for Plan G members and the highest consecutive 36 months of compensation divided by three for Plan B, H, and U members. Benefits fully vest under the OCERS retirement plan upon reaching five years of service. Employees who retire at or after age 50 with ten or more years of service are eligible to receive an annual retirement allowance,but at a reduced benefit for those employees retiring prior to age 62 for Plan U members, 57.5 for Plan B members, or prior to age 55 for Plan G and H members. OCERS also provides death and disability benefits. As a condition of participation under the provisions of the County Employees Retirement Law of 1937, members are required to contribute a percentage of their annual compensation to OCERS. The District contributes a percentage of covered employees' base salary towards the employee's contribution to OCERS for members of Plans G and H. Members of Plans U and B do not receive any contributions toward employee's contribution to OCERS. 0576905.5 19 Set forth in Table 3 below is a current comparison of the District's contributions to OCERS for Fiscal Years 2007-08 through 2012-13 and projected contributions for Fiscal Year 2013-14. Table 3 Orange County Sanitation District Comparison of District Contributions to OCERS for Fiscal Years 2007-08 through 2012-13 and Projected Contributions for Fiscal Year 2013-14 District Fiscal Year RateM Contributions 2007-08 20.55% $11,011,693 2008-09 21.14 12,193,601 2009-10 21.50 13,029,795 2010-11 24.04 14,370,158 2011-12 25.68 15,202,253 2012-13 27.61 17,078,872 2013-14") 31.83 19,163,600 Requi�on as a percent of covered payroll. Includes amortization of Unfunded Actuarial Accrued Liability.Combined rate for all Plans. (a Projected. Source: Orange County Sanitation District. For Fiscal Years 2007-08 through 2012-13, the District's required contribution was equal to the contribution that the District actually made. As noted, the required contribution set forth above includes amortization of Unfunded Actuarial Accrued Liability ("UAAL"). For the Fiscal Year ended June 30, 2013, total payroll costs of employees covered by OCERS was $59,966,096. As of the December 31, 2012 valuation, OCERS has an aggregate UAAL ratio of 62.52%, for a total UAAL on an actuarial basis of$5.68 billion. The District's retirement program includes Additional Retiree Benefit Account ("ARBA') benefits. ARBA benefits provide a monthly payment to retirees towards the premium costs of health insurance for the retiree and eligible dependents. The retiree is not required to use this amount for health insurance premium or to remain on the OCERS medical plan. Benefits vest upon retirement. The District pays 100%of the cost for the ARBA plan and utilizes a pay-as-you-go method for funding the plan. The District paid$421,650 in ARBA benefits during Fiscal Year 2012-13. Effective August 1, 2011, ARBA benefits are no longer available to new OCEA Croup employees of the District. For more information regarding OCERS and the District's retirement plan as of June 30, 2013, see Note 6 to the Comprehensive Annual Financial Report of the Orange County Sanitation District for Fiscal Year Ended June 30,2013 set forth in Appendix A. The Comprehensive Annual Financial Reports of the Orange County Employees Retirement System are available on the OCERS website at http://www.ocers.org. The information on such website is not incorporated herein by such reference or otherwise. The District cannot predict whether the OCERS investment portfolio will experience additional losses in the future; however, any future losses could result in material increases in the District's required contributions. 0576905.5 20 Other Post-Employment Benefits In June 2004, Governmental Accounting Standards Board ("GASB") issued Statement No. 45, which requires state and local governmental employers to fund the actuarially determined annual required contribution ("ARC')for its post-employment benefits other than pension benefits (known as other post- employment benefits or"OPEB") or record the entire amount of the unfunded liability of its OPEB in its financial statements. OPEB includes healthcare and life insurance expenses and related liabilities, and an annual required contribution to fund such liabilities. The District adopted Statement No. 45 for the fiscal year beginning July 1, 2007, as required of a GASB "Phase 1 Agency." According to the District's actuary, Demsey Filliger Associates (the "Actuary"), the unfunded OPEB liability as of July 1, 2013 is approximately$11.6 million. The ARC is $755,078 for Fiscal Year 2013-14. Calculation of the ARC is based on the present value of benefits accruing in the current yew,a 30-year amortization of the unfunded OPEB liability and an assumed rate of term on investments in the retiree fund of 4% per annum. The District does not believe that its OPEB liability will have a material impact on its operational results. Risk Management As of the date hereof, the District has in force basic all risk property and casualty insurance, including theft, fire, flood,terrorism and boiler and machinery losses at its plants and pump stations. The District is self-insured for portions of workers' compensation,property damage and general liability. The self-insurance portion of workers' compensation is $750,000 per person per occurrence with outside excess insurance coverage to the statutory limit. The self-insured portion for property damage covering fire and other disasters is $250,000 per occurrence with outside excess insurance coverage to $1 billion. The self-insured portion for property damage covering flood is $100,000 per occurrence with outside excess insurance coverage to $300 million. The District also maintains outside comprehensive boiler and machinery insurance, including business interruption insurance, with a $100 million limit with deductibles ranging from$25,000 to$350,000. The District is self-insured for general liability coverage up to $250,000 per occurrence (except that employment practice liability is $500,000), with excess general liability coverage up to $30 million. In addition, the District relies on a combination of self-insurance and District reserves for all property damage from the perils of seismic activity as well as the expectation that some disaster relief funds may be available from the Federal Emergency Management Agency (`FEMA") to address any resulting damage. See "DISTRICT REVENUES — Reserves" and "— Integrated Emergency Response Program." There is no assurance that, in the event of a significant seismic event, a combination of self-insurance, District reserves or FEMA assistance would be available or sufficient for the repair or replacement of the affected property. During the past five fiscal years there have been no settlements in excess of covered amounts. Claims against the District are processed by outside claim administrators. The District believes that there are no uurecorded claims as of June 30, 2013 that would materially affect the financial position of the District. For more information regarding the District's insurance coverage as of June 30, 2013, see Note 1 to the Comprehensive Annual Financial Report of the Orange County Sanitation District for Fiscal Year Ended June 30,2013 set forth in Appendix A. Existing Facilities The Wastewater System presently consists of two wastewater treatment plants, an influent metering and diversion structure, 15 off-plant pump stations,various interplant pipelines and connections, "576905.5 21 and the ocean ou[fall facilities. The District's Wastewater System includes approximately 403 miles of sewers within 11 trunk sewer systems, 170 miles of local sewers located within a portion of Revenue Area No. 7, two treatment plants, two discharge outfalls and two emergency weir outlets. The existing treatment plants have a rated primary treatment capacity of 372 mg/d,including standby capacity. Treatment Plant No. 1 ("Plant No. 1")is located in the City of Fountain Valley, about four miles from the coast, adjacent to the Santa Ana River. Secondary treatment capabilities are provided by a trickling filter plant and two conventional air activated sludge plants. Up to 105 mg/d of secondary treated effluent is conveyed to an Orange County Water District (the "OCWD") plant for tertiary treatment prior to reclamation and groundwater recharge. See "Groundwater Replenishment System" below. Treatment Plant No. 2 ("Plant No.2")is located in the City of Huntington Beach, 1,500 feet from the ocean, at the mouth of the Santa Ana River. Secondary treatment capabilities are provided by a Pure Oxygen Activated Sludge plant and a Solids Contact Trickling Filter plant. The District employs several phases in the treatment of wastewater. The first phase, preliminary treatment,removes debris such as eggshells, sand and other non-biodegradable items. See also`Preferred Level of Treatment" and `Biosolids Management" below. In the next phase, primary treatment, wastewater is pumped to large settling basins. The liquids are separated from the remaining solids which settle or float as the wastewater passes through large settling basins called clarifiers. The settled solids are sent to solids treatment facilities. All of the wastewater received by the District is sent to secondary treatment for further processing. During secondary treatment, the wastewater is treated with naturally occurring bacteria to remove most of the remaining dissolved and suspended microscopic organic solids. The treated wastewater from both plants is mixed together at Plant No. 2,where it is then pumped through the ocean outfall pipe that extends five miles offshore. Set forth in Table 4 below are the treatment plants' approximate treatment capacities. Table 4 Wastewater System Treatment Capacities (mad) 2012-13 Primary Secondary Treatment Actual Flows Treatment Capacity Ca aci Plant No. 1 97 204 182 Plant No. 2 103 168 150 Aggregate Treatment 200 372 332 Source: Orange County Sanitation District. The District also has the capability to divert a portion of the influent flow from Plant No. 1 to Plant No. 2 through interplant connections. A portion of the flow destined for Plant No. 2 can also be diverted to Plant No. 1. Another interplant facility allows gas generated during solids treatment to be transported between Plant No. 1 and Plant No. 2 and allows digester gas (which is used as fuel for many of the facilities' engines)from one plant to be used at the other to balance the supply and demand, which results in efficient gas utilization. 0576905.5 22 Permits,Licenses and Other Regulations The District is subject to laws, rules and permits issued by federal, state, regional and local regulatory bodies. The Wastewater System is subject to regulations imposed by the 1972 Clean Water Act, Public Law 92-500 (the "Clean Water Act"), the California Environmental Quality Act of 1970, as amended ("CEQA") and the Federal Clean Air Act. The regulatory requirements are primarily administered by the United States Environmental Protection Agency (the "EPA"), the California Air Resources Board, the Santa Ana Regional Water Quality Control Board ("RWQCB"), and the South Coast Air Quality Management District ("AQMD"). Regulations of these agencies deal primarily with the quality of effluent which may be discharged from the treatment plants and air quality emissions. The Clean Water Act directs the EPA to monitor and to regulate the discharge of pollution into navigable waterways and to enforce the requirements that all wastewater treatment plants in the nation provide full secondary treatment for sewage. In 1977, Congress amended the Clean Water Act to allow waivers of secondary treatment standards for certain ocean dischargers if they can demonstrate,to the satisfaction of the EPA that significant adverse environmental impacts would not occur. The District currently has all applicable permits and licenses necessary to operate its facilities. The District has discharged treated wastewater into the Pacific Ocean under a permit issued by the EPA and the RWQCB. The discharge permit included a waiver under the 301(h) provisions of the Clean Water Act, allowing for less than full secondary treatment based on an ocean discharge of sufficient depth, distance and dilution. The permit was initially issued in 1985 and was the first modified Section 301(h)permit issued to a major wastewater treatment facility. The permit was re-issued on May 6, 1998 and expired on June 8,2003. On July 17,2002,the Board of Directors adopted Resolution No. OCSD 02-14, "Establishing the Policy for Level of Treatment of Wastewater Discharged into the Ocean." This resolution established the District's policy to treat all wastewater discharges into the ocean to secondary treatment standards thereby providing for continued public safety, marine ecosystem protection, and water reclamation opportunities. To implement this policy, District staff was directed to immediately proceed with the planning, design, and implementation of treatment methods that will allow the District to meet Clean Water Act secondary treatment standards with the expressed purposes of eliminating the need for the permit waiver received under Section 301(h). The District completed these improvements on time by December 2012 at a total capital improvement cost of$537.8 million. Following the determination by the Board of Directors on July 2002 to implement full secondary standards, staff prepared the Secondary Treatment National Pollutant Discharge Elimination System ("NPDES") Permit Application that was required to be submitted to the regional office of the EPA and the RWQCB in December 2002. The NPDES Permit is separate and apart from the permit waiver received under Section 301(h), and once awarded would negate the need for a waiver. Achieving secondary treatment standards was originally projected to take nine years to complete, with completion expected in December 2012. Because ocean discharge permits are issued for only five years, and the EPA has no authority to waive the discharge limit requirements or grant a longer permit (except in accordance with Section 301(h)), the District decided to voluntarily seek a consent decree concurrently with the issuance of the new ocean discharge permit. This negotiated consent decree (the "Consent Decree") approves the schedule and decrees that no penalties will be imposed for discharges that exceed the secondary treatment lints during the period of construction. The Consent Decree was signed by the District, the EPA and the RWQCB and filed with the U.S. District Court on November 15, 2004. The District is in compliance with the Consent Deuce, having completed all of the improvements on time by the deadline of December 2012. "576905.5 23 The District is also subject to the requirements of the Federal Clean Air Act which mandates attainment with national ambient air quality standards for criteria pollutants (ozone, particulate matter, carbon monoxide,lead,nitrogen dioxide,and sulfur dioxide). Criteria air pollutants cause adverse effects on human health and environment. AQMD is the local air pollution control agency charged with implementing the Federal Clean Air Act. In addition to criteria pollutants, AQMD also implements numerous federal and state requirements related to the toxic air pollutants which can cause cancer or other severe localized health effects. The State's Air Toxic Hot Spots Act, for example, requires facilities to conduct health risk assessments and notify the neighboring communities if the health risk exceeds the regulatory thresholds. Pursuant to AQMD's requirements, the District must obtain permits before sewage treatment improvement projects can be constructed and operated. Such permits are project specific and may contain conditions that govern design criteria, operating parameters, and emissions standards. Most of the District's treatment facilities are enclosed in order to capture and treat emissions to meet regulatory emissions standards and to minimize odor impact to the neighboring communities. The District's treatment plants are also subject to the requirements of Title V of the Federal Clean Air Act amendments. The Title V permit is a single air quality permit for a facility that consolidates and replaces all of the air permits for individual pieces of equipment previously issued by the local air quality district. The permit contains all of the applicable local, state, and federal requirements, including periodic self-certification of compliance and mandatory self-reporting of permit deviation. All Title V permit related reporting and documents submitted to the AQMD must be signed by the highest District official — in this case the General Manager. The Title V program also demands facilities to organize and conduct extensive training of the staff involved,including the field operation and maintenance staff. Another Title V important feature is a possibility of the public active participation and intervention in the cases of potential emission limits and monitoring violations. The District Title V permits did not receive any negative public responses or comments during the required public review period. The District received initial Title V permits for both treatment plants in January 2009. These Title V permits me issued for a five-year period. In anticipation of permit expiration in January 2014, the District recently submitted application packages for renewal of its Title V permits. [update] District Planning and Capital Improvement Program In November 2007, the Board of Directors adopted a new comprehensive strategic plan to consider the District's service levels and operational needs for the next five years. The Strategic Plan has been updated annually to continue looking at a five-year horizon(each,a"Five-Yen Strategic Plan"). See "THE DISTRICT—Five-Year Strategic Planning." In December 2009, the Board of Directors adopted a Facilities Master Plan (the"Master Plan"). The Master Plan updated the planning processes set forth in the 1989 Master Plan,the 1999 Strategic Plan and the 2002 Interim Strategic Plan Update. The Master Plan also incorporates and implements the levels of services defined by the Board of Directors that are included in the 2009 Five-Year Strategic Plan. The result is a plan that integrates research, facilities planning, water conservation and reclamation, sludge reuse, other wastewater programs and financial planning into a single unified approach. Key components of the Master Plan include updated flow projections and collection system hydraulic modeling. The District expects to satisfy required sewer capacity and rehabilitation improvements for the Wastewater System through its Capital Improvement Program ("CIP"). The District annually reviews and validates its CIP. The CIP was developed to satisfy anticipated regulatory requirements, increased population, anticipated rehabilitations and replacements, additional treatment requirements, conservation, a0576905.5 24 energy and other resource savings considerations, odor control improvements, and air quality protection needs. Through Fiscal Year 2030-31,the current CIP is scheduled to accomplish: • Major rehabilitation of the existing headworks, primary treatment, secondary treatment, outfall pumping, and solids handling facilities at both treatment plants; • Replace and rehabilitate nine of the District's outlying pumping stations, and 26 trunk sewer improvement projects;and • Reduce fence line odor to levels that do not generate odor complaints. The 2014 CIP Validation Study resulted in revisions to the CIP. The CIP currently consists of 115 individual capital projects through Fiscal Year 2030-31 with remaining outlays of$1.9 billion. Over the next five years, the CIP contemplates average annual capital expenditures of$141.7 million based on the 2014 CIP Validation Study. Implementation of full secondary treatment standards was completed in December,2012. Set forth in Table 5 below is a summary of total estimated capital costs for the CIP for Fiscal Years 2014-15 through 2030-31. Table 5 Capital Improvement Program—Estimated Capital Costs Fiscal Years 2014-15 through 2030-31 Project Cost Collection System Capacity $ 215,855,000 Collection System Repair,Rehabilitation,Replacement 419,878,000 Treatment Plant Capacity 311,193,000 Additional Secondary Treatment 121,784,000 Improved Treatment 147,557,000 Treatment Plant Repair,Rehabilitation, Replacement 663,011,000 Support Facilities 33,096.00 Total Validated Capital Improvement Program 1.912.374.000 Source: 2014-I6 Budget Update,Orange County Sanitation District. The CIP included budgeted expenditures of$169.2 million in Fiscal Year 2014-15. There are currently 37 projects in the construction phase with proposed capital outlay spending in 2014-15. The two most significant projects in the construction phase are the Sludge Dewatering and Odor Control at Plant I and the Newport Force Main Rehabilitation with projected Fiscal Year 2014-15 expenditures of$61.1 million and$20.4 million respectively. Groundwater Replenishment System The District has taken a multi jurisdictional approach to planning for capital facilities because many of the methods for reducing or managing flows involve other jurisdictions. One such project is the Groundwater Replenishment System ("GWRS"). In March 2001, the District entered into an agreement with the OCWD to design and construct Phase I of the GWRS. The capital cost of this Phase was shared equally (50% shares) by each agency. The GWRS is a joint effort by the two agencies to provide reclaimed water for replenishment of the Orange County Groundwater Basin and to augment the seawater intrusion barrier. Phase I of the GWRS became operational in January of 2008. In 2013, GWRS produced approximately 72,000 acre-feet. The Phase II expansion broke ground in January 2012 to add approximately 33,000 acre-feet per yen. The District expects the Phase II expansion to be completed in d0576905.5 25 the first quarter of 2015. The Phase 11 expansion and all future phases will be funded solely by OCWD. The District has committed 168,000 acre-feet per year of secondary effluent to these future expanded operations. The District and OCWD amended their 2001 agreement in 2010 to provide OCWD with the first right of refusal of secondary treated water flows from the District's Fountain Valley-based Plant No. 1 for these future phases; however, no capital funding is anticipated or dedicated from the District for these future expansion phases. OCWD and the District have agreed to share equally in the cost of the Joint GWRS Microfiltmtion Backwash Redirection Project which will increase the quantity of water available during the early morning hours when the flows are low. This project will save the District operational costs in the form of reduced primary treatment chemical usage. Preferred Level of Treatment In July 2002, the Board of Directors approved a change from the existing level of treatment, a blend of 50% advanced primary and 50% secondary treated wastewater, to full secondary treatment standards. The District completed all of the necessary expansion projects to support full secondary treatment by December 2012. See "THE DISTRICT — Permits, Licenses and Other Regulations." On July 20, 2012, the District received a new NPDES permit, that reflects the full secondary treatment requirements. Biosolids Management Through the treatment of wastewater,the District recovers and treats nutrient-rich, organic matter (solids) to produce biosolids. Biosolids can be recycled through composting or fertilizing farm fields (non-food) (land application) or disposed in a landfill for methane gas recovery. The District's goal is to ensure our biosolids management strategies align with existing market conditions and continue a sustainable,reliable and economical biosolids management program that provides environmentally sound practices and meets the stringent federal, State and local regulatory requirements. The District's biosolids averaged about 770 tons per day("tpd")in 2013,with an average cost per ton of$62.55 for managing at offsite locations, as described in the table below. The Fiscal Year 2013-14 budget for biosolids management is $17.94 million, with a slight increase anticipated to $18.6 million through Fiscal Year 2015-16. Over the next two fiscal years, the District's biosolids tonnage will be peaking at about 785 tpd until the following new facilities come online to reduce biosolids costs by about a third. • Irvine Ranch Water District is constructing solids processing facilities and will stop sending their solids to the District by the end of 2016. • Plant No. I centrifuges me currently under construction and anticipated to start creating drier solids and reducing hauling costs by mid-2017. • Plant No. 2 centrifuges will begin operating by early 2019. 0576905.5 26 Biosolids Management Contracts Current tons Contract per day Average (Minimum tons managed cost per ton Contractor Location Product act day and ter ml (approximate l (March 20141 Synagro Kem County,CA Compost 250 tpd—10 years plus two 250 tpd $75.18 five-year renewals,first renewal 12/27/16 Synagro La Paz County,AZ Compost 0 tpd—10 years plus two 70 tpd $62.97 five-year renewals,first renewal 12/27/16 Tule Ranch Yuma County,AZ land 0 tpd—One year plus four 350 tpd $54.58 application (4)one-year renewals,first renewal 1/1/2015 Orange Orange County,CA Local 0 tpd—8 years plus one 70 tpd $53.06 County landfill 10-year renewal,first Waste& renewal 6/30/18 Recycling The District's contractors provide back-up biosolids management capacity in California and Arizona that include composting, land application, and landfill. Together, these options have the additional available capacity to manage more than ten times the District's daily biosolids production to ensure sustainable,consistent,and reliable operations. The District anticipates issuing a request for proposals ("RFP") in 2016 in advance of the Synagro contract renewal. In Fall 2013, the Board of Directors adopted a new Five-Year Strategic Plan that included studying biosolids management options in order to make recommendations for a potentially longer-teen management option RFP in 2018. In 2003, the District was the first agency in the nation to be certified by the National Biosolids Partnership for its biosolids program. Certification requires regular third-party audits and a robust internal management system based on the ISO 14001 Environmental Management System standard. The District is committed to a diverse biosolids program to help ensure a sustainable, reliable, and economical program. Urban Runoff Recognizing that County beaches were being affected by pollution carried by urban runoff, the Board of Directors adopted a number of resolutions agreeing to accept dry weather urban runoff into the sewer system. In June 2002, Assembly Bill 1892 amended the District's charter to formally allow the diversion and management of dry weather urban runoff flows. Resolution No. 01-07, adopted March 28, 2001, declared that the District will initially waive fees and charges associated with authorized discharges of dry weather urban runoff to the sewer system until the total volume of all runoff discharges exceeds four million gallons per day ("MGD") calculated on a monthly average. For the first 12 years of the Urban Runoff Program,the average monthly flow averages remained less than the 4 MGD threshold thus avoiding user fee costs being assessed to the diversion permittees. In 2012, the District received a number of diversion proposals to deal with bacteria and selenium loading to the upper Newport Bay. The 0576905.5 27 discharge from the additional proposed diversions combined with the existing diversion flows would eventually exceed the four MGD fee threshold. On June 12, 2013,the Board adopted Resolution No. 13- 09 expanding the waiver of fees or charges on the treatment of dry weather urban runoff from four MGD to ten MGD. According to the Board,the change was necessary not only to protect the County's coastal resources, but also to provide an economic benefit to the local economy by helping to keep our beaches open. There are currently 19 active urban runoff diversion structures, four owned and operated by the County, 11 owned and operated by the City of Huntington Beach, one owned and operated by the City of Newport Beach, two owned and operated by the IRWD, and one owned and operated by The Irvine Company. The Dry Weather Urban Runoff Program is administered by the Environmental Compliance Division which issues a discharge permit for each of the diversion structures. The permit functions as a control mechanism that specifically prohibits storm runoff and authorizes discharge only during periods of dry weather. The permit also establishes specific discharge limits, constituent monitoring, and flow metering requirements. In addition, the District conducts quarterly sampling and analysis of the urban runoff discharges to ensure discharge limit compliance for the various regulated constituents. Since 1999, the District has treated a total of 7.5 billion gallons of dry-weather urban runoff that would otherwise have been discharged into the ocean with no treatment. From January 1, 2013 through December 31, 2013, the daily average urban runoff flow ranged between 0.59 and 1.72 MGD with a cumulative total diversion of 408 million gallons for this period. At the existing operations and maintenance cost of$1,582 per million gallons (2012-13 rate), the District's cost for treating the urban runoff discharge for this period is estimated at$646,143. Due to increasingly strict receiving water quality standards, the District is receiving requests to accept additional urban runoff discharges. Five additional urban runoff diversions have been proposed to deal with bacteria and selenium loading to the Newport Back Bay Watershed: Peters Canyon in the City of Irvine, Big Canyon Wash in the City of Newport Beach, and the Delhi, Santa Fe, and Lane flood control channels in the City of Santa Ana. Peters Canyon Wash, which collects selenium from selenium- laden shallow groundwater, is the biggest contributor of selenium in the San Diego Creek watershed in dry weather. The proposed urban runoff flows will result in average monthly flows of 4-6 MGD. Integrated Emergency Response Program In recognition of the potential damage which could occur in the event of a major earthquake, flood, or other disaster, the District implemented an Integrated Emergency Response Program (the "IERP") in 1979. The IERP is a two-volume plan which contains policies, plans and procedures preparing for, and responding to, emergencies. The District also analyzed disaster preparedness issues and policies within the Master Plan, and within a 1994 document titled Fault Rupture Hazard Investigation—Wastewater Treatment Plant No. 2. The disaster preparedness plan included in the Master Plan reviewed two possible major earthquake scenarios: an 8.3 Richter magnitude ("M") earthquake on the southern San Andreas fault system and an M 7.0 earthquake on the Newport-Inglewood fault zone, which includes Plant No. 2. An M 8.3 earthquake on the southern San Andreas fault,while on the whole more destructive than the M 7.0 Newport-Inglewood fault, may result in less damage to the District's service area due to the distance of the fault from most of the service area. However, the Master Plan stated that damage from such a major earthquake on the San Andreas fault would be extensive. Also, the Master Plan indicated that an M 7.0 earthquake on the Newport-Inglewood fault within five miles of the District's sewerage facilities could cause major destruction to those facilities. The disaster preparedness plan in the Master Plan indicated that it would not be economically feasible to upgrade all of the existing sanitary sewerage facilities to "576905.5 28 survive an earthquake of this magnitude along the Newport-Inglewood fault. The IERP outlines the policies and employee actions to be taken before, during and after an earthquake, earthquake response guidelines and damage assessment procedures. The Master Plan analyzed the vulnerability of the sanitary sewerage facilities and operations of the District and planned a risk reduction program wherein the vulnerability of many of the District's sanitary sewerage facilities to an earthquake could be reduced by recommended retrofit construction measures. The Master Plan also recommended that designs of existing major structures which were constructed prior to development of current seismic design standards be reviewed and the structures strengthened,if necessary. Since the Master Plan and the 1994 Report, the District has completed retrofitting where deemed appropriate. Pursuant to the Master Plan, all recent and future projects have been, and will be, designed to the same high earthquake code standards as set for other essential services, such as hospitals and fire stations. Many of the older buildings analyzed in the Master Plan have been replaced by structures built after 1989. The Amy Corps of Engineers' "All-River Plan" has mitigated any future flooding of the Santa Ana River system and potential threats to the District's Wastewater System. Also, both Plant No. 1 and Plant No.2 are built to federal standards. The IERP takes into account the damage potential posed by coastal flooding, tsunamis (Inge ocean waves generated by seismic activity) and windstorms. No assurance can be given that any such events would not have a material adverse impact on the Wastewater System. The Strategic Plan and IERP makes recommendations regarding fire protection of the Wastewater System. Most of the structures at Plant No. 1 and Plant No. 2 are constructed of fire-resistant materials. The IERP describes the procedures needed to respond to a possible disaster. For more information regarding emergency response policies, the disaster preparedness plan described in the IERP can be reviewed at the District's office. Five-Year Strategic Planning The Strategic Plan envisions an organizational culture that adheres to the District's core values and makes efficient and effective use of all available resources. Over the past six years, the District completed thirty-eight strategic goals and made strides to improve technical operations, biosolids management, odor control,and regulatory compliance. Through a newly developed Vision Statement,the District is committed to focusing efforts on customer service, protecting public health and the environment, fiscal responsibility, communications,partnering with others, and creating the best possible workforce. As a result of two Strategic Planning workshops, individual Board of Director's interviews, employee and management focus groups,the following eight new strategic goals were identified: 1. Odor Control—Completion of the Odor Control Master Plan. 2. Future Biosolids Management Options — Study biosolids management options including third party contracts and onsite capital facilities. 3. Energy Efficiency — Continue to research new energy efficiency and energy conversion technologies. 0576905.5 29 4. Disinfection of Ocean Discharge — Develop an implementation plan that includes the technical,financial and societal factors associated with cessation of disinfection of the ocean discharge. 5. Local Sewer Transfers—Complete the transfer of 174 miles of local sewers serving parts of the City of Tustin and unincorporated areas north of the City of Tustin and local sewer transfers in the City of Santa Ana. 6. Legislative Advocacy and Public Outreach—Develop a unified legislative advocacy and public outreach program. 7. Future Water Recycling — Determine partnerships, needs, strategies, benefits and costs associated with recycling of Plant No. 2 effluent water. 8. Workforce Planning and Workforce Development—This initiative is ongoing and part of a comprehensive workforce planning and development effort to ensure that the District has the right people with the right skills and abilities,in the right place,at the right time. DISTRICT REVENUES Sewer Service Charges General. The District has the power to establish fees and charges for services of the Wastewater System. Such fees and charges are established by the District's Board of Directors and are not subject to review or approval by any other agencies. In Fiscal Year 1997-98, a Rate Advisory Committee (the "RAC") was established comprised of representatives from industrial, commercial and residential users. The goal of the RAC was to examine the then current rate structure and, if needed, develop recommendations for change. The RAC analyzed the District's rate structure to determine whether its then current sewer service user fees (now known as "Sewer Service Charges") were equitable among residential and industrial customers. This review resulted in a proposal to expand the number of non-residential user categories from one to 23 and to provide for gradual rate increases in seven of the nine Revenue Areas. The Sewer Service Charges for those categories were based on the average flow and strength of wastewater discharged for each property type and remain currently in use. The Board of Directors establishes the annual sanitary sewer service charges by ordinance. The sanitary sewer service charge ordinances are adopted by a two-thirds vote of the Board of Directors as required under law after conducting a noticed public hearing in compliance with Proposition 218. See "LIMITATIONS ON TAXES AND REVENUES — Article XIIIC and Article XIIID of the California Constitution." In May 2002, the Board of Directors adopted District Ordinance No. OCSD 18 (the"2002 Ordinance") which became effective on July 1, 2002. The 2002 Ordinance included a single family residential ("SFR") rate increase, the underlying basis for all sanitary sewer service charges including sanitary sewer rates for multi-family residential units as well as most commercial and industrial properties, of $7.50 per year, or 9.4%, to $87.50 per year. In June 2003, the Board of Directors authorized a Proposition 218 notice on proposed"not to exceed"rate increases for each year over the next five years. The District collects Sewer Service Charges from property owners through the semi-annual property tax bill distributed by the County throughout the District, except in Revenue Area No. 14. Pursuant to the IRWD Agreement, the District receives quarterly fee payments from the IRWD which directly collects fees from customers through a monthly billing procedure in Revenue Area No. 14. 0576905.5 30 The District currently participates in the County's Teeter Plan under which the District receives annually 100% of the secured property tax levies to which it otherwise is entitled, regardless of whether the County has actually collected the levies. The District has covenanted in the Master Agreement to fix, prescribe and collect fees and charges to satisfy certain coverage requirements as further described under "SECURITY AND SOURCES OF PAYMENT FOR THE NOTES—Rate Covenant"herein. Residential and Commercial Sewer Service Charges. Pursuant to the 2002 Ordinance, the District established residential Sewer Service Charges, except within Revenue Area No. 14, based on the cost of services and facilities provided to each customer of the District. The noticed public hearing held in connection with the 2002 Ordinance considered increases in the amount of the annual charges of approximately 20% per year for each of the then following five years. In May 2005, the Board of Directors adopted Ordinance No. OCSD-26 increasing the Fiscal Year 2005-06 single family residential rate, the underlying basis for all sewer service charges, by 31%, from $115.00 to $151.00 for all ratepayers, except those located in Revenue Area No. 14. In June 2007, the Board of Directors adopted Ordinance No. OCSD-32 increasing the Fiscal Year 2007-08 single family residential rate by 9.8%. On February 27, 2008, the Board of Directors approved increases in its sanitary sewer service charges for all single family and multi-family residential units, and for all commercial properties. The Board of Directors increased the single family residential rate, which is the basis for all of the District's sewer service charges, by 10.4% for Fiscal Year 2008-09, 10.0% for Fiscal Year 2009-10, 10.4% for Fiscal Year 2010-11, 9.4% for Fiscal Yen 2011-12 and 10.1% for Fiscal Year 2012-13. On March 27, 2013, the Board of Directors adopted Ordinance No. OCSD41 approving increases in its sanitary sewer service charges for all single family residences, multi-family residential units, and all non-residential properties. The Board increased the single family residential rate, which is the basis for all of the District's sewer service charges, by 4.8% for Fiscal Year 2013-14 and thereafter by an average annual increase of 2.4%for each Fiscal Year through Fiscal Year 2017-18. Set forth in Table 6 below is a comparison of the Sewer Service Charge rate for single family residences for the fiscal years shown. Table 6 Annual Sewer Service Charges Single Family Residence Rate Ten Year Rate Schedule Fiscal Years 2008-09 through 2017-18 Fiscal Sewer Service Fiscal Sewer Service Year Charge Year Charge 2008-09 $201 2013-14 $308 2009-10 221 2014-15 316"' 2010-11 244 2015-16 323"' 2011-12 267 2016-17 331"' 2012-13 294 2017-18 339r0 Source: Orange County Sanitation District. N Projected. Set forth in Table 7 below are the total average annual Sewer Service Charges for single family residences ("SFR") within the District, together with comparable total average annual charges for "576905.5 31 wastewater service within the jurisdictions of certain other cities and districts within the State as of the dates indicated. The District's approved SFR rate of$308 in Fiscal Year 2013-14 remains below the average annual sewer rate of $484 according to a Fiscal Year 2012-13 survey of 759 agencies encompassing all 58 counties in California conducted by the State Water Resources Control Board. Table 7 Comparison of Total Sewer Service Charges For Single family Residences As of July 1,2013 Average Dry Annual Weather Sewer Flow Service Treatment Collection Property Tax Entity (me/dl"' Charge"' Levels) Art") Income"' City of San Diego 168 $573 2 Yes No City of Los Angeles 428 409 4 Yes No East Bay MUD 80 331 4 No Yes Sacramento County 140 312 3 No Yes Orange County 221 308 3 No Yes Sanitation District Los Angeles County 497 150 4 No Yes " Source: Information obtained from respective entities listed. o) Treatment Level Categories: "1"—Primary treatment. "2"—Advanced primary or primary with some secondary treatment. "3"—Secondary treatment. "4"—Advanced secondary or secondary with some tertiary treatment. (3) "5"—Tertiary treatment. Source: Wastewater User Charge Survey Report by the California State Water Resources Control Board. Industrial Sewer Service Charges. The District charges industrial Sewer Service Charges to customers discharging high-strength or high-volume wastes into the sewer systems. Customers subject to industrial Sewer Service Charges are billed directly by the District The fee charged to each customer is based on the customer's sewage volume, the concentration of suspended solids and biochemical oxygen demand. Pursuant to the 2002 Ordinance, rates for each component factor were revised for certain industrial users in order to be consistent with the rates charged to residential users. Total industrial Sewer Service Charges in Fiscal Year 2012-13 were approximately $11 million. Industrial Sewer Service Charges are applied to both operating and capital funds. The Sewer Service Charge increases described above are necessary to meet the District's cash flow needs arising from the addition of disinfection treatment and other operating requirements. As projected through Fiscal Year 2030-31, the cash flow needs of the CIP total approximately $1.9 billion. Over the next five years the CIP contemplates average annual capital expenditures of$141.7 million. In addition, the CIP contemplates $286 million, or an annual average of$57 million, to finance projects currently unknown or unidentified as forecasted by the District's Asset Management Program(the"Asset Management Program"). 0576905.5 32 Additional Revenues The District has several sources of additional revenue, including property taxes, Capital Facilities Capacity Charges,capacity rights,permit and inspection fees and interest earnings. Property Ta es. The District receives approximately 2.5%of the one percent County ad valorem property tax levy, based on the allocation procedure under State law. Property tax revenues were $64.8 million in Fiscal Year 2009-10, $64.3 million in Fiscal Year 2010-11, $67.9 million in Fiscal Year 2011- 12, $77.3 million in Fiscal Year 2012-13, and are projected to be $74.0 million in Fiscal Year 2013-14. Because of one-time redevelopment dissolution property tax proceeds received in Fiscal Year 2012-13, but increase by approximately 5.0% each year thereafter through Fiscal Yen 2018-19. The apportionment of the ad valorem tax is made pursuant to a revenue program adopted by the District in April 1979 to comply with EPA and RWQCB mandates, legal and contractual requirements and Board of Director's policy. Capital Facilities Capacity Charges. Capital Facilities Capacity Charges (commonly referred to as connection fees) are one-time fees with two components, paid at the time property is developed and connected to the Wastewater System. The fees me imposed by the District pursuant to Section 5471 of the California Health and Safety Code and are levied to pay a portion of the District's capital costs and for access to capacity in the Wastewater System. The District currently has Capital Facilities Capacity Charges of $3,341 per residential unit (three-bedroom); however, under the current industrial use ordinance, additional Capital Facilities Capacity Charges can be imposed on industrial users who place larger than average demand on the Wastewater System. Member cities and sanitary districts collect Capital Facilities Capacity Charges for the District when building permits are issued. Capital Facilities Capacity Charges are reviewed annually to reflect the changes in the value of the Wastewater System to which a new customer is connecting. On December 15, 1999, the Board of Directors approved District Ordinance No. OCSD 99-11 (the"1999 Ordinance")which established a comprehensive Capital Facilities Capacity Charge. The 1999 Ordinance, effective as of January 1, 2000, renamed connection fees as Capital Facilities Capacity Charges and provided a more equitable schedule of fees among industrial, commercial and residential users. Pursuant to the 1999 Ordinance, Capital Facilities Capacity Charges were revised for high demand industrial users in five incremental increases from 1999 through 2001. For a summary of historical and projected revenues derived from Capital Facilities Capacity Charges, see Table 14 and Table 15 below. Pursuant to an agreement with the IRWD, the IRWD is not required to pay Capital Facilities Capacity Charges and, in exchange, the IRWD provides funding to the District for the construction costs of certain wastewater collection, transmission, treatment and disposal facilities to be used by the IRWD and is obligated to make certain payments to the District for certain services arising from the Wastewater System(including any standby or availability charges). Sale of Capacity. The District has entered into agreements with the Santa Ana Watershed Project Authority ("SAWPA") whereby wastewater from Upper Santa Ana River Basin dischargers can be transported through the District's Santa Ana River Interceptor to the District's wastewater treatment facilities. This program was developed in the early 1970s. The agreements establish control mechanisms regarding the quality of wastes deposited into the Wastewater System. At the present time, SAWPA has purchased and paid for 30 mg/d of maximum regulated flow capacity rights in the District's Santa Ana River Interceptor and 17 mg/d of monthly average flow capacity in the District's wastewater treatment plants. Projected revenues from SAWPA range from$4.5 million to$5.3 million over the next five yews. Additional treatment plant capacity can be purchased in increments at the District's current replacement cost. 0576905.5 33 Federal Subsidy Payments. In connection with the District's Revenue Obligations, Series 2010A (the "2010A Revenue Obligations') and the District's Revenue Obligations, Series 2010C (the "2010C Revenue Obligations"), issued as "Build America Bonds," the District is scheduled to receive certain federal subsidy payments of approximately $5.1 million annually through 2031 and lesser amounts thereafter until 2044. Subsidy payments with respect to the 2010A Revenue Obligations and the 2010C Revenue Obligations constitute Revenues as defined in the Master Agreement. In its financial reports,the District accounts for subsidy payments received in connection with the 2010A Revenue Obligations and the 2010C Revenue Obligations as a reduction in interest expense with respect to such obligations. For the 2010A Revenue Obligations and the 2010C Revenue Obligations to be and remain Build America Bonds, the District most comply with certain covenants and establish certain facts and expectations with respect to the 2010A Revenue Obligations and the 2010C Revenue Obligations,the use and investment of proceeds thereof and the use of property financed thereby. Thus, it is possible that the District may not receive the federal subsidy payments due to the District's noncompliance. The federal subsidy payments are also subject to offset against amounts that may, for unrelated reasons, be owed by the District to any agency of the United States of America. On March 1, 2013, the federal government announced the implementation of certain automatic spending cuts known as the sequester. As a result of the sequester, federal subsidy payments for the 2010A Revenue Obligations were reduced by 8.7% (or $67,874) and federal subsidy payments for the 2010C Revenue Obligations were reduced by 8.7% (or $152,807) for the federal fiscal year ending September 30, 2013. According to the Internal Revenue Service, subsidy payments will be reduced by 7.2% for the federal fiscal year ending September 30, 2014. The District is obligated to make all payments with respect to the 2010A Revenue Obligations and the 2010C Revenue Obligations, however, from Revenues as defined in the Master Agreement, regardless of whether it receives the full meant of federal subsidy payments. The District cannot predict whether future reductions in federal subsidy payments will occur due to the sequester. However, the District does not believe that any reduction in federal subsidy payments will have a material adverse effect on the District's ability to pay the 2010A Revenue Obligations or the 2010C Revenue Obligations Wastewater Treatment History The wastewater flows for Fiscal Year 2008-09 through Fiscal Year 2012-13 were 211 mg/d, 196 mg/d, 207 mg/d, 201 mg/d and 200 mg/d,respectively. The highest flow rate experienced was during El Nifio storm periods. Peak flows of 500 mg/d were recorded in December 1997 and February 1998. There were no sewer failures or overflows during these events. Customers The historical number of customers served by the District for the Fiscal Years 2009-10 through 2013-14 and the projected number of customers served by the District for the Fiscal Years 2014-15 through 2018-19, identified in Equivalent Dwelling Units ("EDUs"), are set forth in Table 8 and Table 9 below. As discussed below, sewer service charges are based on the expected amount of wastewater flow for a single family dwelling. This base amount is considered the "equivalent dwelling unit." Set forth in Table 8 below are the EDUs that equate to total Sewer Service Charge levies,while the EDUs set forth in Table 9 equate to total sewer service charge collections. 0576905.5 34 Table 8 Historical and Projected Equivalent Dwelling Units Fiscal Years 2009-10 through 2018-19 Historical Projected Fiscal Year EDUs([) Fiscal Year EDUs 2009-10 930,164 2014-15 920,506121 2010-11 924,622 2015-16 923,175 2011-12 924,525 2016-17 925,898 2012-13 915,685 2017-18 928,676 2013-14 917,936 2018-19 931,462 With respect Fiscal Years, presentation in the Statistical Section of the District's Comprehensive Annual Financial Report set forth in Appendix A includes EDUs that equate to total Sewer Service Charge collections rather than levies. n) EDUs projected in the proposed two year budget as of June 2014. Source: Orange County Sanitation District. Set forth in Table 9 below are the number of residential and commercial customers and industrial customers and the approximate percentages of Sewer Service Charge revenues derived from the combined residential and commercial use and industrial use for the last five fiscal years. Table 9 Number of Accounts and Revenues by Customer Class for the Fiscal Years 2009-10 through 2013-14 ($in Millions) Residential/Commercial Industrial Number of Percentage Percentage Equivalent of Sewer of Sewer Single- Service Number of Service Family Total Charge Customer Total Charge Fiscal Year Dwellings Revenue Revenues Accounts Revenue Revenues 2009-10 875,442 $193.5 95% 487 $10.8 5% 2010-11 874,130 213.3 95 479 10.1 5 2011-12 869,709 232.2 96 516 9.5 4 2012-13 879,443 258.6 96 527 10.8 4 2013-14 889,02310 273.801 9600 486t0 41'1 12.91'1 Source:Orange County Sanitation District. 1'1 Projected. Set forth in Table 10 below are the ten largest principal sewer service customers of the District for the Fiscal Year ended June 30,2013. 0576905.5 35 Table 10 Largest Principal Sewer Service Customers of the District for the Fiscal Year Ended June 30,2013 Sewer Service User Charees Stremicks Heritage Foods,LLC $ 986,404.98 House Foods America Corp. 953,541.81 Kimberly-Clark Worldwide, Inc. 903,947.22 Dean Foods Co. of CA Inc. 890,942.89 MCP Foods,Inc. 870,130.48 Pulmuone Wildwood,Inc. 574,796.70 Schreiber Foods Inc. 473,288.56 Jazz Semiconductor 446,893.60 Nor-Cal Beverage Co.hie. (NCB) 416,000.20 Pepsi-Cola Bottling Group 394,930.48 Total $6.910.876.92 Source: Orange County Sanitation District. Assessed Valuation The assessed valuation of property in the County is established by the County Assessor, except for public utility property which is assessed by the State Board of Equalization. Due to changes in assessment required under State Constitution Article XHIA, the County assessment roll no longer purports to be proportional to market value. See "LIMITATIONS ON TAXES AND REVENUES" herein. Generally,property can be reappraised upward to market value only upon a change in ownership or completion of new construction. The assessed value of property that has not incurred a change of ownership or new construction must be adjusted annually to reflect inflation at a rate not to exceed 2% per year based on the State consumer price index. In the event of declining property value caused by substantial damage, destruction, economic or other factors, the assessed value must be reduced temporarily to reflect market value. For the definition of full cash value and more information on property tax limitations and adjustments,see"LIMITATIONS ON TAXES AND REVENUES"herein. The County Assessor determines and enrolls a value for each parcel of taxable real property in the County every year. The value review may result in a reduction in value. Taxpayers in the County also may appeal the determination of the County Assessor with respect to the assessed value of their property. 0576905.5 36 Set forth in Table 11 below is a five-year history of assessed valuations in the District for the fiscal years shown. Table 11 Assessed Valuations of Property in the District Fiscal Years 2009-10 through 2013-14 ($in Billions) Fiscal Year Value %Chance 2009-10 $305.2 (0.80%) 2010-11 304.3 (0.27) 2011-12 308.7 1.43 2012-13 316.4 2.48 2013-14 329.3 4.09 Source: Orange County Auditor-Controller. Tax Levies and Delinquencies Property taxes we based on assessed valuation which is determined as described under "DISTRICT REVENUES—Assessed Valuation"herein. In accordance with the California Revenue and Taxation Code, the County tax collector collects secured tax levies for each Fiscal Year. Property taxes on the secured roll are due in two installments, on November 1 and February 1. The District currently participates in the County's Teeter Plan under which the District receives annually 100% of the secured property tax levies and Sewer Service Charges to which it otherwise is entitled,regardless of whether the County has actually collected the levies. This alternative method provides for funding each taxing entity included in the Teeter Plan with its rural secured property taxes during the year the taxes are levied, including any amount uncollected at fiscal year-end. Under this plan, the District's general fund receives the full amount of secured property taxes levied each year on its behalf and, for so long as such plan remains in effect, the participating entities, such as the District, no longer experience delinquent taxes. The County's general fund is the designated recipient of future collections of penalties and interest on all delinquent taxes collected on behalf of participants in this alternative method of apportionment. In recent years, the County has experienced delinquencies of Sewer Service Charges in the District of approximately 2.0%. Set forth in Table 12 below is a five-year history of the District's ad valorem total property tax and Sewer Service Charge levies. 0576905.5 37 Table 12 Total Property Tax and Sewer Service Charge Levies in the District for Fiscal Years 2009-10 through 2013-14 (In Thousands) Total Property Tax and Sewer Fiscal Year Service Charge Lew 2009-10 $272,050 2010-I1 292,646 2011-12 314,077 2012-13 340,298 2013-14 356,904 Source: County of Orange Auditor-Controller. Budgetary Process The District's operating fund budget relies on revenues from Sewer Service Charges and property taxes,both of which are collected on the property tax bill, as previously described under the captions" Sewer Service Charges" and " Additional Revenues." The District receives tax revenues from the County in eight allocations, with the largest receipts in December and April. The District operates on a Fiscal Year beginning each July 1. The operating fund budgets include funds to cover the dry period of each tax year, i.e., the period from the beginning of the Fiscal Year until the first taxes are received. The dry-period requirement is budgeted at one-half of the annual operating fund budgeted expenditures. The District uses the accrual method of accounting in its budgets. The District has conformed to its budgets for the last five fiscal years and is conforming to its budget for the current fiscal year. The District's annual budget preparation process begins in January of each year and concludes in Jane upon its adoption. The General Manager reviews the final operating budgets and then distributes them to the Directors and District Committees for consideration. The Board of Directors then adopts the proposed annual budgets,with any revisions,in June of each year. Budgetary control is exercised at the individual Department level and administrative policies provide guidelines on budget transfers and the authorization necessary to implement transfers. A budget adjustment is a transfer which does not change the total appropriated amount and does not require Board of Directors action. Approval may be granted by the General Manager or the Department Head in certain circumstances. Department Heads have the discretion to reapportion funds between certain line items within a division but may not exceed total appropriated amounts for each department. They may also transfer staff across divisional lines. The General Manager and Board of Directors must approve additional capital outlay items. A budget amendment is an adjustment to the total appropriated amount which was not included in the original budget. These supplemental appropriations require formal action by the Board of Directors. Prior year reserves or fund balances may be appropriated to fund items not previously included in the adopted budget. Reserves or fund balances exceeding minimum amounts required by fiscal policies may be appropriated if it is determined to be in the best interest of the District. Directors may also appropriate reserves in case of emergencies or unusual circumstances. 0576905.5 38 Reserves The District has an established reserve policy with eight separate categories for its reserve funds. Collectively, these individual reserve requirements total over $500 million for each year of the current ten-year cash flow forecast. Set forth in Table 13 below are the actual reserves at June 30, 2011, June 30, 2012 and June 30, 2013, and projected reserves at Jane 30,2014 for each fund. Table 13 Cash Reserves June 30,2011 through 2013 and Projected at June 30,2014 (In Millions) Actual Projected 2011 2012 2013 2014 June 30 June 30 June 30 June 30 Cash Flow Requirements Reserve— Operating Expenses $ 75 $76 $ 76 $ 71 Certificates of Participation Payments 97 92 98 83 Operating Contingencies Reserve 15 15 15 14 Capital Improvement Program Reserve 154 171 209 310 Catastrophe and Self Insurance 57 57 57 57 Capital Replacement and Refurbishment 57 59 61 61 Debt Service Required Reservesn) 142 138 135 132 Total 5 7 608 651 728 "Debt"Debt Se�d Reserves" constitute all amounts held in Obligation Reserve Funds, together with additional amounts held by the District that may be used for the payment of debt service on District obligations in accordance with the District's reserve policy. As of June 30, 2013, $135 million of Debt Scrvice Required Reserves were held in Obligation Reserve Funds,of which$53.1 million is restricted by covenant for the specific obligations for which such Obligation Reserve Foods were established. Source: Orange County Sanitation District. The District has the following reserves: • The Cash Flow Requirements Reserve was established to fund operation, maintenance and certificates of participation debt service expenses for the first half of the fiscal year, prior to the receipt of the first installment of the property tax allocation and sewer service user fees which are collected as a separate line item on the property tax bill. The level of this reserve is established as the sum of an amount equal to six months operations and maintenance expense and the total of certificates of participation debt service expenses due in the subsequent fiscal year. • The Operating Contingencies Reserve was established to provide for non-recurring expenditures that were not anticipated when the annual budget and Sewer Service Charges were adopted. The level of this reserve is equal to 10% of the District's annual operating budget. • The Capital Improvement Program Reserve was established to fund annual increments of the Capital Improvement Program with a target level at one-half of the average annual Capital 0576905.5 39 Improvement Program through the year 2020. Levels higher and lower than the target can be expected while the long-term financing and capital improvement programs are being finalized. • The Catastrophic Loss, or Self-Insurance Reserve is established for property damage including fire, flood and earthquake, general liability and workers' compensation. The level of reserve in this fund is maintained at a level to fiord the District's non-reimbursed costs which are estimated to be$57 million. • The Capital Replacement and Refurbishment Reserve was established to provide 30% of the funding to replace or refurbish the current collection, treatment and disposal facilities. The current replacement value of these facilities is estimated to be approximately $6.2 billion. The initial reserve level for this fund was established at $50 million and is augmented by interest eamings and a portion of the annual Sewer Service Charges. • Debt Service Required Reserves include trustee-held amounts in any Obligation Reserve Fond and additional amounts held by the District for the payment of debt service in accordance with the District's reserve policy. The District's current policy is to maintain reserves (including trustee-held reserves) for debt service in the amount of 10% of the principal amount of the District's outstanding debt obligations. • The Rate Stabilization Reserve accumulates all available funds which exceed the targets for all other reserves. The Rate Stabilization Reserve is a separate fund from the Rate Stabilization Account established under the Trust Agreement. There is currently no established target for this reserve and, because the reserves of all other funds have not been exceeded, the reserve level for this reserve fund has been zero for Fiscal Year 2010-11 through Fiscal Year 2013-14. • In Fiscal Year 2009-10, Financial Management staff and the Board of Directors concluded that given the nature of the likely events that may cause a withdrawal from the District's reserves and the degree of overlap among reserve categories, the total amount reserved need not equal the sum of each separate reserve category. As a result, the District adjusted the application of its reserve policy, leading to a reduction of$40 million of the accumulated total, or approximately 8%. Reserve levels are calculated in accordance with the District's reserve policy. Summary of Operating Data Set forth in Table 14 below is a summary of historic operating results for the District for Fiscal Years 2009-10 through Fiscal Year 2012-13 and projected results for Fiscal Year 2013-14. The information presented in the summary should be read in conjunction with the financial statements and notes. See APPENDIX A — "COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE ORANGE COUNTY SANITATION DISTRICT FOR FISCAL YEAR ENDED JUNE 30,2013." 0576905.5 40 Table 14 Summary of Historical District Revenues and Expenses and Other Financial Information For Fiscal Years 2009-10 through 2012-13 and Projected for Fiscal Year 2013-14 ($in Millions) Audited Projected 2009-10 2010-11 2011-12 2012-13 2013-14 Revenues: Residential&Commercial Sewer Service Charges"' Regional $193.5 $213.3 $232.2 $258.6 $273.5 Local 5.6 5.7 5.7 5.8 5.8 Industrial Sewer Service Charges 10.8 10.1 9.5 13.5 13.3 Revenue Area No. 14 Fees 10.2 21.4 18.0 27.5 8.5 Ad Valorem Taxes 64.8 64.3 67.9 77.3 74.0 Interest Earnings 19.2 10.1 15.7 (3.6) 3.8 Other Revenues 12.5 5.7 3.6 4.6 2.0 Total Revenues $316.6 $330.6 $352.6 $383.7 $380.9 Operations and Maintenance Expenses(2) 138.1 143.4 172.313i 149.8 142.9 Net Revenues S178.5 S187,2 $180.3 $233, S23$,4 Debt Service S 67.1 S 72 a $ 65.4 $ 77.6 S_82 6 Coverage Ratios 2.66x 2.59x 2.76x 3.Olx 2.88x CIP Outlay %251.1 S160.7 $101.7 $ 97, S 92.7 Ending Reserves $473.0 $527. $608.0 $615. S727 6 Net of rebates,if any,to commercial users. (:) Excludes depreciation and amortization expenses. (s) Includes a one-time write-down of$34.2 million for costs of feasibility studies (which costs were previously capitalized and being amortized over a five-year period)to properly conform to generally accepted accounting principles. Source: Orange County Sanitation District. 0576905.5 41 Projected Operating Data Set forth in Table 15 below are forecasted operating results for the District for Fiscal Years 2014- 15 through 2018-19. These projections assume the number of projects and scheduled build out set forth in the 2014 CIP Validation Study, and reflect the Board-approved rate increase of 2.6% in Fiscal Year 2014-15, and the average annual rate increases of 2.4% over the following three fiscal years. Principal expenditure components of these projections are derived from the 2014 CIP Validation Study, which identified 77 large capital projects and 38 special projects with a 20-year projected outlay of$1.9 billion. Much of the construction is scheduled during the next five years, with average annual capital outlays of $164 million. The District's projected CIP cash flow outlay for Fiscal Year 2013-14 was approximately $92.7 million. The District's CIP cash flow budget for Fiscal Year 2014-15 is $186.4 million. This CIP budget finances joint works treatment and disposal system improvement projects, and collection system improvement projects. The preparation of such projections was based upon certain assumptions and certain forecasts with respect to conditions that may occur in the future. While the District believes that these assumptions and forecasts are reasonable for the purposes of the projected selected operating data,it makes no representation that they will in fact occur. To the extent that actual future conditions differ from those assumed herein,the data will vary. [Remainder of page intentionally left blank.] 0576905.5 42 Table 15 Summary of Projected District Revenues and Expenses and Other Financial Information for Fiscal Years 2014-15 through 2018-19 ($in Millions)") 2014-15 2015-16 2016-17 2017-18 2018-19 Revenues Residential&Commercial Sewer Service Charges $288.9 $296.3 $304.5 $312.9 $321.4 Industrial Sewer Service Charges 13.7 14.0 14.3 14.7 15.0 IRWD Assessments 14.2 13.5 8.8 4.6 5.0 SAWPA Assessments 2.5 2.7 2.8 2.9 3.0 Ad Valorem Taxes 77.7 81.6 85.7 90.0 94.5 Interest Earnings 13.1 14.7 17.4 17.5 20.6 Other Revenues 1.7 1.7 10.1 1.8 1.8 Total Revenues $411.8 $424.5 $443.6 $444.4 $461.3 Add: Build America Bonds Federal Subsidy $ 5.1 $ 5.1 $ 5.1 $ 5.1 $ 5.1 Operations and Maintenance Expenses (152.5) (155.0) (158.8) (162.6) (169.9 ) Net Revenues(2) $2644 $274.6 $289.9 $286.92 65 Debt Service $ 85.8 $ 86.7 $ 91.7 $ 87.8 $ 86.0 Build America Bonds Federal Subsidy 5.1 5.1 5.1 5.1 5.1 Gross Debt Service $ 90.9 $ 9L8 S 96.8 S-92.9 $_2I.1 Coverage Ratios(a) 191x 2 99x 2 99x 3 09x 3 25x CIE Outlays $186.4 206. $196.6 205. $198.8 Ending Reserves $599.8 $587.4 593.1 $590.7 $606.9 See REVENUES-Additional Revenues-Federal Subsidy Payments"herein. in Calculated in accordance with the Master Agreement and the Installment Purchase Agreement. (a Assumptions: a) Annual growth in EDUs is projected to increase 0.3%over the next five years. b) The Residential and Commercial Sewer Service Charge and the Industrial Sewer Service Charges forecasts are based on the total projected EDUs, and the actual board approved rate increase of 2.6% in Fiscal Year 2014-15,and board approved rate increases over the next three years averaging 2.4%per year. c) Revenue Area No. 14 Fees are derived based on the projected contribution of sewage flows to the District from the IRWD. d) Ad valorem taxes are projected with annual increases of 5.0%. e) Interest earnings are projected to average 2.0%of annual cash balances. 1) Operating and Maintenance Expenses are forecasted with a base increase of 1.1%per year with adjustments for known periodic outlays that do not occur annually. g) Annual CIP Outlays are based on the cash flow projections developed from the CIP Validation Study. Source: Orange County Sanitation District. 0576905.5 43 Management's Discussion and Analysis of Operating Data The District's Fiscal Year 2014-15 total operating, capital improvement, debt service, and other financing requirement budget is $554.4 million, a 39.6% increase over the prior yen budget of$397.0 million. This overall increase is primarily attributable to a one-time reduction of$125 million in long- term liabilities. This one-time reduction is the result of the CIP program being scheduled out into future years and the receipt of unexpected one-time revenues. This $125 million one-time reduction will consist of either a pay down of the $200 million current unfunded accrued actuarial pension liability, the $25 million current unfunded accrued actuarial "other postemployment benefit" liability, or the $1.2 billion outstanding bonded debt,or some combination of all three. Excluding this one-time reduction,the total proposed cash flow budget for Fiscal Year 2014-15 totals $429 million, an 8.2% increase over the prior year. This overall increase consists of an increase in capital outlay of$41.5 million or 28.2%, a decrease in debt service requirements of$12.4 million or 12.6%, and an increase in operating expenses of $3.2 million or 2.1%. The Fiscal Yen 2014-15 proposed budget to operate, maintain and manage am sewage collection, treatment and disposal system is $152.5 million, an increase of 2.1% over the prior year budget. Personnel costs have increased by$1.2 million,or 1.2%, due to the retirement of many long-term employees, as there were 23 retirees in Fiscal Year 2013-14 and 17 retirees in Fiscal Year 2012-13, and the time required to refill these vacant positions. As of Much 31, 2014, there were 44 vacant positions, or 7.0%of total staffing, and staffing levels are proposed to remain unchanged from the current full-time equivalent("FTE")positions of 626.0. Repairs and maintenance costs are proposed to increase $1.8 million or 15.8%. This increase is mostly attributable to increases in basic repairs and maintenance costs including the scheduling of digester cleanings totaling $1.0 million and one central generation engine overhaul totaling $893,000. Contractual services are proposed to increase$0.9 million, or 4.0%, due primarily to a$382,000, or 2.1% increase in solids removal. This increase is due to both unit cost increases and the increase in production as biosolids production is projected to increase to 765 tons per day,up from the prior year estimate of 756 tons per day, with secondary treatment processes being fully operational. Security services, another component of contractual services,me proposed at an increase of$199,600,or 49.9%. Overhead cost allocation out to the CIP has been reduced by $1.5 million, or 8.1%reduction due to decreased CIP outlay over the past several years. Conversely affecting these operating increases,chemical supplies have decreased$1.0 million,or 6.8%, as a result of the decrease disinfection, odor control, and chemicals used in the treatment process due to chemical optimization and decreased disinfection requirements. In addition,property and liability insurance premiums are proposed to decrease $900,000, or 64.3%, due to favorable market conditions on premiums for insurance renewals. In preparation of the Fiscal Year 2014-16 biennium budget,District staff developed and reviewed with the Board of Directors a capital improvement program to deliver the levels of service included in the District's five-year strategic plan. These levels of services and associated capital projects are included in the District's Five-Year Strategic Plan. In addition, District staff validated the active CIP projects currently being executed to ensure that the scope of work on the active projects remains appropriate, and that the cost estimates have been accurately updated. The Fiscal Yen 2014-15 CIP cash flow budget was approved at $186.5 million. The 2014 validated CIP includes 77 large capital projects and 38 special projects with 20-year outlays totaling$1.9 billion. 0576905.5 44 The completion of the CIP Validation Study in 2013 reaffirmed the need for rate increases in future years. Based on the results of the CIP Validation Study and the Five-Year Plan, the Board of Directors adopted Ordinance No. OCSD-4I, increasing the sanitary sewer service charges by approximately 4.8% in Fiscal Year 2013-014, and by an average of 2.4% over the following four years. These rate increases were approved by a vote of two-thirds of the members of the Board of Directors and are not subject to reaffirmation in any of the future fiscal years covered by this five-year period. This action increased the single family residence user rate, the basis for all sewer user fee rates, from $308 in Fiscal Year 2013-14 to $316 in Fiscal Year 2014-15. See "DISTRICT REVENUES — Sewer Service Charges." Investment of District Funds State statutes authorize the District to invest in obligations of the United States Government, state and local governmental agencies, negotiable certificates of deposits, bankers acceptances, commercial paper, reverse repurchase agreements and a variety of other investment instruments which are allowable under California Government Code Section 53600 et seq. All District funds, except for Obligation Reserve Funds controlled by a bank trustee pursuant to the provisions of Existing Senior Obligations, are managed by an external money manager, Pacific Investment Management Company. Mellon Trust serves as the District's independent custodian bank for its investment program. Callan Associates serves as the District's independent advisor. As of March 31, 2014, the District's externally managed fund consisted of a short-tern investment portfolio of$50.9 million with an average maturity of 22 days, and a long-term investment portfolio of$439.2 million with average maturities of 3.2 years. Investments consist of United States government securities, corporate bonds and commercial paper. The District's portfolio contains no structured investment vehicles("SNs")or reverse repurchase agreements. Deposits in banks are maintained in financial institutions which provide deposit protection on the bank balance from the Federal Deposit Insurance Corporation. The California Government Code requires State banks and savings and loans to secure local government deposits by pledging government securities equal to 110% of the deposits or by pledging first trust deed mortgage notes equal to 150% of the deposits. The District's Investment Policy requires that the District invest public funds in a manner which ensures the safety and preservation of capital while meeting reasonable anticipated operating expenditure needs, achieving a reasonable rate of return and conforming to all state and local statutes governing the investment of public funds. The primary objectives, in order, of the District's investment activities are safety, liquidity and return on investment. FINANCIAL OBLIGATIONS Existing Indebtedness Currently, the District has Senior Obligations Outstanding payable on a parity with the Revenue Obligations. The table below describes the District's outstanding parity certificates of participation as of July 1,2014. The payment obligations in connection with each series of these certificates of participation constitute Senior Obligations, subject to the provisions of the Master Agreement and shall be afforded all of the benefits, interests and security afforded Senior Obligations pursuant to the Master Agreement. The District has no general obligation bonds or subordinate bonds outstanding. "506905.5 45 Table 16 Outstanding Senior Obligations As of duly 1,2014 Original Principal Issue Outstanding Final Amount Date Balance Maturi 2007A Certificates $ 95,180,000 05/22/07 $ 92,385,000 02/01/30 2007B Certificates 300,000,000 12/20/07 267,255,00010 02/01/37 2008B Certificates 27,800,000 09/11/08 25,585,000 08/01/16 2009A Certificates 200,000,000 05/07/09 184,090,000 02/01/39 2010A Certificates 80,000,000 05/18/10 80,000,000 02/01/40 2010C Revenue Obligations 157,000,000 11/29/10 157,000,000 02/01/44 2011A Revenue Obligations 147,595,000 10/03/11 130,345,000 02/01/26 2012A Revenue Obligations 100,645,000 03/22/12 100,645,000 02/01/33 2012B Revenue Obligations 66,395,000 08/16/12 66,395,000 02/01/26 2013A Certificates 129,625,000 10/16/13 129,625,0001n 10/16/14121 Total Senior Obligations $1.304.240.000 $1.233325.000 Includes the Refunded Certificates to be partially refunded with the proceeds of the Revenue Obligations. See "REFUNDING PLAN"herein. (2) The District may in the nature refund the 2013A Certificates(referenced herein as the 2013A Notes)with Senior Obligations amortizing over a term of approximately 22 years. In connection with the execution and delivery of the above-referenced outstanding certificates of participation, the District entered into certain installment purchase agreements, or equivalent documents, providing for the payment of installment payments or similar payments. Anticipated Financings From time to time the District may incur other obligations to finance portions of the CIP. Over the next ten years,however,the District does not expect to issue any additional debt,other than refunding debt. The District expects to refund outstanding obligations from time to time, such as the 2013A Certificates discussed in Table 16 above. Direct and Overlapping Bonded Debt The aggregate direct and overlapping bonded debt of the District as of June 30, 2013 is set forth on page 54 of Appendix B. THE CORPORATION The Corporation was organized on June 19, 2000 as a nonprofit public benefit corporation pursuant to the Nonprofit Public Corporation law of the State. The Corporation's purpose is to render assistance to the District in its acquisition of equipment,real property and improvements on behalf of the District. Under its articles of incorporation, the Corporation has all powers conferred upon nonprofit public benefit corporations by the laws of the State,provided that it will not engage in any activity other than that which is necessary or convenient for, or incidental to the purposes for which it was formed. The Corporation is a separate legal entity from the District. It is governed by a twenty-five member Board of Directors. The Corporation has no employees. All staff work is performed by "576905.5 46 employees of the District. The members of the Corporation's Board of Directors are the Board of Directors of the District. The District's Director of Finance and Administrative Services and other District employees are available to provide staff support to the Corporation. The Corporation has not entered into any material financing arrangements other than those referred to in this Official Statement. Further information concerning the Corporation may be obtained from the Orange County Sanitation District office at 10844 Ellis Avenue, Fountain Valley, California, 92708-7018. LIMITATIONS ON TAXES AND REVENUES Article XIIIA of the California Constitution On June 6, 1978, California voters approved Proposition 13 ("Proposition 13'), which added Article XIIIA to the State Constitution ("Article XIIIA"). Article XIIIA, as amended, limits the amount of any ad valorem tax on real property to one percent of the full cash value thereof, except that additional ad valorem taxes may be levied to pay debt service on (i)indebtedness approved by the voters prior to July 1, 1978,(ii)(as a result of an amendment to Article XIIIA approved by State voters on June 3, 1986) on bonded indebtedness for the acquisition or improvement of real property which has been approved on or after July 1, 1978 by two-third of the voters on such indebtedness, and (in)bonded indebtedness incurred by a school district or community college district for the construction, reconstruction, rehabilitation or replacement of school facilities or the acquisition or lease of real property for school facilities, approved by 55% of the voters of the district, but only if certain accountability measures are included in the proposition. Article XIBA defines full cash value to mean "the county assessor's valuation of real property as shown on the 1975-76 tax bill under "full cash value," or thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment" The full cash value may be adjusted annually to reflect inflation at a rate not to exceed 2%per year or to reflect a reduction in the consumer price index or comparable data for the area under the taxing jurisdiction, or reduced in the event of declining property values caused by substantial damage, destruction, or other factors. Legislation enacted by the State Legislature to implement Article XIIIA provides that notwithstanding any other law, local agencies may not levy any ad valorem property tax except to pay debt service on indebtedness approved by the voters as described above. Legislation Implementing Article XIIIA Legislation has been enacted and amended a number of times since 1978 to implement Article XIIIA. Under current law,local agencies are no longer permitted to levy directly any property tax(except to pay voter-approved indebtedness). The one percent property tax is automatically levied by the County and distributed according to a formula among taxing agencies. The formula apportions the tax roughly in proportion to the relative shares of taxes levied prior to 1989. Increases of assessed valuation resulting from reappraisals of property due to new construction, change in ownership or from the 2% annual adjustment are allocated among the various jurisdictions in the "taxing area" based upon their respective "sins." Any such allocation made to a local agency continues as part of its allocation in future years. Beginning in the 1981-82 fiscal year, assessors in the State no longer record property values on tax rolls at the assessed value of 25%of market value which was expressed as$4 per$100 assessed value. All taxable property is now shown at full market value on the tax rolls. Consequently, the tax rate is 0576905.5 47 expressed as $1 per$100 of taxable value. All taxable property value included in this Official Statement is shown at 100% of market value (unless noted differently) and all tax rates reflect the $1 per $100 of taxable value. Article XIIIB of the California Constitution An initiative to amend the State Constitution entitled"Limitation of Government Appropriations" was approved on September 6, 1979, thereby adding Article XIIIB to the State Constitution ("Article XIIIB"). Under Article XIIIB,the State and each local governmental entity has an annual"appropriations limit" and is not permitted to spend certain moneys that are called "appropriations subject to limitation" (consisting of tax revenues, state subventions and certain other funds) in an amount higher than the appropriations limit. Article XIIIB does not affect the appropriations of moneys that are excluded from the definition of"appropriations subject to limitation,"including debt service on indebtedness existing or authorized as of January 1, 1979, or bonded indebtedness subsequently approved by the voters. In general terms, the appropriations limit is to be based on certain 1978-79 expenditures, and is to be adjusted annually to reflect changes in consumer prices, populations, and services provided by these entities. Among other provisions of Article XIIIB, if these entities' revenues in any year exceed the amounts permitted to be spent,the excess would have to be returned by revising tax rates or fee schedules over the subsequent two years. "Appropriations subject to limitation" are authorizations to spend "proceeds of taxes," which consist of tax revenues, state subventions and certain other funds, including proceeds from regulatory licenses, user charges or other fees to the extent that such proceeds exceed `the cost reasonably borne by such entity in providing the regulation, product or service,"but"proceeds of taxes" excludes tax refunds and some benefit payments such as unemployment insurance. No limit is imposed on appropriations of funds which are not `proceeds of taxes," such as reasonable user charges or fees, and certain other non- tax funds. Not included in the Article XIITB limit we appropriations for the debt service costs of bonds existing or authorized by January 1, 1979, or subsequently authorized by the voters, appropriations required to comply with mandates of courts or the federal government and appropriations for qualified capital outlay projects. The appropriations limit may also be exceeded in certain cases of emergency. The appropriations limit for the District in each year is based on the District's limit for the prior year, adjusted annually for changes in the cost of living and changes in population, and adjusted, where applicable, for transfer of financial responsibility of providing services to or from another unit of government. The change in the cost of living is, at the District's option, either(1)the percentage change in State per capita personal income, or (2) the percentage change in the local assessment roll on nonresidential property. Either test is likely to be greater than the change in the cost of living index, which was used prior to Proposition 111. Change in population is to be measured either within the jurisdiction of the District or the County as a whole. As amended by Proposition 111, the appropriations limit is tested over consecutive two-year periods. Any excess of the aggregate "proceeds of taxes" received by a District over such two-year period above the combined appropriations limits for those two years is to be returned to taxpayers by reductions in tax rates or fee schedules over the subsequent two years. As originally enacted in 1979,the District's appropriations limit was based on 1978-79 authorizations to expend proceeds of taxes and was adjusted annually to reflect changes in cost of living and population (using different definitions, which were modified by Proposition 111). Starting with Fiscal Year 1990-91,the District's appropriations limit was recalculated by taking the actual Fiscal Year 1986-87 limit, and applying the annual adjustments as if Proposition 111 had been in effect. The District does not anticipate that any such appropriations 0576905.5 48 limitations will impair its ability to make Installment Payments as required by the Installment Purchase Agreement. Proposition 1A and Proposition 22 Proposition lA ("Proposition lA"), proposed by the Legislature in connection with the 2004-05 Budget Act and approved by the voters in November 2004, restricts State authority to reduce major local tax revenues such as the tax shifts permitted to take place in Fiscal Years 2004-05 and 2005-06. Proposition lA provides that the State may not reduce any local sales tax rate, limit existing local government authority to levy a sales tax rate or change the allocation of local sales tax revenues, subject to certain exceptions. Proposition lA generally prohibits the State from shifting to schools or community colleges any share of property tax revenues allocated to local governments for any fiscal year,as set forth under the laws in effect as of November 3, 2004. Any change in the allocation of property tax revenues among local governments within a county must be approved by two-thirds of both houses of the Legislature. Proposition IA provides, however, that beginning in Fiscal Year 2008-09, the State may shift to schools and community colleges up to 8%of local government property tax revenues,which amount must be repaid, with interest, within three years, if the Governor proclaims that the shift is needed due to a severe state financial hardship, the shift is approved by two-thirds of both houses and certain other conditions are met. Such a shift may not occur more than twice in any ten-year period. The State may also approve voluntary exchanges of local sales tax and property tax revenues among local governments within a county. Proposition IA was generally superseded by the passage of a new initiative constitutional amendment at the November 2010 election, known as Proposition 22 ("Proposition 22"). The effect of Proposition 22 is to prohibit the State, even during a period of severe fiscal hardship, from delaying the distribution of tax revenues for transportation,redevelopment, or local government projects and services. It prevents the State from redirecting redevelopment agency property tax increment to any other local government or from temporarily shifting property taxes from cities, counties and special districts to schools.This is intended to, among other things,stabilize local government revenue sources by restricting the State's control over local property taxes. Prior to the passage of Proposition 22, the State invoked Proposition lA to divert $1.935 billion in local property tax revenues in fiscal year 2009-10 from cities, counties, and special districts to the State to offset State general fund spending for education and other programs. Approximately$5 million of the District's property tax revenues were diverted to the State as a result of this Proposition IA suspension. The District participated in a Proposition IA Securitization Program (the `Program") sponsored by the California Statewide Communities Development Authority. The Program allowed the District to exchange its anticipated State property tax receivable for an equal amount of cash. In addition,the State's adopted 2009-10 budget included a $1.7 billion diversion in local property tax revenues from local redevelopment agencies. Many California Redevelopment Association members are actively engaged in litigation to block such diversion and recoup certain payments already made under certain legislation passed in July 2009 that is beyond the reach of Proposition 22,known as"ABX4 26." Proposition IA also provides that if the State reduces the vehicle license fee ("VLF") rate currently in effect, 0.65% of vehicle value, the State must provide local governments with equal replacement revenues. Further, Proposition lA requires the State to suspend State mandates affecting cities, counties and special districts, excepting mandates relating to employee rights, schools or community colleges, in any year that the State does not fully reimburse local governments for their costs to comply with such mandates. 0576905.5 49 Article XIIIC and Article XIIID of the California Constitution Proposition 218, a State ballot initiative (mown as the "Right to Vote on Taxes Act," was approved by the voters on November 5, 1996. The initiative added Articles XIIIC and XIIID to the California Constitution, creating additional requirements for the imposition by most local governments of "general taxes,""special taxes,""assessments,""fees,"and"charges." Proposition 218 became effective, pursuant to its terms, as of November 6, 1996, although compliance with some of its provisions was deferred until July 1, 1997, and certain of its provisions purport to apply to any tax imposed for general governmental purposes (Le., "general taxes") imposed, extended or increased on or after January 1, 1995 and prior to November 6, 1996. Article XIIID, imposes substantive and procedural requirements on the imposition, extension or increase of any"fee" or"charge" subject to its provisions. A "fee" or"charge" subject to Article XIIID includes any levy, other than an ad valorem tax, special tax or assessment, imposed by an agency upon a parcel or upon a person as an incident of property ownership. Article XIIID prohibits, among other things, the imposition of any proposed fee or charge, and, possibly, the increase of any existing fee or charge, in the event written protests against the proposed fee or charge are presented at a required public hearing on the fee or charge by a majority of owners of the parcels upon which the fee or charge is to be imposed. Except for fees and charges for water, sewer and refuse collection services, the approval of a majority of the property owners subject to the fee or charge,or at the option of the agency,by a two-thirds vote of the electorate residing in the affected area, is required within 45 days following the public hearing on any such proposed new or increased fee or charge. The California Supreme Court decisions in Richmond v. Shasta Community Services District, 32 Cal.4th 409 (2004) ("Richmond"), and Bighorn- Desert View Water Agency v. Verjil, 39 CalAth 205 (2006) ("Bighorn") have clarified some of the uncertainty surrounding the applicability of Section 6 of Article XIIID to service fees and charges. in Richmond, the Shasta Community Services District charged a water connection fee, which included a capacity charge for capital improvements to the water system and a fire suppression charge. The Court held that both the capacity charge and the fire suppression charge were not subject to Article XIIID because a water connection fee is not a property-related fee or charge because it results from the property owner's voluntary decision to apply for the connection. In both Richmond and Bighorn, however, the Court stated that a fee for ongoing water service through an existing connection is imposed "as an incident of property ownership" within the meaning of Article XIIID, rejecting, in Bighorn, the water agency's argument that consumption-based water charges are not imposed "as an incident of property ownership"but as a result of the voluntary decisions of customers as to how much water to use. Article XIIID also provides that"standby charges" are considered"assessments"and must follow the procedures required for "assessments" under Article XIIID and imposes several procedural requirements for the imposition of any assessment, which may include (1) various notice requirements, including the requirement to mail a ballot to owners of the affected property; (2) the substitution of a property owner ballot procedure for the traditional written protest procedure, and providing that"majority protest" exists when ballots (weighted according to proportional financial obligation) submitted in opposition exceed ballots in favor of the assessments; and (3) the requirement that the levying entity "separate the general benefits from the special benefits conferred on a parcel"of land. Article XIIID also precludes standby charges for services that are not immediately available to the parcel being charged. Article XIIID provides that all existing, new or increased assessments are to comply with its provisions beginning July 1, 1997. Existing assessments imposed on or before November 5, 1996, and "imposed exclusively to finance the capital costs or maintenance and operations expenses for [among other things] water" are exempted from some of the provisions of Article XIIID applicable to assessments. 40576905.5 50 Article XIIIC extends the people's initiative power to reduce or repeal existing local taxes, assessments, fees and charges. This extension of the initiative power is not limited by the terms of Article XIBC to fees, taxes, assessment fees and charges imposed after November 6, 1996 and absent other authority could result in retroactive reduction in any existing taxes, assessments, fees or charges. In Bighorn, the Court concluded that under Article XIBC local voters by initiative may reduce a public agency's water rates and delivery charges. The Court noted, however, that it was not holding that the authorized initiative power is free of all limitations, stating that it was not determining whether the electorate's initiative power is subject to the public agency's statutory obligation to set water service charges at a level that will `pay the operating expenses of the agency, . . . provide for repairs and depreciation of works,provide a reasonable surplus for improvements,extensions,and enlargements,pay the interest on any bonded debt, and provide a sinking or other fund for the payment of the principal of such debt as it may become due." The District implemented a five-year plan beginning in Fiscal Year 2002-03 which included a rate increase of$7.50 per year, or 9.4%, for all ratepayers to$87.50 per year. In May 2003,the Bond of Directors approved a 15% rate increase per yen, for each year, over the then following five years, upon 2/3 vote of the Board of Directors after conducting a noticed public hearing in compliance with Article XBID. The Board of Directors considered this increase necessary to provide needed capital improvements,to cover additional treatment and disinfection costs,and to minimize rate increases over an extended period of time. On July 2, 2003, the Board of Directors adopted Ordinance No. OCSD-20 increasing sanitary sewer service charges for all single family and multi-family residential units as well as most commercial and industrial properties. The Ordinance was adopted by a 2/3 vote of the Board of Directors as required under law after conducting a noticed public hearing in compliance with all laws. The Ordinance increases the amount of the annual charges by approximately 15%per year for each of the following five years, commencing with Fiscal Year 2003-04, thereby raising the single family residence user rate from the then current$87.50 to $100.00, $115.00,$132.00, $152.00, and$175.00 annually. The Ordinance discounted by 5%the annual increases which were the subject of the required protest hearings on the fee increase as described above. After the completion of the CB'Validation Study for Fiscal Year 2005-06 that increased its ten year CB' cash flow projects to $2.2 billion, or an average of$220 million per year, the Board of Directors adopted Ordinance No. OCSD-26 increasing the Fiscal Year 2005-06 single family residential rate 31%,from$115 to $151 for such year. In May 2006,the Bond of Directors adopted Ordinance No. OCSD-30B increasing the Fiscal Year 2006-07 single family residential rate 9.8%, from$151.00 to $165.80 for such year, except those located in Revenue Area 14. These increases represented the increase permitted under the protest hearings on the fee increase which was held in 2003. In Jane 2007, the Board of Directors adopted Ordinance No. OCSD-32 increasing the Fiscal Year 2007- 08 single family residential rate by 9.8%. In February 2008, after a noticed public hearing, the Board of Directors adopted Ordinance No. OCSD-35, which provides for annual increases in the single family residential rate of 10.4%, 10.0%, 10.4%, 9.4%and 10.1%,respectively, for Fiscal Years 2008-09 through 2012-13. On March 27, 2013, the Bond of Directors adopted Ordinance No. OCSD41 approving increases in its sanitary sewer service charges for all single family residences, multi-family residential units, and all non-residential properties. The Board of Directors increased the single family residential rate, which is the basis for all of the District's sewer service charges, by 4.8% for Fiscal Year 2013-14 and thereafter by an average of 2.4%annually for each Fiscal Year through Fiscal Year 2017-18. Pursuant to the Master Agreement, the District will,to the extent permitted by law, fix, prescribe and collect fees and charges for the services of the Wastewater System which will be at least sufficient to yield during each Fiscal Year(a)Net Revenues equal to 125%of Debt Service on Senior Obligations for such Fiscal Year, and(b)Net Operating Revenues equal to 100% of Debt Service on all Obligations for such Fiscal Year. The District may make adjustments from time to time in such fees and charges and may make such classification thereof as it deems necessary, but will not reduce the fees and charges then in effect unless the Revenues and Net Revenues from such reduced fees and charges will at all times be "576905.5 51 sufficient to meet the requirements of the Master Agreement. In the event that service charges are determined to be subject to Article XIIID, and proposed increased service charges cannot be imposed as a result of a majority protest, such circumstances may adversely affect the ability of the District to generate revenues in the amounts required by the Master Agreement, and to make Installment Payments as provided in the Installment Purchase Agreement. No assurance may be given that Articles XIIIC and XIIID will not have a material adverse impact on Net Revenues. Other Initiative Measures Articles XIIIA, XIMS, XIIIC and XIIID were adopted pursuant to California's constitutional initiative process. From time to time other initiative measures could be adopted by California voters, placing additional limitations on the ability of the District to increase revenues. LEGAL MATTERS The validity of the Revenue Obligations and certain other legal matters are subject to the approving opinion of Fulbright & Jaworski LLP (a member of Norton Rose Fulbright), Los Angeles, California, Special Counsel to the District. A complete copy of the proposed form of Special Counsel opinion is attached as Appendix F hereto. Special Counsel, in its capacity as Special Counsel to the District,undertakes no responsibility for the accuracy,completeness or fairness of this Official Statement. Certain legal matters will be passed on for the District and the Corporation by Woodmff, Spradlin & Smart, a Professional Corporation, Costa Mesa, California, and for the District by Fulbright & Jaworski LLP(a member of Norton Rose Fulbright),Disclosure Counsel to the District. FINANCIAL ADVISOR The District has retained Public Resources Advisory Group as financial advisor (the "Financial Advisor") in connection with the execution and delivery of the Revenue Obligations. The Financial Advisor has not been engaged, nor have they undertaken, to audit, authenticate or otherwise verify the information set forth in the Official Statement, or any other related information available to the District, with respect to accuracy and completeness of disclosure of such information. The Financial Advisor has reviewed this Official Statement but makes no guaranty, warranty or other representation respecting accuracy and completeness of the information contained in this Official Statement. ABSENCE OF LITIGATION There is no action, suit,proceeding, inquiry or investigation,at law or in equity,before or by any court, regulatory agency, public board or body, pending or, to the best knowledge of the District, threatened against the District affecting the existence of the District or the titles of its directors or officers to their offices or seeking to restrain or to enjoin the sale or delivery of the Revenue Obligations, the application of the proceeds thereof in accordance with the Trust Agreement, or in any way contesting or affecting the validity or enforceability of the Revenue Obligations, the Trust Agreement, the Master Agreement, the Installment Purchase Agreement or any action of the District contemplated by any of said documents, or in any way contesting the completeness or accuracy of this Official Statement, or contesting the powers of the District or its authority with respect to the Revenue Obligations or any action of the District contemplated by any of said documents, nor, to the knowledge of the District is there any basis therefor. There is no action, suit,proceeding, inquiry or investigation,at law or in equity,before or by any court, regulatory agency, public board or body pending or, to the best knowledge of the District, threatened against the District contesting or affecting the ability of the District to collect amounts from a0506905.5 52 which Installment Payments are payable, or which would have a material adverse effect on the District's ability to make Installment Payments. FINANCIAL STATEMENTS The basic financial statements of the District included in Appendix A to this Official Statement have been audited by McGladrey & Pullen, LLP, independent certified public accountants. See APPENDIX A—"COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE ORANGE COUNTY SANITATION DISTRICT FOR FISCAL YEAR ENDED JUNE 30, 2013" herein. The District has received the Government Finance Officer's Association Certificate of Achievement for "Excellence in Financial Reporting" for 20 consecutive years. The audited financial statements, including the footnotes thereto, should be reviewed in their entirety. McGladrey & Pullen, LLP, the District's independent auditor, has not been engaged to perform, and has not performed, since the date of its report included in Appendix A, any procedures on the financial statements addressed in that report. McGladrey & Pullen, LLP also has not performed any procedures relating to this official statement. TAX MATTERS The Internal Revenue Code of 1986 (the "Code") imposes certain requirements that must be met subsequent to the execution and delivery of the Revenue Obligations for the interest component of each Installment Payment(the`Interest Component"), and the allocable portion thereof distributable in respect of each Revenue Obligation (the "Certificate Interest Distribution"), to be and remain excluded pursuant to section 103(a) of the Code from the gross income of the owners thereof for federal income tax purposes. Noncompliance with such requirements could cause such amounts to be included in gross income for federal income tax purposes retroactive to the date of delivery of the Installment Purchase Agreement and the Revenue Obligations. The District has covenanted to maintain the exclusion of the Interest Components and the Certificate Interest Distributions from the gross income of the owners thereof for federal income tax purposes. In rendering its opinion with respect to the Interest Components and Certificate Interest Distributions as described below, Special Counsel will rely upon representations and covenants of the District (including such covenant noted above, and the covenants and representations described below) made in connection with the execution and delivery of the Revenue Obligations, and will assume that all such representations we true and correct and that the District will comply with all such covenants. Upon the execution and delivery of the Installment Purchase Agreement, Fulbright & Jaworski LLP, Los Angeles, California, Special Counsel, will deliver its opinion that under existing law, and assuming compliance with the covenants referred to herein, each Interest Component, and each of the Certificate Interest Distributions in respect of a Revenue Obligation, is excluded pursuant to section 103(a) of the Code from the gross income of the owner of the Revenue Obligation for federal income tax purposes. Further, on that same day Special Counsel will render its opinion, based solely on the foregoing,and upon existing provisions of the laws of California,that each Interest Component, and each of the Certificate Interest Distributions in respect of a Revenue Obligation, is exempt from personal income taxes of the State of California under present state law. Special Counsel will render its Father opinion that, under existing statutes, regulations, rulings and court decisions, the Installment Purchase Agreement will not constitute a"specified private activity bond" within the meaning of section 57(a)(5) of the Code and,therefore,that each Interest Component,and each of the Certificate Interest Distributions in respect of a Revenue Obligation, will not be treated as an item of tax preference for purposes of computing the alternative minimum tax imposed by section 55 of the Code. Receipt or accrual of an Interest Component allocable to or Certificate Interest Distribution in respect of a Revenue Obligation owned by, a corporation may affect the computation of the alternative minimum taxable income of that 0576905.5 53 corporation. A corporation's alternative minimum taxable income is the basis upon which the alternative minimum tax imposed by section 55 of Code is computed. Pursuant to the Trust Agreement and in the Tax Certificate Pertaining to Arbitrage and Other Matters under Sections 103 and 141-150 of the Internal Revenue Code of 1986, to be delivered by the District in connection with the issuance of the Revenue Obligations,the District will make representations relevant to the determination of, and will make certain covenants regarding or affecting, the exclusion of interest on the Revenue Obligations from the gross income of the owners thereof for federal income tax purposes. In reaching its opinions described above, Special Counsel will assume the accuracy of such representations and the present and future compliance by the District and the Corporation with such covenants. Further, except as stated above, Special Counsel will express no opinion as to any federal or state tax consequences of the receipt of interest on, or the ownership or disposition of, the Revenue Obligations. A copy of the proposed forth of opinion of Special Counsel relating to the Revenue Obligations is included in Appendix F. Special Counsel has not undertaken to advise in the future whether any events after the date of execution and delivery of the Installment Purchase Agreement and the Revenue Obligations may affect the tax status of the Interest Components or the Certificate Interest Distributions. No assurance can be given that future legislation, if enacted into law, will not contain provisions that could directly or indirectly reduce the benefit of the exemption of such amounts from personal income taxation by the State of California or of the exclusion of the interest on the Revenue Obligations from the gross income of the owners thereof for federal income tax purposes. Furthermore, Special Counsel will express no opinion as to any federal, state or local tax law consequences with respect to the Installment Purchase Agreement, the Revenue Obligations, the Interest Components or Certificate Interest Distributions, if any action is taken with respect to the Installment Purchase Agreement, the Revenue Obligations or the proceeds thereof, or the Trust Agreement predicated or permitted upon the advice or approval of other counsel. To the extent that a purchaser of a Revenue Obligation acquires that Revenue Obligation at a price that exceeds the aggregate amount of scheduled distributions (other than distributions of qualified stated interest within the meaning of section 1.1273-1 of the Treasury Regulations) to be made on the Revenue Obligation(determined, in the case of a prepayable Revenue Obligation, under the assumption described below) (the "Stated Redemption Price at Maturity"), such excess will constitute "bond premium" under the Code. Section 171 of the Code, and the Treasury Regulations promulgated thereunder, provide generally that bond premium on a tax-exempt obligation must be amortized on a constant yield, economic accrual, basis; the amount of premium so amortized will reduce the owner's basis in such obligation for federal income tax purposes, but such amortized premium will not be deductible for federal income tax purposes. In the case of a purchase of a Revenue Obligation that is subject to prepayment, the determination whether there is amortizable bond premium, and the computation of the accrual of that premium, must be made under the assumption that the Revenue Obligation will be prepaid on the permitted date that would minimize the purchaser's yield on the Revenue Obligation (or that the Revenue Obligation will not be prepaid prior to the stated maturity date in respect of that Revenue Obligation if that would minimize the purchaser's yield). The rate and timing of the amortization of the bond premium and the corresponding basis reduction may result in an owner realizing a taxable gain when a Revenue Obligation owned by such owner is sold or disposed of for an amount equal to or in some circumstances even less than the original cost of the Revenue Obligation to the owner. Any person considering purchasing a Revenue Obligation at a price that includes bond premium should consult his or her own tax advisors with respect to the amortization and treatment of such bond "576905.5 54 premium, including, but not limited to, the calculation of gain or loss upon the sale, prepayment or other disposition of the Revenue Obligation. Any person considering purchasing a Revenue Obligation of a maturity in respect of which there is original issue discount should consult his or her own tax advisors with respect to the tax consequences of ownership of such Revenue Obligation,including the treatment of a purchaser who does not purchase in the original offering and at the original offering price of that Revenue Obligation, the allowance of a deduction for any loss on a sale or other disposition, and the treatment of accrued original issue discount in respect of such Revenue Obligation under federal individual and corporate alternative minimum taxes. The excess, if any, of the Stated Redemption Price at Maturity of a Revenue Obligation of a maturity over the initial offering price to the public of the Revenue Obligations of that stated maturity set forth on the inside page of this Official Statement is "original issue discount." Such original issue discount accruing in respect of a Revenue Obligation is treated for federal income tax and California personal income tax purposes as additional interest in respect of that Revenue Obligation and is excluded from the gross income of the owner thereof for federal income tax purposes and exempt from the California personal income tax. Original issue discount accruing in respect of any Revenue Obligation purchased at such initial offering price and pursuant to such initial offering will accrue on a semiannual basis over the term to the stated maturity date in respect of the Revenue Obligation on the basis of a constant yield method and, within each semiannual period, will accrue on a ratable daily basis. The amount of original issue discount in respect of such a Revenue Obligation accruing during each period is added to the adjusted basis of such Revenue Obligation to determine taxable gain upon disposition (including upon sale, prepayment or payment on maturity) of such Revenue Obligation. The Code includes certain provisions relating to the second of original issue discount in the case of a purchaser of a Revenue Obligation who purchases that Revenue Obligation other than at the initial offering price and pursuant to the initial offering of that Revenue Obligation. Although Special Counsel is of the opinion that Interest Component, and Certificate Interest Distributions in respect of a Revenue Obligation, are exempt from California personal income tax and excluded from the gross income of the owners thereof for federal income tax purposes, an owner's federal, state or local tax liability may be otherwise affected by the ownership or disposition of the Revenue Obligations. The nature and extent of these other tax consequences will depend upon the owner's other items of income or deduction. Without limiting the generality of the foregoing,prospective purchasers of the Revenue Obligations should be aware that (i) section 265 of the Code denies a deduction for interest on indebtedness incurred or continued to purchase or carry the Revenue Obligations and the Code contains additional limitations on interest deductions applicable to financial institutions that own tax-exempt obligations (such as the Revenue Obligations), (ii) with respect to insurance companies subject to the tax imposed by section 831 of the Code, section 832(b)(5)(B)(i) reduces the deduction for loss reserves by 15% of the sum of certain items, including Interest Component and Certificate Interest Distributions in respect of the Revenue Obligations, (iii) Interest Component and Certificate Interest Distributions accrued in respect of Revenue Obligations owned by certain foreign corporations doing business in the United States could be subject to a branch profits tax imposed by section 884 of the Code, (iv) passive investment income, including Interest Component and Certificate Interest Distributions accrued in respect of Revenue Obligations,may be subject to federal income taxation under section 1375 of the Code for Subchapter S corporations that have Subchapter C earnings and profits at the close of the taxable year if greater than 25% of the gross receipts of such Subchapter S corporation is passive investment income, (v) section 86 of the Code requires recipients of certain Social Security and certain Railroad Retirement benefits to take into account, in determining the taxability of such benefits, Interest Distributions and Certificate Interest Distributions accrued in respect of Revenue Obligations owned by such recipients for federal income tax purposes, and (vi) under section 32(i) of the Code, receipt of investment income, including Interest Components and Certificate Interest Distributions accrued in a0576905.5 55 respect of Revenue Obligations, may disqualify the recipient thereof from obtaining the earned income credit. Special Counsel has expressed no opinion regarding any such other tax consequences. Special Counsel's opinion is not a guarantee of a result, but represents its legal judgment based upon its review of existing statutes, regulations, published rulings and court decisions and the representations and covenants of the District described above. No ruling has been sought from the Internal Revenue Service (the "Service") with respect to the matters addressed in the opinion of Special Counsel, and Special Counsel's opinion is not binding on the Service. The Service has an ongoing program of auditing the tax-exempt status of the interest on municipal obligations. If an audit of the Revenue Obligations is commenced,under current procedures the Service is likely to treat the District as the"taxpayer,"and the owners would have no right to participate in the audit process. In responding to or defending an audit of the tax-exempt status of the Interest Component and Certificate Interest Distributions accrued in respect of Revenue Obligations, the District may have different or conflicting interest from the owners. Public awareness of any future audit of the Revenue Obligations could adversely affect the value and liquidity of the Revenue Obligations during the pendency of the audit, regardless of its ultimate outcome. Existing law may change to reduce or eliminate the benefit to bondholders of the exclusion of interest on the Interest Components and Certificate Interest Distributions seemed in respect of Revenue Obligations from gross income for federal income tax purposes. Any proposed legislation or administrative action,whether or not taken, could also affect the value and marketability of the Revenue Obligations. Prospective purchasers of the Revenue Obligations should consult with their own tax advisors with respect to any proposed or future changes in tax law. VERIFICATION OF MATHEMATICAL COMPUTATIONS Causey Demgen & Moore Inc., a firm of independent arbitrage consultants, will verify the accuracy of(i)mathematical computations concerning the adequacy of the maturing principal amounts of and interest earned on the Federal Securities deposited in the Escrow Fund,together with amounts held as cash therein,to provide for payment of the redemption prices(including seemed interest)of the Refunded Certificates on the Redemption Date and (ii)certain mathematical computations supporting the conclusion that the Revenue Obligations are not"arbitrage bonds"under the Code,which will be used in part by Special Counsel in concluding that interest on the Interest Components and Certificate Interest Distributions seemed in respect of Revenue Obligations is excluded from gross income for federal income tax purposes under present laws, including applicable provisions of the Code, existing court rulings,regulations and Internal Revenue Service rulings. The report of such independent arbitrage consultants will include the statement that the scope of their engagement was limited to verifying the mathematical accuracy of the computations contained in such schedules provided to them and that they have no obligation to update their report because of events occurring,or data or information coming to their attention, subsequent to the date of their report. CONTINUING DISCLOSURE The District has covenanted for the benefit of holders and beneficial owners of the Revenue Obligations (a)to provide certain financial information and operating data(the"Annual Report")relating to the District and the property in the District not later than eight months after the end of the District's Fiscal Year (which currently would be March 1), commencing with the report for the 2013-14 Fiscal Year, and(b)to provide notices of the occurrence of certain enumerated events. The Annual Report will be filed by the Trustee on behalf of the District, with the Municipal Securities Rulemaking Board. The notices of enumerated events will be filed by the Trustee on behalf of the District with the Municipal 0576905.5 56 Securities Rulemaking Board. The specific nature of the information to be contained in the Annual Report or the notices of enumerated events is set forth in the Continuing Disclosure Agreement See APPENDIX D — "FORM OF CONTINUING DISCLOSURE AGREEMENT." These covenants have been made in order to assist the Initial Purchaser in complying with S.E.C. Rule 15c2-12 (the "Rule"). During the past five years, the District has never failed to comply in all material respects with any previous undertaking with respect to the Rule to provide annual reports or notices of enumerated events. RATINGS The Revenue Obligations will be rated " " by Standard & Poor's Financial Services LLC ("S&P"),and" "by Fitch Ratings("Fitch"). Such ratings reflect only the views of the rating agencies, and do not constitute a recommendation to buy, sell or hold the Revenue Obligations. Explanation of the significance of such ratings may be obtained only from the respective organizations at: Standard & Poor's Ratings Services, 55 Water Street, New York, New York 10041 and Fitch Ratings, One State Street Plaza, New York,New York 10004. There is no assurance that any such ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by the respective rating agencies, if in the judgment of any such rating agency circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price of the Revenue Obligations. PURCHASE AND REOFFERING (the `Initial Purchaser") has purchased the Revenue Obligations from the District at a competitive sale for a purchase price of$ (representing the aggregate principal amount of the Revenue Obligations, plus a premium of $ , and less an Initial Purchaser's discount of$ ). The public offering prices may be changed from time to time by the Initial Purchaser. The Initial Purchaser may offer and sell Revenue Obligations to certain dealers and others at prices lower than the offering prices shown on the inside cover page hereof. MISCELLANEOUS Included herein are brief summaries of certain documents and reports, which summaries do not purport to be complete or definitive, and reference is made to such documents and reports for full and complete statements of the contents thereof. Any statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. This Official Statement is not to be construed as a contract or agreement between the District and the purchasers or Owners of any of the Revenue Obligations. 0576905.5 57 The execution and delivery of this Official Statement has been duly authorized by the District. ORANGE COUNTY SANITATION DISTRICT By: Chair of the Board of Directors 0576905.5 58 APPENDIX A COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE ORANGE COUNTY SANITATION DISTRICT FOR FISCAL YEAR ENDED JUNE 30,2013 0576905.5 A-1 APPENDIX B THE COUNTY OF ORANGE-ECONOMIC AND DEMOGRAPHIC INFORMATION 0576905.5 B-I APPENDIX C SUMMARY OF PRINCIPAL LEGAL DOCUMENTS 0576905.5 C-1 APPENDIX D FORM OF CONTINUING DISCLOSURE AGREEMENT 0576905.5 D-2 APPENDIX E BOOK-ENTRY SYSTEM The description that follows of the procedures and recordkeeping with respect to beneficial ownership interests in the Revenue Obligations, payment of principal and interest evidenced by the Revenue Obligations to Participants or Beneficial Owners, confirmation and transfer of beneficial ownership interests in the Revenue Obligations, and other Revenue Obligation-related transactions by and between DTC, Participants and Beneficial Owners, is based on information furnished by DTC which the District and the Corporation each believes to be reliable, but the District and the Corporation take no responsibility for the completeness or accuracy thereof. The Depository Trust Company—Book-Entry System The Depository Trust Company("DTC"),New York,NY,will act as securities depository for the securities (the "Revenue Obligations"). The Revenue Obligations will be issued as fully-registered securities registered in the name of Cede& Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered certificate will be issued for the Revenue Obligations in the aggregate principal amount of such issue, and will be deposited with DTC. DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities,through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations,and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers,banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly("Indirect Participants"). DTC has a Standard&Poor's rating of"AA+." The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. The information on such website is not incorporated herein by such reference or otherwise. Purchases of Revenue Obligations under the DTC system must be made by or through Direct Participants, which will receive a credit for the Revenue Obligations on DTC's records. The ownership interest of each actual purchaser of each Revenue Obligation (`Beneficial Owner") is in tam to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Revenue Obligations are to be accomplished by entries made on 0576905.5 E-1 the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Revenue Obligations, except in the event that use of the book-entry system for the Revenue Obligations is discontinued. To facilitate subsequent transfers, all Revenue Obligations deposited by Direct Participants with DTC are registered in the time of DTC's partnership nominee,Cede&Co. or such other name as may be requested by an authorized representative of DTC. The deposit of Revenue Obligations with DTC and their registration in the time of Cede&Co. or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Revenue Obligations; DTC's records reflect only the identity of the Direct Participants to whose accounts such Revenue Obligations are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Revenue Obligations may wish to take certain steps to augment transmission to them of notices of significant events with respect to the Revenue Obligations, such as prepayments, tenders, defaults, and proposed amendments to the security documents. For example, Beneficial Owners of Revenue Obligations may wish to ascertain that the nominee holding the Revenue Obligations for their benefit has agreed to obtain and transmit notices to Beneficial Owners, in the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of the notices be provided directly to them. Prepayment notices shall be sent to DTC. If less than all of the Revenue Obligations within an issue are being prepaid, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be prepaid. Neither DTC nor Cede &Co. (nor such other DTC nominee)will consent or vote with respect to the Revenue Obligations unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures,DTC mails an Omnibus Proxy to the District as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Revenue Obligations are credited on the record date(identified in a listing attached to the Omnibus Proxy). Prepayments with respect to the Revenue Obligations will be made to Cede& Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts, upon DTC's receipt of funds and corresponding detail information from the District or the Trustee on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, nor its nominee, the Trustee, or the District, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of prepayment proceeds,distributions,and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the District or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. 0576905.5 E-2 DTC may discontinue providing its services as securities depository with respect to the Revenue Obligations at any time by giving reasonable notice to the District or the Trustee. Under such circumstances, in the event that a successor securities depository is not obtained,Revenue Obligations are required to be printed and delivered. The District may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Revenue Obligations will be printed and delivered to DTC. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the District believes to be reliable, but the District takes no responsibility for the accuracy thereof. Discontinuance of DTC Services In the event (i)DTC determines not to continue to act as securities depository for the Revenue Obligations, (ii)DTC shall no longer act and give notice to the Trustee of such determination or(iii) the District determines that it is in the best interest of the Beneficial Owners that they be able to obtain Revenue Obligations and delivers a written certificate to the Trustee to that effect, DTC services will be discontinued. If the District determines to replace DTC with another qualified securities depository, the District shall prepare or direct the preparation of a new single, separate, fully registered Revenue Obligation for each of the maturities of the Revenue Obligations,registered in the name of such successor or substitute qualified securities depository or its nominee. If the District fails to identify another qualified securities depository to replace DTC then the Revenue Obligations shall no longer be restricted to being registered in the certificate registration books in the name of Cede& Co., but shall be registered in such names as are requested in a certificate of the District,in accordance with the Trust Agreement. All Revenue Obligations may be presented for transfer by the Owner thereof, in person or by his attorney duly authorized in writing,at the Principal Office of the Trustee,on the books required to be kept by the Trustee pursuant to the provisions of the Trust Agreement, upon surrender of such Certifications for cancellation accompanied by delivery of a duly executed written instrument of transfer in a form acceptable to the Trustee. The Trustee may treat the Owner of any Revenue Obligation as the absolute owner of such Revenue Obligation for all purposes, whether or not such Revenue Obligation shall be overdue, and the Trustee shall not be affected by any knowledge or notice to the contrary; and payment of the interest and principal evidenced by such Revenue Obligation shall be made only to such Owner, which payments shall be valid and effectual to satisfy and discharge the liability evidenced by such Revenue Obligation to the extent of the sum or sums so paid. Whenever any Revenue Obligations shall be surrendered for transfer, the Trustee shall execute and deliver new Revenue Obligations representing the same principal amount in Authorized Denominations. The Trustee shall require the payment of any Owner requesting such transfer of any tax or other governmental charge required to be paid with respect to such transfer. Revenue Obligations may be presented for exchange at the Principal Office of the Trustee for a like aggregate principal meant of Revenue Obligations of other Authorized Denominations. The Trustee shall require the payment by the Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. The Trustee shall not be required to transfer or exchange any Revenue Obligation during the period in which the Trustee is selecting Revenue Obligations for prepayment, nor shall the Trustee be required to transfer or exchange any Revenue Obligation or portion thereof selected for prepayment from and after the date of mailing the notice of prepayment thereof. "506905.5 E-3 APPENDIX F FORM OF APPROVING OPINION OF SPECIAL COUNSEL Upon the execution and delivery of the Revenue Obligations, Fulbright& Jaworski LLP, Los Angeles, California, Special Counsel to the District, will render its final approving opinion with respect to the Revenue Obligations in substantially thefollowingform: [Date of Delivery] Orange County Sanitation District 10844 Ellis Avenue Fountain Valley,California 92708-7018 Orange County Sanitation District Wastewater Refunding Revenue Obligations Series 2014A Ladies and Gentlemen: We have acted as Special Counsel in connection with the $ aggregate principal amount of Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2014A (the "Revenue Obligations") which are certificates of participation that evidence direct, fractional undivided interests of the Owners thereof in the installment payments (the "Installment Payments"), and the interest thereon, to be made by the Orange County Sanitation District (the "District")pursuant to the Installment Purchase Agreement, dated as of August 1,2014(the"Installment Purchase Agreement"),by and between the District and the Orange County Sanitation District Financing Corporation (the "Corporation"). Pursuant to the Master Agreement for District Obligations, dated as of August 1, 2000 (the "Master Agreement"), by and between the District and the Corporation, the District has established conditions and terms upon which obligations such as the Installment Payments, and the interest thereon, will be incurred and secured. Installment Payments under the Installment Purchase Agreement are payable solely from Net Revenues as provided in the Installment Purchase Agreement, consisting primarily of all income and revenue received by the District from the operation or ownership of the Wastewater System of the District (the "Wastewater System") remaining after payment of Maintenance and Operation Costs. Capitalized terns used and not otherwise defined herein shall have the meanings ascribed to such terns in the Installment Purchase Agreement. The Revenue Obligations are to be executed and delivered pursuant to a Trust Agreement, dated as of August 1, 2014 (the "Trust Agreement"), by and among the District, the Corporation and MUFG Union Bank,N.A., as trustee(the "Trustee"). Proceeds from the sale of the Revenue Obligations will be used to (r)purchase and retire the District's Certificates of Participation, Series 2007B and (ii)pay the costs incurred in connection with the execution and delivery of the Revenue Obligations. 0576905.5 F-1 As Special Counsel,we have examined copies certified to us as being true and complete copies of the Master Agreement,the Trust Agreement and the Installment Purchase Agreement and the proceedings of the District in connection with the execution and delivery of the Revenue Obligations. We have also examined such certificates of officers of the District, the Corporation and others as we have considered necessary for the purposes of this opinion. Based upon the foregoing,we are of the opinion that: I. The Master Agreement, the Installment Purchase Agreement and the Trust Agreement each has been duly and validly authorized,executed and delivered by the District and, assuming the Master Agreement, the Installment Purchase Agreement and the Trust Agreement each constitutes the legally valid and binding obligation of the other parties thereto, each constitutes the legally valid and binding obligation of the District, enforceable against the District in accordance with its respective terms. 2. The obligation of the District to pay the Installment Payments, and the interest thereon, and other payments required to be made by it under the Installment Purchase Agreement is a special obligation of the District payable, in the manner provided in the Installment Purchase Agreement, solely from Net Revenues and other funds provided for in the Installment Purchase Agreement lawfully available therefor. 3. Assuming due authorization, execution and delivery of the Trust Agreement and the Revenue Obligations by the Trustee, the Revenue Obligations me entitled to the benefits of the Trust Agreement. 4. Under existing statutes, regulations, rulings and court decisions, and, assuming compliance with the covenants mentioned below, the component of each Installment Payment designated as "Interest on Installment Payment" in Section 3.02 of the Installment Purchase Agreement (each, an "Interest Component"), and the allocable portion thereof distributable in respect of any Revenue Obligation (the"Certificate Interest Distribution"), is excluded pursuant to section 103(a)of the Internal Revenue Code of 1986(the"Code")from the gross income of the owners thereof for federal income tax purposes. We we further of the opinion that under existing statutes, regulations, rulings and court decisions, the Installment Purchase Agreement is not a "specified private activity bond" within the meaning of section 57(a)(5) of the Code and, therefore, that the Interest Components and the Certificate Interest Distributions will not be treated as items of tax preference for purposes of computing the alternative minimum tax imposed by section 55 of the Code. Receipt or accrual of Interest Component, and the Certificate Interest Distributions in respect of a Revenue Obligation, owned by a corporation may affect the computation of the alternative minimum taxable income of that corporation. A corporation's alternative minimum taxable income is the basis on which the alternative minimum tax imposed by section 55 of the Code will be computed. We are further of the opinion that the Interest Component allocable to and the Certificate Interest Distributions in respect of a Revenue Obligation, are exempt from personal income taxes of the State of California under present state law. Pursuant to the Trust Agreement and in the Tax Certificate Pertaining to Arbitrage and Other Matters under Sections 103 and 141-150 of the Internal Revenue Code of 1986, to be delivered by the District in connection with the execution and delivery of the Revenue Obligations, the District has made representations relevant to the determination of, and has undertaken certain covenants regarding or affecting,the exclusion of the Interest Component,and the Certificate Interest Distribution, from the gross income of the owners thereof for federal 0576905.5 F-2 income tax purposes. In reaching the opinions described in the immediately preceding paragraph, we have assumed the accuracy of such representations and the present and future compliance by the District with such covenants. Except as stated in the second preceding paragraph, we express no opinion as to any federal or state tax consequence of the ownership or disposition of the Installment Purchase Agreement or the Revenue Obligations. Furthermore, we express no opinion as to any federal, state or local tax law consequence with respect to the Installment Purchase Agreement, Revenue Obligations,Interest Components, or Certificate Interest Distributions, if any action is taken with respect to the Installment Purchase Agreement, the Master Agreement, the Trust Agreement, the Revenue Obligations, or the proceeds thereof, permitted or predicated upon the advice or approval of counsel,if such advice or approval is given by counsel other than us. The rights of the owners of the Revenue Obligations and the enforceability of the Revenue Obligations,the Master Agreement,the Trust Agreement and the Installment Purchase Agreement may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted and may also be subject to the exercise of judicial discretion in appropriate cases. The enforceability of the Revenue Obligations, the Master Agreement, the Trust Agreement and the Installment Purchase Agreement is subject to the effect of general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, to the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding in equity or at law, and to the limitations on legal remedies against governmental entities in California. No opinion is expressed herein on the accuracy, completeness or fairness of the Official Statement or other offering material relating to the Revenue Obligations. Our opinions are based on existing law, which is subject to change. Such opinions are further based on our knowledge of facts as of the date hereof. We assume no duty to update or supplement our opinions to reflect any facts or circumstances that may hereafter come to our attention or to reflect any changes in any law that may hereafter occur or become effective. Moreover, our opinions are not a guarantee of result; rather, such opinions represent our legal judgment based upon our review of existing law that we deem relevant to such opinions and in reliance upon the representations and covenants referenced above. Respectfully submitted, 0576905.5 F-3 Fulbright& Jaworski LLP—Draft 06/12/14 RETURN TO AGENDA OFFICIAL NOTICE INVITING BIDS $[PAR AMOUNT]' ORANGE COUNTY SANITATION DISTRICT WASTEWATER REFUNDING REVENUE OBLIGATIONS SERIES 2014A (Book-Entry-Only) NOTICE IS HEREBY GIVEN that bids will be received by the Orange County Sanitation District (the "District") for the purchase of $[PAR AMOUNT]* original principal amount of Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2014A Evidencing Direct, Fractional Undivided Interests of the Owners Thereof in Installment Payments to be Made by the Orange County Sanitation District to the Orange County Sanitation District Financing Corporation(the"Revenue Obligations"). Bids for less than all of the Revenue Obligations will not be accepted. The bids will be received in the form, in the manner and up to the time specified below (unless postponed as described herein): Date: July 8,2014 11:00 a.m.,New York Time Electronic Bids: Electronic proposals may be submitted to Ipreo, at www.newissuehome.i-deal.com and the Parity electronic bid submission system (the "Electronic Service"). The Electronic Service will act as agent of the bidder and not of the District in connection with the submission of bids and the District assumes no responsibility or liability for bids submitted through the Electronic Service. See "Information Regarding Electronic Proposals"herein. No facsimile,hand delivery or sealed bids will be accepted. Terms of the Revenue Obligations The Preliminary Official Statement for the Revenue Obligations, dated June_, 2014, including the cover page and all appendices thereto (the "Preliminary Official Statement"), provides certain information concerning the sale and delivery of$[PAR AMOUNT]*aggregate principal amount of the Revenue Obligations, which are certificates of participation evidencing direct, undivided fractional interests in the Installment Payments (the "Installment Payments"), and the interest thereon, payable by the District pursuant to the Installment Purchase Agreement,dated as of August 1,2014(the"Installment Purchase Agreement"), by and between the District and the Orange County Sanitation District Financing Corporation (the"Corporation"). Each bidder must have obtained and reviewed the Preliminary Official Statement prior to bidding for the Revenue Obligations. This Official Notice Inviting Bids, including all exhibits and attachments, contains certain information for quick reference only, is not a summary of the issue and governs only the terms of the sale of, bidding for and closing procedures with respect to the Revenue Obligations. Bidders most read the entire Preliminary Official Statement to obtain information essential to making an informed investment decision. Preliminary,subject to change. Pursuant to the Master Agreement for District Obligations, dated as of August 1, 2000 (the "Master Agreement"), by and between the District and the Corporation, the District has established and declared the conditions and terms upon which obligations such as the Installment Purchase Agreement, and the Installment Payments and the interest thereon, will be incurred and secured. Installment Payments under the Installment Purchase Agreement are payable solely from Net Revenues, as provided in the Master Agreement and the Installment Purchase Agreement, consisting primarily of all income and revenue received by the District from the operation or ownership of the Wastewater System of the District (the"Wastewater System")remaining after payment of Maintenance and Operation Costs. The Issue The proceeds from the sale of the Revenue Obligations will be used to: (i)prepay and retire a portion of the District's outstanding Certificates of Participation, Series 2007B (the "Prior Certificates") and(ii)pay costs of execution and delivery of the Revenue Obligations. The Revenue Obligations are to be executed and delivered pursuant to a Trust Agreement, dated as of August 1, 2014 (the "Trust Agreement'), by and among the District, the Corporation and MUFG Union Bank, N.A., as trustee (the "Trustee"). Capitalized terms not defined herein shall have the same definitions as used in the Trust Agreement or the Master Agreement. Authorization On June 25, 2014, the District and the Corporation authorized the execution and delivery of the Installment Purchase Agreement,the Trust Agreement and the Revenue Obligations. Outstanding Senior Obligations The District has outstanding Senior Obligations payable on a parity with the Installment Payments under the Installment Purchase Agreement. The term"Existing Senior Obligations"as used in the Preliminary Official Statement refers to the 2007A Installment Purchase Agreement, the 2007B Installment Purchase Agreement, the 2008B Installment Purchase Agreement, the 2009A Installment Purchase Agreement, the 2010A Installment Purchase Agreement, the 2010C Installment Purchase Agreement, the 201 IA Installment Purchase Agreement,the 2012A Installment Purchase Agreement, the 2012B Installment Purchase Agreement and the 2013A Installment Purchase Agreement. Security and Source of Payments The Revenue Obligations are certificates of participation which evidence direct, undivided fractional interests in the Installment Payments, and the interest thereon, paid by the District pursuant to the Installment Purchase Agreement The obligation of the District to pay the Installment Payments and the interest thereon and other payments required to be made by it under the Installment Purchase Agreement is a special obligation of the District payable, in the manner provided under the Installment Purchase Agreement, solely from Net Revenues and other funds as provided in the Installment Purchase Agreement. Net Revenues generally consist of all income and revenue received by the District from the operation or ownership of the Wastewater System remaining after payment of Maintenance and Operation Costs,all as further provided in the Master Agreement. The District's obligation to make Installment Payments from Net Revenues is on a parity with the District's obligation to make payments with respect to its other outstanding obligations described as Senior Obligations and all Reimbursement Obligations, if any, with respect to Senior Obligations, as provided in the Master Agreement, The Installment Purchase Agreement constitutes a Senior Obligation and is subject to the provisions of the Master Agreement and is afforded all of the advantages, benefits, 2 interests and security for Senior Obligations pursuant to the Master Agreement. Pursuant to the Master Agreement, the District pledges all Net Revenues to the payment of the Senior Obligations and Reimbursement Obligations with respect to Senior Obligations,and the Net Revenues will not be used for any other purpose while any of the Senior Obligations or Reimbursement Obligations with respect to Senior Obligations remain unpaid; provided, however, that out of the Net Revenues there may be apportioned such sums for such purposes as are expressly permitted by the Master Agreement. This pledge constitutes a first lien on the Net Revenues for the payment of the Senior Obligations and Reimbursement Obligations with respect to Senior Obligations. The term Senior Obligations, generally means all revenue bonds or notes(including bond anticipation notes and commercial paper)of the District authorized, executed,issued and delivered under and pursuant to applicable law, the Installment Purchase Agreement and all other contracts (including financial contracts) or leases of the District authorized and executed by the District under and pursuant to applicable law, the installment, lease or other payments which are, in accordance with the provisions of the Master Agreement, payable from Net Revenues on a parity with the payments under the Master Agreement. The District may at any time incur Subordinate Obligations; provided, however, that prior to incurring such Subordinate Obligations, the District will have determined that the incurrence thereof will not materially adversely affect the District's ability to comply with the requirements of the Master Agreement. The District may at any time incur Reimbursement Obligations with respect to Subordinate Obligations. Currently, there are no Subordinate Obligations outstanding. For a description of the District's outstanding Senior Obligations, see "FINANCIAL OBLIGATIONS Existing Indebtedness" in the Preliminary Official Statement. The District may, in connection with the incurrence of Subordinate Obligations, pledge Net Revenues to the payment of Subordinate Obligations and Reimbursement Obligations with respect to Subordinate Obligations; provided, however, that such pledge, and any lien created thereby, shall be junior and subordinate to the pledge of, and lien on,Net Revenues for the payment of Senior Obligations and Reimbursement Obligations with respect to Senior Obligations. Pursuant to the Master Agreement, the District is required, to the extent permitted by law, to fix, prescribe and collect fees and charges for the services and facilities of the Wastewater System which will be at least sufficient to yield during each Fiscal Year(a)Net Revenues equal to 125% of Debt Service on Senior Obligations for such Fiscal Year and (b)Net Operating Revenues equal to 100% of Debt Service on all Obligations for such Fiscal Year. The District may make adjustments from time to time in such fees and charges and may make such classification thereof as it deems necessary,but shall not reduce the fees and charges then in effect unless the Revenues and Net Revenues from such reduced fees and charges will at all times be sufficient to meet the requirements of the Master Agreement. See "SECURITY AND SOURCES OF PAYMENT FOR THE REVENUE OBLIGATIONS Rate Covenant"in the Preliminary Official Statement. Additional Obligations In addition to the Existing Senior Obligations, the District may at any time incur Obligations payable on a parity or on a subordinate basis to the payment by the District of the Installment Payments upon satisfaction of conditions provided in the Master Agreement. No Obligations payable on such a subordinate basis are currently outstanding. See "SECURITY AND SOURCES OF PAYMENT FOR THE REVENUE OBLIGATIONS — Limitations on Issuance of Additional Obligations" in the Preliminary Official Statement. 3 Book-Entry-Only The Revenue Obligations will be executed and delivered in the form of fully registered certificates payable in lawful money of the United States of America. The Revenue Obligations will be initially delivered only in book-entry form and will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC'), which will act as securities depository for the Revenue Obligations. Individual purchases of the Revenue Obligations will be made in book-entry form only. Purchasers of Revenue Obligations will not receive physical certificates representing their ownership interests in the Revenue Obligations purchased. The Revenue Obligations will be delivered in Authorized Denominations of$5,000 and any integral multiple thereof. Payments of principal and interest evidenced by the Revenue Obligations are payable directly to DTC by the Trustee. Upon receipt of payments of such principal and interest,DTC will in turn distribute such payments to the beneficial owners of the Revenue Obligations. So long as the Revenue Obligations are in the DTC book- entry system, the interest, principal and prepayment premiums, if any, due with respect to the Revenue Obligations will be payable by the Trustee,or its agent,to DTC or its nominee. Principal and Interest Payments The Revenue Obligations will be dated as of the date of initial delivery and will evidence interest from that date(computed on the basis of a 360-day year of twelve 30-day months). Interest evidenced by the Revenue Obligations is payable semiannually on February 1 and August 1 of each yen, commencing on February 1, 2015. Payment of principal and prepayment premium, if any, evidenced by the Revenue Obligations will be paid in lawful money of the United States of America upon presentation and surrender thereof at the Principal Office of the Trustee. Principal Amortization The Revenue Obligations will be executed and delivered in the original principal amount of $[PAR AMOUNT]*and will be subject to principal amortization through serial maturities on February 1 in the years 20 through 20 in the amounts set forth in the Official Bid Form. Mandatory Sinking Account Prepayment If the successful bidder designates principal amounts to be combined into a term maturity, such term maturity shall be subject to mandatory sinking account payments commencing on February I of the first year which has been combined to form such term maturity and continuing on February 1 in each year thereafter until the stated maturity date of that term maturity The prepayment price will be equal to the principal amount for such year set forth in the Official Bid Form,plus accrued interest evidenced thereby to the date fixed for prepayment, without premium. The amount of each such prepayment shall be reduced in the event and to the extent that Installment Payments payable on the corresponding Installment Payment Date are prepaid pursuant to provisions of the Installment Purchase Agreement governing optional prepayment. Optional Prepayment The Revenue Obligations with stated Principal Payment Dates prior to February 1, 2025 are not subject to optional prepayment prior to their stated Principal Payment Dates. The Revenue Obligations with stated Principal Payment Dates on or after February 1,2025 are subject to optional prepayment prior Preliminary,subject to change. 4 to their stated Principal Payment Dates, on any date on or after February 1, 2024, in whole or in part, in Authorized Denominations, from and to the extent of prepaid Installment Payments paid pursuant to the Installment Purchase Agreement or from any other source of available funds, any such prepayment to be at a price equal to the principal evidenced by the Revenue Obligations to be prepaid,plus accrued interest evidenced thereby to the date fixed for prepayment,without premium. Selection of Revenue Obligations for Prepayment Whenever less than all the Outstanding Revenue Obligations are to be prepaid on any one date pursuant to provisions of the Trust Agreement with respect to optional prepayment of Revenue Obligations, the Trustee shall select the Revenue Obligations to be prepaid among Revenue Obligations with different Principal Payment Dates as directed in a Written Request of the District. Whenever less than all the Outstanding Revenue Obligations with the same stated Principal Payment Date are to be prepaid on any one date pursuant to the Trust Agreement, the Trustee shall select the Revenue Obligations with such Principal Payment Date to be prepaid as directed in a Written Request of the District, or at the discretion of the District by lot in any manner that the Trustee deems fair and appropriate,which decision shall be final and binding upon the District and the Owners. The Trustee shall promptly notify the District in writing of the numbers of the Revenue Obligations so selected for prepayment on such date. Notice of Prepayment The Trustee shall,at least 20 but not more than 60 days prior to any prepayment date, give notice of prepayment to the respective Owners of Revenue Obligations designated for prepayment by first-class mail, postage prepaid, at their addresses appearing on the registration books maintained by the Trustee as of the close of business on the day before such notice of prepayment is given. The actual receipt by the Owner of any notice of such prepayment shall not be a condition precedent to prepayment, and neither failure to receive such notice nor any defect therein shall affect the validity of the proceedings for the prepayment of such Revenue Obligations or the cessation of interest evidenced thereby on the date fixed for prepayment. Interest Rates,Reoffering Prices,Premium or Discount Bids and Certificate of Initial Purchaser Bidders most bid to purchase all and not part of the Revenue Obligations and must submit their bids on the Official Bid Form. Bidders must specify a rate of interest for each maturity of the Revenue Obligations. The rates of interest most be expressed in multiples of either [one-eighth ('s) or one- twentieth ('/,) of one percent (1%)], and no interest rate can exceed [5.0]% per annum. All Revenue Obligations of the same maturity must evidence interest at the same rate. The successful bidder will, within 30 minutes after being notified of the award of the Revenue Obligations, advise the District of the initial bona fide public reoffering prices of each maturity of the Revenue Obligations on the date of award. The successful bidder will also be required to furnish to the District a certificate ("Certificate of Initial Purchaser") in the form of the Certificate of Initial Purchaser attached hereto(with such modifications as may be acceptable to Special Counsel). At any time before or after delivery of the Revenue Obligations to the successful bidder, that successful bidder also may be required by the District or Special Counsel to clarify any discrepancies between the Certificate of Initial Purchaser and publicly available information relating to trades of the Revenue Obligations that might suggest that the initial sale of a substantial portion of any maturity of the Revenue Obligations to the public was at a materially higher price than the price stated for that maturity in the Certificate of Initial Purchaser. 5 Bidders may bid to purchase the Revenue Obligations from the District at a discount or with a premium; however, no bid will be considered if the bid is to purchase Revenue Obligations at an aggregate price less than [113]% or more than [125]% of the aggregate principal amount of the Revenue Obligations. No bid will be accepted that contemplates the waiver of any interest or other concession by the bidder as substitute for payment in full of the purchase price. Bids that do not conform to the terms of this section may be rejected. See`Right to Reject Bids,Waive Irregularities"below. Adjustment of Principal Amounts After Receipt of Bids The principal amounts of the Revenue Obligations set forth in the Official Bid Form reflect estimates of the District as to the likely interest rates of the winning bid and the premium or discount contained in the winning bid. After selecting the winning bid, the amortization schedule for the Revenue Obligations will be adjusted in $5,000 increments, to reflect the actual interest rates and any discount or premium in the winning bid to properly fund the purchase price of the Prior Certificates and to accommodate certain other requirements or preferences of the District. Such adjustments will not change any Revenue Obligation in any yen by more than the greater of$500,000 or 10%of the principal amount for such year. The dollar amount bid for the Revenue Obligations by the winning bidder will be adjusted to reflect such adjustment in the applicable amortization schedule. Any such adjustment will change the total (but not the per Revenue Obligation) dollar amount of purchaser's discount and original issue discount or premium, if any, provided in such bid. Any such adjustment will be communicated to the winning bidder within 24 hours after receipt of such bid by the District. Changes in the amortization schedule made as described in this paragraph will not affect the determination of the winning bidder or give the winning bidder any right to reject the Revenue Obligations. No Insurance THE SUCCESSFUL BIDDER SHALL NOT PURCHASE MUNICIPAL BOND INSURANCE IN CONNECTION WITH THE REVENUE OBLIGATIONS. Form of Bid BIDS FOR LESS THAN ALL OF THE REVENUE OBLIGATIONS WILL NOT BE ACCEPTED. Each bid must be on the Official Bid Form. All electronic proposals shall be deemed to incorporate the provisions of the Official Bid Form and must be unconditional and irrevocable. In addition, each bidder is requested to supply an estimate of the tine interest cost resulting from its bid, computed as prescribed below under the caption "Award, Delivery and Payment," which shall be considered as informative only and not binding on either the bidder or the District. Each bid must be in accordance with the terms and conditions set forth in this Official Notice Inviting Bids. The District will make its best efforts to accommodate electronic bids; however, the District, the Financial Advisor (Public Resources Advisory Group) and Special Counsel assume no responsibility for any error contained in any electronic bid, or for the failure of any electronic bid to be transmitted or received at the official time for receipt of such bids. The official time for receipt of bids will be determined by the District at the place of the bid opening, and the District shall not be required to accept the time kept by Electronic Service as the official time. The District assumes no responsibility for informing any bidder prior to the deadline that its bid is incomplete,or not received. If multiple timely bids are received from a single bidder the District shall accept the best of such bids and each bidder agrees,by submitting any bid,to be bound by its best bid. 6 Information Regarding Electronic Proposals Electronic proposals must be submitted through the Electronic Service. If any provision of this Official Notice Inviting Bids conflicts with information provided by the Electronic Service, this Official Notice Inviting Bids shall control. The District is not responsible for the proper operation of, and shall have no liability for any delays or interruptions of or any damages caused by the Electronic Service. The District is using the Electronic Service as a communication mechanism and not as the District's agent to conduct electronic bidding for the Revenue Obligations. The District is not bound by any advice of or determination by the Electronic Service to the effect that any particular bid complies with the terms of this Official Notice Inviting Bids. All costs and expenses incurred by prospective bidders in connection with their submission of bids through the Electronic Service are the sole responsibility of such bidders and the District is not responsible for any such costs or expenses. Further information about the Electronic Service, including any fee charged, may be obtained from linen, 1359 Broadway, Second Floor,New York,NY 10018 (212-849-5023). The District assumes no responsibility or liability for bids submitted through the Electronic Service. The District shall be entitled to assume that any bid submitted through the Electronic Service has been made by a duly authorized agent of the bidder. Bid Security Deposit Each bidder must provide with its bid (i) a financial surety bond ("Surety Bond") in the amount of$ (the`Bid Security Deposit') issued by an insurance company rated in one of the top two rating categories by Moody's Investors Service, Fitch Ratings or Standard & Poor's Ratings Services, without regard to any modification of the rating, and licensed to issue such a bond in the State of California, naming the District as the beneficiary and identifying the bidder whose deposit is guaranteed by the Surety Bond or(ii)a wire transfer of immediately available federal funds. Surety Bonds. If the successful bidder has provided a Surety Bond, such bidder shall wire transfer to the District the amount of the Bid Security Deposit in immediately available federal funds not later than 3:00 p.m. (New York Time) on the business day next succeeding the day of acceptance of the bid, which amount shall be deposited in an escrow fund or account or a similar fund and applied to the purchase price of the Revenue Obligations at the time of delivery of the Revenue Obligations. If the District has not received such federal funds wire transfer by the time stated, the District may draw upon the Surety Bond to satisfy the successful bidder's Bid Security Deposit requirements. Wire Transfers. Any Bid Security Deposit wire transfers must be received in federal funds prior to the deadline for examination of the bids, and should be directed as follows: Bank: MUFG Union Bank,N.A. ABA: 122000496 Account: 37130196431 Account Name: TRUSDG For Further Credit: Orange County Sanitation District Series 2014A Attention: Timothy P.Miller The wire transfers of unsuccessful bidders will be returned promptly on the bid date after the examination of bids. The wire transfer of the successful bidder will be retained by the District and applied to the purchase price at the time of delivery of the Revenue Obligations. The District disclaims any liability for funds sent by wire transfer,except for any willful misconduct or reckless disregard for its duties. 7 If after the award of the Revenue Obligations,the successful bidder fails to complete the purchase on the terms stated in its bid,unless such Failure of performance shall be caused by any act or omission of the District, the Bid Security Deposit, whether paid by federal funds wire or pursuant to the Surely Bond procedure set forth above, shall be retained by the District as stipulated liquidated damages. No interest will be paid upon any Bid Security Deposit. Official Statement The District has approved a Preliminary Official Statement for the Revenue Obligations, dated June , 2014, which the District has "deemed final" for purposes of Rule 15c2-12 promulgated by the Securities and Exchange Commission, as amended(the"Rule"), although subject to revision,amendment and completion in conformity with the Rule. The District will provide the successful bidder such reasonable number of printed copies of the final Official Statement as such bidder may reasonably request no later than seven business days after the day the Revenue Obligations are awarded. Up to 50 copies of the final Official Statement will be famished without cost to the successful bidder and further copies, if desired, will be made available at the successful bidder's expense. The successful bidder shall file the final Official Statement with a nationally recognized municipal securities information repository on a timely basis. The successful bidder shall, by accepting the award, agree at all times to comply with the provisions of the Rule and with all applicable rules of the Municipal Securities Rulemaking Board. Award,Delivery and Payment If satisfactory bids are received, the Revenue Obligations will be awarded to the highest responsible bidder not later than two hours after the time established for the receipt of bids. The highest bidder shall be the bidder submitting the best price for the Revenue Obligations,which best price shall be that resulting in the lowest true interest cost with respect to the Revenue Obligations. The true interest cost shall be computed by doubling the semi-annual interest rate (compounded semi-annually) necessary to discount the debt service payments from their respective payment dates to the date of the Revenue Obligations and to the price bid. If two or more bidders have bid the same true interest cost, the award shall be made at the sole discretion of the District. Delivery of the Revenue Obligations is expected to occur on or about August. 2014. The Revenue Obligations will be delivered through the facilities of DTC, New York, New York. The successful bidder shall pay for the Revenue Obligations on the date of delivery in Los Angeles,California in immediately available federal funds. Any expenses of providing federal funds shall be home by the purchaser. Payment on the delivery date shall be made in an amount equal to the price bid for the Revenue Obligations less the amount of the bid security deposit. Right to Reject Bids,Waive Irregularities The District reserves the right to reject any and all bids, and to the extent permitted by law, to waive any irregularity or informality in any bid. CUSIP Numbers It is anticipated that CUSIP numbers will be printed on the Revenue Obligations, but the District will assume no obligation for the assignment or printing of such numbers on the Revenue Obligations or for the correctness of such numbers, and neither the failure to print such numbers on any Revenue Obligation nor any error with respect thereto shall constitute cause for a failure or refusal by the purchasers thereof to accept delivery of and make payment for the Revenue Obligations. The cost for the 8 assignment of CUSIP numbers to the Revenue Obligations will be the responsibility of the successful bidder. California Debt and Investment Advisory Commission The successful bidder will be required to pay all fees due to the California Debt and Investment Advisory Commission("CDIAC")under California law. CDIAC will invoice the successful bidder after the delivery of the Revenue Obligations. Legal Opinions The District will famish to the successful bidder at the closing of the Revenue Obligations the legal opinion of Special Counsel to the effect that, in the opinion of Special Counsel, based upon an analysis of existing laws,regulations,ratings and court decisions,and assuming, among other matters,the accuracy of certain representations and compliance with certain covenants,the interest component of each Installment Payment and the allocable portion thereof distributable in respect of each Revenue Obligation is excluded from gross income for federal income tax purposes under section 103 of the Internal Revenue Code of 1986 and is not a specific preference item for purposes of the federal alternative minimum tax and is exempt from State of California personal income taxes. Special Counsel will express no opinion regarding any other tax consequences related to the ownership or disposition of, or the accrual or receipt of interest on,the Revenue Obligations. Closing Documents The District will furnish to the successful bidder at the time of delivery of the Revenue Obligations: (1)a certificate certifying (i) that as of and at the time of delivery of the Revenue Obligations,there is no action, suit,proceeding or investigation,pending or,to the best knowledge of the District, threatened against or affecting the District, (A) which affects or seeks to prohibit, restrain or enjoin the execution and delivery of the Revenue Obligations or the Trust Agreement, (R) in any way contesting the validity of the Revenue Obligations, the Installation Purchase Agreement or the Trust Agreement or the powers of the District to enter into or perform its obligations under such documents to which it is a party or the existence of the District, or (C)wherein an unfavorable decision, ruling or finding would materially and adversely affect the District,or the validity or enforceability of the Revenue Obligations, the Installation Purchase Agreement or the Trust Agreement or the ability of the District to perform its obligations under such documents to which it is a party, (ii)that the Preliminary Official Statement did not on the date of sale of the Revenue Obligations and the Official Statement does not on the date of delivery contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading, and (2) a receipt of the District showing that the purchase price of the Revenue Obligations has been received by the District. Continuing Disclosure To assist the successful bidder in complying with the Rule, the District will undertake, pursuant to the Continuing Disclosure Agreement, to provide certain annual financial information, and notices of the occurrence of certain enumerated events. A description of the Continuing Disclosure Agreement is set forth in the Preliminary Official Statement and will be set forth in the final Official Statement. 9 Additional Information Electronic copies of the Trust Agreement, the Installment Purchase Agreement, the Master Agreement, this Official Notice Inviting Bids, the Official Bid Form, and the Preliminary Official Statement will be furnished to any potential bidder upon request made to the District's Financial Advisor at: Public Resources Advisory Group, 11500 West Olympic Boulevard, Suite 502, Los Angeles, CA 90064,310-477-8487,via e-mail at Ichoi@pragla.com. Right to Modify or Amend The District reserves the right to modify or amend this Official Notice Inviting Bids, including but not limited to the right to adjust and change the principal amount of the Revenue Obligations being offered;provided,however,that such notifications or amendments shall be made not later than August_, 2014, by 4:00 p.m.,New York Time and communicated through Thomson Municipal News (available at http://w .tm3.com) and by facsimile transmission to any qualified bidder timely requesting such notice. Bidders are required to bid for the Revenue Obligations as so modified. Cancellation or Postponement The District reserves the right to cancel or postpone, from time to time, the date established for the receipt of bids for any reason at any time. Any such postponement will be announced by Thomson Municipal News. If any date fixed for the receipt of bids and the sale of the Revenue Obligations is postponed, any alternative sale date will be announced via Thomson Municipal News at least 24 hours prior to such altemative sale date and will be provided by facsimile transmission to any qualified bidder timely requesting such notice. On any such alternative sale date, any bidder my submit a sealed bid for the purchase of the Revenue Obligations in conformity in all respects with the provisions of this Official Notice Inviting Bids except for the date of sale and except for the changes announced by Thomson Municipal News at the time the sale date and time are announced. Dated: June�2014 10 EXHIBIT A FORM OF CERTIFICATE OF INITIAL PURCHASER August_2014 Orange County Sanitation District Fountain Valley,California Fulbright&Jaworski LLP Los Angeles,California Ladies and Gentlemen: We have served as the Underwriter in connection with the execution and delivery on behalf of the Orange County Sanitation District (the "District') of $ Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2014A(the"Revenue Obligations"). We hereby certify that: (i) August_, 2014 was the first day on which there was a binding contract in writing for the sale or exchange of the Revenue Obligations by the District to the Underwriter, and on that day(the "Sale Date"), we undertook pursuant to such contract to make a bona fide public offering of all of the Revenue Obligations. On the Sale Date all of each maturity of the Revenue Obligations was offered in a bona fide initial offering to the general public at the initial offering price or initial offering yield (the "Initial Offering Price") shown, for such maturity on the inside cover page of the Official Statement, dated July 2014, relating to such offering (the "Official Statement'). The Initial Offering Price for each maturity represented: (i) our reasonable determination of a fair market value on the Sale Date of that maturity of the Revenue Obligations; and (ii) the price at which we reasonably expected to sell all the Revenue Obligations of that maturity to the general public; (ii) based upon our records and other information available to us that we believe to be correct,the first price at which a substantial portion(but in no event less than ten percent) of each maturity of the Revenue Obligations[, (except for the Revenue Obligations maturing an (the "Unsold Maturity"),] was sold by the Underwriter to the general public was the Initial Offering Price in respect of that maturity as described above. [For[the] [each]Unsold Maturity,on the Sale Date we reasonably expected that a substantial portion (at least ten percent) of that Unsold Maturity would be sold at the initial offering price or yield in respect of that maturity]; (iii) at the time that we agreed to purchase the Revenue Obligations, based upon then prevailing market conditions, we had no reason to believe that the first sale of any of the Revenue Obligations to a member of the general public would be at an initial offering price greater than or an initial offering yield less than the fair market value thereof; (iv) taking into account the aggregate amount of each maturity, and treating the Initial Offering Price as the issue price of each Revenue Obligation of that maturity, the aggregate issue price of the Revenue Obligations is $ ; and (v) we provided the yield proof attached hereto as Exhibit A to Special Counsel;we make no representations regarding its legal sufficiency for any purpose. For purposes of this Certificate, the term"general public"does not include bond houses,brokers, or similar persons or organizations acting in the capacity of underwriters or wholesalers. The undersigned understands that the statements made herein will be relied upon by the District in its efforts to comply with the conditions imposed by the Internal Revenue Code of 1986 (the "Code"), and will be relied upon by Special Counsel in rendering its legal opinion, concerning the exclusion from gross income for federal income tax purposes of the interest component of each Installment Payment under the Installment Purchase Agreement, dated as of August 1, 2014, and described in more detail in the Official Statement,and the amount thereof distributable with respect to the Revenue Obligations. [INITIAL PURCHASER], as Underwriter By: Title: 2 Exhibit A Yield Proof (See attached) 3 OFFICIAL BID FORM $[PARAMOUNT]- ORANGE COUNTY SANITATION DISTRICT WASTEWATER REFUNDING REVENUE OBLIGATIONS SERIES 2014A August , 2012 Orange County Sanitation District 10844 Ellis Avenue Fountain Valley,CA 92708-7018 Attn: Lorenzo Tyner Ladies and Gentlemen: We hereby offer to purchase all of the $[PAR AMOUNT]" aggregate principal amount of the Orange County Sanitation District (the "District") Wastewater Refunding Revenue Obligations, Series 2014A (the "Revenue Obligations"), more particularly described in the Official Notice Inviting Bids, dated June _, 2014(the"Official Notice Inviting Bids"),which is incorporated herein by reference, and made a part thereof,at a purchase price of$ . This offer is for Revenue Obligations evidencing interest at the rates and in the form of serial maturities or term maturities with mandatory sinking account prepayments as set forth in the table on the following page. The bid is subject to acceptance not later than two hours after the expiration of the time established for the final receipt of bids. Our calculation of the true interest cost, computed in accordance with the instructions in the Official Notice Inviting Bids,and which is considered to be informative only and not a part of the bid,is %. (PLEASE CHECK ONE OF THE FOLLOWING TWO PARAGRAPHS) [ ] A surety bond has been provided to the District in the amount of $ issued by an insurance company rated in one of the top two rating categories by Moody's Investors Service, Fitch Ratings or Standard & Poor's Ratings Services, without regard to any modification of the rating, and licensed to issue such a bond in the State of California, naming the District as the beneficiary and indentifying our bidding syndicate whose deposit is guaranteed by the surety bond. [ ] With this bid we me providing the District a wire transfer in immediately available federal funds in the amount of $ to an account specified by the District or its representative, in accordance with the Official Notice Inviting Bids. We have noted that payment of the purchase price is to be made in immediately available Federal Funds at the time of delivery of the Revenue Obligations. If we are the successful bidder, we will (1) within 30 minutes after being notified of the verbal award of the Revenue Obligations, advise the District of the initial public offering prices of the Revenue Obligations; and (2) prior to delivery of the Revenue Obligations furnish a certificate, acceptable to Special Counsel, Fulbright& Jaworski LLP, as to the "issue price"of the Revenue Obligations in the form specified in the Official Notice Inviting Bids. Preliminary,subject to change. Maturity Principal Interest Serial Sinking (February 1) Amount* Rate Maturi Account Prepayment (Check one column) We represent that we have full and complete authority to submit this bid on behalf of our bidding syndicate and the undersigned will serve as the lead manager for the group if the Revenue Obligations are awarded pursuant to this bid. We certify(or declare)under penalty of perjury under the laws of the State of California that this proposal is genuine, and not a sham or collusive, nor made in the interest of or on behalf of any person not herein named, and that the bidder has not directly or indirectly induced or solicited any other bidder to put in a sham bid or any other person, firm or corporation to refrain from bidding, and that the bidder has not in any manner sought by collusion to secure for himself an advantage over any other bidder. Respectfully Submitted, Account Manager: By: Address: City: State: Telephone: Following(or attached)is a list of the members of our account on whose behalf this bid is made. Preliminary,subject to change. 2 Fulbright& Jaworski LLP—Draft 06/03/14 RETURN TO AGENDA NOTICE OF INTENTION TO SELL Orange County Sanitation District Wastewater Refunding Revenue Obligations Series 2014A NOTICE IS HEREBY GIVEN that the Orange County Sanitation District(the"District") intends to receive electronic bids until 11:00 a.m.,New York time, on July 8,2014, through the use of an electronic bidding service offered by Ipreo; at www.newissuehome.i- deal.com and the Parity electronic bid submission system, for the purchase of all of the Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2014A (the "Revenue Obligations"), dated as of the date of initial delivery, and maturing on such dates as described in the related Official Notice Inviting Bids (the"Notice"). No bids will be accepted by facsimile. Bids for less than all of the Revenue Obligations will not be accepted. The District reserves the right to postpone the date established for the receipt of bids as more fully described under the paragraph"Cancellation or Postponement"in the Notice. NOTICE IS HEREBY FURTHER GIVEN that electronic copies of the Notice and the Preliminary Official Statement issued in connection with the sale of the Revenue Obligations may be obtained from the District's financial advisor, Public Resources Advisory Group, 11500 West Olympic Boulevard, Suite 502, Los Angeles, California 90064, 310-477-8487, via e- mail: tchoi@pmgla.com. Orange County Sanitation District Dated: _June_, 2014 ' Preliminary, subject to change. 40622385.3 ADMINISTRATION COMMITTEE Neeting Date T1.1 of Dir. O6/11/14 6/2s/14 Item AGENDA REPORT N Number Item Nu bar s Nu Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director, Finance and Administrative Services SUBJECT: PURCHASE OF COMPUTER NETWORK PARTS GENERAL MANAGER'S RECOMMENDATION A. Reject the apparent low bid submitted by Office Supply Inc. as deemed non-responsive in accordance with specification requirements for Purchase of Cisco Parts, Specification No. E-2014-616BD; and B. Approve a Purchase Order Agreement with Presidio Networked Solutions, the lowest responsive and responsible bidder, for Purchase of Cisco Parts, Specification No. E-2014-6168D, for an amount not to exceed $435,587; and C. Approve a contingency of$21,780 (5%). SUMMARY This procurement provides information technology networking equipment required to support the wastewater industrial control system. The system was designed by inhouse staff in accordances with the National Institute of Standards and Technology (NIST), Special Publication 800-82, Guide to Industrial Control Systems. The design was vetted by Westin Engineering and peer review. The apparent lowest bidder did not propose on all items as required in the specification, thus the rejection of their bid. PRIOR COMMITTEE/BOARD ACTIONS April1992: Established Cisco Equipment as the Sanitation District's standard networking equipment. ADDITIONAL INFORMATION This procurement was competitively bid with five bid packages received. The responsive bids and the bid amounts are listed below. Purchase of Cisco Parts Bid Date— May 15, 2014 @ 2:00 PM (Pacific) E-2014-616BD Page 1 of 2 Bidder Amount of Bid Presidio Networked Solutions $435,587 Nefterts, Inc. $439,842 Aprisa Technology LLC $449,518 Apex Computer Systems, Inc. $541,005 Staff recommends Presidio Networked Solutions be awarded a purchase order for the Purchase of Cisco Parts as the lowest responsible and responsive bidder. CEQA N/A BUDGET/PURCHASING ORDINANCE COMPLIANCE This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted in SP-89 (Information Technology Equipment Upgrade) and J-125 (Programmable Control Panel Upgrades Project contingency funds will be used for this bid. Date of ADDroval Contract Amount Contingency 6/25/14 $435,587 $21,780 ATTACHMENT N/A Page 2 of 2 ADMINISTRATION COMMITTEE Meath,Dare TOBA.of Dir. 06/11/14 O6/25/14 AGENDA REPORT Item Number Item Nu bar 6 19 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: PROPOSED FY 2014-15 AND 2015-16 BUDGET GENERAL MANAGER'S RECOMMENDATION Approve proposed Operating, Capital, DebUCOP Service and Self-Insurance Budgets for FY 2014-15 and 2015-16 as follows: 2014-15 2015-16 Net Operations, Maintenance &Working Capital $152,500,120 $155,004,500 Worker's Compensation Self Insurance 700,000 700,000 General Liability and Property Self-Insurance 1,501,200 1,611,200 Net Capital Improvement Program 186,485,000 206,087,000 Debt/COP Service 86,070,000 86,714,000 Long-Term Debt Reduction 125,000,000 - Intra-District Joint Equity Purchase/Sale(l) 2,152,000 1,115,000 TOTAL $554.408.320 $451.231.700 (')Cash to Revenue Area 14 (RA14) in exchange for capital assets to Consolidated Revenue Area 15 (RA15). SUMMARY The FY 2014-15 and 2015-16 Proposed Budget is enclosed for the Committee's consideration. The Budget has been presented to the Operations Committee at the regular June meeting in order to allow each Standing Committee an opportunity to review the proposal prior to the June Board meeting. Although each Committee has had an opportunity to review the proposal, it remains the responsibility of the Administration Committee to recommend approval. The Administration Committee is requested to recommend that the Board of Directors approve this budget. PRIOR COMMITTEE/BOARD ACTIONS N/A Page 1 of 2 ADDITIONAL INFORMATION N/A CEQA N/A BUDGET/PURCHASING ORDINANCE COMPLIANCE N/A ATTACHMENTS The following attachment(s) may be viewed on-line at the OCSD website(www.acsd.com) with the complete agenda package: Proposed FY 2014-15 and 2015-16 Budget Page 2 of 2 Back to Agenda Orange County Sanitation District Financing Corporation MINUTES September 25, 2013 G�JN1 SANITgTjQy Q 9 ¢ ci o � Fcl�N HE ENv`P0� Administration Building 10844 Ellis Avenue Fountain Valley, California 92708-7018 09/25/13 Minutes of Financing Corporation Page 1 of 3 ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION CALL TO ORDER: Vice-Chair Anderson called the Board of Directors, Orange County Sanitation District Financing Corporation meeting to order at 6:44 p.m. ROLL CALL: Maria E. Ayala, Clerk of Board, announced that the members of the Orange County Sanitation District Board of Directors are each being compensated $212.50 for the Board Meeting; there is no additional compensation for the Financing Corporation Meeting. ACTIVE DIRECTORS ALTERNATE DIRECTORS A Troy Edgar, Chair Richard Murphy X John Anderson, Vice Chair Gene Hernandez X Tom Beamish Rose Espinoza X David Benavides Sal Tinajero X Steven Choi Christina Shea X Keith Curry Rush Hill X Tyler Diep AI Krippner X James M. Ferryman Bob Ooten X Steven Jones Kris Beard X Peter Kim Gerard Goedhart X Lucille Kring Jordan Brandman X Michael Levitt Gordon Shanks X Brett Murdock Roy Moore X Steve Nagel Mark McCurdy X Prakash Narain Doug Bailey X Scott Nelson Constance Underhill X Janet Nguyen Shawn Nelson X John Nielsen Jerry Amante X Brad Reese Greg Mills X Gregory Sebourn Jan Flory Joe Shaw X Joe Carchio X David Shawver Carol Warren X Fred Smith Steve Berry X Teresa Smith Mark Murphy X John Withers Douglas Reinhart 39/2513 Minutes of Financing Corporation Page 2 of 3 APPROVAL OF MINUTES: MOVED, SECONDED, AND DULY CARRIED: If no corrections or amendments are made, the minutes for the meeting held on September 26, 2012, will be deemed approved and be so ordered by the Vice-Chair. ACTION ITEM: MOVED, SECONDED, AND DULY CARRIED: Adopt Resolution No. FC-20, a resolution of the Board of Directors of the Orange County Sanitation District Financing Corporation Authorizing the Execution and Delivery by the Corporation of an Installment Purchase Agreement and a Trust Agreement in Connection with the Execution and Delivery of Orange County Sanitation District Revenue Refunding Certificate Anticipation Notes, Series 2013a, Authorizing the Execution and Delivery of Such Notes Evidencing Principal in an Aggregate Amount of not to Exceed $135,000,000 and Authorizing the Execution of Other Necessary Documents and Related Actions. (See Agenda Report for Item No. 12) Director Curry abstained. ADJOURNMENT: The Vice-Chair declared the meeting of the Board of Directors, Orange County Sanitation District Financing Corporation adjourned at 6:46 p.m. Kelly A. Lore Secretary Pro Tem 09125 13 Minutes of Financing Corwnatian Page 3 of 3 ITEM NO. 20 MINUTES STEERING COMMITTEE MEETING Orange County Sanitation District The Steering Committee meeting convened on Wednesday, May 28, 2014, at 5:33 p.m. in the Administration Building of the Orange County Sanitation District. A quorum was declared present, as follows: COMMITTEE MEMBERS STAFF PRESENT PRESENT: Jim Herberg, General Manager Troy Edgar, Chair Bob Ghirelli, Assistant General Tom Beamish, Vice-Chair Manager Brad Reese, Administration Committee Nick Arhontes, Director of Facilities Chair Support Services John Nielsen, Operations Committee Rob Thompson, Director of Chair Engineering Brett Murdock, Member-At-Large Ed Torres, Director of Operations & John Withers, Member-At-Large Maintenance Lorenzo Tyner, Director of Finance & Administrative Services COMMITTEE MEMBERS ABSENT: Maria Ayala, Clerk of the Board Keith Curry, Member-At-Large Jim Colston Norbert Gaia Stephanie Good Andrew Nau Rich Spencer OTHERS PRESENT: Brad Hogin, General Counsel Jim Ruth, Consultant Steve Filarsky, Consultant PUBLIC COMMENTS: None. REPORTS: Chair Edgar gave a brief report regarding: OCSD/SAWPA Joint Policy Committee Meeting that took place earlier this month and the upcoming Chino Basin Desalter tour; Legislative Cards that will be handed out at the Board; and thanked staff for the great job they did with the State fo the District event. Minutes of the Steering Committee May 28, 2014 Page 2 of 5 General Manager Jim Herberg reported on the following: Chino Basin Desalter Tour reminder; Newport Beach Construction projects; Award for fleet services, OCSD ranked 131h in North America; and this month's Community outreach efforts - we hosted 14 groups including a delegation from Korea. CONSENT CALENDAR: 1. MOVED, SECONDED, AND DULY CARRIED: Approve Minutes of the April 23, 2014 Steering Committee Meeting. AYES: Beamish, Edgar, Reese, Murdock, Nielsen and Withers NOES: None ABSTENTIONS: None ABSENT: Curry 2. MOVED, SECONDED, AND DULY CARRIED: Authorize the General Manager or his designee to vote on behalf of the Orange County Sanitation District in support of the California Association of Sanitation Agencies' new bylaws via ballot due on June 16, 2014. AYES: Beamish, Edgar, Reese, Murdock, Nielsen and Withers NOES: None ABSTENTIONS: None ABSENT: Curry Minutes of the Steering Committee May 28, 2014 Page 3 of 5 ACTION ITEMS: Mr. Herberg gave a brief overview of the nomination process for Honor Walk Recipients and the former staff members who had been nominated. Vice-Chair Beamish nominated former Board Member Steve Anderson as Honor Walk recipient for the year 2014. MOVED, SECONDED, AND DULY CARRIED: Approve nominated former Board Member Steve Anderson as Honor Walk recipient for the year 2014. AYES: Beamish, Edgar, Reese, Murdock, Nielsen and Withers NOES: None ABSTENTIONS: None ABSENT: Curry Chair Edgar nominated former Board Member Jim Silva as Honor Walk recipient for the year 2014. MOVED, SECONDED, AND DULY CARRIED: Approve nominated former Board Member Jim Silva as Honor Walk recipient for the year 2014. AYES: Beamish, Edgar, Reese, Murdock, Nielsen and Withers NOES: None ABSTENTIONS: None ABSENT: Curry Minutes of the Steering Committee May 28, 2014 Page 4 of 5 3. MOVED, SECONDED, AND DULY CARRIED: Approve nominated retired employees, Michael Heinz and Marshall Fairres, as Honor Walk Brick Recipients for the year 2014. AYES: Beamish, Edgar, Reese, Murdock, Nielsen and Withers NOES: None ABSTENTIONS: None ABSENT: Curry CLOSED SESSION CONVENED IN CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTIONS: 54957.6, 54956.9(d)(1)(2)(4)) The Board convened in closed session at 5:48 p.m. to discuss eight items. Confidential minutes of the Closed Session have been prepared in accordance with the above Government Code Sections and are maintained by the Clerk of the Board in the Official Book of Confidential Minutes of Board and Committee Closed Meetings. RECONVENED IN REGULAR SESSION: The Committee reconvened in regular session at 6:25 p.m. Consideration of action, if any, on matters considered in closed session. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: None. Minutes of the Steering Committee May 28, 2014 Page 5 of 5 ADJOURNMENT: The Chair declared the meeting adjourned at 6:25 p.m. Submitted by: Kelly A. Lore Secretary Pro Tem ITEM NO. 21 MINUTES LEGISLATIVE AND PUBLIC AFFAIRS SPECIAL COMMITTEE MEETING Orange County Sanitation District The Legislative and Public Affairs Special Committee meeting convened on Monday, June 9, 2014, at 8:03 a.m. in the Administration Building of the Orange County Sanitation District. Director Reese led the Flag Salute. A quorum was declared present, as follows: COMMITTEE MEMBERS STAFF PRESENT PRESENT: Jim Herberg, General Manager Troy Edgar, Board Chair Bob Ghirelli, Assistant General Tom Beamish, Board Vice-Chair Manager John Nielsen, Operations Committee Nick Arhontes, Director of Facilities Chair Support Services Brad Reese, Administration Committee Jeff Reed, Director of Human Chair Resources John Withers, Administration Rob Thompson, Director of Committee Vice-Chair Engineering David Benavides, Director Lorenzo Tyner, Director of Finance & Administrative Services Maria Ayala, Clerk of the Board Faviola Miranda, Sr. Public Affairs Specialist COMMITTEE MEMBERS ABSENT: OTHERS PRESENT: Brad Hogin, General Counsel Heather Stratman, Townsend Public Affairs Eric Sapirstein, ENS (via teleconference) PUBLIC COMMENTS: None. REPORTS: Mr. Herberg, General Manager, reported on the community outreach activities and on the construction program for projects in the City of Newport Beach. He also Minutes of the Legislative and Public Affairs Special Committee June 9, 2014 Page 2 of 3 reported OCSD has been invited to a study session with the City of Newport Beach City Council to review the overall program strategies. He also reported that he would be attending and presenting at the "Quadrennial Energy Review Public Meeting — The Water-Energy Nexus' on June 19th in San Francisco, hosted by the U.S. Department of Energy. He stated he would also be attending an OCDC Infrastructure Committee to talk about our CIP. Chair Edgar arrived at 8:04 a.m. Director Benavides arrived at 8:05 a.m. CONSENT ITEMS: 1. MOVED, SECONDED, and DULY CARRIED: Approve the minutes for the Committee meeting held on May 10, 2014. AYES: Beamish; Benavides; Edgar; Nielsen; Reese; and Withers. NOES: None ABSTENTIONS: None ABSENT: None INFORMATIONAL ITEMS: 2. Federal Legislative Update Mr. Sapirstein referred back to Mr. Herberg's report on the Water-Energy Nexus and reiterated the importance of the meeting. He stated that President Obama would likely sign the Water Resources Reform and Development Act (WRRDA), which will give courts more latitude in the riprap removal process and will provide rehabilitation of water infrastructure and restoration of most vital ecosystems. He further reported on the Reuse program and feasibility study via reclamation budget which is being formulated in the House; Senator Feinstein's drought and relief bill passing the Senate; funding for water recycling projects; Corp of Engineers Bill's enhanced subsidies regarding loan forgiveness and provisions for assistance. Minutes of the Legislative and Public Affairs Special Committee June 9, 2014 Page 3 of 3 3. State Legislative Update Ms. Stratman gave an update on SB 946, which passed unanimously, and notified the Committee that it was amended due to the entity name change and verified that there would be no governance change whatsoever. She also stated that the emergency drought funding passed by legislature is now available for solicitations of grant applications. The applications are due on July 21st of this year. If OCSD chooses to apply, we will have to go through SAWPA. The state has prioritized projects to create new water sources, or increased use of existing water. 4. OCSD Public Affairs Update Faviola Miranda, Sr. Public Affairs Specialist, reported on OCSD's recent Public Affairs outreach efforts including: Potential partnership opportunities with the Discovery Center, OC Public Works Open House; City of Irvine events; Tustin Chili Cook-off, Fountain Valley events; upcoming events: Chill Out Day for Employees; Honor Walk Ceremony on June 25"; Westminster Safety Day and beach cleanup day. 5. OCSD Memberships Bob Ghirelli, Assistant General Manager provided an overview and a comprehensive list of organizations of which OCSD is a member. Staff will gather additional information as requested by the Committee and provide at a future meeting. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: ADJOURNMENT: Chair Edgar declared the meeting adjoumed at 8:44 a.m. Submitted by: Kelly A. Lore Secretary Pro Tern ORANGE COUNTY SANITATION DISTRICT Agenda Terminology Glossary Glossary of Terms and Abbreviations AQMD Air Quality Management District ASCE American Society of Civil Engineers BOD Biochemical Oxygen Demand CARB California Air Resources Board CASA California Association of Sanitation Agencies CCTV Closed Circuit Television CEQA California Environmental Quality Act CRWQCB California Regional Water Quality Control Board CWA Clean Water Act CWEA California Water Environment Association EIR Environmental Impact Report EMT Executive Management Team EPA U.S. Environmental Protection Agency FOG Fats, Oils, and Grease FSSD Facilities Support Services Department gpd Gallons per day GWR System Groundwater Replenishment System (also called GWRS) ICS Incident Command System IERP Integrated Emergency Control Plan LOS Level of Service MGD Million gallons per day NACWA National Association of Clean Water Agencies NPDES National Pollutant Discharge Elimination System NWRI National Water Research Institute O&M Operations and Maintenance OCCOG Orange County Council of Governments OCHCA Orange County Health Care Agency OCSD Orange County Sanitation District OCWD Orange County Water District GOBS Ocean Outfall Booster Station OSHA Occupational Safety and Health Administration POTW Publicly Owned Treatment Works ppm Parts per million RFP Request For Proposal RWQCB Regional Water Quality Control Board SARFPA Santa Ana River Flood Protection Agency Glossary of Terms and Abbreviations SARI Santa Ana River Inceptor SARWQCB Santa Ana Regional Water Quality Control Board SAWPA Santa Ana Watershed Project Authority SCADA Supervisory Control and Data Acquisition system SCAP Southern California Alliance of Publicly Owned Treatment Works SCAQMD South Coast Air Quality Management District SOCWA South Orange County Wastewater Authority SSMP Sanitary Sewer Management Plan SSO Sanitary Sewer Overflow SWRCB State Water Resources Control Board TDS Total Dissolved Solids TMDL Total Maximum Daily Load TSS Total Suspended Solids WDR Waste Discharge Requirements WEF Water Environment Federation WERF Water Environment Research Foundation Activated-sludge process — A secondary biological wastewater treatment process where bacteria reproduce at a high rate with the introduction of excess air or oxygen, and consume dissolved nutrients in the wastewater. Benthos— The community of organisms, such as sea stars, worms and shrimp, which live on, in, or near the seabed, also know as the benthic zone. Biochemical Oxygen Demand (BOD)—The amount of oxygen used when organic matter undergoes decomposition by microorganisms. Testing for BOD is done to assess the amount of organic matter in water. Biosolids — Biosolids are nutrient rich organic and highly treated solid materials produced by the wastewater treatment process. This high-quality product can be recycled as a soil amendment on farm land or further processed as an earth-like product for commercial and home gardens to improve and maintain fertile soil and stimulate plant growth. Capital Improvement Program (CIP) — Projects for repair, rehabilitation, and replacement of assets. Also includes treatment improvements, additional capacity, and projects for the support facilities. Coliform bacteria—A group of bacteria found in the intestines of humans and other animals, but also occasionally found elsewhere used as indicators of sewage pollution. E. coli are the most common bacteria in wastewater. Collections system — In wastewater, it is the system of typically underground pipes that receive and convey sanitary wastewater or storm water. Certificate of Participation (COP) —A type of financing where an investor purchases a share of the lease revenues of a program rather than the bond being secured by those revenues. Glossary of Terms and Abbreviations Contaminants of Potential Concern (CPC) — Pharmaceuticals, hormones, and other organic wastewater contaminants. Dilution to Threshold (D!f) — the dilution at which the majority of the people detect the odor becomes the DrT for that air sample. Greenhouse gases — In the order of relative abundance water vapor, carbon dioxide, methane, nitrous oxide, and ozone gases that are considered the cause of global warming ("greenhouse effect"). Groundwater Replenishment (GWR) System — A joint water reclamation project that proactively responds to Southern California's current and future water needs. This joint project between the Orange County Water District and the Orange County Sanitation District provides 70 million gallons a day of drinking quality water to replenish the local groundwater supply. Levels of Service (LOS)—Goals to support environmental and public expectations for performance. NDMA— N-Nitrosodimethylamine is an N-nitrosoamine suspected cancer-causing agent. It has been found in the Groundwater Replenishment System process and is eliminated using hydrogen peroxide with extra ultra-violet treatment. National Biosolids Partnership (NBP) — An alliance of the National Association of Clean Water Agencies (NACWA) and Water Environment Federation (WEF), with advisory support from the U.S. Environmental Protection Agency (EPA). NBP is committed to developing and advancing environmentally sound and sustainable biosolids management practices that go beyond regulatory compliance and promote public participation in order to enhance the credibility of local agency biosolids programs and improved communications that lead to public acceptance. Plume—A visible or measurable concentration of discharge from a stationary source or fixed facility. Publicly-owned Treatment Works (POTW)— Municipal wastewater treatment plant. Santa Ana River Interceptor (SARI) Line — A regional brine line designed to convey 30 million gallons per day (MGD) of non-reclaimable wastewater from the upper Santa Ana River basin to the ocean for disposal, after treatment. Sanitary sewer — Separate sewer systems specifically for the carrying of domestic and industrial wastewater. Combined sewers carry both wastewater and urban run-off. South Coast Air Quality Management District (SCAQMD) — Regional regulatory agency that develops plans and regulations designed to achieve public health standards by reducing emissions from business and industry. Secondary treatment — Biological wastewater treatment, particularly the activated-sludge process, where bacteria and other microorganisms consume dissolved nutrients in wastewater. Sludge—Untreated solid material created by the treatment of wastewater. Total suspended solids (TSS)—The amount of solids floating and in suspension in wastewater. Trickling filter — A biological secondary treatment process in which bacteria and other microorganisms, growing as slime on the surface of rocks or plastic media, consume nutrients in wastewater as it trickles over them. Glossary of Terms and Abbreviations Urban runoff — Water from city streets and domestic properties that carry pollutants into the storm drains, rivers, lakes, and oceans. Wastewater—Any water that enters the sanitary sewer. Watershed —A land area from which water drains to a particular water body. OCSD's service area is in the Santa Ana River Watershed.