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HomeMy WebLinkAbout08-23-2017 Board Meeting Agenda Packet Orange County Sanitation District Wednesday, August 23, 2017 Regular Meeting of the 6:00 P.M. BOARD OF DIRECTORS Board Room 0. 10844 Ellis Avenue Fountain Valley, CA 92708 (714) 593-7433 AGENDA CALL TO ORDER INVOCATION AND PLEDGE OF ALLEGIANCE (Steve Nagel, City of Fountain Valley) ROLL CALL (Clerk of the Board) DECLARATION OF QUORUM (Clerk of the Board) PUBLIC COMMENTS: If you wish to address the Board of Directors on any item, please complete a Speaker's Form (located at the table outside of the Board Room) and submit it to the Clerk of the Board or notify the Clerk of the Board the item number on which you wish to speak. Speakers will be recognized by the Chairperson and are requested to limit comments to three minutes. SPECIAL PRESENTATIONS: Employee Service Awards REPORTS: The Board Chairperson and the General Manager may present verbal reports on miscellaneous matters ofgeneml interest to the Directors. These reports are for information only and require no action by the Directors. Strategic Planning Process 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 Any items withdrawn from the Consent Calendar for separate discussion will be considered in the regular order of business. 1. APPROVAL OF MINUTES (Clerk of the Board) RECOMMENDATION: Approve the minutes of the Regular Meeting of the Board of Directors Meeting held on July 26, 2017. 0&23/2017 OCSD Bead of Directors'Agenda Page 1 of 7 RECEIVE AND FILE: These items require no action; and without objection, will be so ordered by the Board Chair. 2. COMMITTEE MINUTES (Clerk of the Board) RECOMMENDATION: Receive and file the approved minutes of the following committees: A. GWRS Steering Committee Meeting of April 10, 2017 B. Steering Committee Meeting of June 28, 2017 3. REPORT OF THE INVESTMENT TRANSACTIONS FOR THE MONTH OF JULY 2017 (Lorenzo Tyner) RECOMMENDATION: Receive and file the report of the Investment Transactions for the month of July 2017. 4. TREASURER'S REPORT FOR THE FOURTH QUARTER ENDED JUNE 30, 2017 (Lorenzo Tyner) RECOMMENDATION: Receive and file the Orange County Sanitation District Fourth Quarter Treasurer's Report for the period ended June 30, 2017. PUBLIC HEARING: 5. COLLECTION OF SEWER SERVICE CHARGES VIA THE TAX ROLL (Lorenzo Tyner) RECOMMENDATION: A. Conduct a public hearing to receive input on a report filed with the Clerk of the Board entitled "Sewer Service Charges for Collection on Tax Rolls for Fiscal Year 2017-18" 1. Open the public hearing 2. Receive staff report and recommendations 3. Report of written communications by Clerk of the Board 4. Public Comment 5 Close Public Hearing 6 Discussion by the Board of Directors B. Unless there is a majority protest, adopt the report, which has the assessor's parcel numbers and amount of charges for collection on the tax rolls; C. Adopt Resolution No. OCSD 17-14 entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District adopting the Report OW23/2017 OCSD Boad of Directors'Agenda Page 2 of 7 proposing to collect Sewer Service Fees on the Tax Roll for Fiscal Year 2017/2018"; D. Direct staff to file a certified copy of the adopted report and resolution with the County Auditor-Controller; and E. Direct staff to coordinate collection of sanitary sewer service charges on the general Orange County tax rolls with the County Auditor-Controller, Assessor, and Tax Collector. STEERING COMMITTEE: 6. BANDILIER CIRCLE PROPERTY LEASE (Rob Thompson) RECOMMENDATION: Approve the Lease Agreement with the Dickler Corporation, DBA Chef's Toys, for Orange County Sanitation District's real property located at 18484 Bandilier Circle, Fountain Valley, California, in an as-is condition, commencing August 24, 2017 through March 31, 2019, at a lease rate of$13,500 per month for the first 12 months, and increasing to $15,000 per month for the balance of the term, in a form approved by General Counsel. NON-CONSENT: 7. EAST LIDO FORCE MAIN REHABILITATION, PROJECT NO. FE15-10 (Rob Thompson) RECOMMENDATION: A. Award a construction contract to Charles King Company for the East Lido Force Main Rehabilitation, Project No. FE15-10, for a total amount not to exceed $1,389,000; and B. Approve a contingency of$138,900 (10%). 8. SAFETY IMPROVEMENTS PROGRAM, PROJECT NO. J-126 (Rob Thompson) RECOMMENDATION: A. Award a Construction Contract to AMTEK Construction for the Safety Improvement Program, Contract No. J-126 B, F, and G for a total amount not to exceed $557,759; and B. Approve a contingency of$55,776 (10%). OW23/2017 OCSD goad of Directors'Agenda Page 3 of 7 9. GENERAL MANAGER APPROVED PURCHASES AND ADDITIONS TO THE PRE-APPROVED OEM SOLE SOURCE LIST (Lorenzo Tyner) RECOMMENDATION: A. Receive and file Orange County Sanitation District purchases made under the General Manager's authority for the period of April 1, 2017 to June 30, 2017; and B. Approve the following additions to the pre-approved Original Equipment Manufacturer(OEM) Sole Source List: • AVO TRAINING INSTITUTE - Substation Maintenance Technician Certification • CLEAN ENERGY- Operation, maintenance, and repair of the Compressed Natural Gas (CNG) Facilities • COOPER BESSEMER- CenGen engine components • EMBARK CONSULTING - CRISP and SCADA software consulting • ESSCO - Submersible pumps • FISHER CONTROLS/EMERSON - Gas flow regulators • GE INSPECTION • ITT STANDARD - Heat exchangers • SUEZ TREATMENT SOLUTIONS - Bar screen repair parts • TRANE COMPANY- Maintenance for absorption chillers • TREDENT DATA SYSTEMS - Support for Cisco Smartnet • VACTOR - Industrial cleaning truck rental and repair 10. CLEAN HARBOR ENVIRONMENTAL SERVICES (Celia Chandler) A. Approve a Service Contract with Clean Harbors Environmental Services, Inc., Specification No. S-2017-841, for the period of September 1, 2017 through June 30, 2018, for a total annual amount not to exceed $192,000, with up to four (4) one-year renewals options; and B. Approve an annual contingency of$19,200 (10%). AB 1234 REPORTS: This is the time of the meeting when Board Members will provide a brie/oral report on any conference, meeting, or travel paid by the Sanitation District. OW23/2017 OCSD Board of Directors'Agenda Page 4 of 7 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 potentiallifigation,orpersonnel matters,pursuant to Government Code Sections 54956.8, 54956.9, 54957 or 54957.6, as noted. Reports relating to (a)purchase and sale of real property; (b) matters of pending or potential litigation; (c)employment actions or negotiations with employee representatives;or which are exempt from public disclosure under the California Public Records Act, may be reviewed by the Board during a permitted closed session and are not available for public inspection. At such time as the Board takes final action on any of these subjects, the minutes will reflect all required disclosures of information. CONVENE IN CLOSED SESSION. (1) CONFERENCE WITH LEGAL COUNSEL RE EXISTING LITIGATION (Gov. Code Section 54956.9(d)(1))— 1 case Roy Handy, Melissa Forman-Woodbridge v. Orange County Sanitation District, Superior Court of California, County of Orange, Case No. 30-2017-00934699 (2) CONFERENCE WITH LEGAL COUNSEL RE ANTICIPATED LITIGATION Initiation of litigation (Gov. Code Section 54956.9(d)(4))— 1 case (A) Potential eminent domain action Property Owner: Sukut Real Properties LLC. Properties: 18429 Pacific St. Fountain Valley, CA, APN No. 156-163-09; 18410 Bandilier Cir. Fountain Valley, CA, APN No. 156-163-10; 18368 Bandilier Cir. Fountain Valley, CA, APN No. 156-163-11. (3) CONFERENCE WITH REAL PROPERTY NEGOTIATORS (Government Code Section 54956.8) Property: 10950 Virginia Cir. Fountain Valley, CA- APN No.156-165-05; 10870 Spencer Ave. Fountain Valley, CA -APN No.156-163-07; 18480 Pacific St. Fountain Valley, CA -APN No.156-165-04; 18430 Pacific St. Fountain Valley, CA -APN No.156-165-06; 18370 Pacific St. Fountain Valley, CA -APN No.156-165-08; 18429 Pacific St. Fountain Valley, CA -APN No.156-163-09; 18410 Bandilier Cir. Fountain Valley, CA -APN No.156-163-10; 18368 Bandilier Cir. Fountain Valley, CA -APN No.156-163-11; 10700 Spencer St. Fountain Valley, CA-APN No.156-163-16; 10700 Spencer Ave. Fountain Valley, CA -APN No.156-154-07; 18350 Mt. Langley St. Fountain Valley, CA-APN No.156-154-08; 18386 Mt. Langley St. Fountain Valley, CA-APN No.156-154-06; 18385 Bandilier Cir. Fountain Valley, CA -APN No.156-163-12; 18401 Bandilier Cir. Fountain Valley, CA -APN No.156-163-13; 08/23/2017 OCSD Boad of Directors'Agenda Page 5 of 7 18424 Mt. Langley St. Fountain Valley, CA-APN No.156-154-05; 18435 Bandilier .Cir. Fountain Valley, CA -APN No.156-163-14; 18475 Bandilier .Cir. Fountain Valley, CA -APN No.156-163-15; 10725 Ellis Ave. Fountain Valley, CA -APN No.156-154-04; and 10540 Talbert Ave. Fountain Valley, CA -APN No.156-151-03 Agency negotiators: General Manager, Jim Herberg; Assistant General Manager, Bob Ghirelli; Director of Finance and Administrative Services, Lorenzo Tyner; Director of Engineering, Rob Thompson; Engineering Managers, Kathy Millea and Jeff Mohr; CIP Project Manager, Tom Grant; Kevin Turner and John Gallivan, Cushman and Wakefield. Negotiating parties: Valley, Business Park, APN Nos. 156-165-05, .156-165-06, 156-163-07; DK-USA LLC, APN No.156-165-04; Fountain Valley Industrial Parcel 13, APN No.156-165-08; Sukut Real Properties LLC, APN Nos. 156-163-09, 156-163-10, 156-163-11; The Ins Trust Shabtai, Nevon, APN No. 156-163-16; The Ins Trust, APN No. 156-154-07; K & A Investments LP, APN No. 156-154-08; Fountain Valley Star LLC, APN No. 156-154-06; TN Sheet Metal Inc., APN No. 156-163-12; 18401 Bandilier LLC, APN No. 156-163-13; Phone Lilly Lin-Lin TR, APN No. 156-154-05; JDK Partners, APN No. 156-163-14; Chandler Real Properties, APN No. 156-163-15; Ellis Avenue LLC, APN No. 156-154-04; and SFII Fountain Valley LLC, APN No. 156-151-03 Under negotiation: Instruction to negotiator will concern price and terms of payment. RECONVENE IN REGULAR SESSION. CONSIDERATION OF ACTION, IF ANY, ON MATTERS CONSIDERED IN CLOSED SESSION: OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: 0 812 312 01 7 OCSD Boad of Directors'Agenda Page 6 of 7 ADJOURNMENT: Adjourn the Board meeting until the Regular Meeting of the Board of Directors on September 27, 2017 at 6:00 p.m. Accommodations for the Disabled: Meeting Rooms are wheelchair accessible. If you require any special disability related accommodations, please contact the Orange County Sanitation District Clerk of the Board's office at(714) 593-7433 at least 72 hours prior to the scheduled meeting. Requests must specify the nature of the disability and the type of accommodation requested. Agenda 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, and on the Sanitation District's website at www.ocsd.com, not less than 72 hours prior to the meeting date and time above. All public records relating to each agenda item,including any public records distributed less than 72 hours prior to the meeting to all,or a majority of the Board of Directors,are available for public inspection in the office of the Clerk of the Board. Agenda Description: The agenda provides a brief general description of each item of business to be considered or discussed. The recommended action does not indicate what action will be taken. The Board of Directors may take any action which is deemed appropriate. NOTICE TO DIRECTORS: To place items on the agenda for a Committee or Board Meeting, items must be submitted to the Clerk of the Board 14 days before the meeting. Kelly A.Lore Clerk of the Board (714)593-7433 klomiotocsd.com For any questions on the agenda, Committee members may contact staff at: General Manager Jim Herberg (714)593-7300 iherberg[c),ocsd.com Assistant General Manager Bob Ghirelli (714)593-7400 mhirelliRocsd.com Director of Engineering Rob Thompson (714)593-7310 rthomnsonrolocsd.com Director of Environmental Services Jim Colston (714)593-7450 icolstonaocsd.com Director of Finance and Lorenzo Tyner (714)593-7550 INneraocsd.cem Administrative Services Director of Human Resources Celia Chandler (714)593-7202 cchandlerrrpomd.com Director of Operations 8 Maintenance Ed Torres 714 593-7080 etorres omd.com 08/23/2017 OCSD Board of Directors'Agenda Page 7 of ITEM NO. 1 Orange County Sanitation District MINUTES BOARD MEETING July 26, 2017 ANITAT� 9 U N 2 ,y t o � ftwowm0i THE ENV�Q, Administration Building 10844 Ellis Avenue Fountain Valley, California 92708-7018 07/2612017 Minutes of Board Meeting Page 1 of 12 ROLL CALL A regular meeting of the Board of Directors of the Orange County Sanitation District was called to order by Board Chairman Greg Sebourn on July 26, 2017, at 6:06 p.m., in the Administration Building. Chair Sebourn delivered the invocation and led the Pledge of Allegiance. The Clerk of the Board declared a quorum present as follows: ACTIVE DIRECTORS ALTERNATE DIRECTORS X Gregory Sebourn, Chair Jesus Silva X Denise Barnes Lucille Kring X Allan Bernstein Chuck Puckett X Robert Collacott Diana Fascenslli X Ellery Deaton Sandra Massa-Lavitt X Barbara Delgleize Erik Peterson X James M. Ferryman Bob Ooten X Phil Hawkins Brooke Jones X Steven Jones Kris Beard X Peter Kim Gerard Goedhart X At Kdppner Charlie Nguyen X Richard Murphy Warren Kusumoto X Steve Nagel Cheryl Brothers A Glenn Parker Cecilia Hupp X Scott Peotter Brad Avery X Tim Shaw Michael Blazey X David Shawver Carol Warren X Fred Smith Virginia Vaughn A Teresa Smith Mark Murphy X Michelle Steel Shawn Nelson X Sal Tinajero David Benavides X Donald Wagner Lynn Schott X Chad Wanks Ward Smith X John Withers Douglas Reinhart X Mariellen Yarc Stacy Berry STAFF MEMBERS PRESENT: Jim Herberg, General Manager; Bob Ghirelli, Assistant General Manager; Celia Chandler, Director of Human Resources; Jim Colston, Director of Environmental Services; Ed Torres, Director of Operations and Maintenance; Rob Thompson, Director of Engineering; Lorenzo Tyner, Director of Finance &Administrative Services; Kelly Lore, Clerk of the Board; Janine Aguilar; Gilbert Barela; Jennifer Cabral; Dean Fisher; Lisa Frigo; At Garcia; Tom Grant; Tina Knapp; Kathy Millea; Jeff Mohr; Andrew Nau; and Man Nguyen. 07/26/2017 Minutes of Board Meeting Page 2 of 12 OTHERS PRESENT: Brad Hogin (General Counsel); Natalie Medvedev, Art Perry (CMSD); Alternate Directors, Jesus Silva (Fullerton) and Bob Ooten (CMSD); and Kevin Turner and John Gallivan, Cushman & Wakefield. PUBLIC COMMENTS: No public comments were provided. SPECIAL PRESENTATIONS: None. REPORTS: Chair Sebourn announced that the State of the District will be held Friday, November 17, 2017 at 8:00 a.m. at Mile Square Park Golf Course. General Manager Jim Herberg announced that the Operations and Administration Committees will be dark in August and encouraged the Directors to sign up for the upcoming Orange County Leadership Symposium to be held each Friday from October 6— November 3. CONSENT CALENDAR: 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED, SECONDED, AND DULY CARRIED TO: Approve the minutes of the Regular Joint Meeting of the Board of Directors and Financing Corporation Meeting held on June 28, 2017. AYES: Barnes; Collacott; Deaton; Delgleize; Ferryman; Hawkins; Jones; Kim; Krippner; R. Murphy; Nagel; Peotter, Seboum; Shaw; Shawver; F. Smith; Steel; Wagner; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein; Parker; T. Smith; and Tinajero RECEIVE AND FILE: These items require no action; and without objection, will be so ordered by the Board Chair. 2. COMMITTEE MINUTES (Clerk of the Board) Received and filed the approved minutes of the following committees: A. Operations Committee Meeting of June 7, 2017 B. Legislative and Public Affairs Committee Meeting of June 12, 2017 C. Administration Committee Meeting of June 14, 2017 07/26/2017 Minutes of Board Meeting Page 3 of 12 D. Steering Committee Meeting of May 24, 2017 3. REPORT OF THE INVESTMENT TRANSACTIONS FOR THE MONTH OF JUNE 2017 (Lorenzo Tyner) Received and filed the report of the Investment Transactions for the month of June 2017. OPERATIONS COMMITTEE: 4. DIGESTER CLEANING CONTRACT (Ed Torres) MOVED, SECONDED, AND DULY CARRIED TO: A. Approve a Service Contractwith Synagro-WWT, Inc., the lowest responsive and responsible bidder, for Digester Cleaning, Specification No. S-2017-82413D, for an 18-month period beginning September 1, 2017 through February 28, 2019, for an amount not to exceed $3,953,958 with four (4) additional 18-month renewal options; and B. Approve a contingency of$395,396 (10%) aggregately per contract period. AYES: Barnes; Collacott; Deaton; Delgleize; Ferryman; Hawkins; Jones; Kim; Krippner; R. Murphy; Nagel; Peotter; Seboum; Shaw; Shawver; F. Smith; Steel; Wagner; Wanks; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein; Parker; T. Smith; and Tinajero 5. LIGHT DUTY TRUCK COOPERATIVE PROCUREMENT WITH NATIONAL AUTO FLEET GROUP (Ed Torres) MOVED, SECONDED, AND DULY CARRIED TO: Approve the purchase of four light duty trucks using the National Joint Powers Alliance cooperative Contract Number 120716-NAF with National Auto Fleet Group for a total cost of $148,000 in accordance with Ordinance No. OCSD-47, Section 2.03(B), Cooperative Purchases. AYES: Barnes; Collacott; Deaton; Delgleize; Ferryman; Hawkins; Jones; Kim; Krippner; R. Murphy; Nagel; Peotter, Seboum; Shaw; Shawver; F. Smith; Steel; Wagner; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein; Parker; T. Smith; and Tinajero 07/2W2017 Minutes of Board Meeting Page 4 of 12 6. PURCHASE OF SODIUM HYPOCHLORITE, SPECIFICATION NO. C-2017-853BD (Ed Torres) MOVED, SECONDED, AND DULY CARRIED TO: A. Award an Agreement to JCI Jones Chemicals, Inc. for the purchase of sodium hypochlorite (bleach), Specification No. C-2017-853BD, for the period September 1, 2017 through August 31, 2018, for a unit price of $0.51/gallon delivered, plus applicable sales tax, for an estimated annual amount of$626,726.25, with four (4) one-year renewal options; and B. Approve a (10%) unit price contingency. AYES: Barnes; Collacott; Deaton; Delgleize; Ferryman; Hawkins; Jones; Kim; Krippner; R. Murphy; Nagel; Peotter, Seboum; Shaw; Shawver; F. Smith; Steel; Wagner; Wanks; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein; Parker; T. Smith; and Tinajero 7. REPAIR & REFURBISHMENT OF TWO CENTRAL GENERATION ELECTRICAL GENERATORS, SPECIFICATION NO. 5-2017-85OBD (Ed Torres) MOVED, SECONDED, AND DULY CARRIED TO: A. Approve a Service Contract to R.A. Reed Electric Company, the lowest responsive and responsible bidder, for Repair & Refurbishment of two Central Generation Electrical Generators, Specification No. S-2017-85013D, for an amount not to exceed $424,538.62; and B. Approve a contingency of$84,908 (20%). AYES: Barnes; Collacott; Deaton; Delgleize; Ferryman; Hawkins; Jones; Kim; Krippner; R. Murphy; Nagel; Peotter; Seboum; Shaw; Shawver; F. Smith; Steel; Wagner; Wanks; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein; Parker; T. Smith; and Tinajero 8. STORMWATER MASTER PLAN — PROJECT NO. PS16-01 (Rob Thompson) MOVED, SECONDED, AND DULY CARRIED TO: A. Approve a Professional Services Agreement with Michael Baker International, Inc. to provide engineering services for the Stormwater Master Plan, Project No. PS16-01, for an amount not to exceed $715,300; and B. Approve a contingency of$71,530 (10%). 07/26/2017 Minutes of Board Meeting Page 5 of 12 AYES: Barnes; Collacott; Deaton; Delgleize; Ferryman; Hawkins; Jones; Kim; Krippner; R. Murphy; Nagel; Peotter; Seboum; Shaw; Shawver; F. Smith; Steel; Wagner; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein; Parker; T. Smith; and Tinajero 9. CEQA PLAN 2017— MASTER CONTRACT NO. CEQA PLAN2017-00 (Rob Thompson) MOVED, SECONDED, AND DULY CARRIED TO: A. Approve annual Professional Services Agreements with HDR Engineering, Inc.; Michael Baker International; Helix Environmental Planning, Inc.; ESA; AECOM; and LSA; Master Contract No. CEQA PLAN2017-00, with a maximum annual fiscal year contract limitation not to exceed $400,000 for each Professional Services Agreement; and B. Approve two additional one-year optional extensions. AYES: Barnes; Collacott; Deaton; Delgleize; Ferryman; Hawkins; Jones; Kim; Krippner; R. Murphy; Nagel; Peotter; Seboum; Shaw; Shawver; F. Smith; Steel; Wagner; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein; Parker; T. Smith; and Tinajero 10. SLUDGE DEWATERING AND ODOR CONTROL AT PLANT NO. 1, PROJECT NO. P1-101 (Rob Thompson) MOVED, SECONDED, AND DULY CARRIED TO: Approve a contingency increase of $5,718,000 (4.5%) to the construction contract with W.M. Lyles Company for Sludge Dewatering and Odor Control at Plant No. 1, Project No. P1- 101, for a total contingency amount of$9,518,000 (7.5%). AYES: Barnes; Collacott; Deaton; Delgleize; Ferryman; Hawkins; Jones; Kim; Krippner; R. Murphy; Nagel; Peotter; Seboum; Shaw; Shawver; F. Smith; Steel; Wagner; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein; Parker; T. Smith; and Tinajero 07/26/2017 Minutes of Board Meeting Page 6 of 12 11. REHABILITATION OF FLEET SERVICES BUILDING, BUILDING 8 AND PAVING AREA, CONTRACT NO. P1-115B (Rob Thompson) MOVED, SECONDED, AND DULY CARRIED TO: A. Receive and file bid tabulation and recommendation; B. Award a construction contract to ODC Engineering and Technology for Rehabilitation of Fleet Services Building, Building 8 and Paving Area, Contract No. Pit-115B, part of Title 24 Access Compliance and Building Rehabilitation, Project No. P1-115, for a total amount not to exceed $2,235,609; C. Approve a contingency of$223,563 (10%); and D. Approve a budget increase of$791,000 for Title 24 Access Compliance and Building Rehabilitation, Project No. P1-115, for a total budget amount of $18,400,000. AYES: Barnes; Collacott; Deaton; Delgleize; Ferryman; Hawkins; Jones; Kim; Krippner; R. Murphy; Nagel; Peotter; Seboum; Shaw; Shawver; F. Smith; Steel; Wagner; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein; Parker; T. Smith; and Tinajero ADMINISTRATION COMMITTEE: Committee Chair Wanke announced that at the Administration Committee meeting of July 12, information regarding MOU's and benefits in relation to Item No. 12 were requested. He informed the Board that an informational item will be brought forward at a future Administration Committee meeting to address these items. 12. 2018 BENEFITS INSURANCE RENEWAL (Celia Chandler) MOVED, SECONDED, AND DULY CARRIED TO: Approve the Orange County Sanitation District 2018 Benefits Insurance Renewal for the not-to-exceed amounts specified below: A. Employee Benefit Specialists (medical, dental, and vision plans; Employee Assistance Program [EAP])— not-to-exceed $10,507,891; B. Prudential (basic life, short- and long-term disability) — not-to-exceed $598,011; and C. The Standard (EMT & Manager disability)— not-to-exceed $30,000. AYES: Barnes; Collacott; Deaton; Delgleize; Ferryman; Hawkins; Jones; Kim; Krippner; R. Murphy; Nagel; Peotter, Seboum; Shaw; Shawver; F. Smith; Steel; Wagner; Wanke; Withers; and Yarc NOES: None 07/26/2017 Minutes of Board Meeting Page 7 of 12 ABSTENTIONS: None ABSENT: Bernstein; Parker; T. Smith; and Tinajero 13. INDEPENDENT FINANCIAL AUDITORS' COMMUNICATION LETTER FOR THE AUDIT OF THE ORANGE COUNTY SANITATION DISTRICT FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2017 (Lorenzo Tyner) MOVED, SECONDED, AND DULY CARRIED TO: Receive and file the Communication Letter dated June 15, 2017 prepared by the Orange County Sanitation District's independent financial auditors, Macias Gin! & O'Connell LLP (MGO). AYES: Barnes; Collacott; Deaton; Delgleize; Ferryman; Hawkins; Jones; Kim; Krippner; R. Murphy; Nagel; Peotter; Seboum; Shaw; Shawver; F. Smith; Steel; Wagner; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein; Parker; T. Smith; and Tinajero 14. SETTLEMENT AGREEMENT FOR CHARGES AND FEES OWED BY ONE INDUSTRIAL WASTEWATER DISCHARGE PERMITTEE (Lorenzo Tyner) MOVED, SECONDED, AND DULY CARRIED TO: Approve the settlement agreement negotiated by the General Manager for the collection of charges owed for sanitary sewer service charges, plus interest of 6.00%, with Thompson Energy Resources, LLC, in a form approved by General Counsel. AYES: Barnes; Collacott; Deaton; Delgleize; Ferryman; Hawkins; Jones; Kim; Krippner; R. Murphy; Nagel; Peotter; Seboum; Shaw; Shawver; F. Smith; Steel; Wagner; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein; Parker; T. Smith; and Tinajero 15. DEFERRED PAYMENT AGREEMENT FOR CHARGES AND FEES OWED BY ONE INDUSTRIAL WASTEWATER DISCHARGE PERMITTEE (Lorenzo Tyner) MOVED, SECONDED, AND DULY CARRIED TO: Approve the deferred payment agreement negotiated by the General Manager for the collection of all charges and fees owed for sanitary sewer service charges, plus interest of 6.00% per annum, with Aseptic Technology, LLC, in a form approved by General Counsel. AYES: Barnes; Collacott; Deaton; Delgleize; Ferryman; Hawkins; Jones; Kim; Krippner; R. Murphy; Nagel; Peotter; Seboum; 07/28/2017 Minutes of Board Meeting Page 8 of 12 Shaw; Shawver; F. Smith; Steel; Wagner; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein; Parker; T. Smith; and Tinajero STEERING COMMITTEE: 16. TITLE XVI BUREAU OF RECLAMATION FUNDING OPPORTUNITY FOR (SP-173) THE EFFLUENT REUSE STUDY PROJECTS (Robert Ghirelli) Assistant General Manager Bob Ghirelli provided a brief overview of this funding opportunity and history of previously submitted grant applications. MOVED. SECONDED, AND DULY CARRIED TO: Adopt Resolution No. OCSD 17-12 entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District approving and authorizing the application for the Title XVI Water Recycling Projects under the Water Infrastructure Improvements for the Nation (WIIN) Act Effluent Reuse Feasibility Studies Program Grant funds and the execution of grant documents with the United States Department of the Interior, Bureau of Reclamation." AYES: Barnes; Collacott; Deaton; Delgleize; Ferryman; Hawkins; Jones; Kim; Krippner; R. Murphy; Nagel; Peotter; Seboum; Shaw; Shawver; F. Smith; Steel; Wagner; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein; Parker; T. Smith; and Tinajero Director Tinajero arrived at 6:14 p.m. 17. ORANGE COUNTY SANITATION DISTRICT RESPONSE TO GRAND JURY REPORT (Jim Herberg) Mr. Herberg provided a history and overview of this item. He also stated that the County of Orange and Orange County Fire Authority were also mentioned in the Grand Jury report in response to a question regarding other agencies that are contracted with Orange County Employees Retirement System. MOVED, SECONDED, AND DULY CARRIED TO: A. Approve the Orange County Sanitation District Response to the Orange County Grand Jury Report entitled "Pension Enhancements: A Question of Government Code Compliance" published May 17, 2017; and B. Adopt Resolution No. OCSD 17-13 entitled: "A Resolution of the Board of Directors of the Orange County Sanitation District establishing a procedure 07/26/2017 Minutes of Board Meeting Page 9 of 12 to ensure compliance with Government Code section 7507 transparency requirements" AYES: Barnes; Collacott; Deaton; Delgleize; Ferryman; Hawkins; Jones; Kim; Krippner; R. Murphy; Nagel; Peotter, Seboum; Shaw; Shawver; F. Smith; Steel; Tinajero; Wagner; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein; Parker; and T. Smith Director Bernstein arrived at 6:15 p.m. AB 1234 REPORTS: Director Ferryman stated that he will attend a Border Committee meeting this week and reported on the recent Groundwater Replenishment System Steering Committee meeting where the next steps for final expansion were discussed. CLOSED SESSION: CONVENED IN CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTIONS 54956.9(d)(4). 54956.8 & 54956.9(d)(1): The Board convened in closed session at 6:23 p.m. to discuss four 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 Session Meetings. Director Nagel recused himself and left the meeting during discussion on Item CS-1 A and Item CS-2. Director Wagner left the meeting at 6:29 p.m. RECONVENED IN REGULAR SESSION: The Board reconvened in regular session at 6:41 p.m. CONSIDERATION OF ACTION, IF ANY, ON MATTERS CONSIDERED IN CLOSED SESSION: General Counsel Brad Hogin reported the following in regard to Item CS-3: The Board of Directors unanimously approved (by the following vote) a Settlement Agreement in the matter of City of Los Angeles v. County of Kern. The terms of the settlement are as follows: Kern will not appeal the decision by the Tulare Superior Court; the 2003 Ordinance will remain in effect; permit decisions will be made according to objective criteria; Kern will prepare an EIR, but will collaborate with the plaintiffs sanitation 07/26/2017 Minutes of Board Meeting Page 10 of 12 agencies; City of Los Angeles' Green Acres farm is determined to be lawful; and the decision will have collateral estoppel and res judicata effect on any future disputes between the parties. AYES: Barnes; Bernstein; Collacott; Deaton; Delgleize; Ferryman; Hawkins; Jones; Kim; Krippner; R. Murphy; Nagel; Peotter; Sebourn; Shaw; Shawver; F. Smith; Steel; Tinajero; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Parker; T. Smith; and Wagner Item No. 18 was heard prior to Closed Session, but was voted on after Closed Session. 18. APPRAISAL TO ACQUIRE REAL PROPERTY (Rob Thompson) Director of Engineering Rob Thompson provided an informative PowerPoint Presentation regarding this item, including the target and progress of the project and acquisition history. Mr. Thompson requested that the vote for this item be taken after a related Closed session item was heard. MOVED. SECONDED, AND DULY CARRIED TO: Authorize the General Manager to enter into an agreement with George, Hamilton, Jones, Inc. Real Estate Appraisers & Consultants to conduct an appraisal of real property located at 18429 Pacific Street,18410-18436 Bandilier Circle, and 18368-18375 Bandilier Circle to prepare the Sanitation District to initiate negotiations to acquire the same property in compliance with Government Code section 7267.1. AYES: Barnes; Bernstein; Collacott; Deaton; Delgleize; Ferryman; Hawkins; Jones; Kim; Krippner; Peotter; Seboum; Shaw; Shawver; F. Smith; Tinajero; Wanks; Withers; and Yarc NOES: Steel ABSTENTIONS: R. Murphy and Nagel ABSENT: Parker; T. Smith; and Wagner OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: None. 07/2W2017 Minutes of Board Meeting Page 11 of 12 ADJOURNMENT: At 6:51 p.m. Chair Sebourn adjourned the meeting until the Regular Meeting of the Board of Directors on August 23, 2017 at 6:00 p.m. Submitted by: Kelly A. Lore Clerk of the Board 07/2W2017 Minutes of Board Meeting Page 12 of 12 ITEM NO. 2 MINUTES OF THE MEETING GROUNDWATER REPLENISHMENT SYSTEM STEERING COMMITTEE Monday, April 10, 2017 OCSD Director Sebourn called the Groundwater Replenishment System Steering Committee meeting to order in the Boardroom at the District office. Following the Pledge of Allegiance to the flag, the Secretary called the roll and reported a quorum. Committee Members Greg Sebourn - Chair Roger Yoh -Vice Chair James Ferryman Cathy Green Steve Jones (Absent) Phil Anthony Alternates Donald Wagner(Absent) Phil Hawkins Tim Shaw Denis Bilodeau James Vanderbilt (Absent) Dina Nguyen (Absent) OCWD Staff OCSD Staff Mike Markus Jim Herberg Bill Dunivin Jennifer Cabral Christina Fuller Assistant District Secretary Others Debbie Burris-DDB En ineerin CONSENT CALENDAR The Consent Calendar was approved upon motion by Director Green, seconded by Director Ferryman and carried [6-0] as follows. [Yes— Seboum, Ferryman, Green, Hawkins, Shaw, Bilodeau/No- 0] 1. Minutes of Previous Meeting The minutes of the GWRS Steering Committee meeting held January 30, 2017 are approved as presented. INFORMATIONAL ITEMS 2. GWRS Operating Budget Summary Director of Water Production Mehul Patel reminded the Committee that the Joint Exercise of Powers Agreement between OCWD and OCSD governs the operation of the Groundwater Replenishment System (GWRS) and requires OCWD to prepare and submit its annual operating budget for the GWRS to OCSD. He stated that as part of this agreement is a requirement to report the OCWD annual budget for operations, maintenance, and capital expenditures for the GWRS to OCSD. Mr. Patel reviewed the Water Production department work plan and a proposed Fiscal Year 17-18 line-item department budget. He stated the budget would be submitted to the OCWD Board of Directors for its consideration at the April 2017 Board meeting. Director Yoh arrived during discussion of the following item. 3. GWRS Operations Update Executive Director William Dunivin stated the average daily average production for the quarter January through March 2017 was 82.40 mgd. He advised that OCSD staff is working to optimize flow availability while OCWD staff works on operational strategies to make as much water as possible. He reported the GWRS treatment plant has been operating satisfactorily. Mr. Dunivin stated that OCWD recently replaced the membranes in six RO subunits this fiscal year with the work being completed at the end of March 2017 and replacement of these membranes should result in improved water quality as well as lower RO operating energy costs. OCSD General Manager Jim Herberg updated the committee on the Steve Anderson Lift Station (SALS) output. 4. Update on GWRS Final Expansion GWRS Program Manager Sandy Scott-Roberts reported The GWRS Final Expansion Project has been approved by both the OCSD and OCWD Board of Directors. She stated that both agencies have issued Request for Proposals (RFPs) for the design phase of the GWRS Final Expansion Project. 5. Quarterly Outreach Report rJanuary— March 20171 Mr. Patel advised the outreach report is included in the packet. OCSD's Public Affairs Supervisor Jennifer Cabral provided a report of activities related to GWRS bottled water outreach. 'Director Anthony arrived at the end of the meeting. ADJOURNMENT There being no further business to come before the Committee, the meeting was adjourned at 5:30 p.m. O SD VreWor Greg Sebouy , Chair 2 MINUTES OF THE STEERING COMMITTEE Orange County Sanitation District Wednesday, June 28, 2017 at 5:00 p.m. A regular meeting of the Steering Committee of the Orange County Sanitation District was called to order by Chair Sebourn on Wednesday, June 28, 2017 at 5:02 p.m. in the Administration Building of the Orange County Sanitation District. A quorum was declared present, as follows: COMMITTEE MEMBERS PRESENT: STAFF PRESENT: Greg Sebourn, Board Chair Jim Herberg, General Manager David Shawver, Board Vice-Chair Bob Ghirelli,Assistant General Manager Chad Wanks, Administration Committee Celia Chandler, Director of Human Chair Resources John Withers, Operations Committee Jim Colston, Director of Environmental Chair Services Ellery Deaton, Member-At-Large Rob Thompson, Director of Engineering Tim Shaw, Member-At-Large Ed Torres, Director of Operations & Maintenance COMMITTEE MEMBERS ABSENT: Lorenzo Tyner, Director of Finance & Donald Wagner, Member-At-Large Administrative Services Kelly Lore, Clerk of the Board Janine Aguilar Mike Dorman Al Garcia Lori Karaguezian Laurie Klinger Tina Knapp Mark Manzo Kathy Millea Jeff Mohr OTHERS PRESENT: Brad Hogin, General Counsel PUBLIC COMMENTS: No public comments were provided. REPORTS: Chair Sebourn announced the dates and times of the upcoming Legislative tours for Assembly Member Sharon Quirk-Silva (July 26 at 9:00 a.m.); Assembly Member 0612812017 Steering Committee Minutes Page 1 a(3 Phillip Chen (August 4 at 1:30 p.m.); and Senator Josh Newman (August 2 at 1:00 p.m.) and reminded the Committee if their schedule allowed, to sign up to attend one of the tours. General Manager Herberg announced that tonight's Board of Directors meeting will be provided via teleconference for at least one Director and explained the additional requirements that will take place to remain legally compliant. Mr. Herberg then provided a few highlights and accomplishments from the General Manager's FY 2016-17 Work Plan Year-end Update. CONSENT CALENDAR: 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED, SECONDED, AND DULY CARRIED TO: Approve Minutes of the Regular Meeting of the Steering Committee held on May 24, 2017. AYES: Deaton; Seboum; Shaw; Shawver;Wanks;and Withers NOES: None ABSTENTIONS: None ABSENT: Wagner 2. GENERAL MANAGER'S FY 2016-2017 WORK PLAN YEAR-END UPDATE (Jim Herberg) MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: Receive and File the General Manager's FY 2016-2017 Work Plan Year-End Update. AYES: Deaton; Sebourn; Shaw; Shawver;Wanks;and Withers NOES: None ABSTENTIONS: None ABSENT: Wagner CLOSED SESSION: CONVENED IN CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTIONS 54956.8 8: 54957(b)(1): The Committee convened in closed session at 5:07 p.m. to discuss two 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 Session Meetings. 06I20/2017 Steering Canmitlee Mina Page 2 of 3 RECONVENED IN REGULAR SESSION: The Committee reconvened in regular session at 6:05 p.m. CONSIDERATION OF ACTION, IF ANY, ON MATTERS CONSIDERED IN CLOSED SESSION: General Counsel Brad Hogin did not provide a report. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: None. ADJOURNMENT: Chair Sebourn declared the meeting adjourned at 6:05 p.m. to the next Steering Committee meeting to be held on Wednesday, July 26, 2017 at 5:00 p.m. Submitted by: _ r • e or CI k t he Board O6@8/2017 Steering Committee Minutee Page 3 of 3 BOARD OF DIRECTORS Meeting Date TOBE.Or Dir. oB/zs/v AGENDA REPORT Item Item 3 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: REPORT OF THE INVESTMENT TRANSACTIONS FOR THE MONTH OF JULY 2017 GENERAL MANAGER'S RECOMMENDATION Receive and file the report of the Investment Transactions for the month of July 2017. BACKGROUND The CA Government Code requires that a monthly report of investment transactions be provided to the legislative body. Attached is the monthly report of investment transactions for the month ended July 31, 2017. RELEVANT STANDARDS • CA Government Code Section 53607 PRIOR COMMITTEE/BOARD ACTIONS N/A FINANCIAL CONSIDERATIONS N/A ATTACHMENT The following attachment(s)is included in hard copy and may also be viewed on-line at the OCSD website (wwwocsd.com) with the complete agenda package: • Report of the Investment Transactions for the month ended July 31, 2017 Page 1 of 1 C." Orange County Sanitation District Consolidated Transaction Ledger Account#10283 6/30/17 Thru 7/31/17 Transaction Settlement Acq/Disp Interest ,Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount GainfLoss ACQUISITIONS Purchase 07/02/2017 261908107 74,400.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 74,400.00 0.00 74,400.00 0.00 Purchase 07/05/2017 261908107 29,333.33 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 29,333.33 0.00 29,333.33 0.00 Purchase 07/05/2017 261908107 5,086.37 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 5,086.37 0.00 5,086.37 0.00 Purchase 07/05/2017 261908107 4,144.09 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 4,144.09 0.00 4,144.09 0.00 Purchase 07/06/2017 261908107 15,000,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 15,000,000.00 0.00 15,000,000.00 0.00 Purchase 07/06/2017 313397LC3 2,000,000.00 FHLMC Discount Nate 99.845 1.01 % 1,996,904.44 0.00 1,996,904.44 0.00 1%Due 8/31/2017 Purchase 07/06/2017 912796LUl 5,000,000.00 US Treasury Bill 99.795 0.97% 4,989,738.65 0.00 4,989,738.65 0.00 0.96%Due 9/21/2017 Purchase 07/07/2017 06538BYBO B640,000.00 Bank of Tokyo Mitsubishi NV Discount CP 99.542 1.35% 6,609,581.42 0.00 6,609,581.42 0.00 1.33%Due 1118/2017 Purchase 07/07/2017 06538BYBD 1,245,000.00 Bank of Tokyo Mitsubishi NV Discount CP 99.542 1.35% 1,239,296.52 0.00 1,239,296.52 0.00 1.33%Due 1118/2017 Purchase 07/07/2017 261908107 6,345,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 6,345,000.00 0.00 6,345,000.00 0.00 Purchase 07/07/2017 261908107 1,705,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 1,705,000.00 0.00 1,705,000.00 0.00 Purchase 07/07/2017 261908107 10,708.59 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 10,708.59 0.00 10,708.59 0.00 Purchase 07/09/2017 261908107 55,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 55,000.00 0.00 55,000.00 0.00 Purchase 07/12/2017 261908107 18,750.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 18,750.00 0.00 18,750.00 0.00 Purchase 07/13/2017 261908107 1,012,133.33 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 1,012,133.33 0.00 1,012,133.33 0.00 Purchase 07/13/2017 912828H37 2,500,000.00 US Treasury Note 99.871 1.13% 2,496,785.73 10,816.64 2,507,602.37 0.00 0.875%Due 11152018 Purchase 07/14/2017 261908107 43,750.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 43,750.00 0.00 43,750.00 0.00 Purchase 07/14/2017 261908107 10,000,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 10,000,000.00 0.00 10,000,000.00 0.00 Purchase 07/14/2017 313385JX5 1,000,000.00 FHLB Discount Note 99.947 1.01 % 999,472.22 0.00 999,472.22 0.00 1%Due 8/2/2017 Purchase 07/14/2017 912796LUl 5,000,000.00 US Treasury Bill 99.826 0.92% 4,991,298.33 0.00 4,991,298.33 0.00 0.91%Due 9/21/2017 Purchase 07/15/2017 261908107 6,696.37 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 6,696.37 0.00 6,696.37 0.00 Purchase 07/15/2017 261908107 40,937.50 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 40,937.50 0.00 40,937.50 0.00 Purchase 07/16/2017 261908107 24,375.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 24,375.00 0.00 24,375.00 0.00 Purchase 07/16/2017 261908107 11,837.50 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 11,837.50 0.00 11,837.50 0.00 Purchase 07/17/2017 261908107 3,657.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 3,657.00 0.00 3,657.00 0.00 Purchase 07/17/2017 261908107 1,204.79 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 1,2M.79 0.00 1,2M.79 0.00 Purchase 07/17/2017 261908107 2,096.58 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 2,096.58 0.00 2,096.58 0.00 Chandler Asset Management-CONFIDENTIAL Page 1 Execution Time:WM017 9:29:05 AM C." Orange County Sanitation District Consolidated Transaction Ledger Account#10283 6/30/17 Thru 7/31/17 Transaction Settlement Acq/Disp Interest ,Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount GainfLoss ACQUISITIONS Purchase 07/17/2017 261908107 121,281.31 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 121,281.31 0.00 121,281.31 0.00 Purchase 07/17/2017 261908107 1,762.50 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 1,762.50 0.00 1,762.50 0.00 Purchase 07/17/2017 261908107 2,742.67 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 2,742.67 0.00 2,742.67 0.00 Purchase 07/17/2017 261908107 229,688.46 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 229,688.46 0.00 229,688.46 0.00 Purchase 07/17/2017 261908107 1,672.13 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 1,672.13 0.00 1,672.13 0.00 Purchase 07/17/2017 261908107 174,001.93 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 174,001.93 0.00 174,001.93 0.00 Purchase 07/17/2017 261908107 196,067.53 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 196,067.53 0.00 196,067.53 0.00 Purchase 07/17/2017 261908107 1,671.31 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 1,671.31 0.00 1,671.31 0.00 Purchase 07/17/2017 261908107 21.57 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 21.57 0.00 21.57 0.00 Purchase 07/17/2017 92826CAA0 1,000,000.00 Visa Inc Note 99.970 1.27% 999,700.00 1,100.00 1,000,800.00 0.00 1.2%Due 12114/2017 Purchase 07/18/2017 261908107 49,725.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 49,725.00 0.00 49,725.00 0.00 Purchase 07/18/2017 261908107 6,542.U6 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 6,542.06 0.00 6,542.06 0.00 Purchase 07/18/2017 261908107 1,162,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 1,162,000.00 0.00 1,162,000.00 0.00 Purchase 07/18/2017 261908107 30,401.05 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 30,401.05 0.00 30,401.05 0.00 Purchase 07/18/2017 261908107 227,049.70 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 227,049.70 0.00 227,049.70 0.00 Purchase 07/18/2017 458140AL4 1,000,000.00 Intel Corp Note 100.016 1.31 % 1,000,160.00 1,237.50 1,001,397.50 0.00 1.35%Due 12/15/2017 Purchase 07/18/2017 47788BABO 960,000.00 John Deere Owner Trust 2017-B A2A 99.991 1.61 % 959,916.58 0.00 959,916.58 0.00 1.59%Due 4/15/2020 Purchase 07/18/2017 47788BAD6 675,000.00 John Deere Owner Trust 2017-B A3 99.993 1.83% 674,950.59 0.00 674,950.59 0.00 1.82%Due 10115/2021 Purchase 07/18/2017 69372AVH2 2,000,000.00 Paccar Financial Discount CP 99.908 1.13% 1,998,150.00 0.00 1,998,150.00 0.00 1.11%Due 8/17/2017 Purchase 07/19/2017 261908107 1,900,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 1,900,000.00 0.00 1,900,000.00 0.00 Purchase 07/19/2017 89233GN/79 2,500,000.00 Toyota Mawr Credit Discount CP 99.776 1.17% 2,494,409.72 0.00 2,494,409.72 0.00 1 A 5%Due 9/27/2017 Purchase 07/20/2017 261908107 239.37 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 239.37 0.00 239.37 0.00 Purchase 07/20/2017 261908107 294.63 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 294.63 0.00 294.63 0.00 Purchase 07/20/2017 261908107 1,757.82 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 1,757.82 0.00 1,757.82 0.00 Purchase 07/20/2017 261908107 218.25 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 218.25 0.00 218.25 0.00 Purchase 07/20/2017 261908107 3,601.20 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 3,501.20 0.00 3,501.20 0.00 Purchase 07/20/2017 261908107 14,075.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 14,075.00 0.00 14,075.00 0.00 Chandler Asset Management-CONFIDENTIAL Page 2 Execution Time:912/2017 9:29:05 AM C." Orange County Sanitation District Consolidated Transaction Ledger Account#10283 6/30/17 Thru 7/31/17 Transaction Settlement Acq/Disp Interest ,Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount GainfLoss ACQUISITIONS Purchase 07/20/2017 261908107 5,000,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 5,OODp00.00 0.00 5,000,000.00 0.00 Purchase 07/20/2017 912796111 5,000,000.00 US Treasury Bill 99.983 0.91 % 4,999,130.35 0.00 4,999,130.35 0.00 0.89%Due 7/27/2017 Purchase 07/2la017 261908107 10,000,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 10,000,000.00 0.00 10,000,000.00 0.00 Purchase 07/21/2017 261908107 2,230.58 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 2,230.58 0.00 2,230.58 0.00 Purchase 07/21/2017 313385JX5 700,000.00 FHLB Discount Note 99.967 1.00% 699,769.00 0.00 699,769.00 0.00 0.99%Due 8/212017 Purchase 07/21/2017 313385MAl 7,500,000.00 FHLB Discount Note 99.821 1.04% 7,486,546.88 0.00 7,486,546.88 0.00 1.02%Due 9/22/2017 Purchase 07/22/2017 261908107 65,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 65,000.00 0.00 65,000.00 0.00 Purchase 07/23/2017 261908107 22,500.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 22,500.00 0.00 22,500.00 0.00 Purchase 07/24/2017 313385JX6 2,700,000.00 FHLB Discount Note 99.975 1.00% 2,699,331.75 0.00 2,699,331.75 0.00 0.99%Due 8/2/2017 Purchase 07/25/2017 261908107 5,655.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 5,656.00 0.00 5,656.00 0.00 Purchase 07/25/2017 261908107 1,500,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 1,500,000.00 0.00 1,500,000.00 0.00 Purchase 07/25/2017 261908107 6,649.46 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 6,649.46 0.00 6,649.46 0.00 Purchase 07/25/2017 261908107 1,724.37 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 1,724.37 0.00 1,724.37 0.00 Purchase 07/25/2017 261908107 236.94 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 236.94 0.00 236.94 0.00 Purchase 07/25/2017 261908107 4,615.56 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 4,615.56 0.00 4,615.56 0.00 Purchase 07/25/2017 261908107 1,682.30 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 1,682.30 0.00 1,682.30 0.00 Purchase 07/25/2017 261908107 414.12 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 414.12 0.00 414.12 0.00 Purchase 07/25/2017 261908107 5,613.83 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 5,613.83 0.00 5,613.83 0.00 Purchase 07/25/2017 261908107 3,188.25 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 3,188.25 0.00 3,188.25 0.00 Purchase 07/25/2017 261908107 4,041.85 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 4,041.85 0.00 4,041.85 0.00 Purchase 07/25/2017 261908107 414.57 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 414.57 0.00 414.57 0.00 Purchase 07/25/2017 261908107 4,632.69 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 4,632.69 0.00 4,632.69 0.00 Purchase 07/25/2017 261908107 841.59 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 841.59 0.00 841.59 0.00 Purchase 07/25/2017 261908107 208.04 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 208.04 0.00 208.04 0.00 Purchase 07/25/2017 261908107 9,343.72 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 9,343.72 0.00 9,343.72 0.00 Purchase 07/25/2017 261908107 585.48 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 585.48 0.00 585.48 0.00 Purchase 07/25/2017 261908107 232.30 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 232.30 0.00 232.30 0.00 Purchase 07/25/2017 30231GAL6 1,000,000.00 Exxon Mobil Corp Note 99.962 1.37% 999,620.00 5,038.75 1,004,658.75 0.00 1.305%Due 3/6/2018 Chandler Asset Management-CONFIDENTIAL Page 3 Execution Time:9/2/2017 9:29:05 AM C." Orange County Sanitation District Consolidated Transaction Ledger Account#10283 6/30/17 Thru 7/31/17 Transaction Settlement Acq/Disp Interest Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount Gain/Loss ACQUISITIONS Purchase 07/25/2017 313385JX5 1,100,000.00 FHLB Discount Note 99.978 1.01 % 1,099,755.56 0.00 1,099,755.56 0.00 1%Due 8/2/2017 Purchase 07/26/2017 261908107 50,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 50,000.00 0.00 50,000.00 0.00 Purchase 07/26/2017 261908107 19,800,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 19,800,000.00 0.00 19,800,000.00 0.00 Purchase 07/26/2017 912828XW5 5,000,000.00 US Treasury Note 99.469 1.86% 4,973,454.25 6,182.06 4,979,636.31 0.00 1.75%Due 6/30/2022 Purchase 07/27/2017 261908107 5,000,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 5,000,000.00 0.00 5,000,000.00 0.00 Purchase 07/28/2017 261908107 77,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 77,000.00 0.00 77,000.00 0.00 Purchase 07/28/2017 261908107 35,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 35,000.00 0.00 35,000.00 0.00 Purchase 07/28/2017 261908107 12,000,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 12,000,000.00 0.00 12,000,000.00 0.00 Purchase 07/3la017 261908107 192,500.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.88% 192,500.00 0.00 192,500.00 0.00 Subtotal 146,833,134.59 146,721,106.58 24,374.95 146,745,481.53 0.00 Security 07/13/2017 261908107 6,500,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 6,500,000.00 0.00 6,500,000.00 0.00 ConMbution Security 07/14/2017 261908107 2,500,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 2,500,000.00 0.00 2,500,000.00 0.00 Contribution Security 07/17/2017 261908107 1,800,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 1,800,000.00 0.00 1,800,000.00 0.00 Contribution Security 07/31/2017 912828WUO 9,880.00 US Treasury Inflation Index Note 100.000 9,880.00 0.54 9,880.54 0.00 Contribution 0.125%Due 7115/2024 Subtotal 10,809,880.00 10,809,880.00 0.54 10,809,880.54 0.00 TOTAL ACQUISITIONS 157,643,014.59 167,530,986.58 24,375.49 167,05,362.07 0.00 POSITIONS Sale 07/06/2017 261908107 6,986,64309 Dreyfus TrsylAgcy Cash Management 521 1.000 0.86% 6,986,643.09 0.00 6,986,643.09 000 Sale 07/07/2017 261908107 6,609,581.42 Dreyfus TrsylAgcy Cash Management 521 1.000 0.90% 6,609,58142 0.00 6,609,581.42 0.00 Sale 07/07/2017 261908107 1,239,296.52 Dreyfus TrsylAgcy Cash Management 521 1.000 0.86% 1,239,296.52 0.00 1,239,296.52 0.00 Sale 07/13/2017 261908107 2,507,602.37 Dreyfus TrsylAgcy Cash Management 521 1.000 0.86% 2,507,602.37 0.00 2,507,602.37 0.00 Sale 07/14/2017 261908107 5,990,770.55 Dreyfus TrsylAgcy Cash Management 521 1.000 0.86% 5,990,770.55 0.00 5,990,770.55 0.00 Sale 07/17/2017 261908107 1,000,800.00 Dreyfus TrsylAgcy Cash Management 521 1.000 0.86% 1,000,800.00 0.00 1,000,800.00 0.00 Sale 07/1M017 261908107 1,634,867.17 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 1,634,867.17 0.00 1,634,867.17 0.00 Sale 07/1M017 261908107 1,001,397.50 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 1,001,397.50 0.00 1,001,397.50 0.00 Chandler Asset Management-CONFIDENTIAL Page 4 Execution Time:WM017 9:29:05 AM C." Orange County Sanitation District Consolidated Transaction Ledger Account#10283 6/30/17 Thru 7/31/17 Transaction Settlement Acq/Disp Interest Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount GainfLoss DISPOSITIONS Sale 07/18/2017 261908107 1,998,150.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 1,998,150.00 0.00 1,998,150.00 0.00 Sale 07/19/2017 261908107 2,494,409.72 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 2,494,409.72 0.00 2,494,409.72 0.00 Sale 07/20/2017 261908107 4,999,130.35 Dreyfus Trsy/Agcy,Cash Management 521 1.000 0.86% 4,999,130.35 0.00 4,999,130.35 0.00 Sale 07/21/2017 261908107 8,186,315.88 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 8,186,315.88 0.00 8,186,315.88 0.00 Sale 07/24/2017 261908107 2,699,331.75 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 2,699,331.75 0.00 2,699,331.75 0.00 Sale 07/25/2017 261908107 1,004,658.75 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 1,004,658.75 0.00 1,004,658.75 0.00 Sale 07/25/2017 261908107 1,099,755.56 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 1,099,755.56 0.00 1,099,755.56 0.00 Sale 07/26/2017 261908107 4,979,63631 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.86% 4,979,636.31 0.00 4,979,636.31 000 Subtotal 54,432,346S4 54,432,346.94 0.00 54,432,346.94 0.00 Paydown 07/07/2017 62888UAA8 10,308.77 NCUA Guaranteed Note CM02010-R2Due 100.000 10,308.77 399.82 10,708.59 0.00 11/6/2017 Paydown 07/17/2017 161571HHO 0.00 Chase CHAIT Pool#2016-A7 100.000 0.00 3,657.00 3,657.00 0.00 1.06%Due 9/16/2019 Paydown 07/17/2017 3133TCE95 1,583.25 FHLMC FSPC E3 A 100.000 1,583.25 88.06 1,671.31 0.00 2.892%Due 8/15/2032 Paydown 07/17/2017 31348SWZ3 16.26 FHLMC FH 786064 100.000 16.26 5.31 21.57 0.00 2.262%Due 1/1/2028 Paydown 07/17/2017 3837H4NX9 1,168.74 GNMA PooI#2000-9 100.000 1,168.74 36.05 1,204.79 0.00 9.5%Due 2(16/2030 Paydown 07/17/2017 43814CAC2 0.00 Honda Auto Receivables 2016-2 A3 100.000 0.00 2,096.58 2,096.58 0.00 1.39%Due 4/15/2020 Paydown 07/17/2017 477877AD6 120,603.84 John Deere Owner Trust 2014-B A3 100.000 120,603.84 677.47 121,281.31 0.00 1.07%Due 11/15/2018 Paydown 07/17/2017 47787XAB3 0.00 John Deere Owner Trust 2017-A A2 100.000 0.00 1,762.50 1,762.50 0.00 1.5%Due 10/15/2019 Paydown 07/17/2017 47788MAC4 0.00 John Deere Owner Trust 2016-A A3 100.000 0.00 2,742.67 2,742.67 0.00 1.36%Due 4/15/2020 Paydown 07/17/2017 47788NAB4 227,554.41 John Deere Owner Trust 2016-B A2 100.000 227,554.41 2,134.05 229,688.46 0.00 1.09%Due D1512019 Paydown 07/17/2017 654747ABO Oki) Nissan Auto Receivables 2017-A A2A 100.000 0.00 1,672.13 1,672.13 0.00 1 47%Due 1/15/2020 Paydown 07/17/2017 65478WAB1 172,518.22 Nissan Auto Receivables Owner 2016-C 100.000 172,518.22 148371 174,001.93 0.00 A2A 1.07%Due 5/15/2019 Paydown 07/17/2017 89236WAC2 194,608.12 Toyota Auto Receivables Owner 2015-A 100.000 194,608.12 1,459.41 196,067.53 0.00 1.12%Due V1512019 Chandler Asset Management-CONFIDENTIAL Page 5 Execution Time:6/2/2017 9:29:05 AM C." Orange County Sanitation District Consolidated Transaction Ledger Account#10283 6/30/17 Thru 7/31/17 Transaction Settlement Acq/Disp Interest Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount GainfLoss DISPOSITIONS Paytlown 07/18/2017 43814GAC4 30,381.56 Honda Auto Receivables 20142 A3 100.000 30,381.56 19.49 30,401.05 0.00 0,77%Due 3/19/2018 Paytlown 07/18/2017 43814NAB1 226,546.21 Honda Auto Receivables 20161 A2 100.000 226,546.21 503.49 227,049.70 0.00 1.01%Due 6/18/2018 Paytlown 07/20/2017 36225CAZ9 196.55 GNMA P0o1#G280023 100.000 196.55 42.82 239.37 0.00 2.816%Due 12/20/2026 Paytlown 07/20/2017 36225CC20 248.36 GNMA P.I#G280088 100.000 248.36 46.27 294.63 0.00 2.817%Due 61202027 Paytlown 07/20/2017 36225CN28 1,617.% GNMA Pool#G280408 100.000 1,617.06 140.76 1,757.82 0.00 2.691%Due 5/202030 Paytlown 07/202017 36225CNM4 200.96 GNMA Poo1#G280395 100.000 200.96 17.29 218.25 0.00 2.877%Due 41202030 Paytlown 07/202017 W225DCBS 3,360.72 GNMA Pml#G280965 100.000 3,360.72 140.48 3,501.20 0.00 2.31%Due 7/20/2034 Paytlown 07/21/2017 43B14TAB8 0.00 Honda Auto Receivables 2017-1 A2 100.000 0.00 2,230.58 2,230.58 0.00 1.42%Due 7/22/2019 Paytlown 07/252017 03215PFN4 0.00 AMRESCO Residential Securities 1999-1 100.000 0.00 232.30 232.30 0.00 ADue 6/2512029 Paytlown 07/252017 31371NUC7 154.64 FNMA FN 257179 100.000 154.64 82.30 236.94 0.00 4.5%Due 4/1/2028 Paytlown 0725/2017 31376KT22 3,976.88 FNMA FN 357969 100.000 3,976.88 638.68 4,615.56 0.00 5%Due 9/12035 Paytlown 07/252017 31381 PDA3 673.79 FNMA FN 466397 100.000 673.79 1,008.51 1,682.30 0.00 3.4%Due 11/12020 Paytlown 07/252017 3138EG6F6 352.136 FNMA FN AL0869 100.000 352.06 62.06 414.12 0.00 4.5%Due 6/1/2029 Paytlown 0725/2017 313MJY35 639.54 FHLMC FSPC T-582A 100.000 639.54 4,974.29 5,613.83 0.00 6.5%Due 925/2043 Paytlown 07/252017 31397ORED 6,182.01 FNMA FNR 2011-3 FA 100.000 6,182.01 467.45 6,649.46 0.00 0.832%Due 21252041 Paytlown 07/252017 31398VJ98 0.00 FHLMC FHMS K006 A2 100.000 0.00 3,188.25 3,188.25 0.00 4.251%Due 11252020 Paytlown 0725/2017 31403DJZ3 3,419.49 FNMA Pool#745580 100.000 3,419.49 622.36 4,041.85 0.00 5%Due 6/12036 Paytlown 07/252017 31403GXF4 394.49 FNMA Pool#FN 748678 100.000 394.49 20.08 414.57 0.00 5%Due 10/1/2033 Paytlown 07/252017 31406PQYB 3,682.42 FNMA Pool#FN 815971 100.000 3,582.42 1,050.27 4,632.69 0.00 5%Due 3/l2035 Paytlown 0725/2017 31406XW75 474.32 FNMA PooI#FN 823358 100.000 474.32 367.27 841.59 0.00 2.875%Due 2l1/2035 Chandler Assal Management-CONFIDENTIAL Page 6 Execution Time:&P/2017 9:29:05 AM C." Orange County Sanitation District Consolidated Transaction Ledger Account#10283 6/30/17 Thru 7/31/17 Transaction Settlement Acql Interest Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount Gain/Loss DISPOSITIONS Paytlown 07/25/2017 31407BXH7 95.80 FNMA Pool#FN 826080 100.000 95.80 112.24 208.04 0.00 5%Due 7/t/2035 Paytlown 07/25/2017 3141OF4V4 8,120.58 FNMA Pool#FN 888336 100.000 8,120.58 1,223.14 9,343.72 0.00 5%Due 7/1/2036 Paytlown 07/252017 31417YAY3 485.10 FNMA Pool#FN MA0022 100.000 485.10 100.38 585.48 0.00 4.5%Due 4/1/2029 Paytlown 07/25/2017 78445JAA5 1,502.71 SLMA 200&9 ADue 425/2023 100.000 1,502.71 221.66 1,724.37 0.00 Subtotal 1,020,966.86 1,020,966.86 35,727.18 1,056,6".04 0.00 Maturity, 07/062017 912796LG2 15,000,000.00 US Treasury Bill 100.000 15,000,000.00 0.00 15,000,000.00 0.00 0.565%Due 7/6/2017 Maturity 07/07/2017 06538BU76 6,345,000.00 Bank of Tokyo Mitsubishi NY Discount CP 99.600 6,345,000.00 0.00 6,345,000.00 0.00 1.18%Due 7/7/2017 Maturity 07/07/2017 06538BU76 1,705,000.00 Bank of Tokyo Mitsubishi NY Discount CP 99.600 1,705,000.00 0.00 1,705,000.00 0.00 1.18%Due 702017 Maturity, 07/13/2017 89113WEE2 1,000,000.00 Toronto Dominion NY Yankee CD 100.000 1,000,000.00 12,133.33 1,012,133.33 0.00 1.2%Due 7/1 312 01 7 Maturity 07/14/2017 3137EADV8 5,000,000.00 FHLMC Note 100.000 5,000,000.00 0.00 5,000,000.00 0.00 0.75%Due 7/14/2017 Maturity 07/14/2017 4581XOCG1 5,000,000.00 Inter-American Dev Bank Note 100.000 5,000,000.00 0.00 5,000,000.00 0.00 1%Due 7/14/2017 Malunly 07/18/2017 459058DC4 1,162,000.00 Ind.Bank Recon&Development Note 100.000 1,162,000.00 0.00 1,162,000.00 0.00 1.125%Due 7/18/2017 Maturity 07/19/2017 89233GUKO 1,900,000.00 Toyota Motor Credit Discount CP 99.750 1,900,000.00 0.00 1,900,000.00 0.00 1.01%Due 7/19/2017 Maturity 07/20/2017 912796K84 5,000,000.00 US Treasury BILL 100.000 5,000,000.00 0.00 5,000,000.00 0.00 0.77%Due 7/20/2017 Maturity, 07/21/2017 313385JK3 10,000,000.00 FHLB Discount Note 100.000 10,000,000.00 0.00 10,000,000.00 0.00 0.85%Due 7/21/2017 Maturity 07/25/2017 06538BUR2 1,500,000.00 Bank of Tokyo Mitsubishi NY Discount CP 99.704 1,500,000.00 0.00 1,500,000.00 0.00 1.12%Due 7/25/2017 Maturity 07/26/2017 313385JQ0 800,000.00 FHLB Discount Note 100.000 800,000.00 0.00 800,000.00 0.00 1.02%Due 7/26/2017 Maturity, 0726/2017 313589JQ7 19,000,000.00 FNMA Discount Note 100.000 19,000,000.00 0.00 19,000,000.00 0.00 0.82%Due 7/26/2017 Maturity 07272017 912796111 5,000,000.00 US Treasury Bill 100.000 5,000,000.00 0.00 5,000,000.00 0.00 0.89%Due 7/27/2017 Maturity 07282017 313385JS6 5,000,000.00 FHLB Discount Note 100.000 5,000,000.00 0.00 5,000,000.00 0.00 0.86%Due 7/28/2017 Chandler Asset Management-CONFIDENTIAL Page 7 Execution Tima:9/22017 9:29:05 AM CAROrangeCounty Sanitation District Consolidated Transaction Ledger Account#10283 6/30/17 Thru 7/31/17 Transaction Settlement Acq/Disp Interest Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount Gain/Loss DISPOSITIONS Maturity 07/28/2017 3137EADJ5 7,000,000.00 FHLMC Note 100.000 7,000,000.00 0.00 7,000,000.00 0.00 1%Due 7/28/2017 Subtotal 90,412,000.00 90,412,000.00 12,133.33 90,424,133.33 0.00 TOTAL DISPOSITIONS 145,865,313.80 145,865,313.80 47,860.51 145,913,174.31 0.00 OTHER TRANSACTIONS Interest 07/02/2017 073902CD8 3,200,000.00 Bear Stearns Note 0.000 74,400.00 0.00 74,400.00 000 4.65%Due 7/2/2018 Interest 07/05/2017 3135GOS38 3,000,000.00 FNMA Note 0.000 29,333.33 0.00 29,333.33 0.00 2%Due 1/5/2022 Interest 07/09/2017 36962G7MO 5,000,000.00 General ElecMc Capital Corp Callable Note 0.000 55,000.00 0.00 55,000.00 0.00 1X 1219/2019 2.2%Due 1/9/2020 Interest 07/12/2017 3137FADN6 5,000,000.00 FHLMC Note 0.000 18,750.00 0.00 18,750.00 ODD 0.75%Due 1/1 212 01 8 Interest 07/14/2017 3137EADVB 5,000,000.00 FHLMC Note 0.000 18,750.00 0.00 18,750.00 0.00 0.75%Due 7/1412017 Interest 07/14/2017 4581XOCG1 5,000,000.00 Inter-American Dev Bank Note 0.000 25,000.00 0.00 25,000.00 0.00 1%Due 7/14/2017 Interest 07/15/2017 46625HGYO 1,000,000.00 JP Morgan Chase Note 0.000 30,000.00 0.00 30,000.00 ODD 6%Due 1A 5/2018 Interest 07/15/2017 912828H37 2,500,000.00 US Treasury Note 0.000 10,937.50 0.00 10,937.50 0.00 0.875%Due 1/15/2018 Interest 07/15/2017 912828WUO 10,708,984.00 US Treasury Inflation Index Note 0.000 6,696.37 0.00 6,696.37 0.00 0.125%Due 7/15/2024 Interest 07/16/2017 24422EST7 550,000.00 John Deere Capital Corp Note 0.000 3,712.50 0.00 3,712.50 ODD 1.35%Due 1/16/2018 Interest 07/16/2017 40428HPH9 1,000,000.00 HSBC USA Inc NOW 0.000 8,125.00 0.00 8,125.00 0.00 1.625%Due 1/16/2018 Interest 07/16/2017 40428HPH9 3,000,000.00 HSBC USA Inc Note 0.000 24,375.00 0.00 24,375.00 0.00 1.625%Due 1116/2018 Interest 07/18/2017 38141GFG4 600,000ol) Goldman Sachs Group Inc Note 0.000 17,850.00 0.00 17,850.00 0.00 5.95%Due 1/18/2018 Chandler Asset Management-CONFIDENTIAL Paga 8 Execution Time:WM017 9:29:05 AM �'" Orange County Sanitation District Consolidated Transaction Ledger Account#10283 6/30/17 Thru 7/31/17 Transaction Settlement Acq/Disp Interest Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount Gain/Loss OTHER TRANSACTIONS Interest 07/18/2017 4581XOCW6 3,000,000.00 Inter AmericanDour Bank Note 0.000 31,875.00 0.00 31,875.00 0.00 2,125%Due 1/18/2022 Interest 07/18/2017 459058DC4 1,162,000.00 Int.Bank Recent&Development Note 0.000 6,542.06 0.00 6,542.06 0.00 1 A 25%Due 7/182017 Interest 07/202017 45950KCJ7 2,500,000.00 International Finance Corp Note 0.000 14,075.00 0.00 14,075.00 0.00 1 A 25%Due 71202021 Interest 07/222017 94974BOM6 5,000,000.00 Wells Fargo Cary Note 0.000 65,000.00 0.00 65,000.00 0.00 2.6%Due 722/2020 Interest 0723/2017 46625HKA7 2,000,000.00 JP Morgan Chase Callable Note Cant 0.000 22,500.00 0.00 22,500.00 0.00 12/23/2019 2.25%Due 1/23/2020 Interest 07/252017 06406HCE7 870,000DO Bank of New York Callable Note Coat 0.000 5,655.00 0.00 5,655.00 ODD 1 2/2 512 01 7 1.3%Due 1252018 Interest 07262017 459058FY4 5,000,000.00 Intl.Bank Recon&Development Note 0.000 50,000.00 0.00 50,000.00 0.00 2%Due 1/26/2022 Interest 07/28/2017 3137EADJ5 7,000,000.00 FHLMC Note 0.000 35,000.00 0.00 35,000.00 0.00 1%Due 7/28/2017 Interest 07282017 61747WAL3 2,800,000.00 Morgan Stanley Note 0.000 77,000.00 0.00 77,000.00 0.00 5.5%Due 7282021 Interest 07/312017 9128281333 11,000,000.00 US Treasury Note 0.000 82,500.00 0.00 82,500.00 0.00 1.5%Due 1/31/2019 Interest 07/312017 912828N89 6,000,000.00 US Treasury Note 0.000 41,250.00 0.00 41,250.00 0.00 1.375%Due 1/31/2021 Interest 07/312017 912828V72 3,000,000.00 US Treasury Note 0.000 28,125.00 0.00 28,125.00 0.00 1.875%Due 1/31/2022 Interest 07/312017 912828WW6 5,000,000.00 US Treasury Note 0.000 40,625.00 0.00 40,625.00 0.00 1.625%Due 7/31/2019 Subtotal 99,890,984.00 823,076.76 0.00 823,076.76 0.00 Dividend 07/05/2017 261908107 2,916,332.88 Dreyfus Trsy/Agcy Cash Management 521 0.000 5,086.37 0.00 5,086.37 0.00 Dividend 07/05/2017 261908107 29,333.33 Dreyfus Trsy/Agcy Cash Management 521 0.000 4,144.09 0.00 4,144.09 0.00 Subtotal 2,945,666.21 9,230.46 0.00 9,230.46 0.00 TOTAL OTHER TRANSACTIONS 102,836,650.21 832,307.22 0.00 832,307.22 0.00 Chandler Asset Management-CONFIDENTIAL Page 9 Execution Time:e/2/2017 9:29:05 AM BOARD OF DIRECTORS Meeting Date TOBE.Or Dir. oB/zs/v AGENDA REPORT ItemNumber IemNumber a Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: TREASURER'S REPORT FOR THE FOURTH QUARTER ENDED JUNE 30, 2017 GENERAL MANAGER'S RECOMMENDATION Receive and file the Orange County Sanitation District Fourth Quarter Treasurer's Report for the period ended June 30, 2017. BACKGROUND The quarterly treasurer's report contains financial portfolio performance with respect to the Orange County Sanitation District's (Sanitation District)funds. Both Long-Term and Liquid Operating Monies Portfolios are summarized. A performance summary table can be found on page 2 of this section. The report also contains information on the U.S. and global economic outlook from the Sanitation District's investment manager, Chandler Asset Management. Quarterly Treasurer's Reports are customarily presented first to the Administration Committee prior to being placed on the Board agenda. However, as the Administration Committee is not scheduled in August, the Sanitation District's practice has been to present the Fourth Quarter Treasurer's Report directly to the Board. RELEVANT STANDARDS • Quarterly financial reporting ADDITIONAL INFORMATION The quarterly treasurer's report for the Fourth Quarter Ended June 30, 2017 is being submitted in accordance with the Sanitation District's investment policy, which requires the report be submitted to the governing body following the end of each quarter and includes the following information: • Performance results in comparison with the 3-month treasury bill index for the liquid operating portfolio; and the Merrill Lynch Corp./Govt. 1-5 Year Bond index for the long-term portfolio as identified in the investment policy; and the time- weighted total rate of return for the portfolio for the prior three months, six months, nine months, twelve months, year to date, and since inception compared to the Benchmark returns for the same periods: Page 1 of 3 Portfolio Performance Summary Quarter Ended June 30,2017 Liquid Operating Monies(%) Long-Term Opemtng Monies N Total Rate Total Rate of of Return Benchmark Return Benchmark 3 Months 0.20 0.20 0.46 0.48 6 Months 0.34 0.30 0.98 0.96 9 Months 0.47 0.39 0.13 -0.11 12 Months 0.57 0.49 0.19 -0.17 Annualized Since inception 30 Nov 2014 0.41 0.27 1.19 1.16 • A listing of individual securities held at the end of each reporting period (see the detailed listings of each security contained within the report). • Cost and market values of the portfolios: Liquid Oper. Long-Term Cost $124.2 M $331.0 M MV $124.4 M $331.8 M • Modified duration of the portfolio compared to Benchmark: Liquid Oper. Long-Term B.M. 0.15 2.62 Port. 0.14 2.44 • Dollar change in value of the portfolio for a one-percent (1%) change in interest rates: Liquid Oper. — $177,121 Long-Term — $8,084,693 • None of the portfolios are currently invested in reverse repurchase agreements: • The percent of the Liquid Operating Monies portfolio maturing within 90 days: • 85.4% • Average portfolio credit quality: Liquid Oper. —AAA/Aaa Long-Term —AA/Aa1 • Percent of portfolio with credit ratings below "A" by any rating agency, and a description of such securities: Liquid Portfolio— no exceptions Long-Term Portfolio— Percent of portfolio— 3.2% Page 2 of 3 Maturity Cost Date Moody S&P Fitch SLMA 2008-9 A $ 32,879.66 4/25/2023 Baa3 AA+ B AMRESCO Residential Securities 1999-1 A $ 100,432.85 6/25/2029 Not Rated AA+ BBB Bank of America Corp Note $4,334,014.00 12/1/2017 Baal BBB+ A Goldman Sachs Group Inc. Note $ 692,806.00 1/18/2018 A3 BBB+ A American Express Credit Note $3,377,385.79 3/19/2018 A3 BBB+ A Morgan Stanley Note $3,200,848.00 7/28/2021 A3 BBB+ A • All investments are in compliance with this policy and the California Government Code, exceptfor the following Lehman Brother holdings that the Sanitation District is pursuing collection through the bankruptcy court: Lehman Brothers Note-Defaulted $600,000 par value purchased 9/18/2008 Lehman Brothers Note-Defaulted $2,000,000 par value purchased 9/18/2008 • Sufficient funds are available for the Sanitation District to meet its operating expenditure requirements for the next six months. CEQA N/A FINANCIAL CONSIDERATIONS N/A ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.corn with the complete agenda package: • Fourth Quarter Treasurer's Report for the Three Months Ended June 30, 2017 Page 3 of 3 'e? Op July 31, 2017 STAFF REPORT Quarterly Treasurer's Report For the Three Months Ended June 30, 2017 SUMMARY Section 15.0 of the District's Investment Policy includes quarterly reporting requirements for the District's two investment portfolios. These two funds, the "Liquid Operating Monies," and the "Long-Term Operating Monies" are managed by Chandler Asset Management, the District's external money manager. The ongoing monitoring of the District's investment program by staff and Callan Associates, the District's independent investment advisor, indicates that the District's investments are in compliance with the District's adopted Investment Policy and the California Government Code, and that overall performance has tracked with benchmark indices. In addition, sufficient liquidity and anticipated revenues are available for the District to meet budgeted expenditures for the next six months. The District's portfolios do not include any reverse repurchase agreements or derivative securities. ADDITIONAL INFORMATION Performance Reports The Quarterly Strategy Review, prepared by Chandler Asset Management, and the Investment Measurement Service Quarterly Review, prepared by Callan Associates, is attached for reference. Also attached are Long-Term and Liquid Operating Monies Summary of Performance Data and Portfolio Statistics charts that depict the performance results, estimated yield and duration, credit quality, and sector diversification of the District's portfolios, as of June 30, 2017. The Liquid Operating Monies portfolio, with an average maturity of 51 days, consists entirely of high quality fixed income investments consistent with the District's investment policy. Portfolio Performance Summary The following table presents a performance summary of the District's portfolios as compared to their benchmarks for the period April 1 through June 30, 2017. OCSD ♦ P.O.Box8127 ♦ Fountain Valley,CA 9272M127 ♦ r716)%2-2411 Quarterly Treasurer's Report For the Three Months Ended June 30, 2017 Page 2 of 3 Portfolio Performance Summary Quarter Ended June 30,2017 Liquid Operating Monies(%) Lang-Term Operating Monies(%) Total Rate of Total Rate of R.W. Benchmark') Realm Benchmadd'l 3 Months 0.20 0.20 0.46 0.48 6 Months 0.34 0.30 0.98 0.96 9 Months 0.47 0.39 0.13 -0.11 12 Months 0.57 0.49 0.19 -0.17 Annualized Since inception 30 Nov 2014 0.41 0.27 1.19 1.16 Market Value 124.4M $331.8M Average Quality 'AAA'YAaa" 'AA"PAa1" Current Yield(%) 1.2 1B Estimated Yield to Maturity(%) 1.0 1.6 Quarterly Deposits(Withdrawals) Mom 12.0M Estimated Annual Income T5.BM (1) Benchmarks: • Liquid Operating Portfolio: 3-Month Treasury Bill Index • Long-Term Operating Portfolio: Merrill Lynch Corp/Govt. 1-5 Year Bond Index Portfolio Market Values Comparative marked-to-market quarter-end portfolio values are shown in the following table, and in the attached bar chart. Liquid Long-Term Quarter Operating Operating Ending Monies($M) Monies($M) 30 Sep.16 56.0 325B 31 Dec.16 113.0 316.6 31 Mar.17 85.2 318.2 30 Jun.17 124.4 331.8 District's Investment Account Balances as of June 30, 2017 Book Balances Estimated Investment Accounts June 30,2017 Yield(%) State of Calif.LAIF $46,247,195 0.98 Union Bank Checking Account 65,366 0.00 Union Bank Overnight Sweep Account 1,365,000 0.01 Union Bank W/C Checking 84,465 0.00 Chandler-Short-term Portfolio 124,115,543 0.96 Chandler-Long-term Portfolio 330,472,147 1.60 Petty Cash 3,000 N/A BNY Mellon OCIP Reserve 3.585.240 0.75 TOTAL sn59z7 gs 1.38 Debt Service Reserves w/Trustees 4 42Z 0.66 Quarterly Treasurer's Report For the Three Months Ended June 30, 2017 Page 3 of 3 District's Cost of Funds on Debt Issues as of June 30, 2017 Annual CostofFwds Outstanding Interest Issue Description COP Balance Rate(%) 2009A Fixed $9,155,000 4.72 2010A Fixed 80,000,000 3.68 2010C Fixed 157,000,000 4.11 2011A Fixed 96,330,000 2.61 2012A Fixed 100,645,000 3.54 2012B Fixed 66,395,000 1.50 2014A Fixed 85,090,000 2.34 2015A Fixed 127,510,000 3.30 2016A Fixed 145,880,000 3.02 2016B Fixed 109,875,000 0.87 2017A Fixed 66.370.000 2.55 TOTAL $1.044.250.000 Weighted Avg.Cost of Funds 2.89 ATTACHMENTS 1. Chandler Quarterly Report 2. Summary of Performance Data and Portfolio Statistics — Liquid Operating Monies 3. Summary of Performance Data and Portfolio Statistics— L-T Operating Monies 4. Investment Transactions and Balances in LAIF 5. Asset Summary by Asset Type — Liquid Operating Portfolio 6. Asset Summary by Asset Type— Long Term Portfolio 7. Asset Summary by Asset Type — Owner Controlled Insurance Program Escrow Account 8. Investment Listing (Yield Analysis Report) 9. Asset Detail — Consolidated 10. Custody Transaction History—Consolidated 11. Callan Quarterly Review 12. Chandler Quarterly Review 13. Rating Agency Comparisons C/" CHANDLER ASSET MANAGEMENT June 30, 2017 Mr. Mike White, CPA Controller Orange County Sanitation District 10844 Ellis Avenue Fountain Valley CA 92708-7018 Dear Mike, Bond Market Recap The Federal Open Market Committee (FOMC) raised the fed funds target rate by 25 basis points to a range of 1.00%-1.25% at the June 13-14 meeting. However, the FOMC statement indicated that the stance of monetary policy remains accommodative. The FOMC also noted that economic activity has been rising moderately and job gains have been solid, but inflation has recently declined. Nevertheless, the FOMC expects inflation to stabilize around 2.0% over the medium term. The Committee expects to begin trimming the Fed's balance sheet later this year. The Fed's updated Summary of Economic Projections reflects downward revisions to the Fed's median unemployment rate projections for this year and future years, as well as a downward revision to the Fed's median 2017 inflation forecast. The updated projections suggest that the Fed anticipates the labor market to tighten further over the coming years without much impact on inflation. The Fed still expects the fed funds rate to reach 1.4% by the end of this year (which implies one more rate hike before year-end) and 3.0% over the longer-run. Domestic economic data remains indicative of slow growth. The economy is likely at or near full employment, consumer confidence is strong, manufacturing indicators are indicative of modest expansion, and housing trends remain favorable. Looking ahead, a potential boost in fiscal stimulus could provide a further tailwind to economic growth. GDP grew by 1.4% in the first quarter, following growth of 2.1% in the fourth quarter. We expect modest economic growth of about 2.0%-2.5% for the full year 2017. Treasury yields increased modestly in June, led by the 5-year note. The 2-year and 10-year Treasury yields both increased by ten basis points month-over-month, while the 5-year Treasury yield increased 14 basis points. The move higher in domestic yields occurred late in the month, coinciding with hawkish comments from ECB President Draghi. His comments also provided a catalyst for sovereign yields in Germany and Japan to move higher. Over the past three months the yield curve flattened. The spread between 2-year and 10-year Treasury yields narrowed to 92 basis points as of June 30, compared to 114 basis points on March 31. On a year-over-year basis, Treasury yields have increased meaningfully, with the 2- year Treasury yield up 80 basis points and the 10-year Treasury yield up 83 basis points. The Federal Reserve has raised the fed funds target rate by 25 basis points three times in the past year. C/" CHANDLER ASSET MANAGEMENT Consumer Prices The Consumer Price Index (CPI) was up 1.6% year-over-year in June, versus up 1.9% year- over-year in May. Core CPI (CPI less food and energy) was up just 1.7% year-over-year in June. The Personal Consumption Expenditures (PCE) index was up 1.4% year-over-year in May, versus up 1.7% year-over-year in April. Core PCE (excluding food and energy) was also up just 1.4% year-over-year in May, versus up 1.5% year-over-year in April. Core CPI is has fallen back below the Fed's 2.0% target, and the Fed's primary inflation gauge (PCE) also remains below the target. Retail Sales On a year-over-year basis, total retail sales were up 2.8% in June compared with a 4.1% increase in May. On a month-over-month basis, retail sales declined 0.2% in June, below expectations fora 0.1% increase, following a 0.1% decrease in May. Excluding autos and gas, retail sales were down 0.1% in June. Overall, consumer spending trends remain soft. However, the consumer confidence index remained strong in June at 118.9 versus 117.6 in May. Labor Market Job growth was stronger than expected in June but wages remained lackluster. Nonfarm payrolls increased by 222,000 versus the consensus forecast of 178,000. In addition, April and May payrolls were revised up by 47,000 in total. The average increase in monthly payrolls was 194,000 during the second quarter, up from 166,000 per month during the first quarter. The unemployment rate ticked up to 4.4% in June from 4.3% in May, but the labor participation rate also edged up to 62.8% from 62.7%. A broader measure of unemployment called the U-6, which includes those who are marginally attached to the labor force and employed part time for economic reasons, increased to 8.6% in June from 8.4% in May, however this compares to 9.6% in June 2016. Wage growth rose just 0.2% in June, following a downwardly revised gain of 0.1% in May. On a year-over-year basis, wages were up 2.5% in June, versus 2.4% in May. Housing Starts Total housing starts fell 5.5% in May, following a 2.8% decrease in April, missing expectations. Single-family starts declined 3.9% in May, and multi-family starts fell 9.7%. Permits were also weaker than expected in May, down 4.9%. 2 C/" CHANDLER ASSET MANAGEMENT TREASURY YIELDS 6/3012017 3/31/2017 CHANGE 3 Month 1.01 0.75 0.26 2 Year 1.38 1.26 0.12 3 Year 1.55 1.49 0.06 5 Year 1.89 1.92 (0.03) 7 Year 2.14 2.21 (0.07) 10 Year 2.31 2.39 (0.08) 30 Year 2.84 3.01 (0.17) Economic Data Remains Indicative of Slow Growth ECONOMIC INDICATOR Current Release Prior Release One Year Ago Trade Balance (46.5)SBIn MAY 17 (47.6)SBIn APR 17 (41.5)SBIn MAY 16 GDP 1A%MAR 17 2.1%DEC 16 0.8%MAR 16 Unemployment Rate 4.4%JUN 17 4.3%MAY 17 4.9%J UN 16 Prime Rate 4.25%JUN 17 4.0%MAY 17 3.5%JUN 16 CRB Index 174.78 JUN 17 179.77 MAY 17 192.57 JUN 16 Oil(West Texas Int.) 546.04JUN 17 $48.32 MAY 17 548.33 JUN 16 Consumer Price l ndex(y/o/y) 1.9%MAY 17 2.2%APR 17 1.0%MAY 16 Producer Price Index(y/o/y) 2.6%MAY 17 3.9%APR 17 (2.2%)MAY 16 Dollar/Euro 1.14JUN 17 1.12 MAY 17 1.11 JUN 16 Source:eloomberg 3 C/" CHANDLER ASSET MANAGEMENT Performance Attribution Long-Term Portfolio The Long-Term portfolio marginally underperformed the benchmark during the quarter, generating a return of 0.46% versus 0.48% for the Bank of America Merrill Lynch 1-5 Year AAA-A US Corporate and Government Index. From a sector allocation standpoint, all of the deviations delineated by the attribution report were negligible, both on the positive and negative side. The term structure attribution analysis told a similar story with small deviations compared to the benchmark. Chandler is attributing the small performance shortfall to the position in the TIPS sector, as break-even spreads narrowed, which negatively impacted the overall return of the TIPS position. The Chandler team tactically added exposure to the Treasury, Agency, Supranational, and Corporate sectors of the marked during the quarter. The majority of the new positions had maturities close to the five year point, in 2022, with the exception of one purchase at the three year point. One security was called and four matured, in addition to a $12 million dollar contribution into the portfolio to assist in adding the new positions to the portfolio. Chandler continues to avoid adding securities, for the most part, in the two to three year maturity range as from a structuring standpoint we prefer to purchase securities in the shorter and longer ends of the maturity distribution. The duration of the portfolio was close to unchanged, currently 2.44 compared to 2.43 at the end of the prior reporting period. Inflation metrics remain underwhelming, and the Chandler team anticipates keeping the duration close to the benchmark as we continue to hold the view the Federal Reserve's forecast for a 3.0% terminal fed funds rate is too optimistic. Liquid Portfolio The Liquidity Portfolio matched the return of the benchmark during the quarter, generating a quarterly return of 0.20% versus the 0.20% for the Bank of America Merrill Lynch 3-Month Treasury Bill Index. The portfolio experienced net positive cash flows of $39 million during the quarter, comprised of a $60 million contribution in April and a $21 million withdrawal in June. Many securities were purchased across the Treasury, Agency, Certificate of Deposit, Commercial Paper, and Corporate sectors of the market to keep the portfolio as fully invested as possible; one security was called and many matured. Chandler continues to invest in the Agency Discount note sector primarily to offset upcoming cash flow needs while being more opportunistic, and yield seeking, with the short maturity Corporate note positions in the portfolio. 4 OIL CHANDLER ASSET MANAGEMENT Economic Outlook Notably during the quarter, the FOMC telegraphed its intent to begin the process of balance sheet normalization later this year. The Fed has communicated to the market its intent to start with a total of $10 billion per month in a 60/40 split between Treasury and Agency/Mortgage Backed Securities, and increase the amount by $10 billion per quarter, capping the monthly amount at $50 billion after five quarters. The initial impact to the market should be negligible, but over time the increasing amount of securities no longer being purchased by the Fed should put upward pressure on the term premium of interest rates. Chandler anticipates the balance sheet reduction will likely begin in September, and in terms of sequencing balance sheet reduction will commence before the FOMC again tightens traditional monetary policy via the fed funds rate. The Fed's Summary of Economic Projections suggests that policymakers anticipate the labor market to tighten further over the coming years without much impact on inflation. The Fed still expects the fed funds rate to reach 1.4% by the end of this year (which implies one more rate hike before year-end)and 3.0% over the longer-run. Chandler maintains the view the terminal fed funds rate will be below the Fed's 3.0% target at equilibrium. Additionally, in Chandler's judgement, economic data needs to improve for the FOMC meet their forecast of tightening one more time in the calendar year. Risk markets performed well during the quarter, with equity prices strong and corporate spreads tighter. In light of the lack of progress on the domestic legislative agenda in Washington DC, we think risk markets are susceptible to a selloff, but to date markets have remained resilient. Mortgage Backed Securities generated small negative excess returns for the quarter, as options adjusted spreads moved wider, in our view linked to the aforementioned anticipated Fed balance sheet reduction. Strategy Strategy highlights for the Long-Term Portfolio in coming months: • Continue to focus on optimizing the term structure positioning of the portfolio. Chandler's quantitative analysis continues to exhibit a bias in portfolio structures to overweight the wings of the maturity distribution in our 1-5 year strategies relative to the benchmark. o In light of the benign backdrop for inflation the Chandler team will target a duration of 95-100% of the benchmark. o The Fed Balance sheet impact on the markets will initially be benign in our view, but over an intermediate time horizon should be consistent with a steeper yield curve and modestly higher yields. The portfolio will remain positioned to benefit from the expected changes to valuations. • Valuations in the higher quality segment of the Corporate sector are expensive; Chandler will remain selective and opportunistic in added credit risk to the portfolio. The focus will remain on sector and issuer diversification. • Continue to de-emphasize the Agency sector which continues to have unattractive valuations in our judgement. • The Asset Backed sector, particularly at new issue, continues to have an attractive risk adjusted valuation relative to alternatives. The Chandler team will look to maintain and possibly grow the overall allocation to the sector. 5 GAL CHANDLER ASSET MANAGEMENT Strategy highlights for the Liquidity Portfolio in coming months: • Continue to ladder the Agency discount note and Treasury exposure to coincide with forecasted liquidity needs. • Opportunistically add to the Corporate exposure of the portfolio where the additional spread compensation versus the Treasury curve is compelling. • Maintain a dedicated exposure to the Treasury sector on an ongoing basis to ensure ample liquidity in the portfolio at all times. 6 C/" CHANDLER ASSET MANAGEMENT Compliance Issues CA` Orange County Sanitation District Long Term June 30,2017 COMPLIANCE WITH INVESTMENT POLICY Assets managed by Chandler Asset Management are in lull compliance in State lawand to the im,sameatiammy Category Standard Commend Treasury Issues 5 years maximum maturity Complies• Supramdonal 'AR'or better by of 3 NRSl 30%maximum; 5%max issuer, 5were maturity, Complies poll only llEIRD and IFC per CGC U.S.Agencies 20%maxisnfer, 5yearsmadmummidury, Complies U.S.COryorate(MTNs) "A'or better big teen ra8ng by 1 of 3 NRSROs; 30%maxmun;5%max issuer, 5 Complies am max maturity Municipal Secuities "A"or higher by l of 3 NRS 10%maxmun; 5%max issuer, 5years maximal Complies maturty Asset Baci CMOs/Mortgage- "AA"or better by t o1`3 NRSl 'A"or higher issuer rating by l of3 NRSROs; 20% Complies' backed maximurl 5%max issuer excludind,MBSI oNa enc '5 Were max maturity Negotiable CDs 'A'orbeeeron its long tens debtby l of3NRSROs; 'A11P1"orhighestshortterm Complies al by l of 3 NRSROs; 30%madman;5%max Issuer; 5years men maturity CDs/TDS 5%max issuer, 5years max maturity Complies Banker's Acceptances A-1,or equivalent highest shod tern rating by l of 3 NRSROS; 40%madmun; 5% Complies max issuer 180 der max maturity Commar lPaper A-1,or equiyalena by l of3 NRSROS; "A"or better by l of 3 NRSROs,ifleng tens Complies debt issued; 25%maximum 5%max issuer, 270 de max maturi Mutual Fund B Morey Market Highestraboijby2NRSR0s; 20%maxmun;10%max per mutual fund; 20%max Complies Mutual Furl per more market mu lal fund Repumhase Agrmeme 1102%mllatemlimbon Complies Reherse Re timhaseA rbemerts 5%maximum,90de maxmaturi Complies LAIF Not wad byimestmend addser Complies Asg Duration Notto exceed SO morAha - (80%to 120%ofere benchmark) Complies Maximum Maturity SyearamaximunimaMty Complies' 'The partbllo has Minty-0xee(23)emission am meWMles greeter train 5 years sell ore(1)Al ear(4)CMOs,soommen(17)MBS and me(1)trains, All secu'llles wsn Inherited bm has preNous maw3n and cons led at time of purchase. C/" CHANDLER ASSET MANAGEMENT Orange County Sanitation District Liquid OL June 30,2017 COMPLIANCE WITH INVESTMENT POLICY Assets managed by Chandler Asset Managementsre m full compliance wth State lawand duh the investmenfpohcy Category Standard Comment TmasuN issues 1 War maximum maluritf, Minimum allocation of 10% Complies Supanational 'AA'or betler by l of 3 NRSROs; 30%mavmum; 5%maxissuer, 1 War maturity, Complies Includes only, tADB,IBRD,and TO per CGC U.S.A envies 20%maxissuer; 1 a matui Complies U.S.Corpoate(MTN.) 'A'orbe0erbrgtermratirgbylof3NRSROs;30%m Amum;5%maxisswr,, 1 Complies r max maturity Asset Backed/CMOs -AA"or betler by l of 3 NRSROs; "A"or higher issuer rating by l of 3 NRSROs; Complies 20%mavmum; 5%max issuer, 7 war max meNi Negotiable CDs 'A'or be0eron its long term debt by l of3 NRSROs; 'ALPl-or highest shed term Complies ratindis,b 1of3 NRSRCs' 30 mavmvm5 max issuer'1 war mun,maturity CDs/MS 5%max issuer71 Warmb,maturi Complies Bankers Acceptances A-1,or epuiraleM shortesm abW by l of3 NRSROS;40%mavmum;5%max Complies Issuer;180 da max matul Commercial Paper A-1,or eaulvabM by l of3 NRSROS;"A"or betler by l of3 NRSROs,iflorg tens Complies debtissusd725%mavmurn76%max issuer,270 days me,maturi Mutual Fvtl&Money Market M"l Furl -ighestabrgby2NRSROs; 20%mavmum;10%mexpermenalfund; 20%max Complies mums mareunnubwlfvd Re umhes.A aemene 102%collatemlibation C omplies Reverse Re uahaseA reemervis 5%mavmum 90 daysmazmatri Corn LAF Notusedb investmentad�iser Conn prohibited Municipal Secvities Conn Prohibited Mo a eSecvities Co. A Dunned Notb exceed 180 da Maxdua0onof112 ar Mavmum Maturity1 War mavmum maturity 8 C/" CHANDLER ASSET MANAGEMENT CAI OCSD Lehman Exposure June 30,2017 COMPLIANCE WITH INVESTMENT POLICY Assets managed by Chandler Asset Managementare in lull compliance with State lawand with the invesfinentpolicy Category Standard Comment Treasury Issues 5 Were maximum maturity Complies Supmnatlonal "AA"or better by l of 3 NRSROi 30%maximum; 5%max; 5years maturity. Complies Includes on . IADB IBRD and IFC per CGC U.S.Agencies 20%max issuer; 5 was maximum maturity Complies U.S.Corporate(MTNS) "A"or better long tens rating by l of 3 NRSROs; 30%maximum;5%max Complies' issuer 5yearshmaxnedburtyi Municipal Securities "A"or higher by l of 3 NRSROS;10%maximum; 5%max issuer, 5 years Complies maximum maturity Asset Backed/CMOs/ "AA"or better by l of 3 NRSROs; "A"or Ngher issuer mfirg by 1 of 3 Complies Mortgage-0acked NRSROi 20%maximum; 5%maxiwmr(ex uding MBS/govtagercy);5 ars max matui Negotiable CDs "A"or betteron its longterm debt by l of3 NRSROs; "A1/P1"orhighest Complies slw1ttennrafingsby1of3NRSROs; 30%maximum;5%maxissuer; 5years maxi-matunly CDs/TDS 5%max issuer 5 years max maturity C umies Bankers Acceptances A-1,or equivalent highest short term rating by l of 3 NRSROS; 4ies maximum; 5%max issuer 180 daysmax maturity Commercial Paper A-1,or equivalent by l of 3 NRSROS; "A"or better by l of3 NRlies term debt issued; 25%maxmurn; 5%max issuer; 270 daysma MoneyMarket Fund Hi hest mti b 2of 3 NRSROa 20%madni 10%max issulies Repurchase segments 102%collaterali2ation Complies Reverse Repurchase 5%maximum,90 days max maturity lies Agreements LAIF Not used by investment adviser Complies A Duration Not to exceed 60 months - 80%to 120%ofthe benchmarkComplies Maximum Matud 5 years maximum maturitylies Account hade$2 million race value(cusip 525ESMYE)and 3a00,000 race value hosip 525ESC1B])odderaulted Lehman Bras Holdings that ware pumM1ased by the assume manager. Complied at time MpumM1ase. 9 C/" CHANDLER ASSET MANAGEMENT Defaulted Bonds OCSD Lehman Exposure-Account 910264 For the Month Ending 613 012 01 7 BINOPNTM IMmen&oNert,NCOpen Puslllon uq 00,0414" �Wu.e 0 134% 666x o�.mmmn u32 1a11111 Talel Common 3bA 60.6.1.9 000% 30100 111.331611 NNRR ua co+waa 52se3aw ,lo MNeR-on.11W 600000w eex aaW% Oue0llwm+0 oW% 'U'.. o00% aao 180a81s N1 NRrUI-PN o00 62M.. 2,000..DO 12 .63x 0 6 Oe1a9/m19 omx TaW omx aW Ml".S1 oW 1.N551pW IN.]m.W B6.YX NRINR L.Y.810AU U. 011,7M.0 2000 ,M1 .ID 1B fID f00m% TUTU-POKrFOLIG3.BBO.NIW 000% 1.81AY3.Q1 Om% SUS 01AMp11N1 NR PUS 10 OIL CHANDLER ASSET MANAGEMENT Ratings Orange County Sanitation District Long Term June 30,2017 vs.March 31,2017 moon ware Seex aoao% mao% moax iamx 0 0% AU A4 P N XR MA AA A A NR 0 W17 118% 66.0% 11.4% 3.2% 7.6% M1117 13.3% 65.5% 149% 3.6% 6.8% Wurue:S&P Petlnae Orange County Sanitation District Liquid June 30,2017 vs.March 31,2017 sooc% eo.aox loan% v Scl soon% a000x eo.aox :oao% moox oao% OM M A W NR .N:weon .a�a1rza17 A4A AA A U NR 0NNI17 We% 26s% 5.2% 0.0% 0.0% 0N31117 79.9% 15.7% 4A% 0.0% 0.0% Sou,u:sSP Beliga TT C/" CHANDLER ASSET MANAGEMENT OCSD Investment Program Quarter End Portfolio Value $600,000,000 •Liquid Opembrg Monies $500,000,000 •Long-Tom Opending Monies $400,000,000 $300,000,000 $200,000,000 — $100.000,000 A A Y Y W Y SeR>d •>g '>y ✓`�>v >y •>y '>3. ✓`�>9 >4, '>4, '>6, ✓`�>C �'a>s •>y, '>j ✓��>> HISTORICAL YIELD CURVE 4.00% �JUN 2017 MAY 2017 3.00% — : UN 2016 _______________________________________________________2.84%_ 2.31% 2,14% 2.00% ----------------.1.89% _ ____________________________________ ______________ 1.55% 1.38% 1.13% 1.00% 1.01% 0.00% �i 1h 3h Sh la >o 190 % o h h 12 GilOrange County Sanitation District Liquid Portfolio Summary Account#10282 As of 6/3 012 01 7 PORTFOLIO CHARACTERISTICS ACCOUNTSUMMARY •• aaa� 911" Beg.Values End Values Issuer %Portfolio Average Duration 0.14 as of 5/31117 as of 6130/17 Government of United States 28.5 Average Coupon 1.18% Market Value 145,019,885 124,237,952 Federal National Mortgage Assoc 20.1 Average Purchase YTM 0.93% Accrued Interest 320,835 198,126 Federal Home Loan Bank 19.9 Averse Market YTM 0.96% Total Market Value 145,340,720 124,436,078 9 Federal Home Loan Mortgage Corp 14.0 Average S&P/Moody Rating AAA/Aaa Income Earned 103,060 97,671 Bank of Tokyo-Mit UFJ 2.6 Average Final Maturity 0.14 yrs COnt/WD -21,000,000 Dreyfus Treasury Money Market F 2.3 Average Life 0.09 yrs Par 144,940,490 124,188,333 Toyota Motor Corp 1.5% Book Value 145,027,955 124,248,335 Intl Bank Recon and Development 0.9% I Cost Value 145,045,341 124.200,657 89.9% • - • • MATURITY DISTRIBUTION us 100% AAA Corporate us 66.4% (68.9%) (8.5%) Treasury (28.6%) 80% Commercial Paper 80% (4,1%) Negotiable Money CD 46% Market /(1.6%) Fund FI 20% (23%) 10.2% A a4% (5.2%) suprana4onal % Agency (0.9%) 0-.25 M 5 5-1 1-15 15-2 2-25 2.5 a P SM1.9%) AA- Maturtty(Yrs) (25 9%)%) Total Rate of Return Current Latest Year Annualized Since As of 6/30/2017 Month 3 Months To Date 1 Yr 3 Yr8 5 Yrs 10 Yrs 11I30/2014 11/3012014 Orange County Sanitation District Liquid 0.07% 0.20% 0.34% 0.57% N/A N/A N/A 0.41 % 1.06% BAML 3-Month US Treasury Bill Index 0.08% 0.20% 0.30% 0.49% N/A N/A N/A 0.27% 0.69% Chandler Awed Management-CONFIDENTIAL Page 1 Execution Time:7/4I2017 9:27:52 PM C/" Orange County Sanitation District Long Term Portfolio Summary Account#10268 As of 6/3 012 01 7 PORTFOLIO CHARACTERISTICS ACCOUNTSUMMARY •• aaa� 9r Beg.Values End Values Issuer %Portfolio Average Duration 2.44 as of 5/31/17 as of 6130/17 Government of United States 29.2 Average Coupon 1.76% Market Value 330,796,641 330,358,235 Federal National Mortgage Assoc 11.2% Average Purchase YTM 1.68% Accrued Interest 1,331,055 1,447,134 Federal Home Loan Bank 7.7 Averse Market YTM 1.60% Total Market Value 332,127,696 331,805,369 9 Federal Home Loan Mortgage Corp 7.4 Average S&P/Moody Rating AA/Aal Income Earned 448,014 458,872 Inter-American Dev Bank 4.4 Average Final Maturity 2.79 yrs COnt/WD 30,906 Intl Bank Recon and Development 3.0% Average Life 2.54 yrs Par 329,316,087 329,667,101 John Deere ASS 2.1 Book Value 329,271,550 329,645,249 Bank of Tokyo-Mit UFJ 1.9% I Cost Value 330.610,695 330.990,512 66 9 Y • - • • MATURITY DISTRIBUTION MBS 50% AA (0.6%) (W.0%) U6_Cmp 25% I� (24.0%) U9 Treasury (29.2%) t6s% CP 20% (3.8%) 1e.5% Munldpals 15% 1a4=b (1.4%) 10. Suprenetlonel 10% 77% BBB (0.9%) R 4.1% Agency 5% 3.1% NR C% (25.1%) (7,6%) (0c%) % ASS 0- 25 s5-s s-1 1-2 2-s 3-a 4-s s. APA A Maturity yrs) (118%) (11.4%) Total Rate of Return Current Latest Year Annualized Since As of 6/30/2017 Month 3 Months To Date 1 Yr 3 Yrs 5 Yrs 10 Yrs 11/30/2014 11/3012014 Orange County Sanitation District Long Tenn -0.11 % 0.46% 0.98% 0.19% N/A N/A N/A 1.19% 3.11 % BAML 1-5 Yr US Corporate/Govt Rated AAA-A Index -0.12% 0.48% 0.96% -0.17% N/A N/A N/A 1.16% 3.03% BAML US 15 Yr US Corp/Gout Rated AAA-BBB Index -0.10% 0.55% 1.11 % 0.14% N/A N/A N/A 1.32% 3.44% Chandler Asset Management-CONFIDENTIAL Page t Exaction Time:7/612017 9:24:48 PM Orange County Sanitation District Investment Transactions and Balances in the State of California Local Agency Investment Fund June 30, 2017 Par Value Book Value Market Value Rate Yield Balance June 1, 2017 $43,047,195 $43,047,195 $43,047,195 0.98 0.98 Deposits: 6/15/2017 15,000,000 15,000,000 15,000,000 0.98 0.98 Total Deposits 15,000,000 15,000,000 15,000,000 0.98 0.98 Quarterly Interest Distribution 0.98 0.98 Withdrawals: 6/7/2017 (2,900,000) (2,900,000) (2,900,000) 0.98 0.98 6/21/2017 (2,000,000) (2,000,000) (2,000,000) 0.98 0.98 6/22/2017 (3,000,000) (3,000,000) (3,000,000) 0.98 0.98 6/29/2017 (3,900,000) (3,900,000) (3,900,000) 0.98 0.98 Total Withdrawals (11,800,000) (11,800,000) (11,800,000) 0.98 0.98 Balance June 30,2017 $46,247,195 $46,247,195 $46,247,195 0.98 0.98 Report ID: GL8251 Asset Summary Base Cwnener: USD i BNY MELLON by Asset Type with Sectors Alternate eaxe Cpr RaW Exc6eage Rete: OCS LTQ OF CHANDLER-OCSF07511102 6 30 2017 Status: FINAL Net Unrealized Cost Market Value % of Gain/Loss Description Shares Par Base Base Total Base CASH&CASH EQUWALENTS U.B.DOLLAR CERTIFICATES OF DEPOSIT-U.S. 2,000,000.000 2,000,254.44 2,000,254.44 1.61% 0.00 COMMERCIAL PAPER-DISCOUNT 5,105,000.000 5,089,004.37 5,089,004.37 4.09% 0.00 FEDERAL HOME LOAN BANK- 1 YR OR LESS 24,800,000.000 24,751,124.98 24,751,124.98 19.89% 0.00 FNMA ISSUES- I YR OR LESS 19,000,000.000 18,962,050.04 18,962,050.04 15,24% 0.00 SHORT TERM INVESTMENT FUNDS(US REGULATED) 2,916,332.880 2,916,332.88 2,916,332.88 2.34% 0.00 U.S.TREASURY BILLS- 1 YR OR LESS 33,000,000.000 32,918,360.28 32,918,360.28 26.45% 0.00 INTEREST 325,936.87 325,936.87 0.26% 0.00 U.S.DOLLAR 86,821,332.880 86,963,063.86 86,963,063.86 69.88% 0." CASH&CASH EQUIVALENTS 86,821,332.880 86,963,063.86 86,963,063.86 69.88% 0.00 FIXED INCOME SECURITIES U.S.DOLLAR BANKING&FINANCE 5,420,000.000 5,454,308.40 5,442,737.40 4.37% -11,571.00 CAPITAL GOODS 1,000,000.000 1,033,650.00 1,016,420.00 0.82% -17,230.00 HEALTH CARE 1,000,000.000 1,015,310.00 1,004,820.00 0.81% -10,490.00 OIL&GAS 1,000,000.000 1,000,780.00 999,830.00 0.80% -950.00 SUPRANATIONAL ISSUES 1,162,000.000 1,163,057.42 1,161,918.66 0.93% -1,138.76 TECHNOLOGY 1,000,000.000 999,870.00 999,500.00 0.80% -370.00 TRANSPORTATION 1,000,000.000 999,580.00 999,390.00 0.80% -190.00 US AGENCIES 23,285,000.000 23,400,285.65 23,356,574.45 18.77% -43,711.20 US GOVERNMENTS 2,500,000.000 2,496,688.06 2,497,225.00 2.01% 536.94 U.S. DOLLAR 37,367,000.000 37,563,529.53 37,478,415.51 30.12% -85,114.02 FIXED INCOME SECURITIES 37,367,000.000 37,563,529.53 37,478,415.51 30.12% -85,114.02 TOTAL ASSETS-BASE: 124,188,332.880 124,526,593.39 124,441,479.37 100.00% .85,114.02 711212017 11:12:14" EDT 1 Workbench Asset Summary Report ID: GL5251 Base Currenry: Can BNY MELLON by Asset Type with Sectors Alteesa[e Base Currency: Exchange Rate: OCS LONG CHANDLER-0CSF07522202 6 30 2017 Status: FINAL Net Unrealized Cost Market Value % of Gain/Loss Description shares Per Base Base Total Base CASH&CASH EQUIVALENTS U.S.DOLLAR CASH EQUIVALENTS 60,641.490 93,294.59 25,621.03 0.01% -67,673.56 COMMERCIAL PAPER-DISCOUNT 12,645,000.000 12,571,626.30 12,571,626.30 3.79% 0.00 SHORT TERM INVESTMENT FUNDS(US REGULATED) 2,924,235.990 2,924,235.79 2,924,235.79 0.88% 0.00 PENDMG TRADES 16.26 16.26 0.00% 0.00 INTEREST 1,524,158.88 1,524,158.88 0.46% 0.00 U.S.DOLLAR 15,629,877.280 17,113,331.82 17,045,658.26 5.13% -67,673.56 CASH&CASH EQUIVALENTS 15,629,877.280 17,113,331.82 17,045,658.26 5.13% .67,673.56 FL4ED INCOME SECURITIES U.S.DOLLAR ABS-CAR LOANS 8,916,210.650 8,915,740.43 8,907,788.19 2.68% -7,952.24 ADS-CREDIT CARDS 4,140,000.000 4,139,643.13 4,137,267.60 1.25% -2,375.53 ASS-EQUIPMENT 6,939,186.190 6,939,012.46 6,930,481.55 2.09% -8,530.91 ABS-HOMEEQUNY 133,743.290 100,432.85 126,185.46 0.04% 25,752.61 ABS-SMALL BUSINESS ADMINISTRATION 62,182.380 62,182.38 65,359.28 0.02% 3,176.90 ABS-STUDENT LOANS 33,013.570 32,879.63 33,716.43 0.01% 836.80 BANRWG&FINANCE 40,770,000.000 41,617,365.66 39,128,360.70 11.79% -2,489,004.96 CAPITAL GOODS 5,000,000.000 5,014,950.00 5,045,250.00 1.52% 30,300.00 FHLMC MULTICLASS 1,852,198.510 2,024,989.01 2,048,771.90 0.62% 23,782.89 FHLMC POOLS 2,306.830 2,227.41 2,371.38 0.00% 143.97 FNMA POOLS 1,435,847.610 1,496,854.08 1,549,461.42 0.47% 52,607.34 FNMA REMIC 295,835.710 295,743.27 299,678.62 0.09% 3,935.35 GNMA MULTI FAMILY POOLS 217,552.050 217,556.51 225,253.61 0,07% 7,697.10 GNMA REMIC 25,879.970 25,879.97 25,994.62 0.01% 114.65 HEALTH CARE 4,000,000.000 4,009,675.00 4,017,720.00 1.21% 8,045.00 INSURANCE 4,000,000.000 4,131,120.00 4,126,480.00 1.24% -4,640.00 OIL&GAS 12,850,000.000 12,830,976.90 12,875,010.50 3.88% 44,033.60 SUPRANATIONAL ISSUES 27,035,000.000 27,097,392.05 26,947,633.65 8.12% -149,758.40 TAXABLE MUNICIPALS 4,240,000.000 4,307,633.89 4,569,165.60 1.38% 261,531.71 TECHNOLOGY 14,045,000.000 14,095,700.55 14,052,809.35 4,23% -42,891.20 U.S.TIPS 10,708,984.000 10,591,699.89 10,519,113.71 3.17% -72,586.18 711212017 11:13:29AM EDT 1 Workbench Asset Summary Report ID: G1,8251 Base Cunenry: USD BNY MELLON by Asset Type with Sectors Alteesa[e Base Currency: Exchange Rate: OCS LONG CNANDLBR-OCSF07522202 6 30 2017 Status: FINAL Net Unrealized Cost Market Value % of Gain/Loss Description Shares Par Base Base Total Base US AGENCIES 83,365,000.000 83,120,161.40 83,070,233.95 25.02% -49,927.45 US GOVERNMENTS 86,300,000mo 85,617,374.66 85,916,457.00 25.88% 299,082.34 WHOLE LOAN-CMO-COLLATERALIZED MTG OBUG 329,924.566 329,900.2E 330,082.93 0.10% 182.68 U.S.DOLLAR 316,697,865.326 317,017,091.38 314,950,647.45 94.87% -2,066,443.93 FIRED INCOME SECURITIES 316,697,865.326 317,017,091.38 314,950,647.45 94.87% .2,066,443.93 TOTAL ASSETS-BASE: 332,327,742.606 334,130,423.20 331,996,305.71 100.00% -2,134,117.49 711212017 11:13:29AM EDT 2 Workbench Asset Summary Report ID: GL8251 Base Cunenry: USD BNY MELLON by Asset Type with Sectors Alteenate Ease Cwrener: Exchange Rate: ESCROW ACCOUNT-OCS"7555502 6 30 2017 Status: FINAL Net Unrealized Cost Market Value % of Gain/Loss Description shares par Base Base Total Base CASH&CASH EQUWALENTS U.S.DOLLAR INTEREST 5,680.29 5,680.29 0.16% 0.00 PUKED INCOME SECURITIES U.S.DOLLAR US GOVERNMENTS 3,600,000.000 3,590,015.63 3,585,240.00 99.84% -4,775.63 TOTAL ASSETS-BASE: 3,600,000.000 3,595,695.92 3,590,920.29 100.00% -4,775.63 711212017 11:14:16AM EDT 1 Workbench Yield Analysis Report ID: NAM234 Base Currency: BNY MELLON OCSF07511102 6/30/2017 Liquid Oper-Pimco Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(EOP) t Quality Price Market Value %Market AQj Yield Rating Value Duration CASH &.TEMPORARY Sum o(Acmuut Receivables - 0.00 SUMRECV 325,937 AGENCY 10,000,000.00 FEDERAL HOME LN BK CONS DISC N 0.90 Ass 99.96 9,978,514 11.50 0.06 313385JK3 07/21/2017 9,978,514 8.02 5,000,000.00 FEDERAL HOME LN BK CONS DISC N 0.92 Asa 99.92 4,989,118 5.75 0.08 313385JS6 07/28/2017 4,989,118 4.01 9,000,000.00 FEDERAL HOME LN BK CONS DISC 0.96 Asa 99.91 8,984,238 10.35 0.09 313385JX5 08/02/2017 8,984,238 722 CERTIFICATES OF DEPOSIT 1,000,000.00 TORONTO DOMINION BANKC/D 122 1.20 - 100.00 1,000,235 1.15 0.04 89113WEE2 1.200%07/13/2017 DE,07/14/16 1,000,235 0.80 COMMERCIAL PAPER 1,705,000.00 BANK TOKYO-MITSUB DISC 0.85 0.85 P-1 99.70 1,698,182 1.96 0.35 06538BU76 07/07/2017 1,698,182 L36 19,000,000.00 FEDERAL NATL MTG ASSN DISC 0.92 Aaa 99.93 18,962,050 21.85 0.07 313589JQ7 0.000%07/26/2017 DO 08/01/16 18,962,050 1&24 1,500,000.00 BANK TOKYO-MITSUB DISC 4.31 P-t 99.70 1,495,567 1.72 0.07 06538BUR2 07/25/2017 1,495,567 L20 1,900,000.00 TOYOTA MTR CR CP DISC 4.94 P-t 99.75 1,895,256 2.18 0.05 89233GUKO 07/19/2017 1,895,256 L52 OTHER 7/12/2017 11:26.12" EDT 1 Source:The BaAc fNew York Mellon Communion Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON OCSF07511102 6/30/2017 Liquid Oper-Pim<o Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(SOP) t Quality Price Market Value %Market AQj Yield Rating Value Duration 2,916,332.88 DREYFUS TREAS&AGY CSH CSH MG Aaa 2,916,333 3.36 0.08 996085247 VAR RT 12/31/2049 DD 04/09/97 2,916,333 2.34 SWEDEN 1,000,000.00 SVENSKA HANDELSBKN AB C/D 1.19 1,18 - 100.00 1,000,020 1.15 0.34 8695MMUO 1.175%10/02/2017 DO 05/05/17 1,000,020 0.80 TREASURIES AND AGENCIES O 80Q000.00 FEDERAL HOME LN BK CONS DISC 0.92 Aaa 99.94 799,256 0.92 0.07 313385JQO MAT 07/26/2017 799,256 0.64 TREASURY 15,000,000.00 U S TREASURY BILL 0.37 Aaa 99.99 14,962,819 17.24 0.02 912796LG2 0.000%07/06/2017 DD 01/05/17 14,962,819 12.02 5,0OQ000.00 U S TREASURY BILL 0.68 Ann 100.00 4,990,381 5.75 0.06 912796KB4 0.000%07/20/2017 DD 07/21/16 4,990,381 4.01 13,000,000.00 U S TREASURY BILL 0.99 Aso 99.78 12,965,160 14.94 0.22 912796LUl 0.000%09/21/2017 DD 03/23/17 12,965,160 10.42 TOTAL: CASH is TEMPORARY 0.97 0.06 86,637,127 100p0 0.09 86,963,064 FIXED INCOME AGENCIES&OTHER GOVT OBL 7,000,000.00 FEDERAL HOME LN MTG CORP 1.04 1.00 Ase 100.00 7,003,210 18.59 0.08 3137EADJ5 1.000%07/26/2017 DD 06/25/12 6,999,790 5.63 5,285,000.00 FEDERAL HOME LN MTG CORP 1.09 1.00 Ann 99.98 5,284,776 14.03 0.25 3137EADL0 1.000%09/29/2017 DD 08/10/12 5,283,784 4.25 7/12/2017 11:26.12" EDT 2 Sou¢e:The BakofNeu,York Mellon Corporad.n Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON OCSF07511102 6/30/2017 Liquid Oper-Pim<o Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(SOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration 6,000,000.00 FEDERAL NATL MTG ASSN 1.10 1.00 A. 99.98 5,998,350 15.93 0.24 3135GOZW 1.000%09/27/2017 DD 08/25/14 5,998,500 4,82 5,000,000.00 FEDERAL HOME LN MTG CORP 1.19 5.05 Ann 101.49 5,113,950 13.47 0.38 3137EABA6 5.125%11/17/2017 DD 10/12/07 5,074,500 4.08 BANRB is FINANCE 870,000.00 BANK OF NEW YORK MELLON CORP/T 1.42 1.30 Al 99.93 869,365 2.31 0.56 06406HCE7 1.300%01/25/2018 DO 10/25/12 869,408 0.70 1,000,000.00 CHARLES SCHWAB CORP/THE 1.46 1.50 A2 100.03 1,001,100 2.66 0.69 808513AK1 1.500%03/10/2018 DO 03/10/15 1,000,280 0.80 1,000,000.00 HSBC USA INC 1.56 1.62 A2 100.03 1,000,340 2.66 0.54 40428HPH9 1.625%01/16/2018 DO 12/20/12 1,000,340 0.80 1,000,000.00 JPMORGAN CHASE&CO L81 5.87 A3 102.25 1,032,600 2.71 0.52 46625HGYO &000%0 1/15/2018 DO 12/20/07 1,022,470 0.82 INDUSTRIALS 1,000,000.00 UNITED PARCEL SERVICE INC 1.37 1.13 Al 99.94 999,580 2.65 0.25 911312AP1 1.125%10/01/2017 DO 09/27/12 999,390 0.80 1,000,000.00 ORACLE CORD 1.37 1.20 Al 99.95 999,870 2.65 0.29 68389XAN5 1.200%10/15/2017 DO 10/25/12 999,500 0.80 1,000,000.00 CHEVRON CORD 1.39 1.34 As2 99.98 1,000,780 2.65 0.36 16676413C3 1.344%11/09/2017 DO 11/17/15 999,830 0.80 1,000,000.00 AMERICAN HONDA FINANCE CORP 1.40 1.50 Al 100.07 1,001,140 2.66 0.69 02665WATB 1.500%03/13/2018 DO 03/13/15 1,000,690 0.80 1,000,000.00 GENERAL ELECTRIC CO 1.43 5.17 Al 101.64 1,033,650 2.70 0.43 369604BC6 5.250%12/06/2017 DO 12/06/07 1,016,420 0.82 7/12/2017 11:26.12" EDT 3 Source:TheB ofNeu,Pork Mellon Corporadon Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON OCSF07511102 6/30/2017 Liquid Oper-Psm<o Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(SOP) t Quality Price Market Value %Market AQj Yield Rating Value Duration 550,000.00 JOHN DEERE CAPITAL CORP 1.50 1.35 A2 99.92 149,764 1.46 0.54 24422EST7 1.350%01/16/2018 DO 01/16/15 549,549 0.44 1,000,000.00 JOHNSON It JOHNSON 1.66 5.52 Aaa 100.48 1,015,310 2.67 0.12 478160AQ7 5.550%08/15/2017 DO 08/16/07 1,004,820 0.81 SUPRANATIONALS 1,162,000.00 INTERNATIONAL BANK FOR RECONST 1.26 1.13 Asa 99.99 1,163,057 3.09 0.05 459058DC4 1.125%07/18/2017 DO 07/16/13 1,161,919 0.93 TREASURIES 2,500,000.00 U S TREASURY NOTE L07 0.63 Ass 99.89 2,496,688 6.63 0.25 912828TS9 0.625%09/30/2017 DO 09/30/12 2,497,225 2.01 TOTAL:FIEED INCOME 1.20 1.96 37,563,530 100,00 0.28 37,478,416 TOTAL:Liquid Oper-Pienco 1." 0.65 124,200,657 100.00 0.15 124,441,479 7/12/2017 11:26.12" EDT 4 Source:The HaNc. fNew York M,Oa Corporadon Yield Analysis Report ID: RAM234 Base Currency: BNY MELLON OCSF07522202 6/30/2017 Long Term Oper-Plmeo Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(EOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration CASH &.TEMPORARY Sum o(Acmuut Receivables - 0.00 SUMRECV 1,524,175 COMMERCIAL PAPER 6,345,000.00 BANK TOKYO-MITSUB DISC 0.85 0.8$ P-1 99.70 6,319,627 40.53 0.35 06538BU76 07/07/2017 6,319,627 1.90 6,300,000.00 TOYOTA MTR CR CP DISC 8.38 P-1 99.24 6,251,999 40.10 0.09 89233GV29 08/02/2017 6,251,999 1.88 OTHER 60,641.49 SLH PROXY LONG EXPOSURE - - 93,295 0.16 - 99WAEU30 SLHOPNTA4 25,621 0.01 2,924,235.79 DREYFUS TREAS&.AGY CSH CSH MG - Aaa 2,924,236 18.76 0.08 996085247 VAR RT 12/31/2049 DO 04/09/97 2,924,236 0.88 OS CASH 1.00 USD(UNITED STATES DOLLAR) - - 0 0.00 - NA9123459 GL PAYABLES RECEIVABLES 0 0.00 TOTAL:CASH 6 TEMPORARY 4.57 0.84 15,589,157 100.00 0.19 17,045,668 FIXED INCOME AGENCIES&OTHER GOVT OBL 5,000,000.00 FEDERAL HOME LN MTG CORP 1.01 0.75 Ana 99.99 4,994,250 1.58 0.04 3137EADV8 0.750%07/14/2017 DO 05/29/15 4,999,500 1.51 7/12/2017 11:26.12" EDT 5 Source:The BaNc. fNew York Mellen Communion Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON OCSF07522202 6/30/2017 Long Term.Opar Plmco Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(SOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration 5,000,000.00 FEDERAL HOME LN MTG CORD 1.19 0.75 A. 99.77 4,967,500 1.58 0.53 3137EADN6 0950%01/12/2018 DD 11/21/12 4,988,400 1,50 7,500,000.00 FEDERAL HOME LN BK CONS BD 1.23 1.37 Aae 100.10 7,544,850 2.37 0.68 313378A43 1.375%03/09/2018 DD 02/13/12 7,507,500 2.26 5,000,000.00 FEDERAL HOME LN MTG CORP 1.25 0.88 Aae 99.74 4,974,100 1.58 0.68 3137EADP1 0.875%03/07/2018 DD 01/17/13 4,987,050 1.50 5,000,000.00 FEDERAL NATL MTG ASSN 1.37 1.13 Aaa 99.65 4,963,950 1.57 1.44 3135GOG72 1.125%12/14/2018 DD 11/03/15 4,982,250 1.50 7,500,000.00 FEDERAL HOME LN BK CONS BE, 1.43 1.50 Aaa 100.12 7,589,190 2.37 1.66 3133782M2 1.500%03/08/2019 DD 02/06/12 7,509,225 2.26 7,500,000.00 FEDERAL HOME LN MTG CORP 1.50 1.26 Aaa 99.45 7,399,650 2.36 2.21 3137EADM8 1.250%10/02/2019 DD 10/02/12 7,458,750 2.25 5,000,000.00 FEDERAL NATL MTG ASSN 1.58 1.50 Aaa 99.76 4,955,650 1.58 2.91 3135GOD75 1.500%06/22/2020 DD 04/27/15 4,987,800 1.50 5,000,000.00 FEDERAL HOME LN BK CONS BE, LAS 1.74 Aaa 100.34 5,008,950 1.59 2.87 313383HU8 1.750%06/12/2020 DO 06/03/13 5,017,000 1.51 5,365,000.00 FEDERAL HOME LN BK CONS BE, L68 1.39 Aaa 98.92 5,343,325 1.68 3.52 313OA7CV5 1.375%02/18/2021 DO 02/18/16 5,307,219 1.60 7,500,000.00 FEDERAL NATL MTG ASSN 1.69 1.51 Aaa 99.39 7,370,726 2.36 3.32 3135GOF73 1.500%11/30/2020 DO 10/19/15 7,453,950 2.25 10,000,000.00 FEDERAL NATL MTG ASSN 1.72 1.39 Aaa 98.77 10,040,950 3.12 3.54 3135GW20 1.375%02/26/2021 DO 02/05/16 9,877,300 2.98 3,000,000.00 FEDERAL NATL MTG ASSN 1.92 1.99 Aaa 100.33 2,994,570 0.95 4.28 3135GOS38 2.000%01/05/2022 DD 0 1/09/17 3,009,990 0.91 7/12/2017 11:26.12" EDT 6 SOu¢ Ma DaNc. fNew York Mellon Corporndon Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON OCSF07522202 6/30/2017 Long Term.Opar Plmco Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(EOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration 5,000,000.00 FEDERAL NATL MTG ASSN L94 1.88 A. 99.69 4,972,500 1.58 4.54 3135GUF45 1.875%04/05/2022 DO 04/10/17 4,984,300 1,50 BANKS&PIW"CE 3,000,000.00 HSBC USA INC 1.56 1.62 A2 100.03 3,003,290 0.95 0.54 40428HPH9 1.625%01/16/2018 DO 12/20/12 3,001,020 0.90 3,800,000.00 BANK OF AMERICA CORP 1.68 5.65 Baal 101.69 4,334,014 1.22 0.42 060505DP6 5.750%12/01/2017 DO 12/04/07 3,864,296 1.16 5,000,000.00 JOHN DEERE CAPITAL CORP 1.76 2.27 A2 101.16 5,046,984 1.60 2.14 24422ESS9 2.300%09/16/2019 DO 09/15/14 5,057,950 1.52 2,900,000.00 AMERICAN EXPRESS CO 1.77 6.75 A3 103.72 3,377,386 0.95 0.70 025816AY5 7A00h 03/19/2018 DO 03/19/08 3,007,793 0.91 3,200,000.00 BEAR STEARNS COS LLC/THE L81 4.52 A3 102.82 3,523,520 1.04 0.96 073902CD8 4.650%07/02/2018 DO 06/25/03 3,290,208 0A9 5,000,000.00 GENERAL ELECTRIC CO L83 2.18 Al 100.91 5,014,950 1.59 2.42 36962G7M0 2.200%01/09/2020 DO 01/09/15 5,045,250 1.52 2,120,000.00 BANK OF NEW YORK MELLON CORP/T L84 2.28 Al 100.99 2,142,175 0.68 2.12 06406HCW7 2.300%09/11/2019 DO 09/11/14 2,140,903 0b4 600,000.00 GOLDMAN SACHS GROUP INC/THE L84 5.82 A3 102.24 692,806 0.19 0.53 38141GFG4 &950%01/18/2018 DO 0 1/18/08 613,410 0.18 5,000,000.00 WELLS FARGO&CO 2.12 2.56 A2 101.41 5,001,650 1.60 2.91 94974BGM6 2.600%07/22/2020 DO 07/22/15 5,070,500 1.53 1,250,000.00 HSBC USA INC 2.12 2.34 A2 100.59 1,222,788 0.40 2.57 40428HPR7 2.350%03/05/2020 DO 03/05/15 1,257,338 0.38 7/12/2017 11:26.12" EDT 7 Sou¢ Ma DaNc. fNew Pork Mellon Corporndon Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON OCSF07522202 6/30/2017 Long Term.Oper-Plmco Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(SOP) t Quality Price Market Value %Market AQj Yield Rating Value Duration 2,000,000.00 JPMORGAN CHASE&CO 2.12 2.24 A3 100.31 1,994,880 0.63 2A6 46625HKA7 2.250%01/23/2020 DD 01/23/15 2,006,200 0,60 4,000,000.00 BERKSHIRE HATHAWAY FINANCE CDR 2.31 2.91 Aa2 103.16 4,131,120 1.30 4.54 084664BT7 3.000%05/15/2022 DD 05/15/12 4,126,480 1.24 2,500,000.00 BANK OF NEW YORK MELLON CORP/T 2.44 2.58 Al 100.70 2,504,475 0.80 4.30 06406RAA5 2.600%02/07/2022 DD 02/07/17 2,517,475 0.76 2,800,000.00 MORGAN STANLEY 2.66 4.96 A3 110.89 3,200,848 0.98 3.62 61747WAL3 5.500%07/28/2021 DD 07/28/11 3,104,808 0.94 600,000.00 ESC LEHMAN BRTH HLD ESCROW - - 6.25 344,721 0.01 - 525ESCIB7 0.000%11/24/2013 DD 01/22/08 37,500 0.01 2,000,000.00 LEHMAN BRTH HLD ESC - - 6.25 1,181,189 0.04 - 525ESCOY6 0.000%12/30/2016 DD 10/24/05 125,000 0.04 CARDS 4,140,000.00 CHASE ISSUANCE TRUST A7 A7 1.38 1.06 - 99.93 4,139,643 1.31 0.21 161571HHO 1.060%09/16/2019 DO 09/13/16 4,137,268 1.25 1,810,000.00 HONDA AUTO RECEIVABLES 202 A3 1.60 1.39 Aaa 99.79 1,809,965 0.57 1.02 43814QAC2 1A90%04/15/2020 DO 05/31/16 1,806,163 0.54 CARE 598,200.81 HONDA AUTO RECEIVABLES 20 1 A2 1.26 1.01 - 99.96 598,141 0.19 0.09 43814NAB1 1.010%06/18/2018 DD 02/25/16 597,968 0.18 30,381.66 HONDA AUTO RECEIVABLES 20 2 A3 1.35 0.77 Ass 99.97 30,360 0.01 0.02 43814GAC4 0.770%03/19/2018 DD 05/21/14 30,373 0.01 1,663,973.75 NISSAN AUTO RECEIVABLES C A2A 1.38 1.07 - 99.87 1,663,908 0.53 0.37 65478WAB1 1.070%05/15/2019 DD 08/10/16 1,661,861 0.50 7/12/2017 11:26.12" EDT 8 Sou¢e:The BaNc. fNew Pork Mellon Corporndon Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON OCSF07522202 6/30/2017 Long Term.Oper-Plmco Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(SOP) t Quality Price Market Value %Market AQj Yield Rating Value Duration 1,563,654.43 TOYOTA AUTO RECEPIABLES 2 A A3 L38 1.12 A. 99.90 1,563,418 0.49 0.27 89236WAC2 I.120%02/15/2019 DO 03/04/15 1,562,091 0,47 1,885,000.00 HONDA AUTO RECEIVABLES 20 1 A2 1.44 1.42 Aaa 99.99 1,884,955 0.60 0.81 43814TAB8 1.420%07/22/2019 DO 03/28/17 1,884,812 0.57 1,365,000.00 NISSAN AUTO RECEIVABLES A A2A 1.50 1.47 Aaa 99.97 1,364,993 0.43 0.79 654747AB0 1.470%01/15/2020 DO 03/28/17 1,364,522 0.41 EQUIpleg"LOANS 1,410,000.00 JOHN DEERE OWNER TRUST 20 A A2 1.53 1.50 Asa 99.97 1,409,994 0.45 0.56 47787XAB3 1.500%10/15/2019 DO 03/02/17 1,409,591 0.42 2,349,408.52 JOHN DEERE OWNER TRUST 20 B A2 1.56 1.09 Ase 99.91 2,349,265 0.74 0.18 47788NAB4 1M90%02/15/2019 DO 07/27/16 2,347,271 0.71 2,420,000.00 JOHN DEERE OWNER TRUST 20 A A3 1.71 1.36 Aaa 99.78 2,419,619 0.76 0.64 477881AAC4 1.360%04/15/2020 DO 03/02/16 2,414,579 0.73 759,777.67 JOHN DEERE OWNER TRUST 20 B A3 1.91 1.07 Aae 99.90 760,134 0.24 0.08 477877AD6 1.070%11/15/2018 DO 09/03/14 759,041 0.23 FANNIE MAB REKIC 295,835.71 FNMA GTD REMIC P/T 11-3 FA 1.63 1.68 Aaa 101.30 295,743 0.09 0.15 31397QRE0 VAR RT 02/25/2041 DD 01/25/11 299,679 0.09 FHLMC 2,306.83 FHLMC POOL#78-6064 228 3.19 Aaa 102.80 2,227 0.00 0.54 31348SWZ3 VAR RT 01/01/2028 DO 12/01/97 2,371 0.00 FNMA 355,945.49 FNMA POOL#0466397 1.98 3.26 Aae 104.29 348,243 0.12 3.08 31381PDA3 3.400%11/01/2020 DO 11/01/10 371,230 OA1 7/12/2017 11:26.12" EDT 9 Source:The HaNc. fNew Pork M,Fa Corporndon Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON OCSF07522202 6/30/2017 Long Term.Opar Plmco Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(SOP) t Quality Price Market Value %Market AQj Yield Rating Value Duration 134,613.02 FNMA POOL#0823358 2.15 3.27 Aaa 105.49 133,561 0.04 0.66 31406XWT5 VAR RT 02/01/2035DD04/01/05 141,998 0A4 26,938.17 FNMA POOL#0826080 2.30 4.55 Aaa 109.85 28,959 0.01 2.52 31407BXH7 5.000%07/01/2035 DD 06/01/05 29,592 0.01 21,945.63 FNMA POOL#0257179 2.34 4.19 Aaa 107.48 23,210 0.01 3.26 31371NUC7 4.500%04/01/2028 DD 03/01/08 23,587 0.01 26,769.25 FNMA POOL b0MA0022 2.36 4.19 Aaa 107.50 28,311 0.01 3.16 31417YAY3 4.500%04/01/2029 DD 03/01/09 28,777 0.01 16,548.65 FNMA POOLb0AL0869 2.37 4.19 Aaa 107.46 17,502 0.01 3.11 3138EG6F6 4.500%06/01/2029DD09/01/11 17,784 0.01 4,818.39 FNMA POOLN0748678 2.39 4.56 Aaa 109.92 5,180 0.00 2.81 31403GXF4 5.000%10/01/2033 DD 10/01/03 5,287 0.00 153,284.18 FNMA POOL#0357969 2A4 4.55 Aaa 109.99 164,780 0.05 2.59 31376ET22 5.000%09/01/2035 DD 09/01/05 168,288 0.05 149,365.49 FNMA POOL#0745580 2A7 4.56 Aaa 109.77 160,568 0.05 2.71 31403DJZ3 5.000%06/01/2036 DD 05/01/06 163,951 0.05 293,554.37 FNMA POOL#0888336 2A9 4.55 Asa 109.78 315,571 0.10 2.81 3141OF4V4 5.000%07/01/2036 DD 04/01/07 322,267 0.10 252,064.97 FNMA POOL#0815971 2.54 4.55 Aaa 109.77 270,970 0.09 2.84 31406PQY8 5.000%03/01/2035 DD 03/01/05 276,702 0.08 FREDDIE MAC MULTICLASS 33,867.35 MlAfC MULTICLASS MTG E3 A 1.17 2.86 Aaa 104.67 33,903 0.01 0.47 3133ME95 VAR RT 08/15/2032 DD 12/01/97 35,449 0.01 7/12/2017 11:26.12" EDT 10 Soume:The E¢Nc. fNew York Mellon Corporation Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON OCSF07522202 6/30/2017 Long Term.Oper-Plmco Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(SOP) t Quality Price Market Value %Market AQj Yield Rating Value Duration 900,000.00 FHLMC MULTICLASS MTG K006 A2 L84 4.03 NR 105.50 951,047 0.30 2.31 31398VJ98 4.251%01/25/2020 DD 04/01/10 949,455 0.29 918,331.16 MlAfC MULTICLASS MTG 58 2A 3.36 5.61 Aaa 115.85 1,040,039 0.34 3.18 31394JY35 6.500%09/25/2043 DD 09/01/03 1,063,868 0.32 ORMA 79,331.04 GNMA II POOL#0080965 1.49 2.58 Aaa 103.76 79,281 0.03 0.29 36225DCBB VAR RT 07/20/2034DD07/01/04 82,311 0.02 26,131.10 GNMA II POOL a080088M 1.72 2.58 Aaa 103.46 26,703 0.01 1.18 36225CC20 VARRT 06/20/2027DD06/01/97 27,036 0.01 9,763.34 GNMA II POOL a0080395 1.79 2.58 Aaa 103.58 9,675 0.00 0.97 36225CNM4 VARRT 04/20/203ODD04IOl/M 10,113 0.00 22,836.39 GNMA II POOL s0080023 1.81 2.59 Aaa 103.07 23,215 0.01 0.55 36225CA 9 VAR RT 12/20/2026 DD 12/01/96 23,537 OA1 79,490.18 GNMA II POOL s080408X 1.82 2.58 Aaa 103.48 78,683 0.03 1.11 36225CN28 VAR RT 05/20/203ODD05/01/00 82,257 0.02 ONMA RBAHC 25,879.97 GNMA GM REMIC P/T 00-9 FH 1.36 1.66 Aaa 100.44 25,880 0.01 -0.04 3837114NX9 VAR RT 02/16/2030 25,995 0.01 HOME EQUITY 133,743.29 AMRESCO RESIDENTIAL SECURI 1 A 1.74 1.00 - 94.35 100,433 0.04 0.00 03215PFN4 VAR RT 06/25/2029 DD 10/20/99 126,185 0.04 DiDUSTRUX3 2,000,000.00 CHEVRON CORP 1.24 1.10 Aa2 99.94 1,988,600 0.63 OA3 166764AA8 L104%12/05/2017 DD 12/05/12 1,998,840 0.60 7/12/2017 11:26.12" EDT 11 Sourc Ma BaNc. fNew Pork Mellon Corporndon Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON OCSF07522202 6/30/2017 Long Term.Opar Plmco Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(EOP) t Quality Price Market Value %Market AQj Yield Rating Value Duration 2,000,000.00 INTEL CORP L40 1.35 Al 99.98 2,008,280 0.63 0.46 458140AL4 1.350%12/15/2017 DD 12/11/12 1,999,520 0,60 2,000,000.00 OCCIDENTAL PETROLEUM CORP 1.67 1.50 A3 99.89 1,986,340 0.63 0.62 674599CD5 1.500%02/15/2018 DD 06/22/12 1,997,860 0.60 4,000,000.00 ELI LILLY&CO 1.69 1.94 A2 100.44 4,009,675 1.27 1.67 532457BF4 1.950%03/15/2019 DD 02/25/14 4,017,720 1.21 4,000,000.00 AMERICAN HONDA FINANCE CORP 1.84 2.23 Al 100.85 4,046,640 1.27 2.05 02665WAH4 2.250%08/15/2019 DD 09/09/14 4,033,960 1.22 5,000,000.00 QUALCOMM INC 1.91 2.23 Al 100.95 4,995,195 1.60 2.79 747525AD5 2.250%05/20/2020 DD 05/20/15 5,047,450 1.52 3,000,000.00 ER ON MOBIL CORP 2.04 2.21 Ass 100.66 3,016,097 0.95 3.50 30231GAV4 2.222%03/01/2021 DD 03/03/16 3,019,680 0.91 4,000,000.00 APPLEINC 2.06 2.24 Aal 100.66 4,050,840 1.27 3.47 037833B58 2.250%02/23/2021 DD 02/23/16 4,026,520 1.21 3,045,000.00 MICROSOFT CORP 2A0 1.58 Aaa 97.84 3,041,385 0.94 3.95 594918BP8 1.550%08/08/2021 DD 08/08/16 2,979,319 0.90 2,500,000.00 CHEVRON CORP 2AS 2.11 Ae2 99.70 2,485,350 0.79 3.71 166764BG4 2.100%05/16/2021 DD 05/16/16 2,492,450 0.75 3,350,000.00 OCCIDENTAL PETROLEUM CORP 2.49 2.59 A3 100.48 3,354,590 1.06 4.49 674599CE9 2.600%04/15/2022 DD 04/04/16 3,366,181 1.01 OTHER CMO GOUT AGERCEEB 329,924.57 NCUA GUARANTEED NOTES TR R2 lA 1.48 1.41 Aaa 100.05 329,900 0.10 0.08 62888UAA8 VARRT 11/06/2017DDll/17/10 330,083 0.10 7/12/2017 11:26.12" EDT 12 Sou¢ Ma DaNc. fNew Pork Mellon Corporndon Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON OCSF07522202 6/30/2017 Long Term.Oper-Plmco Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(SOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration 62,182.38 SBA GTD PARTN CTFS 2001-20C1 L79 6.03 Aaa 105.11 62,182 0.02 LIO 83162CWO 6.340%03/01/2021 65,359 0.02 SOVEREIGN DEBT 5,000,000.00 INTERNATIONAL BANK FOR RECONST 2.00 2.00 Aaa 100.00 5,030,550 1.58 4.34 459058FY4 2.000%91/26/2022 DO 0 1/26/17 4,999,900 1.51 STUDENT 33,013.57 SLM STUDENT LOAN TRUST 200 9 A 2A 1 2.60 Baa3 102.13 32,880 0.01 OA4 78445JAA5 VAR RT 04/25/2023DD08/28/08 33,716 0.01 SUPRANATIONALS 5,000,000.00 INTER-AMERICAN DEVELOPMENT BAN LI5 1.00 Aae 99.99 5,019,550 1.58 0.04 4581XOCG1 1.000%07/14/2017 DD 04/30/14 4,999,700 1.51 5,000,000.00 INTERNATIONAL BANK FOR RECONST 1.35 1.00 Aaa 99.67 4,991,170 1.58 0.95 459058EJ8 1.000%06/15/2018 DD 04/30/15 4,983,250 1.50 3,035,000.00 INTER-AMERICAN DEVELOPMENT BAN 1.72 1.63 Aaa 99.74 3,027,807 0.96 2.79 4581XOCX4 1.625%05/12/2020 DD 04/12/17 3,027,079 0.91 3,500,000.00 INTER-AMERICAN DEVELOPMENT BAN 1.90 1.88 Aaa 99.90 3,590,405 1.11 3.56 4581XOCS5 1.875%03/15/2021 DD 01/14/16 3,496,325 1.05 2,500,000.00 INTERNATIONAL FINANCE CORP 1.91 1.16 Aaa 96.93 2,441,600 0.77 3.94 45950KCJ7 1.125%07/20/2021 DD 07/20/16 2,423,350 0.73 3,000,000.00 INTER-AMERICAN DEVELOPMENT BAN 2.03 2.12 Aaa 100.60 2,996,310 0.95 4.30 4581XOCW6 2.125%01/18/2022 DD 01/18/17 3,018,030 0.91 TIPS 0.00 US TREAS-CPI INFLAT 1.67 1.08 Aaa 103.84 0 0.00 2.87 912828PP9 L125%01/15/2021 DO 01/15/Il 0 0.00 7/12/2017 11:26.12" EDT 13 Source:The BaNc. fNew York M,Ua Corporation Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON OCSF07522202 6/30/2017 Long Term.Oper-Plmco Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(SOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration 10,708,984.00 US TREAS-CPI INFLT 2.16 0.13 Aaa 98.23 10,591,700 3.32 5.83 912828W O O.125%07/15/2024 DD 07/15/14 10,519,114 3.17 TREASURIES 2,000,000.00 U S TREASURY NOTE 1.12 0.88 Aaa 99.91 1,989,757 0.63 0.37 91282SG20 0.875%11/15/2017 DD 11/15/14 1,998,200 0.60 3,500,000.00 U S TREASURY NOTE 1.21 0.75 Aaa 99.70 3,496,457 1.10 0.66 912828UR9 0.750%02/28/2018 DD 02/28/13 3,489,325 1.05 5,000,000.00 U S TREASURY NOTE 1.36 1.50 Aaa 100.24 5,016,423 1.58 1.72 912828SN1 1.500%03/31/2019 DD 03/31/12 5,011,900 1.51 11,000,000.00 U S TREASURY NOTE 1.37 1.50 Aaa 100.20 11,042,439 3.48 1.55 91282SB33 1.500%01/31/2019 DD 01/31/14 11,022,330 3.32 2,000,000.00 U S TREASURY NOTE L40 1.62 Aaa 100.45 1,996,861 0.63 1.96 912828WSS 1.625%06/30/2019 DD 06/30/14 2,008,900 0.61 5,000,000.00 U S TREASURY NOTE L40 1.62 Aaa 100.46 5,012,389 1.59 2.03 912828WW6 1.625%07/31/2019 DD 07/31/14 5,022,850 L51 5,800,000.00 U S TREASURY NOTE L42 1.74 Aae 100.72 5,873,187 1.85 2.20 912828F39 1.750%09/30/2019 DD 09/30/14 5,841,702 1.76 7,500,000.00 U S TREASURY NOTE L46 1.50 Aaa 100.09 7,449,635 2.37 2.37 91282SG61 1.500%11/30/2019 DD 11/30/14 7,507,050 2.26 5,000,000.00 U S TREASURY NOTE 1.55 1.50 Aae 99.85 4,966,423 1.58 2.85 912828X 5 1.500%05/31/2020 DD 05/31/15 4,992,600 1.50 5,500,000.00 U S TREASURY NOTE 1.63 1.39 Aaa 99.18 5,424,667 1.72 3.25 9128281.99 1.375%10/31/2020 DD 10/31/15 5,454,900 1. 4 7/12/2017 11:26.12" EDT 14 Soume:The E¢Nc. fNew York Mellon Corporndon Yield Analysis Report ID: RAM234 Base Currency: BED BNY MELLON OCSF07522202 6/30/2017 Long Term.Opar Plmco Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(SOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration 6,000,000.00 U S TREASURY NOTE L68 1.39 Aaa 98.95 5,895,840 1.88 3.47 91282SN89 1.375%01/31/2021 DO 01/31/16 5,937,180 1,79 7,000,000.00 U S TREASURY NOTE 1.79 1.16 Aae 97.27 6,757,914 2.15 4.13 912828T34 1.125%09/30/2021 DO 09/30/16 6,809,110 2.05 6,000,000.00 U S TREASURY NOTE 1.81 1.28 Aaa 97.68 5,813,692 1.85 4.21 912828T67 1.250%10/31/2021 DO 10/31/16 5,860,800 1.77 7,000,000.00 U S TREASURY NOTE 1.81 1.75 Aaa 99.74 6,900,492 2.21 4.25 912828U65 1.750%11/30/2021 DO 11/30/16 6,981,660 2.10 3,000,000.00 U S TREASURY NOTE 1.85 1.87 Aaa 100.13 3,004,815 0.95 4.37 912828V72 1.875%01/31/2022 DO 0 1/31/17 3,003,750 0.90 5,000,000.00 U S TREASURY NOTE 1.86 1.76 Aaa 99.48 4,976,384 1.57 4.55 91282806 1.750%03/31/2022 DO 03/31/15 4,974,200 1.50 US TAXABLE MUM BONDS 1,400,000.00 NEW YORK CITY NY TRANSITIONAL 1.88 3.81 Aal 107.06 1,400,000 0.47 3.12 64971M5E8 4.075%11/01/2020 DO 11/03/10 1,498,882 OAS 2,440,000.00 PORT AUTH OF NEW YORK S,NEW JE 1.93 4.92 Aa3 107.94 2,507,634 0.83 2.28 73358WAG9 5.309%12/01/2019 DO 07/01/09 2,633,712 0.79 400,000.00 UNIV OF CALIFORNIA CA ROTS MED 2.54 4.61 Aa3 109.14 400,000 0.14 3.53 913366EJ5 5.035%05/15/2021 DO 11/IS/10 436,572 0.13 TOTAL:FIXED INCOME 1.68 1.78 317,017,091 100.00 2.80 314,950,647 TOTAL:Long Term OPer-Pimco 1.79 1.76 332,606,248 100.00 2.39 331,996,306 7/12/2017 11:26.12" EDT 15 Source:The BaNc. fNew York M tba Corporation Yield Analysis Report ID: NAM234 Base currency: BNY MELLON OCSF07555502 6/30/2017 O.C.S.Escrow Account Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(SOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration CASH &.TEMPORARY Sum o(Acmunt Receivables - 0.00 SUMRECV 5,680 TOTAL:CASH&TEMPORARY 0.00 0.00 100.00 5,680 FIXED INCOME TREASURIES 3,600,000.00 U S TREASURY NCTE 1.27 0.75 Asa 99.59 3,590,016 99.84 0.79 912828K25 0.750%04/15/2018 DD 04/15/15 3,585,240 99.84 TOTAL:F=D INCOME 1.27 0.75 3,590,016 300.00 0.78 3,585,240 TOTAL:O.C.S.Escrow Account 1.27 0.75 3,590,016 100.00 0.78 3,590,920 7/12/2017 11:26.12" EDT 16 Source:The DaNc. fNew York Megan Communion j� Asset Detail BNY MELLON OCSD-CONSOLIDATED-0CSGOOO1O000 As Of Date 6/30/2017 m Mellon Security OesOnwion Base Price ShareslPar Base Cost Base Market Percent of Local Unrealized Net UnrealizeO GaiNLoss Base Security lO Value Total GalnII Grand Total 460.116,075.486 462,252,712.51 460,028,705.37 100.00 -2,224,007.14 CASH&CASH EQUIVALENTS 102,451,210.160 104,082,075.97 104,014,402.41 22.61 -67,673.56 U.S.DOLLAR 102,451,210.160 104,082,075.97 104,014,402.41 22.61 -67,673.56 INTEREST RECEIVABLE IIN, OWp L&5577604 lJ.117600 041 p.00 1N RECEIVABLE FOR INVESTMENTS SOLO I NN 0Wp 1626 R. N538BU78 BANK TOKY0MITSUB OUVOO1b]I201] .Coal 0,050000 9 Lou 000 0X17 POP B 91,O17He. 1. IN .1 N538BUR2 BANK TONSONOTSUB DISW]I3SR01] AS7. 1SW,000WO IA.F 50887 1,I955N.87 033 0.00 ON 3133BSJK3 FEDERAL HOME ON BK CONS DISC NW21I2017 .7.1 100W,000WD 9,978,51390 B970,11 S. 217 0.00 000 STON1100 FEDERAL HOME ON BK CONS OISCMAT OVOM 01] 8B9010 BW.000 AN OR 25566 ONSPL.SS 017 0.10 1N 313395196 FEDERAL HOME LN CK CONS DISC N07QW2017 99 7824 S,OM,000Jr. 4NI11792 4NI117 S2 313385J%5 FEDERAL HOME ON BY CONS DISCOBtlXA1] SO 0249 9,0(QWO WO Seat 23750 SON423150 IOF 000 ON 3135NJ07 FEDERAL NAIL MTG ASSN DISCO OW%0]128201]DO DRIIIB 990W3 190W,000000 1a.Droo. MN2050.W 4,12 0.00 000 Nual MU0 SVENSKA HANDELSBKN AS C1D1175%1010211 DO ONAX17 TOO NC0 10W,000WO 1ONOOT 85 1,W0019.85 0.22 D.00 ON 89113WEE2 TORONTO DOMINION BANK G01200%01I13kO17 DO 01 HO 58 0W00 W 1 ,0O 1.W034 2 .39 LW031 2 . OBITOY0TA MTR OR OP DISM711 ANTI N1503 1,9W,W0 W0 1,895 IS,.1 11895$5581 041 09233GV29 TOl MTR OR OP OISCOBN22017 _ 9B2301 8,3fA000000 8,2519NN 8.251,99O25 1M ON ON OUCOPKER U S TREASURY BILLS OW%OSS00017 DD OA2J16 AS oV76 SOW,WO.WO 4.990,38125 40590,381.25 UN DOS 000 9127WLG2 U S TREASURY BILLO XN%DCOWN17 011 .7.1 150W,000WO L,962,01803 MJN281803 38 0.00 000 91n95LD1 U S TREASURY SILLOON%0W12017 DO 0M217 V7.1 12' N,N0 Np 12985150.N 128651N.N 2e2 010 10. 9520 DREYFUS TREAS&AGY CRT OBH MGVAR FIT TM1I20490O O AAAR 1000Wp F.,A66870 BVIO,560.87 5,0405..7 1 27 0.00 99WAEW0 MH FRO% LONG ENJOSURESLH0FNTA4 04SN & 1090 932.an 2562103 001 -87.873.58 8],873.56 FIXED INCOME SECURITIES 357,884,885.326 358,170,535.54 356,014,302.96 77.39 -2,156,333.58 U.S.DOLLAR 357,864,865.326 358,170,636.54 356,014,302.96 77.39 .2,156,333.58 0O.UFAY5 AMERIGN EXPRESS COT WO%OSI19IID10000119IW 1037170 2FOLO00 WO SOOT 3899 300779300 065 -30B59279 02NSWAJN AMERIGN HONDA FINANCE ODOM 250%OMUSCOA DO NMW14 1.0 0490 60WWLO, OD 4.04BF.00 4,O339M.W 80 O80 -120.00 312,S8000 02RAWAS PMERICAN HONDA FINANCE CORAL SW%OCVHVX10 D003I1M15 TOO N0 10VOLONO LWI 14000 1W0693.00 022 J50.00 L5000 03215PFW PMRESC0 RESIDENTIAL SECURI I SOAR RT ON263129 D010YONs 9f.390 133,4329D 1004U 85 12B, 85.W 003 25]5261 25752.61 OOLOSSI APPLE INOS 250%02QN20210O 0 YS3I18 4,OW,W p 4,N0N 00 4,0N;M.W - 0ee 2 32000 -2432000 NOSOSDPB BANK OF AMERICA COWS.M%12AVM17 D0 ISONAS U.,Sol 3,BW,NO WO 4,334,01400 3,0%,293W 081 JB9,]10.00 -489 71800 N4TI BAN K OF N EW WORK M ELLON CORPRIW%01252010 D010 ND 2 999320 BID,NONO ORD 30490 NB 4MAO 0.19 43.50 4350 OANICW] BANK OF NEW YOHN MELLON C0RPII2.3W%GM1 TOOTS D00OI L4 100 Wea 212OCI 2.1421]520 2,1409N.20 0.47 12]2.00 127200 PARK OF NEWYORK MELLON CORP?26Po%p2N72022 DO 0M7117 TO NN 25W,00O.1 2,504,47500 2,517 475SO 0 Or 13W000 0]3902000 BEAR STEARNS COR LLC/IHECROM NN2/2018 DD OVAIN _ 3RN,NO NO 552S,SID.00 .or OR 533312N312 Or 0LINI BERKSIORE HLTHAWAY FINANCE C0R3 01 ODSCa 3DO OMIV12 1031820 4,OMNO NO 4,UU 1.00 4.1284W.00 090 dM000 234,OurN 161571HHD CHASE ISSUANCE MUST AS All III OWUN 98O MUSTS 999340 4,U....ON 4.139643.13 4.137267.0 VOL 1.37S53 237553 lN764PA0 CHEVRON C0ROT 104%USNABO11]D012MV12 989420 20W,NOWO LN56W 00 1.W58W.00 043 10.240.00 10$4001 166764BC3 CHEVRON C0RPI 344%11109,2017 DO 11117115 1,OW.NO WO 1,W0780.00 an.,. 022 95010 110, - 16W81BG4 CHEVRON C0RP2.iN%0HINCO1 DD OVIN18 OF ANOO 25W,NO WO 2405,350.00 2,492 450 00 0. ]ANT. 71.101 2M22ESS9 J0HN DEERE CAPITAL CORPS.300%WIM2019 DO OflH5114 Hot ist0 S,ON,NONO SW6SBLN SNT9N.N 1,10 10,N600 149N 00 24422EST7 J0HN DEERE CAPITAL CORPU35O%01I1M201B OO Dlll&l 5 900100 SSQNO.ND 549,]63to 54a EN.0 0.12 R14.50 R14.NO 3(C31GAW E%%ON M0BIL CORP2222%0SVoX21 DO OSOOSHO tooNp SNoun)WO SJUSO740 SJOBSOON 0IN SJXSSN 3,582N FEDERAL HOME ON Be CONS SOLII Oe1I. 1DO 0&1N113 5,365,00O.1 5,34SJOE 40 530721095 ill d610645 31331 FEDERAL HOME IN BK CONSBOL SN%O1C32019 DO NMMI2 1001230 71yourO NO 7,N91.O0 ],509,225.N LB] TO as 00 .7598501 313370MS FEDERAL HOME ON BK CONS SOL 375%03G92010 0 0 02113'12 100.1N0 ],SW,000 NO 70.R.00 7.50%lcurc 163 -1l0 d1 OIL r0 313383HUS FEDERAL HOME ON INK CONS BDI IW%ONUSCON DO O QSH3 100340D SOW,000WO BW laoun XVIOW.00 1N B.N000 BON 00 31331 FHLMC MULTICI MTG E3 AVAR HT OEM WN20D ICALM 1.ON, 3S.71. M90278 35440.62 00, 1,64584 1141. 31346SAS1 FHLMC PC4LN]BBN4VARRT01IDloSCu D0l lM7 102 7AN 2,306 SOO C 227 41 2,3]1 OF 0.1 140R7 14397 Far-III L.La RepN Timessmp:Md Jul 12 V l708:1924 AM Page l Of j� Asset Detail BNY MELLON OCSD-CONSOLIDATED-OCSG00010000 As Of Date 6/30/2017 Mellon Security OescriPtian Base Price ShanslPar Base Cost Base Market PercentTotal Local GndLares Net Unrealized GaiNLoss Base Mellon lB Value Total GaWLoed 3135GOD75 FEDERAL NATL MTG ANN1 500%OWEECAN OD M/P/15 99]590 S,OW,000WO d85585000 488],BD3.00 108 32,15000 32,150N 3135GOF73 FEDERAL HAT.MTG ASSN1 S00%H OWNSO DO 10I1WIS 99885D 7SW,000OOD 7.37072300 7.L53BA.00 162 ...N 83,224.00 3135GOGR FEDERAL NATL MTG ASSHL125%121IQ2018 DD 1 Nolla .NIO SOW.000000 4,W39W 00 4,N2NO,00 100 18.300.00 1B,300N 3135GWID FEDERAL NATL MTG ASSN13T5%0212N2021 DD%NS116 987730 100W.O1.WO 10,0408`A.00 PUT Noon 1....1. - LMIG0338 FEDERAL NATL MTG ASSN2ON%01 M&2022 DD0 AOMI 7 1 0 n 30W00o 2J.570 99 00 3,W9, 0.01 15,02000 1542000 3135GOT45 FEDERAL NATL MTG ABSN d W/I.8]5% AcGVG2DD 1 W1] N acto S,OW,000W0 4,G? ,GR000 4J.-Uo. 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HONDA AUTO RECEIVABLES 202 A30]]0%GGISCOM Do OV21/14 .1710 30,301880 30,3W.30 303R.85 0.01 _ II.55 1255 43814NAB1 HONDA AUTO RECEIVABLES 201 A21010%O6/1 W2C10 D00212Y1fi 999610 SBBR00.510 on,14105 SB1 WE at 0,13 -173.54 -173.54 41N.C2 NON DA AUTO RECEIVABLES 202 A313W%W/1 GOING DD NO H6 W7880 1810.000 W0 loan 9..89 1ROS1.u. 039 3W209 3,GOIs 43O.B8 HONDA AUTO RECEIVABLES 201 ALL 44%O]222019 Do 0W2W17 So No. 1N1, N.1 1,M4,954.95 1'.811 SO 41N.ALd INTEL CORPISGR%IVIM017 Do lall 1112 .ONO 20LQWO on 2W8,2.to 1,WB,SNW 041 JuNo 00 17A)N 4581XOCGI INTER-AMERICAN DEVELOPMENT BAN1.000%OA1V2017 DO M GGM 99,on Soccan.0 Ban GAOCO 4 o7000V 1.09 ItAn 00 -1.1000 4581XWS5 INTER-AMERICAN DEVELOPMENT BANLB]5%0]11W2021 DD 01/14116 99 S910 =5W.000000 %PP4NN 9A983N.W 0,71 Bd.WD00 -94,OB001 45StXI.E INTERANEMON DEVELOPMENT BAN2125%OI11VE22 DD 01118117 100 Soto 30W.000 no zBou 31000 3",BO Go OGo 21.R0 UP 21]2000 Par-IU GLW1a RCprO NJASmP:Wetl Jul 12 n 1708:19:N AM Page 2 of j� Asset Detail BNY MELLON OCSD-CONSOLIDATED-0CSGOOO1O000 As Of Date 6/30/2017 Mellon Security Oee.RON. 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L.st �1,S.B4 17B1W4O7 J0HNSON 3 JOHNS0N5.55O%0& 17 DO OBIR07 100482E 10...00.000 1,015910,00 1'.B.. 022 10,490.00 -104900E 61 LEHMAN BRTH RDESCOON%1213N2016 DO SAMOS _ 82W0 20OONO WO 1.181 IM70 1250N.N 003 -LOW.18870 -1,0561087E $C LEHMAN RUH HOD E$CRONO00%11I2N2013 CO 01MMS 12.. _BN.00O000 _N4,72147 175W an 0.1 _ 532d5]RPo OU LILLY A MIAMI 0311M2019 DO 0 !116 100663E 4T.T0W0 4,N9,67500 4,017720.0E O H] 306J.EN 30 8,0450E MINDOBPH MICRCROFT COOR1.550%AINSMOUL DO Ool _ OR J4. 1S0000.WO 3..I,SM 11 2.9]d31935 065 _0,. .30 82NS. 61..M M0RGAN 3TANLEY5.W0%07QW2021 DO Nocul 1 1108SED _28N.NOWO 3..D.,00 U.Na.uN 0.67 66.W0.00 -Es uOo0 62090UAA9 NCUA GUARPNIEEO NOTES TR R2 IAVAR RT I IM12017 DO 11117/10 100048D WA024 sal 328BN.21 330002.B3 007 _ 1826E 102IS .AR1MSEH NEW YORK CRY NY TRANSITIONAL 076%110011202000 11Ny10 1.7 S. 14001 W0 1,4000O.0 1,.Baw.00 033 9A,RSN ours"OO 654747AM NISSAN AUTO RECEIVABLES A A 10RM O111 M020 D00MW17 99965E 138500000E 13 MSRU 1,386,523.25 030 47S 79 470 79 65476WPB1 NISSAN AUTO RECEIVABLES C AM 070%Ofilfic BDDOUNIS 99 JrI 1683.973350 1R03BN.19 1R61 BN.W S. _-2W7.5S 204769 6745WCD5 OCCIDENTAL PETROLEUM CORPI.WO%02I1SQ0180O ON22I12 .8 Mu 20N,000000 luess1O.OD 1.W]BW.N 04S 11,5200E 1112000 (I45W00 OCCIDENTAL PETROLEUM CCRP2WO%041IN2022 DO MIWH6 1004830 335O00OWO S.5095E 3.366,1W.W 071 11'.100 ORACLE DORRNO%10I1SQN7 DO 10R5112 91 U.. 0W OOO WO ESEJO00 939,SN.W 022 - 73350WAG9 PORT AUTH OF NEN YORK a NEW JEBWB%12NII2018 D00]N1N9 107939E 2,.,W.W0 2,N7,63389 2,83371160 O57 46,0771 12607771 767525A06 OUALCOMM INC22W%OSINOVt DD OSR0I15 100949E SON000.W0 4.935,19540 S.M]4W.W 1.10 _52DCR R) 52$5460 i8K.. %le STUDENT L0AN(RUST 200 E AVM Ri.. 102.128E _ 51013570 3SJJRS63 33716.43 0.01 8368E 03580 LHMLE$SCHWAB CORPIIHE15G0%OW1012010 DO O3110115 R.LN INON.000 LNI 1W.00 1.NO2W.N 0. - H3162LW0 SEA GTO PARTN CTF52N1-MC 16.N0%0VMQrN 105 JON W023H0 62182.3E 65,359.2E SON 3,1769E .238WA02 TOYOTA AUT0 RECEIVABLES 2 A ASIA.%0S1S2019 DO OSMANS 99 R.O 1583854.430 1,MS41801 1.5620N.7. 0.% -1,327.23 -1,.711 811312AP1 UNITED PARCEL SERVIOE IN01.1.%1.1MON7 CD LflRL12 90938E 10BSOM WO BBa MIO.0 W93N.N 0.22 19D.00 -IRS OS 9IJJJKB T USTREASURY NOTEI WO%OM1I20180D D1MI/14 IN 2010 110W,000.NO 11..24381E 11O22,SOON 2. 20,10919 -201.11 B120.1. U S TREASU RY N0TE171RS Vol 9 DO WARM 7190 _"AMONO W0 SW3106W 5,.1,]02.N 121 _-D...E] 9i..C. u S TREASU RY NOTES 1111 Y1017 DO 1111 All 4 I999100 2 ONTO.SO0 1N9,i56.]0 1,9362N.00 041 .,.3.30 384433E SSIOGB1 U S TREASURY NOTELWO%11/3M01800119N14 100094E 7t.aO0WO iM0A.A.D ].N]ON.00 I.A. _SiM5.50 57615.5E .I..J]fi USTRESSURV NOTEL]50%0]I31I2WR OD DL31/15 98484E v,ON,000.W0 4.Bi6,383.W 4,8]4,2N.W LOS 2,03.OR ]18394 .I..K26 U 3 TREASURY N0TEOJRM W15T01S OD./1U15 995N0 INOO 0N0 3.-MOlED3 3.W5240.N 078 _"IEC3 177563 uS TREASURY N0TEI 375%10I311DWO DO ISS1115 99 isr. 5ONTOOW0 5,424,AsV 5,4J,ot, 1 1E 30,23313 9ISA.NH9 u S TREASURY N0TEL3i5%01/NQOt DO OTAVE 98953E fi3ON,000 W0 SWS,Eb.41 R.7I A. 1. 61,339.59 41,1.1E rl..SN1 U S TREASURY N0TE1.500%01.1.019 DO0391112 1002.E 50N,000.WO 5.01642300 tLAINo. LOS H,.2 00 J,52300 B12020DIR USTRESSURVN0TE1.12Ey OQM 1W1DDDB 1E Bi 2]30 1DOSON.WO 6.75791008 ARM 110.W 1.4E 51.1BS.B2 51,1BS 92 B12920T67 U S TREREURY N0TE1250%imi,20210O ISM1116 97 6WO .NOO 0000 58136B111 SWO BN.00 1 27 47,108.02 4710802 N SWOT59 u$TREASURY NOTED 06%NOW2017 OO p?(JO/12 2500. WO 249668E N 21.7,A4GO 054 5369E SUE 9 912H2HU85 U$TREASURY NOTED 750%11/3MW10D 11M116 99730E 7,ON,000000 8,900,6922E 8.9H1,BR 00 152 8118]HO H118]HO 912H2OUR9 USTREASURVN0TE0.750%0=5201BDDWRBl13 99695E 3,SN AN 000 3pB6457M 3M8,a.or 0.76 7.132N 713204 .U..N2 U 3 TREASURY N0TELWS%0lMlQW20O D1131/P .0.KIT 3NOO 0.WO 9.N4 B10N 9.N3]W.W 0.65 -1.064 i4 1,D.74 A'..", USTREASURY N0TE1625%WI3W201B DO CMNI 0 20N,0 WO 1,W686 KI 2NSBNN ONI 12 12 1 3836 Rep-I0 GLW13 aepX Timealamp:Md Jul 12 N170R1SN AM Page 3 of j� Asset Detail BNY MELLON OCSD-CONSOLIDATED-0CSGOOO1O000 As Of Date 6/30/2017 IFMellon SecurilYO...fl tian� Base Price ShereslPar Base Coat Base Market PercentTotal Local Gall Unrealized Net Unrealised GaiNLoaa Base Security lB Value Total GaINLoec 91202HWU0 USTREAS-0PIINFLATe125%07115 a24c0N/161U 90321O lrl., 4.c 10691,89909 1051911371 129 -72,M618 e�,rll 912H2HWW6 U S TREASURY N0TEIffi5%051QD19 Do 1114 100457D 60N,000OOc 5.012,Ba0]0 SpatHW.00 109 10p61.00 11 J6,11 91R028%ES USTRIJ URY N0TE1.WO%OSI3V20200005I31115 9a a520 _60W.000.W1 4.966423,00 4.99t6N.00 108 26,17700 11 1�7 11 36uEl5 UNN OF GJFORNIACA RGTS MF05O351011151=DO llllWl0 1091430 _4W.O10 W1 4000.,Oc 4365]tW 0re 36.57t00 94974BGMa WFLLSF GO a CO ai 07129ID2000073115 1014100 S,OW➢OnWO unct a.a0 5,0]0$W.00 110 68,85000 111.11 F.-HGLW13 RepNTimessm,Md Jul 121J1708:1924AM Page 4 of j� Transaction Report BNY MELLON OCSD-CONSOLIDATED-OCSG00010000 Secant,IS OescriP,Nm Effective Contract 6M1aresl Par Tried.Data Investment Investment Settle Base Amount Date Settle Date Base Amount Base A mount Base Gla.11- smet GRANDTOTAL -5851 -30,464,865.72 -81,284.68 .585,531.00 MATURITIES 47,720,532.88 47,800,071.72 -79,538.84 47,720,532.88 CASH&CASH EQUIVALENTS 39,063,532.S8 -29,063,53288 0.00 29,063,532.88 U.S.DOLLAR 29,063,532.88 -29,063,532.88 0.00 29,063,532.88 31338EGR1 FEDERAL HONE ON BK CONS DISC N QVDsSK17 &9Y1m7 6RI2017 sND.:X00So BOAS47Bd B,SBSW]Bd 000 9.M5647. J6860LTF2 GENERAL ELEC CO DISC ON15I201] .1.17 A1512017 -1.W0.0000W 8%,J6528 IKB41520 Lou WB<6528 8EWNGTF3 TOVOTAM]RGRGPDISCOSEED01] _ N1.11 .152011 -t,W0,W00W 9e81216] .990.12167 1 G 99612L8] 912]96LE] U S TREASURY BILL 0 W0%WIM017 OD 1N1WR &I.u7 Btl5R01] A],S000OO OW 17481,N8M -17481298 NO 000 0,.11.E9 FIXED INCOME SECURITIES 19,657,000.00 .18,736,538.84 .79,538.84 18,657,000.00 U.S.DOLLAR 18,657,000.00 .18,736,M8.84 -79,538.84 18,657,000.00 3137EAOH9 FEDERAL DONE IN MTG CORPI00O%N12912017 XSEHV12 8242017 8I29201] -20000W 2,OLO,Wa. 2000800W .0800E J'NOB0000 31398AOM1 EEOEWJ NAM MTG ASSN 5.375%OL1L2111]DO DBtl80] fl1.0 6l1&ID1] $" -80W 5,15],W000 �523325221 76252.21 5,157,00000 N422ESND JOHN DEEM CAPITAL CORP IOE%0AHSON17 DD O&1N14 &121A1] fi112I2017 -1,WI 01 ON 1JJW,WO.W -1 are 420.W L2000 I.I.A.JJ0 912028WP1 U 3 TREV3URV NOTE 0.075%ON151201]DOON1914 N15I2pP 6I15I201] -0O.WO.000OW 100W,WOW -1p0019066J -1 P8663 10.W00.000 m9WJ2L0 WELLS FARGO BANK rvq VAR RT Wl15409 DD0&'1Y1d &'15200 W112o11 .0,00I SW,WOW 100 Surco00 PRINCIPAL PAYMENTS 1,165,805.49 -1,167,535.11 -1,745.84 1,165,789.23 FIXED INCOME SECURITIES 1,165,805.49 -1,167,535.11 -1,745.84 1,165,789.23 U.S.DOLLAR 1,165,805.49 -1,167,535.11 -1,745.84 1,165,789.23 313105W23 FHLMC PoJL N]8809d VAR RT 01101I2028 Olrn9] Y1Y1m] SI1201] -10220 _ la.. eac 000 R22 3 FHLM 01N C POOLYNEREIVARRT 112028DI) 2HA1 6'112,17 16.2E 0 1 313.111E FHLMC MULTCLASS MTG 582A B AX%MNEDW3 ED WN1N3 .0017 .112.1 -1,112150 1,11VAS 1,259.5E 112E 3133TCEM EHLMC MULTICLASS MTG E3 A VAR RT ONIE2032 DO 1=19] &1I201] SINME] -1,4 983W ".C. 4d99.92 a15] 14983E 313]1NUC] ENMA POOL OUS71794.W0%MNQNS DD MINAS &11201] BI1f201] -151.53E lau. -1W.20 -R]3 151.53 31376KT22 FNMA POOL NW57ND5000%OM112035 ED MIKE W. WN201] 3.N8.1. 3.74816 -0Ssou34 381,1E 3149.15 31381PDA3 FNMA POOL"ROST 3400%1 IMIQUO DD 11N1110 N112017 AV2017 .62,51E 623. b1005 134E tI 31d03DJ]3 ENMA POOL WGRES805000%XM1Q036 DO OSNINB 8N1201] WN2017 $9227. 3,922]3 -021893 .2942E 3 314WG%F ENMA POOL p]1NGS50W%lMlQO33 DO 10101N3 .1. 611120E .101.11E 1B.11 LeCa9 7.58 In I 314. Y8 ENMA POOL Actual 5000%0salQ035 DO CSXIM5 W1I201] 6I1n.17 RI.A.. 6..8.8E Ee23.Se 45516 JMete 31406%W15 FNMA POOLPX2335SVARRT%N12035D004I01N5 N112017 WliWI] -4.a. 406.0E .11 365 J.B0 FNMA POOL MC828pB05000%OTMI12035 DD VNI ."All 33238 3465E - 31d10. FNMA POOL MWM3385.DI 07MIQM6ED MAHAR UlQO17 WN20E7 425091E ],25081 47.79401 .1t,. 7r2EC6r 3138EGBF5 FNMA POOL XAESP 94.SW%ONSIMN DO Mein M1.1 &N2017 418.7BO 4183E .442W 24.11 418.]8 31417. FNMA POOL NVWOA24.500%M ISM DD 0=12e N1I201] 611GO17 -42B6W d29.05 J.Nsc -2475 42965 J1J97ORE0 FNMA GM ESSIG PR 113 FA VAR RT WP192N10D 012L11 N26120P 625I201T I35189� 7.354.as -7A52IN 2J0 ],364.8E 3W7WNX9 GNMAGTOREMICPRW-9FHVA1RT0,1WAG0 &164017 BI162017 .%02. "am A00.2B 9SO 28 JSG2 C. GNMA II POOL pMSI VAR RT 12 2e D012 NS6 m12017 8I120E7 .29195E .1 Or -298.R 4.. 2919E 38225CNMd GNMA II POOL pWBO]95 VER RT N2W2WO DO GW1AV .11201] WN20E7 B. BEE, .55.9E 0.51 Re On JECR5CB0 GNMA II POOL AVEMBS VAR RT EEASe34 DO 0O01Nd N1I201] G12017 103394E 1.833N -L83R]9 1,15 1,033N J6225CG20 GNMA II POOL ANSI VAR RT CN1012027DOONOAR W112017 D112017 .24769E T. 1.11 542 24T,69 RSCN28 GNMA I I POOL rVARVW VAR RT DECI OD OSIOVW 61I2017 6I12017 44674 4Jm4NABl HONDA AUTO RECEIVABLES M 1 M 1010%WI1MO18 ED WRM10 fiH8201] W182017 -230M39W 230M395 -239.8208E 2308 2308439E 43614GAC4 HONDA AUTO RECEIVABLES M 2 A30.]]0%0]118I20180D NCI ER.17 fi110I2017 33.5..53E TL504.53 ]]A50.03 51.5E ]],501.53 4108NA64 JOHN DEEM OWNER TRUST M B A21aW%OCHROX19 DO 0OOD16 N1501] 6I15IMP Sd4,On ElS 2M.T9].01 -2K.]02.M 1493 2d4,]9]01 4T10PADA JOHN DEERE OWNER TRUST M B A31ID0%11DJAA0 DD 0910W14 y151MP A15017 .P3.4804. 173u.043 -1]3,%1]4 b132 173,480,42 Wem"A NOUAGUARANTEEDNOTESTRR2IAVARRT IlMN2017MI1117110 W2017 .2017 RJa SdW 9,.54E $SN.]E 0]O 9,W6d5 65478WAm NISSAN AUTO RECEIVABLES C MA 1 Was am Scale DD OMW16 fiHEXI 6I15R01] _ -is'aaBOW_ 18LEfi8W REEG0.93 ].15 it, RE.08 R.-M T.RIR Report Timndm9:Me Jul 12 X 17 CV2J:12AM Pagel Df3 j� Transaction Report BNY MELLON OCSD-CONSOLIDATED-OCSG00010000 Security ID OescriPtNm Effective Contract SM1aresl Par red.Data Investment Inveme stnt Settle Base Amount Date Settle Data Base Amount Base Amount Base GalnlLoss 09238WAC2 TOYOTA AUTO RECERABLE52 A AS 1120%OAD 5N1B DD OWSULS d132m7 WA2017 3107231W 210,72310 31069110 S. 210]2310 PURCHASES -62,248,099.62 62,248,099.62 0.00 42,248,099.62 CASH&CASH EQUIVALENTS 44,803,858.16 44,603,858.16 0.00 -M,803,BSB.16 U.S.DOLLAR _ _ M,603,858.16 N,803,858.16 0.00 44,803,858.16 96BOBID9I BNY MELLON CASH RESERVE 0010%12J312VB DO NVI &IN017 e115R017 1T7 6ID -1,]776] 1,]R6i 99808520 DREYFUS TREAS A ANY LSH LSH MG VAR RT 1N3112em DO MN997 dL2011 61112017 174,019 ON -1,LUN00 IMAUS. .1 -1] O.L S981 DREYFUS TREAS&AGY CSH CSH MG VAR RT 1831120A9 DO O4N997 BRON17 VI _5374.1. d.274SE 53]<.ea 000 5274.55 Searee.] DREYFUS TREES&AGY CSH CSH MG VM RT LJ31f 9DO WN9R7 ..all 602017 50<23]0 S.W2B] S,WR.B] 000 5,0120] 39608524] DREYFUS TREES&AGY CSH C5H MG VAR RT 1 Be 12043 DU WN9N] W201] 6/SI201] 11,MOOW �11.W0W 11.WO.US ISO -11,C4000 NsNK247 DREYFUS TREAS A AGY LSH LSH MO VAR RT I2/311SLU DO WN9N7 WEI .2017 28,2500W -28,25000 2Q250.no 000 625000 99 800524] DREYFUS TREES&AGY LSH CSH MG VAR RT 1831IA49 DO OSAMe -]d]IID1T 81eMU7 6929130 $92913 9 0 BONDS Or $92913 99808524] DREYFUS IDEAS AGY CSH CSH MG VAR RT lV312019 DO WN99] d9Ytm7 M2017 7.100.323.SW 71W.32356 7UNS23.M 0or -7,ID0,323.50 SW.., DREYFUS TREAE&AGY CSH CSH MG VAR RT D O10149 DD W/OBIS] d121N1] W12QD17 43.70 ON 4S.750W 43.7E0W 0JO -03,75000 DREYFUS TREES&AGY LSH CSH MG VAR RT 1SU1l2WS DO WNSPo] yt}1311] Al2I017 0301.21K VO -A 3U,938 6301,01930 1.0 5,30121938 NOV.M] DREYFUSTREAS&AGY LSH LSH MG VAR RT 12J312049 DO WN95] d142011 W14QO17 2B,125ON -2612S 0O 28125.W 1., -1J1250J NE08524] DREYFUS TREAS&AGY CSH CSH MG VAR RT IVO12W9 DO aI d15201] BI15YA1] U.JT50000 8S43]5000 8,R3D.OR 000 8S4375000 NBAS.] DREYFUS TREES&AGY CSH Call MG VAR RT 12I31f2049 DO WN9B] M1 AA1] W15QD17 1.%8IN Ae -1301.122.38 1,363,122Y 000 -1.seU236 SSNDAN] DREYFUS TREES&AGY CSH Call MG VAR RT 12I31I2W9 DO WN9N7 d1fi'GII] 6116QO17 27S1AN -2.13136 2731.36 JA 1711,11 e960B5347 DREYFUS TPEAS&AGY CSH CSH MG VAR RT IVUll We DO Wro9ro7 F1.17 V1912017 30EI11 US 3W,115A9 3W,11543 I.,NER35247 DREYFUS TREES&AGY LSH CSH MN VAR RT 1831 INus DO U,NVm d20201] .1117 3$]1 NSJ -1,171 AD 3.271 As Do 23303B 998 DREYFUS AGY CSH Can MG VAR RT 1N31I20A9 DO WN&V] d212m] 8RV201] 0 -2 -AI 2.2 as 0 00 1 085M] ,210.IS 396035247 OREYFUSTREAS&AGY CSH CSH MG VAR RT 12I31RNSDD OAOM7 d221201] N12QO17 3],500 ON 3).500.DO W,SOO.. 0JO -37,50000 SS6DB524] DREYFUS TREES&AGY CSH CSH MG VAR RT IV31fllMSDD WNSPo] . 62.Ull 46,221 ON i 221 fie AS 22165 1A A5221 AS 9.1.1207 DREYFUS TREES&AGY LSH CSH ML VAR RT lSnl_W9 DO uOrem V2.17 ASUI 2010.0OD ON 2 AC O,WW 2 W 010.OW. 9R08526] DREYFUS TRFASA AGY LSH LSH MG VAR RT 1L31cJus DO WNAY] d302m] BI301201] 18$540W ESBRN USEO.W 00J D6,25001 313 ADS FEDERAL HOME LN BR CONS DISC OESSIID1] d6Y1017 SId201] SWOp00 No 1,992,43]50 0992A3750 000 d992437.50 313335J00 FEDERAL HOME LN BK CONS DISC MAT Wla9(1%] d2YN1] NJU.S17 ....NO -]WS5S66 7W,255E6 000 -789,ISE IN 9127B6LU1 U S TREASURY BILL 0 Po0%O QIQ017 OD OL2L17 N1.11 Alle01] 5,W0,0000W 1SASSO In DENSN0W 000 -UNSS 50000 m29.U1 U S TRFAWRV BILL 0 W0%OB2112017 DO 01MM17 01.11 W161017 B.WOAOO ON j978,66000 ]9]086O NO FIXED INCOME SECURITIES -1I,4,11,241A6 17,411,261A6 000 -17,444,24166 U.S.DOLLAR -17,444,261A6 13,4 ,261.46 0.00 -12,444,2N.46 ODUJI BANK OF NEW YORK MELLON CORE?1 NO%OlOWCO1S DO 1025112 &2.17 W0.000010 E5$36490 6,.AD 1.0 RI U LDEAOLO FEDEMHCMELNMTGCOW1WO%m12912017DD0&1NI2 d232m] ANO,017 2,W00000. 1,49952500 2499S25W 0 or _ 3.AStoDO FEDERAL NAM MTG ASSN 14W%092]/M1]DO ONJI 1192m7 EIMYA1] 3,RSOON O 2N00000 29Al2.OR 000 IDNO NOre 3.Uaa R0 PHI NAM WE ASEN 1 Ne%D92TCO17 DO OWEL4 &221A1] GI 3.WO.000 OW 2SME100.00 2a.100.W 0or -2.Mea 100 or 45SOSBFY4 INTERNATIONAL BANK FOR RECONST 2SOX OLQAOO220D%IIDI17 d2.17 6R7I2017 DON NO No IOUS.55060 5030,SSO.W 000 5,030550 , .22ESP JOHN DEERE CAPITAL CORE1350%01116RU1B DO 0111N16 F1.17 .12017 READOC NO S4e7m NO BUST63.5o 10, -549,76350 912AVT59 U E TRFASURY NOTE 0625%ONON09 DO 01 d0Y201] ANKS1] 2,W00000. Q496,68806 14NEANUS RECEIPTS AND DISBURSEMENT TRANSACTIONS -21,000,000.00 30,888.00 0.00 -21,000,000.00 DISTRIBUTION TO PLAN ADMINISTRATOR -21,000,000.00 0.00 000 -21,000,000.00 U.S.DOLLAR -21,000,000.00 0.00 0.00 -21,000,000.00 NA9123459 GIST TO PUN ADMIN N1512m7 DUN 21 LI N -01000,10000 MISCELLANEOUS INCOME 0.00 30,88800 0.00 0.00 U.S.DOLLAR 0.00 30,888.00 0.00 0.00 N S.SWV0 ILB INFLATION ADJUSTMENTS US TREASCPI INFIAT d1Y1m] 161 1 2.0. ON 20&W 000 0A 912626WU0 ILB INFLATION ADJUSTMENTS US TREAS-CPI INFIAT WV2017 1.17 1 1144,000 ON 1,14aW 000 000 .,.I JTXDVS FUJI Theurer,Wetl JUI 12201]08 NAS AM Page 2 of j� Transaction Report BNY MELLON OCSD-CONSOLIDATED-OCSG00010000 SecurilY ID Oescriation Date Effective Contract Shareal Par Trade Data InvsstmeM Investment Settle Base Amount Date 6eHle Dale Base Amount Baas Amount Base GalnlLoss 912828WU0 ILa INFLATION ADJUSTMENTS US TREASCPI Wool BISI2017 (SLAO17 _3,12r NS ON 3,120W SOL 0SO 912828WU0 ILB INFLATION ADJUSTMENTS US TREASLPI INFLAT SEI2M7 6I6I20P LM0000 O.W U.S.. 000 our 912828WU0 ILB INFLATION ADJUSTMENTS US TRE4&CPIINEIAT NA201] WfJ017 1.MOOW O.W LWO.W ON ON II828WOO IN INFLATION ADJUSTMENTS US TREASLPI NFIAT NOROq NN2017 _1.OJ0000 ON 1pCOW 91292MUC ILa INFLATION ADJUSTMENTS US TREA6LPI INFUll &9Y2017 flR 17 3,224A. OW 3,12IW 912828WU0 en INFLATION ADJUSTMENTS US TnoA3 PI INFLAT .12201i 61122D17 1.040 No O.W LWOW 000 000 912UMUO ILB INFATION ADJUSTMENTS US TRE45{PIINFIAT W1. sil. 1] _1.M00W D.W LWO.W 000 0or 912825WU0 RUBINFlATION ADJUSTMENTS US TREASCPI INFLAT N14.11 N1J.111 1,0400. OW 1..a. IN .1 LB INFLATION ADJUSTMENTS US TREASCPI NFIAT NUVN17 N1512017 _1p.ON O.CO L1ClW 912828WU0 ILa INFLATION ADJUSTMENTS US TREAELPI INFIUN flNaR01i 6/10/017 3,12000o ON 3120W 000 .0 S1SVS.UO ILB INFLATION ADJUSTMENTS US TROUNCE INFLAT &19201] 6I19YA17 1.060 No O.W 1.MO.W 000 000 912828WUO ILB INMTION ADJUSTMENTS US TREAACPI INFLAT N20R01i SSOI2017 1,040 ON O.W U.A. 000 0or 912828WUO LB INFLATION ADJUSTMENTS US TREASCPI INFLAT N21. ENSO17 _1,MOOW OCO 1.WOW 000 IN IN INFLATION ADJUSTMENTS US TREASCPI NFIAT N22/2o1i N222017 OW 1.160.W 912828WU0 IN INFLATION ADJUSTMENTS US TREASCPI NFIAT fip32ol] 6I23I2017 3,120 No OTrAN LN Oo0 912525WU0 IS INFLATION ADJUSTMENTS US TREASCPI INFLAT .26R01] ASWSO17 1.040 ON AN LMOW 000 000 912UMUO ILB INETATIONAOJUETMEMSUS TREASCPI INFLAT N2]IIDli 6R712017 1M00W O.W 1.WO.W 000 0Or 912828WOO ILB INFLATION ADJUSTMENTS US TRENSUPI INFLAT N2.11 N2sA17 1.ON ON ON 1..a. 000 000 rU2UNvUU ILB INFLATION ADJUSTMENTS US TREASCPI NFIAT 6@NN17 N29101] 11CC.OW 0W lj.ON 000 0 or 912828WUD IN INFLATION ADJUSTMENTS US TREASCPI INFLAT SON2DI7 BN92017 1M0 ON 000 L010W LN 000 SALES 33,71o6.246.51 33,71N6,2A6.51 0.00 33,]]6,246.51 CASH S CASH EQUIVALENTS 33,]]6,246.51 -33,]]6,246.51 0.00 33,]]6,246.51 U.S.DOLLAR 33,7)6,]06.51 -33,176,246.51 0.00 33,716,2A6.51 SHY MELLON CASH RESERVE DO1O%lNr1SN9 Do OSR6.N7 N1N201] N16ROP 1,TI7 67 'JP67 956035247 OREYNA TREAS A AGY Can Can MG VAR RT ISaSSa Do MNAY] ..all 61N2017 -U.S37SW 6,992}3]50 1o.,Al]So .1 4932,d37,50 996005247 DREYNSTREAS A AGY Call Call MG VAR RT I VS 1I20A9 Do O,NN97 d13201] &13YA17 {908,500 No g98O500W 4,986500W 000 4AtS 50000 9WUS5247 DREYN6 THESE A AGY CSH CSH MG VAR RT 1031RW9 D0 WN9N] N1NN17 N16I2017 7,WB.SSOOW ISONESOW ]SDINAW 0or 7W8.66000 99W652<7 DREYNS TREAS 6 AGY CSH CSH MG VAR RT lV31SAJ DO SOMM7 N2N2UP 62N2017 3ONSlM.N 90W,16617 3,006166.So 000 SONle66] 9EAMS202 OREYNS TREAS A AGV CAL CAN MG VAR RT lNnlSA DO 0SNW7 SN,o,11 BR22017 -5629e10. 5529810 552,961 On 00. 552,98.Or 996065242 DREYFUS TREAS&AGY CSH Can MG VAR RT ISOlSoo Do MN99] avo.o] 61231017 -3,Po5,522.330 300552233 35054231 .1 3,W552233 9960652J7 DREYNSTREAS A AGY CSH CSH MG VAR RT IlSa201a D0 WN&97 N262017 NOSS2017 -2 EOE SE510 2SOLASL6] 2W1,558.17 0or 2.WS.58067 Pact2G7 DREYEVSTREAS 6 AGY CSH Cal MG VAN RT lV31ONHE DO WMM7 SUDON9 SQ712017 �74.1402N 874.14023 b70,1402J 0or 87<,14023 IMeol24] DREYFVS TREA68AGY CSH CSH MG VAR RT 1N31,olva DO WNN97 N2]I2017 N27QD17 L Sm24W.440. 1,072aWN 5S724WI4 IN 5.S.494.44 P.-IS TX OS RquN Timeamm,All Jul 12 Sol 7 0e2SIS AM Page 3 of Callan June 30, 2017 Orange County Sanitation District Investment Measurement Service Quarterly Review The holder, report waa prepared by Callan Associates Inc. ("CAI"I using Information from sources that include the following: fund thusands); fund cuatodian(s);Investment remove r(s);CAI computer service;CAI investment manager and fund sponsor database;third party data vendors;and other outside sources as directed by the client CAI assumes no responsibility for the accuracy or completeness of the inroannummn provided,or methodologies employed,by any information providers external to CAI.Reasonable care has been taken to assure the accuracy of the CAI database and computer software.Callan does not provide advice reversing, nor shall Callan be responsible for,the purchase,sale, hedge or holding of individual securities, including,without limitation cuticles of the client(i.e. company stock)or derivatives in the clients accounts.In preparing the following report CAI has not reviewed the risks of individual cunt,holdings or the conformity of individual seventy holdings with the client's Investment policies and guidelines,nor has it assumed any responsibility to do a.Advice pertaining to Me medic of individual securities and derivatives sal be discussed with a Mind party securities expert.Copyright 2017 by Callan Associates mr. Table of Contents June 30, 2017 Capital Markel Review 1 Active Management Overview Market Overview 9 Domestic Fixed Income 10 Asset Allocation Investment Manager Asset Allocation 12 Investment Manager Retums 13 Asset Class Risk and Return 17 Manager Analysis Chandler-Long Term Operating Fund 19 Chandler-Liquid Operating Money 23 Callan Reseamh/Education 25 Definitions 28 Disclosures 33 Callan Orange County Sanitation District Executive Summary for Period Ending June 30, 2017 Asset Allocation June 30, 2017 Market Value Welaht Net New Inv. Uameetic Fix" mome Lon9Ten Opeating Fund' 331.99e,306 72.74% 12,000,000 Toni Fund $456,Crr,785 100.0% $51,000,000 Performance Last Last Last Last Last 3 5 7 Quarter Year Years Years Years Domestic Fixed Income Long Term Operating Fund" 0.49% 0.29% 1.31% 0.96% 1.77% Chandler 0.49% 0.29% - - - BlmbgGovt/Cmd 1-5 Year ldx 0.56% 0.11% 1.35% 1.29% 1.68% ML 1-5 Govt/Corp 0.55% 0.13% 1.37% 1.37% 1.76% Liquid Operating Monies" 0.20% 0.57% 0.36% 0.27% 0.26% Chandler 0.20% 0.57% - - - Ciliorcuo3-Month Treasury Bill 0.18% 0.46% 0.20% 0.15% 0.13% Total Fund 0.41% 0.22% 1.07% 0.81% 1.49% Target' 0.48% 0.20% 1.14% 1.12% 1.43% `Cunent OuaderTaMrt=80.0%ML 1-5 GoWCorp and 20.0%3m0 T-Bills. ^Assets were transfened In kind to Chandleron 12I1/2014.Previous performance reflects PIMCO. Recent Developments During the quarter, $51.0 million was deposited into the total portfolio. Of that sum, $12.0 million was invested into the Long Term Operating Fund and $39.0 million was put into the Liquid Operating Monies. Organizational Issues NA Manager Performance Intermediate and long U.S. Treasury yields fell modestly in the second quarter as inflation data releases were persistently weak. Short rates rose, consistent with the Fed hike,and the yield curve flattened. Risky assets continued their long streak of outperformance. The 10- year U.S. Treasury yield closed the quarter at 2.31%, down from 2AO% as of March 31a, though it hit a 2017 low of 2.12% earlier in June. The 2-year U.S. Treasury yield climbed 11 bps to close at 1.38%. As a result, short and intermediate maturity Treasuries underperformed and the Bloomberg Barclays Intermediate Treasury Index returned 0.7% Callan Orange County Sanilatlon gatre July 27,2017 While the Long Index gained 4.0%. The Bloomberg Barclays Aggregate Index earned 1.4% with corporate bonds performing the best on strong demand. The Bloomberg Barclays Corporate Index was up 2.5% for the quarter, outperforming the High Yield Index (+2.2%). TIPS underperformed as expectations for inflation sank.The Bloomberg Barclays TIPS Index lost 0.4% for the quarter. The 10-year breakeven spread (the difference between nominal and real yields) was 173 bps as of quarter-end, down from 1.97% at the end of the first quarter. The Long Term Operating Fund rose 0.49% in the quarter, lagging the ML 1-5 Govt/Corp Index(+0.55%) and ranking in the 4V percentile versus peers. Slight underperformance in the quarter is attributed to an out of benchmark allocation to TIPS. The portfolio was also modestly short duration (2.44 versus 2.78 years), which helped relative performance as the very short end of the yield curve rose. The Long Term Operating Fund had less than 30% invested in credit and less than the permitted 20% invested in the combination of asset- backed securities, commercial mortgage backed securities, and CMOs as of June 30, 2017 (see page 22). The Liquid Operating Portfolio gained 0.16%(after fees) in the quarter, which slightly trailed the return of the 3-month Treasury(+0.18%).The Portfolio retumed 0.42%(after fees) for the trailing 12 months and ranked 32nd percentile versus peers. Cordially, Gordon M.Weightman, CFA Vice President 2 Capital Market Review CallanCALLAN CMR Preview Second Quarter 2017 Overseas Stocks Lead the Charge 2 Yield Hunt, Weak Dollar Drove Returns 5 U.S.AND NON-U.S. EQUITY e a G E U.S.AND NON-U.S. FIXED INCOME P A G E - The S&P WO Index rose 3.1%and hit a high during the quarter - The Bloomberg Barclays US Aggregate Bond Index gained 1.4% - Large cap outperformed smaller capitalizabons—again - Corporate bonds pertolmed best,driven by strong demand - Growth outperformed value across large and small capitalization - Low retes kept pushing Investors out on the disk spectrum for higher yields - The MSCI Wodd ex USA Index jumped 5.6% - Municipal bonds outperformed Treasuries - Europes economic recovery fueled non-U.S.developed markets - The Bloomberg Barclays Global Aggregate ex-0S(unhi jumped 3.5% - Once again,emerging markets outpaced developed ones - Unhedged non-U.S.bonds were helped by a weaker dollar - Developed non-U.S.small cap outperformed large cap - The dollar-denominated JPM EMBI Global Diversified Index rose 2.2% Additional Callan Newsletters and Resources Coming Soon to Our Slog 'Perspectives' Hedge Fund Monitor Real Assets Reporter Economy Fund Sponsor An analysis of hedge fund manag- A review of real estate and other While the Initial read on first quar- Each quarter we track the median am and marketplace issues real assets ter GDP growth was disappointing, return for all fund types, includ- at 0]%,later revisions bumped it ing endowments and foundations, Private Markets Trends Callan DC Indez^' up to 1 4% The second quarter public plans, corporate plans, and The latest news and trends in pill A Web teal tracking performance figure is due later this month,with Taft-Hanley plans. Our analysis vote equity investing and fund flows of over 90 DC plans consensus estimates putting it at offers insight into the factors that DC Observer Callan Target Date Indei 2A%.That would place the econ. drove performance and how van. A look at the Issues and challenges An online feature tracking returns omy back on track for solid—d ous types of funds fared relative to facing DC plan sponsors and allocations of target date funds uniusctacular­,rowih. each other. Visit our Research Library at callan.comllibrary Find even more on our blog at callan.comlblag Broad Market Quarterly Returns U.S.Equity Non-U.S.Equity U.S.Fixed Income Non-U.S.Fixed Income Russell 3000 MSCI ACWI ex USA Bloomberg Barclays Agg Bloomberg Barclays Gbl ex US t t t t +3.0% +5.8% +1.4% +3.5% Sources:Bloomberg Barclays.MSCI,Russell Investment Group Knowledge.Experience.Integrity. Global Equity U.S. Stocks: Shocks, but No Slowing Growth outperformed value across large and small caps Despite an increase in interest rates (Russell 1000 Growth:+4.7%vs.Russell 1000Value:+1.3%; +3 0% and turbulent events in the news, Russell 2000 Growth:+4.4%vs.Russell 2000 Value:+0.7%). RUSSELL 3000 including disruptions within the Trump The strong-performing "FAAMG" stocks (Facebook, Amazon, administration and terrorist attacks in Apple,Microsoft,and Google)comprised 22%of the S&P 500's the U.K.,U.S.stocks continued to inch higher during the second return in the second quarter versus 32% in the first. Investors quarter. Amid this volatile macro backdrop, S&P 500 compa- continued to be drawn to the top-line growth prospects and mar- nies reported the strongest quarterly earnings growth rate in six ket share gains at these large,established firms. years(70%reported profits above expectations), and the S&P 500 Index hit a record high during the quarter. Investor sentiment broadened across sectors in the second quarter compared to the first,as a wider range of firms reported Large cap stocks outperformed mid and small caps(S&P 500 positive results. Top sectors in the S&P 500 included Health Index:+3.1%; Russell 2000 Index:+2.5%). Strong earnings Care(+7.1%),which rallied on the Trump administration's pros- reports out of large cap stocks contributed to their leg up pact of change to the Affordable Care Act; Industrials(+4.7%), over small cap. Large cap was also buoyed by the continued which benefited from declining commodity pnces; Financials Flow of assets into passively managed strategies, especially (+4.2%), spurred by the Fed's announcement that 34 of the ETF vehicles. largest banks passed their stress tests,the largest cohort to do so since the tests began; and Tech (+4.1%, on the continued Small cap valuations kept stretching higher and, as a result, rise of those FAAMG stocks. investors continued to take profits following a boon year in 2016.The continued expansion in small cap multiples may be Energy(-6.4%)and Telecom(-7.0%)were the laggards.Crude giving some investors pause, particularly as the current eco- oil prices fell due to an increase in supply,the result of a milder nomic upturn is nearing nine years. winter. In addition, improving efficiency within the U.S.fracking Quarterly Performance of Select Sectors •Russell 1000 •Rcsscll2000 I IN I I 1.5% L1% I I I -1.4%. li I � _1.7x I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I Heatlh Cere Producer Flnenciel Technology Motenels& Consumer Consumer utiiltlies Enemy Durables Servkes Processing oiscretlonary goggles Spume:Russell Iro snrent Group 2 1 Callan U.S.Equity:Quarterly Returns From a factor perspective, Momentum (+7.9%) was the top- performing factor while Enhanced Value (weighted to the Russell MOO- 3.0% forward price-earnings ratio, enterprise value/cash flow from Russell 1000- 9.1% operations, and pdce-to-book value of stocks in the factor) Russel loan crowoI 0.M was the worst performer(+1.3%). Momentum was favored as investors sought stocks with demonstrated earnings growth. Russell t000 value_ 1.8% S&P So- 8.1% Non-U.S. Stocks: Europe's Recovery a Boost Russell Mkkap- z]% Non-U.S. developed equity outper- Russellzs00- 2.1% +5.8% formed the U.S. for the second con- Russell MOO- 9.5% MSCI ACWI Ex USA secutive quarter, fueled by economic recovery in Europe and market-friendly outcomes in European elections. The MSCI Europe Index Source:Russell Irseement croup and Standard&Pears' jumped 7.4% and the MSCI World ex USA Index notched a 5.6%gain,compared to the 3.1%rise in the S&P 500. U.S.Equity:One-Year Returns Gains were broad-based and helped by weakness in the U.S. dollar, which lost about 7% versus the auto and 5% versus a Russell anon- 18.5% broad basket of currencies. Ruasell 1000- 18.0% The auto rallied as a result of hawkish comments from the Russell 1000 GmvM BOA% European Central Bank,coupled with improving European eco- Russell i00ovalue- 15.5% nomic and sentiment indicators.European Financials benefited S&P Soo- 17.9% from expectations of higher rates, and European Industrials Russell Midoup- 16.5% were propped up by stronger economic expectations. Russell MOD 19.9ye Ruve112000 Bd.e% Energy and Telecom Services were the only sectors in devel- oped markets with negative second quarter returns.Energy fell source:Russell lrsestment croup and Standard!&Pears' as oil prices continue to languish due to an imbalance between supply and demand despite OPEC's efforts to cut production. Telecom Services were buffeted by pricing pressure. industry impacted prices.Within Telecom, competition for mar- Within the MSCI indices, Europe ex-U.K.was up 8.4%,the U.K ket share intensified in the increasingly commoditized(and con- gained 4.7%, and Japan returned 5.2%. Small caps outper- solidated)space. formed;the MSCI EAFE Small Cap Index rose 8.1%. Value stocks were hurt by Consumer Staples companies re- Looking at the global picture for stocks,the MSCI ACWI Index setting to more sensible valuations following the strong rally in gained 4.3%, and developed and emerging markets oulper- 2016 that resulted from the-yield trade,"as investors sought the formed the U.S. (MSCI ACWI ex USA Index: +5.8%), due safety of strong dividends and lower-volatility stocks. largely to broad-based weakness in the U.S.dollar. Knowledge.Experience.Integrity. 1 3 Non-U.S.Equity:Quarterly Returns (U.S.Dollar) Non-U.S.Equity:One-Year Returns (U.S.Dollar) MSCIACWI — 4.3% MSCIACWI — 19.8% MSCI Wotltl 40% MSCI ward — 18.2% MSCI ACWI.USA 5.8% Al — 20.5% MSCIW,rd.USA —5.5% MSCIWwN..USA 19.5% MSCI ACWI ex USA Smell Cap — 83% MSCI ACWI ex USA Small Cap 20.3% MSCI Wotltl ex USA Small Cap —1]% MSCI Wotltl ex USA Small Cap —21.3% MSLI Be,-UK SA% MSCI Eumpa ea UK U4% MSCI UK —4.7% MSCI UK 13.3% MSCI l ex Japan -1.5% MSCI Pad@ex Japan — 19.4% MSCI Japan — 5.2% MSCIJI.. —19.2% MSCI Em reng MaAels 6.3% MSCI EmeRin9 M.r ale — 23.7% MSCI China 10.6% MSCI China 32.2% MSCI From.,MaAala 6.1% MSCI FroMIer MaMela 19.2% Source'.MSCI Source:MSCI Emerging Markets: Tech Triumphs in Brazil(including President Michel Tamer's bribery scandal) Emerging markets outpaced the and commodity prices weighed on the country. +6a3% developed markets for the sec- MSCI EM and straight quarter, propelled by Quality, growth, and momentum factors dominated the market Technology companies in China, given the returns of large cap technology companies. South Korea, and Taiwan. The MSCI Emerging Markets Index gained 6.3%. Industry leaders in online and mobile Non-U.S.Small Cap: All Over the Map commerce, payments, digital media, cloud Computing, and Developed non-U.S.small cap stocks smarphones are monopolizing the markets. That includes +6a2% outperformed large cap equity, as Tencent and Alibaba in China;Samsung in South Korea;and MSCI ACWI 5 USA SC they were better positioned for the Taiwan Semiconductor Manufacturing in Taiwan. local economic recovery in Europe. But small Cap equity lagged large cap in emerging markets, Positive economic momentum and European election results due to the performance of the large cap tech companies.The placed Greece (+33.8%) and Hungary (+19.4%) as the top MSCI World ex USA Small Cap Index climbed 7.3%while the two performing countries in emerging markets. China rose MSCI Emerging Markets Small Cap Index increased 2.6%. 10.6%, while India's gain was muted at +2.9%, though it remains a lop performer year-to-date (+21%). The three Energy was the worst-performing sector in developed and wonst-performing countries were Qatar (-10.9%), Russia emerging markets due to declining oil prices,which also caused (-10.0%), and Brazil (-6.7%). Qatar was hit after four Arab growth to outperform value in developed small cap. Financials, nations (Saudi Arabia, the United Arab Emirates, Egypt, and the top performing sector for the quarter,offset Energy;on the Bahrain)imposed an embargo,accusing the country of back- heels of positive economic data and election results, Eastern ing terrorism. Russia slumped because of declining oil prices European Financials rallied. and looming new sanctions.And continuing political instability 4 1 Callan Global Fixed Income U.S. Bonds: On the Hunt for Yield U.S.Treasury Yield Curves Corporate bonds performed best in +1e4% the second quarter on strong demand. 0 June 30,2017 0March 31,2017 •June 30.4016 BB AGGREGATE Investors continued their hunt for sta- 4% _ ble yields that are higher than what is available for like-duration government bonds.The Bloomberg 3% _ _ _ __ Barclays US Corporate Bond Index was up 2.5% (+3.8% year to date), while the Bloomberg Barclays US Aggregate 2% ____ Bond Index rose 1.4% (+2.3% YTD). Credit fundamentals - - - - - - - ----------- remained strong with solid earnings growth and a modest(but 1% acceptable)economic growth environment;corporate balance sheets appeared to be in good shape.And although rates have 0% moved higher on the front end,overall the curve has flattened; 1, s io is zo z5 so the demand for yield is providing support for spread sectors Maturity Years) broadly. source:aloombsrg The Bloomberg Barclays High Yield Corporate Index In the government market, municipal bonds outperformed increased 2.2%. Low interest rates continued to be a catalyst Treasuries. The Bloomberg Barclays Municipal Bond pushing investors out the risk spectrum in search of higher Index was up 2.0%, compared to the Bloomberg Barclays yields. Default expectations are low across most sectors, pro- US Treasury Index (+1.2%). Results were bolstered by low- viding some comfort to investors. Energy was the only high- ered expectations for tax reform and favorable supply/demand yield sector to decline (-0.66%). Rising inventories and con- technicals.The Fed,viewing inflation weakness as temporary, earn over OPEC policy put pressure on oil prices,which have raised rates by 25 basis points, as expected. The yield curve fallen approximately 17%so far this year. flattened over the quarter, with short rates rising and longer U.S.Fixed Income:Quarterly Returns U.S.Fixed Income:One-Year Returns Bloomberg Bartleys Gov/Cres 1-3 Yr ' 0.3% Bloomberg Barclays Gos/Crelit 1-3 Yr 10.3% Bloombeg aside s Irius.Gov/Chi - 0.9% 43 I Bloombeg Bentleys Iri GovlCredit Bloomberg Bardays Aggregate 1.4% 4.3% I Bloomberg Bardays Aggregate Bloombeg Barclays_xxGov1CretlM1 — M% -1.1% 1 Bloomberg Barclays LougGov/CretlX BlWmberg Samla}S UnivBrsal 1.5% Bloomberg Bardays UnWxsal 1 0.9% CS Leveraged Loans ■ 0.8% CS Leveraged Loans — 7.5% Bloomberg Bardays Co,High Yield —2.2% Bloomberg Bartlays Co,High Yleld 12.7% 4A%, Bloombeg Barclays Us TIPS 4.6% ' Bloomberg Bardays US TIPS Source:Bloomberg Barclays.Credit Suisse Source:Bloomleurg Bardays,Gredlt Suisse Knowledge.Experience.Integrity. 1 5 rates falling.The 10-year U.S.Treasury yield closed the quar- in tone spooked investors and sent global yields higher and ter at 2.31%,down from 2.40%as of March 31,though it hit a stocks lower going into quarter-end. 2017 low of 2.12% earlier in June. The 2-year U.S. Treasury yield climbed 11 bps to close at 1.38%. Despite growing geopolitical tension and pressure on energy and commodity prices, the demand for yield drove returns in TIPS underperformed as expectations for inflation sank,a rever- emerging market (EM) debt amid a strong technical climate sal from the previous quarter; the Bloomberg Barclays US supported by robust investor flows. The dollar-denominated TIPS Indexfell 0.4%.The 10-year breakeven spread(the differ- JPM EMBI Global Diversified Index was up 2.2%, and the ence between nominal and real yields)was 1.73%as of quarter- local currency-denominated JPM GBI-EM Global Diversified end,down from 1.97%at the end of the first quarter,as inflation Index jumped even more sharply, rising 3.6%. The weaker came in below expectations for the third consecutive month. U.S. dollar and relatively higher local yields pushed EM local debt returns higher for the quarter and the year,continuing the Non-U.S. Bonds: Our Pain,Their Gain post-election rebound. Aweaker U.S.dollar helped unhedged +3e 5% non-U.S.bonds and hindered hedged BB GBL AGO ea US bonds. The Bloomberg Barclays Global Aggregate ex-US Bond Change in 10-Year Global Government Bond Yields Index(unhedged)jumped 3.5%, while the hedged index rose only 0.6%.The U.S. dollar lost nearly 7%versus the euro and 1Q17 to 2017 almost 5% versus a broad basket of developed market cur- -9 bps— U.S.Treasury rencies. Positive economic growth and hawkish rhetoric from Germany —la ape the European Central Bank (ECB) and the Bank of England U.K. —12 bps drove strong results in the euro and the British pound corn- Canada —uape pared to the U.S. dollar. The quarter closed with an upbeat Japan . 26pa assessment of the euro zone's recovery from the president of the ECB, Mario Draghi, fueling speculation that the tapering Source:Bloomberg Barclays of ECB asset purchases may be on the horizon. This change Non-U.S.Fixed Income:Quarterly Returns Non-U.S.Fixed Income:One-Year Returns Bloomberg Barclays Global Aggregate — 2.6% .2.2% ■ Bloomberg Bardays GlobelA,r,,W Bloomberg Bamlaye Global Ago nub,) -1.0% 4.4% I Bloombmg Barclays Global AM(bag) Bloomberg Same,Global Hlgb Ylela —3.2% Bloomberg Bardaya Global Hi9b Ybla— 11.9% Bloomberg Barclays Global AM ex US — 3.5% d.6% _ Bloombeq BerGays Glpbel Agg ex US JPM EMBI Global Dnm eJiea — 2.2% JPM EMBI Global DlvereRea— 6.0% JPM GBI-EM Global l3n amRiea — 3.6% JPM GBI-EM Global Dl-.ff M— 6.4% JPM EMBI GI DivlJPM GBI-EM GI Div — 2.9% JPM EMBI GI Diol JPM GBI-EM GI Dlv— 6.3% JPM CEMBI _ 1.7% JPM CEMBI— 7.0% Source:Bloomberg Bamlaye,JP Morgan Soorce:Bloomberg Barclays,JP Morgan 6 1 Callan Active Management Overview Market Overview Active Management vs Index Returns Market Overview The charts below illustrate the range of returns across managers in Callan's Separate Account database over the most recent one quarter and one year time periods. The database is broken down by asset class to illustrate the difference in returns across those asset classes.An appropriate index is also shown for each asset class for comparison purposes.As an example, the 0rsl bar in the upper chart illustrates the range of returns for domestic equity managers over the last quarter. The triangle represents the S&P 500 return. The number next to the triangle represents the ranking of the S&P 500 in the Large Cap Equity manager database. Range of Separate Account Manager Returns by Asset Class One Quarter Ended June 30,2017 10% 8% 8% (]3) 4% (]0)® ( 2% 50) (48) �b�� (50) 0% wo large Cep Smell Cep Non-US Domartic Nan-US Real Equity Equity Equly Fixed lnwme Fixed Income Estate s Va vs vs S&P SOU Russell 2000 MSCI EAFE Blmbg Aggr Bd Citi Non.US GoA NCREIF index 10ih Percantile 6.22 840 8.83 1.]] 4.4] 3.68 250 Percentile 4.86 432 ].90 1.88 422 2.64 Median 3.09 233 6.75 1.54 395 1,74 ]SM Percentile 2.07 037 Bfi 6.0] 145 3.71 1.33 90th Percentile 1.23 (03]) 5.26 1.35 3.16 0,55 Index • 3.09 246 6.12 145 3.81 1,75 Range of Separate Account Manager Returns by Asset Class One Year Ended June 30,2017 35% 30% 25% (39) 20% (61)� (58)� 15% X. 10% 5]) 5% 0% (5%) m) (10%) Large Cap Small Cap Non-US Domestic Non-Us Real Equity Equity Equity Fixed Income Fixed Income Estate se vs nP500 Russell 2000 MSCI EAFE Blmbg Aggr ad Giti Non US GoA NCREIF Index 10MPercentile 24.M 29.03 26.38 1.58 5.05 12.34 25ih Percentile 22.01 26.14 23.72 0.95 2.44 9.67 Median 19.14 23.16 2105 (0.3] (((2.43))) 7.41 75th Percentile 16.69 2083 18.04 (0.Q (4.46) 0.23 462 90M Percentile 14.43 17.M 15.35 Callan • 17.90 24.60 20.27 (0.31) Sul) 6.97 Canal l Orarcg County Sanitation Mend g Domestic Fixed Income Active Management Overview Intermediate and long U.S. Treasury yields fell modestly in the second quarter as inflation was unexpectedly weak and economic data releases were mixed. The Fed, viewing inflation weakness as temporary, raised rates by 25 bps in line with expectations. The yield curve flattened over the course of the quarter, with short roles rising and longer rates falling. Risky assets continued their long streak of outperformance. The 10-year U.S. Treasury yield closed the quarter at 2.31%, down from 2.40% as of 3/31, though it hit a 2017 low of 2.12% earlier in June. The 2-year U.S. Treasury yield climbed 11 bps to close at 1.38%.The Bloomberg Barclays Aggregate Index earned 1.4%with corporate bonds performing the best on strong demand.The Bloomberg Barclays Corporate Index was up 2.5%for the quarter, outperforming the High Yield Index(+2.2%). TIPS underperformed as expectations for inflation sank.The Bloomberg Barclays TIPS Index lost 0.4% for the quarter. The 10-year breakeven spread(the difference between nominal and real yields)was 1.73%as of quarter-end, down from 1.97% at the end of the first quarter. High Yield managers trailed the Bloomberg Barclays High Yield Index, while Core Bond and Core Plus managers bested the Bloomberg Barclays Aggregate. Separate Account Style Group Median Returns for Quarter Ended June 30,2017 Blmbg Aggregate. 1.45% 5% Blmbg High Yield: 2.17% Bled,Long Gov/Cred: 4.39% 5% 4.51 4% ---------------------- ------------ N 3% ---------------------- ------------ N 2.20 54 1 so O1 0.46 0% Defensive Intermed Care Core Plus Extended Bank High Yield Bond Maturity Loans Separate Account Style Group Median Returns for One Year Ended June 30,2017 Blai Aggregate: (0,31%) 20% Bled,High Yield: 12.70% Blmbg Long Gov/Creel (1.07%) 15% 11.98 10% -------------------------------- -- 5 N � 5% 2,29 0.75 0 23 0.3] 0% (0.25) (5%) Defensive Intermed care Core Plus ExlBnded Bank High Yield Callan Maturity Loans Callan change County sanitation Distric to Asset Allocation Investment Manager Asset Allocation The table below Contrasts the distribution of assets across the Fund's investment managers as of June 30, 2017, with the distribution as of March 31, 2017. The change in asset distribution is broken down into the dollar change due to Net New Investment and the dollar change due to Investment Return. Asset Distribution Across Investment Managers June 30,2017 March 31,2017 Market Value Weight Net New Inv. Inv.Return Market Value Weloht Domestic Fixed Income tons Term Operating Fund' 331,996,306 72,74% 12,000,000 1.578.039 318.418.266 78,89% Liquid Operatic Monies' 124.441A79 27.26% 39,000,000 261.045 85.180.434 21.11% Total Fund $456,437,785 100.0% $51,000,000 81,839,084 3403,598.701 100.0% 'Chandler replaced PIMCO during,the 4th quarter of 2014.Assets were tmnafeoed In+lnd as of 12I01I2014. Callan Omhge County Sanitation DisNct 12 Investment Manager Returns The table below details the rates of return for the Fund's investment managers over various time periods ended June 30, 2017. Negative returns are shown in red, positive returns in black. Returns for one year or greater are annualized. The first set of returns for each asset class represents the composite returns for all the fund's accounts for that asset class. Returns for Periods Ended June 30,2017 Last Last Last Last Last 3 5 7 Quarter Year Years Years Years Domestic Fixed Income Long Term Operating Fund^ 0.49% 0.29% 1.31% 0.96% 1.77% Chandler 0.49% 0.29% - - - BlmbgGovt/Cred1-5 Year ldx 0.56% 0.11% 1.35% 1.29% 1.68% ML 1-5 Govt/Corp 0.55% 0.13% 1.37% 1.37% 1.76% Liquid Operating Monies^ 0.20% 0.57% 0.36% 0.27% 0.26% Chandler 0.20% 0.57% - - - Citigroup 3-Month Treasury Bill 0.18% 0,46% 0.20% 0.15% 0,13% Total Fund 0.41% 0.22% 1.07% 0.81% 1.49% Target* 0,48% 0,20% 1.14% 1,12% 1,43% Current Quarter Target=80.0%MIL US Corp/Govt 1-5Y and 20.0%Citi 3 Mo T-Bill. Callan were transferred in kind to Chandler on 12/112014.Previous performance reflects PIMCO. Callan Omr,e County Santlerinn Distnd 19 Investment Manager Returns The table below details the rates of return for the Fund's investment managers over various time periods ended June 30, 2017. Negative returns are shown in red, positive returns in black. Returns for one year or greater are annualized. The first set of returns for each asset class represents the composite returns for all the fund's accounts for that asset class. Returns for Periods Ended June 30,2017 Last Last Last 10 15 21.3/4 Years Years Years Domestic Fixed Income Long Term Operating Fund^ 3.19% 3.37% 4.42% Blmbg Govt/Cred 1-5 Year Idz 2.97% 3.16% 4.23% ML 1-5 Govt/Corp 3.00% 3.17% 4.26% Liquid Operating Monies^ 0.74% 1.45% 2.65% Citigroup 3-Month Treasury Bill 0.51% 1.22% 2.33% Total Fund 2.70% 3.02% 4.14% Target` 2.50% 2.78% 3.88% Current Quarter Target=80.0%ML US Corp/Govt 1-5Y and 20.0%Citi 3 Mo T-Bill. ^Assets were transferred in kind to Chandler on 12/112014.Previous performance reflects PIMCO. Callan 0mrve County sannarrnDiamn ,< Investment Manager Returns The table below details the rates of return for the Fund's investment managers over various time periods. Negative returns are shown in red, positive returns in black. Returns for one year or greater are annualized. The first set of returns for each asset class represents the composite returns for all the fund's accounts for that asset class. 12/2016- 6/2017 2016 2015 2014 2013 Domestic Fixed Income Long Term Operating Fund^ 1.00% 1.58% 0.85% 1.98% (1.77%) Chandler 1.00% 1,58% 0.85% - - Blmbg Govl/Cred 1-5 Year Idx 1.14% 1.56% 0.97% 1.42% 0.28% ML1-5 Govt/Com 1.11% 1.62% 1.05% 1.51% 0.32% Liquid Operating Monies^ 0.35% 0.47% 0.22% 0.09% 0.13% Chandler 0.35% 0.47% 0.22% - Citiarouo 3-Month Treasury Bill 0.30% 0.27% 0.03% 0.03% 0.05% Total Fund 0.841/6 1.15% 0.80% 1.73% (1.49%) Target* 0.95% 1.35% 0.85% 1.21% 0.26% *Current Quarter Target=80.0%ML US Corp/Gov:1-5Y and 20.0%Citi 3 Mo T-Bill. ^Assets were transferred in kind to Chandler on 12/112014.Previous performance reflects PIMCO. Callan 0mr,,e County SantlerinnDist c ,s Investment Manager Returns The table below details the rates of return for the Fund's investment managers over various time periods. Negative returns are shown in red, positive returns in black. Returns for one year or greater are annualized. The first set of returns for each asset class represents the composite returns for all the fund's accounts for that asset class. 2012 2011 2010 2009 2008 Domestic Fixed Income Long Term Operating Fund^ 3.06% 4.59% 4.42% 5.52% 5.37% Blmbg Govt/Cred 1-5 Year Idx 2.24% 3.14% 4.08% 4.62% 5,12% ML1-5 Govt/Corp 2.47% 3.10% 4.17% 4.88% 4.65% Liquid Operating Monies- 0.17% 0,24% 0.25% 0,58% 2,40% Ciligroup 3-Month Treasury Bill 0.07% 0.08% 0.13% 0.16% 1.80% Total Fund 2.70% 3.70% 3.68% 4.65% 4.61% Target` 1.99% 2.49% 3.36% 3.93% 4.08% Current Quarter Target=80.0%MIL US Corp/Govl 1-5Y and 20.0%Citi 3 Mo T-Bill. ^Assets were transferred in kind to Chandler on 12/112014.Previous performance reflects PIMCO. Callan 0mr,,e County santle,InnmisNtl ,a Asset Class Risk and Return The charts below show the seven year annualized risk and return for each asset class component of the Total Fund.The first graph contrasts these values with those of the appropriate index for each asset class.The second chart contrasts them with the risk and return of the median portfolio in each of the appropriate CAI comparative databases. In each case, the crosshairs on the chart represent the return and risk of the Total Fund. Seven Year Annualized Risk vs Return Asset Classes vs Benchmark Indices 2.0% 1.8% 1.8% 4% 1.2% 1.0% N K 0.8% 0.6% 0.4% 0.2% 0.0% 0.0% 02% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% Standard Deviation Seven Year Annualized Risk vs Return Asset Classes vs Asset Class Median 1.8% 1.6% 1.4% 1.2% c 1.0% N K 0.8% 0.6% 0.4% 0.2% 0.0% 0.0% 02% 0.4% 0.6% 0.8% 1.0% 12% 1.4% 1.8% ,.., 1,, Standard Deviation Callan Omrr County San0ation OisNt ,] Manager Analysis Chandler-Long Term Operating Fund Period Ended June 30, 2017 Investment Philosophy Chandler Asset Management's Short Term Bond strategy is driven by quantitative models and focuses on active duration management,sector selection and term structure.The strategy seeks to achieve consistent above-benchmark returns with low volatility relative to the style's performance benchmark. The firm has a unique focus on high quality fixed income management, and places risk control as a higher objective than return. Assets were transferred in kind to Chandler on 12/l/2014.Previous performance reflects PIMCO. Quarterly Summary and Highlights Quarterly Asset Growth • Long Term Operating Fund's portfolio posted a 0.49%return Beginning Market Value $318,418,266 for the quarter placing it in the 41 percentile of the CAI Net New Investment $12,000,000 Defensive Fixed Income group for the quarter and in the 79 Investment Gains/(Losses) $1,578,039 percentile for the last year. • Long Term Operating Fund's portfolio underperformed the Ending Market Value $331,996,306 ML US Corp/Govt 1-5Y by 0.07% for the quarter and outperformed the ML US Corp/Govt 1-5Y for the year by 0.16%. Performance vs CAI Defensive Fixed Income(Gross) (( )4.s% 25)II6(i ) 4.0% 3. % ®A( ) 3.0% 24) 2.5 6 2 1.0% (( 411KiM O1®AI4 791®B14 )11®B(3 ) Os% 25)®A(4 A] 0.0% Last Utr Leal Chandler Lost 3 Ym Lied 5Yrs Laid 7Ym LaN10Yrs Last20.5Yrs Yr Inception loth Percentile 0.]2 2.01 1.99 1]4 1.92 2.61 3.39 4.41 25U Percpn111e 055 1.11 1l1 1.51 150 t81 29] 426 Medium 046 075 1.35 1.21 1.24 is2 258 396 75th Percentile 0.36 036 L10 0.99 1.00 1.19 2.28 3.81 With Percentile 0.30 006 0,97 0.92 ow 1.07 2.06 3.68 Long Term Operating Fund •A 0.49 0.29 1.37 1.31 ow 1.77 3.19 4.42 Blmbg Gov6Cred t-5 Year Idx •6 056 0.11 147 1,35 in 1.68 297 423 ML US CorylGoH 1-5( ♦ 0.55 0.13 1,51 1.37 1.37 1.76 3.00 426 CAI Defensive Fixed Income(Gross) Relative Return vs ML US Corp/Govt 1-SY Annualized Seven Year Risk vs Return 2.0% 3.0% 15% ___ __ 2.5% p. 1.0% E 05% -- _ E2.o% 0.0% 1.5% - •.- ZgO 1.0% (1.5%) 0.5% 10 2011 2012 2013 2014 2015 2016 17 00 0.5 10 1.5 20 0 Long Term Operating Fun tl Standard Deviation L.A,�11,..M 3 l Orange County Sanitation cornet 19 Long Term Operating Fund Return Analysis Summary Return Analysis The graphs below analyze the manager's return on both a risk-adjusted and unadjusted basis.The first chart illustrates the manager's ranking over different periods versus the appropriate style group.The second chart shows the historical quarterly and cumulative manager returns versus the appropriate market benchmark. The last chart illustrates the manager's ranking relative to their style using various risk-adjusted return measures. Assets were transferred in kind to Chandler on 12M/2014. Previous performance reflects PIMCO. Performance vs CAI Defensive Fixed Income(Gross) 20% 1s% 0% ANJM2kJAl A� 8� S%) A ) (10%) 13116.07 M16 2015 2014 2013 2012 2011 2010 2009 2003 101h Percentile 1.39 2.82 1.17 1.50 1.20 4." 2.72 4.71 13.74 6.63 25th Pemen0le 1.13 2.17 1.02 1.27 0.81 2.On 2.30 4.01 8.60 5.64 Median 0.02 1.56 O9t 1.11 0.65 181 187 3.18 5.94 3.88 75th PemeMile 075 1.18 e75 087 040 145 185 272 2.53 (0.1]j 90Ih Percentile 0.64 1.03 0.64 073 0.29 0.92 1." 2.41 L82 (3.46 Long Term 0pem8n9 Fund *A 1,00 1.58 085 1,98 (1,77) 3.06 4.59 442 5.52 5.37 elm Gowcred -5 Year irk •B 1.14 1.% 0.97 142 0.28 2.24 3.14 4.08 4.62 5.12 ML US Corp/Gov115Y ♦ 1.11 1.62 1.05 151 0.32 2.47 3.10 4.17 4.88 4.65 Cumulative and Quarterly Relative Return vs ML US Corp/Govt 1-SY 6% 4% - --- --- -------- - -- --- ___ _-- -- of 0% N (6%) (8%) 2007 2008 2009 2010 2011 2012 M13 2014 2015 2016 2017 10 Long Tama Operating Fund M Blmbg GovllCred 1-5 Year Idx 0 CAI Defensive Fixed Inc Risk Adjusted Return Measures vs ML US Corp/Gout 1-SY Rankings Against CAI Defensive Fixed Income(Gross) Seven Years Ended June 30,2017 38 2.5 2.0 1.5 B(g0) 1.0 MIRA198) 0.5 0.0 A 1994 5 (1.0) (1.5) Alpha Sharpe Excess Return Res. Ratio 1 h Percentlla 1.12 2.14 0.88 25th Percentile 0.]6 1.83 0.22 Median 0.39 1.66 He 75th Percen118 0.23 1.41 0.82 OOIh Percentile 0.03 1.18 1.06 Longg Term Oyecong Fund *A 0.18 0.94 0.02 /'�,,Blmbg GovVCred 1-S Vear ltlx ■B 0.08 1.18 (a.95) Callan OraMre county Sanitation DisNct 20 Long Term Operating Fund Bond Characteristics Analysis Summary Portfolio Characteristics This graph compares the managers portfolio characteristics with the range of characteristics for the portfolios which make up the manager's style group. This analysis illustrates whether the manager's current holdings are Consistent with other managers employing the same style. Fixed Income Portfolio Characteristics Rankings Against CAI Defensive Fixed Income as of June 30,2017 45 4.0 35 3.5 (3)♦ (12)� 2.5 9(5) •(14) 2.0 (42) 1.5 (54) 1101 6184) 1.0 0.5 0.0 (0.5) Average ERacave Coupon OA Duration Late Yield Rate convexity 101h Pemen1le 1.99 3.07 2.33 3.fi5 O.0 250M1 Percen8le 1.90 2.20 2.02 288 005 Median 1.80 1.99 1.80 2.13 0.03 75tb Percentile i 74 1.86 1.63 1 86 000 901M1 Pemen0le 1.4] i.fi8 1.45 1.49 (0.03) Long Tam Operating Fund • 2.44 2.54 1.68 1.76 - SlmbgGov/Cred 1-5 Yr ♦ 2.78 2.91 1.]] 2.21 009 Sector Allocation and Quality Ratings The first graph compares the managers sector allocation with the average allocation across all the members of the manager's style.The second graph compares the manager's weighted average quality rating with the range of quality ratings for the style. Sector Allocation Quality Ratings June 30,2017 T vs CAI Defensive Fixed Income Tray US rrsy ------------ AAA RMBS ° COry(IIKI 144A) MI 2 M+ tither AA •(sa) ABS AA- Tax-Exempt US Muni A+ CasM1 CMOs A Weighted Average Quality Rating CMBS 10m Percentile AAA 25iM1 Percentile AA Gov Relatetl Median AA ]lain Percentile AA, Slain Percentile A+ 0% 10% 20% 30% 60% 50% 60% 70% 80% Long Term Operedng Fund CAI Defensive Fixed Inmme Long Term Operating Fund 0 AA /'�,, 1,, Blmbg Gw/Cred 1-5 Yr Blmbg Gav/Cred 1-5 Yr ♦ AA+ Callan Grange County Sanitation Distnd 21 Long Term Operating Fund Portfolio Characteristics Summary As of June 30, 2017 Portfolio Structure Comparison The charts below compare the structure of the portfolio to that of the index from the three perspectives that have the greatest influence on return. The first chart compares the two portfolios across sectors. The second chart Compares the duration distribution.The last chart compares the distribution across quality ratings. Sector Allocation US Trsy US Trsy 29% 61% CMBS ABS 1% 6% Tax-Exe'pt US Muni %% other RMBS 12% 25% Cash Gov Releled 1% 2% CMOs Cory(Intl 16dA) Cory(Ind 1WU 1% 2)% 24% Long Term Operating Fund Blmbg Govt/Credit 1.5 Year Weighted Average: Duration Duration Distribution ■ Long Term ogereeng Fund: 2.44 70% ■ Blmbg GoN/Credti 1-5 Year 2.78 0 80% __________ffi2 ______ ___----------aa------ ____ ______ 0 ______ ______ 0 41.5 30% �)A---- ______ ______ ______ 0% 0.3 3.2 <1 1-3 35 5-7 7-10 No Years Duration Weighted Average: quality Duality Distribution Long Term 0pndtng Fund M 100% ■ Blmbg GovllCredit 1-5 Year: AA+• p80% ______ ___ ___ __ ___ ___ ___ __ ___ ___ 69.2 66.0 R 60% _ LIA ___ ___ __ ___ ___ ______ 40% _ ___ ___ __ ___ ___ ______ ___ ___ m zB% T.S11.a�1-B —123 4 3.2 T.8 g% APA AA A BBB BB B CCC CC C 0 NIR Quality Rating Callan Charge County Sanitation Dist/d Chandler-Liquid Operating Money Period Ended June 30, 2017 Investment Philosophy Assets were transferred in kind to Chandler on 12/1/2014. Previous performance reflects PIMCO. Quarterly Summary and Highlights Quarterly Asset Growth • Liquid Operating Money Net's portfolio posted a 0,16% Beginning Market Value $85.180,434 return for the quarter placing it in the 34 percentile of the CAI Net New Investment $39,000,000 Money Market Funds group for the quarter and in the 32 percentile for the last year. Investment Gains/(Losses) $281,045 • Liquid Operating Money Nefs portfolio underperformed the Ending Market Value $124,441,479 Citigroup 3-Month Treasury Bill by 0.02%for the quarter and underperformed the Citigroup 3-Month Treasury Bill for the year by 0.04%. Performance vs CAI Money Market Funds(Net) 2. % F-el(ifi 2.0% 8) 1.5% 1.0% 0.6% 21) (32 48)®(25 z5) (M 251 (23 24) (23 21) (27 18) (22 0.0% Lsat Oa Last Chandler Last 3 Yrs Last 5Ym Last 7Ym LastlOYrs Last20.5Yrs Yr Incewlon 10T Percentile 027 083 0.57 045 0.30 022 075 258 25M Percentile 0.18 047 0.24 0.20 0.13 0.09 0.59 2.39 Msdian 0.13 0.28 0,13 0.11 0.07 0.05 0.50 2.23 75M Peroentlle 008 008 0.04 0.03 0,02 0.02 041 2.12 90T Perwntile 001 002 0,01 0,01 0.01 0.01 034 197 Liquid Operating Money Net • 0.18 OA2 0,26 0,21 0.12 0.11 059 2A9 Ciligmup 3-Month Treasury Bill ♦ 0.18 OA6 om 0.20 0.15 0.13 0.51 2.33 Relative Returns vs CAI Money Market Funds(Net) Citigroup 3-Month Treasury Bill Annualized Seven Year Risk vs Return 0.10% 5% 908% ___ __ __ __ __ __ 0% . . . : e.- IX E m 0.00% (20%) C (0.02%) --- - - - -- -- (25%) (004%) (30%) (0.06%) 10 2011 2012 2013 2014 2015 2016 17 (36%(10) 0 10 20 30 40 Callan Liquid Operaing Money Net Standard Deviation Callan l Orercg County Sanitation Oistdct 21 Liquid Operating Money Net Return Analysis Summary Return Analysis The graphs below analyze the manager's return on both a risk-adjusted and unadjusted basis.The first chart illustrates the manager's ranking over different periods versus the appropriate style group.The second chart shows the historical quarterly and cumulative manager returns versus the appropriate market benchmark. The last chart illustrates the manager's ranking relative to their style using various risk-adjusted return measures. Assets were transferred in kind to Chandler on 12M/2014. Previous performance reflects PIMCO. Performance vs CAI Money Market Funds(Net) 3.5% 30% 2.6% 2.0% 1.5% 61 1.0% 0.5% 26 37 26 22 02 14 0.0% (0.5%) 121WW17 M16 2015 2014 2013 2012 2011 2010 2009 2008 10lh Percentile 0.53 071 0.11 007 0.08 0.18 008 0.15 0.52 2.]] 25th PercznOle 0.33 0.28 003 002 0.02 003 002 005 0.28 2.46 Median 0.22 0.10 0.01 001 0.01 0.01 0.01 0.01 0.12 2.03 75th Pertendle 0.07 0.01 0.00 O rl 0.00 0.01 0.00 0.01 0.03 1.46 901h Perterde 0.01 cW 000 000 0.00 000 000 run oci 1.08 Liquid Operating Money Net 01 0.27 0.32 0.07 (Orin (0.02) 0.02 0.09 0.10 OA3 2.25 Citigroup 3-MoMh Treasury Bill ♦ 0.30 0.27 0.03 003 0.05 0.07 0.08 0.13 0.16 1.80 Cumulative and Quarterly Relative Return vs Citigroup 3-Month Treasury Bill 1.2% 1.0% - --- -- _- --- ___ 0.6% u � 0.4% u 0.2% m 0.0% d � (0.2%) (0.4%) (0.6%) 2007 2008 2009 2010 2011 2012 M13 2014 2015 2016 2017 10 Liquid Operating Money Net 0CAI Money Market Funds Risk Adjusted Return Measures vs Citigroup 3-Month Treasury BIII Rankings Against CAI Money Market Funds(Net) Seven Years Ended June 30,2017 5 9 (s) Ito) 115) (20) (�5) /dpha SM1 rye Excess ReturnRat. Ratio 1 Dun Percendle 0.09 0.35 1.09 25th Percendle (0.03) 10.]5) 1.03 Median (0.07) 1.90 1.68 75th Percentile (0.10) (5.90) 2.02 901h Percendle (0.11) (19.30) 2.5] /'� Liquid Operating Money Net • M N) (0.54) (0.61) Callan Oraroe County 6andation District 24 Callan Research/Education CALLAN Callan INSTITUTE 2nd Quarter 2017 Education Research and Educational Programs The Callan Institute provides both research to update clients on the latest industry trends and carefully structured educational programs to enhance the knowledge of industry professionals.Visit www.callan.coMlibrary to see all of our publications,and www.callan.com/blog to view our blog"Perspectives,"For more information contact Anna West at 415.974,5060/institute@callan.mm. New Research from Callan's Experts The Hedge Fund Edge: Still Sharp or Too June 2017 Monthly Periodic Table of Dull? I Why should investors bother with Returns I A monthly update for Callan's -. hedge funds?The original proposition behind ��������� Periodic Table of Investment Returns, them was their differentiated performance: covering the major public equity asset _� �oo���� better risk-adjusted d s -ajuste returns with a lower cor- __------- classes.- - — � ===' relation to traditional capital markets. Do hedge funds still have their inherent advan- tage?This white paper looks at the key traits in the DNA of hedge Periodicals funds—and why they still offer an advantage for investors. Private Markets Trends, Spring 2017 1 Gary Robertson reports White Label Funds:a JouNo-rnal Design Handbook I a , that the private equity market is off to a roaring start in 2017,and paper published in The Journal mRetirement, fferCalla g Rod Bare, new partnership commitments may exceed the level of 2016. Jay Klcepfer,Lon Lucas,and Jimmy Veneruso offer a guide to plan sponsors considering adding these funds to their lineup. Hedge Fund Monitor, 2nd Quarter 20171 Jim McKee looks at "false charges,"or bear markets that come and go quickly but can Survivorship Bias Presentation Summary, 2017 National leave unprepared investors at significant risk. Conference I In this presentation, Greg Allen and Butch Cliff dis- cussed an algorithm they developed with Walter J. Meerschaert, DC Observer, 2nd Quarter 2017 1 Lon Lucas discusses how to Callan's manager of Information Technology,to measure and cor- manage DC plan recordkeepers, explaining that one of the best rect for survivorship bias, the logical flaw of looking only at the ways is to conduct periodic searches. results for the survivors in a universe, rather than the results for all members of the universe. Their algorithm, called SUBICO (for Market Pulse Flipbook, tat Quarter 2017 1 A quarterly market SUrvivorship Bias COrrection), uses all of the underlying data for reference guide covering investment and fund sponsor trends in both surviving and non-surviving members of the universe to correct the U.S. economy, U.S. and non-U.S. equities and fixed income, for survivorship bias. alternatives,and defined contribution. Next Generation QDIAS,2017 National Conference I The work- Capital Market Review,tat Quarter 20171 Aquarterly maaoece- shop"The Future of DC Is Here:The Next Generation of ODIAs," nomic newsletter providing thoughtful insights on the economy and hosted by Ben Taylor, James Venenrso, and Stands Weymouth, recent performance in equity, fixed income, alternatives, interna- discussed new approaches to qualified default investment alter- tional,real estate,and other capital markets, natives as they become the primary savings vehicle for defined contribution plans. The Center for Investment Training Events Educational Sessions Miss out on a Callan conference or workshop? Event summa- The Center for Investment Training, better known as the -Callan des and speakers presentations are available on our websile: College;provides a foundation of knowledge for industry profes- www.callan.com/library/ sionals who are involved in the investment decision-making pro. Mark your calendars for our fall Regional Workshop, October cess.It was founded in 1994 to provide clients and non-clients alike 24 in New York and October 26 in Chicago, where we'll cover with basic-to intermediate-level instruction.Our next session is: highlights from our soon-tu-be published Investment Manage- Introduction to Investments ment Fee Sunray and cover other aspects of fees. Callan's Na- Chicago, October 24-25,2017 tional Conference will be held January 29-31,2018,at the Palace This program familiarizes fund sponsor trustees, staff, and asset Hotel in San Francisco. management advisers with basic investment theory,terminology, and practices. It lasts one-and-a-half days and is designed for in- For more information about events, please contact Barb dividuals who have less than two years of experience with asset- Gerraty:415.274.30931 gerraty@callan.com management oversight and/or support responsibilities.Tuition for the Introductory "Callan College" session is $2,350 per person. Tuition includes instruction, all materials, breakfast and lunch on each day,and dinner on the first evening with the instructors. Customized Sessions The 'Callan College" is equipped to customize a curriculum to meet the training and educational needs of a specific organization. These tailored sessions range from basic to advanced and can take place anywhera van at your office. Learn more at www.callan.com/events/callan-college-intro or contact Kathleen Cunnie:415.274.3029/cunnie@callan.com Education: By the Numbers 525 Attendees(on average)of the 50+ Unique pieces of research the Institutes annual National Conference Institute generates each year 3 500 Total attendees of the'Callan 1980 Year the Callan Institute College since 1994 was founded "We think the best way to learn something is to teach it. Entrusting client education to our consultants and specialists ensures that they have a total command of their subject matter. This is one reason why education and research have been cornerstones of our firm for more than 40 years." t Ron Peyton,Chairman and CEO Callan 9 @CallanAssoc ID Callan Associates Definitions Risk/Reward Statistics The risk statistics used in this report examine performance characteristics of a manager or a portfolio relative to a benchmark (market indicator) which assumes to represent overall movements in the asset class being considered. The main unit of analysis is the excess return, which is the portfolio return minus the return on a risk free asset (3 month T-Bill). Alpha measures a portfolio's return in excess of the market return adjusted for disk. It is a measure of the manager's contribution to performance with reference to security selection. A positive alpha indicates that a portfolio was positively rewarded for the residual risk which was taken for that level of market exposure. Beta measures the sensitivity of rates of portfolio returns to movements in the market index. A portfolio's beta measures the expected change in return per 1% change in the return on the market. If a beta of a portfolio is 1.5,a 1 percent increase in the return on the market will result,on average, in a 1.5 percent increase in the return on the portfolio. The converse would also be true. Downside Risk stems from the desire to differentiate between "good risk" (upside volatility) and "bad risk" (downside volatility). Whereas standard deviation punishes both upside and downside volatility, downside risk measures only the standard deviation of returns below the target. Returns above the target are assigned a deviation of zero. Both the frequency and magnitude of underperformance affect the amount of downside risk. Excess Return Ratio is a measure of risk adjusted relative return. This ratio captures the amount of active management performance (value added relative to an index) per unit of active management risk (tracking error against the index.) It is calculated by dividing the managers annualized cumulative excess return relative to the index by the standard deviation of the individual quarterly excess returns. The Excess Return Ratio can be interpreted as the manager's active riskireward tradeoff for diverging from the index when the index is mandated to be the"nskless"market position. Information Ratio measures the manager's market risk-adjusted excess return per unit of residual risk relative to a benchmark. It is computed by dividing alpha by the residual risk over a given time period. Assuming all other factors being equal, managers with lower residual risk achieve higher values in the information ratio. Managers with higher information ratios will add value relative to the benchmark more reliably and consistently. R-Squared indicates the extent to which the variability of the portfolio returns are explained by market action. It can also be thought of as measuring the diversification relative to the appropriate benchmark. An r-squared value of.75 indicates that 75% of the fluctuation in a portfolio return is explained by market action. An r-squared of 1.0 indicates that a portfolio's returns are entirely related to the market and it is not influenced by other factors. An r-squared of zero indicates that no relationship exists between the portfolio's return and the market. Relative Standard Deviation is a simple measure of a managers risk(volatility)relative to a benchmark. It is calculated by dividing the manager's standard deviation of returns by the benchmark's standard deviation of returns. A relative standard deviation of 1.20,for example, means the manager has exhibited 20% more risk than the benchmark over that time period. A ratio of .80 would imply 20% less risk. This ratio is especially useful when analyzing the risk of investment grade fixed-income products where actual historical durations are not available. By using this relative risk measure over rolling time periods one can illustrate the "implied" historical duration patterns of the portfolio versus the benchmark. Residual Portfolio Risk is the unsystematic risk of a fund,the portion of the total risk unique to the fund(manager)itself and not related to the overall market. This reflects the"bets"which the manager places in that particular asset market. These bets may reflect emphasis in particular sectors, maturities (for bonds), or other issue specific factors which the manager considers a good investment opportunity. Diversification of the portfolio will reduce or eliminate the residual risk of that portfolio. Callan 29 Risk/Reward Statistics Sharpe Ratio is a commonly used measure of risk-adjusted return. It is calculated by subtracting the "risk-free" return (usually 3 Month Treasury Bill)from the portfolio return and dividing the resulting"excess return" by the portfolio's risk level (standard deviation).The result is a measure of return gained per unit of risk taken. Sortino Ratio is a downside risk-adjusted measure of value-added. It measures excess return over a benchmark divided by downside risk. The natural appeal is that it identifies value-added per unit of truly bad risk. The danger of interpretation, however, lies in these two areas: (1)the statistical significance of the denominator,and (2) its reliance on the persistence of skewness in return distributions. Standard Deviation is a statistical measure of portfolio risk. It reflects the average deviation of the observations from their sample mean. Standard deviation is used as an estimate of risk since it measures how wide the range of returns typically is. The wider the typical range of returns,the higher the standard deviation of returns,and the higher the portfolio risk. If returns are normally distributed (ie. has a bell shaped curve distribution) then approximately 2/3 of the returns would occur within plus or minus one standard deviation from the sample mean. Total Portfolio Risk is a measure of the volatility of the quarterly excess returns of an asset. Total risk is composed of two measures of risk: market(non-diversifiable or systematic)risk and residual(diversifiable or unsystematic) risk. The purpose of portfolio diversification is to reduce the residual disk of the portfolio. Tracking Error is a statistical measure of a portfolio's risk relative to an index. It reflects the standard deviation of a portfolio's individual quarterly or monthly returns from the index's returns. Typically,the lower the Tracking Error, the more "Index-like"the portfolio. Traynor Ratio represents the portfolio's average excess return over a specified period divided by the beta relative to its benchmark over that same period. This measure reflects the reward over the risk-free rate relative to the systematic risk assumed. Note:Alpha,Total Risk,and Residual Risk are annualized. Callan 30 Fixed Income Portfolio Characteristics All Portfolio Characteristics are derived by first calculating the characteristics for each security, and then calculating the market value weighted average of these values for the portfolio. Allocation by Sector- Sector allocation is one of the tools which managers often use to add value without impacting the duration of the portfolio. The sector weights exhibit can be used to contrast a portfolio's weights with those of the index to identity any significant sector bets. Average Coupon-The average coupon is the market value weighted average coupon of all securities in the portfolio. The total portfolio coupon payments per year are divided by the total portfolio par value. Average Moody's Rating for Total Portfolio- A measure of the credit quality as determined by the individual security ratings. The ratings for each security, from Moody's Investor Service, are compiled into a composite rating for the whole portfolio. Quality symbols range from Aaa+ (highest investment quality-lowest credit risk)to C (lowest investment quality- highest credit risk). Average Option Adjusted(Effective)Convexity-Convexity is a measure of the portfolio's exposure to interest rate risk. It is a measure of how much the duration of the portfolio will change given a change in interest rates. Generally,securities with negative convexities are considered to be risky in that changes in interest rates will result in disadvantageous changes in duration. When a security's duration changes it indicates that the stream of expected future cash-flows has changed, generally having a significant impact on the value of the security. The option adjusted convexity for each security in the portfolio is calculated using models developed by Lehman Brothers and Salomon Brothers which determine the expected stream of cash-flows for the security based on various interest rate scenarios. Expected cash-flows take into account any put or call options embedded in the security, any expected sinking-fund paydowns or any expected mortgage principal prepayments. Average Option Adjusted(Effective)Duration- Duration is one measure of the portfolio's exposure to interest rate risk. Generally, the higher a portfolio's duration, the more that its value will change in response to interest rate changes. The option adjusted duration for each security in the portfolio is calculated using models developed by Lehman Brothers and Salomon Brothers which determine the expected stream of cash-flows for the security based on various interest rate scenarios. Expected cash-flows take into account any put or call options embedded in the security, any expected sinking-fund paydowns or any expected mortgage principal prepayments. Average Price-The average price is equal to the portfolio market value divided by the number of securities in the portfolio. Portfolios with an average price above par will tend to generate more current income than those with an average price below par. Average Years to Expected Maturity- This is a measure of the market-value-weighted average of the years to expected maturity across all of the securities in the portfolio. Expected years to maturity takes into account any put or call options embedded in the security, any expected sinking-fund paydowns or any expected mortgage principal prepayments. Average Years to Stated Maturity- The average years to stated maturity is the market value weighted average time to stated maturity for all securities in the portfolio. This measure does not take into account imbedded options, sinking fund paydowns,or prepayments. Current Yield-The current yield is the current annual income generated by the total portfolio market value. It is equal to the total portfolio coupon payments per year divided by the current total portfolio market value. Callan 31 Fixed Income Portfolio Characteristics Duration Dispersion- Duration dispersion is the market-value weighted standard deviation of the portfolio's individual security durations around the total portfolio duration. The higher the dispersion, the more variable the security durations relative to the total portfolio duration ('barbellness"), and the smaller the dispersion, the more concentrated the holdings' durations around the overall portfolio's ('bulletnessi The purpose of this statistic is to gauge the 'bulletness' or 'barbellness'of a portfolio relative to its total duration and to that of its benchmark index. Effective Yield-The effective yield is the actual total annualized return that would be realized if all securities in the portfolio were held to their expected maturities. Effective yield is calculated as the internal rate of return, using the current market value and all expected future interest and principal cash flows. This measure incorporates sinking fund paydowns,expected mortgage principal prepayments,and the exercise of any"in-the-money"imbedded put or call options. Weighted Average Life-The weighted average life of a security is the weighted average time to payment of all remaining principal. It is calculated by multiplying each expected future principal payment amount by the time left to the payment. This amount is then divided by the total amount of principal remaining. Weighted average life is commonly used as a measure of the investment life for pass-through security types for comparison to non-pass-through securities. Callan 32 Disclosures Callan 1 Quarterly List as of June 30, 2017 List of Callan's Investment Manager Clients Confidential-For Callan Client Use Only Callan takes its fiduciary and disclosure responsibilities to clients very seriously.We recognize that there are numerous potential confide of interest encountered in the investrnerx consulting industry and Mat it is our responsibility to manage those conflicts effectively and in the best interest of our chants. At Callan,we employ a robust process to Identify,manage,monitor and disclose potential conflicts on an c ing basis. The list below is an important component of our conflicts management and disclosure process. It identities those investment managers Mat pay Callan fees for educational,consulting,software,database or reporting products and services. We update the list quarterly because we believe that our fund sponsor clients should know the investment managers that do business with Callan,pariculady Mesa investment manager clients that Me fund sponsor clients may be using or considering using.Callan is committed to ensuring that we do not consider an investment managers business relationship with Callan,or lack thereof,in performing evaluations for or making suggestions or recommendations M its other clients. Please refer to Callan's ADV Part 2A for a more detailed description of the services and products Mat Callan makes available to investment manager clients through our Institutional Consulting Group,Independent Adviser Group and Fund Sponsor Consulting Group. Due to the complex corporate and organizational ownership structures of many investment management firms,parent and affiliate firm relationships are not Indicated on our list. Fund sponsor clients may request a copy of Me most currently available list at any time.Fund sponsor clients may also request specific information regarding the fees paid to Callan by particular fund manager clients. Per company policy,information requests regarding fees are handled exclusively by Callan's Compliance Department, Manager Name Manager Name 1607 Capital Partners,LLC Brandywine Global Investment Management,LLC Aberdeen Asset Management PLC Brown Brothers Hammon&Company Acadian Asset Management LLC Brown Investment Advisory&Trust Company AEGON USA Investment Management Gambier Investors,LLC AEW Capital Management Capital Group Affiliated Managers Group,Inc. Castlal Management,LLC Alcentra Causeway Capital Management AllianceBemstein Chariwell Investment Partners Allianz Global Investors Chicago Equity Partners,LLC Allianz Life Insurance Company of North America ClearBridge Investments,LLC American Century Investments Cohen&Steers Capilal Management,Inc. Amundl Smith Breeden LLC Columbia Management Investment Advisers,LLC Angelo,Gordon&Co. Columbus Circle Investors Apollo Global Management Cornerstone Capital Management AQR Capital Management Cramer Rosenthal McGlynn,LLC Ares Management LLC Credit Suisse Asset Management Adel Investments,LLC Coastline Investors,Inc. Aristotle Capital Management,LLC D.E.Shaw Investment Management,L.L.C. Artisan Holdings Defended,Race&Zollo,Inc. Atlanta Capital Management Co.,LLC Deutsche Asset Management Aviva Investors Americas Diamond HIII Capital Management,Inc. AXA Investment Managers Dimensional Fund Advisors LP Baillie Gifford Overseas Limited Doubleline Baird Advisors Duff&Phelps Investment Ml Co. Bank of America Eagle Asset Management,Inc. Baring.LLC EARNEST Partners,LLC Baron Capital Management,Inc. Eaton Vance Management Barrow,Hanley,Mewhinney It Stmuss,LLC Epoch Investment Partners,Inc. Black Creek Investment Management Inc Fayez Sarofim&Company Blackpool Federated Investors BMO Global Asset Management Fidelity Institutional Asset Management BNP Paribas Investment Partners Plans Capital Corporation BNV Mellon Asset Management First Eagle Investment Management,LLC Boston Partners First Hawaiian Bank Wealth Management Division Boyd Watterson Asset Management,LLC Fisher Investments Besides Investment Partners,L.P. Franklin Templeton Callan I Knowledge.Experience.Integrity. Page 1 of 3 Manager Name Manager Name Franklin Templeton Institutional NOMem Trust Asset Management Fred Alger Management,Inc. Nuveen Investments,Inc. Fuller&Thaler Asset Management,Inc. OR Global Asset Management GAM(USA)Inc. Old Mutual Asset Management Global Evolution USA O'Shaughnessy Asset Management,LLC GlobeFlex Capital,L.P. Pacific Investment Management Company GMO Peregrine Capital Management,Inc. Goldman Sachs Asset Management PGIM Gryphon International Investment Corporation PGIM Fixed Income Guggenheim Investments PineBridge Investments GW&K Investment Management Pioneer Investments Harbor Capital Group Trust PNC Capital Advisors,LLC Harding Lcevner LP PPM America Hartford Funds Principal Global Investors Hartford Investment Management Co. Private Advisors,LLC Heitman LLC Putnam Investments,LLC Henderson Global Investors Pzena Investment Management,LLC Hotchkis&Wiley Capital Management,LLC OMA(Quantitative Management Associates) HSBC Global Asset Management RBC Global Asset Management Income Research t Management,Inc. Record Currency Management Ltd. Insight Investment Management Limited Regions Financial Corporation INTECH Investment Management,LLC Ridgei Capital Management,Inc. Invesco Rockefeller&Co.,Inc. Invested Asset Management Rothschild Asset Management,Inc. Ivy Investments Russell Investments Jacobs Levy Equity Management,Inc. Santander Global Facilities Janus Capital Management,LLC Schroder Investment Management North America Inc. Jensen Investment Management Smith,Graham&Co.Investment Advisors,L.P. Jobs Peak Advisors Smith Group Asset Management J.P.Morgan Asset Management South Texas Money Management,Ltd KeyCorp Standard Life Investments Limited Lazard Asset Management Standish Legal&General Investment Management America State Street Global Advisors Lincoln National Corporation Stone Harbor Investment Partners,L.P. LMCG Investments,LLC Strategic Global Advisors Logan Circle Partners,L.P. T.Rowe Price Associates,Inc. Longfellow Investment Management Co. Tenth,Canida&Habacht Longview Partners Teachers Insurance&Annuity Association of America Loomis,Salves&Company,L.P. The Boston Company Asset Management,LLC Lord Abbetl&Company The Hartford Los Angeles Capital Management The London Company LSV Asset Management The TCW Group,Inc. MacKay Shields LLC Thompson,Siegel&Wernaley LLC Macquarie Investment Management(formody Delaware Thornburg Investment Management,Inc. Investments) Tri-Star Trust Bank Man Investments Inc. UBS Asset Management Mani Asset Management Van Eck Global McKinley Capital Management,LLC Versus Capital Group MFS Investment Management Victory Capital Management Inc. MldFlmt Bank Vo Mondrian Investment Partners Limited Asset Management,Inc. Voya F Fininancial Montag 8 Caldwell,LLC Voya Investment Management(fka ING) Morgan Stanley Investment Management Vulcan Value Partners,LLC Mountain Lake Investment Management LLC Wasatch Advisors,Inc. MUFG Union Bank,N.A. WCM Investment Management Neuberger Berman WEDGE Capital Management New York Life Investment Management LLC Wedgewood Partners,Inc. Neatest Asset Management LLC Wellington Management Company,LLP Newton Investment Management d a New en Capital Mgmt) Wells Capital Management Nikko Asset Management Co.,Ltd. Western Asset Management Company Callan I Knowledge.Experience.Integrity. Page 2 of 3 June 30,2017 Manager Name Manager Name William Blair&Company W storri Asset Management Callan I Knowledge.Experience.Integrity. Page 3 of 3 June 30,2017 Investment Report Orange County Sanitation District Period Ending June 30, 2017 Diego,6225 Lusk Blvd San 0 c111JI Table of Contents SECTION 1 Economic Update SECTION 2 Account Profile SECTION 3 Consolidated Information SECTION 4 Portfolio Holdings SECTION 5 Transactions Coil SECTION 1 Economic Update Economic Update ■ The Federal Open Market Committee(FOMC) raised the fed funds target rate by 25 basis points to a range of 1.00%- 1.25%at the June 13-14 meeting. However,the FOMC statement indicated that the stance of monetary policy remains accommodative. The FOMC also noted that economic activity has been rising moderately and job gains have been solid, but inflation has recently declined. Nevertheless, the FOMC expects inflation to stabilize around 2.0% over the medium term. The Committee expects to begin trimming the Fed's balance sheet later this year. The Fed's updated Summary of Economic Projections reflects downward revisions to the Fed's median unemployment rate projections for this year and future years, as well as a downward revision to the Fed's median 2017 inflation forecast. The updated projections suggest that the Fed anticipates the labor market to tighten further over the coming years without much impact on inflation. The Fed still expects the fed funds rate to reach 1.4% by the end of this year (which implies one more rate hike before year-end)and 3.0%over the longer-run. ■ Domestic economic data remains indicative of slow growth. The economy is likely at or near full employment, consumer confidence is strong, manufacturing indicators are indicative of modest expansion, and housing trends remain favorable. Looking ahead, a potential boost in fiscal stimulus could provide a further tailwind to economic growth. GDP grew by 1.4% in the first quarter, following growth of 2.1% in the fourth quarter. We expect modest economic growth of about 2.0%-2.5%for the full year 2017. ■ Treasury yields increased modestly in June, led by the 5-year note. The 2-year and 10-year Treasury yields both increased by ten basis points month-over-month, while the 5-year Treasury yield increased 14 basis points. The move higher in domestic yields occurred late in the month, coinciding with hawkish comments from ECB President Draghi. His comments also provided a catalyst for sovereign yields in Germany and Japan to move higher. On a year-over- year basis, Treasury yields have increased meaningfully,with the 2-year Treasury yield up 80 basis points and the 10- year Treasury yield up 83 basis points. The Federal Reserve has raised the fed funds target rate by 25 basis points three times in the past year. Cilil Employment Nonfarm Payroll (000's) Unemployment Rate 350 13.0% 300 12.0% —Underemployment Rab(U6) 11 0°/ �Unempbymenl Rate(U3) 250 10.0% 200 u 9.0% c 8.0% L 150 U i7.0% 0 100 6.0% 50 5.0% 0 y 4.0% "�'n,]S S0a]S �°c]S ya•�G `�'n.]s `kL�C �0c]@ ya.>> �'o,>> �'o,�S ]S O0a]S y�•]E ���8 7E 7E y�•]> ]> Scurtn:US Oepartmenf o/La6w Sw2e:US CepaNnenf MLaGoi Job growth was stronger than expected in June but wages remained lackluster. Nonfarm payrolls increased by 222,000 versus the consensus forecast of 178,000. In addition, April and May payrolls were revised up by 47,000 in total. The average increase in monthly payrolls was 194,000 during the second quarter, up from 166,000 per month during the first quarter. The unemployment rate ticked up to 4.4% in June from 4.3% in May, but the labor participation rate also edged up to 62.8% from 62.7%. A broader measure of unemployment called the U-6, which includes those who are marginally attached to the labor force and employed part time for economic reasons, increased to 8.6% in June from 8.4% in May, however this compares to 9.6% in June 2016. Wage growth rose just 0.2% in June, following a downwardly revised gain of 0.1% in Ivfay. On a year-over-year basis, wages were up 2.5% in June, versus 2.4% in May. 0111 Inflation Consumer Price Index (CPI) Personal Consumption Expenditures 3.5% 3.5% (PCE) _CPI YOY%Chen,. _PCE Poce MllN YOY%Chan �Ca CPI YOY%Change 3.0% le PCE Core Rlletor YOY%CSe le 2.5% 2.5% u $ c 2.0% `m Z0% L X1.5% 1.5% 1.0% Ne 01.0% > > 0.5% 0.5% 0.0% 0.0% 0s% -as% %76 0�76 "'91,76 l.76 7e %7& 1k, 1&n,7j yay 7S llt�e ryU/<16 �1& �alc1e 1S ry0/a10 ��J yaX1! source:US OepaN nt ollab source:US Department of LaO r The Consumer Price Index (CPI)was up 1.6% year-over-year in June, versus up 1.9% year-over-year in May. Core CPI(CPI less food and energy) was up just 1.7% year-over-year in June. The Personal Consumption Expenditures (PCE) index was up 1.4% year-over- year in May, versus up 1.7% year-over-year in April. Core PCE (excluding food and energy) was also up just 1.4% year-over-year in May, versus up 1.5% year-over-year in April. Core CPI is has fallen back below the Fed's 2.0% target, and the Fed's primary inflation gauge(PCE)also remains below the target. CIR I Consumer Retail Sales YOY % Change Consumer Confidence 6.0% 100 5.0% 125 120 m 4.0% 115 i u > 710 3.0 � u 105 O v � 2.0% 100 . 1.0% 90 0.0% p. ,C 65 `Eays 'S 2�S ;1s >s ^n.76 70 7j q'a>) '9.7& >S�Bc7,, >s y@ .swat e4'f16�ac;7&45,744; Source:US CePert I of Cor . Souce:F a'W Reserve On a year-over-year basis, total retail sales were up 2.8% in June compared with a 4.1% increase in May. On a month-over-month basis, retail sales declined 0.2% in June, below expectations for a 0.1% increase, following a 0.1% decrease in May. Excluding autos and gas, retail sales were down 0.1% in June. Overall, consumer spending trends remain soft. However, the consumer confidence index remained strong in June at 118.9 versus 117.6 in May. GRI Economic Activity Leading Economic Indicators (LEI) Chicago Fed National Activity Index 0.7% oso (CFNAI) 0.6% 0.5% 0.40 d 0.4% v 0.3% IF 0.20 u 0.2% > a o.i% � 0.00 c 0.0% f -ago -at% -a2% Y -a4o -aa% #V — -0.4% q -a80 y ,7y -'y�a7S N6k7s �6476 4.y70 1,!g-'s NOy7s F6477 4$A7� h7s '%tb7s 7e kb,7s %,76 '%76 4'6k76 ��i ' `» Source:%he COM Mre Bo M Source Fe eml Reserve Bank or Chicago The Index of Leading Economic Indicators (LEI) rose 0.3%in May, in line with expectations, following a 0.2%increase in April. According to the Conference Board, the LEI suggests economic growth will remain on, or possibly moderately above, its long-term trend of about 2% growth through year-end. However, the Chicago Fed National Activity Index (CFNAI) declined to 0.04 in May on a 3-month moving average basis from 0.21 in April. The index declined meaningfully in May,which weighed on the three month moving average. CIRI Housing Housing Starts S&P/CaseShiller20 City Composite Home 1600 6.5% Price Index " •MulO Famlly Houtly Sfatls Y 1400 •SlnBle Famlly Wu®ng5lar@ 6.0% `0 1200 1000 orn 5.5% 5 0 F 800 ti 5.0% T 600 4.5% � O c 400 U 4.0% C 200 f p 3.5% g1a 7s �s �s �s �s �s �s �> » s s s s Souse:US Census Bureau Soumm S&P Total housing starts fell 5.5% in May, following a 2.8% decrease in April, missing expectations. Single-family starts declined 3.9% in May, and multi-family starts fell 9.7%. Permits were also weaker than expected in May, down 4.9%. According to the Case-Shiller 20- City home price index, home prices were up 5.7%year-over-year in April, versus up 5.9%year-over-year in March. C1111 Manufacturing Institute of Supply Management Purchasing Capacity Utilization Manager Index 80.0% so Expanding 58 79.0% 56 78.0% 54 X 77.0% sz 8 so 6.0% 48 75.0% Contracting 46 74.0% o S lik 'S Oda'S "1,76 4k76 11.47@ 6.176 44,7' J.�j lkIS 7S RlIS 4101,7s 7s l76 OPC.6 �,1•» Source:Inandute for Supply Management Source:Fetleral Reserve The Institute for Supply Management (ISM) manufacturing index increased to 57.8 in June from 54.9 in May, suggesting that manufacturing activity is accelerating. The report was stronger than expected. Notably, a reading above 50.0 suggests the manufacturing sector is expanding. However, capacity utilization, which is production divided by capacity, increased to 76.6% in June from a downwardly-revised 76.4% in May. The capacity utilization rate remains below the long-run average of 79.9% (1972-2016), suggesting there is still excess capacity in the industrial sector. �jjjj Gross Domestic Product (GDP) Gross Domestic Product(GDP) 6.0% Personal consumption Expenditures 2.9% 2.0% 2.4% 0.8% 5.0% Gross Private Domestic investment -1.3% 0.5% 1.5% 0.6% 4.0% 3.0% Net Exports and Imports 0.2% 0.9% -1.8% 0.2% 2.0% 1.0% Federal Government Expenditures 0.0% 0.2% -0.1% -0.1% 0.0% State and Loral(Consumption and Gross _t 0% r_GDP DOD%Change Investment) -0.3% 00% 0.1% 0.0% -GDP YOY%Change -20% Total 1.4% 3.5% 2.1% 1.4 b,1 ,fib,� v0`Yi 0�d,Qsoq ,S%s4'., Y 44, Source: US Department of Commerce Soule: US Depan~t of Commece First quarter GDP growth was revised up to 1.4°% from the second estimate of 1.2% and the advance estimate of 0.7%. The most recent upward revision was driven by an increase in consumer spending and net exports. Economic growth is believed to have improved in the second quarter to a pace of about 3.0%. The consensus forecast currently calls for GDP growth of about 2.4°% in the third quarter. ii� G111 Bond Yields US Treasury Note Yields US Treasury Yield Curve 3.5% 3.5% 2-Yeer —J-17 3.0% �&Year 3.0% Mar-n 10-Yeer Jun-16 2.5% 2.5% X 2.0% 92.0% 5= 1.5% 1.5°0 1.0% 1.0% 0.5% 0.5% 0.0% aC 1S Q �S ��B ��B �+A�B O��B Qfa��� ✓`��� ��b,�O 2� S,p 10� �� Source:B .be `�a �C Soule:Blmm6elg Over the past three months the yield curve flattened. The spread between 2-year and 10-year Treasury yields narrowed to 92 basis points as of June 30, compared to 114 basis points on IVlarch 31. In the three months ending in June, the 2-year Treasury yield increased nearly 13 basis points while the 10-year Treasury yield decreased eight basis points. Immediately following the US Presidential election last fall, the Treasury yield curve steepened meaningfully, driven by heightened expectations for fiscal stimulus and economic growth under the Trump administration. However, as the post-election exuberance started to wane earlier this year, the yield curve flattened. Since the election, the 2-year Treasury yield is up about 60 basis points and the 10-year Treasury yield is up about 50 basis points. Ilia C11% SECTION 2 Account Profile 011 Objectives Investment Objectives The investment objectives of the Orange County Sanitation District are first, to provide safety of principal to ensure the preservation of capital in the overall portfolio; second, to provide sufficient liquidity to meet all operating requirements; and third, to earn a commensurate rate of return consistent with the constraints imposed by the safety and liquidity objectives. Chandler Asset Management Performance Objective Liquid Operating Monies—will be compared to the 3-month T-Bill rate and operate with a maximum maturity of one year. Long-Term Operating Monies—will be compared to the Bank of America Merrill Lynch 1-5 Year Corporate Government Rated AAA—A Index. Strategy In order to achieve these objectives, the portfolio invests in high quality fixed income securities consistent with the investment policy and California Government Code. C1111 Compliance CA Orange County Sanitation District Long Term June 30,2017 COMPLIANCE • Assets managed by ChandlerAsset Management are in full compliance Wit,State lawand aith the investmentpolicy Category Standard Comment Treasury Issues 5 years maximum maturity Complies" Supmnational "AA"or better by l of 3 NRSROs; 30%maximum; 5%max issuer; 5years maturity, Complies Includes only: IADB IBIRD,and IFC per CGC U.S.Agencies 20%max issuer, 5 years maximum maturity Complies U.S.Corporate(MTNs) "A"or better long term rating by 1 of 3 NRSROs; 30%maximum;5%max issuer; 5 Complies years max maturity Municipal Securities "A"or higher by 1 of 3 NRSROS;10%maximum; 5%max issuer; 5years maximum Complies maturity Asset Backed/CMOs/Mortgage- "AA"or better by 1 of 3 NRSROs; "A"or higher issuer rating by 1 of 3 NRSROs; 20% Complies* backed maximum; 5%max issuer(excluding MBS/ ovtagency);5 ars max maturity Negotiable CDs "A"or better on its longterm debt by l of 3 NRSROs; "At/P1"or highest short term Complies ratings by l of 3 NRSROs; 30%maximum;5%max issuer, 5years max maturity CDs/TDS 5%max issuer; 5years max maturity Complies Bankers Acceptances A-1,or equivalent highest short term ratng by l of 3 NRSROS; 40%maximum; 5% Complies max issuer,180 days max maturity Commercial Paper A-1,or equivalent by 1 of NRSROS: "A"or better by l of 3 NRSROs,if long term Complies debt issued; 25%maximum; 5%max issuer 270 days max maturity Mutual Fund B Money Market Highest rating by 2 NRSROs; 20%maximum; 10%max per mutual fund; 20%max Complies Mutual Fund per money market mutual fund Repurchase Agreements 102%collateralimtion Complies Reverse Repurchase A reements 5%maximum 90 da max matun Complies LAIF Not used by irrvestrnen adviser Complies Avg Duration Not to exceed 60 months - (80%to 120%of the benchmark) Complies Maximum Maturity 15 years maximum maturity Complies' 'The po tho has twenty-three(23)securities with maturities greater than 5 years including one(1)ABS,bur(4)CMOs,setefteen(17)MBS and one(1)treasury. All securities were inherited mom the pramous manager arM complied at time of pumhese. C1111 Portfolio Characteristics Orange County Sanitation District Long Term 6/30/2017 3/31/2017 Benchmark` Portfolio Portfolio Average Maturity(yrs) 2.74 2.79 2.80 Modified Duration 2.62 2.44 2.43 Average Purchase Yield n/a 1.68% 1.62% Average Market Yield 1.67% 1.60% 1.55% Average Quality" AAA AA/Aa2 AA/Aa1 ContributionslWithdrawals 12,077,106 Total Market Value 331,805,369 318,223,280 `BAML 1-5 Yr US Corporate/Govt Rated AAA-A Index '"Benchmark is a blended rating of S&P, Moody's,and Fitch.Portfolio is S&P and Moody's respectively. Multiple securities were purchased across the Treasury,Agency, Supranational and Corporate sectors of the market to keep the portfolio structure in-line with Chandler targets. The purchased securities ranged in maturity from May 2020 to May 2022. One security was sold and four matured, in addition to a $12 million dollar contribution during the reporting period,to help facilitate the new holdings in the portfolio. Sector Distribution Orange County Sanitation District Long Term June 30, 2017 March 31, 2017 ABS ASS US Treasury 6.1 7.4 29 2% US Treasury 29.8% Agency 25.1% Agency 24.6% CMO 0.8% CM 0.9% Commercial Commercial Paper Paper 3.8% Money Market 40% US Corporate Money Market US Corporate Fund FI 24.0% Fund FI 23.0% 0.9% Supranational Municipal Mortgage p,g% Municipal Mortgage 8.2% Bonds Pass Thru Supranational goods Pass Thru 1.4% 0.6% 7.5% 1.5% 0.6% The sector allocation was relatively stable during the quarter. GR I Issuers Orange County Sanitation District Long Term—Account#10268 As of 6/30/2017 Issue Name Investment Type % Portfolio Government of United Stales US Treasury 29.16% Federal National Mortgage Association Agency 10.67% Federal Home Loan Bank Agency 7.67% Federal Home Loan Mortgage Corp Agency 6.78% Inter-American Dev Bank Supanational 4.41% Intl Bank Recen and Development Supanational 3.02% John Deere ASS ASS 2.09% Bank of Tokyo-Mit UFJ Commercial Paper 1.91% Toyota Motor Corp Commercial Paper 1.90% Occidental Petroleum Corporation US Corporate 1.63% JP Morgan Chase&Co US Corporate 1.62% Wells Fargo Corp US Corporate 1.55% General Electric Cc US Corporate 1.54% Deere&Company US Corporate 1.53% Qualcomm Inc US Corporate 1.53% Bank of New York US Corporate 1.42% ChevronTexaco Corp US Corporate 1.36% Honda ABS ASS 1.30% HSBC USA Corp US Corporate 1.29% Berkshire Hathaway US Corporate 1.25% JP Morgan ABS ABS 1.25% Honda Motor Corporation US Corporate 1.23% Apple Inc US Corporate 1.22% Eli Lilly&Cc US Corporate 1.22% Bank of America Corp US Corporate 1.17% Morgan Stanley US Corporate 0.96% American Express Credit US Corporate 0.92% Exxon Mobil Corp US Corporate 0.92% Nissan ABS ABS 0.91% Microsoft US Corporate 0.90% GR I Issuers Orange County Sanitation District Long Term—Account#10268 As of 6/30/2017 Issue Name Investment Type % Portfolio Dreyfus Treasury Money Market Fund Money Markel Fund FI 0.88% Port Authority of New York and New Jersey Municipal Bonds 0.80% International Finance Corp Supranational 0.73% Federal Home Loan Mortgage Corp CIO 0.62% Intel Corp US Corporate 0.60% Toyota ABS ABS 0.47% Federal National Mortgage Association Mortgage Pass Thou 0.47% New York City Transitional Finance Authority Municipal Bonds 0.45% Goldman Sachs Inc. US Corporate 0.19% University of California Municipal Bonds 0.13% NCUA Guaranteed Notes CMO 0.10% Federal National Mortgage Association CMO 0.09% GNMA Mortgage Pass Thou 0.07% AMRESCO Residental Securities Corp Mortgage Pass Thou 0.04% Small Business Administration ABS 0.02% SUM Corp ABS 0.01% GNMA CMO 0.01% Federal Home Loan Mortgage Corp Mortgage Pass Thou 0.00% Total 100.00% Quality Distribution Orange County Sanitation District Long Term June 30, 2017 vs. March 31, 2017 70.00% 60.00% 50.00% 40.00% 30.00% — 20.00% 10.00% 0.00% AAA AA A <A NR .W30/2017 •3/31/2017 AAA AA A <A NR O6/30/17 11.8% 66.0% 11.4% 3.2% 7.6% 03/31/17 13.3% 65.5% 10.9% 3.4% 6.8% Soume:S&P FZWngs Jjjjj Duration Distribution Orange County Sanitation District Long Term Portfolio Compared to the Benchmark as of June 30, 2017 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 0.0.25 0.25-0.50 0.50-1 1.2 2.3 3-4 4.5 5+ •flange County Sanitation District Long Tenn •BAML 1-5 Vr US Comorate/Gout Rated AAA-A Index 0-0.25 0.25-0.50 0.50-1 1 -2 2-3 3-4 4-5 5+ Portfolio 9.6% 4.7% 13.6% 11.0% 23.4% 17.6% 16.9% 3.2% Benchmark* 0.1% 0.0% 1.3% 30.8% 29.2% 23.0% 15.5% 0.0% 'BAML 1-5 Vr US Corporate/Gout Rated AAA-A Index The duration of the portfolio was close to unchanged,currently 2.44 compared to 2.43 at the end of the prior reporting period. Inflation metrics remain underwhelming, and the Chandler team anticipates keeping the duration close to the benchmark as we continue to hold the view the Federal Reserve's forecast for a 3.0%terminal fed funds rate is too optimistic. KI Investment Performance MEN Orange County Sanitation District Long Term Period Ending June 30,2017 Total Rate of Return Annualized Since Inception November 30,2014 1.40% 1.20% 1.00% 0.80% 0.60% 040% 0.20% 0.00% -0.20% n 40-1 12 months 2 years 3 years 5 years 10 years Since Inception •Orange County Sanitation District Long Term Annualized 3 months 12 months 2 years 3 years 5 years 10 years Since IOcephOn Orange County Sanitation District long Term 0,46% 0,19% 1,33% N/A N/A N/A 1.19% BAML 1-5 Yr US Corporate/Gout Rated AAA-A Index 0.48% .0.17% 1.19% N/A N/A N/A 1.16% Total rate of return:A measure of a portfolio's performance over time. It is the Internal rate of return,which equates the beginning value of the portfolio with the ending value; It Includes interest eamings,realized and unrealized gains and losses in the portfolio. C1111 Compliance C/" Orange County Sanitation District Liquid June 30,2017 COMPLIANCE • Assets managed by ChandlerAsset Management are in full compliance Wth State lawand Wth the investment policy Category Standard Comment Treasury Issues 1 year maximum maturity; Minimum allocation of 10% Complies Supranational "AA"or better by 1 of 3 NRSROs; 30%maximum; 5%max issuer; 1 year maturity, Complies Includes only, WDB IBRD and IFC per CGC U.S.Agencies 20%max issuer; 1 year maximum maturity Complies U.S.Corporate(MTNs) "A"or better long tens rating by 1 of 3 NRSROs;30%maximum;5%max issuer; 1 Complies year max maturity Asset Backed/CMOs "AA"or better by 1 of 3 NRSROs; "A"or higher issuer rating by 1 of 3 NRSROs; Complies 20%maximum; 5%max issuer 1 year max maturity Negotiable CDs "A"or better on its long term debt by 1 of 3 NRSROs; "A1/P1"or highest short term Complies rafings by 1 of 3 NRSROs: 30%maximum 5%max issuer 1 year max maturity CDs/TDS 5%max issuer; 1 year max maturity Complies Banker's Acceptances A-1,or equivalent short term rating by l of 3 NRSROS;40%maximum;5%max Complies issuer 180 days max maturity, Commercial Paper A-1,or equivalent by 1 of 3 NRSROS;"A"or better by 1 of 3 NRSROs,if long term Complies debt issued; 25%maximum;5%max issuer 270 days max maturity Mutual Fund& Money Market Mutual Fund Highest rating by 2 NRSROs; 20%maximum; 10%max per mutual Turd; 20%max Complies per money market mutual fund Repurchase A reements 102%collateralization lComliesReverse Re urchaseA reements 5%maximum 90 da max maturi sLAIF Not usedb investment adviser sProhibited Munici al Securities sProhibited Mo a eSecurifies sA Duration Nottoexceed 180 da ; Max duration of 1/2 ar sMaximum Maturi 1 ar maximum maturi s C1111 Portfolio Characteristics Orange County Sanitation District Liquid 6/30/2017 3/31/2017 Benchmark` Portfolio Portfolio Average Maturity(yrs) 0.15 0.14 0.16 Modified Duration 0.15 0.14 0.16 Average Purchase Yield n/a 0.93% 0.69% Average Market Yield 0.89% 0.96% 0.73% Average Quality" AAA AAA/Aaa AAA/Aaa ContributionslWithdrawals 39,000,000 Total Market Value 124,436,078 85,177,162 `BAML 3-Month US Treasury Bill Index '"Benchmark is a blended rating of S&P, Moody's,and Fitch.Portfolio is S&P and Moody's respectively. Many securities were purchased across the Treasury,Agency, Certificate of Deposit, Commercial Paper, and Corporate sectors of the market to keep the portfolio as fully invested as possible. One security was called, many matured, in addition to a positive inflow early in the quarter,offset by an outflow late in the quarter. Sector Distribution Orange County Sanitation District Liquid June 30, 2017 March 31, 2017 US Treasury 28.5% kNegotiable gency US Treasury 1.2% 46.9% US Corporate 8.5% Agency Commercial Supranational 54.0% Paper 0.9% 3.2 Negotiable Market CD nd FI 4 1.6% 4% Money Market Commercial US Corporate Fund FI Paper 10.4% Supranational CD 2.3% 4.1% 2.6% 1.4% The sector allocation changed materially with the large cash flows experienced during the quarter. The two largest changes were the 22.8% increase in the Agency allocation, to 54.0%of the portfolio, partially offset by the 18.4% decline in the Treasury allocation, to 28.5%of the portfolio. GR I Issuers Orange County Sanitation District Liquid-Account#10282 As of 6/30/2017 Issue Name Investment Type % Portfolio Government of United Stales US Treasury 28.50% Federal National Mortgage Association Agency 20.09% Federal Home Loan Bank Agency 19.92% Federal Home Loan Mortgage Corp Agency 14.01% Bank of Tokyo-Mit UFJ Commercial Paper 2.57% Dreyfus Treasury Money Market Fund Money Market Fund FI 2.34% Toyota Motor Corp Commercial Paper 1.53% Intl Bank Recon and Development Supranational 0.94% JP Morgan Chase&Co US Corporate 0.84% Johnson&Johnson US Corporate 0.82% General Electric Cc US Corporate 0.82% Toronto Dominion Holdings Negotiable CD 0.81% HSBC USA Corp US Corporate 0.81% Honda Motor Corporation US Corporate 0.81% Charles Schwab Corp/The US Corporate 0.81% United Parcel Service US Corporate 0.81% Oracle Corp US Corporate 0.81% Svenska Handelsbanken NY Negotiable CD 0.81% ChevmnTezace Corp US Corporate 0.81% Bank of New York US Corporate 0.70% Deere&Company US Corporate 0.44% Total 100.00% Quality Distribution Orange County Sanitation District Liquid June 30, 2017 vs. March 31, 2017 90.00% 80.00 70.00% 60.00 50.00% 40.00 30.00 20.00% 10.00% 0.00% AAA AA A <A NR •8/30/2017 •3/31/2017 AAA AA A c4 NR O6/30/17 68.9% 25.9% 5.2% 0.0% 0.0% 03/31/17 79.9% 15.7% 4.4% 0.0% 0.0% Soume:S&P FZWngs Jjjjj Duration Distribution Orange County Sanitation District Liquid Portfolio Compared to the Benchmark as of June 30, 2017 120.00% 100.00% 30.00% s0.M% 40.N% 20.00% 111% 0-0.25 0.25-0.50 0.50.1 1 .1.5 1.5.2 2.2.5 2.5.3 3+ •Orange County Sanitation District Liquid •BAML 3-Month US Treasury Bill Index 0-0.25 0.25-0.50 0.50-1 1 -1.5 1.5-2 2-2.5 2.5-3 3+ Portfolio 85.4% 10.2% 4.4% 0.0% 0.0% 0.0% 0.0% 0.0% Benchmark* 100.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 'BAML 3-Month US Treasury Bill Index The duration of the portfolio was close to unchanged. KI Investment Performance Orange County Sanitation District Liquid Period Ending June 30,2017 Total Rate of Return Annualized Since Inception November 30,2014 0.60% 0.50% 0.40% 0.30% 0,20% 0.10% 0.00% 12 months 2yeare 3years 5Were 10 years Since Inception •Orange County Sanitation District Liquid •BAML 3-Month US Treasury Bill Index Annualized 3 months 12 months 2 years 3 years 5 years 10 years Since IOcaphOn Orange County Sanitation District Liquid 0,20% 0,57% 0,47% N/A N/A N/A 0.41% BAML 3-Month US Treasury Bill Index 0.20% 0.49% 0.34% N/A N/A N/A 0.27% Total rate of return:A measure of a portfolio's performance over time. It is the Internal rate of return,which equates the beginning value of the portfolio with the ending value; It Includes interest eamings,realized and unrealized gains and losses in the portfolio. C1111 Compliance CR OCSD Lehman Exposure June 30,2017 COMPLIANCE • Assets managed by Chandler Asset Management are in full compliance wth State lawand with the investmentpolicy Category Standard Treasury Issues 5 years maximum mat7nty Com lies Supranational "AA"or better by 1 of 3 NRSROs; 30%maximum; 5%max; 5 years maturity, Complies Includes only. ADS, IBRD,and IFC per CGC U.S.A encies 20%max issuer 5 years maximum maturity Complies U.S.Corporate(MTNs) "A"or better long tens rating by 1 of 3 NRSROs; 30%maxmtm;5%max Complies' issuer, 5 ars max maturity Municipal Securities "A"or higher by 1 of 3 NRSROS; 10%maximum; 5%max issuer; 5 years Complies maximum maturity Asset Backed/CMOs/ "AA"or better by 1 of 3 NRSROs; "A"or higher issuer rating by 1 of 3 Complies Mortgage-backed NRSROs; 20%maximum; 5%max issuer(excluding MBS/gout agency); 5 years max maturity Negotiable CDs "A"or better on its lore term debt by 1 of 3 NRSROs ; "A1/P1"or highest Complies short term ratings by 1 of 3 NRSROs; 30%maximum;5%max issuer, 5 years maxmatunty CDs/TDS 5%max issuer 5 years max maturity Complies Bankers Acceptances A-1,or equivalent highest short term rating by 1 of 3 NRSROS; 40% Complies maximum; 5%max issuer, 180 days max maturity Commercial Paper A-1,or equivalent by 1 of 3 NRSROS; "A"or better by 1 of 3 NRSROs, if long Complies term debt issued; 25%maximum; 5%max issuer 270 days max maturity Money Market Fund Highest rating by 2of3 NRSROs; 20%maximum; 10%max issuer Complies Re umhaseAgreements 102%collateralization Complies Reverse Repurchase 5%maximum,90 days max maturity Complies Agreements LAIF Not used by investment adviser Com as A Duration Not to exceed 60 months - 80%to 120%of the benchmark Complies Maximum ration 5 years maximum maturity Complies "Account holds$2 million face value(cusip 525ESMY6)and$600,000 face value(cusip 525ESC1 B])of defaulted Lehman Bms Holdings that were purchased by the hnnious manager. Complietl at time of purchase. C1111 Portfolio Characteristics OCSD Lehman Exposure 6/30/2017 3/31/2017 Portfolio Portfolio Average Maturity(yrs) 21.35 21.50 Modified Duration 0.00 0.00 Average Purchase Yield 0.00% 0.00% Average Market Yield 0.00% 0.00% Average Quality NR/NR NR/NR ContributionsfWithdrawals -34,109 Total Market Value 190,371 187,121 GIR SECTION 3 Consolidated Information C1111 Portfolio Characteristics Orange County Sanitation District Consolidated 6/30/2017 3/31/2017 Portfolio Portfolio Average Maturity(yrs) 2.07 2.25 Modified Duration 1.81 1.95 Average Purchase Yield 1.47% 1.42% Average Market Yield 1.43% 1.37% Average Quality AA+/Aal AA+/Aal Contri butions/W ilhdrawals Total Market Value 456,431,818 403,587,563 Sector Distribution Orange County Sanitation District Consolidated June 30, 2017 March 31, 2017 ABS ABS US Treasury 4.4% 5.8% 29.0% US Treasury 33.4% Agency Agency 26.0% 33.0% CMO o8°0 0.7% Commercial US Corporate Commercial Paper 19.8% Paper US Corporate 3.8% Supra national Money Market 3.9% 20.3% Money Market 6 2% Fund FI Sup Fund FI Negotiable Mortgage 1.3% 6.5% Negotiable Munici a Mortgage CD Municipal Pass Thru CD p Pass Thm 1.6 0.4% Bonds Bonds 10% 0.4% 0.3% 12% 0.5% GIR SECTION 4 Portfolio Holdings CA I Holdings Report Orange County Sanitation District Long Term -Account#10268 For the Month Ending 6/30/2017 Puncture Data Coal Vid.. Miad Price Market Value %of Pod, Moody/S&P Materity CUSIP Security Description Par ValuentUnift Book Yi in Book Value Mki Accrued Ind. Gaindi-ce. Pitch Duration Ass 43014GAC4 Hmtla Aulo Receivables 2014-2 A3 30,381.56 04/08/2015 30,360.20 99.97 30,372.39 001% Aaa I AAA 072 0770% Due O3/19/2018 0.83% W.Ul56 153% 845 19.17) NR 0.03 43814NAB1 Nuance Auto Receivables 2016-1 A2 598,200.81 02/16/2016 590,141.05 99.96 597,967]6 0.18% NR IAAA 0.97 1010% Due OW1812018 102% 5911,17589 1.a% 21818 (2013). AAA 0,11 477177AD6 Jahn Deere Owner Tmct 2014-B A3 759,777.67 O2 2015 7W,133.81 99.90 759,039.29 0.23% AaaI NR 1m 1.070% Duell/15)2018 1.05% 759.825.98 1,52% 361.32 (78770) AAA 022 89236WAC2 ToyMa Auto Receivables Owner 201 SA 1,563,1154.43 0=4O015 1,563,418.01 99.90 1,562,085.82 0.47% Aaa/AAA i(Kl 1.120% Due O&15O019 1.13% 1.563,604.25 143% 778.35 (1.51863) NR ("M 4Pici John Deere Owner Tend 2016-B A2 2,W,408.52 07I19Y1016 2,W,265.20 99.91 2,147,277,40 0]1% Aaa/NR 163 1.090% Due0211512019 1.10% 2.349.317.27 1.39% 1,138,18 (2.03987) AAA 031 65478WAB1 Nissan AUW Receivables Amer 2016-C A2A 1.663,973.75 OWN2016 1.663,908.19 99.87 1,66185955 0.50% Aaa/NR 1.87 1.070% Due0511512018 1.08% 1.6W,929.33 1,40% 791.31 (2.06978) AAA 0.39 43814TAB8 Honda A.A.Receivables 2017-1 A2 1,805,0(10.00 0W2112017 1,804,954.95 99.99 1,884,80962 0.57% And I NR 2.06 1.420% Due0712212019 1.43% 1.8m.960.01 144% 743.53 0SO 39) AAA 067 161571HHD Chase CHAIT Poo1#2016-A7 4.140.00000 091062016 4.139,613.13 9993 4a37,27994 125% A.I AAA 221 1dW% Due(KINW2019 1.09% 4,139.926.10 141% 1,95000 (2.6RIA(l) AAA OAS 4P07XAB3 Jahn Deere Owner Trust 2017A A2 1.410800.00 00202017 1.409994.36 99.97 1.409.58828 0.43% Ave I NR 229 1500% Due10/1512019 1.50% 140999507 I'M% 94000 MO619) AAA 0m 654747AB0 Nissan Auto RecWwlbks2017-AA 1,365,0(10.00 OW21/2017 1,3&1,99304 99.97 1,W4,52362 0.41% Aaa)NR 255 1.470% Due011151202(l 147% 1.36`199369 1.52% 89180 (470.07) AAA 004 47708MAU John Deere Owner Trust 2016-A A3 2,429000.00 02/232016 2,419,619.09 99.78 2,414571.94 0.73% Me)NR 2.79 13W% Due04115)2020 137% 2.41974209 1.63% 146276 (5.170.15) APA 095 4Ml40AC2 Honda Auto ReceNables 2016-2 A3 1,810,W0.00 05040016 1,809,964.89 99.79 1,W6,186.42 am% Aaa)NR 2.79 1.390% Due0411512020 1.40% 1.809974.72 1,59% 1.118.18 (3.80830) AAA 1m 83162CUO Small Buslneea Adminietracn 2001-20C 8$182.39 03filmool 62,182.39 103.75 64,516.72 0.02% Aa.1AA+ 387 6.340% Due0310112021 8.34% 62.182.39 4.31% 1.314.12 2,334.33 AAA 181 76445JAA5 SLMA 2W8-9A 33,01360 ammom 32,979.66 102.13 33,716.33 0.01% Baa31 AA+ 582 2.670% Due 0412512023 2.74% 32,96045 2.06% 164.07 755,88 B 345 20,089,457.97 20,073)74.07 6.05% Ado I AAA 2.15 To(al ASS 20,090,592.73 1.26%. 20,089,968,80 1.48% 1ISSOS3 (16,19433) Aaa 0.55 Agency Ill el 3137EADV8 FHLMC Note 5,000,00000 06/25/2015 4,99,125000 99.99 4,999,52000 151% Aaa/AA+ 0.W 0750% Due07/14/2017 081% 4,9W 90020 0.99% 17.39583 (380.20) AAA 0.04 3137131DN6 FHLMC Note 5.000,000.00 01/212015 4.967,W000 99.77 4,988,40500 151% Aaa/AA+ 054 07M% Due011122018 0.97% 4,994.14279 1,19% 17,604.17 (5,73779) AAA O53 3137EADP1 FHLMC Not. 5,OW,WO.00 01113)2015 4,974,100.00 99.74 4,98705500 1.51% M./AA, 068 0075% Due0=712018 1.04% 4,994,382.32 1,25% 13,854.17 (7,327.32) AAA 068 313378A43 FHLB Note 7,5W,W0.00 OV1112015 7,544,850.00 100.10 7,507,507.50 2.27% Aae/AA+ 0.69 1.375% Due030912018 1.18% 7,510,042.24 in% 32,083.33 (2,534.74) APA 0.68 Cal Holdings Report Orange County Sanitation District Long Term -Account#10268 For the Month Ending 6/30/2017 Purchase Date Co.,Val" OID P,id, M,rkct Vale, %.1 on Saudi sturity CUSIF Security Description Par ValoWUni Book Yield Book Verde kIrt YTM Accrued Ind G.ini Fitch Duration 3135GOG72 FNMA Note 5.000.00000 12J1012015 4,96395000 9964 4,98224600 150% Asti 146 1.125% DualDIN2018 1.37% 4,992,421.90 1,37% 2,656.25 (17690) AAA 144 3133782M2 FHLB Note 7,500,000.00 Various 7.589,190.00 100.12 7.509.210.00 227% AeaIAA+ 169 1500% Due03g82019 1.14% 7,543,96160 143% 35,31250 D4,75160) AAA 165 3137FADM8 FHLMC Note 7,500,000.00 Various 7,399,050.00 99.45 7,450,74250 2.25% AaeIAA+ 2.a 1.250% Due 10MV2019 1.61% 7,4W,632.86 1.50% 23,177.08 181109.64 AAA 2.21 313383HU8 FHLB NOW 5,000000.00 01 6008950.00 101 5,016,985.00 1.51% AaBIAA+ 2.95 1.750% Due0611&2020 1.71% 5.005.464.37 1.63% 4.61806 11,52063 NR 286 3135GOD75 FNMA None 5,000,000.00 11116Y1015 4,955,650.00 99]6 4,987,780.00 1.50% AsaIAA+ 2.98 1500% Due 0611 1.70% 4.971,287,40 1.58% 1.875,00 16,49260 AAA 290 3135GOF73 FNMA Note 7,500,000.00 Various 7,370,726.00 99.39 7,453,912.50 2.25% AaaIAA+ 342 1.500% Due 1113012020 1.87% 7.410,093.54 1,69% 9.687.50 43,018.96 AAA 331 3130A7GV5 FHLB NOW 5,3M.DOO.00 OW17UO16 5,W.32540 99.92 5,%7,229.88 1.61% Aini 384 1.375% Due=lal 21 1.46% 5.3492A820 1.68% 27,253.45 (42.01660) AAA 351 3135GOJ20 FNMA Note 10,000,00000 Various 10,040,95000 9877 9.877,21 299% Aini 366 1.375% Due 02/2612021 1.28% 10,032.646.61 1.72% 47.743.06 (155.376.61) AAA 3.53 3135GOS% FNMA Note 3,000,000.00 0113(1 2.994,67000 100.33 3,009,975.0D 0.92% AuaIAA+ 4.52 2.000% Due0110512022 2.01 2,995025,52 1.92% 26666.67 14.949.48 AAA 4.26 3135GU45 FNMA Note 5.000.00000 0510i 4.972,50000 9969 4,98430000 151% At IAA+ 4P 1.875% Due OW0512OU 1.99% 4,973,32822 1.94% 21,093.75 10.971]8 AAA 452 83,120,161.40 0,070,137.18 25.12% "a IAA+ 2.% TOWI A9enaY 83.%5,000.00 1.42k 83,203,374.85 1.51% 283,@682 (13$33 al Aida 2.22 62888UAA8 NCUA Guarani Note CMG 2010 R2 329,92456 11/10/2010 329.923.07 100.05 330,08226 0.10% Aaa IAA+ 0.35 1594% Due11106/2017 000% 329,92307 145% 32705 15919 NR 0.08 313NVJ98 FHLMC FHMS KOM A2 W0,000.00 1112312010 951,046.88 105.49 949,453.20 0.29% AaaIAA+ 257 4251% Due01I2512020 354% 914,31877 1,81% 3.18825 35,134.43 AAA 228 38371141l GNAA Po0W 20009 25,879.91 OHOW2000 25,879.91 100.55 26,021.47 0.01% maIAA+ 1264 1.712% Due OVIW2030 1.72% 25,879.91 1,27% 34.63 141.56 APA ON 3133TCE95 FHLMC FSPC E3A 33,867.05 Ni 33,90248 100.50 34,036.39 0.01% Atli 15A4 3.129% Due001192032 3.10% 33,%2.67 148% 88.31 153.72 AAA 1M 31397OREO FNMAFNR2(11Y3FA Ni i2Y10Y1010 295,74329 101.39 2991915.30 O.N% AaaIAA+ 2367 1.900% Due O&2W2041 1.90% 295,763.03 1.54% 93.68 4,152.27 AAA 0,10 313NJY35 FHLMC FSPC T-582A 918,331A7 OWNcO11 11040101004 1I631 1,068,13853 03216 Assi 2625 6.500% Due 0911 5.40% 1,01721396 2.92% 99488 50,924,57 AAA 449 2,676,505.67 2,707,647.15 0.82% Aaa IAA+ 14.23 Total CMO 2,503.83842 3,64% 2616,98141 2A6% 472678 1174 Aaa 2.61 Commercial Pa llllll 0111ir.176 Bank of Tokyo MI5aYI5M NY Discount CP 6.rs5,II0LID 93I962017 6,319,62705 9996 634375215 1110 P1 At 0.02 11806 Due 07/07/2017 12% 6,3437522.15 12080 000 0.00 NR 002 1 CAI Holdings Report Orange County Sanitation District Long Term -Account#10268 For the Month Ending 6/30/2017 Purchase Date Cos'Value Mat Price Market Value %.1 Phil Mardi Maturity CUSIP Security Description Par Valurri Book Yi a led Book Value Met YTM Accrued Ind, Gauni Fitch Duration 89233GV29 Toyota Motor Credit Discount OF 6,30000000 1W2W2016 6.25199925 9989 6293,11200 190% P-1/A-1+ ON 1230% Due O&0&2017 1.26% 6,293,11200 1.26% 000 0.00 NR 0.09 12,571,626.30 12,636,864.15 3.81% P-11 A-1 0.05 Total Contras l Paper 12,645,000.00 1,23% 12,636,864.15 1.23% 0.00 0.00 Nut 0.05 Money Market Fund FI 261908107 Dreyfus Trsylggcy Cash Management 521 2,924,23579 Various 2,924,23579 1.00 2,924,23579 0.88% Ads IAM 000 086% 292423579 0.86% 000 000 AAA 0.DO 2,924,235.79 2,924,235.79 0.88% Aaa I AAA OM TINal Money Market Fund FI 2.92s D5.79 0.86% 2,924,235.79 0.95% 0.00 0.00 A. 0.00 3131 FNMA FN 466397 355.945.47 1M112010 348,242,61 10429 37122834 0.11% Pan/AA+ 3.34 3.400% Due 1110112020 3.80% 353,350,17 2.03% 23532 17,878.17 AM IN 36225CA29 GNMA P.W G280023 22,936.45 ONOW1997 23,21067 103.07 23,537.03 001% Asia I AA+ 9M 1.625% Due 12121 1.52% 22.958.61 1.90% 30.92 570.42 AM 3.19 3621 GNMA Pooh G2 80008 26,131.17 (011111997 26,70280 101 21 001% Aaa IM+ 990 2.680% Due 0612012027 252% 26.322.27 1.M% 57.92 713.22 AM 2.98 313488WZ3 FHLMC FH 7W064 2,306.86 C211812000 225068 102.80 2,371.40 0.00% Me1M+ 10.51 3.297% Due 0110112028 3.50% 2,285,68 273% 6.31 35.72 AM 482 31371NUC7 FNMA FN 257179 21,94567 12/0512011 2320970 107,48 23.586.79 001% Asti 1076 4.500% Due ON0112028 3.72% U.779.23 2,21% 82.30 W7.56 AM 338 31417YAY3 FNMA POMN FN MA0022 26.769.24 12J062011 28,311.08 107.60 28.776.93 0.01% Aari 11,76 4.500% Due04/(t¢029 376% 27,816,33 2,28% 101 96060 AAA 349 3130EG6F6 FNMA FN AL0869 16,548.68 12AX12011 17,501.85 107.46 17,783.51 0.01% Aaa1M+ 1193 4.500% Due OMI2029 3.77% 17,198.91 2.13% 14.48 584.60 AM 3.20 03218PFN4 AMRESCO ResWenBal SewOtles 1999-1A l33743.29 05202011 100,432.85 96.43 128,963.30 O.N% NRIM+ 1199 2.160% Due0612512029 5.78% 111,67582 2,65% 48,15 17,287,48 BBB OW 38225CNM4 GNMA Pi G280395 9,763.33 0115Y1000 9,674.83 103.58 10,113.11 0.00% Asti 12.81 2660% Due 0412012030 2.73% 9,72544 1.99% 2164 U767 AM 431 3022KN29 GNMA Pope G28=8 79,490.19 0115R000 78,682.88 103.49 82,257.24 0.02% Aaa1M+ 12O 2.660% Due 051 2.73% 79,143.33 2,15% 176.20 3,113.91 AM 543 31400G)i FNMA PmM FN 748678 4,li 0110,2013 5,179]8 109.72 5,286.77 0.00% No IM+ 1627 5.000% Due 1WO1120M 4.16% 5,108.93 2,52% 20.08 177.84 AM 383 3622MCBS GNMA Poops G2 We65 79133104 0711ENON 79,28147 101 82,31079 0021% Aeri l7b7 2.090% Due 0712011 2.10% 79,302.77 1.89% 138.17 3, 06.02 AM 4.26 31406%N45 FNMA Pooh FN U3358 134,613.00 01111120M 133,561.34 104.M 140453.86 O N% Auri 17.0 3.274% Due010112035 3.34% 133.975.65 1,23% 367.27 6.47821 AM 2AI 314WP0Y8 FNMA Potl0 FN 815971 252.06499 0611012013 270,96988 10977 276.70107 ON% Asti 17,60 5.000% Due OW112035 4.21% 267,508]4 2,62% 1,050.27 9.194.33 AM 4M 314078XH7 FNMA POMN FN 826NO 26,938.19 OUl MO13 28,958.54 109.85 29.592.3D 0.01% Aari 1801 5000% Due0710V2035 422% 28.594,07 2,62% 11224 Ni MA 4M CAI Holdings Report Orange County Sanitation District Long Term -Account#10268 For the Month Ending 6/30/2017 CUSIP Security Description Par Valli In'.11ace Juts Cost Value Mint Price Market Vail, %a,Pon ...d,)S&p Maturity 31376KT22 FNMA FN 357969 153.28423 0611012013 164780.54 10979 168,288,15 005% Aaa I AA, 1818 5.000% Due 0910112035 4.22% 162,722,50 264% 149.03 5,565.65 AAA 4A0 31403DM FNMA Pool#745580 149,36548 OW10/2013 IW.667.90 109.77 163.961.02 005% Aaa I AA, 18.93 6000% Dria(M112036 426% 168.62522 2.65% 62230 5,32280 AM 4A2 3141OF4V4 FNMA Pool#FN 881 293.554.38 OU10/2013 315,570.98 109.78 322,265]8 0,10% Aaa I AA, 1902 5.000% Due0710112036 425% 311,77248 2.64% 1,223.14 10,49328 AAA 4.11 1,817,094.36 1,904,502.86 0.58% Aa6l Ma 169 Total Marshall Pass That 1.789,450.04 3.94% 1,13M,867.15 2.32% 4456.21 83,635]1 Aaa 3.52 Municipal B 733581 Port Authority of NY B NJ TE-REV 2440,00000 Various 2,507,633,89 101 2,644,569.60 0.80% Poll/AA- 242 5.309% Doll 4.97% 2.455701.69 1.75% 10.I9497 1SSN7.91 AA 228 64971hal New York NY TE-REV 1,400,000.00 10Y17Y1010 1,400,000.00 106.21 1,486,95,IDD 0.45% Sal 1AAA 334 4.075% Due11M112020 4.08% 1.400.000.00 2.14% 9,508.33 SSB56.00 AAA 3.11 913361 Dniv M Colibmia Rgls Med TE-REV "D00000 limly1010 403,03000 11083 44313080n OA3% Aa3IPA- 308 5.035% Dua0511512021 5.04% 400IDD0.00 2.11% 2.573.4,11 43,WEBB AA- 3.53 4p0,633.89 4.574,831.60 1A95k M21M 2.86 Total Municipal Bonds 4,240,000.00 4.68% 4,255,701.69 1.91% 22,876.74 319,129.91 M 2.67 anational 4581XOGG1 Inter-American Dav Bank Note 5,000000-00 06/22/2015 5,019,550-00 99-99 4,999,680-00 151% Aaa/AAA ON 1000% Due07114120P 0.81% 5,00C),337.97 1.16% 23,19464 (657.97) AAA 004 459058EJ0 IMI.Bank Recent 8 Development Note 5.0W.000.00 Various 4.991,170.00 99.66 4.983.245.00 1.60% A./AAA 0,96 1000% Due OW15I2018 1.07% 4,996,832.13 1.35% 2,22222 (13,587A3) AM 095 4581X0CX4 IMerAmencan Day Bank Nate 3,035,000.00 04M512017 3,027,W7.05 99.74 3,027,090.79 0.92% All 287 1.625% Due0511212020 1.70% 3.028,318.09 in% 10,8n.73 (1,227.30) AAA 2.78 4581X0CS5 IMerAmetlwn Bev Bank Nate 3,500,000.00 07@SI2016 3,580,405.00 99.90 3,496,335.50 1.06% Aaa IAM 371 1875% Due0W1512021 1.30% 3.572,249,24 1.90% 19.32292 (75.91374) AAA 355 4595(KCJ7 IMernaOonal Finance Cwp Note 2,5W,W0.00 1IMM016 2,441,600.00 98.93 2p23,340.00 0.73% Aaa1AAA 4.06 1.125% Due0712012021 1.64% 2.449,54349 1,91% 12.578,13 (26.203.49) NR 392 4WNX0GW6 IMer-Amerlpn Dav Bank Nab 3,000,000.00 01I1MO17 2,996,310.00 100.60 $1118,021.00 0.92% Aaai MR 456 2.125% Due0111812022 2.15% 2.996.641.41 1.99% 28.864.58 21,379.59 AAA 428 4591 IMI.Bank Recon B oevelopmeM Note 5,0pil OMM017 5,030550.00 100.00 4,999,915.00 1.52% Asian 1 MR 458 2.OW% Due0112612022 1.86% 5.OW,477.00 2,W% 43.055.55 (30.582001 AAA 431 27,097,392.05 2Q947,627.29 8.16% Aaa IAAA 2.72 Total Supranational 27,035,000.00 1.44% 27,074,399,33 1.67% 140,0 58 (126,77204) Pan 259 US Corporate 060505DP6 Bank of America Corp Note 3.800,000.00 0111612014 4.334014.00 101.69 3,064.30740 1.17% Baa11 BB8+ 0.42 5.750% Due 1VO112017 1.95% 3,857.94630 1.68% 18,209.33 6.361.20 A 042 166761 Chevron Corp Csll.l Note Cant 1115117 2.000)00.00 1& 2014 1.905.60000 99.94 1.W8.836.00 0 60% Aa l M- 043 1.1n4% Du612MW2017 1.30% 1,998,360.99 1V% 1.591 475.01 MR 035 CAI Holdings Report Orange County Sanitation District Long Term -Account#10268 For the Month Ending 6/30/2017 Purchase Date Cost Value Miat Price Market Value %of Palo Moral biturce, CUSIP Secarrit,Description Par VolicUllita Book Yield Book Value Met YTM Accrued Int, Conrad-... Firch Duration 458140AI4 Intel Car,Note 2.00000000 01/2612015 ?00828000 9998 1,999.51000 060% Al 1A, 046 1.350% Due t&152017 1.20% 2,001,31566 140% 1,200.00 (1,805.Md A- 0.46 4042811l HSBC USA Inc Note 3,OW,W0.00 Various 3,008290.00 100.03 3001.008.OD 091% A2IA 055 1625% Due0111612018 1.59% 3,000,60089 1.58% 22,34375 40733 AA- 054 38141GFG4 Goldman Secba Group Inc Note W0,000.00 Various 692,W6.00 102.23 613,408.80 0,19% A3IBBB+ 0,55 5950% Due0111812018 2.73% 609,870.69 1.85% 16,164.17 3153811 A 0.53 674599CD5 Occdenlal Peboleum Callable Nate Con1I15I18 2,000,000.00 oii3O@015 1,988340.00 99.89 1,997,854.00 0.61% A3IA am 1SW% Due O&1512018 1.73% 1.997,239,06 1,70% 11.33333 61494 A 053 025816AY5 American Evpeas Credit Note 2,9W,W0.00 Various 3,3P,385.79 103.72 3,007,793.00 0.92% A31BBBI 0.72 TOW% Due0311912018 4.28% 2.M,W644 in% 57.51667 506985E A 070 073902CD8 Bear Steams NOB 3,200,000.00 01115R014 3,523,520.00 102.82 3,290,214,10 1.01% MINN 101 4.6W% Due 071OD2018 2.25% 3.272.9136.45 1,81% 73.986.67 17, 57.95 A. 096 532457BF4 Eli Ully 8 Co N01e 4,003,000.00 Various 4,00$875.00 100A4 4,017,709.00 1.22% A2I AA- 111 1.950% Due0311572019 1.89% 4.003,867.00 1.89% 22.968.67 13,841.00 A 167 02665WAH4 American Honda Finance None 4,000,00000 Warren 4,W864000 10085 4,033,96400 123% Al IA. 2A3 2.250% Du.,All& 1.93% 4.025.989.71 1.84% 34,000.00 7,974.29 NR 2.05 064NHCW7 Bank a New York Callable Note Cant AM 112019 2,12U.000.00 02M1U2016 2.142,175.20 100.99 2,140.89260 0.65% Al IA 2.20 2.300% Due 0911112019 1.99% 2.133.441.10 1,82% 14,898.89 7451.50 PA- 214 24422ESS9 Jahn Drem Capital Corp Note 5.00)00000 Various 5.1346.984.00 101,16 5,057,97000 153% A2IA 221 2.300% Due0911612019 2.07% 5.023594.40 1,76% 33.51 34.275.60 A 2A4 36962G7M0 General Electric Capital Corp Callable Note IX 5.0W.000.00 Various 5,014,950.00 100.90 5,045,245.00 1.54% Al IAA- 2.53 12I812019 2.13% 5.007,71047 1,82% 52.55555 37,534.53 AA- 2.34 2.200% Due01/0912020 4661 JP Morgan Chase Callal Note Cant 121GWI9 2,000,000.00 OMW2015 1,994,880.00 100.31 2,006,20400 0.61% A31A- 2.57 2.250% Due 01123120M 2.3D% 1.997.347.91 2,12% 19,750.00 all Ai 2,38 40428HPR7 HSBC USA Inc Note 1.25000000 0&092016 1,222787.50 10059 1,25733875 038% A21A 268 2.350% Due ON0512020 2.92% 1232.07823 2,12% 9.46528 25.260.52 AM 257 74752SAD5 Duelwmm Inc Note 5.000,00000 091912015 4.995,196,40 10095 5,1047.42500 153% Al IA 289 2.250% Due 09200020 2.27% 4,997.225d8 1,91% 12,812.51 50.199.82 NR 278 94974BGM6 Wells Fargo Corp Note 5,008000.00 0711612015 5,001.650.00 101.41 5,070,49000 1.55% A2IA 306 2600% Due 07122G020 2.59% 5,001,0878 2,12% 5741667 69,48122 AA- 29t1 037833BS8 Apple Inc Callable Note Cant 1GX2021 4,000,000.00 092312016 4,050,840.00 100.66 4,026,512.00 1.22% Aid I AA, 3.65 2.250% Due 0212312021 1.96% 4,038058.87 2.06% 3?00000 (12,35807) NR 3.46 30231GAV4 Evon Mobil Cory Callable Dole Cant 2/112021 3,000,000.00 Various 3,016,W7.40 100.66 3,019,671.01 0.92% BeaIAA+ 3.67 22U% Due0310D2021 2.10% 3.012,394.72 204% 22.22000 7,27629 NR 348 166761 Chevron Cory Callable Note Cant 01512021 2,50G000.00 051202016 2,485,350.00 99.70 2,492p45.00 0.75% Bel 3.US 2.IW% Du,091612021 2.23% 2.488591.22 2,18% 6.562.60 Sill NR 369 61747WM3 Mogan Stanley Note 2,800,000.00 06b6p014 3,21)(1,848.00 110.89 3,104,794.00 0.96% AS BBB+ 408 5500% Due 0712612021 3.24% 3.029.056.00 2.66% 65.450.00 75,738.00 A 361 594918BP8 MicmcoR Callable Ni Cont 7021 3,045,00000 Various 3,041.385,15 9]84 2,979,31326 0SC% Asa IAAA CAI 1.550% Due 0WOW2021 1.57% 3.042.032A9 2.10% 18,747.89 (62.719.23) AA, 3.0 06406RAA5 BANK OF NY MELLON CORP Note Callable 113`022,W0.l OMM017 2.504.475.00 100.70 2,517.48D.OD 0.P% Al IA 461 CONT 2.56% 2,504,12081 244% 26,00D0D 131350.19 AA- CM 2600% Due O&0712022 CA I Holdings Report Orange County Sanitation District Long Term -Account#10268 For the Month Ending 6/30/2017 Purchase Date Cost Value Midt Price Market Valre %or Part ...d,)S&p Mancris, CUSIF Securrit,Description Par Valleanelits Book Yield Book Value Met YTM Accrued Int, Gal... Fitch Duration 674599CK9 Occidental Petroleum Callable Note Cold WIW0223,353,W900 04I25/2017 3.354,589.50 10048 3,366,18385 102% ASIA 479 2.600% Due 0411512022 2.57% 3,354,424,67 249% 18,38T78 11,759.18 A 4.38 084664BW Berkshire Rrithi Note 4.000.000.00 0512312017 4.131.12000 103,16 4126,472.00 125% M2I AA 4.08 30W% Due0511512022 230% 4,128,61927 231% 15,33333 (2022]) A. 451 80,1]3,87].94 79,083,040.07 24.03% A11A+ 2.67 Total U3 Comomle ]B.O65,o00.00 2.22% 78,706,765.99 1.95% 664,456.33 376,274.08 A. 2A1 US Total 912828G20 US Treasury Note 2,000,000.00 Various 1,989,756.70 99.91 1,998,200.00 0.60% Aaa IAA+ 0.38 0875% Oue111512017 105% 1,996,01,66 1.11% 2,23605 (481.66) AAA 0.37 912828UR9 US Treasury Note 3,5W,00000 0412212016 3,496,457.04 9970 3489,335.50 1.05% Abe IAA+ 0.67 0.750% Due 02/2812013 0.81% 3.491 1.21% 8.77378 (9.392401 AAA 0.86 912UBB33 US Treasury Nob 11,W0,000.W Various 11,04$439d9 100.20 11,022,341.00 334% Area I AA, 159 1.500% Due0113112019 1.37% 11.021,693.05 1,37% 68,825.97 047.95 AAA 1M 912828SN1 US Treasury Nob 51000,00000 12YM016 5,016,42300 100.24 51011191500 152% Pas I AA, 175 1.50% Due013112019 1.35% 5.012,746.81 1.36% 18,852.48 (83181) Am 1.72 912828WS5 US Treasury Note 2,0W.W0.00 Various 1,996.861.44 100.45 2.W8,906.00 0.61% Me IAA+ 2.W 1.625% Due0613012019 1.66% 1.996.729.98 140% 88.31 10.176.02 AM 188 912828WW6 US Treasury Note 5,0W.W0.00 Various 5,012,388.70 100.46 5,022,850.00 1.52% Me IAA+ IN 1.625% Due(7131)2019 1.57% 5.005.198.01 140% 33,891.58 17.651.99 AM 203 912028F39 US Treasury Note 5.8W.W000 1012712014 5.873,13637 10072 5.8,11.69040 i't'11% Al 225 1.750% Due091300019 1.48% 5,83341848 142% 25,513.67 8.271.92 AM 2A9 912028G61 US Treasury Note 7,6W,W0.00 12/1912014 7.449634,50 100.09 7,07.035.00 2.0% AaeIAA+ 242 1500% Due1113012019 1.64% 7,47537563 148% 9,52869 31,658.37 AM 2W 912828l US Treasury Nab 5,0W,W0.00 1212112016 4,966,423,00 99.85 4,992,500.00 1.51% AaaIAA+ 292 1.5W% Due 0513112020 1.70% 4.971,52906 1.55% 6,352.46 211050.94 AAA 2.64 912828199 US Treasury Note 5,500,000.00 Varloue 5424,566.87 99.18 5,454,883.50 1.65% Maim+ 3.34 1375% Due 10131/20M 1.67% 5.443.03904 1,0% 12.741,17 SWA6 AAA 324 9128281,89 US Treasury Note BpW,W0.00 Val 5,895840.41 98.95 5,937,188.00 1.80% PaaIAA+ 3.59 1375% Due 0113112021 1.81% 5.91)),855.31 1.68% 34.412.99 27,330.69 AAA 346 912UBTU US Treasury Note 7,0W,W0.00 Varlws 6,757,914.08 97.27 6,809,138.00 2.06% Maim+ 425 1.125% Dus0913012021 1.88% 6.785,065.15 1,79% 19.795.09 23,272.85 Am 4,11 912828T67 US Treasury Note 6,000,000.00 12113t2016 5,813,691.98 97.69 5,861 1.]]% Pas l A4+ 434 1.250% Due 1013112021 1.92% 5.834.49742 1,81% 12,635.87 26,284.58 AAA 4,18 912828U65 US Treasury Note 7,OW.W000 12/ M016 6,900,49220 9914 61981168100 2A1% Aa01AA+ 4A2 1.7W% Due 1113012021 2.06% 6.910.681.09 1,81% 10,375.68 70.999.91 AAA 423 912UW72 US Treasury Note 3,0W.W0.00 002712017 3,004814.74 100.13 3,W3,750.00 0.91% Abri 4.59 1.875% Due0113112022 1.84% 3.0N.485.37 1.&5% 23,46340 (73537) AM 434 912028J76 US Treasury Note 5.0W.W000 041292017 4.976,38394 9948 4,974,22800 151% Al 475 1.750% Due=3112OU 1.85% 4,971.249.86 1.86% 21,994.54 (3.02986) AM 452 Cal Holdings Report Orange County Sanitation District Long Term -Account#10268 For the Month Ending 6/30/2017 Purchase Date Cost Value Map Price Market Value %.11.1 a.d,)S&p fall CUSIF Securit,Description Par ValueoUnins Book Yi a Id Book Value Md`(TM Accrued Ind. GainlLoss Fil Duration 912828VVU0 US Treasury inflation Index None 10708,984100 0.125% Due 0711 WON Various 10,595,152.09 98.23 10,519,081.57 3.17% McIAA1 705 023% 10,628,51607 0.38% 6,175,42 (109.434.60) AAA 5.9 98,212,538.]5 96,435,5]I.97 29.16% Me IAA. 338 Total US Tnasury 9],008,984.00 1A8% 96,Jifi,089.89 1.41% 315,fi56.13 119,485.08 Ada 3.29 9J0,990,513.13 330,358,235.13 100.00% Aai IAA 279 TOTAL PORTFOLIO 329,667,100.98 1.69% 329,645,249.05 1.60% 1,4],1N.22 712,986.08 Area 2.44 TOTAL MARKET VALUE PLUS ACCRUALS 331,805,369.35 CAI Holdings Report Orange County Sanitation District Liquid -Account#10282 For the Month Ending 6/30/2017 Purchase Data Can Vid.. Ifflut Pri. Market Valtn, %of Pod, shoodi Maturity CUSIP Security Description Par VagargUnits Book d,d Book Value M!"Y'UM Accrued Int. GainfLos. Fitch Duration Apency 313381 FHLB Discount Note 10,W0,00000 04/21/2017 9,978,513,90 99.95 9995,27778 803% P-1/A4+ nos 0850% Due 07/2112017 086% 9.9178 086% 000 000 F 1+ 006 313581 FNMA Diount sc Note 19,WO,OW.W Various 18,962,05004 99.94 18,989,114.59 15 4+.26% P-1IA 0.07 0820% Due 07/2W2017 0No. 18.989.114.59 0.84% 000 000 F-1+ 0.07 313385JQO FHLB Discount Note W0,000.W OB/2W2017 799,255.66 99.93 799,438.11 0.64% P-1/A-11 007 1.020% Due 0712W2017 1.03% 799.436.11 1,03% D.0 0.00 F-1+ 007 3137EADJ5 FHLMC Note 7,000,000.00 Various 7,OW,210.00 100.00 6,999,755.00 5.65% Me l AA+ ON 1.00% Due 01 0.83% 7.00O.086.95 1.04% 29.750.00 (1.13195) AAA ON 3133111 FHLB Discount Note 510001000.90 04428Y2017 4,999,117.92 99.94 4,61 4.02% P-1/A-1+ O09 0.860% Due 0712W2017 0.87% 4.998.P1.25 0,87% am 0.00 F-1+ ON 313385J%5 FHLB Discount Note 9,0001000.00 Varga 0,904,237.50 99.92 8.9112,401 7.23% P-1/A-1+ ON 0.950% Due 0WOV2017 0.96% 8.992A00.00 0.96% C.W DAD F-1+ 0.W 3135GMD FNMA Note 6,0001W0.00 vardens 5,999350.00 99.97 5,990,470.00 4.83% AaaIAA+ 0.24 10W% Due OW2772017 1.10% 5.999.508.33 1.10% 15,666.66 (3833) AAA 024 3137FADLO FHLMC Note 5.285.00000 Various 5.204.3`7965 9998 5.283.758.03 4,26% Me/AA+ 025 1.000% Due OW2W2017 1.02% 5,284.695.54 1.09% 13.506.11 193759 AAA 025 3131 FHLMC Not. 5.000.000.00 0412612017 5.113,950.00 101.49 5.074.515.OD 4.10% Aa./AA+ 038 5A25% Duefl/P/2017 100% 5,01 1,18% 311319.44 (3,12740) AAA O38 67,113,460.67 67,129,07.76 64.02% Aai 0.13 Total Agency 67,085,000.00 0.91% 67,134,732.95 0.%% 90,242.21 15,235.19) Ass. 0.13 rclal Paper OH38BU76 Bank of Tokyo Mitsubishi NY Discount CP 1,705,W000 03/06/2017 1,690,181.89 99.98 1704,664.68 1.37% P-1IA4 0.02 11W% Due 07/0712017 120% 1�7N 06668 120% 000 000 NO 0.02 89233GUKO Toi Motor Credit Discount CP 1,9W,W0.00 04/2012017 1,895,255.81 99.95 1,899,040.50 153% P-11A-1+ a05 1.010% Due07119/2017 1.03% 1.899.040.50 1,03% ON 0.00 NR 005 06538BUR2 BankofTokya Mllsublsbi NYDlscuunt CP 1,5W,W0.00 OWtH10P 1,495,566.87 99.93 1,498,880.00 1.20% P-1/A-1 007 1.120% Due012512017 1.14% 1.498.880.00 1.14% ON 0.00 NR 0.07 5,089,004.37 5,102,585.18 4.10% PA IA,1 0.05 Total Commercial Pager 5,1D5,W0.00 1.12% 6.102.565.18 1.12% 0.00 0.00 NR 0.05 Market Fund FI 261W8107 Dreyfus TrsylAgW Cash Management 521 2,916,33288 Various 2,916,33289 100 2,916,33298 234% Aaa IAM 000 (1 2,916,332,88 0.86% 0.00 000 AAA 0.00 2,916333.88 2,916,332.88 2.34% Me/AAA O.W Total Money Market Fund FI 2.916,332.88 0.86% 2,91 0.86% 0.00 0.00 Aaa O.W NegONable CD 89113WEE2 Toronto Dominion NY Yankee CD 1,000,000-00 04/07/2017 1,000,234.59 100.00 1,000,02995 0.81% Pita4+ 004 1200% Due07/1312017 110% 1,000,02991 1.10% 11,13333 000 F-1+ 004 CAI Holdings Report Orange County Sanitation District Liquid -Account#10282 For the Month Ending 6/30/2017 Purchase Date Cos'Value Sky Price Market Value %.1 Pon ...c,)S&P Maturity CUSIP Security Description Par Valueli Book Yj a III Book Value Ill YTM Accrued Int, GainiLoss Fitch Duration 86958JMUO Svenska Hanbelshanken Yankee CD 1,00000000 05/08/2017 lh(C 01985 10000 1,W001256 081% P-1/A-1+ 026 U175% Due 10/02/2017 1.17% 1,000,012,56 1.17% 1,81 0.00 F4+ 0.26 2,0H 254.44 2,000:012.711 ISM Me/AAA 015 Total Negotiable CD 2,000,000.00 1,13% 2,OW,042.51 1.13% 135937 5 0.00 Asa 015 suwauatlonal See 459050Dc4 Intl Bank Food B Development Note 1,162n00.00 02AU2017 1,163,05742 99.99 1161,91285 0.9a% Aaa IAM 0.05 1125% Due O711812017 0-92% 1,162,11306 127% 5,91894 (20021) AAA 005 1,163.09.42 1,161,91 R.85 0.94% Aw". 005 TMI Supmnatlonal 1.162,000.00 0.92X 1,182,113.08 1.27% 5,918.94 I200.21) Aaa 0.05 b 478160AR7 Johnson B Jobnao.Note 1,00000000 04/12I2017 1,015,310,00 100.48 1,004,816.00 0.82% Aaa I AAA 0.13 5550% Due 081 Ul 1.005,51160 165% 20,96667 (695.NC AM 0.12 911312AP1 UPS Note 1,OW,W0.00 05/12QOP 999,58000 tri 999,386.00 081% Ai/A+ 025 1.125% Due1WO113017 1.24% 991 1.36% 2,812.50 (33196) NR 025 68389MN5 Oracle Core Nob 1,0W,W000 OW30i 999,07000 9895 99,9150100 081% At IAA- 029 1.200% Due 10,1512017 1.22% 999.930.40 137% 2,533.33 1429.40) A+ ON 166764BC3 Chevron Corp Note 1,0W,W0.00 01/18/2017 1.00,780.00 99.98 999,825.00 0.81% Bull/AA- 0.36 1.344% Due1110W2017 1.24% 1.000.352.34 1.39% 1,941.33 (527 SO NR 0.36 369604BC6 General Electric CO Note 1.0W.W000 0112612017 L03365000 10164 1,016.42100 082% Al/AA- 044 5.250% Due 1WW2017 1.24% 1,017.M6.15 143% 3,645.83 I]&5.151 PA- 943 461 JP Morgan Chese Nate 1.000.000.00 04I112017 1.032.600.00 102.25 1.022.468.00 0.84% A3/A- 055 50W% Du,0111512018 1.57% 1,023,64386 1,81% 37,660.67 (1,1]586) A. O52 404281 HSBC USA Inc Note 1,0W,W0.00 0511112017 1,OW,340.00 100.03 1.000.336.00 0.81% A2/A 055 1.625% Due01/i W2018 1.57% 1,OW,D6.16 1.56% 7447.92 59.84 AA- 0.54 24422EST7 John Dearer Capital Cord Noe 5s0,000.W 06119E 017 s49,763.50 99.92 549,547.90 O.4 Va A2/A 0.55 13W% Due0111612018 1.43% 549.7373 1.W% 3.403.13 (22583) A 054 06,1011 Bank of New York Callable Note Cent 12C!SCXI7 870,000.00 08YM017 869,394.90 99.93 89840840 0.70% Ai/A 0.57 130P% Due011292018 1.43% 869.37688 142% 4.90100 3152 Ate 0,56 808513AK1 Charles Schwab CoM Callable NMe Cont 2/10I20181,0W,W0.00 05b1120P UOD1,100.00 100.03 1,000,278.00 0.81% A2/A 0.69 1.5W% Due0311012018 1.37% 1.000,888.46 145% 4.625.00 1610461 A OW 026MWATB Attetlwn Honda Finance Note ipho'ba 0 032712017 1,001,140.00 100.07 1,W0,686.0D 0.81% At/A+ BID 1.500% Due031TV2018 1.38% 1.00(.035.34 140% 4,500.00 (14934) NR 0.69 10,5D3,498.40 10,482,673.30 8.48% A1/A+ 048 Thal US Carbonate 10,420.000.00 1.34% 10467,512,98 149% 84,44338 (4,83968) AA- 0.44 S in 912791 US Treasury Bill 151W0000.W Various 14.962,81903 9999 14,998.82327 12.05% P-1/A-1+ 0.02 0.567% Due O71OW2017 0.57% 14,998.823.27 0,57% ON 0.00 NR 902 912791 US Treasury BILL 5.0W.W000 04I2112017 4.9W.38125 9996 4,9117,96930 402% P-1/A-1+ 005 0.770% Du00]RW201] 0.78% 4,997,969.30 0,78% 0.00 0.00 F-1+ 005 CAI Holdings Report Orange County Sanitation District Liquid -Account#10282 For the Month Ending 6/30/2017 Fa,c,.a,rod, Cast Vers Mkt Price Market Value %.1 Purl c.d,S&P Maturity GUSIF Security Description Par VaIrWhinits Book Yield Book Ver. Met YTM Accrued Int, Garini Fitch Duration 912796LUI US Treasury Bit 13,000.00000 Various 12965,16000 9978 12 970,890 00 1042% P-1IA-11 0.23 0.992% Due 09/21/2017 1.00% 12,970,89000 1.00% 0.00 0.00 F4- 023 912828TS9 US Treasury Nate 2,500,000.00 06I08I2017 2.49608.06 9989 2497.225.0D 201% Me IAA+ 025 0.625% Due OW30/2017 1.05% 2,497,33286 107% 3,92760 (107A6) AAA 025 35,415,018.34 35,164,907.65 28,50% "a IAAA 0.12 Total US Treasury ss.wo,aoD.oO 0.79% 35,465,D15.51 0]9% 3,9P.80 (ID7.80) Arta 0.12 124,20g856.52 124,237,952.13 100.00% Aae IAAA 0.14 TOTAL PORTFOLIO 124,188,392.88 0.93% 124,248,335.07 0.96% 198,125.88 (10,382.91 AM. 0.14 TOTAL MARKET VALUE PLUS ACCRUALS 124,436,078.01 Cal Holdings Report OCSD Lehman Exposure-Account#10284 For the Month Ending 6/30/2017 Purchase D to Cos Value Ifflad Price Market Valme %of Pod, Moody/S&P Maturity CUSIP Security Description Par ValumUnits Book Yi:d Book Value saki Accrued Ind. Gaindurs. Fitch Duration Common Stock SLHOPNTA4 Lehman Brothers,Inc Open Position long 60,64149 11/21/2014 57 S1264 OA2 25,62103 13.46% NR/NR 0.00 Exposure Expo% one 0613012017 0.00% 57842.64 0.00% 0.00 (32.221.61) NR 000 57,842.64 25,621.03 13.46% NR/NR 0.00 Total Common Stock 60,641A .69 0.00% SirS 4 0.00% 000 p?221.61) NR Odd US Cor"dte 525ESCIB7 Lehman Brothers Note-Oefaulied 600,00000 09/19/2008 3.365,48 663 39,750d) 20.88% NR/NR 0.57 0000% Due 01/24/2018 000% 344,36548 000% 000 (304,61548) NR 000 525ESCOY6 Lehman Brothers Note-Defaulted 2.000,00000 09/18/2008 1.112,174,55 625 125000d) 65.66% NR/NR 32.33 0000% Due10/22r2019 000% 1112,17455 000% 000 (987,17465) NR am 1,41 10.01 164,750.00 86.54% NRINR 24.67 Total US Corporate 2.600000.00 0.00% 1,4w:lwua.0. 0.00% 0.00 (1,291,790.03) NR 0.00 1:50. 267 190,371.03 100.00% NRINR 21.35 TOTAL PORTFOLIO 2,660,641.49 0.00% 0.30332,67 0.00% 0.00 )1,44,011.64) NR 0.00 TOTAL MARKET VALUE PLUS ACCRUALS 190,371.03 AM SECTION 5 Transactions CAI Transaction Ledger Orange County Sanitation District Long Tenn -Account#10268 March 31, 2017 through June 30, 2017 transaction Seffinel.ric L, Q........ Security Description N. Acq`Bisp Interest UISITIONS tor-A PumM1ase 04/12/2017 4581XOCX4 3,035,000.00 In626%Due0112Bank Note 020 99763 1.70% 3027,80705 0.00 3027,80705 0.00 1625%Oue:n Dee Bank PumM1ase 0412612017 912828,76 5.0WWo 00 US Treasury Note 99,528 185% 4.976,38894 6.215.85 4.982.599.79 0.00 1.75%Due:OW3112022 PumM1ase 0412M017 674599CK9 3,350,030.00 Occi tental Petroleum Cellade Note Cant 311512022 100.137 2.57% 3,354,599.50 3,145.28 3,357,]34]8 0.00 2.6%Due:0,11152022 Purchase OMM017 3135GOT45 5,0W.000.00 FNMA Note 99.4W 1.99% 4,972,500.00 7,291.66 4,979,791.66 0.00 1.875%Due:OCVs 022 Purchase 0512612017 084664BT7 6,000,D00.00 Berkshire Halkamay Note 103.278 2W% 4,131,120.00 3,666.67 4,134,786.67 0.00 3%Due:051151 PumM1ase OW70017 459058FY4 5100000000 Intl.Bank Rican 6 Development NO. 100611 1 86% 5103055000 41,9 ," 5,072,494.44 0.00 2%Due:01n6n022 Sublelal 25,385,000.00 25,492,950.49 62,263.90 25,555,214.39 0.00 Security N13MD17 91282SWUO 32,136.00 US Treasury Inflation Index Note 100.000 32,136.00 11.65 32,147.65 0.00 Contribute, 0.125%Due:0711WO24 Serelty OU31/2017 912828WUO 11.76200 US Treasury Inflation Index Note 1000W 11,75200 5,52 11,757,52 000 Camnbu8on 0.125%Due:071152024 Semrily 0613012017 91282OWUO 30,888.00 US Treasury OMetian Index Note 100.000 30,89800 1771 30,W6]1 0.00 Contribu ion 0,125%Des:0711WO24 Subtotal 74,775.00 74,n6.00 34.88 74,810.88 0.00 TOTAL ACQUISITIONS 25.459.P6.00 25.58].]26.49 62.398.]8 25,830,025.27 0.00 Er Sale WOW2017 91282BG20 500,00000 US Treasury Note 99968 093% a99,8a208 1,716.16 501,558.24 378.56 0.875%Due:1111512017 Subtotal 500,000.00 a99,542.08 1,716.16 501,55834 378.56 MaW6ry 04/24/2017 4595OKBS8 5,0W,0.00 Intematlonal Finance Core Note 100000 5,000000.00 0.00 5,0W.W0.00 0.00 1%Due:0412al2017 CAI Transaction Ledger Orange County Sanitation District Long Tenn -Account#10268 March 31, 2017 through June 30, 2017 Transact- Sent Iment CUSIP Q.-tia, Security Description AcqiDisp Interest Ty, at. p6r, Yield sun.­t III Total Amount Gairill-oss Maturty 041301 9128283SO 2,500,000.00 US To.,Note 100.000 2,500,000.00 0.00 2,5W WO.00 0.00 0.875%Due:wMM17 M9Wnty OSIWO17 0WWTL%8 800,00000 Bank of America Note 10o000 600,00000 0.00 600,00000 000 Due:OMM017 Maturity 06115I2017 94981 500,ikam Wells Fargo Bank Callable Note OMy W1512016 0. 0611512017 100.000 500.000.00 0.00 500,000.00 0.00 Subtotal 8,600,000.00 816001000.00 0.00 8,600,000.00 0.00 TOTAL DISPOSITIONS 12,685,102.76 H,684.94d.8d 11d,977.50 12,799.922.I0 378.56 CAI Transaction Ledger Orange County Sanitation District Liquid -Account#10282 March 31, 2017 through June 30, 2017 T Security Description Ace, I., Interest ye. Due YI.Id Amount PurlSold Total Amount GamiLoses UISITIONS PumM1ase 0410712017 89233GTF3 1000,000.00 Toyota Motor Crcd,t Dismuni CP 098%Due 0611512017 gg,g12 1.00% 998,121.6] 0.00 990,121.6] 0.00 : Purchase OW102017 89113WEH 1.OW.W000 Toronto Dominion NY Yankee CD 1.2%Due 07/13201) 100023 110% 1.OW.234.59 9.OW.W 1,OW.234.59 000 : Purchase OW11M1] 36960LTF2 1,003,W0.00 General Electric CO Discount CP 085%Due:0WlW2017 89.867 0.89% 988,465.28 0.00 998,465.28 0.00 Purchase OWIM017 31398ADM1 W7.0W.W FNIM Note 100.753 0.84% 661,947.21 11.771.25 673,718.46 0.00 5.375%Due:OWI=017 Purchase OW12=17 47816DA07 1,OW,W0.00 Johnson B Johnson Nate 101.531 1,W% 1,015,310.00 8,787.W 1,0N,07.50 0.00 5.55%Due:0WW2017 Purchase OWIW017 3137EAMS 2,OW,W000 FHLMC Note 100040 085% 2,000,86000 4,166.67 2,00,02867 0.00 1%Due:0)20/2017 Purchase OW132017 912828WPI 2,SW,W0.00 US Treasury Note 10D.020 076% 2,5W,496.66 7,15144 2,507,648.10 0.00 0.875%Due:O6/1 MUl7 Purchase 04417aD17 46625HGYO lJow,W0.00 JP Mogan Chose Note 103.260 157% 1,032,WO.00 15,33133 1,W,933.33 0.00 6%Due:01/1 W2018 Purchase OWIM017 313385GR1 WO.OW00 FHLB Discount Nate 99.886 ON% 599.315.33 ON 599.315.33 0.00 0.79%Due:0WOW2017 PurcM1ase O4J202017 912828WP1 7,51)(3,1)1 US Treasury Note 100.020 014% 7,501,488.97 22,716.35 7,524,208.32 0.00 0.875%Due:06/152017 Purchase 04212017 W538BUR2 1.SW.W000 Bank of Tekyo Mitsuhishl NY Discount CP 99.704 114% 1,495,56667 ON 1,495,56667 0.00 1.12%Due:0712512017 Purchase O421/2017 313385JK3 10,0w,W0.00 FHW Discount Note 89.785 0.89% 9,978,513.90 ON 9,978,513.90 0.00 085%Due:07121/2017 Purchase 04212017 89233GUK0 1,9W,W0.00 Toyela Mohr Credit Discount CP 99.750 1.03% 1,895,255.81 ON 1,895,255.81 0.00 1.01%Due:071IW2017 Purchase OW212017 9127961<114 5,0W,WO.00 US Treawy Btu 99.808 0.78% 4,990,331.25 O.W 4,9W,381.25 0.00 0.77%Due:0712012017 Purchase 04212017 912]96LE) 17,5W,WO.00 US T..,BILL 90883 071% 17,481,29509 O.W 17.481,29509 0.00 0.7%Due:W/152017 0111 Transaction Ledger Orange County Sanitation District Liquid -Account#10282 March 31, 2017 through June 30, 2017 Transaction Settlement Act Cleo Interest Type Date CUSIP Q- I,, Security Description once Yield Amount PonSold Total Amount Gairill-oc, Purchase 04n4=17 3137EFUJ5 5,0OO,OOo.00 FHLMC Note 100.047 0.82% 5,002,350.00 11,944.44 5.014294.44 0.00 1%Due.O7AW2017 Purchase OM2]0017 31371FABA6 5100010,0000 FHLMC Note 5.125%Due W 11I17=17 2279 103% 5,113,95000 113,088.89 5227,83689 000 : Purchase 04I27I2017 3137EADL0 2,705,030.00 FHLMC NOR 100.009 0%% 2,705,250.65 2,1%.11 2,787,416.76 0.00 1%Due:0MM017 Purchase 041201D17 313365JS6 5,0w,D30.00 FHLB Discount Note 99.792 O87% 4,999,117.92 O00 4,999,117.92 0.00 0.86%Due:0712W2017 Purchase MM017 313589JD7 12.OW,W0.00 FNMA Discount Note 99.7% 064% 11,975,525.04 ON 11,975,525.04 0.00 0.82%Due:0712612017 Purchase Offi=D17 808513AH1 1,0W,Wo.Oo Chad.SmwsE Corp Canaae NOR Cent L1012018 100.110 137% 1,001,100.00 2,166.67 1,003,266.67 0.00 1.5%Due:03110 O18 Purchase OSI03I2017 313WW07 7.0W.W000 FNMA Discount Note 99808 0,84% 6.986,52500 ON 6.9815,525,00 0.00 0.82%Due:07I26I3017 Purchase 05I0&2017 86MUMU0 1,0W,W0.00 Svenska Hentlelsbenken Yankee CD 100.002 1.17% 1,0W,019.85 97.92 1,000,117]7 0.00 1.175%Due:IMM017 Purchase OUIM017 313MWM 4,0110,W0.00 FHLB Discount Note 99.795 0.91% 3,991,800.00 ON 3,991,800.00 0.00 0.9%Due'.08M2I2017 Purchase OSIi&209 4428HPH9 1,OW,W0.00 HSBC USA Inc NOR 100.034 1.57% 1,0W,34000 5,416.67 1,01 0.00 1.625%Due:0111612018 Purchase 0&1]IID9 91131MPI 11000,00000 UPS Note WASS 124% 999158000 1.437.50 1.001,017,50 0.00 1.125%Due:IM1=17 Purchase OMM017 313385J%5 5,0W,W0.00 FHLB Discount NOR 99.849 101% 4,992,437.50 OW 4,992,437.50 0.00 0.99%Due:OWOV2017 Purchase 0MMD17 912826TS9 2,500,000.00 US Treasury Note 99868 106% 2,496,688.06 2,981 2,499,576.44 0.00 0.625%Due:09I30I201] Purchase 00=017 912]96LU1 5.0W,W0.00 US Treasury Bill 99.730 ON% 4,986,530.00 ON 4.9%.530.00 0.00 0.97%Due:OW2112017 Purchase OWlMD17 9127981U1 8,0W,W000 US Treasury Bill 99.733 101% ],9]8,660.00 ON ],9]8,660.00 0.00 0.99%Due:09/21/2017 Purchase 06I20I2017 3135GO O 3.OW.Wit 00 FNMANWA 99,975 109% 2.999,25000 6.91667 SO%.16667 0.00 1%Due:OM7I2017 0111 Transaction Ledger Orange County Sanitation District Liquid -Account#10282 March 31, 2017 through June 30, 2017 Transaction Settlement Art Met, interest Type Date CUSIP Quantity S—rity Dellontion Inc. Yi'e[ld Amount Peroold Total Amount Gairill-oss Purchase 0622=17 24422EST7 550,000.Do John Deare Capital Corp Note 1.35%Due:0111612018 99,957 143% 549,763.50 3,217.50 552,981.00 0.00 Purchase OWWO17 313386300 800101)( OO FHLB Discount Note 99907 1M% 799,25566 Ow 7W,25566 000 1.02%Due:0n2612oP Purchase 06232017 31350OR0 3,000,000.00 FNMA Note 99.970 1,11% 2.990100.00 7,166,67 3,006,266.67 0.00 1%Due:OMDQ017 Purchase 052B1ID9 3137FADL0 2,503,030.00 FHLMC Note 99.991 1 07% 2,499,525.00 6,04187 2,505,556.67 0.00 1%Due:O92W2017 Purchase 06272017 06406HCE7 870.0110m Bank of N—York Callable NO,Coat 1 WWO17 99.927 143% 869.364.90 4.775.33 874,140.23 0.00 1.3%Due:01eZS4t018 Subtowl 130,162,000.00 130,165,959.51 247,151 130,413,110.47 0.00 TOTAL ACQUISITIONS 130,162,000.00 130.165 959 51 247.15096 130413,11047 0.00 &SPOSITIONS Call 04/15/2017 91159HHD5 740,000.00 US Bancorp Callable Note Cant 4/15/2017 100.000 1.65% 740,000.00 5,08750 745,08750 0,00 1 65%Due OWl W2017 Subtotal 740,000.00 740,000.00 Still 745,0 7.50 0.00 MaWtlty 06NN201] 912796KQ1 10,ow bel 00 US Traeeury Bill 100.000 100oo'bol ON 100oo'bol 0.00 0.47%Doe:04MW2017 poorly 04Y20@017 89233GRU 1,000,000.00 Toyota Motor Credit Discount CP 99.669 1,0W.W0.00 0.00 1,0001W0.00 0.00 1.01%Due:0412W2017 Meant, 04202017 91998K75 15000,000.00 US Treasury Bill 100.000 15,000000.00 am 15,000000.00 0.00 0.57%Due:OV2012017 McWrry GtRtO0l7 t5950KBSS 1,000.00000 Intemstlprel Finaaco Cor,Note 100000 11000100000 000 1,0001000.00 0.00 1%Dae:04242017 Maturity 04282017 313385ER0 5,000000.00 FHIB overarm Note 100.000 5,000000.00 O.oO 5,000000.00 0.00 0.54%Doe:04/2W2017 Moody 0WlaDI7 313589FA6 4,00],0]0.00 FNMA DIacount Note 100.000 4,003,030.00 Oil 4,000,000.00 0.00 0.5,1%Due:0901/2017 batttlty OW=017 89113EM6 1,1W.00000 Toronto Deal ionn Yankee CD 1.15%Due 09O 100000 1,1 W.00000 13.335.21 1.163.33621 0.00 : 0111 Transaction Ledger Orange County Sanitation District Liquid -Account#10282 March 31, 2017 through June 30, 2017 Transaction Settlement Act,Disp Interest Type Data CUSIP Quantity Security Description pace Yi'*Eld Amount PorlSold Total Amount Gairill-oc, Maturity 05I05Y2017 037833FM2 1,000,000.00 Apple Inc Note 100.000 1,000,W0.00 0.00 1,0W wo.00 0.00 105%Due:0510512017 Mercury OWWO17 3133851FE1 2,000,00000 FHLB Discount Note 100OW 2,0W.00000 000 2,000,00000 0.00 0.55%Due:MOSCOW Maturity 051U82017 94974BFW 1,0W,W0.00 Welk Fargo Corp Note 100.0W 1,0W,W0.00 OW 1,0W,W0.00 0.00 2.1%Due:05MM17 Maturity 051IN209 08486CB59 1,0W,W0.00 Batteries Hathaway Note 100.0W 1,0W,W0.00 0.00 1,0W,WOAo 0.00 1.6%Due:05I15=7 Maturity 06I09R017 313305GR1 9.61M.W0.00 FHIB Discount No* 100.0W 9,6W,W0.00 0.00 9.6W.W0.00 0.00 0.78%Due:0WOW2017 Maturity OWlMD17 24422ESN0 1,0W,W0.00 John Deere Capital Carp Note 100.03) 1,0W,W0.00 0.0 1,0W,DI 0.00 1.125%Due:061IM017 Mummy 00=017 31390ADM1 5.157.WS00 FNM4Nate 10000 5.157.W000 O.W 5.157.W000 0.00 5.375%Due:OW12C09 MaWtlty 0&1512017 31391 1,0W,W0.00 General Electric CO Discount CP 085%Due:0811512017 89.867 1,0W,W0.00 0.03 1,0W,W0.00 0.00 Maturity 0OW017 89233GTF3 1,0W,W0.00 Toyota Motor Cre08 Discount CP 99.812 1,0W,W0.00 O.W 1,0W,W0.00 0.00 0.98%Due:0611512017 Maurity 0WI5CW7 912]WLE] 17,5W,WO.00 US To.,BlLL 100.00 17,500,W0.00 0.0) 17,500,W0.00 0.00 0.7%Due:Wn5201] Maturity ONIW017 912028WP1 10,000,00000 US Tonaury NWe IMOW 10,000,00000 0.W 10,000,00000 0.00 0.875%Due:0611 5@01 7 Maturity 0WDC017 3137EADH9 2,0W,W0.00 FHLMC NOR 100.05) 2,003,W0.00 O.W 2,0W,W0.00 0.00 1%0ue:OMM017 Subtotal 89,407, 00.00 89,407,1)1 13.335.21 89,4211,333.21 0.00 TOTAL DISPOSITIONS 90.147.000.00 90.147.W0.00 18.4n.71 90.165.42271 0.00 c111JI Disclosure Information contained herein is confidential. Prices are provided by IDC, an independent pricing source. In the event IDC does not provide a price or if the price provided is not reflective of fair market value, Chandler will obtain pricing from an alternative approved third party pricing source in accordance with our written valuation policy and procedures. Our valuation procedures are also disclosed in Item 5 of our Form ADV Part 2A. Rating Agency Comparisons A summary of investment grade ratings are listed below. More complete descriptions of Moody's and Standard & Poor's ratings are included in the following pages. Quality/Grade Mood 's Standard & Poor's Fitch Best Quality Aaa AAA AAA High Quality Aal AA+ AA+ Aa2 AA AA Aa3 AA- AA- Upper Medium Grade Al A+ A+ A2 A A A3 A- A- Medium Grade Baal BBB+ BBB+ Baa2 BBB BBB Baa3 BBB- BBB1 Moodv's - Investment Grade "Aaa" - Bonds rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk. Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. "Aa" - Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in Aaa securities. "A" - Bonds which are rated A possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present which suggest a susceptibility to impairment sometime in the future. Mae" - Bonds which are rated Baa are considered as medium grade obligations; i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. Bonds in the As, A, and Bee are also assigned "1", "2", or "S' based on the strength of the issue within each category. Accordingly, "At" would be the strongest group of A securities and "AY would be the weakest A securities. Be, B, Caa, Ca, and C - Bonds that possess one of these ratings provide questionable protection of interest and principal ("Be" indicates some speculative elements; "B" indicates a general lack of characteristics of desirable investment; "Caa" represents a poor standing; "Ca" represents obligations which are speculative in a high degree; and "C" represents the lowest rated class of bonds). "Caa", "Ca" and "C" bonds may be in default. Standard and Poor's-Investment Grade AAA- Debt rated "AAA" has the highest rating assigned by S&P. Capacity to pay interest and repay principal Is extremely strong. AA - Debt rated "AA" has a very strong capacity to pay interest and repay principal and differs from the highest rated issues only in small degree. A - Debt rated "A" has a strong capacity to pay interest and repay principal although it is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher rated categories. BBB - Debt rated "BBB" is regarded as having an adequate capacity to pay interest and repay principal. Whereas it normally exhibits adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for debt in this category than in higher rated categories. Standard and Poor's - Speculative Grade Retina Debt rated "BB", "B", "CCC", "CC" and "C" is regarded as having predominantly speculative characteristics with respect to capacity to pay interest and repay principal. "BB" indicates the least degree of speculation and "C" the highest. While such debt will likely have some quality and protective characteristics these are outweighed by major uncertainties or major exposures to adverse conditions. BB - Debt rated "BB" has less near-term vulnerability to default than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to inadequate capacity to meet timely interest and principal payments. The "BB" rating category is also used for debt subordinated to senior debt that is assigned an actual or implied "BBB" rating. B - Debt rated "B" has a greater vulnerability to default but currently has the capacity to meet interest payments and principal repayments. Adverse business, financial, or economic conditions will likely impair capacity or willingness to pay interest and repay principal. The "B" rating category is also used for debt subordinated to senior debt that is assigned an actual or implied "BB" or"BB" rating. CCC - Debt rated "CCC' has a currently identifiable vulnerability to default, and is dependent upon favorable business, financial, and economic conditions to meet timely payment of interest and repayment of principal. In the event of adverse business, financial, or economic conditions, it is not likely to have the capacity to pay interest and repay principal. The "CCC' rating category is also used for debt subordinated to senior debt that is assigned an actual or implied "B" or"B" rating. CC - The rating "CC' typically is applied to debt subordinated to senior debt that is assigned an actual or implied "CCC' debt rating. C-The rating"C'typically is applied to debt subordinated to senior debt which is assigned an actual or implied "CCC" debt rating. The "C' rating may be used to cover a situation where a bankruptcy petition has been filed, but debt service payments are continued. Cl -The rating "Cl" is reserved for income bonds on which no interest is being paid. D - Debt rated "D" is in payment default. The "D" rating category is used when interest payments or principal payments are not made on the date due even if the applicable grace period has not expired, unless S&P believes that such payments will be made during such grace period. The "D" rating also will be used upon the filing of a bankruptcy petition if debt service payments are jeopardized. Plus (+) or Minus (-) - The ratings from "AA" to "CCC' may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories. NR-Indicates no rating has been requested,that there is insufficient information on which to base a rating, or that S&P does not rate a particular type of obligation as a matter of policy. BOARD OF DIRECTORS Meeting Date TOBE.Or Dir. o8/zs/v AGENDA REPORT ItemNumber IemNumber s Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Administrative Services SUBJECT: COLLECTION OF SEWER SERVICE CHARGES VIA THE TAX ROLL GENERAL MANAGER'S RECOMMENDATION A. Conduct a public hearing to receive input on a report filed with the Clerk of the Board entitled "Sewer Service Charges for Collection on Tax Rolls for Fiscal Year 2017-18" 1. Open the public hearing 2. Receive staff report and recommendations 3. Report of written communications by Clerk of the Board 4. Public Comment 5 Close Public Hearing 6 Discussion by the Board of Directors B. Unless there is a majority protest, adopt the report,which has the assessor's parcel numbers and amount of charges for collection on the tax rolls; C. Adopt Resolution No. OCSD 17-14 entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District adopting the Report proposing to collect Sewer Service Fees on the Tax Roll for Fiscal Year 2017/2018"; D. Direct staff to file a certified copy of the adopted report and resolution with the County Auditor-Controller; and E. Direct staff to coordinate collection of sanitary sewer service charges on the general Orange County tax rolls with the County Auditor-Controller, Assessor, and Tax Collector. BACKGROUND Sections 5473 and 5473.1 of the State Health and Safety Codes allow the Orange County Sanitation District (Sanitation District) to collect the Sanitary Sewer Service Charges on the County's Property Tax Roll. The Sanitation District has exercised this option in the past because it has proven to be a cost-effective method of collection. To collect the charges on the tax roll it is necessary annually to: 1. File a report with the Clerk of the Board identifying each parcel of real property receiving the Sanitation District's services and the amount of the charge; and 2. Provide notice and conduct a public hearing on the report. Page 1 of 2 RELEVANT STANDARDS • Maintain a culture of improving efficiency • Cost-effective and most efficient method to collect sewer service fees PROBLEM The California Health and Safety Code requires a public hearing on the annual report of charges and mechanism to collect sewer fees. PROPOSED SOLUTION Provide notice of and hold a public hearing on annual charges and adopt a resolution directing the County Tax Collector-Treasurer to include local and regional sanitary sewer service charges on the tax roll. TIMING CONCERNS Special Assessments are due to the County Auditor-Controller in August to be included on the tax roll. RAMIFICATIONS OF NOT TAKING ACTION Approximately $305 million of sanitary sewer service charges would not be collected on the County tax roll. PRIOR COMMITTEE/BOARD ACTIONS Similar hearings are conducted annually to enable the Sanitation District to collect local and regional sanitary sewer service charges via special assessments on the tax roll. FINANCIAL CONSIDERATIONS Collecting sanitary sewer service charges on the County tax roll is the most efficient and cost-effective way of collecting these charges from property owners. 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: • Resolution No. OCSD 17-14 • "Sewer Service Charges for Collection on Tax Rolls for Fiscal Year 2017-1 S" filed electronically in the Clerk of the Board's office (11,700 pages) Page 2 of 2 RESOLUTION NO. OCSD 17-14 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT ADOPTING THE REPORT PROPOSING TO COLLECT SEWER SERVICE FEES ON THE TAX ROLL FOR FISCAL YEAR 2017/2018 WHEREAS, California Health and Safety Code sections 5473 et seq. authorize the Orange County Sanitation District (Sanitation District) to adopt an ordinance by a two-thirds vote of the Board of Directors of the Sanitation District to collect sewer service fees on the tax roll, in the same manner and at the same time as the general taxes; and WHEREAS, on March 27, 2013, the Board of Directors adopted Ordinance No. OCSD-41, an ordinance establishing sanitary sewer service charges and allowing for the collection of such sanitary sewer service charges ('Regional Sewer Fees") on the 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; and WHEREAS, on May 22, 2013, the Board of Directors adopted Ordinance No. OCSD-43, an ordinance establishing local sanitary sewer service charges for customers receiving local sanitary sewer service in former revenue area 7 and allowing for the collection of such local sanitary sewer service charges ("Local Sewer Fees") on the 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; and WHEREAS, pursuant to California Health and Safety Code sections 5473 et seq., a written report (the 'Report"), a copy of which is filed electronically with the Clerk of the Board of Directors of the Sanitation District and by this reference incorporated herein, describing each parcel of real property subject to said Regional Sewer Fees and Local Sewer Fees, including the amount of said charges to be imposed thereon for Fiscal Year 2017-2018; and WHEREAS, the District has caused notice of the filing of the Report to be published and has given notice of the hearing to consider such Report in accordance with California Health and Safety Code section 5473.1; and WHEREAS, the Board of Directors has heard and considered all objections and protests to the Report and has determined and hereby finds that protests have not been made by the owner of a majority of the separate parcels of property described in the Report; and WHEREAS, the Board of Directors has determined to adopt the Report and collect the Regional Sewer Fees and the Local Sewer Fees on the tax roll, which fees shall constitute a lien against the parcels or parcels of land described in the Report in accordance with California Health and Safety Code sections 5473 at. seq. 837661.1 OCSD 17-14-1 NOW, THEREFORE, the Board of Directors of the Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE, AND ORDER: Section 1: The above recitals are true and correct. Section 2: The Report as presented is hereby adopted. Section 3: The Clerk of the Board, or the designee, is hereby directed to file a copy of the Report with the Orange County Auditor's Office, together with a statement endorsed thereon over his/her signature that the Report has been adopted by the Board of Directors of the Sanitation District and shall request that said Regional Sewer Fees and Local Sewer Fees be entered against the respective parcels of land as they appear on the current assessment roll pursuant to California Health and Safety Code sections 5473 et seq. Section 4: 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 Nos. OCSD41 and OCSD43, are changed by increasing the annual rate. Section 5: That the General Manager, or his designee, is hereby authorized and directed to execute any necessary documents or agreements to affect the order set forth in Section 3 herein. PASSED AND ADOPTED at a regular meeting of the Board of Directors held August 23, 2017. Gregory C. Sebourn, PLS Chairman of the Board of Directors ATTEST: Kelly A. Lore Clerk of the Board 837661.1 OCSD 17-14-2 STATE OF CALIFORNIA ) ss COUNTY OF ORANGE ) I, Kelly A. Lore, Clerk of the Board of Directors of the Orange County Sanitation District, do hereby certify that the foregoing Resolution No. OCSD 17-14 was passed and adopted at a regular meeting of said Board on the 23r' day of August, 2017, by the following vote, to wit: AYES: NOES: ABSTENTIONS: ABSENT: IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of Orange County Sanitation District this 2V day of August, 2017. Kelly A. Lore Clerk of the Board of Directors Orange County Sanitation District 837661.1 OCSD 17-14-3 STEERING COMMITTEE Melting Dat0 TOBE.Or Dir. os/zs/I7 oB/zs/v AGENDA REPORT Item Item Number 2 fi Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: BANDILIER CIRCLE PROPERTY LEASE GENERAL MANAGER'S RECOMMENDATION Approve the Lease Agreement with the Dickler Corporation, DBA Chefs Toys,for Orange County Sanitation District's real property located at 18484 Bandilier Circle, Fountain Valley, California, in an as-is condition, commencing August 24, 2017 through March 31, 2019, at a lease rate of $13,500 per month for the first 12 months, and increasing to $15,000 per month for the balance of the term, in a form approved by General Counsel. BACKGROUND In February 2017, the Orange County Sanitation District (Sanitation District) purchased the property at 18484 Bandilier Circle in Fountain Valley across the street from the current Administration Building. The property is currently vacant. Staff was approached with an unsolicited offer from Chef's Toys, represented by Lee and Associates, through the Sanitation District's representative Cushman & Wakefield, to lease the warehouse space for a term of just over 19 months. The lease rate would be $13,500 per month for the first 12 months, increasing to $15,000 per month for the balance of the term. The total projected revenue is $270,483.87. The tenant will accept the building in an as-is condition. The tenant will pay all utilities and provide its own janitorial services and alarm system. The Sanitation District will continue to provide landscape maintenance in conjunction with its other property. The tenant would be prohibited from any and all public uses, warehouse sales, or public cash and carry sales. RELEVANT STANDARDS • Protection of Orange County Sanitation District assets PROBLEM Vacant properties invite opportunities for vandalism and other security problems. The Sanitation District has experienced several incidents in its short term of ownership of this parcel. Additionally, the property is not realizing its potential revenue generation without a tenant. Page 1 of 2 PROPOSED SOLUTION Leasing the building would increase visibility of activity and discourage vandalism and loitering in the area. The tenant would be responsible for all security and interior janitorial services. In addition, the Sanitation District would be collecting revenue while eliminating security and janitorial services. The timing and length of the lease work well with future demolition and construction timelines. TIMING CONCERNS The proposed tenant would like to take possession of the warehouse as soon as possible and has requested occupancy immediately following approval by the Board of Directors. RAMIFICATIONS OF NOT TAKING ACTION The proposed tenant would have to make alternative plans for warehouse space and the Sanitation District could lose a viable tenant. PRIOR COMMITTEE/BOARD ACTIONS November 2016 — Property acquisition for 18475 Pacific Avenue and 18484 Bandilier Circle, Fountain Valley, California. ADDITIONAL INFORMATION The assessor parcel is 18484 Bandilier Circle; however, the street address and utility connections are associated with 18480 Bandilier Circle. CEQA N/A FINANCIAL CONSIDERATIONS The Sanitation District will provide a one-time commission fee of$16,229.03 (6%) of the total lease value of$270,483.87, with an equally agreed upon split between the two real estate firms. This request complies with authority levels of the Sanitation District's Purchasing Ordinance. ATTACHMENT The following attachment(s)is included in hard copy and may also be viewed on-line at the OCSD website (www.ocsd.corn with the complete agenda package: • Commercial Lease Agreement between Orange County Sanitation District and Chef's Toys Page 2 of 2 OCSD COMMERCIAL LEASE- BANDILIER PROPERTY LEASE BY AND BETWEEN THE ORANGE COUNTY SANITATION DISTRICT AND THE DICKLER CORPORATION,DBA CHEFS TOYS 1. General Provisions("General Provisions"). 1.1. Parties: This Lease ("Lease"), entered into this day of TWENTY-FOURTH (24T") day of August 2017,is made by and between the Orange County Sanitation District("Lessor")and The Dickler Corporation, dba Chef's Toys ("Lessee"). Lessor and Lessee shall be referred to herein collectively as the"Parties,'or individually as a"Party". 1.2. Premises: That Certain real property, including all improvements thereon, under the terms of this Lease,and commonly known as 18484 Bandilier Circle,located in the City of Fountain Valley,County of Orange, State of California, commonly referred to as 18480 Bandilier Circle, comprised of a part of a commercial building approximately 24,073 square feet ("Premises"), a depiction of which is attached hereto as Attachment"1." 1.3. Term: Nineteen(19)months and eight(8)days("Original Tenn")commencing on August 24,2017 ("Commencement Date")and ending March 31,2019("Expiration Date"). 1.4. Rent: Lessee shall pay to Lessor rent on a modified gross basis in the amount stated in the table below ("Monthly Base Rent") which excludes payments for building utility costs, security, and janitorial costs, all of which are the responsibility of the Lessee. All monetary obligations of Lessee to Lessor as described in this Paragraph are deemed to be and shall be referred to herein as rent ("Rent"). DATE MONTHLY BASE RENT August 24,2017—August 31,2017 $3,483.87 or$435.48 per day) September 1,2017—August 31,2018 $13,500 or$450.00 per day) September 1,2018—March 31,2018 $15,000 1.5.. Initial Rent and Security Deposit Paid Upon Execution: Lessee shall deposit with Lessor the Monthly Base Rent for last eight days of August 2017 and the Monthly Base Rent for September 2017 in the total amount of sixteen thousand nine hundred eighty-three dollars and eighty-seven cents ($16,983.87) and a Security Deposit in the amount of fifteen thousand dollars $15,000.00 ("Security Deposit")upon execution of the Lease Agreement 1.6. Agreed Use: Lessor agrees to Lease the Premises to Lessee for the sole purpose of a warehouse for storage of restaurant equipment and for any related uses thereto. (See also Paragraph 5). Any and all public uses,warehouse sales,or public cash and carry sales are strictly prohibited. 1.7. Real Estate Brokers: (a) Representation: The following real estate brokers represent Lessee exclusively ("Lessee's Broker"). Lessee's Broker can be contacted at: Brokerage Firm: Lee 8 Associates Attn: Jim Snyder Title: Senior Vice President Address: 100 Bayview Circle Newport Beach,CA 92660 Telephone: (949)724-4731 Facsimile: (949)623-6331 Federal ID No: 01197433 Broker/Agent DIRE Lic. #00872220 1262100.1 The following real estate brokers (Lessor's Brokers) represent Lessor exclusively ("Lessor's Broker").Lessors Broker can be contacted at: Brokerage Firm: Cushman&Wakefield Attn: John Gallivan Title: Executive Director Address: 2020 Main Street, Suite 1000 Irvine, CA 92614 Telephone: (949)955-7647 Facsimile: (949)474-0405 Federal ID No: 13-2899582 Broker/Agent ORE Lic. #01096309 (b) Payment to Brokers: Upon execution and delivery of this Lease by both Parties, Lessor shall pay a total brokerage fee of six percent (6%) %)of the total Monthly Base Rent payable for the Original Term which shall be divided three and one quarter percent(3.25%) to Lessee's Broker,for the brokerage services rendered by Lessee's Broker, and two and three quarters percent (2.75%) to Lessor's Broker for the brokerage services rendered by Lessors Broker. 2. Premises. 2.1. Leasing.Lessor hereby leases to Lessee,and Lessee hereby leases from Lessor,the Premises,for the Term, at the Rent, and upon all of the terms, covenants and conditions set forth in this Lease. While the approximate square footage of the Premises may have been used in the marketing of the Premises,the Base Rent stated herein is NOT tied to square footage and is not subject to adjustment should the actual size be determined to be different.Lessee is to verify the actual size of the Premises prior to executing this Lease. 2.2. Condition. Lessee acknowledges and accepts the Premises in an "AS-IS" condition. Unless otherwise stated in Paragraph 2.5 herein, Lessor shall deliver the Premises to Lessee in an"AS- IS"Condition on the Commencement Date so long as the required service contracts described in Paragraph 6.1(b) below are obtained by Lessee and in effect within thirty days of the Commencement Date. Lessor makes no warranties (a)that the existing electrical, plumbing, fire sprinkler,lighting,heating,ventilating and air conditioning systems("HVAC"),loading doors,sump pumps,if any,roofing,and all other such elements in the Premises,are in good operating condition on said Commencement Date, (b) that the structural elements of the roof, bearing walls and foundation of any buildings on the Premises(the"Building")are free of material defects,or(c)that the Premises do not contain hazardous levels of any mold or fungi defined as toxic under applicable state or federal law. 2.3. No Warranties.Lessor makes no warranties conceming the improvements on the Premises.Lessee shall be responsible for any modifications which may be required by the Americans with Disabilities Act or any similar laws as a result of Lessee's use, or to any Alterations or Utility Installations (as defined in Paragraph 6.3(a)) made or to be made by Lessee. NOTE: Lessee is responsible for determining whether or not the Applicable Requirements, and especially the zoning, are appropriate for Lessee's intended use, and acknowledges that past uses of the Premises may no longer be allowed.If Lessee is required to make any changes or modifications to the Premises so as to comply with building codes, applicable laws, covenants or restrictions of record, regulations and ordinances during the Term of this Lease ("Capital Expenditure"), Leases shall be fully responsible for the cost thereof. 2.4. Acknowledgements. Lessee acknowledges that: (a) it has been given an opportunity to inspect, evaluate and measure the Premises, (b)it has been advised by Lessor and/or Brokers to satisfy itself with respect to the size and condition of the Premises(including but not limited to the electrical, HVAC and fire sprinkler systems, security, environmental aspects, and compliance with applicable laws and regulations and the Americans with Disabilities Act), and the suitability of the Premises for Lessee's intended use, (c) Lessee has made such investigation and evaluation as it deems necessary with reference to such matters and assumes all responsibility therefor as the same relates to its occupancy and use of the Premises,(d)Lessee is not relying on any representation as to the size or condition of the Premises made by Brokers or Lessor, (e) the square footage of the Premises was not material to Lessee's decision to lease the Premises and pay the Rent stated herein,and(f)neither Lessor,Lessor's 1262100.1 agents, nor Brokers have made any oral or written representations or warranties with respect to the above referenced matters other than as set forth in this Lease.In addition,Lessor acknowledges that(i) Brokers have made no representations,promises or warranties concerning Lessee's ability to honor the Lease or Lessee's suitability to occupy the Premises;and(ii)it is Lessofs sole responsibility to investigate the financial capability and/or suitability of Lessee. 2.5. Lessor's Responsibility. Lessor is leasing the Premises in an"AS-IS"condition. Lessor takes no responsibility for the condition of the Premises or any repairs or maintenance required for the allowed use of the Premises by Lessee. Unless otherwise specified herein, Lessor shall not be responsible for any other repairs or improvements to the Premises. 2.6. Lessee's Responsibility.Lessee is leasing the Premises in an"AS-IS"condition.Lessee may repair and maintain the Premises at its own cost. 3. Term. 3.1. Term.The Commencement Date, Expiration Date,and Original Term of this Lease are as specified in Paragraph 1.3. Lessor and Lessee may mutually agree in writing, signed by both Parties, to terminate this Lease prior to the Expiration Date. 3.2. Delay In Possession.If Lessor is unable to deliver possession by the Commencement Dale,Lessor shall not be subject to any liability therefor, nor shall such failure affect the validity of this Lease or change the Expiration Date. Lessee shall not,however, be obligated to pay Rent or perform its other obligations until Lessor delivers possession of the Premises 3.3. Lessee Compliance.Lessor shall not be required to deliver possession of the Premises to Lessee until Lessee complies with its obligation to provide evidence of insurance (Paragraph 8). Pending delivery of such evidence,Lessee shall be required to perform all of its obligations under this Lease from and after the Commencement Date, including the payment of Rent, notwithstanding Lessor's election to withhold possession pending receipt of such evidence of insurance. Furthermore, if Lessee is required to perform any other conditions prior to or concurrent with the Commencement Date,the Commencement Data shall occur but Lessor may elect to withhold possession until such conditions are satisfied. 3.4. No Right To Holdover. Lessee has no right to retain possession of the Premises or any part thereof beyond the expiration or termination of this Lease. In the event that Lessee continues to occupy the Premises beyond the expiration or terrnination of the Lease,then Lessee shall become a tenant-at-sufferance only,and the Base Rent shall be increased to either 150%of the Base Rent applicable immediately preceding the expiration or termination of the Lease, or 150%of the market rental rate for the Premises,whichever is greater. Nothing contained herein shall be construed as consent by Lessor to any holding over by Lessee,and Lessee shall be responsible for all damages to Lessor caused by any such holdover(including consequential damages). 4. Rent. 4.1. Rent Defined.All monetary obligations of Lessee to Lessor under the terms of this Lease as set forth in Paragraph 1.4 herein are deemed to be Rent. 4.2. Payment. Lessee shall pay Lessor Rent on or before the day on which it is due,which is no later than the first day of each month.All Rent payments shall be made in the amounts stated in Sectiori above. Rent for any period during the Term of this Lease, which is for less than one full calendar month,shall be prorated based upon the actual number of days of said month.Payment of Rent shall be made to Lessor at: Orange County Sanitation District Attn:Angela Brandt Post Office Box 8127 Fountain Valley,CA 92728-8127 Lessor may,from time to time, designate in writing a different person or place to make payments. Acceptance of a payment which is less than the amount then due shall not be a waiver of Lessor's rights to the balance of such Rent, regardless of Lessofs endorsement of any check so stating. In the event that any check, draft, or other instrument of payment given by Lessee to Lessor is dishonored for any reason, Lessee agrees to pay to Lessor the sum of$25 in addition to any Late Charge, and Lessor, at its option, may require all future Rent be paid by cashier's check. Payments 1262100.1 will be applied first to accrued late charges and attorneys'fees, second to accrued interest,then to Base Rent,and any remaining amount to any other outstanding charges or costs. 4.3. Late Charge.Lessee acknowledges that late payment of Rent or other sums due will cause Lessor to incur costs, the exact amount of which will be difficult to ascertain. Accordingly, if any Rent payment or any other sum due from the Lessee is not received by Lessor within ten (10) days of the date on which it is due, Lessee shall pay to Lessor, in addition to the Rent due and any other amounts owing, the lesser of the maximum amount allowed by law or ten percent (10%of such overdue amount. In addition,Lessee shall pay Lessor any attomeys'fees or notice/process service fees incurred by Lessor by reason of Lessee's failure to pay Rent or other charges when due hereunder. In addition, all unpaid amounts shall accrue interest at the lesser of the maximum rate allowed by law or 10%per annum until paid. S. Use. 5.1. Use.Lessee shall use and occupy the Premises only for the Agreed Use,or any other legal use which is reasonably comparable to the Agreed Use,and for no other purpose.Lessee shall not cause or permit the Premises to be used in any way which (i) constitutes a violation of any law, ordinance, or governmental regulation or order regulating the manner of use by Lessee of the Premises (including, without limitation,any law ordinance,regulation or order relating to Hazardous Materials),(it)constitutes a nuisance or waste,or fill)increases the cost of any insurance relating to the Premises paid by Lessor. Lessee shall obtain,at its sole cost and expense,all governmental permits,licenses and authorizations of whatever nature required by any governmental agencies having jurisdiction over Lessee's use of the Premises. Further, Lessee, at its sole cost, will comply with all applicable governmental laws and regulations in connection with its operations within the City of Fountain Valley. Lessee will also comply with any and all reasonable rules and regulations promulgated by Lessor.No signage shall be installed on the Premises or within the City of Fountain Valley without receipt of the prior written approval of Lessor.Other than guide,signal and seeini dogs,Lessee shall not keep or allow in the Premises any pets,animals,birds,fish,or reptiles. 5.2. Hazardous Substances. (a) Reportable Uses Require Consent.The term"Hazardous Substance"as used in this Lease shall mean flammable items, explosives, radioactive materials, hazardous or toxic substances, material or waste or related materials, including any substances defined as or included in the definition of"hazardous substances", "hazardous wastes", "hazardous materials" or "toxic substances" now or subsequently regulated under any applicable federal, state or local laws or regulations, including without limitation petroleum-based products, hydrocarbons,gasoline, and/or crude oil, paints, solvents, lead, cyanide, DDT, acids, pesticides, ammonia compounds and other chemical products, asbestos, PCBs and similar compounds, by-products or fractions thereof, and including any different products and materials which are subsequently found to have adverse effects on the environment or the health and safety of person,and any product,substance,or waste whose presence, use, manufacture, disposal, transportation, or release, either by itself or in combination with other materials expected to be on the Premises, is either: (i)potentially injurious to the public health, safety or welfare, the environment or the Premises, (ii) regulated or monitored by any governmental authority, or(ill) a basis for potential liability of Lessor to any governmental agency or third party under any applicable statute or common law theory. Lessee shall not engage in any activity in or on the Premises which constitutes a Reportable Use of Hazardous Substances without the express prior written consent of Lessor and timely compliance (at Lessee's expense)with all applicable laws and regulations. "Reportable Use" shall mean (i) the installation or use of any above or below ground storage tank, (ill the generation, possession, storage, use, transportation, or disposal of a Hazardous Substance that requires a permit from,or with respect to which a report, notice, registration or business plan is required to be fled with,any governmental authority, and/or (ill)the presence at the Premises of a Hazardous Substance with respect to which any applicable laws and requires that a notice be given to persons entering or occupying the Premises or neighboring properties.Notwithstanding the foregoing,Lessee may use any ordinary and customary materials reasonably required to be used in the normal course of the Agreed Use, ordinary office supplies (copier toner, liquid paper, glue, etc.)and common household cleaning materials, so long as such use is in compliance with all applicable laws and regulations, is not a Reportable Use,and does not expose the Premises or neighboring property to any meaningful risk of contamination or damage or expose Lessor to any liability therefor. In addition, Lessor may condition its consent to any Reportable Use upon receiving such additional assurances as Lessor reasonably deems necessary to protect itself, the public, the Premises and/or the environment against damage, 1262100.1 contamination, injury and/or liability, including,but not limited to,the installation(and removal on or before the expiration or termination of the Lease) of protective modifications (such as concrete encasements). (b) Duty to Inform Lessor. If Lessee knows, or has reasonable cause to believe, that a Hazardous Substance has come to be located in,on,under or about the Premises,other than as previously consented to by Lessor, Lessee shall immediately give written notice of such fact to Lessor,and provide Lessor with a copy of any report, notice,claim or other documentation which it has concerning the presence of such Hazardous Substance. (c) Lessee Remedialion.Lessee shall not cause or permit any Hazardous Substance to be spilled or released in, on, under, or about the Premises (including through the plumbing or sanitary sewer system)and shall promptly,at Lessee's sole expense,comply with all applicable laws and regulations and take all investigatory and/or remedial action reasonably recommended,whether or not formally ordered or required,for the cleanup of any contamination of,and for the maintenance, security and/or monitoring of the Premises or neighboring properties,that was caused or materially contributed to by Lessee, or pertaining to or involving any Hazardous Substance brought onto the Premises during the term of this Lease,by or for Lessee,or any third party.The obligations contained in this Paragraph shall survive the expiration or termination of this Lease. (d) Lessee Indemnification. Lessee shall indemnify, defend and hold Lessor, its directors,officers,agents,employees,lenders and ground lessor,if any,hamiless from and against any and all loss of rents and/or damages, liabilities,judgments, claims, expenses, penalties, and attorneys'and consultants'fees arising out of or involving any Hazardous Substance brought onto the Premises by or for Lessee, or any third party (provided, however, that Lessee shall have no liability under this Lease with respect to underground migration of any Hazardous Substance under the Premises from adjacent properties not caused or contributed to by Lessee).Lessee's obligations shall include, but not be limited to,the effects of any contamination or injury to person, property or the environment created or suffered by Lessee,and the cost of investigation, removal,remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease. No termination, cancellation or release agreement entered into by Lessor and Lessee shall release Lessee from its obligations under this Lease with respect to Hazardous Substances, unless specifically so agreed by both Parties in writing at the time of such agreement. (a) Lessor Indemnification.Lessor and its successors and assigns shall indemnify, defend,reimburse and hold Lessee,its employees and lenders,harmless from and against any and all environmental damages, claims, and/or actions, including the cost of remediation,which result from Hazardous Substances which existed on the Premises prior to Lessee's occupancy or which are caused by the gross negligence or willful misconduct of Lessor, its agents or employees. Lessor's obligations,as and when required by the applicable laws and regulations,shall include,but not be limited to,the cost of investigation, removal,remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease. (f) Investigations and Remedialions.Lessor shall retain the responsibility and pay for any investigations or remediation measures required by governmental entities having jurisdiction with respect to the existence of Hazardous Substances on the Premises prior to Lessee's occupancy, unless such remediation measure is required as a result of Lessee's use(including"Alterations",as defined in paragraph 6.3(a) below)of the Premises, in which event Lessee shall be responsible for such payment.Lessee shall cooperate fully in any such activities at the request of Lessor,including allowing Lessor and Lessors agents to have reasonable access to the Premises at reasonable times in order to carry out Lessors investigative and remedial responsibilities. 5.3. Lessee's Compliance with Applicable Laws and Regulations. Except as otherwise provided in this Lease,Lessee shall,at Lessee's sole expense,fully,diligently and in a timely manner,materially comply with federal, state, and local laws, regulations, and ordinances ("Applicable Requirements"), the requirements of any applicable fire insurance underwriter or rating bureau, and the recommendations of Lessors engineers and/or consultants,without regard to whether such Applicable Requirements are now in effect or become effective after the Commencement Dale. Lessee shall,within 10 days after receipt of Lessors written request, provide Lessor with copies of all permits and other documents, and other information evidencing Lessee's compliance with any Applicable Requirements specified by Lessor, and shall immediately upon receipt, notify Lessor in writing (with copies of any documents involved)of any threatened or actual claim, notice, citation, warning,complaint or report pertaining to or involving the failure of Lessee or the Premises to comply with any Applicable Requirements.Likewise,Lessee shall immediately give written notice to Lessor 1262100.1 of: (i)any water damage to the Premises and any suspected seepage, pooling,dampness or other condition conducive to the production of mold;or(ii)any mustiness or other odors that might indicate the presence of mold in the Premises. 5.4. Inspection; Compliance. Lessor and Lessors agents and/or consultants shall have the right to enter into and upon the Premises at any time, in the case of an emergency, and otherwise at reasonable times after reasonable notice,for the purpose of inspecting the condition of the Premises and for verifying compliance by Lessee with this Lease. The cost of any such inspections shall be paid by Lessor. In the event an inspection is required as a result of a violation of Applicable Requirements, or a Hazardous Substance on, in, under, or upon the Premises is found to exist or be imminent, or the inspection is requested or ordered by a governmental authority, Lessee shall upon written request by Lessor, reimburse Lessor for the cost of such inspection, so long as such inspection is reasonably related to the violation or contamination. In addition, Lessee shall provide copies of all relevant material safety data sheets(MSDS)to Lessor within 10 days of the receipt of a written request therefor. 6. Maintenance; Repairs,Utility Installations;Trade Fixtures and Alterations. 6.1. Lessee's Obligations. (a) Unless otherwise expressly provided for herein, Lessee shall be responsible for utility costs for electricity and water and shall provide its own security for the Premises, and, at Lessee's sole expense,keep the Premises,Utility Installations(intended for Lessee's exclusive use, no matter where located), and Alterations in good order, condition and repair(whether or not the portion of the Premises requiring repairs, or the means of repairing the same, are reasonably or readily accessible to Lessee, and whether or not the need for such repairs occurs as a result of Lessee's use or any prior use), including, but not limited to, all equipment or facilities, such as plumbing, HVAC equipment, electrical, lighting facilities, fire protection system, fixtures, walls (interior and exterior), foundations, ceilings, roofs, roof drainage systems, floors, windows, doors, plate glass,skylights,landscaping,driveways, parking lots,fences,retaining walls,signs,sidewalks and parkways located in,on,or adjacent to the Premises.Lessee,in keeping the Premises in good order, condition and repair, shall exercise and perform good maintenance practices, specifically including the procurement and maintenance of the service contracts required by Paragraph 6.1(b) below. Lessee's obligations shall include restorations, replacements or renewals when necessary to keep the Premises and all improvements thereon or a part thereof in good order,condition and state of repair. Lessee shall, during the term of this Lease, keep the exterior appearance of the Building in a first-class condition (including, e.g. graffiti removal) consistent with the exterior appearance of other similar facilities of comparable age and size in the vicinity, including, when necessary,the exterior repainting of the Building.Lessee may,upon written consent of Lessor,make changes and/or alternations to the interior and exterior portions of the Building consistent with all Applicable Requirements. Lessee may return the Premises in the same condition as received. Lessee is not responsible for any structural failure or subfloor plumbing failure if failure is related solely to age and/or circumstances entirely outside of Lessee's control. (b) Service Contracts. Lessee shall, at Lessee's sole expense, procure and maintain contracts, with copies to Lessor, with contractors specializing and experienced in the maintenance of the following equipment and improvements, if any, if and when installed on the Premises: (i) HVAC equipment, (ii) fire extinguishing systems, including fire alarm and/or smoke detection, (III) landscaping and irrigation systems, (iv) roof covering and drains, and (v) clarifiers. However, Lessor reserves the right, upon written notice to Lessee,to procure and maintain any or all of such service contracts,and Lessee shall reimburse Lessor,upon demand,for the cost thereof. (0) Failure to Perform. If Lessee fails to perform Lessee's obligations under this Paragraph 6.1, Lessor may enter upon the Premises after 10 days' prior written notice to Lessee (except in the case of an emergency, in which case no notice shall be required), perform such obligations on Lessee's behalf,and put the Premises in good order,condition and repair,and Lessee shall promptly pay to Lessor a sum equal to 115%of the cost thereof. 6.2. Lessors Obligations.Other than maintenance of landscaping or as expressly provided herein, it is intended by the Parties hereto that Lessor have no obligation or responsibility, in any manner whatsoever,to repair and maintain the Premises, or the equipment therein,all of which obligations are intended to be that of the Lessee. It is the intention of the Parties that the terms of this Lease govern the respective obligations of the Parties as to maintenance and repair of the Premises, and 1262100.1 they expressly waive the benefit of any statute now or hereafter in effect to the extent it is inconsistent with the terms of this Lease. 6.3. Utility Installations;Trade Fixtures;Alterations. (a) Definitions. The term "Utility Installations" refers to all floor and window coverings, air and/or vacuum lines, power panels, electrical distribution,security and fire protection systems, communication cabling, lighting fixtures, HVAC equipment,plumbing,and fencing in or on the Premises. The term "Trade Fixtures"shall mean Lessee's machinery and equipment that can be removed without doing material damage to the Premises.The term"Alterations"shall mean any modification of the improvements, other than Utility Installations or Trade Fixtures, whether by addition or deletion. "Lessee Owned Alterations and/or Utility Installations" are defined as Alterations and/or Utility Installations made by Lessee that are not yet owned by Lessor pursuant to Paragraph 6.4(a). (b) Consent. Lessee shall not make any Alterations or Utility Installations to the Premises without Lessor's prior written consent. Lessee may, however, make non-structural Alterations or Utility Installations to the interior of the Premises (excluding the roof) without such consent, but upon notice to Lessor, as long as they are not visible from the outside,do not involve puncturing, relocating or removing the roof or any existing walls, will not affect the electrical, plumbing, HVAC, and/or life safety systems, and the cumulative cost thereof during this Lease as extended does not exceed a sum equal to 3 month's Base Rent in the aggregate or a sum equal to one month's Base Rent in any one year. Notwithstanding the foregoing, Lessee shall not make or permit any roof penetrations and/or install anything on the roof without the prior written approval of Lessor. Lessor may, as a precondition to granting such approval, require Lessee to utilize a contractor chosen and/or approved by Lessor. Any Alterations or Utility Installations that Lessee shall desire to make and which require the consent of the Lessor shall be presented to Lessor in written form with detailed plans.Consent shall be deemed conditioned upon Lessee's:(i)acquiring all applicable governmental permits, (ii)furnishing Lessor with copies of both the permits and the plans and specifications prior to commencement of the work,and(III)compliance with all conditions of said permits and other Applicable Requirements in a prompt and expeditious manner. Any Alterations or Utility Installations shall be performed in a workmanlike manner with good and sufficient materials. Lessee shall promptly upon completion furnish Lessor with as-built plans and specifications. For work which costs an amount in excess of one month's Base Rent, Lessor may condition its consent upon Lessee providing a lien and completion bond in an amount equal to 150% of the estimated cost of such Alteration or Utility Installation. (c) Liens; Bonds. Lessee shall not permit to be placed against the Premises, or any part of the Premises, any mechanics', materialmen's, contractors, subcontractors' or other liens. Lessee shall indemnify, defend (with counsel acceptable to Lessor) and hold Lessor harmless from all liability for any and all liens, claims and demands, together with the costs of defense and reasonable attorneys'fees related to same.Lessor reserves the right,at any time and from time to time,to post and maintain on the Premises,any portion thereof or on the improvements on the Premises any notices of non-responsibility or other notice as may be desirable to protect Lessor against liability. In addition to and not in limitation of Lessor's other rights and remedies under this Lease, should Lessee fail, within ten (10) days of a written request from Lessor, to discharge any lien or claim related to Lessee's use of the Premises,or to indemnify,hold harmless and defend Lessor from and against any loss, damage, injury, liability or claim arising out of Lessee's use of the Premises as provided herein,then Lessor, at its option, may elect to pay any lien, claim, loss, demand, injury, liability or damages, or settle or discharge any action or satisfy any judgment and all costs, expenses and attorneys' fees incurred in doing so shall be paid to Lessor by Lessee upon written demand, together with interest thereon at the rate of ten percent (10%)per annum(but in no event more than the maximum interest rate permitted by law)from the date incurred or paid through and including the date of payment.If Lessee shall contest the validity of any such lien,claim or demand,then Lessee shall,at its sole expense defend and protect itself, Lessor and the Premises against the same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof.If Lessor shall require,Lessee shall furnish a surety bond in an amount equal to 150%of the amount of such contested lien, claim or demand, indemnifying Lessor against liability for the same. If Lessor elects to participate in any such action, Lessee shall pay Lessors attorneys'fees and costs. 1262100.1 6.4. Ownership; Removal;Surrender;and Restoration. (a) Ownership.All Alterations and Utility Installations made by Lessee shall be the property of Lessee, but considered a part of the Premises.Lessor may,at any time,elect in writing to be the owner of all or any specified part of the Lessee Owned Alterations and Utility Installations. Unless otherwise instructed per paragraph 6.4(b) hereof, all Lessee Owned Alterations and Utility Installations shall,at the expiration or termination of this Lease,become the property of Lessor and be surrendered by Lessee with the Premises. (b) Removal. By written notice to Lessee from Lessor, no earlier than 90 days and not later than 30 days prior to the Expiration Date of the Lease, Lessor may require the removal at any time of all or any part of any Lessee Owned Alterations or Utility Installations made without Lessor's consent as required herein. (c) Surrender; Restoration. Lessee shall surrender the Premises by the Expiration Date or any earlier termination date,with all of the improvements, parts and surfaces thereof broom clean and free of debris,and in good operating order,condition and state of repair,ordinary wear and tear excepted."Ordinary wear and tear"shall not include any damage or deterioration that would have been prevented by good maintenance practice. Lessee shall repair any damage occasioned by the installation, maintenance or removal of Trade Fixtures, Lessee owned Alterations and/or Utility Installations,furnishings,and equipment as well as the removal of any storage tank installed by or for Lessee. Lessee shall completely remove from the Premises any and all Hazardous Substances brought onto the Premises by or for Lessee,or any third party(except Hazardous Substances which were deposited via underground migration from areas outside of the Premises)even if such removal would require Lessee to perform or pay for work that exceeds statutory requirements.Trade Fixtures shall remain the property of Lessee and shall be removed by Lessee.Any personal property of Lessee not removed on or before the Expiration Date or any earlier termination date shall be deemed to have been abandoned by Lessee and may be disposed of or retained by Lessor as Lessor may desire. The failure by Lessee to timely vacate the Premises pursuant to this Paragraph 6.4(c)without the express written consent of Lessor shall constitute a holdover under the provisions of Paragraph 3.5. In the event Lessee makes any changes and/or alterations to the interior or exterior portions of the Building consistent with Applicable Requirements as provided in Paragraphs 6.1(a) and 6.3 (b), Lessee shall not be required to restore the Building to the original configuration upon the expiration or termination of this Lease. 7. Insurance;Indemnity. 7A. Payment For Insurance.Except as expressly provided herein, Lessee shall provide and maintain at its own expense during the term of this Lease the following insurance covering its operations and activities under this Lease. Such insurance shall be provided with insurers licensed to do business in the State of California,with a rating of at least WWI,"according to the latest Best's Key Rating Guide. Evidence of such insurance shall be delivered to Lessor on or before the effective date of this Lease. The Certificate of Insurance shall specifically identify this Lease and shall contain express conditions that Lessor is to be given at least thirty(30)days advance written notice by the insurer,of any material modification in ortennination of insurance.Such insurance,shall be primary to and not contributing with any other insurance maintained by Lessor, and shall name the Lessor, and its directors,officers,agents and employees as additional insureds.Premiums for policy periods commencing prior to or extending beyond the Lease term shall be prorated to correspond to the Lease term. 7.2. Liability Insurance. (a)Carried by Lessee.Lessee shall obtain and provide during the Term of this Lease the following insurance: (i) General Liability Insurance.Comprehensive general liability insurance covering the Premises in contractual, broad form property damage, and personal injury, with a combined single limit of not less than two million dollars ($2,000,000.00) per occurrence.Lessee shall be responsible for the costto obtain and provide General Liability Insurance coverage for the Premises. ("GL Insurance Coverage Cost"). The GL Insurance Coverage Cost stated herein does not include Lessee's responsibility for obtaining insurance coverage for Lessee's operations and activities, including but not limited to,Lessee's Utility Installations or Trade Fixtures.Lessee shall be solely responsible for all costs to obtain and provide insurance for Lessee's operations and activities. 1262100.1 till Workers Compensation Insurance.Workers compensation insurance in an amount and form meeting all applicable requirements of the California Labor Code, covering all persons providing services by or on behalf of Lessee and all risks to such persons with a minimum limit of$1,000,000.00. (III) Fire and Extended Coverage Insurance.A standard form all-risk policy for the actual cash value covering fire and extended coverage,theft, burglary,vandalism, malicious mischief, sprinkler leakage and other perils of direct physical loss or damage insuring the personal property,trade fixtures, equipment, and improvements of Lessee. lb) Carried by Lessor. Lessor shall pay any amount exceeding the GL Insurance Coverage Cost for the Premises up to but not exceeding three thousand dollars($3,000.00).Lessor shall not be responsible for paying any liability insurance coverage for Lessee's operations and activities, including, but not limited to Utility Installations and Trade Fixtures. Lessor may elect to maintain separate liability insurance, in addition to, and not in lieu of, the insurance required to be maintained by Lessee. Lessee shall not be named as an additional insured therein. (c)Proof of Coverage:The Vendor shall furnish OCSD 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 OCSD before work commences. OCSD reserves the right to require complete, certified copies of all required insurance policies, including endorsements,affecting 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 or other equivalent Certificate of Insurance form. • Additional Insured (ISO Form)CG2010 1185 or 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 OCSD, and OCSD may reject alternatives that provide different or less coverage to OCSD. • Additional Insured Submit endorsement provided by carrier for OCSD approval. • Waiver of Subrogation State Compensation Insurance Fund Endorsement No. 2570 or equivalent. • Cancellation Notice State Compensation Insurance Fund Endorsement No. 2065 or equivalent. 7.3. Failure to Maintain Insurance.Failure by Lessee to procure or maintain required insurance as specified in Paragraph 7.2 above shall constitute an event of default, upon which Lessor may immediately terminate this Lease.Lessee's operations shall be subject to suspension by Lessor during any period Lessee fails to maintain required insurance in full force and effect. 7.4. Risk of Loss. Lessor shall not be liable for any injury to Lessee's business or loss of income therefrom or for injury to any person or for any damage to personal property, good, wares, or merchandise sustained by Lessee or others that are caused by any defects in said Premises,crony service facilities or due to the happening of an accident,including any damage caused by water,wind storm, or by any gas, steam, electrical wiring, sprinkler system, plumbing, heating or conditioning apparatus,or acts or omissions of co-Lessees or other occupants of the Premises,if any,or hereafter occurring therein or due to any part or appurtenance thereof,including any and all furniture,fixtures, and equipment of Lessee becoming out of repair,or from any act or omission of Lessee. 7.5. Waiver of Subrogation.Lessee hereby releases Lessor from liability and waives all right of recovery against Lessor for any loss in or about the Premises from perils insured against Lessor under its fire, property,or liability insurance contracts, including any all risk endorsements thereof,whether due to negligence or any other cause,provided that this Paragraph shall be inapplicable if it would have the effect,but only to the extent it would have the effect,of invalidating any insurance coverage of Lessor or Lessee. Nothing herein shall relieve Lessee of its obligation to request and procure,to the extent 1262100.1 available on a commercially reasonable basis,the necessary endorsements required to validly waive subrogation in accordance with this Paragraph. Lessee shall, at the request of Lessor, execute and deliver to Lessor a Waiver of Subrogation in the form and content as reasonably required by Lessor's insurance carrier. To the extent Lessee fails to maintain the insurance required under the terms of this Lease,such failure shall be a defense to any claim asserted by Lessee against Lessor by reason of any loss sustained by Lessee due to circumstances that would have been covered had such required insurance been maintained. 7.6. Lessor's Substitute Performance. If Lessee fails to procure, maintain and pay for, at the times and for the durations specified in this Lease, any insurance required by this Lease or fails to carry insurance required by law or governmental regulation, Lessor, at any time or from time to time and without notice, may,at its option, procure such insurance and pay the premiums therefore, in which event Lessee shall repay all sums so paid by Lessor, together with interest thereon as provided in the Lease,and any costs or expenses incurred by Lessor in connection therewith within ten(10)days following Lessors written demand to Lessee for such payment. 7.7. Indemnity.Lessee,as a material part of the consideration to be rendered to Lessor, hereby agrees that it will defend (with counsel acceptable to Lessor), indemnify, and hold harmless Lessor and all of its directors, officers, employees, agents, and independent contractors thereof from any loss, damage, injury, accident, casualty, liability, claim, cost or expense (including, but not limited to, reasonable attorneys'fees)of any kind or character to any person or property(collectively,"Claims") arising from or related to Lessee's use and occupancy of the Premises, the conduct of Lessee's business, and/or any act or omission of Lessee, its employees, agents, contractors, or invitees. Lessee shall not be liable for such Claims to the extent and in the proportion that the same is ultimately determined to be attributable to the sole gross negligence or intentional misconduct of Lessor. Lessee hereby assumes all risk of damage to property or injury to person in or about the Premises from any cause, and Lessee hereby waives all claims in respect thereof against Lessor. Lessor shall not be liable for any loss or theft of any property on the Premises. The indemnity obligations contained herein under this Paragraph shall survive the expiration or termination of this Lease. 7.8. Exemption of Lessor and its Agents from Liability. Notwithstanding the sole gross negligence, intentional misconduct or breach of this Lease by Lessor or its agents,neither Lessor nor its directors, officers,employees,agents,and or independent contractors shall be liable under any circumstances for(1) injury or damage to the person or goods, wares, merchandise or other property of Lessee, Lessee's employees,contractors,invitees,customers,or any other person in or about the Premises, whether such damage or injury is caused by or results from fire,steam,electricity,gas,water or rain, indoor air quality, the presence of mold or from the breakage, leakage,obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC or lighting fixtures, or from any other cause,whether the said injury or damage results from conditions arising upon the Premises or upon other portions of the building of which the Premises are a part,or from other sources or places, (ii) any damages arising from any act or neglect of any other Lessee of Lessor or from the failure of Lessor or its agents to enforce the provisions of any other lease,or(III)injury to Lessee's business or for any loss of income or profit therefrom. Instead,it is intended that Lessee's sole recourse in the event of such damages or injury be to file a claim on the insurance policy(ies)that Lessee is required to maintain pursuant to the provisions of Paragraph 8 herein. 8. Damage or Destruction. 8.1. Insured Loss. In the event the Premises shall be totally or partially destroyed by a risk covered by insurance required by this Lease, Lessor shall be entitled to make the loss adjustment with the insurance company insuring the loss and receive payment of the proceeds of insurance. 8.2. Damage.If the damage to the Premises cannot lawfully and reasonably be repaired within thirty(30) days after the date of damage,this Lease may be terminated by written notice of either Party. If the Premises can reasonably be repaired within the thirty (30) day period, or if this Lease is not terminated in accordance with this provision, Lessee may opt to restore the Premises. In the event Lessee chooses to restore the Premises,said insurance proceeds,if any,shall be held by Lessor for the benefit of Lessee and shall be disbursed in installments as construction progresses for payment of the costs of restoration or reconstruction,upon satisfactory performance of the work required,and release of mechanics liens by all persons furnishing labor and materials thereon. If the insurance proceeds are insufficient to pay the actual costs of restoration or reconstruction,Lessee shall deposit the amount of the deficiency with Lessor upon demand by Lessor, and said sums shall be held for payment of said costs and disbursed in the manner heretofore provided. 1262100.1 8.3. Lessee Restoration.If Lessee elects to restore the Premises,written plans,specifications, and construction cost estimates for the restoration shall be prepared by Lessee and forwarded to Lessor for approval prior to the performance of any work.Said documents shall be prepared and submitted in a timely manner following adjustment of the loss and receipt of the proceeds of insurance by Lessor. The required construction shall be performed by Lessee and/or licensed and bonded contrector(s),who shall be required to carry comprehensive liability and property damage insurance, workers compensation insurance, and standard fire and extended coverage insurance, with vandalism and malicious mischief endorsements,during the period of construction,in amounts equal to insurance limits required herein,or in greater amounts if otherwise reasonably required by Lessor. Said construction shall be commenced promptly following approval by Lessor, the issuance of applicable permits and posting of the construction site by Lessor with notice of non-responsibility, and shall be diligently prosecuted to completion.All work shall be performed in accordance with the approved plans and specifications, unless changes are approved in writing, in advance, by Lessor. Lessee agrees that Lessor may have on the site at any time during the construction period, an inspector who shall have the right to access the Premises and the work occurring thereon. Lessee, at the commencement of the construction work,shall notify Lessor in writing of the identity, place of business, and telephone number or responsible person(s) in charge of construction. Lessee shall ensure that all construction shall be performed in a good and workmanlike manner.Upon completion of the restoration, Lessee shall immediately record a notice of completion with the Orange County Recorder. In the event Lessee makes any changes and/or alterations to the interior or exterior portions of the Building as provided in this Paragraph 8.3,Lessee shall not be required to restore the Building to the original configuration upon the expiration or termination of this Lease. 8.4. No Insurance Coverage. In the event the Premises shall be totally or partially destroyed by a risk for which insurance coverage is not required or provided herein, Lessor, in its sole discretion, may either restore the Premises or terminate this Lease by providing notice to Lessee. 8.5. Insurance Proceeds. If Lessee elects not to restore the Premises, the insurance proceeds shall be first used to demolish and clearthe Premises.Thereafter,following Lessor's compensation for any amounts remaining owing to Lessor pursuant to this Lease, Lessee shall be entitled to the remainder of the insurance proceeds. 8.6. No Obligation of Lessor. Under no circumstances shall Lessor have any obligation to restore or reconstruct the Premises. In the event Lessor elects to repair any damage or destruction,such repair shall be to the Premises,but not Lessee's trade Fixtures or Lessee Owned Altemations and Utility Installations. 9. Real Property Taxes. 9.1. Definition.As used herein, the term "Real Property Taxes"shall include any form of assessment, including,but not limited to,real estate,general,special,ordinary or extraordinary,or rental levy or tax,any improvement bond,and/or license fee imposed upon or levied against any legal or equitable interest in the Premises by any authority having the direct or indirect power to tax and where the funds are generated with reference to the Building address and where the proceeds so generated are to be applied by the city,county or other local taxing authority of a jurisdiction within which the Premises are located. Real Property Taxes shall also include any tax, fee, levy, assessment or charge, or any increase therein: (i)imposed by reason of events occurring during the term of this Lease, including but not limited to, a change in the ownership of the Premises, and (if) levied or assessed on machinery or equipment (other than "Personal Property Taxes" as described in Paragraph 10.3 below). 9.2. Payment of Real Property Taxes.Lessor shall pay any and all Real Property Tax installments. 9.3. Personal Property Taxes. Lessee shall be solely responsible for paying, prior to delinquency, all taxes assessed against and levied upon Lessee Owned Alterations, Utility Installations, Trade Fixtures,furnishings,equipment and all personal property of Lessee.When possible, Lessee shall cause its Lessee Owned Alterations and Utility Installations,Trade Fixtures,furnishings,equipment and all other personal property to be assessed and billed separately from the real property of Lessor. 10. Utilities and Services.Lessee shall be responsible for and pay all utilities for the Premises during the use and occupancy of the Premises by Lessee during the Term of the Lease. Lessee's responsibility to pay all utilities include,but are not limited to,water,gas,heat,light,power,telephone,trash disposal and other utilities and services supplied to the Premises,together with any taxes thereon.If any such services are not separately metered or billed to Lessee,Lessee shall pay a reasonable proportion,to be determined by Lessor,of all charges jointly metered or billed. 1262100.1 B9606.2 it. Assignment and Subletting.Lessee is prohibited from assigning this Lease or subletting the Property. 12. Default;Breach; Remedies. 12.1. Default;Breach.Failure by the Lessee to comply with or perform any of Lessee's obligations under the terms,covenants,or conditions of this Lease shall constitute a"Default."Lessee is in"Breach" of this Lease when Lessee fails to cure any such Default within any applicable period of time specified herein or within the applicable grace period,if any.The following shall constitute an event of Default and Breach by Lessee: (a) Lessee's failure(i)to make payments under this Lease,including Rent,when due, or(it)to provide reasonable evidence of insurance or surety bond.THE ACCEPTANCE BY LESSOR OF A PARTIAL PAYMENT OF RENT SHALL NOT CONSTITUTE A WAIVER OF ANY OF LESSOR'S RIGHTS, INCLUDING LESSOR'S RIGHT TO RECOVER POSSESSION OF THE PREMISES. (b) Lessee's failure to operate in the manner required by this Lease, where such failure continues for more than ten(10)days following receipt of written notice from Lessor to cored the condition therein specified. (c) Lessor's failure to maintain the Premises and Improvements in the state of repair required under this Lease, and in a clean, sanitary, safe, and satisfactory condition, where such failure continues for more than ten(10)days following receipt of written notice from Lessor to correct the conditions therein specified. Where fulfillment of said maintenance obligation requires activity over a period of time and Lessee shall have immediately, following receipt of notice, commenced whatever action may be required to cure the particular Default and continued such performance diligently,said time may be waived in writing in the manner and to the extent determined by Lessor. In the event Lessee fails to correct any maintenance or repair deficiency within the prescribed time, Lessor may, at its option,exercise its rights of entry and repair and/or terminate this Lease. (d) Lessee's failure to keep, perform, and observe any other promises, covenants, conditions, and agreements set forth in this Lease,where such failure continues for more than ten (10)days after receipt of written notice from Lessor to correct the condition therein specified.Where fulfillment of any maintenance or repair obligation requires activity over a period of time and Lessee shall have immediately,following receipt of notice, commenced whatever may be required to cure the particular Default and continued such performance diligently,said time may be waived in writing in the manner and to the extent determined by Lessor. (a) The fling of a voluntary petition in bankruptcy by Lessee; the adjudication of Lessee as bankrupt; the appointment of a receiver or trustee of Lessee's assets; the making of a general assignment for the benefit of creditors; a petition or answer seeking reorganization of Lessee under any Federal reorganization act;the occurrence of any act which operates to deprive Lessee permanently of the rights, powers, and privileges necessary for the proper conduct of its operations under this Lease;the levy of any attachment or execution which substantially interferes with Lessee's operations under this Lease and which is not vacated,dismisses,stayed,or set aside within a period of sixty(60)days;or a reasonable determination by Lessor that Lessee is insolvent. (f) The failure to submit written plans for the Improvements on or before the times designated in this Lease for submission thereof. (g) Lessee's abandonment of the Premises prior to the expiration or termination of the Lease without prior notice or agreement of Lessor. (h) The discovery that any financial statement of Lessee or any information or representation given to Lessor was materially false. 12.2. Remedies.If Lessee fails to comply with or perform any of Lessee's obligations under the terms, covenants,or conditions of this Lease, within 10 days after written notice from Lessor (or in case of an emergency, without notice), Lessor may, at its option, perform such duty or obligation on Lessee's behalf, including but not limited to the obtaining of reasonably required bonds, insurance policies, or governmental licenses, permits or approvals. Upon written demand or presentation of an invoice, Lessee shall pay to Lessor an amount equal to 115% of the costs and expenses incurred by Lessor in such performance. In the event of a Breach, Lessor may, with or without further notice or 1262100.1 demand, and without limiting Lessor in the exercise of any right or remedy which Lessor may have by reason of such Breach: (a) Terminate Lessee's right to possession of the Premises by any lawful means, in which case this Lease shall terminate on the date specified in a notice of termination, Lessee shall immediately surrender possession to Lessor,all rights of Lessee under this Lease and in and to the Premises shall expire and terminate, and Lessee shall remain liable for all obligations under this Lease arising up to the date of such termination;or (b) If termination of this Lease is obtained through the provisional remedy of unlawful detainer, Lessor shall have the right to recover in such proceeding any unpaid Rent and damages as are recoverable therein, or Lessor may reserve the right to recover all or any part thereof in a separate suit. If a notice and grace period required under Paragraph 12.1 was not previously given, a notice to pay rent or quit,or to perform or quit given to Lessee under the unlawful detainer statute shall also constitute the notice required by Paragraph 12.1.In such case,the applicable grace period required by Paragraph 12.1 and the unlawful detainer statute shall run concurrently,and the failure of Lessee to cure the Default within the greater of the two such grace periods shall constitute both an unlawful detainer and a Breach of this Lease entitling Lessor to the remedies provided for in this Lease and/or by said statute. (c) Without terminating this Lease, declare immediately due and payable all Rent, Taxes, and other amounts due and coming due under this Lease for the entire remaining Term hereof, together with all other amounts previously due, at once; provided, however, that such payment shall not be deemed a penalty or liquidated damages but shall merely constitute payment in advance of rent for the remainder of said term;or (d) Allow the Premises to remain unoccupied and collect rent from Lessee as it comes due;or (a) Pursue such other remedies as are available at law or equity. The expiration or termination of this Lease and/or the termination of Lessee's right to possession shall not relieve Lessee from liability under any indemnity provisions of this Lease as to matters occurring or accruing during the Term hereof or by reason of Lessee's occupancy of the Premises. 12.3. Breach by Lessor. (a) Notice of Breach. Lessor shall not be deemed in Breach of this Lease unless Lessor fails,within a reasonable time,to perform an obligation required to be performed by Lessor. A reasonable time as used in this Paragraph shall in no event be less than 30 days after receipt by Lessor of written notice specifying any act or obligation that Lessor has failed to perform; provided, however, that if the nature of Lessor's obligation is such that more than 30 days are reasonably required for its performance,then Lessor shall not be in breach if performance is commenced within such 30 day period and thereafter diligently pursued to completion. (b) Performance by Lessee on Behalf of Lessor. In the event that Lessor fails to cure said breach within 30 days after receipt of said notice,or if having commenced said cure,Lessor fails to diligently pursue it to completion,then Lessee may elect to cure said breach at Lessee's expense and offset from Rent the actual and reasonable cost to perform such cure; provided, however, that such offset shall not exceed an amount equal to the greater of one month's Base Rent, reserving Lessee's fight to seek reimbursement from Lessor for any such expense in excess of such offset. Lessee shall document the cost of said cure and supply said documentation to Lessor. 13. Condemnation. 13.1. Total Taking. If, after the execution of this Lease and prior to the expiration of the term hereof,the whole of the Leased Premises shall be taken under power of eminent domain or condemnation by any public or private authority,or conveyed by Lessor to said authority in lieu of such taking,then this Lease and the term hereof shall cease and terminate as of the date when possession of the Leased Premises shall be taken by the taking authority and any unearned rent or other charges, if any, paid in advance, shall be refunded to Lessee. 13.2. Partial Taking.g,after the execution of this Lease and prior to the expiration of the term hereof, any public or private authority shall, under the power of eminent domain or 1262100.1 condemnation,take,or Lessor shall convey to said authority in lieu of such taking,property which results in a reduction by fifteen (15%) percent or more of the area in the Leased Premises, or of a portion of the Leased Premises that substantially interrupts or substantially obstructs the conducting of business on the Leased Premises;then Lessee may,at its election,terminate this Lease by giving Lessor notice of the exercise of Lessee's election within thirty(30)days after Lessee shall receive notice of such taking. In the event of termination by Lessee,this Lease and the Term hereof shall cease and terminate as of the date when possession shall be taken by the appropnate authority of that portion of the Entire Premises that results in one of the above takings, and any unearned rent or other charges, if any, paid in advance by Lessee shall be refunded to Lessee. 13.3. Restoration.In the event of a taking,Lessor and Lessee may terminate the Lease. 13.4. The Award.All compensation awarded for any taking,whether for the whole or a portion of the Leased Premises,shall be the sole property of the Lessor whether such compensation shall be awarded for diminution in the value of, or loss of,the leasehold or for diminution in the value of,or loss of,the fee in the Leased Premises,or otherwise.The Lessee hereby assigns to Lessor all of Lessee's right and title to and interest in any and all such compensation. However, the Lessor shall not be entitled to and Lessee shall have the sole right to make its independent claim for and retain any portion of any award made by the appropriating authority directly to Lessee for loss of business, or damage to or depreciation of, and cost of removal of fixtures, personality and improvements installed in the Leased Premises by, or at the expense of Lessee, and to any other award made by the appropriating authority directly to Lessee. 13.5. Release. In the event of any termination of this Lease as the result of the provisions of this Paragraph concerning Condemnation, the Parties, effective as of such termination, shall be released,each to the other,from all liability and obligations thereafter arising under this Lease. 14. No Relocation Benefits or Loss of Goodwill from Lessor.Lessee expressly waives any and all relocation assistance, relocation benefits, or compensation for loss of goodwill, known or unknown, to which it is or might be entitled upon the expiration or termination of this Lease or sublease, including the provisions of California Civil Code Section 1542. In no event will Lessor be obligated to pay any costs or charges related to costs, expenses,damages, or other charges Lessee might incur as a result of its move to or from the Premises, securing new facilities, or maintaining customer relations. 15. Severablllty.Whenever possible, each provision of this Lease shall be interpreted in such a manner as to be effective and valid under applicable law,but if any provision of this Lease shall be invalid under the applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity,without invalidating the reminder of that provision,or the remaining provisions of this Lease. 16. Days. Unless otherwise specifically indicated to the contrary, the word "days" as used in this Lease shall mean and refer to calendar days. 17. Limitation on Liability.The obligations of Lessor under this Lease shall not constitute personal obligations of Lessor or its directors,officers,employees,or agents,and Lessee shall look to the Premises,and to no other assets of Lessor for the satisfaction of any liability of Lessor with respect to this Lease,and shall not seek recourse against Lessors directors,officers,emplogyees,agents,or any of their personal assets for such satisfaction. 18. Time of Essence.Time is of the essence with respect to the performance of all obligations to be performed or observed by the Parties under this Lease. 19. No Prior or Other Agreements.This Lease contains all agreements between the Parties with respect to any matter mentioned herein,and no other prior or contemporaneous agreement or understanding shall be effective. 20. Notices.All notices or other communications required or permitted hereunder shall be in writing,and shall be personally delivered or sent by registered or certified mail, postage prepaid, return receipt requested, delivered or sent by electronic transmission, and shall be deemed received upon the earlier of(1)the date of delivery to the address of the person to receive such notice if delivered personally or by messenger or overnight courier; (ii)three (3) 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 forty-eight (48) hours by letter mailed or delivered. Notices or other communications shall be addressed as follows: 1262100.1 To Lessor: Orange County Sanitation District Attn:Angela Brandt Post Office Box 8127 Fountain Valley,CA 92728-8127 To Lessee: The Dickler Corporation chat Chefs Toys Attn: Steve Dickler, President 18430 Pacific Street Fountain Valley,CA 92708 Either party may, by written notice to the other, designate a different address, which shall be substituted for that specified above. 21. waivers. (a)No waiver by Lessor of the Default or Breach of any term,covenant or condition hereof by Lessee, shall be deemed a waiver of any other term, covenant or condition hereof, or of any subsequent Default or Breach by Lessee of the same or of any other term, covenant or condition hereof. Lessors consent to, or approval of,any act shall not be deemed to render unnecessary the obtaining of Lessors consent to, or approval of, any subsequent or similar act by Lessee, or be construed as the basis of an estoppel to enforce the provision or provisions of this Lease requiring such consent. (b)The acceptance of Rent,or any portion thereof,by Lessor shall not be a waiver of any Default or Breach by Lessee.Any payment by Lessee may be accepted by Lessor on account of moneys or damages due Lessor,notwithstanding any qualifying statements or conditions made by Lessee in connection therewith, which such statements and/or conditions shall be of no force or effect whatsoever unless specifically agreed to in writing by Lessor at or before the time of deposit of such payment. 22. Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity. 23. Covenants and Conditions: Construction of Agreement.All provisions of this Lease to be observed or performed by Lessee are both covenants and conditions. In interpreting this Lease,all headings and titles are for the convenience of the Parties only and shall not be considered a part of this Lease.Whenever required by the context, the singular shall include the plural and vice versa. This Lease shall not be construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole, as if both Parties had prepared it. 24. Binding Effect;Choice of Law.This Lease shall be binding upon the Parties,their personal representatives, successors and assigns and be governed by the laws of the State of California. Any litigation between the Parties hereto concerning this Lease shall be initiated in the County of Orange. 25. Subordination.This Lease shall be subject and subordinate to any ground lease, mortgage,deed of trust, or other hypothecation or security device (collectively, "Security Device"), now or hereafter placed upon the Premises, to any and all advances made on the security thereof,and to all renewals, modifications, and extensions thereof. 26. Attorneys'Fees.If any Party brings an action or proceeding involving the Premises whether founded in tort, contract or equity, or to declare rights hereunder, the Prevailing Party in any such proceeding, action, or appeal thereon,shall be entitled to costs and reasonable attorneys'fees,whether or not such action or proceeding is pursued to decision or judgment. In addition, Lessor shall be entitled to attorneys'fees, costs and expenses incurred in the preparation and service of notices of Default and consultations in connection therewith,whether or not a legal action is subsequently commenced in connection with such Default or resulting Breach. 27. Lessors Access to Premises.Lessor and Lessors agents shall have the right to enter the Premises at any time,in the case of an emergency,and otherwise at reasonable times after reasonable prior notice for the purpose of showing the same to prospective purchasers,lenders,or Lessees,and making such alterations,repairs,improvements or additions to the Premises as Lessor may deem necessary or desirable and the erecting, using and maintaining of utilities, services, pipes and conduits through the Premises and/or other premises as long as there is no material adverse effect to Lessee's use of the Premises. All such activities shall be without abatement of rent or liability to Lessee. 1262100.1 28. Signs. Lessor may place on the Premises ordinary"For Sale"signs at any time and ordinary"For Lease" signs during the last 6 months of the term hereof. Except for ordinary"for sublease"signs,Lessee shall not place any sign upon the Premises without Lessors prior written consent.All signs must comply with all Applicable Requirements. 29. Consents.Except as otherwise provided herein,wherever the consent or action of a Party is required,such consent or action shall not be unreasonably withheld or delayed. Lessors actual reasonable costs and expenses (including but not limited to architects',attorneys',engineers'and other consultants'fees)incurred in the consideration of,or response to, a request by Lessee for consent or action, including but not limited to consents to an assignment, a subletting or the presence or use of a Hazardous Substance,shall be paid by Lessee upon receipt of an invoice and supporting documentation. Lessor's consent to any act, assignment or subletting shall not constitute an acknowledgment that no Default or Breach by Lessee of this Lease exists,nor shall such consent be deemed a waiver of any then existing Default or Breach,except as may be otherwise specifically stated in writing by Lessor at the time of such consent. The failure to specify herein any particular condition to Lessors consent shall not preclude the imposition by Lessor at the time of consent of such further or other conditions as are then reasonable with reference to the particular matter for which consent is being given. 30. Estoppel Certificates.At any time and from time to time, Lessor and Lessee each agree, upon request in writing from the other,to execute, acknowledge and deliver to the other or to any person designated by the other a statement in writing certifying that the Lease is unmodified and is in full force and effect, or if there have been modifications,that the same is in full force and effect as modified(stating the modifications),that the other party is not in default in the performance of its covenants hereunder,or if there have been such defaults,specifying the same,and the dates to which the rent and other charges have been paid. 31. Quiet Possession. Subject to payment by Lessee of the Rent and performance of all of the covenants, conditions and provisions on Lessee's part to be observed and performed under this Lease, Lessee shall have quiet possession and quiet enjoyment of the Premises during the Term hereof. 32. Security Measures. Lessee hereby acknowledges that the Rent payable to Lessor hereunder does not include the cost of guard service or other security measures,and that Lessor shall have no obligation whatsoever to provide same. Lessee assumes all responsibility for the protection of the Premises, Lessee, its agents and invitees and their property from the acts of third parties. 33. Reservations. Lessor reserves to itself the right,from time to time,to grant,without the consent or joinder of Lessee, such easements, rights and dedications that Lessor deems necessary, and to cause the recordation of parcel maps and restrictions, so long as such easements, rights, dedications, maps and restrictions do not unreasonably interfere with the use of the Premises by Lessee. Lessee agrees to sign any documents reasonably requested by Lessor to effectuate any such easement rights,dedication,map or restrictions. 34. Performance Under Protest. If at any time a dispute shall arise as to any amount or sum of money to be paid by one Party to the other under the provisions hereof,the Parry against whom the obligation to pay the money is asserted shall have the right to make payment "under protest" and such payment shall not be regarded as a voluntary payment and there shall survive the right on the part of said Party to institute suit for recovery of such sum. If it shall be adjudged that there was no legal obligation on the part of said Party to pay such sum or any part thereof, said Party shall be entitled to recover such sum or so much thereof as it was not legally required to pay.A Party who does not initiate suit for the recovery of sums paid "under protest"with 6 months shall be deemed to have waived its right to protest such payment. 35. Authority; Multiple Parties; Execution. (a) If either Party hereto is a corporation,trust,limited liability company, partnership, or similar entity, each individual executing this Lease on behalf of such entity represents and warrants that he or she is duly authorized to execute and deliver this Lease on its behalf. (b) If this Lease is executed by more than one person or entity as "Lessee", each such person or entity shall be jointly and severally liable hereunder. It is agreed that any one of the named Lessees shall be empowered to execute any amendment to this Lease, or other document ancillary thereto and bind all of the named Lessees,and Lessor may rely on the same as if all of the named Lessees had executed such document. (c) This Lease may be executed by the Parties in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. 36. Amendments.This Lease may be modified only in writing,signed by the authorized representatives of both Parties. 1262100.1 37. Americans with Disabilities Act. Lessor makes no warranty or representation as to whether or not the Premises comply with ADA or any similar legislation. In the event that Lessee's use of the Premises requires modifications or additions to the Premises in order to be in ADA compliance, Lessee agrees to make any such necessary modifications and/or additions at Lessee's sole expense. 38. Counterparts.This Lease may be executed in counterparts,each of which shall be deemed an original,but all of which together shall constitute one and the same instrument. LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. IN WITNESS WHEREOF, this Lease Agreement has been executed in the name of the Orange County Sanitation District by its officers,thereunto duly authorized,and executed by the The Dickler Corporation, dba Chefs Toys as of this day of August,2017. ORANGE COUNTY SANITATION DISTRICT THE DICKLER CORPORATION, dba CHEF'S TOYS By By Greg Sebourn Steve Dickler Chair, Board of Directors President By Kelly Lore Clerk of the Board APPROVED AS TO FORM: Bradley R. Hogin General Counsel 1262100.1 18484 BANDILIER CIRCLE FOUNTAIN VALLEY, CA ATTACHMENT "1 " IIIIIIIIIIIIIIIII �IIIIIIIIIIIIIIIII I I I A IIIII MIIWINE 911T, GL I GL a)D OPq SHWOOMI CE Am s SUBJECT =eE NOTA m m G 1BUILDIN PART T I IT, ' HR HH I I � ELLIS AVENUE BOARD OF DIRECTORS Meeting Date TOBE.Or Dir. oB/zs/v AGENDA REPORT Item Item Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: EAST LIDO FORCE MAIN REHABILITATION, PROJECT NO. FE15-10 GENERAL MANAGER'S RECOMMENDATION A. Award a construction contract to Charles King Company for the East Lido Force Main Rehabilitation, Project No. FE15-10, for a total amount not to exceed $1,389,000; and B. Approve a contingency of$138,900 (10%). BACKGROUND The East and West Lido Force Mains convey sewage from the Lido Pump Station into the Pacific Coast Highway Force Main network. Lido Pump Station is on Newport Boulevard and located across the street from the former Newport Beach City Hall on the Balboa Peninsula. The West Lido Force Main ruptured in 2014 and required emergency repairs. Subsequent video assessment taken inside the East Force Main Pipe has revealed corrosion. RELEVANT STANDARDS • Maintain a proactive asset management program • Less than 2.1 sewer spills per 100 miles PROBLEM The East Lido Force Main is corroding and could fail, causing a sewage spill. PROPOSED SOLUTION Rehabilitate the East Lido Force Main using cured-in-place pipe to prevent failure due to corrosion. TIMING CONCERNS Predicting precisely when the corroding portions of the force main will fail is not possible. The City of Newport Beach is requiring that this work occur during the non-summer Page 1 of 4 months. It is recommended the work occur during the time frame after Labor Day and before wet weather. RAMIFICATIONS OF NOT TAKING ACTION The pipe will continue to corrode and the risk of a sewer spill will increase. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION The Orange County Sanitation District (Sanitation District) advertised for bids on June 20, 2017. A summary of the bids follows: Engineer's Estimate $1,009,000 Bidder Amount of Bid Charles King Company $1,389,000 The bids were evaluated in accordance with the Sanitation District's policies and procedures. A notice was sent to the one bidder on August 3, 2017, informing them of the intent of Sanitation District staff to recommend award of the Construction Contract to Charles King Company. Staff recommends awarding a construction contract to the one bidder, Charles King Company, for the East Lido Force Main Rehabilitation, Project No. FE15-10 (Project). Afterthe engineer's estimate was prepared, two significant additional and necessary work items were added to the Project scope involving expansion joints on a bridge section of pipe, but were not reflected in that estimate. A significant portion of cost over the estimate is due to that added work. For this reason, staff believes that the bid was reasonable for the work involved. CEQA The Project is statutorily exempt from CEQA under Public Resources Code section 21080.21 (Application of division to public right-of-way pipeline projects less than one mile in length). Section 21080.21 exempts from CEQA "any project of less than one mile in length within a public street or highway or any other public right-of-way for the installation of a new pipeline or the maintenance, repair, restoration, reconditioning, relocation, replacement, removal, or demolition of an existing pipeline." Section 21080.21(b) defines "pipeline" to mean "subsurface pipelines and subsurface or surface accessories or appurtenances to a pipeline, such as mains, traps, vents, cables, conduits, vaults, valves, flanges, manholes, and meters." Page 2 of 4 The Project consists of the restoration/reconditioning of approximately 750 feet of a subsurface Sanitation District pipeline, which is less than one mile in length. The force main is located within Newport Boulevard and the adjacent sidewalk, a public right-of-way. Accordingly, the statutory exemption set forth in section 21080.21 applies to the Project. In addition to the statutory exemption described above, the Project is also exempt from CEQA under the Class 1 and 2 categorical exemptions set forth in California Code of Regulations sections 15301 and 15302. Section 15301 (Class 1) exempts from CEQA "the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of use beyond that existing at the time of the lead agency's determination" including "(b) Existing facilities of both investor and publicly-owned utilities used to provide electric power, natural gas, sewerage, or other public utility services." The Project consists of the rehabilitation of an existing Sanitation District pipeline using CIPP, a trenchless rehabilitation method by which a cured tube is inserted into the pipeline. CIPP is a method for repairing/maintaining the existing force main. The Project will not increase the capacity of the pipeline or otherwise expand the current use of the force main. Further, the painting of the exposed portion of the force main is maintenance that does not expand the use of the force main. Section 15301(b) specifically contemplates the exemption of repairs, maintenance, or minor alterations to existing sewerage facilities, and therefore applies to the Project. Section 15302 (Class 2) exempts from CEQA the "replacement or reconstruction of existing structures and facilities where the new structure will be located on the same site as the structure replaced and will have substantially the same purpose and capacity as the structure replaced, including but not limited to: (c) Replacement or reconstruction of existing utility systems and/or facilities involving negligible or no expansion of capacity." As indicated above, the Project consists of the rehabilitation of the existing Sanitation District force main using the CIPP method. The Project is exempt under section 15302 as the force main 1) will remain in the same location, and 2) will continue to have the same purpose and capacity following the completion of the Project. Sanitation District staff will file and record a Notice of Exemption for this Project with the County of Orange following Board of Directors award of this construction contract. FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted under the Facilities Engineering Program — Collections (Budget FY2017-18 Update, Appendix, Page A-7, M-FE-COLLECT) and the budget is sufficient for the recommended action. Page 3 of 4 ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package: Construction Contract AN:dm:sa Page 4 of 4 PART A CONTRACT AGREEMENT C-CA-011317 TABLE OF CONTENTS CONTRACT AGREEMENT SECTION - 1 GENERAL CONDITIONS..................................................................1 SECTION -2 MATERIALS AND LABOR.................................................................4 SECTION -3 PROJECT..........................................................................................4 SECTION -4 PLANS AND SPECIFICATONS ........................................................5 SECTION -5 TIME OF COMMENCEMENT AND COMPLETION ..........................5 SECTION -6 TIME IS OF THE ESSENCE .............................................................5 SECTION -7 EXCUSABLE DELAYS......................................................................6 SECTION -8 EXTRA WORK...................................................................................6 SECTION -9 CHANGES IN PROJECT...................................................................7 SECTION - 10 LIQUIDATED DAMAGES FOR DELAY.............................................7 SECTION - 11 CONTRACT PRICE AND METHOD OF PAYMENT.........................7 SECTION - 12 SUBSTITUTION OF SECURITIES IN LIEU OF RETENTION OF FUNDS ..............................................................................................9 SECTION - 13 COMPLETION.................................................................................10 SECTION - 14 CONTRACTOR'S EMPLOYEES COMPENSATION.......................10 SECTION - 15 SURETY BONDS ............................................................................12 SECTION - 16 INSURANCE....................................................................................13 SECTION - 17 RISK AND INDEMNIFICATION.......................................................22 SECTION - 18 TERMINATION................................................................................22 SECTION - 19 WARRANTY....................................................................................23 SECTION -20 ASSIGNMENT.................................................................................24 SECTION -21 RESOLUTION OF DISPUTES ........................................................24 SECTION -22 SAFETY& HEALTH ........................................................................24 SECTION -23 NOTICES.........................................................................................24 C-CA-011317 CONTRACT AGREEMENT ORANGE COUNTY SANITATION DISTRICT PROJECT NO. FE15-10 EAST LIDO FORCE MAIN REHABILITATION THIS AGREEMENT is made and entered into, to be effective, this August 23, 2017, by and between Charles King Company, hereinafter referred to as "CONTRACTOR"and the Orange County Sanitation District, hereinafter referred to as "OCSD". WITNESSETH That for and in consideration of the promises and agreements hereinafter made and exchanged, OCSD and CONTRACTOR agree as follows: SECTION— 1 GENERAL CONDITIONS CONTRACTOR certifies and agrees that all the terms, conditions and obligations of the Contract Documents as hereinafter defined, the location of the job site, and the conditions under which the Work is to be performed have been thoroughly reviewed, and enters into this Contract based upon CONTRACTOR's investigation of all such matters and is in no way relying upon any opinions or representations of OCSD. It is agreed that this Contract represents the entire agreement. It is further agreed that the Contract Documents are each incorporated into this Contract by reference, with the same force and effect as if the same were set forth at length herein, and that CONTRACTOR and its Subcontractors, if any, will be and are bound by any and all of said Contract Documents insofar as they relate in any part or in any way, directly or indirectly, to the Work covered by this Contract. A. Contract Documents Order of Precedence "Contract Documents" refers to those documents identified in the definition of"Contract Documents" in the General Conditions—Definitions. C-CA-011317 PROJECT NO. FE15-10 EAST LIDO FORCE MAIN 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-011317 PROJECT NO. FE15-10 EAST LIDO FORCE MAIN 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-011317 PROJECT NO. FE15-10 EAST LIDO FORCE MAIN 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. FE15-10 EAST LIDO FORCE MAIN REHABILITATION C-CA-011317 PROJECT NO. FE15-10 EAST LIDO FORCE MAIN 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. FE15-10 EAST LIDO FORCE MAIN 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 238 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 Ten (10) calendar days determined by OCSD likely to be inclement weather when CONTRACTOR will be unable to work. In addition, CONTRACTOR shall accomplish such milestones within the periods of performance set forth in Appendix A of the Special Provisions entitled "Work Completion Schedule." SECTION—6 TIME IS OF THE ESSENCE Time is of the essence of this Contract. As required by the Contract Documents, CONTRACTOR shall prepare and obtain approval of all shop drawings, details and samples, and do all other things necessary and incidental to the prosecution of CONTRACTOR's Work in conformance with an approved construction progress schedule. CONTRACTOR shall coordinate the Work covered by this Contract with that of all other contractors, subcontractors and of OCSD, in a manner that will facilitate the efficient completion of the entire Work and 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 C-CA-011317 PROJECT NO. FE15-10 EAST LIDO FORCE MAIN REHABILITATION CONFORMED Page 5 of 26 which the Work is to be performed and shall have the right to decide the time or order in which the various portions of the Work shall be installed or the priority of the work of subcontractors, and, in general, all matters representing the timely and orderly conduct of the Work of CONTRACTOR on the premises. SECTION—7 EXCUSABLE DELAYS CONTRACTOR shall only be excused for any delay in the prosecution or completion of the Project as specifically provided in General Conditions, "Extensions for Delay", and the General Requirements, "By CONTRACTOR or Others—Unknown Utilities during Contract Work". Extensions of time and extra compensation arising from such excusable delays will be determined in accordance with the General Conditions, "Extension of Time for Delay" and "Contract Price Adjustments and Payments", and extensions of time and extra compensation as a result of incurring undisclosed utilities will be determined in accordance with General Requirements, "By CONTRACTOR or Others— Unknown Utilities during Contract Work". OCSD's decision will be conclusive on all parties to this Contract. SECTION—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 C-CA-011317 PROJECT NO. FE15-10 EAST LIDO FORCE MAIN REHABILITATION CONFORMED Page 6 of 26 any, reasonably required for CONTRACTOR to perform the Extra Work, as determined by OCSD's ENGINEER. The decision of the ENGINEER shall be final. SECTION-9 CHANGES IN PROJECT OCSD may at any time, without notice to any Surety, by Change Order, make any changes in the Work within the general scope of the Contract Document, including but not limited to changes: 1. In the Specifications (including Drawings and designs); 2. In the time, method or manner of performance of the Work; 3. In OCSD-furnished facilities, equipment, materials, services or site; or 4. Directing acceleration in the performance of the Work. No change of period of performance or Contract Price, or any other change in the Contract Documents, shall be binding until the Contract is modified by a fully executed Change Order. All Change Orders shall be issued in accordance with the requirements set forth in the General Conditions, "Request for Change (Changes at CONTRACTOR's Request)" and "OWNER Initiated Changes'. SECTION—10 LIQUIDATED DAMAGES FOR DELAY Liquidated Damages shall be payable in the amounts and upon the occurrence of such events or failure to meet such requirements or deadlines as provided in the Special Provisions, "Liquidated Damages and Incentives." SECTION—11 CONTRACT PRICE AND METHOD OF PAYMENT A. OCSD agrees to pay and the CONTRACTOR agrees to accept as full consideration for the faithful performance of this Contract, subject to any additions or deductions as provided in approved Change Orders, the sum of One Million Three Hundred Eighty-Nine Thousand ($1,389,000) as itemized on the Attached Exhibit"A". C-CA-011317 PROJECT NO. FE15-10 EAST LIDO FORCE MAIN REHABILITATION CONFORMED Page 7 of 26 Upon satisfaction of the conditions precedent to payment set forth in the General Requirements, Additional General Requirements and General Conditions (including but not limited to Sections entitled "Mobilization Payment Requirements" and "Payment Itemized Breakdown of Contract Lump Sum Prices"), there shall be paid to the CONTRACTOR an initial Net Progress Payment for mobilization. OCSD shall issue at the commencement of the job a schedule which shows: 1. A minimum of one payment to be made to the CONTRACTOR for each successive four(4)week period as the Work progresses, and 2. The due dates for the CONTRACTOR to submit requests for payment to meet the payment schedule. After the initial Net Progress Payment, and provided the CONTRACTOR submits the request for payment prior to the end of the day required to meet the payment schedule, the CONTRACTOR shall be paid a Net Progress Payment on the corresponding monthly payment date set forth in the schedule. Payments shall be made on demands drawn in the manner required by law, accompanied by a certificate signed by the ENGINEER, stating that the Work for which payment is demanded has been performed in accordance with the terms of the Contract Documents, and that the amount stated in the certificate is due under the terms of the Contract. Payment applications shall also be accompanied with all documentation, records, and releases as required by the Contract, Exhibit A, Schedule of Prices, and General Conditions, "Payment for Work—General". The Total amount of Progress Payments shall not exceed the actual 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-011317 PROJECT NO. FE15-10 EAST LIDO FORCE MAIN 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-011317 PROJECT NO. FE15-10 EAST LIDO FORCE MAIN 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-011317 PROJECT NO. FE15-10 EAST LIDO FORCE MAIN 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. Apprentices: Sections 1777.5, 1777.6, 1777.7 of the Labor Code of the State of California, regarding the employment of apprentices are applicable to this Contract and the CONTRACTOR shall comply therewith if the prime contract involves Thirty Thousand Dollars ($30,000.00) or more. E. Workday: In the performance of this Contract, not more than eight(8) hours shall constitute a day's work, and the CONTRACTOR shall not require more than eight (8) hours of labor in a day from any person employed by him hereunder except as provided in paragraph (B) above. CONTRACTOR shall conform to Article 3, Chapter 1, Part 7 (Section 1810 at seg.)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-011317 PROJECT NO. FE15-10 EAST LIDO FORCE MAIN REHABILITATION CONFORMED Page 11 of 26 required or permitted to labor more than eight (8) hours in any one calendar day and forty (40) hours in any one week in violation of said Article. CONTRACTOR shall keep an accurate record showing the name and actual hours worked each calendar day and each calendar week by each worker employed by CONTRACTOR in connection with the Project. F. Registration: Record of Wages: Insoection: CONTRACTOR shall comply with the registration requirements of Labor Code Section 1725.5. Pursuant to Labor Code Section 1771.4, the Work is subject to compliance monitoring by the California Department of Industrial Relations. CONTRACTOR shall maintain accurate payroll records and shall submit payroll records to the Labor Commissioner pursuant to Labor Code Section 1771.4(a)(3). Penalties for non-compliance with the requirements of Section 1776 may be deducted from progress payments per Section 1776. CONTRACTOR shall comply with the job site notices posting requirements established by the Labor Commissioner per Title 8, California Code of Regulations Section 16461(a). SECTION-15 SURETYBONDS CONTRACTOR shall, before entering upon the performance of this Contract, furnish Bonds approved by OCSD's General Counsel—one in the amount of one hundred percent(100%)of the Contract amount, to guarantee the faithful performance of the Work, and the other in the amount of one hundred percent (100%)of the Contract amount to guarantee payment of all claims for labor and materials furnished. As changes to the Contract occur via approved Change Orders, the CONTRACTOR shall assure that the amounts of the Bonds are adjusted to maintain 100% of the Contract Price. This Contract shall not become effective until such Bonds are supplied to and approved by OCSD. Bonds must be issued by a Surety authorized by the State Insurance Commissioner to do business in California. The Performance Bond shall remain in full force and effect through the warranty period, as specified in Section 19 below. All C-CA-011317 PROJECT NO. FE15-10 EAST LIDO FORCE MAIN REHABILITATION CONFORMED Page 12 of 26 Bonds required to be submitted relating to this Contract must comply with California Code of Civil Procedure Section 995.630. Each Bond shall be executed in the name of the Surety insurer under penalty of perjury, or the fact of execution of each Bond shall be duly acknowledged before an officer authorized to take and certify acknowledgments, and either one of the following conditions shall be satisfied: A. A copy of the transcript or record of the unrevoked appointment, power of attorney, by- laws, or other instrument, duly certified by the proper authority and attested by the seal of the insurer entitling or authorizing the person who executed the Bond to do so for and on behalf of the insurer, is on file in the Office of the County Clerk of the County of Orange; or B. A copy of a valid power of attorney is attached to the Bond. SECTION— 16 INSURANCE CONTRACTOR shall purchase and maintain, for the duration of the Contract, insurance against claims for injuries to persons, or damages to property which may arise from or in connection with the performance of the Work hereunder, and the results of that Work by CONTRACTOR, its agents, representatives, employees, or Subcontractors, in amounts equal to the requirements set forth below. CONTRACTOR shall not commence Work under this Contract until all insurance required under this Section is obtained in a form acceptable to OCSD, nor shall CONTRACTOR allow any Subcontractor to commence Work on a subcontract until all insurance required of the Subcontractor has been obtained. CONTRACTOR shall maintain all of the foregoing insurance coverages in force through the point at which the Work under this Contract is fully completed and accepted by OCSD pursuant to the provisions of the General Conditions, "Final Acceptance and Final Completion'. Furthermore, CONTRACTOR shall 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 C-CA-011317 PROJECT NO. FE15-10 EAST LIDO FORCE MAIN REHABILITATION CONFORMED Page 13 of 26 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 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: Ten Million Dollars ($10,000,000) per occurrence and a general aggregate limit of Ten Million Dollars ($10,000,000)for bodily injury, personal injury and property damage. Coverage shall include each of the following: a. Premises-Operations. C-CA-011317 PROJECT NO. FE15-10 EAST LIDO FORCE MAIN REHABILITATION CONFORMED Page 14 of 26 b. Products and Completed Operations, with limits of at least Ten Million Dollars ($10,000,000) per occurrence and a general aggregate limit of Ten Million Dollars ($10,000,000)which shall be in effect at all times during the warranty period set forth in the Warranty section herein, and as set forth in the General Conditions, "Warranty(CONTRACTOR's Guarantee)", plus any additional extension or continuation of time to said warranty period that may be required or authorized by said provisions. C. Broad Form Property Damage, expressly including damage arising out of explosion, collapse, or underground damage. d. Contractual Liability, expressly including the indemnity provisions assumed under this Contract. e. Separation of Insured Clause, providing that coverage applies separately to each insured, except with respect to the limits of liability. f. Independent CONTRACTOR's Liability. To the extent first dollar coverage, including defense of any claim, is not available to OCSD or any other additional insured because of any SIR, deductible, or any other form of self insurance, CONTRACTOR is obligated to assume responsibility of insurer until the deductible, SIR or other condition of insurer assuming its defense and/or indemnity has been satisfied. CONTRACTOR shall be responsible to pay any deductible or SIR. 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. C-CA-011317 PROJECT NO. FE15-10 EAST LIDO FORCE MAIN REHABILITATION CONFORMED Page 15 of 26 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 Ten Million Dollars ($10,000,000) and a general aggregate limit of Ten Million Dollars ($10,000,000)for bodily injury, personal injury and property damage; Or alternatively, (2) Ten Million Dollars ($10,000,000) 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. 4. Drone Liability Insurance: If a drone will be used, drone liability insurance must be maintained by CONTRACTOR in the amount of One Million Dollars ($1,000,000) in a form acceptable by OCSD. 5. Worker's Compensation/Employer's Liability: CONTRACTOR shall provide such Worker's Compensation Insurance as required by the Labor Code of the State of California, including employer's liability with a minimum limit of One Million Dollars ($1,000,000) per accident for bodily injury or disease. If an exposure to Jones Act C-CA-011317 PROJECT NO. FE15-10 EAST LIDO FORCE MAIN REHABILITATION CONFORMED Page 16 of 26 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. 6. 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) and shall apply to sudden and non-sudden pollution conditions C-CA-011317 PROJECT NO. FE15-10 EAST LIDO FORCE MAIN REHABILITATION CONFORMED Page 17 of 26 (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. 7. Limits are Minimums: If CONTRACTOR maintains higher limits than the minimums shown in this Section, OCSD requires and shall be entitled to coverage for the higher limits maintained by the CONTRACTOR. B. Deductibles and Self-Insured Retentions Any deductibles or self-insured retentions must be declared to and approved by OCSD. At the option of OCSD, either: the Insurer shall reduce or eliminate such deductibles or self- insured retentions as respects OCSD, its Directors, officers, agents, CONSULTANTS, and employees; or CONTRACTOR shall provide a financial guarantee satisfactory to OCSD guaranteeing payment of losses and related investigations, claim administration, and defense expenses. C. Other Insurance Provisions 1. Each such policy of General Liability Insurance and Automobile Liability Insurance shall be endorsed to contain, the following provisions: C-CA-011317 PROJECT NO. FE15-10 EAST LIDO FORCE MAIN REHABILITATION CONFORMED Page 18 of 26 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 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. C-CA-011317 PROJECT NO. FE15-10 EAST LIDO FORCE MAIN REHABILITATION CONFORMED Page 19 of 26 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 workers compensation insurance, subject to OCSD's option, at any time during the term of this Contract, to require a change in insurer upon twenty (20)days written notice. Further, OCSD will require CONTRACTOR to substitute any insurer whose rating drops below the levels herein specified. Said substitution shall occur within twenty (20)days of written notice to CONTRACTOR by OCSD or its agent. E. Verification of Coverage CONTRACTOR shall furnish OCSD with original certificates and mandatory endorsements affecting coverage. Said policies and endorsements shall conform to the requirements herein stated. All certificates and endorsements are to be received and approved by OCSD before Work commences. OCSD reserves the right to require complete, certified copies of all required insurance policies, including endorsements, affecting the coverage required by these Specifications at any time. C-CA-011317 PROJECT NO. FE15-10 EAST LIDO FORCE MAIN REHABILITATION CONFORMED Page 20 of 26 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. G. Required Forms and Endorsements 1. Required ACORD Form a. Certificate of Liability Form 25 2. Required Insurance Services Office, Inc. Endorsements (when alternative forms are shown, they are listed in order of preference) In the event any of the following forms are cancelled by Insurance Services Office, Inc. (ISO), or are updated, the ISO replacement form or equivalent must be supplied. a. Commercial General Liability Form CG-0001 10 01 b. Additional Insured Including Form CG-2010 10 01 and Products-Completed Operations Form CG-2037 10 01 C. Waiver of Transfer of Rights of Form CG-2404 11 85; or Recovery Against Others to Us/ Form CG-2404 10 93 Waiver of Subrogation 3. Required State Compensation Insurance Fund Endorsements a. Waiver of Subrogation Endorsement No. 2570 b. Cancellation Notice Endorsement No. 2065 C-CA-011317 PROJECT NO. FE15-10 EAST LIDO FORCE MAIN REHABILITATION CONFORMED Page 21 of 26 4. Additional Required Endorsements a. Notice of Policy Termination Manuscript Endorsement 5. Pollution Liability Endorsements There shall be a Separation of Insured Clause or endorsement, providing that coverage applies separately to each insured, except with respect to the limits of liability. There shall also be an endorsement or policy language containing a waiver of subrogation rights on the part of the insurer. OCSD, its directors, officers, agents, CONSULTANTS and employees and all public agencies from whom permits will be obtained as well as their directors, officers, agents, and employees shall be included as insureds under the policy. Any additional insured endorsement shall contain language at least as broad as the coverage language contained in ISO form CG 20 10 11 85 or alternatively in both CG 20 10 10 01 and CG 20 37 10 01 together. SECTION-17 RISK AND INDEMNIFICATION All Work covered by this Contract done at the site of construction or in preparing or delivering materials to the site shall be at the risk of CONTRACTOR alone. CONTRACTOR shall save, indemnify, defend, and keep OCSD and others harmless as more specifically set forth in General Conditions, "General Indemnification". SECTION-18 TERMINATION This Contract may be terminated in whole or in part in writing by OCSD in the event of substantial failure by the CONTRACTOR to fulfill its obligations under this Agreement, or it may be terminated by OCSD for its convenience provided that such termination is effectuated in a manner and upon such conditions set forth more particularly in General Conditions, "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 C-CA-011317 PROJECT NO. FE15-10 EAST LIDO FORCE MAIN REHABILITATION CONFORMED Page 22 of 26 manner provided in said General Conditions. If termination for default or convenience is effected by OCSD, an equitable adjustment in the price provided for in this Contract shall be made at the time and in the manner provided in the General Conditions, "Termination for Default" and "Termination for Convenience". SECTION—19 WARRANTY The CONTRACTOR agrees to perform all Work under this Contract in accordance with the Contract Documents, including OCSD's designs, Drawings and Specifications. The CONTRACTOR guarantees for a period of at least one (1) year from the date of Final Acceptance of the Work, pursuant to the General Conditions, "Final Acceptance and Final Completion" that the completed Work is free from all defects due to faulty materials, equipment or workmanship and that it shall promptly make whatever adjustments or corrections which may be necessary to cure any defects, including repairs of any damage to other parts of the system resulting from such defects. OCSD shall promptly give notice to the CONTRACTOR of observed defects. In the event that the CONTRACTOR fails to make adjustments, repairs, corrections or other work made necessary by such defects, OCSD may do so and charge the CONTRACTOR the cost incurred. The CONTRACTOR's warranty shall continue as to any corrected deficiency until the later of(1)the remainder of the original one-year warranty period; or(2)one year after acceptance by OCSD of the corrected Work. The Performance Bond and the Payment Bond shall remain in full force and effect through the guarantee period. The CONTRACTOR's obligations under this clause are in addition to the CONTRACTOR's other express or implied assurances under this Contract, including but not limited to specific 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. C-CA-011317 PROJECT NO. FE15-10 EAST LIDO FORCE MAIN REHABILITATION CONFORMED Page 23 of 26 SECTION-20 ASSIGNMENT No assignment by the CONTRACTOR of this Contract or any part hereof, or of funds to be received hereunder, will be recognized by OCSD unless such assignment has had prior written approval and consent of OCSD and the Surety. SECTION—21 RESOLUTION OF DISPUTES OCSD and the CONTRACTOR shall comply with the provisions of California Public Contract Code Section 20104 at. seq., regarding resolution of construction claims for any Claims which arise between the CONTRACTOR and OCSD, as well as all applicable dispute and Claims provisions as set forth in the General Conditions and as otherwise required by law. SECTION—22 SAFETY & HEALTH CONTRACTOR shall comply with all applicable safety and health requirements mandated by federal, state, city and/or public agency codes, permits, ordinances, regulations, and laws, as well as these Contract Documents, including but not limited to the General Requirements, Section entitled "Safety" and Exhibit B OCSD Safety Standards. 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 C-CA-011317 PROJECT NO. FE15-10 EAST LIDO FORCE MAIN REHABILITATION CONFORMED Page 24 of 26 Bradley R. Hogin, Esquire Woodruff, Spradlin &Smart 555 Anton Boulevard Suite 1200 Costa Mesa, California 92626 TO CONTRACTOR: Charles King Company 2841 Gardena Avenue Signal Hill, CA 90755 Copy to: Debra King Charles King Company 2841 Gardena Avenue Signal Hill, CA 90755 C-CA-011317 PROJECT NO. FE15-10 EAST LIDO FORCE MAIN 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 2841 Gardena Avenue Signal Hill, CA 90755 By Printed Name Its CONTRACTOR's State License No. 738236 (Expiration Date—07/31/2019) OCSD: Orange County Sanitation District By Gregory C. Sebourn, PLS Chair, Board of Directors By Kelly A. Lore Clerk of the Board By Marc Dubois Contracts, Purchasing and Materials Management Manager C-CA-011317 PROJECT NO. FE15-10 EAST LIDO FORCE MAIN REHABILITATION CONFORMED Page 26 of 26 EXHIBIT A SCHEDULE OF PRICES C-EXA-080414 TABLE OF CONTENTS EXHIBIT A SCHEDULE OF PRICES EXA-1 BASIS OF COMPENSATION.............................................................................1 EXA-2 PROGRESS PAYMENTS ..................................................................................1 EXA-3 RETENTION AND ESCROW ACCOUNTS........................................................1 EXA-4 STOP PAYMENT NOTICE.................................................................................3 EXA-5 PAYMENT TO SUBCONTRACTORS................................................................3 EXA-6 PAYMENT OF TAXES .......................................................................................3 EXA-7 FINAL PAYMENT...............................................................................................4 EXA-8 DISCOVERY OF DEFICIENCIES BEFORE AND AFTER FINAL PAYMENT...5 ATTACHMENT 1 -CERTIFICATION FOR REQUEST FOR PAYMENT.........................7 ATTACHMENT 2-SCHEDULE OF PRICES...................................................................8 C-EXA-080414 EXHIBIT A SCHEDULE OF PRICES EXA-1 BASIS OF COMPENSATION CONTRACTOR will be paid the Contract Price according to the Schedule of Prices, and all other applicable terms and conditions of the Contract Documents. EXA-2 PROGRESSPAYMENTS Progress payments will be made in accordance with all applicable terms and conditions of the Contract Documents, including, but not limited to: 1. Contract Agreement—Section 11 —"Contract Price and Method of Payment;" 2. General Conditions—"Payment—General"; 3. General Conditions—"Payment—Applications for Payment'; 4. General Conditions—"Payment— Mobilization Payment Requirements;" 5. General Conditions—"Payment— Itemized Breakdown of Contract Lump Sum Prices"; 6. General Conditions—"Contract Price Adjustments and Payments"; 7. General Conditions—"Suspension of Payments"; 8. General Conditions—"OCSD's Right to Withhold Certain Amounts and Make Application Thereof"; and 9. General Conditions—"Final Payment." EXA-3 RETENTION AND ESCROW ACCOUNTS A. Retention: OCSD shall retain a percentage of each progress payment to assure satisfactory completion of the Work. The amount to be retained from each progress payment shall be determined as provided in General Conditions— "Retained Funds; Substitution of Securities". In all contracts between CONTRACTOR and its Subcontractors and/or Suppliers, the retention may not exceed the percentage specified in the Contract Documents. C-EXA-080414 PROJECT NO.FE15-10 EAST LIDO FORCE MAIN 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-080414 PROJECT NO.FE15-10 EAST LIDO FORCE MAIN 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-080414 PROJECT NO.FE15-10 EAST LIDO FORCE MAIN 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 filed in connection with the Work. Prior progress payments shall be subject to correction in OCSD's review of the application for Final Payment. Claims filed with the application for Final Payment must be otherwise timely under the Contract and applicable law. 3. Within a reasonable time, OCSD will review the CONTRACTOR'S application for Final Payment. Any recommended changes or corrections will then be forwarded to the CONTRACTOR. Within ten (10) calendar days after receipt of recommended changes from OCSD, the CONTRACTOR will make the changes, or list Claims that will be filed as a result of the changes, and shall submit the revised application for Final Payment. Upon C-EXA-080414 PROJECT NO.FE15-10 EAST LIDO FORCE MAIN 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 filed with the initial or any revised application for Final Payment, and no Claims remain unsettled within thirty-five (35) calendar days after Final Acceptance of the Work by OCSD, and agreements are reached on all issues regarding the application for Final Payment, OCSD, in exchange for an executed release, satisfactory in form and substance to OCSD, will pay the entire sum found due on the approved application for Final Payment, including the amount, if any, allowed on settled Claims. 5. The release from the CONTRACTOR shall be from any and all Claims arising under the Contract, except for Claims that with the concurrence of OCSD are specifically reserved, and shall release and waive all unreserved Claims against OCSD and its officers, directors, employees and authorized representatives. The release shall be accompanied by a certification by the CONTRACTOR that: a. It has resolved all Subcontractors, Suppliers and other Claims that are related to the settled Claims included in the Final Payment; b. It has no reason to believe that any party has a valid claim against the CONTRACTOR or OCSD which has not been communicated in writing by the CONTRACTOR to OCSD as of the date of the certificate; c. All warranties are in full force and effect, and; d. The releases and the warranties shall survive Final Payment. 6. If any claims remain open, OCSD may make Final Payment subject to resolution of those claims. OCSD may withhold from the Final Payment an amount not to exceed one hundred fifty percent (150%) of the sum of the amounts of the open claims, and one hundred twenty-five percent (125%) of the amounts of open stop payment notices referred to in article entitled stop payment notices herein. 7. The CONTRACTOR shall provide an unconditional waiver and release on final payment from each Subcontractor and Supplier providing Work under the Contract(per Civil Code Section 8138) and an unconditional waiver and release on final payment on behalf of the CONTRACTOR (per Civil Code Section 8138)within thirty (30)days of receipt of Final Payment. EXA-8 DISCOVERY OF DEFICIENCIES BEFORE AND AFTER FINAL PAYMENT Notwithstanding OCSD's acceptance of the application for Final Payment and irrespective of whether it is before or after Final Payment has been made, OCSD shall not be precluded from subsequently showing that: 1. The true and correct amount payable for the Work is different from that previously accepted; C-EXA-080414 PROJECT NO.FE15-10 EAST LIDO FORCE MAIN REHABILITATION CONFORMED Page 5 of 8 2. The previously-accepted Work did not in fact conform to the Contract requirements, or; 3. A previous payment or portion thereof for Work was improperly made. OCSD also shall not be stopped from demanding and recovering damages from the CONTRACTOR, as appropriate, under any of the foregoing circumstances as permitted under the Contract or applicable law. C-EXA-080414 PROJECT NO.FE15-10 EAST LIDO FORCE MAIN REHABILITATION CONFORMED Page 6 of 8 ATTACHMENT 1 —CERTIFICATION FOR REQUEST FOR PAYMENT I hereby certify under penalty of perjury as follows: That the claim for payment is in all respects true, correct; that the services mentioned herein were actually rendered and/or supplies delivered to OCSD in accordance with the Contract. I understand that it is a violation of both the federal and California False Claims Acts to knowingly present or cause to be presented to OCSD a false claim for payment or approval. A claim includes a demand or request for money. It is also a violation of the False Claims Acts to knowingly make use of a false record or statement to get a false claim paid. The term "knowingly" includes either actual knowledge of the information, deliberate ignorance of the truth or falsity of the information, or reckless disregard for the truth or falsity of the information. Proof of specific intent to defraud is not necessary under the False Claims Acts. I understand that the penalties under the Federal False Claims Act and State of California False Claims Act are non-exclusive, and are in addition to any other remedies which OCSD may have either under contract or law. I hereby further certify, to the best of my knowledge and belief, that: 1. The amounts requested are only for performance in accordance with the Specifications, terms, and conditions of the Contract; 2. Payments to Subcontractors and Suppliers have been made from previous payments received under the Contract, and timely payments will be made from the proceeds of the payment covered by this certification; 3. This request for progress payments does not include any amounts which the prime CONTRACTOR intends to withhold or retain from a Subcontractor or Supplier in accordance with the terms and conditions of the subcontract; and 4. This certification is not to be construed as Final Acceptance of a Subcontractor's performance. Name Title Date C-EXA-080414 PROJECT NO.FE15-10 EAST LIDO FORCE MAIN REHABILITATION CONFORMED Page 7 of 8 ATTACHMENT SCHEDULE OF PRICES See next pages for Bid Submittal Forms (Charles King Company) BF-14 Schedule of Prices, Page 1 - 2 C-EXA-080414 PROJECT NO.FE15-10 EAST LIDO FORCE MAIN REHABILITATION CONFORMED Page 8 of 8 Bid submitted By: Charles King Company (Name of Firm) BF-14 SCHEDULE OF PRICES INSTRUCTIONS A. General For Unit Prices, it is understood that the following quantities are approximate only and are solely for the purpose of estimating the comparison of Bids, and that the actual value of Work will be computed based upon the actual quantities in the completed Work,whether they be more or less than those shown. CONTRACTOR's compensation for the Work under the Contract Documents will be computed based upon the lump sum amount of the Contract at time of award, plus any additional or deleted costs approved by OCSD via approved Change Orders, pursuant to the Contract Documents. Bidder shall separately price and accurately reflect costs associated with each line item, leaving no blanks. Any and all modifications to the Bid must be initialed by an authorized representative of the Bidder in accordance with the Instructions to Bidders, Preparation of Bid. Bidders are reminded of Instruction to Bidders, Discrepancy in Bid Items,which, in summary, provides that the total price for each item shall be based on the Unit Price listed for each item multiplied by the quantity;and the correct Total Price for each item shall be totaled to determine the Total Amount of Bid. All applicable costs including overhead and profit shall be reflected in the respective unit costs and the TOTAL AMOUNT OF BID. The Bid Price shall include all costs to complete the Work including Profit overhead etc unless otherwise specified in the Contract Documents All applicable sales taxes state and/or federal and any other special taxes patent rights or royalties shall be included in the prices quoted in this Bid. B. Basis of Award AWARD OF THE CONTRACT WILL BE MADE ON THE BASIS OF THE LOWEST RESPONSIVE AND RESPONSIBLE BID. THE LOWEST BID IS DEFINED AS THE'TOTAL AMOUNT OF BID' LISTED IN THIS BID, UNLESS OTHERWISE SPECIFIED BELOW. Note 1: Base Bid. Includes all costs necessary to furnish all labor, materials,equipment and services for the construction of the Project per the Contract Documents. SF-14 SCHEDULE OF PRICES C-BF-050517 PROJECT NO.FE15.10 EAST LIDO FORCE MAIN REHABILITATION Page 1 of 2 Bid Submitted By: Charles King Company (Name of Fine) EXHIBIT A SCHEDULE OF PRICES BASE BID ITEMS (Refer to Note 1 in the Instructions): Item No. Description Unit of Approz Unit Price Extended Price Measurement my 1 Mobilization: Mobilization in conformance with the Contract Documents LumpSum ' '''"r' _ for the lump sum price of... ( �xS $ 50,000 2 Permits:Allowance for permits, Caltrans and City of Newport Beach r« ' inspection and other fees and charges required to complete the Work, Allowance ; _ $ 80,000 in conformance with the Contract Documents. 3 Shoring&Bracing: Furnish all labor, equipment and materials required to provide sheeting, shoring and bracing for protection of life and limb in LumpSum " ° "' _ 0 trenches, open excavations and confined spaces, in conformance with $ ��o the Contract Documents for the lump sum price of... q Asphalt and Concrete Restoration and Striping: Furnish all labor, Q equipment and materials required for the restoration of street pavement 3/ and striping and replacement of concrete curbs, gutters, and sidewalks Square Foot 1,300 x 30 - $ removed and/or damaged during construction required to perform the Work as specified in the Contract Documents for the per unit price of... 5 All Other Work: Furnish all labor, equipment and materials to provide all other work except for work specified under Bid Items 1 through 4 and xu _ 6 required to perform the Work as specified in the Contract Documents Lump Sum + - $ /*w for the lump sum price of... -' g Demobilization: Furnish all labor, equipment and materials to provide all demobilization activities performed by the CONTRACTOR including, but not limited to, moving out, submittal and acceptance of As-Built Lump Sum = $ 25,000 Drawings, and final cleanup and restoration of the staging area to its original condition upon Final Completion, in conformance with the Contract Documents for the lump sum price of... .' 00 TOTAL AMOUNT OF BID(BASIS OF AWARD) $ 1, 9 BF-14 SCHEDULE OF PRICES C-BF-050517 PROJECT NO. FE15-10 EAST LIDO FORCE MAIN REHABILITATION Page 2 of 2 BOARD OF DIRECTORS Meeting Date TOBE.Or Dir. oB/zs/v AGENDA REPORT ItemNumber IemNumber e Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: SAFETY IMPROVEMENTS PROGRAM, PROJECT NO. J-126 GENERAL MANAGER'S RECOMMENDATION A. Award a Construction Contract to AMTEK Construction for the Safety Improvements Program, Contract No. J-126 B, F, and G for a total amount not to exceed $557,759; and B. Approve a contingency of$55,776 (10%). BACKGROUND The Orange County Sanitation District (Sanitation District) owns and operates facilities that were designed and constructed from the 1950s to present. In July 2014, the Facility Wide Safety Assessment, Project No. SP-145-1, reviewed safety issues at the Sanitation District Plant Nos. 1 and 2 and pump stations. The study identified approximately 2,000 facility issues impacting worker safety and compliance with Cal/OSHA regulations including electrical, fall protection, machine guarding, hazardous area classifications, skylights, and walkway hazards. Each item was assigned a high, medium, or low priority rating. Pending resolution of the safety items, the Sanitation District took interim measures to mitigate life-safety risks. There was approximately an even distribution between identified issues that would be addressed using Sanitation District resources, and those that would be addressed through the Capital Improvements Program (CIP), depending on their nature and complexity. Items on the CIP list that could not be timely assigned to existing projects have been assigned to Safety Improvements Program, Project No. J-126. To resolve the deficiencies as quickly as possible, Safety Improvements Program, Project No. J-126, is being executed through multiple construction packages that can be completed in a shorter time than using a single construction contract. Development of multiple construction packages also allows higher priority safety items to be completed more quickly than lower priority items. RELEVANT STANDARDS Provide a safe and collegial workplace Page 1 of 3 PROBLEM Among the various Project No. J-126 deficiencies are 12 emergency and exit light issues and 23 ladder and fall hazard issues. PROPOSED SOLUTION Award Construction Contract No. J-126BFG to correct the identified lighting and fall hazard issues. TIMING CONCERNS Delaying resolution of the safety items poses potential threats to staff, Contractor, and visitor safety. RAMIFICATIONS OF NOT TAKING ACTION • Staff, Contractors, and visitors will continue to be exposed to potential safety hazards. • Certain facilities will continue to not comply with code requirements. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION The Sanitation District advertised Contract No. J-126BFG for bid on May 15, 2017, and two sealed bids were received on June 27, 2017. Summary information on the bid opening is as follows: Engineer's Estimate $ 548,498 Bidder Amount of Bid R & H Industries dba Best Electric $ 537,700 AMTEK Construction $ 557,759 The bids were evaluated in accordance with the Sanitation District's policies and procedures. As a result of the staff evaluation, Best Electric was determined to be non-responsive. The following discussion provides details of the staff evaluation: R & H Industries dba Best Electric The bid documents required bidders to list five projects completed with aluminum and stainless steel ladders and handrails that are of similar nature, scope, complexity, and cost to this project. Bidders were also permitted to list any current relevant projects. Page 2 of 3 Best Electric listed five electrical projects in its bid. The electrical only scope of work for each project listed was confirmed by the Evaluation Team through contacting the reference(s) listed for each project. Best Electric listed one subcontractor in its bid to perform steel and ladder work. On July 5, 2017, the Sanitation District sent a letter, overnight and via email, to Best Electric requesting the same information required on the bid form from its listed subcontractor. On July 10, 2017, the Sanitation District was informed by Best Electric, via email, that it was not able to obtain the information from its subcontractor. It should be noted that the subcontractor's license detail from the California State License Board (CSLB) indicates a license issuance date of November 1, 2016. It should also be noted that the license details from the CSLB for both the bidder and its listed subcontractor indicate the same individual as owning ten percent or more of the voting stock/membership interest in both companies. There were several irregularities in the bid submitted by Best Electric; however, it is the lack of verifiable required experience that renders the bid non-responsive. Staff similarly evaluated the bid from AMTEK. The bid was determined to be responsible and responsive. A notice was sent to both bidders on July 17, 2017, informing them of the Sanitation District staff's intention to recommend award of the contract to AMTEK Construction. Staff recommends awarding a construction contract to the lowest responsive bidder, AMTEK Construction, for Safety Improvements Program, Contract No. J-126BFG, for a total amount not to exceed $557,759. CEQA A CEQA Notice of Exemption for this project was filed on August 14, 2015. FINANCIAL CONSIDERATIONS This item has been budgeted (FY2017-18 Budget Update, Appendix, Page A8, Project No. J-126), 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.coml with the complete agenda package: Construction Contract TG:dm:gc Page 3 of 3 PART A CONTRACT AGREEMENT C-CA-011317 TABLE OF CONTENTS CONTRACT AGREEMENT SECTION - 1 GENERAL CONDITIONS..................................................................1 SECTION -2 MATERIALS AND LABOR.................................................................4 SECTION -3 PROJECT..........................................................................................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....................................................................................22 SECTION -20 ASSIGNMENT.................................................................................23 SECTION -21 RESOLUTION OF DISPUTES ........................................................23 SECTION -22 SAFETY& HEALTH ........................................................................23 SECTION -23 NOTICES.........................................................................................24 C-CA-011317 CONTRACT AGREEMENT ORANGE COUNTY SANITATION DISTRICT CONTRACT NO. J-126 B, F, and G SAFETY IMPROVEMENTS PROGRAM THIS AGREEMENT is made and entered into, to be effective, this August 23, 2017, by and between AMTEK Construction, 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. CONFORMED C-CA-011317 CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 1 of 25 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 iIL 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-011317 CONFORMED CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 2 of 25 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. CONFORMED C-CA-011317 CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 3 of 25 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: CONTRACT NO. J-126 B, F, and G SAFETY IMPROVEMENTS PROGRAM C-CA-011317 CONFORMED CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 4 of 25 SECTION-4 PLANS AND SPECIFICATONS The Work to be done is shown in a set of Plans and Specifications entitled: CONTRACT NO. J-126 B, F, and G SAFETY IMPROVEMENTS PROGRAM 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 fifteen (15) 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 three hundred eighty-five (385) Days from the effective date of the "Notice to Proceed" issued by OCSD, excluding delays caused or authorized by OCSD as set forth in Sections 7, 8, and 9 hereof, and applicable provisions in the General Conditions. The time for completion includes five (5) 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, CONFORMED C-CA-011317 CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 5 of 25 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 Work 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 Work by the number of days, if any, reasonably required for CONTRACTOR to perform the Extra Work, as determined by the ENGINEER. The decision of the ENGINEER shall be final. C-CA-011317 CONFORMED CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 6 of 25 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 Documents, 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." 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 Hundred Fifty-Seven Thousand Seven Hundred Fifty-Nine Dollars ($557,759) as itemized on the Attached Exhibit"X. Upon satisfaction of the conditions precedent to payment set forth in the General Requirements, Additional General Requirements and General Conditions (including but CONFORMED C-CA-011317 CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 7 of 25 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 Work a schedule which shows: 1. A minimum of one (1) payment to be made to the CONTRACTOR for each successive four-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 the ENGINEER. The processing of payments shall not be considered as an acceptance of any part of the Work. C-CA-011317 CONFORMED CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 8 of 25 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 et seq., the CONTRACTOR may, at its sole expense, substitute securities as provided in General Conditions—"Retained Funds; Substitution of Securities." CONFORMED C-CA-011317 CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 9 of 25 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 Engineering Department. The CONTRACTOR agrees that not less than said prevailing rates shall be paid to workers employed on this public works C-CA-011317 CONFORMED CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 10 of 25 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 thousand dollars ($200.00)for each calendar day or portion thereof for each worker paid (either by the CONTRACTOR or any Subcontractor under it) less than the prevailing rate of per diem wages as set by the Director of Industrial Relations, in accordance with Sections 1770-1780 of the California Labor Code for the Work provided for in this Contract, all in accordance with Section 1775 of the Labor Code of the State of California. D. Apprentices: Sections 1777.5, 1777.6, 1777.7 of the Labor Code of the State of California, regarding the employment of apprentices are applicable to this Contract and the CONTRACTOR shall comply therewith if the prime contract involves thirty thousand dollars ($30,000.00) or more. E. Workday: In the performance of this Contract, not more than eight(8) hours shall constitute a day's work, and the CONTRACTOR shall not require more than eight (8) hours of labor in a day from any person employed by it hereunder except as provided in paragraph (B)above. CONTRACTOR shall conform to Article 3, Chapter 1, Part 7 (Section 1810 at sea.)of the Labor Code of the State of California and shall forfeit to OCSD as a penalty, the sum of twenty-five dollars ($25.00)for each worker employed in the execution of this Contract by CONTRACTOR or any Subcontractor for each calendar day during which any worker is required or permitted to labor more than eight (8) hours in any one (1)calendar day and CONFORMED C-CA-011317 CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 11 of 25 forty (40) hours in any one (1)week in violation of said Article. CONTRACTOR shall keep an accurate record showing the name and actual hours worked each calendar day and each calendar week by each worker employed by CONTRACTOR in connection with the Project. F. Registration: Record of Wages: Inspection: CONTRACTOR shall comply with the registration requirements of Labor Code Section 1725.5. Pursuant to Labor Code Section 1771.4, the Work is subject to compliance monitoring by the California Department of Industrial Relations. CONTRACTOR shall maintain accurate payroll records and shall submit payroll records to the Labor Commissioner pursuant to Labor Code Section 1771.4(a)(3). Penalties for non-compliance with the requirements of Section 1776 may be deducted from progress payments per Section 1776. CONTRACTOR shall comply with the job site notices posting requirements established by the Labor Commissioner per Title 8, California Code of Regulations Section 16461(a). SECTION-15 SURETYBONDS CONTRACTOR shall, before entering upon the performance of this Contract, furnish Bonds approved by OCSD's General Counsel—one in the amount of one hundred percent (100%)of the Contract amount, to guarantee the faithful performance of the Work, and the other in the amount of one hundred percent (100%)of the Contract amount to guarantee payment of all claims for labor and materials furnished. As changes to the Contract occur via approved Change Orders, the CONTRACTOR shall assure that the amounts of the Bonds are adjusted to maintain one hundred percent (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 C-CA-011317 CONFORMED CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 12 of 25 with California Code of Civil Procedure Section 995.630. Each Bond shall be executed in the name of the Surety insurer under penalty of perjury, or the fact of execution of each Bond shall be duly acknowledged before an officer authorized to take and certify acknowledgments, and either one of the following conditions shall be satisfied: A. A copy of the transcript or record of the unrevoked appointment, power of attorney, by- laws, or other instrument, duly certified by the proper authority and attested by the seal of the insurer entitling or authorizing the person who executed the Bond to do so for and on behalf of the insurer, is on file in the Office of the County Clerk of the County of Orange; or B. A copy of a valid power of attorney is attached to the Bond. SECTION— 16 INSURANCE CONTRACTOR shall purchase and maintain, for the duration of the Contract, insurance against claims for injuries to persons, or damages to property which may arise from or in connection with the performance of the Work hereunder, and the results of that Work by CONTRACTOR, its agents, representatives, employees, or Subcontractors, in amounts equal to the requirements set forth below. CONTRACTOR shall not commence Work under this Contract until all insurance required under this Section is obtained in a form acceptable to OCSD, nor shall CONTRACTOR allow any Subcontractor to commence Work on a subcontract until all insurance required of the Subcontractor has been obtained. CONTRACTOR shall maintain all of the foregoing insurance coverages in force through the point at which the Work under this Contract is fully completed and accepted by OCSD pursuant to the provisions of the General Conditions, "Final Acceptance and Final Completion'. Furthermore, CONTRACTOR shall 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 CONFORMED C-CA-011317 CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 13 of 25 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 requirement(s) providing the more protective coverage for both OSCD and the Third Parties shall control and be purchased and maintained by CONTRACTOR. A. Limits of Insurance 1. General Liability: Five Million Dollars ($5,000,000) per occurrence and a general aggregate limit of Five Million Dollars ($5,000,000)for bodily injury, personal injury and property damage. Coverage shall include each of the following: a. Premises-Operations. C-CA-011317 CONFORMED CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 14 of 25 b. Products and Completed Operations, with limits of at least Five Million Dollars ($5,000,000) per occurrence and a general aggregate limit of Five Million Dollars ($5,000,000)which shall be in effect at all times during the warranty period set forth in the Warranty section herein, and as set forth in the General Conditions, "Warranty(CONTRACTOR's Guarantee)", plus any additional extension or continuation of time to said warranty period that may be required or authorized by said provisions. C. Broad Form Property Damage, expressly including damage arising out of explosion, collapse, or underground damage. d. Contractual Liability, expressly including the indemnity provisions assumed under this Contract. e. Separation of Insured Clause, providing that coverage applies separately to each insured, except with respect to the limits of liability. f. Independent CONTRACTOR's Liability. To the extent first dollar coverage, including defense of any claim, is not available to OCSD or any other additional insured because of any SIR, deductible, or any other form of self insurance, CONTRACTOR is obligated to assume responsibility of insurer until the deductible, SIR or other condition of insurer assuming its defense and/or indemnity has been satisfied. CONTRACTOR shall be responsible to pay any deductible or SIR. g. If a crane will be used, the General Liability insurance will be endorsed to add Riggers Liability coverage or its equivalent to cover the usage of the crane and exposures with regard to the crane operators, riggers and others involved in using the crane. CONFORMED C-CA-011317 CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 15 of 25 h. If divers will be used, the General Liability insurance will be endorsed to cover marine liability or its equivalent to cover the usage of divers. 2. Automobile Liability: The CONTRACTOR shall maintain a policy of Automobile Liability Insurance on a comprehensive form covering all owned, non-owned, and hired automobiles, trucks, and other vehicles providing the following minimum limits of liability coverage: Either(1)a combined single limit of Five Million Dollars ($5,000,000) and a general aggregate limit of Five Million Dollars ($5,000,000)for bodily injury, personal injury and property damage; Or alternatively, (2) Five Million Dollars ($5,000,000) per person for bodily injury and Five Million Dollars ($5,000,000) per accident for property damage. 3. Umbrella Excess Liability: The minimum limits of general liability and automobile liability insurance required, as set forth above, shall be provided for either in a single policy of primary insurance or a combination of policies of primary and umbrella excess coverage. Excess liability coverage shall be issued with limits of liability which, when combined with the primary insurance, will equal the minimum limits for general liability and automobile liability. 4. Drone Liability Insurance: If a drone will be used, drone liability insurance must be maintained by CONTRACTOR in the amount of One Million Dollars ($1,000,000) in a form acceptable by OCSD. 5. Worker's Compensation/Employer's Liability: CONTRACTOR shall provide such Worker's Compensation Insurance as required by the Labor Code of the State of California, including employer's liability with a minimum limit of One Million Dollars ($1,000,000) per accident for bodily injury or disease. If an exposure to Jones Act C-CA-011317 CONFORMED CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 16 of 25 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. 6. Limits are Minimums: If CONTRACTOR maintains higher limits than the minimums shown in this Section, OCSD requires and shall be entitled to coverage for the higher limits maintained by the CONTRACTOR. B. Deductibles and Self-Insured Retentions Any deductibles or self-insured retentions must be declared to and approved by OCSD. At the option of OCSD, either: the Insurer shall reduce or eliminate such deductibles or self- insured retentions as respects OCSD, its Directors, officers, agents, CONSULTANTS, and CONFORMED C-CA-011317 CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 17 of 25 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 thirty(30)days prior notice of such an event to OCSD, or to have its insurance broker/agent send to OCSD a certified letter describing the changes in coverage and any increase in deductible or SIR C-CA-011317 CONFORMED CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 18 of 25 amounts. The certified letter must be sent Attention: Risk Management and shall be received not less than twenty (20) days prior to the effective date of the change(s). The letter must be signed by a Director or Officer of the broker/agent and must be on company letterhead, and may be sent via e-mail in pdf format. 3. Coverage shall not extend to any indemnity coverage for the active negligence of any additional insured in any case where an agreement to indemnify the additional insured would be invalid under California Civil Code Section 2782(b). 4. If required by a public agency from whom permit(s)will be obtained, each policy of General Liability Insurance and Automobile Liability Insurance shall be endorsed to specify by name the public agency and its legislative members, officers, agents, CONSULTANTS, and employees, to be additional insureds. D. Acceptability of Insurers Insurers must have an "A-", or better, Policyholder's Rating, and a Financial Rating of at least Class Vill, or better, in accordance with the most current A.M. Best Rating Guide. OCSD recognizes that State Compensation Insurance Fund has withdrawn from participation in the A.M. Best Rating Guide process. Nevertheless, OCSD will accept State Compensation Insurance Fund for the required policy of workers compensation insurance, subject to OCSD's option, at any time during the term of this Contract, to require a change in insurer upon twenty (20)days written notice. Further, OCSD will require CONTRACTOR to substitute any insurer whose rating drops below the levels herein specified. Said substitution shall occur within twenty (20)days of written notice to CONTRACTOR by OCSD or its agent. CONFORMED C-CA-011317 CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 19 of 25 E. Verification of Coverage CONTRACTOR shall furnish OCSD with original certificates and mandatory endorsements affecting coverage. Said policies and endorsements shall conform to the requirements herein stated. All certificates and endorsements are to be received and approved by OCSD before Work commences. OCSD reserves the right to require complete, certified copies of all required insurance policies, including endorsements, affecting the coverage required by these Specifications at any time. F. Subcontractors CONTRACTOR shall be responsible to establish insurance requirements for any Subcontractors hired by CONTRACTOR. The insurance shall be in amounts and types reasonably sufficient to deal with the risk of loss involving the Subcontractor's operations and work. OCSD and any public agency issuing permits for the Project must be named as "Additional Insured"on any General Liability or Automobile Liability policy obtained by a Subcontractor. The CONTRACTOR must obtain copies and maintain current versions of all Subcontractors' policies, Certificate of Liability and mandatory endorsements effecting coverage. Upon request, CONTRACTOR must furnish OCSD with the above referenced required documents. G. Required Forms and Endorsements 1. Required ACORD Form a. Certificate of Liability Form 25 2. Required Insurance Services Office, Inc. Endorsements (when alternative forms are shown, they are listed in order of preference) In the event any of the following forms are cancelled by Insurance Services Office, Inc. (ISO), or are updated, the ISO replacement form or equivalent must be supplied. C-CA-011317 CONFORMED CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 20 of 25 a. Commercial General Liability Form CG-0001 10 01 b. Additional Insured Including Form CG-2010 10 01 and Products-Completed Operations Form CG-2037 10 01 C. Waiver of Transfer of Rights of Form CG-2404 11 85; or Recovery Against Others to Us/ Form CG-2404 10 93 Waiver of Subrogation 3. Required State Compensation Insurance Fund Endorsements a. Waiver of Subrogation Endorsement No. 2570 b. Cancellation Notice Endorsement No. 2065 4. Additional Required Endorsements a. Notice of Policy Termination Manuscript Endorsement SECTION-17 RISK AND INDEMNIFICATION All Work covered by this Contract done at the site of construction or in preparing or delivering materials to the site shall be at the risk of CONTRACTOR alone. CONTRACTOR shall save, indemnify, defend, and keep OCSD and others harmless as more specifically set forth in General Conditions, "General Indemnification". 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 CONFORMED C-CA-011317 CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 21 of 25 made at the time and in the manner provided in the General Conditions, "Termination for Default" and "Termination for Convenience". SECTION—19 WARRANTY The CONTRACTOR agrees to perform all Work under this Contract in accordance with the Contract Documents, including OCSD's designs, Drawings and Specifications. The CONTRACTOR guarantees for a period of at least one (1) year from the date of Final Acceptance of the Work, pursuant to the General Conditions, "Final Acceptance and Final Completion" that the completed Work is free from all defects due to faulty materials, equipment or workmanship and that it shall promptly make whatever adjustments or corrections which may be necessary to cure any defects, including repairs of any damage to other parts of the system resulting from such defects. OCSD shall promptly give notice to the CONTRACTOR of observed defects. In the event that the CONTRACTOR fails to make adjustments, repairs, corrections or other work made necessary by such defects, OCSD may do so and charge the CONTRACTOR the cost incurred. The CONTRACTOR's warranty shall continue as to any corrected deficiency until the later of(1)the remainder of the original one-year warranty period; or(2)one year after acceptance by OCSD of the corrected Work. The Performance Bond and the Payment Bond shall remain in full force and effect through the guarantee period. The CONTRACTOR's obligations under this clause are in addition to the CONTRACTOR's other express or implied assurances under this Contract, including but not limited to specific 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. C-CA-011317 CONFORMED CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 22 of 25 SECTION-20 ASSIGNMENT No assignment by the CONTRACTOR of this Contract or any part hereof, or of funds to be received hereunder, will be recognized by OCSD unless such assignment has had prior written approval and consent of OCSD and the Surety. SECTION—21 RESOLUTION OF DISPUTES OCSD and the CONTRACTOR shall comply with the provisions of California Public Contract Code Section 20104 at. seq., regarding resolution of construction claims for any Claims which arise between the CONTRACTOR and OCSD, as well as all applicable dispute and Claims provisions as set forth in the General Conditions and as otherwise required by law. SECTION—22 SAFETY & HEALTH CONTRACTOR shall comply with all applicable safety and health requirements mandated by Federal, State, City, and/or public agency codes, permits, ordinances, regulations, and laws, as well as these Contract Documents, including but not limited to the General Requirements, Section entitled "Safety" and Exhibit B OCSD Safety Standards. CONFORMED C-CA-011317 CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 23 of 25 SECTION-23 NOTICES Any notice required or permitted under this Contract may be given by ordinary mail at the address set forth below. Any party whose address changes shall notify the other party in writing. TO OCSD: Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, California 92708-7018 Attn: Clerk of the Board Copy to: Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, California 92708-7018 Attn: Construction Manager Bradley R. Hogin, Esquire Woodruff, Spradlin &Smart 555 Anton Boulevard Suite 1200 Costa Mesa, California 92626 TO CONTRACTOR: AMTEK Construction 12409 Slauson Avenue, Suite"I" Whittier, CA 90606 Copy to: Steven Sayce, President AMTEK Construction 12409 Slauson Avenue, Suite"I" Whittier, CA 90606 C-CA-011317 CONFORMED CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 24 of 25 IN WITNESS WHEREOF, the parties hereto have executed this Contract Agreement as the date first hereinabove written. CONTRACTOR: AMTEK Construction 12409 Slauson Avenue, Suite "I" Whittier, CA 90606 By Printed Name Its CONTRACTOR's State License No. 490382 (Expiration Date—04/30/2019) OCSD: Orange County Sanitation District By Gregory C. Sebourn, PLS Chair, Board of Directors By Kelly A. Lore Clerk of the Board By Marc Dubois Contracts, Purchasing and Materials Management Manager CONFORMED C-CA-011317 CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 25 of 25 EXHIBIT A SCHEDULE OF PRICES C-EXA-080414 TABLE OF CONTENTS EXHIBIT A SCHEDULE OF PRICES EXA-1 BASIS OF COMPENSATION.............................................................................1 EXA-2 PROGRESS PAYMENTS ..................................................................................1 EXA-3 RETENTION AND ESCROW ACCOUNTS........................................................1 EXA-4 STOP PAYMENT NOTICE.................................................................................3 EXA-5 PAYMENT TO SUBCONTRACTORS................................................................3 EXA-6 PAYMENT OF TAXES .......................................................................................3 EXA-7 FINAL PAYMENT...............................................................................................4 EXA-8 DISCOVERY OF DEFICIENCIES BEFORE AND AFTER FINAL PAYMENT...5 ATTACHMENT 1 -CERTIFICATION FOR REQUEST FOR PAYMENT.........................7 ATTACHMENT 2-SCHEDULE OF PRICES...................................................................8 C-EXA-080414 EXHIBIT A SCHEDULE OF PRICES EXA-1 BASIS OF COMPENSATION CONTRACTOR will be paid the Contract Price according to the Schedule of Prices, and all other applicable terms and conditions of the Contract Documents. EXA-2 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. CONFORMED C-EXA-080414 CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM 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) Days after receipt of the payment, the respective amount of interest earned, net of costs attributed to retention withheld from each Subcontractor, on the amount of retention withheld to ensure the performance of the Subcontractor. The escrow agreement used by the escrow agent pursuant to this article shall be substantially similar to the form set forth in §22300 of the California Public Contract Code. C. Release of Retention: Upon Final Acceptance of the Work, the CONTRACTOR shall submit an invoice for release of retention in accordance with the terms of the Contract. D. Additional Deductibles: In addition to the retentions described above, OCSD may deduct from each progress payment any or all of the following: 1. Liquidated Damages that have occurred as of the date of the application for progress payment; 2. Deductions from previous progress payments already paid, due to OCSD's discovery of deficiencies in the Work or non-compliance with the Specifications or any other requirement of the Contract; 3. Sums expended by OCSD in performing any of the CONTRACTOR's obligations under the Contract that the CONTRACTOR has failed to perform, and; 4. Other sums that OCSD is entitled to recover from the CONTRACTOR under the terms of the Contract, including without limitation insurance deductibles and assessments. C-EXA-080414 CONFORMED CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM 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. CONFORMED C-EXA-080414 CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 3 of 8 EXA-7 FINAL PAYMENT After Final Acceptance of the Work, as more particularly set forth in the General Conditions, "Final Acceptance and Final Completion", and after Resolution of the Board authorizing final payment and satisfaction of the requirements as more particularly set forth in General Conditions—"Final Payment", a final payment will be made as follows: 1. Prior to Final Acceptance, the CONTRACTOR shall prepare and submit an application for Final Payment to OCSD, including: a. The proposed total amount due the CONTRACTOR, segregated by items on the payment schedule, amendments, Change Orders, and other bases for payment; b. Deductions for prior progress payments; c. Amounts retained; d. A conditional waiver and release on final payment for each Subcontractor(per Civil Code Section 8136); e. A conditional waiver and release on final payment on behalf of the CONTRACTOR (per Civil Code Section 8136); f. List of Claims the CONTRACTOR intends to file at that time or a statement that no Claims will be filed, g. List of pending unsettled Claims, stating claimed amounts, and copies of any and all complaints and/or demands for arbitration received by the CONTRACTOR; and h. For each and every Claim that resulted in litigation or arbitration which the CONTRACTOR has settled, a conformed copy of the Request for Dismissal with prejudice or other satisfactory evidence the arbitration is resolved. 2. The application for Final Payment shall include complete and legally effective releases or waivers of liens and stop payment notices satisfactory to OCSD, arising out of or filed in connection with the Work. Prior progress payments shall be subject to correction in OCSD's review of the application for Final Payment. Claims filed with the application for Final Payment must be otherwise timely under the Contract and applicable law. 3. Within a reasonable time, OCSD will review the CONTRACTOR's application for Final Payment. Any recommended changes or corrections will then be forwarded to the CONTRACTOR. Within ten (10) Days after receipt of recommended changes from OCSD, the CONTRACTOR will C-EXA-080414 CONFORMED CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 4 of 8 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 acceptance by OCSD, the revised application for Final Payment will become the approved application for Final Payment. 4. If no Claims have been filed with the initial or any revised application for Final Payment, and no Claims remain unsettled within thirty-five (35) Days after Final Acceptance of the Work by OCSD, and agreements are reached on all issues regarding the application for Final Payment, OCSD, in exchange for an executed release, satisfactory in form and substance to OCSD, will pay the entire sum found due on the approved application for Final Payment, including the amount, if any, allowed on settled Claims. 5. The release from the CONTRACTOR shall be from any and all Claims arising under the Contract, except for Claims that with the concurrence of OCSD are specifically reserved, and shall release and waive all unreserved Claims against OCSD and its officers, directors, employees and authorized representatives. The release shall be accompanied by a certification by the CONTRACTOR that: a. It has resolved all Subcontractors, Suppliers and other Claims that are related to the settled Claims included in the Final Payment; b. It has no reason to believe that any party has a valid Claim against the CONTRACTOR or OCSD which has not been communicated in writing by the CONTRACTOR to OCSD as of the date of the certificate; c. All warranties are in full force and effect, and; d. The releases and the warranties shall survive Final Payment. 6. If any Claims remain open, OCSD may make Final Payment subject to resolution of those Claims. OCSD may withhold from the Final Payment an amount not to exceed one hundred fifty percent (150%) of the sum of the amounts of the open claims, and one hundred twenty-five percent (125%) of the amounts of open stop payment notices referred to in article entitled stop payment notices herein. 7. The CONTRACTOR shall provide an unconditional waiver and release on final payment from each Subcontractor and Supplier providing Work under the Contract(per Civil Code Section 8138) and an unconditional waiver and release on final payment on behalf of the CONTRACTOR (per Civil Code Section 8138)within thirty (30) Days of receipt of Final Payment. EXA-8 DISCOVERY OF DEFICIENCIES BEFORE AND AFTER FINAL PAYMENT Notwithstanding OCSD's acceptance of the application for Final Payment and irrespective of whether it is before or after Final Payment has been made, OCSD shall not be precluded from subsequently showing that: CONFORMED C-EXA-080414 CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 5 of 8 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-080414 CONFORMED CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 6 of 8 ATTACHMENT 1 — CERTIFICATION FOR REQUEST FOR PAYMENT I hereby certify under penalty of perjury as follows: That the claim for payment is in all respects true, correct; that the services mentioned herein were actually rendered and/or supplies delivered to OCSD in accordance with the Contract. I understand that it is a violation of both the federal and California False Claims Acts to knowingly present or cause to be presented to OCSD a false claim for payment or approval. A claim includes a demand or request for money. It is also a violation of the False Claims Acts to knowingly make use of a false record or statement to get a false claim paid. The term "knowingly" includes either actual knowledge of the information, deliberate ignorance of the truth or falsity of the information, or reckless disregard for the truth or falsity of the information. Proof of specific intent to defraud is not necessary under the False Claims Acts. I understand that the penalties under the Federal False Claims Act and State of California False Claims Act are non-exclusive, and are in addition to any other remedies which OCSD may have either under Contract or law. I hereby further certify, to the best of my knowledge and belief, that: 1. The amounts requested are only for performance in accordance with the Specifications, terms, and conditions of the Contract; 2. Payments to Subcontractors and Suppliers have been made from previous payments received under the Contract, and timely payments will be made from the proceeds of the payment covered by this certification; 3. This request for progress payments does not include any amounts which the prime CONTRACTOR intends to withhold or retain from a Subcontractor or Supplier in accordance with the terms and conditions of the subcontract; and 4. This certification is not to be construed as Final Acceptance of a Subcontractor's performance. Name Title Date CONFORMED C-EXA-080414 CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 7 of 8 ATTACHMENT 2—SCHEDULE OF PRICES See next pages from the Bid Submittal Forms (AMTEK Construction): BF-14 Schedule of Prices, Pages 1-2 C-EXA-080414 CONFORMED CONTRACT NO.J-126 B, F,and G SAFETY IMPROVEMENTS PROGRAM Page 8 of 8 Bid Submitted By: AMTEK CONSTRUCTION (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. Bidders compensation for the Work under the Contract Documents will be computed based upon the lump sum amount of the Contract at time of award, plus any additional or deleted costs approved by OCSD via approved Change Orders, pursuant to the Contract Documents. Bidder shall separately price and accurately reflect costs associated with each line Item, leaving no blanks. Any and all modifications to the Bid must be initialed by an authorized representative of the Bidder in accordance with the Instructions to Bidders, Preparation of Bid. Bidders are reminded of Instruction to Bidders, Discrepancy in Bid Items,which, in summary, provides that the total price for each item shall be based on the unit price listed for each item multiplied by the quantity; and the correct Total Price for each item shall be totaled to determine the Total Amount of Bid. All applicable costs including overhead and profit shall be reflected in the respective unit costs and the TOTAL AMOUNT OF BID. The Bid Price shall include all costs to complete the Work including Profit overhead etc unless otherwise specified in the Contract Documents All applicable sales taxes. Federal and/or State and any other special taxes oat nt rights or royalties shall be included in the prices Quoted in this Bid B. Basis of Award AWARD OF THE CONTRACT WILL BE MADE ON THE BASIS OF THE LOWEST RESPONSIVE AND RESPONSIBLE BID. THE LOWEST BID IS DEFINED AS THE"TOTAL AMOUNT OF BID" LISTED IN THIS BID, UNLESS OTHERWISE SPECIFIED BELOW. Note 1: Base Bid. Includes all costs necessary to furnish all labor, materials, equipment and services for the construction of the Project per the Invitation for Bids. den BF-14 SCHEDULE OF PRICES C-SF-02111e CONTRACT NO.J-126 B,F.and G SAFETY IMPROVEMENTS PROGRAM Page 1 of 2 \ r§! z ; x `§ Q ! \ w mom ) LO °\\ \ § `® ) 2r E ! ! � \ ) 8ra ! 0 B E - , ! ! ! - k *k { i ) {/ | \/ ! E#o �� } !! ! C e \ a J 2x , 2B r ƒ E: 777 - E . ! o9 � - !«f § kkk § . ~ - } BOARD OF DIRECTORS Meeting Date T0.1 of Dr. -- os/zs/v AGENDA REPORT I em Number Item Number g Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: GENERAL MANAGER APPROVED PURCHASES AND ADDITIONS TO THE PRE-APPROVED OEM SOLE SOURCE LIST GENERAL MANAGER'S RECOMMENDATION A. Receive and file Orange County Sanitation District purchases made under the General Manager's authority for the period of April 1, 2017 to June 30, 2017; and B. Approve the following additions to the pre-approved Original Equipment Manufacturer (OEM) Sole Source List: • AVO TRAINING INSTITUTE - Substation Maintenance Technician Certification • CLEAN ENERGY - Operation, maintenance, and repair of the Compressed Natural Gas (CNG) Facilities • COOPER BESSEMER - CenGen engine components • EMBARK CONSULTING - CRISP and SCADA software consulting • ESSCO - Submersible pumps • FISHER CONTROLS/EMERSON - Gas flow regulators • GE INSPECTION • ITT STANDARD - Heat exchangers • SUEZ TREATMENT SOLUTIONS - Bar screen repair parts • TRANE COMPANY - Maintenance for absorption chillers • TREDENT DATA SYSTEMS - Support for Cisco Smartnet • VACTOR - Industrial cleaning truck rental and repair BACKGROUND Quarterly reports of General Manager approved purchases between $50,000 and $100,000 and additions to the pre-approved OEM Sole Source List are customarily presented first to the Administration Committee prior to being placed on the Board of Directors (Board) agenda. However, as the Administration Committee is not scheduled in August, the Orange County Sanitation District's (Sanitation District) practice has been to present this information directly to the Board. RELEVANT STANDARDS • Quarterly financial reporting • Ensure the public's money is wisely spent Page 1 of 4 PRIOR COMMITTEE/BOARD ACTIONS December 2016 - Minute Order 12(b) authorized the General Manager to ratify additions or deletions to the OEM Sole Source list on the General Manager's quarterly approved purchases agenda report. ADDITIONAL INFORMATION In accordance with Board purchasing policy, Ordinance No. OCSD47, the General Manager has authority to approve purchases between $50,000 and $100,000. Below is a summary of General Manager approved purchases, in amounts exceeding $50,000, for the fourth quarter of fiscal year 2016-17: Vendor Name Amount Department Description/Discussion Warranty Work for CenGen Emissions BLACK&VEATCH $6203500 Engineering Control Project J-111 , . g g CORPORATION Sole Source Justification 1738 Reason: Unique Service Blanket PO for BLAST Development BLAST General Training with Authorized Vendors CONTRACTS - $7500000 Manager's 6/1/17 to 5/31118 , . PURCHASING USE Office with 4 Optional 1-year Renewal Periods ONLY Sole Source 1751 Reason: Unique Service District-Wide Safety Training CINTAS FIRE Human 7/1/17 to 6/30/18 PROTECTION $99,000.00 Resources U.S. Communities Contract 12-JLH-011C, in accordance with Ordinance OCSD-47, Section 2.03 (B) Cooperative Purchases COURTESY Operations & Three 2017 Chevy Colorado Trucks CHEVROLET $92,009.16 Maintenance Approved CORF Budget CENTER Specification No. V-2017-851 Blanket PO for iPACS (Environmental ENFOTECH & $g500000 Administrative Compliance System) Software & Support , . CONSULTING, INC. Services 7/1/17 to 6/30/18 Board Award: M.O. 12/14/16, Item 12 Page 2 of 4 Vendor Name Amount Department Description/Discussion Emergency Sinkhole Remediation on J R FILANC $75,000.00 Engineering Dover Dr. —Related to Project 5-63 CONSTRUCTION Sole Source Justification 1782 Reason: Emergency SharePoint Software Technical Services KONICA MINOLTA Administrative 4/10/17 to 10/19/20 BUSINESS $59,895.00 Services NJPA Contract 083116-KON, SOLUTIONS USA in accordance with Ordinance OCSD-47, Section 2.03 (B) Cooperative Purchases J2 SCIENTIFIC, Environmental Chromatography Sample Cleanup System LLC $50,352.56 Services Approved CORF Budget Specification No. E-2017-842 Purchase Existing Construction Trailer for MCCARTHY Relocation of PCI and EIM Groups BUILDING $75,000.00 Engineering Sole Source Justification 1778 COMPANIES, INC. Reason: Trailer Already on OCSD Property and Needed for Relocation Convenience Blanket PO for Classed ORANGE COUNTY $99000.00 Administrative and Legal Advertising , REGISTER Services 7/1/17 to 6/30/18 GM Article 2, Section 2.2 (b) (1) Blanket PO for Activated Carbon for Plant PROMINENT Operations & 1 CenGen Fuel Gas Cleaning System SYSTEMS INC $59,352.00 Maintenance 7/1/17 to 6130/18 with 4 Optional 1-year Renewal Periods Specification No. S-2017-840 Scripps Institution of Oceanography to Install & Maintain 2 Water Quality Sensors REGENTS OF UNIV on Newport Pier Monitoring Station OF CALIFORNIA $55,000.00 Environmental Services 7/1/17 to 6/30/18 SD with 2 Optional 1-year Renewal Periods Sole Source Justification 1746 Reason: Unique Product/Service Page 3 of 4 Vendor Name Amount Department Description/Discussion Convenience Blanket PO for On-Site SAFETY SHOE $7000 Human Safety Shoe Service As-Needed ,000. SERVICES Resources 7/1/17 to 6/30/18 GM Article 2, Section 2.2 (b) (1) Underwater External Assessment of the SGS US WEST Operations & 120-inch Outfall Line COAST LLC $80,000.00 Maintenance Sole Source Justification 1749 Reason: Time is of the Essence to Meet Permit-Stipulated Requirement W.A. RASIC Operations & Security Booth Repair at Plant 2 CONSTRUCTION $71,750.00 Maintenance Task Order Bid TOB-2017-868 of CO., INC. Master Service Contract 5-2015-700-3 XYLEM Bypass Pumping at Seal Beach Pump DEWATERING Operations & Station During Electrical Investigation of a SOLUTIONS/GOD $80,000.00 Maintenance Failing MCC WIN PUMPS Sole Source Justification 1781 Reason: Time is of the Essence- Urgent Page 4 of 4 BOARD OF DIRECTORS Meeting Date TOBE.Or Dir. oB/zs/v AGENDA REPORT Item Item 10 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Celia Chandler, Director of Human Resources SUBJECT: CLEAN HARBORS ENVIRONMENTAL SERVICES GENERAL MANAGER'S RECOMMENDATION A. Approve a Service Contract with Clean Harbors Environmental Services, Inc., Specification No. S-2017-841, for the period of September 1, 2017 through June 30, 2018, for a total annual amount not to exceed $192,000, with up to four (4) one-year renewals options; and B. Approve an annual contingency of$19,200 (10%). BACKGROUND Orange County Sanitation District (Sanitation District) is required to properly dispose of all hazardous waste generated. The requirements are based upon environmental regulations; specifically, the Resource Conservation and Recovery Act (RCRA). The vendor's primary service is the transportation, treatment, and either recycling or disposal of hazardous waste generated by the Sanitation District. The Sanitation District uses the vendor to provide the following additional services: • Hazardous waste profiling — sampling a waste and conducting lab analysis to determine how the waste is supposed to be disposed of properly; • Lab packs—sampling and property packing small quantities of chemicals to ensure they are disposed of properly; • Spill cleanup — provide the trained personnel, material, and equipment to clean up spills caused by Sanitation District activities that are beyond the capabilities of the Sanitation District staff to handle; and, • Hazardous waste storage yard inspections — examining all the different storage areas at Plant Nos. 1 and 2 to ensure they are compliant with regulations. RELEVANT STANDARDS • Provide a safe and collegial workplace • Compliance with the Resource Conservation and Recovery Act (RCRA) Page 1 of 3 RAMIFICATIONS OF NOT TAKING ACTION If there is no contract in place, the Sanitation District may not be able to properly dispose of the hazardous waste generated by its facilities and in accordance with the requirements set forth by the RCRA. PRIOR COMMITTEE/BOARD ACTIONS July 2016 - Request to add funds was ratified for Change Order No. 3 to P.O. 104652-OB, Specification 5-2011498, issued to Clean Harbors for waste disposal services for an additional $50,000 for a contract amount not to exceed $242,500 for the period of July 1, 2015 to June 30, 2016. August 2015 - Request to add funds was ratified for Change Order No. 2 to P.O. 104652-OB, Specification S-2011498, issued to Clean Harbors for waste disposal services for an additional $10,000 for a contract amount not to exceed $205,000 for the remainder of the 2014/15 Fiscal year contract ending June 30, 2015. May 2015 - Administration Committee - Request to add funds was ratified for Change Order No. 1 to P.O. 104652-OB, Specification S-2011498, issued to Clean Harbors for hazardous waste services for an additional $70,000 for annual contract amount not to exceed $195,500, for the remainder of the contract ending June 30, 2017. ADDITIONAL INFORMATION The Sanitation District requested and advertised for proposals for a Hazardous Waste Disposal Services Contract on March 9, 2017. The following evaluation criteria were described in the request for proposals and used to determine the most qualified firm. CRITERION WEIGHT Qualifications of Firm 30% Staffing and Project Organization 20% Work Plan 30% Cost 20% Six(6)proposals were received on April 7, 2017, and five (5)were evaluated in accordance with the evaluation process set forth in Ordinance OCSD47, by a pre-selected evaluation team consisting of the following Sanitation District's staff. Paulo Pavia Environmental Specialist Leyla Perez Pr. Environmental Specialist George Rivera Security/Emergency Planning Specialist Cindy Vellucci Sr. Environmental Specialist Jessica Avalos Sr. Safety and Health Representative Page 2 of 3 Each member of the evaluation team ranked the firms based on the proposals using the evaluation criteria and weighting described above. In this request for proposal process, cost is a weighted factor and has already been included. The following table reflects the ranking outcome for the five (5) evaluated firms. This process is different from the professional design services contract where cost is not included. Clean K-Vac NRC United Water Harbors Pumping Shark Systems Evaluator 1 1st 5°i 3rd 2nd 4th Evaluator 2nd 4ih 1st 3rd 5th Evaluator 1st 4ih 2nd 3rd 5th Evaluator 3rd 2nd 4th let 51h Evaluators 1st 4th 2nd 2nd 5th Ranking 1st 4m 3rd 2nd 5th CEQA N/A FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package: • Service Contract Page 3 of 3 SERVICE CONTRACT Hazardous Waste Disposal Services Specification No. S-2017-841 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 Clean Harbors Environmental Services, Inc.with a principal place of business at 42 Longwater Drive, Norwell, MA 02061 (hereinafter referred to as "SERVICE PROVIDER")collectively referred to as the"Parties". WITNESSETH WHEREAS, OCSD desires to retain the services of SERVICE PROVIDER for Hazardous Waste Disposal Services "Services"; and WHEREAS, OCSD has chosen SERVICE PROVIDER to conduct Services in accordance with Ordinance No. OCSD-47; and WHEREAS, on August 23, 2017, the OCSD Board of Directors authorized execution of this Contract between OCSD and SERVICE PROVIDER; and WHEREAS,SERVICE PROVIDER is qualified byvirtue 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 ("Contract") is made by OCSD and SERVICE PROVIDER. The Terms and Conditions herein exclusively govern the purchase of Services as described in the attached Exhibits "A", "A-1", "A-2"and "B". 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" Technical Proposal from SERVICE PROVIDER Exhibit"A-1" Emergency Response Agreement Exhibit"A-2" OCSD's Scope of Work Exhibit"B" Cost Proposal from SERVICE PROVIDER Exhibit"C" Acknowledgement of Insurance Requirements Exhibit"D" OCSD Safety Standards 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. 1.4 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 10 Specification No. S-2017-841 1.6 The term "days", when used in the Contract, shall mean calendar days, unless otherwise noted as business days. 1.7 OCSD holidays (non-working days) are as follows: New Years Day, Lincoln's Birthday, Presidents' Day Monday, Memorial Day Monday, Independence Day, Labor Day Monday, Veterans Day, Thanksgiving Day, Day after Thanksgiving, Christmas Eve, and Christmas Day. 1.8 SERVICE PROVIDER 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 SERVICE PROVIDER 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 Ninety Three Thousand and 00100 Dollars ($193,000.00). 3. California Department of Industrial Relations 1D/R)Rectistration and Record of Wages 3.1 To the extent SERVICE PROVIDER's employees and/or its Subcontractors who will perform Work during the design and preconstruction phases of a construction contract for which Prevailing Wage Determinations have been issued by the DIR and as more specifically defined under Labor Code Section 1720 at seq, SERVICE PROVIDER and its Subcontractors shall comply with the registration requirements of Labor Code Section 1725.5. Pursuant to Labor Code Section 1771.4, the Work is subject to compliance monitoring and enforcement by the DIR. 3.2 The SERVICE PROVIDER and its Subcontractors shall maintain accurate payroll records and shall comply with all the provisions of Labor Code Section 1776, and shall submit payroll records to the Labor Commissioner pursuant to Labor Code 1771.4(a)(3). Penalties for non- compliance with the requirements of Section 1776 may be deducted from progress payments per Section 1776. 3.3 Pursuant to Labor Code Section 1776, the SERVICE PROVIDER and its Subcontractors shall furnish a copy of all certified payroll records to OCSD and/or general public upon request, provided the public request is made through OCSD, the Division of Apprenticeship Standards or the Division of Labor Enforcement of the Department of Industrial Relations. 3.4 The SERVICE PROVIDER and its Subcontractors shall comply with the job site notices posting requirements established by the Labor Commissioner per Title 8, California Code of Regulation Section 16461(e). 4. Payments Payments shall be made upon approval by OCSD Project Manager, Jessica Avalos or his/her designee, of invoices submitted for Services completed as described in Exhibits "A". "A-1". "A-2" and "B". OCSD, at its sole discretion, shall be the determining party as to whether the Services have been satisfactorily completed. 5. Invoices 5.1 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. 5.2 Invoices shall be emailed by SERVICE PROVIDER to OCSD Accounts Payable at APStaff0OCSD.com and reference the following in the subject line: "INVOICE", the Purchase Order number, the Project Manager, Jessica Avalos and 5-2017-841. Orange County Sanitation District 2 of 10 Specification No. S-2017-841 6. Audit Rights SERVICE PROVIDER 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 SERVICE PROVIDER relating to the invoices submitted by SERVICE PROVIDER pursuant to this Contract. 7. Scone of Work Subject to the terms of this Contract, SERVICE PROVIDER shall perform the Services identified in Exhibits "A", "A-1", "A-2" and "B". SERVICE PROVIDER shall perform said Services in accordance with generally accepted industry and professional standards. 6. Modifications to Scope of Work Requests for modifications to the Exhibits"A", "A-1", "A-2" and "B" hereunder can be made by OCSD at any time. All modifications must be made in writing and signed by both Parties. 9. Contract Term The Services provided under this Contract shall commence on the effective date of Notice to Proceed, and be completed no later than June 30, 2018. 9.1 OCSD may exercise the option to renew the Agreement for up to four (4) one-year periods (July 1• —June 30'h)based upon the criteria set forth in Exhibits"A", "A-1","A-2"and "B", if mutually acceptable contract terms can be negotiated. OCSD shall make no obligation to renew nor give reason if it elects not to renew. 9.2 Renewals may be made through the OCSD Purchase Order Process. 10. Termination 10.1 OCSO 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, SERVICE PROVIDER shall immediately discontinue all work under this Contract (unless the notice directs otherwise). OCSD shall thereafter, within thirty (30) days, pay SERVICE PROVIDER for work performed (cost and fee)to the date of termination. SERVICE PROVIDER 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 SERVICE PROVIDER 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 SERVICE PROVIDER 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 SERVICE PROVIDER: • if SERVICE PROVIDER becomes insolvent or files a petition under the Bankruptcy Act; or • if SERVICE PROVIDER sells its business; or • if SERVICE PROVIDER breaches any of the terms of this Contract; or • if total amount of compensation exceeds the amount authorized under this Contract. 10.4 All OCSD property in the possession or control of SERVICE PROVIDER shall be returned by SERVICE PROVIDER to OCSD upon demand,or at the termination of this Contract, whichever occurs first. Orange County Sanitation District 3 of 10 Specification No. S-2017-841 11. Insurance SERVICE PROVIDER 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"). SERVICE PROVIDER shall not commence work under this Contract until all required insurance is obtained in a form acceptable to OCSD, nor shall SERVICE PROVIDER 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. Indemnification and Hold Harmless Provision SERVICE PROVIDER 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 SERVICE PROVIDER's services under this Contract, or by its subcontractor or by anyone directly or indirectly employed by SERVICE PROVIDER, 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, SERVICE PROVIDER shall indemnify, protect, defend and hold harmless OCSD, its elected and appointed officials, officers, agents and employees, from and against any and all claims, liabilities, damages or expenses of any nature, including attorneys'fees: (a)for injury to or death of any person or damage to property or interference with the use of property, arising out of or in connection with SERVICE PROVIDER'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 SERVICE PROVIDER of or anyone employed by or working under SERVICE PROVIDER. To the maximum extent permitted by law, SERVICE PROVIDER'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. SERVICE PROVIDER agrees to provide this defense immediately upon written notice from OCSD, and with well qualified, adequately insured, and experienced legal counsel acceptable to OCSD. 13. Safety Standards and Human Resources IHRI Policies 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 SERVICE PROVIDER is required to follow the most stringent regulatory requirement at no cost to OCSD. SERVICE PROVIDER and all their employees and subcontractors, shall adhere to all applicable OCSD Safety Standards and Human Resources Policies found at: OCSD.com, "Document Central", under the heading "About Us". OCSD's Safety Standards and Human Resource Policies are hereby incorporated by reference as though fully set forth herein. In addition to the requirements stated above, SERVICE PROVIDER shall adhere to the following OCSD Safety requirements: SOP-102 PPE, SOP-607 Hazard Communication, SOP-109 Respiratory Protection Program. These OCSD Safety requirements are available at: OCSD.com, "Document Central", under the heading "About Us". 14. Warranties 14.1 Manufacturer's standard warranty shall apply. All manufacturer warranties will begin at date of completion of this Contract. Orange County Sanitation District 4 of 10 Specification No. S-2017-841 14.2 SERVICE PROVIDER's warranty: If, within the 12-month period following completion of its Services, OCSD informs SERVICE PROVIDER that any part of the Services fails to meet the standards required under this Contract, SERVICE PROVIDER shall, within the time agreed to by OCSD and SERVICE PROVIDER, take all such actions as are necessary to correct or complete the noted deficiency(ies) at SERVICE PROVIDER's sole expense. 15. Performance Time is of the essence in the performance of this Contract and the provisions hereof. 16. Force Maieure 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. Freight (F.O.B. Destination) SERVICE PROVIDER 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. 18. Familiarity with Work By executing this Contract, SERVICE PROVIDER 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 SERVICE PROVIDER 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 SERVICE PROVIDER's risk, until written instructions are received from OCSD. 19. Regulatory Requirements SERVICE PROVIDER 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 SERVICE PROVIDER 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 SERVICE PROVIDER. 21. Applicable Laws and Regulations SERVICE PROVIDER shall comply with all applicable federal, state, and local laws, rules, and regulations. SERVICE PROVIDER also agrees to indemnify and hold harmless from any and all damages and liabilities assessed against OCSD as a result of SERVICE PROVIDER'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. SERVICE PROVIDER's Employees Compensation 22.1 Davis-Bacon Act-SERVICE PROVIDER 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. Orange County Sanitation District 5 of 10 Specification No. S-2017-841 22.2 General Prevailina 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 SERVICE PROVIDER agrees that not less than said prevailing rates shall be paid to workers employed on this 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. 22.3 Forfeiture For Violation - SERVICE PROVIDER 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 SERVICE PROVIDER 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. 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 SERVICE PROVIDER 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. 22.5 Workday—In the performance of this contract, not more than eight(8)hours shall constitute a day's work, and the SERVICE PROVIDER 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. SERVICE PROVIDER 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 SERVICE PROVIDER 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. SERVICE PROVIDER shall keep an accurate record showing the name and actual hours worked each calendar day and each calendar week by each worker employed by SERVICE PROVIDER in connection with the project. 22.6 Record of Wages; Inspection - SERVICE PROVIDER 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 SERVICE PROVIDER or subcontractor or its agent having authority over such matters. SERVICE PROVIDER 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. 23. South Coast Air Quality Management District's(SCAQMD) Reguirements Itis SERVICE PROVIDER'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 Orange County Sanitation District 6 of 10 Specification No. S-2017-841 contract work practices, which may have associated emissions such as sandblasting, open Feld spray painting or demolition of asbestos containing components or structures, shall comply with the appropriate rules and regulations of the SCAOMD. 24. Governing 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 SERVICE PROVIDER 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 SERVICE PROVIDER 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 SERVICE PROVIDER. In the event OCSD elects to "cover" as described in (3), OCSD shall be entitled to recover from SERVICE PROVIDER as damages the difference between the cost of the substitute goods or Services and the contract price, together with any incidental or consequential damages. 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 alternate 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 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. 26. 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 Contract, 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. 29. Survival The provisions of this Contract dealing with Payment, Warranty, Indemnity, and Forum for Enforcement, shall survive termination or expiration of this Contract. Orange County Sanitation District 7 of 10 Specification No. S-2017-841 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 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. 31. Damage to OCSD's Property Any of OCSD's property damaged by SERVICE PROVIDER, any subcontractors or by the personnel of either will be subject to repair or replacement by SERVICE PROVIDER at no cost to OCSD. 32. Disclosure SERVICE PROVIDER agrees not to disclose, to any third party, 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 SERVICE PROVIDER an OCSD employee. During the performance of this Agreement, SERVICE PROVIDER and its officers, employees, and agents shall act in an independent capacity and shall not act as OCSD's officers,employees,or agents. SERVICE PROVIDER and its officers, employees, and agents shall obtain no rights to any benefits which accrue to OCSD's employees. 34. Limitations upon Subcontracting and Assignment SERVICE PROVIDER 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. 35. Third Party Rights Nothing in this Contract shall be construed to give any rights or benefits to anyone other than OCSD and SERVICE PROVIDER. 36. Non-Liability of OCSD Officers and Employees No officer or employee of OCSD shall be personally liable to SERVICE PROVIDER, or any successor-in-interest, in the event of any default or breach by OCSD or for any amount which may become due to SERVICE PROVIDER or to its successor, or for breach of any obligation for the terms of this Agreement. 37. Read and Understood By signing this Contract, SERVICE PROVIDER represents that he/she has read and understood the terms and conditions of the Contract. 36. 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. 40. Non-conforming Waste. Waste materials to be handled pursuant to this Agreement shall be as provided in Exhibit A-2, Section 3.1.13. Should Service Provider become aware of non- conforming waste, Service Provider will dispose of the waste materials in a lawful manner. Service Provider shall promptly notify OCSD of the non-conforming waste, including a description of the non-conforming waste and the date it was collected, and OCSD shall pay Service Provider at agreed rates for the disposal. Orange County Sanitation District 8 of 10 Specification No. S-2017-841 41. Emeraencv Response Services. Responder Immunity Indemnity: Notwithstanding anything to the contrary herein, it is understood and agreed by the parties that Contractor will at all times under this Agreement retain any exemption or limitation from liability ('Responder Immunity") pursuant to the Federal Water Pollution Control Act, as amended (FWPCA) 33 U.S.C.A. §1251 at seq., the Oil Pollution Act of 1990, as amended (OPA-90) 33 U.S.C.A. §2701 at seq., and any other applicable Federal,state or local law, regulation or ordinance which provides such responder immunity."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. 42. 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 for 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: Ludwig R. Lapus, Contracts Administrator Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, CA 92708-7018 SERVICE PROVIDER: George L. Curtis, Executive Vice President Clean Harbors Environmental Services, Inc. 42 Longwater Drive Norwell, MA 02061-9149 Each party shall provide the other party written notice of any change in address as soon as practicable. Orange County Sanitation District 9 of 10 Specification No. S-2017-841 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: Gregory C. Sebourn, PLS Chair, Board of Directors Dated: By: Kelly A. Lore Clerk of the Board Dated: By: Marc Dubois Contracts, Purchasing and Materials Management Manager CLEAN HARBORS ENVIRONMENTAL SERVICES, INC. Dated: By: Print Name and Title of Officer IRS Employer's I.D. Number Orange County Sanitation District 10 of 10 Specification No. S-2017-841 ► WOODRUFF,.SPRADLIN&SMART CLOSED SESSION 1 555 ANTON BOULEVARD, BUITC1200 C.sIA MNsA, CA 92626-7670 (714)556-0000 MEMORANDUM TO: Hon. Chair and Members of the Orange County Sanitation District Board of Directors FROM: Bradley R. Hogin, Esq. General Counsel DATE: August 16, 2017 RE: Closed Session Items The Board of Directors desires to hold a closed session on August 23, 2017 for the purpose of conferring with its legal counsel regarding existing litigation to which the District is a party. The title of the case is Heady,Forman-Woodbridge v. OCSD. Orange County Superior Court Case No. 30-2017-000934699. The closed session will be held pursuant to the authority of California Government Code Section 54956.9(d)(1). Respectfully submitted,, By 14 BradleY R.Hogin, Ocneral Counsel 1114541.1 ►` WOODRUFF,.SPRADLIN&SMART CLOSED SESSION 2 555 ANTON BOULEVARD, BUITC1200 C.sIA MNSA, CA 92626-7670 (714)556-0000 MEMORANDUM TO: Hon. Chair and Members of the Orange County Sanitation District Board of Directors FROM: Bradley R. Hogin, Esq. General Counsel DATE: August 14, 2017 RE: Closed Session Items The Board of Directors desires to hold a closed session on August 23, 2017 for the purpose of conferring with its legal counsel regarding a potential eminent domain action. Based on existing facts and circumstances,the Committee is deciding whether to initiate litigation against another party. The closed session will be held pursuant to the authority of California Government Code Section 54956.9(d)(4). The facts and circumstances are as follows. The Board may consider filing an eminent domain action against Sukut Real Properties LLC for the properties 18429 Pacific St. Fountain Valley,CA,APB No. 156-163-09: 18410 Bandilier Cir. Fountain Valley, CA,APN No. 156-163-10: and 18368 Bandilier Cit. Fountain Valley, CA, APN No. 156-163-11. Respectfully submitted, By Bradl R.Hogin, eneral Counsel 1114541.1 WOODRUFF ADLIN&SPRSMART A CLOSED SESSION 3 • 555 ANTON BOULEVARD, SUITE 1200 COSTA MESA, CA 92626-7670 (714)556-7000 MEMORANDUM TO: Hon. Chair and Members of the Orange County Sanitation District Board of Directors FROM: Bradley R. Hogin, Esq. General Counsel DATE: August 14, 2017 RE: Closed Session Items The Board of Directors will hold a closed session on August 23,2017 for the purpose of conferring with its negotiators regarding the purchase of real property. The negotiating parties and properties are as follows: Valley Business Park,APN Nos. 156-165-05, 156-165-06, 156-163-07; DK-USA LLC, APN No.156-165-04; Fountain Valley Industrial Parcel 13,APN No.156-165-08; Sukut Real Properties LLC, APN Nos. 156-163-09, 156-163-10, 156-163-11; The his Trust Shabtai,Nevon, APN No. 156-163-16; The Ins Trust, APN No. 156-154-07; K&A Investments LP,APN No. 156-154-08;Fountain Valley Star LLC,APN No. 156-154-06; TN Sheet Metal Inc., APN No. 156-163-12; 18401 Bandilier LLC,APN No. 156-163-13;Phone Lilly Lin-Lin TR,APN No. 156-154-05; JDK Partners, APN No. 156-163-14; Chandler Real Properties, APN No. 156- 163-15; Ellis Avenue LLC, APN No. 156-154-04; and SFII Fountain Valley LLC,APN No. 156- 151-03; 7311 Doig Drive Garden Grove,CA,APN No. 131-654-20. The District's negotiators are Jim Herberg, Rob Thompson,Kathy Millea and Jeff Mohr, Wendy Sevenandt, Kevin Turner and John Gallivan, Cushman and Wakefield. Said closed session will be held pursuant to authority of California Government Code Section 54956.8. Respectfully submitted, By. /f BradleY R. Hogin, Vieneral Counsel 11921611 ORANGE COUNTY SANITATION DISTRICT Agenda Terminology Glossary Glossary of Terms and Abbreviations AQMD Air Quality Management District ASCE American Society of Civil Engineers BOD Biochemical Oxygen Demand CARS California Air Resources Board CASA California Association of Sanitation Agencies CCTV Closed Circuit Television CEQA California Environmental Quality Act CIP Capital Improvement Program CRWQCB California Regional Water Quality Control Board CWA Clean Water Act CWEA California Water Environment Association EIR Environmental Impact Report EMT Executive Management Team EPA US Environmental Protection Agency FOG Fats, Oils, and Grease gpd gallons per day GWRS Groundwater Replenishment System ICS Incident Command System IERP Integrated Emergency Response Plan LOS Level Of Service MGD Million Gallons Per Day NACWA National Association of Clean Water Agencies NPDES National Pollutant Discharge Elimination System NWRI National Water Research Institute O & M Operations & Maintenance OCCOG Orange County Council of Governments OCHCA Orange County Health Care Agency OCSD Orange County Sanitation District OCWD Orange County Water District OOBS Ocean Outfall Booster Station OSHA Occupational Safety and Health Administration PCSA Professional Consultant/Construction Services Agreement PDSA Professional Design Services Agreement POTW Publicly Owned Treatment Works ppm parts per million PSA Professional Services Agreement RFP Request For Proposal RWQCB Regional Water Quality Control Board Glossary of Terms and Abbreviations SARFPA Santa Ana River Flood Protection Agency SARI Santa Ana River Interceptor SARWQCB Santa Ana Regional Water Quality Control Board SAW PA Santa Ana Watershed Project Authority SCADA Supervisory Control And Data Acquisition SCAP Southern California Alliance of Publicly Owned Treatment Works SCAQMD South Coast Air Quality Management District SOCWA South Orange County Wastewater Authority SRF Clean Water State Revolving Fund SSMP Sewer System Management Plan SSO Sanitary Sewer Overflow SWRCB State Water Resources Control Board TDS Total Dissolved Solids TMDL Total Maximum Daily Load TSS Total Suspended Solids WDR Waste Discharge Requirements WEF Water Environment Federation W ERF Water Environment & Reuse Foundation WIFIA Water Infrastructure Finance and Innovation Act WIIN Water Infrastructure Improvements for the Nation Act W RDA Water Resources Development Act Activated sludge process — A secondary biological wastewater treatment process where bacteria reproduce at a high rate with the introduction of excess air or oxygen and consume dissolved nutrients in the wastewater. Benthos —The community of organisms, such as sea stars, worms, and shrimp, which live on, in, or near the seabed, also known as the benthic zone. Biochemical Oxygen Demand (BOD) — The amount of oxygen used when organic matter undergoes decomposition by microorganisms. Testing for BOD is done to assess the amount of organic matter in water. Biogas—A gas that is produced by the action of anaerobic bacteria on organic waste matter in a digester tank that can be used as a fuel. Biosolids—Biosolids are nutrient rich organic and highly treated solid materials produced by the wastewater treatment process. This high-quality product can be recycled as a soil amendment on farmland or further processed as an earth-like product for commercial and home gardens to improve and maintain fertile soil and stimulate plant growth. Glossary of Terms and Abbreviations Capital Improvement Program (CIP) — Projects for repair, rehabilitation, and replacement of assets. Also includes treatment improvements, additional capacity, and projects for the support facilities. Coliform bacteria—A group of bacteria found in the intestines of humans and other animals, but also occasionally found elsewhere, used as indicators of sewage pollution. E. coli are the most common bacteria in wastewater. Collections system— In wastewater, it is the system of typically underground pipes that receive and convey sanitary wastewater or storm water. Certificate of Participation (COP)—A type of financing where an investor purchases a share of the lease revenues of a program rather than the bond being secured by those revenues. Contaminants of Potential Concern (CPC) — Pharmaceuticals, hormones, and other organic wastewater contaminants. Dilution to Threshold (DIT) — The dilution at which the majority of people detect the odor becomes the D/T for that air sample. Greenhouse Gases (GHG) — In the order of relative abundance water vapor, carbon dioxide, methane, nitrous oxide, and ozone gases that are considered the cause of global warming ("greenhouse effect'). Groundwater Replenishment System (GWRS) — A joint water reclamation project that proactively responds to Southern California's current and future water needs. This joint project between the Orange County Water District and the Orange County Sanitation District provides 70 million gallons per day of drinking quality water to replenish the local groundwater supply. Levels Of Service (LOS) — Goals to support environmental and public expectations for performance. N-Nitrosodimethylamine (NDMA) — A N-nitrosamine suspected cancer-causing agent. It has been found in the Groundwater Replenishment System process and is eliminated using hydrogen peroxide with extra ultra-violet treatment. National Biosolids Partnership (NBP)—An alliance of the National Association of Clean Water Agencies and Water Environment Federation, with advisory support from the US Environmental Protection Agency. NBP is committed to developing and advancing environmentally sound and sustainable biosolids management practices that go beyond regulatory compliance and promote public participation to enhance the credibility of local agency biosolids programs and improved communications that lead to public acceptance. Plume — A visible or measurable concentration of discharge from a stationary source or fixed facility. Glossary of Terms and Abbreviations Publicly Owned Treatment Works (POTW) —A municipal wastewater treatment plant. Santa Ana River Interceptor(SARI) Line —A regional brine line designed to convey 30 million gallons per day of non-reclaimable wastewater from the upper Santa Ana River basin to the ocean for disposal, after treatment. Sanitary sewer—Separate sewer systems specifically for the carrying of domestic and industrial wastewater. Combined sewers carry both wastewater and urban runoff. South Coast Air Quality Management District (SCAQMD) — Regional regulatory agency that develops plans and regulations designed to achieve public health standards by reducing emissions from business and industry. Secondary treatment — Biological wastewater treatment, particularly the activated sludge process, where bacteria and other microorganisms consume dissolved nutrients in wastewater. Sludge—Untreated solid material created by the treatment of wastewater. Total Suspended Solids (TSS)—The amount of solids floating and in suspension in wastewater. Trickling filter — A biological secondary treatment process in which bacteria and other microorganisms, growing as slime on the surface of rocks or plastic media, consume nutrients in wastewater as it trickles over them. Urban runoff—Water from city streets and domestic properties that carry pollutants into the storm drains, rivers, lakes, and oceans. Wastewater—Any water that enters the sanitary sewer. Watershed—A land area from which water drains to a particular water body. The Orange County Sanitation District's service area is in the Santa Ana River Watershed.