HomeMy WebLinkAbout11-13-2019 Administration Committee Meeting Agenda PacketOrange County Sanitation District
ADMINISTRATION COMMITTEE
Regular Meeting Agenda
Wednesday, November 13, 2019 - 5:00 PM
Board Room
Administration Building
10844 Ellis Avenue
Fountain Valley, CA 92708
(714) 593-7433
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.
MEETING AUDIO: An audio recording of this meeting is available within 24 hours after adjournment of the
meeting. Please contact the Clerk of the Board's office at (714) 593-7433 to request the audio file.
NOTICE TO DIRECTORS: To place items on the agenda for a Committee or Board Meeting, the item must be
submitted in writing to the Clerk of the Board: Kelly A. Lore, MMC, (714) 593-7433 / klore@ocsd.com at least 14
days before the meeting.
FOR ANY QUESTIONS ON THE AGENDA, BOARD MEMBERS MAY CONTACT STAFF AT:
General Manager: Jim Herberg, jherberg@ocsd.com / (714) 593-7300
Asst. General Manager: Lorenzo Tyner, ltyner@ocsd.com / (714) 593-7550
Asst. General Manager: Rob Thompson, rthompson@ocsd.com / (714) 593-7310
Director of Human Resources: Celia Chandler, cchandler@ocsd.com / (714) 593-7202
Director of Engineering: Kathy Millea, kmillea@ocsd.com / (714) 593-7365
Director of Environmental Services: Lan Wiborg, lwiborg@ocsd.com / (714) 593-7450
ADMINISTRATION COMMITTEE Regular Meeting Agenda Wednesday, November 13, 2019
CALL TO ORDER
PLEDGE OF ALLEGIANCE
DECLARATION OF QUORUM:
PUBLIC COMMENTS:
If you wish to address the Committee 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.
REPORTS:
The Committee Chairperson and the General Manager may present verbal reports on miscellaneous matters of
general interest to the Directors. These reports are for information only and require no action by the Directors.
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.
1.2019-640APPROVAL OF MINUTES
RECOMMENDATION:
Approve Minutes of the Regular Meeting of the Administration Committee held
September 11, 2019.
Originator:Kelly Lore
Agenda Report
09-11-2019 Administration Committee Minutes
Attachments:
2.2019-6662019 CONFLICT OF INTEREST CODE
RECOMMENDATION: Recommend to the Board of Directors to:
Adopt Resolution No. OCSD 19-XX entitled, “A Resolution of the Board of Directors of
Orange County Sanitation District adopting a Conflict of Interest Code which
supersedes all prior Conflict of Interest Codes and amendments previously adopted”.
Originator:Kelly Lore
Agenda Report
OCSD Resolution 2019 Conflict of Interest Code
2019 DRAFT Conflict of Interest Code
Attachments:
Page 1 of 5
ADMINISTRATION COMMITTEE Regular Meeting Agenda Wednesday, November 13, 2019
3.2019-699UPDATE TO THE ESTABLISHED RULES OF PROCEDURE FOR THE
CONDUCT OF BUSINESS OF THE ORANGE COUNTY SANITATION
DISTRICT
RECOMMENDATION: Recommend to the Board of Directors to:
Adopt Resolution No. OCSD 19-XX entitled, “A Resolution of the Board of Directors of
Orange County Sanitation District establishing Rules of Procedure for the Conduct of
Business of the Orange County Sanitation District; and repealing Resolution No. OCSD
18-12”.
Originator:Kelly Lore
Agenda Report
Rules of Procedure Resolution - Redline
Attachments:
4.2019-709GENERAL MANAGER APPROVED PURCHASES AND ADDITIONS TO
THE PRE-APPROVED OEM SOLE SOURCE LIST
RECOMMENDATION: Recommend to the Board of Directors to:..body
A. Receive and file Orange County Sanitation District purchases made under the
General Manager’s authority for the period of July 1, 2019 to September 30,
2019; and
B. Approve the following additions to the pre-approved OEM Sole Source List for
the period of July 1, 2019 to September 30, 2019:
·ALLEN-BRADLEY - Medium Voltage Variable Frequency Drive
·CLEAVER-BROOKS - Burner Elements
·EATON - Self-Cleaning Strainers
·SONETICS - Wireless headsets and system
·TRM/Maximo - Rules Manager SE and Lock out Tag Out (LOTO) Software
·VAUGHAN - Mixing Nozzles..body
Originator:Lorenzo Tyner
Agenda ReportAttachments:
5.2019-707CONSOLIDATED FINANCIAL REPORT FOR THE FIRST QUARTER
ENDED SEPTEMBER 30, 2019
RECOMMENDATION: Recommend to the Board of Directors to:
Receive and file the Orange County Sanitation District First Quarter Financial Report
for the period ended September 30, 2019.
Originator:Lorenzo Tyner
Page 2 of 5
ADMINISTRATION COMMITTEE Regular Meeting Agenda Wednesday, November 13, 2019
Agenda Report
Consolidated Financial Report for the First Quarter Ended
September 30, 2019
Attachments:
6.2019-702LEASE AGREEMENT WITH MEGDAL GREEN, LLC PROVIDING
ORANGE COUNTY SANITATION DISTRICT PARCEL FOR PARKING
AND/OR RELATED ACTIVITIES
RECOMMENDATION: Recommend to the Board of Directors to:
Approve a five-year lease agreement with Megdal Green, LLC, a California limited
liability company, to allow paving, striping, parking, and related improvements over a
4-foot wide portion of the Orange County Sanitation District’s 50-foot wide utility
corridor which abuts 21532 South Brookhurst Street in Huntington Beach owned by
Megdal Green, LLC, at an annual cost of $250, for a term of five-years.
Originator:Lorenzo Tyner
Agenda Report
Lease Agreement with Megdal Green, LLC
Attachments:
NON-CONSENT:
7.2019-705ORANGE COUNTY SANITATION DISTRICT COMPREHENSIVE
ANNUAL FINANCIAL REPORT (CAFR) FOR THE YEAR END JUNE 30,
2019
RECOMMENDATION: Recommend to the Board of Directors to:
Receive and file the Orange County Sanitation District’s Comprehensive Annual
Financial Report for the year ended June 30, 2019, prepared by staff and audited by
Macias Gini & O’Connell LLP (MGO), Certified Public Accountants, along with the
following reports prepared by MGO:
1. Report to the Board of Directors; and
2. Independent Accountants’ Report on Agreed-Upon Procedures Applied to
Appropriations Limit Worksheets.
Originator:Lorenzo Tyner
Agenda Report
Report to the Board of Directors
Independent Accountant's Report on Applying Agreed-Upon
Procedures Related to Appropriations Limit Calculation
Comprehensive Annual Financial Report for the Year Ended
June 30, 2019 (separately bound document)
Single Audit Reports
Attachments:
Page 3 of 5
ADMINISTRATION COMMITTEE Regular Meeting Agenda Wednesday, November 13, 2019
8.2019-708PROFESSIONAL RISK MANAGEMENT CONSULTANT AGREEMENT
RECOMMENDATION:
Approve a sole source Professional Consultant Services Agreement with John J.
Preston, Specification No. SSJ 2174, to perform professional risk management
consulting services for the Orange County Sanitation District, which includes
overseeing property and general liability loss control and setting loss control
requirements on public bids and contracts, risk transfer, loss prevention, and risk
reduction in an amount not to exceed $150,000 per year, for a term of one year
beginning December 1, 2019 - November 30, 2020; with a one-year renewal option.
Originator:Lorenzo Tyner
Agenda Report
Professional Consultant Services Agreement
Attachments:
9.2019-711POSITION CHANGES FOR FISCAL YEAR 2019-20
RECOMMENDATION: Recommend to the Board of Directors to:
Approve a position exchange and corresponding salary upgrade from a vacant Senior
Mechanic (Salary Grade LOC67) position to Maintenance Specialist (Salary Grade
PRO80).
Originator:Celia Chandler
Agenda Report
Preventative Maintenance Optimization Position Exchanges
Attachments:
INFORMATION ITEMS:
10.2019-713CLIMATE RESILIENCY STUDY, PROJECT NO. SP-152
RECOMMENDATION:
Information Item.
Originator:Kathy Millea
Agenda Report
SP-152 OCSD Climate Resiliency Executive Summary
Attachments:
OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF
ANY:
BOARD OF DIRECTORS INITIATED ITEMS FOR A FUTURE MEETING:
At this time Board members may request staff to place an item on a future agenda.
Page 4 of 5
ADMINISTRATION COMMITTEE Regular Meeting Agenda Wednesday, November 13, 2019
ADJOURNMENT:
The next Administration Committee meeting is scheduled for Wednesday, December 11,
2019 at 5:00 p.m.
Page 5 of 5
Orange County Sanitation District
ADMINISTRATION COMMITTEE
Agenda Report
Administration Building
10844 Ellis Avenue
Fountain Valley, CA 92708
(714) 593-7433
File #:2019-640 Agenda Date:11/13/2019 Agenda Item No:1.
FROM:James D. Herberg, General Manager
Originator: Kelly A. Lore, Clerk of the Board
SUBJECT:
APPROVAL OF MINUTES
GENERAL MANAGER'S RECOMMENDATION
RECOMMENDATION:
Approve Minutes of the Regular Meeting of the Administration Committee held September 11, 2019.
BACKGROUND
In accordance with the Board of Directors Rules of Procedure,an accurate record of each meeting
will be provided to the Directors for subsequent approval at the following meeting.
RELEVANT STANDARDS
·Resolution No. OCSD 18-12
ATTACHMENT
The following attachment(s)are included in hard copy and may also be viewed on-line at the OCSD website
(www.ocsd.com) with the complete agenda package:
·Minutes of the Administration Committee meeting held September 11, 2019
Orange County Sanitation District Printed on 11/6/2019Page 1 of 1
powered by Legistar™
Orange County Sanitation District
Minutes of the
ADMINISTRATION COMMITTEE
Wednesday, September 11, 2019
5:00 PM
Board Room
Administration Building
10844 Ellis Avenue
Fountain Valley, CA 92708
(714) 593-7433
CALL TO ORDER
A regular meeting of the Administration Committee of the Orange County Sanitation District
was called to order by Committee Chairman Chad Wanke on September 11, 2019 at 5:01
p.m. in the Administration Building of the Orange County Sanitation District. Director Erik
Peterson led the Flag Salute and a moment of silence was observed for the occurrences of
September 11, 2001.
A quorum was declared present as follows:
DECLARATION OF QUORUM:
Present:Chad Wanke, Richard Murphy, James Ferryman, Peter Kim, Mark
Murphy, Steve Nagel, Andrew Nguyen, Glenn Parker, Erik Peterson,
Christina Shea, David Shawver, John Withers and David Penaloza
(Alternate)
Absent:None
STAFF PRESENT:
Jim Herberg, General Manager; Rob Thompson, Assistant General Manager; Lorenzo Tyner,
Assistant General Manager; Celia Chandler, Director of Human Resources; Kathy Millea,
Director of Engineering; Lan Wiborg, Director of Environmental Services; Tina Knapp,
Assistant Clerk of the Board; Jennifer Cabral; Rod Collins; Rhea de Guzman; Al Garcia; Derek
Harp; Laura Maravilla; Tyler Ramirez; and Paula Zeller.
OTHERS PRESENT:
Brad Hogin, General Counsel; Steve Delaney, Orange County Employees Retirement System
(OCERS); Molly Murphy, OCERS; and Brenda Shott, OCERS.
PUBLIC COMMENTS:
None.
REPORTS:
Chair Wanke did not provide a report.
General Manager Jim Herberg invited the Committee to the recognition for recent excellent
beach report cards event being held on September 18 from 3:15 - 4:45 p.m., prior to the
Page 1 of 5
ADMINISTRATION
COMMITTEE
Minutes September 11, 2019
Special Board Meeting, at both Plant Nos. 1 and 2.
Assistant General Manager Lorenzo Tyner indicated that the termination of the necessary
leases on the properties across the street have been obtained and he will provide more
information at the Board Meeting on September 25.
CONSENT CALENDAR:
Chair Wanke indicated that the Information Item, Item No. 5, would immediately follow the
Consent Calendar, Item Nos. 1-3.
1.APPROVAL OF MINUTES 2019-517
Originator:Kelly Lore
MOVED, SECONDED, AND DULY CARRIED TO:
Approve Minutes of the Special Meeting of the Administration Committee held July 17,
2019.
Ayes:Chad Wanke, Richard Murphy, James Ferryman, Peter Kim, Mark
Murphy, Steve Nagel, Andrew Nguyen, Glenn Parker, Erik Peterson,
Christina Shea, David Shawver and David Penaloza (Alternate)
Noes:None
Absent:John Withers
Abstentions:None
2.SCRIPPS INSTITUTION OF OCEANOGRAPHY BEST PRACTICE
DEVELOPMENT AND SEAWATER ANALYSIS FOR PH
2019-538
Originator:Lan Wiborg
MOVED, SECONDED, AND DULY CARRIED TO:
Approve and authorize the Purchasing and Contracts Manager to enter into a one (1)
year Sole Source Service Contract with The Regents of the University of California on
behalf of its San Diego campus’ Scripps Institution of Oceanography, for a total amount
not to exceed $40,000, with two (2) optional one (1) year renewals at $40,000 per
renewal, for a total amount not to exceed $120,000 for the three-year period, to
develop best practices and analyze seawater for pH in compliance with permit
mandated data quality requirements and regional comparability as recommended by
the Bight’13 Nutrients Study.
Ayes:Chad Wanke, Richard Murphy, James Ferryman, Peter Kim, Mark
Murphy, Steve Nagel, Andrew Nguyen, Glenn Parker, Erik Peterson,
Christina Shea, David Shawver and David Penaloza (Alternate)
Noes:None
Absent:John Withers
Page 2 of 5
ADMINISTRATION
COMMITTEE
Minutes September 11, 2019
Abstentions:None
3.REIMBURSEMENTS TO BOARD MEMBERS AND STAFF 2019-563
Originator:Lorenzo Tyner
MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of
Directors to:
Receive and file report of reimbursements to Board Members and Staff per
Government Code Section 53065.5 for the period July 1, 2018 through June 30, 2019.
Ayes:Chad Wanke, Richard Murphy, James Ferryman, Peter Kim, Mark
Murphy, Steve Nagel, Andrew Nguyen, Glenn Parker, Erik Peterson,
Christina Shea, David Shawver and David Penaloza (Alternate)
Noes:None
Absent:John Withers
Abstentions:None
Board Vice-Chair Withers arrived at 5:20 p.m., during the OCERS presentation.
INFORMATION ITEMS:
5.ORANGE COUNTY EMPLOYEE RETIREMENT SYSTEM (OCERS)
INFORMATION UPDATE
2019-565
Originator:Lorenzo Tyner
Mr. Tyner introduced Steve Delaney, Molly Murphy, and Brend Shott from OCERS.
The OCERS representatives provided the Committee with a PowerPoint presentation
that included information on OCERS investment policies, 2018 investment results, and
impacts on the Sanitation District. Staff and the OCERS representatives responded to
questions from the Committee.
INFORMATIONAL ITEM HEARD ON:
OCERS will present information regarding its investment policies, 2018 investment
results, and impacts on the Orange County Sanitation District.
NON-CONSENT:
4.2019 ORANGE COUNTY REGIONAL WATER AND WASTEWATER
HAZARD MITIGATION PLAN
2019-547
Originator:Celia Chandler
Page 3 of 5
ADMINISTRATION
COMMITTEE
Minutes September 11, 2019
MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of
Directors to:
Adopt Resolution No. OCSD 19-XX entitled, “A Resolution of the Board of Directors of
the Orange County Sanitation District Approving and Adopting the 2019 Orange County
Regional Water and Wastewater Hazard Mitigation Plan,” in accordance with the
Disaster Mitigation Act (DMA) of 2000.
Ayes:Chad Wanke, Richard Murphy, James Ferryman, Peter Kim, Mark
Murphy, Steve Nagel, Andrew Nguyen, Glenn Parker, Erik Peterson,
David Shawver, John Withers and David Penaloza (Alternate)
Noes:None
Absent:Christina Shea
Abstentions:None
Director Shea stepped out of the room during Item No. 4 and was not present for the vote.
DEPARTMENT HEAD REPORTS:
None.
CLOSED SESSION:
None.
OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF
ANY:
Board Chair Shawver reported that he attended the staff volunteer recognition event on
September 10 and that it was a great event recognizing the outstanding efforts of staff that
volunteer at various Sanitation District events throughout the year.
Committee Chair Wanke requested that staff look into the possibility of issuing identification
cards to the Directors and providing the Directors with a Board contact list.
BOARD OF DIRECTORS INITIATED ITEMS FOR A FUTURE MEETING:
None.
ADJOURNMENT:
Chair Wanke declared the meeting adjourned at 6:11 p.m. to the Regular meeting to be held
on Wednesday, October 9, 2019 at 5:00 p.m.
Page 4 of 5
ADMINISTRATION
COMMITTEE
Minutes September 11, 2019
Submitted by:
_____________________
Tina Knapp, MMC
Assistant Clerk of the Board
Page 5 of 5
Orange County Sanitation District
ADMINISTRATION COMMITTEE
Agenda Report
Administration Building
10844 Ellis Avenue
Fountain Valley, CA 92708
(714) 593-7433
File #:2019-666 Agenda Date:11/13/2019 Agenda Item No:2.
FROM:James D. Herberg, General Manager
Originator: Kelly A. Lore, Clerk of the Board
SUBJECT:
2019 CONFLICT OF INTEREST CODE
GENERAL MANAGER'S RECOMMENDATION
RECOMMENDATION: Recommend to the Board of Directors to:
Adopt Resolution No. OCSD 19-XX entitled, “A Resolution of the Board of Directors of Orange
County Sanitation District adopting a Conflict of Interest Code which supersedes all prior Conflict of
Interest Codes and amendments previously adopted”.
BACKGROUND
The last biennial review,and formal amendment,to the Orange County Sanitation District’s Conflict
of Interest Code was completed in April 2018.Although the Political Reform Act requires that every
local agency review its Conflict of Interest Code biennially (which would bring forth the next
amendment in 2020),staff is proposing this new amendment in order to reflect the current positions
of those designated employees that are required to file statements of economic interests.
RELEVANT STANDARDS
·Political Reform Act,Government Code Sections 81000,et seq.
·California Government Code Sections 87300-87306
·Fair Political Practices Commission (2 Cal. Code of Regs. Section 18100, et seq.)
PROBLEM
During the last budget cycle and due to reorganization of the agency,several positions have been
added,reclassified,or eliminated.These positions are required to file statements of economic
interests and the updated Conflict of Interest Code must be adopted.
PROPOSED SOLUTION
Staff recommends that the Board of Directors adopt the updated 2019 Conflict of Interest Code to
reflect the following changes:
·Addition of the following new positions:Administration Manager,Administration Supervisor,Orange County Sanitation District Printed on 11/6/2019Page 1 of 2
powered by Legistar™
File #:2019-666 Agenda Date:11/13/2019 Agenda Item No:2.
·Addition of the following new positions:Administration Manager,Administration Supervisor,
Cost Estimator,Lead Source Control Inspector,Principal Buyer,and Principal Public Affairs
Specialist
·Addition of Assistant Clerk of the Board (deletion of Deputy Clerk of the Board)
·Addition of Environmental Supervisor (deletion of Laboratory Supervisor)
·Addition of Purchasing and Contracts Manager (deletion of Contracts and Purchasing
Manager)
·Deletion of the following eliminated positions:Facilities Manager,Information Technology
Manager, and Senior Construction Inspection Supervisor
If approved by the Board,the newly approved code will be forwarded to the County of Orange for
amendment approval.
TIMING CONCERNS
The changes in position control have taken place and therefore cannot wait until a future meeting.
RAMIFICATIONS OF NOT TAKING ACTION
Non-compliance with state law.
PRIOR COMMITTEE/BOARD ACTIONS
April 2018 -Board of Directors amended the Conflict of Interest Code and approved Resolution No.
OCSD 18-04.
ATTACHMENT
The following attachment(s)are included in hard copy and may also be viewed on-line at the OCSD website
(www.ocsd.com) with the complete agenda package:
·Resolution No. OCSD 19-XX
·2019 DRAFT Conflict of Interest Code
Orange County Sanitation District Printed on 11/6/2019Page 2 of 2
powered by Legistar™
1427827.1 OCSD 19-XX-1
RESOLUTION NO. OCSD 19-XX
A RESOLUTION OF THE BOARD OF DIRECTORS OF ORANGE
COUNTY SANITATION DISTRICT ADOPTING A CONFLICT OF
INTEREST CODE WHICH SUPERSEDES ALL PRIOR CONFLICT
OF INTEREST CODES AND AMENDMENTS PREVIOUSLY
ADOPTED
WHEREAS, the Political Reform Act of 1974, Government Code Section 81000 et
seq. (“the Act”), requires a local government agency to adopt a Conflict of Interest Code
pursuant to the Act; and
WHEREAS, the Orange County Sanitation District has previously adopted a
Conflict of Interest Code and that Code now requires updating; and
WHEREAS, amendments to the Act have in the past and foreseeably will in the
future require conforming amendments to be made to the Conflict of Interest Code; and
WHEREAS, the Fair Political Practices Commission has adopted a regulation,
2 California Code of Regulations, Section 18730, which contains terms for a standard
model Conflict of Interest Code, which, together with amendments thereto, may be
adopted by public agencies and incorporated by reference to save public agencies time
and money by minimizing the actions required of such agencies to keep their codes in
conformity with the Political Reform Act; and
WHEREAS, the reorganization of the Orange County Sanitation District workforce
resulted in the reclassification of a position; and
WHEREAS, the Orange County Sanitation District’s existing Conflict of Interest
Code must be amended in order to reflect the current positions of those designated
employees that are required to file statements of economic interests.
NOW, THEREFORE, the Board of Directors of the Orange County Sanitation
District, DOES HEREBY RESOLVE, DETERMINE, AND ORDER:
1427827.1 OCSD 19-XX-2
Section 1.The terms of 2 California Code of Regulations, Section 18730, any
amendments to it duly adopted by the Fair Political Practices Commission, and all
additional guidance by the Fair Political Practices Commission, are hereby incorporated
by reference and, together with the 2018 Conflict of Interest Code for the Orange County
Sanitation District, including Exhibits A and B in which members and employees are
designated and disclosure categories are set forth, constitute the Conflict of Interest Code
of the Orange County Sanitation District.
Section 2.The provisions of all Conflict of Interest Codes and Amendments
thereto previously adopted by the Orange County Sanitation District are hereby
superseded.
Section 3. The Filing Officer is hereby authorized to forward a copy of this
Resolution to the Clerk of the Orange County Board of Supervisors for review and
approval by the Orange County Board of Supervisors as required by California
Government Code Section 87303.
PASSED AND ADOPTED at a regular meeting of the Board of Directors
held November 20, 2019.
________________________________
David John Shawver
Board Chairman
ATTEST:
______________________________
Kelly A. Lore, MMC
Clerk of the Board
1427827.1 OCSD 19-XX-3
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 19-XX was passed and
adopted at a regular meeting of said Board on the 20th day of November 2019, 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 20th day of November 2019.
Kelly A. Lore, MMC
Clerk of the Board of Directors
Orange County Sanitation District
1427807.1 OCSD 19-XX-1
2019 CONFLICT OF INTEREST CODE FOR THE
ORANGE COUNTY SANITATION DISTRICT
The Political Reform Act, Government Code Sections 81000, et seq., requires
state and local government agencies to adopt and promulgate Conflict of Interest Codes.
The Fair Political Practices Commission has adopted a regulation (2 Cal. Code of Regs.
Section 18730) which contains the terms of a standard Conflict of Interest Code, which
may be incorporated by reference in an agency’s code. After public notice and hearing,
it may be amended by the Fair Political Practices Commission to conform to amendments
in the Political Reform Act. Therefore, the terms of 2 California Code of Regulations
Section 18730, any amendments to it duly adopted by the Fair Political Practices
Commission, and all additional guidance by the Fair Political Practices Commission, are
hereby incorporated by reference. This regulation and the attached Appendix designating
officials and employees and establishing disclosure categories, shall constitute the
Conflict of Interest Code of the Orange County Sanitation District (Sanitation District).
The following designated employees shall file statements of economic interests
electronically with the Clerk of the Orange County Board of Supervisors: Orange County
Sanitation District Board of Directors, Orange County Sanitation District Financing
Corporation, General Manager, General Counsel, Assistant General Manager, Director
of Finance and Administrative Services, Director of Engineering, Director of Operations
& Maintenance, Director of Environmental Services, Director of Human Resources, and
the Clerk of the Board. The Sanitation District’s Filing Officer (Clerk of the Orange County
Sanitation District Board of Directors) will thereafter verify the completion of the filing
statements. If the Sanitation District’s Filing Officer receives any statements of economic
interests by other means, the Filing Officer shall make and retain a copy and forward the
original of these statements to the Clerk of the Orange County Board of Supervisors.
1427807.1 OCSD 19-XX-2
Statements for all other designated employees will be retained by the Sanitation District’s
Filing Officer.
1427807.1 OCSD 19-XX-3
EXHIBIT A
ORANGE COUNTY SANITATION DISTRICT
LIST OF DESIGNATED POSITIONS
CONFLICT OF INTEREST CODE
Designated Positions
Disclosure
Categories
Accounting Supervisor OC-05
*Administration Manager (addition)OC-05
*Administration Supervisor (addition)OC-05
*Assistant Clerk of the Board (addition)OC-05
Assistant General Manager OC-01
Buyer OC-05
Capital Improvement Program Project Manager OC-41
Chief Plant Operator OC-05
Clerk of the Board OC-05
Construction Inspection Supervisor OC-05
Construction Inspector OC-10
Consultant OC-30
*Contracts & Purchasing Manager (deletion)
Reclassified as Purchasing & Contracts Manager OC-05
Contracts Administrator OC-05
Contracts Supervisor OC-05
Controller OC-05
*Cost Estimator (addition)OC-41
*Deputy Clerk of the Board (deletion)
Reclassified as Assistant Clerk of the Board OC-05
Director of Engineering OC-41
Director of Environmental Services OC-41
Director of Finance & Administrative Services OC-41; OC-12
Director of Human Resources OC-41, OC-11
Director of Operations & Maintenance OC-41
Engineer OC-29, OC-41
Engineering Manager OC-41
Engineering Supervisor OC-41
Environmental Laboratory & Ocean Monitoring Manager OC-05
Environmental Supervisor OC-29
*Facilities Manager (deletion) Position eliminated OC-05
General Counsel OC-01
General Manager OC-01
Human Resources & Risk Manager OC-11; OC-12
Human Resources Supervisor OC-11
*Information Technology Manager (deletion)
Position eliminated OC-08
1427807.1 OCSD 19-XX-4
Information Technology Supervisor OC-08
Information Technology Systems & Operations Manager OC-08
*Laboratory Supervisor (deletion)
Previously reclassified as Environmental Supervisor OC-21
*Lead Source Control Inspector (addition)OC-05; OC-29
Maintenance Manager OC-05
Maintenance Superintendent OC-05
Maintenance Supervisor OC-05
Materials Control Supervisor OC-05
Operations Manager OC-05
Operations Supervisor OC-05
Orange County Sanitation District Financing Corporation Board
of Directors OC-01
Principal Accountant OC-41
Principal Contracts Administrator OC-05
*Principal Buyer (addition)OC-05
Principal Human Resources Analyst OC-11
*Principal Public Affairs Specialist (addition)OC-05
Principal Staff Analyst OC-05; OC-12
*Purchasing and Contracts Manager (addition)OC-05
Public Affairs Supervisor OC-05
Purchasing Supervisor OC-05
Safety & Health Supervisor OC-05
Secretary of the Orange County Financing Corporation OC-05
Senior Buyer OC-05
*Senior Construction Inspection Supervisor (deletion)
Position eliminated OC-05
Senior Construction Inspector OC-10
Senior Contracts Administrator OC-05
Senior Engineer OC-05
Senior Scientist OC-21
Source Control Supervisor OC-29
Treasurer of the Orange County Financing Corporation OC-41
*The following amendments are made:
ADDITIONS:
Administration Manager - OC-05
Administration Supervisor - OC-05
Assistant Clerk of the Board - OC-05
Cost Estimator - OC-41
Principal Buyer - OC-05
Principal Public Affairs Specialist - OC-05
Purchasing and Contracts Manager - OC-05
1427807.1 OCSD 19-XX-5
DELETIONS:
Contracts & Purchasing Manager - Reclassified as Purchasing & Contracts Manager
Deputy Clerk of the Board -reclassified as Assistant Clerk of the Board
Facilities Manager -Position eliminated
Information Technology Manager -Position eliminated
Laboratory Supervisor -Reclassified as Environmental Supervisor
Senior Construction Inspection Supervisor -Position eliminated
1427807.1 OCSD 19-XX-6
EXHIBIT B
ORANGE COUNTY SANITATION DISTRICT
DISCLOSURE CATEGORIES
CONFLICT OF INTEREST CODE
Disclosure
Category Disclosure Description
OC-01 All interests in real property in Orange County or located entirely or
partly within the Sanitation District’s boundaries, as well as investments,
business positions and sources of income (including gifts, loans and
travel payments).
OC-05 All investments in, business positions with and income (including gifts,
loans and travel payments) from sources that provide services, supplies,
materials, machinery, equipment (including training and consulting
services) used by the Sanitation District.
OC-08 All investments in, business positions with and income (including gifts,
loans and travel payments) from sources that develop or provide
computer hardware/software, voice data communications, or data
processing goods, supplies, equipment, or services (including training
and consulting services) used by the Sanitation District.
OC-10 All investments in, business positions with and income (including gifts,
loans and travel payments) from sources that are engaged in any real
estate activity including, but not limited to real estate appraisal,
development, construction, planning/architectural design, engineering,
sales, brokerage, leasing, lending, insurance, rights of way, and/or
studies; and/or property or facilities management/maintenance/custodial
and utility services used by the Sanitation District or provides capital for
the purchase of property used or sold by the Sanitation District.
OC-11 All interests in real property in Orange County or located entirely or
partly within the Sanitation District’s boundaries, as well as investments
in, business positions with and income (including gifts, loans and travel
payments) from sources that are engaged in the supply of equipment
related to (i) recruitment, employment search & marketing, classification,
training, or negotiation with personnel; (ii) employee benefits; and (iii)
health and welfare benefits.
OC-12 All interests in real property in Orange County or located entirely or
partly within the Sanitation District’s boundaries, as well as investments
in, business positions with and income (including gifts, loans and travel
payments) from sources that invest funds or engage in the business of
insurance including, but not limited to insurance companies, carriers,
holding companies, underwriters, brokers, solicitors, agents, adjusters,
claims managers and actuaries; from financial institutions including but
not limited to, banks, savings & loan associations and credit unions or
sources that have filed a claim, or have a claim pending, against the
Sanitation District.
1427807.1 OCSD 19-XX-7
EXHIBIT B
ORANGE COUNTY SANITATION DISTRICT
DISCLOSURE CATEGORIES
CONFLICT OF INTEREST CODE
Disclosure
Category Disclosure Description
OC-21 All investments in, business positions with and income (including gifts,
loans and travel payments) from sources that provide laboratory or
chemical – related goods, supplies, equipment, or services (including
training and consulting services).
OC-29 All investments in, business positions with and income (including gifts,
loans and travel payments) from sources that are subject to inspection
or regulation by the Sanitation District.
OC-30 Consultants shall be included in the list of designated employees and
shall disclose pursuant to the broadest category in the code subject to
the following limitation: The Department Head/Director/General
Manager may determine that a particular consultant, although a
“designated position,” is hired to perform a range of duties that is limited
in scope and thus is not required to fully comply with the disclosure
requirements in this section. Such written determination shall include a
description of the consultant’s duties and, based upon that description, a
statement of the extent of disclosure required. The determination of
disclosure is a public record and shall be filed with the Form 700 and
retained by the Filing Officer for public inspection.
OC-41 All interests in real property in Orange County, as well as investments
in, business positions with and income (including gifts, loans and travel
payments) from sources that provide services, supplies, materials,
machinery, vehicles, or equipment (including training and consulting
services) used by the Sanitation District.
Orange County Sanitation District
ADMINISTRATION COMMITTEE
Agenda Report
Administration Building
10844 Ellis Avenue
Fountain Valley, CA 92708
(714) 593-7433
File #:2019-699 Agenda Date:11/13/2019 Agenda Item No:3.
FROM:James D. Herberg, General Manager
Originator: Kelly A. Lore, Clerk of the Board
SUBJECT:
UPDATE TO THE ESTABLISHED RULES OF PROCEDURE FOR THE CONDUCT OF BUSINESS
OF THE ORANGE COUNTY SANITATION DISTRICT
GENERAL MANAGER'S RECOMMENDATION
RECOMMENDATION: Recommend to the Board of Directors to:
Adopt Resolution No. OCSD 19-XX entitled, “A Resolution of the Board of Directors of Orange
County Sanitation District establishing Rules of Procedure for the Conduct of Business of the Orange
County Sanitation District; and repealing Resolution No. OCSD 18-12”.
BACKGROUND
At this time,the procedures are being updated to include changes to the Legislative and Public
Affairs Committee dates,adding the order of business,updating decorum language,and minor
clerical revisions.
RELEVANT STANDARDS
·California Government Code Section 54950 et seq.
·Comply with transparency and communication requirements, including the Brown Act
PRIOR COMMITTEE/BOARD ACTIONS
July 2018 -Adopted Resolution No.OCSD 18-12 entitled,“A Resolution of the Board of Directors of
Orange County Sanitation District establishing Rules of Procedure for the Conduct of Business of the
District;and repealing Resolution No.OCSD 17-18”,which will amend the rules of procedure to
provide for the appointment of a Chairperson and Vice Chairperson of the Legislative and Public
Affairs Committee by the Chairperson of the Board of Directors.
ATTACHMENT
The following attachment(s)are included in hard copy and may also be viewed on-line at the OCSD website
(www.ocsd.com) with the complete agenda package:
·Draft Resolution No. OCSD 19-XX (Redline)
Orange County Sanitation District Printed on 11/6/2019Page 1 of 1
powered by Legistar™
OCSD 18-1219-XX-1
RESOLUTION NO. OCSD 18-1219-XX
A RESOLUTION OF THE BOARD OF DIRECTORS OF
ORANGE COUNTY SANITATION DISTRICT
ESTABLISHING RULES OF PROCEDURE FOR THE
CONDUCT OF BUSINESS OF THE ORANGE COUNTY
SANITATION DISTRICT, AND REPEALING RESOLUTION
NO. OCSD 17-1818-12
WHEREAS it is necessary to establish rules of procedure to facilitate the orderly
handling of business to come before the Orange County Sanitation District Board of
Directors and Standing, Steering, Special and Ad Hoc Committees.
NOW THEREFORE, the Board of Directors of the Orange County Sanitation
District DOES HEREBY RESOLVE, DETERMINE AND ORDER:
Section 1: Rules of Procedure. That the following rules of procedure be
adopted for the conduct of business of the Orange County Sanitation District (Sanitation
District):
A. Regular Meetings. There shall be a regular monthly meeting of the Board
of Directors of the Sanitation District on the fourth Wednesday of every month at 6:00
p.m., in the Administrative Offices of the Sanitation District, located at 10844 Ellis Avenue,
Fountain Valley, California; provided, however, if the fourth Wednesday of the month falls
upon a legal holiday, said monthly meeting shall be held on the next day thereafter, at the
same time and place, unless the Board adjourns to a different date and time.
The Board of Directors may adjourn any regular, special or adjourned special
meeting to a time and place certain, as specified in the order of adjournment.
B. Special Meetings. A special meeting of the Board of Directors may be
called in either one of the following ways:
(1) By the Chairperson of the Board of Directors; or
(2) By the written request of a majority of the Steering Committee
delivered to the Clerk of the Board.
The call or notice for special meeting shall be in writing and delivered personally
or by mail at least twenty-four (24) hours before the time of such meeting, as specified in
the notice. Any notice deposited in the regular mail addressed to a Director at the address
he or she has on file with the Clerk of the Board postage prepaid, sixty (60) hours in
advance of any such meeting as specified in the notice, shall be presumed to have been
delivered.
OCSD 18-1219-XX-2
The call or notice shall specify the time and place of the special meeting, a
description of the business to be transacted and copies of all pertinent written materials.
Such written notice may be dispensed with as to any Director or Alternate Director
who, at or prior to the time the meeting convenes, files with the Clerk of the Board a
written waiver of notice. Such waiver may be given by facsimile or electronic mail. Such
written notice may also be dispensed with as to any member who is actually present at
the meeting at the time it convenes. The Clerk of the Board shall diligently attempt to
notify each Director personally of the time, place and purpose of said meeting, not less
than twenty-four (24) hours before the time of said meeting.
The call or notice shall be posted in the administrative offices’ public lobby and in
a location freely accessible to the public at least twenty-four (24) hours prior to the special
meeting.
C. Meetings Adjourned by Clerk of the Board. If at any regular, adjourned
regular, special or adjourned special meeting there is not a quorum of Directors present,
the Clerk of the Board may declare the meeting adjourned to a stated time and place and
shall cause written notice of the adjournment to be given in the same manner as for a
special meeting, unless such notice is waived as provided for in special meetings. Within
twenty-four (24) hours after the time of the adjournment, a copy of the order or notice of
adjournment shall be conspicuously posted on or near the door of the place where the
meeting was held and, in a location, freely accessible to the public.
D. Notices to News Media. When any local newspaper of general circulation,
radio or television station requests, in writing, notices of meetings of the Board of
Directors, the Clerk of the Board shall thereafter, until receipt of a notice terminating said
request, deliver notices of regular, regular adjourned and special adjourned meetings to
such newspapers, radio or television stations. Delivery shall be made in the same manner
as delivery is made to the Directors.
E. Conduct of Meetings.
(1) Procedural Rules. The procedural rules for debate and action shall
be as set forth in Table 1, attached hereto and adopted herein by reference. Robert’s
Rules of Order shall not be applicable or govern the procedures for the conduct of
Sanitation District business.
(2) Legal Officer. In any case of ambiguity or uncertainty in the
interpretation or application of these Rules to any procedure, the presiding officer may
direct such question for a ruling to the Board’s General Counsel, who shall be the
parliamentarian of the Board.
(3) Obtaining the Floor and Making Motions. Any member of the Board
wishing to speak, or any member of the public wishing to address the Board, must first
OCSD 18-1219-XX-3
be recognized by the Chairperson. The Chairperson must recognize any member of the
Board who seeks the floor when appropriately entitled to address the Board.
Any member of the Board, including the Chairperson, may bring a
matter of business properly before the Board by making a motion. Any member, including
the Chairperson, except the member making the motion, may second the motion. Once
a motion is seconded, it may be opened for discussion and debate, in accordance with
the procedures in Subsection (4) below.
(4) Rules for Discussion, Debate and Deliberation by the Board. The
procedures for consideration and action on all matters to come before the Board shall be
in compliance with the terms of this Section, as follows:
(a) Each item on the Agenda will be introduced in a form of a
report by either the General Manager, a member of the Executive Management Team, or
General Counsel, Special Counsel, or Clerk of the Board.
(b) Upon completion of the report, the Chairperson will allow for
direct questions regarding the item, by Directors, each in turn, and in the order as selected
by the Chairperson.
(c) Upon completion of the question period, the Chairperson will
entertain a motion and second for consideration by the Board.
(d) Discussion among the Directors will follow. Each Director will
be recognized to address the Board in the order selected by the Chairperson, with a five
(5) minute time limit for each Member wishing to speak on the Agenda item, unless the
time limit is waived by the Chairperson. Directors should limit comment to the subject
matter, item, or motion currently being considered. There will be no interruptions of the
Director who has been recognized. Attempted interruptions will be declared out-of-order,
and the Board Member attempting to interrupt will be asked to remain silent until
recognized.
(e) As an additional courtesy to everyone, repetition of comments
will be discouraged in the interest of time and, at the discretion of the Chairperson, can
be declared out-of-order.
(f) After each Member who wishes to speak has been recognized
and completed his/her remarks, a single three (3) minute period of rebuttal will be allowed
any Director, unless the time limit is waived by the Chairperson.
(g) If it appears to the Chairperson that any Director is pursuing a
line of questioning or commentary due to lack of preparation or prior review with the
Sanitation District’s Staff, the Director’s time will be declared to have been used up, and
no further inquiry will be allowed.
OCSD 18-1219-XX-4
(h) Upon adoption of a motion on an Agenda item, there will be
no further discussion of that item.
(5) Decorum in Debate. All Members shall address their remarks to the
Chairperson and confine them to the business then pending and subject to discussion
before the Board, avoiding personalities and reflections upon anyone’s motives.
(6) Closing or Limiting Debate. At all times, the Board shall endeavor to
allow free and open debate among Members of the Board. However, in the discretion of
the Chairperson, it may become necessary to close or limit debate, so that action can be
taken by the Board. An order by the Chairperson closing or limiting the debate can only
be set aside by a majority vote of the Board.
F. Quorum. A majority of the Directors shall constitute a quorum of the Board.
G. Chairperson and Vice Chairperson of the Board. A Chairperson and Vice
Chairperson of the Board shall be elected by a majority vote of Directors at the regular
meeting in June of each year and will assume office July 1st. The nominations for
Chairperson and Vice Chairperson shall be made at the regular Board meeting in May of
each year. Any person nominated for Chairperson shall be deemed to be nominated for
Vice Chairperson in the event the person is not elected as Chairperson. Thereafter, the
nominees shall prepare a statement setting forth their qualifications for the office sought.
The statements should be forwarded to the Clerk of the Board who will in turn mail to the
members of the Board of Directors with the Agenda and other meeting material for the
June regular meeting. If only one individual is nominated for Chairperson at the regular
Board meeting in May, that individual shall be deemed elected as Chairperson, no
election shall be held in June, and the individual shall assume office July 1st. If only one
individual is nominated for Vice Chairperson at the regular Board meeting in May, that
individual shall be deemed elected as Vice Chairperson, no election shall be held in June,
and the individual shall assume office July 1st.
The Chairperson and Vice Chairperson shall serve at the pleasure of a majority of
the Directors. In the event the office of Chairperson becomes vacant due to resignation
or retirement of the incumbent prior to the expiration of the regular term, the Vice
Chairperson shall automatically succeed to the office of the Chairperson and shall
continue to serve through the remainder of the regular term unless sooner removed by
action of a majority of the Directors. In the event the office of Vice Chairperson becomes
vacant prior to the expiration of the regular term, nominations and the election of a
Director to serve in that capacity shall be conducted at the next regular Board meeting.
The person so elected shall serve the balance of the regularly scheduled term unless
sooner removed as a result of action by a majority of the Directors.
The Chairperson shall not serve more than two consecutive one-year terms for
which he/she has been elected to the office of Chairperson. The Vice Chairperson shall
not serve more than two consecutive one-year terms for which he/she has been elected
to the office of Vice Chairperson.
OCSD 18-1219-XX-5
H. Presiding Officer. The Chairperson of the Board shall preside during
meetings of the Directors. In the absence of the Chairperson, the Vice Chairperson shall
preside.
I. Clerk of the Board and Minutes. The Board of Directors shall have a person
designated to serve as Clerk of the Board. The Clerk of the Board will be appointed to
the position by the General Manager and shall report to the General Manager or a
Department Head their designeeas designated by the General Manager. The Clerk of
the Board will be a regular full-time employee, subject to all the rules and policies
applicable to all regular full-time employees. The Clerk of the Board shall attend all
meetings of the Board of Directors, unless excused by the Chairperson, and shall prepare
an accurate record of each meeting for submission to the Directors and subsequent
approval at the following meeting; provided, however, that when an adjourned, special or
special adjourned meeting of the Board of Directors immediately precedes a regular
meeting, Minutes of said meeting shall be submitted for approval at the next meeting of
the Board following said regular meeting.
In the preparation of Official Minutes of a meeting of the Board of Directors, the
Clerk of the Board will not record the name of the Director who moves or who seconds
the adoption of a motion or Resolution but will reflect the votes by name of each Director
on each item brought before the Board.
In the absence of the Clerk of the Board, an Deputy Assistant Clerk of the Board
shall be appointed to exercise the duties of the Clerk of the Board.
J. Regular Business to Come Before the Board of Directors. Insofar as
practicable, all items of business to be taken up at a regular meeting of the Board shall
be submitted to the Clerk of the Board, who shall include on the Agenda all such items
submitted by Directors, the General Manager and General Counsel, and all formal
communications.
The Order of Business on the agenda for regular meetings of the Board of Directors
shall be:
Call to Order
Invocation and Pledge of Allegiance
Roll Call and Declaration of Quorum
Public Comment
Special Presentations
Board Chairperson / General Manager Reports
Public Hearings
Elections (when necessary)
Consent Calendar
Receive and File
Committee Items
Non-Consent
OCSD 18-1219-XX-6
Information Items
AB 1234 Disclosure Reports
Closed Session
Other Business and communications or Supplemental agenda items
Board of Directors initiated items for a future meeting
Adjournment
The Board Chairperson shall have the discretion to change the order of business.
The Clerk of the Board shall mail to each Director a notice of such regular
meetings, together with a proposed Agenda, not later than the Friday immediately
preceding such regular meetings. Said Agenda, insofar as possible, shall include copies
of Resolutions, except as hereafter provided, and a description of all matters to be
considered, together with any pertinent written materials.
Agendas shall be posted in a location freely accessible to the public not less than
seventy-two (72) hours in advance of the meeting.
Resolutions designated as “standard” and adopted by the Board of Directors from
time to time, and approved as to form and content, need not be included with said Agenda;
provided, however, that the information completing said standard Resolutions shall be set
forth on the Agenda listing, and copies of said standard Resolutions shall be on file with
the Clerk of the Board at the meeting time and place.
Items of business not known at the time the regular Agenda is mailed as herein
provided, may be considered as supplemental Agenda items; provided that all
requirements of the Ralph M. Brown Act (California Government Code Sections 54950 et
seq.) are satisfied.
No business, except with consent of two-thirds of the Directors present (a majority
of Directors present for emergency actions), and only if permitted by the Ralph M. Brown
Act, not appearing on the regular or supplemental Agendas may be brought before the
Board of Directors.
The meeting Agenda shall provide for an opportunity for members of the public to
address the Board on items on the Agenda and non-Agenda items of public interest. As
determined by the Chairperson, speakers may be deferred until the specific Agenda item
is taken for discussion, and remarks may be limited to three (3) minutes. Speakers on
non-Agenda items may address only items that are within the subject matter jurisdiction
of the Board of Directors. Time allotted for such presentations is limited to three (3)
minutes or less. Total time allotted for all public input on each non-Agenda item is limited
to thirty (30) minutes to one (1) hour, taking into consideration the number of persons
filing a request to address the Board. However, time allotments may be waived by a
majority vote of the Board.
Formatted: Indent: First line: 0"
OCSD 18-1219-XX-7
K. Handling of Business and Voting. During the course of a Board meeting,
routine matters listed on the Agenda for consideration will be referred to by Agenda Item
Number only.
Voting on all Resolutions shall be by roll call, except if waived by unanimous voice
vote, in which event, the Chairperson may order a unanimous ballot cast in favor of the
motion or Resolution under discussion. The name of each Director shall be called only
once.
On matters of considerable interest or on which there appears to be a controversy,
the motion or Resolution shall be read by title or repeated by the Chairperson. The
Chairperson shall thereafter call for discussion of the motion or Resolution, at which time
any member may discuss the pending matter. Any person other than a Director present
at the meeting may speak on the motion if recognized by the Chairperson. Sole discretion
as to the extent of discussion outside of the membership of the Board shall rest with the
Chairperson. At the close of discussion, the Chairperson may, at the Chairperson’s
discretion, repeat the motion or Resolution pending, and thereafter, call for a vote.
The Clerk of the Board shall determine and state whether or not a motion or
Resolution is adopted by roll call vote. On all other matters, the Chairperson shall
determine the outcome of the voting.
L. Committees.
(1) Standing Committees.
(a) Steering Committee: There shall be a permanent Committee
designated as the Steering Committee, comprised of the Chairperson of the Board, the
Vice Chairperson of the Board, the Chairperson of each of the Standing Committees and
two at-large members selected by the Chairperson of the Board. The Vice Chairperson
of each of the three Standing Committees shall serve as the designated Alternate, in the
absence or inability to serve by any Chairperson. In the absence or inability of any
designated member of the Steering Committee to serve, his/her city/agency appointed
Alternate Director may not serve in that member’s absence.
The Committee shall conduct an annual performance evaluation of the
General Manager and submit recommendations on his/her compensation to the Board of
Directors. The Committee shall also review the General Manager’s evaluation and
compensation of the executive management employees, based on established criteria,
and executive management’s goals and objectives for the following year.
The Committee shall also conduct an annual performance evaluation of
General Counsel and submit recommendations to the Board of Directors as provided by
Resolution No. OCSD 12-03.
OCSD 18-1219-XX-8
The Committee shall make recommendations to the Board of Directors on labor
negotiations and other related activities as may be needed or appropriate.
The Committee shall also be authorized to assign new subjects of significant
importance to the appropriate Standing Committee for study, evaluation and
recommendation.
The Steering Committee shall meet on the fourth Wednesday of each month at
5:00 p.m. preceding the Board’s meeting, or at the call of the Chairperson of the Board of
Directors.
(b) Administration Committee: There shall be a permanent
Administration Committee (Finance & Administrative Services, Environmental Services,
and Human Resources) to advise the Staff and make recommendations on matters
related to the financial, budgeting, administrative and personnel policies and programs of
the Sanitation District.
The Committee shall review with the Staff the procedures for development,
preparation and format of the annual budget and recommend appropriate change, and
counsel the Staff during the budget process to assure the proper interpretation and
implementation of the Board’s policies and that the desired procedures have been
followed.
The responsibility for consideration and adoption of the Sanitation District budget
rests with the Board of Directors.
The Committee shall periodically interview and recommend the selection of outside
auditors. The Committee shall review the result of the annual audit of the Sanitation
District’s accounts with representatives of the outside audit firm, including any comments
received recommending improvements. The Committee shall review management’s
response to these comments and make appropriate recommendations for
implementation.
Periodically, the Committee shall recommend employment of an outside firm to
audit internal control procedures to safeguard the assets of the Sanitation District.
The Committee shall interview and make recommendations on the employment of
investment-banking firms, bond counsel and, if necessary or desired, financial advisors,
to be used in connection with the Sanitation District’s financing programs.
The Committee shall periodically coordinate recommendations on personnel
audits of the Sanitation District’s operations or segments of the operations on an as-
needed basis.
OCSD 18-1219-XX-9
The Committee shall make recommendations on personnel policies and
procedures, insurers and coverage, procurement procedures and such other related
activities as may be needed or appropriate.
The Chairperson of the Board of Directors shall appoint a Committee Chairperson
and a Committee Vice Chairperson for the Administration Committee. The Committee
Chairperson and Committee Vice Chairperson shall serve at the pleasure of the
Chairperson of the Board of Directors.
The Administration Committee shall consist of thirteen members, as follows:
(1) The Chairperson of the Board of Directors;
(2) The Vice Chairperson of the Board of Directors;
(3) The Committee Chair of the Administration Committee;
(4) The Committee Vice Chair of the Administration Committee; and
(5) Nine additional Board members appointed by the Chairperson of the Board of
Directors.
Other than the Board Chairperson and the Board Vice Chairperson, no Director
who serves on the Operations Committee shall be eligible to serve concurrently on the
Administration Committee. In the absence of the Board Chairperson, his or her alternate
Director may attend meetings of the Administration Committee.
The Administration Committee shall meet on the second Wednesday of each
month at 5:00 p.m., or at the call of its Chairperson.
(c) Operations Committee: There shall be a permanent
Committee designated the Operations Committee (Engineering, and Operations &
Maintenance and Environmental Services). With the goal of compliance with all public
health and environmental laws and regulations, the Operations Committee shall review
and submit appropriate recommendations on the matters pertaining to the operation of
the Sanitation District tTreatment Works, including such matters as current and projected
service/flow needs, level and quality of treatment, conservation, recycling and reuse
activities and air quality issues.
The Committee shall also review issues pertaining to the Sanitation District’s
National Pollutant Discharge Elimination System Ocean Outfall Discharge Permit,
including annual review of the contractor(s) performing the ocean monitoring and
research programs required as a condition of said permit, and related issues regarding
protection of the marine waters off metropolitan Orange County’s coastline from impacts
resulting from the Sanitation District’s operations and discharge of treated wastewater.
OCSD 18-1219-XX-10
The Committee shall also review matters pertaining to contractual arrangements
by the Sanitation District to provide sewerage services to areas outside the Sanitation
District’s boundaries or approved spheres of influence.
The Committee shall review plans for the future needs of the Sanitation District,
explore alternatives and make recommendations to the Board of Directors.
The Operations Committee shall also review and submit appropriate
recommendations on matters pertaining to capital projects which address operational
needs, including the selection of professional consulting services to assist in studying,
planning and designing needed Sanitation District tTreatment Works and support
facilities, including computerized systems, in accordance with the Board’s established
policies and procedures for procuring such services; the Committee shall further review
construction projects for said facilities in accordance with applicable public works laws
and Board policies. Said oversight shall include the contracts for professional services
and public works construction projects and addenda or change orders thereto. In carrying
out its responsibilities, the Committee shall receive advance notice and regular status
reports on the projects from Staff, and monitor, visit and observe the Sanitation District
Treatment Works’ operational functions and major capital construction projects.
The Chairperson of the Board of Directors shall appoint a Committee Chairperson
and a Committee Vice Chairperson of the Operations Committee. The Committee
Chairperson and Committee Vice Chairperson shall serve at the pleasure of the
Chairperson of the Board of Directors.
The Operations Committee shall consist of fourteen members, as follows:
(1) The Chairperson of the Board of Directors;
(2) The Vice Chairperson of the Board of Directors;
(3) The Committee Chair of the Operations Committee;
(4) The Committee Vice Chair of the Operations Committee; and
(5) Ten (10) additional Board members appointed by the Chairperson of the Board
of Directors.
Other than the Board Chairperson and the Board Vice Chairperson, no Director
who serves on the Administration Committee shall be eligible to serve concurrently on the
Operations Committee. In the absence of the Board Vice-Chairperson, his or her
Alternate Director may attend meetings of the Operations Committee.
The Operations Committee shall meet on the first Wednesday of each month at
5:00 p.m., or at the call of its Chairperson.
OCSD 18-1219-XX-11
(d) Legislative and Public Affairs Committee: There shall be a permanent
Committee designated as the Legislative and Public Affairs (LaPA) Committee.
The Committee shall review issues pertaining to the impact on OCSD of legislative
and regulatory proposals and submit appropriate recommendations on the matters.
The Committee shall also be responsible for overseeing the contractual
arrangements with the Sanitation District’s legislative advocates to provide advocacy
services in Sacramento and Washington, D.C. In carrying out its responsibilities, the
Committee shall receive regular status reports from the advocates and staff and monitor
and recommend positions on legislative and regulatory proposals.
The Committee shall also review issues pertaining to the Sanitation District’s public
outreach, branding, and communications activities, evaluate alternatives and make
recommendations to the Board of Directors.
The Chairperson of the Board of Directors shall appoint a Committee Chairperson
and a Committee Vice Chairperson to the LaPA committee. The Committee Chairperson
and Vice Chairperson shall serve at the pleasure of the Chairperson of the Board of
Directors.
The LaPA Committee shall consist of seven members, as follows:
(1) The Chairperson of the Board of Directors
(2) The Vice Chairperson of the Board of Directors
(3) The Committee Chairperson of the LaPA Committee
(3)
(4) The Committee Vice Chairperson of the LaPA committee
(5) Three (3) additional Board Members appointed by the Chairperson of the Board
of Directors
The LaPA Committee shall meet on the second Monday of each the months of
February, March, May, September and December at 12:00 p.m. and the months of April
and July at 3:30 p.m. or at the call of its Chairperson.”
(2) Special and Ad Hoc Committees. In addition to the Standing
Committees, the Chairperson of the Board of Directors, the Chairperson of a Standing
Committee or a majority of the Directors, may appoint from time to time, Special or Ad
Hoc Committees to study and report on specific matters. Such Committees shall be
temporary in nature, and their assignments shall pertain to a current, specific issue. Upon
completion of the assigned task, the Ad Hoc or Special Committee will be dissolved.
Formatted: Justified
Formatted: Indent: Left: 0.75", No bullets or numbering
Formatted: Justified
Formatted: Justified
OCSD 18-1219-XX-12
The Chairperson and Vice Chairperson of Special and Ad Hoc Committees shall
be appointed by the Chairperson of the appointing authority.
Each Special and Ad Hoc Committee shall meet at the call of its Chairperson.
M. Alternate Directors: If a regular Director cannot attend a meeting of the
Operations Committee, the Administration Committee or the full Board of Directors, the
Director’s alternate may attend in place of his or her regular Director. An alternate
Director may not, however, attend a meeting of any other Committee in the absence of
his or her regular Director. If the regular Director and the Alternate Director are both
unable to attend the meeting, the regular Director may request that the meeting be
teleconferenced. The request may be approved, at the Board Chairperson’s discretion,
provided that all requirements of the Ralph M. Brown Act (California Government Code
Sections 54950 et seq.) are able to be satisfied.
N. Motion to Refer to a Standing Committee. Any Director at a Board meeting
may move to have a policy or any other activity affecting the Sanitation District, or any
one of the member Agencies, referred to a Standing Committee for study and report. This
motion shall be a privileged motion, and when duly seconded, discussion thereof shall be
limited to Directors only. Said motion shall receive an affirmative vote of a majority of the
Directors for adoption.
Section 2: Procedure for Consideration of Demands for Corrective Action.
A. Requirement of Written Demand. Prior to any person commencing a judicial
action for injunction or mandamus to declare any action taken by the Board void because
of failure to observe Brown Act requirements, such person must first serve upon the Clerk
of the Board a written demand describing the alleged violation and demanding corrective
action. Such demand must be served upon the Clerk of the Board within thirty (30) days
of the complained of action. Failure to serve any such demand within this thirty (30) day
period shall result in the loss of any right to challenge any action to have been taken in
violation of Sections 54953, 54954.2 or 54956 of the California Government Code.
B. Consideration of Corrective Action. Upon receipt of such a demand,
consideration of the demand shall immediately be placed on the Agenda for the next
meeting of the Board of Directors. If the demand is received less than seventy-two (72)
hours prior to the time set for the next meeting, the Board may determine that the notice
constitutes the initiation of litigation, and that the need to take action on the threatened
litigation arose subsequent to the posting of the Agenda and may consider it at that
meeting pursuant to Section 1(J) above. A description of any item so placed on the
Agenda shall include both consideration of the demand, and the possibility of corrective
action, by the Board.
In considering such demands, the Board shall first determine, by motion,
whether corrective action should be taken. If no motion to take corrective action is carried,
OCSD 18-1219-XX-13
the Clerk of the Board shall inform the demanding party in writing of the Board’s decision
not to cure or correct the challenged action.
C. Implementing Corrective Action. If a motion to take corrective action
passes, the Chairperson may entertain a motion implementing corrective action. Any
motion implementing corrective action shall address the concerns raised in the
consideration of corrective action. The motion implementing corrective action may
include a motion to rescind prior action taken, as appropriate. Passage of a motion to
rescind invalidates prior action only as of the time of the passage of the motion, and not
from the date of the initial action. A motion implementing corrective action resulting from
a written demand is out-of-order if the action complained of (a) was in connection with the
sale or issuance of notes, bonds or other evidences of indebtedness, or any contract,
agreement or incident thereto; or (b) gave rise to a contractual obligation upon which a
party has, in good faith, detrimentally relied. In any event, the Board shall notify the party
making the demand in writing of its decision to take corrective action and shall describe
any corrective action taken. This notice shall be given to the demanding party as soon
as possible after the meeting, but in no event more than thirty (30) days after receipt of
the demand.
Section 3: Resolution No. OCSD 17-1818-12 is hereby repealed.
Section 4: This Resolution shall become effective immediately.
PASSED AND ADOPTED at a regular meeting of the Board of Directors held
July 25, 2018November 20, 2019.
_______________________________
Gregory C. Sebourn, PLS David John Shawver
Board Chairman
ATTEST:
__________________________
Kelly A. Lore, MMC
Clerk of the Board
APPROVED AS TO FORM:
___________________________
Bradley R. Hogin
General Counsel
OCSD 18-1219-XX-14
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 18-12 19-XX was passed and
adopted at a regular meeting of said Board on the 25th day of July 201820th day of
November 2019, 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 25th day of July 201820th day of November 2019.
Kelly A. Lore, MMC
Clerk of the Board of Directors
Orange County Sanitation District
Formatted: Superscript
Formatted: Superscript
OCSD 18-1219-XX-15
TABLE 1
BOARD PROCEDURES AND ORGANIZATION
SUMMARY OF MOTIONS
A. PRIVILEGED MOTIONS
Kind of
Motion
Second
Required
Debatable
Amendable
Vote
Required
Purpose
Adjourn
Yes
No
No
Majority
To end the
meeting
To Take a
Recess
Yes
No
No
Majority
To interrupt a
meeting for a
short time or to
provide an
intermission
Raise a
Question of
Privilege
No No No None To obtain action
immediately in an
emergency
B. MAIN MOTION AND RELATED
SUBSIDIARY MOTIONS
Kind of
Motion
Second
Required
Debatable
Amendable
Vote
Required
Purpose
Main
Motion
Yes
Yes
Yes
Majority
To introduce new
business
Amend
Main
Motion
Yes
Yes
Yes
Majority
To modify or alter a
motion
Substitute
Motion
Yes
Yes
Yes
Majority
To replace the main
motion entirely
OCSD 18-1219-XX-16
Previous
Question
Yes
No
No
Majority
To close debate on
the main or
amended motion
immediately
Continue to
a Certain
Time
Yes
Yes
Yes
Majority
To defer action
To Table
Yes
No
No
Majority
To discontinue
consideration until
brought back by vote
of the Board
Take a
Motion
from the
Table
Yes
No
No
Majority
To bring before the
group a motion
previously tabled
Limit or
Extend
Limits of
Debate
Yes
No
Yes
Majority
To limit or extend
limits of debate
Refer to a
Committee
Yes
Yes
Yes
Majority
To place business in
hands of a
Committee
Withdraw a
Motion
No
No
No
None
To withdraw a
motion before it is
voted on
Reconsider Yes Yes No Majority
must be
by a
Director
who voted
for the
prevailing
side on
the
original
motion
To secure a new
vote on a motion
previously voted
upon
OCSD 18-1219-XX-17
C. INCIDENTAL RULES
NON-RANKING
Kind of
Motion
Second
Required
Debatable
Amendable
Vote
Required
Purpose
Request to
Suspend
the Rules
Yes
No
No
Two-
Thirds
To facilitate business
ordinarily contrary to
the rules of the
organization
Override
Order of
the Chair
Yes
No
No
Majority
To have Board
majority rule on the
order
Point of
Order
No No No None To enforce the rules
of the organization
Orange County Sanitation District
ADMINISTRATION COMMITTEE
Agenda Report
Administration Building
10844 Ellis Avenue
Fountain Valley, CA 92708
(714) 593-7433
File #:2019-709 Agenda Date:11/13/2019 Agenda Item No:4.
FROM:James D. Herberg, General Manager
Originator: Lorenzo Tyner, Assistant General Manager
SUBJECT:
GENERAL MANAGER APPROVED PURCHASES AND ADDITIONS TO THE PRE-APPROVED
OEM SOLE SOURCE LIST
GENERAL MANAGER'S RECOMMENDATION
RECOMMENDATION: Recommend to the Board of Directors to:
A. Receive and file Orange County Sanitation District purchases made under the General
Manager’s authority for the period of July 1, 2019 to September 30, 2019; and
B. Approve the following additions to the pre-approved OEM Sole Source List for the period of
July 1, 2019 to September 30, 2019:
·ALLEN-BRADLEY - Medium Voltage Variable Frequency Drive
·CLEAVER-BROOKS - Burner Elements
·EATON - Self-Cleaning Strainers
·SONETICS - Wireless headsets and system
·TRM/Maximo - Rules Manager SE and Lock out Tag Out (LOTO) Software
·VAUGHAN - Mixing Nozzles..body
..body
BACKGROUND
Staff provides the Administration Committee and the Board of Directors quarterly reports of General
Manager approved and executed purchases between $50,000 and $100,000;maintenance and
repair Services Task Orders between $50,000 and $300,000;and additions to the pre-approved OEM
Sole Source List.
The list of additions to the pre-approved OEM Sole Source List displays the original equipment
manufacturers (OEM)added this quarter that require sole source procurement to maintain,service,
or replace equipment currently in operation at Orange County Sanitation District facilities,because
the parts and/or service can only be provided by the OEM or their designated representative.
Orange County Sanitation District Printed on 11/6/2019Page 1 of 4
powered by Legistar™
File #:2019-709 Agenda Date:11/13/2019 Agenda Item No:4.
RELEVANT STANDARDS
·Quarterly financial reporting
·Ensure the public’s money is wisely spent
PRIOR COMMITTEE/BOARD ACTIONS
The Board of Directors authorizes the General Manager to ratify additions and deletions to the OEM
Sole Source list quarterly on the General Manager’s approved purchases agenda report.
ADDITIONAL INFORMATION
In accordance with Board purchasing policies,Ordinance No.OCSD-52,the General Manager has
authority to approve and execute purchases between $50,000 and $100,000.Below is a summary of
General Manager approved purchases,in amounts exceeding $50,000,for the first quarter of fiscal
year 2019-20:
Vendor Name Amount Department Description/Discussion
CE SCHMIDT,
ENVIRONMENTAL
CONSULTANT
$70,248.00 Engineering Sampling Methodology and Field
Testing Services for Trickling Filter
Research Test at Plant No. 1, Project
No. RE18-01 Sole Source
Justification 2164 Reason: Unique
Product/Service
FIRE SERVICE
CORP.
$69,251.50 Operations &
Maintenance
Annual Service Maintenance and
Preventative Maintenance, Testing
and Inspection for Fire Sprinkler, Fire
Extinguishers and Misc. Systems
7/1/19 to 6/30/20 with 4 Optional 1-yr
Renewal Periods Specification No. S-
2019-1073
GST $66,590.51 Administrative
Services
Purchase, Installation and
Configuration of Audio Visual
Equipment for OCSD Boardroom
Specification No. S-2019-1023
KEENAN &
ASSOCIATES
$95,000.00 Human
Resources
Consulting Services from a Risk
Management Professional 8/26/19 to
12/31/19 HR Sole Source
Justification
MICROSOFT
CORPORATION
$92,890.00 Administrative
Services
Microsoft Premier Support Services
9/17/19 to 9/16/20 Board Approved
OEM Sole Source List M.O.
12/14/16, Item 12
MURPHY
INDUSTRIAL
COATINGS, INC.
$66,570.00 Operations &
Maintenance
Plant 1 Secondary Clarifier #31
Catwalk Coating Repairs
Specification No. S-2019-1057
NORTH
AMERICAN
CRANE COMPANY
$55,000.00 Operations &
Maintenance
Crane Inspection Finding Repairs
Sole Source Justification 2157
Reason: Emergency
PROTEIN MATRIX
LLC
$74,250.00 Engineering Pilot Test Use of a Proprietary Product
that may Improve Accumulation of
Fats, Oils and Grease (FOG) Sole
Source Justification 2136 Reason:
Unique Product/Service
PROTEIN MATRIX
LLC
$74,250.00 Engineering Super Base for Pilot Test at Plant 1
Sole Source Justification 2165
Reason: Unique Product/Service
QUINCY
COMPRESSOR
$63,912.13 Operations &
Maintenance
Provide Quincy Air Compressor per
Proposal No. BMA-656512 Sole
Source Justification 2146 Reason:
Time Sensitive/Standardization of Air
Compressors
SC FUELS $76,635.97 Operations &
Maintenance
Purchase of 5,000 Gallons (Bulk Oil)
of Chevron 5200 HDAX Low Ash 40
(No Sub) Sole Source Justification
2137 Reason: Unique
Product/Service
SGS US WEST
COAST LLC
$59,500.00 Operations &
Maintenance
120-Inch Ocean Outfall Pipeline
External ROV Video Inspection
Services Specification No. S-2019-
1027
SIEMENS
INDUSTRY, INC.
$75,685.00 Operations &
Maintenance
Three (3) Year Technical Service
Agreement to Perform Annual
Preventative Maintenance 10/1/19 to
9/30/22 Board Approved OEM Sole
Source List M.O. 12/14/16, Item 12
Orange County Sanitation District Printed on 11/6/2019Page 2 of 4
powered by Legistar™
File #:2019-709 Agenda Date:11/13/2019 Agenda Item No:4.
Vendor Name Amount Department Description/DiscussionCE SCHMIDT,ENVIRONMENTALCONSULTANT $70,248.00 Engineering Sampling Methodology and FieldTesting Services for Trickling FilterResearch Test at Plant No. 1, ProjectNo. RE18-01 Sole SourceJustification 2164 Reason: UniqueProduct/ServiceFIRE SERVICECORP.$69,251.50 Operations &Maintenance Annual Service Maintenance andPreventative Maintenance, Testingand Inspection for Fire Sprinkler, FireExtinguishers and Misc. Systems7/1/19 to 6/30/20 with 4 Optional 1-yrRenewal Periods Specification No. S-2019-1073GST$66,590.51 AdministrativeServices Purchase, Installation andConfiguration of Audio VisualEquipment for OCSD BoardroomSpecification No. S-2019-1023KEENAN &ASSOCIATES $95,000.00 HumanResources Consulting Services from a RiskManagement Professional 8/26/19 to12/31/19 HR Sole SourceJustificationMICROSOFTCORPORATION$92,890.00 AdministrativeServices Microsoft Premier Support Services9/17/19 to 9/16/20 Board ApprovedOEM Sole Source List M.O.
12/14/16, Item 12
MURPHY
INDUSTRIAL
COATINGS, INC.
$66,570.00 Operations &
Maintenance
Plant 1 Secondary Clarifier #31
Catwalk Coating Repairs
Specification No. S-2019-1057
NORTH
AMERICAN
CRANE COMPANY
$55,000.00 Operations &
Maintenance
Crane Inspection Finding Repairs
Sole Source Justification 2157
Reason: Emergency
PROTEIN MATRIX
LLC
$74,250.00 Engineering Pilot Test Use of a Proprietary Product
that may Improve Accumulation of
Fats, Oils and Grease (FOG) Sole
Source Justification 2136 Reason:
Unique Product/Service
PROTEIN MATRIX
LLC
$74,250.00 Engineering Super Base for Pilot Test at Plant 1
Sole Source Justification 2165
Reason: Unique Product/Service
QUINCY
COMPRESSOR
$63,912.13 Operations &
Maintenance
Provide Quincy Air Compressor per
Proposal No. BMA-656512 Sole
Source Justification 2146 Reason:
Time Sensitive/Standardization of Air
Compressors
SC FUELS $76,635.97 Operations &
Maintenance
Purchase of 5,000 Gallons (Bulk Oil)
of Chevron 5200 HDAX Low Ash 40
(No Sub) Sole Source Justification
2137 Reason: Unique
Product/Service
SGS US WEST
COAST LLC
$59,500.00 Operations &
Maintenance
120-Inch Ocean Outfall Pipeline
External ROV Video Inspection
Services Specification No. S-2019-
1027
SIEMENS
INDUSTRY, INC.
$75,685.00 Operations &
Maintenance
Three (3) Year Technical Service
Agreement to Perform Annual
Preventative Maintenance 10/1/19 to
9/30/22 Board Approved OEM Sole
Source List M.O. 12/14/16, Item 12
Additionally,in accordance with Board purchasing policies,Ordinance No.OCSD-52,the General
Manager has authority to approve and execute maintenance and repair Services Task Orders
between $50,000 and $300,000.Below is a summary of General Manager approved maintenance
and repair Services Task Orders,in amounts exceeding $50,000,for the first quarter of fiscal year
2019-20:
Vendor Name Amount Department Description/Discussion
AECOM ENERGY
&
CONSTRUCTION,
INC.
$115,000.00 Operations &
Maintenance
Standby Generator replacements at
Power Building 3A (P1) and Power
Building "C" (P2) Specification No.
TOB-2019-1064 of Master Service
Contract S-2018-942BD-1
AECOM ENERGY
&
CONSTRUCTION,
INC.
$89,741.00 Operations &
Maintenance
Plant 2 Digester F Valves
Replacement, and Pipe and Concrete
Repair (P2-91-1K) Specification No.
TOB-2019-1101 of Master Service
Contract S-2018-942BD-1
J R FILANC
CONSTRUCTION
$139,664.00 Operations &
Maintenance
Primary Basin 4 Repairs at Plant 1
Specification No. TOB-2019-1080 of
Master Service Contract S-2018-
942BD-4
J R FILANC
CONSTRUCTION
$265,230.60 Operations &
Maintenance
Elevator Modernization Project, Phase
II at Plant 1 (MP-301) Specification
No. TOB-2019-1082 of Master
Service Contract S-2018-942BD-4
W.A. RASIC
CONSTRUCTION
CO., INC.
$71,060.00 Operations &
Maintenance
Lighting Replacement at Plant 1
Specification No. TOB-2019-1094 of
Master Service Contract S-2018-
942BD-7
Orange County Sanitation District Printed on 11/6/2019Page 3 of 4
powered by Legistar™
File #:2019-709 Agenda Date:11/13/2019 Agenda Item No:4.
Vendor Name Amount Department Description/DiscussionAECOM ENERGY
&
CONSTRUCTION,
INC.
$115,000.00 Operations &
Maintenance
Standby Generator replacements at
Power Building 3A (P1) and Power
Building "C" (P2) Specification No.
TOB-2019-1064 of Master Service
Contract S-2018-942BD-1
AECOM ENERGY
&
CONSTRUCTION,
INC.
$89,741.00 Operations &
Maintenance
Plant 2 Digester F Valves
Replacement, and Pipe and Concrete
Repair (P2-91-1K) Specification No.
TOB-2019-1101 of Master Service
Contract S-2018-942BD-1
J R FILANC
CONSTRUCTION
$139,664.00 Operations &
Maintenance
Primary Basin 4 Repairs at Plant 1
Specification No. TOB-2019-1080 of
Master Service Contract S-2018-
942BD-4
J R FILANC
CONSTRUCTION
$265,230.60 Operations &
Maintenance
Elevator Modernization Project, Phase
II at Plant 1 (MP-301) Specification
No. TOB-2019-1082 of Master
Service Contract S-2018-942BD-4
W.A. RASIC
CONSTRUCTION
CO., INC.
$71,060.00 Operations &
Maintenance
Lighting Replacement at Plant 1
Specification No. TOB-2019-1094 of
Master Service Contract S-2018-
942BD-7
CEQA
N/A
FINANCIAL CONSIDERATIONS
N/A
ATTACHMENT
The following attachment(s)may be viewed on-line at the OCSD website (www.ocsd.com)with the complete agenda
package:
N/A
Orange County Sanitation District Printed on 11/6/2019Page 4 of 4
powered by Legistar™
Orange County Sanitation District
ADMINISTRATION COMMITTEE
Agenda Report
Administration Building
10844 Ellis Avenue
Fountain Valley, CA 92708
(714) 593-7433
File #:2019-707 Agenda Date:11/13/2019 Agenda Item No:5.
FROM:James D. Herberg, General Manager
Originator: Lorenzo Tyner, Assistant General Manager
SUBJECT:
CONSOLIDATED FINANCIAL REPORT FOR THE FIRST QUARTER ENDED SEPTEMBER 30,
2019
GENERAL MANAGER'S RECOMMENDATION
RECOMMENDATION: Recommend to the Board of Directors to:
Receive and file the Orange County Sanitation District First Quarter Financial Report for the period
ended September 30, 2019.
BACKGROUND
Included in this consolidated report are the following quarterly financial reports for the period ended
September 30, 2019:
·First Quarter Budget Review
The Budget Review Summary provides the Directors,staff,and general public with a
comprehensive overview of the financial results of the Orange County Sanitation District
(Sanitation District) through the first quarter ended September 30, 2019.
·Quarterly Treasurer’s Report
This section reports on financial portfolio performance with respect to the Sanitation District’s
funds.Both Long-Term and Liquid Operating Monies Portfolios are summarized.A
performance summary table can be found on page 2 of this agenda report.The report also
contains information on the U.S.and global economic outlook from the Sanitation District’s
investment manager, Chandler Asset Management.
·Certificates of Participation Quarterly Report
The report includes a summary of each outstanding debt issuance and a comparative chart
illustrating the COP rate history.
RELEVANT STANDARDS
·Quarterly financial reporting
Orange County Sanitation District Printed on 11/6/2019Page 1 of 3
powered by Legistar™
File #:2019-707 Agenda Date:11/13/2019 Agenda Item No:5.
ADDITIONAL INFORMATION
The quarterly treasurer’s report contained within the Consolidated Financial Reports for the First
Quarter Ended September 30,2019 is being submitted in accordance with the Sanitation District’s
investment policy that requires the report be submitted to the governing body following the end of
each quarter and includes the following information:
·Performance results in comparison with the ICE BAML 3-month treasury bill index for the liquid
operating portfolio;and the ICE BAML 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,and since
inception compared to the Benchmark returns for the same periods:
Portfolio Performance Summary
As of September 30, 2019
Liquid Operating Monies (%)Long-Term Operating Monies (%)
Total Rate
of Return
Benchmark Total Rate
of Return
Benchmark
3 Months 0.59 0.56 0.88 0.82
6 Months 1.28 1.20 2.59 2.69
9 Months 1.92 1.81 4.14 4.15
12 Months 2.50 2.39 5.52 5.79
Annualized Since Inception 30 Nov 2014 1.12 1.02 1.84 1.79
·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 Operating Long-Term
Cost $67.8 M $535.6 M
Market Value $68.2 M $548.1 M
·Modified duration of the portfolio compared to the Benchmark:
Liquid Operating Long-Term
District Policy < 0.50 < 5.00
Benchmark 0.16 2.53
Portfolio 0.30 2.46
·Dollar change in value of the portfolio for a one percent (1%) change in interest rates:
Liquid Operating - $207,478
Long- Term - $13,474,939
·None of the portfolios are currently invested in reverse repurchase agreements.
Orange County Sanitation District Printed on 11/6/2019Page 2 of 3
powered by Legistar™
File #:2019-707 Agenda Date:11/13/2019 Agenda Item No:5.
·The percent of the Liquid Operating Monies portfolio maturing within 90 days: 21.5%
·Average portfolio credit quality:
Liquid Operating - AA+/Aa1
Long- Term - AA/Aa1
·Percent of portfolio with credit ratings below “A”by any rating agency and a description of
such securities:
Liquid Operating - no exceptions
Long- Term - Percent of portfolio - 0.6%
Cost Maturity
Date
Moody S&P Fitch
SLMA 2008-9 A $13,290.71 4/25/2023 Baa3 B B
AMRESCO Residential Securities 1999-1 A $92,461.32 6/25/2029 NR A+BBB
Morgan Stanley Note $3,200,848.00 7/28/2021 A3 BBB+A
·All investments are in compliance with this policy and the California Government Code,except
for the following Lehman Brother holdings that the Sanitation District is pursuing collection
through the bankruptcy court:
Lehman Brothers Note-Defaulted $ 600,000 par value purchased 9/19/2008
Lehman Brothers Note-Defaulted $2,000,000 par value purchased 9/18/2008
·Sufficient funds are available for the Sanitation District to meet its operating expenditure
requirements for the next six months.
CEQA
N/A
FINANCIAL CONSIDERATIONS
N/A
ATTACHMENT
The following attachment(s)may be viewed on-line at the OCSD website (www.ocsd.com)with the complete agenda
package:
·Consolidated Financial Report for the First Quarter Ended September 30, 2019
Orange County Sanitation District Printed on 11/6/2019Page 3 of 3
powered by Legistar™
Orange County, California
Orange County Sanitation District
First Quarter
Financial Report
for the period ended September 30, 2019
Table of Contents
Executive Summary………………………………………………………………………..…….………1
Budget Review
Section 1 – Consolidated Financial Reports .......................................................................... 1
Section 2 – Operating Budget Review
Chart of the Cost per Million Gallons by Department – Budget and Actual .............. 1
Chart of the Net Expenses by Major Category – Budget and Actual ....................... 1
Divisional Contributions to Cost Per Million Gallons ................................................ 2
Comparison of Expenses by Department ................................................................. 3
Summary of Collection, Treatment, and Disposal Expenses by Major Category ..... 4
Summary of District-Wide Revenues ....................................................................... 5
Summary of Collection, Treatment and Disposal Revenues .................................... 5
Summary of Collection, Treatment, and Disposal Expenses by Line Item ............... 6
Summary of Collection, Treatment, and Disposal Expenses by Process................. 8
Chart of Staffing Trends ........................................................................................... 9
Section 3 – Capital Improvement Program Budget Review
Capital Improvement Program Graphs by Type and Funding Source...................... 1
Summary of Capital Improvement Construction Requirements - Current Year........ 2
Summary of Capital Improvement Construction Requirements - Project Life .......... 6
Section 4 – Capital Assets Schedule & Debt Service Budget Review
Capital Assets Schedule .......................................................................................... 1
Debt Service Budget Review .................................................................................... 1
Section 5 – Self Insurance Budget Review
General Liability and Property Fund Budget Review ................................................ 1
Workers’ Compensation Fund Budget Review ......................................................... 2
Quarterly Treasurer’s Report…………………………………………………………………………….1
Quarterly COP Report…………………………………………………………………………………....1
FY 2019-20 First Quarter Financial Report
This Page Intentionally Left Blank
Executive Summary
Page 1
Consolidated Financial Reports
For the First Quarter Ended
September 30, 2019
Included in this consolidated report are the following quarterly financial reports for the
period ended September 30, 2019:
First Quarter Budget Review:
The Consolidated Financial Reports Section provides the Directors, staff, and the
general public with a comprehensive overview of the financial results of the
Sanitation District through the first quarter ended September 30, 2019.
Contained within the Consolidated Financial Reports is the budget-to-actual status
of the Collections, Treatment and Disposal Operations, the Capital Improvement
Program, the Self-Insurance Program, and Debt Service Outlays. Also included is
a Capital Assets Schedule as of September 30, 2019. The chart below provides
for a summary of these activities.
Various detail information can be found in this report. Below is a descriptive
summary of these activities through September 30th:
a) Most major expense categories are anticipated to be at or below budget.
b) Total revenues are at 4.4 percent of the $465.7 million budget, mainly due to
the timing of property tax and sewer fee distribution from the County that
occurs mostly after the first quarter. These two revenue sources make up
84.7 percent of the District’s total budgeted revenue. Except for Service Fees,
Property Taxes, Capital Assessments-IRWD, CIP Reimbursements, Grant
Revenue, Rents & Leases, and Other Revenues, most major revenue
sources are currently tracking close to or exceeding revenue estimates.
$20.6M
$41.4M
$20.0M $11.9M
$619K
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Oper.
Rev
Oper Exp Capital
Outlays
Debt
Service
Self Ins
Outlays
First Quarter Results
as a Percentage of Budget
FY 2019-20 First Quarter Financial Report
Page 2
Overall, total revenues are projected to approximate budget at year-end.
More detailed information on District revenues is provided within Section 1 –
Pages 3 through 5.
c) Collection, Treatment and Disposal Costs:
As indicated within the Consolidated Financial Reports Section of this report,
the net operating requirements through the first quarter of $41.4 million is
currently tracking at 24.6 percent of the $168.2 million budget. In addition, net
operating expenses have increased $5.4 million or 14.9 percent in
comparison with the same period last year. Overall, staff expects the total
operating costs to remain within budget throughout the remainder of the year.
More detailed information on District operating expenses is provided within
Section 1- Pages 1 through 3.
The total cost per million gallons is $2,396 based on flows of 188 million
gallons per day. This is $55 per million gallons, or 2.2 percent lower than the
budgeted cost per million gallons per day. A further description of these costs
and benchmarking with other agencies is contained within Section 1 – Pages
6 through 8.
d) The total projected capital outlay cash flow of the Capital Improvement
Program (CIP) for FY 2019-20 has been revised to $155.5 million, or 101.4
percent of the board approved cash outlay of $153.3 million. The actual cash
outlay spending through the first quarter is $20.0 million, or 13.0 percent of
the total budgeted outlay. More detailed information on the CIP budget review
can be found in Section 3.
Quarterly Treasurer’s Report
This section reports on financial portfolio performance with respect to the
Sanitation District’s funds. Both Long-Term and Liquid Operating Monies
Portfolios are summarized. A performance summary table can be found on page
2 of this section. The report also contains information on the national economic
outlook from the Sanitation District’s money manager, Chandler Asset
Management (Chandler).
Chandler notes the Long-Term Portfolio quarterly return of 88 basis points
outperformed the ICE BAML 1-5 Year US Corp/Govt Rated AAA-A Index return of
82 basis points, while the Liquid Operating Monies Portfolio quarterly return of 59
basis points outperformed the ICE BAML 3-Month US Treasury Bill Index return of
56 basis points.
Chandler further notes that the labor market and consumer fundamentals remain
favorable, but manufacturing data continue to disappoint. We believe economic
growth has slowed from earlier this year and downside risks to the outlook remain
elevated. The US economy continues to face headwinds from trade disputes,
slowing global economic growth, and an uncertain outlook for Brexit. However, we
believe accommodative US monetary policy and a collective dovish stance by all
Executive Summary
Page 3
of the major global central banks should help to combat the headwinds. We also
believe the Trump administration faces significant political pressure to make
progress toward a trade agreement with China as we head into an election year.
The Federal Open Market Committee (FOMC) lowered the target fed funds rate
by 25 basis points in September (for the second time this year) to a range of
1.75%-2.00%. There were three dissenting votes; one policymaker favored a 50-
basis point rate cut, and two policymakers favored leaving the fed funds rate
unchanged. According to the Fed's dot plot, only seven out of 17 policymakers
are anticipating another rate cut before year-end. Although there is a growing
disparity among policymakers about the appropriate path of monetary policy, Fed
Chair Powell’s press conference suggested the Fed will be flexible and data
dependent. Powell indicated more rate cuts may be appropriate if the economy
slows further, but the Fed is not on a preset course. We continue to believe the
FOMC is likely to cut the fed funds target rate again before year-end, in the
absence of a trade resolution or meaningful improvement in market-based
measures of inflation. The next FOMC meeting is scheduled for October 29-30.
The Treasury yield curve steepened modestly in September, although the curve
remains partially inverted. The 3-month T-bill yield declined nearly 17 basis points
to 1.81%, the 2-year Treasury yield increased nearly twelve basis points to
1.62%, and the 10-year Treasury yield increased about 17 basis points to 1.67%.
An inversion of the yield curve in which the 10-year Treasury yield is lower than
the 3-month T-bill yield is generally viewed as a powerful predictive signal of an
upcoming recession. However, we believe increased short-term Treasury
issuance to fund the deficit, and negative sovereign bond yields in other countries
may be distorting the US Treasury yield curve. German sovereign bond yields
(from 1-month out to 30-years) remained negative at September month-end.
The shape of the Treasury yield curve has changed significantly on a year-over-
year basis. As of September month-end, the 3-month T-bill yield was down 39
basis points, the 2-Year Treasury yield was down nearly 120 basis points, and the
10-Year Treasury yield was down nearly 140 basis points, year-over-year. The
current shape of the yield curve implies that market participants are pricing-in
additional rate cuts. We believe the year-over-year decline in long-term Treasury
yields reflects a high level of market participants' nervousness about the outlook
for global economic growth and a decline in global inflation expectations.
The Consumer Price Index (CPI) was up 1.7% year-over-year in August, versus
up 1.8% year-over-year in July. Core CPI (CPI less food and energy) was up
2.4% year-over-year in August, versus up 2.2% year-over-year in July. The
Personal Consumption Expenditures (PCE) index was up 1.4% year-over-year in
August, unchanged from July. Core PCE, which is the Fed's primary inflation
gauge, was up 1.8% year-over-year in August versus 1.7% year-over-year in July.
Core PCE remains below the Fed’s 2.0% inflation target.
FY 2019-20 First Quarter Financial Report
Page 4
Economic Outlook
US Treasury yields dropped precipitously during the quarter as the US/China
trade impasse continued to negatively influence global manufacturing trends. In
particular, the manufacturing weakness in Europe is becoming acute, with
German purchasing managers indices rolling over into recessionary territory. The
manufacturing weakness helped to accelerate the negative yield conundrum in
Europe, with the ten-year German Bund bottoming out at negative 72 basis points
during September and closing the quarter at negative 57 basis points. The lack of
any meaningful fiscal response in Europe is exacerbating the downturn;
considering the empirical evidence thus far on utilizing negative interest rates as a
policy tool fiscal stimulus is long overdue in Germany in Chandler’s judgement.
The Chandler team has long held the view the inability of interest rates to
normalize in developed overseas markets, arguably most importantly Germany,
would serve as a ceiling for how high US interest rates could adjust. The team’s
beginning of year analysis did not accurately account for the degree to which
developed market benchmark rates overseas could move into negative territory
which served as a catalyst for the US ten-year Treasury notes to close the quarter
at 1.67%, compared to 2.01% at the end of June and 2.69% at year-end. In a pre-
emptive move to sustain the economic expansion the Federal Reserve was active
during the quarter, cutting the Fed Funds rate two times to a current range of
1.75% to 2.00%, compared to 2.25% to 2.50% at the end of June. Policymakers
are describing the monetary stimulus adjustment as “mid-cycle” and in Chandler’s
view have little interest in pushing the policy rate close to the zero lower bound
considering the current readings on the health of the US economy. One of the
primary factors influencing the dovish shift by the Federal Reserve is the market’s
pricing of long-term inflation becoming unanchored. The ten-year TIPS break
even rate continued to drift lower during the quarter, with a spread of 1.52% as of
quarter-end, well below the 2.25% to 2.60% considered “normal” and consistent
with the Federal Reserve’s 2.0% inflation objective. TIPS breakeven rates moving
higher will mitigate the pressure on the Federal Reserve to remain hyper
accommodative with monetary policy settings.
The service sector focus of the US economy continues to insulate the domestic
economy from the global manufacturing weakness. The underlying tenets of the
US economy remain sound, with current unemployment rate at 3.5%, the
underemployment rate at 6.9%, weekly jobless claims hovering at multi-year lows
with a recent reading of 210k, and the domestic saving rates elevated as the US
personal savings rate as a percentage of disposable income is currently at 8.1%.
Additionally, the reduction in interest rates is providing a positive catalyst for the
more cyclical sectors of the economy, with the housing market improving as both
new and existing home sales have seen an uptick in volume with the contraction
in mortgage rates. Given the lack of visibility globally, business investment
remains soft, but the lower cost of capital linked to the reduction in interest rates
should ultimately lead to an uptick in capital spending. The Chandler team
continues to look for modest incremental progress on the US/China trade
Executive Summary
Page 5
negotiations to help sustain economic growth. The key issue for a more
comprehensive deal remains intellectual property reform in China. In our view
President Trump’s administration will become more motivated to make progress
on US/China trade as the Democratic field for the Presidential nomination
narrows; the probability of President Trump hitting the campaign trail with little
progress on US/China trade is low. The fixed income markets are forecasted to
remain volatile but given our internal view the domestic economy is not on the
precipice of a recession, the relative performance of the portfolio compared to the
benchmark should improve as the economic expansion is sustained.
Quarterly Certificates of Participation (COP) Report
The report includes a summary of each outstanding debt issuance and a
comparative chart illustrating the COP rate history.
FY 2019-20 First Quarter Financial Report
Page 6
This Page Intentionally Left Blank
Consolidated Financial Reports
Section 1 - Page 1
First Quarter Financial Report
September 30, 2019
Financial Management is pleased to present the FY 2019-20 first quarter financial
report. This report provides a comprehensive overview of the financial condition of the
Sanitation District and reports on the status of all capital projects in progress. A
summary of the sections contained within this report is provided below.
Operating Budget Review: This section reports on collection, treatment and disposal
net operating requirements. At September 30, 2019, 24.6 percent, or $41.4 million of
the FY 2019-20 net operating budget of $168.2 million has been expended. Net
operating expenses increased from the same period last year by $5.4 million, or 14.9
percent, mainly due to an increase of $3.5 million in Repairs and Maintenance,
$701,000 in Operating Materials and Supplies, $671,000 in Salaries and Benefits,
$571,000 in Research and Monitoring, $311,000 in Administrative Expenses, $225,000
in Other Operating Supplies, $93,000 in Professional Services, and a decrease of
$109,000 in indirect costs allocated out to capital projects, partially offset by a decrease
of $653,000 in Contractual Services, $111,000 in Utilities, and $28,000 in Training and
Meetings. These and other variances that factor into this net increase in expenses are
discussed in more detail below. Overall, staff expects the total operating costs to
remain at or slightly below budget throughout the remainder of the year.
Significant operating results as of September 30, 2019 include the following:
Salaries, Wages and Benefits – Personnel costs of $24.2 million are on target at
24.6 percent of budget through the first quarter of FY 2019-20. Although the
budget is based on a 5 percent vacancy factor, staffing is 24 full-time equivalents
(FTE’s), or 3.8 percent below the total 640 FTE’s approved in the FY 2019-20
budget. Salary and benefit costs are $671,000 or 2.9 percent higher than the $23.5
million incurred in the same period last year, mainly due to an increases of $345,000
in salaries and wages resulting from cost of living adjustments included in the
current Memorandums of Understanding for all employee bargaining units and
$326,000 in employee benefits due to increases in costs for retirement and group
insurances. Net operating personnel costs are expected to approximate budget
throughout the remainder of the year.
Administrative Expenses – Administrative Expenses totaled $780,000, or 38.5
percent of the $2.0 million budget through September 30. These costs are
$311,000 or 66.4 percent higher at September 30 in comparison with the prior year,
mainly due to increases of $153,000 in purchases of small computer items including
HP Elitebooks, $85,000 in memberships, attributable to timing of payments, and
$39,000 in minor furniture and fixtures for workstation installations and ergonomic
chairs. It is anticipated that administrative costs will approximate budget at
year-end.
FY 2019-20 First Quarter Financial Report
Section 1 - Page 2
Printing and Publication Expenses – Printing and Publication Expenses totaled
$72,000, or 21.7 percent of the $330,000 budget through September 30. These
costs are $9,000 or 14.4 percent higher at September 30 in comparison with the
prior year. Printing and publication costs are expected to approximate budget
at year-end.
Training and Meetings – Training and meetings of $130,000 are below target at
11.7 percent of the $1.1 million budget. This account is lower than the
proportionate budget due to the timing and need for training throughout the year.
These costs have decreased over the same period last year by $28,000 or 17.6
percent. Total training and meeting costs are anticipated to be below budget at
year-end.
Operating Materials and Supplies – Operating materials and supplies of $4.8
million is on target at 23.1 percent of the $21.0 million budget through
September 30. Operating Materials and Supplies are higher than the prior year by
$701,000 or 16.9 percent, primarily due to an increase in Chemical Coagulants of
$1.2 million brought about by higher chemical unit costs and usage as compared to
the prior year, partially offset by a decrease in Odor Control of $438,000. Based on
current processes, operating materials and supplies are anticipated to
approximate budget at year-end.
Contractual Services – Contractual services is below target at $4.5 million or
20.3 percent of the $22.0 million budget through September 30. Contractual
Services is lower by $653,000 or 12.7 percent over the same period last year. Solids
Removal costs, budgeted at $13.4 million, comprise the majority of this expense
category at $3.0 million, or 22.5 percent of budget at September 30. These costs
decreased by $897,000 or 22.9 percent, due to a reduction in biosolids production
attributable to the new dewatering centrifuges that replaced aging belt presses. This
decrease is offset by increases in Other Contractual Services of $157,000 for
industrial cleaning and digester assessment services and Temporary Services of
$51,000 as a result of position vacancies in the current period. County Service Fees
totaled only $5,000, or 0.9 percent of the $512,000 budget through the first quarter
as the preponderance of these fees are billed by the County in the fourth quarter.
Total contractual services costs are anticipated to approximate budget at year-
end.
Professional Services – Professional services costs totaled $762,000 or 13.6
percent of the $5.6 million budget through September 30. Professional service
costs, such as Audit & Accounting, Engineering, Environmental Scientific Consulting,
Industrial Hygiene, and Other Services, are proportionately low through September
30 due to a variety of factors such as timing of services and re-evaluation of needs
for services. These costs are $93,000 or 13.9 percent higher at September 30 in
comparison with the prior year, mainly due to increases of $139,000 in Legal costs
and $47,000 in Software Program Consulting, offset by a decrease of $90,000 in
Engineering services. It is anticipated that the costs for this category will be
below budget at year-end.
Consolidated Financial Reports
Section 1 - Page 3
Research and Monitoring – Research and monitoring costs totaled $720,000, or
65.4 percent of the $1.1 million budget through September 30. These costs are
$571,000, or 384.3 percent higher at September 30 in comparison with the prior
year, mainly due to increases of $363,000 in Research costs, reflecting the annual
contribution to Southern California Coastal Water Research Project which is now
expensed in full when paid instead of allocating on a quarterly basis, $150,000 in
Environmental Monitoring costs for ocean water quality analysis, and $59,000 in Air
Quality Monitoring costs for emissions testing. Total research and monitoring
costs are anticipated to exceed budget at year-end.
Repairs and Maintenance – Repair and maintenance costs totaled $7.5 million,
or 31.8 percent of the $23.5 million budget through September 30. These costs
are $3.5 million, or 86.9 percent higher at September 30 in comparison with the prior
year, mainly for repair and maintenance services such as digester cleaning and
mechanical rehabilitation and overhaul of primary clarifier tanks. It is anticipated
that the costs for this category will exceed budget at year-end.
Utilities – Utilities costs totaled $2.4 million, or 25.5 percent of the $9.3 million
budget through September 30. These costs are $111,000 or 4.5 percent lower at
September 30 in comparison with the prior year, primarily due to a decrease in
natural gas costs because of a volatile natural gas market in the prior period that
caused unit prices to spike. It is anticipated that the costs will approximate
budget at year-end.
Other Operating Supplies – Other operating supplies costs totaled $685,000, or
23.0 percent of the $3.0 million budget through September 30. Property and
General Liability Insurance, budgeted at $1.7 million, comprise the majority of this
expense category at $430,000. These costs are $105,000 or 32.4 percent higher at
September 30 in comparison with the prior year primarily due to an increase in
budgeted in-lieu premium charges to maintain recommended reserve balances. In
addition, Regulatory Operating Fees increased by $93,000 due to timing of
payments for equipment permit fees. It is anticipated that other operating
supplies costs will approximate budget at year-end.
Revenues – Service Fees and Property Taxes – Through September 30, revenues
from service fees are at $7,000, or 0.0 percent of the $298.1 million budget and
property taxes are at $2.3 million, or 2.4 percent of the $96.4 million budget.
These items comprise the majority of the Sanitation District’s revenues and are
mostly collected by the County through the property tax roll and distributed to the
Sanitation District throughout the year based on a set distribution schedule that
begins in November of each year. The low sewer service fee revenue is attributable
to no sewer service fee apportionments scheduled or received from the County
through the first quarter, while sewer service rebates have been issued for
overcharges in prior years. The increase of $338,000 is due to a reduction in user
fee rebates issued in the current period as well as higher sewer service rates. The
property tax revenue reduction of $123,000 or 5.0 percent over the prior period is a
result of timing of property tax collections from the County, offset by growth in
FY 2019-20 First Quarter Financial Report
Section 1 - Page 4
assessed property values. These revenues are expected to approximate budget
at year-end.
Revenues – Permittee User Fees – Permittee User Fees are at $3.3 million, or
33.2 percent of the $9.9 million budget. The revenues through the first quarter are
lower than the same period last year by $1.5 million or 30.9 percent due to the actual
discharge for industrial users was significantly less than the estimated billings in the
prior year, with adjustments made in the current year. The number of permittees
fluctuates from year to year as businesses are established or close their operations.
Permit user fees revenues are expected to approximate or exceed budget at
year-end.
Revenues – Inter District Sewer Use – SAWPA and SBSD – Inter District Sewer
revenues - SAWPA and SBSD are at $726,000, or 27.4 percent of the $2.7
million budget. This revenue is derived from charges to the Santa Ana Watershed
Protection Agency (SAWPA) and Sunset Beach Sanitary District (SBSD) for
treatment of flows. The revenues through the first quarter are higher than the same
period last year by $101,000 or 16.1 percent due to an increase in flows received
from these agencies and a resulting increase in operation and maintenance charges.
These revenues are expected to approximate budget at year-end.
Revenues – Intra District Sewer Use – IRWD – Intra District Sewer revenues -
IRWD are at $1.2 million, or 17.0 percent of the $6.9 million budget. This
revenue is derived from charges to the Irvine Ranch Water District (IRWD) for
treatment of flows. The revenues through the first quarter are higher than the same
period last year by $155,000 or 15.3 percent, mainly due to an increase of $79,000
in operation and maintenance charges to IRWD and a decrease of $76,000 in
interest income allocated to IRWD based on lower cash reserves. These revenues
are expected to be below budget at year-end.
Revenues - Sludge Disposal – IRWD – Sludge Disposal fees - IRWD are at $2.2
million, or 41.6 percent of the $5.4 million budget. The revenue is for the
handling, treatment and disposal of solids, derived from flows discharged from IRWD
to the Sanitation District. The revenues through the first quarter are higher than the
same period last year by $252,000 or 12.6 percent, mainly due to increased solids
received from IRWD. The current fiscal year quarterly billing to IRWD is based on
estimates. The budget reflects the anticipated completion of IRWD solids processing
facilities that would cease solids to the OCSD line. However, the timeline is no
longer forecasted to be complete during the current fiscal year. It is anticipated that
IRWD sludge disposal revenues will exceed budget at year-end.
Revenues – Capital Assessments – IRWD – Capital Assessments-IRWD are at
$502,000, or 9.3 percent of the $5.4 million budget. The revenues through the
first quarter are lower than the same period last year by $530,000 or 51.4 percent,
mainly due to a decrease in joint capital costs allocable to IRWD. It is estimated
that IRWD capital assessments revenues will be below budget at year-end.
Consolidated Financial Reports
Section 1 - Page 5
Revenues – Capital Facilities Capacity Charges (CFCC) – CFCC are at $3.3
million, or 18.5 percent of the $18.0 million budget. The revenues through the
first quarter are lower than the same period last year by $1.4 million or 28.9 percent,
due to less supplemental capital facilities capacity charges assessed to industrial
dischargers than at this time last year, partially offset by an increase in connection
fees collected from cities. These revenues are expected to be below the budget
at year-end.
Revenues – Interest Earnings – Interest Earnings are at $5.8 million or 87.7
percent of the $6.6 million budget. The revenues through the first quarter are
higher than the same period last year by $3.5 million or 151.7 percent due to higher
account balances and yields earned on securities held in the investment portfolios. It
is estimated that interest earnings will exceed the budget amount at year-end.
Revenues – CIP Reimbursements – CIP Reimbursements are at $657,000 or 11.0
percent of the $6.0 million budget. This revenue is $657,000 or 100.0 percent
higher than the same period last year. The increase is due to timing of
reimbursements received for construction projects from the Orange County Water
District for P2-122 Headworks Modifications at Plant 2 for GWRS Final Expansion.
No reimbursements were received for these projects during the same period in the
prior year. These revenues are expected to be below budget at year-end.
Revenues – Wastehauler – Wastehauler revenues are at $194,000 or 25.9
percent of the $750,000 budget. This revenue is derived from fees charged to
wastehaulers allowing them to dump waste into the Sanitation District’s system. The
revenues through the first quarter are higher than the same period last year by
$56,000 or 40.0 percent due to an increase in waste dumping. These revenues are
expected to approximate budget at year-end.
Revenues – CNG Sales – CNG Sales revenues are at $71,000 or 17.7 percent of
the $400,000 budget. This revenue is derived from public sales at the District’s
Compressed Natural Gas (CNG) fueling station. The revenues through the first
quarter are lower than the same period last year by $2,000 or 2.6 percent. These
revenues are expected to be below budget at year-end.
Revenues – Rents & Leases – Rents & Leases revenues are at $227,000 or 10.0
percent of the $2.3 million budget. The revenues through the first quarter are
lower than the same period last year by $173,000 or 43.3 percent due to less rent
received as tenants move out of the properties acquired for construction of the new
headquarters building. These revenues are expected to be below budget at year-
end.
FY 2019-20 First Quarter Financial Report
Section 1 - Page 6
Comparison of First Quarter Cost per
Million Gallon Results with Budget
Last Five Years
As demonstrated in the preceding graph for each of the last four fiscal years, the cost
per million gallons at the end of the first quarter has been between 3.4 percent to 13.7
percent lower than the annual budget. The FY 2019-20 first quarter cost per million
gallons of $2,396 is 2.2 percent lower when compared with this year’s budget. The
increase in cost per million gallons of $314 from the previous year is primarily due to an
increase in operating expenses, which are 14.9 percent higher than the same period
last year and a decrease in flows, which are 0.1 percent lower than the same period last
year. Staff believes that overall operating costs will be below budget at year-end.
The total cost per million gallons at September 30 is $2,396 based on flows of 188
million gallons per day. This is $55 per million gallons, or 2.2 percent, lower than the
budgeted cost per million gallons of $2,451. There is an inverse relationship between
the amount of flows and the cost per unit of collection, treatment, and disposal.
Consequently, the lower cost per million gallons is due to net expenses being 1.6
percent less than the proportionate budget through September 30, with flows of 188
million gallons per day being equal to the budgeted flow of 188 million gallons per day.
More detailed information on operating revenues, costs, and related information is
provided within Section 2.
Consolidated Financial Reports
Section 1 - Page 7
Following are data tables showing the last five years of Single Family Residential User
Fees (SFR) and the cost per MG to collect, treat, and dispose of wastewater for OCSD
and for similar agencies. The agencies used in the table were determined to be those
that most closely resembled OCSD in terms of services provided and treatment levels.
The summaries demonstrate that OCSD’s SFR and cost per million gallons are each
one of the lowest in their respective group.
2015 2016 2017 2018 2019
Agency SFR SFR SFR SFR SFR Notes
San Francisco 784$ 842$ 937$ 988$ 1,076$
Vallejo Sanitation/Flood Control District 520$ 520$ 520$ 585$ 656$
Central Contra Costa Sanitary District 471$ 503$ 530$ 567$ 598$
City of Los Angeles 464$ 495$ 527$ 561$ 597$ Note 1
City of San Diego 573$ 573$ 573$ 573$ 573$ Note 4
Dublin San Ramon Services District 382$ 382$ 397$ 423$ 447$
Sacramento County 384$ 420$ 432$ 444$ 444$
East Bay MUD 355$ 373$ 391$ 410$ 423$
Union Sanitary District 377$ 380$ 393$ 407$ 421$
City of Hayward 347$ 358$ 375$ 394$ 412$
Orange County Sanitation District 322$ 327$ 331$ 335$ 339$
Irvine Ranch Water District 289$ 309$ 309$ 309$ 313$ Note 2
City of Fresno 309$ 309$ 309$ 309$ 309$ Note 3
Oro Loma Sanitary District 206$ 221$ 238$ 256$ 275$
Los Angeles County 177$ 182$ 186$ 191$ N/A Note 5
Notes:
(1) - Data is for the typical SFR customer rate.
(2) - Data represents the usage of 10 hundred cubic feet per unit.
(3) - Data represents the minimum SFR rate not including flow.
(4) - Data represents the base sewer fee plus the average usage of 9 hundred cubic feet per month.
(5) - Data represents the Average Service Charge Rates for the prior fiscal year.
N/A - Not currently available.
Benchmark Study
Five-Year Single Family Residential Rate
Rates as of July
FY 2019-20 First Quarter Financial Report
Section 1 - Page 8
FY 13-14 FY 14-15 FY 15-16 FY 16-17 FY 17-18
Agency Svc. Trt. Cost/MG Cost/MG Cost/MG Cost/MG Cost/MG Notes
Central Contra Costa Sanitary District B 4 5,778$ 6,281$ 6,454$ 6,081$ 5,588$
Vallejo Sanitation/Flood Control District B 3 6,153$ 5,590$ 5,396$ 4,745$ 5,393$
San Francisco B 3 5,400$ 5,358$ 5,268$ 4,916$ 5,295$
Union Sanitary District B 3 3,832$ 3,911$ 3,957$ 4,039$ 4,757$
City of San Diego B 4 3,156$ 3,592$ 3,606$ 3,834$ 4,147$
Dublin San Ramon Services District B 4 2,507$ 2,522$ 2,896$ 2,961$ 3,422$
East Bay MUD T 3 2,559$ 2,728$ 2,599$ 2,353$ 3,137$
Sacramento County T 4 2,375$ 2,494$ 2,571$ 2,752$ 2,831$
City of Los Angeles B 4 2,163$ 2,269$ 2,452$ 2,487$ 2,329$ Note 2
Orange County Sanitation District B 3 1,935$ 2,071$ 2,110$ 2,055$ 2,069$
City of Fresno B 4 1,552$ 1,629$ 1,678$ 1,796$ 1,813$
Los Angeles County B 4 1,224$ 1,239$ 1,371$ 1,151$ 1,365$ Note 1
Legend for Service Provided and Treatment Level:
B - Agency operates both collection and treatment facilities
T - Agency provides treatment services but not collection
3 - Secondary treatment
4 - Advanced secondary or secondary with some tertiary treatment
Notes:
(1) - Does not include source control or overhead costs.
(2) - 2017 Influent flow has not been reduced by the amount of sludge discharged to the sewers from DCTWRP and LAGWRP.
Benchmark Study
Five-Year Cost per MG
Consolidated Financial Reports
Section 1 - Page 9
Capital Outlay Review:
As depicted by the preceding chart, Capital Outlays totaled $20.0 million or 13.0
percent of the capital outlay cash flow budget for FY 2019-20 as of September 30,
2019. Costs are proportionately low through the first quarter as some projects are still in
the design phase or have experienced various delays or deferrals. Examples as of
September 30 are Ocean Outfall System Rehabilitation, which has a budget of $26.9
million but actual costs of $3.7 million, Newhope-Placentia Trunk Replacement, which
has a budget of $22.7 million but actual costs of $2.8 million, Headquarters Complex
and Site Security at Plant 1, which has a budget of $9.8 million but actual costs of
$300,000, and Rehabilitation of Western Regional Sewers, which has a budget of $9.6
million but actual costs of $466,000. Overall, the capital outlay costs of the capital
improvement program are expected to approximate $155.5 million, or 101.4
percent of the capital outlay cash flow budget at year-end.
More detailed information on the capital improvement program is provided within
Section 3.
Capital Assets Schedule and Debt Service Budget Review: Section 4 is the Capital
Assets Schedule and Debt Service Section. This section shows the cost value of the
Sanitation District’s capital facilities at September 30, 2019, as well as the debt service
costs resulting from the need to provide funding for the construction of capital facilities.
The majority of principal payments on debt issues are due in February during the third
quarter of each fiscal year. As of September 30, 2019, no principal payments have been
made through the end of the first quarter. Total principal payments, excluding
FY 2019-20 First Quarter Financial Report
Section 1 - Page 10
refundings, are expected to approximate budget at year-end. Interest costs are
expensed ratably throughout the fiscal year. Interest expense is anticipated to
approximate budget at year-end.
Self-Insurance Budget Reviews: Section 5 is the Self-Insurance Section. Through
September 30, the Self-Insurance Fund revenues totaled $787,000 or 31.1 percent of
the budget, while expenses were $619,000 or 24.5 percent of the budget.
Separate fund accounting is used for recording the revenue and expenses incurred in
managing these liability claims. The revenues to these funds represent charges to
operating divisions. Expenses to these funds include actual claims paid, claims
administration, and excess loss policies.
Operating Budget Review
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
$1,100
$1,200
$1,300
$1,400
$1,500
$1,600
$1,700
Ex
e
c
u
t
i
v
e
M
a
n
a
g
e
m
e
n
t
Hu
m
a
n
R
e
s
o
u
r
c
e
s
Ad
m
i
n
i
s
t
r
a
t
i
v
e
S
e
r
v
i
c
e
s
En
v
i
o
r
n
m
e
n
t
a
l
S
e
r
v
i
c
e
s
En
g
i
n
e
e
r
i
n
g
Op
e
r
a
t
i
o
n
s
&
M
a
i
n
t
e
n
a
n
c
e
Cost per Million Gallons by Department
Budget and Actual
September 30, 2019
Budget Actual
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
$55,000
$60,000
$65,000
$70,000
$75,000
Sa
l
a
r
y
&
W
a
g
e
s
Em
p
l
o
y
e
e
B
e
n
e
f
i
t
s
Ad
m
i
n
i
s
t
r
a
t
i
v
e
E
x
p
e
n
s
e
s
Pr
i
n
t
i
n
g
&
P
u
b
l
i
c
a
t
i
o
n
Tr
a
i
n
i
n
g
&
M
e
e
t
i
n
g
s
Op
e
r
a
t
i
n
g
E
x
p
e
n
s
e
s
Co
n
t
r
a
c
t
u
a
l
S
e
r
v
i
c
e
s
Pr
o
f
e
s
s
i
o
n
a
l
S
e
r
v
i
c
e
s
Re
s
e
a
r
c
h
&
M
o
n
i
t
o
r
i
n
g
Re
p
a
i
r
s
&
M
a
i
n
t
e
n
a
n
c
e
Ut
i
l
i
t
i
e
s
Ot
h
e
r
M
a
t
e
r
i
a
l
s
,
S
u
p
p
l
i
e
s
,
&
S
v
c
s
Collection, Treatment, & Disposal Expenses by Major Category
Budget and Actual (in thousands)
September 30, 2019
Budget Actual
Section 2 - Page 1
Divisional Contributions to Cost Per Million Gallons
For the Three Months Ended September 30, 2019
2019-20
9/30/17 9/30/18 Annual 9/30/19
Actual Actual Budget Actual
Flow in Million Gallons 17,320.06 17,286.08 68,620.00 17,268.33
Flow in Million Gallons per Day 188.26 187.89 188.00 187.70
Executive Management Department
General Management Administration 30.70$ 28.94$ 46.24$ 33.90$
Board Services 8.92 8.50 10.11 8.62
Public Affairs 13.82 13.74 16.84 16.84
Subtotal 53.44 51.18 73.19 59.36
Human Resources Department
Human Resources 48.94 51.22 72.68 58.62
Risk Management / Safety / Security 83.53 68.34 84.31 77.04
Subtotal 132.47 119.56 156.99 135.66
Administrative Services Department
Administrative Services 6.94 6.78 2.63 7.58
Financial Management 45.80 34.32 50.17 38.81
Contracts, Purchasing, & Materials Mgmt. 62.27 64.97 72.38 60.76
Information Technology 184.43 202.83 177.20 243.60
Subtotal 299.44 308.90 302.38 350.75
Environmental Services Department
Environmental Services Administration 12.07 12.88 9.03 33.21
Resource Protection 75.62 83.11 83.86 77.56
Laboratory, Monitoring and Compliance 154.21 149.46 166.03 176.72
Subtotal 241.90 245.45 258.92 287.49
Engineering Department
Engineering Administration 6.08 6.99 10.99 13.22
Planning 49.37 50.22 78.91 51.38
Project Management Office 34.83 42.65 73.15 65.18
Design 117.63 120.78 110.52 105.39
Construction Management 66.38 70.98 82.63 93.14
Subtotal 274.29 291.62 356.20 328.31
Operations & Maintenance Department
Operations & Maintenance Administration 8.43 8.61 11.73 3.86
Collections Facilities O & M 186.66 194.08 194.83 160.12
Fleet Services 26.70 26.27 27.40 25.83
Plant No. 1 Operations 373.60 402.43 459.68 445.91
Plant No. 2 Operations 289.79 300.46 276.73 261.64
Plant No. 1 Maintenance 198.98 197.38 369.47 357.46
Maintenance Reliability and Planning 95.42 85.40 - -
Plant No. 2 Maintenance 164.09 156.85 260.88 279.25
Subtotal 1,343.67 1,371.48 1,600.72 1,534.07
Total Operating Expenses 2,345.21 2,388.19 2,748.40 2,695.64
Cost Allocation (295.42) (305.76) (297.40) (299.74)
Net Operating Requirements 2,049.79$ 2,082.43$ 2,451.00$ 2,395.90$
FY 2019-20 First Quarter Financial Report
Section 2 - Page 2
Comparison of Expenses by Department
For the Three Months Ended September 30, 2019
2019-20
9/30/17 9/30/18 Year to Date Budget %
Department and Division Actual Actual Budget 9/30/19 Realized
Executive Management Department
General Management Administration 531,754$ 500,317$ 3,172,680$ 585,471$ 18.45%
Board Services 154,476 146,867 693,980 148,781 21.44%
Public Affairs 239,435 237,539 1,155,600 290,832 25.17%
Subtotal 925,665 884,723 5,022,260 1,025,084 20.41%
Human Resources Department
Human Resources 847,629 885,374 4,987,200 1,012,301 20.30%
Risk Management / Safety / Security 1,446,767 1,181,374 5,785,360 1,330,391 23.00%
Subtotal 2,294,396 2,066,748 10,772,560 2,342,692 21.75%
Administrative Services Department
Administrative Services 120,275 117,171 180,710 130,873 72.42%
Financial Management 793,250 593,289 3,442,410 670,249 19.47%
Contracts, Purchasing, & Materials Mgmt. 1,078,522 1,123,009 4,966,960 1,049,256 21.12%
Information Technology 3,194,317 3,506,102 12,159,200 4,206,492 34.60%
Subtotal 5,186,364 5,339,571 20,749,280 6,056,870 29.19%
Environmental Services Department
Environmental Services Administration 209,135 222,718 619,510 573,469 92.57%
Resource Protection 1,309,788 1,436,715 5,754,790 1,339,345 23.27%
Laboratory, Monitoring and Compliance 2,670,898 2,583,600 11,393,290 3,051,597 26.78%
Subtotal 4,189,821 4,243,033 17,767,590 4,964,411 27.94%
Engineering Department
Engineering Administration 105,345 120,828 753,920 228,357 30.29%
Planning 855,091 868,073 5,414,675 887,257 16.39%
Project Management Office 603,334 737,206 5,019,310 1,125,582 22.43%
Design 2,037,393 2,087,898 7,583,810 1,819,922 24.00%
Construction Management 1,149,722 1,226,924 5,670,320 1,608,438 28.37%
Subtotal 4,750,885 5,040,929 24,442,035 5,669,556 23.20%
Operations & Maintenance Department
Operations & Maintenance Administration 146,017 148,869 804,870 66,693 8.29%
Collections Facilities O & M 3,232,914 3,354,942 13,369,492 2,764,942 20.68%
Fleet Services 462,460 454,126 1,880,480 446,011 23.72%
Plant No. 1 Operations 6,470,777 6,956,506 31,542,920 7,700,099 24.41%
Plant No. 2 Operations 5,019,118 5,193,785 18,989,328 4,518,161 23.79%
Plant No. 1 Maintenance 3,446,394 3,411,921 25,352,831 6,172,705 24.35%
Maintenance Reliability and Planning 1,652,656 1,476,165 - - 0.00%
Plant No. 2 Maintenance 2,842,015 2,711,247 17,901,451 4,822,142 26.94%
Subtotal 23,272,351 23,707,561 109,841,372 26,490,753 24.12%
Total Operating Expenses 40,619,482 41,282,565 188,595,097 46,549,366 24.68%
Cost Allocation (5,117,058) (5,285,554) (20,378,610) (5,176,213) 25.40%
Net Operating Requirements 35,502,424$ 35,997,011$ 168,216,487$ 41,373,153$ 24.60%
Operating Budget Review
Section 2 - Page 3
Summary of Collection, Treatment, & Disposal Expenses by Major Category
For the Three Months Ended September 30, 2019
Expense Expense Increase Increase Percent
Budget Through Through (Decrease) (Decrease)Budget Remaining
2019-20 9/30/19 9/30/18 $ % Realized Budget
Salary & Wages 74,364,500$ 17,994,172 17,649,325 344,847$ 1.95% 24.20% 56,370,328$
Employee Benefits 24,069,740 6,216,211 5,889,801 326,410 5.54% 25.83% 17,853,529
Administrative Expenses 2,027,930 780,131 468,759 311,372 66.42% 38.47% 1,247,799
Printing & Publication 329,970 71,705 62,684 9,021 14.39% 21.73%258,265
Training & Meetings 1,109,740 129,506 157,090 (27,584) -17.56% 11.67%980,234
Operating Materials & Supplies 21,008,781 4,848,888 4,147,497 701,391 16.91% 23.08% 16,159,893
Contractual Services 22,033,974 4,480,474 5,133,841 (653,367) -12.73% 20.33% 17,553,500
Professional Services 5,586,170 761,765 668,690 93,075 13.92% 13.64% 4,824,405
Research & Monitoring 1,099,600 719,513 148,567 570,946 384.30% 65.43% 380,087
Repairs & Maintenance 23,469,642 7,469,206 3,996,894 3,472,312 86.88% 31.82% 16,000,436
Utilities 9,250,310 2,356,960 2,468,268 (111,308) -4.51% 25.48% 6,893,350
Other Materials, Supplies,
and Services 4,244,740 720,835 491,149 229,686 46.77% 16.98% 3,523,905
Net Cost Allocation (20,378,610) (5,176,213) (5,285,554) 109,341 -2.07% 25.40% (15,202,397)
Net Operating Requirements 168,216,487 41,373,153 35,997,011 5,376,142 14.93% 24.60% 126,843,334
Gallonage Flow (MG) 68,620.00 17,268.33 17,286.08 (17.75) -0.10%
Gallonage Flow (MGD) 188.00 187.70 187.89 (0.19) -0.10%
Gallonage Flow ($'s /MG) $2,451.00 $2,395.90 $2,082.43 $313.47 15.05%
Description
FY 2019-20 First Quarter Financial Report
Section 2 - Page 4
Revenue Percent Revenue Increase Increase
Budget Through Budget Remaining Through (Decrease) (Decrease)
Description 2019-20 9/30/19 Realized Budget 9/30/18 $ %
Service Fees 298,144,000$ 7,095$ 0.00% 298,136,905$ (330,829)$ 337,924$ 102.14%
Permit Fees 9,917,000 3,289,220 33.17% 6,627,780 4,760,889 (1,471,669) -30.91%
Inter District Sewer Use-SAWPA & SBSD 2,654,000 726,065 27.36% 1,927,935 625,418 100,647 16.09%
Intra District Sewer Use-IRWD 6,861,560 1,168,597 17.03% 5,692,963 1,013,278 155,319 15.33%
Sludge Disposal-IRWD 5,400,000 2,244,149 41.56% 3,155,851 1,992,636 251,513 12.62%
Capital Assessments-IRWD 5,397,000 502,008 9.30% 4,894,992 1,032,191 (530,183) -51.36%
Capital Facilities Capacity Charges 18,000,000 3,324,839 18.47% 14,675,161 4,678,078 (1,353,239) -28.93%
Property Taxes 96,354,000 2,326,912 2.41% 94,027,088 2,449,863 (122,951) -5.02%
Interest Earnings 6,602,000 5,788,216 87.67% 813,784 2,299,559 3,488,657 151.71%
CIP Reimbursements 5,987,869 657,477 10.98% 5,330,392 - 657,477 100.00%
Wastehauler 750,000 194,244 25.90% 555,756 138,721 55,523 40.02%
Grant Revenue 464,000 - 0.00% 464,000 - - 0.00%
CNG Sales 400,000 70,670 17.67% 329,330 72,538 (1,868) -2.58%
Rents & Leases 2,260,100 226,838 10.04% 2,033,262 399,845 (173,007) -43.27%
Other Revenues 6,413,529 73,051 1.14% 6,340,478 68,460 4,591 6.71%
Power Sales 25,000 32,306 129.22% (7,306) 12,204 20,102 164.72%
Other Sales 50,000 8,867 17.73% 41,133 40,998 (32,131) -78.37%
Total Revenues 465,680,058$ 20,640,554$ 4.43% 445,039,504$ 19,253,849$ 1,386,705$ 7.20%
Summary of Revenues
For the Three Months Ended September 30, 2019
Operating Budget Review
Section 2 - Page 5
FY 2019-20 First Quarter Financial Report
Summary of Collection, Treatment, & Disposal Expenses by Line Item
For the Three Months Ended September 30, 2019
Expense Percent Expense Increase
Budget Through Budget Remaining Through (Decrease)
Description 2019-20 9/30/19 Expensed Budget 9/30/18 $
Salaries, Wages & Benefits
Salaries & Wages 74,364,500$ 17,994,172$ 24.20% 56,370,328$ 17,649,325$ 344,847$ 1.95%
Employee Benefits
Retirement 11,478,840 3,073,082 26.77% 8,405,758 2,874,236 198,846 6.92%
Group Insurances 11,006,200 2,715,032 24.67% 8,291,168 2,641,026 74,006 2.80%
Tuition & Certification Reimb 98,100 20,241 20.63% 77,859 24,604 (4,363) -17.73%
Edu. degrees, Cert. & Lic. 470,300 157,169 33.42% 313,131 131,458 25,711 19.56%
Uniform Rental 140,800 29,322 20.83% 111,478 33,516 (4,194) -12.51%
Workers' Compensation 780,000 194,998 25.00% 585,002 146,649 48,349 32.97%
Unemployment Insurance 3,200 328 10.25% 2,872 1,244 (916) -73.63%
EMT Supplemental Benefits 92,300 26,039 28.21% 66,261 37,068 (11,029) -29.75%
Total Benefits 24,069,740 6,216,211 25.83% 17,853,529 5,889,801 326,410 5.54%
Salaries, Wages & Benefits 98,434,240 24,210,383 24.60% 74,223,857 23,539,126 671,257 2.85%
Matl, Supply, & Services
Administrative Expenses
Memberships 639,660 320,515 50.11% 319,145 235,829 84,686 35.91%
Office Exp - Supplies 71,330 15,832 22.20% 55,498 7,163 8,669 121.02%
Postage 43,330 7,097 16.38% 36,233 11,957 (4,860) -40.65%
Books & Publications 62,340 35,617 57.13% 26,723 3,634 31,983 880.10%
Forms 970 - 0.00% 970 1,245 (1,245) -100.00%
Small Computer Items 900,300 350,785 38.96% 549,515 197,956 152,829 77.20%
Minor Furniture & Fixtures 310,000 50,285 16.22% 259,715 10,975 39,310 358.18%
Subtotal 2,027,930 780,131 38.47% 1,247,799 468,759 311,372 66.42%
Printing & Publication
Repro-In-House 200,790 58,805 29.29% 141,985 50,569 8,236 16.29%
Printing-Outside 66,480 2,200 3.31% 64,280 4,215 (2,015) -47.81%
Notices & Ads 62,650 10,700 17.08% 51,950 7,900 2,800 35.44%
Photo Processing 50 - 0.00% 50 - - N/A
Subtotal 329,970 71,705 21.73% 258,265 62,684 9,021 14.39%
Training & Meetings
Meetings 170,850 23,932 14.01% 146,918 22,705 1,227 5.40%
Training 938,890 105,574 11.24% 833,316 134,385 (28,811) -21.44%
Subtotal 1,109,740 129,506 11.67% 980,234 157,090 (27,584) -17.56%
Operating Mat'ls & Supplies
Chemical Coagulants 10,364,188 2,656,756 25.63% 7,707,432 1,506,429 1,150,327 76.36%
Odor Control 7,415,288 1,493,511 20.14% 5,921,777 1,931,936 (438,425) -22.69%
Disinfection 233,000 63,200 27.12% 169,800 37,793 25,407 67.23%
Chemicals - Misc & Cogen 331,070 72,115 21.78% 258,955 84,507 (12,392) -14.66%
Gasoline, Diesel & Oil 563,460 120,227 21.34% 443,233 152,692 (32,465) -21.26%
Tools 469,135 103,645 22.09% 365,490 80,553 23,092 28.67%
Safety equipment/tools 624,500 129,730 20.77% 494,770 119,502 10,228 8.56%
Solv, Paints & Jan. Supplies 100,000 31,603 31.60% 68,397 25,136 6,467 25.73%
Lab Chemicals & Supplies 639,570 149,353 23.35% 490,217 166,564 (17,211) -10.33%
Other Operating Supplies 176,880 27,703 15.66% 149,177 42,514 (14,811) -34.84%
Property Tax Fees 91,690 1,045 1.14% 90,645 (129) 1,174 -910.08%
Subtotal 21,008,781 4,848,888 23.08% 16,159,893 4,147,497 701,391 16.91%
Contractual Services
Solids Removal 13,403,700 3,019,756 22.53% 10,383,944 3,916,758 (897,002) -22.90%
Other Waste Disposal 840,900 179,945 21.40% 660,955 191,293 (11,348) -5.93%
Groundskeeping 193,000 49,562 25.68% 143,438 41,829 7,733 18.49%
Janitorial 444,360 129,636 29.17% 314,724 111,262 18,374 16.51%
Outside Lab Services 260,000 35,592 13.69% 224,408 30,012 5,580 18.59%
Oxygen 306,000 93,789 30.65% 212,211 77,712 16,077 20.69%
County Service Fee 512,410 4,560 0.89% 507,850 10,113 (5,553) -54.91%
Temporary Services 810,000 86,676 10.70% 723,324 35,251 51,425 145.88%
Security Services 1,608,000 411,424 25.59% 1,196,576 406,713 4,711 1.16%
Other 3,655,604 469,534 12.84% 3,186,070 312,898 156,636 50.06%
Subtotal 22,033,974 4,480,474 20.33% 17,553,500 5,133,841 (653,367) -12.73%
Increase
(Decrease)
%
Section 2 - Page 6
(Continued)
Operating Budget Review
Summary of Expenses by Line Item
For the Three Months Ended September 30, 2019
Expense Expense Increase Increase
Budget Through Remaining Through (Decrease) (Decrease)
Description 2019-20 9/30/19 Expensed Budget 9/30/18 $ %
Continued:
Professional Services
Legal 1,565,820 303,212 19.36% 1,262,608 164,077 139,135 84.80%
Audit & Accounting 241,110 31,925 13.24% 209,185 52,198 (20,273) -38.84%
Engineering 1,361,000 69,894 5.14% 1,291,106 160,183 (90,289) -56.37%
Enviro Scientific Consulting 200,000 388 0.19% 199,612 10,000 (9,612) -96.12%
Software Prgm Consulting 376,000 129,033 34.32% 246,967 82,287 46,746 56.81%
Advocacy Efforts 179,400 42,400 23.63% 137,000 39,000 3,400 8.72%
Industrial Hygiene Services 50,000 110 0.22% 49,890 7,208 (7,098) -98.47%
Labor Negotiation Services 80,000 28,748 35.94% 51,252 - 28,748 N/A
Other 1,532,840 156,055 10.18% 1,376,785 153,737 2,318 1.51%
Subtotal 5,586,170 761,765 13.64% 4,824,405 668,690 93,075 13.92%
Research & Monitoring
Environmental Monitoring 549,600 176,467 32.11% 373,133 26,510 149,957 565.66%
Air Quality Monitoring 100,000 68,046 68.05% 31,954 9,557 58,489 612.00%
Research 450,000 475,000 105.56% (25,000) 112,500 362,500 322.22%
Subtotal 1,099,600 719,513 65.43% 380,087 148,567 570,946 384.30%
Repairs & Maintenance
Materials & Services 19,774,364 5,409,985 27.36% 14,364,379 2,544,507 2,865,478 112.61%
Svc. Mtc. Agreements 3,695,278 2,059,221 55.73% 1,636,057 1,452,387 606,834 41.78%
Subtotal 23,469,642 7,469,206 31.82% 16,000,436 3,996,894 3,472,312 86.88%
Utilities
Telephone 501,100 127,794 25.50% 373,306 104,367 23,427 22.45%
Diesel For Generators 17,000 5,635 33.15% 11,365 9,469 (3,834) -40.49%
Natural Gas 722,140 242,957 33.64% 479,183 375,875 (132,918) -35.36%
Power 7,237,990 1,738,100 24.01% 5,499,890 1,805,197 (67,097) -3.72%
Water 772,080 242,474 31.41% 529,606 173,360 69,114 39.87%
Subtotal 9,250,310 2,356,960 25.48% 6,893,350 2,468,268 (111,308) -4.51%
Other Operating Supplies
Outside Equip Rental 122,000 21,766 17.84% 100,234 8,048 13,718 170.45%
Insurance Premiums 37,800 28,501 75.40% 9,299 27,155 1,346 4.96%
Prop & Gen Liab Insurance 1,720,000 429,999 25.00% 1,290,001 324,825 105,174 32.38%
Freight 87,050 22,562 25.92% 64,488 18,848 3,714 19.71%
Misc. Operating Expense 249,460 63,728 25.55% 185,732 55,058 8,670 15.75%
Regulatory Operating Fees 769,000 118,791 15.45% 650,209 26,271 92,520 352.18%
Subtotal 2,985,310 685,347 22.96% 2,299,963 460,205 225,142 48.92%
General Mgr Contingency
& Reappropriations 1,133,800 - 0.00% 1,133,800 - - N/A
Other Non-Oper Expense 125,630 35,488 28.25% 90,142 30,944 4,544 14.68%
Total Materials,
Supplies & Services 90,160,857 22,338,983 24.78% 67,821,874 17,743,439 4,595,544 25.90%
Total Expenditures 188,595,097 46,549,366 24.68% 142,045,731 41,282,565 5,266,801 12.76%
Cost Allocation (20,378,610) (5,176,213) 25.40% (15,202,397) (5,285,554) 109,341 -2.07%
Net Operating Requirements 168,216,487$ 41,373,153$ 24.60% 126,843,334$ 35,997,011$ 5,376,142$ 14.93%
Percent
Budget
Section 2 - Page 7
FY 2019-20 First Quarter Financial Report
Summary of Collection, Treatment, & Disposal Expenses by Process
For the Three Months Ended September 30, 2019
Increase Increase
Actual Actual (Decrease) (Decrease)
9/30/19 9/30/18 $ %
Process:
Preliminary Treatment 1,729,329$ 1,778,265$ (48,936)$ -2.75%
Primary Treatment 6,252,735 3,384,203 2,868,532 84.76%
Secondary Treatment 2,738,688 2,169,677 569,011 26.23%
Cryogenic Plant (Plant 2)190,774 162,770 28,004 17.20%
Effluent Disposal 183,311 225,825 (42,514) -18.83%
Solids Handling 12,425,127 10,328,537 2,096,590 20.30%
Cogeneration 4,659,215 4,685,747 (26,532) -0.57%
Utilities 948,216 738,357 209,859 28.42%
Electrical Distribution 418,488 418,054 434 0.10%
Miscellaneous Buildings 2,457,228 2,276,232 180,996 7.95%
External Location 87,689 82,512 5,177 6.27%
Nerissa Vessel 66,771 52,892 13,879 26.24%
Laboratory 4,451,240 3,786,837 664,403 17.55%
Collections 4,764,342 5,907,103 (1,142,761) -19.35%
Net Operating Requirements 41,373,153$ 35,997,011$ 5,376,142$ 14.93%
Section 2 - Page 8
Staffing Trends
Full Time Equivalents
September 30, 2019
At September 30, 2019, the total head count was 633 employees, or a full time equivalency of 616.
Operating Budget Review
450
500
550
600
650
700
6/30/16 6/30/17 6/30/18 6/30/19 9/30/19
572 578 603 614 616
52 49
32 22 24
Actual Vacant
636624627635 640
Section 2 - Page 9
FY 2019-20 First Quarter Financial Report
This Page Intentionally Left Blank
Section 2 - Page 10
Capital Improvement Program
By Type and Funding Source
For the Three Months Ended September 30, 2019
CIP Budget Review
Total Capital Improvement Outlays - $19,990,410
Rehabilitation and Replacement: 51%
Strategic Initiatives: 24%
Additional Capacity: 15%
Regulatory: 10%
Total Capital Improvement Outlays - $19,990,410
Collections Facilities: 18.7%
Liquid Treatment: 35.2%
Solids Handling & Digestion: 16.5%
Utility Systems: 5.4%
Support Facilities: 9.4%
Other: 14.8%
Section 3 - Page 1
Summary of Capital Improvement Construction Requirements - Current Year
For the Three Months Ended September 30, 2019
2019-20 2019-20 2019-20
Cashflow Actual at Projected
Budget 9/30/2019 Outlay
Collection System Improvement Projects
Collections Facilities
Taft Branch Improvements 105,676 - 105,700
Newhope - Placentia Trunk Grade Separation Replacement 71,875 270 54,000
Newhope-Placentia Trunk Replacement 22,653,359 2,835,034 17,141,100
Westminster Blvd Force Main Replacement 2,534,429 68,922 2,242,900
Rehabilitation of Western Regional Sewers 9,563,225 465,685 6,278,100
Interstate 405 Widening Project Impacts on OCSD Sewers 107,640 14,041 93,000
Seal Beach Pump Station Replacement 578,588 52,560 566,300
Newport Force Main Rehabilitation - 2,056 61,600
Bay Bridge Pump Station Replacement 1,039,692 43,669 1,070,400
Newport Beach Pump Station Odor Control Improvements 148,187 9,461 58,400
District 6 Trunk Sewer Relief 465,049 40,219 821,700
Gisler - Red Hill Trunk Improvements - Reach B - 1,865 195,300
Gisler - Red Hill Interceptor Rehabilitation 211,211 - 159,900
Main Street Pump Replacement & Force Main Rehabilitation 493,458 - 167,200
Small Construction Projects Program - Collections 1,688,579 124,189 124,200
Operations & Maintenance Capital Program - Collections - 13,981 14,000
Planning Studies Program - Collections - 21,878 21,900
SARI Rock Stabilizers Removal 4,065,703 32,404 3,267,000
Sunflower and Red-Hill Interceptor Repair 390,189 12,232 261,800
Additional Charges to CIP Closed at 6/30/19 - (8,400) (8,400)
Subtotal - Collections Facilities 44,116,860 3,730,066 32,696,100
Revenue Area 14
Newport Force Main Rehabilitation (2.18%) - 46 1,400
Subtotal - Revenue Area 14 - 46 1,400
Total Collection System Improvement Projects 44,116,860 3,730,112 32,697,500
FY 2019-20 First Quarter Financial Report
Section 3 - Page 2
(Continued)
Summary of Capital Improvement Construction Requirements - Current Year
For the Three Months Ended September 30, 2019
2019-20 2019-20 2019-20
Cashflow Actual at Projected
Budget 9/30/2019 Outlay
Treatment & Disposal Projects
Headworks
Headworks Rehabilitation and Expansion at Plant 1 7,870,442 873,157 10,256,900
Headworks Modifications at P2 for GWRS Final Expansion 4,159,614 363,279 2,433,000
Subtotal - Headworks 12,030,056 1,236,436 12,689,900
Primary Treatment
Primary Clarifier Reliability Improvements at Plant No. 1 480,336 61,788 651,400
Primary Treatment Rehabilitation at Plant 2 9,186,737 1,993,474 9,318,200
Subtotal - Primary Treatment 9,667,073 2,055,262 9,969,600
Secondary Treatment
Return Activated Sludge Piping Replacement at Plant 1 2,803,867 40,054 3,973,800
Activated Sludge Aeration Basin Deck Repair at Plant 2 14,671 2,641 3,400
Return Activated Sludge Piping Replacement at Plant 2 3,234,395 52,851 1,264,500
Subtotal - Secondary Treatment 6,052,933 95,546 5,241,700
Solids Handling & Digestion
Sludge Dewatering and Odor Control at Plant 1 6,781,194 2,253,034 5,849,800
Digester Ferric Chloride Piping Replacement at Plant No. 1 68,898 817 24,500
Plant No. 2 Digester Facilities Rehabilitation 2,770,904 - 1,208,300
Sludge Dewatering and Odor Control at Plant 2 5,998,220 906,789 4,763,300
Interim Food Waste Receiving Facility 641,684 75,995 630,600
TPAD Digester Facility at P2 874,204 53,254 971,200
Subtotal - Solids Handling & Digestion 17,135,104 3,289,889 13,447,700
Ocean Outfall Systems
Ocean Outfall System Rehabilitation 26,862,720 3,654,612 24,552,900
Subtotal - Ocean Outfall Systems 26,862,720 3,654,612 24,552,900
Utility Systems
Digester Gas Facilities Rehabilitation 3,957,325 138,460 3,512,800
Natural Gas Pipelines Replacement at Plants 1 and 2 283,122 129,807 252,100
Electrical Power Distribution System Improvements 851,397 29,526 597,000
Uninterruptable Power Supply Improvements at Plant 1 270,355 14,525 190,800
Consolidated Demolition and Utility Improvements at P2 3,545,396 768,191 5,061,600
Substation Replacement at Plant No. 2 506,550 - 506,600
Subtotal - Utility Systems 9,414,145 1,080,509 10,120,900
CIP Budget Review
Section 3 - Page 3
(Continued)
Summary of Capital Improvement Construction Requirements - Current Year
For the Three Months Ended September 30, 2019
2019-20 2019-20 2019-20
Cashflow Actual at Projected
Budget 9/30/2019 Outlay
Process Related Special Projects
Safety Improvements Program 7,701,072 1,349,664 7,532,900
Subtotal - Process Related Special Projects 7,701,072 1,349,664 7,532,900
Information Management Systems
Process Control Systems Upgrades 578,902 - 579,000
Project Management Information System 1,860,070 53,647 700,800
Information Technology Capital Program 2,749,741 268,368 1,467,700
Geographic Information System 493,346 129,732 419,200
EAM Software and Process Implementation 976,100 72,335 651,000
Process Control Systems Upgrades Study 1,783,597 63,912 1,295,500
Subtotal - Information Management Systems 8,441,756 587,994 5,113,200
Strategic & Master Planning
Planning Studies Program 5,562,122 269,025 7,357,500
Climate Resiliency Study 222,600 97,210 291,000
Subtotal - Strategic & Master Planning 5,784,722 366,235 7,648,500
Water Management Projects
GWRS Final Expansion Coordination 182,157 12,712 372,100
Subtotal - Water Management Projects 182,157 12,712 372,100
Research
Research Program 2,351,548 228,076 1,469,200
Subtotal - Research 2,351,548 228,076 1,469,200
Support Facilities
Small Construction Projects Program 4,341,552 964,333 8,088,300
Fleet Services UST Leak Remediation at Plant 1 2,251,879 31,497 31,500
Operations & Maintenance Capital Program 5,061,149 297,708 2,877,300
18350 Mt. Langley Building Purchase and Improvement 155,080 7,570 205,700
Title 24 Access Compliance and Building Rehab Project 1,075,459 240,641 903,500
Headquarters Complex and Site Security at Plant 1 9,765,435 299,596 8,688,400
South Perimeter Security and Utility Improvements at Plant N 781,427 46,193 690,300
Plant 2 Warehouse Relocation 67,593 - 67,600
Subtotal - Support Facilities 23,499,574 1,887,538 21,552,600
FY 2019-20 First Quarter Financial Report
Section 3 - Page 4
(Continued)
Summary of Capital Improvement Construction Requirements - Current Year
For the Three Months Ended September 30, 2019
2019-20 2019-20 2019-20
Cashflow Actual at Projected
Budget 9/30/2019 Outlay
Others
Perimeter Screening at Plant 2 44,087 - 28,900
Capital Improvement Program Management Services 118,846 (17) 90,200
Subtotal - Others 162,933 (17) 119,100
Total Treatment and Disposal Projects 129,285,793 15,844,456 119,830,300
Capital Equipment Purchases 2,923,300 415,842 2,923,300
Total Collection, Treatment and Disposal Projects
and Capital Equipment Purchases 176,325,953 19,990,410 155,451,100
Less: Savings and Deferrals (23,000,000) - -
Net Collection, Treatment and Disposal Projects
and Capital Equipment Purchases 153,325,953$ 19,990,410$ 155,451,100$
CIP Budget Review
Section 3 - Page 5
FY 2019-20 First Quarter Financial Report
Summary of Capital Improvement Construction Requirements - Project Life
For the Three Months Ended September 30, 2019
Current Total
Approved June 30, 2019 Year Projected Remaining
Project Accumulated Projected Cost at Future
Budget Cost Cost June 30, 2020 Budget
Collection System Improvement Projects
Collections Facilities
Taft Branch Improvements 8,130,000 12,083 105,700 117,783 8,012,217
Newhope - Placentia Trunk Grade Separation Replacement 4,300,000 4,192,559 54,000 4,246,559 53,441
Newhope-Placentia Trunk Replacement 112,000,000 61,677,495 17,141,100 78,818,595 33,181,405
Yorba Linda Pump Station Abandonment 10,800,000 - - - 10,800,000
Beach Trunk/Knott Interceptor Sewer Relief 21,000,000 - - - 21,000,000
Westminster Blvd Force Main Replacement 54,000,000 6,690,994 2,242,900 8,933,894 45,066,106
Rehabilitation of Western Regional Sewers 202,000,000 15,684,536 6,278,100 21,962,636 180,037,364
Interstate 405 Widening Project Impacts on OCSD Sewers 528,000 94,547 93,000 187,547 340,453
Seal Beach Pump Station Replacement 78,900,000 141,174 566,300 707,474 78,192,526
Los Alamitos Sub-Trunk Extension 66,000,000 - - - 66,000,000
Newport Force Main Rehabilitation 58,367,238 58,305,659 61,600 58,367,259 (21)
Crystal Cove Pumping Station Upgrade and Rehabilitation 17,900,000 - - - 17,900,000
Bay Bridge Pump Station Replacement 64,000,000 1,241,764 1,070,400 2,312,164 61,687,836
Newport Beach Pump Station Odor Control Improvements 4,066,000 52,522 58,400 110,922 3,955,078
District 6 Trunk Sewer Relief 7,965,000 7,086,802 821,700 7,908,502 56,498
Gisler - Red Hill Trunk Improvements - Reach B 25,213,000 25,017,792 195,300 25,213,092 (92)
MacArthur Pump Station Rehabilitation 9,151,000 - - - 9,151,000
Main Street Pump Station Rehabilitation 40,660,000 - - - 40,660,000
Gisler - Red Hill Interceptor Rehabilitation 14,800,000 - 159,900 159,900 14,640,100
Main Street Pump Replacement & Force Main Rehabilitation 17,160,000 - 167,200 167,200 16,992,800
MacArthur Force Main Improvement 2,385,000 - - - 2,385,000
Edinger Bolsa Chica Trunk Improvements 5,159,000 - - - 5,159,000
Edinger Pump Station Upgrade and Rehabilitation 14,100,000 - - - 14,100,000
Slater Avenue Pump Station Rehabilitation 25,300,000 - - - 25,300,000
Small Construction Projects Program - Collections 9,258,000 3,606,091 124,200 3,730,291 5,527,709
Operations & Maintenance Capital Program - Collections 570,109 33,002 14,000 47,002 523,107
Planning Studies Program - Collections 4,258,600 3,178,275 21,900 3,200,175 1,058,425
Research Program - Collections 154,000 46,250 - 46,250 107,750
SARI Rock Stabilizers Removal 6,860,000 1,059,637 3,267,000 4,326,637 2,533,363
Sunflower and Red-Hill Interceptor Repair 5,500,000 20,888 261,800 282,688 5,217,312
Additional Charges to CIP Closed at 6/30/19 - - (8,400) (8,400) 8,400
Subtotal - Collections Facilities 890,484,947 188,142,070 32,696,100 220,838,170 669,646,777
Revenue Area 14:
Newport Force Main Rehabilitation (2.18%) 1,300,762 1,299,390 1,400 1,300,790 (28)
Subtotal - Revenue Area 14 1,300,762 1,299,390 1,400 1,300,790 (28)
Total Collection System Improvement Projects 891,785,709 189,441,460 32,697,500 222,138,960 669,646,749
Section 3 - Page 6
(Continued)
Summary of Capital Improvement Construction Requirements - Project Life
For the Three Months Ended September 30, 2019
Current Total
Approved June 30, 2019 Year Projected Remaining
Project Accumulated Projected Cost at Future
Budget Cost Cost June 30, 2020 Budget
Treatment & Disposal Projects
Headworks
Headworks Rehabilitation and Expansion at Plant 1 406,000,000 19,524,945 10,256,900 29,781,845 376,218,155
Headworks Modifications at P2 for GWRS Final Expansion 54,000,000 5,356,267 2,433,000 7,789,267 46,210,733
Subtotal - Headworks 460,000,000 24,881,212 12,689,900 37,571,112 422,428,888
Primary Treatment
Primary Clarifiers Replacements and Improvements at P1 106,000,000 521,057 - 521,057 105,478,943
Primary Clarifier Reliability Improvements at Plant No. 1 12,000,000 198,647 651,400 850,047 11,149,953
Primary Treatment Rehabilitation at Plant 2 245,000,000 16,832,705 9,318,200 26,150,905 218,849,095
B/C-Side Primary Clarifiers Rehabilitation at Plant 2 249,560,000 - - - 249,560,000
Subtotal - Primary Treatment 612,560,000 17,552,409 9,969,600 27,522,009 585,037,991
Secondary Treatment
Return Activated Sludge Piping Replacement at Plant 1 10,300,000 964,280 3,973,800 4,938,080 5,361,920
Activated Sludge Aeration Basin Deck Repair at Plant 2 1,800,000 1,612,387 3,400 1,615,787 184,213
Return Activated Sludge Piping Replacement at Plant 2 20,000,000 849,751 1,264,500 2,114,251 17,885,749
Subtotal - Secondary Treatment 32,100,000 3,426,418 5,241,700 8,668,118 23,431,882
Solids Handling & Digestion
Digester Rehabilitation at Plant 1 66,000,000 65,609,228 - 65,609,228 390,772
Sludge Dewatering and Odor Control at Plant 1 199,500,000 191,251,029 5,849,800 197,100,829 2,399,171
Digester Ferric Chloride Piping Replacement at Plant No. 1 1,360,000 - 24,500 24,500 1,335,500
Plant No. 2 Digester Facilities Rehabilitation 15,500,000 14,717 1,208,300 1,223,017 14,276,983
Sludge Dewatering and Odor Control at Plant 2 90,477,000 80,701,878 4,763,300 85,465,178 5,011,822
Interim Food Waste Receiving Facility 6,300,000 448,580 630,600 1,079,180 5,220,820
TPAD Digester Facility at P2 405,100,000 - 971,200 971,200 404,128,800
Digester P, Q, R, and S Replacement 166,000,000 - - - 166,000,000
Subtotal - Solids Handling & Digestion 950,237,000 338,025,432 13,447,700 351,473,132 598,763,868
Ocean Outfall Systems
Ocean Outfall System Rehabilitation 166,000,000 38,447,897 24,552,900 63,000,797 102,999,203
Subtotal - Ocean Outfall Systems 166,000,000 38,447,897 24,552,900 63,000,797 102,999,203
Utility Systems
UPS System Upgrades 4,700,000 - - - 4,700,000
Digester Gas Facilities Rehabilitation 156,500,000 4,894,979 3,512,800 8,407,779 148,092,221
Natural Gas Pipelines Replacement at Plants 1 and 2 1,310,000 221,027 252,100 473,127 836,873
Electrical Power Distribution System Improvements 30,000,000 138,428 597,000 735,428 29,264,572
CIP Budget Review
Section 3 - Page 7
(Continued)
FY 2019-20 First Quarter Financial Report
Summary of Capital Improvement Construction Requirements - Project Life
For the Three Months Ended September 30, 2019
Current Total
Approved June 30, 2019 Year Projected Remaining
Project Accumulated Projected Cost at Future
Budget Cost Cost June 30, 2020 Budget
Utility Systems (continued)
Central Generation Rehabilitation at Plant 1 87,000,000 - - - 87,000,000
Uninterruptable Power Supply Improvements at Plant 1 7,000,000 79,108 190,800 269,908 6,730,092
Consolidated Demolition and Utility Improvements at P2 31,000,000 26,399,159 5,061,600 31,460,759 (460,759)
Central Generation Rehabilitation at Plant 2 114,000,000 - - - 114,000,000
Substation Replacement at Plant No. 2 40,261,000 - 506,600 506,600 39,754,400
Subtotal - Utility Systems 471,771,000 31,732,701 10,120,900 41,853,601 429,917,399
Process Related Special Projects
Safety Improvements Program 19,000,000 8,118,140 7,532,900 15,651,040 3,348,960
Subtotal - Process Related Special Projects 19,000,000 8,118,140 7,532,900 15,651,040 3,348,960
Information Management Systems
Process Control Systems Upgrades 46,000,000 - 579,000 579,000 45,421,000
Project Management Information System 4,000,000 1,149,166 700,800 1,849,966 2,150,034
SCADA System and Network Upgrades 5,000,000 4,970,908 - 4,970,908 29,092
Information Technology Capital Program 10,000,000 1,250,053 1,467,700 2,717,753 7,282,247
Geographic Information System 4,568,000 3,058,209 419,200 3,477,409 1,090,591
EAM Software and Process Implementation 7,500,000 5,219,288 651,000 5,870,288 1,629,712
Process Control Systems Upgrades Study 3,554,000 1,224,489 1,295,500 2,519,989 1,034,011
Subtotal - Information Management Systems 80,622,000 16,872,113 5,113,200 21,985,313 58,636,687
Strategic & Master Planning
Planning Studies Program 24,393,400 8,690,620 7,357,500 16,048,120 8,345,280
Climate Resiliency Study 878,000 586,978 291,000 877,978 22
Subtotal - Strategic & Master Planning 25,271,400 9,277,598 7,648,500 16,926,098 8,345,302
Water Management Projects
GWRS Final Expansion Coordination 1,132,000 232,090 372,100 604,190 527,810
Subtotal - Water Management Projects 1,132,000 232,090 372,100 604,190 527,810
Research
Research Program 8,346,000 617,093 1,469,200 2,086,293 6,259,707
Subtotal - Research 8,346,000 617,093 1,469,200 2,086,293 6,259,707
Section 3 - Page 8
(Continued)
Summary of Capital Improvement Construction Requirements - Project Life
For the Three Months Ended September 30, 2019
Current Total
Approved June 30, 2019 Year Projected Remaining
Project Accumulated Projected Cost at Future
Budget Cost Cost June 30, 2020 Budget
Support Facilities
Small Construction Projects Program 29,040,000 12,847,554 8,088,300 20,935,854 8,104,146
Fleet Services UST Leak Remediation at Plant 1 14,952,000 374,111 31,500 405,611 14,546,389
Operations & Maintenance Capital Program 15,051,891 1,334,458 2,877,300 4,211,758 10,840,133
18350 Mt. Langley Building Purchase and Improvement 10,200,000 9,907,140 205,700 10,112,840 87,160
Laboratory Rehabilitation at Plant No. 1 15,000,000 - - - 15,000,000
Title 24 Access Compliance and Building Rehab Project 18,400,000 17,054,173 903,500 17,957,673 442,327
Headquarters Complex and Site Security at Plant 1 167,500,000 24,758,304 8,688,400 33,446,704 134,053,296
South Perimeter Security and Utility Improvements at Plant N 10,500,000 543,599 690,300 1,233,899 9,266,101
Plant 2 Warehouse Relocation 9,800,000 - 67,600 67,600 9,732,400
Plant 2 Collections Yard Relocation 1,840,000 - - - 1,840,000
Subtotal - Support Facilities 292,283,891 66,819,339 21,552,600 88,371,939 203,911,952
Others
Banning Gate Relocation and Grading at Plant 2 2,931,000 - - - 2,931,000
Perimeter Screening at Plant 2 2,800,000 64,040 28,900 92,940 2,707,060
Capital Improvement Program Management Services 700,000 184,309 90,200 274,509 425,491
Subtotal - Others 6,431,000 248,349 119,100 367,449 6,063,551
Total Treatment and Disposal Projects 3,125,754,291 556,250,791 119,830,300 676,081,091 2,449,673,200
Capital Equipment Purchases 9,727,153 - 2,923,300 2,923,300 6,803,853
Total Collection, Treatment and Disposal Projects
and Capital Equipment Purchases 4,027,267,153$ $745,692,251 $155,451,100 $901,143,351 $3,126,123,802
CIP Budget Review
Section 3 - Page 9
FY 2019-20 First Quarter Financial Report
This Page Intentionally Left Blank
Section 3 - Page 10
Capital Assets Schedule
For the Three Months Ended September 30, 2019
Balance Year-to-Date Balance
07/01/19 Activity 6/30/19
CONSTRUCTION IN PROGRESS:
Treatment Plant 447,941,678$ 16,260,298$ 464,201,976$
Collection System 73,889,956 3,730,112 77,620,068
Subtotal 521,831,634 19,990,410 541,822,044
PROPERTY, PLANT & EQUIPMENT (at cost):
Land and Property Rights 41,967,355 - 41,967,355
Collection Lines and Pump Stations 886,790,503 - 886,790,503
Treatment Facilities 2,478,726,934 - 2,478,726,934
Effluent disposal facilities 96,972,016 - 96,972,016
Solids disposal facilities 3,463,236 - 3,463,236
General and administrative facilities 257,168,345 - 257,168,345
Excess purchase price over book value on acquired assets 19,979,000 - 19,979,000
Subtotal 3,785,067,389 - 3,785,067,389
Total Property, Plant & Equipment & CIP 4,306,899,023$ 19,990,410$ 4,326,889,433$
2019-20 Year-to-Date Remaining
Budget Payments % of Budget Budget
Principal Payments by Debt Issue:
2010A BABs - - 0.00% -
2010C BABs - - 0.00% -
2011A COP - - 0.00% -
2012A COP - - 0.00% -
2012B COP 20,915,000 - 0.00% 20,915,000
2014A COP 7,400,000 - 0.00% 7,400,000
2015A COP - - 0.00% -
2016A COP 4,415,000 - 0.00% 4,415,000
2017A COP - - 0.00% -
2018A CANs - - 0.00% -
Subtotal Principal Payments 32,730,000 - 0.00% 32,730,000
Interest Expense by Debt Issue:
2010A BABs 2,897,700 992,488 34.25% 1,905,212
2010C BABs 6,523,800 2,234,587 34.25% 4,289,213
2011A COP 3,348,400 837,175 25.00% 2,511,225
2012A COP 3,735,900 934,050 25.00% 2,801,850
2012B COP 2,191,400 547,800 25.00% 1,643,600
2014A COP 3,566,500 891,650 25.00% 2,674,850
2015A COP 6,375,500 1,593,850 25.00% 4,781,650
2016A COP 6,977,300 1,744,350 25.00% 5,232,950
2017A COP 3,318,500 829,650 25.00% 2,488,850
2018A CANs 5,110,000 1,277,500 25.00% 3,832,500
Subtotal Interest Expense 44,045,000 11,883,100 26.98% 15,825,950
Total Debt Service 76,775,000$ 11,883,100$ 15.48% 48,555,950$
Section 4 - Page 1
Capital Facilities Budget Review
Capital Assets Schedule & Debt Service Budget Review
Debt Service Budget Review
FY 2019-20 First Quarter Financial Report
This Page Intentionally Left Blank
Section 4 - Page 2
General Liability and Property Fund Budget Review
For the Three Months Ended September 30, 2019
Actual Actual
2019-20 Through Through
Budget 9/30/19 9/30/18
Revenues:
In-Lieu Premiums 1,720,000$ 429,999$ 25.00% 1,290,001$ 324,825$ 105,174$
Miscellaneous Other Revenue 10,000 135,416 1354.16% - - 135,416
Service Department Allocations 20,000 (774) -3.87% 20,774 (774) -
Total Revenues 1,750,000 564,641 32.27%1,310,775 324,051 240,590
Expenses:
Benefits/Claims 360,000 - 0.00% 360,000 - -
Legal Services 40,000 - 0.00% 40,000 - -
Professional Services 10,000 - 0.00% 10,000 - -
Subtotal 410,000 - 0.00%410,000 - -
Policy Premium Expense 1,340,000 354,732 26.47% 985,268 319,224 35,508
Total Expenses 1,750,000 354,732 20.27%1,395,268 319,224 35,508
Excess Revenue (Expense)- 209,909 (84,493)$ 4,827 205,082
Beginning Reserves 55,000,000 55,389,842 55,367,246 22,596
Ending Reserves 55,000,000$ 55,599,751$ 55,372,073$ 227,678$
9/30/19 Budget (Decrease)
Self Insurance Budget Review
Percent
of Budget Remaining
Through 2019-20 Increase
Section 5 - Page 1
FY 2019-20 First Quarter Financial Report
Workers' Compensation Fund Budget Review
For the Three Months Ended September 30, 2019
Actual Actual
2019-20 Through Through
Budget 9/30/19 9/30/19 9/30/18
Revenues:
In-Lieu Premiums 780,000$ 195,000$ 25.00% 585,000$ 146,650$ 48,350$
Service Department Allocations - 27,174 N/A (27,174) 27,174 -
Total Revenues 780,000 222,174 28.48%557,826 173,824 48,350
Expenses:
Benefits/Claims 430,000 159,525 37.10% 270,475 89,848 69,677
Legal Services 80,000 38,978 48.72% 41,022 5,388 33,590
Professional Services 60,000 11,417 19.03% 48,583 18,473 (7,056)
Subtotal 570,000 209,920 36.83%360,080 113,709 96,211
Policy Premium Expense 210,000 54,441 25.92% 155,559 54,832 (391)
Total Expenses 780,000 264,361 33.89%515,639 168,541 95,820
Excess Revenue (Expense)- (42,187) 42,187$ 5,283 (47,470)
Beginning Reserves 2,000,000 2,036,708 2,085,542 (48,834)
Ending Reserves 2,000,000$ 1,994,521$ 2,090,825$ (96,304)$
Budget (Decrease)
Percent
of Budget Remaining
Through 2019-20 Increase
Section 5 - Page 2
OCSD ♦ P.O. Box 8127 ♦ Fountain Valley, CA 92728-8127 ♦ (714) 962-2411
October 31, 2019
STAFF REPORT
Quarterly Treasurer’s Report
For the Period Ended September 30, 2019
SUMMARY
Section 17.0 of the Sanitation District's Investment Policy includes quarterly reporting
requirements for the Sanitation 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 Sanitation District's external money manager.
The ongoing monitoring of the Sanitation District's investment program by staff and Callan
Associates, the Sanitation District's independent investment advisor, indicates that the
Sanitation District's investments are in compliance with the Sanitation 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 Sanitation District to meet budgeted expenditures for the next six
months. The Sanitation 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
Sanitation District's portfolios, as of September 30, 2019. The Liquid Operating Monies
portfolio, with an average maturity of 113 days, consists entirely of high quality fixed
income investments consistent with the Sanitation District’s investment policy.
Portfolio Performance Summary
The following table presents a performance summary of the Sanitation District's portfolios
as compared to their benchmarks as of September 30, 2019.
Quarterly Treasurer’s Report
For the Period Ended September 30, 2019
Page 2 of 4
(1) Benchmarks:
Liquid Operating Portfolio: ICE BAML 3-Month Treasury Bill Index
Long-Term Operating Portfolio: ICE BAML 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.
Quarter
Ending
Liquid
Operating
Monies ($M)
Long-Term
Operating
Monies ($M)
31 Dec 18 176.7 498.8
31 Mar 19 108.5 506.2
30 Jun 19 164.5 558.1
30 Sep 19 68.2 548.1
Portfolio Performance Summary As of September 30, 2019
Liquid Operating Monies (%)Long-Term Operating Monies (%)
Total Rate of Return Benchmark(1) Total Rate of Return Benchmark(1)
3 Months 0.59 0.56 0.88 0.82
6 Months 1.28 1.20 2.59 2.69
9 Months 1.92 1.81 4.14 4.15
12 Months 2.50 2.39 5.52 5.79
Annualized Since inception 30 Nov 2014 1.12 1.02 1.84 1.79
Market Value $68.2 M $548.1 M
Average Quality “AA+”/”Aa1” “AA”/”Aa1”
Current Yield (%) 1.88 2.29
Estimated Yield to Maturity (%) 2.01 1.79
Quarterly Deposits (Withdrawals) ($97.0 M) ($15.0 M)
Estimated Annual Income $1.5 M $12.9 M
Quarterly Treasurer’s Report
For the Period Ended September 30, 2019
Page 3 of 4
The Sanitation District’s Investment Account Balances as of September 30, 2019
Investment Accounts
Book Balances
September 30, 2019
Estimated
Yield (%)
State of California LAIF
Banc of California Checking Account
Banc of California Overnight Sweep Account
Banc of California W/C Checking
Union Bank Mount Langley Account
Union Bank Bandilier Account
Chandler/U.S. Bank – Short-term Portfolio
Chandler/U.S. Bank – Long-term Portfolio
Petty Cash
BNY Mellon OCIP Reserve
TOTAL
Debt Service Reserves w/Trustees
$61,265,396
2,365,784
653,979
79,793
114,567
617,377
68,233,258
548,126,927
3,000
3,649,362
$685,109,443
$1,571
2.28
0.55
0.20
0.55
0.75
0.75
2.01
1.79
N/A
0.00
1.84
2.24
The Sanitation District’s Cost of Funds on Debt Issues as of September 30, 2019
Cost of Funds
Issue Description
Outstanding
COP Balance
Annual
Interest
Rate (%)
2010A Fixed
2010C Fixed
2011A Fixed
2012A Fixed
2012B Fixed
2014A Fixed
2015A Fixed
2016A Fixed
2017A Fixed
2018A Fixed
TOTAL
Weighted Avg. Cost of Funds
80,000,000
157,000,000
75,370,000
100,645,000
46,475,000
71,330,000
127,510,000
145,880,000
66,370,000
102,200,000
$972,780,000
3.68
4.11
2.61
3.54
1.50
2.34
3.30
3.02
2.55
2.02
3.05
Quarterly Treasurer’s Report
For the Period Ended September 30, 2019
Page 4 of 4
ATTACHMENTS
1. Chandler Quarterly Report
2. Summary of Performance Data and Portfolio Statistics – Liquid Operating Monies
3. Summary of Performance Data and Portfolio Statistics – Long Term 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
1
September 30, 2019
Mr. Lorenzo Tyner
Assistant General Manager
Director of Finance and Administrative Services
Orange County Sanitation District
10844 Ellis Avenue
Fountain Valley CA 92708-7018
Dear Lorenzo,
Bond Market Recap
Labor market and consumer fundamentals remain favorable, but manufacturing data continue to disappoint. We believe
economic growth has slowed from earlier this year and downside risks to the outlook remain elevated. The US economy
continues to face headwinds from trade disputes, slowing global economic growth, and an uncertain outlook for Brexit.
However, we believe accommodative US monetary policy and a collective dovish stance by all of the major global central
banks should help to combat the headwinds. We also believe the Trump administration faces significant political pressure
to make progress toward a trade agreement with China as we head into an election year.
The Federal Open Market Committee (FOMC) lowered the target fed funds rate by 25 basis points in September (for the
second time this year) to a range of 1.75%-2.00%. There were three dissenting votes; one policymaker favored a 50-basis
point rate cut, and two policymakers favored leaving the fed funds rate unchanged. According to the Fed's dot plot, only
seven out of 17 policymakers are anticipating another rate cut before year-end. Although there is a growing disparity
among policymakers about the appropriate path of monetary policy, Fed Chair Powell’s press conference suggested the
Fed will be flexible and data dependent. Powell indicated more rate cuts may be appropriate if the economy slows further,
but the Fed is not on a preset course. We continue to believe the FOMC is likely to cut the fed funds target rate again
before year-end, in the absence of a trade resolution or meaningful improvement in market-based measures of inflation.
The next FOMC meeting is scheduled for October 29-30.
The Treasury yield curve steepened modestly in September, although the curve remains partially inverted. The 3-month
T-bill yield declined nearly 17 basis points to 1.81%, the 2-year Treasury yield increased nearly twelve basis points to
1.62%, and the 10-year Treasury yield increased about 17 basis points to 1.67%. An inversion of the yield curve in which
the 10-year Treasury yield is lower than the 3-month T-bill yield is generally viewed as a powerful predictive signal of an
upcoming recession. However, we believe increased short-term Treasury issuance to fund the deficit, and negative
sovereign bond yields in other countries may be distorting the US Treasury yield curve. German sovereign bond yields
(from 1-month out to 30-years) remained negative at September month-end.
The shape of the Treasury yield curve has changed significantly on a year-over-year basis. As of September month-end,
the 3-month T-bill yield was down 39 basis points, the 2-Year Treasury yield was down nearly 120 basis points, and the
10-Year Treasury yield was down nearly 140 basis points, year-over-year. The current shape of the yield curve implies that
market participants are pricing-in additional rate cuts. We believe the year-over-year decline in long-term Treasury yields
reflects a high level of market participants' nervousness about the outlook for global economic growth and a decline in
global inflation expectations.
2
Consumer Prices
The Consumer Price Index (CPI) was up 1.7% year-over-year in August, versus up 1.8% year-over-year in July. Core CPI (CPI
less food and energy) was up 2.4% year-over-year in August, versus up 2.2% year-over-year in July. The Personal
Consumption Expenditures (PCE) index was up 1.4% year-over-year in August, unchanged from July. Core PCE, which is
the Fed's primary inflation gauge, was up 1.8% year-over-year in August versus 1.7% year-over-year in July. Core PCE
remains below the Fed’s 2.0% inflation target.
Retail Sales
Retail sales in August were moderately above consensus expectations, coming in at 0.4% compared to the 0.2% estimate.
Excluding auto and gas, retail sales were up 0.1% compared to expectations for a 0.2% increase. On a year-over-year
basis, retail sales increased by 4.1%, a modest increase from the prior year-over-year number of 3.6%.
Labor Market
U.S. nonfarm payrolls rose by 136,000 in September, slightly below expectations of 145,000. However, August payrolls
were revised higher by 38,000. On a trailing 3-month and 6-month average basis, payrolls increased an average of about
157,000 and 154,000 per month, respectively. The unemployment rate declined to 3.5% (the lowest rate since December
1969) from 3.7% in August, and the participation rate held steady at 63.2%. 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, dropped to 6.9% in September from 7.2% in August. Wages were flat in September, missing expectations for a
0.3% increase, and the average workweek was unchanged. On a year-over-year basis, wages were up 2.9% in September,
versus up 3.2% in August.
Housing Starts
Housing starts were much stronger than expected in August, up 12.3% month-over-month to a 1.364 million annualized
rate. Multi-family starts jumped 32.8% month-over-month to an annualized rate of 445,000, while single-family starts rose
4.4% to an annualized rate of 919,000. On a year-over-year basis, total housing starts were up 6.6% in August. Permits
were also stronger than expected in the month. Although housing data tends to be volatile on a month-over-month basis,
the August report and three-month moving averages suggest that housing activity is accelerating.
3
TREASURY YIELDS 9/30/2019 6/30/2019 CHANGE
3 Month 1.81 2.09 (0.28)
2 Year 1.62 1.76 (0.14)
3 Year 1.56 1.71 (0.15)
5 Year 1.54 1.77 (0.23)
7 Year 1.61 1.88 (0.27)
10 Year 1.67 2.01 (0.34)
30 Year 2.11 2.51 (0.40)
4
Performance Attribution
Long-Term Portfolio
The portfolio outperformed the benchmark during the quarter, generating a return of 0.88% compared to the 0.82%
return of the ICE Bank of America Merrill Lynch 1-5 Year US Corporate and Government AAA-A Index. The overall asset
allocation of the portfolio led to the modest outperformance during the reporting period. In particular, the overweight
exposure to the Agency, Asset Backed and Corporate sectors of the allocation all were additive to the quarterly results.
From a term structure perspective, the positive deviations in exposure relative to the benchmark in the shorter and longer
maturity segments of the portfolio were also positive differentiators to the total return of the portfolio.
A diverse set of securities in the Treasury, Agency, Asset Backed, Commercial Paper and Corporate sectors were purchased
during the quarter to keep the portfolio positioned in-line with Chandler objectives. The purchased securities ranged in
maturity from November 2019 to July 2024. One security was sold, one was called, and several matured to facilitate the
new holdings in the portfolio. Additionally, $15 million was withdrawn from the portfolio late in the quarter to account
for the liquidity needs of the District. The sector allocation was relatively stable during the quarter. Notably the Money
Market allocation decreased by 2.4% to 0.7% of the portfolio partially offset by the 2.0% increase in the Agency allocation
to 25.6% of the portfolio. The duration of the portfolio moderately increased, currently 2.46 compared to 2.43 at the end
of the prior reporting period. The Chandler team anticipates keeping the overall duration of the portfolio close to the
benchmark in the coming quarter.
Liquid Portfolio
The Liquidity portfolio modestly outperformed the benchmark, generating a return of 0.59% compared to the 0.56%
return of the ICE Bank of America Merrill Lynch US Treasury 3 Month Treasury Bill Index. Multiple securities were
purchased across the Treasury, Agency, Commercial Paper and Corporate sectors of the market to keep the portfolio fully
invested in the liquidity strategy. The purchased securities ranged in maturity from October 2019 to May 2020. One
security was called and many matured to facilitate the two liquidity needs totaling $97 million. The sector allocation
evolved with the drop-in market value due to the liquidity needs during the reporting period. The two largest adjustments
were the 4.6% decline in the US Treasury allocation, to 69.2% of the portfolio, more than offset by the 8.4% increase in
the US Corporate allocation, to 17.0% of the portfolio. The duration of the portfolio moderately increased to 0.30
compared to 0.24 at the end of the prior reporting period. The Chandler team continues to utilize the Treasury and Agency
sectors to immunize the large forecasted liquidity needs and overlay spread product (i.e. Commercial Paper and
Corporates) to enhance the total return strategy of the portfolio.
5
Economic Outlook
US Treasury yields dropped precipitously during the quarter as the US/China trade impasse continued to negatively
influence global manufacturing trends. In particular, the manufacturing weakness in Europe is becoming acute, with
German purchasing managers indices rolling over into recessionary territory. The manufacturing weakness helped to
accelerate the negative yield conundrum in Europe, with the ten-year German Bund bottoming out at negative 72 basis
points during September and closing the quarter at negative 57 basis points. The lack of any meaningful fiscal response
in Europe is exacerbating the downturn; considering the empirical evidence thus far on utilizing negative interest rates as
a policy tool fiscal stimulus is long overdue in Germany in Chandler’s judgement.
The Chandler team has long held the view the inability of interest rates to normalize in developed overseas markets,
arguably most importantly Germany, would serve as a ceiling for how high US interest rates could adjust. The team’s
beginning of year analysis did not accurately account for the degree to which developed market benchmark rates overseas
could move into negative territory which served as a catalyst for the US ten-year Treasury notes to close the quarter at
1.67%, compared to 2.01% at the end of June and 2.69% at year-end. In a pre-emptive move to sustain the economic
expansion the Federal Reserve was active during the quarter, cutting the Fed Funds rate two times to a current range of
1.75% to 2.00%, compared to 2.25% to 2.50% at the end of June. Policymakers are describing the monetary stimulus
adjustment as “mid-cycle” and in Chandler’s view have little interest in pushing the policy rate close to the zero lower
bound considering the current readings on the health of the US economy. One of the primary factors influencing the
dovish shift by the Federal Reserve is the market’s pricing of long-term inflation becoming unanchored. The ten-year TIPS
break even rate continued to drift lower during the quarter, with a spread of 1.52% as of quarter-end, well below the
2.25% to 2.60% considered “normal” and consistent with the Federal Reserve’s 2.0% inflation objective. TIPS breakeven
rates moving higher will mitigate the pressure on the Federal Reserve to remain hyper accommodative with monetary
policy settings.
The service sector focus of the US economy continues to insulate the domestic economy from the global manufacturing
weakness. The underlying tenets of the US economy remain sound, with current unemployment rate at 3.5%, the
underemployment rate at 6.9%, weekly jobless claims hovering at multi-year lows with a recent reading of 210k, and the
domestic saving rates elevated as the US personal savings rate as a percentage of disposable income is currently at 8.1%.
Additionally, the reduction in interest rates is providing a positive catalyst for the more cyclical sectors of the economy,
with the housing market improving as both new and existing home sales have seen an uptick in volume with the
contraction in mortgage rates. Given the lack of visibility globally, business investment remains soft, but the lower cost
of capital linked to the reduction in interest rates should ultimately lead to an uptick in capital spending. The Chandler
team continues to look for modest incremental progress on the US/China trade negotiations to help sustain economic
growth. The key issue for a more comprehensive deal remains intellectual property reform in China. In our view President
Trump’s administration will become more motivated to make progress on US/China trade as the Democratic field for the
Presidential nomination narrows; the probability of President Trump hitting the campaign trail with little progress on
US/China trade is low. The fixed income markets are forecasted to remain volatile but given our internal view the domestic
economy is not on the precipice of a recession, the relative performance of the portfolio compared to the benchmark
should improve as the economic expansion is sustained.
6
Strategy
Strategy highlights for the Long-Term Portfolio in coming months:
• Continue to focus on optimizing the underlying mix of securities held in the Corporate sector allocation.
o Focus on adding attractively valued foreign bank names that meet the requirements of the investment
policy and California Government Code.
o Continue to seek out exposure to entities with steeper credit curves to maintain the overall corporate
duration of the portfolio at a greater level than the benchmark.
• Increase the diversification of the Asset Backed holdings via greater utilization of the new issue calendar.
• Within the Agency allocation, bias the portfolio more towards the Federal Home Loan Bank where valuations are
more attractive compared to Fannie Mae and Freddie Mac.
• The portfolio will continue to be biased towards a barbell structure, relative to the benchmark, given the
Chandler team’s outlook for interest rates over the coming six months.
Strategy highlights for the Liquidity Portfolio in coming months:
• Continue to ladder the Treasury and Agency exposure to coincide with forecasted liquidity needs.
• Opportunistically add Corporate, Negotiable CD and Commercial Paper exposure to the portfolio where the
additional spread compensation versus like maturity Treasury notes is attractive.
• Maintain a dedicated exposure to the Treasury sector on an ongoing basis to ensure ample liquidity in the
portfolio for unexpected cash flow needs.
7
Compliance Issues
Category Standard Comment
Treasury Issues 5 years maxmaturity; Minimum allocation of 10%Complies*
U.S. Agencies 20% max issuer; 5 years max maturity Complies
Supranational "AA" rated or better by a NRSRO; 30% maximum; 5 years max maturity; USD denominated senior unsecured
unsubordinated obligations issued or unconditionally guaranteed by IBRD, IFC, or IADB Complies
Corporate (MTNs)"A" rated or better long term debt by a NRSRO; 30% maximum; 5% max issuer; 5 years max maturity; Issued by corporations organized and operating within the U.S. or issued by depository institutions licensed by the U.S.Complies
Municipal Securities "A" rated or higher by a NRSRO; 10% maximum; 5% max issuer; 5 years max maturity Complies
Asset Backed/ CMOs/ Mortgage-backed "AA" rated or better by a NRSRO; "A" or higher issuer rating by a NRSRO; 20% maximum; 5% max issuer (excluding
govt agency/mbs); 5 years max maturity Complies*
Negotiable CDs "A" rated or better long term debt by a NRSRO; or "A-1"/ highest short term rating by a NRSRO; 30% maximum; 5% max issuer; 5 years max maturity Complies
Certificates of Deposit 5% max issuer; 5 years max maturity; Secured/ collateralized Complies
Banker’s Acceptances A-1 rated or equivalent short term rating by a NRSRO; 40% maximum; 5% max issuer; 180 days max maturity Complies
Commercial Paper
A-1 rated or equivalent short term rating by a NRSRO; "A" or better long term debt issuer by a NRSRO; Issued by a
domestic corporation organized and operating in the US with AUM > $500million; 25% maximum; 5% max issuer;
270 days max maturity
Complies
Mutual Fund & Money Market Mutual
Fund
Highest rating or "AAA" rated by two NRSROs; SEC registered adviser with AUM >$500 million and experience greater
than 5 years; 10% per one Mutual Fund; 20% max per issuer on Money Market Mutual Funds; 20% max of the
District's surplus money
Complies
Repurchase Agreements 102% collateralization Complies
Reverse Repurchase Agreements 5% maximum, 90 days max maturity Complies
LAIF Not used by investment adviser Complies
OCIP Not used by investment adviser Complies
Avg Duration Not to exceed 60 months - (80% to 120% of the benchmark)Complies
Max Per Issuer 5% of portfolio (except Supranationals, U.S. Government, Agencies, Mutual Fund)Complies
Maximum Maturity 5 years maximum maturity Complies*
Orange County Sanitation District Long Term
Assets managed by Chandler Asset Management are in full compliance with state law and with the investment policy
*The portfolio has twenty (20) securities with maturities greater than 5 years including four (4) CMOs and sixteen (16) MBS. All securities were inherited from the previous manager and complied at time
of purchase.
8
Category Standard Comment
Treasury Issues 1 year max maturity; Minimum allocation of 10%Complies
U.S. Agencies 20% max issuer; 1 year max maturity Complies
Supranational "AA" rated or better by a NRSRO; 30% maximum; 1 year max maturity; USD denominated senior unsecured
unsubordinated obligations issued or unconditionally guaranteed by IBRD, IFC, or IADB Complies
Corporate (MTNs)"A" rated or better long term debt by a NRSRO; 30% maximum; 5% max issuer; 1 year max maturity; Issued by corporations organized and operating within the U.S. or issued by depository institutions licensed by the U.S.Complies
Asset Backed/ CMOs "AA" rated or better by a NRSRO; "A" or higher issuer rating by a NRSRO; 20% maximum; 5% max issuer; 1 year max maturity Complies
Negotiable CDs "A" rated or better long term debt by a NRSRO; or "A-1"/ highest short term rating by a NRSRO; 30% maximum; 5% max issuer; 1 year max maturity Complies
Certificates of Deposit 5% max issuer; 1 year max maturity; Secured/collateralized Complies
Banker’s Acceptances A-1 rated or equivalent short term rating by a NRSRO; 40% maximum; 5% max issuer; 180 days max maturity Complies
Commercial Paper A-1 rated or equivalent short term rating by a NRSRO; "A" or better long term debt issuer by a NRSRO; Issued by a domestic corporation organized and operating in the US with AUM > $500million; 25% maximum; 5% max issuer;
270 days max maturity
Complies
Mutual Fund & Money Market Mutual
Fund
Highest rating or "AAA" rated by two NRSROs; SEC registered adviser with AUM >$500 million and experience greater
than 5 years; 10% per one Mutual Fund; 20% max per issuer on Money Market Mutual Funds; 20% max of the District's surplus money Complies
Repurchase Agreements 102% collateralization Complies
Reverse Repurchase Agreements 5% maximum, 90 days max maturity Complies
LAIF Not used by investment adviser Complies
OCIP Not used by investment adviser Complies
Prohibited Municipal Securities Complies
Prohibited Mortgage Securities Complies
Avg Duration Not to exceed 180 days; Max duration of 1/2 year Complies
Max Per Issuer 5% of portfolio (except Supranationals, U.S. Government, Agencies, Mutual Fund)Complies
Maximum Maturity 1 year maximum maturity Complies
Orange County Sanitation District Liquid
Assets managed by Chandler Asset Management are in full compliance with state law and with the investment policy
9
Category Standard Comment
Treasury Issues 5 years maximum maturity Complies
Supranational "AA" or better by 1 of 3 NRSROs; 30% maximum; 5% max; 5 years maturity; Includes only: IADB, IBRD, and IFC per
CGC Complies
U.S. Agencies 20% max issuer; 5 years maximum maturity Complies
U.S. Corporate (MTNs)"A" or better long term rating by 1 of 3 NRSROs; 30% maximum; 5% max issuer; 5 years max maturity Complies*
Municipal Securities "A" or higher by 1 of 3 NRSROS; 10% maximum; 5% max issuer; 5 years maximum maturity Complies
Asset Backed/ CMOs/ Mortgage-backed "AA" or better by 1 of 3 NRSROs; "A" or higher issuer rating by 1 of 3 NRSROs; 20% maximum; 5% max issuer
(excluding MBS/govt agency); 5 years max maturity Complies
Negotiable CDs "A" or better on its long term debt by 1 of 3 NRSROs ; "A1/P1" or highest short term ratings by 1 of 3 NRSROs; 30%
maximum; 5% max issuer; 5 years max maturity Complies
CDs/ TDS 5% max issuer; 5 years max maturity Complies
Banker’s Acceptances A-1, or equivalent highest short term rating by 1 of 3 NRSROS; 40% maximum; 5% max issuer; 180 days max maturity Complies
Commercial Paper A-1, or equivalent by 1 of 3 NRSROS; "A" or better by 1 of 3 NRSROs, if long term debt issued; 25% maximum; 5% max
issuer; 270 days max maturity Complies
Money Market Fund Highest rating by 2 of 3 NRSROs; 20% maximum; 10% max issuer Complies
Repurchase Agreements 102% collateralization Complies
Reverse Repurchase Agreements 5% maximum, 90 days max maturity Complies
LAIF Not used by investment adviser Complies
Avg Duration Not to exceed 60 months - (80% to 120% of the benchmark)Complies
Maximum Maturity 5 years maximum maturity Complies
OCSD Lehman Exposure
Assets managed by Chandler Asset Management are in full compliance with state law and with the investment policy
* Account holds $2 million face value (cusip 525ESC0Y6) and $600,000 face value (cusip 525ESC1B7) of defaulted Lehman Bros Holdings that were purchased by the previous manager. Complied at
time of purchase.
10
Defaulted Bonds
OCSD Lehman Exposure -Account #10284
CUSIP Security Description Par Value/Units Purchase Date Book Yield Cost ValueBook Value Mkt Price Mkt YTM Market Value Accrued Int.% of Port.Gain/Loss Moody/S&P Fitch Maturity Duration
Common Stock
SLHOPNTA4 Lehman Brothers, Inc Open Position Long Exposure0.000% Due 09/30/2019 60,641.49 11/21/20140.00%57,842.6457,842.64 0.42 0.00%25,621.03 0.00 41.36% (32,221.61)NR / NRNR 0.000.00
TOTAL Common Stock 60,641.49 0.00%57,842.6457,842.64 0.00%25,621.030.00 41.36%(32,221.61)NR / NRNR 0.000.00
US Corporate
525ESCIB7 Lehman Brothers Note-Defaulted0.000% Due 01/24/2020 600,000.00 09/19/20080.00%320,227.27320,227.27 1.42 0.00%8,520.00 0.00 13.76% (311,707.27)NR / NRNR 0.320.00
525ESC0Y6 Lehman Brothers Note-Defaulted0.000% Due 10/22/2049 2,000,000.00 09/18/20080.00%1,031,998.651,031,998.65 1.39 0.00%27,800.00 0.00 44.88% (1,004,198.65)NR / NRNR 30.080.00
TOTAL US Corporate 2,600,000.00 0.00%1,352,225.92
1,352,225.92 0.00%
36,320.00
0.00
58.64%
(1,315,905.92)
NR / NR
NR
23.10
0.00
TOTAL PORTFOLIO 2,660,641.49 0.00%1,410,068.561,410,068.56 0.00%61,941.030.00 100.00%(1,348,127.53)NR / NRNR 13.550.00
TOTAL MARKET VALUE PLUS ACCRUALS 61,941.03
11
Ratings
AAA AA A <A NR
09/30/19 8.9%66.5%16.9%0.5%7.2%
06/30/19 9.7%65.2%16.5%0.5%8.1%
Source: S&P Ratings
September 30, 2019 vs. June 30, 2019
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
AAA AA A <A NR
9/30/2019 6/30/2019
Orange County Sanitation District Long Term
AAA AA A <A NR
09/30/19 24.0%59.0%17.0%0.0%0.0%
06/30/19 13.0%78.4%8.6%0.0%0.0%
Source: S&P Ratings
September 30, 2019 vs. June 30, 2019
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
AAA AA A <A NR
9/30/2019 6/30/2019
Orange County Sanitation District Liquid
12
HISTORICAL YIELD CURVE
$-
$100,000,000
$200,000,000
$300,000,000
$400,000,000
$500,000,000
$600,000,000
OCSD Investment Program
Quarter End Portfolio Value
Liquid Operating Monies
Long-Term Operating Monies
0.00%
1.00%
2.00%
3.00%
4.00%
SEP 2019
AUG 2019
SEP 2018
ACCOUNT SUMMARY
Beg. Values
as of 8/31/19
End Values
as of 9/30/19
Market Value 92,692,564 67,964,485
Accrued Interest 360,101 254,745
Total Market Value 93,052,665 68,219,230
Income Earned 186,163 184,656
Cont/WD -25,000,000
Par 92,775,197 68,050,213
Book Value 92,619,041 67,909,224
Cost Value 92,385,249 67,777,379
TOP ISSUERS
Government of United States 69.2%
HSBC Holdings PLC 3.7%
Bank of Nova Scotia Houston 3.4%
General Dynamics Corp 3.0%
Bank of America Corp 3.0%
Qualcomm Inc 3.0%
Toyota Motor Corp 2.9%
MUFG Bank Ltd/NY 2.7%
Total 90.8%
PORTFOLIO CHARACTERISTICS
Average Modified Duration 0.30
Average Coupon 1.88%
Average Purchase YTM 2.26%
Average Market YTM 2.01%
Average S&P/Moody Rating AA+/Aa1
Average Final Maturity 0.31 yrs
Average Life 0.25 yrs
CREDIT QUALITY (S&P)MATURITY DISTRIBUTIONSECTOR ALLOCATION
Portfolio Summary
As of September 30, 2019
Orange County Sanitation District Liquid
Account #10282
PERFORMANCE REVIEW
Annualized
TOTAL RATE OF RETURN 1M 3M YTD 1YR 2YRS 3YRS 5YRS 10YRS 11/30/2014
Orange County Sanitation District Liquid 0.18% 0.59% 1.92% 2.50% 2.06% 1.61% N/A N/A 1.12%
ICE BAML 3-Month US Treasury Bill Index 0.17% 0.56% 1.81% 2.39% 1.99% 1.54% N/A N/A 1.02%
Execution Time: 10/1/2019 10:19:10 PMChandler Asset Management - CONFIDENTIAL Page 1
ACCOUNT SUMMARY
Beg. Values
as of 8/31/19
End Values
as of 9/30/19
Market Value 561,436,498 545,604,957
Accrued Interest 2,598,094 2,507,363
Total Market Value 564,034,592 548,112,320
Income Earned 1,084,220 1,079,547
Cont/WD -14,981,899
Par 550,933,428 536,717,789
Book Value 550,299,112 536,487,490
Cost Value 549,567,055 535,563,737
TOP ISSUERS
Government of United States 30.4%
Federal Home Loan Bank 10.2%
Federal National Mortgage Assoc 9.1%
Federal Home Loan Mortgage Corp 5.9%
Inter-American Dev Bank 3.2%
Honda ABS 3.0%
John Deere ABS 2.5%
MUFG Bank Ltd/NY 2.0%
Total 66.3%
PORTFOLIO CHARACTERISTICS
Average Modified Duration 2.46
Average Coupon 2.29%
Average Purchase YTM 2.36%
Average Market YTM 1.79%
Average S&P/Moody Rating AA/Aa1
Average Final Maturity 2.82 yrs
Average Life 2.58 yrs
CREDIT QUALITY (S&P)MATURITY DISTRIBUTIONSECTOR ALLOCATION
Portfolio Summary
As of September 30, 2019
Orange County Sanitation District Long Term
Account #10268
PERFORMANCE REVIEW
Annualized
TOTAL RATE OF RETURN 1M 3M YTD 1YR 2YRS 3YRS 5YRS 10YRS 11/30/2014
Orange County Sanitation District Long Term -0.17% 0.88% 4.14% 5.52% 2.69% 1.97% N/A N/A 1.84%
ICE BAML 1-5 Yr US Corp/Govt Rated AAA-A Index -0.20% 0.82% 4.15% 5.79% 2.65% 1.85% N/A N/A 1.79%
ICE BAML US 1-5 Yr US Corp/Govt Rated AAA-BBB Indx -0.16% 0.90% 4.52% 6.02% 2.80% 2.04% N/A N/A 1.95%
Execution Time: 10/1/2019 10:11:28 PMChandler Asset Management - CONFIDENTIAL Page 1
Par Value Book Value Market Value Rate Yield
Balance
September 1, 2019 $45,865,396 $45,865,396 $45,865,396 2.28 2.28
Deposits:
9/30/2019 39,900,000 39,900,000 39,900,000 2.28 2.28
Total Deposits 39,900,000 39,900,000 39,900,000 2.28 2.28
Quarterly
Interest
Distribution - - - 2.28 2.28
Withdrawals:
9/3/2019 (8,100,000) (8,100,000) (8,100,000) 2.28 2.28
9/9/2019 (2,300,000) (2,300,000) (2,300,000) 2.28 2.28
9/10/2019 (1,700,000) (1,700,000) (1,700,000) 2.28 2.28
9/13/2019 (500,000) (500,000) (500,000) 2.28 2.28
9/18/2019 (4,700,000) (4,700,000) (4,700,000) 2.28 2.28
9/24/2019 (3,600,000) (3,600,000) (3,600,000) 2.28 2.28
9/25/2019 (3,600,000) (3,600,000) (3,600,000) 2.28 2.28
Total Withdrawals (24,500,000) (24,500,000) (24,500,000) 2.28 2.28
Balance
September 30, 2019 $61,265,396 $61,265,396 $61,265,396 2.28 2.28
Orange County Sanitation District
Investment Transactions and Balances in the
State of California Local Agency Investment Fund
September 30, 2019
U.S. Bank
Asset Summary - Liquid
As of 09/30/2019
Industry Name Shares/Units Cost Basis Market Value Percent of Total Unrealized Gain/Loss
Cash Equivalents
COMMERCIAL PAPER 3,860,000.0000 3,811,916.91 3,842,880.80 5.65 30,963.89
FIRST AMERICAN SHORT TERM FDS 1,740,212.5600 1,740,212.56 1,740,212.56 2.56 -
U. S. GOVERNMENT 11,150,000.0000 11,095,680.14 11,106,741.50 16.34 11,061.36
Cash Equivalents Total 16,750,212.5600 16,647,809.61 16,689,834.86 24.55 42,025.25
Fixed Income
FINANCE 7,500,000.0000 7,484,210.00 7,505,520.00 11.04 21,310.00
INDUSTRIAL 2,000,000.0000 2,011,340.00 2,010,420.00 2.96 (920.00)
INFORMATION TECHNOLOGY 2,000,000.0000 2,002,700.00 2,000,840.00 2.94 (1,860.00)
SHORT TERM FUNDS 3,800,000.0000 3,803,917.20 3,803,274.00 5.60 (643.20)
U. S. GOVERNMENT 36,000,000.0000 35,827,402.35 35,963,370.00 52.91 135,967.65
Fixed Income Total 51,300,000.0000 51,129,569.55 51,283,424.00 75.45 153,854.45
Grand Total 68,050,212.5600 67,777,379.16 67,973,258.86 100.00 195,879.70
1 of 1
U.S. Bank
Asset Summary - Long-Term
As of 09/30/2019
Industry Name Shares/Units Cost Basis Market Value Percent of Total Unrealized Gain/Loss
Cash Equivalents
COMMERCIAL PAPER 11,255,000.0000 11,194,685.71 11,224,386.40 2.06 29,700.69
FIRST AMERICAN SHORT TERM FDS 3,794,924.7000 3,794,924.70 3,794,924.70 0.70 -
Cash Equivalents Total 15,049,924.7000 14,989,610.41 15,019,311.10 2.75 29,700.69
Fixed Income
CONSUMER DISCRETIONARY 4,064,000.0000 4,055,701.78 4,236,379.07 0.78 180,677.29
CONSUMER STAPLES 3,880,000.0000 3,878,991.40 4,084,282.00 0.75 205,290.60
ENERGY 9,000,000.0000 8,942,542.40 9,174,330.00 1.68 231,787.60
FINANCE 66,494,000.0000 65,657,463.39 65,614,038.26 12.03 (43,425.13)
FOREIGN CORPORATE 19,000,000.0000 19,106,195.00 19,449,335.00 3.56 343,140.00
HEALTH CARE 2,000,000.0000 1,948,640.00 2,059,160.00 0.38 110,520.00
INDUSTRIAL 4,410,000.0000 4,388,275.50 4,547,081.60 0.83 158,806.10
INFORMATION TECHNOLOGY 28,715,000.0000 28,626,584.95 29,190,193.75 5.35 563,608.80
INVESTMENT GRADE-MUNI REVENUE 4,240,000.0000 4,307,633.89 4,302,946.00 0.79 (4,687.89)
MTG RELATED SECURITY 49,241,351.0500 49,185,445.13 49,626,842.36 9.10 441,397.23
SUPRANATIONAL 33,005,000.0000 32,742,600.25 33,126,886.15 6.07 384,285.90
U. S. GOVERNMENT 153,006,521.3900 151,173,978.03 154,654,079.46 28.35 3,480,101.43
U.S. GOVERNMENT TIPS 11,236,992.0000 11,092,272.09 11,222,945.76 2.06 130,673.67
US AGY - LONG TERM ISSUES 135,975,000.0000 136,788,232.45 139,283,961.25 25.53 2,495,728.80
Fixed Income Total 524,267,864.4400 521,894,556.26 530,572,460.66 97.25 8,677,904.40
Grand Total 539,317,789.1400 536,884,166.67 545,591,771.76 100.00 8,707,605.09
1 of 1
The Bank of New York Mellon may utilize subsidiaries and affiliates to provide services and certain products to the Account. Subsidiaries and affiliates may be compensated for their services and products.
The value of securities set forth on this Account Statement are determined by The Bank of New York Mellon for Corporate Trust on the basis of market prices and information obtained by The Bank of New York Mellon from
unaffiliated third parties (including independent pricing vendors) ("third party pricing services"). The Bank of New York Mellon has not verified such market values or information and makes no assurances as to the accuracy or
correctness of such market values or information or that the market values set forth on this Account Statement reflect the value of the securities that can be realized upon the sale of such securities. In addition, the market values
for securities set forth in this Account Statement may differ from the market prices and information for the same securities used by other business units of The Bank of New York Mellon or its subsidiaries or affiliates based upon
market prices and information received from other third party pricing services utilized by such other business units. Corporate Trust does not compare its market values with those used by, or reconcile different market values
used by, other business units of The Bank of New York Mellon or its subsidiaries or its affiliates. The Bank of New York Mellon shall not be liable for any loss, damage or expense incurred as a result of or arising from or
related to the market values or information provided by third party pricing services or the differences in market prices or information provided by other third party pricing services.
No Transactions This Period
Accrued Estimated Market
Shares/Par Value Asset Description Market Price Market Value Cost Average Cost Income Income Yield
Realized
Transaction Date Transaction Description Income Principal Cost Gains/Losses
Statement Period 09/01/2019 Through 09/30/2019
Statement of Assets Held by Asset Classification
Statement of Transactions by Transaction Date
Account 300282 Base Currency = USD
OCSD LIBERTY MUTUAL
3,681,000.000 UNITED STATES TREASURY BILL 99.07000 3,646,766.70 3,599,335.48 97.78146 0.00 0.00 0.00%
CUSIP: 912796SH3
MATURITY DATE: 03/26/2020
RATE: 0.000%
CASH BALANCE 2,595.51 2,595.51 0.00000 0.00 0.00 0.00%
Total Market Value Plus Total Accrued Income 3,649,362.21
Cumulative realized capital gain and loss position from 12/31/2018 for securities held in principal of account:
Short Term: 46,968.75 * Long Term: 0.00 *
* The above gain and loss position does not include transactions where tax cost information is incomplete or unavailable.
CASH AND SHORT TERM
Total CASH AND SHORT TERM 3,649,362.21 3,601,930.99 0.00 0.00 0.00%
ACCOUNT TOTALS 3,649,362.21 3,601,930.99 0.00 0.00 0.00%
e
0
9
4
8
1
1
n
0
7
7
2
4
0
a
0
1
t
D
O
M
i
W
I
s
2
6
4
,
6
3
3
U.S. Bank
Investment Listing - Yield
As of 09/30/2019
Asset Category CUSIP Asset Short Name Yield Shares/Units Moody's S&P Rating Price Cost Basis Market Value
Cash Equivalents 31846V567 FIRST AM GOVT OB FD CL Z 1.7005% 1,740,212.5600 1.00 1,740,212.56 1,740,212.56
Cash Equivalents 31846V567 FIRST AM GOVT OB FD CL Z 1.7005% 3,794,924.7000 1.00 3,794,924.70 3,794,924.70
Cash Equivalents 62479MYK3 MUFG BANK LTD NY BRAN C P 11/19/19 0.0000% 1,860,000.0000 99.73 1,850,032.47 1,854,940.80
Cash Equivalents 62479MYK3 MUFG BANK LTD NY BRAN C P 11/19/19 0.0000% 11,255,000.0000 99.73 11,194,685.71 11,224,386.40
Cash Equivalents 89233GAH9 TOYOTA MOTOR CREDIT CO C P 1/17/20 0.0000% 2,000,000.0000 99.40 1,961,884.44 1,987,940.00
Cash Equivalents 912796RY7 U S TREASURY BILL 1/30/20 1.7844% 7,000,000.0000 N/A N/A 99.40 6,950,415.19 6,958,140.00
Cash Equivalents 912796SL4 U S TREASURY BILL 10/03/19 1.6251% 1,650,000.0000 N/A N/A 99.99 1,646,687.63 1,649,851.50
Cash Equivalents 912796VY2 U S TREASURY BILL 10/08/19 1.7181% 1,250,000.0000 N/A N/A 99.97 1,249,517.42 1,249,575.00
Cash Equivalents 912796VZ9 U S TREASURY BILL 10/15/19 1.7074% 1,250,000.0000 N/A N/A 99.93 1,249,059.90 1,249,175.00
Fixed Income 00440EAP2 ACE INA HOLDINGS 2.700% 3/13/23 2.6422% 2,000,000.0000 A3 A 102.19 1,937,000.00 2,043,720.00
Fixed Income 00440EAU1 ACE INA HOLDINGS 2.875% 11/03/22 2.8048% 4,169,000.0000 A3 A 102.50 4,232,453.17 4,273,391.76
Fixed Income 02587AAJ3 AMERICAN EXPRESS 1.930% 9/15/22 1.9315% 6,270,000.0000 AAA N/A 99.92 6,174,085.15 6,265,046.70
Fixed Income 02665WCZ2 AMERICAN HONDA MTN 2.400% 6/27/24 2.3744% 1,219,000.0000 A2 A 101.08 1,213,843.63 1,232,140.82
Fixed Income 02665WCJ8 AMERICAN HONDA MTN 3.450% 7/14/23 3.2893% 845,000.0000 A2 A 104.89 843,538.15 886,278.25
Fixed Income 02665WCQ AMERICAN HONDA MTN 3.625% 10/10/23 3.4231% 2,000,000.0000 A2 A 105.90 1,998,320.00 2,117,960.00
Fixed Income 03215PFN4 AMRESCO 2.95841% 6/25/29 3.0451% 123,127.8500 N/A A+ 97.15 92,461.32 119,621.17
Fixed Income 037833BS8 APPLE INC 2.250% 2/23/21 2.2398% 4,000,000.0000 AA1 AA+ 100.46 4,050,840.00 4,018,200.00
Fixed Income 037833CU2 APPLE INC 2.850% 5/11/24 2.7470% 3,000,000.0000 AA1 AA+ 103.75 3,017,760.00 3,112,470.00
Fixed Income 06051GHF9 BANK OF AMERICA 3.550% 3/05/24 3.4159% 6,675,000.0000 A2 A- 103.93 6,770,625.75 6,937,060.50
Fixed Income 06051GFN4 BANK OF AMERICA MTN 2.250% 4/21/20 2.2476% 2,000,000.0000 A2 A- 100.11 2,001,960.00 2,002,140.00
Fixed Income 06417G5Q7 BANK OF NOVA C D 2.610% 12/23/19 2.6071% 2,300,000.0000 100.11 2,300,614.40 2,302,599.00
Fixed Income 06406HCZ0 BANK OF NY MELLO MTN 2.150% 2/24/20 2.1494% 1,500,000.0000 A1 A 100.03 1,493,925.00 1,500,390.00
Fixed Income 06406RAA5 BANK OF NY MTN 2.600% 2/07/22 2.5638% 2,500,000.0000 A1 A 101.41 2,504,475.00 2,535,250.00
Fixed Income 06406RAE7 BANK OF NY MTN 2.950% 1/29/23 2.8726% 2,500,000.0000 A1 A 102.70 2,489,555.00 2,567,400.00
Fixed Income 084670BR8 BERKSHIRE HATHAWAY 2.750% 3/15/23 2.6826% 2,500,000.0000 AA2 AA 102.51 2,440,950.00 2,562,825.00
Fixed Income 084664BT7 BERKSHIRE HATHAWAY 3.000% 5/15/22 2.9154% 4,000,000.0000 AA2 AA 102.90 4,131,120.00 4,116,040.00
Fixed Income 09247XAL5 BLACKROCK INC 3.500% 3/18/24 3.2777% 1,000,000.0000 AA3 AA- 106.78 1,036,330.00 1,067,820.00
Fixed Income 808513AT2 CHARLES SCHWAB CORP 2.650% 1/25/23 2.6031% 6,750,000.0000 A2 A 101.80 6,729,480.00 6,871,635.00
Fixed Income 166764BG4 CHEVRON CORP 2.100% 5/16/21 2.0919% 2,500,000.0000 AA2 AA 100.39 2,485,350.00 2,509,650.00
Fixed Income 166764AH3 CHEVRON CORP 3.191% 6/24/23 3.0607% 3,500,000.0000 AA2 AA 104.26 3,441,095.00 3,648,960.00
Fixed Income 30231GAV4 EXXON MOBIL 2.222% 3/01/21 2.2104% 3,000,000.0000 AAA AA+ 100.52 3,016,097.40 3,015,720.00
Fixed Income 3133EKWV4 F F C B DEB 1.850% 7/26/24 1.8304% 5,000,000.0000 AAA AA+ 101.07 5,048,280.00 5,053,600.00
Fixed Income 3130A1XJ2 F H L B 2.875% 6/14/24 2.7230% 11,110,000.0000 AAA AA+ 105.58 11,589,031.30 11,730,160.20
Fixed Income 3130A7CV5 F H L B DEB 1.375% 2/18/21 1.3822% 5,365,000.0000 AAA AA+ 99.48 5,343,325.40 5,336,941.05
Fixed Income 313383HU8 F H L B DEB 1.750% 6/12/20 1.7512% 5,000,000.0000 AAA AA+ 99.93 5,008,950.00 4,996,450.00
Fixed Income 313379RB7 F H L B DEB 1.875% 6/11/21 1.8708% 4,000,000.0000 AAA AA+ 100.22 4,030,160.00 4,008,880.00
Fixed Income 3130A2UW4 F H L B DEB 2.875% 9/13/24 2.7194% 2,500,000.0000 AAA AA+ 105.72 2,635,950.00 2,643,025.00
1 of 5
U.S. Bank
Investment Listing - Yield
As of 09/30/2019
Asset Category CUSIP Asset Short Name Yield Shares/Units Moody's S&P Rating Price Cost Basis Market Value
Fixed Income 313383QR5 F H L B DEB 3.250% 6/09/23 3.0775% 5,000,000.0000 AAA AA+ 105.61 5,083,350.00 5,280,250.00
Fixed Income 313383YJ4 F H L B DEB 3.375% 9/08/23 3.1664% 10,000,000.0000 AAA AA+ 106.59 10,211,831.00 10,658,700.00
Fixed Income 3130A0F70 F H L B DEB 3.375% 12/08/23 3.1544% 10,000,000.0000 AAA AA+ 106.99 10,269,043.75 10,699,200.00
Fixed Income 3137EAEN5 F H L M C 2.750% 6/19/23 2.6431% 10,000,000.0000 AAA AA+ 104.04 9,956,500.00 10,404,300.00
Fixed Income 3137EADM8 F H L M C M T N 1.250% 10/02/19 1.2500% 7,500,000.0000 WR N/R 100.00 7,399,650.00 7,499,775.00
Fixed Income 3137EAEK1 F H L M C M T N 1.875% 11/17/20 1.8731% 5,000,000.0000 AAA AA+ 100.10 4,986,225.00 5,005,150.00
Fixed Income 3137EAEL9 F H L M C M T N 2.375% 2/16/21 2.3559% 7,500,000.0000 AAA AA+ 100.81 7,484,475.00 7,560,675.00
Fixed Income 31348SWZ3 F H L M C #786064 4.678% 1/01/28 4.5658% 1,845.5200 N/A N/A 102.46 1,800.58 1,890.88
Fixed Income 3133TCE95 F H L M C MLTCL MTG 4.016% 8/15/32 4.0007% 7,928.5000 N/A N/A 100.38 7,936.80 7,958.79
Fixed Income 31398VJ98 F H L M C MLTCL MTG 4.251% 1/25/20 4.2441% 659,054.7400 N/A N/A 100.16 696,435.51 660,129.00
Fixed Income 31394JY35 F H L M C MLTCL MTG 6.500% 9/25/43 5.7059% 686,785.6800 N/A N/A 113.92 777,784.78 782,372.51
Fixed Income 3135G0F73 F N M A 1.500% 11/30/20 1.5053% 7,500,000.0000 AAA AA+ 99.65 7,370,726.00 7,473,450.00
Fixed Income 3135G0T45 F N M A 1.875% 4/05/22 1.8623% 5,000,000.0000 AAA AA+ 100.68 4,972,500.00 5,034,050.00
Fixed Income 3135G0S38 F N M A 2.000% 1/05/22 1.9858% 3,000,000.0000 AAA AA+ 100.72 2,994,570.00 3,021,480.00
Fixed Income 3135G0V34 F N M A 2.500% 2/05/24 2.4092% 5,000,000.0000 AAA AA+ 103.77 4,980,850.00 5,188,500.00
Fixed Income 3135G0U35 F N M A 2.750% 6/22/21 2.7021% 7,500,000.0000 AAA AA+ 101.77 7,515,225.00 7,632,975.00
Fixed Income 31371NUC7 F N M A #257179 4.500% 4/01/28 4.2658% 14,717.5300 N/A N/A 105.49 15,565.23 15,525.38
Fixed Income 31376KT22 F N M A #357969 5.000% 9/01/35 4.5262% 98,885.2800 N/A N/A 110.47 106,301.67 109,237.58
Fixed Income 31381PDA3 F N M A #466397 3.400% 11/01/20 3.3735% 337,358.0300 N/A N/A 100.79 330,057.41 340,009.66
Fixed Income 31403DJZ3 F N M A #745580 5.000% 6/01/36 4.5274% 92,510.2700 N/A N/A 110.44 99,448.54 102,166.49
Fixed Income 31403GXF4 F N M A #748678 5.000% 10/01/33 4.5758% 1,781.1400 N/A N/A 109.27 1,914.73 1,946.25
Fixed Income 31406PQY8 F N M A #815971 5.000% 3/01/35 4.5317% 157,142.7900 N/A N/A 110.34 168,928.51 173,383.50
Fixed Income 31406XWT5 F N M A #823358 4.722% 2/01/35 4.5121% 109,269.4000 N/A N/A 104.65 108,415.73 114,353.71
Fixed Income 31407BXH7 F N M A #826080 5.000% 7/01/35 4.5270% 18,677.2900 N/A N/A 110.45 20,078.08 20,628.69
Fixed Income 31410F4V4 F N M A #888336 5.000% 7/01/36 4.5284% 180,164.2100 N/A N/A 110.42 193,676.52 198,928.31
Fixed Income 3138EG6F6 F N M A #AL0869 4.500% 6/01/29 4.2238% 10,044.9200 N/A N/A 106.54 10,623.50 10,701.76
Fixed Income 31417YAY3 F N M A #MA0022 4.500% 4/01/29 4.2238% 16,436.7800 N/A N/A 106.54 17,383.51 17,511.75
Fixed Income 3135G0J20 F N M A DEB 1.375% 2/26/21 1.3825% 10,000,000.0000 AAA AA+ 99.46 10,040,950.00 9,946,100.00
Fixed Income 3135G0D75 F N M A DEB 1.500% 6/22/20 1.5042% 5,000,000.0000 AAA AA+ 99.72 4,955,650.00 4,986,050.00
Fixed Income 3135G0T94 F N M A DEB 2.375% 1/19/23 2.3174% 5,000,000.0000 AAA AA+ 102.49 4,910,990.00 5,124,250.00
Fixed Income 31397QRE0 F N M A GTD REMIC 2.825% 2/25/41 2.6683% 186,495.6800 N/A N/A 101.13 186,437.40 188,597.49
Fixed Income 36225CAZ9 G N M A I I #080023 4.125% 12/20/26 4.0045% 15,348.4000 N/A N/A 103.01 15,601.96 15,810.08
Fixed Income 36225CC20 G N M A I I #080088 3.875% 6/20/27 3.8369% 15,097.0500 N/A N/A 100.99 15,427.31 15,246.96
Fixed Income 36225CNM4 G N M A I I #080395 3.875% 4/20/30 3.7330% 6,521.3900 N/A N/A 103.80 6,462.26 6,769.46
Fixed Income 36225CN28 G N M A I I #080408 3.875% 5/20/30 3.7329% 49,754.7600 N/A N/A 103.81 49,249.44 51,648.92
Fixed Income 36225DCB8 G N M A I I #080965 3.750% 7/20/34 3.5940% 45,340.4700 N/A N/A 104.34 45,312.14 47,308.70
Fixed Income 369550BA5 GENERAL DYNAMICS 2.875% 5/11/20 2.8601% 2,000,000.0000 A2 A+ 100.52 2,011,340.00 2,010,420.00
2 of 5
U.S. Bank
Investment Listing - Yield
As of 09/30/2019
Asset Category CUSIP Asset Short Name Yield Shares/Units Moody's S&P Rating Price Cost Basis Market Value
Fixed Income 369550BE7 GENERAL DYNAMICS 3.000% 5/11/21 2.9484% 3,160,000.0000 A2 A+ 101.75 3,138,038.00 3,215,331.60
Fixed Income 43814RAC0 HONDA AUTO 1.210% 12/18/20 1.2123% 563,719.9400 N/A AAA 99.81 557,532.23 562,648.87
Fixed Income 43814PAC4 HONDA AUTO 1.790% 9/20/21 1.7915% 2,115,225.6000 N/A AAA 99.92 2,081,679.44 2,113,448.81
Fixed Income 43815NAB0 HONDA AUTO 1.900% 4/15/22 1.9019% 3,530,000.0000 AAA AAA 99.90 3,529,752.90 3,526,540.60
Fixed Income 43814WAB1 HONDA AUTO 2.750% 9/20/21 2.7386% 4,395,000.0000 N/A AAA 100.42 4,394,716.96 4,413,371.10
Fixed Income 43815HAC1 HONDA AUTO 2.950% 8/22/22 2.9163% 3,970,000.0000 AAA N/A 101.16 3,969,455.32 4,015,893.20
Fixed Income 43814UAG4 HONDA AUTO 3.010% 5/18/22 2.9802% 1,710,000.0000 N/A AAA 101.00 1,709,962.72 1,727,082.90
Fixed Income 404280BF5 HSBC HOLDINGS PLC 2.650% 1/05/22 2.6312% 4,500,000.0000 A2 A 100.72 4,429,980.00 4,532,175.00
Fixed Income 40428HPR7 HSBC USA INC MTN 2.350% 3/05/20 2.3469% 2,500,000.0000 A2 A 100.13 2,493,300.00 2,503,325.00
Fixed Income 40428HPR7 HSBC USA INC MTN 2.350% 3/05/20 2.3469% 2,500,000.0000 A2 A 100.13 2,472,287.50 2,503,325.00
Fixed Income 44932HAH6 IBM CREDIT CORP 3.000% 2/06/23 2.9163% 5,670,000.0000 A2 A 102.87 5,603,264.40 5,832,672.30
Fixed Income 458140BD1 INTEL CORP 2.875% 5/11/24 2.7665% 5,000,000.0000 A1 A+ 103.92 5,025,900.00 5,196,050.00
Fixed Income 4581X0CS5 INTER AMER BK M T N 1.875% 3/15/21 1.8722% 5,000,000.0000 AAA AAA 100.15 5,059,610.00 5,007,600.00
Fixed Income 4581X0CX4 INTER AMER DEV BK 1.625% 5/12/20 1.6281% 3,035,000.0000 AAA AAA 99.81 3,027,807.05 3,029,142.45
Fixed Income 4581X0CZ9 INTER AMER DEV BK 1.750% 9/14/22 1.7449% 6,500,000.0000 AAA AAA 100.30 6,249,655.00 6,519,175.00
Fixed Income 4581X0CW6 INTER AMER DEV BK 2.125% 1/18/22 2.1034% 3,000,000.0000 AAA N/A 101.03 2,996,310.00 3,030,810.00
Fixed Income 459058FY4 INTL BK 2.000% 1/26/22 1.9843% 10,000,000.0000 AAA N/A 100.79 10,006,350.00 10,078,900.00
Fixed Income 45950KCM0 INTL BK M T N 2.250% 1/25/21 2.2372% 2,970,000.0000 AAA AAA 100.57 2,961,268.20 2,986,958.70
Fixed Income 45950KCJ7 INTL FINANCE CORP 1.125% 7/20/21 1.1367% 2,500,000.0000 AAA AAA 98.97 2,441,600.00 2,474,300.00
Fixed Income 24422EUM9 JOHN DEERE MTN 3.650% 10/12/23 3.4259% 1,250,000.0000 A2 A 106.54 1,250,237.50 1,331,750.00
Fixed Income 47788NAD0 JOHN DEERE OWNER 1.490% 5/15/23 1.4904% 1,003,712.9300 AAA N/A 99.97 987,088.93 1,003,451.96
Fixed Income 47788BAD6 JOHN DEERE OWNER 1.820% 10/15/21 1.8228% 441,393.7800 AAA N/A 99.85 441,361.46 440,709.62
Fixed Income 477870AB5 JOHN DEERE OWNER 2.280% 5/16/22 2.2748% 2,800,000.0000 AAA N/A 100.23 2,799,989.36 2,806,440.00
Fixed Income 47788CAB8 JOHN DEERE OWNER 2.420% 10/15/20 2.4198% 180,610.3100 AAA N/A 100.01 180,243.45 180,622.95
Fixed Income 47788CAC6 JOHN DEERE OWNER 2.660% 4/18/22 2.6492% 1,340,000.0000 AAA N/A 100.41 1,339,903.65 1,345,480.60
Fixed Income 47789JAB2 JOHN DEERE OWNER 2.850% 12/15/21 2.8369% 3,265,000.0000 AAA N/A 100.46 3,264,851.12 3,280,051.65
Fixed Income 47788EAC2 JOHN DEERE OWNER 3.080% 11/15/22 3.0401% 4,630,000.0000 AAA N/A 101.31 4,629,649.05 4,690,791.90
Fixed Income 46625HRL6 JP MORGAN CHASE CO 2.700% 5/18/23 2.6554% 5,000,000.0000 A2 A- 101.68 4,821,910.00 5,084,050.00
Fixed Income 46647PAU0 JPMORGAN CHASE CO 3.797% 7/23/24 3.6002% 2,500,000.0000 A2 A- 105.47 2,632,175.00 2,636,675.00
Fixed Income 525ESC0Y6 LEHMAN BRTH HLD ESC 0.0000% 2,000,000.0000 - 1,031,998.65 -
Fixed Income 525ESCIB7 LEHMAN BRTH MTN ES 0.00001% 1/24/13 0.0007% 600,000.0000 N/A N/A 1.42 320,227.27 8,520.00
Fixed Income 58933YAF2 MERCK CO INC 2.800% 5/18/23 2.7196% 2,000,000.0000 A1 AA 102.96 1,948,640.00 2,059,160.00
Fixed Income 594918BP8 MICROSOFT CORP 1.550% 8/08/21 1.5565% 3,045,000.0000 AAA AAA 99.58 3,041,385.15 3,032,241.45
Fixed Income 61747WAL3 MORGAN STANLEY 5.500% 7/28/21 5.1832% 2,800,000.0000 A3 BBB+ 106.11 3,200,848.00 2,971,136.00
Fixed Income 64971M5E8 NEW YORK CITY NY 4.075% 11/01/20 3.9890% 1,400,000.0000 AA1 AAA 102.16 1,400,000.00 1,430,170.00
Fixed Income 65478VAD9 NISSAN AUTO 1.320% 1/15/21 1.3213% 252,050.0200 AAA N/A 99.90 250,031.65 251,800.49
Fixed Income 65478GAD2 NISSAN AUTO 1.750% 10/15/21 1.7523% 2,063,703.3300 AAA N/A 99.87 2,031,699.81 2,060,958.60
3 of 5
U.S. Bank
Investment Listing - Yield
As of 09/30/2019
Asset Category CUSIP Asset Short Name Yield Shares/Units Moody's S&P Rating Price Cost Basis Market Value
Fixed Income 65479GAD1 NISSAN AUTO 3.060% 3/15/23 3.0164% 3,560,000.0000 AAA AAA 101.45 3,559,884.66 3,611,477.60
Fixed Income 68389XBK0 ORACLE CORP 1.900% 9/15/21 1.9022% 3,000,000.0000 A1 A+ 99.88 2,892,240.00 2,996,460.00
Fixed Income 69353RFL7 PNC BANK NA 3.500% 6/08/23 3.3335% 5,000,000.0000 A2 A 105.00 4,993,318.05 5,249,800.00
Fixed Income 69353RFB9 PNC BANK NA MTN 2.625% 2/17/22 2.5890% 1,000,000.0000 A2 A 101.39 974,940.00 1,013,890.00
Fixed Income 73358WAG9 PORT AUTH NY NJ 5.309% 12/01/19 5.2805% 2,440,000.0000 AA3 AA- 100.54 2,507,633.89 2,453,176.00
Fixed Income 747525AD5 QUALCOMM INC 2.250% 5/20/20 2.2491% 2,000,000.0000 A2 A- 100.04 2,002,700.00 2,000,840.00
Fixed Income 747525AD5 QUALCOMM INC 2.250% 5/20/20 2.2491% 5,000,000.0000 A2 A- 100.04 4,995,195.40 5,002,100.00
Fixed Income 78013XZU5 ROYAL BANK OF MTN 2.550% 7/16/24 2.5159% 6,500,000.0000 A2 A 101.35 6,581,445.00 6,588,010.00
Fixed Income 83162CLJ0 S B A GTD DEV PART 6.340% 3/01/21 6.2464% 11,184.5600 N/A N/A 101.50 11,184.56 11,352.22
Fixed Income 78445JAA5 S L M A 3.8594% 4/25/23 3.8368% 13,344.8500 BAA3 B 100.59 13,290.71 13,423.58
Fixed Income 89114QCA4 TORONTO DOMINION MTN 2.650% 6/12/24 2.6010% 3,000,000.0000 AA3 A 101.89 3,000,570.00 3,056,550.00
Fixed Income 89114QC48 TORONTO MTN 3.500% 7/19/23 3.3190% 5,000,000.0000 AA1 AA- 105.45 5,094,200.00 5,272,600.00
Fixed Income 89238BAB8 TOYOTA AUTO 2.100% 10/15/20 2.1001% 683,639.4400 AAA AAA 100.00 683,569.57 683,618.93
Fixed Income 89239AAB9 TOYOTA AUTO 2.830% 10/15/21 2.8201% 3,615,000.0000 AAA AAA 100.35 3,614,671.76 3,627,652.50
Fixed Income 912828WU0 U S TREASURY I P S 0.125% 7/15/24 0.1252% 11,236,992.0000 AAA N/A 99.88 11,092,272.09 11,222,945.76
Fixed Income 912828T34 U S TREASURY NT 1.125% 9/30/21 1.1366% 7,000,000.0000 AAA N/A 98.98 6,757,914.08 6,928,390.00
Fixed Income 912828H52 U S TREASURY NT 1.250% 1/31/20 1.2528% 13,500,000.0000 AAA N/A 99.78 13,396,542.97 13,469,895.00
Fixed Income 912828T67 U S TREASURY NT 1.250% 10/31/21 1.2602% 6,000,000.0000 AAA N/A 99.19 5,813,691.98 5,951,280.00
Fixed Income 912828UL2 U S TREASURY NT 1.375% 1/31/20 1.3776% 5,000,000.0000 AAA N/A 99.81 4,988,671.88 4,990,650.00
Fixed Income 912828N89 U S TREASURY NT 1.375% 1/31/21 1.3822% 6,000,000.0000 AAA N/A 99.48 5,895,840.41 5,968,620.00
Fixed Income 912828L99 U S TREASURY NT 1.375% 10/31/20 1.3814% 10,000,000.0000 AAA N/A 99.54 9,850,311.40 9,953,900.00
Fixed Income 912828XE5 U S TREASURY NT 1.500% 5/31/20 1.5037% 5,000,000.0000 AAA N/A 99.75 4,966,423.00 4,987,700.00
Fixed Income 912828F62 U S TREASURY NT 1.500% 10/31/19 1.5007% 2,500,000.0000 AAA N/A 99.95 2,486,718.75 2,498,775.00
Fixed Income 912828G61 U S TREASURY NT 1.500% 11/30/19 1.5014% 7,500,000.0000 AAA N/A 99.91 7,449,634.50 7,493,100.00
Fixed Income 912828R69 U S TREASURY NT 1.625% 5/31/23 1.6218% 5,000,000.0000 AAA N/A 100.20 4,757,226.56 5,009,750.00
Fixed Income 912828J76 U S TREASURY NT 1.750% 3/31/22 1.7433% 5,000,000.0000 AAA N/A 100.38 4,976,383.94 5,019,150.00
Fixed Income 912828XW5 U S TREASURY NT 1.750% 6/30/22 1.7424% 5,000,000.0000 AAA N/A 100.44 4,973,454.25 5,021,900.00
Fixed Income 912828L57 U S TREASURY NT 1.750% 9/30/22 1.7414% 13,000,000.0000 AAA N/A 100.50 12,763,554.69 13,064,480.00
Fixed Income 912828U65 U S TREASURY NT 1.750% 11/30/21 1.7461% 7,000,000.0000 AAA N/A 100.22 6,900,492.20 7,015,610.00
Fixed Income 912828V72 U S TREASURY NT 1.875% 1/31/22 1.8647% 3,000,000.0000 AAA N/A 100.56 3,004,814.74 3,016,650.00
Fixed Income 912828L24 U S TREASURY NT 1.875% 8/31/22 1.8594% 6,000,000.0000 AAA N/A 100.84 5,987,832.60 6,050,400.00
Fixed Income 9128283S7 U S TREASURY NT 2.000% 1/31/20 1.9995% 15,000,000.0000 AAA N/A 100.03 14,955,468.75 15,004,050.00
Fixed Income 912828XX3 U S TREASURY NT 2.000% 6/30/24 1.9619% 5,000,000.0000 AAA N/A 101.94 5,028,710.94 5,097,050.00
Fixed Income 912828M80 U S TREASURY NT 2.000% 11/30/22 1.9752% 8,000,000.0000 AAA N/A 101.26 7,907,500.00 8,100,640.00
Fixed Income 912828W48 U S TREASURY NT 2.125% 2/29/24 2.0757% 10,000,000.0000 AAA N/A 102.38 9,911,718.75 10,237,500.00
Fixed Income 912828U57 U S TREASURY NT 2.125% 11/30/23 2.0792% 15,000,000.0000 AAA N/A 102.20 14,723,632.81 15,330,450.00
Fixed Income 912828N30 U S TREASURY NT 2.125% 12/31/22 2.0893% 5,000,000.0000 AAA N/A 101.71 4,926,562.50 5,085,350.00
4 of 5
U.S. Bank
Investment Listing - Yield
As of 09/30/2019
Asset Category CUSIP Asset Short Name Yield Shares/Units Moody's S&P Rating Price Cost Basis Market Value
Fixed Income 912828V80 U S TREASURY NT 2.250% 1/31/24 2.1879% 7,500,000.0000 AAA 102.84 7,491,503.91 7,712,700.00
Fixed Income 9128284D9 U S TREASURY NT 2.500% 3/31/23 2.4238% 10,000,000.0000 AAA N/A 103.15 9,887,265.63 10,314,500.00
Fixed Income 912828WJ5 U S TREASURY NT 2.500% 5/15/24 2.4011% 7,000,000.0000 AAA N/A 104.12 7,193,046.88 7,288,190.00
Fixed Income 913366EJ5 UNIV OF CALIFORNIA 5.035% 5/15/21 4.7998% 400,000.0000 AA3 AA- 104.90 400,000.00 419,600.00
Fixed Income 90331HNL3 US BANK NA MTN 2.850% 1/23/23 2.7861% 5,000,000.0000 A1 AA- 102.29 4,981,600.00 5,114,600.00
Fixed Income 931142EK5 WALMART INC 3.400% 6/26/23 3.2299% 3,880,000.0000 AA2 AA 105.27 3,878,991.40 4,084,282.00
Fixed Income 94974BGM6 WELLS FARGO CO MTN 2.600% 7/22/20 2.5878% 5,000,000.0000 A2 A- 100.47 5,001,650.00 5,023,600.00
Fixed Income 94974BGF1 WELLS FARGO MTN 2.150% 1/30/20 2.1506% 1,000,000.0000 A2 A- 99.97 996,600.00 999,700.00
Fixed Income 94988J5G8 WELLS FARGO MTN 2.150% 12/06/19 2.1502% 500,000.0000 AA2 A+ 99.99 498,425.00 499,965.00
Fixed Income 95000U2B8 WELLS FARGO MTN 2.625% 7/22/22 2.5962% 3,000,000.0000 A2 A- 101.11 2,954,520.00 3,033,300.00
Fixed Income 96130AAK4 WESTPAC BKING C D 2.970% 10/18/19 2.9687% 1,500,000.0000 100.05 1,503,302.80 1,500,675.00
Total Consolidated 613,565,030.62
5 of 5
U.S. Bank
Asset Detail - Consolidated
As of 09/30/2019
CUSIP Asset Short Name Price Shares/Units Cost Basis Market Value Percent of Total Unrealized Gain/Loss
Cash Equivalents Total
31846V567 FIRST AM GOVT OB FD CL Z 1.00 1,740,212.5600 1,740,212.56 1,740,212.56 0.28 -
31846V567 FIRST AM GOVT OB FD CL Z 1.00 3,794,924.7000 3,794,924.70 3,794,924.70 0.62 -
62479MYK3 MUFG BANK LTD NY BRAN C P 11/19/19 99.73 1,860,000.0000 1,850,032.47 1,854,940.80 0.30 4,908.33
62479MYK3 MUFG BANK LTD NY BRAN C P 11/19/19 99.73 11,255,000.0000 11,194,685.71 11,224,386.40 1.83 29,700.69
89233GAH9 TOYOTA MOTOR CREDIT CO C P 1/17/20 99.40 2,000,000.0000 1,961,884.44 1,987,940.00 0.32 26,055.56
912796RY7 U S TREASURY BILL 1/30/20 99.40 7,000,000.0000 6,950,415.19 6,958,140.00 1.13 7,724.81
912796SL4 U S TREASURY BILL 10/03/19 99.99 1,650,000.0000 1,646,687.63 1,649,851.50 0.27 3,163.87
912796VY2 U S TREASURY BILL 10/08/19 99.97 1,250,000.0000 1,249,517.42 1,249,575.00 0.20 57.58
912796VZ9 U S TREASURY BILL 10/15/19 99.93 1,250,000.0000 1,249,059.90 1,249,175.00 0.20 115.10
Cash Equivalents Total 31,800,137.2600 31,637,420.02 31,709,145.96 5.17 71,725.94
Fixed Income
00440EAP2 ACE INA HOLDINGS 2.700% 3/13/23 102.19 2,000,000.0000 1,937,000.00 2,043,720.00 0.33 106,720.00
00440EAU1 ACE INA HOLDINGS 2.875% 11/03/22 102.50 4,169,000.0000 4,232,453.17 4,273,391.76 0.70 40,938.59
02587AAJ3 AMERICAN EXPRESS 1.930% 9/15/22 99.92 6,270,000.0000 6,174,085.15 6,265,046.70 1.02 90,961.55
02665WCZ2 AMERICAN HONDA MTN 2.400% 6/27/24 101.08 1,219,000.0000 1,213,843.63 1,232,140.82 0.20 18,297.19
02665WCJ8 AMERICAN HONDA MTN 3.450% 7/14/23 104.89 845,000.0000 843,538.15 886,278.25 0.14 42,740.10
02665WCQ2 AMERICAN HONDA MTN 3.625% 10/10/23 105.90 2,000,000.0000 1,998,320.00 2,117,960.00 0.35 119,640.00
03215PFN4 AMRESCO 2.95841% 6/25/29 97.15 123,127.8500 92,461.32 119,621.17 0.02 27,159.85
037833BS8 APPLE INC 2.250% 2/23/21 100.46 4,000,000.0000 4,050,840.00 4,018,200.00 0.65 (32,640.00)
037833CU2 APPLE INC 2.850% 5/11/24 103.75 3,000,000.0000 3,017,760.00 3,112,470.00 0.51 94,710.00
06051GHF9 BANK OF AMERICA 3.550% 3/05/24 103.93 6,675,000.0000 6,770,625.75 6,937,060.50 1.13 166,434.75
06051GFN4 BANK OF AMERICA MTN 2.250% 4/21/20 100.11 2,000,000.0000 2,001,960.00 2,002,140.00 0.33 180.00
06417G5Q7 BANK OF NOVA C D 2.610% 12/23/19 100.11 2,300,000.0000 2,300,614.40 2,302,599.00 0.38 1,984.60
06406HCZ0 BANK OF NY MELLO MTN 2.150% 2/24/20 100.03 1,500,000.0000 1,493,925.00 1,500,390.00 0.24 6,465.00
06406RAA5 BANK OF NY MTN 2.600% 2/07/22 101.41 2,500,000.0000 2,504,475.00 2,535,250.00 0.41 30,775.00
06406RAE7 BANK OF NY MTN 2.950% 1/29/23 102.70 2,500,000.0000 2,489,555.00 2,567,400.00 0.42 77,845.00
084670BR8 BERKSHIRE HATHAWAY 2.750% 3/15/23 102.51 2,500,000.0000 2,440,950.00 2,562,825.00 0.42 121,875.00
084664BT7 BERKSHIRE HATHAWAY 3.000% 5/15/22 102.90 4,000,000.0000 4,131,120.00 4,116,040.00 0.67 (15,080.00)
09247XAL5 BLACKROCK INC 3.500% 3/18/24 106.78 1,000,000.0000 1,036,330.00 1,067,820.00 0.17 31,490.00
808513AT2 CHARLES SCHWAB CORP 2.650% 1/25/23 101.80 6,750,000.0000 6,729,480.00 6,871,635.00 1.12 142,155.00
166764BG4 CHEVRON CORP 2.100% 5/16/21 100.39 2,500,000.0000 2,485,350.00 2,509,650.00 0.41 24,300.00
166764AH3 CHEVRON CORP 3.191% 6/24/23 104.26 3,500,000.0000 3,441,095.00 3,648,960.00 0.59 207,865.00
30231GAV4 EXXON MOBIL 2.222% 3/01/21 100.52 3,000,000.0000 3,016,097.40 3,015,720.00 0.49 (377.40)
3133EKWV4 F F C B DEB 1.850% 7/26/24 101.07 5,000,000.0000 5,048,280.00 5,053,600.00 0.82 5,320.00
3130A1XJ2 F H L B 2.875% 6/14/24 105.58 11,110,000.0000 11,589,031.30 11,730,160.20 1.91 141,128.90
3130A7CV5 F H L B DEB 1.375% 2/18/21 99.48 5,365,000.0000 5,343,325.40 5,336,941.05 0.87 (6,384.35)
313383HU8 F H L B DEB 1.750% 6/12/20 99.93 5,000,000.0000 5,008,950.00 4,996,450.00 0.81 (12,500.00)
313379RB7 F H L B DEB 1.875% 6/11/21 100.22 4,000,000.0000 4,030,160.00 4,008,880.00 0.65 (21,280.00)
3130A2UW4 F H L B DEB 2.875% 9/13/24 105.72 2,500,000.0000 2,635,950.00 2,643,025.00 0.43 7,075.00
313383QR5 F H L B DEB 3.250% 6/09/23 105.61 5,000,000.0000 5,083,350.00 5,280,250.00 0.86 196,900.00
1 of 4
U.S. Bank
Asset Detail - Consolidated
As of 09/30/2019
CUSIP Asset Short Name Price Shares/Units Cost Basis Market Value Percent of Total Unrealized Gain/Loss
313383YJ4 F H L B DEB 3.375% 9/08/23 106.59 10,000,000.0000 10,211,831.00 10,658,700.00 1.74 446,869.00
3130A0F70 F H L B DEB 3.375% 12/08/23 106.99 10,000,000.0000 10,269,043.75 10,699,200.00 1.74 430,156.25
3137EAEN5 F H L M C 2.750% 6/19/23 104.04 10,000,000.0000 9,956,500.00 10,404,300.00 1.70 447,800.00
3137EADM8 F H L M C M T N 1.250% 10/02/19 100.00 7,500,000.0000 7,399,650.00 7,499,775.00 1.22 100,125.00
3137EAEK1 F H L M C M T N 1.875% 11/17/20 100.10 5,000,000.0000 4,986,225.00 5,005,150.00 0.82 18,925.00
3137EAEL9 F H L M C M T N 2.375% 2/16/21 100.81 7,500,000.0000 7,484,475.00 7,560,675.00 1.23 76,200.00
31348SWZ3 F H L M C #786064 4.678% 1/01/28 102.46 1,845.5200 1,800.58 1,890.88 0.00 90.30
3133TCE95 F H L M C MLTCL MTG 4.016% 8/15/32 100.38 7,928.5000 7,936.80 7,958.79 0.00 21.99
31398VJ98 F H L M C MLTCL MTG 4.251% 1/25/20 100.16 659,054.7400 696,435.51 660,129.00 0.11 (36,306.51)
31394JY35 F H L M C MLTCL MTG 6.500% 9/25/43 113.92 686,785.6800 777,784.78 782,372.51 0.13 4,587.73
3135G0F73 F N M A 1.500% 11/30/20 99.65 7,500,000.0000 7,370,726.00 7,473,450.00 1.22 102,724.00
3135G0T45 F N M A 1.875% 4/05/22 100.68 5,000,000.0000 4,972,500.00 5,034,050.00 0.82 61,550.00
3135G0S38 F N M A 2.000% 1/05/22 100.72 3,000,000.0000 2,994,570.00 3,021,480.00 0.49 26,910.00
3135G0V34 F N M A 2.500% 2/05/24 103.77 5,000,000.0000 4,980,850.00 5,188,500.00 0.85 207,650.00
3135G0U35 F N M A 2.750% 6/22/21 101.77 7,500,000.0000 7,515,225.00 7,632,975.00 1.24 117,750.00
31371NUC7 F N M A #257179 4.500% 4/01/28 105.49 14,717.5300 15,565.23 15,525.38 0.00 (39.85)
31376KT22 F N M A #357969 5.000% 9/01/35 110.47 98,885.2800 106,301.67 109,237.58 0.02 2,935.91
31381PDA3 F N M A #466397 3.400% 11/01/20 100.79 337,358.0300 330,057.41 340,009.66 0.06 9,952.25
31403DJZ3 F N M A #745580 5.000% 6/01/36 110.44 92,510.2700 99,448.54 102,166.49 0.02 2,717.95
31403GXF4 F N M A #748678 5.000% 10/01/33 109.27 1,781.1400 1,914.73 1,946.25 0.00 31.52
31406PQY8 F N M A #815971 5.000% 3/01/35 110.34 157,142.7900 168,928.51 173,383.50 0.03 4,454.99
31406XWT5 F N M A #823358 4.722% 2/01/35 104.65 109,269.4000 108,415.73 114,353.71 0.02 5,937.98
31407BXH7 F N M A #826080 5.000% 7/01/35 110.45 18,677.2900 20,078.08 20,628.69 0.00 550.61
31410F4V4 F N M A #888336 5.000% 7/01/36 110.42 180,164.2100 193,676.52 198,928.31 0.03 5,251.79
3138EG6F6 F N M A #AL0869 4.500% 6/01/29 106.54 10,044.9200 10,623.50 10,701.76 0.00 78.26
31417YAY3 F N M A #MA0022 4.500% 4/01/29 106.54 16,436.7800 17,383.51 17,511.75 0.00 128.24
3135G0J20 F N M A DEB 1.375% 2/26/21 99.46 10,000,000.0000 10,040,950.00 9,946,100.00 1.62 (94,850.00)
3135G0D75 F N M A DEB 1.500% 6/22/20 99.72 5,000,000.0000 4,955,650.00 4,986,050.00 0.81 30,400.00
3135G0T94 F N M A DEB 2.375% 1/19/23 102.49 5,000,000.0000 4,910,990.00 5,124,250.00 0.84 213,260.00
31397QRE0 F N M A GTD REMIC 2.825% 2/25/41 101.13 186,495.6800 186,437.40 188,597.49 0.03 2,160.09
36225CAZ9 G N M A I I #080023 4.125% 12/20/26 103.01 15,348.4000 15,601.96 15,810.08 0.00 208.12
36225CC20 G N M A I I #080088 3.875% 6/20/27 100.99 15,097.0500 15,427.31 15,246.96 0.00 (180.35)
36225CNM4 G N M A I I #080395 3.875% 4/20/30 103.80 6,521.3900 6,462.26 6,769.46 0.00 307.20
36225CN28 G N M A I I #080408 3.875% 5/20/30 103.81 49,754.7600 49,249.44 51,648.92 0.01 2,399.48
36225DCB8 G N M A I I #080965 3.750% 7/20/34 104.34 45,340.4700 45,312.14 47,308.70 0.01 1,996.56
369550BA5 GENERAL DYNAMICS 2.875% 5/11/20 100.52 2,000,000.0000 2,011,340.00 2,010,420.00 0.33 (920.00)
369550BE7 GENERAL DYNAMICS 3.000% 5/11/21 101.75 3,160,000.0000 3,138,038.00 3,215,331.60 0.52 77,293.60
43814RAC0 HONDA AUTO 1.210% 12/18/20 99.81 563,719.9400 557,532.23 562,648.87 0.09 5,116.64
43814PAC4 HONDA AUTO 1.790% 9/20/21 99.92 2,115,225.6000 2,081,679.44 2,113,448.81 0.34 31,769.37
43815NAB0 HONDA AUTO 1.900% 4/15/22 99.90 3,530,000.0000 3,529,752.90 3,526,540.60 0.57 (3,212.30)
43814WAB1 HONDA AUTO 2.750% 9/20/21 100.42 4,395,000.0000 4,394,716.96 4,413,371.10 0.72 18,654.14
43815HAC1 HONDA AUTO 2.950% 8/22/22 101.16 3,970,000.0000 3,969,455.32 4,015,893.20 0.65 46,437.88
2 of 4
U.S. Bank
Asset Detail - Consolidated
As of 09/30/2019
CUSIP Asset Short Name Price Shares/Units Cost Basis Market Value Percent of Total Unrealized Gain/Loss
43814UAG4 HONDA AUTO 3.010% 5/18/22 101.00 1,710,000.0000 1,709,962.72 1,727,082.90 0.28 17,120.18
404280BF5 HSBC HOLDINGS PLC 2.650% 1/05/22 100.72 4,500,000.0000 4,429,980.00 4,532,175.00 0.74 102,195.00
40428HPR7 HSBC USA INC MTN 2.350% 3/05/20 100.13 2,500,000.0000 2,493,300.00 2,503,325.00 0.41 10,025.00
40428HPR7 HSBC USA INC MTN 2.350% 3/05/20 100.13 2,500,000.0000 2,472,287.50 2,503,325.00 0.41 31,037.50
44932HAH6 IBM CREDIT CORP 3.000% 2/06/23 102.87 5,670,000.0000 5,603,264.40 5,832,672.30 0.95 229,407.90
458140BD1 INTEL CORP 2.875% 5/11/24 103.92 5,000,000.0000 5,025,900.00 5,196,050.00 0.85 170,150.00
4581X0CS5 INTER AMER BK M T N 1.875% 3/15/21 100.15 5,000,000.0000 5,059,610.00 5,007,600.00 0.82 (52,010.00)
4581X0CX4 INTER AMER DEV BK 1.625% 5/12/20 99.81 3,035,000.0000 3,027,807.05 3,029,142.45 0.49 1,335.40
4581X0CZ9 INTER AMER DEV BK 1.750% 9/14/22 100.30 6,500,000.0000 6,249,655.00 6,519,175.00 1.06 269,520.00
4581X0CW6 INTER AMER DEV BK 2.125% 1/18/22 101.03 3,000,000.0000 2,996,310.00 3,030,810.00 0.49 34,500.00
459058FY4 INTL BK 2.000% 1/26/22 100.79 10,000,000.0000 10,006,350.00 10,078,900.00 1.64 72,550.00
45950KCM0 INTL BK M T N 2.250% 1/25/21 100.57 2,970,000.0000 2,961,268.20 2,986,958.70 0.49 25,690.50
45950KCJ7 INTL FINANCE CORP 1.125% 7/20/21 98.97 2,500,000.0000 2,441,600.00 2,474,300.00 0.40 32,700.00
24422EUM9 JOHN DEERE MTN 3.650% 10/12/23 106.54 1,250,000.0000 1,250,237.50 1,331,750.00 0.22 81,512.50
47788NAD0 JOHN DEERE OWNER 1.490% 5/15/23 99.97 1,003,712.9300 987,088.93 1,003,451.96 0.16 16,363.03
47788BAD6 JOHN DEERE OWNER 1.820% 10/15/21 99.85 441,393.7800 441,361.46 440,709.62 0.07 (651.84)
477870AB5 JOHN DEERE OWNER 2.280% 5/16/22 100.23 2,800,000.0000 2,799,989.36 2,806,440.00 0.46 6,450.64
47788CAB8 JOHN DEERE OWNER 2.420% 10/15/20 100.01 180,610.3100 180,243.45 180,622.95 0.03 379.50
47788CAC6 JOHN DEERE OWNER 2.660% 4/18/22 100.41 1,340,000.0000 1,339,903.65 1,345,480.60 0.22 5,576.95
47789JAB2 JOHN DEERE OWNER 2.850% 12/15/21 100.46 3,265,000.0000 3,264,851.12 3,280,051.65 0.53 15,200.53
47788EAC2 JOHN DEERE OWNER 3.080% 11/15/22 101.31 4,630,000.0000 4,629,649.05 4,690,791.90 0.76 61,142.85
46625HRL6 JP MORGAN CHASE CO 2.700% 5/18/23 101.68 5,000,000.0000 4,821,910.00 5,084,050.00 0.83 262,140.00
46647PAU0 JPMORGAN CHASE CO 3.797% 7/23/24 105.47 2,500,000.0000 2,632,175.00 2,636,675.00 0.43 4,500.00
525ESC0Y6 LEHMAN BRTH HLD ESC - 2,000,000.0000 1,031,998.65 - - (1,031,998.65)
525ESCIB7 LEHMAN BRTH MTN ES 0.00001% 1/24/13 1.42 600,000.0000 320,227.27 8,520.00 0.00 (311,707.27)
58933YAF2 MERCK CO INC 2.800% 5/18/23 102.96 2,000,000.0000 1,948,640.00 2,059,160.00 0.34 110,520.00
594918BP8 MICROSOFT CORP 1.550% 8/08/21 99.58 3,045,000.0000 3,041,385.15 3,032,241.45 0.49 (9,143.70)
61747WAL3 MORGAN STANLEY 5.500% 7/28/21 106.11 2,800,000.0000 3,200,848.00 2,971,136.00 0.48 (229,712.00)
64971M5E8 NEW YORK CITY NY 4.075% 11/01/20 102.16 1,400,000.0000 1,400,000.00 1,430,170.00 0.23 30,170.00
65478VAD9 NISSAN AUTO 1.320% 1/15/21 99.90 252,050.0200 250,031.65 251,800.49 0.04 1,768.84
65478GAD2 NISSAN AUTO 1.750% 10/15/21 99.87 2,063,703.3300 2,031,699.81 2,060,958.60 0.34 29,258.79
65479GAD1 NISSAN AUTO 3.060% 3/15/23 101.45 3,560,000.0000 3,559,884.66 3,611,477.60 0.59 51,592.94
68389XBK0 ORACLE CORP 1.900% 9/15/21 99.88 3,000,000.0000 2,892,240.00 2,996,460.00 0.49 104,220.00
69353RFL7 PNC BANK NA 3.500% 6/08/23 105.00 5,000,000.0000 4,993,318.05 5,249,800.00 0.86 256,481.95
69353RFB9 PNC BANK NA MTN 2.625% 2/17/22 101.39 1,000,000.0000 974,940.00 1,013,890.00 0.17 38,950.00
73358WAG9 PORT AUTH NY NJ 5.309% 12/01/19 100.54 2,440,000.0000 2,507,633.89 2,453,176.00 0.40 (54,457.89)
747525AD5 QUALCOMM INC 2.250% 5/20/20 100.04 2,000,000.0000 2,002,700.00 2,000,840.00 0.33 (1,860.00)
747525AD5 QUALCOMM INC 2.250% 5/20/20 100.04 5,000,000.0000 4,995,195.40 5,002,100.00 0.82 6,904.60
78013XZU5 ROYAL BANK OF MTN 2.550% 7/16/24 101.35 6,500,000.0000 6,581,445.00 6,588,010.00 1.07 6,565.00
83162CLJ0 S B A GTD DEV PART 6.340% 3/01/21 101.50 11,184.5600 11,184.56 11,352.22 0.00 167.66
78445JAA5 S L M A 3.8594% 4/25/23 100.59 13,344.8500 13,290.71 13,423.58 0.00 132.87
89114QCA4 TORONTO DOMINION MTN 2.650% 6/12/24 101.89 3,000,000.0000 3,000,570.00 3,056,550.00 0.50 55,980.00
3 of 4
U.S. Bank
Asset Detail - Consolidated
As of 09/30/2019
CUSIP Asset Short Name Price Shares/Units Cost Basis Market Value Percent of Total Unrealized Gain/Loss
89114QC48 TORONTO MTN 3.500% 7/19/23 105.45 5,000,000.0000 5,094,200.00 5,272,600.00 0.86 178,400.00
89238BAB8 TOYOTA AUTO 2.100% 10/15/20 100.00 683,639.4400 683,569.57 683,618.93 0.11 49.36
89239AAB9 TOYOTA AUTO 2.830% 10/15/21 100.35 3,615,000.0000 3,614,671.76 3,627,652.50 0.59 12,980.74
912828WU0 U S TREASURY I P S 0.125% 7/15/24 99.88 11,236,992.0000 11,092,272.09 11,222,945.76 1.83 130,673.67
912828T34 U S TREASURY NT 1.125% 9/30/21 98.98 7,000,000.0000 6,757,914.08 6,928,390.00 1.13 170,475.92
912828H52 U S TREASURY NT 1.250% 1/31/20 99.78 13,500,000.0000 13,396,542.97 13,469,895.00 2.20 73,352.03
912828T67 U S TREASURY NT 1.250% 10/31/21 99.19 6,000,000.0000 5,813,691.98 5,951,280.00 0.97 137,588.02
912828UL2 U S TREASURY NT 1.375% 1/31/20 99.81 5,000,000.0000 4,988,671.88 4,990,650.00 0.81 1,978.12
912828N89 U S TREASURY NT 1.375% 1/31/21 99.48 6,000,000.0000 5,895,840.41 5,968,620.00 0.97 72,779.59
912828L99 U S TREASURY NT 1.375% 10/31/20 99.54 10,000,000.0000 9,850,311.40 9,953,900.00 1.62 103,588.60
912828XE5 U S TREASURY NT 1.500% 5/31/20 99.75 5,000,000.0000 4,966,423.00 4,987,700.00 0.81 21,277.00
912828F62 U S TREASURY NT 1.500% 10/31/19 99.95 2,500,000.0000 2,486,718.75 2,498,775.00 0.41 12,056.25
912828G61 U S TREASURY NT 1.500% 11/30/19 99.91 7,500,000.0000 7,449,634.50 7,493,100.00 1.22 43,465.50
912828R69 U S TREASURY NT 1.625% 5/31/23 100.20 5,000,000.0000 4,757,226.56 5,009,750.00 0.82 252,523.44
912828J76 U S TREASURY NT 1.750% 3/31/22 100.38 5,000,000.0000 4,976,383.94 5,019,150.00 0.82 42,766.06
912828XW5 U S TREASURY NT 1.750% 6/30/22 100.44 5,000,000.0000 4,973,454.25 5,021,900.00 0.82 48,445.75
912828L57 U S TREASURY NT 1.750% 9/30/22 100.50 13,000,000.0000 12,763,554.69 13,064,480.00 2.13 300,925.31
912828U65 U S TREASURY NT 1.750% 11/30/21 100.22 7,000,000.0000 6,900,492.20 7,015,610.00 1.14 115,117.80
912828V72 U S TREASURY NT 1.875% 1/31/22 100.56 3,000,000.0000 3,004,814.74 3,016,650.00 0.49 11,835.26
912828L24 U S TREASURY NT 1.875% 8/31/22 100.84 6,000,000.0000 5,987,832.60 6,050,400.00 0.99 62,567.40
9128283S7 U S TREASURY NT 2.000% 1/31/20 100.03 15,000,000.0000 14,955,468.75 15,004,050.00 2.45 48,581.25
912828XX3 U S TREASURY NT 2.000% 6/30/24 101.94 5,000,000.0000 5,028,710.94 5,097,050.00 0.83 68,339.06
912828M80 U S TREASURY NT 2.000% 11/30/22 101.26 8,000,000.0000 7,907,500.00 8,100,640.00 1.32 193,140.00
912828W48 U S TREASURY NT 2.125% 2/29/24 102.38 10,000,000.0000 9,911,718.75 10,237,500.00 1.67 325,781.25
912828U57 U S TREASURY NT 2.125% 11/30/23 102.20 15,000,000.0000 14,723,632.81 15,330,450.00 2.50 606,817.19
912828N30 U S TREASURY NT 2.125% 12/31/22 101.71 5,000,000.0000 4,926,562.50 5,085,350.00 0.83 158,787.50
912828V80 U S TREASURY NT 2.250% 1/31/24 102.84 7,500,000.0000 7,491,503.91 7,712,700.00 1.26 221,196.09
9128284D9 U S TREASURY NT 2.500% 3/31/23 103.15 10,000,000.0000 9,887,265.63 10,314,500.00 1.68 427,234.37
912828WJ5 U S TREASURY NT 2.500% 5/15/24 104.12 7,000,000.0000 7,193,046.88 7,288,190.00 1.19 95,143.12
913366EJ5 UNIV OF CALIFORNIA 5.035% 5/15/21 104.90 400,000.0000 400,000.00 419,600.00 0.07 19,600.00
90331HNL3 US BANK NA MTN 2.850% 1/23/23 102.29 5,000,000.0000 4,981,600.00 5,114,600.00 0.83 133,000.00
931142EK5 WALMART INC 3.400% 6/26/23 105.27 3,880,000.0000 3,878,991.40 4,084,282.00 0.67 205,290.60
94974BGM6 WELLS FARGO CO MTN 2.600% 7/22/20 100.47 5,000,000.0000 5,001,650.00 5,023,600.00 0.82 21,950.00
94974BGF1 WELLS FARGO MTN 2.150% 1/30/20 99.97 1,000,000.0000 996,600.00 999,700.00 0.16 3,100.00
94988J5G8 WELLS FARGO MTN 2.150% 12/06/19 99.99 500,000.0000 498,425.00 499,965.00 0.08 1,540.00
95000U2B8 WELLS FARGO MTN 2.625% 7/22/22 101.11 3,000,000.0000 2,954,520.00 3,033,300.00 0.49 78,780.00
96130AAK4 WESTPAC BKING C D 2.970% 10/18/19 100.05 1,500,000.0000 1,503,302.80 1,500,675.00 0.24 (2,627.80)
Fixed Income Total 575,567,864.4400 573,024,125.81 581,855,884.66 94.83 8,831,758.85
Grand Total 607,368,001.7000 604,661,545.83 613,565,030.62 100.00 8,903,484.79
4 of 4
U.S. Bank
Transaction History
07/01/2019 Thru 09/30/2019
Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss
ACQUISITIONS
07/01/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 2,113,125.0000 1.000000 -2,113,125.00 2,113,125.00 0.00
07/02/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 12,397.2400 1.000000 -12,397.24 12,397.24 0.00
07/02/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 34,814.0700 1.000000 -34,814.07 34,814.07 0.00
07/05/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 89,625.0000 1.000000 -89,625.00 89,625.00 0.00
07/08/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 53,087.7200 1.000000 -53,087.72 53,087.72 0.00
07/12/2019 02665WCZ2 PURCHASED PAR VALUE OF AMERICAN HONDA MTN 2.400% 6/27/24 /J.P. MORGAN
SECURITIES LLC/1,219,000 PAR VALUE AT 99.577 %
1,219,000.0000 0.995770 -1,213,843.63 1,213,843.63 0.00
07/12/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 1,130,000.0000 1.000000 -1,130,000.00 1,130,000.00 0.00
07/12/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 4,943.7500 1.000000 -4,943.75 4,943.75 0.00
07/12/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 298,478.6200 1.000000 -298,478.62 298,478.62 0.00
07/15/2019 912828XX3 PURCHASED PAR VALUE OF U S TREASURY NT 2.000% 6/30/24 /J.P. MORGAN
SECURITIES LLC/5,000,000 PAR VALUE AT 100.5742188 %
5,000,000.0000 1.005742 -5,028,710.94 5,028,710.94 0.00
07/15/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 14,083.3600 1.000000 -14,083.36 14,083.36 0.00
07/16/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 217,968.1200 1.000000 -217,968.12 217,968.12 0.00
07/18/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 7,473.6200 1.000000 -7,473.62 7,473.62 0.00
07/18/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 368,080.0400 1.000000 -368,080.04 368,080.04 0.00
07/19/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 146,875.0000 1.000000 -146,875.00 146,875.00 0.00
07/22/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 133,436.4600 1.000000 -133,436.46 133,436.46 0.00
07/23/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 16,875.0000 1.000000 -16,875.00 16,875.00 0.00
07/23/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 93,750.0000 1.000000 -93,750.00 93,750.00 0.00
07/24/2019 477870AB5 PURCHASED PAR VALUE OF JOHN DEERE OWNER 2.280% 5/16/22 /RBC CAPITAL
MARKETS, LLC/2,800,000 PAR VALUE AT 99.99962 %
2,800,000.0000 0.999996 -2,799,989.36 2,799,989.36 0.00
07/25/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 100,248.5000 1.000000 -100,248.50 100,248.50 0.00
07/25/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 144,986.2600 1.000000 -144,986.26 144,986.26 0.00
07/26/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 100,000.0000 1.000000 -100,000.00 100,000.00 0.00
07/29/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 13,702.5000 1.000000 -13,702.50 13,702.50 0.00
07/29/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 1,890,000.0000 1.000000 -1,890,000.00 1,890,000.00 0.00
07/29/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 113,875.0000 1.000000 -113,875.00 113,875.00 0.00
07/30/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 10,750.0000 1.000000 -10,750.00 10,750.00 0.00
07/31/2019 313384MD8 PURCHASED PAR VALUE OF F H L B DISC NTS 9/25/19 /WELLS FARGO
SECURITIES, LLC/2,500,000 PAR VALUE AT 99.6702224 %
2,500,000.0000 0.996702 -2,491,755.56 2,491,755.56 0.00
07/31/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 76,203,125.0000 1.000000 -76,203,125.00 76,203,125.00 0.00
07/31/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 5,194,375.0000 1.000000 -5,194,375.00 5,194,375.00 0.00
08/02/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 13,196.2900 1.000000 -13,196.29 13,196.29 0.00
1 of 23
U.S. Bank
Transaction History
07/01/2019 Thru 09/30/2019
Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss
08/02/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 29,177.6400 1.000000 -29,177.64 29,177.64 0.00
08/05/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 61,458.3400 1.000000 -61,458.34 61,458.34 0.00
08/06/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 85,050.0000 1.000000 -85,050.00 85,050.00 0.00
08/07/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 32,500.0000 1.000000 -32,500.00 32,500.00 0.00
08/08/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 23,598.7500 1.000000 -23,598.75 23,598.75 0.00
08/09/2019 06051GFN4 PURCHASED PAR VALUE OF BANK OF AMERICA MTN 2.250% 4/21/20 /MORGAN
STANLEY & CO. LLC/2,000,000 PAR VALUE AT 100.098 %
2,000,000.0000 1.000980 -2,001,960.00 2,001,960.00 0.00
08/09/2019 747525AD5 PURCHASED PAR VALUE OF QUALCOMM INC 2.250% 5/20/20 /BARCLAYS
CAPITAL INC. FIXED IN/2,000,000 PAR VALUE AT 100.135 %
2,000,000.0000 1.001350 -2,002,700.00 2,002,700.00 0.00
08/12/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 1,083,000.0000 1.000000 -1,083,000.00 1,083,000.00 0.00
08/12/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 6,498.0000 1.000000 -6,498.00 6,498.00 0.00
08/14/2019 3133EKWV4 PURCHASED PAR VALUE OF F F C B DEB 1.850% 7/26/24 /J.P. MORGAN
SECURITIES LLC/5,000,000 PAR VALUE AT 100.9656 %
5,000,000.0000 1.009656 -5,048,280.00 5,048,280.00 0.00
08/15/2019 369550BA5 PURCHASED PAR VALUE OF GENERAL DYNAMICS 2.875% 5/11/20 /PERSHING
LLC/2,000,000 PAR VALUE AT 100.567 %
2,000,000.0000 1.005670 -2,011,340.00 2,011,340.00 0.00
08/15/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 22,241.2500 1.000000 -22,241.25 22,241.25 0.00
08/15/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 28,481.4000 1.000000 -28,481.40 28,481.40 0.00
08/15/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 3,462,512.3700 1.000000 -3,462,512.37 3,462,512.37 0.00
08/16/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 89,062.5000 1.000000 -89,062.50 89,062.50 0.00
08/19/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 3,290,000.0000 1.000000 -3,290,000.00 3,290,000.00 0.00
08/19/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 11,522,306.1200 1.000000 -11,522,306.12 11,522,306.12 0.00
08/20/2019 62479MYK3 PURCHASED PAR VALUE OF MUFG BANK LTD NY BRAN C P 11/19/19 /MUFG UNION
BK NA/MMI/PIMS/IPA/1,860,000 PAR VALUE AT 99.46411129 %
1,860,000.0000 0.994641 -1,850,032.47 1,850,032.47 0.00
08/20/2019 62479MYK3 PURCHASED PAR VALUE OF MUFG BANK LTD NY BRAN C P 11/19/19 /MUFG UNION
BK NA/MMI/PIMS/IPA/11,255,000 PAR VALUE AT 99.46411115 %
11,255,000.0000 0.994641 -11,194,685.71 11,194,685.71 0.00
08/20/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 1,974.5400 1.000000 -1,974.54 1,974.54 0.00
08/21/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 9,759.5800 1.000000 -9,759.58 9,759.58 0.00
08/23/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 45,000.0000 1.000000 -45,000.00 45,000.00 0.00
08/26/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 16,125.0000 1.000000 -16,125.00 16,125.00 0.00
08/26/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 139,881.5700 1.000000 -139,881.57 139,881.57 0.00
08/27/2019 43815NAB0 PURCHASED PAR VALUE OF HONDA AUTO 1.900% 4/15/22 /SG AMERICAS
SECURITIES, LLC/3,530,000 PAR VALUE AT 99.993 %
3,530,000.0000 0.999930 -3,529,752.90 3,529,752.90 0.00
08/27/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 1,504,012.5000 1.000000 -1,504,012.50 1,504,012.50 0.00
08/27/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 2,005,350.0000 1.000000 -2,005,350.00 2,005,350.00 0.00
08/28/2019 912796VW6 PURCHASED PAR VALUE OF U S TREASURY BILL 9/24/19 /NOMURA
SECURITIES INTERNATIONA/1,650,000 PAR VALUE AT 99.84681273 %
1,650,000.0000 0.998468 -1,647,472.41 1,647,472.41 0.00
2 of 23
U.S. Bank
Transaction History
07/01/2019 Thru 09/30/2019
Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss
08/28/2019 912796SL4 PURCHASED PAR VALUE OF U S TREASURY BILL 10/03/19 /NOMURA
SECURITIES INTERNATIONA/1,650,000 PAR VALUE AT 99.7992503 %
1,650,000.0000 0.997993 -1,646,687.63 1,646,687.63 0.00
08/28/2019 912828UL2 PURCHASED PAR VALUE OF U S TREASURY NT 1.375% 1/31/20 /GOLDMAN
SACHS & CO. LLC/5,000,000 PAR VALUE AT 99.7734376 %
5,000,000.0000 0.997734 -4,988,671.88 4,988,671.88 0.00
09/03/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 199,797.0500 1.000000 -199,797.05 199,797.05 0.00
09/04/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 14,244.3100 1.000000 -14,244.31 14,244.31 0.00
09/04/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 29,015.3700 1.000000 -29,015.37 29,015.37 0.00
09/05/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 29,375.0000 1.000000 -29,375.00 29,375.00 0.00
09/05/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 147,856.2500 1.000000 -147,856.25 147,856.25 0.00
09/09/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 168,750.0000 1.000000 -168,750.00 168,750.00 0.00
09/11/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 2,120,000.0000 1.000000 -2,120,000.00 2,120,000.00 0.00
09/11/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 24,380.0000 1.000000 -24,380.00 24,380.00 0.00
09/12/2019 78013XZU5 PURCHASED PAR VALUE OF ROYAL BANK OF MTN 2.550% 7/16/24 /RBC CAPITAL
MARKETS, LLC/6,500,000 PAR VALUE AT 101.253 %
6,500,000.0000 1.012530 -6,581,445.00 6,581,445.00 0.00
09/13/2019 3130A2UW4 PURCHASED PAR VALUE OF F H L B DEB 2.875% 9/13/24 /MORGAN STANLEY &
CO. LLC/2,500,000 PAR VALUE AT 105.438 %
2,500,000.0000 1.054380 -2,635,950.00 2,635,950.00 0.00
09/13/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 3,500,000.0000 1.000000 -3,500,000.00 3,500,000.00 0.00
09/13/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 33,783.7500 1.000000 -33,783.75 33,783.75 0.00
09/16/2019 46647PAU0 PURCHASED PAR VALUE OF JPMORGAN CHASE CO 3.797% 7/23/24 /RBC CAPITAL
MARKETS, LLC/2,500,000 PAR VALUE AT 105.287 %
2,500,000.0000 1.052870 -2,632,175.00 2,632,175.00 0.00
09/16/2019 912796RY7 PURCHASED PAR VALUE OF U S TREASURY BILL 1/30/20 /NOMURA
SECURITIES INTERNATIONA/4,000,000 PAR VALUE AT 99.292611 %
4,000,000.0000 0.992926 -3,971,704.44 3,971,704.44 0.00
09/16/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 61,307.6100 1.000000 -61,307.61 61,307.61 0.00
09/16/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 3,460,497.0400 1.000000 -3,460,497.04 3,460,497.04 0.00
09/18/2019 912796RY7 PURCHASED PAR VALUE OF U S TREASURY BILL 1/30/20 /CITIGROUP GLOBAL
MARKETS INC./3,000,000 PAR VALUE AT 99.29035833 %
3,000,000.0000 0.992904 -2,978,710.75 2,978,710.75 0.00
09/18/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 881,289.2500 1.000000 -881,289.25 881,289.25 0.00
09/18/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 17,500.0000 1.000000 -17,500.00 17,500.00 0.00
09/18/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 335,432.6300 1.000000 -335,432.63 335,432.63 0.00
09/20/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 2,714.6400 1.000000 -2,714.64 2,714.64 0.00
09/23/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 9,759.5800 1.000000 -9,759.58 9,759.58 0.00
09/24/2019 912828TR1 PURCHASED PAR VALUE OF U S TREASURY NT 1.000% 9/30/19 /NOMURA
SECURITIES INTERNATIONA/1,650,000 PAR VALUE AT 99.98437515 %
1,650,000.0000 0.999844 -1,649,742.19 1,649,742.19 0.00
09/25/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 2,500,000.0000 1.000000 -2,500,000.00 2,500,000.00 0.00
09/25/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 4,617.5700 1.000000 -4,617.57 4,617.57 0.00
09/25/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 84,359.7400 1.000000 -84,359.74 84,359.74 0.00
3 of 23
U.S. Bank
Transaction History
07/01/2019 Thru 09/30/2019
Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss
09/26/2019 912828F39 PURCHASED PAR VALUE OF U S TREASURY NT 1.750% 9/30/19 /CITIGROUP
GLOBAL MARKETS INC./1,350,000 PAR VALUE AT 99.99609407 %
1,350,000.0000 0.999961 -1,349,947.27 1,349,947.27 0.00
09/30/2019 912796VY2 PURCHASED PAR VALUE OF U S TREASURY BILL 10/08/19 /WELLS FARGO
SECURITIES, LLC/1,250,000 PAR VALUE AT 99.9613936 %
1,250,000.0000 0.999614 -1,249,517.42 1,249,517.42 0.00
09/30/2019 912796VZ9 PURCHASED PAR VALUE OF U S TREASURY BILL 10/15/19 /NOMURA
SECURITIES INTERNATIONA/1,250,000 PAR VALUE AT 99.924792 %
1,250,000.0000 0.999248 -1,249,059.90 1,249,059.90 0.00
09/30/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 22,640,235.1800 1.000000 -22,640,235.18 22,640,235.18 0.00
09/30/2019 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 6,172,625.0000 1.000000 -6,172,625.00 6,172,625.00 0.00
TOTAL ACQUISITIONS 225,878,801.0800 -226,168,935.54 226,168,935.54 0.00
DISPOSITIONS
07/01/2019 912828WS5 MATURED PAR VALUE OF U S TREASURY NT 1.625% 6/30/19 2,000,000 PAR
VALUE AT 100 %
-2,000,000.0000 1.000000 2,000,000.00 -1,996,861.44 3,138.56
07/08/2019 31398VJ98 PAID DOWN PAR VALUE OF F H L M C MLTCL MTG 4.251% 1/25/20 -54,896.1900 0.003221 54,896.19 -58,009.83 -3,113.64
07/08/2019 31398VJ98 PAID DOWN-RV PAR VALUE OF F H L M C MLTCL MTG 4.251% 1/25/20 RATE CHANGE
6/25/19
1,808.4700 0.000000 -1,808.47 1,911.04 102.57
07/12/2019 02665WAH4 SOLD PAR VALUE OF AMERICAN HONDA MTN 2.250% 8/15/19 /PERSHING
LLC/1,500,000 PAR VALUE AT 99.984 %
-1,500,000.0000 0.999840 1,499,760.00 -1,514,655.00 -14,895.00
07/12/2019 25468PDL7 MATURED PAR VALUE OF WALT DISNEY MTN 0.875% 7/12/19 1,130,000 PAR
VALUE AT 100 %
-1,130,000.0000 1.000000 1,130,000.00 -1,114,812.80 15,187.20
07/15/2019 3133TCE95 PAID DOWN PAR VALUE OF F H L M C MLTCL MTG 4.016% 8/15/32 -532.8500 0.000000 532.85 -533.41 -0.56
07/15/2019 31348SWZ3 PAID DOWN PAR VALUE OF F H L M C #786064 4.677% 1/01/28 JUNE FHLMC
DUE 7/15/19
-24.6700 0.000000 24.67 -24.07 0.60
07/15/2019 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -4,213,772.7800 1.000000 4,213,772.78 -4,213,772.78 0.00
07/15/2019 43814QAC2 PAID DOWN PAR VALUE OF HONDA AUTO 1.390% 4/15/20 CMO FINAL
PAYDOWN
-6,808.6400 0.000000 6,808.64 -6,808.51 0.13
07/15/2019 47788BAD6 PAID DOWN PAR VALUE OF JOHN DEERE OWNER 1.820% 10/15/21 -31,420.2200 12.419054 31,420.22 -31,417.92 2.30
07/15/2019 47788CAB8 PAID DOWN PAR VALUE OF JOHN DEERE OWNER 2.420% 10/15/20 -124,097.1500 3.144387 124,097.15 -123,845.08 252.07
07/15/2019 65477UAD2 PAID DOWN PAR VALUE OF NISSAN AUTO 1.500% 9/15/21 CMO FINAL
PAYDOWN
-217,968.1200 0.000000 217,968.12 -216,605.82 1,362.30
07/15/2019 65478GAD2 PAID DOWN PAR VALUE OF NISSAN AUTO 1.750% 10/15/21 -173,517.4600 2.248819 173,517.46 -170,826.58 2,690.88
07/15/2019 65478VAD9 PAID DOWN PAR VALUE OF NISSAN AUTO 1.320% 1/15/21 -80,576.8400 4.842699 80,576.84 -79,931.60 645.24
07/15/2019 89238BAB8 PAID DOWN PAR VALUE OF TOYOTA AUTO 2.100% 10/15/20 -333,070.3700 1.171552 333,070.37 -333,036.33 34.04
07/18/2019 43814PAC4 PAID DOWN PAR VALUE OF HONDA AUTO 1.790% 9/20/21 -188,638.4700 0.000000 188,638.47 -185,646.78 2,991.69
07/18/2019 43814RAC0 PAID DOWN PAR VALUE OF HONDA AUTO 1.210% 12/18/20 -128,232.7900 0.000000 128,232.79 -126,825.23 1,407.56
07/22/2019 36225CAZ9 PAID DOWN PAR VALUE OF G N M A I I #080023 4.125% 12/20/26 JUNE GNMA
DUE 7/20/19
-1,074.9000 0.000000 1,074.90 -1,092.66 -17.76
4 of 23
U.S. Bank
Transaction History
07/01/2019 Thru 09/30/2019
Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss
07/22/2019 36225CC20 PAID DOWN PAR VALUE OF G N M A I I #080088 3.625% 6/20/27 JUNE GNMA DUE
7/20/19
-1,306.6000 0.000000 1,306.60 -1,335.18 -28.58
07/22/2019 36225CN28 PAID DOWN PAR VALUE OF G N M A I I #080408 3.625% 5/20/30 JUNE GNMA DUE
7/20/19
-1,152.2200 0.000000 1,152.22 -1,140.52 11.70
07/22/2019 36225CNM4 PAID DOWN PAR VALUE OF G N M A I I #080395 3.625% 4/20/30 JUNE GNMA DUE
7/20/19
-158.0800 0.000000 158.08 -156.65 1.43
07/22/2019 36225DCB8 PAID DOWN PAR VALUE OF G N M A I I #080965 3.750% 7/20/34 JUNE GNMA DUE
7/20/19
-1,098.2400 0.000000 1,098.24 -1,097.55 0.69
07/24/2019 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -2,799,989.3600 1.000000 2,799,989.36 -2,799,989.36 0.00
07/25/2019 03215PFN4 PAID DOWN PAR VALUE OF AMRESCO 3.14513% 6/25/29 -4,442.3000 0.000000 4,442.30 -3,335.89 1,106.41
07/25/2019 31371NUC7 PAID DOWN PAR VALUE OF F N M A #257179 4.500% 4/01/28 JUNE FNMA DUE
7/25/19
-150.7800 0.000000 150.78 -159.46 -8.68
07/25/2019 31376KT22 PAID DOWN PAR VALUE OF F N M A #357969 5.000% 9/01/35 JUNE FNMA DUE
7/25/19
-1,239.7900 0.000000 1,239.79 -1,332.77 -92.98
07/25/2019 31381PDA3 PAID DOWN PAR VALUE OF F N M A #466397 3.400% 11/01/20 JUNE FNMA DUE
7/25/19
-739.8600 0.000000 739.86 -723.85 16.01
07/25/2019 3138EG6F6 PAID DOWN PAR VALUE OF F N M A #AL0869 4.500% 6/01/29 JUNE FNMA DUE
7/25/19
-201.7200 0.000000 201.72 -213.34 -11.62
07/25/2019 31394JY35 PAID DOWN PAR VALUE OF F H L M C MLTCL MTG 6.500% 9/25/43 -8,120.9900 0.000000 8,120.99 -9,197.02 -1,076.03
07/25/2019 31397QRE0 PAID DOWN PAR VALUE OF F N M A GTD REMIC 1.113% 2/25/41 -2,626.6000 0.000000 2,626.60 -2,625.78 0.82
07/25/2019 31398VJ98 PAID DOWN PAR VALUE OF F H L M C MLTCL MTG 4.251% 1/25/20 -85,346.9400 0.000000 85,346.94 -90,187.71 -4,840.77
07/25/2019 31403DJZ3 PAID DOWN PAR VALUE OF F N M A #745580 5.000% 6/01/36 JUNE FNMA DUE
7/25/19
-1,195.7000 0.000000 1,195.70 -1,285.38 -89.68
07/25/2019 31403GXF4 PAID DOWN PAR VALUE OF F N M A #748678 5.000% 10/01/33 JUNE FNMA DUE
7/25/19
-8.8600 0.000000 8.86 -9.52 -0.66
07/25/2019 31406PQY8 PAID DOWN PAR VALUE OF F N M A #815971 5.000% 3/01/35 JUNE FNMA DUE
7/25/19
-2,095.9000 0.000000 2,095.90 -2,253.09 -157.19
07/25/2019 31406XWT5 PAID DOWN PAR VALUE OF F N M A #823358 4.722% 2/01/35 JUNE FNMA DUE
7/25/19
-437.8000 0.000000 437.80 -434.38 3.42
07/25/2019 31407BXH7 PAID DOWN PAR VALUE OF F N M A #826080 5.000% 7/01/35 JUNE FNMA DUE
7/25/19
-86.3000 0.000000 86.30 -92.77 -6.47
07/25/2019 31410F4V4 PAID DOWN PAR VALUE OF F N M A #888336 5.000% 7/01/36 JUNE FNMA DUE
7/25/19
-3,239.4100 0.000000 3,239.41 -3,482.37 -242.96
07/25/2019 31417YAY3 PAID DOWN PAR VALUE OF F N M A #MA0022 4.500% 4/01/29 JUNE FNMA DUE
7/25/19
-385.7000 0.000000 385.70 -407.92 -22.22
07/25/2019 78445JAA5 PAID DOWN PAR VALUE OF S L M A 4.12559% 4/25/23 -669.6900 0.000000 669.69 -666.97 2.72
07/29/2019 69353REX2 MATURED PAR VALUE OF PNC BANK MTN 1.450% 7/29/19 1,890,000 PAR VALUE
AT 100 %
-1,890,000.0000 1.000000 1,890,000.00 -1,872,668.70 17,331.30
5 of 23
U.S. Bank
Transaction History
07/01/2019 Thru 09/30/2019
Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss
07/31/2019 313384JV2 MATURED PAR VALUE OF F H L B DISC NTS 7/31/19 5,500,000 PAR VALUE AT
100 %
-5,500,000.0000 1.000000 5,461,946.11 -5,461,946.11 0.00
07/31/2019 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -74,491,755.5600 1.000000 74,491,755.56 -74,491,755.56 0.00
07/31/2019 9128282K5 MATURED PAR VALUE OF U S TREASURY NT 1.375% 7/31/19 35,000,000 PAR
VALUE AT 100 %
-35,000,000.0000 1.000000 35,000,000.00 -34,810,156.26 189,843.74
07/31/2019 912828TH3 MATURED PAR VALUE OF U S TREASURY NT 0.875% 7/31/19 15,000,000 PAR
VALUE AT 100 %
-15,000,000.0000 1.000000 15,000,000.00 -14,874,023.44 125,976.56
07/31/2019 912828WW6 MATURED PAR VALUE OF U S TREASURY NT 1.625% 7/31/19 20,000,000 PAR
VALUE AT 100 %
-20,000,000.0000 1.000000 20,000,000.00 -19,923,437.51 76,562.49
07/31/2019 912828WW6 MATURED PAR VALUE OF U S TREASURY NT 1.625% 7/31/19 5,000,000 PAR
VALUE AT 100 %
-5,000,000.0000 1.000000 5,000,000.00 -5,012,388.70 -12,388.70
08/09/2019 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -4,028,035.0000 1.000000 4,028,035.00 -4,028,035.00 0.00
08/12/2019 69371RN36 MATURED PAR VALUE OF PACCAR FINANCIAL MTN 1.200% 8/12/19 1,083,000 PAR
VALUE AT 100 %
-1,083,000.0000 1.000000 1,083,000.00 -1,069,484.16 13,515.84
08/14/2019 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -5,052,905.0000 1.000000 5,052,905.00 -5,052,905.00 0.00
08/15/2019 02665WAH4 MATURED PAR VALUE OF AMERICAN HONDA MTN 2.250% 8/15/19 1,977,000 PAR
VALUE AT 100 %
-1,977,000.0000 1.000000 1,977,000.00 -1,972,709.91 4,290.09
08/15/2019 02665WAH4 MATURED PAR VALUE OF AMERICAN HONDA MTN 2.250% 8/15/19 2,500,000 PAR
VALUE AT 100 %
-2,500,000.0000 1.000000 2,500,000.00 -2,531,985.00 -31,985.00
08/15/2019 3133TCE95 PAID DOWN PAR VALUE OF F H L M C MLTCL MTG 4.016% 8/15/32 -327.6500 0.000000 327.65 -327.99 -0.34
08/15/2019 31348SWZ3 PAID DOWN PAR VALUE OF F H L M C #786064 4.677% 1/01/28 JULY FHLMC
DUE 8/15/19
-17.5100 0.000000 17.51 -17.08 0.43
08/15/2019 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -49,353.8900 1.000000 49,353.89 -49,353.89 0.00
08/15/2019 47788BAD6 PAID DOWN PAR VALUE OF JOHN DEERE OWNER 1.820% 10/15/21 -41,039.5800 10.101764 41,039.58 -41,036.58 3.00
08/15/2019 47788CAB8 PAID DOWN PAR VALUE OF JOHN DEERE OWNER 2.420% 10/15/20 -158,985.8800 2.607604 158,985.88 -158,662.94 322.94
08/15/2019 47788NAD0 PAID DOWN PAR VALUE OF JOHN DEERE OWNER 1.490% 5/15/23 -42,667.9300 9.716248 42,667.93 -41,961.24 706.69
08/15/2019 65478GAD2 PAID DOWN PAR VALUE OF NISSAN AUTO 1.750% 10/15/21 -202,815.7200 2.044083 202,815.72 -199,670.49 3,145.23
08/15/2019 65478VAD9 PAID DOWN PAR VALUE OF NISSAN AUTO 1.320% 1/15/21 -87,902.0400 4.716297 87,902.04 -87,198.14 703.90
08/15/2019 89238BAB8 PAID DOWN PAR VALUE OF TOYOTA AUTO 2.100% 10/15/20 -369,146.5800 1.123056 369,146.58 -369,108.85 37.73
08/19/2019 43814PAC4 PAID DOWN PAR VALUE OF HONDA AUTO 1.790% 9/20/21 -196,780.7500 0.000000 196,780.75 -193,659.93 3,120.82
08/19/2019 43814RAC0 PAID DOWN PAR VALUE OF HONDA AUTO 1.210% 12/18/20 -131,592.8900 0.000000 131,592.89 -130,148.45 1,444.44
08/19/2019 62479MVK6 MATURED PAR VALUE OF MUFG BANK LTD NY BRAN C P 8/19/19 11,125,000 PAR
VALUE AT 100 %
-11,125,000.0000 1.000000 11,081,427.08 -11,081,427.08 0.00
08/19/2019 62479MVK6 MATURED PAR VALUE OF MUFG BANK LTD NY BRAN C P 8/19/19 3,290,000 PAR
VALUE AT 100 %
-3,290,000.0000 1.000000 3,277,114.17 -3,277,114.17 0.00
08/20/2019 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -1,850,032.4700 1.000000 1,850,032.47 -1,850,032.47 0.00
08/20/2019 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -11,194,685.7100 1.000000 11,194,685.71 -11,194,685.71 0.00
6 of 23
U.S. Bank
Transaction History
07/01/2019 Thru 09/30/2019
Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss
08/20/2019 36225CAZ9 PAID DOWN PAR VALUE OF G N M A I I #080023 4.125% 12/20/26 JULY GNMA DUE
8/20/19
-159.4000 0.000000 159.40 -162.03 -2.63
08/20/2019 36225CC20 PAID DOWN PAR VALUE OF G N M A I I #080088 3.875% 6/20/27 JULY GNMA DUE
8/20/19
-175.0500 0.000000 175.05 -178.88 -3.83
08/20/2019 36225CN28 PAID DOWN PAR VALUE OF G N M A I I #080408 3.875% 5/20/30 JULY GNMA DUE
8/20/19
-935.2900 0.000000 935.29 -925.79 9.50
08/20/2019 36225CNM4 PAID DOWN PAR VALUE OF G N M A I I #080395 3.875% 4/20/30 JULY GNMA DUE
8/20/19
-41.7300 0.000000 41.73 -41.35 0.38
08/20/2019 36225DCB8 PAID DOWN PAR VALUE OF G N M A I I #080965 3.750% 7/20/34 JULY GNMA DUE
8/20/19
-225.8200 0.000000 225.82 -225.68 0.14
08/26/2019 03215PFN4 PAID DOWN PAR VALUE OF AMRESCO 6.88883% 6/25/29 -5,170.7400 0.000000 5,170.74 -3,882.90 1,287.84
08/26/2019 31371NUC7 PAID DOWN PAR VALUE OF F N M A #257179 4.500% 4/01/28 JULY FNMA DUE
8/25/19
-133.6400 0.000000 133.64 -141.34 -7.70
08/26/2019 31376KT22 PAID DOWN PAR VALUE OF F N M A #357969 5.000% 9/01/35 JULY FNMA DUE
8/25/19
-2,305.8700 0.000000 2,305.87 -2,478.81 -172.94
08/26/2019 31381PDA3 PAID DOWN PAR VALUE OF F N M A #466397 3.400% 11/01/20 JULY FNMA DUE
8/25/19
-697.4800 0.000000 697.48 -682.39 15.09
08/26/2019 3138EG6F6 PAID DOWN PAR VALUE OF F N M A #AL0869 4.500% 6/01/29 JULY FNMA DUE
8/25/19
-237.8800 0.000000 237.88 -251.58 -13.70
08/26/2019 31394JY35 PAID DOWN PAR VALUE OF F H L M C MLTCL MTG 6.500% 9/25/43 -2,847.9200 0.000000 2,847.92 -3,225.27 -377.35
08/26/2019 31397QRE0 PAID DOWN PAR VALUE OF F N M A GTD REMIC 1.113% 2/25/41 -4,128.0900 0.000000 4,128.09 -4,126.80 1.29
08/26/2019 31398VJ98 PAID DOWN PAR VALUE OF F H L M C MLTCL MTG 4.251% 1/25/20 -34,844.9200 0.000000 34,844.92 -36,821.28 -1,976.36
08/26/2019 31403DJZ3 PAID DOWN PAR VALUE OF F N M A #745580 5.000% 6/01/36 JULY FNMA DUE
8/25/19
-1,200.6000 0.000000 1,200.60 -1,290.64 -90.04
08/26/2019 31403GXF4 PAID DOWN PAR VALUE OF F N M A #748678 5.000% 10/01/33 JULY FNMA DUE
8/25/19
-8.9000 0.000000 8.90 -9.57 -0.67
08/26/2019 31406PQY8 PAID DOWN PAR VALUE OF F N M A #815971 5.000% 3/01/35 JULY FNMA DUE
8/25/19
-3,829.3500 0.000000 3,829.35 -4,116.55 -287.20
08/26/2019 31406XWT5 PAID DOWN PAR VALUE OF F N M A #823358 4.722% 2/01/35 JULY FNMA DUE
8/25/19
-443.0000 0.000000 443.00 -439.54 3.46
08/26/2019 31407BXH7 PAID DOWN PAR VALUE OF F N M A #826080 5.000% 7/01/35 JULY FNMA DUE
8/25/19
-589.9700 0.000000 589.97 -634.22 -44.25
08/26/2019 31410F4V4 PAID DOWN PAR VALUE OF F N M A #888336 5.000% 7/01/36 JULY FNMA DUE
8/25/19
-2,768.1900 0.000000 2,768.19 -2,975.80 -207.61
08/26/2019 31417YAY3 PAID DOWN PAR VALUE OF F N M A #MA0022 4.500% 4/01/29 JULY FNMA DUE
8/25/19
-313.7600 0.000000 313.76 -331.83 -18.07
08/27/2019 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -3,529,752.9000 1.000000 3,529,752.90 -3,529,752.90 0.00
7 of 23
U.S. Bank
Transaction History
07/01/2019 Thru 09/30/2019
Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss
08/27/2019 46625HKA7 PURCHASE OFFER PAR VALUE OF JPMORGAN CHASE CO 2.250% 1/23/20
/TENDER/PURCHASE OFFER/TENDER OFFER PAID AT $1000.55 PER $1000
-1,500,000.0000 1.000550 1,500,825.00 -1,490,940.00 9,885.00
08/27/2019 46625HKA7 PURCHASE OFFER PAR VALUE OF JPMORGAN CHASE CO 2.250% 1/23/20
/TENDER/PURCHASE OFFER/TENDER OFFER PAID AT $1000.55 PER $1000
-2,000,000.0000 1.000550 2,001,100.00 -1,994,880.00 6,220.00
08/28/2019 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -8,288,062.9000 1.000000 8,288,062.90 -8,288,062.90 0.00
09/03/2019 83162CLJ0 PAID DOWN PAR VALUE OF S B A GTD DEV PART 6.340% 3/01/21 -3,501.5000 0.000000 3,501.50 -3,501.50 0.00
09/11/2019 06406HCW7 MATURED PAR VALUE OF BANK OF NY MTN 2.300% 9/11/19 2,120,000 PAR VALUE
AT 100 %
-2,120,000.0000 1.000000 2,120,000.00 -2,142,175.20 -22,175.20
09/12/2019 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -6,607,228.3300 1.000000 6,607,228.33 -6,607,228.33 0.00
09/13/2019 21687BWD9 MATURED PAR VALUE OF COOPERATIEVE CENTRAL C P 9/13/19 2,000,000 PAR
VALUE AT 100 %
-2,000,000.0000 1.000000 1,957,864.44 -1,957,864.44 0.00
09/13/2019 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -2,608,950.0000 1.000000 2,608,950.00 -2,608,950.00 0.00
09/13/2019 96130ABJ6 MATURED PAR VALUE OF WESTPAC BKING C D 2.970% 9/13/19 1,500,000 PAR
VALUE AT 100 %
-1,500,000.0000 1.000000 1,500,000.00 -1,500,000.00 0.00
09/16/2019 24422ESS9 MATURED PAR VALUE OF JOHN DEERE CAP MTN 2.300% 9/16/19 5,000,000 PAR
VALUE AT 100 %
-5,000,000.0000 1.000000 5,000,000.00 -5,046,984.00 -46,984.00
09/16/2019 3133TCE95 PAID DOWN PAR VALUE OF F H L M C MLTCL MTG 4.016% 8/15/32 -426.1500 0.000000 426.15 -426.60 -0.45
09/16/2019 31348SWZ3 PAID DOWN PAR VALUE OF F H L M C #786064 4.677% 1/01/28 AUGUST FHLMC
DUE 9/15/19
-10.2600 0.000000 10.26 -10.01 0.25
09/16/2019 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -3,971,704.4400 1.000000 3,971,704.44 -3,971,704.44 0.00
09/16/2019 47788BAD6 PAID DOWN PAR VALUE OF JOHN DEERE OWNER 1.820% 10/15/21 -33,250.3900 0.193666 33,250.39 -33,247.96 2.43
09/16/2019 47788CAB8 PAID DOWN PAR VALUE OF JOHN DEERE OWNER 2.420% 10/15/20 -132,838.5800 0.048476 132,838.58 -132,568.75 269.83
09/16/2019 47788NAD0 PAID DOWN PAR VALUE OF JOHN DEERE OWNER 1.490% 5/15/23 -104,619.1400 0.061551 104,619.14 -102,886.39 1,732.75
09/16/2019 65478GAD2 PAID DOWN PAR VALUE OF NISSAN AUTO 1.750% 10/15/21 -184,963.4900 0.034815 184,963.49 -182,095.11 2,868.38
09/16/2019 65478VAD9 PAID DOWN PAR VALUE OF NISSAN AUTO 1.320% 1/15/21 -78,512.8800 0.082018 78,512.88 -77,884.16 628.72
09/16/2019 89238BAB8 PAID DOWN PAR VALUE OF TOYOTA AUTO 2.100% 10/15/20 -338,320.6100 0.019034 338,320.61 -338,286.03 34.58
09/18/2019 313384LW7 MATURED PAR VALUE OF F H L B DISC NTS 9/18/19 2,850,000 PAR VALUE AT
100 %
-2,850,000.0000 1.000000 2,835,718.33 -2,835,718.33 0.00
09/18/2019 43814PAC4 PAID DOWN PAR VALUE OF HONDA AUTO 1.790% 9/20/21 -191,465.2700 0.000000 191,465.27 -188,428.75 3,036.52
09/18/2019 43814RAC0 PAID DOWN PAR VALUE OF HONDA AUTO 1.210% 12/18/20 -125,470.4900 0.000000 125,470.49 -124,093.26 1,377.23
09/18/2019 69353RDZ8 FULL CALL PAR VALUE OF PNC BANK NA MTN 2.400% 10/18/19 /CALLS/ -1,000,000.0000 1.000000 1,000,000.00 -999,000.00 1,000.00
09/20/2019 36225CAZ9 PAID DOWN PAR VALUE OF G N M A I I #080023 4.125% 12/20/26 AUGUST GNMA
DUE 9/20/19
-168.0000 0.000000 168.00 -170.78 -2.78
09/20/2019 36225CC20 PAID DOWN PAR VALUE OF G N M A I I #080088 3.875% 6/20/27 AUGUST GNMA
DUE 9/20/19
-172.1100 0.000000 172.11 -175.88 -3.77
09/20/2019 36225CN28 PAID DOWN PAR VALUE OF G N M A I I #080408 3.875% 5/20/30 AUGUST GNMA
DUE 9/20/19
-1,313.3300 0.000000 1,313.33 -1,299.99 13.34
8 of 23
U.S. Bank
Transaction History
07/01/2019 Thru 09/30/2019
Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss
09/20/2019 36225CNM4 PAID DOWN PAR VALUE OF G N M A I I #080395 3.875% 4/20/30 AUGUST GNMA
DUE 9/20/19
-107.5000 0.000000 107.50 -106.53 0.97
09/20/2019 36225DCB8 PAID DOWN PAR VALUE OF G N M A I I #080965 3.750% 7/20/34 AUGUST GNMA
DUE 9/20/19
-521.4100 0.000000 521.41 -521.08 0.33
09/24/2019 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -7,721.7000 1.000000 7,721.70 -7,721.70 0.00
09/24/2019 912796VW6 MATURED PAR VALUE OF U S TREASURY BILL 9/24/19 1,650,000 PAR VALUE
AT 100 %
-1,650,000.0000 1.000000 1,647,472.41 -1,647,472.41 0.00
09/25/2019 03215PFN4 PAID DOWN PAR VALUE OF AMRESCO 3.08529% 6/25/29 -1,002.4000 0.000000 1,002.40 -752.74 249.66
09/25/2019 313384MD8 MATURED PAR VALUE OF F H L B DISC NTS 9/25/19 2,500,000 PAR VALUE AT
100 %
-2,500,000.0000 1.000000 2,491,755.56 -2,491,755.56 0.00
09/25/2019 31371NUC7 PAID DOWN PAR VALUE OF F N M A #257179 4.500% 4/01/28 AUGUST FNMA
DUE 9/25/19
-152.2000 0.000000 152.20 -160.97 -8.77
09/25/2019 31376KT22 PAID DOWN PAR VALUE OF F N M A #357969 5.000% 9/01/35 AUGUST FNMA
DUE 9/25/19
-1,514.2800 0.000000 1,514.28 -1,627.85 -113.57
09/25/2019 31381PDA3 PAID DOWN PAR VALUE OF F N M A #466397 3.400% 11/01/20 AUGUST FNMA
DUE 9/25/19
-700.3700 0.000000 700.37 -685.21 15.16
09/25/2019 3138EG6F6 PAID DOWN PAR VALUE OF F N M A #AL0869 4.500% 6/01/29 AUGUST FNMA
DUE 9/25/19
-166.2300 0.000000 166.23 -175.80 -9.57
09/25/2019 31394JY35 PAID DOWN PAR VALUE OF F H L M C MLTCL MTG 6.500% 9/25/43 -11,750.1900 0.000000 11,750.19 -13,307.09 -1,556.90
09/25/2019 31397QRE0 PAID DOWN PAR VALUE OF F N M A GTD REMIC 2.825% 2/25/41 -4,168.6800 1,910.816505 4,168.68 -4,167.38 1.30
09/25/2019 31398VJ98 PAID DOWN PAR VALUE OF F H L M C MLTCL MTG 4.251% 1/25/20 -49,947.5300 0.000000 49,947.53 -52,780.49 -2,832.96
09/25/2019 31403DJZ3 PAID DOWN PAR VALUE OF F N M A #745580 5.000% 6/01/36 AUGUST FNMA
DUE 9/25/19
-1,592.2000 0.000000 1,592.20 -1,711.62 -119.42
09/25/2019 31403GXF4 PAID DOWN PAR VALUE OF F N M A #748678 5.000% 10/01/33 AUGUST FNMA
DUE 9/25/19
-8.9400 0.000000 8.94 -9.61 -0.67
09/25/2019 31406PQY8 PAID DOWN PAR VALUE OF F N M A #815971 5.000% 3/01/35 AUGUST FNMA
DUE 9/25/19
-2,093.3300 0.000000 2,093.33 -2,250.33 -157.00
09/25/2019 31406XWT5 PAID DOWN PAR VALUE OF F N M A #823358 4.722% 2/01/35 AUGUST FNMA
DUE 9/25/19
-438.9600 0.000000 438.96 -435.53 3.43
09/25/2019 31407BXH7 PAID DOWN PAR VALUE OF F N M A #826080 5.000% 7/01/35 AUGUST FNMA
DUE 9/25/19
-300.8600 0.000000 300.86 -323.42 -22.56
09/25/2019 31410F4V4 PAID DOWN PAR VALUE OF F N M A #888336 5.000% 7/01/36 AUGUST FNMA
DUE 9/25/19
-3,923.7200 0.000000 3,923.72 -4,218.00 -294.28
09/25/2019 31417YAY3 PAID DOWN PAR VALUE OF F N M A #MA0022 4.500% 4/01/29 AUGUST FNMA
DUE 9/25/19
-248.4500 0.000000 248.45 -262.76 -14.31
09/26/2019 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -1,361,501.5700 1.000000 1,361,501.57 -1,361,501.57 0.00
09/30/2019 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -24,982,984.4400 1.000000 24,982,984.44 -24,982,984.44 0.00
09/30/2019 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -15,000,000.0000 1.000000 15,000,000.00 -15,000,000.00 0.00
9 of 23
U.S. Bank
Transaction History
07/01/2019 Thru 09/30/2019
Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss
09/30/2019 89114MM20 MATURED PAR VALUE OF TORONTO DOMINION C D 2.470% 9/30/19 2,000,000 PAR
VALUE AT 100 %
-2,000,000.0000 1.000000 2,000,000.00 -2,000,066.62 -66.62
09/30/2019 9128282X7 MATURED PAR VALUE OF U S TREASURY NT 1.375% 9/30/19 10,000,000 PAR
VALUE AT 100 %
-10,000,000.0000 1.000000 10,000,000.00 -9,962,500.00 37,500.00
09/30/2019 912828F39 MATURED PAR VALUE OF U S TREASURY NT 1.750% 9/30/19 1,350,000 PAR
VALUE AT 100 %
-1,350,000.0000 1.000000 1,350,000.00 -1,349,947.27 52.73
09/30/2019 912828F39 MATURED PAR VALUE OF U S TREASURY NT 1.750% 9/30/19 5,800,000 PAR
VALUE AT 100 %
-5,800,000.0000 1.000000 5,800,000.00 -5,873,186.87 -73,186.87
09/30/2019 912828TR1 MATURED PAR VALUE OF U S TREASURY NT 1.000% 9/30/19 1,650,000 PAR
VALUE AT 100 %
-1,650,000.0000 1.000000 1,650,000.00 -1,649,742.19 257.81
09/30/2019 912828TR1 MATURED PAR VALUE OF U S TREASURY NT 1.000% 9/30/19 10,000,000 PAR
VALUE AT 100 %
-10,000,000.0000 1.000000 10,000,000.00 -9,937,500.00 62,500.00
TOTAL DISPOSITIONS -333,973,193.3100 333,813,176.41 -333,437,975.64 375,200.77
OTHER TRANSACTIONS
07/01/2019 31846V567 INTEREST EARNED ON FIRST AM GOVT OB FD CL Z UNIT ON 0.0000 SHARES DUE
6/30/2019 INTEREST FROM 6/1/19 TO 6/30/19
0.0000 0.000000 12,397.24 0.00 0.00
07/01/2019 31846V567 INTEREST EARNED ON FIRST AM GOVT OB FD CL Z UNIT ON 0.0000 SHARES DUE
6/30/2019 INTEREST FROM 6/1/19 TO 6/30/19
0.0000 0.000000 34,814.07 0.00 0.00
07/01/2019 912828N30 INTEREST EARNED ON U S TREASURY NT 2.125% 12/31/22 $1 PV ON 5000000.0000
SHARES DUE 6/30/2019
0.0000 0.000000 53,125.00 0.00 0.00
07/01/2019 912828WS5 INTEREST EARNED ON U S TREASURY NT 1.625% 6/30/19 $1 PV ON 2000000.0000
SHARES DUE 6/30/2019
0.0000 0.000000 16,250.00 0.00 0.00
07/01/2019 912828XW5 INTEREST EARNED ON U S TREASURY NT 1.750% 6/30/22 $1 PV ON 5000000.0000
SHARES DUE 6/30/2019
0.0000 0.000000 43,750.00 0.00 0.00
07/05/2019 3135G0S38 INTEREST EARNED ON F N M A 2.000% 1/05/22 $1 PV ON 3000000.0000
SHARES DUE 7/5/2019
0.0000 0.000000 30,000.00 0.00 0.00
07/05/2019 404280BF5 INTEREST EARNED ON HSBC HOLDINGS PLC 2.650% 1/05/22 $1 PV ON
4500000.0000 SHARES DUE 7/5/2019
0.0000 0.000000 59,625.00 0.00 0.00
07/08/2019 31398VJ98 INTEREST EARNED ON F H L M C MLTCL MTG 4.251% 1/25/20 $1 PV ON 3131.8900
SHARES DUE 6/25/2019 $0.00354/PV ON 884,090.32 PV DUE 6/25/19
0.0000 0.000000 3,131.89 0.00 0.00
07/08/2019 31398VJ98 INTEREST EARNED ON F H L M C MLTCL MTG 4.251% 1/25/20 $1 PV ON 3131.8900
SHARES DUE 6/25/2019 RATE CHANGE 6/25/19
0.0000 0.000000 -3,131.89 0.00 0.00
07/11/2019 912828WU0 BOOK VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 12688.00 UNITS
INCREASE TO ADJUST FOR CHANGE IN CPI
0.0000 0.000000 0.00 0.00 0.00
07/11/2019 912828WU0 FED BASIS OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 12688.00 UNITS
INCREASE TO ADJUST FOR CHANGE IN CPI
0.0000 0.000000 0.00 12,688.00 0.00
07/11/2019 912828WU0 PAR VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 12688.0000
UNITS INCREASE TO ADJUST FOR CHANGE IN CPI
12,688.0000 0.000000 0.00 0.00 0.00
10 of 23
U.S. Bank
Transaction History
07/01/2019 Thru 09/30/2019
Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss
07/11/2019 912828WU0 STATE COST OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 12688.00 UNITS
INCREASE TO ADJUST FOR CHANGE IN CPI
0.0000 0.000000 0.00 0.00 0.00
07/12/2019 02665WAH4 RECEIVED ACCRUED INTEREST ON SALE OF AMERICAN HONDA MTN 2.250%
8/15/19
0.0000 0.000000 13,781.25 0.00 0.00
07/12/2019 02665WCZ2 PAID ACCRUED INTEREST ON PURCHASE OF AMERICAN HONDA MTN 2.400%
6/27/24
0.0000 0.000000 -1,219.00 0.00 0.00
07/12/2019 25468PDL7 INTEREST EARNED ON WALT DISNEY MTN 0.875% 7/12/19 $1 PV ON 1130000.0000
SHARES DUE 7/12/2019 INTEREST ON 7/12/19 MATURITY
0.0000 0.000000 4,943.75 0.00 0.00
07/15/2019 02587AAJ3 INTEREST EARNED ON AMERICAN EXPRESS 1.930% 9/15/22 $1 PV ON 10084.2400
SHARES DUE 7/15/2019 $0.00161/PV ON 6,270,000.00 PV DUE 7/15/19
0.0000 0.000000 10,084.24 0.00 0.00
07/15/2019 02665WCJ8 INTEREST EARNED ON AMERICAN HONDA MTN 3.450% 7/14/23 $1 PV ON
845000.0000 SHARES DUE 7/14/2019
0.0000 0.000000 14,576.25 0.00 0.00
07/15/2019 3133TCE95 INTEREST EARNED ON F H L M C MLTCL MTG 4.016% 8/15/32 $1 PV ON 30.8400
SHARES DUE 7/15/2019 $0.00335/PV ON 9,215.15 PV DUE 7/15/19
0.0000 0.000000 30.84 0.00 0.00
07/15/2019 31348SWZ3 INTEREST EARNED ON F H L M C #786064 4.677% 1/01/28 $1 PV ON 7.4000 SHARES
DUE 7/15/2019 MAY FHLMC DUE 7/15/19
0.0000 0.000000 7.40 0.00 0.00
07/15/2019 43814QAC2 INTEREST EARNED ON HONDA AUTO 1.390% 4/15/20 $1 PV ON 7.8900 SHARES
DUE 7/15/2019 $0.00116/PV ON 6,808.64 PV DUE 7/15/19
0.0000 0.000000 7.89 0.00 0.00
07/15/2019 47788BAD6 INTEREST EARNED ON JOHN DEERE OWNER 1.820% 10/15/21 $1 PV ON 829.7700
SHARES DUE 7/15/2019 $0.00152/PV ON 547,103.97 PV DUE 7/15/19
0.0000 0.000000 829.77 0.00 0.00
07/15/2019 47788CAB8 INTEREST EARNED ON JOHN DEERE OWNER 2.420% 10/15/20 $1 PV ON 1203.0100
SHARES DUE 7/15/2019 $0.00202/PV ON 596,531.92 PV DUE 7/15/19
0.0000 0.000000 1,203.01 0.00 0.00
07/15/2019 47788CAC6 INTEREST EARNED ON JOHN DEERE OWNER 2.660% 4/18/22 $1 PV ON 2970.3300
SHARES DUE 7/15/2019 $0.00222/PV ON 1,340,000.00 PV DUE 7/15/19
0.0000 0.000000 2,970.33 0.00 0.00
07/15/2019 47788EAC2 INTEREST EARNED ON JOHN DEERE OWNER 3.080% 11/15/22 $1 PV ON 11883.6700
SHARES DUE 7/15/2019 $0.00257/PV ON 4,630,000.00 PV DUE 7/15/19
0.0000 0.000000 11,883.67 0.00 0.00
07/15/2019 47788NAD0 INTEREST EARNED ON JOHN DEERE OWNER 1.490% 5/15/23 $1 PV ON 1429.1600
SHARES DUE 7/15/2019 $0.00124/PV ON 1,151,000.00 PV DUE 7/15/19
0.0000 0.000000 1,429.16 0.00 0.00
07/15/2019 47789JAB2 INTEREST EARNED ON JOHN DEERE OWNER 2.850% 12/15/21 $1 PV ON 7754.3800
SHARES DUE 7/15/2019 $0.00238/PV ON 3,265,000.00 PV DUE 7/15/19
0.0000 0.000000 7,754.38 0.00 0.00
07/15/2019 65477UAD2 INTEREST EARNED ON NISSAN AUTO 1.500% 9/15/21 $1 PV ON 272.4600
SHARES DUE 7/15/2019 $0.00125/PV ON 217,968.12 PV DUE 7/15/19
0.0000 0.000000 272.46 0.00 0.00
07/15/2019 65478GAD2 INTEREST EARNED ON NISSAN AUTO 1.750% 10/15/21 $1 PV ON 3828.1200
SHARES DUE 7/15/2019 $0.00146/PV ON 2,625,000.00 PV DUE 7/15/19
0.0000 0.000000 3,828.12 0.00 0.00
07/15/2019 65478VAD9 INTEREST EARNED ON NISSAN AUTO 1.320% 1/15/21 $1 PV ON 548.9500
SHARES DUE 7/15/2019 $0.00110/PV ON 499,041.78 PV DUE 7/15/19
0.0000 0.000000 548.95 0.00 0.00
07/15/2019 65479GAD1 INTEREST EARNED ON NISSAN AUTO 3.060% 3/15/23 $1 PV ON 9078.0000
SHARES DUE 7/15/2019 $0.00255/PV ON 3,560,000.00 PV DUE 7/15/19
0.0000 0.000000 9,078.00 0.00 0.00
11 of 23
U.S. Bank
Transaction History
07/01/2019 Thru 09/30/2019
Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss
07/15/2019 89238BAB8 INTEREST EARNED ON TOYOTA AUTO 2.100% 10/15/20 $1 PV ON 3017.3100
SHARES DUE 7/15/2019 $0.00175/PV ON 1,724,177.00 PV DUE 7/15/19
0.0000 0.000000 3,017.31 0.00 0.00
07/15/2019 89239AAB9 INTEREST EARNED ON TOYOTA AUTO 2.830% 10/15/21 $1 PV ON 8525.3700
SHARES DUE 7/15/2019 $0.00236/PV ON 3,615,000.00 PV DUE 7/15/19
0.0000 0.000000 8,525.37 0.00 0.00
07/15/2019 912828WU0 INTEREST EARNED ON U S TREASURY I P S 0.125% 7/15/24 $1 PV ON
11203608.0000 SHARES DUE 7/15/2019
0.0000 0.000000 7,002.26 0.00 0.00
07/15/2019 912828XX3 PAID ACCRUED INTEREST ON PURCHASE OF U S TREASURY NT 2.000% 6/30/24 0.0000 0.000000 -4,076.09 0.00 0.00
07/18/2019 43814PAC4 INTEREST EARNED ON HONDA AUTO 1.790% 9/20/21 $1 PV ON 4015.7300
SHARES DUE 7/18/2019 $0.00149/PV ON 2,692,110.09 PV DUE 7/18/19
0.0000 0.000000 4,015.73 0.00 0.00
07/18/2019 43814RAC0 INTEREST EARNED ON HONDA AUTO 1.210% 12/18/20 $1 PV ON 956.9200
SHARES DUE 7/18/2019 $0.00101/PV ON 949,016.11 PV DUE 7/18/19
0.0000 0.000000 956.92 0.00 0.00
07/18/2019 43814UAG4 INTEREST EARNED ON HONDA AUTO 3.010% 5/18/22 $1 PV ON 4289.2500
SHARES DUE 7/18/2019 $0.00251/PV ON 1,710,000.00 PV DUE 7/18/19
0.0000 0.000000 4,289.25 0.00 0.00
07/18/2019 43814WAB1 INTEREST EARNED ON HONDA AUTO 2.750% 9/20/21 $1 PV ON 10071.8800
SHARES DUE 7/18/2019 $0.00229/PV ON 4,395,000.00 PV DUE 7/18/19
0.0000 0.000000 10,071.88 0.00 0.00
07/18/2019 4581X0CW6 INTEREST EARNED ON INTER AMER DEV BK 2.125% 1/18/22 $1 PV ON
3000000.0000 SHARES DUE 7/18/2019
0.0000 0.000000 31,875.00 0.00 0.00
07/18/2019 525ESC0Y6 Unknown LEHMAN BRTH HLD ESC PARTIAL LIQUIDATING DISTRIBUTION PAID @
2.87/SHARE
0.0000 0.000000 5,744.23 -5,744.23 0.00
07/18/2019 525ESCIB7 Unknown LEHMAN BRTH MTN ES 0.00001% 1/24/13 PARTIAL LIQUIDATING
DISTRIBUTION PAID @ 2.88/SHARE
0.0000 0.000000 1,729.39 -1,729.39 0.00
07/19/2019 3135G0T94 INTEREST EARNED ON F N M A DEB 2.375% 1/19/23 $1 PV ON 5000000.0000
SHARES DUE 7/19/2019
0.0000 0.000000 59,375.00 0.00 0.00
07/19/2019 89114QC48 INTEREST EARNED ON TORONTO MTN 3.500% 7/19/23 $1 PV ON 5000000.0000
SHARES DUE 7/19/2019
0.0000 0.000000 87,500.00 0.00 0.00
07/22/2019 36225CAZ9 INTEREST EARNED ON G N M A I I #080023 4.125% 12/20/26 $1 PV ON 57.5800
SHARES DUE 7/20/2019 JUNE GNMA DUE 7/20/19
0.0000 0.000000 57.58 0.00 0.00
07/22/2019 36225CC20 INTEREST EARNED ON G N M A I I #080088 3.625% 6/20/27 $1 PV ON 50.6000
SHARES DUE 7/20/2019 JUNE GNMA DUE 7/20/19
0.0000 0.000000 50.60 0.00 0.00
07/22/2019 36225CN28 INTEREST EARNED ON G N M A I I #080408 3.625% 5/20/30 $1 PV ON 160.5700
SHARES DUE 7/20/2019 JUNE GNMA DUE 7/20/19
0.0000 0.000000 160.57 0.00 0.00
07/22/2019 36225CNM4 INTEREST EARNED ON G N M A I I #080395 3.625% 4/20/30 $1 PV ON 20.6300
SHARES DUE 7/20/2019 JUNE GNMA DUE 7/20/19
0.0000 0.000000 20.63 0.00 0.00
07/22/2019 36225DCB8 INTEREST EARNED ON G N M A I I #080965 3.750% 7/20/34 $1 PV ON 147.4600
SHARES DUE 7/20/2019 JUNE GNMA DUE 7/20/19
0.0000 0.000000 147.46 0.00 0.00
07/22/2019 43815HAC1 INTEREST EARNED ON HONDA AUTO 2.950% 8/22/22 $1 PV ON 9759.5800
SHARES DUE 7/21/2019 $0.00246/PV ON 3,970,000.00 PV DUE 7/21/19
0.0000 0.000000 9,759.58 0.00 0.00
07/22/2019 45950KCJ7 INTEREST EARNED ON INTL FINANCE CORP 1.125% 7/20/21 $1 PV ON
2500000.0000 SHARES DUE 7/20/2019
0.0000 0.000000 14,075.00 0.00 0.00
12 of 23
U.S. Bank
Transaction History
07/01/2019 Thru 09/30/2019
Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss
07/22/2019 94974BGM6 INTEREST EARNED ON WELLS FARGO CO MTN 2.600% 7/22/20 $1 PV ON
5000000.0000 SHARES DUE 7/22/2019
0.0000 0.000000 65,000.00 0.00 0.00
07/22/2019 95000U2B8 INTEREST EARNED ON WELLS FARGO MTN 2.625% 7/22/22 $1 PV ON
3000000.0000 SHARES DUE 7/22/2019
0.0000 0.000000 39,375.00 0.00 0.00
07/23/2019 46625HKA7 INTEREST EARNED ON JPMORGAN CHASE CO 2.250% 1/23/20 $1 PV ON
1500000.0000 SHARES DUE 7/23/2019
0.0000 0.000000 16,875.00 0.00 0.00
07/23/2019 46625HKA7 INTEREST EARNED ON JPMORGAN CHASE CO 2.250% 1/23/20 $1 PV ON
2000000.0000 SHARES DUE 7/23/2019
0.0000 0.000000 22,500.00 0.00 0.00
07/23/2019 90331HNL3 INTEREST EARNED ON US BANK NA MTN 2.850% 1/23/23 $1 PV ON 5000000.0000
SHARES DUE 7/23/2019
0.0000 0.000000 71,250.00 0.00 0.00
07/25/2019 31371NUC7 INTEREST EARNED ON F N M A #257179 4.500% 4/01/28 $1 PV ON 56.8300
SHARES DUE 7/25/2019 JUNE FNMA DUE 7/25/19
0.0000 0.000000 56.83 0.00 0.00
07/25/2019 31376KT22 INTEREST EARNED ON F N M A #357969 5.000% 9/01/35 $1 PV ON 433.1100
SHARES DUE 7/25/2019 JUNE FNMA DUE 7/25/19
0.0000 0.000000 433.11 0.00 0.00
07/25/2019 31381PDA3 INTEREST EARNED ON F N M A #466397 3.400% 11/01/20 $1 PV ON 961.9000
SHARES DUE 7/25/2019 JUNE FNMA DUE 7/25/19
0.0000 0.000000 961.90 0.00 0.00
07/25/2019 3138EG6F6 INTEREST EARNED ON F N M A #AL0869 4.500% 6/01/29 $1 PV ON 39.9400
SHARES DUE 7/25/2019 JUNE FNMA DUE 7/25/19
0.0000 0.000000 39.94 0.00 0.00
07/25/2019 31394JY35 INTEREST EARNED ON F H L M C MLTCL MTG 6.500% 9/25/43 $1 PV ON 3843.1500
SHARES DUE 7/25/2019 $0.00542/PV ON 709,504.78 PV DUE 7/25/19
0.0000 0.000000 3,843.15 0.00 0.00
07/25/2019 31397QRE0 INTEREST EARNED ON F N M A GTD REMIC 1.113% 2/25/41 $1 PV ON 507.4300
SHARES DUE 7/25/2019 $0.00257/PV ON 197,419.05 PV DUE 7/25/19
0.0000 0.000000 507.43 0.00 0.00
07/25/2019 31398VJ98 INTEREST EARNED ON F H L M C MLTCL MTG 4.251% 1/25/20 $1 PV ON 2937.4200
SHARES DUE 7/25/2019 $0.00354/PV ON 829,194.13 PV DUE 7/25/19
0.0000 0.000000 2,937.42 0.00 0.00
07/25/2019 31403DJZ3 INTEREST EARNED ON F N M A #745580 5.000% 6/01/36 $1 PV ON 402.0800
SHARES DUE 7/25/2019 JUNE FNMA DUE 7/25/19
0.0000 0.000000 402.08 0.00 0.00
07/25/2019 31403GXF4 INTEREST EARNED ON F N M A #748678 5.000% 10/01/33 $1 PV ON 7.5300 SHARES
DUE 7/25/2019 JUNE FNMA DUE 7/25/19
0.0000 0.000000 7.53 0.00 0.00
07/25/2019 31406PQY8 INTEREST EARNED ON F N M A #815971 5.000% 3/01/35 $1 PV ON 688.1700
SHARES DUE 7/25/2019 JUNE FNMA DUE 7/25/19
0.0000 0.000000 688.17 0.00 0.00
07/25/2019 31406XWT5 INTEREST EARNED ON F N M A #823358 4.722% 2/01/35 $1 PV ON 435.1700
SHARES DUE 7/25/2019 JUNE FNMA DUE 7/25/19
0.0000 0.000000 435.17 0.00 0.00
07/25/2019 31407BXH7 INTEREST EARNED ON F N M A #826080 5.000% 7/01/35 $1 PV ON 81.8900
SHARES DUE 7/25/2019 JUNE FNMA DUE 7/25/19
0.0000 0.000000 81.89 0.00 0.00
07/25/2019 31410F4V4 INTEREST EARNED ON F N M A #888336 5.000% 7/01/36 $1 PV ON 792.0600
SHARES DUE 7/25/2019 JUNE FNMA DUE 7/25/19
0.0000 0.000000 792.06 0.00 0.00
07/25/2019 31417YAY3 INTEREST EARNED ON F N M A #MA0022 4.500% 4/01/29 $1 PV ON 65.1900
SHARES DUE 7/25/2019 JUNE FNMA DUE 7/25/19
0.0000 0.000000 65.19 0.00 0.00
13 of 23
U.S. Bank
Transaction History
07/01/2019 Thru 09/30/2019
Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss
07/25/2019 45950KCM0 INTEREST EARNED ON INTL BK M T N 2.250% 1/25/21 $1 PV ON 2970000.0000
SHARES DUE 7/25/2019
0.0000 0.000000 33,412.50 0.00 0.00
07/25/2019 78445JAA5 INTEREST EARNED ON S L M A 4.12559% 4/25/23 $1 PV ON 144.5500 SHARES
DUE 7/25/2019 $0.01031/PV ON 14,014.54 PV DUE 7/25/19
0.0000 0.000000 144.55 0.00 0.00
07/25/2019 808513AT2 INTEREST EARNED ON CHARLES SCHWAB CORP 2.650% 1/25/23 $1 PV ON
6750000.0000 SHARES DUE 7/25/2019
0.0000 0.000000 89,437.50 0.00 0.00
07/26/2019 459058FY4 INTEREST EARNED ON INTL BK 2.000% 1/26/22 $1 PV ON 10000000.0000
SHARES DUE 7/26/2019
0.0000 0.000000 100,000.00 0.00 0.00
07/29/2019 06406RAE7 INTEREST EARNED ON BANK OF NY MTN 2.950% 1/29/23 $1 PV ON 2500000.0000
SHARES DUE 7/29/2019
0.0000 0.000000 36,875.00 0.00 0.00
07/29/2019 61747WAL3 INTEREST EARNED ON MORGAN STANLEY 5.500% 7/28/21 $1 PV ON
2800000.0000 SHARES DUE 7/28/2019
0.0000 0.000000 77,000.00 0.00 0.00
07/29/2019 69353REX2 INTEREST EARNED ON PNC BANK MTN 1.450% 7/29/19 $1 PV ON 1890000.0000
SHARES DUE 7/29/2019 INTEREST ON 7/29/19 MATURITY
0.0000 0.000000 13,702.50 0.00 0.00
07/29/2019 912828WU0 BOOK VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 12272.00 UNITS
INCREASE TO ADJUST FOR CHANGE IN CPI
0.0000 0.000000 0.00 0.00 0.00
07/29/2019 912828WU0 FED BASIS OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 12272.00 UNITS
INCREASE TO ADJUST FOR CHANGE IN CPI
0.0000 0.000000 0.00 12,272.00 0.00
07/29/2019 912828WU0 PAR VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 12272.0000
UNITS INCREASE TO ADJUST FOR CHANGE IN CPI
12,272.0000 0.000000 0.00 0.00 0.00
07/29/2019 912828WU0 STATE COST OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 12272.00 UNITS
INCREASE TO ADJUST FOR CHANGE IN CPI
0.0000 0.000000 0.00 0.00 0.00
07/30/2019 94974BGF1 INTEREST EARNED ON WELLS FARGO MTN 2.150% 1/30/20 $1 PV ON
1000000.0000 SHARES DUE 7/30/2019
0.0000 0.000000 10,750.00 0.00 0.00
07/31/2019 313384JV2 INTEREST EARNED ON F H L B DISC NTS 7/31/19 $1 PV ON 5500000.0000
SHARES DUE 7/31/2019 5,500,000 PAR VALUE AT 100 %
0.0000 0.000000 38,053.89 0.00 0.00
07/31/2019 9128282K5 INTEREST EARNED ON U S TREASURY NT 1.375% 7/31/19 $1 PV ON
35000000.0000 SHARES DUE 7/31/2019
0.0000 0.000000 240,625.00 0.00 0.00
07/31/2019 9128283S7 INTEREST EARNED ON U S TREASURY NT 2.000% 1/31/20 $1 PV ON
15000000.0000 SHARES DUE 7/31/2019
0.0000 0.000000 150,000.00 0.00 0.00
07/31/2019 912828H52 INTEREST EARNED ON U S TREASURY NT 1.250% 1/31/20 $1 PV ON
13500000.0000 SHARES DUE 7/31/2019
0.0000 0.000000 84,375.00 0.00 0.00
07/31/2019 912828N89 INTEREST EARNED ON U S TREASURY NT 1.375% 1/31/21 $1 PV ON 6000000.0000
SHARES DUE 7/31/2019
0.0000 0.000000 41,250.00 0.00 0.00
07/31/2019 912828TH3 INTEREST EARNED ON U S TREASURY NT 0.875% 7/31/19 $1 PV ON
15000000.0000 SHARES DUE 7/31/2019
0.0000 0.000000 65,625.00 0.00 0.00
07/31/2019 912828V72 INTEREST EARNED ON U S TREASURY NT 1.875% 1/31/22 $1 PV ON 3000000.0000
SHARES DUE 7/31/2019
0.0000 0.000000 28,125.00 0.00 0.00
14 of 23
U.S. Bank
Transaction History
07/01/2019 Thru 09/30/2019
Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss
07/31/2019 912828V80 INTEREST EARNED ON U S TREASURY NT 2.250% 1/31/24 $1 PV ON 7500000.0000
SHARES DUE 7/31/2019
0.0000 0.000000 84,375.00 0.00 0.00
07/31/2019 912828WW6 INTEREST EARNED ON U S TREASURY NT 1.625% 7/31/19 $1 PV ON
20000000.0000 SHARES DUE 7/31/2019
0.0000 0.000000 162,500.00 0.00 0.00
07/31/2019 912828WW6 INTEREST EARNED ON U S TREASURY NT 1.625% 7/31/19 $1 PV ON 5000000.0000
SHARES DUE 7/31/2019
0.0000 0.000000 40,625.00 0.00 0.00
07/31/2019 CASH DISBURSEMENT PAID TO BANC OF CALIFORNIA OUTGOING DOMESTIC WIRE
PER DIR DTD 7/30/19
0.0000 0.000000 -72,000,000.00 0.00 0.00
08/01/2019 31846V567 INTEREST EARNED ON FIRST AM GOVT OB FD CL Z UNIT ON 0.0000 SHARES DUE
7/31/2019 INTEREST FROM 7/1/19 TO 7/31/19
0.0000 0.000000 13,196.29 0.00 0.00
08/01/2019 31846V567 INTEREST EARNED ON FIRST AM GOVT OB FD CL Z UNIT ON 0.0000 SHARES DUE
7/31/2019 INTEREST FROM 7/1/19 TO 7/31/19
0.0000 0.000000 29,177.64 0.00 0.00
08/05/2019 3135G0V34 INTEREST EARNED ON F N M A 2.500% 2/05/24 $1 PV ON 5000000.0000
SHARES DUE 8/5/2019
0.0000 0.000000 61,458.34 0.00 0.00
08/06/2019 44932HAH6 INTEREST EARNED ON IBM CREDIT CORP 3.000% 2/06/23 $1 PV ON 5670000.0000
SHARES DUE 8/6/2019
0.0000 0.000000 85,050.00 0.00 0.00
08/07/2019 06406RAA5 INTEREST EARNED ON BANK OF NY MTN 2.600% 2/07/22 $1 PV ON 2500000.0000
SHARES DUE 8/7/2019
0.0000 0.000000 32,500.00 0.00 0.00
08/08/2019 594918BP8 INTEREST EARNED ON MICROSOFT CORP 1.550% 8/08/21 $1 PV ON
3045000.0000 SHARES DUE 8/8/2019
0.0000 0.000000 23,598.75 0.00 0.00
08/09/2019 06051GFN4 PAID ACCRUED INTEREST ON PURCHASE OF BANK OF AMERICA MTN 2.250%
4/21/20
0.0000 0.000000 -13,500.00 0.00 0.00
08/09/2019 747525AD5 PAID ACCRUED INTEREST ON PURCHASE OF QUALCOMM INC 2.250% 5/20/20 0.0000 0.000000 -9,875.00 0.00 0.00
08/12/2019 69371RN36 INTEREST EARNED ON PACCAR FINANCIAL MTN 1.200% 8/12/19 $1 PV ON
1083000.0000 SHARES DUE 8/12/2019 INTEREST ON 8/12/19 MATURITY
0.0000 0.000000 6,498.00 0.00 0.00
08/13/2019 912828WU0 BOOK VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 1768.00 UNITS
INCREASE TO ADJUST FOR CHANGE IN CPI
0.0000 0.000000 0.00 0.00 0.00
08/13/2019 912828WU0 FED BASIS OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 1768.00 UNITS
INCREASE TO ADJUST FOR CHANGE IN CPI
0.0000 0.000000 0.00 1,768.00 0.00
08/13/2019 912828WU0 PAR VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 1768.0000 UNITS
INCREASE TO ADJUST FOR CHANGE IN CPI
1,768.0000 0.000000 0.00 0.00 0.00
08/13/2019 912828WU0 STATE COST OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 1768.00 UNITS
INCREASE TO ADJUST FOR CHANGE IN CPI
0.0000 0.000000 0.00 0.00 0.00
08/14/2019 3133EKWV4 PAID ACCRUED INTEREST ON PURCHASE OF F F C B DEB 1.850% 7/26/24 0.0000 0.000000 -4,625.00 0.00 0.00
08/15/2019 02587AAJ3 INTEREST EARNED ON AMERICAN EXPRESS 1.930% 9/15/22 $1 PV ON 10084.2400
SHARES DUE 8/15/2019 $0.00161/PV ON 6,270,000.00 PV DUE 8/15/19
0.0000 0.000000 10,084.24 0.00 0.00
08/15/2019 02665WAH4 INTEREST EARNED ON AMERICAN HONDA MTN 2.250% 8/15/19 $1 PV ON
1977000.0000 SHARES DUE 8/15/2019 INTEREST ON 8/15/19 MATURITY
0.0000 0.000000 22,241.25 0.00 0.00
15 of 23
U.S. Bank
Transaction History
07/01/2019 Thru 09/30/2019
Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss
08/15/2019 02665WAH4 INTEREST EARNED ON AMERICAN HONDA MTN 2.250% 8/15/19 $1 PV ON
2500000.0000 SHARES DUE 8/15/2019 INTEREST ON 8/15/19 MATURITY
0.0000 0.000000 28,125.00 0.00 0.00
08/15/2019 3133TCE95 INTEREST EARNED ON F H L M C MLTCL MTG 4.016% 8/15/32 $1 PV ON 28.7500
SHARES DUE 8/15/2019 $0.00335/PV ON 8,682.30 PV DUE 8/15/19
0.0000 0.000000 28.75 0.00 0.00
08/15/2019 31348SWZ3 INTEREST EARNED ON F H L M C #786064 4.677% 1/01/28 $1 PV ON 7.3000 SHARES
DUE 8/15/2019 JUNE FHLMC DUE 8/15/19
0.0000 0.000000 7.30 0.00 0.00
08/15/2019 369550BA5 PAID ACCRUED INTEREST ON PURCHASE OF GENERAL DYNAMICS 2.875%
5/11/20
0.0000 0.000000 -15,013.89 0.00 0.00
08/15/2019 47788BAD6 INTEREST EARNED ON JOHN DEERE OWNER 1.820% 10/15/21 $1 PV ON 782.1200
SHARES DUE 8/15/2019 $0.00152/PV ON 515,683.75 PV DUE 8/15/19
0.0000 0.000000 782.12 0.00 0.00
08/15/2019 47788CAB8 INTEREST EARNED ON JOHN DEERE OWNER 2.420% 10/15/20 $1 PV ON 952.7400
SHARES DUE 8/15/2019 $0.00202/PV ON 472,434.77 PV DUE 8/15/19
0.0000 0.000000 952.74 0.00 0.00
08/15/2019 47788CAC6 INTEREST EARNED ON JOHN DEERE OWNER 2.660% 4/18/22 $1 PV ON 2970.3300
SHARES DUE 8/15/2019 $0.00222/PV ON 1,340,000.00 PV DUE 8/15/19
0.0000 0.000000 2,970.33 0.00 0.00
08/15/2019 47788EAC2 INTEREST EARNED ON JOHN DEERE OWNER 3.080% 11/15/22 $1 PV ON 11883.6700
SHARES DUE 8/15/2019 $0.00257/PV ON 4,630,000.00 PV DUE 8/15/19
0.0000 0.000000 11,883.67 0.00 0.00
08/15/2019 47788NAD0 INTEREST EARNED ON JOHN DEERE OWNER 1.490% 5/15/23 $1 PV ON 1429.1600
SHARES DUE 8/15/2019 $0.00124/PV ON 1,151,000.00 PV DUE 8/15/19
0.0000 0.000000 1,429.16 0.00 0.00
08/15/2019 47789JAB2 INTEREST EARNED ON JOHN DEERE OWNER 2.850% 12/15/21 $1 PV ON 7754.3800
SHARES DUE 8/15/2019 $0.00238/PV ON 3,265,000.00 PV DUE 8/15/19
0.0000 0.000000 7,754.38 0.00 0.00
08/15/2019 65478GAD2 INTEREST EARNED ON NISSAN AUTO 1.750% 10/15/21 $1 PV ON 3575.0800
SHARES DUE 8/15/2019 $0.00146/PV ON 2,451,482.54 PV DUE 8/15/19
0.0000 0.000000 3,575.08 0.00 0.00
08/15/2019 65478VAD9 INTEREST EARNED ON NISSAN AUTO 1.320% 1/15/21 $1 PV ON 460.3100
SHARES DUE 8/15/2019 $0.00110/PV ON 418,464.94 PV DUE 8/15/19
0.0000 0.000000 460.31 0.00 0.00
08/15/2019 65479GAD1 INTEREST EARNED ON NISSAN AUTO 3.060% 3/15/23 $1 PV ON 9078.0000
SHARES DUE 8/15/2019 $0.00255/PV ON 3,560,000.00 PV DUE 8/15/19
0.0000 0.000000 9,078.00 0.00 0.00
08/15/2019 89238BAB8 INTEREST EARNED ON TOYOTA AUTO 2.100% 10/15/20 $1 PV ON 2434.4300
SHARES DUE 8/15/2019 $0.00175/PV ON 1,391,106.63 PV DUE 8/15/19
0.0000 0.000000 2,434.43 0.00 0.00
08/15/2019 89239AAB9 INTEREST EARNED ON TOYOTA AUTO 2.830% 10/15/21 $1 PV ON 8525.3700
SHARES DUE 8/15/2019 $0.00236/PV ON 3,615,000.00 PV DUE 8/15/19
0.0000 0.000000 8,525.37 0.00 0.00
08/16/2019 3137EAEL9 INTEREST EARNED ON F H L M C M T N 2.375% 2/16/21 $1 PV ON 7500000.0000
SHARES DUE 8/16/2019
0.0000 0.000000 89,062.50 0.00 0.00
08/19/2019 3130A7CV5 INTEREST EARNED ON F H L B DEB 1.375% 2/18/21 $1 PV ON 5365000.0000
SHARES DUE 8/18/2019
0.0000 0.000000 36,884.38 0.00 0.00
08/19/2019 43814PAC4 INTEREST EARNED ON HONDA AUTO 1.790% 9/20/21 $1 PV ON 3734.3500
SHARES DUE 8/18/2019 $0.00149/PV ON 2,503,471.62 PV DUE 8/18/19
0.0000 0.000000 3,734.35 0.00 0.00
08/19/2019 43814RAC0 INTEREST EARNED ON HONDA AUTO 1.210% 12/18/20 $1 PV ON 827.6200
SHARES DUE 8/18/2019 $0.00101/PV ON 820,783.32 PV DUE 8/18/19
0.0000 0.000000 827.62 0.00 0.00
16 of 23
U.S. Bank
Transaction History
07/01/2019 Thru 09/30/2019
Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss
08/19/2019 43814UAG4 INTEREST EARNED ON HONDA AUTO 3.010% 5/18/22 $1 PV ON 4289.2500
SHARES DUE 8/18/2019 $0.00251/PV ON 1,710,000.00 PV DUE 8/18/19
0.0000 0.000000 4,289.25 0.00 0.00
08/19/2019 43814WAB1 INTEREST EARNED ON HONDA AUTO 2.750% 9/20/21 $1 PV ON 10071.8800
SHARES DUE 8/18/2019 $0.00229/PV ON 4,395,000.00 PV DUE 8/18/19
0.0000 0.000000 10,071.88 0.00 0.00
08/19/2019 62479MVK6 INTEREST EARNED ON MUFG BANK LTD NY BRAN C P 8/19/19 $1 PV ON
11125000.0000 SHARES DUE 8/19/2019 11,125,000 PAR VALUE AT 100 %
0.0000 0.000000 43,572.92 0.00 0.00
08/19/2019 62479MVK6 INTEREST EARNED ON MUFG BANK LTD NY BRAN C P 8/19/19 $1 PV ON
3290000.0000 SHARES DUE 8/19/2019 3,290,000 PAR VALUE AT 100 %
0.0000 0.000000 12,885.83 0.00 0.00
08/19/2019 69353RFB9 INTEREST EARNED ON PNC BANK NA MTN 2.625% 2/17/22 $1 PV ON 1000000.0000
SHARES DUE 8/17/2019
0.0000 0.000000 13,125.00 0.00 0.00
08/20/2019 36225CAZ9 INTEREST EARNED ON G N M A I I #080023 4.125% 12/20/26 $1 PV ON 53.8900
SHARES DUE 8/20/2019 JULY GNMA DUE 8/20/19
0.0000 0.000000 53.89 0.00 0.00
08/20/2019 36225CC20 INTEREST EARNED ON G N M A I I #080088 3.875% 6/20/27 $1 PV ON 49.8700
SHARES DUE 8/20/2019 JULY GNMA DUE 8/20/19
0.0000 0.000000 49.87 0.00 0.00
08/20/2019 36225CN28 INTEREST EARNED ON G N M A I I #080408 3.875% 5/20/30 $1 PV ON 167.9300
SHARES DUE 8/20/2019 JULY GNMA DUE 8/20/19
0.0000 0.000000 167.93 0.00 0.00
08/20/2019 36225CNM4 INTEREST EARNED ON G N M A I I #080395 3.875% 4/20/30 $1 PV ON 21.5400
SHARES DUE 8/20/2019 JULY GNMA DUE 8/20/19
0.0000 0.000000 21.54 0.00 0.00
08/20/2019 36225DCB8 INTEREST EARNED ON G N M A I I #080965 3.750% 7/20/34 $1 PV ON 144.0200
SHARES DUE 8/20/2019 JULY GNMA DUE 8/20/19
0.0000 0.000000 144.02 0.00 0.00
08/21/2019 43815HAC1 INTEREST EARNED ON HONDA AUTO 2.950% 8/22/22 $1 PV ON 3970000.0000
SHARES DUE 8/21/2019
0.0000 0.000000 9,759.58 0.00 0.00
08/23/2019 037833BS8 INTEREST EARNED ON APPLE INC 2.250% 2/23/21 $1 PV ON 4000000.0000
SHARES DUE 8/23/2019
0.0000 0.000000 45,000.00 0.00 0.00
08/26/2019 03215PFN4 INTEREST EARNED ON AMRESCO 6.88883% 6/25/29 $1 PV ON 742.2800
SHARES DUE 8/25/2019 $0.00574/PV ON 129,300.99 PV DUE 8/25/19
0.0000 0.000000 742.28 0.00 0.00
08/26/2019 06406HCZ0 INTEREST EARNED ON BANK OF NY MELLO MTN 2.150% 2/24/20 $1 PV ON
1500000.0000 SHARES DUE 8/24/2019
0.0000 0.000000 16,125.00 0.00 0.00
08/26/2019 3135G0J20 INTEREST EARNED ON F N M A DEB 1.375% 2/26/21 $1 PV ON 10000000.0000
SHARES DUE 8/26/2019
0.0000 0.000000 68,750.00 0.00 0.00
08/26/2019 31371NUC7 INTEREST EARNED ON F N M A #257179 4.500% 4/01/28 $1 PV ON 56.2600
SHARES DUE 8/25/2019 JULY FNMA DUE 8/25/19
0.0000 0.000000 56.26 0.00 0.00
08/26/2019 31376KT22 INTEREST EARNED ON F N M A #357969 5.000% 9/01/35 $1 PV ON 427.9400
SHARES DUE 8/25/2019 JULY FNMA DUE 8/25/19
0.0000 0.000000 427.94 0.00 0.00
08/26/2019 31381PDA3 INTEREST EARNED ON F N M A #466397 3.400% 11/01/20 $1 PV ON 991.8000
SHARES DUE 8/25/2019 JULY FNMA DUE 8/25/19
0.0000 0.000000 991.80 0.00 0.00
08/26/2019 3138EG6F6 INTEREST EARNED ON F N M A #AL0869 4.500% 6/01/29 $1 PV ON 39.1800
SHARES DUE 8/25/2019 JULY FNMA DUE 8/25/19
0.0000 0.000000 39.18 0.00 0.00
17 of 23
U.S. Bank
Transaction History
07/01/2019 Thru 09/30/2019
Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss
08/26/2019 31394JY35 INTEREST EARNED ON F H L M C MLTCL MTG 6.500% 9/25/43 $1 PV ON 3799.1600
SHARES DUE 8/25/2019 $0.00542/PV ON 701,383.79 PV DUE 8/25/19
0.0000 0.000000 3,799.16 0.00 0.00
08/26/2019 31397QRE0 INTEREST EARNED ON F N M A GTD REMIC 1.113% 2/25/41 $1 PV ON 478.2200
SHARES DUE 8/25/2019 $0.00246/PV ON 194,792.45 PV DUE 8/25/19
0.0000 0.000000 478.22 0.00 0.00
08/26/2019 31398VJ98 INTEREST EARNED ON F H L M C MLTCL MTG 4.251% 1/25/20 $1 PV ON 2635.0800
SHARES DUE 8/25/2019 $0.00354/PV ON 743,847.19 PV DUE 8/25/19
0.0000 0.000000 2,635.08 0.00 0.00
08/26/2019 31403DJZ3 INTEREST EARNED ON F N M A #745580 5.000% 6/01/36 $1 PV ON 397.1000
SHARES DUE 8/25/2019 JULY FNMA DUE 8/25/19
0.0000 0.000000 397.10 0.00 0.00
08/26/2019 31403GXF4 INTEREST EARNED ON F N M A #748678 5.000% 10/01/33 $1 PV ON 7.5000 SHARES
DUE 8/25/2019 JULY FNMA DUE 8/25/19
0.0000 0.000000 7.50 0.00 0.00
08/26/2019 31406PQY8 INTEREST EARNED ON F N M A #815971 5.000% 3/01/35 $1 PV ON 679.4400
SHARES DUE 8/25/2019 JULY FNMA DUE 8/25/19
0.0000 0.000000 679.44 0.00 0.00
08/26/2019 31406XWT5 INTEREST EARNED ON F N M A #823358 4.722% 2/01/35 $1 PV ON 433.4500
SHARES DUE 8/25/2019 JULY FNMA DUE 8/25/19
0.0000 0.000000 433.45 0.00 0.00
08/26/2019 31407BXH7 INTEREST EARNED ON F N M A #826080 5.000% 7/01/35 $1 PV ON 81.5300
SHARES DUE 8/25/2019 JULY FNMA DUE 8/25/19
0.0000 0.000000 81.53 0.00 0.00
08/26/2019 31410F4V4 INTEREST EARNED ON F N M A #888336 5.000% 7/01/36 $1 PV ON 778.5700
SHARES DUE 8/25/2019 JULY FNMA DUE 8/25/19
0.0000 0.000000 778.57 0.00 0.00
08/26/2019 31417YAY3 INTEREST EARNED ON F N M A #MA0022 4.500% 4/01/29 $1 PV ON 63.7500
SHARES DUE 8/25/2019 JULY FNMA DUE 8/25/19
0.0000 0.000000 63.75 0.00 0.00
08/27/2019 46625HKA7 INTEREST EARNED ON JPMORGAN CHASE CO 2.250% 1/23/20 $1 PV ON
1500000.0000 SHARES DUE 8/26/2019 $2.125 PER $1000 ACCD INT (34 DAYS)
0.0000 0.000000 3,187.50 0.00 0.00
08/27/2019 46625HKA7 INTEREST EARNED ON JPMORGAN CHASE CO 2.250% 1/23/20 $1 PV ON
2000000.0000 SHARES DUE 8/26/2019 $2.125 PER $1000 ACCD INT (34 DAYS)
0.0000 0.000000 4,250.00 0.00 0.00
08/28/2019 912828UL2 PAID ACCRUED INTEREST ON PURCHASE OF U S TREASURY NT 1.375% 1/31/20 0.0000 0.000000 -5,230.98 0.00 0.00
08/28/2019 912828WU0 BOOK VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 1248.00 UNITS
INCREASE TO ADJUST FOR CHANGE IN CPI
0.0000 0.000000 0.00 0.00 0.00
08/28/2019 912828WU0 FED BASIS OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 1248.00 UNITS
INCREASE TO ADJUST FOR CHANGE IN CPI
0.0000 0.000000 0.00 1,248.00 0.00
08/28/2019 912828WU0 PAR VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 1248.0000 UNITS
INCREASE TO ADJUST FOR CHANGE IN CPI
1,248.0000 0.000000 0.00 0.00 0.00
08/28/2019 912828WU0 STATE COST OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 1248.00 UNITS
INCREASE TO ADJUST FOR CHANGE IN CPI
0.0000 0.000000 0.00 0.00 0.00
09/03/2019 30231GAV4 INTEREST EARNED ON EXXON MOBIL 2.222% 3/01/21 $1 PV ON 3000000.0000
SHARES DUE 9/1/2019
0.0000 0.000000 33,330.00 0.00 0.00
09/03/2019 31846V567 INTEREST EARNED ON FIRST AM GOVT OB FD CL Z UNIT ON 0.0000 SHARES DUE
8/31/2019 INTEREST FROM 8/1/19 TO 8/31/19
0.0000 0.000000 14,244.31 0.00 0.00
09/03/2019 31846V567 INTEREST EARNED ON FIRST AM GOVT OB FD CL Z UNIT ON 0.0000 SHARES DUE
8/31/2019 INTEREST FROM 8/1/19 TO 8/31/19
0.0000 0.000000 29,015.37 0.00 0.00
18 of 23
U.S. Bank
Transaction History
07/01/2019 Thru 09/30/2019
Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss
09/03/2019 83162CLJ0 INTEREST EARNED ON S B A GTD DEV PART 6.340% 3/01/21 $1 PV ON 465.5500
SHARES DUE 9/1/2019 $0.03170/PV ON 14,686.06 PV DUE 9/ 1/19
0.0000 0.000000 465.55 0.00 0.00
09/03/2019 912828L24 INTEREST EARNED ON U S TREASURY NT 1.875% 8/31/22 $1 PV ON 6000000.0000
SHARES DUE 8/31/2019
0.0000 0.000000 56,250.00 0.00 0.00
09/03/2019 912828W48 INTEREST EARNED ON U S TREASURY NT 2.125% 2/29/24 $1 PV ON
10000000.0000 SHARES DUE 8/31/2019
0.0000 0.000000 106,250.00 0.00 0.00
09/05/2019 06051GHF9 INTEREST EARNED ON BANK OF AMERICA 3.550% 3/05/24 $1 PV ON 6675000.0000
SHARES DUE 9/5/2019
0.0000 0.000000 118,481.25 0.00 0.00
09/05/2019 40428HPR7 INTEREST EARNED ON HSBC USA INC MTN 2.350% 3/05/20 $1 PV ON 2500000.0000
SHARES DUE 9/5/2019
0.0000 0.000000 29,375.00 0.00 0.00
09/05/2019 40428HPR7 INTEREST EARNED ON HSBC USA INC MTN 2.350% 3/05/20 $1 PV ON 2500000.0000
SHARES DUE 9/5/2019
0.0000 0.000000 29,375.00 0.00 0.00
09/09/2019 313383YJ4 INTEREST EARNED ON F H L B DEB 3.375% 9/08/23 $1 PV ON 10000000.0000
SHARES DUE 9/8/2019
0.0000 0.000000 168,750.00 0.00 0.00
09/11/2019 06406HCW7 INTEREST EARNED ON BANK OF NY MTN 2.300% 9/11/19 $1 PV ON 2120000.0000
SHARES DUE 9/11/2019 INTEREST ON 9/11/19 MATURITY
0.0000 0.000000 24,380.00 0.00 0.00
09/12/2019 78013XZU5 PAID ACCRUED INTEREST ON PURCHASE OF ROYAL BANK OF MTN 2.550% 7/16/24 0.0000 0.000000 -25,783.33 0.00 0.00
09/12/2019 912828WU0 BOOK VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 8736.00 UNITS
INCREASE TO ADJUST FOR CHANGE IN CPI
0.0000 0.000000 0.00 0.00 0.00
09/12/2019 912828WU0 FED BASIS OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 8736.00 UNITS
INCREASE TO ADJUST FOR CHANGE IN CPI
0.0000 0.000000 0.00 8,736.00 0.00
09/12/2019 912828WU0 PAR VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 8736.0000 UNITS
INCREASE TO ADJUST FOR CHANGE IN CPI
8,736.0000 0.000000 0.00 0.00 0.00
09/12/2019 912828WU0 STATE COST OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 8736.00 UNITS
INCREASE TO ADJUST FOR CHANGE IN CPI
0.0000 0.000000 0.00 0.00 0.00
09/13/2019 00440EAP2 INTEREST EARNED ON ACE INA HOLDINGS 2.700% 3/13/23 $1 PV ON 2000000.0000
SHARES DUE 9/13/2019
0.0000 0.000000 27,000.00 0.00 0.00
09/13/2019 21687BWD9 INTEREST EARNED ON COOPERATIEVE CENTRAL C P 9/13/19 $1 PV ON
2000000.0000 SHARES DUE 9/13/2019 2,000,000 PAR VALUE AT 100 %
0.0000 0.000000 42,135.56 0.00 0.00
09/13/2019 96130ABJ6 INTEREST EARNED ON WESTPAC BKING C D 2.970% 9/13/19 $1 PV ON
1500000.0000 SHARES DUE 9/13/2019 INTEREST ON 9/13/19 MATURITY
0.0000 0.000000 33,783.75 0.00 0.00
09/16/2019 02587AAJ3 INTEREST EARNED ON AMERICAN EXPRESS 1.930% 9/15/22 $1 PV ON 10084.2400
SHARES DUE 9/15/2019 $0.00161/PV ON 6,270,000.00 PV DUE 9/15/19
0.0000 0.000000 10,084.24 0.00 0.00
09/16/2019 084670BR8 INTEREST EARNED ON BERKSHIRE HATHAWAY 2.750% 3/15/23 $1 PV ON
2500000.0000 SHARES DUE 9/15/2019
0.0000 0.000000 34,375.00 0.00 0.00
09/16/2019 24422ESS9 INTEREST EARNED ON JOHN DEERE CAP MTN 2.300% 9/16/19 $1 PV ON
5000000.0000 SHARES DUE 9/16/2019 INTEREST ON 9/16/19 MATURITY
0.0000 0.000000 57,500.00 0.00 0.00
09/16/2019 3133TCE95 INTEREST EARNED ON F H L M C MLTCL MTG 4.016% 8/15/32 $1 PV ON 27.9600
SHARES DUE 9/15/2019 $0.00335/PV ON 8,354.65 PV DUE 9/15/19
0.0000 0.000000 27.96 0.00 0.00
19 of 23
U.S. Bank
Transaction History
07/01/2019 Thru 09/30/2019
Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss
09/16/2019 31348SWZ3 INTEREST EARNED ON F H L M C #786064 4.677% 1/01/28 $1 PV ON 7.2300 SHARES
DUE 9/15/2019 JULY FHLMC DUE 9/15/19
0.0000 0.000000 7.23 0.00 0.00
09/16/2019 43815NAB0 INTEREST EARNED ON HONDA AUTO 1.900% 4/15/22 $1 PV ON 3353.5000
SHARES DUE 9/15/2019 $0.00095/PV ON 3,530,000.00 PV DUE 9/15/19
0.0000 0.000000 3,353.50 0.00 0.00
09/16/2019 4581X0CS5 INTEREST EARNED ON INTER AMER BK M T N 1.875% 3/15/21 $1 PV ON
5000000.0000 SHARES DUE 9/15/2019
0.0000 0.000000 46,875.00 0.00 0.00
09/16/2019 4581X0CZ9 INTEREST EARNED ON INTER AMER DEV BK 1.750% 9/14/22 $1 PV ON
6500000.0000 SHARES DUE 9/14/2019
0.0000 0.000000 56,875.00 0.00 0.00
09/16/2019 46647PAU0 PAID ACCRUED INTEREST ON PURCHASE OF JPMORGAN CHASE CO 3.797%
7/23/24
0.0000 0.000000 -13,975.07 0.00 0.00
09/16/2019 477870AB5 INTEREST EARNED ON JOHN DEERE OWNER 2.280% 5/16/22 $1 PV ON 9044.0000
SHARES DUE 9/15/2019 $0.00323/PV ON 2,800,000.00 PV DUE 9/15/19
0.0000 0.000000 9,044.00 0.00 0.00
09/16/2019 47788BAD6 INTEREST EARNED ON JOHN DEERE OWNER 1.820% 10/15/21 $1 PV ON 719.8800
SHARES DUE 9/15/2019 $0.00152/PV ON 474,644.17 PV DUE 9/15/19
0.0000 0.000000 719.88 0.00 0.00
09/16/2019 47788CAB8 INTEREST EARNED ON JOHN DEERE OWNER 2.420% 10/15/20 $1 PV ON 632.1200
SHARES DUE 9/15/2019 $0.00202/PV ON 313,448.89 PV DUE 9/15/19
0.0000 0.000000 632.12 0.00 0.00
09/16/2019 47788CAC6 INTEREST EARNED ON JOHN DEERE OWNER 2.660% 4/18/22 $1 PV ON 2970.3300
SHARES DUE 9/15/2019 $0.00222/PV ON 1,340,000.00 PV DUE 9/15/19
0.0000 0.000000 2,970.33 0.00 0.00
09/16/2019 47788EAC2 INTEREST EARNED ON JOHN DEERE OWNER 3.080% 11/15/22 $1 PV ON 11883.6700
SHARES DUE 9/15/2019 $0.00257/PV ON 4,630,000.00 PV DUE 9/15/19
0.0000 0.000000 11,883.67 0.00 0.00
09/16/2019 47788NAD0 INTEREST EARNED ON JOHN DEERE OWNER 1.490% 5/15/23 $1 PV ON 1376.1800
SHARES DUE 9/15/2019 $0.00124/PV ON 1,108,332.07 PV DUE 9/15/19
0.0000 0.000000 1,376.18 0.00 0.00
09/16/2019 47789JAB2 INTEREST EARNED ON JOHN DEERE OWNER 2.850% 12/15/21 $1 PV ON 7754.3800
SHARES DUE 9/15/2019 $0.00238/PV ON 3,265,000.00 PV DUE 9/15/19
0.0000 0.000000 7,754.38 0.00 0.00
09/16/2019 65478GAD2 INTEREST EARNED ON NISSAN AUTO 1.750% 10/15/21 $1 PV ON 3279.3100
SHARES DUE 9/15/2019 $0.00146/PV ON 2,248,666.82 PV DUE 9/15/19
0.0000 0.000000 3,279.31 0.00 0.00
09/16/2019 65478VAD9 INTEREST EARNED ON NISSAN AUTO 1.320% 1/15/21 $1 PV ON 363.6200
SHARES DUE 9/15/2019 $0.00110/PV ON 330,562.90 PV DUE 9/15/19
0.0000 0.000000 363.62 0.00 0.00
09/16/2019 65479GAD1 INTEREST EARNED ON NISSAN AUTO 3.060% 3/15/23 $1 PV ON 9078.0000
SHARES DUE 9/15/2019 $0.00255/PV ON 3,560,000.00 PV DUE 9/15/19
0.0000 0.000000 9,078.00 0.00 0.00
09/16/2019 68389XBK0 INTEREST EARNED ON ORACLE CORP 1.900% 9/15/21 $1 PV ON 3000000.0000
SHARES DUE 9/15/2019
0.0000 0.000000 28,500.00 0.00 0.00
09/16/2019 89238BAB8 INTEREST EARNED ON TOYOTA AUTO 2.100% 10/15/20 $1 PV ON 1788.4300
SHARES DUE 9/15/2019 $0.00175/PV ON 1,021,960.05 PV DUE 9/15/19
0.0000 0.000000 1,788.43 0.00 0.00
09/16/2019 89239AAB9 INTEREST EARNED ON TOYOTA AUTO 2.830% 10/15/21 $1 PV ON 8525.3700
SHARES DUE 9/15/2019 $0.00236/PV ON 3,615,000.00 PV DUE 9/15/19
0.0000 0.000000 8,525.37 0.00 0.00
09/18/2019 09247XAL5 INTEREST EARNED ON BLACKROCK INC 3.500% 3/18/24 $1 PV ON 1000000.0000
SHARES DUE 9/18/2019
0.0000 0.000000 17,500.00 0.00 0.00
20 of 23
U.S. Bank
Transaction History
07/01/2019 Thru 09/30/2019
Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss
09/18/2019 313384LW7 INTEREST EARNED ON F H L B DISC NTS 9/18/19 $1 PV ON 2850000.0000
SHARES DUE 9/18/2019 2,850,000 PAR VALUE AT 100 %
0.0000 0.000000 14,281.67 0.00 0.00
09/18/2019 43814PAC4 INTEREST EARNED ON HONDA AUTO 1.790% 9/20/21 $1 PV ON 3440.8100
SHARES DUE 9/18/2019 $0.00149/PV ON 2,306,690.87 PV DUE 9/18/19
0.0000 0.000000 3,440.81 0.00 0.00
09/18/2019 43814RAC0 INTEREST EARNED ON HONDA AUTO 1.210% 12/18/20 $1 PV ON 694.9300
SHARES DUE 9/18/2019 $0.00101/PV ON 689,190.43 PV DUE 9/18/19
0.0000 0.000000 694.93 0.00 0.00
09/18/2019 43814UAG4 INTEREST EARNED ON HONDA AUTO 3.010% 5/18/22 $1 PV ON 4289.2500
SHARES DUE 9/18/2019 $0.00251/PV ON 1,710,000.00 PV DUE 9/18/19
0.0000 0.000000 4,289.25 0.00 0.00
09/18/2019 43814WAB1 INTEREST EARNED ON HONDA AUTO 2.750% 9/20/21 $1 PV ON 10071.8800
SHARES DUE 9/18/2019 $0.00229/PV ON 4,395,000.00 PV DUE 9/18/19
0.0000 0.000000 10,071.88 0.00 0.00
09/18/2019 69353RDZ8 INTEREST EARNED ON PNC BANK NA MTN 2.400% 10/18/19 $1 PV ON
1000000.0000 SHARES DUE 9/18/2019
0.0000 0.000000 10,000.00 0.00 0.00
09/20/2019 36225CAZ9 INTEREST EARNED ON G N M A I I #080023 4.125% 12/20/26 $1 PV ON 53.3400
SHARES DUE 9/20/2019 AUGUST GNMA DUE 9/20/19
0.0000 0.000000 53.34 0.00 0.00
09/20/2019 36225CC20 INTEREST EARNED ON G N M A I I #080088 3.875% 6/20/27 $1 PV ON 49.3100
SHARES DUE 9/20/2019 AUGUST GNMA DUE 9/20/19
0.0000 0.000000 49.31 0.00 0.00
09/20/2019 36225CN28 INTEREST EARNED ON G N M A I I #080408 3.875% 5/20/30 $1 PV ON 164.9100
SHARES DUE 9/20/2019 AUGUST GNMA DUE 9/20/19
0.0000 0.000000 164.91 0.00 0.00
09/20/2019 36225CNM4 INTEREST EARNED ON G N M A I I #080395 3.875% 4/20/30 $1 PV ON 21.4100
SHARES DUE 9/20/2019 AUGUST GNMA DUE 9/20/19
0.0000 0.000000 21.41 0.00 0.00
09/20/2019 36225DCB8 INTEREST EARNED ON G N M A I I #080965 3.750% 7/20/34 $1 PV ON 143.3200
SHARES DUE 9/20/2019 AUGUST GNMA DUE 9/20/19
0.0000 0.000000 143.32 0.00 0.00
09/23/2019 43815HAC1 INTEREST EARNED ON HONDA AUTO 2.950% 8/22/22 $1 PV ON 9759.5800
SHARES DUE 9/21/2019 $0.00246/PV ON 3,970,000.00 PV DUE 9/21/19
0.0000 0.000000 9,759.58 0.00 0.00
09/24/2019 912796VW6 INTEREST EARNED ON U S TREASURY BILL 9/24/19 $1 PV ON 1650000.0000
SHARES DUE 9/24/2019 1,650,000 PAR VALUE AT 100 %
0.0000 0.000000 2,527.59 0.00 0.00
09/24/2019 912828TR1 PAID ACCRUED INTEREST ON PURCHASE OF U S TREASURY NT 1.000% 9/30/19 0.0000 0.000000 -7,979.51 0.00 0.00
09/25/2019 03215PFN4 INTEREST EARNED ON AMRESCO 3.08529% 6/25/29 $1 PV ON 319.1500
SHARES DUE 9/25/2019 $0.00257/PV ON 124,130.25 PV DUE 9/25/19
0.0000 0.000000 319.15 0.00 0.00
09/25/2019 313384MD8 INTEREST EARNED ON F H L B DISC NTS 9/25/19 $1 PV ON 2500000.0000
SHARES DUE 9/25/2019 2,500,000 PAR VALUE AT 100 %
0.0000 0.000000 8,244.44 0.00 0.00
09/25/2019 31371NUC7 INTEREST EARNED ON F N M A #257179 4.500% 4/01/28 $1 PV ON 55.7600
SHARES DUE 9/25/2019 AUGUST FNMA DUE 9/25/19
0.0000 0.000000 55.76 0.00 0.00
09/25/2019 31376KT22 INTEREST EARNED ON F N M A #357969 5.000% 9/01/35 $1 PV ON 418.3300
SHARES DUE 9/25/2019 AUGUST FNMA DUE 9/25/19
0.0000 0.000000 418.33 0.00 0.00
09/25/2019 31381PDA3 INTEREST EARNED ON F N M A #466397 3.400% 11/01/20 $1 PV ON 989.7600
SHARES DUE 9/25/2019 AUGUST FNMA DUE 9/25/19
0.0000 0.000000 989.76 0.00 0.00
09/25/2019 3138EG6F6 INTEREST EARNED ON F N M A #AL0869 4.500% 6/01/29 $1 PV ON 38.2900
SHARES DUE 9/25/2019 AUGUST FNMA DUE 9/25/19
0.0000 0.000000 38.29 0.00 0.00
21 of 23
U.S. Bank
Transaction History
07/01/2019 Thru 09/30/2019
Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss
09/25/2019 31394JY35 INTEREST EARNED ON F H L M C MLTCL MTG 6.500% 9/25/43 $1 PV ON 3783.7400
SHARES DUE 9/25/2019 $0.00542/PV ON 698,535.87 PV DUE 9/25/19
0.0000 0.000000 3,783.74 0.00 0.00
09/25/2019 31397QRE0 INTEREST EARNED ON F N M A GTD REMIC 2.825% 2/25/41 $1 PV ON 448.8900
SHARES DUE 9/25/2019 $0.00235/PV ON 190,664.36 PV DUE 9/25/19
0.0000 0.000000 448.89 0.00 0.00
09/25/2019 31398VJ98 INTEREST EARNED ON F H L M C MLTCL MTG 4.251% 1/25/20 $1 PV ON 2511.6400
SHARES DUE 9/25/2019 $0.00354/PV ON 709,002.27 PV DUE 9/25/19
0.0000 0.000000 2,511.64 0.00 0.00
09/25/2019 31403DJZ3 INTEREST EARNED ON F N M A #745580 5.000% 6/01/36 $1 PV ON 392.0900
SHARES DUE 9/25/2019 AUGUST FNMA DUE 9/25/19
0.0000 0.000000 392.09 0.00 0.00
09/25/2019 31403GXF4 INTEREST EARNED ON F N M A #748678 5.000% 10/01/33 $1 PV ON 7.4600 SHARES
DUE 9/25/2019 AUGUST FNMA DUE 9/25/19
0.0000 0.000000 7.46 0.00 0.00
09/25/2019 31406PQY8 INTEREST EARNED ON F N M A #815971 5.000% 3/01/35 $1 PV ON 663.4800
SHARES DUE 9/25/2019 AUGUST FNMA DUE 9/25/19
0.0000 0.000000 663.48 0.00 0.00
09/25/2019 31406XWT5 INTEREST EARNED ON F N M A #823358 4.722% 2/01/35 $1 PV ON 431.7000
SHARES DUE 9/25/2019 AUGUST FNMA DUE 9/25/19
0.0000 0.000000 431.70 0.00 0.00
09/25/2019 31407BXH7 INTEREST EARNED ON F N M A #826080 5.000% 7/01/35 $1 PV ON 79.0800
SHARES DUE 9/25/2019 AUGUST FNMA DUE 9/25/19
0.0000 0.000000 79.08 0.00 0.00
09/25/2019 31410F4V4 INTEREST EARNED ON F N M A #888336 5.000% 7/01/36 $1 PV ON 767.0300
SHARES DUE 9/25/2019 AUGUST FNMA DUE 9/25/19
0.0000 0.000000 767.03 0.00 0.00
09/25/2019 31417YAY3 INTEREST EARNED ON F N M A #MA0022 4.500% 4/01/29 $1 PV ON 62.5700
SHARES DUE 9/25/2019 AUGUST FNMA DUE 9/25/19
0.0000 0.000000 62.57 0.00 0.00
09/26/2019 912828F39 PAID ACCRUED INTEREST ON PURCHASE OF U S TREASURY NT 1.750% 9/30/19 0.0000 0.000000 -11,554.30 0.00 0.00
09/26/2019 912828WU0 BOOK VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 9360.00 UNITS
INCREASE TO ADJUST FOR CHANGE IN CPI
0.0000 0.000000 0.00 0.00 0.00
09/26/2019 912828WU0 FED BASIS OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 9360.00 UNITS
INCREASE TO ADJUST FOR CHANGE IN CPI
0.0000 0.000000 0.00 9,360.00 0.00
09/26/2019 912828WU0 PAR VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 9360.0000 UNITS
INCREASE TO ADJUST FOR CHANGE IN CPI
9,360.0000 0.000000 0.00 0.00 0.00
09/26/2019 912828WU0 STATE COST OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 9360.00 UNITS
INCREASE TO ADJUST FOR CHANGE IN CPI
0.0000 0.000000 0.00 0.00 0.00
09/30/2019 89114MM20 INTEREST EARNED ON TORONTO DOMINION C D 2.470% 9/30/19 $1 PV ON
2000000.0000 SHARES DUE 9/30/2019 INTEREST ON 9/30/19 MATURITY
0.0000 0.000000 17,015.56 0.00 0.00
09/30/2019 9128282X7 INTEREST EARNED ON U S TREASURY NT 1.375% 9/30/19 $1 PV ON
10000000.0000 SHARES DUE 9/30/2019
0.0000 0.000000 68,750.00 0.00 0.00
09/30/2019 9128284D9 INTEREST EARNED ON U S TREASURY NT 2.500% 3/31/23 $1 PV ON
10000000.0000 SHARES DUE 9/30/2019
0.0000 0.000000 125,000.00 0.00 0.00
09/30/2019 912828F39 INTEREST EARNED ON U S TREASURY NT 1.750% 9/30/19 $1 PV ON 1350000.0000
SHARES DUE 9/30/2019
0.0000 0.000000 11,812.50 0.00 0.00
09/30/2019 912828F39 INTEREST EARNED ON U S TREASURY NT 1.750% 9/30/19 $1 PV ON 5800000.0000
SHARES DUE 9/30/2019
0.0000 0.000000 50,750.00 0.00 0.00
22 of 23
U.S. Bank
Transaction History
07/01/2019 Thru 09/30/2019
Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss
09/30/2019 912828J76 INTEREST EARNED ON U S TREASURY NT 1.750% 3/31/22 $1 PV ON 5000000.0000
SHARES DUE 9/30/2019
0.0000 0.000000 43,750.00 0.00 0.00
09/30/2019 912828L57 INTEREST EARNED ON U S TREASURY NT 1.750% 9/30/22 $1 PV ON
13000000.0000 SHARES DUE 9/30/2019
0.0000 0.000000 113,750.00 0.00 0.00
09/30/2019 912828T34 INTEREST EARNED ON U S TREASURY NT 1.125% 9/30/21 $1 PV ON 7000000.0000
SHARES DUE 9/30/2019
0.0000 0.000000 39,375.00 0.00 0.00
09/30/2019 912828TR1 INTEREST EARNED ON U S TREASURY NT 1.000% 9/30/19 $1 PV ON
11650000.0000 SHARES DUE 9/30/2019
0.0000 0.000000 58,250.00 0.00 0.00
09/30/2019 CASH DISBURSEMENT PAID TO BANC OF CALIFORNIA OUTGOING DOMESTIC WIRE
PER DIR DTD 9/26/19
0.0000 0.000000 -25,000,000.00 0.00 0.00
09/30/2019 CASH DISBURSEMENT PAID TO BANC OF CALIFORNIA OUTGOING DOMESTIC WIRE
PER DIR DTD 9/26/19
0.0000 0.000000 -15,000,000.00 0.00 0.00
TOTAL OTHER TRANSACTIONS 46,072.0000 -107,644,240.87 38,598.38 0.00
23 of 23
September 30, 2019
Orange County Sanitation District
Investment Measurement Service
Quarterly Review
Information contained herein includes confidential, trade secret and proprietary information. Neither this Report nor any specific information contained herein is
to be used other than by the intended recipient for its intended purpose or disseminated to any other person without Callan’s permission. Certain information
herein has been compiled by Callan and is based on information provided by a variety of sources believed to be reliable for which Callan has not necessarily
verified the accuracy or completeness of or updated. This content may consist of statements of opinion, which are made as of the date they are expressed and
are not statements of fact. This content is for informational purposes only and should not be construed as legal or tax advice on any matter. Any decision you
make on the basis of this content is your sole responsibility. You should consult with legal and tax advisers before applying any of this information to your
particular situation. Past performance is no guarantee of future results. For further information, please see Appendix for Important Information and Disclosures.
Table of Contents
September 30, 2019
Capital Market Review 1
Active Management Overview
Market Overview 7
Domestic Fixed Income 8
Asset Allocation
Investment Manager Asset Allocation 10
Investment Manager Returns 11
Asset Class Risk and Return 15
Manager Analysis
Chandler-Long Term Operating Fund 17
Chandler-Liquid Operating Money 21
Callan Research/Education 23
Definitions 26
Disclosures 31
Orange County Sanitation District
Executive Summary for Period Ending September 30, 2019
Asset Allocation
Performance
* Current Quarter Target = 80.0% ML 1-5 Govt/Corp and 20.0% FTSE 3mo T-Bills.
^Assets were transferred in kind to Chandler on 12/1/2014. Previous performance reflects PIMCO.
Recent Developments
During the quarter, $15.0 million was withdrawn from the Long Term Operating Fund and $97.0
million was withdrawn from the Liquid Operating Monies for a combined withdrawal of $112.0
million.
Organizational Issues
N/A
Fixed Income Market Snapshot
The Federal Open Market Committee (FOMC) met market expectations with two 25 basis point
rate cuts in the third quarter (July and September) to finish the period at a target range of 1.75-
2.00%. Another rate cut is expected at the Fed’s meeting in late October. Yields fell across the
maturity spectrum, with the long-end of the curve realizing the largest drop. Significantly, the
closely watched spread between the two- and ten-year Treasury yields briefly inverted toward
the end of August and the 30-year rate fell below 2.00% to 1.94% on August 28th. In
September, the repo market saw a significant increase in volatility, with rates reaching as high
September 30, 2019 June 30, 2019
Market Value Weight Net New Inv.Inv. Return Market Value Weight
Domestic Fixed Income
Long Term Operating Fund*548,126,927 88.93%(15,000,000)4,926,318 558,200,609 77.23%
Liquid Operating Monies*68,233,258 11.07%(97,000,000)666,613 164,566,646 22.77%
Total Fund $616,360,185 100.0%$(112,000,000)$5,592,930 $722,767,255 100.0%
Last Last Last
Last Last 3 5 7
Quarter Year Years Years Years
Domestic Fixed Income
Long Term Operating Fund^0.88%5.57%2.04%1.98%1.40%
Chandler 0.88%5.57%2.04%--
Blmbg Govt/Cred 1-5 Year Idx 0.89%6.01%2.01%2.01%1.65%
ML 1-5 Govt/Corp 0.90%6.02%2.04%2.05%1.70%
Liquid Operating Monies^0.58%2.48%1.61%1.08%0.81%
Chandler 0.58%2.48%1.61%--
Citigroup 3-Month Treasury Bill 0.56%2.36%1.52%0.96%0.70%
Total Fund 0.86%4.98%1.91%1.78%1.26%
Target*0.84%5.28%1.94%1.83%1.50%
2
Orange County Sanitation District
as 10%, causing the Fed to temporarily inject funds in an attempt to level out the market. The
spike was largely idiosyncratic and partially caused by the simultaneous settling of a significant
amount of Treasury debt and federal tax payments coming due. Treasuries rallied in the third
quarter in response to fears of slowing growth, geopolitical concerns, and trade tensions with
China. The two-year fell 12 bps to finish the quarter at 1.63%, the 10-year fell 32 bps to finish at
1.68% and the 30-year fell 40 bps to finish at 2.12%. Corporate spreads were steady in the third
quarter as issuance was offset by investor demand; investment grade corporates performed
well
Manager Performance
The Long Term Operating Fund returned 0.88% during the quarter, which was generally in line
with the return of the ML U.S. 1-5 Corp/Gov Index (+0.90%). Over the trailing 12 months, the
Fund has underperformed the benchmark by 45 basis points. However, ranked against the
Callan Short Term Fixed Income Peer Group, the Fund is performing in the top quartile over the
trailing year (15th percentile) and ranked above median in the third quarter of 2019 (37th
percentile). The manager increased the portfolio’s duration slightly in the third quarter to 2.46
from 2.43 in the prior quarter. Even with the uptick, duration remains lower than that of the
benchmark. From a term structure perspective, the portfolio has larger exposure to the front and
back end of the curve versus the benchmark. The fund also holds overweight positions in the
Agency, Asset Backed and Corporate sectors which benefited relative performance during the
quarter. The portfolio had less than 30% invested in credit (22%) and less than the permitted
20% invested in the combination of asset-backed securities (9%), commercial mortgage backed
securities (0%), and CMOs (0%) as of September 30, 2019 (see page 20).
The Liquid Operating Portfolio appreciated 0.55% (after fees) in the third quarter, performing in
line with the 3-month Treasury return of 0.56%. Over the trailing 12 months, the Portfolio gained
2.33%, which ranked in the 26th percentile among peers.
Cordially,
Gordon M. Weightman, CFA
Senior Vice President
Capital Market Review
Russell 3000
Russell 1000
Russell 1000 Growth
Russell 1000 Value
S&P 500
Russell Midcap
Russell 2500
Russell 2000
U.S. Equity: Quarterly Returns
1.2%
1.4%
1.5%
1.4%
1.7%
0.5%
-1.3%
-2.4%
Russell 3000
Russell 1000
Russell 1000 Growth
Russell 1000 Value
S&P 500
Russell Midcap
Russell 2500
Russell 2000
U.S. Equity: One-Year Returns
2.9%
3.9%
3.7%
4.0%
4.3%
3.2%
-4.0%
-8.9%
Source: Standard & Poor’s
U.S. EQUITY
U.S. equity markets posted mixed results amid a market that
saw 30-year Treasury yields hit historic lows and the most
meaningful, albeit short-lived, factor rotation among equities
since the Global Financial Crisis (GFC). Large cap (+1.4%)
and mid cap stocks (+0.5%) posted modest gains for the
quarter while small caps declined (Russell 2000: -2.4%).
Ongoing U.S.-China trade tension, earnings and interest rate
uncertainty, and the global political landscape continued to
drive investor uncertainty.
Large Cap U.S. Equity (S&P 500: +1.7%; Russell 1000:
+1.4%)
–Top sectors were in defensive areas including Utilities
(+9.3%), Real Estate (+7.7%), and Consumer Staples
(+6.1%) in response to investors’ continued flight to quality.
–Energy, hurt by falling oil prices, fell 6.3%; Health Care
lagged (-2.2%) amid discussions around price transparency
and pricing reform by U.S. presidential candidates.
–Cyclical sector exposure has been volatile given uncertainty
around the trade deal (and continued sideways movement of
markets) along with slowed global growth.
–Up to September, momentum stocks (which have shifted to
include many of the market’s least volatile stocks)
outperformed as investors shunned the cheapest quintile of
value (and more volatile) stocks. This trend sharply reversed
in early September as the 10-year Treasury yield rose from
1.46% to 1.73% and momentum stocks fell precipitously
while value stocks traded up over the course of two days.
The magnitude of the reversal gave a boost to value stocks
across market capitalizations for the quarter.
Growth vs. Value (Russell 1000 Value: +1.4%, Russell 1000
Growth: +1.5%; Russell 2000 Value: -0.6%, Russell 2000
Growth: -4.2%)
–While value continues to trail growth year-to-date, it gained
ground during September’s factor reversal, finishing the
quarter essentially in line with growth within large caps.
–Within small cap, value benefited as investors favored the
cheapest 20% of small caps while the most expensive
quintile within the Russell 2000 declined double digits.
Capital Market Overview September 30, 2019
S&P Sector Returns, Quarter Ended September 30, 2019
Last Quarter
2.2%
0.5%
6.1%
-6.3%
2.0%
-2.2%
3.3%
1.0%
-0.1%
7.7%
9.3%
Services
Communication
Discretionary
Consumer
Staples
Consumer Energy Financials Health Care Industrials
Technology
Information Materials Real Estate Utilities
Sources: FTSE Russell, Standard & Poor’s
Capital Market Overview (continued) September 30, 2019
MSCI EAFE
MSCI ACWI
MSCI World
MSCI ACWI ex USA
MSCI World ex USA
MSCI ACWI ex USA SC
MSCI World ex USA SC
MSCI Europe ex UK
MSCI United Kingdom
MSCI Pacific ex Japan
MSCI Japan
MSCI Emerging Markets
MSCI China
MSCI Frontier Markets
Global Equity: Quarterly Returns
-1.1%
0.0%
0.5%
-1.8%
-0.9%
-1.2%
-0.3%
-1.5%
-2.5%
-5.2%
3.1%
-4.2%
-4.7%
-1.1%
MSCI EAFE
MSCI ACWI
MSCI World
MSCI ACWI ex USA
MSCI World ex USA
MSCI ACWI ex USA SC
MSCI World ex USA SC
MSCI Europe ex UK
MSCI United Kingdom
MSCI Pacific ex Japan
MSCI Japan
MSCI Emerging Markets
MSCI China
MSCI Frontier Markets
Global Equity: One-Year Returns
1.1%
5.7%
6.3%
1.3%
1.3%
-5.9%
-6.2%
3.4%
-2.0%
8.1%
-4.2%
1.2%
-6.7%
4.9%
Source: MSCI
NON-U.S./GLOBAL EQUITY
Global equity markets turned negative in the third quarter. After
more modest positive results in the second quarter, fears over
continued trade war impacts, a no-deal Brexit, and a potential
global slowdown impacted investor behavior. Given this
backdrop, more defensive areas of the market outperformed.
Global/Non-U.S. Developed (MSCI EAFE: -1.1%; MSCI
World ex USA: -0.9%; MSCI ACWI ex USA: -1.8%; MSCI Hong
Kong: -11.9%; MSCI Japan: +3.1%)
–Boris Johnson’s attempted suspension of Parliament and no-
deal Brexit proclamations weighed on U.K. stocks (-2.5%).
–Germany (-4.0%) experienced recession fears; industrial
production dropped 1.5% in June from the prior month, while
the estimate was -0.5%.
–Hong Kong protests proved to be a headwind as the market
fell -11.9% over the three-month period.
–Japan was one of the few bright spots within developed
markets as low short-term interest rates remain unchanged
and a resolution to the Japan/South Korea trade war looked
more promising.
–Cyclical sectors trailed as investors were positioned
defensively; Energy (-6.5%) had the worst performance.
–For the quarter, factor performance reflected cautious
investor behavior as quality and low volatility did well.
However, the month of September saw a brief recovery in
value across all markets as trade talks improved and central
banks eased.
Emerging Markets (MSCI Emerging Markets Index: -4.2%)
–Emerging markets fared worst among global markets;
uncertainty weighed heavily on these volatile countries.
–Though most emerging market countries fell during the
quarter, Turkey (+11.7%) had strong results as its central
bank cut rates two times in less than two months.
–Factor performance in emerging markets favored quality and
price momentum as investors moved toward safe assets.
Non-U.S. Small Cap (MSCI World ex USA Small Cap: -0.3%;
MSCI EM Small Cap: -4.6%; MSCI ACWI ex USA Small Cap:
-1.2%)
–Small cap marginally outperformed large cap, both in
developed and all country ex-U.S. markets; despite overall
defensive posturing, idiosyncratic businesses pushed past
global market issues.
–Japan (+4.0%) helped drive developed returns as small cap
companies also benefited from low rates and resolved trade
tensions; Hong Kong (-7.6%) detracted as local businesses
were hurt by the protests.
Blmberg Barclays Gov/Cr 1-3 Yr
Blmberg Barclays Interm Gov/Cr
Blmberg Barclays Aggregate
Blmberg Barclays Long Gov/Cr
Blmberg Barclays Universal
CS Leveraged Loans
Blmberg Barclays High Yield
Blmberg Barclays TIPS
U.S. Fixed Income: Quarterly Returns
2.3%
2.1%
0.7%
1.4%
6.6%
0.9%
1.3%
1.3%
Blmberg Barclays Gov/Cr 1-3 Yr
Blmberg Barclays Interm Gov/Cr
Blmberg Barclays Aggregate
Blmberg Barclays Long Gov/Cr
Blmberg Barclays Universal
CS Leveraged Loans
Blmberg Barclays High Yield
Blmberg Barclays TIPS
U.S. Fixed Income: One-Year Returns
10.3%
10.1%
4.6%
8.2%
21.9%
3.1%
6.4%
7.1%
0%
1%
2%
3%
4%
0 5 10 15 20 25 30
Maturity (Years)
9/30/2019 6/30/2019 9/30/2018
U.S. Treasury Yield Curves
FIXED INCOME
The Federal Open Market Committee (FOMC) cut short-term
interest rates by 25 basis points twice in the third quarter amid
an economic backdrop that has been supported by strong
consumer spending and a solid labor market, but challenged
by weakening manufacturing data and business investment.
The Fed chair stated that the FOMC would act as “appropriate
to sustain the expansion,” and the European Central Bank and
other central banks around the world also moved in the
direction of easing monetary policy. Yields fell in the U.S. and
abroad given global growth headwinds fueled by mounting
trade tensions as well as geopolitical uncertainty.
U.S. Fixed Income (Bloomberg Barclays US Aggregate Bond
Index: +2.3%)
–Treasuries returned 2.4% as rates fell across the yield curve.
–While the widely monitored 2- and 10-year key rates
remained positive, the spread between the 3-month and 10-
year key rates remained inverted.
–Long Treasuries soared (+7.9%) as 30-year yields fell
roughly 40 bps.
–Nominal Treasuries outperformed TIPS as inflation
expectations continued to fall; 10-year breakeven spreads
were 1.53% as of quarter-end, down from 1.69% as of June
30. The 10-year real yield dipped briefly into negative
territory in early September.
Investment Grade Corporates (Bloomberg Barclays
Corporate: +3.1%)
–Investment grade corporate credit spreads were range-
bound, but their yield advantage was enough to generate
positive excess returns versus like-duration Treasuries.
–Issuance in the corporate bond market was $320 billion in
the quarter, $50 billion higher than a year ago; demand
remained solid. BBB-rated corporates (+3.1%) modestly
outperformed A-rated or higher corporates (+3.0%).
High Yield (Bloomberg Barclays Corporate High Yield: +1.3%)
–BB-rated corporates (+2.0%) outperformed CCC-rated
corporates (-1.8%). BB- and B-rated spreads narrowed
slightly, but the rally in rates helped drive outperformance as
a result of higher quality bonds’ greater sensitivity to interest
rate movements.
–CCC-rated bond spreads widened significantly, representing
some concern about deteriorating quality at the lower-end of
the spectrum.
Leveraged Loans (CS Leveraged Loans: +0.9%)
–Bank loans, which have floating rate coupons,
underperformed high yield bonds as rates rallied and
investors worried about deteriorating credit quality.
–CLO issuance continued to exceed expectations, providing
positive technical support to the leveraged loan market.
Capital Market Overview (continued) September 30, 2019
Sources: Bloomberg, Bloomberg Barclays, Credit Suisse
Blmberg Barclays Gl Aggregate
Blmberg Barclays Gl Agg (hdg)
Blmberg Barclays Gl High Yield
Blmberg Barclays Gl Agg ex US
JPM EMBI Global Diversified
JPM GBI-EM Global Diversified
JPM EMBI Gl Div/JPM GBI-EM Gl Div
JPM CEMBI
Global Fixed Income: Quarterly Returns
0.7%
2.6%
-0.7%
-0.6%
1.5%
-0.8%
0.4%
2.0%
Blmberg Barclays Gl Aggregate
Blmberg Barclays Gl Agg (hdg)
Blmberg Barclays Gl High Yield
Blmberg Barclays Gl Agg ex US
JPM EMBI Global Diversified
JPM GBI-EM Global Diversified
JPM EMBI Gl Div/JPM GBI-EM Gl Div
JPM CEMBI
Global Fixed Income: One-Year Returns
7.6%
10.6%
5.0%
5.3%
11.6%
10.1%
10.9%
11.9%
17 bps
13 bps
1 bps
20 bps
6 bps
0 5 10 15 20 25
U.S. Treasury
Germany
U.K.
Canada
Japan
2Q19 to 3Q19
Change in 10-Year Global Government Bond Yields
NON-U.S. FIXED INCOME
Global Fixed Income (Bloomberg Barclays Global Aggregate
(unhedged): +0.7%; (hedged): +2.6%)
–Developed market sovereign bond yields rallied, pushing
European sovereigns further into negative territory as the
ECB reduced its deposit rate and announced a new bond
purchasing stimulus program.
–Negative yielding debt totals nearly $17 trillion, a record high.
–The U.S. dollar was up 3.4% versus a basket of trade
partner currencies and up 4.3% vs the beleaguered euro.
US$ EMD (JPM EMBI Global Diversified: +1.5%), Local
Currency EMD (JPM GBI-EM Global Diversified: -0.8%)
–Broadly, emerging market currencies depreciated versus the
U.S. dollar, hampering local currency returns.
–Within the dollar-denominated benchmark, Argentina (-42%)
and Venezuela (-51%) were among the few to post negative
returns. Conversely, returns in the local debt benchmark
were more mixed with Turkey (+19%) and Argentina (-60%)
being outliers.
Capital Market Overview (continued) September 30, 2019
Sources: Bloomberg, Bloomberg Barclays, JP Morgan
Active Management Overview
Market Overview
Active Management vs Index Returns
Market Overview
The charts below illustrate the range of returns across managers in Callan’s Separate Account database over the most
recent one quarter and one year time periods. The database is broken down by asset class to illustrate the difference in
returns across those asset classes. An appropriate index is also shown for each asset class for comparison purposes. As an
example, the first bar in the upper chart illustrates the range of returns for domestic equity managers over the last quarter.
The triangle represents the S&P 500 return. The number next to the triangle represents the ranking of the S&P 500 in the
Large Cap Equity manager database.
Range of Separate Account Manager Returns by Asset Class
One Quarter Ended September 30, 2019
Re
t
u
r
n
s
(8%)
(6%)
(4%)
(2%)
0%
2%
4%
6%
Large Cap Small Cap Non-US Domestic Non-US Real
Equity Equity Equity Fixed Income Fixed Income Estate
vs vs vs vs vs vs
S&P 500 Russell 2000 MSCI EAFE Blmbg Aggr Bd Citi Non-US Govt NCREIF Index
(31)
(60)
(35)
(83)
(13)
(75)
10th Percentile 2.73 1.10 0.15 2.49 (0.08)3.05
25th Percentile 1.95 (0.29) (0.75)2.45 (0.28)2.20
Median 1.16 (1.84) (1.44)2.36 (0.71)1.81
75th Percentile (0.08) (3.72) (2.05)2.29 (1.95)1.4090th Percentile (1.03) (5.63) (2.71)2.21 (2.57)0.77
Index 1.70 (2.40) (1.07)2.27 (0.11)1.41
Range of Separate Account Manager Returns by Asset Class
One Year Ended September 30, 2019
Re
t
u
r
n
s
(20%)
(15%)
(10%)
(5%)
0%
5%
10%
15%
20%
Large Cap Small Cap Non-US Domestic Non-US Real
Equity Equity Equity Fixed Income Fixed Income Estatevs vs vs vs vs vsS&P 500 Russell 2000 MSCI EAFE Blmbg Aggr Bd Citi Non-US Govt NCREIF Index
(35)
(63)
(43)
(69)
(27)(63)
10th Percentile 8.46 (0.24)3.16 11.08 7.77 13.43
25th Percentile 5.46 (3.74)0.63 10.82 6.80 8.21Median 2.83 (7.07) (2.10)10.52 5.92 6.99
75th Percentile (0.31) (10.61) (4.70)10.26 3.34 5.80
90th Percentile (1.87) (13.09) (6.52)9.97 (0.14)3.85
Index 4.25 (8.89) (1.34)10.30 6.78 6.24
7Orange County Sanitation District
Domestic Fixed Income
Active Management Overview
Ten-year U.S. Treasury yields were volatile in the third quarter, especially in September, hitting a 2019 low of 1.40% on Sept.
4, soaring to 1.90% mid-month and closing the quarter at 1.68%, down 32 bps from June 30. U.S. Treasuries thus posted
strong results (Bloomberg Barclays US Treasury Index: +2.4%). Long U.S. Treasuries soared (Bloomberg Barclays Long US
Treasury Index: +7.9%; +19.8% YTD) in the falling rate environment. The Bloomberg Barclays Aggregate rose 2.3%,
bringing its YTD result to an impressive +8.5%. High yield was up just over 1% (+11.4% YTD) but, notably, lower quality
significantly underperformed (CCC: -1.8% vs BB: +2.0%, and +5.6% vs +12.8% YTD) representing some concern about
deteriorating quality at the lower end of the spectrum. TIPS (Bloomberg Barclays TIPS: +1.3%) underperformed as inflation
expectations waned; 10-year breakeven spreads were 1.53% as of quarter-end, down from 1.69% as of 6/30/19. The
10-year real yield dipped briefly into negative territory in early September.
Separate Account Style Group Median Returns
for Quarter Ended September 30, 2019
0%
2%
4%
6%
8%
10%
0.84
Defensive
1.42
Intermed
2.36
Core
Bond
2.34
Core Plus
6.63
Extended
Maturity
1.24
Bank
Loans
1.55
High Yield
Re
t
u
r
n
s
Blmbg Aggregate: 2.27%
Blmbg High Yield: 1.33%
Blmbg Long Gov/Cred: 6.58%
Separate Account Style Group Median Returns
for One Year Ended September 30, 2019
0%
5%
10%
15%
20%
25%
30%
4.87
Defensive
7.98
Intermed
10.52
Core
Bond
10.41
Core Plus
22.12
Extended
Maturity
3.50
Bank
Loans
6.86
High Yield
Re
t
u
r
n
s
Blmbg Aggregate: 10.30%
Blmbg High Yield: 6.36%
Blmbg Long Gov/Cred: 21.88%
8Orange County Sanitation District
Asset Allocation
Investment Manager Asset Allocation
The table below contrasts the distribution of assets across the Fund’s investment managers as of September 30, 2019, with
the distribution as of June 30, 2019. 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
September 30, 2019 June 30, 2019
Market Value Weight Net New Inv. Inv. Return Market Value Weight
Domestic Fixed Income
Long Term Operating Fund* 548,126,927 88.93%(15,000,000)4,926,318 558,200,609 77.23%
Liquid Operating Monies* 68,233,258 11.07%(97,000,000)666,613 164,566,646 22.77%
Total Fund $616,360,185 100.0%$(112,000,000)$5,592,930 $722,767,255 100.0%
*Chandler replaced PIMCO during the 4th quarter of 2014. Assets were transferred in-kind as of 12/01/2014.
10Orange County Sanitation District
Investment Manager Returns
The table below details the rates of return for the Fund’s investment managers over various time periods ended September
30, 2019. 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 September 30, 2019
Last Last Last
Last Last 3 5 7
Quarter Year Years Years Years
Domestic Fixed Income
Long Term Operating Fund^ 0.88% 5.57% 2.04% 1.98% 1.40%
Chandler 0.88% 5.57% 2.04% - -
Blmbg Govt/Cred 1-5 Year Idx 0.89% 6.01% 2.01% 2.01% 1.65%
ML 1-5 Govt/Corp 0.90% 6.02% 2.04% 2.05% 1.70%
Liquid Operating Monies^ 0.58% 2.48% 1.61% 1.08% 0.81%
Chandler 0.58% 2.48% 1.61% - -
Citigroup 3-Month Treasury Bill 0.56% 2.36% 1.52% 0.96% 0.70%
Total Fund 0.86% 4.98% 1.91% 1.78% 1.26%
Target* 0.84% 5.28% 1.94% 1.83% 1.50%
* Current Quarter Target = 80.0% ML:Corp/Gov 1-5 Yr and 20.0% FTSE 3 Mo T-Bill.
^Assets were transferred in kind to Chandler on 12/1/2014. Previous performance reflects PIMCO.
11Orange County Sanitation District
Investment Manager Returns
The table below details the rates of return for the Fund’s investment managers over various time periods ended September
30, 2019. 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 September 30, 2019
Last Last Last
10 15 24
Years Years Years
Domestic Fixed Income
Long Term Operating Fund^ 2.19% 3.11% 4.25%
Blmbg Govt/Cred 1-5 Year Idx 2.12% 2.89% 4.08%
ML 1-5 Govt/Corp 2.18% 2.92% 4.11%
Liquid Operating Monies^ 0.63% 1.54% 2.58%
Citigroup 3-Month Treasury Bill 0.51% 1.32% 2.29%
Total Fund 1.90% 2.81% 3.98%
Target*1.85% 2.60% 3.75%
* Current Quarter Target = 80.0% ML:Corp/Gov 1-5 Yr and 20.0% FTSE 3 Mo T-Bill.
^Assets were transferred in kind to Chandler on 12/1/2014. Previous performance reflects PIMCO.
12Orange County Sanitation District
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.
12/2018-
9/2019 2018 2017 2016 2015
Domestic Fixed Income
Long Term Operating Fund^ 4.17% 1.60% 1.18% 1.58% 0.85%
Chandler 4.17% 1.60% 1.18% 1.58% 0.85%
Blmbg Govt/Cred 1-5 Year Idx 4.48% 1.38% 1.27% 1.56% 0.97%
ML 1-5 Govt/Corp 4.52% 1.40% 1.28% 1.62% 1.05%
Liquid Operating Monies^ 1.88% 1.90% 0.91% 0.47% 0.22%
Chandler 1.88% 1.90% 0.91% 0.47% 0.22%
Citigroup 3-Month Treasury Bill 1.78% 1.86% 0.84% 0.27% 0.03%
Total Fund 3.74% 1.72% 1.02% 1.15% 0.80%
Target* 3.97% 1.49% 1.19% 1.35% 0.85%
* Current Quarter Target = 80.0% ML:Corp/Gov 1-5 Yr and 20.0% FTSE 3 Mo T-Bill.
^Assets were transferred in kind to Chandler on 12/1/2014. Previous performance reflects PIMCO.
13Orange County Sanitation District
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.
2014 2013 2012 2011 2010
Domestic Fixed Income
Long Term Operating Fund^ 1.98%(1.77%)3.06% 4.59% 4.42%
Blmbg Govt/Cred 1-5 Year Idx 1.42% 0.28% 2.24% 3.14% 4.08%
ML 1-5 Govt/Corp 1.51% 0.32% 2.47% 3.10% 4.17%
Liquid Operating Monies^ 0.09% 0.13% 0.17% 0.24% 0.25%
Citigroup 3-Month Treasury Bill 0.03% 0.05% 0.07% 0.08% 0.13%
Total Fund 1.73%(1.49%)2.70% 3.70% 3.68%
Target* 1.21% 0.26% 1.99% 2.49% 3.36%
* Current Quarter Target = 80.0% ML:Corp/Gov 1-5 Yr and 20.0% FTSE 3 Mo T-Bill.
^Assets were transferred in kind to Chandler on 12/1/2014. Previous performance reflects PIMCO.
14Orange County Sanitation District
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
0.2%0.4%0.6%0.8%1.0%1.2%1.4%1.6%
0.6%
0.8%
1.0%
1.2%
1.4%
1.6%
1.8%
Total Fund
Blmbg Gov/Cred 1-5 Yr
FTSE 3 Mo T-Bill
Total Fund Target
ML:Corp/Gov 1-5 Yr
Standard Deviation
Re
t
u
r
n
s
Seven Year Annualized Risk vs Return
Asset Classes vs Asset Class Median
0.30%0.40%0.50%0.60%0.70%0.80%0.90%1.00%1.10%1.20%1.30%1.40%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
1.6%
1.8%
Total Fund
Callan Money Market Funds
Callan Short Fixed Inc
Standard Deviation
Re
t
u
r
n
s
15Orange County Sanitation District
Manager Analysis
Chandler-Long Term Operating Fund
Period Ended September 30, 2019
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
12/1/2014. Previous performance reflects PIMCO.
Quarterly Summary and Highlights
Long Term Operating Fund’s portfolio posted a 0.88% return
for the quarter placing it in the 37 percentile of the Callan
Short Term Fixed Income group for the quarter and in the 15
percentile for the last year.
Long Term Operating Fund’s portfolio underperformed the
ML:Corp/Gov 1-5 Yr by 0.02% for the quarter and
underperformed the ML:Corp/Gov 1-5 Yr for the year by
0.45%.
Quarterly Asset Growth
Beginning Market Value $558,200,609
Net New Investment $-15,000,000
Investment Gains/(Losses) $4,926,318
Ending Market Value $548,126,927
Performance vs Callan Short Term Fixed Income (Gross)
0%
1%
2%
3%
4%
5%
6%
7%
Last Qtr Last Last 3 Yrs Chandler Last 5 Yrs Last 7 Yrs Last 10 Yrs Since 9/30/95
Yr Inception
B(37)A(37)(36)
B(5)A(15)
(5)
A(75)B(79)(75)B(52)
A(58)(49)B(48)
A(52)(45)B(59)A(84)(52)
A(44)B(47)(44)
A(16)
B(31)(28)
10th Percentile 1.03 5.67 2.81 2.61 2.53 2.25 3.14 4.40
25th Percentile 0.95 5.29 2.47 2.33 2.27 2.02 2.62 4.14
Median 0.84 4.87 2.21 2.06 2.00 1.70 2.10 3.89
75th Percentile 0.75 4.49 2.04 1.84 1.78 1.50 1.72 3.67
90th Percentile 0.68 3.78 1.83 1.61 1.57 1.28 1.37 3.32
Long Term
Operating Fund A 0.88 5.57 2.04 1.97 1.98 1.40 2.19 4.25
Blmbg Govt/Cred
1-5 Year Idx B 0.89 6.01 2.01 2.03 2.01 1.65 2.12 4.08
ML:Corp/Gov 1-5 Yr 0.90 6.02 2.04 2.07 2.05 1.70 2.18 4.11
Relative Return vs ML:Corp/Gov 1-5 Yr
Re
l
a
t
i
v
e
R
e
t
u
r
n
s
(1.4%)
(1.2%)
(1.0%)
(0.8%)
(0.6%)
(0.4%)
(0.2%)
0.0%
0.2%
0.4%
0.6%
12 2013 2014 2015 2016 2017 2018 2019
Long Term Operating Fund
Callan Short Term Fixed Income (Gross)
Annualized Seven Year Risk vs Return
0.0 0.5 1.0 1.5 2.0 2.5
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
Blmbg Govt/Cred 1-5 Year Idx
Long Term Operating Fund
ML:Corp/Gov 1-5 Yr
Standard Deviation
Re
t
u
r
n
s
17Orange County Sanitation District
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 12/1/2014. Previous performance reflects PIMCO.
Performance vs Callan Short Term Fixed Income (Gross)
(3%)
(2%)(1%)0%1%2%
3%4%5%6%
12/18- 9/19 2018 2017 2016 2015 2014 2013 2012 2011 2010
B(17)A(33)16
A(65)B(87)87 B(58)A(65)57 A(49)B(50)47 B(35)A(63)24
A(4)B(17)10
B(90)
A(100)
89
A(21)B(38)27
A(1)
B(4)4
A(15)B(20)17
10th Percentile 4.87 1.99 2.23 2.82 1.17 1.50 1.20 4.46 2.72 4.7125th Percentile 4.36 1.81 1.74 2.17 1.01 1.27 0.80 2.60 2.30 4.01
Median 3.89 1.69 1.31 1.56 0.91 1.11 0.65 1.81 1.85 3.18
75th Percentile 3.57 1.54 0.95 1.18 0.75 0.87 0.40 1.45 1.65 2.72
90th Percentile 3.00 1.33 0.66 1.03 0.64 0.73 0.29 0.92 1.44 2.41
Long Term
Operating Fund A 4.17 1.60 1.18 1.58 0.85 1.98 (1.77)3.06 4.59 4.42
Blmbg Govt/Cred
1-5 Year Idx B 4.48 1.38 1.27 1.56 0.97 1.42 0.28 2.24 3.14 4.08
ML:Corp/Gov
1-5 Yr 4.52 1.40 1.28 1.62 1.05 1.51 0.32 2.47 3.10 4.17
Cumulative and Quarterly Relative Return vs ML:Corp/Gov 1-5 Yr
Re
l
a
t
i
v
e
R
e
t
u
r
n
s
(4%)
(3%)
(2%)
(1%)
0%
1%
2%
3%
09 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Long Term Operating Fund Blmbg Govt/Cred 1-5 Year Idx Callan Short Fixed Inc
Risk Adjusted Return Measures vs ML:Corp/Gov 1-5 Yr
Rankings Against Callan Short Term Fixed Income (Gross)
Seven Years Ended September 30, 2019
(1.5)
(1.0)
(0.5)
0.0
0.5
1.0
1.5
2.0
Alpha Sharpe Excess Return
Ratio Ratio
B(94)A(98)
B(89)A(97)
A(87)
B(97)
10th Percentile 0.94 1.49 0.97
25th Percentile 0.63 1.23 0.46
Median 0.37 0.97 0.01
75th Percentile 0.18 0.80 (0.36)
90th Percentile 0.05 0.63 (0.65)
Long Term Operating Fund A (0.26)0.45 (0.56)
Blmbg Govt/Cred 1-5 Year Idx B (0.05)0.65 (0.95)
18Orange County Sanitation District
Long Term Operating Fund
Bond Characteristics Analysis Summary
Portfolio Characteristics
This graph compares the manager’s 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 Callan Short Term Fixed Income
as of September 30, 2019
(1.0)
(0.5)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Average Effective Coupon OA
Duration Life Yield Rate Convexity
(10)(8)(22)(18)
(92)
(88)
(62)
(4)
10th Percentile 2.46 3.13 2.79 3.31 0.06
25th Percentile 2.09 2.54 2.30 2.96 0.04
Median 1.88 2.10 2.14 2.79 0.02
75th Percentile 1.79 1.97 1.99 2.54 0.00
90th Percentile 1.09 1.21 1.92 2.20 (0.13)
Long Term
Operating Fund 2.46 2.58 - 2.29 -
ML:Corp/Gov 1-5 Yr 2.54 2.70 1.87 2.64 0.08
Sector Allocation and Quality Ratings
The first graph compares the manager’s 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
September 30, 2019
0%10%20%30%40%50%60%70%80%
US Trsy
30.4
24.4
62.1
Gov Related
25.6
50
%
Mg
r
M
V
50
%
Mg
r
M
V
1.5
9.9
Corp (incl 144A)
21.8
51.7
28.0
Other
11.7
ABS
8.5
17.2
Tax-Exempt US Muni
0.8
Cash
0.7
1.3
CMOs
0.3
0.1
CMBS
0.2
2.1
RMBS 1.9
Long Term Operating Fund Callan Short Term Fixed Income
ML:Corp/Gov 1-5 Yr
Quality Ratings
vs Callan Short Term Fixed Income
A-
A
A+
AA-
AA
AA+
AAA
Trsy
Weighted Average
Quality Rating
(60)(11)
10th Percentile AA
25th Percentile AA
Median AA
75th Percentile A
90th Percentile A
Long TermOperating Fund AA
ML:Corp/Gov 1-5 Yr AA
19Orange County Sanitation District
Long Term Operating Fund
Portfolio Characteristics Summary
As of September 30, 2019
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
Long Term Operating Fund
US Trsy
30%
CMBS
0%
Gov Related26%
CMOs
0%Corp (incl 144A)22%
Cash
1%
Other
12%
Tax-Exempt US Muni
1%
ABS
9%
ML:Corp/Gov 1-5 Yr
US Trsy
62%
Gov Related
10%
Corp (incl 144A)
28%
Duration Distribution
0%
10%
20%
30%
40%
50%
60%
70%
80%
<1
17.0
2.1
1-3
39.4
60.6
3-5
43.6
37.2
5-7 7-10 >10
Years Duration
Pe
r
c
e
n
t
o
f
P
o
r
t
f
o
l
i
o
Weighted Average: Duration
Long Term Operating Fund:
ML:Corp/Gov 1-5 Yr:
2.46
2.54
Quality Distribution
0%
20%
40%
60%
80%
100%
AAA
8.9
68.2
AA
66.5
5.6
A
16.912.5
BBB
0.5
13.7
BB B CCC CC C D N/R
7.2
Quality Rating
Pe
r
c
e
n
t
o
f
P
o
r
t
f
o
l
i
o
Weighted Average: Quality
Long Term Operating Fund:
ML:Corp/Gov 1-5 Yr:
AA
AA
20Orange County Sanitation District
Chandler-Liquid Operating Money
Period Ended September 30, 2019
Investment Philosophy
Assets were transferred in kind to Chandler on 12/1/2014. Previous performance reflects PIMCO.
Quarterly Summary and Highlights
Liquid Operating Money Net’s portfolio posted a 0.55%
return for the quarter placing it in the 28 percentile of the
Callan Money Market Funds group for the quarter and in the
26 percentile for the last year.
Liquid Operating Money Net’s portfolio underperformed the
Citigroup 3-Month Treasury Bill by 0.02% for the quarter and
underperformed the Citigroup 3-Month Treasury Bill for the
year by 0.03%.
Quarterly Asset Growth
Beginning Market Value $164,566,646
Net New Investment $-97,000,000
Investment Gains/(Losses) $666,613
Ending Market Value $68,233,258
Performance vs Callan Money Market Funds (Net)
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
Last Qtr Last Last 3 Yrs Chandler Last 5 Yrs Last 7 Yrs Last 10 Yrs Since 9/30/95
Yr Inception
(28)(26)
(26)(24)
(30)(26)
(27)(26)(27)(26)
(25)(22)
(23)(21)
(12)(25)
10th Percentile 0.66 2.90 1.96 1.55 1.48 1.12 1.03 2.62
25th Percentile 0.57 2.34 1.55 1.02 0.97 0.66 0.47 2.29
Median 0.49 2.05 1.25 0.80 0.76 0.53 0.38 2.13
75th Percentile 0.44 1.86 1.07 0.68 0.64 0.46 0.32 2.00
90th Percentile 0.37 1.57 0.85 0.52 0.49 0.35 0.25 1.85
Liquid Operating
Money Net 0.55 2.33 1.45 0.98 0.93 0.65 0.48 2.43
Citigroup 3-Month
Treasury Bill 0.56 2.36 1.52 1.01 0.96 0.70 0.51 2.29
Relative Returns vs
Citigroup 3-Month Treasury Bill
Re
l
a
t
i
v
e
R
e
t
u
r
n
s
(0.08%)
(0.06%)
(0.04%)
(0.02%)
0.00%
0.02%
0.04%
0.06%
0.08%
0.10%
12 2013 2014 2015 2016 2017 2018 2019
Liquid Operating Money Net
Callan Money Market Funds (Net)
Annualized Seven Year Risk vs Return
0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
Liquid Operating Money Net
Citigroup 3-Month Treasury Bill
Standard Deviation
Re
t
u
r
n
s
21Orange County Sanitation District
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 12/1/2014. Previous performance reflects PIMCO.
Performance vs Callan Money Market Funds (Net)
(0.5%)
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
12/18- 9/19 2018 2017 2016 2015 2014 2013 2012 2011 2010
2827 2212
3530
3033 2236 9822 9820 4424 1315 1915
10th Percentile 2.57 1.89 1.42 1.32 0.28 0.35 0.30 0.85 0.12 0.24
25th Percentile 1.84 1.72 0.91 0.40 0.06 0.03 0.04 0.06 0.04 0.08
Median 1.57 1.53 0.61 0.14 0.01 0.01 0.01 0.01 0.01 0.02
75th Percentile 1.42 1.30 0.42 0.04 0.01 0.01 0.01 0.01 0.01 0.0190th Percentile 1.20 1.04 0.23 0.01 0.00 0.00 0.00 0.00 0.00 0.00
Liquid Operating
Money Net 1.77 1.75 0.76 0.32 0.07 (0.06) (0.02)0.02 0.09 0.10
Citigroup 3-Month
Treasury Bill 1.78 1.86 0.84 0.27 0.03 0.03 0.05 0.07 0.08 0.13
Cumulative and Quarterly Relative Return vs Citigroup 3-Month Treasury Bill
Re
l
a
t
i
v
e
R
e
t
u
r
n
s
(0.50%)
(0.40%)
(0.30%)
(0.20%)
(0.10%)
0.00%
0.10%
0.20%
0.30%
0.40%
0.50%
09 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Liquid Operating Money Net Callan Money Market Funds
Risk Adjusted Return Measures vs Citigroup 3-Month Treasury Bill
Rankings Against Callan Money Market Funds (Net)
Seven Years Ended September 30, 2019
(3.0)
(2.5)
(2.0)
(1.5)
(1.0)
(0.5)
0.0
0.5
1.0
1.5
2.0
Alpha Sharpe Excess Return
Ratio Ratio
(31)(25)
(28)
10th Percentile 0.38 0.71 1.22
25th Percentile (0.03) (0.14) (0.37)
Median (0.15) (0.48) (1.98)
75th Percentile (0.23) (0.76) (2.27)
90th Percentile (0.34) (1.26) (2.46)
Liquid Operating Money Net (0.07) (0.15) (0.82)
22Orange County Sanitation District
Callan Research/Education
Research and Educational Programs
The Callan Institute provides research to update clients on the latest industry trends and carefully structured educational programs
to enhance the knowledge of industry professionals. Visit www.callan.com/library to see all of our publications, and www.callan.com/blog
to view our blog “Perspectives.” For more information contact Barb Gerraty at 415-274-3093 / institute@callan.com.
New Research from Callan’s Experts
DTS Offers Some Key Advantages for Evaluating Fixed
Income Portfolios | This paper describes duration times spread
(DTS), which measures systematic credit-spread risk exposure.
DTS estimates the return of any bond, by percentage, if its spread
were to change from the current level, all else equal. DTS offers
several advantages for monitoring risk in credit portfolios over
other methods.
2019 ESG Survey | Callan’s seventh
annual survey assessing the status of
environmental, social, and governance
(ESG) investing in the U.S. institutional
investment market.
Callan’s DC Index in Detail | A video about the Callan DC Index™:
why we started it, what it measures, and how it can beneit deined
contribution plan sponsors.
DC Plan Hacks: Tips for an Eficient Design | Deined contribution
plan sponsors should
regularly evaluate their
plans to make sure they
serve the organization’s
beneits philosophy. When evaluating changes, the sponsor should
consider its demographics, cost of beneits, vendor capabilities,
impact on nondiscrimination testing, communication capabilities,
and legal requirements.
2019 June Workshop Summary: In the Age of Illiquidity | For
many nonproits and deined beneit plans, the shift to higher-
returning but less liquid asset classes has myriad implications.
This summary discusses how consultants, institutional investors,
and investment managers can work together to identify solutions
tailored to each plan.
The Keys to Unlocking Private Equity Portfolio Assessment
Private equity performance evaluation has some unique
considerations, so return calculations and benchmarking
methodologies differ from public securities. Closed-end private
equity vehicles are assessed using ratio analyses and internal rate
of return (IRR) measures. Using performance metrics, private equity
portfolios can be evaluated at the partnership level, at the vintage
year level, and then at the total portfolio level.
Survivorship Bias and the Walking Dead | Survivorship bias,
the predisposition to evaluate a data set by focusing on the
“survivors” rather than also examining the record of non-survivors,
is important to understand for hedge fund peer groups, which tend
to have a relatively large number of constituents that disappear.
Using a proprietary approach, Callan is able to adjust peer group
comparisons for survivorship bias. This better-informed perspective
enables a more honest assessment in considering performance
relative to other opportunities.
Quarterly Periodicals
Private Equity Trends | A newsletter on private equity activity,
covering both the fundraising cycle and performance over time.
Market Pulse Flipbook | A market reference guide covering trends
in the U.S. economy, developments for institutional investors, and
the latest data for U.S. and non-U.S. equities and ixed income,
alternatives, and deined contribution plans.
Active vs. Passive Charts | This series of charts compares active
managers alongside relevant benchmarks over the long term.
Capital Market Review | A newsletter providing analysis and
a broad overview of the economy and public and private market
activity each quarter across a wide range of asset classes.
Education
3rd Quarter 2019
Events
Miss out on a Callan conference or workshop? Event summaries
and speakers’ presentations are available on our website:
www.callan.com/library/
Please mark your calendar and look forward to upcoming invitations.
2020 National Conference
Celebrating the 40th anniversary of the Callan Institute
January 27-29, 2020 – San Francisco
Please also keep your eye out for upcoming Webinars in 2019!
We will be sending invitations to register for these events and will
also have registration links on our website at www.callan.com/
webinarsupcoming.
For more information about events, please contact Barb
Gerraty: 415-274-3093 / gerraty@callan.com
The Center for Investment Training
Educational Sessions
The Center for Investment Training, better known as the “Callan
College,” provides a foundation of knowledge for industry
professionals who are involved in the investment decision-making
process. It was founded in 1994 to provide clients and non-clients
alike with basic- to intermediate-level instruction.
Introduction to Investments
April 21-22, 2020
July 21-22, 2020
This program familiarizes institutional investor trustees and staff
and asset management advisers with basic investment theory,
terminology, and practices. It lasts one-and-a-half days and
is designed for individuals who have less than two years of
experience with asset-management oversight and/or support
responsibilities. Tuition for the Introductory “Callan College”
session is $2,350 per person. Tuition includes instruction, all
materials, breakfast and lunch on each day, and dinner on the
irst evening with the instructors.
Learn more at www.callan.com/events/callan-college-intro
Unique pieces of research the
Institute generates each year50+
Total attendees of the “Callan
College” since 19943,700 Year the Callan Institute
was founded1980
Attendees (on average) of the
Institute’s annual National Conference525
Education: By the Numbers
@CallanLLC Callan
“Research is the foundation of all we do at Callan, and sharing our
best thinking with the investment community is our way of helping
to foster dialogue to raise the bar across the industry.”
Greg Allen, CEO and Chief Research Oficer
Definitions
Risk/Reward Statistics
The risk statistics used in this report examine performance characteristics of a manager or a portfolio relative to a benchmark
(market indicator) which assumes to represent overall movements in the asset class being considered. The main unit of
analysis is the excess return, which is the portfolio return minus the return on a risk free asset (3 month T-Bill).
Alpha measures a portfolio’s return in excess of the market return adjusted for risk. It is a measure of the manager’s
contribution to performance with reference to security selection. A positive alpha indicates that a portfolio was positively
rewarded for the residual risk which was taken for that level of market exposure.
Beta measures the sensitivity of 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 manager’s annualized cumulative excess return relative to the index by the standard deviation of
the individual quarterly excess returns. The Excess Return Ratio can be interpreted as the manager’s active risk/reward
tradeoff for diverging from the index when the index is mandated to be the "riskless" market position.
Information Ratio measures the manager’s market risk-adjusted excess return per unit of residual risk relative to a
benchmark. It is computed by dividing alpha by the residual risk over a given time period. Assuming all other factors being
equal, managers with lower residual risk achieve higher values in the information ratio. Managers with higher information
ratios will add value relative to the benchmark more reliably and consistently.
R-Squared indicates the extent to which the variability of the portfolio returns are explained by market action. It can also be
thought of as measuring the diversification relative to the appropriate benchmark. An r-squared value of .75 indicates that
75% of the fluctuation in a portfolio return is explained by market action. An r-squared of 1.0 indicates that a portfolio’s
returns are entirely related to the market and it is not influenced by other factors. An r-squared of zero indicates that no
relationship exists between the portfolio’s return and the market.
Relative Standard Deviation is a simple measure of a manager’s 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.
27
Risk/Reward Statistics
Rising Declining Periods refer to the sub-asset class cycles vis-a-vis the broader asset class. This is determined by
evaluating the cumulative relative sub-asset class index performance to that of the broader asset class index. For example,
to determine the Growth Style cycle, the S&P 500 Growth Index (sub-asset class) performance is compared to that of the
S&P 500 Index (broader asset class).
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 risk 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.
Treynor 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.
28
Fixed Income Portfolio Characteristics
All Portfolio Characteristics are derived by first calculating the characteristics for each security, and then calculating the
market value weighted average of these values for the portfolio.
Allocation by Sector - Sector allocation is one of the tools which managers often use to add value without impacting the
duration of the portfolio. The sector weights exhibit can be used to contrast a portfolio’s weights with those of the index to
identify any significant sector bets.
Average Coupon - The average coupon is the market value weighted average coupon of all securities in the portfolio. The
total portfolio coupon payments per year are divided by the total portfolio par value.
Average Moody’s Rating for Total Portfolio - A measure of the credit quality as determined by the individual security
ratings. The ratings for each security, from Moody’s Investor Service, are compiled into a composite rating for the whole
portfolio. Quality symbols range from Aaa+ (highest investment quality - lowest credit risk) to C (lowest investment quality -
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.
29
Fixed Income Portfolio Characteristics
Duration Dispersion - Duration dispersion is the market-value weighted standard deviation of the portfolio’s individual
security durations around the total portfolio duration. The higher the dispersion, the more variable the security durations
relative to the total portfolio duration ("barbellness"), and the smaller the dispersion, the more concentrated the holdings’
durations around the overall portfolio’s ("bulletness"). The purpose of this statistic is to gauge the "bulletness" or
"barbellness" of a portfolio relative to its total duration and to that of its benchmark index.
Effective Yield - The effective yield is the actual total annualized return that would be realized if all securities in the portfolio
were held to their expected maturities. Effective yield is calculated as the internal rate of return, using the current market
value and all expected future interest and principal cash flows. This measure incorporates sinking fund paydowns, expected
mortgage principal prepayments, and the exercise of any "in-the-money" imbedded put or call options.
Weighted Average Life - The weighted average life of a security is the weighted average time to payment of all remaining
principal. It is calculated by multiplying each expected future principal payment amount by the time left to the payment. This
amount is then divided by the total amount of principal remaining. Weighted average life is commonly used as a measure of
the investment life for pass-through security types for comparison to non-pass-through securities.
30
Disclosures
List of Callan’s Investment Manager Clients
Confidential – For Callan Client Use Only Callan takes its fiduciary and disclosure responsibilities to clients very seriously. We recognize that there are numerous potential conflicts of interest encountered in the investment consulting industry and that it is our responsibility to manage those conflicts effectively and in the best interest of our clients. At Callan, we employ a robust process to identify, manage, monitor and disclose potential conflicts on an on-going basis. The list below is an important component of our conflicts management and disclosure process. It identifies those investment managers that pay Callan fees for educational, consulting, software, database or reporting products and services. We update the list quarterly because we believe that our fund sponsor clients should know the investment managers that do business with Callan, particularly those investment manager clients that the fund sponsor clients may be using or considering using. Please note that if an investment manager receives a product or service on a complimentary basis (e.g. attending an educational event), they are not included in the list below. Callan is committed to ensuring that we do not consider an investment manager’s business relationship with Callan, or lack thereof, in performing evaluations for or making suggestions or recommendations to its other clients. Please refer to Callan’s ADV Part 2A for a more detailed description of the services and products that Callan makes available to investment manager clients through our Institutional Consulting Group, Independent Adviser Group and Fund Sponsor Consulting Group. Due to the complex corporate and organizational ownership structures of many investment management firms, parent and affiliate firm relationships are not indicated on our list. Fund sponsor clients may request a copy of the most currently available list at any time. Fund sponsor clients may also request specific information regarding the fees paid to Callan by particular fund manager clients. Per company policy, information requests regarding fees are handled exclusively by Callan’s Compliance Department.
Quarterly List as of
September 30, 2019
Knowledge. Experience. Integrity. Page 1 of 2
Manager Name
Aberdeen Standard Investments
Acadian Asset Management LLC
AEGON USA Investment Management Inc.
Alcentra
AllianceBernstein
Allianz Global Investors
Allianz Life Insurance Company of North America
American Century Investments
Amundi Pioneer Asset Management
AQR Capital Management
Ares Management LLC
Ariel Investments, LLC
Atlanta Capital Management Co., LLC
Aurelius Capital Management
Aviva Investors Americas
AXA Investment Managers
Baillie Gifford International, LLC
Baird Advisors
Baron Capital Management, Inc.
Barrow, Hanley, Mewhinney & Strauss, LLC
BlackRock
BMO Global Asset Management
BNP Paribas Asset Management
BNY Mellon Asset Management
Boston Partners
Brandes Investment Partners, L.P.
Brandywine Global Investment Management, LLC
BrightSphere Investment Group
Brown Brothers Harriman & Company
Cambiar Investors, LLC
Capital Group
Carillon Tower Advisers
CastleArk Management, LLC
Causeway Capital Management LLC
Chartwell Investment Partners
Manager Name
ClearBridge Investments, LLC
Cohen & Steers Capital Management, Inc.
Columbia Threadneedle Investments
Columbus Circle Investors
Corbin Capital Partners, L.P.
Cooke & Bieler, L.P.
Credit Suisse Asset Management
DePrince, Race & Zollo, Inc.
Diamond Hill Capital Management, Inc.
Dimensional Fund Advisors LP
Doubleline
Duff & Phelps Investment Management Co.
DWS
EARNEST Partners, LLC
Eaton Vance Management
Epoch Investment Partners, Inc.
Fayez Sarofim & Company
Federated Investors
Fidelity Institutional Asset Management
Fiera Capital Corporation
Financial Engines
First Hawaiian Bank Wealth Management Division
First State Investments
Fisher Investments
Franklin Templeton
Fred Alger Management, Inc.
GAM (USA) Inc.
Glenmeade Investment Management, LP
GlobeFlex Capital, L.P.
Goldman Sachs
Green Square Capital Advisors, LLC
Guggenheim Investments
GW&K Investment Management
Harbor Capital Group Trust
Hartford Investment Management Co.
Knowledge. Experience. Integrity. September 30, 2019 Page 2 of 2
Manager Name
Heitman LLC
Hotchkis & Wiley Capital Management, LLC
HSBC Global Asset Management
Income Research + Management, Inc.
Insight Investment Management Limited
Intech Investment Management, LLC
Intercontinental Real Estate Corporation
Invesco
Investec Asset Management North America, Inc.
Ivy Investments
J.P. Morgan
Janus
Jarislowsky Fraser Global Investment Management
Jennison Associates LLC
Jobs Peak Advisors
KeyCorp
Lazard Asset Management
Legal & General Investment Management America
Lincoln National Corporation
LMCG Investments, LLC
Logan Circle Partners, L.P.
Longview Partners
Loomis, Sayles & Company, L.P.
Lord Abbett & Company
Los Angeles Capital Management
LSV Asset Management
MacKay Shields LLC
Macquarie Investment Management (MIM)
Manulife Investment Management
Marathon Asset Management, L.P.
McKinley Capital Management, LLC
Mellon
MFS Investment Management
MidFirst Bank
Mondrian Investment Partners Limited
Montag & Caldwell, LLC
Morgan Stanley Investment Management
Mountain Lake Investment Management LLC
Mountain Pacific Advisors, LLC
MUFG Union Bank, N.A.
Natixis Investment Managers
Neuberger Berman
Newton Investment Management
Nikko Asset Management Co., Ltd.
Northern Trust Asset Management
Nuveen
OFI Global Asset Management
Manager Name
Osterweis Capital Management, LLC
P/E Investments
Pacific Investment Management Company
Pathway Capital Management
Peregrine Capital Management, LLC.
Perkins Investment Management
PGIM Fixed Income
PineBridge Investments
PNC Capital Advisors, LLC
Polen Capital Management
Principal Global Investors
Putnam Investments, LLC
QMA LLC
RBC Global Asset Management
Regions Financial Corporation
Robeco Institutional Asset Management, US Inc.
Rockefeller Capital Management
Rothschild & Co. Asset Management US
Russell Investments
Schroder Investment Management North America Inc.
Smith Graham & Co. Investment Advisors, L.P.
South Texas Money Management, Ltd.
State Street Global Advisors
Strategic Global Advisors
Stone Harbor Investment Partners, L.P.
Sun Life Investment Management
T. Rowe Price Associates, Inc.
The TCW Group, Inc.
Thompson, Siegel & Walmsley LLC
Thornburg Investment Management, Inc.
Tri-Star Trust Bank
UBS Asset Management
VanEck
Versus Capital Group
Victory Capital Management Inc.
Virtus Investment Partners, Inc.
Vontobel Asset Management, Inc.
Voya
WCM Investment Management
WEDGE Capital Management
Wellington Management Company, LLP
Wells Fargo Asset Management
Western Asset Management Company LLC
Westfield Capital Management Company, LP
William Blair & Company LLC
CHANDLER ASSET MANAGEMENT, INC. | 800.317.4747 | www.chandlerasset.com
INVESTMENT REPORT
Period Ending September 30, 2019
Orange County Sanitation District
SECTION 1 Economic Update
SECTION 2 Account Profile
SECTION 3 Consolidated Information
SECTION 4 Portfolio Holdings
SECTION 5 Transactions
Table of Contents As of September 30, 2019
1
SECTION ||||||||||||||Section 1 |Economic Update
2
Economic Update
Labormarketandconsumerfundamentalsremainfavorable,butmanufacturingdatacontinueƐtodisappoint.Webelieve
economicgrowthhasslowedfromearlierthisyearanddownsideriskstotheoutlookremainelevated.TheUSeconomy
continuestofaceheadwindsfromtradedisputes,slowingglobaleconomicgrowth,andanuncertainoutlookforBrexit.
However,webelieveaccommodativeUSmonetarypolicyandacollectivedovishstancebyallofthemajorglobalcentral
banksshouldhelptocombatheadwinds.WealsobelievetheTrumpadministrationfacessignificantpoliticalpressureto
make progress toward a trade agreement with China as we head into an election year.
TheFederalOpenMarketCommittee(FOMC)loweredthetargetfedfundsrateby25basispointsinSeptember(forthe
secondtimethisyear)toarangeof1.75%-2.00%.Therewerethreedissentingvotes;onepolicymakerfavoreda50-basis
pointratecut,andtwopolicymakersfavoredleavingthefedfundsrateunchanged.AccordingtotheFed'sdotplot,only
seven out of 17 policymakers are anticipating another rate cut before year-end. Although there is a growing disparity among
policymakersabouttheappropriatepathofmonetarypolicy,FedChairPowell’spressconferencesuggestedtheFedwillbe
flexibleanddatadependent.Powellindicatedmoreratecutsmaybeappropriateiftheeconomyslowsfurther,buttheFed
isnotonapresetcourse.WecontinuetobelievetheFederalReserveislikelytocutthefedfundstargetrateagainbefore
year-end,intheabsenceofatraderesolutionormeaningfulimprovementinmarket-basedmeasuresofinflation.Thenext
Federal Open Market Committee (FOMC) meeting is scheduled for October 29-30.
TheTreasuryyieldcurvesteepenedmodestlyinSeptember,althoughthecurveremainspartiallyinverted.The3-monthT-
billyielddeclinednearly17basispointsto1.81%,the2-yearTreasuryyieldincreasednearlytwelvebasispointsto1.62%,
andthe10-yearTreasuryyieldincreasedabout17basispointsto1.67%.Aninversionoftheyieldcurveinwhichthe10-year
Treasuryyieldislowerthanthe3-monthT-billyieldisgenerallyviewedasapowerfulpredictivesignalofanupcoming
recession.However,webelieveincreasedshort-termTreasuryissuancetofundthedeficit,andnegativesovereignbond
yieldsinothercountriesmaybedistortingtheUSTreasuryyieldcurve.Germansovereignbondyields(from1-monthoutto
30-years) remained negative at September month-end.
Source: Bloomberg
3
U.S. nonfarm payrolls rose by 136,000 in September, slightly below expectations of 145,000. However, August payrolls were revised higher by
38,000. On a trailing 3-month and 6-month average basis, payrolls increased an average of about 157,000 and 154,000per month, respectively.
The unemploymentrate declinedto 3.5%(the lowestrate sinceDecember 1969) from 3.7% in August, and the participation rate held steady at
63.2%. A broadermeasure of unemploymentcalled the U-6, which includes those whoare marginallyattached tothe laborforce andemployed
part time for economicreasons, dropped to 6.9% in Septemberfrom 7.2% in August. Wages were flat inSeptember, missingexpectations fora
0.3% increase, and the average workweek was unchanged. On a year-over-year basis, wages were up 2.9% in September, versus up 3.2% in
August.
Source: US Department of Labor Source: US Department of Labor
0
50
100
150
200
250
300
350
MO
M
C
h
a
n
g
e
I
n
(
0
0
0
'
s
)
Nonfarm Payroll (000's)
Non-farm Payroll (000's)
3 month average (000's)
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
11.0%
Unemployment Rate
Underemployment Rate (U6)
Unemployment Rate (U3)
Ra
t
e
(
%
)
Employment
4
TheConsumerPrice Index(CPI) wasup 1.7%year-over-year inSeptember, unchanged from August. Core CPI (CPI less food and energy) was up
2.4% year-over-year in September, also unchanged from August. The Personal Consumption Expenditures (PCE) index was up 1.4% year-over-
year in August, unchanged from July. Core PCE, which is the Fed's primary inflation gauge, was up 1.8% year-over-year in August versus 1.7%
year-over-year in July. Core PCE remains below the Fed’s 2.0% inflation target.
Source: US Department of Labor Source: US Department of Commerce
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
Consumer Price Index (CPI)
CPI YOY % Change
Core CPI YOY % Change
YO
Y
(
%
)
C
h
a
n
g
e
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
Personal Consumption Expenditures (PCE)
PCE Price Deflator YOY % Change
PCE Core Deflator YOY % Change
YO
Y
(
%
)
C
h
a
n
g
e
Inflation
5
Retail sales in August were moderately above consensus expectations, coming in at 0.4% compared to the 0.2% estimate. Excluding autoand
gas, retail sales were up 0.1% compared toexpectations fora0.2% increase. On ayear-over-year basis, retail sales increased by 4.1%, amodest
increase from the prior year-over-year number of 3.6%. The Consumer Confidence Index unexpectedly declined to 125.1 in September from
134.2 in August. Nevertheless, the index remains at a strong level.
Source: US Department of Commerce Source: The Conference Board
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
Retail Sales YOY % Change
YO
Y
(
%
)
C
h
a
n
g
e
110
115
120
125
130
135
140
145
In
d
e
x
L
e
v
e
l
Consumer Confidence
Consumer
6
The LeadingEconomicIndex (LEI) was flatin August, in line with expectations,followinga0.4%increaseinJuly.Whilethe LEIremains higheron
a year-over-year basis (up 1.1% in August) the pace of year-over-year improvement continues to decline, and the index suggests broad
economic growth will continue to slow. The Chicago Fed National Activity Index (CFNAI) increased to 0.10in Augustfrom -0.41in July. On a3-
month moving average basis, the index improved to -0.06 in August versus -0.14 in July. Negative values are generally consistent with below-
average growth. However, periods of economic contraction have historically been associated with values below -0.70 on a 3-month moving
average basis.
-0.4%
-0.2%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
Leading Economic Indicators (LEI)
MO
M
(
%
)
C
h
a
n
g
e
-0.70
-0.50
-0.30
-0.10
0.10
0.30
0.50
0.70
Chicago Fed National Activity Index (CFNAI)
3
M
o
n
t
h
A
v
e
r
a
g
e
Source: The Conference Board Source: Federal Reserve Bank of Chicago
Economic Activity
7
Housingstarts were much strongerthan expected in August, up 12.3% month-over-month toa 1.364million annualized rate. Multi-family starts
jumped 32.8% month-over-month to an annualized rate of 445,000, while single-family starts rose 4.4% to an annualized rate of 919,000. On a
year-over-year basis, total housing starts were up 6.6% in August. Permits were also stronger than expected in the month. Although housing
data tends to be volatile on a month-over-month basis, the August report and three-month moving averages suggest that housing activity is
accelerating. According to the Case-Shiller 20-City home price index, home prices were up just 2.0% year-over-year in July, versus up 2.2% in
June. The year-over-year pace of price appreciation is at a 7-year low.
Source: US Department of Commerce Source: S&P
0
200
400
600
800
1000
1200
1400
1600
1800
MO
M
C
h
a
n
g
e
(
I
n
T
h
o
u
s
a
n
d
s
o
f
U
n
i
t
s
)
Housing Starts
Multi Family Housing Starts
Single Family Housing Starts
1.5%
2.5%
3.5%
4.5%
5.5%
6.5%
7.5%
S&P/Case-Shiller 20 City Composite Home Price Index
YO
Y
(
%
)
C
h
a
n
g
e
Housing
8
The Institute for Supply Management (ISM) manufacturing index declined to 47.8 in September from 49.1 in August. The reading was worse than
expected and suggests the manufacturing sector remains in contraction. New orders and backlog orders also remained below 50.0 in
September. Overall, the ISM Manufacturing report suggests the outlook for the manufacturing sector is weak. The Industrial Production index
was up 0.4% year-over-year in August versus up 0.5% year-over-year in July. On a month-over-month basis, the index rose 0.6% in August,
above the consensus forecast of 0.2%. The manufacturing componentof the index rose 0.5% in August, above the 0.1% consensus, followinga
0.4% decline in July. Capacity Utilization increased to 77.9% in August from 77.5% in July, but remains below the long-run average of 79.8%
indicating there is still excess capacity for growth.
Source: Institute for Supply Management Source: Federal Reserve
46
48
50
52
54
56
58
60
62
64
Institute of Supply Management Purchasing Manager
Index
EXPANDING
CONTRACTING
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
Industrial Production
YO
Y
(
%
)
C
h
a
n
g
e
Manufacturing
9
Second quarter GDP grew at an annualized rate of 2.0% following growth of 3.1%in thefirst quarter.Although theoverall paceof GDPgrowth
slowed in the second quarter (as expected), personal consumption expenditures accelerated and were up 4.6% in Q2, following sluggish growth
of just 1.1% in Q1. Personal consumption expenditures contributed 3.00 percentage points to Q2 GDP, federal government spending
contributed 0.53 percentage points, and state & local government spending contributed 0.29 percentage points. Meanwhile, gross private
domestic investment and net exports were a drag on Q2 GDP growth. The consensus forecast calls for GDP growth of 1.9% in the third quarter
and 1.7% in the fourth quarter, for full year growth of about 2.0-2.5% versus 2.9% growth in 2018.
Source: US Department of Commerce Source: US Department of Commerce
9/18 12/18 3/19 6/19
2.3% 1.0% 0.8% 3.0%
2.3% 0.5% 1.1% -1.2%
-2.1% -0.4% 0.7% -0.7%
0.2% 0.1% 0.1% 0.5%
0.2% -0.1% 0.4% 0.3%
2.9% 1.1% 3.1% 2.0%Total
Components of GDP
Net Exports and Imports
Personal Consumption
Expenditures
Gross Private Domestic
Investment
Federal Government
Expenditures
State and Local (Consumption
and Gross Investment)
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
Gross Domestic Product (GDP)
GDP QOQ % Change
GDP YOY % Change
Gross Domestic Product (GDP)
10
Source: Bloomberg
The shape of the Treasury yield curve has changed significantly on a year-over-yearbasis. As of Septembermonth-end, the 3-month T-bill yield
wasdown39basispoints,the2-YearTreasuryyieldwasdownnearly120basis points, and the 10-Year Treasury yield was down nearly 140basis
points, year-over-year. The current shape of the yield curve implies that market participants are pricing-in additional rate cuts. We believe the
year-over-year decline in long-term Treasury yields reflects a high level of market participants' nervousness about the outlook for global
economic growth and a decline in global inflation expectations.
Source: Bloomberg
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
US Treasury Note Yields
2-Year
5-Year
10-Year
Yi
e
l
d
(
%
)
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
US Treasury Yield Curve
Sep-19
Jun-19
Sep-18
Yi
e
l
d
(
%
)
Bond Yields
11
Section 2|SECTION ||||||||||||||Section 2 |Account Profile
12
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 ICE BAML 1-5 Year Corporate Government Rated
AAA – A Index.
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.
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.
13
Compliance As of September 30, 2019
Category Standard Comment
Treasury Issues 5 years maxmaturity; Minimum allocation of 10%Complies*
U.S. Agencies 20% max issuer; 5 years max maturity Complies
Supranational "AA" rated or better by a NRSRO; 30% maximum; 5 years max maturity; USD denominated senior unsecured
unsubordinated obligations issued or unconditionally guaranteed by IBRD, IFC, or IADB Complies
Corporate (MTNs)"A" rated or better long term debt by a NRSRO; 30% maximum; 5% max issuer; 5 years max maturity; Issued by
corporations organized and operating within the U.S. or issued by depository institutions licensed by the U.S.Complies
Municipal Securities "A" rated or higher by a NRSRO; 10% maximum; 5% max issuer; 5 years max maturity Complies
Asset Backed/ CMOs/ Mortgage-backed "AA" rated or better by a NRSRO; "A" or higher issuer rating by a NRSRO; 20% maximum; 5% max issuer (excluding
govt agency/mbs); 5 years max maturity Complies*
Negotiable CDs "A" rated or better long term debt by a NRSRO; or "A-1"/ highest short term rating by a NRSRO; 30% maximum; 5% max
issuer; 5 years max maturity Complies
Certificates of Deposit 5% max issuer; 5 years max maturity; Secured/ collateralized Complies
Banker’s Acceptances A-1 rated or equivalent short term rating by a NRSRO; 40% maximum; 5% max issuer; 180 days max maturity Complies
Commercial Paper
A-1 rated or equivalent short term rating by a NRSRO; "A" or better long term debt issuer by a NRSRO; Issued by a
domestic corporation organized and operating in the US with AUM > $500million; 25% maximum; 5% max issuer;
270 days max maturity
Complies
Mutual Fund & Money Market Mutual
Fund
Highest rating or "AAA" rated by two NRSROs; SEC registered adviser with AUM >$500 million and experience greater
than 5 years; 10% per one Mutual Fund; 20% max per issuer on Money Market Mutual Funds; 20% max of the
District's surplus money
Complies
Repurchase Agreements 102% collateralization Complies
Reverse Repurchase Agreements 5% maximum, 90 days max maturity Complies
LAIF Not used by investment adviser Complies
OCIP Not used by investment adviser Complies
Avg Duration Not to exceed 60 months - (80% to 120% of the benchmark)Complies
Max Per Issuer 5% of portfolio (except Supranationals, U.S. Government, Agencies, Mutual Fund)Complies
Maximum Maturity 5 years maximum maturity Complies*
Orange County Sanitation District Long Term
Assets managed by Chandler Asset Management are in full compliance with state law and with the investment policy
*The portfolio has twenty (20) securities with maturities greater than 5 years including four (4) CMOs and sixteen (16) MBS. All securities were inherited from the previous manager and complied at time
of purchase.
14
Portfolio Characteristics
Orange County Sanitation District Long Term
9/30/2019 6/30/2019
Benchmark* Portfolio Portfolio
Average Maturity (yrs)2.67 2.82 2.77
Average Modified Duration 2.53 2.46 2.43
Average Purchase Yield n/a 2.36% 2.36%
Average Market Yield 1.75% 1.79% 1.98%
Average Quality**AAA AA/Aa1 AA/Aa1
Total Market Value 548,112,320 558,146,074
*ICE BAML 1-5 Yr US Corp/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.
A diverse set of securities in the Treasury, Agency, Asset Backed, Commercial Paper and Corporate sectors were purchased
during the quarter to keep the portfolio positioned in-line with Chandler objectives. The purchased securities ranged in
maturity from November 2019 to July 2024. One security was sold, one was called, and several matured to facilitate the
new holdings in the portfolio. Additionally, $15 million was withdrawn from the portfolio late in the quarter to account for
the liquidity needs of the District.
As of September 30, 2019
15
Orange County Sanitation District Long Term
Sector Distribution
ABS
8.5%
Agency
25.6%
CMO
0.3%
Commercial
Paper
2.0%
Foreign
Corporate
3.6%Money Market
Fund FI
0.7%
Mortgage Pass
Thru
0.2%
Municipal Bonds
0.8%
Supranational
6.1%
US Corporate
21.8%
US Treasury
30.4%
September 30, 2019 June 30, 2019
ABS
7.9%
Agency
23.6%
CMO
0.4%
Commercial
Paper
2.0%
Foreign
Corporate
2.3%
Money Market
Fund FI
3.1%
Mortgage Pass
Thru
0.2%
Municipal Bonds
0.8%
Supranational
6.0%
US Corporate
23.0%
US Treasury
30.7%
As of September 30, 2019
The sector allocation was relatively stable during the quarter. Notably the Money Market allocation decreased by 2.4% to
0.7% of the portfolio partially offset by the 2.0% increase in the Agency allocation to 25.6% of the portfolio.
16
Issue Name Investment Type % Portfolio
Government of United States US Treasury 30.37%
Federal Home Loan Bank Agency 10.16%
Federal National Mortgage Association Agency 8.87%
Federal Home Loan Mortgage Corp Agency 5.59%
Inter-American Dev Bank Supranational 3.22%
Honda ABS ABS 2.99%
John Deere ABS ABS 2.51%
MUFG Bank Ltd/NY Commercial Paper 2.05%
Intl Bank Recon and Development Supranational 1.85%
Toronto Dominion Holdings Foreign Corporate 1.53%
Wells Fargo Corp US Corporate 1.48%
JP Morgan Chase & Co US Corporate 1.42%
Apple Inc US Corporate 1.31%
Bank of America Corp US Corporate 1.27%
Charles Schwab Corp/The US Corporate 1.26%
Berkshire Hathaway US Corporate 1.23%
Royal Bank of Canada Foreign Corporate 1.21%
Chubb Corporation US Corporate 1.16%
PNC Financial Services Group US Corporate 1.15%
American Express ABS ABS 1.14%
ChevronTexaco Corp US Corporate 1.13%
Nissan ABS ABS 1.08%
IBM Corp US Corporate 1.07%
International Finance Corp Supranational 1.00%
Intel Corp US Corporate 0.96%
US Bancorp US Corporate 0.94%
Bank of New York US Corporate 0.94%
Federal Farm Credit Bank Agency 0.93%
Qualcomm Inc US Corporate 0.92%
HSBC Holdings PLC Foreign Corporate 0.83%
Toyota ABS ABS 0.79%
Honda Motor Corporation US Corporate 0.78%
Wal-Mart Stores US Corporate 0.75%
First American Govt Obligation Fund Class-Z Money Market Fund FI 0.69%
General Dynamics Corp US Corporate 0.59%
Microsoft US Corporate 0.55%
Exxon Mobil Corp US Corporate 0.55%
Oracle Corp US Corporate 0.55%
Issuers
Orange County Sanitation District Long Term – Account #10268
As of September 30, 2019
17
Issue Name Investment Type % Portfolio
Morgan Stanley US Corporate 0.55%
HSBC Holdings PLC US Corporate 0.46%
Port Authority of New York and New Jersey Municipal Bonds 0.46%
Merck & Company US Corporate 0.38%
Federal Home Loan Mortgage Corp CMO 0.27%
New York City Transitional Finance Authority Municipal Bonds 0.27%
Deere & Company US Corporate 0.25%
Federal National Mortgage Association Mortgage Pass Thru 0.20%
BlackRock Inc/New York US Corporate 0.20%
University of California Municipal Bonds 0.08%
Federal National Mortgage Association CMO 0.03%
GNMA Mortgage Pass Thru 0.03%
AMRESCO Residental Securities Corp CMO 0.02%
SLM Corp ABS 0.00%
Small Business Administration ABS 0.00%
Federal Home Loan Mortgage Corp Mortgage Pass Thru 0.00%
TOTAL 100.00%
Issuers
Orange County Sanitation District Long Term – Account #10268
As of September 30, 2019
18
AAA AA A <A NR
09/30/19 8.9% 66.5% 16.9% 0.5% 7.2%
06/30/19 9.7% 65.2% 16.5% 0.5% 8.1%
Source: S&P Ratings
September 30, 2019 vs. June 30, 2019
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
AAA AA A <A NR
9/30/2019 6/30/2019
Quality Distribution
Orange County Sanitation District Long Term
As of September 30, 2019
19
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
0 - 0.25 0.25 - 0.50 0.50 - 1 1 - 2 2 - 3 3 - 4 4 - 5 5+
Orange County Sanitation District Long Term ICE BAML 1-5 Yr US Corp/Govt Rated AAA-A Index
Portfolio Compared to the Benchmark as of September 30, 2019
0 - 0.25 0.25 - 0.50 0.50 - 1 1 - 2 2 - 3 3 - 4 4 - 5 5+
Portfolio 6.6% 2.7% 7.7% 22.3% 17.1% 27.7% 15.9% 0.0%
Benchmark* 0.2% 0.1% 1.9% 34.0% 27.7% 22.3% 13.8% 0.0%
*ICE BAML 1-5 Yr US Corp/Govt Rated AAA-A Index
Duration Distribution
Orange County Sanitation District Long Term
As of September 30, 2019
The duration of the portfolio moderately increased, currently 2.46 compared to 2.43 at the end of the prior reporting period.
The Chandler team anticipates keeping the overall duration of the portfolio close to the benchmark in the coming quarter. 20
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
12 months 2 years 3 years 5 years 10 years Since Inception
Orange County Sanitation District Long Term ICE BAML 1-5 Yr US Corp/Govt Rated AAA-A Index
Total Rate of Return Annualized Since Inception 11/30/2014
Annualized
TOTAL RATE OF RETURN 3 months 12 months 2 years 3 years 5 years 10 years
Since
Inception
Orange County Sanitation District Long Term 0.88% 5.52% 2.69% 1.97%N/A N/A 1.84%
ICE BAML 1-5 Yr US Corp/Govt Rated AAA-A Index 0.82% 5.79% 2.65% 1.85% N/A N/A 1.79%
Total rate of return: A measure of a portfolio’s performance over time. It is the internal rate of return, which equates the beginning value of the portfolio with the
ending value; it includes interest earnings, realized and unrealized gains and losses in the portfolio.
Investment Performance
Orange County Sanitation District Long Term
As of September 30, 2019
21
Compliance As of September 30, 2019
Category Standard Comment
Treasury Issues 1 year max maturity; Minimum allocation of 10%Complies
U.S. Agencies 20% max issuer; 1 year max maturity Complies
Supranational "AA" rated or better by a NRSRO; 30% maximum; 1 year max maturity; USD denominated senior unsecured
unsubordinated obligations issued or unconditionally guaranteed by IBRD, IFC, or IADB Complies
Corporate (MTNs)"A" rated or better long term debt by a NRSRO; 30% maximum; 5% max issuer; 1 year max maturity; Issued by
corporations organized and operating within the U.S. or issued by depository institutions licensed by the U.S.Complies
Asset Backed/ CMOs "AA" rated or better by a NRSRO; "A" or higher issuer rating by a NRSRO; 20% maximum; 5% max issuer; 1 year max
maturity Complies
Negotiable CDs "A" rated or better long term debt by a NRSRO; or "A-1"/ highest short term rating by a NRSRO; 30% maximum; 5% max
issuer; 1 year max maturity Complies
Certificates of Deposit 5% max issuer; 1 year max maturity; Secured/collateralized Complies
Banker’s Acceptances A-1 rated or equivalent short term rating by a NRSRO; 40% maximum; 5% max issuer; 180 days max maturity Complies
Commercial Paper
A-1 rated or equivalent short term rating by a NRSRO; "A" or better long term debt issuer by a NRSRO; Issued by a
domestic corporation organized and operating in the US with AUM > $500million; 25% maximum; 5% max issuer;
270 days max maturity
Complies
Mutual Fund & Money Market Mutual
Fund
Highest rating or "AAA" rated by two NRSROs; SEC registered adviser with AUM >$500 million and experience greater
than 5 years; 10% per one Mutual Fund; 20% max per issuer on Money Market Mutual Funds; 20% max of the
District's surplus money
Complies
Repurchase Agreements 102% collateralization Complies
Reverse Repurchase Agreements 5% maximum, 90 days max maturity Complies
LAIF Not used by investment adviser Complies
OCIP Not used by investment adviser Complies
Prohibited Municipal Securities Complies
Prohibited Mortgage Securities Complies
Avg Duration Not to exceed 180 days; Max duration of 1/2 year Complies
Max Per Issuer 5% of portfolio (except Supranationals, U.S. Government, Agencies, Mutual Fund)Complies
Maximum Maturity 1 year maximum maturity Complies
Orange County Sanitation District Liquid
Assets managed by Chandler Asset Management are in full compliance with state law and with the investment policy
22
Portfolio Characteristics
Orange County Sanitation District Liquid
9/30/2019 6/30/2019
Benchmark* Portfolio Portfolio
Average Maturity (yrs)0.16 0.31 0.24
Average Modified Duration 0.16 0.30 0.24
Average Purchase Yield n/a 2.26% 2.48%
Average Market Yield 1.84% 2.01% 2.24%
Average Quality**AAA AA+/Aa1 AA+/Aaa
Total Market Value 68,219,230 164,545,331
*ICE 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.
Multiple securities were purchased across the Treasury, Agency, Commercial Paper and Corporate sectors of the market
to keep the portfolio fully invested in the liquidity strategy. The purchased securities ranged in maturity from October
2019 to May 2020. One security was called and many matured to facilitate the two liquidity needs totaling $97 million.
As of September 30, 2019
23
Orange County Sanitation District Liquid
Sector Distribution
Commercial
Paper
5.6%Money Market
Fund FI
2.6%
Negotiable CD
5.7%
US Corporate
17.0%
US Treasury
69.2%
September 30, 2019 June 30, 2019
Commercial
Paper
4.4%Money Market
Fund FI
3.6%
Negotiable CD
4.5%
US Corporate
8.6%
US Treasury
73.8%
Agency
5.1%
As of September 30, 2019
The sector allocation evolved with the drop-in market value due to the liquidity needs during the reporting period. The
two largest adjustments were the 4.6% decline in the US Treasury allocation, to 69.2% of the portfolio, more than offset
by the 8.4% increase in the US Corporate allocation, to 17.0% of the portfolio.
24
Issue Name Investment Type % Portfolio
Government of United States US Treasury 69.15%
HSBC Holdings PLC US Corporate 3.68%
Bank of Nova Scotia Houston Negotiable CD 3.42%
General Dynamics Corp US Corporate 2.98%
Bank of America Corp US Corporate 2.96%
Qualcomm Inc US Corporate 2.96%
Toyota Motor Corp Commercial Paper 2.91%
MUFG Bank Ltd/NY Commercial Paper 2.72%
First American Govt Obligation Fund Class-Z Money Market Fund FI 2.55%
Westpac Banking Corp NY Negotiable CD 2.26%
Wells Fargo Corp US Corporate 2.21%
Bank of New York US Corporate 2.20%
TOTAL 100.00%
Issuers
Orange County Sanitation District Liquid – Account #10282
As of September 30, 2019
25
AAA AA A <A NR
09/30/19 24.0% 59.0% 17.0% 0.0% 0.0%
06/30/19 13.0% 78.4% 8.6% 0.0% 0.0%
Source: S&P Ratings
September 30, 2019 vs. June 30, 2019
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
AAA AA A <A NR
9/30/2019 6/30/2019
Quality Distribution
Orange County Sanitation District Liquid
As of September 30, 2019
26
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
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 ICE BAML 3-Month US Treasury Bill Index
Portfolio Compared to the Benchmark as of September 30, 2019
0 - 0.25 0.25 - 0.50 0.50 - 1 1 - 1.5 1.5 - 2 2 - 2.5 2.5 - 3 3+
Portfolio 21.5% 69.6% 8.9% 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%
*ICE BAML 3-Month US Treasury Bill Index
Duration Distribution
Orange County Sanitation District Liquid
As of September 30, 2019
The duration of the portfolio moderately increased to 0.30 compared to 0.24 at the end of the prior reporting period.
The Chandler team continues to utilize the Treasury and Agency sectors to immunize the large forecasted liquidity needs
and overlay spread product (i.e. Commercial Paper and Corporates) to enhance the total return strategy of the portfolio.
27
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
12 months 2 years 3 years 5 years 10 years Since Inception
Orange County Sanitation District Liquid ICE BAML 3-Month US Treasury Bill Index
Total Rate of Return Annualized Since Inception 11/30/2014
Annualized
TOTAL RATE OF RETURN 3 months 12 months 2 years 3 years 5 years 10 years
Since
Inception
Orange County Sanitation District Liquid 0.59% 2.50% 2.06% 1.61% N/A N/A 1.12%
ICE BAML 3-Month US Treasury Bill Index 0.56% 2.39% 1.99% 1.54% N/A N/A 1.02%
Total rate of return: A measure of a portfolio’s performance over time. It is the internal rate of return, which equates the beginning value of the portfolio with the
ending value; it includes interest earnings, realized and unrealized gains and losses in the portfolio.
Investment Performance
Orange County Sanitation District Liquid
As of September 30, 2019
28
Compliance As of September 30, 2019
Category Standard Comment
Treasury Issues 5 years maximum maturity Complies
Supranational "AA" or better by 1 of 3 NRSROs; 30% maximum; 5% max; 5 years maturity; Includes only: IADB, IBRD, and IFC per
CGC Complies
U.S. Agencies 20% max issuer; 5 years maximum maturity Complies
U.S. Corporate (MTNs) "A" or better long term rating by 1 of 3 NRSROs; 30% maximum; 5% max issuer; 5 years max maturity Complies*
Municipal Securities "A" or higher by 1 of 3 NRSROS; 10% maximum; 5% max issuer; 5 years maximum maturity Complies
Asset Backed/ CMOs/ Mortgage-backed "AA" or better by 1 of 3 NRSROs; "A" or higher issuer rating by 1 of 3 NRSROs; 20% maximum; 5% max issuer
(excluding MBS/govt agency); 5 years max maturity Complies
Negotiable CDs "A" or better on its long term debt by 1 of 3 NRSROs ; "A1/P1" or highest short term ratings by 1 of 3 NRSROs; 30%
maximum; 5% max issuer; 5 years max maturity Complies
CDs/ TDS 5% max issuer; 5 years max maturity Complies
Banker’s Acceptances A-1, or equivalent highest short term rating by 1 of 3 NRSROS; 40% maximum; 5% max issuer; 180 days max maturity Complies
Commercial Paper A-1, or equivalent by 1 of 3 NRSROS; "A" or better by 1 of 3 NRSROs, if long term debt issued; 25% maximum; 5% max
issuer; 270 days max maturity Complies
Money Market Fund Highest rating by 2 of 3 NRSROs; 20% maximum; 10% max issuer Complies
Repurchase Agreements 102% collateralization Complies
Reverse Repurchase Agreements 5% maximum, 90 days max maturity Complies
LAIF Not used by investment adviser Complies
Avg Duration Not to exceed 60 months - (80% to 120% of the benchmark)Complies
Maximum Maturity 5 years maximum maturity Complies
OCSD Lehman Exposure
Assets managed by Chandler Asset Management are in full compliance with state law and with the investment policy
* Account holds $2 million face value (cusip 525ESC0Y6) and $600,000 face value (cusip 525ESC1B7) of defaulted Lehman Bros Holdings that were purchased by the previous manager. Complied at
time of purchase.
29
Portfolio Characteristics
OCSD Lehman Exposure
9/30/2019
Portfolio
6/30/2019
Portfolio
Average Maturity (yrs)13.55 14.73
Modified Duration 0.00 0.00
Average Purchase Yield 0.00% 0.00%
Average Market Yield 0.00% 0.00%
Average Quality*NR/NR NR/NR
Total Market Value 61,941 69,161
*Portfolio is S&P and Moody’s, respectively.
As of September 30, 2019
30
SECTION ||||||||||||||Section 3 |Consolidated Information
31
Portfolio Characteristics
Orange County Sanitation District Consolidated
9/30/2019 6/30/2019
Portfolio Portfolio
Average Maturity (yrs)2.54 2.20
Modified Duration 2.22 1.93
Average Purchase Yield 2.35% 2.39%
Average Market Yield 1.81% 2.04%
Average Quality*AA/Aa1 AA/Aa1
Total Market Value 616,393,490 722,760,566
* Portfolio is S&P and Moody’s respectively.
As of September 30, 2019
32
Orange County Sanitation District Consolidated
Sector Distribution
ABS
7.6%
Agency
22.7%
CMO
0.3%
Commercial
Paper
2.4%
Foreign
Corporate
3.2%
Money Market
Fund FI
0.9%
Mortgage Pass
Thru
0.2%
Municipal Bonds
0.7%
Negotiable CD
0.6%
Supranational
5.4%
US Corporate
21.3%
US Treasury
34.7%
September 30, 2019 June 30, 2019
ABS
6.1%
Agency
19.4%
CMO
0.3%
Commercial
Paper
2.5%
Foreign
Corporate
1.8%
Money Market
Fund FI
3.2%
Mortgage Pass
Thru
0.2%
Municipal Bonds
0.6%
Negotiable CD
1.0%
Supranational
4.6%
US Corporate
19.8%
US Treasury
40.5%
As of September 30, 2019
33
SECTION ||||||||||||||Section 4 |Portfolio Holdings
34
Holdings Report
Orange County Sanitation District Long Term - Account #10268
CUSIP Security Description Par Value/Units
Purchase Date
Book Yield
Cost Value
Book Value
Mkt Price
Mkt YTM
Market Value
Accrued Int.
% of Port.
Gain/Loss
Moody/S&P
Fitch
Maturity
Duration
ABS
89238BAB8 Toyota Auto Receivables Owner 2018-A A2A
2.100% Due 10/15/2020
683,639.44 01/23/2018
2.12%
683,569.57
683,612.57
100.00
2.14%
683,622.21
638.06
0.12%
9.64
Aaa / AAA
NR
1.04
0.07
47788CAB8 John Deere Owner Trust 2018-A A2
2.420% Due 10/15/2020
180,610.31 03/16/2018
2.59%
180,243.45
180,462.00
100.01
2.29%
180,623.78
194.26
0.03%
161.78
Aaa / NR
AAA
1.04
0.05
43814RAC0 Honda Auto Receivables 2016-4 A3
1.210% Due 12/18/2020
563,719.94 02/07/2018
2.58%
557,532.23
561,085.86
99.81
2.17%
562,647.16
246.31
0.10%
1,561.30
NR / AAA
AAA
1.22
0.20
65478VAD9 NAROT 2016-B A3
1.320% Due 01/15/2021
252,050.02 02/12/2018
1.87%
250,031.65
251,156.33
99.90
2.14%
251,800.82
36.97
0.05%
644.49
Aaa / NR
AAA
1.30
0.12
83162CLJ0 Small Business Administration 2001-20C
6.340% Due 03/01/2021
11,184.56 03/06/2001
6.34%
11,184.56
11,184.56
101.50
4.10%
11,352.18
59.09
0.00%
167.62
Aaa / AA+
AAA
1.42
0.87
43814PAC4 Honda Auto Receivables Owner T 17-3 A3
1.790% Due 09/20/2021
2,115,225.60 06/28/2018
2.78%
2,081,679.44
2,094,739.40
99.92
1.96%
2,113,452.98
1,367.26
0.39%
18,713.58
NR / AAA
AAA
1.98
0.53
43814WAB1 HAROT 2019-1 A2
2.750% Due 09/20/2021
4,395,000.00 02/19/2019
2.77%
4,394,716.96
4,394,782.28
100.42
2.11%
4,413,379.89
4,364.48
0.81%
18,597.61
NR / AAA
AAA
1.98
0.63
47788BAD6 John Deere Owner Trust 2017-B A3
1.820% Due 10/15/2021
441,393.78 07/11/2017
1.83%
441,361.46
441,378.25
99.84
2.16%
440,709.33
357.04
0.08%
(668.92)
Aaa / NR
AAA
2.04
0.46
65478GAD2 Nissan Auto Receivables Owner 2017-B A3
1.750% Due 10/15/2021
2,063,703.33 11/06/2018
3.10%
2,031,699.81
2,041,462.08
99.87
2.03%
2,060,954.09
1,605.10
0.38%
19,492.01
Aaa / NR
AAA
2.04
0.49
89239AAB9 Toyota Auto Receivables 2019-A A2A
2.830% Due 10/15/2021
3,615,000.00 02/05/2019
2.85%
3,614,671.76
3,614,749.19
100.35
2.13%
3,627,645.27
4,546.87
0.66%
12,896.08
Aaa / AAA
NR
2.04
0.49
47789JAB2 John Deere Owner Trust 2019-A A2
2.850% Due 12/15/2021
3,265,000.00 03/05/2019
2.87%
3,264,851.12
3,264,880.96
100.46
2.09%
3,280,045.12
4,135.67
0.60%
15,164.16
Aaa / NR
AAA
2.21
0.59
43815NAB0 HAROT 2019-3 A2
1.900% Due 04/15/2022
3,530,000.00 08/20/2019
1.92%
3,529,752.90
3,529,767.39
99.90
1.99%
3,526,547.66
2,980.89
0.64%
(3,219.73)
Aaa / AAA
NR
2.54
1.14
47788CAC6 John Deere Owner Trust 2018-A A3
2.660% Due 04/18/2022
1,340,000.00 02/21/2018
2.68%
1,339,903.65
1,339,940.66
100.41
2.12%
1,345,476.58
1,584.18
0.25%
5,535.92
Aaa / NR
AAA
2.55
0.73
477870AB5 JDOT 2019-B A2
2.280% Due 05/16/2022
2,800,000.00 07/16/2019
2.29%
2,799,989.36
2,799,990.07
100.23
2.06%
2,806,445.60
2,837.33
0.51%
6,455.53
Aaa / NR
AAA
2.63
0.99
43814UAG4 Honda Auto Receivables 2018-2 A3
3.010% Due 05/18/2022
1,710,000.00 05/22/2018
3.03%
1,709,962.72
1,709,975.30
101.00
2.10%
1,727,089.74
1,858.68
0.32%
17,114.44
NR / AAA
AAA
2.63
1.07
43815HAC1 Honda Auto Receivables Owner 2018-3 A3
2.950% Due 08/22/2022
3,970,000.00 08/21/2018
2.98%
3,969,455.32
3,969,604.69
101.16
1.99%
4,015,905.07
3,253.19
0.73%
46,300.38
Aaa / NR
AAA
2.90
1.18
02587AAJ3 American Express Credit 2017-1
1.930% Due 09/15/2022
6,270,000.00 Various
2.91%
6,174,085.15
6,202,803.05
99.92
2.16%
6,265,034.10
5,378.27
1.14%
62,231.05
Aaa / NR
AAA
2.96
0.36
As of September 30, 2019
35
Holdings Report
Orange County Sanitation District Long Term - Account #10268
CUSIP Security Description Par Value/Units
Purchase Date
Book Yield
Cost Value
Book Value
Mkt Price
Mkt YTM
Market Value
Accrued Int.
% of Port.
Gain/Loss
Moody/S&P
Fitch
Maturity
Duration
47788EAC2 John Deere Owner Trust 2018-B A3
3.080% Due 11/15/2022
4,630,000.00 07/18/2018
3.10%
4,629,649.05
4,629,745.59
101.31
1.99%
4,690,778.01
6,337.96
0.86%
61,032.42
Aaa / NR
AAA
3.13
1.18
65479GAD1 Nissan Auto Receivables Owner 2018-B A3
3.060% Due 03/15/2023
3,560,000.00 07/17/2018
3.08%
3,559,884.66
3,559,914.14
101.45
2.08%
3,611,474.04
4,841.60
0.66%
51,559.90
Aaa / AAA
NR
3.46
1.44
78445JAA5 SLMA 2008-9 A
3.820% Due 04/25/2023
13,344.85 08/22/2008
3.90%
13,290.71
13,331.68
100.59
3.36%
13,423.58
96.29
0.00%
91.90
Baa3 / B
B
3.57
2.60
47788NAD0 John Deere Owner Trust 2016-B A4
1.490% Due 05/15/2023
1,003,712.93 06/27/2018
2.19%
987,088.93
991,373.27
99.97
2.28%
1,003,451.96
664.68
0.18%
12,078.69
Aaa / NR
AAA
3.62
0.03
TOTAL ABS 46,413,584.76 2.77%
46,224,604.46
46,285,939.32 2.08%
46,631,859.17
47,384.18
8.52%
345,919.85
Aaa / AAA
Aaa
2.57
0.78
Agency
3137EADM8 FHLMC Note
1.250% Due 10/02/2019
7,500,000.00 Various
1.61%
7,399,650.00
7,499,927.87
100.00
1.78%
7,499,775.00
46,614.58
1.38%
(152.87)
Aaa / AA+
AAA
0.01
0.01
313383HU8 FHLB Note
1.750% Due 06/12/2020
5,000,000.00 08/13/2015
1.71%
5,008,950.00
5,001,293.79
99.93
1.85%
4,996,425.00
26,493.06
0.92%
(4,868.79)
Aaa / AA+
NR
0.70
0.69
3135G0D75 FNMA Note
1.500% Due 06/22/2020
5,000,000.00 11/16/2015
1.70%
4,955,650.00
4,993,000.15
99.72
1.89%
4,986,065.00
20,625.00
0.91%
(6,935.15)
Aaa / AA+
AAA
0.73
0.72
3137EAEK1 FHLMC Note
1.875% Due 11/17/2020
5,000,000.00 Various
1.97%
4,986,225.00
4,994,713.15
100.10
1.78%
5,005,160.00
34,895.83
0.92%
10,446.85
Aaa / AA+
AAA
1.13
1.11
3135G0F73 FNMA Note
1.500% Due 11/30/2020
7,500,000.00 Various
1.87%
7,370,726.00
7,469,583.86
99.65
1.81%
7,473,480.00
37,812.50
1.37%
3,896.14
Aaa / AA+
AAA
1.17
1.15
3137EAEL9 FHLMC Note
2.375% Due 02/16/2021
7,500,000.00 02/26/2018
2.45%
7,484,475.00
7,492,788.39
100.81
1.78%
7,560,637.50
22,265.63
1.38%
67,849.11
Aaa / AA+
AAA
1.38
1.35
3130A7CV5 FHLB Note
1.375% Due 02/18/2021
5,365,000.00 02/17/2016
1.46%
5,343,325.40
5,358,997.07
99.48
1.76%
5,336,935.69
8,811.27
0.98%
(22,061.38)
Aaa / AA+
AAA
1.39
1.36
3135G0J20 FNMA Note
1.375% Due 02/26/2021
10,000,000.00 Various
1.28%
10,040,950.00
10,012,560.14
99.46
1.76%
9,946,070.00
13,368.06
1.82%
(66,490.14)
Aaa / AA+
AAA
1.41
1.38
313379RB7 FHLB Note
1.875% Due 06/11/2021
4,000,000.00 08/30/2017
1.67%
4,030,160.00
4,013,528.29
100.22
1.74%
4,008,896.00
22,916.67
0.74%
(4,632.29)
Aaa / AA+
AAA
1.70
1.66
3135G0U35 FNMA Note
2.750% Due 06/22/2021
7,500,000.00 06/28/2018
2.68%
7,515,225.00
7,508,807.85
101.77
1.70%
7,632,960.00
56,718.75
1.40%
124,152.15
Aaa / AA+
AAA
1.73
1.67
3135G0S38 FNMA Note
2.000% Due 01/05/2022
3,000,000.00 01/30/2017
2.04%
2,994,570.00
2,997,505.22
100.72
1.68%
3,021,465.00
14,333.33
0.55%
23,959.78
Aaa / AA+
AAA
2.27
2.20
3135G0T45 FNMA Note
1.875% Due 04/05/2022
5,000,000.00 05/05/2017
1.99%
4,972,500.00
4,985,935.58
100.68
1.60%
5,034,050.00
45,833.33
0.93%
48,114.42
Aaa / AA+
AAA
2.52
2.43
As of September 30, 2019
36
Holdings Report
Orange County Sanitation District Long Term - Account #10268
CUSIP Security Description Par Value/Units
Purchase Date
Book Yield
Cost Value
Book Value
Mkt Price
Mkt YTM
Market Value
Accrued Int.
% of Port.
Gain/Loss
Moody/S&P
Fitch
Maturity
Duration
3135G0T94 FNMA Note
2.375% Due 01/19/2023
5,000,000.00 Various
2.78%
4,910,990.00
4,938,398.90
102.49
1.60%
5,124,270.00
23,750.00
0.94%
185,871.10
Aaa / AA+
AAA
3.31
3.16
313383QR5 FHLB Note
3.250% Due 06/09/2023
5,000,000.00 08/28/2018
2.87%
5,083,350.00
5,064,339.51
105.60
1.68%
5,280,245.00
50,555.56
0.97%
215,905.49
Aaa / AA+
NR
3.69
3.45
3137EAEN5 FHLMC Note
2.750% Due 06/19/2023
10,000,000.00 Various
2.84%
9,956,500.00
9,967,277.08
104.04
1.63%
10,404,280.00
77,916.66
1.91%
437,002.92
Aaa / AA+
AAA
3.72
3.51
313383YJ4 FHLB Note
3.375% Due 09/08/2023
10,000,000.00 Various
2.88%
10,211,831.00
10,179,259.32
106.59
1.64%
10,658,660.00
21,562.50
1.95%
479,400.68
Aaa / AA+
NR
3.94
3.69
3130A0F70 FHLB Note
3.375% Due 12/08/2023
10,000,000.00 Various
2.79%
10,269,043.75
10,228,287.46
106.99
1.64%
10,699,230.01
105,937.50
1.97%
470,942.55
Aaa / AA+
AAA
4.19
3.88
3135G0V34 FNMA Note
2.500% Due 02/05/2024
5,000,000.00 02/27/2019
2.58%
4,980,850.00
4,983,133.56
103.77
1.60%
5,188,510.00
19,444.44
0.95%
205,376.44
Aaa / AA+
AAA
4.35
4.10
3130A1XJ2 FHLB Note
2.875% Due 06/14/2024
11,110,000.00 Various
1.96%
11,589,031.30
11,561,434.66
105.58
1.64%
11,730,160.20
94,936.49
2.16%
168,725.54
Aaa / AA+
NR
4.71
4.37
3133EKWV4 FFCB Note
1.850% Due 07/26/2024
5,000,000.00 08/13/2019
1.65%
5,048,280.00
5,046,998.23
101.07
1.62%
5,053,585.00
16,701.39
0.93%
6,586.77
Aaa / AA+
AAA
4.82
4.59
3130A2UW4 FHLB Note
2.875% Due 09/13/2024
2,500,000.00 09/12/2019
1.73%
2,635,950.00
2,634,610.59
105.72
1.67%
2,643,027.50
3,593.75
0.48%
8,416.91
Aaa / AA+
AAA
4.96
4.62
TOTAL Agency 135,975,000.00 2.18%
136,788,232.45
136,932,380.67 1.70%
139,283,886.90
765,086.30
25.55%
2,351,506.23
Aaa / AA+
Aaa
2.66
2.52
CMO
31398VJ98 FHLMC FHMS K006 A2
4.251% Due 01/25/2020
659,054.74 11/23/2010
3.54%
696,435.51
660,351.44
100.16
2.36%
660,127.62
2,334.70
0.12%
(223.82)
Aaa / AA+
AAA
0.32
0.23
03215PFN4 AMRESCO Residential Securities 1999-1 A
2.994% Due 06/25/2029
123,127.85 05/20/2011
6.75%
92,461.32
106,627.24
98.45
3.31%
121,218.14
61.43
0.02%
14,590.90
NR / A+
BBB
9.74
5.91
3133TCE95 FHLMC FSPC E3 A
4.024% Due 08/15/2032
7,928.50 03/11/1998
3.98%
7,936.80
7,931.61
100.38
2.92%
7,958.80
26.59
0.00%
27.19
Aaa / AA+
AAA
12.88
2.31
31397QRE0 FNMA FNR 2011-3 FA
2.734% Due 02/25/2041
186,495.68 12/20/2010
2.74%
186,437.40
186,454.21
100.55
2.56%
187,530.73
84.97
0.03%
1,076.52
Aaa / AA+
AAA
21.42
4.19
31394JY35 FHLMC FSPC T-58 2A
6.500% Due 09/25/2043
686,785.68 06/09/2011
5.40%
777,784.78
754,392.51
117.31
0.10%
805,633.94
744.02
0.15%
51,241.43
Aaa / AA+
AAA
24.00
2.41
TOTAL CMO 1,663,392.45 4.51%
1,761,055.81
1,715,757.01 1.43%
1,782,469.23
3,251.71
0.33%
66,712.22
Aaa / AA+
Aaa
13.93
2.02
As of September 30, 2019
37
Holdings Report
Orange County Sanitation District Long Term - Account #10268
CUSIP Security Description Par Value/Units
Purchase Date
Book Yield
Cost Value
Book Value
Mkt Price
Mkt YTM
Market Value
Accrued Int.
% of Port.
Gain/Loss
Moody/S&P
Fitch
Maturity
Duration
Commercial Paper
62479MYK3 MUFG Bank Ltd/NY Discount CP
2.120% Due 11/19/2019
11,255,000.00 08/20/2019
2.16%
11,194,685.71
11,222,523.07
99.71
2.16%
11,222,523.07
0.00
2.05%
0.00
P-1 / A-1
NR
0.14
0.14
TOTAL Commercial Paper 11,255,000.00 2.16%
11,194,685.71
11,222,523.07 2.16%
11,222,523.07
0.00
2.05%
0.00
P-1 / A-1
NR
0.14
0.14
Foreign Corporate
404280BF5 HSBC Holdings PLC Note
2.650% Due 01/05/2022
4,500,000.00 Various
3.08%
4,429,980.00
4,458,948.54
100.71
2.32%
4,532,157.00
28,487.50
0.83%
73,208.46
A2 / A
AA-
2.27
2.17
89114QC48 Toronto Dominion Bank Note
3.500% Due 07/19/2023
5,000,000.00 02/26/2019
3.04%
5,094,200.00
5,081,557.68
105.45
2.00%
5,272,615.00
35,000.00
0.97%
191,057.32
Aa1 / AA-
AA-
3.80
3.54
89114QCA4 Toronto Dominion Bank Note
2.650% Due 06/12/2024
3,000,000.00 06/12/2019
2.65%
3,000,570.00
3,000,535.96
101.89
2.22%
3,056,553.00
24,070.83
0.56%
56,017.04
Aa3 / A
NR
4.70
4.37
78013XZU5 ROYAL BANK OF CANADA Note
2.550% Due 07/16/2024
6,500,000.00 09/10/2019
2.28%
6,581,445.00
6,580,570.24
101.35
2.25%
6,588,036.00
34,531.25
1.21%
7,465.76
A2 / A
AA
4.80
4.47
TOTAL Foreign Corporate 19,000,000.00 2.73%
19,106,195.00
19,121,612.42 2.20%
19,449,361.00
122,089.58
3.57%
327,748.58
A1 / A+
AA-
3.92
3.67
Money Market Fund FI
31846V567 First American Govt Obligation MMKT Class-Z 3,794,924.70 09/30/2019
1.82%
3,794,924.70
3,794,924.70
1.00
1.82%
3,794,924.70
0.00
0.69%
0.00
P-1 / A-1+
F-1
0.00
0.00
TOTAL Money Market Fund FI 3,794,924.70 1.82%
3,794,924.70
3,794,924.70 1.82%
3,794,924.70
0.00
0.69%
0.00
Aaa / AAA
AA
0.00
0.00
Mortgage Pass Thru
31381PDA3 FNMA FN 466397
3.400% Due 11/01/2020
337,358.02 12/01/2010
3.80%
330,057.40
336,556.93
100.79
2.56%
340,009.32
223.03
0.06%
3,452.39
Aaa / AA+
AAA
1.09
1.10
36225CAZ9 GNMA Pool# G2 80023
4.120% Due 12/20/2026
15,348.40 08/08/1997
4.01%
15,602.60
15,410.99
103.01
2.46%
15,810.11
52.70
0.00%
399.12
Aaa / AA+
AAA
7.23
2.37
36225CC20 GNMA Pool# G2 80088
3.410% Due 06/20/2027
15,097.04 08/11/1997
3.27%
15,427.30
15,182.52
100.99
2.77%
15,247.01
42.90
0.00%
64.49
Aaa / AA+
AAA
7.73
2.52
31348SWZ3 FHLMC FH 786064
4.737% Due 01/01/2028
1,845.51 02/18/2000
4.96%
1,800.57
1,832.20
102.46
3.24%
1,890.88
7.29
0.00%
58.68
Aaa / AA+
AAA
8.26
3.73
31371NUC7 FNMA FN 257179
4.500% Due 04/01/2028
14,717.52 12/05/2011
3.72%
15,565.22
15,159.52
105.49
2.32%
15,525.38
55.19
0.00%
365.86
Aaa / AA+
AAA
8.51
2.76
As of September 30, 2019
38
Holdings Report
Orange County Sanitation District Long Term - Account #10268
CUSIP Security Description Par Value/Units
Purchase Date
Book Yield
Cost Value
Book Value
Mkt Price
Mkt YTM
Market Value
Accrued Int.
% of Port.
Gain/Loss
Moody/S&P
Fitch
Maturity
Duration
31417YAY3 FNMA Pool# FN MA0022
4.500% Due 04/01/2029
16,436.77 12/05/2011
3.76%
17,383.50
16,956.57
106.54
2.20%
17,511.77
61.64
0.00%
555.20
Aaa / AA+
AAA
9.51
2.91
3138EG6F6 FNMA FN AL0869
4.500% Due 06/01/2029
10,044.92 12/05/2011
3.77%
10,623.50
10,365.08
106.54
2.24%
10,701.72
8.79
0.00%
336.64
Aaa / AA+
AAA
9.68
2.96
36225CNM4 GNMA Pool# G2 80395
3.410% Due 04/20/2030
6,521.39 03/15/2000
3.49%
6,462.26
6,500.53
103.80
2.61%
6,769.44
18.53
0.00%
268.91
Aaa / AA+
AAA
10.56
3.67
36225CN28 GNMA Pool# G2 80408
3.410% Due 05/20/2030
49,754.80 03/15/2000
3.49%
49,249.47
49,575.61
103.81
2.48%
51,649.11
141.39
0.01%
2,073.50
Aaa / AA+
AAA
10.64
3.09
31403GXF4 FNMA Pool# FN 748678
5.000% Due 10/01/2033
1,781.14 06/10/2013
4.16%
1,914.73
1,873.67
109.27
2.17%
1,946.25
7.42
0.00%
72.58
Aaa / AA+
AAA
14.01
3.52
36225DCB8 GNMA Pool# G2 80965
4.100% Due 07/20/2034
45,340.46 07/19/2004
4.12%
45,312.13
45,326.44
104.34
2.55%
47,308.55
154.91
0.01%
1,982.11
Aaa / AA+
AAA
14.81
3.96
31406XWT5 FNMA Pool# FN 823358
4.724% Due 02/01/2035
109,269.40 01/11/2006
4.81%
108,415.73
108,818.24
104.65
3.15%
114,353.27
430.13
0.02%
5,535.03
Aaa / AA+
AAA
15.35
6.83
31406PQY8 FNMA Pool# FN 815971
5.000% Due 03/01/2035
157,142.80 06/10/2013
4.21%
168,928.52
165,543.05
110.34
2.31%
173,384.14
654.76
0.03%
7,841.09
Aaa / AA+
AAA
15.43
3.75
31407BXH7 FNMA Pool# FN 826080
5.000% Due 07/01/2035
18,677.30 06/10/2013
4.22%
20,078.10
19,681.84
110.45
2.30%
20,628.72
77.82
0.00%
946.88
Aaa / AA+
AAA
15.76
3.74
31376KT22 FNMA FN 357969
5.000% Due 09/01/2035
98,885.27 06/10/2013
4.22%
106,301.66
104,219.79
110.47
2.33%
109,237.27
96.14
0.02%
5,017.48
Aaa / AA+
AAA
15.93
3.77
31403DJZ3 FNMA Pool #745580
5.000% Due 06/01/2036
92,510.26 06/10/2013
4.26%
99,448.53
97,564.73
110.44
2.35%
102,166.11
385.46
0.02%
4,601.38
Aaa / AA+
AAA
16.68
3.80
31410F4V4 FNMA Pool# FN 888336
5.000% Due 07/01/2036
180,164.23 06/10/2013
4.25%
193,676.55
190,020.96
110.41
2.34%
198,927.79
750.68
0.04%
8,906.83
Aaa / AA+
AAA
16.76
3.79
TOTAL Mortgage Pass Thru 1,170,895.23 4.10%
1,206,247.77
1,200,588.67 2.49%
1,243,066.84
3,168.78
0.23%
42,478.17
Aaa / AA+
Aaa
11.19
3.24
Municipal Bonds
73358WAG9 Port Authority of NY & NJ TE-REV
5.309% Due 12/01/2019
2,440,000.00 Various
4.97%
2,507,633.89
2,441,084.71
100.54
2.07%
2,453,176.00
43,179.87
0.46%
12,091.29
Aa3 / AA-
AA-
0.17
0.17
64971M5E8 New York NY TE-REV
4.075% Due 11/01/2020
1,400,000.00 10/27/2010
4.08%
1,400,000.00
1,400,000.00
102.16
2.06%
1,430,170.00
23,770.83
0.27%
30,170.00
Aa1 / AAA
AAA
1.09
1.05
As of September 30, 2019
39
Holdings Report
Orange County Sanitation District Long Term - Account #10268
CUSIP Security Description Par Value/Units
Purchase Date
Book Yield
Cost Value
Book Value
Mkt Price
Mkt YTM
Market Value
Accrued Int.
% of Port.
Gain/Loss
Moody/S&P
Fitch
Maturity
Duration
913366EJ5 Univ of California Rgts Med TE-REV
5.035% Due 05/15/2021
400,000.00 11/09/2010
5.04%
400,000.00
400,000.00
104.90
1.96%
419,600.00
7,608.44
0.08%
19,600.00
Aa3 / AA-
AA-
1.62
1.54
TOTAL Municipal Bonds 4,240,000.00 4.68%
4,307,633.89
4,241,084.71 2.06%
4,302,946.00
74,559.14
0.80%
61,861.29
Aa2 / AA
AA
0.62
0.59
Supranational
4581X0CX4 Inter-American Dev Bank Note
1.625% Due 05/12/2020
3,035,000.00 04/05/2017
1.70%
3,027,807.05
3,033,569.08
99.81
1.94%
3,029,130.31
19,042.52
0.56%
(4,438.77)
Aaa / AAA
AAA
0.62
0.61
45950KCM0 International Finance Corp Note
2.250% Due 01/25/2021
2,970,000.00 01/18/2018
2.35%
2,961,268.20
2,966,159.92
100.57
1.81%
2,986,958.70
12,251.25
0.55%
20,798.78
Aaa / AAA
NR
1.32
1.29
4581X0CS5 Inter-American Dev Bank Note
1.875% Due 03/15/2021
5,000,000.00 Various
1.68%
5,059,610.00
5,013,242.13
100.15
1.77%
5,007,595.00
4,166.67
0.91%
(5,647.13)
Aaa / AAA
AAA
1.46
1.43
45950KCJ7 International Finance Corp Note
1.125% Due 07/20/2021
2,500,000.00 11/09/2016
1.64%
2,441,600.00
2,477,567.31
98.97
1.71%
2,474,287.50
5,546.88
0.45%
(3,279.81)
Aaa / AAA
NR
1.81
1.77
4581X0CW6 Inter-American Dev Bank Note
2.125% Due 01/18/2022
3,000,000.00 01/10/2017
2.15%
2,996,310.00
2,998,302.52
101.03
1.67%
3,030,804.00
12,927.08
0.56%
32,501.48
Aaa / NR
AAA
2.30
2.23
459058FY4 Intl. Bank Recon & Development Note
2.000% Due 01/26/2022
10,000,000.00 Various
1.99%
10,006,350.00
10,002,227.46
100.79
1.65%
10,078,930.00
36,111.12
1.85%
76,702.54
Aaa / NR
AAA
2.33
2.25
4581X0CZ9 Inter-American Dev Bank Note
1.750% Due 09/14/2022
6,500,000.00 Various
2.65%
6,249,655.00
6,338,148.06
100.30
1.65%
6,519,188.00
5,371.52
1.19%
181,039.94
Aaa / AAA
AAA
2.96
2.87
TOTAL Supranational 33,005,000.00 2.07%
32,742,600.25
32,829,216.48 1.71%
33,126,893.51
95,417.04
6.06%
297,677.03
Aaa / AAA
Aaa
2.03
1.97
US Corporate
40428HPR7 HSBC USA Inc Note
2.350% Due 03/05/2020
2,500,000.00 Various
2.64%
2,472,287.50
2,497,043.44
100.13
2.03%
2,503,330.00
4,243.06
0.46%
6,286.56
A2 / A
AA-
0.43
0.43
747525AD5 Qualcomm Inc Note
2.250% Due 05/20/2020
5,000,000.00 05/19/2015
2.27%
4,995,195.40
4,999,389.22
100.04
2.18%
5,002,085.00
40,937.51
0.92%
2,695.78
A2 / A-
NR
0.64
0.63
94974BGM6 Wells Fargo Corp Note
2.600% Due 07/22/2020
5,000,000.00 07/16/2015
2.59%
5,001,650.00
5,000,266.42
100.47
2.01%
5,023,605.00
24,916.67
0.92%
23,338.58
A2 / A-
A+
0.81
0.80
037833BS8 Apple Inc Callable Note Cont 1/23/2021
2.250% Due 02/23/2021
4,000,000.00 05/23/2016
1.96%
4,050,840.00
4,014,329.54
100.45
1.90%
4,018,188.00
9,500.00
0.73%
3,858.46
Aa1 / AA+
NR
1.40
1.29
30231GAV4 Exxon Mobil Corp Callable Note Cont 2/1/2021
2.222% Due 03/01/2021
3,000,000.00 Various
2.10%
3,016,097.40
3,004,785.71
100.52
1.85%
3,015,714.00
5,555.01
0.55%
10,928.29
Aaa / AA+
NR
1.42
1.39
369550BE7 General Dynamics Corp Note
3.000% Due 05/11/2021
3,160,000.00 05/08/2018
3.24%
3,138,038.00
3,148,217.47
101.75
1.89%
3,215,334.76
36,866.67
0.59%
67,117.29
A2 / A+
NR
1.61
1.56
As of September 30, 2019
40
Holdings Report
Orange County Sanitation District Long Term - Account #10268
CUSIP Security Description Par Value/Units
Purchase Date
Book Yield
Cost Value
Book Value
Mkt Price
Mkt YTM
Market Value
Accrued Int.
% of Port.
Gain/Loss
Moody/S&P
Fitch
Maturity
Duration
166764BG4 Chevron Corp Callable Note Cont 4/15/2021
2.100% Due 05/16/2021
2,500,000.00 05/20/2016
2.23%
2,485,350.00
2,495,218.79
100.39
1.84%
2,509,652.50
19,687.50
0.46%
14,433.71
Aa2 / AA
NR
1.63
1.50
61747WAL3 Morgan Stanley Note
5.500% Due 07/28/2021
2,800,000.00 06/06/2014
3.24%
3,200,848.00
2,902,521.03
106.11
2.07%
2,971,144.40
26,950.00
0.55%
68,623.37
A3 / BBB+
A
1.83
1.73
594918BP8 Microsoft Callable Note Cont 7/8/2021
1.550% Due 08/08/2021
3,045,000.00 Various
1.57%
3,041,385.15
3,043,659.78
99.58
1.78%
3,032,244.49
6,948.52
0.55%
(11,415.29)
Aaa / AAA
AA+
1.86
1.82
68389XBK0 Oracle Corp Callable Note Cont 8/15/2021
1.900% Due 09/15/2021
3,000,000.00 06/28/2018
3.08%
2,892,240.00
2,934,371.04
99.88
1.96%
2,996,463.00
2,533.33
0.55%
62,091.96
A1 / A+
A
1.96
1.91
06406RAA5 Bank of NY Mellon Corp Callable Note Cont 1/7/2022
2.600% Due 02/07/2022
2,500,000.00 02/08/2017
2.56%
2,504,475.00
2,502,073.66
101.41
1.96%
2,535,242.50
9,750.00
0.46%
33,168.84
A1 / A
AA-
2.36
2.19
69353RFB9 PNC Bank Callable Note Cont 1/18/2022
2.625% Due 02/17/2022
1,000,000.00 03/26/2018
3.32%
974,940.00
984,667.93
101.39
2.00%
1,013,893.00
3,208.33
0.19%
29,225.07
A2 / A
A+
2.39
2.22
084664BT7 Berkshire Hathaway Note
3.000% Due 05/15/2022
4,000,000.00 05/23/2017
2.30%
4,131,120.00
4,069,136.00
102.90
1.86%
4,116,024.00
45,333.33
0.76%
46,888.00
Aa2 / AA
A+
2.62
2.50
95000U2B8 Wells Fargo & Company Note
2.625% Due 07/22/2022
3,000,000.00 Various
2.99%
2,954,520.00
2,971,566.74
101.11
2.21%
3,033,306.00
15,093.76
0.56%
61,739.26
A2 / A-
A+
2.81
2.69
00440EAU1 Chubb INA Holdings Inc Callable Note Cont 9/3/2022
2.875% Due 11/03/2022
4,169,000.00 Various
2.54%
4,232,453.17
4,207,579.63
102.50
1.99%
4,273,408.44
49,275.26
0.79%
65,828.81
A3 / A
A
3.10
2.77
90331HNL3 US Bank NA Callable Note Cont 12/23/22
2.850% Due 01/23/2023
5,000,000.00 01/29/2018
2.93%
4,981,600.00
4,987,753.58
102.29
2.11%
5,114,585.00
26,916.67
0.94%
126,831.42
A1 / AA-
AA-
3.32
3.06
808513AT2 Charles Schwab Corp Callable Note Cont 12/25/2022
2.650% Due 01/25/2023
6,750,000.00 05/21/2019
2.74%
6,729,480.00
6,731,481.58
101.80
2.07%
6,871,601.25
32,793.75
1.26%
140,119.67
A2 / A
A
3.32
3.08
06406RAE7 Bank of NY Mellon Corp Callable Note Cont 12/29/2022
2.950% Due 01/29/2023
2,500,000.00 Various
3.03%
2,489,555.00
2,493,670.01
102.70
2.09%
2,567,390.00
12,701.39
0.47%
73,719.99
A1 / A
AA-
3.33
3.08
44932HAH6 IBM Credit Corp Note
3.000% Due 02/06/2023
5,670,000.00 Various
3.26%
5,603,264.40
5,623,851.42
102.87
2.11%
5,832,672.30
25,987.50
1.07%
208,820.88
A2 / A
NR
3.36
3.17
00440EAP2 Chubb INA Holdings Inc Note
2.700% Due 03/13/2023
2,000,000.00 05/24/2018
3.42%
1,937,000.00
1,954,650.09
102.19
2.04%
2,043,726.00
2,700.00
0.37%
89,075.91
A3 / A
A
3.45
3.28
084670BR8 Berkshire Hathaway Callable Note Cont 1/15/2023
2.750% Due 03/15/2023
2,500,000.00 04/20/2018
3.28%
2,440,950.00
2,458,307.92
102.51
1.96%
2,562,825.00
3,055.56
0.47%
104,517.08
Aa2 / AA
A+
3.46
3.14
58933YAF2 Merck & Co Note
2.800% Due 05/18/2023
2,000,000.00 10/26/2018
3.41%
1,948,640.00
1,959,029.50
102.96
1.95%
2,059,158.00
20,688.89
0.38%
100,128.50
A1 / AA
A+
3.63
3.42
As of September 30, 2019
41
Holdings Report
Orange County Sanitation District Long Term - Account #10268
CUSIP Security Description Par Value/Units
Purchase Date
Book Yield
Cost Value
Book Value
Mkt Price
Mkt YTM
Market Value
Accrued Int.
% of Port.
Gain/Loss
Moody/S&P
Fitch
Maturity
Duration
46625HRL6 JP Morgan Chase Callable Note Cont 3/18/2023
2.700% Due 05/18/2023
5,000,000.00 Various
3.59%
4,821,910.00
4,852,279.35
101.68
2.19%
5,084,060.00
49,875.00
0.94%
231,780.65
A2 / A-
AA-
3.63
3.27
69353RFL7 PNC Bank Callable Note Cont 5/9/2023
3.500% Due 06/08/2023
5,000,000.00 Various
3.53%
4,993,318.05
4,995,067.01
105.00
2.06%
5,249,810.00
54,930.56
0.97%
254,742.99
A2 / A
NR
3.69
3.36
166764AH3 Chevron Corp Callable Note Cont 3/24/2023
3.191% Due 06/24/2023
3,500,000.00 11/08/2018
3.59%
3,441,095.00
3,452,358.31
104.26
1.92%
3,648,967.00
30,092.90
0.67%
196,608.69
Aa2 / AA
NR
3.73
3.27
931142EK5 Wal-Mart Stores Callable Note Cont 5/26/2023
3.400% Due 06/26/2023
3,880,000.00 Various
3.41%
3,878,991.40
3,879,246.17
105.26
1.90%
4,084,266.48
34,812.22
0.75%
205,020.31
Aa2 / AA
AA
3.74
3.41
02665WCJ8 American Honda Finance Note
3.450% Due 07/14/2023
845,000.00 07/11/2018
3.49%
843,538.15
843,892.39
104.88
2.10%
886,275.72
6,235.40
0.16%
42,383.33
A2 / A
NR
3.79
3.53
02665WCQ2 American Honda Finance Note
3.625% Due 10/10/2023
2,000,000.00 Various
3.64%
1,998,320.00
1,998,628.05
105.90
2.09%
2,117,962.00
34,437.50
0.39%
119,333.95
A2 / A
NR
4.03
3.69
24422EUM9 John Deere Capital Corp Note
3.650% Due 10/12/2023
1,250,000.00 11/28/2018
3.64%
1,250,237.50
1,250,196.74
106.54
1.96%
1,331,751.25
21,418.40
0.25%
81,554.51
A2 / A
A
4.04
3.70
06051GHF9 Bank of America Corp Callable Note 1X 3/5/2023
3.550% Due 03/05/2024
6,675,000.00 Various
3.14%
6,770,625.75
6,761,171.09
103.93
2.35%
6,937,087.20
17,113.96
1.27%
175,916.11
A2 / A-
A+
4.43
3.22
09247XAL5 Blackrock Inc Note
3.500% Due 03/18/2024
1,000,000.00 05/09/2019
2.69%
1,036,330.00
1,033,437.55
106.78
1.91%
1,067,821.00
1,263.89
0.20%
34,383.45
Aa3 / AA-
NR
4.47
4.14
458140BD1 Intel Corp Callable Note Cont 3/11/2024
2.875% Due 05/11/2024
5,000,000.00 05/09/2019
2.76%
5,025,900.00
5,023,829.76
103.92
1.95%
5,196,060.00
55,902.78
0.96%
172,230.24
A1 / A+
A+
4.62
4.13
037833CU2 Apple Inc Callable Note Cont 3/11/2024
2.850% Due 05/11/2024
3,000,000.00 05/17/2019
2.72%
3,017,760.00
3,016,414.85
103.75
1.97%
3,112,458.00
33,250.00
0.57%
96,043.15
Aa1 / AA+
NR
4.62
4.13
02665WCZ2 American Honda Finance Note
2.400% Due 06/27/2024
1,219,000.00 07/10/2019
2.49%
1,213,843.63
1,214,074.13
101.08
2.16%
1,232,142.04
7,639.07
0.23%
18,067.91
A2 / A
NR
4.75
4.44
46647PAU0 JP Morgan Chase & Co Callable Note Cont 7/23/2023
3.797% Due 07/23/2024
2,500,000.00 09/12/2019
2.35%
2,632,175.00
2,630,764.88
105.47
2.29%
2,636,682.50
17,930.28
0.48%
5,917.62
A2 / A-
AA-
4.82
3.76
TOTAL US Corporate 115,963,000.00 2.89%
116,145,973.50
115,934,930.78 2.04%
118,896,935.83
790,544.67
21.84%
2,962,005.05
A1 / A+
A+
2.97
2.68
US Treasury
912828G61 US Treasury Note
1.500% Due 11/30/2019
7,500,000.00 12/19/2014
1.64%
7,449,634.50
7,498,324.87
99.91
2.04%
7,493,130.00
37,807.38
1.37%
(5,194.87)
Aaa / AA+
AAA
0.17
0.17
912828XE5 US Treasury Note
1.500% Due 05/31/2020
5,000,000.00 12/21/2016
1.70%
4,966,423.00
4,993,503.81
99.75
1.87%
4,987,695.00
25,204.92
0.91%
(5,808.81)
Aaa / AA+
AAA
0.67
0.66
As of September 30, 2019
42
Holdings Report
Orange County Sanitation District Long Term - Account #10268
CUSIP Security Description Par Value/Units
Purchase Date
Book Yield
Cost Value
Book Value
Mkt Price
Mkt YTM
Market Value
Accrued Int.
% of Port.
Gain/Loss
Moody/S&P
Fitch
Maturity
Duration
912828L99 US Treasury Note
1.375% Due 10/31/2020
10,000,000.00 Various
1.81%
9,850,311.40
9,954,972.20
99.54
1.81%
9,953,910.00
57,540.76
1.83%
(1,062.20)
Aaa / AA+
AAA
1.09
1.06
912828N89 US Treasury Note
1.375% Due 01/31/2021
6,000,000.00 Various
1.81%
5,895,840.41
5,966,419.39
99.48
1.77%
5,968,596.00
13,899.45
1.09%
2,176.61
Aaa / AA+
AAA
1.34
1.31
912828T34 US Treasury Note
1.125% Due 09/30/2021
7,000,000.00 Various
1.88%
6,757,914.08
6,899,279.35
98.98
1.65%
6,928,362.00
215.16
1.26%
29,082.65
Aaa / AA+
AAA
2.00
1.97
912828T67 US Treasury Note
1.250% Due 10/31/2021
6,000,000.00 12/13/2016
1.92%
5,813,691.98
5,920,437.48
99.19
1.65%
5,951,250.00
31,385.87
1.09%
30,812.52
Aaa / AA+
AAA
2.09
2.04
912828U65 US Treasury Note
1.750% Due 11/30/2021
7,000,000.00 12/28/2016
2.06%
6,900,492.20
6,956,198.85
100.22
1.64%
7,015,589.00
41,168.03
1.29%
59,390.15
Aaa / AA+
AAA
2.17
2.11
912828V72 US Treasury Note
1.875% Due 01/31/2022
3,000,000.00 02/27/2017
1.84%
3,004,814.74
3,002,284.19
100.55
1.63%
3,016,641.00
9,476.90
0.55%
14,356.81
Aaa / AA+
AAA
2.34
2.27
912828J76 US Treasury Note
1.750% Due 03/31/2022
5,000,000.00 04/25/2017
1.85%
4,976,383.94
4,988,034.53
100.38
1.59%
5,019,140.00
239.07
0.92%
31,105.47
Aaa / AA+
AAA
2.50
2.44
912828XW5 US Treasury Note
1.750% Due 06/30/2022
5,000,000.00 07/25/2017
1.86%
4,973,454.25
4,985,208.12
100.44
1.59%
5,021,875.00
22,112.77
0.92%
36,666.88
Aaa / AA+
AAA
2.75
2.66
912828L24 US Treasury Note
1.875% Due 08/31/2022
6,000,000.00 09/27/2017
1.92%
5,987,832.60
5,992,792.95
100.84
1.58%
6,050,388.00
9,581.04
1.11%
57,595.05
Aaa / AA+
AAA
2.92
2.83
912828L57 US Treasury Note
1.750% Due 09/30/2022
13,000,000.00 Various
2.15%
12,763,554.69
12,851,750.09
100.50
1.58%
13,064,493.00
621.58
2.38%
212,742.91
Aaa / AA+
AAA
3.00
2.91
912828M80 US Treasury Note
2.000% Due 11/30/2022
8,000,000.00 12/22/2017
2.25%
7,907,500.00
7,940,594.44
101.26
1.59%
8,100,624.00
53,770.49
1.49%
160,029.56
Aaa / AA+
AAA
3.17
3.04
912828N30 US Treasury Note
2.125% Due 12/31/2022
5,000,000.00 01/24/2018
2.44%
4,926,562.50
4,951,598.94
101.71
1.58%
5,085,350.00
26,851.22
0.93%
133,751.06
Aaa / AA+
AAA
3.25
3.12
9128284D9 US Treasury Note
2.500% Due 03/31/2023
10,000,000.00 Various
2.75%
9,887,265.63
9,920,185.30
103.14
1.57%
10,314,450.00
683.06
1.88%
394,264.70
Aaa / AA+
AAA
3.50
3.35
912828R69 US Treasury Note
1.625% Due 05/31/2023
5,000,000.00 05/30/2018
2.67%
4,757,226.56
4,822,107.96
100.20
1.57%
5,009,765.00
27,305.33
0.92%
187,657.04
Aaa / AA+
AAA
3.67
3.53
912828U57 US Treasury Note
2.125% Due 11/30/2023
15,000,000.00 Various
2.53%
14,723,632.81
14,761,703.80
102.20
1.58%
15,330,465.00
107,120.90
2.82%
568,761.20
Aaa / AA+
AAA
4.17
3.95
912828V80 US Treasury Note
2.250% Due 01/31/2024
7,500,000.00 Various
2.27%
7,491,503.91
7,492,293.08
102.84
1.57%
7,712,692.50
28,430.70
1.41%
220,399.42
Aaa / AA+
AAA
4.34
4.11
912828W48 US Treasury Note
2.125% Due 02/29/2024
10,000,000.00 04/24/2019
2.32%
9,911,718.75
9,919,644.62
102.38
1.57%
10,237,500.00
18,097.53
1.87%
317,855.38
Aaa / AA+
AAA
4.42
4.20
912828WJ5 US Treasury Note
2.500% Due 05/15/2024
7,000,000.00 06/10/2019
1.91%
7,193,046.88
7,181,035.07
104.12
1.57%
7,288,204.00
66,100.54
1.34%
107,168.93
Aaa / AA+
AAA
4.63
4.33
As of September 30, 2019
43
Holdings Report
Orange County Sanitation District Long Term - Account #10268
CUSIP Security Description Par Value/Units
Purchase Date
Book Yield
Cost Value
Book Value
Mkt Price
Mkt YTM
Market Value
Accrued Int.
% of Port.
Gain/Loss
Moody/S&P
Fitch
Maturity
Duration
912828XX3 US Treasury Note
2.000% Due 06/30/2024
5,000,000.00 07/12/2019
1.88%
5,028,710.94
5,027,475.04
101.94
1.57%
5,097,070.00
25,271.74
0.93%
69,594.96
Aaa / AA+
AAA
4.75
4.50
912828WU0 US Treasury Inflation Index Note
0.125% Due 07/15/2024
11,236,992.00 Various
0.23%
11,124,068.09
11,182,687.92
99.87
0.15%
11,222,900.78
2,977.21
2.05%
40,212.86
Aaa / AA+
AAA
4.79
4.77
TOTAL US Treasury 164,236,992.00 2.00%
162,291,583.86
163,208,532.00 1.54%
165,870,090.28
605,861.65
30.37%
2,661,558.28
Aaa / AA+
Aaa
3.05
2.94
TOTAL PORTFOLIO 536,717,789.14 2.37%
535,563,737.40
536,487,489.83 1.79%
545,604,956.53
2,507,363.05
100.00%
9,117,466.70
Aa1 / AA
Aaa
2.82
2.46
TOTAL MARKET VALUE PLUS ACCRUALS 548,112,319.58
As of September 30, 2019
44
Holdings Report
Orange County Sanitation District Liquid - Account #10282
CUSIP Security Description Par Value/Units
Purchase Date
Book Yield
Cost Value
Book Value
Mkt Price
Mkt YTM
Market Value
Accrued Int.
% of Port.
Gain/Loss
Moody/S&P
Fitch
Maturity
Duration
Commercial Paper
62479MYK3 MUFG Bank Ltd/NY Discount CP
2.120% Due 11/19/2019
1,860,000.00 08/20/2019
2.16%
1,850,032.47
1,854,632.87
99.71
2.16%
1,854,632.87
0.00
2.72%
0.00
P-1 / A-1
NR
0.14
0.14
89233GAH9 Toyota Motor Credit Discount CP
2.560% Due 01/17/2020
2,000,000.00 04/23/2019
2.63%
1,961,884.44
1,984,640.00
99.23
2.63%
1,984,640.00
0.00
2.91%
0.00
P-1 / A-1+
NR
0.30
0.29
TOTAL Commercial Paper 3,860,000.00 2.41%
3,811,916.91
3,839,272.87 2.41%
3,839,272.87
0.00
5.63%
0.00
P-1 / A-1
NR
0.22
0.22
Money Market Fund FI
31846V567 First American Govt Obligation MMKT Class-Z 1,740,212.56 Various
1.82%
1,740,212.56
1,740,212.56
1.00
1.82%
1,740,212.56
0.00
2.55%
0.00
P-1 / A-1+
F-1
0.00
0.00
TOTAL Money Market Fund FI 1,740,212.56 1.82%
1,740,212.56
1,740,212.56 1.82%
1,740,212.56
0.00
2.55%
0.00
Aaa / AAA
AA
0.00
0.00
Negotiable CD
96130AAK4 Westpac Banking Corp NY Yankee CD
2.970% Due 10/18/2019
1,500,000.00 06/25/2019
2.23%
1,503,302.80
1,500,488.24
100.03
2.23%
1,500,488.24
42,941.25
2.26%
0.00
P-1 / A-1+
F-1+
0.05
0.05
06417G5Q7 Bank of Nova Scotia Yankee CD
2.610% Due 12/23/2019
2,300,000.00 04/05/2019
2.57%
2,300,614.40
2,300,194.64
100.01
2.57%
2,300,194.64
32,182.75
3.42%
0.00
P-1 / A-1
F-1+
0.23
0.23
TOTAL Negotiable CD 3,800,000.00 2.43%
3,803,917.20
3,800,682.88 2.43%
3,800,682.88
75,124.00
5.68%
0.00
Aaa / AA+
Aaa
0.16
0.16
US Corporate
94988J5G8 Wells Fargo Bank Note
2.150% Due 12/06/2019
500,000.00 04/18/2019
2.66%
498,425.00
499,542.07
99.99
2.17%
499,966.50
3,434.03
0.74%
424.43
Aa2 / A+
AA-
0.18
0.18
94974BGF1 Wells Fargo Corp Note
2.150% Due 01/30/2020
1,000,000.00 05/21/2019
2.65%
996,600.00
998,367.46
99.97
2.23%
999,698.00
3,643.06
1.47%
1,330.54
A2 / A-
A+
0.33
0.33
06406HCZ0 Bank of New York Callable Note Cont 1/24/2020
2.150% Due 02/24/2020
1,500,000.00 04/23/2019
2.64%
1,493,925.00
1,497,091.97
100.03
2.07%
1,500,390.00
3,314.58
2.20%
3,298.03
A1 / A
AA-
0.40
0.31
40428HPR7 HSBC USA Inc Note
2.350% Due 03/05/2020
2,500,000.00 05/10/2019
2.69%
2,493,300.00
2,496,468.92
100.13
2.03%
2,503,330.00
4,243.06
3.68%
6,861.08
A2 / A
AA-
0.43
0.43
06051GFN4 Bank of America Corp Note
2.250% Due 04/21/2020
2,000,000.00 08/07/2019
2.11%
2,001,960.00
2,001,554.22
100.11
2.06%
2,002,132.00
20,000.00
2.96%
577.78
A2 / A-
A+
0.56
0.55
369550BA5 General Dynamics Corp Note
2.875% Due 05/11/2020
2,000,000.00 08/13/2019
2.10%
2,011,340.00
2,009,366.00
100.52
2.01%
2,010,418.00
22,361.11
2.98%
1,052.00
A2 / A+
NR
0.61
0.60
As of September 30, 2019
45
Holdings Report
Orange County Sanitation District Liquid - Account #10282
CUSIP Security Description Par Value/Units
Purchase Date
Book Yield
Cost Value
Book Value
Mkt Price
Mkt YTM
Market Value
Accrued Int.
% of Port.
Gain/Loss
Moody/S&P
Fitch
Maturity
Duration
747525AD5 Qualcomm Inc Note
2.250% Due 05/20/2020
2,000,000.00 08/07/2019
2.07%
2,002,700.00
2,002,197.89
100.04
2.18%
2,000,834.00
16,375.00
2.96%
(1,363.89)
A2 / A-
NR
0.64
0.63
TOTAL US Corporate 11,500,000.00 2.36%
11,498,250.00
11,504,588.53 2.09%
11,516,768.50
73,370.84
16.99%
12,179.97
A2 / A
AA-
0.50
0.48
US Treasury
912796SL4 US Treasury Bill
2.007% Due 10/03/2019
1,650,000.00 08/27/2019
2.04%
1,646,687.63
1,649,815.98
99.99
2.04%
1,649,815.98
0.00
2.42%
0.00
P-1 / A-1+
F-1+
0.01
0.01
912796VY2 US Treasury Bill
1.737% Due 10/08/2019
1,250,000.00 09/27/2019
1.76%
1,249,517.42
1,249,577.74
99.97
1.76%
1,249,577.74
0.00
1.83%
0.00
P-1 / A-1+
F-1+
0.02
0.02
912796VZ9 US Treasury Bill
1.805% Due 10/15/2019
1,250,000.00 09/27/2019
1.83%
1,249,059.90
1,249,122.57
99.93
1.83%
1,249,122.57
0.00
1.83%
0.00
P-1 / A-1+
F-1+
0.04
0.04
912828F62 US Treasury Note
1.500% Due 10/31/2019
2,500,000.00 04/04/2019
2.44%
2,486,718.75
2,498,093.60
99.95
2.07%
2,498,775.00
15,692.93
3.69%
681.40
Aaa / AA+
AAA
0.08
0.08
912796RY7 US Treasury Bill
1.887% Due 01/30/2020
7,000,000.00 Various
1.93%
6,950,415.19
6,955,601.40
99.36
1.93%
6,955,601.40
0.00
10.20%
0.00
P-1 / A-1+
F-1+
0.33
0.33
9128283S7 US Treasury Note
2.000% Due 01/31/2020
15,000,000.00 05/06/2019
2.41%
14,955,468.75
14,979,803.67
100.03
1.91%
15,004,095.00
50,543.48
22.07%
24,291.33
Aaa / AA+
AAA
0.34
0.33
912828H52 US Treasury Note
1.250% Due 01/31/2020
13,500,000.00 Various
2.35%
13,396,542.97
13,451,311.72
99.78
1.92%
13,469,935.50
28,430.70
19.79%
18,623.78
Aaa / AA+
AAA
0.34
0.33
912828UL2 US Treasury Note
1.375% Due 01/31/2020
5,000,000.00 08/27/2019
1.91%
4,988,671.88
4,991,140.83
99.81
1.94%
4,990,625.00
11,582.88
7.33%
(515.83)
Aaa / AA+
AAA
0.34
0.33
TOTAL US Treasury 47,150,000.00 2.22%
46,923,082.49
47,024,467.51 1.92%
47,067,548.19
106,249.99
69.15%
43,080.68
Aaa / AA+
Aaa
0.30
0.29
TOTAL PORTFOLIO 68,050,212.56 2.26%
67,777,379.16
67,909,224.35 2.01%
67,964,485.00
254,744.83
100.00%
55,260.65
Aa1 / AA+
Aaa
0.31
0.30
TOTAL MARKET VALUE PLUS ACCRUALS 68,219,229.83
As of September 30, 2019
46
Holdings Report
OCSD Lehman Exposure - Account #10284
CUSIP Security Description Par Value/Units
Purchase Date
Book Yield
Cost Value
Book Value
Mkt Price
Mkt YTM
Market Value
Accrued Int.
% of Port.
Gain/Loss
Moody/S&P
Fitch
Maturity
Duration
Common Stock
SLHOPNTA4 Lehman Brothers, Inc Open Position Long Exposure
0.000% Due 09/30/2019
60,641.49 11/21/2014
0.00%
57,842.64
57,842.64
0.42
0.00%
25,621.03
0.00
41.36%
(32,221.61)
NR / NR
NR
0.00
0.00
TOTAL Common Stock 60,641.49 0.00%
57,842.64
57,842.64 0.00%
25,621.03
0.00
41.36%
(32,221.61)
NR / NR
NR
0.00
0.00
US Corporate
525ESCIB7 Lehman Brothers Note-Defaulted
0.000% Due 01/24/2020
600,000.00 09/19/2008
0.00%
320,227.27
320,227.27
1.42
0.00%
8,520.00
0.00
13.76%
(311,707.27)
NR / NR
NR
0.32
0.00
525ESC0Y6 Lehman Brothers Note-Defaulted
0.000% Due 10/22/2049
2,000,000.00 09/18/2008
0.00%
1,031,998.65
1,031,998.65
1.39
0.00%
27,800.00
0.00
44.88%
(1,004,198.65)
NR / NR
NR
30.08
0.00
TOTAL US Corporate 2,600,000.00 0.00%
1,352,225.92
1,352,225.92 0.00%
36,320.00
0.00
58.64%
(1,315,905.92)
NR / NR
NR
23.10
0.00
TOTAL PORTFOLIO 2,660,641.49 0.00%
1,410,068.56
1,410,068.56 0.00%
61,941.03
0.00
100.00%
(1,348,127.53)
NR / NR
NR
13.55
0.00
TOTAL MARKET VALUE PLUS ACCRUALS 61,941.03
As of September 30, 2019
47
SECTION ||||||||||||||Section 5 |Transactions
48
Transaction Ledger
Orange County Sanitation District Long Term - Account #10268
Transaction
Type
Settlement
Date CUSIP Quantity Security Description Price
Acq/Disp
Yield Amount Interest
Pur/Sold Total Amount Gain/Loss
ACQUISITIONS
Purchase 07/12/2019 02665WCZ2 1,219,000.00 American Honda Finance Note
2.4% Due: 06/27/2024
99.577 2.49% 1,213,843.63 1,219.00 1,215,062.63 0.00
Purchase 07/15/2019 912828XX3 5,000,000.00 US Treasury Note
2% Due: 06/30/2024
100.574 1.88% 5,028,710.94 4,076.09 5,032,787.03 0.00
Purchase 07/24/2019 477870AB5 2,800,000.00 JDOT 2019-B A2
2.28% Due: 05/16/2022
100.000 2.29% 2,799,989.36 0.00 2,799,989.36 0.00
Purchase 08/14/2019 3133EKWV4 5,000,000.00 FFCB Note
1.85% Due: 07/26/2024
100.966 1.65% 5,048,280.00 4,625.00 5,052,905.00 0.00
Purchase 08/20/2019 62479MYK3 11,255,000.00 MUFG Bank Ltd/NY Discount CP
2.12% Due: 11/19/2019
99.464 2.16% 11,194,685.71 0.00 11,194,685.71 0.00
Purchase 08/27/2019 43815NAB0 3,530,000.00 HAROT 2019-3 A2
1.9% Due: 04/15/2022
99.993 1.92% 3,529,752.90 0.00 3,529,752.90 0.00
Purchase 09/12/2019 78013XZU5 6,500,000.00 ROYAL BANK OF CANADA Note
2.55% Due: 07/16/2024
101.253 2.28% 6,581,445.00 25,783.33 6,607,228.33 0.00
Purchase 09/13/2019 3130A2UW4 2,500,000.00 FHLB Note
2.875% Due: 09/13/2024
105.438 1.73% 2,635,950.00 0.00 2,635,950.00 0.00
Purchase 09/16/2019 46647PAU0 2,500,000.00 JP Morgan Chase & Co Callable Note Cont
7/23/2023
3.797% Due: 07/23/2024
105.287 2.47% 2,632,175.00 13,975.07 2,646,150.07 0.00
Subtotal 40,304,000.00 40,664,832.54 49,678.49 40,714,511.03 0.00
Security
Contribution
07/31/2019 912828WU0 24,960.00 US Treasury Inflation Index Note
0.125% Due: 07/15/2024
100.000 24,960.00 1.36 24,961.36 0.00
Security
Contribution
08/31/2019 912828WU0 3,016.00 US Treasury Inflation Index Note
0.125% Due: 07/15/2024
100.000 3,016.00 0.48 3,016.48 0.00
June 30, 2019 through September 30, 2019
As of September 30, 2019
49
Transaction Ledger
Orange County Sanitation District Long Term - Account #10268
Transaction
Type
Settlement
Date CUSIP Quantity Security Description Price
Acq/Disp
Yield Amount Interest
Pur/Sold Total Amount Gain/Loss
Security
Contribution
09/30/2019 912828WU0 18,096.00 US Treasury Inflation Index Note
0.125% Due: 07/15/2024
100.000 18,096.00 4.73 18,100.73 0.00
Subtotal 46,072.00 46,072.00 6.57 46,078.57 0.00
TOTAL ACQUISITIONS 40,350,072.00 40,710,904.54 49,685.06 40,760,589.60 0.00
DISPOSITIONS
Sale 07/12/2019 02665WAH4 1,500,000.00 American Honda Finance Note
2.25% Due: 08/15/2019
99.984 2.40% 1,499,760.00 13,781.25 1,513,541.25 -667.58
Subtotal 1,500,000.00 1,499,760.00 13,781.25 1,513,541.25 -667.58
Redemption 08/27/2019 46625HKA7 2,000,000.00 JP Morgan Chase Callable Note Cont 12/23/2019
2.25% Due: 01/23/2020
100.055 2.08% 2,001,100.00 4,250.00 2,005,350.00 1,522.18
Subtotal 2,000,000.00 2,001,100.00 4,250.00 2,005,350.00 1,522.18
Maturity 07/31/2019 912828WW6 5,000,000.00 US Treasury Note
1.625% Due: 07/31/2019
100.000 5,000,000.00 0.00 5,000,000.00 0.00
Maturity 08/15/2019 02665WAH4 2,500,000.00 American Honda Finance Note
2.25% Due: 08/15/2019
100.000 2,500,000.00 0.00 2,500,000.00 0.00
Maturity 08/19/2019 62479MVK6 11,125,000.00 MUFG Bank Ltd/NY Discount CP
2.35% Due: 08/19/2019
99.608 11,125,000.00 0.00 11,125,000.00 0.00
Maturity 09/11/2019 06406HCW7 2,120,000.00 Bank of New York Callable Note Cont 8/11/2019
2.3% Due: 09/11/2019
100.000 2,120,000.00 0.00 2,120,000.00 0.00
Maturity 09/16/2019 24422ESS9 5,000,000.00 John Deere Capital Corp Note
2.3% Due: 09/16/2019
100.000 5,000,000.00 0.00 5,000,000.00 0.00
June 30, 2019 through September 30, 2019
As of September 30, 2019
50
Transaction Ledger
Orange County Sanitation District Long Term - Account #10268
Transaction
Type
Settlement
Date CUSIP Quantity Security Description Price
Acq/Disp
Yield Amount Interest
Pur/Sold Total Amount Gain/Loss
Maturity 09/30/2019 912828F39 5,800,000.00 US Treasury Note
1.75% Due: 09/30/2019
100.000 5,800,000.00 0.00 5,800,000.00 0.00
Subtotal 31,545,000.00 31,545,000.00 0.00 31,545,000.00 0.00
TOTAL DISPOSITIONS 35,045,000.00 35,045,860.00 18,031.25 35,063,891.25 854.60
June 30, 2019 through September 30, 2019
As of September 30, 2019
51
Transaction Ledger
Orange County Sanitation District Liquid - Account #10282
Transaction
Type
Settlement
Date CUSIP Quantity Security Description Price
Acq/Disp
Yield Amount Interest
Pur/Sold Total Amount Gain/Loss
ACQUISITIONS
Purchase 07/31/2019 313384MD8 2,500,000.00 FHLB Discount Note
2.12% Due: 09/25/2019
99.670 2.16% 2,491,755.56 0.00 2,491,755.56 0.00
Purchase 08/09/2019 06051GFN4 2,000,000.00 Bank of America Corp Note
2.25% Due: 04/21/2020
100.098 2.11% 2,001,960.00 13,500.00 2,015,460.00 0.00
Purchase 08/09/2019 747525AD5 2,000,000.00 Qualcomm Inc Note
2.25% Due: 05/20/2020
100.135 2.07% 2,002,700.00 9,875.00 2,012,575.00 0.00
Purchase 08/15/2019 369550BA5 2,000,000.00 General Dynamics Corp Note
2.875% Due: 05/11/2020
100.567 2.10% 2,011,340.00 15,013.89 2,026,353.89 0.00
Purchase 08/20/2019 62479MYK3 1,860,000.00 MUFG Bank Ltd/NY Discount CP
2.12% Due: 11/19/2019
99.464 2.16% 1,850,032.47 0.00 1,850,032.47 0.00
Purchase 08/28/2019 912796SL4 1,650,000.00 US Treasury Bill
2.007% Due: 10/03/2019
99.799 2.04% 1,646,687.63 0.00 1,646,687.63 0.00
Purchase 08/28/2019 912796VW6 1,650,000.00 US Treasury Bill
2.042% Due: 09/24/2019
99.847 2.07% 1,647,472.41 0.00 1,647,472.41 0.00
Purchase 08/28/2019 912828UL2 5,000,000.00 US Treasury Note
1.375% Due: 01/31/2020
99.773 1.91% 4,988,671.88 5,230.98 4,993,902.86 0.00
Purchase 09/16/2019 912796RY7 4,000,000.00 US Treasury Bill
1.873% Due: 01/30/2020
99.293 1.91% 3,971,704.44 0.00 3,971,704.44 0.00
Purchase 09/18/2019 912796RY7 3,000,000.00 US Treasury Bill
1.907% Due: 01/30/2020
99.290 1.95% 2,978,710.75 0.00 2,978,710.75 0.00
Purchase 09/24/2019 912828TR1 1,650,000.00 US Treasury Note
1% Due: 09/30/2019
99.984 1.94% 1,649,742.19 7,979.51 1,657,721.70 0.00
Purchase 09/26/2019 912828F39 1,350,000.00 US Treasury Note
1.75% Due: 09/30/2019
99.996 2.09% 1,349,947.27 11,554.30 1,361,501.57 0.00
Purchase 09/30/2019 912796VY2 1,250,000.00 US Treasury Bill
1.737% Due: 10/08/2019
99.961 1.76% 1,249,517.42 0.00 1,249,517.42 0.00
June 30, 2019 through September 30, 2019
As of September 30, 2019
52
Transaction Ledger
Orange County Sanitation District Liquid - Account #10282
Transaction
Type
Settlement
Date CUSIP Quantity Security Description Price
Acq/Disp
Yield Amount Interest
Pur/Sold Total Amount Gain/Loss
Purchase 09/30/2019 912796VZ9 1,250,000.00 US Treasury Bill
1.805% Due: 10/15/2019
99.925 1.83% 1,249,059.90 0.00 1,249,059.90 0.00
Subtotal 31,160,000.00 31,089,301.92 63,153.68 31,152,455.60 0.00
TOTAL ACQUISITIONS 31,160,000.00 31,089,301.92 63,153.68 31,152,455.60 0.00
DISPOSITIONS
Call 09/18/2019 69353RDZ8 1,000,000.00 PNC Bank Callable Note Cont 9/18/2019
2.4% Due: 10/18/2019
100.000 2.40% 1,000,000.00 10,000.00 1,010,000.00 171.43
Subtotal 1,000,000.00 1,000,000.00 10,000.00 1,010,000.00 171.43
Redemption 08/27/2019 46625HKA7 1,500,000.00 JP Morgan Chase Callable Note Cont 12/23/2019
2.25% Due: 01/23/2020
100.055 2.08% 1,500,825.00 3,187.50 1,504,012.50 4,749.24
Subtotal 1,500,000.00 1,500,825.00 3,187.50 1,504,012.50 4,749.24
Maturity 07/12/2019 25468PDL7 1,130,000.00 TWDC Enterprises 18 Corp Note
0.875% Due: 07/12/2019
100.000 1,130,000.00 0.00 1,130,000.00 0.00
Maturity 07/29/2019 69353REX2 1,890,000.00 PNC Bank Callable Note Cont 6/29/2019
1.45% Due: 07/29/2019
100.000 1,890,000.00 0.00 1,890,000.00 0.00
Maturity 07/31/2019 313384JV2 5,500,000.00 FHLB Discount Note
2.395% Due: 07/31/2019
100.000 5,500,000.00 0.00 5,500,000.00 0.00
Maturity 07/31/2019 9128282K5 35,000,000.00 US Treasury Note
1.375% Due: 07/31/2019
100.000 35,000,000.00 0.00 35,000,000.00 0.00
Maturity 07/31/2019 912828TH3 15,000,000.00 US Treasury Note
0.875% Due: 07/31/2019
100.000 15,000,000.00 0.00 15,000,000.00 0.00
Maturity 07/31/2019 912828WW6 20,000,000.00 US Treasury Note
1.625% Due: 07/31/2019
100.000 20,000,000.00 0.00 20,000,000.00 0.00
Maturity 08/12/2019 69371RN36 1,083,000.00 Paccar Financial Corp Note
1.2% Due: 08/12/2019
100.000 1,083,000.00 0.00 1,083,000.00 0.00
Maturity 08/15/2019 02665WAH4 1,977,000.00 American Honda Finance Note
2.25% Due: 08/15/2019
100.000 1,977,000.00 0.00 1,977,000.00 0.00
June 30, 2019 through September 30, 2019
As of September 30, 2019
53
Transaction Ledger
Orange County Sanitation District Liquid - Account #10282
Transaction
Type
Settlement
Date CUSIP Quantity Security Description Price
Acq/Disp
Yield Amount Interest
Pur/Sold Total Amount Gain/Loss
Maturity 08/19/2019 62479MVK6 3,290,000.00 MUFG Bank Ltd/NY Discount CP
2.35% Due: 08/19/2019
99.608 3,290,000.00 0.00 3,290,000.00 0.00
Maturity 09/13/2019 21687BWD9 2,000,000.00 Rabobank Nederland NV NY Discount CP
2.83% Due: 09/13/2019
97.893 2,000,000.00 0.00 2,000,000.00 0.00
Maturity 09/13/2019 96130ABJ6 1,500,000.00 Westpac Banking Corp NY Yankee CD
2.97% Due: 09/13/2019
100.000 1,500,000.00 33,783.75 1,533,783.75 0.00
Maturity 09/18/2019 313384LW7 2,850,000.00 FHLB Discount Note
2.2% Due: 09/18/2019
100.000 2,850,000.00 0.00 2,850,000.00 0.00
Maturity 09/24/2019 912796VW6 1,650,000.00 US Treasury Bill
2.042% Due: 09/24/2019
100.000 1,650,000.00 0.00 1,650,000.00 0.00
Maturity 09/25/2019 313384MD8 2,500,000.00 FHLB Discount Note
2.12% Due: 09/25/2019
100.000 2,500,000.00 0.00 2,500,000.00 0.00
Maturity 09/30/2019 89114MM20 2,000,000.00 Toronto Dominion Bank Yankee CD
2.47% Due: 09/30/2019
100.000 2,000,000.00 17,015.56 2,017,015.56 0.00
Maturity 09/30/2019 9128282X7 10,000,000.00 US Treasury Note
1.375% Due: 09/30/2019
100.000 10,000,000.00 0.00 10,000,000.00 0.00
Maturity 09/30/2019 912828F39 1,350,000.00 US Treasury Note
1.75% Due: 09/30/2019
100.000 1,350,000.00 0.00 1,350,000.00 0.00
Maturity 09/30/2019 912828TR1 11,650,000.00 US Treasury Note
1% Due: 09/30/2019
100.000 11,650,000.00 0.00 11,650,000.00 0.00
Subtotal 120,370,000.00 120,370,000.00 50,799.31 120,420,799.31 0.00
TOTAL DISPOSITIONS 122,870,000.00
122,870,825.0
0 63,986.81 122,934,811.81 4,920.67
June 30, 2019 through September 30, 2019
As of September 30, 2019
54
Transaction Ledger
OCSD Lehman Exposure - Account #10284
Transaction
Type
Settlement
Date CUSIP Quantity Security Description Price
Acq/Disp
Yield Amount Interest
Pur/Sold Total Amount Gain/Loss
Other Transactions
Cash Capital
Distribution
07/18/2019 525ESC0Y6 0.00 Lehman Brothers Note-Defaulted
Due: 10/22/2049
0.000 5,744.23 0.00 5,744.23 0.00
Cash Capital
Distribution
07/18/2019 525ESCIB7 0.00 Lehman Brothers Note-Defaulted
Due: 01/24/2020
0.000 1,729.39 0.00 1,729.39 0.00
Subtotal 0.00 7,473.62 0.00 7,473.62 0.00
TOTAL Other Transactions 0.00 7,473.62 0.00 7,473.62 0.00
June 30, 2019 through September 30, 2019
As of September 30, 2019
55
Important Disclosures
2019 Chandler Asset Management, Inc, An Independent Registered Investment Adviser.
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 Part2A.
Performance results are presented gross-of-advisory fees and represent the client’s Total Return. The deduction of advisory fees lowers performance results. These results include the reinvestment of
dividends and other earnings. Past performance may not be indicative of future results. Therefore, clients should not assume that future performance of any specific investment or investment strategy
will be profitable or equal to past performance levels. All investment strategies have the potential for profit or loss. Economic factors, market conditions or changes in investment strategies,
contributions or withdrawals may materially alter the performance and results of your portfolio.
Index returns assume reinvestment of all distributions. Historical performance results for investment indexes generally do not reflect the deduction of transaction and/or custodial charges or the
deduction of an investment management fee, the incurrence of which would have the effect of decreasing historical performance results. It is not possible to invest directly in an index.
Source ice Data Indices, LLC ("ICE"), used with permission. ICE permits use of the ICE indices and related data on an "as is" basis; ICE, its affiliates and their respective third party suppliers disclaim any and
all warranties and representations, express and/or implied, including any warranties of merchantability or fitness for a particular purpose or use, including the indices, index data and any data included
in, related to, or derived therefrom. Neither ICE data, its affiliates or their respective third party providers guarantee the quality, adequacy, accuracy, timeliness or completeness of the indices or the
index data or any component thereof, and the indices and index data and all components thereof are provided on an "as is" basis and licensee's use it at licensee's own risk. ICE data, its affiliates and their
respective third party do not sponsor, endorse, or recommend chandler asset management, or any of its products or services.
This report is provided for informational purposes only and should not be construed as a specific investment or legal advice. The information contained herein was obtained from sources believed to be
reliable as of the date of publication, but may become outdated or superseded at any time without notice. Any opinions or views expressed are based on current market conditions and are subject to
change. This report may contain forecasts and forward-looking statements which are inherently limited and should not be relied upon as indicator of future results. Past performance is not indicative of
future results. This report is not intended to constitute an offer, solicitation, recommendation or advice regarding any securities or investment strategy and should not be regarded by recipients as a
substitute for the exercise of their own judgment.
Fixed income investments are subject to interest, credit and market risk.Interest rate risk: the value of fixed income investments will decline as interest rates rise. Credit risk: the possibility that the
borrower may not be able to repay interest and principal. Low rated bonds generally have to pay higher interest rates to attract investors willing to take on greater risk. Market risk: the bond market in
general could decline due to economic conditions, especially during periods of rising interest rates.
Ratings information have been provided by Moody’s, S&P and Fitch through data feeds we believe to be reliable as of the date of this statement, however we cannot guarantee its accuracy.
Security level ratings for U.S. Agency issued mortgage-backed securities (“MBS”) reflect the issuer rating because the securities themselves are not rated. The issuing U.S. Agency guarantees the full and
timely payment of both principal and interest and carries a AA+/Aaa/AAA by S&P, Moody’s and Fitch respectively.
As of September 30, 2019
56
Benchmark Disclosures
ICE BAML 3-Month US Treasury Bill Index
The ICE BAML US 3-Month Treasury Bill Index is comprised of a single issue purchased at the beginning of the month and held for a full month. At the end of the month that issue is sold and rolled into a
newly selected issue. The issue selected at each month-end rebalancing is the outstanding Treasury Bill that matures closest to, but not beyond, three months from the rebalancing date. (Index: G0O1.
Pleasevisit www.mlindex.ml.com for more information)
ICE BAML 1-5 Yr US Corp/Govt Rated AAA-A Index
The ICE BAML US Issuers 1-5 Year AAA-A US Corporate & Government Index tracks the performance of US dollar denominated investment grade debt publicly issued in the US domestic market, including
US Treasury, US agency, foreign government, supranational and corporate securities. Qualifying securities must issued from US issuers and be rated AAA through A3 (based on an average of Moody’s, S&P
and Fitch). In addition, qualifying securities must have at least one year remaining term to final maturity and less than five years remaining term to final maturity, at least 18 months to final maturity at
point of issuance, a fixed coupon schedule and a minimum amount outstanding of $1 billion for US Treasuries and $250 million for all other securities.(Index: BV10. Please visit www.mlindex.ml.com for
more information)
ICE BAML US 1-5 Yr US Corp/Govt Rated AAA-BBB Indx
The ICE BAML 1-5 Year US Corporate & Government Index tracks the performance of US dollar denominated investment grade debt publicly issued in the US domestic market, including US Treasury, US
agency, foreign government, supranational and corporate securities. Qualifying securities must have an investment grade rating (based on an average of Moody’s, S&P and Fitch). In addition, qualifying
securities must have at least one year remaining term to final maturity and less than five years remaining term to final maturity, at least 18 months to final maturity at point of issuance, a fixed coupon
scheduleand a minimum amount outstanding of $1billion for US Treasuriesand $250 million for all other securities. (Index:BVA0. Please visit www.mlindex.ml.com for more information)
As of September 30, 2019
57
Rating Agency Comparisons
A summary of investment grade ratings are listed below. More complete descriptions of
Moody's and Standard & Poor's ratings are included in the following pages.
Quality/Grade Moody’s Standard & Poor’s
Fitch
Best Quality
Aaa
AAA
AAA
High Quality
Aa1
Aa2
Aa3
AA+
AA
AA-
AA+
AA
AA-
Upper Medium Grade
A1
A2
A3
A+
A
A-
A+
A
A-
Medium Grade
Baa1
Baa2
Baa3
BBB+
BBB
BBB-
BBB+
BBB
BBB1
Moody's - Investment Grade
"Aaa" - Bonds rated Aaa are judged to be of the best quality. They carry the smallest
degree of investment risk. Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
"Aa" - Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection may not
be as large as in Aaa securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the long-term risks appear
somewhat larger than in Aaa securities.
"A" - Bonds which are rated A possess many favorable investment attributes and are to
be considered as upper medium grade obligations. Factors giving security to principal and
interest are considered adequate, but elements may be present which suggest a
susceptibility to impairment sometime in the future.
"Baa" - 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 Aa, A, and Baa are also assigned "1", "2", or "3" based on the strength of
the issue within each category. Accordingly, "A1" would be the strongest group of A
securities and "A3" would be the weakest A securities.
Ba, B, Caa, Ca, and C - Bonds that possess one of these ratings provide questionable
protection of interest and principal ("Ba" 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 Rating
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.
OCSD ♦ P.O. Box 8127 ♦ Fountain Valley, CA 92728-8127 ♦ (714) 962-2411
October 31, 2019
STAFF REPORT
Certificates of Participation (COP) Quarterly Report
for the Period Ended September 30, 2019
Summary
The District began issuing Certificates of Participation (COPs) in 1990. These COPs
were a part of our long-term financing plan that included both variable interest rate and
traditional fixed rate borrowing. Following are the current outstanding debt issues of the
District:
In May 2010, the District issued $80 million of fixed rate BABs, Series 2010A at a true
interest cost of 3.68 percent for the issue.
In December 2010, the District issued $157 million of fixed rate BABs, Series 2010C at
a true interest cost of 4.11 percent for the issue.
In October 2011, the District issued $147.595 million of fixed rate COPs, Series 2011A
refunding a portion of the Series 2000 variable rate debt and a portion of the Series
2003 fixed rate debt. The true interest cost for the issue is 2.61 percent.
In March 2012, the District issued $100.645 million of fixed rate COPs, Series 2012A
refunding the Series 2003 fixed rate debt. The true interest cost for the issue is 3.54
percent.
In August 2012, the District issued $66.395 million of fixed rate COPs, Series 2012B
refunding the Series 2000 variable rate debt. The true interest cost for the issue is 1.50
percent.
With the issuance of Series 2012B, there remains no variable interest rate COPs at the
District.
In August 2014, the District issued $85.09 million of fixed rate COPs, Series 2014A,
refunding a portion of Series 2007B debt. The true interest cost for the issue is 2.34
percent.
Quarterly COP Report
For the Period Ended September 30, 2019
Page 2 of 2
In February 2015, the District issued $127.51 million of fixed rate COPs, Series 2015A,
refunding $152.99 million of the Series 2007B debt. The true interest cost for the issue
is 3.30 percent.
In March 2016, the District issued $145.88 million of fixed rate CANs, Series 2016A,
refunding $162.78 million of the Series 2009A fixed rate debt. The true interest cost for
the issue is 3.02 percent.
In February 2017, the District issued $66.37 million of fixed rate COPs, Series 2017A,
refunding $91.885 million of the Series 2007A debt. The true interest cost for the issue
is 2.55 percent.
In November 2018, the District issued $102.2 million of fixed rate CANs, Series 2018A,
refunding the Series 2016B CANs. The true interest cost for the issue is 2.02 percent.
Additional Information
The graph entitled, "OCSD COP Rate History Report,” shows the various fixed interest
rates of the District’s eleven debt issues.
Attachments
1. Graph - OCSD COP Rate History Report
Prepared by Finance, 10/29/2019, 5:05 PM
H:\dept\asd\220\Common\Monthly and Quarterly Treasurer's Report\FY 19-20\COP Rate History Report FY 19-20
0.00
1.00
2.00
3.00
4.00
5.00
12
-
S
e
p
-
1
8
26
-
S
e
p
-
1
8
10
-
O
c
t
-
1
8
24
-
O
c
t
-
1
8
7-
N
o
v
-
1
8
21
-
N
o
v
-
1
8
5-
D
e
c
-
1
8
19
-
D
e
c
-
1
8
2-
J
a
n
-
1
9
16
-
J
a
n
-
1
9
30
-
J
a
n
-
1
9
13
-
F
e
b
-
1
9
27
-
F
e
b
-
1
9
13
-
M
a
r
-
1
9
27
-
M
a
r
-
1
9
10
-
A
p
r
-
1
9
24
-
A
p
r
-
1
9
8-
M
a
y
-
1
9
22
-
M
a
y
-
1
9
5-
J
u
n
-
1
9
19
-
J
u
n
-
1
9
3-
J
u
l
-
1
9
17
-
J
u
l
-
1
9
31
-
J
u
l
-
1
9
14
-
A
u
g
-
1
9
28
-
A
u
g
-
1
9
11
-
S
e
p
-
1
9
25
-
S
e
p
-
1
9
RA
T
E
(
%
)
DATE
OCSD COP RATE HISTORY REPORT
SEPTEMBER 2019
Series 2010A Fixed Series 2010C Fixed Series 2011A Fixed Series 2012A Fixed Series 2012B Fixed
Series 2014A Fixed Series 2015A Fixed Series 2016A Fixed Series 2017A Fixed Series 2018A Fixed
FY 2019-20 First Quarter Financial Report
This Page Intentionally Left Blank
ORANGE COUNTY SANITATION DISTRICTFINANCIAL MANAGEMENT DIVISION
10844 Ellis Avenue
Fountain Valley, California 92708-7018
714.962.2411
www.ocsd.com
09/30/19
Orange County Sanitation District
ADMINISTRATION COMMITTEE
Agenda Report
Administration Building
10844 Ellis Avenue
Fountain Valley, CA 92708
(714) 593-7433
File #:2019-702 Agenda Date:11/13/2019 Agenda Item No:6.
FROM:James D. Herberg, General Manager
Originator: Lorenzo Tyner, Assistant General Manager
SUBJECT:
LEASE AGREEMENT WITH MEGDAL GREEN,LLC PROVIDING ORANGE COUNTY
SANITATION DISTRICT PARCEL FOR PARKING AND/OR RELATED ACTIVITIES
GENERAL MANAGER'S RECOMMENDATION
RECOMMENDATION: Recommend to the Board of Directors to:
Approve a five-year lease agreement with Megdal Green,LLC,a California limited liability company,
to allow paving,striping,parking,and related improvements over a 4-foot wide portion of the Orange
County Sanitation District’s 50-foot wide utility corridor which abuts 21532 South Brookhurst Street in
Huntington Beach owned by Megdal Green, LLC, at an annual cost of $250, for a term of five-years.
BACKGROUND
The Orange County Sanitation District (Sanitation District)has leased a 4-foot wide strip of its 50-foot
wide parcel to Carl Karcher Enterprises since 1993 for the purpose of creating additional parking
spaces in this congested commercial center.The Carl’s Jr.restaurant has moved out of this center
and Megdal Green,LLC has now leased its property to Starbucks Coffee Company.With parking in
this center still a concern,Megdal Green contacted the Sanitation District and requested the
opportunity to lease the same strip of land for the same purpose.
The agreement is for a five-year period and provides for Megdal Green,LLC and its tenants to utilize
the Sanitation District land,classified as an Interplant Pipeline and Utility Corridor,for the purpose of
parking,outdoor seating,or related activities for the sum of $250 per year.Improvements such as
paving,striping,etc.are to be maintained in good condition by Megdal Green,LLC for the term of the
lease. This lease may be terminated by either party with 60-day written notice.
RELEVANT STANDARDS
·Maintain collaborative and cooperative relationships with regulators,stakeholders,and
neighboring communities
PROBLEM
The Sanitation District’s property is adjacent to a busy commercial center.A shortage of parking
spaces, litter, and vagrancy can be a problem in this area.
Orange County Sanitation District Printed on 11/6/2019Page 1 of 2
powered by Legistar™
File #:2019-702 Agenda Date:11/13/2019 Agenda Item No:6.
PROPOSED SOLUTION
By leasing this strip of land to Megdal Green,LLC,the lessee becomes responsible for keeping the
area clean, maintained, and free from loitering.
TIMING CONCERNS
Starbucks is due to open December 2019.
RAMIFICATIONS OF NOT TAKING ACTION
The Sanitation District would not have an agreement with Megdal Green,LLC to maintain the area
and Sanitation District staff or contractors would then have to monitor litter and loitering.
PRIOR COMMITTEE/BOARD ACTIONS
July 2018 - Board approved a one-year and five-month lease agreement with CKE.
April 2008 -Board approved 5-year Lease extension with CKE,which included an additional 5-year
extension option.
August 2003 - Board approved 5-year Lease extension with CKE.
August 1993 - Board approved Lease Agreement with Carl Karcher Enterprises (CKE).
ADDITIONAL INFORMATION
N/A
CEQA
N/A
FINANCIAL CONSIDERATIONS
N/A
ATTACHMENT
The following attachment(s)is included in hard copy and may also be viewed on-line at the OCSD website
(www.ocsd.com) with the complete agenda package:
·Lease Agreement with Megdal Green, LLC
Orange County Sanitation District Printed on 11/6/2019Page 2 of 2
powered by Legistar™
1326921.2 1
LEASE AGREEMENT
THIS LEASE AGREEMENT (“Agreement”), is made and entered into, to be
effective this ___ day of ______________, 2019, by and between:
ORANGE COUNTY SANITATION DISTRICT, a
public agency (“DISTRICT”);
AND
MEGDAL GREEN, LLC, a California limited
liability company (“MEGDAL”)
RECITALS
A.DISTRICT owns a parcel of land approximately fifty (50) feet wide
(hereinafter, the “Property”), which abuts the easterly property line of those certain
premises located at 21532 South Brookhurst Street, Huntington Beach, California
(hereinafter, the “Brookhurst Premises”), and the westerly right-of-way line of the Santa
Ana River Channel.
B.The Brookhurst Premises are owned by MEGDAL and leased to Starbucks
Coffee Company.
C.DISTRICT owns certain utility improvements, including an Outfall Sewer,
which is presently located in the subsurface of the Property. DISTRICT previously
constructed additional improvements on the Property, including a permanent retaining
wall. There remains a strip of the Property, approximately four (4) feet wide, that lies
between the retaining wall and the Brookhurst Premises (hereinafter referred to as “Parcel
A”). Parcel A is more particularly described and shown on Exhibits “A” and “B,” attached
hereto and incorporated herein by this reference.
1326921.2 2
D.The Parties now desire to enter into an agreement wherein the DISTRICT
would lease Parcel A to MEGDAL to allow MEGDAL to install and maintain paving,
striping, parking, and related improvements within Parcel A pursuant to the terms and
conditions stated herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and pursuant to the terms and conditions
contained herein, the Parties hereby agree as follows:
Section 1 – Recitals: The Recitals set forth above are incorporated herein as part
of this Agreement.
Section 2 – Rent:DISTRICT hereby leases Parcel A to MEGDAL for an
annual sum of two hundred and fifty dollars ($250.00). MEGDAL shall pay the first year’s
rent within five (5) business days following execution of this Agreement, and shall make
all subsequent annual rent payments on or before November 1st of each year.
Section 3 – Term: This Agreement shall have a term of five (5) years beginning
on the date this Agreement is executed by the Parties.
Section 4 – Early Termination: Notwithstanding Section 3 of this
Agreement, either Party may terminate this Agreement for any reason by providing at least
sixty (60) days advance written notice to the other Party.
Section 5 – Maintenance:MEGDAL agrees to maintain Parcel A in good and
fair condition, free of trash, and generally in a manner consistent with cleanliness standards
for similar commercial properties in the area.
Section 6 – Authorized Uses: MEGDAL shall make use of Parcel A only for
vehicular traffic, parking, outdoor seating, and any related activities, or for the use of
MEGDAL and its employees, invitees, and customers. MEGDAL shall not use Parcel A
1326921.2 3
for any other use or purpose. MEGDAL agrees, during the term of its leasehold interest,
to pave, maintain, and keep in good condition and repair the paving and improvements to
be installed by MEGDAL within Parcel A. Such maintenance shall include, but is not
limited to, repairs, resurfacing, restriping, cleaning, and sweeping.
Section 7 – DISTRICT Access:In consideration of this Lease, MEGDAL
hereby grants to DISTRICT a license to enter Parcel A at any time during the term of this
Agreement. Further, upon prior written notice to MEGDAL, DISTRICT may remove the
retaining wall or any paving or parking area improvements for the purpose of accessing,
maintaining, altering, or relocating DISTRICT’s Outfall Sewer, which is located on
DISTRICT’s land and beneath the surface of Parcel A.
Section 8 – DISTRICT Work:If DISTRICT exercises its license to enter
and remove any improvements to the lease area, it agrees to act expeditiously to undertake
and conclude all work affecting Parcel A. MEGDAL shall have the option to terminate
this Lease (in accordance with Section 4 above) in the event of DISTRICT’s removal of
improvements, but shall replace the improvements at its own expense if MEGDALchooses
to continue the Lease.
Section 9 – Indemnity & Duty to Defend:MEGDAL shall indemnify, assume
the defense of, and hold free and harmless, DISTRICT, its agents, employees, successors,
and assigns, from any and all obligations, liabilities, liens, claims, demands, losses,
damages, costs, or causes of action (hereinafter “liability”) arising out of or in any way
connected to MEGDAL’s use of Parcel A, or any act or omission to act by MEGDAL,
including its agents, servants, employees, invitees, or guests, including but not limited to
any liability arising from bodily injury (including death), personal property damage,
damage to any of DISTRICT’s property, and reasonable attorneys’ fees, sustained at any
1326921.2 4
time by any person or persons arising out of or in consequence of MEGDAL’s use of Parcel
A, whether or not such bodily injury or property damage is claimed to be due to the
negligence, gross negligence, or willful misconduct of MEGDAL, its agents, servants,
employees, invitees, or guests, excepting only liability arising from the sole negligence or
willful misconduct of DISTRICT.
Section 10 – No Assignment:No assignment or sublease of MEGDAL’s
interest hereunder may be made without the written consent of DISTRICT, which may be
withheld in its sole discretion.
Section 11 – Insurance:MEGDAL agrees that it will, at its sole expense,
maintain a policy or policies of insurance, written by one or more qualified and rated
insurance carriers, and insuring DISTRICT and its employees against liability for injury,
death of persons, or loss or damage to property in or about the lease area. This insurance
requirement may be met by the naming of DISTRICT, its employees, officers and directors,
as additional insureds to MEGDAL’s general liability insurance policy. The general
liability coverage shall not be less than $1,000,000 per occurrence for bodily injury,
including death, and $500,000 for property damage.
Section 12 – Arbitration:Any controversy or claim between the Parties to this
Agreement, including but not limited to, any claims, disputes, demands, differences,
controversies, or misunderstandings arising under, out of, or in relation to this Lease, or
any alleged breach thereof, shall be submitted to and determined by arbitration. The Rules
of the American Arbitration Association shall apply. The prevailing party shall be entitled
to recover reasonable attorneys’ fees and costs, as fixed by the Arbitrator.
Section 13 – Entire Agreement:This instrument contains the entire agreement
between the Parties relating to the rights herein granted and the obligations herein assumed.
1326921.2 5
Any oral representations or modifications concerning this instrument shall be of no force
and effect, excepting a subsequent modification in writing, signed by the Party to be
charged.
Section 14 – Counterparts:This Agreement may be executed in counterparts,
each of which shall be deemed an original but all of which together shall constitute one
and the same Agreement.
IN WITNESS WHEREOF, DISTRICT and MEGDAL have executed this Lease
Agreement on the day and year first above written.
“DISTRICT”
ORANGE COUNTY SANITATION DISTRICT,
a public agency
By___________________________________
David John Shawver, Chair, Board of Directors
ATTEST:
___________________________________
Kelly A. Lore, Clerk of the Board
APPROVED AS TO FORM:
___________________________________
Bradley R. Hogin, General Counsel
“MEGDAL”
MEGDAL GREEN, LLC,
a California Limited Liability Company
By___________________________________
Its: ____________________________
By___________________________________
Its: ____________________________
Orange County Sanitation District
ADMINISTRATION COMMITTEE
Agenda Report
Administration Building
10844 Ellis Avenue
Fountain Valley, CA 92708
(714) 593-7433
File #:2019-705 Agenda Date:11/13/2019 Agenda Item No:7.
FROM:James D. Herberg, General Manager
Originator: Lorenzo Tyner, Assistant General Manager
SUBJECT:
ORANGE COUNTY SANITATION DISTRICT COMPREHENSIVE ANNUAL FINANCIAL REPORT
(CAFR) FOR THE YEAR END JUNE 30, 2019
GENERAL MANAGER'S RECOMMENDATION
RECOMMENDATION: Recommend to the Board of Directors to:
Receive and file the Orange County Sanitation District’s Comprehensive Annual Financial Report for
the year ended June 30, 2019, prepared by staff and audited by Macias Gini & O’Connell LLP
(MGO), Certified Public Accountants, along with the following reports prepared by MGO:
1. Report to the Board of Directors; and
2. Independent Accountants’ Report on Agreed-Upon Procedures Applied to Appropriations Limit
Worksheets.
BACKGROUND
The CAFR for the year ended June 30,2019 is enclosed for the Committee’s consideration.Included
within the report are the Orange County Sanitation District’s financial statements for the year ended
June 30, 2019, along with the Independent Auditor’s Report that includes the unmodified opinion.
RELEVANT STANDARDS
·Produce appropriate financial reporting - annual financial report & audit letter
ATTACHMENT
The following attachment(s)are included in hard copy and may also be viewed on-line at the OCSD website
(www.ocsd.com) with the complete agenda package:
·Report to the Board of Directors
·Independent Accountant's Report on Applying Agreed-Upon Procedures Related to
Appropriations Limit Calculation
·Comprehensive Annual Financial Report for the Year Ended June 30, 2019 (separately bound
document)
·Single Audit Reports
Orange County Sanitation District Printed on 11/6/2019Page 1 of 1
powered by Legistar™
www.mgocpa.com
Macias Gini & O’Connell LLP 4675 MacArthur Court, Suite 600 Newport Beach, CA 92660
1
October 25, 2019
To the Board of Directors
Orange County Sanitation District
10844 Ellis Avenue
Fountain Valley, California
We have audited the basic financial statements of the Orange County Sanitation District (OCSD) for the
year ended June 30, 2019. Professional standards require that we provide you with information about our
responsibilities under generally accepted auditing standards and Government Auditing Standards, as well
as certain information related to the planned scope and timing of our audit. We have communicated such
information in our letter to you dated April 30, 2019. Professional standards also require that we
communicate to you the following information related to our audit.
Significant Audit Matters
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by OCSD are described in Note 1 to the basic financial statements. As described
in Note 1 to the basic financial statements, OCSD implemented Governmental Accounting Standard Board
(GASB) Statement No. 83, Certain Asset Retirement Obligations and also GASB Statement No. 88, Certain Disclosures Related to Debt, Including Direct Borrowings and Direct Placements. However,
implementation of these Standards did not materially impact OCSD. The application of existing policies
was not changed during 2019.
We noted no transactions entered into by OCSD during the year for which there is a lack of authoritative
guidance or consensus. All significant transactions have been recognized in the financial statements in the
proper period.
Accounting estimates are an integral part of the financial statements prepared by management and are based
on management’s knowledge and experience about past and current events and assumptions about future
events. Certain accounting estimates are particularly sensitive because of their significance to the financial
statements and because of the possibility that future events affecting them may differ significantly from
those expected. The most sensitive estimates affecting OCSD’s financial statements were:
•Valuations of actuarially determined contributions, deferred outflows of resources, deferred
inflows of resources, and net pension liability for OCSD’s employee pension plan and additional
retiree benefit account plan are based on actuarial calculations, which incorporate actuarial methods
and assumptions adopted by the Board of Directors.
•Valuations of actuarially determined contributions, deferred outflows of resources, deferred
inflows of resources, and net OPEB liability for OCSD’s employee OPEB plan are based on
actuarial calculations, which incorporate actuarial methods and assumptions adopted by the Board
of Directors.
2
• Management’s estimates of workers’ compensation and general liability are based on reports
prepared by third party actuarial valuations. We evaluated the key factors and assumptions used to
develop the estimate liability in determining that they are reasonable in relation to the financial
statements taken as a whole.
• Management’s estimate of the allowance for uncollectible accounts receivable is based on
evaluating individual customer accounts receivable at least one year past due and considering the
customer’s financial condition, credit history and current economic conditions. We evaluated the
key factors and assumptions used to assess the collectability of the receivables in determining that
they are reasonable in relation to the financial statements taken as a whole.
• Management’s estimate of depreciation is based on the useful-lives of the capital assets. We
evaluated the key factors and assumptions used to develop the useful-lives of the capital assets in
determining that it is reasonable in relation to the financial statements taken as a whole.
• Fair values of investments are based on quoted market prices or significant other observable inputs
from independent published sources. We evaluated the key factors and assumptions used to develop
the fair value of investments in determining that it is reasonable in relation to the financial
statements taken as a whole.
Certain financial statement disclosures are particularly sensitive because of their significance to financial
statement users. The most sensitive disclosures affecting the financial statements were:
• The disclosure of net pension liability and OPEB benefits in Note 5 and 6 to the financial statements,
respectively, are based on actuarial valuations.
• Transactions with Irvine Ranch Water District – Revenue Area No. 14 as disclosed in Note 7.
• Commitments and contingencies that will impact future resources of OCSD as disclosed in Note 9.
The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no difficulties in dealing with management in performing and completing our audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the
audit, other than those that are trivial, and communicate them to the appropriate level of management. There
were no misstatements detected as a result of audit procedures and corrected by management which were
material, either individually or in the aggregate, to the financial statements taken as a whole.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing
matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or
the auditor’s report. We are pleased to report that no such disagreements arose during the course of our
audit.
3
Management Representations
We have requested certain representations from management that are included in the management
representation letter dated October 25, 2019.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting
matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application
of an accounting principle to OCSD’s financial statements or a determination of the type of auditor’s
opinion that may be expressed on those statements, our professional standards require the consulting
accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge,
there were no such consultations with other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing
standards, with management each year prior to retention as OCSD’s auditors. However, these discussions
occurred in the normal course of our professional relationship and our responses were not a condition to
our retention.
Other Matters
We applied certain limited procedures to the Management’s Discussion and Analysis, Schedule of
Proportionate Share of Net Pension Liability (Asset) – OCERS Pension Plan, Schedule of District
Contributions – OCERS Pension Plan, Schedule of Total Pension Liability – Additional Retiree Benefit
Plan, Schedule of Changes in Total Pension Liability - Additional Retiree Benefit Plan, Schedule of Total
OPEB Liability – Post Employment Medical Benefits Plan, and Schedule of Changes in Total OPEB
Liability – Post Employment Medical Benefits Plan, which are required supplementary information (RSI)
that supplement the basic financial statements. Our procedures consisted of inquiries of management
regarding the methods of preparing the information and comparing the information for consistency with
management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained
during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion
or provide any assurance on the RSI.
We were engaged to report on the “Combining Area” financial statements, which accompany the financial
statements but are not RSI. With respect to this supplementary information, we made certain inquiries of
management and evaluated the form, content, and methods of preparing the information to determine that
the information complies with accounting principles generally accepted in the United States of America,
the method of preparing it has not changed from the prior period, and the information is appropriate and
complete in relation to our audit of the financial statements. We compared and reconciled the supplementary
information to the underlying accounting records used to prepare the financial statements or to the financial
statements themselves.
We were not engaged to report on the introductory and statistical sections, which accompany the financial
statements but are not RSI. Such information has not been subjected to the auditing procedures applied in
the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any
assurance on it.
4
Restriction on Use
This information is intended solely for the information and use of the Board of Directors and management
of OCSD and is not intended to be, and should not be, used by anyone other than these specified parties.
Very truly yours,
Newport Beach, California
October 25, 2019
ORANGE COUNTY SANITATION DISTRICT
Independent Accountant’s Report on Applying
Agreed-Upon Procedures Related to
Appropriations Limit Calculation
Year Ended June 30, 2019
www.mgocpa.com
Macias Gini & O’Connell LLP 4675 MacArthur Court, Suite 600 Newport Beach, CA 92660
1
Independent Accountant’s Report on
Applying Agreed-Upon Procedures
To the Board of Directors
Orange County Sanitation District
We have performed the procedures enumerated below to the accompanying Appropriations Limit
Worksheet of the Orange County Sanitation District (OCSD) for the year ended June 30, 2019. These
procedures, which were agreed to by OCSD and the League of California Cities (as presented in the
publication titled Agreed-Upon Procedures Applied to the Appropriations Limitation Prescribed by Article
XIII-B of the California Constitution), were performed solely to assist OCSD in meeting the requirements
of Section 1.5 of Article XIII-B of the California Constitution. OCSD’s management is responsible for the
Appropriations Limit Worksheet. The sufficiency of these procedures is solely the responsibility of those
parties specified in this report. Consequently, we make no representation regarding the sufficiency of the
procedures described below either for the purpose for which this report has been requested or for any other
purpose.
The procedures performed and our findings are as follows:
1. We obtained the completed worksheets setting forth the calculations necessary to establish OCSD’s
appropriations limit and compared the limit and annual adjustment factors included in those
worksheets to the limit and annual adjustment factors that were adopted by resolution of OCSD’s
Board of Directors. We also compared the population and inflation options included in the
aforementioned worksheets to those that were selected by a recorded vote of OCSD’s Board of
Directors.
Finding: No exceptions were noted as a result of our procedures.
2. For the accompanying Appropriations Limit Calculation, we added Line A, last year’s limit, to
Line E, total adjustments, and compared the resulting amount to Line F, current year’s limit.
Finding: No exceptions were noted as a result of our procedures.
3. We compared the current year information presented in the accompanying Appropriations Limit
Calculation to the appropriate supporting calculations described in item 1 above.
Finding: No exceptions were noted as a result of our procedures.
4. We compared the prior year Appropriations Limit presented in the accompanying Appropriations
Limit Calculation to the prior year Appropriations Limit adopted by the Board of Directors for the
prior year.
Finding: No exceptions were noted as a result of our procedures.
2
This agreed-upon procedures engagement was conducted in accordance with attestation standards
established by the American Institute of Certified Public Accountants. We were not engaged to and did not
conduct an examination or review, the objective of which would be the expression of an opinion or
conclusion, respectively, on the accompanying Appropriations Limit Calculation of OCSD. Accordingly,
we do not express such an opinion or conclusion. Had we performed additional procedures, other matters
might have come to our attention that would have been reported to you. No procedures have been performed
with respect to the determination of the appropriations limit for the base year, as defined by Article XIII-B
of the California Constitution.
This report is intended solely for the information and use of the Board of Directors and management of
OCSD, and is not intended to be, and should not be, used by anyone other than these specified parties.
However, this report is a matter of public record and its distribution is not limited.
Newport Beach, California
October 25, 2019
ORANGE COUNTY SANITATION DISTRICT
Appropriations Limit Calculation
Year Ended June 30, 2019
3
Amount Source
A. Last year’s limit 105,998,787 $
B. Adjustment factors:
1. Population change 1.00310000 State Finance
2. Per capita change 1.03670000 State Finance
Total adjustments [(B.1 x B.2)-1.0]0.03991377
C. Annual adjustment 4,230,811 (BxA)
D. Other adjustments:
1. Lost responsibility (-) -
2. Transfer to private (-) -
3. Transfer to fees (-) -
4. Assumed responsibility (+) -
Subtotal -
E. Total adjustments 4,230,811 (C+D)
F. This year’s limit 110,229,598 $ (A+E)
Orange County Sanitation District
Comprehensive Annual
Financial Report
for the year ended June 30, 2019
Orange County, California
ORANGE COUNTY SANITATION DISTRICT
ORANGE COUNTY, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2019
Prepared By:
Administrative Services Department
Financial Management Division
Wally Ritchie
Controller
(THIS PAGE LEFT INTENTIONALLY BLANK)
ORANGE COUNTY SANITATION DISTRICT
Comprehensive Annual Financial Report
Table of Contents
For the Year Ended June 30, 2019
Page
INTRODUCTORY SECTION:
Letter of Transmittal ..................................................................................................................... i-vii
GFOA Certificate of Achievement ............................................................................................... viii
Board of Directors ........................................................................................................................ ix
Organization Chart ...................................................................................................................... x
Map of Service Area .................................................................................................................... xi
FINANCIAL SECTION:
Independent Auditors’ Report ...................................................................................................... 1-2
Management Discussion and Analysis – Required Supplementary Information ........................ 3-9
Basic Financial Statements:
Statement of Net Position ................................................................................................... 12
Statement of Revenues, Expenses, and Changes in Net Position .................................... 13
Statement of Cash Flows .................................................................................................... 14
Notes to Basic Financial Statements .................................................................................. 15-48
Required Supplementary Information:
Proportionate Share of the Net Pension Liability (Asset) – OCERS Pension Plan ............ 50
Schedule of District Contributions – OCERS Pension Plan ............................................... 51
Total Pension Liability – Additional Retiree Benefit Account .............................................. 52
Changes in Total Pension Liability – Additional Retiree Benefit Account ........................... 53
Total OPEB Liability –Post-Employment Medical Benefits Plan......................................... 54
Changes in Total OPEB Liability –Post-Employment Medical Benefits Plan ..................... 55
Supplementary Information:
Combining Area Schedule of Net Position .......................................................................... 58
Combining Area Schedule of Revenues, Expenses, and Changes in Net Position .......... 59
Combining Area Schedule of Cash Flows .......................................................................... 60 STATISTICAL SECTION:
Net Position by Component – Last Ten Fiscal Years .................................................................. 62
Revenues and Gross Capital Contributions by Source – Last Ten Fiscal Years ........................ 63
Expenses by Type – Last Ten Fiscal Years ................................................................................ 64
Change in Net Position – Last Ten Fiscal Years ......................................................................... 65
Cash and Investment Reserve Balances – Last Ten Fiscal Years ............................................. 66
Sewer Service Fees – Last Nine Fiscal Years and Next Fiscal Year .......................................... 67
Number of Accounts and Revenues by Customer Class – Last Ten Fiscal Years ..................... 68
Principal Sewer Service Customers – Current Fiscal Year and Nine Years Ago ....................... 69
Ratio of Annual Debt Service to Total Expenses – Last Ten Fiscal Years ................................. 70
Debt Coverage Ratios – Last Ten Fiscal Years .......................................................................... 71
Ratios of Outstanding Debt – Last Ten Fiscal Years .................................................................. 72
Comparison of the Volume of Wastewater Treated – Last Ten Fiscal Years ............................. 73
Authorized Full-time Equivalents by Function – Last Ten Fiscal Years ...................................... 74
Biosolids Produced – Last Ten Fiscal Years ............................................................................... 75
Capital Asset Statistics – Last Ten Fiscal Years ......................................................................... 76
Demographic Statistics – Last Ten Fiscal Years ......................................................................... 77
Estimated Population Served by Orange County Sanitation District .......................................... 78
Principal Orange County Employers – Current Fiscal Year and Nine Years Ago ....................... 79
Operating Indicators .................................................................................................................... 80 OTHER DATA & TRENDS:
Cash and Investment Portfolio ................................................................................................... 82
Property Tax Rates – Direct and Overlapping Governments – Last Ten Fiscal Years ............... 83
Assessed and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years ................ 84
Property Tax and User Fee Levies and Collections – Last Ten Fiscal Years ............................. 85
Property Value and Construction – Last Ten Fiscal Years ......................................................... 86
Insurance in Force ....................................................................................................................... 87
(THIS PAGE LEFT INTENTIONALLY BLANK)
i
October 25, 2019
The Board of Directors of the
Orange County Sanitation District,
Orange County, California
Submitted herewith is the Comprehensive Annual Financial Report of the Orange County Sanitation
District (OCSD), Orange County, California for the fiscal year ended June 30, 2019. This report includes
the financial position and activity of individual revenue areas, as described within the Governmental
Structure below, as of June 30, 2019 and was prepared by the Financial Management Division of
OCSD’s Administrative Services Department.
Responsibility for both the accuracy of the data, and the completeness and fairness of the presentation,
including all disclosures, rests with OCSD. To the best of our knowledge and belief, the enclosed data
is accurate in all material respects and is reported in a manner designed to present fairly the financial
position and changes in the financial position of OCSD. All disclosures necessary to enable the reader
to gain an understanding of the agency’s financial activities have been included.
Included within the accompanying financial statements are all of the organizations, activities, and
functions controlled by OCSD’s Board of Directors in accordance with the Governmental Accounting
Standards Board (GASB) Codification of Governmental Accounting and Financial Reporting. For the
purpose of this evaluation, control was determined by the Board’s responsibility for: (1) adoption of the
budget and user charges, (2) taxing authority, and (3) establishment of policies. The reporting entity
and its services are described in further detail in Note 1 of the financial statements.
An audit of the books, financial records and transactions of OCSD is conducted annually by independent
certified public accountants. OCSD selected the accounting firm of Macias Gini & O’Connell LLP to
perform the audit for the year ended June 30, 2019. The auditor’s report on OCSD’s basic financial
statements and supplementary information is located on page 1 within the financial section of this report.
This report renders an unmodified opinion on OCSD’s basic financial statements for the year ended
June 30, 2019.
Management’s discussion and analysis (MD&A) immediately follows the independent auditor’s report
and provides a narrative introduction, overview, and analysis of the basic financial statements. The
MD&A complements this letter of transmittal and should be read in conjunction with it.
GOVERNMENTAL STRUCTURE
The Orange County Sanitation District encompasses the Northern section of Orange County. OCSD
provides wastewater treatment for an area of the County covering 479 square miles and serving a
population of approximately 2.6 million, or 81 percent of the County’s population. OCSD was originally
incorporated in 1954 as nine separate public corporations, or districts. In April of 1998, at OCSD’s
request, the Board of Supervisors of the County of Orange passed Resolution No. 98-140 ordering the
consolidation of these nine County Sanitation Districts into a new, single sanitation district, to be known
as the Orange County Sanitation District, effective July 1, 1998. This action was recommended to the
Board by the Local Agency Formation Commission in order to simplify governance structures, reduce
the size of the Board, ease administrative processes, streamline decision-making and consolidate
accounting and auditing processes. The boundaries of the nine previous districts had remained intact
for the purpose of collecting sewer user fees at the previously established rate schedules, and were
referred to as nine individual revenue areas through June 30, 2000. Effective July 1,2003, all Revenue
Areas, except Revenue Area 14, consolidated user fee rates and all enterprise fund accounting and
budgeting activities and are now known as the Consolidated Revenue Area.
i
ii
OCSD is managed by an administrative organization composed of directors appointed by the agencies or
cities which are serviced by OCSD. Each of the two remaining Revenue Areas, the Consolidated Revenue
Area and Revenue Area 14, has its own budget and is responsible for the construction and maintenance
of its own collection system. All Revenue Areas, except Revenue Area 14 and the portion of the
Consolidated Revenue Area previously known as Revenue Area 13, receive their own share of the one-
percent ad valorem property tax levy. In addition, all Revenue Areas except Revenue Area 14, collect user
fees from property owners. Revenue Area 14 receives all of its revenues from service charges to the Irvine
Ranch Water District.
The purpose of OCSD’s wastewater management program is to protect the public’s health, preserve the
beneficial uses of the coastal waters, and maintain air quality. The objectives of operating the treatment
plants are to process and dispose of the treated wastewater and the separated solids in accordance with
Federal, state, and local laws including the Environmental Protection Agency.
OCSD sewerage system includes approximately 389 miles of sewers that convey wastewater generated
within OCSD’s boundaries to OCSD’s two wastewater treatment plants, Reclamation Plant No. 1 located
in the City of Fountain Valley, and Treatment Plant No. 2 located in the City of Huntington Beach.
Plants No. 1 and No. 2 have secondary treatment capacities of 182 million gallons per day (mgd) and 150
mgd, respectively. In fiscal year 2019-20, both plants are projected to receive a combined average daily
wastewater flow of 188 million gallons per day from residential, commercial, and industrial sources.
After wastewater receives secondary treatment at Plant No. 1, it flows to the Groundwater Water
Replenishment System (GWRS) at the Orange County Water District, located adjacent to OCSD, where it
undergoes a state-of-the-art purification process consisting of microfiltration, reverse osmosis, and
ultraviolet light with hydrogen peroxide. The product water is near-distilled quality. Approximately 35 million
gallons (132,500 cubic meters) per day of the GWRS water are pumped into injection wells to create a
seawater intrusion barrier. Another 65 million gallons (246,000 cubic meters) are pumped daily to Orange
County Water District's percolation basins in Anaheim where the GWRS water naturally filters through sand
and gravel to the deep aquifers of the groundwater basin.
Remaining outflows of treated wastewater from Plants 1 and 2 are combined and discharged to the ocean
off the Huntington Beach coast through an outfall pipe that is 120 inches in diameter and approximately five
miles long. The last mile of the outfall pipe is a diffuser that dilutes the wastewater with seawater in a ratio
of 148 parts seawater to one part treated wastewater at an average depth of 185 feet.
ECONOMIC CONDITIONS AND OUTLOOK
According to the California Employment Development Department (EDD), Orange County generated a
slight increase of approximately 0.3 percent in payroll jobs from August 2018 to August 2019. During this
same time period, unemployment in Orange County decreased to 3.0 percent from 3.1 percent while the
unemployment in California as a whole decreased to 4.2 percent from 4.3 percent. In June 2018, Chapman
University forecasted Orange County’s 2019 total payroll employment to increase 1.2 percent over the prior
year, or the addition of 20,000 payroll jobs in 2019.
Despite the forecasted slowing in Orange County job growth, Chapman University continues to project an
increase in housing appreciation of 1.2 percent. Short-run increases can occur when inventories remain
tight. Longer-run economic and demographic forces will eventually dominate the pricing equation,
especially when affordability, as measured by the median home price-to-median income ratio, is projected
to continue increasing.
According to Chapman University, residential permit valuation in the County is forecasted to increase from
a 13.4 percent decline in 2018 to 2.5 percent decline in 2019.
iii
MAJOR INITIATIVES
Following are the District’s current major initiatives as outlined in the General Manager’s work plan for FY
2019-20:
1. Safety and Security
Emergency Preparedness – Develop and conduct an external emergency response and recovery
drill by June 30, 2020 that tests the Integrated Emergency Response Plan (IERP).
Safety Engineering Solutions – Complete six of the remaining eight Safety Improvement
Construction Projects by June 30, 2020.
Voluntary Protection Plan (VPP) Certification – Apply for the VPP certification for Plant No.
1 by June 30, 2020
Physical Security Plan – Complete the development and implementation of a Physical Security
Plan by June 30, 2020.
Cyber Security Plan – Complete the development and implementation of a Cyber Security Plan
by June 30, 2020.
2. Succession Planning
Leadership Development – Provide at least two specialized trainings tailored to the Supervisory
Level and one for the EMT/ Managers by June 30, 2020.
3. Resource Recovery
Groundwater Replenishment System (GWRS) Final Expansion – Meet the following
milestones to support the final expansion of GWRS:
o Advertise for Construction of Project P2-122, Headworks Modifications at Plant No. 2
for GWRS Expansion by January 31, 2020.
o Issue Construction Contract Notice to Proceed for Project P2-122, Headworks
Modifications at Plant No. 2 for GWRS Expansion by June 30, 2020.
Emerging Contaminants – Work with industry, academic, and agency partners to develop
science-based regulations and an adaptive plan by June 30, 2020 to address the potential impact
of PFAS to OCSD.
Food Waste Digestion Pricing Policy – Present a draft policy and pricing plan to the Board of
Directors by June 30, 2020.
4. Reliability
Asset Management Plan – Develop an Asset Management Plan by December 31, 2019 that
includes an inventory of critical assets for each process area and the collection system; an
evaluation of their condition and performance; and an implementation plan to maintain,
rehabilitate, and replace these assets to meet the required levels of service at the lowest life cycle
cost and at an acceptable level of risk.
Central Generation Engines – Implement an in-house heavy mechanical maintenance team
and award a contract by December 31, 2019 to overhaul two Central Generation Engines.
Pump Station Bypass Exercises – Bypass pump two Pump Stations to prove emergency
readiness and use the exercise to do critical valve and electrical maintenance at those Pump
Stations by June 30, 2020.
iv
5. Operational Optimization
OCSD Headquarters Building – Advertise for Construction for Headquarters Complex Site
Preparation, Contract No. P1-128C by February 29, 2020. Obtain City of Fountain Valley
approvals for the Headquarters Building by June 30, 2020.
Document Management – Complete Records Management and Trusted System Needs
Assessment by November 30, 2019.
Communications Audit – Complete the audit and provide a report to the Legislative and Public
Affairs Committee by March 30, 2020.
Capital Project Delivery – Complete a formal design review framework by June 30, 2020.
Complete a framework for regular updates of engineering policies and procedures, design
guidelines, and engineering standards by June 30, 2020.
Solids Handling Optimization – Complete commissioning and optimize performance of new
solids handling facilities at each plant by December 31, 2019.
Strategic Plan – Complete new Strategic Plan for adoption by the Board of Directors by November
30, 2019.
Two Year Budget – Complete new two-year budget for adoption by the Board of Directors on
June 24, 2020.
Strategic Planning
In December 2017, the Board of Directors approved the biennium update to the rolling five-year strategic
plan. This is a comprehensive strategic plan to steer OCSD’s efforts and engage the organization to
envision service levels and operational needs for the next five years. This annual process begins with the
General Manager’s Office initiating the planning effort with the Executive Management Team, and then
soliciting input and ideas from managers and supervisors. A draft of the updated five-year strategic plan is
then presented to the Board of Directors during a workshop, where Board Members discuss and deliberate
changes and additions to the plan.
Driven by our Mission, Vision and Core Values, the 2017 Strategic Plan update maintains the District’s
aggressive efforts to meet the sanitation, health, and safety needs of the 2.6 million people being served in
a cost effective manner, while protecting the environment where we live.
Since implementation of the first comprehensive strategic plan in 2007, 40 strategic goals have been
established and completed. In December 2017, the District updated the Five-Year Strategic Plan and, as
part of the strategic planning process, reaffirmed the following goals:
Completion of the Odor Control Master Plan;
Development of Future Biosolids Management Options;
Research new energy efficiency and conversion technologies;
Complete the transfer of 174 miles of local sewers to a local agency;
Determine partnerships, needs, strategies, benefits and costs associated with recycling of Plant
No. 2 effluent water; and
Workforce planning and development to ensure that the right people with the right skills and
abilities, are in the right place, at the right time.
This Strategic Plan continues to chart a focused roadmap of success for the future of the Orange County
Sanitation District. It addresses critical operations and construction issues, financial and budgeting
challenges, and gives a clear and concise direction to staff, ratepayers, regulatory agencies, and the
general public. Every two years the Board of Directors revisits the Strategic Plan to assure that it captures
the will of the Board of Directors and sets a proper planning basis for the two-year budgeting effort. The
Board of Directors is scheduled to consider and adopt a finalized strategic plan in November 2019 to support
the start of a new two-year budget in January 2020.
v
SERVICE EFFORTS AND ACCOMPLISHMENTS
The following service efforts and accomplishments were achieved by OCSD during the year ended June
30, 2019:
Utility of the Future Award – 2019 Water Environmental Research Foundation, National
Association of Clean Water Agencies, Water Environment Federation and Environmental
Protection Agency
Platinum Peak Performance Award – 2019 National Association of Clean Water Agencies
2018 Excellence Award in Information Technology Practices from the Municipal Information
Systems Association of California (MISAC)
Honor Award – 2019 Facilities Master Plan, American Academy of Environmental Engineers &
Scientist
Superior Achievement Award – 2019 Collections System Odor Control, American Academy of
Environmental Engineers & Scientist
Silver Award – 2019 GWRS Bottled Water Campaign, Mercury Excellence Awards
Certificate of Achievement for Excellence in Financial Reporting from the Government
Finance Officers Association (GFOA)
District Transparency Certificate of Excellence from the Special District Leadership Foundation
Distinguished Budget Presentation Award from GFOA
American Graphic Design Award – Innovative, Resourceful, Reliable Annual Report, Graphic
Design USA
Project Achievement Award – 2019 Interplant Effluent Pipeline Rehabilitation, Orange County
Engineering Council
Engineering Merit Award – 2019 Orange County Engineering Council
OC Wastewater Treatment Project of the Year – 2019 Newhope-Placentia Trunk Sewer Project
(State College Sewer Construction, American Society of Civil Engineers)
Award of Excellence – 2018 GWRS Bottled Water Campaign, Orange County Chapter of Public
Relations Society of America
Achievement of Excellence in Procurement Award from the National Procurement Institute.
SARBS/CWEA 2019
o Quarter Century Award, Tony Lee
o Community Engagement and Outreach Project of the Year, Plant No. 2 Neighborhood
Outreach Program (Project leads: Tanya Chong and Daisy Covarrubias)
o Supervisor of the Year 1st Place, Ted Gerber
o Supervisor of the Year 2nd Place, Kevin Schuler
o Mechanical Technician Person of the Year, Gilbert Barela
o Operator of the Year, April Frost
o SARBS Spotlight Award, Dindo Carrillo
vi
ACCOUNTING AND BUDGETARY CONTROLS
OCSD’s accounting records are maintained on the accrual basis. In developing and evaluating OCSD’s
accounting system, consideration is given to the adequacy of internal accounting controls. Internal
accounting controls are designed to provide reasonable, but not absolute, assurance regarding: (1) the
safeguarding of assets against loss from unauthorized use or disposition; and (2) the reliability of financial
records for preparing financial statements and maintaining accountability for assets. The concept of
reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be
derived; and (2) the evaluation of costs and benefits requires estimates and judgments by management.
We believe that OCSD’s internal accounting controls adequately safeguard assets and provide reasonable
assurance of proper recording of financial transactions.
Each year OCSD’s Board of Directors adopts an annual operating plan. A joint works budget is first
prepared that identifies the specific capital projects and operating activities to be undertaken by OCSD
during the year. The budgetary level of control, the level at which expenses cannot exceed budget, is
exercised at the individual district, or fund level. OCSD has adopted a Uniform Purchasing Policy that
identifies the agreed upon purchasing standards.
ACCUMULATED FUNDS AND RESERVES POLICY
The Board of Directors of the Orange County Sanitation District has established the following Accumulated
Funds and Reserves Policy:
Cash Flow Reserve: is established to fund operations, maintenance and certificates of participation
expenses for the first half of the fiscal year, prior to the receipt of the first installment of the property tax
allocation and the sewer service user fees which are collected as a separate line item on the property tax
bill. The level of this reserve will be established as the sum of an amount equal to six months operations
and maintenance expenses and the total of the annual debt (COP) service payments due in August each
year.
Operating Contingency Reserve: is established to provide for non-recurring expenditures that were not
anticipated when the annual budget and sewer service fees were considered and adopted. The level of this
reserve will be established at an amount equal to ten percent of the annual operating budget.
Capital Improvement Reserve: is established to fund annual increments of the capital improvement
program. The long-term target is for one half of the capital improvement program to be funded from
borrowing and for one half to be funded from current revenues and reserves. With this program in mind,
the target level of this reserve has been established at one half of the average annual capital improvement
program over the next ten years. Levels higher and lower than the target can be expected as a result of
outlay variability in the annual capital improvement programs.
Catastrophic Loss or Self-Insurance Reserves: are established for property damage including fire, flood
and earthquake; for general liability; and for workers' compensation. These reserves are intended to
supplement purchased insurance policies, FEMA disaster reimbursements and State disaster
reimbursements. The potential infrastructure loss from a major earthquake has been estimated at $495
million. The level of this reserve has been set to fund the District's non-reimbursed costs, estimated to be
$57 million.
Capital Replacement/Renewal Reserve Policy: is established to provide thirty percent of the funding to
replace or refurbish the current collection and treatment and disposal facilities at the end of their useful
economic lives. The current replacement value of these facilities is estimated to be $10.8 billion. The initial
criterion level was established at $50 million, which will be augmented by interest earnings and a small
portion of the annual sewer user fees in order to meet projected needs over the next 20 years.
Debt Service Reserves: Provisions of the various Certificate of Participation (COP) issues require debt
service reserves to be under the control of the Trustee for that issue. These reserve funds are not available
viii
ix
ORANGE COUNTY SANITATION DISTRICT
Board of Directors
As of June 30, 2019
Agency _ Active Director _ Alternate Director _
Cities:
Anaheim Lucille Kring Denise Barnes
Brea Glenn Parker Steven Vargas
Buena Park Fred Smith Sunny Park
Cypress Mariellen Yarc Stacy Berry
Fountain Valley Steve Nagel Patrick Harper
Fullerton Jesus Silva Jan Flory
Garden Grove Steve Jones John O'Neill
Huntington Beach Erik Peterson Mike Posey
Irvine Christina Shea Anthony Kuo
La Habra Tim Shaw Tom Beamish
La Palma Peter Kim Marshall Goodman
Los Alamitos Richard Murphy Dean Grose
Newport Beach Brad Avery Joy Brenner
Orange Mark Murphy Kim Nichols
Placentia Chad Wanke Ward Smith
Santa Ana Cecilia Iglesias David Penaloza
Seal Beach Sandra Massa-Lavitt Schelly Sustarsic
Stanton David Shawver Carol Warren
Tustin Allan Bernstein Chuck Puckett
Villa Park Robert Collacott Chad Zimmerman
Sanitary Water Districts:
Costa Mesa Sanitary District James M. Ferryman Robert Ooten
Midway City Sanitary District Andrew Nguyen Al Krippner
Irvine Ranch Water District John Withers Douglas Reinhart
Yorba Linda Water District Phil Hawkins Brooke Jones
County Areas:
Member of the Board
of Supervisors
Doug Chaffee Michelle Steel
x
ORANGE COUNTY SANITATION DISTRICT
Organizational Chart
As of June 30, 2019
xi
ORANGE COUNTY SANITATION DISTRICT
Map of Service Area
As of June 30, 2019
xii
(THIS PAGE LEFT INTENTIONALLY BLANK)
www.mgocpa.com
Macias Gini & O’Connell LLP 4675 MacArthur Court, Suite 600 Newport Beach, CA 92660 1
Independent Auditor’s Report
To the Board of Directors
Orange County Sanitation District
Fountain Valley, California
We have audited the accompanying financial statements of the Orange County Sanitation District (OCSD)
as of and for the year ended June 30, 2019, and the related notes to the financial statements, which
collectively comprise OCSD’s basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes the
design, implementation, and maintenance of internal control relevant to the preparation and fair presentation
of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor’s judgment, including the assessment
of the risks of material misstatement of the financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control relevant to OCSD’s preparation and fair
presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of OCSD’s internal
control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of significant accounting estimates made by management,
as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
position of the Orange County Sanitation District, as of June 30, 2019, and the changes in its financial
position and its cash flows for the year then ended in accordance with accounting principles generally
accepted in the United States of America.
2
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s
Discussion and Analysis, Schedule of Proportionate Share of the Net Pension Liability (Asset) – OCERS
Pension Plan, Schedule of District Contributions – OCERS Pension Plan, Schedule of Total Pension
Liability – Additional Retiree Benefit Account, Schedule of Changes in Total Pension Liability –
Additional Retiree Benefit Account, Schedule of Total OPEB Liability – Post-Employment Medical
Benefits Plan, and Schedule of Changes in Total OPEB Liability – Post-Employment Medical Benefits
Plan, as listed in the table of contents, be presented to supplement the basic financial statements. Such
information, although not a part of the basic financial statements, is required by the Governmental
Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the
basic financial statements in an appropriate operational, economic, or historical context. We have applied
certain limited procedures to the required supplementary information in accordance with auditing standards
generally accepted in the United States of America, which consisted of inquiries of management about the
methods of preparing the information and comparing the information for consistency with management’s
responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit
of the basic financial statements. We do not express an opinion or provide any assurance on the information
because the limited procedures do not provide us with sufficient evidence to express an opinion or provide
any assurance.
Other Information
Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively
comprise OCSD’s basic financial statements. The separate “Combining Area” financial statements,
introductory section, statistical section, and other data and trends are presented for purposes of additional
analysis and are not a required part of the basic financial statements.
The “Combining Area” financial statements are the responsibility of management and were derived from,
and relate directly to, the underlying accounting and other records used to prepare the basic financial
statements. Such information has been subjected to the auditing procedures applied in the audit of the basic
financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic financial
statements or to the basic financial statements themselves, and other additional procedures in accordance
with auditing standards generally accepted in the United States of America. In our opinion, the “Combining
Area” financial statements are fairly stated, in all material respects, in relation to the basic financial
statements as a whole.
The introductory and statistical sections and other data and trends have not been subjected to the auditing
procedures applied in the audit of the basic financial statements, and accordingly, we do not express an
opinion or provide any assurance on them.
Newport Beach, California
October 25, 2019
3
Management Discussion and Analysis
June 30, 2019
This section of the financial statements of the Orange County Sanitation District (OCSD) is management’s
narrative overview and analysis of the financial activities of OCSD for the fiscal year ended June 30, 2019.
The information presented here is to be considered in conjunction with additional information provided
within the letter of transmittal located in the Introductory Section of this report.
Financial Highlights
As of June 30, 2019, OCSD’s assets and deferred outflows of resources exceeded its liabilities and
deferred inflows of resources by $2,360.5 million (net position). Of this amount, $712.8 million
represents unrestricted net position, which may be used to meet OCSD’s ongoing obligations to citizens
and creditors.
Total net position increased $165.7 million, or 7.6 percent over the prior year.
Net capital assets, consisting of non-depreciable capital assets and depreciable capital assets net of
accumulated depreciation, increased $43.3 million, or 1.6 percent over the prior year.
Net investment in capital assets increased $79.6 million, or 5.1 percent over the prior year.
Unrestricted net position increased $86.1 million, or 13.7 percent over the prior year.
Total outstanding bonded debt decreased by $39.3 million from the prior year to $972.8 million.
Overview of the Basic Financial Statements
OCSD operates as a utility enterprise and presents its financial statements using the economic resources
measurement focus and the full accrual basis of accounting. As an enterprise fund, OCSD’s basic financial
statements are comprised of two components: financial statements and notes to the financial statements.
This report also contains other supplementary information in addition to the basic financial statements
themselves.
In accordance with the GASB Codification of Governmental Accounting and Financial Reporting Standards,
OCSD’s financial statements include a Statement of Net Position; Statement of Revenues, Expenses, and
Changes in Net Position; and a Statement of Cash Flows. The Statement of Net Position includes OCSD’s
assets, deferred outflow of resources, liabilities, and deferred inflows of resources; and provides information
about the nature and amounts of investments in resources (assets) and the obligations to OCSD’s creditors
(liabilities). It also provides the basis for computing the rate of return, evaluating the capital structure of
OCSD, and assessing the liquidity and financial flexibility of OCSD.
The Statement of Revenues, Expenses, and Changes in Net Position accounts for the current year’s
revenues and expenses. This statement measures the success of OCSD’s operations over the past year
and can be used to determine OCSD’s creditworthiness. It also highlights OCSD’s dependency on property
tax revenues in supplementing user fees and other charges for recovering total cost.
The final required financial statement, the Statement of Cash Flows, reports cash receipts, cash payments,
and net changes in cash resulting from operations, investments, and financial activities of the reporting
period.
4
Net Position
As previously noted, net position increased $165.7 million, or 7.6 percent over the net position for FY 2017-
18, to $2,360.5 million in FY 2018-19.
(Dollars in thousands)
Assets
Current and other assets 789,769$ 750,084$ 39,685$ 5.3%
Net capital assets 2,669,309 2,626,015 43,294 1.6%
Total assets 3,459,078 3,376,099 82,979 2.5%
Deferred outflows of
resources 122,683 83,940 38,743 46.2%
Total assets and deferred
outflows of resources 3,581,761 3,460,039 121,722 3.5%
Liabilities
Current liabilities 109,982 117,665 (7,683) -6.5%
Noncurrent liabilities 1,065,679 1,083,311 (17,632) -1.6%
Total liabilities 1,175,661 1,200,976 (25,315) -2.1%
Deferred inflows of
resources 45,598 64,274 (18,676) -29.1%
Total liabilities and
deferred inflows of
resources 1,221,259 1,265,250 (43,991) -3.5%
Net position
Net investment in
capital assets 1,647,723 1,568,118 79,605 5.1%
Unrestricted 712,779 626,671 86,108 13.7%
Total net position 2,360,502$ 2,194,789$ 165,713$ 7.6%
Increase
(Decrease)
Percentage
Increase
(Decrease)
June 30,
2018
June 30,
2019
5
Current and other assets increased $39.7 million, or 5.3 percent, due primarily to net cash provided by
operations of $141.1 million, proceeds from debt issuance of $110.3 million, proceeds from property taxes
of $99.2 million, receipt of capital facilities capacity charges of $23.2 million, interest received of $13.7
million, and contributions from other governments of $3.9 million, offset by bonded debt retirements of
$141.5 million, capital outlays of $119.4 million, interest paid of $42.9 million, local sewer service transfer
of $23.2 million, and net investment activities and other items of $24.7 million.
Net Capital assets increased $43.3 million, or 1.6 percent, due mostly to the ongoing capital improvement
program construction in progress additions of $134.4 million, land additions of $18.4 million, and capital
equipment of $4.0 million, offset by depreciation of $102.2 million, land sales of $6.2 million, and $3.7 million
of prior capital project expenses that were written off as expense. Included in total capital outlay additions
is the Sludge Dewatering and Odor Control Project at Plant No. 1 and Plant No. 2 with total project budgets
of $199.5 million and $90.5 million, respectively. These projects construct primary sludge thickening
facilities to improve solids handling capacity, replace aging sludge dewatering facilities, reduce biosolids
handling and disposal, and rehabilitate obsolete solids handling odor control equipment. In FY 2018-19,
OCSD incurred project costs of $16.5 million at Plant No. 1 and $11.9 million at Plant No. 2 bringing the
total cost-to-date to $191.3 million and $80.7 million, respectively.
Collection system projects include the Newhope-Placentia Trunk Replacement. The Newhope-Placentia
Trunk Replacement incurred outlays of $27.2 million in FY 2018-19 with a total project budget of $112.0
million through the projected completion in FY 2021-22. This project will increase the size of approximately
35,000 feet of the trunk line from Yorba Linda Boulevard to Orangewood Avenue. The upsized sewer will
accommodate flows from the newly abandoned Yorba Linda Pump Station and the newly interconnected
Atwood Sub-trunk.
See page 8 for the Schedule of Capital Assets and listing of other major capital additions for FY 2018-19.
Deferred Outflows of Resources increased $38.7 million, or 46.2 percent from the prior year, primarily due
to $42.7 million increase in pension deferred outflows attributable to the change in projected and actual
earnings on pension plan investments and changes of actuarial assumptions and other inputs, offset by a
decrease of $4.0 million for the difference between carrying amount of the retired debt and the acquisition
price of COP Series.
Deferred Inflows of Resources decreased $18.7 million, or 29.1 percent under the prior year, primarily due
to the increase in pension expense as a result of the change in projected and actual earnings on pension
plan investments and changes of assumptions or other inputs.
Net Investment in capital assets increased $79.6 million, or 5.1 percent over the prior year, primarily as a
result of the net increase in capital assets of $43.3 million coupled with a $36.3 million decrease in related
debt.
Unrestricted net position increased $86.1 million, or 13.7 percent, due to the overall increase in net position
of $165.7 million, offset by the increase in net investment in capital assets of $79.6 million.
6
Changes in Net Position
Net position increased $4.6 million in FY 2018-19, or 2.8 percent over the prior year’s increase in net
position.
(Dollars in thousands)
Revenues:
Operating revenues
Service charges 317,291$ 316,329$ 962$ 0.3%
Permit and inspection fees 1,199 1,170 29 2.5%
Total operating revenues 318,490 317,499 991 0.3%
Non-operating revenues
Property taxes 99,534 94,188 5,346 5.7%
Investment and interest income 29,102 3,230 25,872 801.0%
Contrib. from other governments 27,800 6,802 20,998 308.7%
Other 2,162 809 1,353 167.2%
Total non-operating revenues 158,598 105,029 53,569 51.0%
Total revenues 477,088 422,528 54,560 12.9%
Expenses:
Operating expense other than
depreciation and amortization 166,586 145,556 21,030 14.4%
Depreciation and amortization 102,239 97,399 4,840 5.0%
Non-operating expense 63,582 36,494 27,088 74.2%
Total expenses 332,407 279,449 52,958 19.0%
Income before capital
contributions 144,681 143,079 1,602 1.1%
Capital facilities capacity charges 21,032 18,077 2,955 16.3%
Increase in net position 165,713 161,156 4,557 2.8%
Beginning net position 2,194,789 2,033,633 161,156 7.9%
Ending net position 2,360,502$ 2,194,789$ 165,713$ 7.6%
June 30,
2019
June 30,
2018
Increase
(Decrease)
Percentage
Increase
(Decrease)
As previously stated, an enterprise fund is used to account for the operations of OCSD, which is financed
and operated in a manner similar to private business enterprises. This allows OCSD to determine that the
costs (expenses, including depreciation and amortization) of providing wastewater management services
on a continuing basis are financed or recovered primarily through user charges.
Sewer service user fees are evaluated annually based primarily on budget requirements for total operation
and maintenance expenses and capital outlays for providing wastewater management services. Property
tax revenues are dedicated for the payment of debt service.
7
In FY 2018-19, operating revenues increased $1.0 million, or 0.3 percent from the prior year, primarily due
to a 1.2 percent increase in the average sewer user fee rate, offset by a slight increase in user fee rebates
issued over the prior year.
The $53.6 million, or 51.0 percent increase in non-operating revenues primarily consists of a $25.9 million
or 801.0 percent increase in investment and interest income, a $21.0 million or 308.7 percent increase in
contributions from other governments, a $5.3 million or 5.7 percent increase in property taxes, and a $1.4
million or 167.2 percent increase in other revenues. The increase in investment and interest income is a
result of higher account balances and yields earned on securities held in the investment portfolios. The
increase in contributions from other governments is reflective of the increase in the integration adjustment
of Revenue Area 14’s equity share in OCSD’s Joint Works Treatment Facilities based on the flows
discharged to OCSD. The increase in property taxes revenue is primarily the result of the increase in total
assessed valuation of 6.4 percent over the prior year. The increase in other revenues is mainly attributable
to a $1.2 million increase in rents and leases from properties purchased for the new headquarters building.
Operating expense before depreciation and amortization increased $21.0 million, or 14.4 percent from the
prior year. The majority of this increase is attributable to the $18.1 million or 26.8 percent increase in salaries
and benefits and the $2.7 million or 38.0 percent increase in other expenses. When including the salaries
and benefits capitalized within the capital improvement program, total operating salaries and benefits costs
were $102.9 million, a $18.9 million or 22.5 percent increase from the prior year total of $84.0 million. This
increase is reflective of the $14.3 million or 358.3 percent increase in retirement expenses as a result of
the change in projected and actual earnings on pension plan investments and changes of assumptions,
and a $3.9 million or 5.7 percent increase in salaries and wages. The increase in other expenses is primarily
attributable to a $2.0 million increase in reserves for claims and judgments.
Non-operating expense increased $27.1 million, or 74.2 percent, and is primarily reflective of the $23.2
million transfer of local sewer service fee assets and replacement funds to the City of Santa Ana and a $5.5
million or 2706.2 percent increase in loss on disposal of capital assets. Somewhat offsetting this increase
is the decrease in interest expense of $0.5 million or 1.6 percent decrease from the prior year total of $35.0
million.
Capital Facility Capacity Charges increased $3.0 million, or 16.3 percent from the prior year, due to an
increase in rates and connection fees collected from cities as well as more supplemental capital facilities
capacity charges assessed to industrial dischargers than last year.
3%
73%
4%
21%
Sources of Revenue
June 30, 2019
Interest
User Fees
Other
Taxes Levied
10%
40%31%
13%
6%
Functional Expenses
June 30, 2019
Collections
Treatment &
Disposal
Depreciation &
Amortization
Interest Expense
8
Capital Assets
At June 30, 2019, OCSD had a net investment of $2.7 billion in capital assets. This represents a net
increase (including additions and deletions) of $43.3 million, or 1.6 percent over the prior year.
(Dollars in thousands)
Land 41,967$ 29,741$ 12,226$ 41.1%
Construction in progress 521,832 427,996 93,836 21.9%
Sewage collection facilities 508,164 494,171 13,993 2.8%
Sewage treatment facilities 1,485,491 1,557,473 (71,982) -4.6%
Effluent disposal facilities 31,696 33,178 (1,482) -4.5%
Solids disposal facilities 278 288 (10) -3.5%
General and administrative facilities 79,881 83,168 (3,287) -4.0%
Capital assets, net 2,669,309$ 2,626,015$ 43,294$ 1.6%
Schedule of Capital Assets
(Net of Depreciation and Amortization)
June 30,
2019
June 30,
2018
Increase
(Decrease)
Percentage
Increase
(Decrease)
Major capital asset additions for the current fiscal year included the following:
$27.2 million Newhope-Placentia Trunk Replacement
$22.3 million Headquarters Complex at Plant No. 1 (includes land addition of $18.4 million)
$16.5 million Sludge Dewatering and Odor control at Plant 1
$13.4 million Ocean Outfall System Rehabilitation
$13.3 million Consolidated Demolition & Utility Improvements at Plant No. 2
$11.9 million Sludge Dewatering and Odor Control at Plant 2
$ 7.0 million Headworks Rehabilitation at Plant No. 1
$ 6.8 million Primary Clarifiers Replacement at Plant No. 2
$ 3.3 million Digester Gas Facilities Rehabilitation
More detailed information about OCSD’s capital assets is provided in Notes 1 and 3 of Notes to Basic
Financial Statements.
9
Debt Administration
At June 30, 2019, OCSD had $972.8 million outstanding in bonded debt, a net decrease of $39.3 million,
or 3.9 percent from the prior year. This reduction consisted of the accumulation of principal payments made
in accordance with the schedule of debt service payments.
During OCSD’s most recent debt refunding, Moody’s, Standard and Poor’s, and Fitch Ratings all reaffirmed
their AAA rating of the Orange County Sanitation District. OCSD’s long-range financing plan is designed to
maintain this high rating. Over the next five years, OCSD is projecting over $1.3 billion in future treatment
plant and collection system capital improvements. In accordance with OCSD’s long-term debt fiscal policy,
OCSD will restrict long-term borrowing to capital improvements that cannot be financed from current
revenue. No new debt issuances are being proposed over the next five years to assist with the funding of
the system improvements scheduled over this time period. During FY 2018-19, the Board of Directors of
OCSD authorized and adopted Resolution No. OCSD 18-17 to issue the 2018A Certificate Anticipation
Notes (CANs) of up to $109,875,000 in November 2018 which allowed OCSD to repay the 2016B CANs,
which were due and payable on December 15, 2018, and avoid using $110 million of reserves for such
purpose. For more information on long-term debt activities, see Note 4 of the Notes to Basic Financial
Statements.
Economic Factors and Next Year’s Budgets and Rates
The unemployment rate within the County of Orange is at 3.0 percent in June 2019, a slight decrease
from the rate of 3.3 percent a year ago.
Inflation for the Los Angeles-Riverside-Orange County area increased 3.2 percent in 2018 over the
prior year based on the actual percentage change in the consumer price index according to the U. S.
Department of Labor, Bureau of Labor Statistics.
The yield on investments decreased from the 2.4 percent earnings rate in FY 2017-18 to 2.0 percent
for FY 2018-19.
All of these factors are considered in preparing OCSD’s biennium budget.
As part of OCSD’s recently approved five-year rate schedule, user fees were increased by 1.2 percent for
FY 2019-20 over the prior year. The Single Family Residential (SFR) fee, which is the underlying for all
other user rates, is applicable to OCSD’s largest customer base: the SFR fee, increased by $4.00, from
$335.00 to $339.00. This rate increase is necessary to finance OCSD’s cash flow needs including $168.2
million in operating costs, $76.8 million in debt service costs and $176.3 million in capital improvement
outlays in 2019-20. Capital Improvement costs are projected to total $2.5 billion over the next 10 years in
order to rehabilitate and upgrade existing facilities and maintain full secondary treatment standards.
Requests for Information
The financial report is designed to provide a general overview of OCSD’s finances. Questions concerning
any of the information provided in this report or requests for additional financial information should be
addressed to the Financial Management Division, Orange County Sanitation District, 10844 Ellis Avenue,
Fountain Valley, CA 92708-7018.
10
(THIS PAGE LEFT INTENTIONALLY BLANK)
ORANGE COUNTY SANITATION DISTRICT
BASIC FINANCIAL STATEMENTS
11
ORANGE COUNTY SANITATION DISTRICT
Statement of Net Position
June 30, 2019
Current assets:
Cash and cash equivalents 75,930,213$
Investments 684,538,124
Accounts receivable, net of allowance for uncollectibles $349,973 13,701,223
Accrued interest receivable 3,801,257
Connection fees receivable 1,735,064
Property tax receivable 1,586,671
Inventories 6,005,074
Due from other governmental agency 465,886
Prepaid expenses 1,966,446
Total current assets 789,729,958
Noncurrent assets:
Restricted:
Cash and cash equivalents held by fiscal agents 28,766
Unrestricted:
Non-depreciable capital assets 563,798,989
Depreciable capital assets, net of accumulated depreciation 2,105,509,917
Other noncurrent assets, net 10,344
Total noncurrent assets 2,669,348,016
Total assets 3,459,077,974
Deferred outflows of resources:
Deferred losses on defeasances 28,888,051
Deferred outflows related to pensions 93,794,964
Total deferred outflows of resources 122,683,015
Total assets and deferred outflows of resources 3,581,760,989
Current liabilities:
Accounts payable 16,909,092
Accrued expenses 16,630,416
Retentions payable 3,845,922
Interest payable 18,270,200
Current portion of long-term obligations 54,326,759
Total current liabilities 109,982,389
Noncurrent liabilities:
Noncurrent portion of long-term obligations 1,011,058,609
Total OPEB liability 4,013,291
Net pension liability - OCERS 29,029,147
Total pension liability - ARBA 21,577,464
Total noncurrent liabilities 1,065,678,511
Total liabilities 1,175,660,900
Deferred inflows of resources:
Deferred inflows related to pensions 45,597,614
Total liabilities and deferred inflows of resources 1,221,258,514
Net position:
Net investment in capital assets 1,647,723,350
Unrestricted 712,779,125
Total net position 2,360,502,475$
See Accompanying Notes to Basic Financial Statements.
12
ORANGE COUNTY SANITATION DISTRICT
Statement of Revenues, Expenses, and Changes in Net Position
For the Year Ended June 30, 2019
Operating revenues:
Service charges 317,291,238$
Permit and inspection fees 1,199,294
Total operating revenues 318,490,532
Operating expenses other than depreciation
and amortization:
Salaries and benefits 85,506,144
Utilities 7,733,225
Supplies, repairs and maintenance 31,769,669
Contractual services 26,082,243
Feasibility studies 5,850,461
Other 9,644,588
Total operating expenses other than
depreciation and amortization 166,586,330
Operating income before depreciation
and amortization 151,904,202
Depreciation and amortization 102,238,914
Operating income 49,665,288
Non-operating revenues:
Property taxes 99,534,027
Investment and interest income 29,101,612
Contributions from other governments 27,800,051
Other 2,162,262
Total non-operating revenues 158,597,952
Non-operating expenses:
Interest 34,465,835
Local sewer service transfer 23,229,000
Other 392,996
Loss on disposal of assets 5,493,970
Total non-operating expenses 63,581,801
Income before capital contributions 144,681,439
Capital contributions:
Capital facilities capacity charges 21,031,628
Change in net position 165,713,067
Total net position - beginning 2,194,789,408
Total net position - ending 2,360,502,475$
See Accompanying Notes to Basic Financial Statements.
13
ORANGE COUNTY SANITATION DISTRICT
Statement of Cash Flows
For the Year Ended June 30, 2019
Cash flows from operating activities:
Receipts from customers and users 298,744,099$
Payments to employees (78,098,096)
Payments to suppliers (79,534,001)
Net cash provided by operating activities 141,112,002
Cash flows from noncapital financing activities:
Proceeds from property taxes 99,174,491
Payments for sewer service transfer and other obligations (21,481,271)
Net cash provided by noncapital financing activities 77,693,220
Cash flows from capital and related financing activities:
Capital facilities capacity charges 23,167,640
Additions to capital assets (119,440,593)
Interest paid (42,922,157)
Principal payments on debt obligations (31,655,000)
Proceeds released to escrow account on defeased debt (109,875,000)
Proceeds from debt issuance 110,302,416
Debt issuance costs (402,429)
Contribution from other governments 3,904,107
Net cash used in capital and related financing activities (166,921,016)
Cash flows from investing activities:
Proceeds from the sale of investments 300,864,608
Purchases of investments (431,416,584)
Interest received 13,694,416
Net cash used in investing activities (116,857,560)
Net decrease in cash and cash equivalents (64,973,354)
Cash and cash equivalents, beginning of year 140,932,333
Cash and cash equivalents, end of year 75,958,979$
Reconciliation of operating income to net cash provided by operating activities:
Operating income 49,665,288$
Adjustments to reconcile operating income to net cash provided by operating activities:
Depreciation and amortization 102,238,914
Bad debt expense (net recoveries) (106,006)
(Increase)/decrease in operating assets:
Accounts receivable (392,277)
Inventories 595,820
Due from other governmental agency (19,354,156)
Prepaid and other assets (321,034)
Increase/(decrease) in operating liabilities:
Accounts payable (1,441,374)
Accrued expenses 882,405
Net pension/OPEB liabilities 6,923,368
Compensated absences (3,185)
Claims and judgments 2,424,239
Net cash provided by operating activities 141,112,002$
Noncash activities:
Unrealized gain on the fair value of investments 14,464,176$
Capital assets acquired through accounts payable 5,353,308
Capital facilities capacity charges acquired (2,136,012)
See Accompanying Notes to Basic Financial Statements.
14
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
15
(1) Summary of Significant Accounting Policies
Reporting Entity The Orange County Sanitation District (OCSD) is a public agency which owns and operates certain
wastewater facilities in order to provide regional wastewater collection, treatment, and disposal
services to approximately 2.6 million people in the northern and central portion of the County of
Orange, California. OCSD is overseen by a Board comprised of directors appointed by the
agencies and cities which are serviced by OCSD.
OCSD’s service area was originally formed in 1954 pursuant to the County Sanitation District Act
and consisted of seven independent special districts. Two additional districts were formed and
additional service areas were added in 1985 and 1986. These special districts were jointly
responsible for the treatment and disposal facilities which they each used. In April of 1998, the
Board of Supervisors of Orange County passed Resolution 98-140 approving the consolidation of
the existing nine special districts into a new, single sanitation district. This action was taken in
order to simplify the governance structures, reduce the size of OCSD’s Board of Directors, ease
administrative processes, streamline decision-making and consolidate accounting and auditing
processes. Pursuant to the Resolution and Government Code Section 57500, the predecessor
special districts transferred and assigned all of their powers, rights, duties, obligations, functions
and properties to OCSD, including all assets, liabilities, and equity.
Effective July 1, 1998, the organization became known as the Orange County Sanitation District.
The boundaries of one of the previous districts, now known as Revenue Area No. 14, have been
maintained separately because their use of OCSD’s collection, treatment, and disposal system is
funded by the Irvine Ranch Water District (IRWD). The boundaries of the other eight districts have
been consolidated and are collectively referred to as the Consolidated Revenue Area. OCSD
utilizes joint operating and capital outlay accounts to pay joint treatment, disposal, and construction
costs. These joint costs are allocated to each revenue area based on gallons of sewage flow. The
supplemental schedules and statements show internal segregations and are not intended to
represent separate funds for presentation as major or non-major funds in the basic financial
statements.
The accompanying financial statements present OCSD and its blended component unit, the
Orange County Sanitation District Financing Corporation (Corporation). The Corporation is a
legally separate entity although in substance it is considered to be part of OCSD’s operations.
OCSD is considered to be financially accountable for the Corporation which is governed by a
board comprised entirely of OCSD’s board members. There is no requirement for separate
financial statements of the Corporation; consequently, separate financial statements for the
Corporation are not prepared. The Corporation had no financial activity during the fiscal year
ended June 30, 2019, other than principal and interest payments on outstanding certificates of
participation/ revenue obligations and notes (see Note 4).
OCSD is independent of and overlaps other formal political jurisdictions. There are many
governmental entities, including the County of Orange, that operate within OCSD’s jurisdiction;
however, financial information for these entities is not included in the accompanying financial
statements in accordance with the Governmental Accounting Standards Board (GASB)
Codification of Governmental Accounting and Financial Reporting Standards.
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
16
Measurement Focus and Basis of Accounting OCSD operates as an enterprise activity. Enterprise funds account for operations that are financed
and operated in a manner similar to private business enterprises, where the intent of the Board of
Directors is that the costs (expenses, including depreciation and amortization) of providing services
to the general public on a continuing basis be financed or recovered primarily through user
charges.
Basis of accounting refers to when revenues and expenses are recognized in the accounts and
reported in the financial statements. Enterprise funds are accounted for on the flow of economic
resources measurement focus and use the accrual basis of accounting, whereby revenues are
recognized when earned and expenses are recognized when incurred, regardless of the timing of
related cash flows.
The accounting policies of OCSD conform to accounting principles generally accepted in the
United States of America (GAAP) as applicable to governments. The GASB is the accepted
standard-setting body for establishing governmental accounting and financial reporting principles in
the United States.
Operating Plans
Each year, OCSD staff prepares an annual operating plan which is adopted by the Board of
Directors. The annual operating plan is used to serve as a basis for monitoring financial progress,
estimating the levy and collection of taxes, and determining future service charge rates. During the
year, these plans may be amended as circumstances or levels of operation dictate.
Cash and Cash Equivalents Investments with original maturities of three months or less when purchased and money market
mutual funds and external investment pools that can be withdrawn on demand are considered to
be cash equivalents.
Investments Except for certain investments in monies held by fiscal agents as disclosed in Note 2, section “Fair
Value of Investments”, all other investments are stated at fair value (the price that would be
received to sell an asset in an orderly transaction between market participants acting in their
economic best interest at the measurement date). Changes in fair value that occur during the
fiscal year are reported as part of investment and interest income. Investment and interest income
includes interest earnings and realized and unrealized gains or losses in fair value. Investment
and interest income are recorded as revenues and receivables when declared and realized gains
or losses are recorded when the investment is sold.
Accounts Receivable
Accounts receivable is reported net of the allowance for uncollectible receivables. Uncollectible
receivables were $349,973 at June 30, 2019. Unbilled sewer services through June 30, 2019 are
recorded as revenue and receivables. Management determines the allowance for uncollectible
receivables by evaluating individual accounts receivable at least one year past due and
considering a customer’s financial condition, credit history and current economic conditions.
Accounts receivables are written off when deemed uncollectible. Recoveries of accounts
receivables previously written off are recorded when received.
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
17
Inventories Inventories, which are held for consumption and not resale, are stated at cost on a weighted-
average basis and are expensed when used.
Capital Assets
Outlays for property, plant, equipment, and construction in progress are recorded in the revenue
area which will use the asset. Such outlays may be for individual revenue area assets or for a
revenue area’s share of joint assets.
Capital assets of property, plant, and equipment are defined as assets with an initial, individual
cost of more than $5,000 and an estimated useful life of at least three years. Such assets are
recorded at cost, except for donated capital assets, donated works of art and similar items, and
capital assets received in a service concession arrangement, which are recorded at acquisition
value at the time received. Cost includes labor; materials; outside services; vehicle and equipment
usage; other ancillary costs consisting of direct charges such as engineering, purchasing,
supervision, or fringe benefits. Interest costs, net of interest earnings, have been capitalized on
projects prior to fiscal year 2017-2018. Commencing with fiscal year 2017-2018, OCSD early
implemented GASB Statement No. 89, where interest costs incurred before the end of the
construction period are no longer capitalized.
Depreciation of plant and equipment is provided for over the estimated useful lives of the assets
using the straight-line method in accordance with generally accepted accounting principles. OCSD
also considers the guidelines of estimated useful lives as recommended in the State of California
Controller’s Uniform System of Accounts for Waste Disposal Districts, which range from 3 to 75
years. The following are estimated useful lives for major classes of depreciable assets: Sewage
collection facilities – 50 years, Sewage treatment facilities – 40 years, Sewage disposal facilities –
40 years, General plant and administrative structures – 40 years, and other General plant and
administrative facilities and equipment – 4 to 25 years.
Restricted Assets
Certain assets are classified as restricted because their use is limited by applicable debt
covenants. Specifically, the assets are restricted for installment payments due on certificates of
participation and revenue obligations or are maintained by a trustee as a reserve requirement for
the certificates of participation and revenue obligations. When both restricted and unrestricted
resources are available for use, it is OCSD’s policy to use restricted resources first, then
unrestricted resources as they are needed.
Amortization Amortization of the excess purchase price over the book value of assets acquired is provided
using the straight-line method over an estimated useful life of 30 years.
Premiums and discounts on certificate anticipation notes and wastewater refunding revenue
obligations are amortized to interest expense over the respective terms of the installment
obligations based on the effective interest method (Note 4).
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
18
Deferred Charges on Defeasances For advance refundings resulting in defeasance of debt, the difference between the reacquisition
price and the net carrying amount of the old debt (i.e. deferred charges) is reported as a deferred
outflow of resources and amortized to interest expense based on the effective interest method over
the remaining life of the old debt or the life of the new debt, whichever is shorter. OCSD’s deferred
charges on the refunding debt at June 30, 2019 are $28,888,051.
Net Position Net position represents the total of assets and deferred outflows of resources less liabilities and
deferred inflows of resources, and is classified into two categories:
Net Investment in Capital Assets – This amount consists of capital assets, net of accumulated
depreciation, reduced by the outstanding balances of any borrowings used for the acquisition,
construction or improvement of those assets and excludes unspent debt proceeds. Deferred
outflows of resources that are attributable to the acquisition, construction or improvement of those
assets or related debt also are included in this component of net position.
Unrestricted – This amount represents the residual of amounts not classified in the other category
and represents the net equity available for OCSD.
Compensated Absences OCSD’s employees, other than operations and maintenance personnel, are granted vacation and
sick leave in varying amounts with maximum accumulations of 200 hours and 560 hours for
vacation and sick days earned but unused, respectively. Operations and maintenance personnel
accrue between 80 and 250 personal leave hours per year depending on years of service, which
can be accumulated up to a maximum of 440 hours.
Vacation and sick leave benefits and personal days are recorded as an expense and liability when
earned by eligible employees. The distribution between current and long-term portions of the
liability is based on historical trends.
Claims and Judgments
OCSD records estimated losses when it is probable that a claim liability has been incurred and
when the amount of the loss can be reasonably estimated. Claims payable includes an estimate
for incurred but unreported claims. The distribution between current and long-term portions of the
liability is based on historical trends.
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
19
Pensions OCSD has two defined benefit pension plans for retirees: the plan maintained through and by the
Orange County Employees’ Retirement System (OCERS) and the Additional Retiree Benefit
Account (ARBA) administered directly by OCSD. For purposes of measuring the net pension
liability, deferred outflows of resources related to pensions, deferred inflows of resources related to
pensions, and pension expense, information about the fiduciary net position of OCSD’s cost
sharing multiple-employer plan with the OCERS plan (Plan) and additions to/deductions from the
Plan’s fiduciary net position have been determined on the same basis as they are reported by
OCERS. Benefit payments (including refunds of employee contributions) are recognized when due
and payable in accordance with the benefit terms. Investments are reported at fair value. A
deferred outflow of resources and deferred inflow of resources related to pensions result from
changes in the components of the net pension liability and are applicable to a future reporting
period (Note 5).
Property Taxes
The County is permitted by State law (Proposition 13) to levy taxes at one percent of full market
value (at time of purchase) and can increase the assessed value no more than two percent per
year. OCSD receives a share of this basic levy, proportionate to what was received in the 1976 to
1978 period.
Property taxes are determined annually and attached as enforceable liens on real property as of
January 1 and are payable in two installments which become delinquent after December 10 and
April 10. The County bills and collects the property taxes and remits them to OCSD in installments
during the year. Property tax revenues are recognized when levied. The Board of Directors has
designated property tax revenue to be used for the annual debt service requirements prior to being
used as funding for current operations.
Capital Facilities Capacity Charges Capital facilities capacity charges represent fees imposed at the time a structure is newly
connected to OCSD’s system, directly or indirectly, or an existing structure or category of use is
increased. This charge is to pay for District facilities in existence at the time the charge is imposed
or to pay for new facilities to be constructed that are of benefit to the property being charged.
Operating and Non-operating Revenues and Expenses
Operating revenues and expenses result from collecting, treating, and disposing of wastewater and
inspection and permitting services. OCSD’s operating revenues consist of charges to customers
for the services provided. Operating expenses include the cost of providing these services,
administrative expenses, and depreciation and amortization expenses. All revenues and expenses
not meeting these definitions and which are not capital in nature are reported as non-operating
revenues and expenses.
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
20
Self-Insurance Plans For the year ended June 30, 2019, OCSD was self-insured for portions of workers’ compensation,
property damage, and general liability. The self-insurance portion of the workers’ compensation
exposure is the $1,000,000 deductible per occurrence under the outside excess insurance
coverage to statutory levels. The self-insurance portion of the property damage exposure covering
fire and other perils is the $500,000 per occurrence deductible (for most perils) under the outside
excess property insurance coverage to $1 billion. The self-insurance portion of the property
damage exposure covering flood is the $250,000 per occurrence deductible with outside excess
property insurance coverage to $300 million. The self-insurance portion of the property damage
exposure covering earthquake is the 5% per structure, minimum $5,000,000 deductible with
outside excess insurance coverage to $25 million on covered structures. OCSD has insured a
number of key structures against the peril of earthquake, all other structures are completely self-
insured. The self-insurance portion of the boiler & machinery exposure is the deductible ranging
from $25,000 to $350,000 under the outside excess boiler & machinery insurance coverage to
$100 million per occurrence combined limit. The self-insurance portion of the general liability
exposure is the $500,000 per occurrence deductible under the outside excess liability coverage to
$40 million per occurrence and aggregate. The self-insurance portion of the pollution liability
exposure is the $75,000 per loss deductible under the outside pollution liability insurance coverage
to $10 million. There were no significant changes in insurance coverage during the fiscal year
ended June 30, 2019.
During the past three fiscal years there have been no settlements in excess of covered amounts.
Claims against OCSD are processed by General Counsel or an outside claim administrator. These
claims are charged to claims expense based on estimated or known amounts which will ultimately
be paid. Claims incurred but not yet reported have been considered in determining the accrual for
loss contingencies. Workers’ compensation reserves are actuarially determined and general
liability estimated loss accruals are estimated using past experience adjusted for current trends
and any other factors that would modify past experience. The estimate of the claims liability also
includes any amounts for incremental and nonincremental claim adjustment expenses. OCSD
management believes that there are no unrecorded claims as of June 30, 2019 that would
materially affect the financial position of OCSD.
Deferred Compensation Plan OCSD offers its employees a deferred compensation plan established in accordance with Internal
Revenue Code Section 457. The plan permits all employees of OCSD to defer a portion of their
salary until future years. The amount deferred is not available to employees until termination,
retirement, death or for unforeseeable emergency. The assets of the plan are held in trust for the
exclusive benefit of the participants and their beneficiaries. Since the plan assets are administered
by an outside party and are not subject to the claims of OCSD’s general creditors, in accordance
with GASB Statement 32, the plan’s assets and liabilities are not included within OCSD’s financial
statements.
New Accounting Pronouncements
OCSD implemented GASB Statement No. 83, Certain Asset Retirement Obligations and GASB
Statement No. 88, Certain Disclosures Related to Debt, Including Direct Borrowings and Direct
Placements for the fiscal year ended June 30, 2019. Implementation of these Standards did not
materially impact OCSD’s financial statements.
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
21
(2) Cash and Investments
Cash and investments as of June 30, 2019 are classified within the accompanying Statement of
Net Position as follows:
Statement of Net Position:
Current, Unrestricted:
Cash and cash equivalents 75,930,213$
Investments 684,538,124
Subtotal - current, unrestricted 760,468,337
Restricted:
Cash and cash equivalents 28,766
Total cash and cash equivalents and investments 760,497,103$
Cash and investments consist of the following as of June 30, 2019:
Cash on hand 3,000$
Deposits with financial institutions 2,343,869
Managed portfolio - cash and investments 758,121,468
Subtotal - unrestricted cash and investments 760,468,337
Monies held by trustees:
Cash and cash equivalents 28,766
Grand total cash and investments 760,497,103$
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
22
Investments Authorized by the California Government Code and OCSD’s Investment Policy The following table identifies the investment types that are authorized by the California
Government Code and OCSD’s investment policy. This table and the subsequent tables identify
certain provisions of either the California Government Code or OCSD’s investment policy
(whichever is more restrictive) that address interest rate risk, credit risk, and concentration of credit
risk.
Authorized Maximum
by OCSD's Maximum Investment
Investment Type - Authorized by Investment Maximum Percentage in a Single
the California Government Code Policy? Maturity (1 ) (3)of Portfolio (1 )Issuer (1 )
Local Agency Bonds Yes 5 years 10% (2) 5% (2)
U.S. Treasury Obligations Yes 5 years No limit No limit
California State Treasury Obligations Yes 5 years No limit No limit
U.S. Agency Securities Yes 5 years No limit 20% (2)
Banker's Acceptances Yes 180 days 40% 5% (2)
Commercial Paper Yes 270 days 25% 5% (2)
Negotiable Certificates of Deposit Yes 5 years 30% 5% (2)
Repurchase Agreements Yes 1 year 20% (2) 5% (2)
Reverse Repurchase Agreements Yes 90 days (2) 5% (2) 5% (2)
Corporate Medium-Term Notes Yes 5 years 30% 5% (2)
Mutual Funds Yes N/A 20% 10%
Money Market Mutual Funds Yes N/A 20% 20%
Mortgage Pass-Through Securities/
CMO/Asset-Backed Securities Yes 5 years 20% 5% (2)
County Investment Pools Yes N/A 15% (2) 15% (2)
Local Agency Investment Fund (LAIF) Yes N/A 15% (2) 15% (2)
Supranational Obligations Yes 5 years 30% 30%
Notes
(1 ) Restrictions are in accordance with the California Government Code unless indicated otherwise.
(2) The restriction is in accordance with OCSD's Investment Policy which is more restrictive than the California Government Code.
(3) As allowed by California Government Code Section 53601, the Board of Directors has adopted a policy of a maximum
maturity of 5 years for investments purchased by OCSD's external money manager for the long-term investment portfolio.
The duration of the long-term investment portfolio can never exceed 60 months. Investments purchased for the short-term
portfolio are subject to the maturity restrictions noted in this table.
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
23
Investments Authorized by Debt Agreements
The investment of debt proceeds held by trustees is governed by provisions of the debt covenant
agreements, rather than the general provisions of the California Government Code or OCSD’s
investment policy. The following table identifies the investment types that are authorized for
investments held by OCSD’s debt trustees. This table and the subsequent tables identify certain
provisions of the debt covenant agreements that address interest rate risk, credit risk, and
concentration of credit risk.
Maximum Maximum
Investment Type - Authorized by the Maximum Percentage Investment in a
Debt Covenant Agreement Maturity of Portfolio Single Issuer
State and Local Agency Bonds 5 years No limit No limit
U.S. Treasury Obligations 5 years No limit No limit
U.S. Agency Securities 5 years No limit No limit
Banker's Acceptances 180 days 40% 30%
Commercial Paper 270 days 40% 10%
Negotiable Certificates of Deposit 5 years 30% 30%
Repurchase Agreements 1 year No limit No limit
Corporate Medium-Term Notes 5 years 30% 30%
Mutual Funds N/A 20% 10%
Money Market Mutual Funds N/A 20% 20%
Local Agency Investment Fund (LAIF) N/A No limit No limit
Guaranteed Investment Contracts N/A No limit No limit
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value
of an investment. Generally, the longer an investment has before maturity, the greater the
sensitivity of its fair value to changes in market interest rates. One of the ways that OCSD
manages its exposure to interest rate risk is by purchasing a combination of shorter term and
longer term investments and by timing cash flows from maturities so that a portion of the portfolio
is maturing or coming close to maturity evenly over time, as necessary to provide the cash flow
and liquidity needed for operations.
OCSD monitors the interest rate risk inherent in its managed portfolio by measuring the modified
duration of its portfolio. The duration of monies held for shorter term purposes is recommended by
OCSD’s Treasurer and is based on OCSD’s cash flow requirements in meeting current operating
and capital needs. The average duration of monies invested for shorter term purposes may never
exceed 180 days. The duration of monies held for longer term purposes is recommended annually
by OCSD’s Treasurer and is based on OCSD’s five-year cash flow forecast. The average duration
may not exceed 120 percent nor be less than 80 percent of the recommended duration. The
average duration of monies invested for longer term purposes may never exceed 60 months.
There is no stated maximum maturity for the Money Market Mutual Funds. The money market
mutual funds for BlackRock Institutional Fund and First American Government Obligations Fund
are daily liquid funds available on demand.
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
24
Following is a table which summarizes OCSD’s managed portfolio investments by purpose with the
modified duration as of June 30, 2019.
Modified Modified
Duration Duration
Investment Type Fair Value (in years)(in months)
Short-Term Portfolio:
U.S. Treasury Notes 120,821,505$ 0.233 2.80
Local Agency Investment Fund 35,218,920 0.474 5.69
Corporate Medium-Term Notes 14,071,967 0.362 4.34
U.S. Agency Securities 8,326,426 0.129 1.55
Certificates of Deposit 7,304,306 0.321 3.85
Commercial Paper 7,246,498 0.265 3.18
Money Market Mutual Funds 5,955,570 - -
U.S. Treasury Bills 3,629,890 0.563 6.76
Short-term portfolio subtotal 202,575,082$ 0.283 3.40
Long-Term Portfolio:
U.S. Treasury Notes 161,747,910$ 2.753 33.04
Corporate Medium-Term Notes 140,474,618 2.664 31.96
U.S. Agency Securities* 132,290,121 2.632 31.58
Asset Backed Securities/CMO* 46,051,290 0.984 11.81
Supranationals 33,041,747 2.202 26.42
Money Market Mutual Funds 15,203,202 - -
U.S. Treasury Inflation-Protected Securities (TIPS)** 11,171,448 5.020 60.24
Commercial Paper 11,089,623 0.135 1.62
Taxable Municipal Bonds 4,330,845 0.841 10.09
U.S. Govt. Backed Mortgage Pools (GNMA)* 145,582 3.362 40.34
Long-term portfolio subtotal 555,546,386$ 2.425 29.10
Total Portfolio 758,121,468$
* Includes highly sensitive securities.
** The investment's duration in excess of five years was permitted by OCSD's Investment Policy
at the time it was purchased.
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
25
OCSD monitors the interest rate risk inherent in its other investments using specific identification
of the investments. Following is a table of these investments all held by trustees, as of June 30,
2019.
Fair Value Maturities
Cash equivalents held by fiscal agents:
Money Market Mutual Funds:
First American Government Obligations Fund 27,976$ 19 days
BlackRock Institutional Funds 790 30 days
Total fair value of investments held by fiscal agents 28,766$
Investments with Fair Values Highly Sensitive to Interest Rate Fluctuations OCSD’s investments (including investments held by trustees) include the following investments
that are highly sensitive to interest rate fluctuations (to a greater degree than already indicated in
the information provided above):
Mortgage-backed securities: These securities are subject to early payment in a period of
declining interest rates. The resulting reduction in expected total cash flows affects the fair
value of these securities, making them highly sensitive to change in interest rates. At fiscal
year end, the fair value of investments in mortgage-backed securities totaled $3,346,950
including $2,064,262 of mortgage pass-through securities, $1,137,106 of U.S. agency
securities, and $145,582 of U.S. government backed mortgage pools.
Fair Value of Investments
OCSD measures and records its investments using fair value measurement guidelines established
by generally accepted accounting principles. These guidelines recognize a three-tiered fair value
hierarchy, as follows:
Level 1: Quoted prices for identical investments in active markets;
Level 2: Observable inputs other than quoted market prices; and
Level 3: Unobservable inputs.
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
26
At June 30, 2019, OCSD had the following fair value measurements for its managed investment
portfolio:
Quoted Prices
in Active Significant Other
Markets for Observable Unobservable
Identical Assets Inputs Inputs
Investment Type Fair Value Level 1 Level 2 Level 3
Investments in Short-Term Portfolio:
U.S. Treasury Notes 120,821,505$ -$ 120,821,505$ -$
Corporate Medium-term Notes 14,071,967 14,071,967 -
U.S. Agency Securities 8,326,426 - 8,326,426 -
Certificates of Deposits 7,304,306 - 7,304,306 -
Commercial Paper 7,246,498 - 7,246,498 -
U.S. Treasury Bills 3,629,890 - 3,629,890 -
Investments in Long-Term Portfolio:
U.S. Treasury Notes 161,747,910 - 161,747,910 -
Corporate Medium-term Notes 140,474,618 - 140,474,618 -
U.S. Agency Securities 132,290,121 - 132,290,121 -
Asset Backed Securities/CMO 46,051,290 - 46,051,290 -
Supranationals 33,041,747 - 33,041,747 -
US Treasury Inflation Protected Securities (TIPS) 11,171,448 - 11,171,448 -
Commercial Paper 11,089,623 - 11,089,623 -
Taxable Municipal Bonds 4,330,845 - 4,330,845 -
U.S. Government Backed Mortgage Pools 145,582 - 145,582 -
Fair Value Hierarchy Totals -$ 701,743,776$ -$
Investments Not Subject To Fair Value Hierarchy:
Local Agency Investment Fund (LAIF)* 35,218,920
Money Market Mutual Funds* 5,955,570
Money Market Mutual Funds** 15,203,202
Total Portfolio 758,121,468$
* Invested in Short-Term Portfolio
** Invested in Long-Term Portfolio
US Bank is the custodial bank for all of OCSD’s investments shown above in the managed
portfolio, except for LAIF. Investments classified as Level 2 are valued using US Bank’s fair value
hierarchy matrix based on the asset type classification. The fair value hierarchy level matrix is
based on discussions with (1) pricing vendors, (2) broker/dealers, (3) investment managers, (4)
industry groups, and (5) independent accounting firms.
Monies held by trustees (fiscal agents) that are invested in money market mutual funds are
reported at carrying cost.
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the
holder of the investment. This is measured by the assignment of a rating by a nationally
recognized statistical rating organization. The following table presents the minimum rating as
required by the California Government Code, OCSD’s investment policy, or debt agreements, and
the actual rating as of year-end for each investment type.
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
27
Investments with no legal minimum rating & no required disclosure:
U.S. Treasury Obligations 297,370,753$
U.S. Agency Securities - GNMA 145,582
Subtotal 297,516,335$
Investments with no legal minimum rating:
U.S. Agency Securities (other than GNMA):
Rating of AA+ (Standard & Poor's)132,290,121
Rating of P-1 (Moody's) 8,326,426
Municipal Bonds:
Rating of Aa3 (Moody's)2,892,163
Rating of Aa1 (Moody's)1,438,682
Certificates of Deposits;
Rating of Aa2 (Moody's) 3,003,150
Rating of A-1 (Standard and Poor's)2,300,276
Rating of P-1 (Moody's )2,000,880
Local Agency Investment Fund (LAIF):
Not rated 35,218,920
Subtotal 187,470,618
Investments with a legal minimum rating (or its equivalent) of A:
Corporate Medium-Term Notes:
Rating of Aa1 (Moody's) 7,104,610
Rating of AA+ (Standard and Poor's)3,008,310
Rating of AA+ (Fitch)3,019,087
Rating of Aa2 (Moody's) 10,212,776
Rating of Aa3 (Moody's) 1,062,450
Rating of AA- (Standard & Poor's)5,245,600
Rating of A1 (Moody's)13,366,926
Rating of A+ (Fitch) 6,652,520
Rating of A+ (Standard and Poor's) 499,530
Rating of A2 (Moody's)38,262,689
Rating of A (Standard & Poor's) 17,523,943
Rating of A (Fitch) 9,818,790
Rating of A3 (Moody's)* 6,278,802
Rating of A- (Standard & Poor's)*29,505,524
Rating of BBB+ (Standard & Poor's)* 2,974,888
Not rated 10,140
Money Market Mutual Funds:
Rating of P-1 (Moody's )21,158,772
Invested with fiscal agents:
Rating of Aaa-mf (Moody's) 28,766
Subtotal 175,734,123
Investments with a legal minimum rating (or its equivalent) of AA:
Asset Backed Securities/CMO:
Rating of Aaa (Moody's) 34,200,405
Rating of AAA (Standard & Poor's) 9,772,451
Rating of AA+ (Standard and Poor's) 1,933,793
Rating of BBB (Fitch)* 130,469
Rating of B (Fitch)* 14,172
Supranational Obligations:
Rating of Aaa (Moody's) 26,551,367
Rating of AAA (Fitch) 6,490,380
Subtotal 79,093,037
Investments with a legal minimum rating (or its equivalent) of "Prime":
Commercial Paper:
Rating of P-1 (Moody's)* 1,976,340
Rating of A-1 (Standard & Poor's)* 16,359,781
Subtotal 18,336,121
Total 758,150,234$
* Investment was in compliance with legal requirements at the time it was purchased.
Fair ValueInvestment Type and the Lowest Rating Reported at Year End
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
28
Concentration of Credit Risk Limitations on the amount that OCSD is allowed to invest in any one issuer have been identified
previously in the section “Investments Authorized by the California Government Code and OCSD’s
Investment Policy” and in the section “Investments Authorized by Debt Agreements.” OCSD
follows whichever guideline is the most restrictive.
As of June 30, 2019, OCSD had the following investments representing five percent or more of
total investments:
Name of Issuer Fair Value % of Total
Federal Home Loan Bank System (FHLB) 60,810,641$ 8.02%
Federal National Mortgage Association (FNMA) 49,603,962$ 6.54%
Custodial Credit Risk Custodial credit risk for deposits is the risk that in the event of the failure of a depository financial
institution, a government will not be able to recover its deposits or will not be able to recover
collateral securities that are in the possession of an outside party. The California Government
Code and OCSD’s investment policy contain legal requirements that limit the exposure to custodial
credit risk for deposits as follows: a financial institution must secure deposits made by state or local
governmental units by pledging securities in an undivided collateral pool held by a depository
regulated under state law (unless so waived by the governmental unit). The fair value of the
pledged securities in the collateral pool must equal at least 110% of the total amount deposited by
the public agencies. California law also allows financial institutions to secure deposits by pledging
first trust deed mortgage notes having a value of 150% of the secured public deposits.
Custodial credit risk for investments is the risk that in the event of the failure of the counterparty
(e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its
investment or collateral securities that are in the possession of another party. The California
Government Code and OCSD’s investment policy do not contain legal or policy requirements that
would limit the exposure to custodial credit risk for investments. As of June 30, 2019, in
accordance with OCSD’s investment policy, none of OCSD’s investments were held with a
counterparty. All of OCSD’s investments were held with an independent third party custodian bank
registered in the name of OCSD. OCSD uses US Bank as a third party custody and safekeeping
service for its investment securities.
Investment in State Investment Pool OCSD is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by
California Government Code Section 16429 under the oversight of the Treasurer of the State of
California. The fair value of OCSD’s investment in this pool is reported in the accompanying
financial statements at amounts based upon OCSD’s pro-rata share of the fair value provided by
LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance
available for withdrawal is based on the accounting records maintained by LAIF, which are
recorded on an amortized cost basis. Included in LAIF’s investment portfolio are mortgage-backed
securities, other asset-backed securities, loans to certain state funds, securities with interest rates
that vary according to changes in rates greater than a one-for-one basis, and structured notes. The
amounts invested in LAIF are recorded as cash and cash equivalents at June 30, 2019.
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
29
(3) Capital Assets
Capital asset activity for the year ended June 30, 2019 is as follows:
Beginning Ending
Balance at Additions / Deletions / Balance at
July 1, 2018 Transfers Transfers June 30, 2019
Capital assets not depreciated:
Cost:
Land 29,741,243$ 18,422,112$ (6,196,000)$ 41,967,355$
Construction in progress 427,995,850 134,421,652 (40,585,868) 521,831,634
Total nondepreciable assets 457,737,093 152,843,764 (46,781,868) 563,798,989
Depreciable capital assets:
Cost:
Sewage collection facilities 860,710,368 34,905,828 (8,825,693) 886,790,503
Sewage treatment facilities 2,477,357,509 1,386,759 (17,334) 2,478,726,934
Effluent disposal facilities 97,014,820 - (42,804) 96,972,016
Solids disposal facilities 3,463,236 - - 3,463,236
General and administrative facilities 253,129,772 4,558,340 (519,767) 257,168,345
Excess purchase price over book
value on acquired assets 19,979,000 - - 19,979,000
Subtotal 3,711,654,705 40,850,927 (9,405,598) 3,743,100,034
Accumulated depreciation:
Sewage collection facilities (366,539,393) (19,557,558) 7,471,311 (378,625,640)
Sewage treatment facilities (919,884,146) (73,369,661) 17,334 (993,236,473)
Effluent disposal facilities (63,837,052) (1,439,304) - (65,276,356)
Solids disposal facilities (3,175,690) (9,718) - (3,185,408)
General and administrative facilities (169,961,690) (7,862,673) 537,123 (177,287,240)
Excess purchase price over book
value on acquired assets (19,979,000) - - (19,979,000)
Subtotal (1,543,376,971) (102,238,914) 8,025,768 (1,637,590,117)
Net depreciable assets 2,168,277,734 (61,387,987) (1,379,830) 2,105,509,917
Net capital assets 2,626,014,827$ 91,455,777$ (48,161,698)$ 2,669,308,906$
For the fiscal year ended June 30,2019, capitalasset additionsof $40.9 million in depreciable capitalassets are$0.3 million more
than the $40.6 million transferred from Construction in Progress due to capital equipment purchases of $4.0 million, partially offset
by $3.7 million of priorcapital project expensesthat were written offas expense.Also, the removal ofland of$6.2 million was due to
the sale of property in May 2019.
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
30
(4) Long-Term Liabilities
The following is a summary of the changes in long-term liabilities for the year ended June 30, 2019:
Beginning Ending Due w ithin Long-term
Balance, July 1 Additions Deletions Balance, June 30 one year amount
Compensated absences 8,025,854$ 7,590,606$ (7,593,791)$ 8,022,669$ 7,367,217$ 655,452$
Claims and judgments 4,436,087 2,820,028 (395,789) 6,860,326 673,070 6,187,256
Certificates of participation,
revenue obligations & notes 1,012,110,000 102,200,000 (141,530,000) 972,780,000 32,730,000 940,050,000
Unamortized premium 83,627,610 8,102,416 (14,007,653) 77,722,373 13,556,472 64,165,901
Totals 1,108,199,551$ 120,713,050$ (163,527,233)$ 1,065,385,368$ 54,326,759$ 1,011,058,609$
Compensated Absences
OCSD’s policies related to compensated absences are described in Note 1. OCSD’s liability at
June 30, 2019 is $8,022,669 with an estimated $7,367,217 to be paid or used within the next fiscal
year.
Claims and Judgments Payable
OCSD is self-insured in a number of areas as described in Note 1. The following is a summary of
the change in claims and judgments payable for the years ended June 30, 2019 and 2018:
2018-19 2017-18
Claims and judgments payable at July 1 4,436,087$ 4,052,668$
Claims incurred during the fiscal year 2,820,028 971,427
Payments on claims during the fiscal year (395,789) (588,008)
Claims and judgments payable at June 30 6,860,326 4,436,087
Less: current portion (673,070) (732,040)
Total long-term claims and judgments payable 6,187,256$ 3,704,047$
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
31
Certificates of Participation/ Revenue Obligations and Notes OCSD issues certificates of participation, revenue obligations and notes in order to finance
construction of the treatment facilities. Each issuance represents a direct and proportionate
interest in the semi-annual interest payments. Installment payments for the issues are payable
from any source of lawfully available funds of OCSD. Certificates of participation, revenue
obligations, and notes at June 30, 2019 are summarized as follows:
Amount
2010A wastewater revenue obligations 80,000,000$
2010C wastewater revenue obligations 157,000,000
2011A wastewater refunding revenue obligations 75,370,000
2012A wastewater refunding revenue obligations 100,645,000
2012B wastewater refunding revenue obligations 46,475,000
2014A wastewater refunding revenue obligations 71,330,000
2015A wastewater refunding revenue obligations 127,510,000
2016A wastewater refunding revenue obligations 145,880,000
2017A wastewater refunding revenue obligations 66,370,000
2018A revenue refunding certificate anticipation notes 102,200,000
Total certificates of participation, revenue obligations, and notes 972,780,000$
Outstanding Certificates of Participation / Revenue Obligations and Notes
All of the outstanding debt of OCSD is senior lien debt with rate covenants that require a minimum
coverage ratio of 1.25. The minimum coverage ratio is the ratio of net annual revenues available
for debt service requirements to total annual debt service requirements. As of June 30, 2019, the
coverage ratio for senior lien debt was 4.08.
May 2010 Wastewater Revenue Obligations, Series 2010A On May 18, 2010, OCSD completed the sale of $80,000,000 of wastewater revenue
obligations under the federally taxable Build America Bonds program. The obligations were
issued to finance and to reimburse OCSD for the acquisition, construction, and installation of
additional improvements made to the wastewater system. The stated interest rate on the
obligations is fixed and will range from 5.56 percent to 5.58 percent, however, in accordance
with their designation as Build America Bonds, OCSD expects to receive a cash subsidy from
the United States Treasury equal to 35 percent of the interest payable with respect to these
revenue obligations. The expected net interest rate on the obligations is fixed and will range
from 3.614 percent to 3.627 percent. Annual principal payments are due on February 1,
beginning February 1, 2034 through February 1, 2040.
The trust agreement for the revenue obligations does not require the establishment of a
reserve.
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
32
December 2010 Wastewater Revenue Obligations, Series 2010C On December 8, 2010, OCSD completed the sale of $157,000,000 of wastewater revenue
obligations under the federally taxable Build America Bonds program. The obligations were
issued to finance and to reimburse OCSD for the acquisition, construction, and installation of
additional improvements made to the wastewater system. The stated interest rate on the
obligations is fixed and will range from 6.35 percent to 6.40 percent, however, in accordance
with their designation as Build America Bonds, OCSD expects to receive a cash subsidy from
the United States Treasury equal to 35 percent of the interest payable with respect to these
revenue obligations. The expected net interest rate on the obligations is fixed and will range
from 4.1275 percent to 4.16 percent. Annual principal payments are due on February 1,
beginning February 1, 2031 through February 1, 2044.
The trust agreement for the revenue obligations does not require the establishment of a
reserve.
October 2011 Wastewater Refunding Revenue Obligations, Series 2011A
On October 3, 2011, OCSD completed the sale of $147,595,000 of wastewater refunding
revenue obligations. The obligations were issued to refund $89,800,000 of the outstanding
principal balance of 2000 Series A and B refunding certificates of participation, and
$83,320,000 of the outstanding principal balance of 2003 certificates of participation. The
stated interest rate on the obligations is fixed and will range from 3 percent to 5 percent.
Annual principal payments are due on August 1 and February 1, beginning August 1, 2012
through February 1, 2026.
The trust agreement for the revenue obligations does not require the establishment of a
reserve.
March 2012 Wastewater Refunding Revenue Obligations, Series 2012A
On March 22, 2012, OCSD completed the sale of $100,645,000 of wastewater refunding
revenue obligations. The obligations were issued to refund the $108,180,000 outstanding
principal balance of the 2003 certificates of participation. The stated interest rate on the
obligations is fixed and will range from 3 percent to 4 percent. Annual principal payments are
due on February 1, beginning February 1, 2031 through February 1, 2033.
The trust agreement for the revenue obligations does not require the establishment of a
reserve.
August 2012 Wastewater Refunding Revenue Obligations, Series 2012B
On August 16, 2012, OCSD completed the sale of $66,395,000 of wastewater refunding
revenue obligations. The obligations were issued to refund the remaining $91,900,000
outstanding principal balance of the Series 2000A and 2000B refunding certificates of
participation. The stated interest rate on the obligations is fixed and will range from 3 to 5
percent. Annual principal payments are due on February 1, beginning February 1, 2019
through February 1, 2026.
The trust agreement for the revenue obligations does not require the establishment of a
reserve.
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
33
August 2014 Wastewater Refunding Revenue Obligations, Series 2014A On August 7, 2014, OCSD completed the sale of $85,090,000 of wastewater refunding
revenue obligations. The obligations were issued to partially refund an amount of $93,930,000
of the outstanding principal balance of 2007 Series B certificates of participation. The stated
interest rate on the obligations is fixed at 5 percent. Annual principal payments are due on
February 1, beginning February 1, 2018 through February 1, 2027.
The trust agreement for the revenue obligations does not require the establishment of a
reserve.
February 2015 Wastewater Refunding Revenue Obligations, Series 2015A On February 12, 2015, OCSD completed the sale of $127,510,000 of wastewater refunding
revenue obligations. The obligations were issued to partially refund an amount of
$152,990,000 of the outstanding principal balance of 2007 Series B certificates of
participation. The stated interest rate on the obligations is fixed at 5 percent. Annual principal
payments are due on February 1, beginning February 1, 2028 through February 1, 2037.
The trust agreement for the revenue obligations does not require the establishment of a
reserve.
March 2016 Wastewater Refunding Revenue Obligations, Series 2016A On March 30, 2016, OCSD completed the sale of $145,880,000 of wastewater refunding
revenue obligations. The obligations were issued to partially refund an amount of
$162,780,000 of the outstanding principal balance of 2009 Series A certificates of
participation. The stated interest rate on the obligations is fixed and will range from 4 to 5
percent. Annual principal payments are due on February 1, beginning February 1, 2020
through February 1, 2039.
The trust agreement for the revenue obligations does not require the establishment of a
reserve.
February 2017 Wastewater Refunding Revenue Obligations, Series 2017A
On February 1, 2017, OCSD completed the sale of $66,370,000 of wastewater refunding
revenue obligations. The obligations were issued to refund $91,620,000 of the outstanding
principal balance of 2007 Series A certificates of participation. The stated interest rate on the
obligations is fixed at 5 percent. Annual principal payments are due on February 1, beginning
February 1, 2021 through February 1, 2030.
The trust agreement for the revenue obligations does not require the establishment of a
reserve.
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
34
November 2018 Revenue Refunding Certificate Anticipation Notes, Series 2018A On November 1, 2018, OCSD completed the sale of $102,200,000 of revenue refunding
certificate anticipation notes. The notes were issued to fully refund the $109,875,000
outstanding principal balance of the 2016 Series B revenue refunding certificate anticipation
notes. The interest rate on the notes is fixed at 5 percent. The notes will mature on August 15,
2021. OCSD expects the principal and interest on the notes to be paid from proceeds of the
sale, prior to the maturity date, of a future series of certificates of participation, notes or other
obligations.
The aggregate difference in debt service between the refunding debt and the refunded debt is
a negative amount of approximately $7,052. The total future payments for the new debt
provide a net present value loss of approximately $534,127 to refund the old debt.
The trust agreement for the certificates does not require the establishment of a reserve.
Annual Amortization Requirements The annual requirements to amortize all debt related to certificates of participation, revenue
obligations, and anticipation notes as of June 30, 2019, including the Revenue Refunding
Certificate Anticipation Notes, Series 2018A that currently matures in August 2021, are as follows:
Year Ending June 30,Principal Estimated Interest Total
2020 32,730,000$ 44,044,869$ 76,774,869$
2021 30,430,000 42,408,369 72,838,369
2022 130,605,000 38,331,869 168,936,869
2023 29,805,000 34,371,619 64,176,619
2024 31,140,000 33,041,769 64,181,769
2025-2029 175,555,000 142,236,946 317,791,946
2030-2034 257,560,000 94,348,085 351,908,085
2035-2039 214,870,000 39,392,596 254,262,596
2040-2044 70,085,000 6,378,599 76,463,599
Total 972,780,000$ 474,554,721$ 1,447,334,721$
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
35
(5) Pension Benefits
OCSD has two defined benefit pension plans for retirees: the plan maintained through and by the
Orange County Employees’ Retirement System (OCERS) and the Additional Retiree Benefit
Account (ARBA) administered directly by OCSD.
A summary of pension amounts for OCSD’s plans at June 30, 2019 is presented below:
OCERS ARBA Total
Net pension liability - OCERS 29,029,147$ -$ 29,029,147$
Deferred outflows - pensions 91,463,662 2,331,302 93,794,964
Total pension liability - ARBA - 21,577,464 21,577,464
Deferred inflows - pensions 45,597,614 - 45,597,614
Pension expenses 16,730,225 1,695,688 18,425,913
A. Orange County Employees’ Retirement System (OCERS)
Plan Description: All qualified permanent and probationary employees are eligible to participate in
OCSD’s Employee Pension Plan (Plan), which is a cost-sharing multiple employer defined benefit
pension plan administered by the Orange County Employees Retirement System (OCERS).
OCERS was established in 1945 under the provisions of the County Employees Retirement Law of
1937 (CERL). The Plan operates under the provisions of the CERL, the California Public
Employees’ Pension Reform Act of 2013 (PEPRA), and the regulations, procedures and policies
adopted by OCERS’ Board of Retirement. The Plan’s authority to establish and amend the benefit
terms are set by the CERL and PEPRA and may be amended by the California state legislature.
The Plan is a tax qualified plan under Section 401(a) of the Internal Revenue Code
Benefits Provided: OCERS provides service retirement, disability, death and survivor benefits to
plan members who may be public employees or beneficiaries. The CERL and PEPRA establish
benefit terms. Benefits are based on years of credited service equal to one year of full time
employment. Members of plans B, G and H with ten years of service credit are entitled to receive a
retirement allowance beginning at age 50; members of plan U with 5 years of service are eligible to
receive a retirement allowance at age 52. Members attaining age 70 are eligible to retire
regardless of credited service.
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
36
Benefits are determined by plan formula, age, years of service and final average salary (FAS) as
follows:
Plan G Plan H Plan B Plan U
Hire Date Prior to 9/21/79
After 9/21/79
Prof/Sup*: Before 10/1/10
OCEA*: Before 8/1/11
501*: Before 7/1/11
Prof/Sup: After 10/1/10
OCEA: After 8/1/11
501: After 7/1/11
All: Before 1/1/2013
On or after 1/1/2013
Final Average
Compensation (FAS)Highest 12 months Highest 36 months Highest 36 months Highest 36 months
Normal Retirement Age Age 55 Age 55 Age 57.5 Age 67
Age 70, any years Age 70, any years Age 70, any years Age 70, any years
Age 50, 10 years Age 50, 10 years Age 50, 10 years Age 52, 5 years
Benefit percent per
year of service for
normal retirement age
2.5% per year of FAS
for every year of
service credit
2.5% per year of
FAS for every year of
service credit
1.667% per year of
FAS for every year of
service credit
2.5% per year of
FAS for every year
of service credit
Benefit Adjustments Reduced before age
55
Reduced before age
55
Reduced before age
57.5
Reduced before age
67
FAS Limitation Internal Revenue Code
Section 401(a)(17)
Internal Revenue Code
Section 401(a)(17)
Internal Revenue Code
Section 401(a)(17)
Public Employees
Pension Reform Act
(PEPRA): 120% of
Social Security
wage base per year
* Prof/Sup: Professional and Supervisor employee groups, bargaining unit SPMG.
* OCEA: Administrative, Clerical, Engineering, and Technical Services employee groups, bargaining unit OCEA.
* 501: Operations and Maintenance employee groups, bargaining unit International Union of Operating Engineers Local 501.
Service Requirement
Eligibility
A cost of living adjustment is provided to benefit recipients based on changes in the Consumer
Price Index (CPI) up to a maximum of 3% per year. Any increase greater than 3% is banked and
may be used in years when the CPI is less than 3%. The increase is established and approved
annually by the Board of Retirement.
The Plan also provides disability and death benefits to eligible members and their beneficiaries,
respectively. For retirees the death benefit is determined by the retirement benefit option chosen.
For all other members the beneficiary is entitled to benefits based on the member’s years of
service and whether or not the cause of death is service related.
At the December 31, 2018 measurement date, the following employees were covered by the
benefit terms:
Inactive employees or beneficiaries currently receiving benefits486
Inactive employees entitled to but not yet receiving benefits 117
Active employees 616
Total 1,219
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
37
Contributions: Participating employers and active members are required by statute to contribute a
percentage of covered salary to the Plan. CERL requires that the employer contribution rates for all
public employers be determined on an annual basis by the actuary and be effective on the July 1
following notice of a change in rate. Funding contributions are determined annually on an actuarial
basis as of December 31 by OCERS. The actuarially determined rate is the estimated amount
necessary to finance the costs of benefits earned by employees during the year, with an additional
amount to finance any unfunded accrued liability.
Contributions to the Plan from OCSD were $7,769,431 for the year ended June 30, 2019.
Contribution rates in effect for the fiscal year ended June 30, 2019 are as follows:
Plan G Plan H Plan B Plan U
Employer Contribution Rate, 7/1/18 - 6/30/19 12.28% 12.28% 10.21% 9.27%
Employee Contribution Rate, 7/1/18 - 6/30/19 (2)6.35-12.22% (1)5.88-12.22% (1)6.76-12.37% 6.42-13.65%
Paid by Employer for Employee 3.50% 3.50% 0.00% 0.00%
(1) Net of employer paid portion of 3.5%.
(2) Employee rates are determined by the age of entry into the retirement system.
For the year ended June 30, 2019, the contributions and average employer’s contribution rate as a
percentage of covered payroll were as follows:
Plans
Employer
Contributions
Employee (Paid
by Employer)
Contributions
Average
Employer
Contribution
Rate (%)
Plan G 18,141$ 5,171$ 0.03%
Plan H 5,259,549 1,486,230 9.76%
Plan B 666,923 - 0.97%
Plan U 1,824,818 - 2.64%
Total 7,769,431$ 1,491,401$
Pension Liabilities: As of June 30, 2019, OCSD reported a net pension liability of $29,029,147 for
its proportionate share of OCERS’ net pension liability. The net pension liability was measured as
of December 31, 2018 and the total pension liability used to calculate the net pension liability was
determined by an actuarial valuation as of that date. OCSD’s proportion of the net pension liability
was based on a projection of OCSD’s long-term share of contributions to the pension plan relative
to the projected contribution of all participating employers, actuarially determined.
At December 31, 2018, OCSD’s proportion of the net pension liability was 0.468%, which was an
increase of 1.267% from its proportion measured as of December 31, 2017. The change in
OCSD’s proportion of the net pension liability during the fiscal year ended June 30, 2019 was
caused by the contributions and projections noted above.
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
38
Pension Expense and Deferred Outflows/Inflows of Resources Related to Pensions: For the year
ended June 30, 2019, OCSD recognized pension expense of $16,730,225 for its proportionate
share of the pension expense. At June 30, 2019 OCSD reported its share of deferred outflows of
resources and deferred inflows of resources related to pensions from the following sources:
Deferred Outflows
of Resources
Deferred Inflows of
Resources
Difference between expected and actual experience 2,740,145$ 10,405,119$
Net difference between projected and actual investment
earnings on pension plan investments 59,867,140 32,687,002
Changes of assumptions (1) 16,401,122 2,445,073
Changes in proportion and differences between employer
contributions and proportionate share of contributions 872,851 60,420
Employer contributions paid to OCERS subsequent to
the measurement date 11,582,404 -
Total 91,463,662$ 45,597,614$
• adjustments to the mortality tables,
• % in the rate of marriage for male and female members at retirement or pre-retirement death,
• an increase in the Consumer Price Index of 2.75% per year, maximum increase is 3%,
• and a slight increase of .50% in salaries per year.
• retirement assumptions for deferred vested members (age at retirement 59, increase of 4.25% in reciprocity,
and an increase in compensation increases),
Detail for these changes is available in the Segal Actuarial Valuation for December 31, 2018, Section 3. This report is
available on the OCERS w ebsite at w ww .ocers.org.
(1) The monetary effects of changes in actuarial assumptions and method totals $16,401,122 for deferred outflow s
and $2,445,073 for deferred inflows of resources. These changes include:
The $11,582,404 reported as deferred outflows of resources related to pensions resulting from
OCSD’s contributions to OCERS subsequent to the measurement date will be recognized as a
reduction of the net pension liability in the year ended June 30, 2019. Other amounts reported as
deferred outflows of resources and deferred inflows of resources related to OCERS pensions will
be recognized in pension expense as follows:
Year ended June 30 Amount
2020 6,841,613$
2021 3,479,359
2022 6,546,883
2023 16,876,166
2024 539,623
Total 34,283,644$
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
39
Actuarial Assumptions and Methods: The total pension liability in the December 31, 2018 actuarial
valuation was determined using the following actuarial assumptions, applied to all periods included
in the measurement:
Investment rate of return 7.00% of net pension plan investment expenses, including inflation
Discount rate 7.00%
Inflation rate 2.75%
Projected salary increases 4.25% to 12.25%
Cost of living adjustment 2.75% of retirement income
OCERS Economic and Demographic Assumptions: On October 16, 2017, the OCERS Board
adopted the following significant changes to the economic and demographic actuarial
assumptions, which will be used to establish retirement contribution rates effective July 1, 2019:
Reduced the assumed investment rate of return from 7.25% to 7%
Reduced the assumed rate of price inflation from 3.00% to 2.75%
Adopted the use of generational tables, which have identified reduced rates of mortality for
members
Additionally, the OCERS Board adopted a three-year phase-in of the impact to the contribution
rates associated with the Unfunded Actuarially Accrued Liability. The cumulative effect of these
changes will have the impact of increasing contribution rates for members and plan sponsors.
The mortality assumptions used in the total pension liability at December 31, 2018 were based on
the Headcount-Weighted RP-2014 Healthy Annuitant Mortality Table as a starting point, projected
generationally using the two-dimensional Scale MP-2016, with age adjustments, and adjusted
separately for healthy and disabled members. The basis for determining the mortality assumptions
used were based on the results of the actuarial experience study for the period January 1, 2014
through December 31, 2016.
Further details of the experience study can be found in the OCERS CAFR, available on their
website at www.ocers.org.
Long-Term Expected Real Rate of Return: The long-term expected rate of return on pension plan
investments was determined using a building-block method in which expected future real rates of
return (expected returns, net of inflation) are developed for each major asset class. These returns
are combined to produce the long-term expected rate of return by weighting the expected future
real rates of return by the target asset allocation percentage and by adding expected inflation and
deducting expected investment expenses.
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
40
The target allocation and projected arithmetic real rates of return for each major asset class, after
deducting inflation, but before investment expenses, used in the derivation of the long-term
expected investment rate of return assumption are summarized in the following table for the
calendar year ended December 31, 2018:
Asset Class
Target
Allocation
Long-Term Expected Real
Rate of Return (Arithmetic)
Global Equity 35.00% 6.38%
Core Bonds 13.00% 1.03%
High Yield Bonds 4.00% 3.52%
Bank Loan 2.00% 2.86%
TIPS 4.00% 0.96%
Emerging Markets Debt 4.00% 3.78%
Real Estate 10.00% 4.33%
Core Infrastructure 2.00% 5.48%
Natural Resources 10.00% 7.86%
Risk Mitigation 5.00% 4.66%
Mezzanine/Distressed Debts 3.00% 6.53%
Private Equity 8.00% 9.48%
Total 100.00%
Discount Rate: The discount rate used to measure the total pension liability was 7.00% for the
year ended December 31, 2018. The projection of cash flows used to determine the discount rate
assumed that plan member contributions will be made at the current contribution rate and that
employer contributions will be made at rates equal to the actuarially determined contribution rates.
For this purpose, only employer contributions that are intended to fund benefits for current plan
members and their beneficiaries are included. Projected employer contributions that are intended
to fund the service costs for future plan members and their beneficiaries, as well as projected
contributions from future plan members, are not included. Based on those assumptions, the
pension plan’s fiduciary net position was projected to be available to make all projected future
benefit payments for current plan members. Therefore, the long-term expected rate of return on
pension plan investments was applied to all periods of projected benefit payments to determine the
total pension liability as of December 31, 2018.
Sensitivity of the Proportionate Share of Net Pension Liability to Changes in the Discount Rate:
The following table represents OCSD’s proportionate share of the net pension liability calculated
using the discount rate of 7.00%, as well as what OCSD’s proportionate share of the net pension
liability would be if it were calculated using a discount rate that is 1 percentage point lower (6.00%)
or 1 percentage point higher (8.00%) than the current rate:
Net Pension Liability
December 31, 2018 $ 131,317,068 $ 29,029,145 $ (54,119,840)
(6.00%) (7.00%) (8.00%)
1% Decrease Current Discount Rate 1% Increase
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
41
Pension Plan Fiduciary Net Position: Detailed information about OCERS’ fiduciary net position is
available in a separately issued OCERS comprehensive annual financial report. That report may
be obtained from OCERS at 2223 Wellington Avenue, Santa Ana, California 92708 or at their web
site (www.ocers.org).
B. Additional Retiree Benefit Account (ARBA)
Plan Description: The OCSD ARBA plan is a single-employer defined benefit plan which was
administered by OCERS until February 29, 2008, when OCSD began direct administration. This
benefit was established by the OCSD Board of Directors on October 25, 1992. It provides a
monthly payment to retirees towards the premium costs of health insurance for the retiree and
eligible dependents. The retiree is not required to use this amount for health insurance premium or
to remain on the OCSD medical plan. The plan is currently paying benefits to 357 retirees. The
ARBA plan is not subject to the reporting requirements of GASB 68 and 71 because a trust has not
been set up for the plan. However, GASB 73 has been implemented for the ARBA plan in the fiscal
year ended June 30, 2016. The plan is a funded on a pay-as-you-go plan from general funds and
is administered by OCSD. Stand-alone financial statements are not issued for the plan.
Benefits Provided: Employees who retire receive $10 per month for every year of service up to a
maximum of 25 years, or $250 per month. This amount is independent of salary and is fixed at
retirement. Because OCSD cannot ensure the use of the benefit for payment of eligible health
insurance expenses, the benefit is taxable to the retiree. Survivor benefits are provided in the
event that a retiree pre-deceases his/her spouse. For retirees hired prior to July 1, 1988, OCSD
provides health insurance coverage for 2½ months per year of service (see Note 6 – Other
Postemployment Benefits). ARBA benefits begin immediately after this benefit ends. For those
hired on or after July 1, 1988, ARBA benefits begin immediately upon retirement and continue for
life. Employees hired into the OCEA bargaining group after August 1, 2011 are ineligible for this
benefit.
Benefits are determined by hire date, bargaining unit and years of service as follows:
Hire date All: Prior to 7/1/88 All: After 7/1/88
OCEA*: Before 8/1/11
Benefit amount per
year of service for
normal retirement age
$10 per month x years of service up to
a maximum of 25 years
$10 per month x years of service up to
a maximum of 25 years
Service requirement
eligibility
Age 50 or over with 10 or more years
Any age with 30 or more years
Age 70 or over, any years
Age 50 or over with 10 or more years
Any age with 30 or more years
Age 70 or over, any years
Benefit payments Monthly for life Monthly for life
Benefit schedule Immediately after retiree health
insurance coverage ends Immediately upon retirement
* OCEA: Administrative, Clerical, Engineering, and Technical Services employee groups, bargaining unit OCEA.
No cost of living adjustment is provided to benefit recipients.
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
42
At June 30, 2019, the following employees were covered by the benefit terms:
Inactive employees or beneficiaries currently receiving benefits357
Inactive employees entitled to but not yet receiving benefits 44
Active employees 564
Total 965
Contributions: There are no employee contributions for this plan; OCSD covers 100% of the cost.
OCSD utilizes a pay-as-you-go method for funding the plan. Contributions to the plan from OCSD
were $816,450 for the year ended June 30, 2019.
Pension Liabilities: As of June 30, 2019, OCSD reported total pension liability of $21,577,464 for
its ARBA plan. The total pension liability was determined by an actuarial valuation as of July 1,
2017. OCSD funds benefits on a “pay as you go” basis and elected not to pre-fund its pension
obligation. As a result, there are no plan assets and the total pension liability is equal to the net
pension liability. Standard actuarial update procedures were used to project/discount from July 1,
2017 to the measurement date of June 30, 2019.
The actuarial valuation performed as of July 1, 2017, used the entry age, level percent of pay cost
method. This method represents the present value of all benefits accrued through the valuation
date assuming that each employee’s liability is expensed from hire date until retirement date as a
level percentage of pay.
The following table shows the changes in the total pension liability:
Total Pension Liability
Increase (Decrease)
Beginning balance at July 1, 2018 20,831,172$
Changes in the year:
Service cost 570,409
Interest on total pension liability 663,852
Changes of benefit terms -
Difference between expected and actual experience -
Changes of assumptions 328,481
Benefit payments (1)(816,450)
Net changes 746,292
Ending balance at June 30, 2019 21,577,464$
(1) As part of the July 1, 2017 actuarial valuation report, Demsey, Filliger & Associates prepared
a projection of the expected annual cost to the District to pay ARBA benefits.
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
43
Pension Expense and Deferred Outflows/Inflows of Resources Related to Pension: For the year
ended June 30, 2019, OCSD recognized pension expense of $1,695,688 for its ARBA plan. At
June 30, 2019 OCSD reported its share of deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:
Deferred Outflows
of Resources
Deferred Inflows
of Resources
Difference between expected and actual experience 1,316,766$ -$
Changes of assumptions (1) 1,014,536 -
Net difference between projected and actual investment
earnings on pension plan investments - -
Employer contributions over actuary projections - -
Total 2,331,302$ -$
(1) The monetary effects of changes in actuarial assumptions and method totals $1,014,536. These changes
include passage of time, a change in the discount rate from 3.25% to 3.13%, change in actuarial system,
census and other losses.
Amounts reported as deferred outflows of resources related to ARBA pensions will be recognized
in pension expense as follows:
Year ended June 30 Amount
2020 461,427$
2021 461,427
2022 461,427
2023 461,427
2024 346,923
2025 138,671
Total 2,331,302$
Actuarial Assumptions and Methods: The total pension liability in the July 1, 2017 actuarial
valuation was determined using the following actuarial assumptions, applied to all periods included
in the measurement:
Investment rate of return 3.25% per annum
Discount rate 3.25% per annum as of July 1, 2017 (valuation date)
3.13% per annum as of June 30, 2019 (measurement date)
Inflation rate 3.00% per annum
Projected salary increases 3.00% per annum (for service cost only; benefits not pay-related)
The mortality assumptions used in the total pension liability at July 1, 2017 were based on the RP-
2014 Employee Mortality and Health Annuitant Mortality Tables for Males or Females, as
appropriate, without projection.
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
44
Discount Rate: The discount rate used to measure the total pension liability was 3.25% as of the
valuation date, July 1, 2017, and 3.13% as of the measurement date, June 30, 2019. Because
there are no assets held in a trust that meets GASB 68 or 71, the discount rate is based on the 20-
year, tax exempt general obligation municipal bonds with an average rating of AA or higher.
Sensitivity of the Total Pension Liability to Changes in the Discount Rate: The following table
represents the total pension liability calculated using the discount rate of 3.13% as of the
measurement date, as well as what total pension liability would be if it were calculated using a
discount rate that is 1 percentage point lower (2.13%) or 1 percentage point higher (4.13%) than
the current rate:
Total Pension Liability
June 30, 2019 $ 24,631,326 $ 21,577,464 $ 19,061,942
(2.13%) (3.13%) (4.13%)
1% Decrease Current Discount Rate 1% Increase
(6) Other Postemployment Benefits (OPEB)
Plan Description: The post-employment medical benefits plan is a single-employer defined benefit
plan administered by OCSD. This plan was established and may be modified only by action of the
OCSD Board of Directors. Stand-alone financial statements are not issued.
Benefits Provided: OCSD offers medical insurance to active and retired employees, as well as
their qualified dependents. All retirees may choose coverage in an OCSD medical plan, with
retirees paying the full premium. However, for employees hired prior to July 1, 1988, medical
benefits begin immediately at retirement with OCSD paying 2.5 months of premium for each year
of continuous service toward the cost of coverage under OCSD medical plans. At the termination
of this period the retiree may elect to continue coverage at his/her own expense. For the fiscal year
ended June 30, 2019, premiums ranged between $225 and $4,067 per month, depending on the
plan and number of dependents covered.
At June 30, 2019, the following employees were covered by the benefit terms:
Inactive employees or beneficiaries currently receiving benefits
(includes 105 paying premiums and 44 with premiums paid by OCSD)149
Inactive employees entitled to but not yet receiving benefits 0
Active employees (includes 5 eligible for premiums paid by OCSD)605
Total 754
Contributions: There are no employee contributions to this plan; OCSD covers 100% of the cost
for qualifying employees as stated above. Retirees opting to remain with the plan after employment
pay 100% of the premium cost, except for those for whom OCSD pays for a period (see above).
OCSD utilizes a pay-as-you-go method for funding the plan. Contributions to the plan from OCSD
were $819,779 and the estimated implicit subsidy was $446,944, resulting in total payments of
$1,266,723, and retirees contributed $1,060,261 for the year ended June 30, 2019.
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
45
OPEB Liabilities: As of June 30, 2019, OCSD reported total OPEB liability of $4,013,291 for its
post-employment retiree medical benefits plan. The total OPEB liability was determined by an
actuarial valuation as of July 1, 2017. OCSD funds benefits on a “pay as you go” basis and elected
not to pre-fund its OPEB obligation. As a result, there are no plan assets and the total OPEB
liability is equal to the net OPEB liability. Standard actuarial update procedures were used to
project/discount from July 1, 2017 to the measurement date of June 30, 2019.
The actuarial valuation performed as of July 1, 2017 used the entry age, level percent of pay cost
method. This method represents the present value of benefits accrued through the valuation date,
assuming that each employee’s liability is expensed from hire date until retirement date as a level
percentage of pay.
The following table shows the changes in the total OPEB liability:
Total OPEB Liability
Increase (Decrease)
5,025,395$
Changes in the year:
Service cost 16,489
Interest on total OPEB liability 159,195
Changes of benefit terms
Changes of assumptions 78,935
Benefit payments (1)(1,266,723)
Net changes (1,012,104)
4,013,291$
(1) As part of the July 1, 2017 actuarial valuation report, Demsey, Filliger & Associates
prepared a projection of the expected annual cost to the District to pay OPEB benefits.
Ending balance at June 30, 2019
Beginning balance at July 1, 2018
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB: For the year
ended June 30, 2019, OCSD recognized OPEB expense of $254,619 for its post-employment
retiree medical benefits plan. At June 30, 2019 OCSD reported $0 for its share of deferred
outflows/inflows of resources related to OPEB.
Actuarial Assumptions and Methods: The total OPEB liability in the July 1, 2017 actuarial valuation
was determined using the following actuarial assumptions, applied to all periods included in the
measurement:
Investment rate of return 4.00% per annum
Discount rate 3.13% per annum
Inflation rate 3.00% per annum
Healthcare cost trend rate 6.00% for 2017; 5.00% for 2018 and later years
Projected salary increases 3.00% per annum
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
46
The mortality assumptions used in total OPEB liability at July 1, 2017 were based on the RP-2014
Employee Mortality Table for Males or Females, as appropriate, without projection for pre-
retirement mortality rates and RP-2014 Health Annuitant Mortality Table for Males or Females, as
appropriate, without projection for post-retirement mortality rates.
Actuarial assumptions used in the July 1, 2017 valuation were based on a review of plan
experience during the period July 1, 2015 through June 30, 2017.
Discount Rate: The discount rate used to measure the total OPEB liability was 3.13% as of the
valuation date, July 1, 2017, and 3.13% as of the measurement date, June 30, 2019. Because
there are no assets held in a trust, for GASB 75 reporting purposes, the discount rate is based on
a yield or index rate for 20-year, tax-exempt general obligation municipal bonds with an average
rating of AA/Aa or higher.
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate: The following table
represents the total OPEB liability calculated using the discount rate of 3.13% as of the
measurement date, as well as what total OPEB liability would be if it were calculated using a
discount rate that is 1 percentage point lower (2.13%) or 1 percentage point higher (4.13%) than
the current rate:
Total OPEB Liability
June 30, 2019 $ 4,181,167 $ 4,013,291 $ 3,854,570
(2.13%) (3.13%) (4.13%)
1% Decrease Current Discount Rate 1% Increase
Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rates: The
following table represents the total OPEB liability calculated using the healthcare cost trend rate of
6.00% decreasing to 5.00% as of the measurement date, as well as what total OPEB liability would
be if it were calculated using a healthcare cost trend rate that is 1 percentage point lower (5.00%
decreasing to 4.00%) or 1 percentage point higher (7.00% decreasing to 6.00%) than the current
rate:
Total OPEB Liability
June 30, 2019 $ 3,767,993 $ 4,013,291 $ 4,278,841
(5.00% decreasing
to 4.00%)
(6.00% decreasing
to 5.00%)
(7.00% decreasing
to 6.00%)
1% Decrease Current Trend Rate 1% Increase
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
47
(7) Transactions with Irvine Ranch Water District – Revenue Area No. 14
Formation of Revenue Area No. 14 & Excess Purchase Price Over Book Value of Acquired Assets On July 1, 1985, Revenue Area No. 14 was formed as an independent special district as a result of
a negotiated agreement between OCSD and Irvine Ranch Water District (IRWD). At the time of
Revenue Area 14’s creation, OCSD consisted of eight independent special districts (see Note 1 –
Reporting Entity). The eight existing districts sold a portion of the joint treatment facilities and land
to the newly created district and recorded capacity rights revenue at the time of the sale.
In accordance with the negotiated agreement between OCSD and IRWD, IRWD paid OCSD
$34,532,000 for an initial 15,000,000 gallons per day capacity in OCSD’s joint treatment facilities
(with an ultimate collection capacity of 32,000,000 gallons per day) and for a pro-rata interest in
real property (based on flow of 32,000,000 gallons per day). The book value of the assets acquired
was determined to be $14,553,000 as of June 30, 1986; these assets were recorded at book value
in Revenue Area 14. The excess of the purchase price over the assets' book value was
$19,979,000 and was recorded as an intangible asset in Revenue Area 14. The excess of the
purchase price over the assets’ book value was amortized over useful lives of the original assets
acquired. As of June 30, 2019, the excess of purchase price over the assets' book value was fully
amortized.
Annual Transactions IRWD entered into a separate agreement with Revenue Area 14 on January 1, 1986 whereby
IRWD agreed to fund quarterly payments of Revenue Area 14's proportionate share of OCSD's
joint capital outlay revolving fund budget requirements and certain capital improvements during the
term of the agreement, for which contributions of $4,213,751 were recorded as contribution from
other government during the fiscal year ended June 30, 2019. IRWD also agreed to fund the
annual integration adjustment of Revenue Area 14’s equity share in OCSD’s Joint Works
Treatment Facilities based on the flows discharged to OCSD. Integration contributions of
$19,682,194 to Revenue Area 14 were recognized and reported as reductions to contributions
from other government during the fiscal year ended June 30, 2019. These contributions received
from or credited to IRWD for their agreed-upon share of capital assets and equity share in OCSD’s
Joint Works Treatment Facilities are calculated as prescribed in the agreements.
In addition, a separate agreement for transfer of IRWD’s wastewater solids residuals to OCSD was
entered on April 28, 2010. IRWD agreed to pay OCSD a charge for interim solids handling charge
which include annual capital and quarterly operating expense components designed to
compensate OCSD for IRWD’s share of the cost of operating and maintaining the existing facilities
for the treatment of solids. As a result, $2,866,745 in annual solids capital handling charges were
reported as operating revenue in Consolidated Revenue Area, and $7,115,846 in quarterly solids
operating and maintenance charges were reported as operating revenue in Revenue Area No. 14
during the fiscal year ended June 30, 2019.
Any amounts credited to IRWD are not refunded in cash but are held as a credit to satisfy future
contributions required of IRWD. Amounts owed from IRWD are invoiced on a quarterly or annual
basis. As a result, a balance of $465,886 was reported in due from other governmental agency as
of June 30, 2019.
Annual Cash Reserve Requirement The cash reserve contribution requirement from IRWD at June 30, 2019; in accordance with
Amendment No. 2 to the Agreement between IRWD and OCSD Acquiring Ownership Interests,
Assigning Rights, and Establishing Obligations; is $14.0 million. This cash reserve requirement is
recognized as a liability to IRWD.
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2019
48
(8) Commitments and Contingencies
Pollution Remediation: An Underground Storage Tank (UST) at Plant No. 1 failed the pressure test
to ensure its tank integrity. As a result of the test failure, OCSD voluntarily took this UST out of
service and tested the immediate surrounding area and determined that both gasoline and diesel
were present. During the fiscal year ended June 30, 2017, OCSD completed an analysis of
remediation alternatives resulting in a less costly remediation plan for the contaminated soil than
the plan developed during the previous fiscal year. The new remediation plan received approval
from the Orange County Health Care Agency, and based upon their feedback a final design is now
completed. This new remediation plan calls for removal and disposal of approximately 2,200 tons
of contaminated soil, and some limited groundwater treatment. This work was issued a
construction contract in March 2019 and is anticipated to be completed by January 2020. As of
June 30, 2019, actual costs of $374,112 were incurred. Total remaining costs are estimated not to
exceed $5,000,000, including post-remediation monitoring costs for a five-year period and a
project contingency of 50 percent for the remediation effort.
Construction Commitments: OCSD has active construction projects to add additional capacity,
improve treatment, or replace/ rehabilitate existing assets. At June 30, 2019, the outstanding
commitments with contractors totaled $143,791,502.
Litigation: Certain claims involving disputed construction costs have arisen in the ordinary course
of business. Additionally, OCSD is a defendant in lawsuits. Although the outcome of these matters
is not presently determinable, management does not expect that the resolution of these matters
will have a material adverse impact on the financial condition of OCSD.
(9) Local Sewer Facilities Transfer
On February 5, 2019, OCSD entered into an agreement to transfer 44,400 linear feet (8.5 miles) of
local sewer facilities to the City of Santa Ana. In accordance with this agreement, OCSD made a
one-time disbursement of $23.2 million of local sewer accumulated capital repair and replacement
funds to the City of Santa Ana during fiscal year 2018-19. Local sewer capital assets transferred
had an approximate book value net of depreciation of approximately $33,617.
ORANGE COUNTY SANITATION DISTRICT
REQUIRED SUPPLEMENTARY INFORMATION
49
2015 2016 2017 2018 2019
1.13% 0.74% (0.20%) (0.80%) 0.47%
57,418,760$ 42,439,759$ (10,384,508)$ (39,571,100)$ 29,029,147$
58,641,163$ 59,789,927$ 60,000,017$ 62,341,796$ 66,475,479$
97.92% 70.98% (17.31%) (63.47%) 43.67%
89.61% 92.74% 101.70% 105.96% 95.86%
(1) The amounts presented were determined as of the measurement date December 31. Data for fiscal years ended
June 30, 2010 through 2014 is not available in a comparable format.
(2) Covered payroll represents compensation earnable and pensionable compensation for the measurement period ended
December 31. Only compensation earnable and pensionable compensation that would possibly go into the determination
of retirement benefits are included.
OCSD's covered payroll (2)
OCSD's proportionate share of the
net pension liability (asset) as a
percentage of covered payroll
OCERS' fiduciary net position as a
percentage of the total pension
liability
OCSD's proportion of the net
pension liability (asset)
ORANGE COUNTY SANITATION DISTRICT
Proportionate Share of the Net Pension Liability (Asset)
Orange County Employees Retirement System (OCERS) Pension Plan
Last 10 Fiscal Years (1)
OCSD's proportionate share of the
net pension liability (asset)
Fiscal Year Ended June 30,
50
2015 2016 2017 2018 2019
17,201,569$ 12,222,849$ 7,709,734$ 7,525,655$ 7,769,431$
(17,201,569) (12,222,849) (7,709,734) (7,525,655) (7,769,431)
-$ -$ -$ -$ -$
60,025,942$ 60,595,474$ 62,266,907$ 65,390,144$ 69,101,109$
28.66% 20.17% 12.38% 11.51% 11.24%
(1) Data for fiscal years ended June 30, 2010 through 2014 is not available in a comparable format.
(2) Covered payroll represents compensation earnable and pensionable compensation for the fiscal year ended June 30.
Only compensation earnable and pensionable compensation that would possibly go into the determination of retirement
benefits are included.
Contribution deficiency (excess)
Covered payroll (2)
Contributions as a percentage of
covered payroll
Contractually required contribution
ORANGE COUNTY SANITATION DISTRICT
Orange County Employees Retirement System (OCERS) Pension Plan
Schedule of District Contributions
Last 10 Fiscal Years (1)
Contributions in relation to the
contractually required contribution
Fiscal Year Ended June 30,
51
2015 2016 2017 2018 2019
16,680,614$ 18,313,122$ 18,467,361$ 20,831,172$ 21,577,464$
62,139,375$ 62,977,577$ 65,120,945$ 68,126,103$ 71,948,599$
26.84% 29.08% 28.36% 30.58% 29.99%
(1) The amounts presented for each fiscal year were determined as of July 1. Data for fiscal years ended
June 30, 2010 through 2014 is not available in a comparable format.
(2) This plan is not administered through a trust or equivalent arrangement, thus covered-employee payroll is used.
Covered-employee payroll represents total payroll of employees that are provided benefits through the pension
plan for the fiscal year ended June 30.
(3)
“pay as you go” basis and elected not to pre-fund its pension obligation. As a result, there are no plan
assets and the total pension liability is equal to the net pension liability.
There are no assets in a trust compliant with GASB codification P22.101. OCSD funds benefits on a
Covered-employee payroll (2)
Total pension liability as a
percentage of covered-
employee payroll
ORANGE COUNTY SANITATION DISTRICT
Total Pension Liability (3)
Additional Retiree Benefit Account (ARBA)
Last 10 Fiscal Years (1)
Total pension liability
Fiscal Year Ended June 30,
52
2016 2017 2018 2019
16,680,614$ 18,313,122$ 18,467,361$ 20,831,172$
Changes in the year:
Service cost 270,223 278,330 553,795 570,409
Interest on total pension liability 626,386 593,711 649,192 663,852
Changes of benefit terms - - - -
Changes of assumptions 1,230,327 (70,952) 1,889,274 328,481
Benefit payments (2) (494,428) (646,850) (728,450) (816,450)
Net changes 1,632,508 154,239 2,363,811 746,292
Ending balance at June 30 18,313,122$ 18,467,361$ 20,831,172$ 21,577,464$
(1) The amounts presented for each fiscal year were determined as of July 1. Data for fiscal years ended
June 30, 2010 through 2015 is not available in a comparable format.
(2) As part of the July 1, 2017 actuarial valuation report, Demsey, Filliger & Associates prepared a projection of
the expected annual cost to OCSD to pay ARBA benefits. OCSD elected to use actual costs rather than
the projected annual costs to pay ARBA benefits.
(3)OCSD funds benefits on a “pay as you go” basis and elected not to pre-fund its pension obligation. As a result,
there are no plan assets and the total pension liability is equal to the net pension liability.
ORANGE COUNTY SANITATION DISTRICT
Changes in Total Pension Liability (3)
Additional Retiree Benefit Account (ARBA)
Last 10 Fiscal Years (1)
Beginning balance at July 1
Fiscal Year Ended June 30,
53
2017 2018 2019
6,398,694$ 5,025,395$ 4,013,291$
65,120,945$ 68,126,103$ 71,948,599$
9.83% 7.38% 5.58%
(1) The amounts presented for each fiscal year were determined as of July 1. Data for fiscal years ended
June 30, 2010 through 2016 is not available in a comparable format.
(2) This plan is not administered through a trust or equivalent arrangement, thus covered-employee payroll
is used. Covered-employee payroll represents total payroll of employees that are provided benefits
through the OPEB plan for the fiscal year ended June 30.
(3)
“pay as you go” basis and elected not to pre-fund its OPEB obligation. As a result, there are no plan
assets and the total OPEB liability is equal to the net OPEB liability.
There are no assets in a trust compliant with GASB codification P52.101. OCSD funds benefits on a
Covered-employee payroll (2)
Total OPEB liability as a percentage of
covered-employee payroll
ORANGE COUNTY SANITATION DISTRICT
Total OPEB Liability (3)
Post-Employment Medical Benefits Plan
Last 10 Fiscal Years (1)
Fiscal Year Ended June 30,
Total OPEB liability
54
2018 2019
Beginning balance at July 1 6,398,694$ 5,025,395$
Changes in the year:
Service cost 18,182 16,489
Interest on total OPEB liability 177,395 159,195
Changes of benefit terms - -
Changes of assumptions (95,279) 78,935
Benefit payments (2) (1,473,597) (1,266,723)
Net changes (1,373,299) (1,012,104)
Ending balance at June 30 5,025,395$ 4,013,291$
(1) The amounts presented for each fiscal year were determined as of July 1. Data for
fiscal years ended June 30, 2010 through 2017 is not available in a comparable format.
(2) Benefit payments include implicit subsidy associated with benefits paid.
(3) OCSD funds benefits on a “pay as you go” basis and elected not to pre-fund its OPEB
obligation. As a result, there are no plan assets and the total OPEB liability is equal to the net
OPEB liability.
Fiscal Year Ended June 30,
ORANGE COUNTY SANITATION DISTRICT
Changes in Total OPEB Liability (3)
Post-Employment Medical Benefits Plan
Last 10 Fiscal Years (1)
55
(THIS PAGE INTENTIONALLY LEFT BLANK)
56
ORANGE COUNTY SANITATION DISTRICT
SUPPLEMENTARY INFORMATION
57
Revenue Consolidated
Area No. 14 Revenue Area Eliminations Totals
Current assets:
Cash and cash equivalents -$ 75,930,213$ -$ 75,930,213$
Investments - 684,538,124 - 684,538,124
Accounts receivable, net of allowance
for uncollectibles $349,973 - 13,701,223 - 13,701,223
Accrued interest receivable - 3,801,257 - 3,801,257
Connection fees receivable - 1,735,064 - 1,735,064
Property tax receivable - 1,586,671 - 1,586,671
Inventories - 6,005,074 - 6,005,074
Due from other revenue area - 465,886 (465,886) -
Due from other governmental agency 465,886 - - 465,886
Prepaid expenses - 1,966,446 - 1,966,446
Total current assets 465,886 789,729,958 (465,886) 789,729,958
Noncurrent assets:
Restricted:
Cash and cash equivalents held by fiscal agents - 28,766 - 28,766
Unrestricted:
Non-depreciable capital assets 22,266,597 541,532,392 - 563,798,989
Depreciable capital assets, net of accumulated depreciation 90,118,506 2,015,391,411 - 2,105,509,917
Other noncurrent assets, net - 10,344 - 10,344
Total noncurrent assets 112,385,103 2,556,962,913 - 2,669,348,016
Total assets 112,850,989 3,346,692,871 (465,886) 3,459,077,974
Deferred outflows of resources:
Deferred losses on defeasances - 28,888,051 - 28,888,051
Deferred outflows related to pensions - 93,794,964 - 93,794,964
Total deferred outflows of resources - 122,683,015 - 122,683,015
Total assets and deferred outflows of resources 112,850,989 3,469,375,886 (465,886) 3,581,760,989
Current liabilities:
Accounts payable - 16,909,092 - 16,909,092
Accrued expenses - 16,630,416 - 16,630,416
Due to other revenue area 465,886 - (465,886) -
Retentions payable - 3,845,922 - 3,845,922
Interest payable - 18,270,200 - 18,270,200
Current portion of long-term obligations - 54,326,759 - 54,326,759
Total current liabilities 465,886 109,982,389 (465,886) 109,982,389
Noncurrent liabilities:
Noncurrent portion of long-term obligations - 1,011,058,609 - 1,011,058,609
Total OPEB liability - 4,013,291 - 4,013,291
Net pension liability - OCERS - 29,029,147 - 29,029,147
Total pension liability - ARBA - 21,577,464 - 21,577,464
Total noncurrent liabilities - 1,065,678,511 - 1,065,678,511
Total liabilities 465,886 1,175,660,900 (465,886) 1,175,660,900
Deferred inflows of resources:
Deferred inflows related to pensions - 45,597,614 - 45,597,614
Total liabilities and deferred inflows of resources 465,886 1,221,258,514 (465,886) 1,221,258,514
Net position:
Net investment in capital assets:
Collection system 14,850,908 506,835,384 - 521,686,292
Treatment and disposal -land 1,930,045 36,096,353 - 38,026,398
Treatment and disposal system 95,604,150 2,013,992,066 - 2,109,596,216
Capital assets related debt - (1,021,585,556) - (1,021,585,556)
Subtotal 112,385,103 1,535,338,247 - 1,647,723,350
Unrestricted - 712,779,125 - 712,779,125
Total net position 112,385,103$ 2,248,117,372$ -$ 2,360,502,475$
ORANGE COUNTY SANITATION DISTRICT
Combining Area Schedule of Net Position
June 30, 2019
58
Revenue Consolidated
Area No. 14 Revenue Area Totals
Operating revenues:
Service charges 9,308,233$ 307,983,005$ 317,291,238$
Permit and inspection fees 17,499 1,181,795 1,199,294
Total operating revenues 9,325,732 309,164,800 318,490,532
Operating expenses other than depreciation
and amortization:
Salaries and benefits 2,806,581 82,699,563 85,506,144
Utilities 254,308 7,478,917 7,733,225
Supplies, repairs and maintenance 1,511,365 30,258,304 31,769,669
Contractual services 7,715,970 18,366,273 26,082,243
Feasibility studies 171,966 5,678,495 5,850,461
Other 491,935 9,152,653 9,644,588
Total operating expenses other than
depreciation and amortization 12,952,125 153,634,205 166,586,330
Operating income (loss) before
depreciation and amortization (3,626,393) 155,530,595 151,904,202
Depreciation and amortization 3,724,401 98,514,513 102,238,914
Operating income (loss) (7,350,794) 57,016,082 49,665,288
Non-operating revenues:
Property taxes 3,027,217 96,506,810 99,534,027
Investment and interest income 437,514 28,664,098 29,101,612
Contributions from other governments 24,017,885 3,782,166 27,800,051
Other 64,292 2,097,970 2,162,262
Total non-operating revenues 27,546,908 131,051,044 158,597,952
Non-operating expenses:
Interest - 34,465,835 34,465,835
Local sewer service transfer - 23,229,000 23,229,000
Other 3,033 389,963 392,996
Loss on disposal of assets 45,743 5,448,227 5,493,970
Total non-operating expenses 48,776 63,533,025 63,581,801
Income before capital contributions 20,147,338 124,534,101 144,681,439
Capital contributions:
Capital facilities capacity charges - 21,031,628 21,031,628
Change in net position 20,147,338 145,565,729 165,713,067
Total net position - beginning 92,237,765 2,102,551,643 2,194,789,408
Total net position - ending 112,385,103$ 2,248,117,372$ 2,360,502,475$
ORANGE COUNTY SANITATION DISTRICT
Combining Area Schedule of Revenues, Expenses, and Changes in Net Position
For the Year Ended June 30, 2019
59
ORANGE COUNTY SANITATION DISTRICT
Combining Area Schedule of Cash Flows
For the Year Ended June 30, 2019
Revenue Consolidated
Area No. 14 Revenue Area Eliminations Totals
Cash flows from operating activities:
Receipts from (refunds to) customers and users (9,562,055)$ 308,306,154$ -$ 298,744,099$
Payments to employees (2,806,581) (75,291,515) - (78,098,096)
Payments to suppliers (10,145,544) (69,388,457) - (79,534,001)
Net cash provided by (used in) operating activities (22,514,180) 163,626,182 - 141,112,002
Cash flows from noncapital financing activities:
Proceeds from property taxes 3,027,217 96,147,274 - 99,174,491
Receipts (payments) for sewer service transfer and other obligations 39,722 (21,520,993) - (21,481,271)
Net cash provided by noncapital financing activities 3,066,939 74,626,281 - 77,693,220
Cash flows from capital and related financing activities:
Capital facilities capacity charges - 23,167,640 - 23,167,640
Additions to capital assets (23,895,944) (99,758,399) 4,213,750 (119,440,593)
Disposal of capital assets - (19,682,194) 19,682,194 -
Interest paid - (42,922,157) - (42,922,157)
Principal payments on debt obligations - (31,655,000) - (31,655,000)
Proceeds released to escrow account on defeased debt - (109,875,000) (109,875,000)
Proceeds from debt issuance - 110,302,416 - 110,302,416
Debt issuance costs - (402,429) - (402,429)
Contributions from other government 24,017,885 3,782,166 (23,895,944) 3,904,107
Net cash provided by (used in) capital and related financing activities 121,941 (167,042,957) - (166,921,016)
Cash flows from investing activities:
Proceeds from the sale of investments 15,085,667 285,778,941 - 300,864,608
Purchases of investments - (431,416,584) - (431,416,584)
Interest received 437,514 13,256,902 - 13,694,416
Net cash provided by (used in) investing activities 15,523,181 (132,380,741) - (116,857,560)
Net decrease in cash and cash equivalents (3,802,119) (61,171,235) - (64,973,354)
Cash and cash equivalents, beginning of year 3,802,119 137,130,214 - 140,932,333
Cash and cash equivalents, end of year -$ 75,958,979$ -$ 75,958,979$
Reconciliation of operating income (loss) to net cash provided
by (used in) operating activities:
Operating income (loss) (7,350,794)$ 57,016,082$ -$ 49,665,288$
Adjustments to reconcile operating income (loss)
to net cash provided by operating activities:
Depreciation and amortization 3,724,401 98,514,513 - 102,238,914
Bad debt expense (net recoveries) - (106,006) - (106,006)
(Increase)/decrease in operating assets:
Accounts receivable 483 (392,760) - (392,277)
Inventories - 595,820 - 595,820
Due from other governmental agency (18,888,270) (465,886) - (19,354,156)
Prepaid and other assets - (321,034) - (321,034)
Increase/(decrease) in operating liabilities:
Accounts payable - (1,441,374) - (1,441,374)
Accrued expenses - 882,405 - 882,405
Net pension/OPEB liabilities - 6,923,368 - 6,923,368
Compensated absences - (3,185) - (3,185)
Claims and judgments - 2,424,239 - 2,424,239
Net cash provided by (used in) operating activities (22,514,180)$ 163,626,182$ -$ 141,112,002$
Noncash activities:
Unrealized gain on the fair value of investments -$ 14,464,176$ 14,464,176$
Capital assets acquired through accounts payable - 5,353,308 5,353,308
Capital facilities capacity charges acquired - (2,136,012) (2,136,012)
60
ORANGE COUNTY SANITATION DISTRICT
STATISTICAL SECTION
Contents Pages
Financial Position and Trends
62 - 66
Revenue Capacity
67 - 69
Debt Capacity
70 - 72
Operating Information
73 - 76
Demographic and Economic Factors
77 - 80
This part of the comprehensive annual financial report of the Orange County Sanitation District (OCSD)
presents detailed information as a context for understanding what the information in the financial
statements, note disclosures, and required supplementary information says about OCSD's overall
financial health.
These schedules contain information to help the reader assess OCSD's most
significant revenue source of sewer service fees.
These schedules offer demographic information to help the reader understand the
environment within which OCSD's financial activities take place.
These schedules contain current and trend information to help the reader understand
OCSD's financial position and how OCSD's financial performance and well-being have
changed over time.
These schedules contain data to help the reader understand how the information in
OCSD's financial report relates to the services it provides and the activities it performs.
These schedules present information to help the reader assess the affordability of
OCSD's current levels of outstanding debt and OCSD's ability to issue additional debt
in the future. All of OCSD's debt is recorded in a proprietary fund; consequently, many
of the schedules which are applicable to governmental funds are not presented.
61
ORANGE COUNTY SANITATION DISTRICT
Net Position by Component
(Dollars in Thousands)
Last Ten Fiscal Years
Fiscal Year
2009-10 1,121,057$ 310,016$ 1,431,073$
2010-11 1,131,063 379,423 1,510,486
2011-12 1,125,966 471,652 1,597,618 (1)
2012-13 1,180,298 520,427 1,700,725
2013-14 1,204,706 617,589 1,822,295
2014-15 1,327,384 434,460 1,761,844 (2)
2015-16 1,429,269 489,303 1,918,572 (3)
2016-17 1,504,898 536,327 2,041,225
2017-18 1,568,118 626,671 2,194,789 (4)
2018-19 1,647,723 712,779 2,360,502
(2) Beginning net position restated due to implementation of GASB 68.
(3) Beginning net position restated due to implementation of GASB 73.
(4) Beginning net position restated due to implementation of GASB 75.
Source: Orange County Sanitation District's Financial Management Division.
Total Net Position
Net Investment in
Capital Assets Unrestricted
(1) Beginning net position restated due to implementation of GASB 65.
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Net Investment in Capital Assets Unrestricted
62
ORANGE COUNTY SANITATION DISTRICT
Revenues and Gross Capital Contributions by Source
(Dollars in Thousands)
Last Ten Fiscal Years
Fiscal Service Property
Year Charges Taxes Interest Other
2009-10 225,059$ 629$ 225,688$ 64,759$ 19,166$ 6,939$ 90,864$ ($2,406)
2010-11 244,465 784 245,249 64,307 10,092 11,015 85,414 9,800
2011-12 259,491 1,030 260,521 67,882 15,747 8,486 92,115 8,936
2012-13 303,400 1,176 304,576 79,240 (3,913) 3,781 79,108 12,797
2013-14 300,611 848 301,459 74,944 6,498 12,595 94,037 14,093
2014-15 301,548 902 302,450 79,835 4,806 9,996 94,637 17,656
2015-16 314,477 951 315,428 84,407 9,183 14,658 108,248 17,974
2016-17 312,237 1,045 313,282 88,284 3,081 27,146 118,511 16,351
2017-18 316,329 1,170 317,499 94,188 3,230 7,611 105,029 18,077
2018-19 317,291 1,199 318,490 99,534 29,102 29,962 158,598 21,032
Source: Orange County Sanitation District's Financial Management Division.
Total
Non-
Operating
Non-Operating Revenue
Fees
Permit &
Operating Revenue
Inspection Total
Operating
Capital
Contributions
-$25,000
$0
$25,000
$50,000
$75,000
$100,000
$125,000
$150,000
$175,000
$200,000
$225,000
$250,000
$275,000
$300,000
$325,000
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Operating Revenue Non-Operating Revenue Capital Contributions
63
ORANGE COUNTY SANITATION DISTRICT
Expenses by Type
Operating Expense Non - Operating Expense
Fiscal
Year
Salaries &
Benefits Utilities
Maint &
Other
Depr &
Amort
Interest
Expense Other
2009-10 69,652$ 6,934$ 61,499$ 52,036$ 190,121$ 27,537$ 13,736$ 41,273$
2010-11 73,112 6,948 63,328 49,288 192,676 29,129 39,245 68,374
2011-12 75,642 7,405 89,272 56,051 228,370 28,700 8,433 37,133
2012-13 76,878 6,403 66,536 63,907 213,724 42,315 37,335 79,650
2013-14 79,179 6,381 60,887 99,805 246,252 40,450 1,317 41,767
2014-15 79,657 7,246 62,323 94,186 243,412 34,112 3,168 37,280
2015-16 75,576 7,246 70,679 90,502 244,003 27,597 6,482 34,079
2016-17 74,291 6,119 69,843 96,320 246,573 25,648 53,270 78,918
2017-18 67,418 7,298 70,840 97,399 242,955 35,011 1,483 36,494
2018-19 85,506 7,733 73,347 102,239 268,825 34,466 29,116 63,582
Source: Orange County Sanitation District's Financial Management Division.
(Dollars in Thousands)
Last Ten Fiscal Years
Total Non-
Operating
Total
Operating
$0
$25,000
$50,000
$75,000
$100,000
$125,000
$150,000
$175,000
$200,000
$225,000
$250,000
$275,000
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Operating Expense Non-Operating Expense
64
ORANGE COUNTY SANITATION DISTRICT
Change in Net Position
(Dollars in Thousands)
Last Ten Fiscal Years
Fiscal Total Total
Year
2009-10 314,146$ 231,394$ 82,752$ 1,348,321$ 1,431,073$
2010-11 340,463 261,050 79,413 1,431,073 1,510,486
2011-12 361,572 265,503 96,069 1,501,549 (1)1,597,618
2012-13 396,481 293,374 103,107 1,597,618 1,700,725
2013-14 409,589 288,019 121,570 1,700,725 1,822,295
2014-15 414,743 280,692 134,051 1,627,793 (2)1,761,844
2015-16 441,650 278,082 163,568 1,755,004 (3)1,918,572
2016-17 448,144 325,491 122,653 1,918,572 2,041,225
2017-18 440,605 279,449 161,156 2,033,633 (4)2,194,789
2018-19 498,120 332,407 165,713 2,194,789 2,360,502
(2) Beginning net position restated due to implementation of GASB 68.
(3) Beginning net position restated due to implementation of GASB 73.
(4) Beginning net position restated due to implementation of GASB 75.
Source: Orange County Sanitation District's Financial Management Division.
Change in Beginning Ending
(1) Beginning net position restated due to implementation of GASB 65.
Net PositionRevenues Expenses Net Position Net Position
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Ending Net Position by Fiscal Year
65
ORANGE COUNTY SANITATION DISTRICT
Cash and Investment Reserve Balances
(Dollars in Millions)
Last Ten Fiscal Years
Fiscal Year Total
2009-10 185$ 57$ 102$ 129$ 473$
2010-11 187 57 176 141 561
2011-12 196 57 186 138 577
2012-13 174 57 234 135 600
2013-14 189 57 296 131 673
2014-15 177 57 194 129 557
2015-16 181 57 190 117 545
2016-17 174 57 173 107 511
2017-18 173 57 350 100 680
2018-19 177 57 429 97 760
Notes:
Source: Orange County Sanitation District's Financial Management Division.
The Debt Service Required Reserves are monies held and controlled by a trustee pursuant to the provisions of
certificates of participation issues, and the monies are not available for the general needs of the District.
Debt
Service
Requirements
Self-
Insurance
Capital
Improvement
Program
Cash Flow
Contingency
The Cash Flow Contingency Reserve is to fund operations, maintenance, and certificates of participation debt service
expenses for the first half of the fiscal year, prior to the receipt of the first installment of the property tax allocation and
sewer service user fees.
The Self-Insurance Reserve is to provide requirements for property damage including fire, flood and earthquake, general
liability and workers' compensation.
The Capital Improvement Program Reserve is to fund annual increments of the capital improvement program with a
target level at one half of the average annual capital improvement program over the next 10 years.
The Board of Directors of the Orange County Sanitation District has established the criteria below to determine the total
funds required as listed in the Accumulated Funds and Reserves Policy:
66
ORANGE COUNTY SANITATION DISTRICT
Sewer Service Fees
Single Family Residence Rate
Last Nine Fiscal Years and Next Fiscal Year
2010-11 244.00$
2011-12 267.00
2012-13 294.00
2013-14 308.00
2014-15 316.00
2015-16 322.00
2016-17 327.00
2017-18 331.00
2018-19 335.00
2019-20 339.00
Source: Orange County Sanitation District's Financial Management Division.
Sewer service fees are comprised of three categories: residential customers, commercial customers, and
industrial customers. Although the majority of sewer service fee revenues are from residential and commercial
customers (see the schedule of Number of Accounts and Revenues by Customer Class), the fee paid by each
residential and commercial customer is less than the individual fees paid by industrial customers. The rates for
commercial and industrial customers are derived from the base sewer service fee charged for a single-family
residence and are based on the type of business and the strength and volume of waste that is discharged into
the sewer system. Due to the complexity of the rate structure for commercial and industrial customers and
since the rates are derivatives of the single-family residence rate, only the single-family residence rate is
presented within the statistical section.
Fiscal Year
Sewer Service
Charge
0
50
100
150
200
250
300
350
400
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20
SF
R
A
n
n
u
a
l
F
e
e
Fiscal Year
Annual Sewer Service Fees
Single Family Residence
67
ORANGE COUNTY SANITATION DISTRICT
Number of Accounts and Revenues by Customer Class
(Dollars in Millions)
Last Ten Fiscal Years
Number of Total Percentage Total Percentage
Equivalent Sewer Svc. of Sewer Number of Sewer Svc. of Sewer
Fiscal Single-Family Charge Service Charge Customer Charge Service Charge
Year Dwellings Revenue Revenues Accounts Revenue Revenues
2009-10 880,213 194.5$ 95% 487 10.8$ 5%
2010-11 878,408 214.3 95% 479 10.1 5%
2011-12 874,008 233.4 96% 516 9.5 4%
2012-13 883,477 259.8 96% 527 10.8 4%
2013-14 873,308 269.0 95% 489 14.4 5%
2014-15 824,465 260.5 95% 467 14.2 5%
2015-16 863,317 278.0 96% 450 12.6 4%
2016-17 859,869 281.2 95% 466 13.8 5%
2017-18 871,338 288.4 94% 473 17.9 6%
2018-19 871,312 291.9 97% 476 9.7 3%
Source: Orange County Sanitation District's Financial Management Division.
Residential/Commercial Industrial
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
$350,000,000
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Residential/Commercial Users Industrial Users
68
ORANGE COUNTY SANITATION DISTRICT
Principal Sewer Service Customers
For the Current Fiscal Year and Nine Years Ago
Fiscal Year Ended 6/30/19 Fiscal Year Ended 6/30/10
Industrial % to Total Industrial % to Total
Permittee Service Permittee Service
Service Charge Service Charge
Customer Charges Rank Revenue Charges Rank Revenue
House Foods America Corp. 1,423,273$ 1 0.45% 534,052$ 5 0.24%
Ameripec Inc. 752,128 2 0.24% 410,545 7 0.18%
Stremicks Heritage Foods, LLC 747,890 3 0.24% 629,473 4 0.28%
Pulmuone Wildwood, Inc. 681,048 4 0.21% 409,974 8
Kimberly-Clark Worldwide, Inc. 651,129 5 0.21% 1,325,796 1 0.59%
Jazz Semiconductor 578,150 6 0.18%
Nor-Cal Beverage Co. Inc. (Main) 505,790 7 0.16%
Dae Shin USA, Inc. 471,401 8 0.15%
MCP Foods, Inc. 414,959 9 0.13% 1,313,284 2 0.58%
Broncs, Inc. dba WesCoast Textiles 355,395 10 0.11%
Alstyle Apparel-A&G Inc. 1,019,603 3 0.45%
Pepsi-Cola Bottling Group 419,539 6 0.19%
Mornningstar Foods, LLC 360,198 9 0.16%
Angelica Textile Services 321,568 10 0.14%
6,581,163$ 2.08% 6,744,032$ 2.81%
Source: Orange County Sanitation District's Financial Management Division.
Although the majority of sewer service fee revenues are from residential and commercial customers (see the
schedule of Number of Accounts and Revenues by Customer Class), the fee paid by each residential and commercial
customer is less than the individual fees paid by industrial customers. Consequently, this schedule shows the largest
sewer service fee customers.
69
ORANGE COUNTY SANITATION DISTRICT
Ratio of Annual Debt Service to Total Expenses
(Dollars in Thousands)
Last Ten Fiscal Years
Total
Fiscal Principal Total Debt Operating
Year (1) Interest (4) Service (3) Expenses (2)
2009-10 24,030$ 46,052$ 70,082$ 138,085$ 50.75%
2010-11 25,895 49,426 75,321 143,388 52.53
2011-12 14,370 50,975 65,345 172,319 37.92
2012-13 23,965 53,640 77,605 149,817 51.80
2013-14 39,590 53,163 92,753 146,447 63.34
2014-15 27,875 53,586 81,461 149,226 54.59
2015-16 29,405 50,301 79,706 153,501 51.93
2016-17 35,575 47,143 82,718 150,253 55.05
2017-18 32,140 43,466 75,606 145,555 51.94
2018-19 31,655 44,481 76,136 166,586 45.70
Notes
Source: Orange County Sanitation District's Financial Management Division.
(4) - Excludes amortization of premium/discount and deferred amount.
(3) - Debt consists of certificates of participation, revenue obligations, and anticipation notes.
Ratio of Debt
Service to Total
Operating
Expenses
(2) - Excludes depreciation and amortization expense.
(1) - Excludes principal reductions due to advanced refunding.
0%
10%
20%
30%
40%
50%
60%
70%
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
70
ORANGE COUNTY SANITATION DISTRICT
Debt Coverage Ratios
(Dollars in Millions)
Last Ten Fiscal Years
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Operating & Non-operating Revenues:
Service Charges, Net of Refunds-Regional 194.5$ 214.3$ 233.4$ 259.8$ 269.0$ 260.5$ 278.0$ 281.2$ 288.4$ 291.9$
Service Charges, Net of Refunds-Local (3) 5.6 5.7 5.7 5.8 5.7 5.5 5.7 1.3 (0.1) -
Industrial Sewer Service Charges 10.8 10.1 9.5 10.8 14.4 14.2 12.6 13.8 17.9 9.4
SAWPA Assessment 6.6 4.9 3.6 2.7 2.4 2.7 3.2 3.3 2.7 2.9
IRWD Assessment 6.7 18.2 14.2 25.6 19.6 26.4 26.6 36.0 9.9 36.3
Ad Valorem Taxes 64.8 64.3 67.9 79.2 74.9 79.8 84.4 88.3 94.2 99.5
Interest Earnings 19.2 10.1 15.7 (3.9) 6.5 4.8 9.2 3.1 3.2 29.1
Other Revenues 8.4 3.0 2.5 3.7 3.0 3.2 4.0 5.0 6.4 8.0
Total Revenues 316.6 330.6 352.5 383.7 395.5 397.1 423.7 432.0 422.6 477.1
Operating Expenses (1) 138.1 143.4 172.3 149.8 146.4 149.2 153.5 150.3 145.6 166.6
Net Revenues 178.5$ 187.2$ 180.2$ 233.9$ 249.1$ 247.9$ 270.2$ 281.7$ 277.0$ 310.5$
Debt Service Requirements
Principal Payments 24.0 25.9 14.4 24.0 39.6 27.9 29.4 35.6 32.1 31.7
Interest Payments 43.1 46.5 51.0 53.6 53.2 53.6 50.3 47.1 43.5 44.4
Total Debt Service Requirements 67.1$ 72.4$ 65.4$ 77.6$ 92.8$ 81.5$ 79.7$ 82.7$ 75.6$ 76.1$
Coverage Ratios 2.66 2.59 2.76 3.01 2.68 3.04 3.39 3.41 3.66 4.08
Ending Reserves (2) 344.0$ 420.0$ 439.0$ 465.0$ 542.0$ 428.0$ 428.0$ 404.0$ 580.0$ 663.0$
Notes
(1) - Operating expenses exclude depreciation and amortization expenses.
(2) - Excludes debt service reserves in accordance with the District's reserve policy.
(3) - Local Sewer transferred to East Orange County Water District in FY2016-17.
Source: Orange County Sanitation District's Financial Management Division.
Fiscal Year Ending June 30,
The Orange County Sanitation District has no legal debt limits as imposed by State legislation. The District does have contractual covenants
within the existing Certificates of Participation indenture agreements which require minimum coverage ratios of 1.25. The coverage ratio is
calculated as the ratio of net annual revenues available for debt service payments to total annual debt service requirements.
-
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
2007-08 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
71
ORANGE COUNTY SANITATION DISTRICT
Ratios of Outstanding Debt
Last Ten Fiscal Years
Debt as a
(5) (3) Percentage
Total Median of Median (4) Debt
Fiscal Outstanding Family Family Population per
Year Debt Income (1) Income Estimate (2) Capita
2009-10 1,306,255,753$ 87,200$ 0.007% 2,539,990 514.28
2010-11 1,427,792,453 84,200 0.006% 2,563,170 557.04
2011-12 1,376,404,782 85,300 0.006% 2,457,571 560.07
2012-13 1,325,928,512 84,100 0.006% 2,472,122 536.35
2013-14 1,278,998,124 84,900 0.007% 2,491,268 513.39
2014-15 1,241,140,357 85,900 0.007% 2,521,803 492.16
2015-16 1,206,722,347 85,000 0.007% 2,548,745 473.46
2016-17 1,140,679,773 88,000 0.008% 2,578,681 442.35
2017-18 1,095,737,610 92,700 0.008% 2,609,419 419.92
2018-19 1,050,502,373 97,900 0.009% 2,607,092 402.94
Notes & Data Sources
(1) - Data is for the entire County of Orange.
(2) - Data is for the estimated population served by the Orange County Sanitation District.
(3) - Data Source: U.S. Department of Housing and Urban Development.
(4) - Data Source: Demographic Research Unit, California Department of Finance.
(5) - Data Source: Orange County Sanitation District. Debt includes certificates of participation,
revenue obligations, and anticipation notes and is presented net of original issuance premiums.
72
ORANGE COUNTY SANITATION DISTRICT
Comparison of the Volume of Wastewater Treated
With Revenues and Expenses
Last Ten Fiscal Years
Millions of
Gallons of
Waste-
water
Treated
Fiscal Per
Year Day
2009-10 196 1,588.72$ 190,121$ 41,273$ 225,688$ 90,864$
2010-11 207 1,816.62 192,676 68,374 245,249 85,414
2011-12 201 1,871.47 228,370 37,133 260,521 92,115
2012-13 200 1,906.01 213,724 79,650 304,576 79,108
2013-14 198 1,936.64 246,252 41,767 301,459 94,037
2014-15 187 2,070.97 243,412 37,280 302,450 94,637
2015-16 183 2,110.43 244,003 34,079 315,428 108,248
2016-17 188 2,054.56 246,573 78,918 313,282 118,511
2017-18 185 2,069.30 242,955 36,494 317,499 105,029
2018-19 191 2,274.73 268,825 63,582 318,490 158,598
Source: Orange County Sanitation District.
Total
Non-Operating
Revenues
(In Thousands)
Total
Operating
(In Thousands)
Revenues
Non-Operating
(In Thousands)
Operating
(In Thousands)
TotalTotal
CostsCosts
Gallons
Collection,
Treatment
& Disposal
Cost per
Million
Total expenses in FY 2018-19 increased $101 million, or 43.7 percent since FY 2009-10, primarily as a result of
expansion of the Capital Improvement Program (CIP) and increase in operational services levels with OCSD's decision
beginning in FY 2002-03 to maximize existing secondary treatment facilities as OCSD moved from a 50/50 mix of
primary and secondary effluent treatment to meeting secondary treatment standards as of December 31, 2012.
Depreciation expense represents 49.7 percent of the increase as a result of the expansion in capital facilities and the
financing associated with the expansion. Other non-operating expense represents 15.2 percent of the increase due to
the local sewer facilities transfer to City of Santa Ana. Maintenance, chemicals, utilities, and other operating costs
represent another 12.5 percent of the increase, primarily due to the increase in the levels of treatment referred to
above. In FY 2018-19 personnel expenses increased 26.8 percent over the prior year. This increase is mainly due to
the difference between projected and actual investment earnings on OCERS plan investments that have been
recognized as pension expense. The full-time equivalent positions authorized increased by 1 in FY 2018-19.
As depicted from the chart above, actual wastewater treatment flows were 196 mgd in FY 2009-10. The last several
years of California's record-breaking drought and water conservation efforts have resulted in FY 2018-19 flows of only
191 mgd, a decrease of 5 mgd or 2.56 percent since FY 2009-10.
73
ORANGE COUNTY SANITATION DISTRICT
Authorized Full-time Equivalents by Function
Last Ten Fiscal Years
Fiscal Year Ending June 30,
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
General Management (1)13 13 13 12 12 14 15 15 15 14
Human Resources (2)17 27 17 16 18 16 27 27 27 27
Administrative Services (2)92 85 111 111 110 111 98 99 99 100
Environmental Services (3)- - - - - - - 91 91 91
Facilities Support Services (3)71 70 84 81 78 76 63 - - -
Technical Services 105 102 - - - - - - - -
Engineering 96 112 128 125 123 123 127 116 116 116
Operations and Maintenance 245 230 281 281 283 284 294 279 287 288
Total FTE's 639 639 634 626 624 624 624 627 635 636
Notes
(1) - Management Discretion positions used on a temporary basis have been excluded from FTE count.
(2) - In 2016, Risk Management moved from Administrative Services to Human Resources Department.
(3) - In 2017, District reorganization created Environmental Services and eliminated Facilities Support Services.
Source: Orange County Sanitation District's Financial Management Division.
0
50
100
150
200
250
300
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
General Management (1)Human Resources (2)Administrative Services (2)
Environmental Services (3)Facilities Support Services (3)Technical Services
Engineering Operations and Maintenance
74
ORANGE COUNTY SANITATION DISTRICT
Biosolids Produced
Last Ten Fiscal Years
Fiscal Year Wet Tonnage Dry Tonnage
2009-10 245,668 50,799
2010-11 253,557 49,133
2011-12 280,572 47,556
2012-13 274,957 43,365
2013-14 279,362 50,764
2014-15 275,943 45,515
2015-16 283,052 50,439
2016-17 288,771 50,641
2017-18 284,039 58,325
2018-19 254,616 50,421
Source: Orange County Sanitation District's Environmental Compliance Division.
-
50,000
100,000
150,000
200,000
250,000
300,000
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Wet Tonnage Dry Tonnage
75
ORANGE COUNTY SANITATION DISTRICT
Capital Asset Statistics
Last Ten Fiscal Years
Number Primary Secondary
Fiscal of Pump Treatment Treatment
Year Stations Capacity (1) Capacity (1)
2009-10 579 17 376 212
2010-11 587 17 376 212
2011-12 572 17 376 332
2012-13 572 17 376 332
2013-14 580 17 376 332
2014-15 580 17 376 332
2015-16 570 17 376 332
2016-17 396 (2) 17 376 332
2017-18 396 17 376 332
2018-19 389 17 376 332
Notes
(1) - Capacity is presented as million gallons treated per day.
(2) - In FY 2016-17, local sewers were transferred to East Orange County Water District.
Source: Orange County Sanitation District
Miles of
Trunk &
Subtrunk
Sewers
76
ORANGE COUNTY SANITATION DISTRICT
Demographic Statistics
Covering The Entire County of Orange (1)
Last Ten Fiscal Years
Total (6)
(2)Personal Per Capita Public (7)
Fiscal Population Income Personal School Unemployment
Year Estimates (in thousands) Income Enrollment Rate
2009-10 3,166,000 147,138,449$ (3)46,475$ 87,200$ 502,239 9.5%
2010-11 3,030,000 154,131,535 (3)50,868 84,200 502,903 9.2%
2011-12 3,056,000 169,584,000 (4)55,492 85,300 502,195 7.9%
2012-13 3,082,000 166,370,000 (4)53,981 84,100 501,801 6.1%
2013-14 3,114,000 179,141,000 (4)57,528 84,900 500,487 5.2%
2014-15 3,148,000 193,359,000 (4)61,423 85,900 497,116 4.3%
2015-16 3,183,000 199,442,000 (4)62,658 85,000 493,030 4.4%
2016-17 3,194,000 208,653,000 (4)65,327 88,000 490,430 3.8%
2017-18 3,221,000 220,368,000 (4)68,416 92,700 485,835 3.3%
2018-19 3,222,000 230,180,000 (4),(8)71,440 97,900 478,823 3.0%
Notes and Data Sources
(2) - Data Source: Demographic Research Unit, California Department of Finance.
(3) - Data Source: Bureau of Economic Analysis, U.S. Department of Commerce.
(4) - Data Source: A. Gary Anderson Center for Economic Research, Chapman University.
(5) - Data Source: U.S. Department of Housing and Urban Development.
(6) - Data Source: California Department of Education, Educational Demographics Unit.
(7) - Data Source: State of California, Employment Development Department as of June 30 of each fiscal year.
(8) - Forecasted number.
Median
(5)
(1) -The Orange County Sanitation District services 479 square miles or 60% of the total 799 square miles that
make up the boundaries of the County of Orange.
Income
Family
77
ORANGE COUNTY SANITATION DISTRICT
Estimated Population Served by the
Orange County Sanitation District
June 30, 2019
Anaheim 359,339
Brea 45,606
Buena Park 83,384
Costa Mesa 115,830
Cypress 49,833
Fountain Valley 56,652
Fullerton 142,824
Garden Grove 175,155
Huntington Beach 203,761
Irvine 280,202
La Habra 63,542
La Palma 15,820
Los Alamitos 11,721
Newport Beach 87,180
Orange 141,691
Placentia 52,333
Santa Ana 337,716
Seal Beach 25,073
Stanton 39,307
Tustin 81,369
Villa Park 5,933
Westminster 92,610
Yorba Linda 68,706
Subtotal Cities (1)2,535,587
Estimated Population Served in
Unincorporated Areas (2)71,505
2,607,092
Data Sources:
(1) Demographic Research Unit, State of California Department of Finance
(2) Center for Demographic Research, California State University, Fullerton.
Population
as of
January 1, 2019
78
ORANGE COUNTY SANITATION DISTRICT
Principal Orange County Employers (1)
For the Current Fiscal Year and Nine Years Ago
Fiscal Year Ended 6/30/19 Fiscal Year Ended 6/30/010
Percentage of Percentage of
Number of Total County Number of Total County
Employers Employees (2) Rank Employment (3) Employees (2) Rank Employment (4)
Walt Disney Co. 30,000 1 1.92% 19,800 1 1.36%
University of California, Irvine 23,884 2 1.53% 19,279 2 1.33%
County of Orange 17,271 3 1.10% 17,895 3 1.23%
St. Joseph Health 14,000 4 0.89% 10,929 4 0.75%
Kaiser Permanente 8,178 5 0.52% 5,598 9 0.38%
Albertsons Southern California 7,670 6 0.49%
Target Corp. 6,300 7 0.40% 6,226 7 0.43%
Wal-Mart Stores Inc. 6,200 8 0.40%
Hoag Memorial Hospital 6,100 9 0.39%
Boeing Co. 6,000 10 0.38% 8,477 5 0.58%
Yum! Brands Inc 7,000 6 0.48%
SuperValu, Inc.5,923 8 0.41%
Memorial Health Services, Inc 5,533 10 0.38%
Total 125,603 8.02% 106,660 7.33%
Notes & Data Sources(1) - Data is for the entire County of Orange.(2) - Data Sources: Orange County Business Journal Book of Lists, County of Orange
(3) - Data Source: State of California, Employment Development Department.
- Percentage is calculated by dividing employees by total employment of 1,558,900 as of June 2019.
(4) - Data Source: State of California, Employment Development Department.
- Percentage is calculated by dividing employees by total employment of 1,454,700 as of June 2010.
79
ORANGE COUNTY SANITATION DISTRICT
Operating Indicators
June 30, 2019
Consolidated Revenue Area
County of Orange (unincorporated areas)
Cities:
Anaheim Huntington Beach Santa Ana
Brea Irvine Seal Beach
Buena Park La Habra Stanton
Costa Mesa La Palma Tustin
Cypress Los Alamitos Villa Park
Fountain Valley Newport Beach Westminster
Fullerton Orange Yorba Linda
Garden Grove Placentia
Special Districts:
Costa Mesa Sanitary District
Midway City Sanitary District
Yorba Linda Water District
Revenue Area No. 14
County of Orange (unincorporated areas)
Cities:
Irvine
Orange
Tustin
Special District:
Irvine Ranch Water District
Governing Body:25-member Board of Directors
Authorized Full-Time Equivalent Employees:636
Operational Date:July 1, 1954
Authority:California Health & Safety Code Section 4700 et. seq.
Services:Wastewater collection, treatment, and disposal
Service Area:479 square miles
Population Served:2.6 million
Total Miles of Sewers (including force mains):389 miles
Number of Pumping Stations:17
Wastewater System Treatment Capacities (Million Gallons per Day)
Actual Flows Existing Secondary
FY18-19 Treatment Capacity
Plant 1 120 182
Plant 2 71 150
Total 191 332
Source: Orange County Sanitation District's Financial Management Division.
District Organization:The Orange County Sanitation District is one consolidated district made up of two revenue
areas which service unincorporated county areas and twenty-three cities and related special districts, as follows:
Existing Primary
376
168
208
Treatment Capacity
80
ORANGE COUNTY SANITATION DISTRICT
OTHER DATA & TRENDS
Information within this section consists of other data and trends including
additional annual disclosures as required by the Sanitation District's debt
covenants beyond what is allowed to be reported in the Statistical Section.
81
Net Unrealized
Cost Market Value Gain/(Loss)
Shares Par Base Base % of Total Base
INVESTMENT PORTFOLIO:
CASH & CASH EQUIVALENTS (U.S. DOLLAR):
COMMERCIAL PAPER 14,415,000$ 14,358,541$ 14,369,161$ 1.99% 10,620$
FIRST AMERICAN SHORT TERM FDS 21,158,772 21,158,772 21,158,772 2.93% -
US AGENCY 2,850,000 2,835,718 2,836,491 0.39% 773
SUBTOTAL - CASH & CASH EQUIVALENTS 38,423,772 38,353,031 38,364,424 5.31% 11,393
FIXED INCOME SECURITIES (U.S. DOLLAR):
COMMERCIAL PAPER 4,000,000 3,919,749 3,966,960 0.55% 47,211
CONSUMER DISCRETIONARY 8,822,000 8,861,208 8,959,006 1.24% 97,798
CONSUMER STAPLES 3,880,000 3,878,991 4,077,996 0.56%199,005
ENERGY 9,000,000 8,942,542 9,143,090 1.26%200,548
FINANCE 88,504,000 88,501,683 89,521,399 12.38% 1,019,716
HEALTH CARE 2,000,000 1,948,640 2,048,160 0.28% 99,520
INDUSTRIAL 10,493,000 10,504,744 10,613,239 1.47%108,495
INFORMATION TECHNOLOGY 28,715,000 28,626,585 29,054,181 4.02%427,596
INVESTMENT GRADE-MUNI REVENUE 4,240,000 4,307,634 4,330,845 0.60% 23,211
MTG RELATED SECURITY 46,930,801 46,861,535 47,326,912 6.55%465,377
SHORT TERM FUNDS 7,300,000 7,303,984 7,304,306 1.01% 322
SUPRANATIONAL 33,005,000 32,742,600 33,041,747 4.57%299,147
TELECOMMUNICATION SERVICES 1,130,000 1,114,813 1,129,514 0.16% 14,701
U. S. GOVERNMENT 285,487,829 282,973,692 286,206,371 39.59% 3,232,679
U.S. GOVERNMENT TIPS 11,190,920 11,046,200 11,171,448 1.55%125,248
US AGENCY 133,975,000 134,565,949 136,642,950 18.90% 2,077,001
SUBTOTAL - FIXED INCOME SECURITIES 678,673,550 676,100,549 684,538,124 94.69% 8,437,575
TOTAL INVESTMENT PORTFOLIO 717,097,322$ 714,453,580 722,902,548 100.00% 8,448,968$
DEMAND DEPOSITS AND CASH ON HAND 2,346,869 2,346,869
MONIES HELD WITH FISCAL AGENTS 28,766 28,766
MONIES WITH THE LOCAL AGENCY INVESTMENT FUND 35,158,735 35,218,920
TOTAL CASH AND INVESTMENTS 751,987,950$ 760,497,103$
Source: US Bank and Orange County Sanitation District's Financial Management Division.
ORANGE COUNTY SANITATION DISTRICT
Cash and Investment Portfolio
As of June 30, 2019
82
ORANGE COUNTY SANITATION DISTRICT
Property Tax Rates - Direct and Overlapping Governments
Last Ten Fiscal Years
Tax Rate
OCSD
1958 OCSD's
General Average
Fiscal Basic Obligation Total Share of
Year Levy Bonds Tax Rate Basic Levy
2009-10 1.00% 0.00% 1.00% 1.63%
2010-11 1.00% 0.00% 1.00% 1.64%
2011-12 1.00% 0.00% 1.00% 1.64%
2012-13 1.00% 0.00% 1.00% 1.64%
2013-14 1.00% 0.00% 1.00% 1.65%
2014-15 1.00% 0.00% 1.00% 1.63%
2015-16 1.00% 0.00% 1.00% 1.62%
2016-17 1.00% 0.00% 1.00% 1.61%
2017-18 1.00% 0.00% 1.00% 1.59%
2018-19 1.00% 0.00% 1.00% 1.59%
Notes
Source: County of Orange Auditor-Controller's Office.
In 1978, California voters passed Proposition 13 which set the property tax rate at a
1.00% fixed amount of assessed value. This 1.00% is shared by all taxing agencies
within which the subject property resides. In addition to the 1.00% fixed amount,
property owners were charged taxes as a percentage of assessed property values for
the payment of OCSD general obligation bonds (which were paid in full in fiscal year
1998-99).
83
ORANGE COUNTY SANITATION DISTRICT
Assessed and Estimated Actual Value of Taxable Property
(Dollars In Thousands)
Last Ten Fiscal Years
Percent
Change in
Fiscal Assessed
Year Secured Unsecured Total Value
2009-10 299,038,654$ 6,116,530$ 305,155,184$ 5.08%
2010-11 298,099,034 6,238,834 304,337,868 -0.27%
2011-12 302,526,970 6,163,979 308,690,949 1.43%
2012-13 310,451,986 5,901,040 316,353,026 2.48%
2013-14 323,064,994 6,220,505 329,285,499 4.09%
2014-15 343,102,030 7,378,643 350,480,673 6.44%
2015-16 365,267,850 6,936,768 372,204,618 6.20%
2016-17 385,137,024 6,642,312 391,779,336 5.26%
2017-18 409,310,248 6,990,609 416,300,857 6.26%
2018-19 435,911,818 7,213,037 443,124,855 6.44%
Source: Orange County Auditor - Controller's Office.
In 1978, the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum
rate of 1% based upon the assessed value of the property being taxed. Each year, the assessed value of property
may be increased by an inflation factor which is limited to a maximum increase of 2%. With a few exceptions,
property is only reassessed at the time that it is sold to a new owner. At that point, the new assessed value is
reassessed at the purchase price of the property sold. The assessed valuation data shown above represents the
only data currently available with respect to the actual market value of taxable property and is subject to the
limitations described above. Consequently, the assessed and estimated values are the same.
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
$350,000,000
$400,000,000
$450,000,000
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Secured Unsecured
84
ORANGE COUNTY SANITATION DISTRICT
Property Tax and User Fee Levies and Collections
(Dollars in Thousands)
Last Ten Fiscal Years
(1)
Total Tax Current Tax Percent Total Tax % of Total % of Pass-
Fiscal and User and User Fee of Levy Delinquent and User Fee Collection O/S Delinquencies Through
Year Fee Levy Collection Collected Collection Collection to Levy Delinquencies to Levy Payments
2009-10 272,050$ 272,110$ 100.02 226$ 272,336$ 100.11 (60)$ (0.02) -$
2010-11 292,646 292,689 100.01 120 292,809 100.06 (43) (0.01) -
2011-12 314,077 314,133 100.02 121 314,254 100.06 (56) (0.02) 3,116
2012-13 340,298 340,156 99.96 64 340,220 99.98 142 0.04 14,687
2013-14 356,607 356,108 99.86 76 356,184 99.88 499 0.14 7,274
2014-15 362,978 362,927 99.99 108 363,035 100.02 51 0.01 8,447 (2)
2015-16 371,502 370,170 99.64 637 370,807 99.81 1,332 0.36 9,199 (2)
2016-17 381,226 380,078 99.70 608 380,686 99.86 1,148 0.30 9,751
2017-18 386,538 385,673 99.78 741 386,414 99.97 865 0.22 11,353
2018-19 394,641 393,809 99.79 786 394,595 99.99 832 0.21 12,524
Notes
Source: Orange County Auditor - Controller's Office.
(1)Upon dissolution of California redevelopment agencies during fiscal year 2011-12, property tax increment formerly
remitted to OCSD by its member city redevelopment agencies was instead deposited into the newly formed Redevelopment
Property Tax Trust Fund (RPTTF) from which the Auditor/Controller makes disbursements on behalf of the successor
agencies. There is no tax levy associated with these collections; thus, they have been excluded from the "% of Total
Collection to Levy" calculation.
(2)In fiscal year 2014-15 and 2015-16, the County did not bill user fees for wholly exempt agencies not subject to property
taxes. In fiscal year 2014-15 and 2015-16,OCSD internally billed user fees of $5 million and $4.5 million, respectively, to
wholly exempt agencies. These amounts have been excluded from the levy and collection amounts above, as only tax and
user fees included on County property tax billings are shown in this schedule.
$-
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Total Tax and User Fee Levy Total Tax and User Fee Collection
85
ORANGE COUNTY SANITATION DISTRICT
Property Value and Construction
Covering The Entire County of Orange (1)
(Dollars In Thousands)
Last Ten Fiscal Years
Non-
Residential
Construction (3) Total
Fiscal Calendar No. of Construction
Year Value Year Value Units Value Value (3)
2009-10 422,965,596$ 2010 1,151,929$ 3,091 1,029,407$ 2,181,336$
2010-11 420,751,575 2011 1,300,019 4,807 1,236,973 2,536,992
2011-12 424,769,642 2012 1,265,430 6,163 1,560,509 2,825,939
2012-13 432,902,274 2013 1,521,280 10,453 2,653,728 4,175,008
2013-14 447,749,156 2014 1,993,154 10,636 2,640,484 4,633,638
2014-15 476,303,290 2015 2,196,000 10,897 2,834,000 5,030,000
2015-16 504,650,360 2016 2,487,000 12,134 3,160,000 5,647,000
2016-17 531,052,158 2017 2,062,000 10,294 3,217,000 5,279,000
2017-18 563,662,044 2018 3,675,000 8,417 2,786,000 6,461,000
2018-19 598,901,016 2019 3,595,000 8,567 2,717,000 6,312,000 (4)
Notes and Data Sources
(2) - Data Source: Orange County Auditor-Controller's Office.
(3) - Data Source: A. Gary Anderson Center for Economic Research, Chapman University.
(4) - Forecasted numbers.
(1) -The Orange County Sanitation District services 479 square miles or 60% of the total 799 square miles
that make up the boundaries of the County of Orange.
Residential
Construction (3)
Assessed
Property Value (2)
86
ORANGE COUNTY SANITATION DISTRICT
Insurance in Force
As of June 30, 2019
Type Insurer Deductible
All-Risk Property
Fire and Other Perils Public Entity Property $500,000 per $1 billion/occurrence
Insurance Program occurrence
(multiple insurers)
Flood Public Entity Property $2500,000 per $300 million/occurrence
Insurance Program occurrence
Earthquake Two insurers 5% per structure, $25 million
(certain structures only) min. $5,000,000
Boiler & Machinery Public Entity Property $25,000 to $100 million/occurrence
Insurance Program $350,000
(multiple insurers)
Crime Insurance National Union Fire $25,000 $5 million
Cyber Insurance Lloyd's of London (Beazley) $100,000 $2 million
Excess Great American $500,000 $40 million/occurrence
General Liability (first $10 million layer); and annual aggregate
Berkley National
($20 million layer
excess $10 million)
Great American
($10 million layer
excess $30 million)
Travel & Accident Chubb Group of Insurance None Accidental Death & Dismemberment:
Companies Class 1: Elected Officials,
$500,000 per occurrence
Class 2: Employees, 10X annual
salary, up to $500,000 per occur.
Excess Workers'CSAC Excess Insurance $1,000,000 Unlimited statutory coverage
Compensation Authority Program Each Accident each accident, each employee
$4 million employer's liability
Pollution Liability CSAC Excess Insurance $75,000 $10,000,000 per loss
Authority Program
Watercraft
Liability Atlantic Specialty $2,500 BI / $10 million
$10,000 All other
Hull & Machinery Atlantic Specialty $10,000
Pollution Liability Great American Ins. Co, None $5 million
Source: Orange County Sanitation District's Risk Management Office.
Limit
$600,000
87
(THIS PAGE INTENTIONALLY LEFT BLANK)
88
ORANGE COUNTY SANITATION DISTRICTFINANCIAL MANAGEMENT DIVISION
10844 Ellis Avenue
Fountain Valley, California 92708-7018
714.962.2411
www.ocsd.com
06/30/19
ORANGE COUNTY SANITATION DISTRICT
Single Audit Reports
For the Year Ended June 30, 2019
ORANGE COUNTY SANITATION DISTRICT
Single Audit Reports
For the Year Ended June 30, 2019
Table of Contents
Page
Independent Auditor's Report on Internal Control Over Financial Reporting and
on Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance with Government Auditing Standards ....................................... 1
Independent Auditor's Report on Compliance for the Major Federal Program;
Report on Internal Control Over Compliance; and Report on Schedule of
Expenditures of Federal Awards Required by the Uniform Guidance .................................................. 3
Schedule of Expenditures of Federal Awards .............................................................................................. 6
Notes to the Schedule of Expenditures of Federal Awards .......................................................................... 7
Schedule of Findings and Questioned Costs ................................................................................................ 8
www.mgocpa.com
Macias Gini & O’Connell LLP 4675 MacArthur Court, Suite 600 Newport Beach, CA 92660 1
Independent Auditor’s Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance With Government Auditing Standards
To the Board of Directors
Orange County Sanitation District
Fountain Valley, California
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the financial statements of the Orange County
Sanitation District (OCSD), as of and for the year ended June 30, 2019, and the related notes to the
financial statements, which collectively comprise OCSD’s basic financial statements, and have issued
our report thereon dated October 25, 2019.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered OCSD’s internal control
over financial reporting (internal control) to determine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinion on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of OCSD’s internal control. Accordingly, we do
not express an opinion on the effectiveness of OCSD’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control, such that there is a reasonable possibility that a material
misstatement of OCSD’s financial statements will not be prevented, or detected and corrected on a timely
basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is
less severe than a material weakness, yet important enough to merit attention by those charged with
governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether OCSD’s financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
2
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of OCSD’s internal
control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering OCSD’s internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
Newport Beach, California
October 25, 2019
www.mgocpa.com
Macias Gini & O’Connell LLP 4675 MacArthur Court, Suite 600 Newport Beach, CA 92660
3
Independent Auditor’s Report on Compliance for the Major Federal Program;
Report on Internal Control Over Compliance; and Report on Schedule of
Expenditures of Federal Awards Required by the Uniform Guidance
To the Board of Directors
Orange County Sanitation District
Fountain Valley, California
Report on Compliance for the Major Federal Program
We have audited the Orange County Sanitation District’s (OCSD) compliance with the types of
compliance requirements described in the OMB Compliance Supplement that could have a direct and
material effect on OCSD’s major federal program for the year ended June 30, 2019. OCSD’s major
federal program is identified in the summary of auditor’s results section of the accompanying schedule of
findings and questioned costs.
Management’s Responsibility
Management is responsible for compliance with federal statutes, regulations, and the terms and
conditions of its federal awards applicable to its federal programs.
Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for OCSD’s major federal program based on
our audit of the types of compliance requirements referred to above. We conducted our audit of
compliance in accordance with auditing standards generally accepted in the United States of America;
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we
plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of
compliance requirements referred to above that could have a direct and material effect on a major federal
program occurred. An audit includes examining, on a test basis, evidence about OCSD’s compliance with
those requirements and performing such other procedures as we considered necessary in the
circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for the major federal
program. However, our audit does not provide a legal determination of OCSD’s compliance.
Opinion on the Major Federal Program
In our opinion, OCSD complied, in all material respects, with the types of compliance requirements
referred to above that could have a direct and material effect on its major federal program for the year
ended June 30, 2019.
4
Report on Internal Control Over Compliance
Management of OCSD is responsible for establishing and maintaining effective internal control over
compliance with the types of compliance requirements referred to above. In planning and performing our
audit of compliance, we considered OCSD’s internal control over compliance with the types of
requirements that could have a direct and material effect on the major federal program to determine the
auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on
compliance for the major federal program and to test and report on internal control over compliance in
accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the
effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the
effectiveness of OCSD’s internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a
federal program on a timely basis. A material weakness in internal control over compliance is a
deficiency, or combination of deficiencies, in internal control over compliance, such that there is a
reasonable possibility that material noncompliance with a type of compliance requirement of a federal
program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in
internal control over compliance is a deficiency, or a combination of deficiencies, in internal control
over compliance with a type of compliance requirement of a federal program that is less severe than a
material weakness in internal control over compliance, yet important enough to merit attention by those
charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over
compliance that might be material weaknesses or significant deficiencies. We did not identify any
deficiencies in internal control over compliance that we consider to be material weaknesses. However,
material weaknesses may exist that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our
testing of internal control over compliance and the results of that testing based on the requirements of the
Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance
We have audited the financial statements of OCSD as of and for the year ended June 30, 2019, and the
related notes to the financial statements, which collectively comprise OCSD’s basic financial statements.
We issued our report thereon dated October 25, 2019, which contained an unmodified opinion on those
financial statements. Our audit was conducted for the purpose of forming an opinion on the financial
statements that collectively comprise the basic financial statements. The accompanying schedule of
expenditures of federal awards is presented for purposes of additional analysis as required by the
Uniform Guidance and is not a required part of the basic financial statements. Such information is the
responsibility of management and was derived from and relates directly to the underlying accounting and
other records used to prepare the basic financial statements.
5
The information has been subjected to the auditing procedures applied in the audit of the basic financial
statements and certain additional procedures, including comparing and reconciling such information
directly to the underlying accounting and other records used to prepare the basic financial statements or
to the basic financial statements themselves, and other additional procedures in accordance with auditing
standards generally accepted in the United States of America. In our opinion, the schedule of
expenditures of federal awards is fairly stated in all material respects in relation to the basic financial
statements as a whole.
Newport Beach, California
October 25, 2019
ORANGE COUNTY SANITATION DISTRICT
Notes to the Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2019
7
(1) BASIS OF PRESENTATION
The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal
award activity of the Orange County Sanitation District (OCSD), under programs of the federal
government for the year ended June 30, 2019. The information in this Schedule is presented in
accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform
Guidance). Because the Schedule presents only a selected portion of the operations of OCSD, it is not
intended to and does not present the financial position, changes in financial position or cash flows of
OCSD.
(2) SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES
Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures
are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of
expenditures are not allowable or are limited as to reimbursement. Under the accrual basis of accounting
expenditures are recognized when incurred, regardless of the timing of cash flows.
(3) PASS-THROUGH AMOUNTS TO SUB-RECIPIENTS
OCSD did not pass through any federal awards to subrecipients during the year ended June 30, 2019.
(4) INDIRECT COST RATES
OCSD has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform
Guidance. There were no indirect costs charged to any of OCSD’s Federal programs during the year
ended June 30, 2019.
ORANGE COUNTY SANITATION DISTRICT
Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2019
8
Section I - Summary of Auditor’s Results
Financial Statements:
Type of report the auditor issued on whether the financial
statements were prepared in accordance with GAAP:
Unmodified
Internal control over financial reporting:
• Material weakness(es) identified? No
• Significant deficiency(ies) identified? None reported
Noncompliance material to financial
statements noted?
No
Federal Awards:
Internal control over major federal programs:
• Material weakness(es) identified? No
• Significant deficiency(ies) identified? No
Type of auditor’s report issued on compliance
for the major federal program: Unmodified
Any audit findings disclosed that are required to be
reported in accordance with 2 CFR 200.516(a)? No
Identification of major federal program:
CFDA Number Name of Federal Program
15.504
Title XVI Water Reclamation and
Reuse Program
Dollar threshold used to distinguish
between Type A and Type B
programs:
$750,000
Auditee qualified as a low-risk auditee?
No
ORANGE COUNTY SANITATION DISTRICT
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2019
9
Section II - Financial Statement Findings
A. Internal Control Matters
None reported.
B. Compliance Findings
None reported.
Section III – Federal Award Findings and Questioned Costs
A. Internal Control Matters
None reported.
B. Compliance Findings
None reported.
Orange County Sanitation District
ADMINISTRATION COMMITTEE
Agenda Report
Administration Building
10844 Ellis Avenue
Fountain Valley, CA 92708
(714) 593-7433
File #:2019-708 Agenda Date:11/13/2019 Agenda Item No:8.
FROM:James D. Herberg, General Manager
Originator: Lorenzo Tyner, Assistant General Manager
SUBJECT:
PROFESSIONAL RISK MANAGEMENT CONSULTANT AGREEMENT
GENERAL MANAGER'S RECOMMENDATION
RECOMMENDATION:
Approve a sole source Professional Consultant Services Agreement with John J.Preston,
Specification No.SSJ 2174,to perform professional risk management consulting services for the
Orange County Sanitation District,which includes overseeing property and general liability loss
control and setting loss control requirements on public bids and contracts,risk transfer,loss
prevention,and risk reduction in an amount not to exceed $150,000 per year,for a term of one year
beginning December 1, 2019 - November 30, 2020; with a one-year renewal option.
BACKGROUND
The Orange County Sanitation District (Sanitation District)entered into an agreement with Keenan
and Associates (Keenan)in August 2019 to provide risk management consulting services through
December 31,2019.The Sanitation District has an existing relationship with John J.Preston through
Keenan providing risk management consulting services.Entering into a separate agreement with
John J.Preston will provide a cost savings compared to the contract with Keenan and allow the
Sanitation District to have greater direction and control of the services provided.Mr.Preston is
familiar with the Sanitation District,has exhibited a clear understanding of Sanitation District
processes,and is well-versed in Sanitation District operations.It would be in the best interest of the
Sanitation District to retain John J.Preston's services for immediate risk management consulting
needs to ensure business continuity while giving the Sanitation District the opportunity to evaluate the
program and its management.Staff previously contacted risk management firms including Bickmore
Risk Management Consulting (Bickmore)and Marsh Risk Consulting (Marsh)to inquire about their
risk management services;however,Bickmore was unresponsive and Marsh does not provide the
requested services.
RELEVANT STANDARDS
·Commitment to safety & reducing risk in all operations
Orange County Sanitation District Printed on 11/6/2019Page 1 of 2
powered by Legistar™
File #:2019-708 Agenda Date:11/13/2019 Agenda Item No:8.
PROBLEM
The agreement with Keenan ends on December 31,2019.The Sanitation District will be without
professional risk management personnel during the evaluation of the program and its management
as of this date. This scenario will expose the Sanitation District to greater risk and potential liability.
PROPOSED SOLUTION
Approve a sole source Professional Consultant Services Agreement with John J.Preston in
accordance with Purchasing Ordinance No. OCSD-52, Section 107 A (Sole Source Procurement).
TIMING CONCERNS
The existing agreement ends on December 31, 2019.
RAMIFICATIONS OF NOT TAKING ACTION
Potentially exposing the Sanitation District to risk and liability.
FINANCIAL CONSIDERATIONS
It is estimated that the cost for professional risk management consulting services will not exceed
$150,000.This request complies with authority levels of the Sanitation District's Purchasing
Ordinance.Funding for this agreement is available from an open budgeted risk management
position.This position is currently vacant following the retirement of a long-term employee and
attempts to find a permanent replacement.
ATTACHMENT
The following attachment(s)are included in hard copy and may also be viewed on-line at the OCSD website
(www.ocsd.com) with the complete agenda package:
·Professional Consultant Services Agreement
Orange County Sanitation District Printed on 11/6/2019Page 2 of 2
powered by Legistar™
Orange County Sanitation District 1 of 10 Specification No. SSJ 2174
Version 080919
PROFESSIONAL CONSULTANT SERVICES AGREEMENT
RISK MANAGEMENT LOSS CONTROL SERVICES AGREEMENT
Specification No. SSJ 2174
THIS AGREEMENT is made and entered into as of the date fully executed below, by and between
Orange County Sanitation District, with a principal place of business at 10844 Ellis Avenue,
Fountain Valley, CA 92708 (hereinafter referred to as "OCSD") and John J. Preston with a
principal place of business at 166 Fox Ln, Calimesa, CA 92320 (hereinafter referred to as
"Consultant") collectively referred to as the “Parties”.
W I T N E S S E T H
WHEREAS, based on Consultant’s expertise and experience, OCSD desires to temporarily
engage Consultant to provide Risk Management Consulting Services "Services” as described
in Exhibit “B”; and
WHEREAS, Consultant submitted its Proposal, and
WHEREAS, on November 13, 2019, the Administration Committee of OCSD, by minute order,
authorized execution of this Agreement between OCSD and Consultant; and
WHEREAS, OCSD has chosen Consultant to conduct Services in accordance with Ordinance
No. OCSD-52; and
NOW, THEREFORE, in consideration of the mutual promises and mutual benefits exchanged
between the Parties, the Parties mutually agree as follows:
1. Introduction
1.1 This Agreement and all exhibits hereto (called the "Agreement") is made by OCSD and the
Consultant. The terms and conditions herein exclusively govern the purchase of Services
as described in Exhibit “B”.
1.2 Exhibits to this Agreement are incorporated by reference and made a part of this Agreement
as though fully set forth at length herein.
Exhibit “A” NOT USED
Exhibit “B” Proposal
Exhibit “C” Acknowledgement of Insurance Requirements
Exhibit “D” OCSD Safety Standards
Exhibit “E” Human Resources Policies
Exhibit “F” NOT USED
1.3 In the event of any conflict or inconsistency between the provisions of this Agreement and
any of the provisions of the exhibits hereto, the provisions of this Agreement shall in all
respects govern and control.
1.4 This Agreement may not be modified, changed, or supplemented, nor may any obligations
hereunder be waived or extensions of time for performance granted, except by written
instrument signed by both Parties.
1.5 The various headings in this Agreement are inserted for convenience only and shall not
affect the meaning or interpretation of this Agreement or any section or provision hereof.
Orange County Sanitation District 2 of 10 Specification No. SSJ 2174
Version 080919
1.6 The term “days”, when used in the Agreement, shall mean calendar days, unless otherwise
noted as workdays.
1.7 The term “workday”. Workdays are defined as all days that are not Saturday, Sunday, or
OCSD observed holidays. Meetings with OCSD staff shall be scheduled from Monday
through Thursday between the hours of 8 a.m. and 4 p.m. (exception is Operations staff
who maintain plant operations 24/7 and work a rotated 12-hour shift) and shall conform to
OCSD work schedules. OCSD review periods shall not include OCSD observed holidays.
1.8 OCSD holidays (non-working days) are as follows: New Year’s Day, Lincoln’s Birthday,
Presidents’ Day, Memorial Day, Independence Day, Labor Day, Veterans Day,
Thanksgiving Day, Day after Thanksgiving, Christmas Eve, and Christmas Day.
1.9 Work Hours: All work shall be scheduled Monday through Friday, between the hours of 7:30
a.m. and 5:30 p.m. OCSD will not pay for travel time.
1.10 Consultant shall provide OCSD with all required premiums and/or overtime work at no
charge beyond the total amount of the Agreement.
1.11 Except as expressly provided otherwise, OCSD accepts no liability for any expenses,
losses, or action incurred or undertaken by Consultant as a result of work performed in
anticipation of purchases of said services by OCSD.
2. Scope of Work - Subject to the terms of this Agreement, Consultant shall perform the
Services identified in Exhibit “B”. Consultant warrants that all of its Services shall be
performed in a competent, professional, and satisfactory manner.
3. Modifications to Scope of Work Requests for modifications to the Scope of Work
hereunder can be made by OCSD at any time. All modifications must be made in writing
and signed by both Parties. A review of the time required for the modification will be made
by OCSD and Consultant and the Agreement period adjusted accordingly.
4. Compensation Compensation to be paid by OCSD to Consultant for the Services provided
under this Agreement shall be a total amount not to exceed One Hundred Fifty Thousand
Dollars ($150,000.00).
5. California Department of Industrial Relations (DIR)Registration and Record of Wages
5.1 To the extent Consultant’s employees and/or subconsultants who will perform work for
which Prevailing Wage Determinations have been issued by the DIR and as more
specifically defined under Labor Code Section 1720 et seq, Consultant and subconsultants
shall comply with the registration requirements of Labor Code Section 1725.5. Pursuant to
Labor Code Section 1771.4, the work is subject to compliance monitoring and enforcement
by the DIR.
5.2 The Consultant and subconsultants shall maintain accurate payroll records and shall comply
with all the provisions of Labor Code Section 1776, and shall submit payroll records to the
Labor Commissioner pursuant to Labor Code 1771.4(a)(3). Penalties for non-compliance
with the requirements of Section 1776 may be deducted from progress payments per
Section 1776.
5.3 Pursuant to Labor Code Section 1776, the Consultant and subconsultants shall furnish a
copy of all certified payroll records to OCSD and/or general public upon request, provided
Orange County Sanitation District 3 of 10 Specification No. SSJ 2174
Version 080919
the public request is made through OCSD, the Division of Apprenticeship Standards, or the
Division of Labor Standards Enforcement of the Department of Industrial Relations.
5.4 The Consultant and subconsultants shall comply with the job site notices posting
requirements established by the Labor Commissioner per Title 8, California Code of
Regulation Section 16461(e).
6. Payment and Invoicing
6.1 OCSD shall pay, net thirty (30) days, upon receipt and approval, by OCSD’s Project
Manager or designee, of itemized invoices submitted monthly for Services rendered in
accordance with Exhibit “B”. OCSD, at its sole discretion, shall be the determining party as
to whether the Services have been satisfactorily completed.
6.2 Invoices shall be emailed by Consultant to OCSD Accounts Payable at
APStaff@OCSD.com and “INVOICE” with the Purchase Order Number shall be referenced
in the subject line.
7. Audit Rights Consultant agrees that, during the term of this Agreement and for a period of
three (3) years after its termination, OCSD shall have access to and the right to examine
any directly pertinent books, documents, and records of Consultant relating to the invoices
submitted by Consultant pursuant to this Agreement.
8. Commencement and Term
The Services provided under this Agreement shall be for the period of one (1) year
commencing on December 1, 2019 and continuing through November 30, 2020.
9. Renewals
9.1 OCSD may exercise the option to renew this Agreement for (1) one-year period based upon
the criteria set forth in Exhibit “B”, under the terms and conditions contained herein. OCSD
shall make no obligation to renew nor give reason if it elects not to renew.
9.2 This Agreement may be renewed by OCSD Purchase Order.
10. Extensions The term of this Agreement may be extended only by written instrument signed
by both Parties.
11. Performance Time is of the essence in the performance of the provisions hereof.
12. Termination
12.1 OCSD reserves the right to terminate this Agreement for its convenience, with or without
cause, in whole or in part, at any time, by written notice from OCSD. Upon receipt of a
termination notice, Consultant shall immediately discontinue all work under this Agreement
(unless the notice directs otherwise). OCSD shall thereafter, within thirty (30) days, pay
Consultant for work performed (cost and fee) to the date of termination. Consultant
expressly waives any claim to receive anticipated profits to be earned during the
uncompleted portion of this Agreement. Such notice of termination shall terminate this
Agreement and release OCSD from any further fee, cost or claim hereunder by Consultant
other than for work performed to the date of termination.
12.2 OCSD reserves the right to terminate this Agreement immediately upon OCSD’s
determination that Consultant is not complying with the Scope of Work requirements, if the
level of service is inadequate, or any other default of this Agreement.
Orange County Sanitation District 4 of 10 Specification No. SSJ 2174
Version 080919
12.3 OCSD may also immediately terminate for default of this Agreement in whole or in part by
written notice to Consultant:
• if Consultant becomes insolvent or files a petition under the Bankruptcy Act; or
• if Consultant sells its business; or
• if Consultant breaches any of the terms of this Agreement; or
• if total amount of compensation exceeds the amount authorized under this Agreement.
12.4 All OCSD property in the possession or control of Consultant shall be returned by Consultant
to OCSD on demand, or at the termination of this Agreement, whichever occurs first.
13. Indemnification and Hold Harmless Provision Consultant shall assume all responsibility
for damages to property and/or injuries to persons, including accidental death, which may
arise out of or be caused by Consultant's services under this Agreement, or by its
subconsultant(s) or by anyone directly or indirectly employed by Consultant, and whether
such damage or injury shall accrue or be discovered before or after the termination of the
Agreement. Except as to the sole active negligence of or willful misconduct of OCSD,
Consultant shall indemnify, protect, defend and hold harmless OCSD, its elected and
appointed officials, officers, agents and employees, from and against any and all claims,
liabilities, damages or expenses of any nature, including attorneys' fees: (a) for injury to or
death of any person or damage to property or interference with the use of property, arising
out of or in connection with Consultant's performance under the Agreement, and/or (b) on
account of use of any copyrighted or uncopyrighted material, composition, or process, or
any patented or unpatented invention, article or appliance, furnished or used under the
Agreement, and/or (c) on account of any goods and services provided under this
Agreement. This indemnification provision shall apply to any acts or omissions, willful
misconduct, or negligent misconduct, whether active or passive, on the part of Consultant
or anyone employed by or working under Consultant. To the maximum extent permitted by
law, Consultant's duty to defend shall apply whether or not such claims, allegations,
lawsuits, or proceedings have merit or are meritless, or which involve claims or allegations
that any of the parties to be defended were actively, passively, or concurrently negligent, or
which otherwise assert that the parties to be defended are responsible, in whole or in part,
for any loss, damage, or injury. Consultant agrees to provide this defense immediately upon
written notice from OCSD, and with well qualified, adequately insured, and experienced
legal counsel acceptable to OCSD. This section shall survive the expiration or early
termination of the Agreement.
14. Insurance Consultant and all subconsultants shall purchase and maintain, throughout the
life of this Agreement and any periods of warranty or extensions, insurance in amounts equal
to the requirements set forth in the signed Acknowledgement of Insurance Requirements,
Exhibit “C“. Consultant shall not commence work under this Agreement until all required
insurance is obtained in a form acceptable to OCSD, nor shall Consultant allow any
subconsultant to commence service pursuant to a subcontract until all insurance required
of the subconsultant has been obtained. Failure to maintain required insurance coverage
shall result in termination of this Agreement.
15. Key Personnel Personnel, as provided in Exhibit “B”, are considered “key” to the work
under this Agreement and will be available for the term of the Agreement. No person
designated as key under this Agreement shall be removed or replaced without prior written
consent of OCSD. If OCSD asks Consultant to remove a person designated as key under
this Agreement, Consultant agrees to do so immediately regardless of the reason, or the
Orange County Sanitation District 5 of 10 Specification No. SSJ 2174
Version 080919
lack of reason, for OCSD's request. Consultant shall assign only competent personnel to
perform services pursuant to this Agreement.
16. Confidentiality and Non-Disclosure
16.1 Consultant acknowledges that in performing the Services hereunder, OCSD may have to
disclose to Consultant orally and in writing certain confidential information that OCSD
considers proprietary and has developed at great expense and effort.
16.2 Consultant agrees to maintain in confidence and not disclose to any person, firm, or
corporation, without OCSD's prior written consent, any trade secret or confidential
information, knowledge or data relating to the products, process, or operation of OCSD.
16.3 Consultant further agrees to maintain in confidence and not to disclose to any person, firm,
or corporation any data, information, technology, or material developed or obtained by
Consultant during the term of this Agreement.
16.4 Consultant agrees as follows:
• To use the confidential information only for the purposes described herein; to not reproduce
the confidential information; to hold in confidence and protect the confidential information
from dissemination to and use by anyone not a party to this Agreement; and to not use the
confidential information to benefit itself or others.
• To restrict access to the confidential information to its Consultant or personnel of Consultant
who (1) have a need to have such access and (2) have been advised of and have agreed
in writing to treat such information in accordance with the terms of this Agreement.
• To return all confidential information in Consultant's possession upon termination of this
Agreement or upon OCSD's request, whichever occurs first.
• To hold in confidence information and materials, if any, developed pursuant to the Services
hereunder.
16.5 The provisions of this section shall survive termination or expiration of this Agreement and
shall continue for so long as the material remains confidential.
17. Ownership of Documents All drawings, specifications, reports, records, documents,
memoranda, correspondence, computations, and other materials prepared by Consultant,
its employees, subconsultants, and agents in the performance of this Agreement shall be
the property of OCSD and shall be promptly delivered to OCSD upon request of OCSD’s
Project Manager or designee, or upon the termination of this Agreement, and Consultant
shall have no claim for further employment or additional compensation as a result of the
exercise by OCSD of its full rights of ownership of the documents and materials hereunder.
Any use of such completed documents for other projects and/or use of incomplete
documents without specific written authorization by the Consultant will be at OCSD's sole
risk and without liability to Consultant. Consultant shall ensure that all its subconsultants
shall provide for assignment to OCSD of any documents or materials prepared by them.
18. Ownership of Intellectual Property
18.1 Consultant agrees that all designs, plans, reports, specifications, drawings, schematics,
prototypes, models, inventions, and all other information and items made during the course
of this Agreement and arising from the Services (hereinafter referred to as "New
Developments") shall be and are assigned to OCSD as its sole and exclusive property.
18.2 Consultant agrees to promptly disclose to OCSD all such New Developments. Upon
Orange County Sanitation District 6 of 10 Specification No. SSJ 2174
Version 080919
OCSD's request, Consultant agrees to assist OCSD, at OCSD's expense, to obtain patents
or copyrights for such New Developments, including the disclosure of all pertinent
information and data with respect thereto, the execution of all applications, specifications,
assignments, and all other instruments and papers which OCSD shall deem necessary to
apply for and to assign or convey to OCSD, its successors and assigns, the sole and
exclusive right, title and interest in such New Developments. Consultant agrees to obtain or
has obtained written assurances from its employees and contract personnel of their
agreement to the terms hereof with regard to New Developments and confidential
information.
18.3 Consultant warrants that Consultant has good title to any New Developments, and the right
to assign New Developments to OCSD free of any proprietary rights of any other party or
any other encumbrance whatever.
18.4 The originals of all computations, drawings, designs, graphics, studies, reports, manuals,
photographs, videotapes, data, computer files, and other documents prepared or caused to
be prepared by Consultant or its subconsultants in connection with these Services shall be
delivered to and shall become the exclusive property of OCSD. OCSD may utilize these
documents for OCSD applications on other projects or extensions of this project, at its own
risk.
19. No Solicitation of Employees
19.1 Consultant agrees that it shall not, during the term of this Agreement and for a period of one
(1) year immediately following termination of this Agreement, or any extension hereof, call
on, solicit, or take away any of the employees whom Consultant became aware of as a result
of Consultant's Services to OCSD.
19.2 Consultant acknowledges that OCSD’s employees are critical to its business and OCSD
expends significant resources to hire, employ, and train employees. Should Consultant
employ or otherwise engage OCSD’s employees during the term of this Agreement and for
a period of one (1) year following termination of this Agreement, Consultant will pay OCSD
fifty percent (50%) of the former employee’s most recent annual salary earned at OCSD to
accurately reflect the reasonable value of OCSD’s time and costs. This payment is in
addition to any other rights and remedies OCSD may have at law.
20. Independent Contractor Capacity
20.1 The relationship of Consultant to OCSD is that of an independent contractor and nothing
herein shall be construed as creating an employment or agency relationship.
20.2 Consultant shall act independently and not as an officer or employee of OCSD. OCSD
assumes no liability for Consultant’s action and performance, nor assumes responsibility for
taxes, funds, payments or other commitments, implied or expressed, by or for Consultant.
20.3 Consultant shall not be considered an agent of OCSD for any purpose whatsoever, nor shall
Consultant have the right to, and shall not, commit OCSD to any agreement, contract or
undertaking. Consultant shall not use OCSD’s name in its promotional material or for any
advertising or publicity purposes without expressed written consent.
20.4 Consultant shall not be entitled to any benefits accorded to those individuals listed on
OCSD’s payroll as regular employees including, without limitation, worker's compensation,
disability insurance, vacation, holiday or sick pay. Consultant shall be responsible for
providing, at Consultant’s expense, disability, worker's compensation or other insurance as
well as licenses and permits usual or necessary for conducting the Services hereunder.
Orange County Sanitation District 7 of 10 Specification No. SSJ 2174
Version 080919
20.5 Consultant shall be obligated to pay any and all applicable Federal, State and local payroll
and other taxes incurred as a result of fees hereunder. Consultant hereby indemnifies OCSD
for any claims, losses, costs, fees, liabilities, damages or penalties suffered by OCSD arising
out of Consultant's breach of this provision.
20.6 Consultant shall not be eligible to join or participate in any benefit plans offered to those
individuals listed on OCSD's payroll as regular employees. Consultant shall remain ineligible
for such benefits or participation in such benefit plans even if a court later decides that OCSD
misclassified Consultant for tax purposes.
21. Licenses, Permits Consultant represents and warrants to OCSD that it has obtained all
licenses, permits, qualification and approvals of whatever nature that are legally required to
engage in this work. Any and all fees required by Federal, State, County, City and/or
municipal laws, codes and/or tariffs that pertain to work performed under the terms of this
Agreement will be paid by Consultant.
22. Consultant's Representations In the performance of duties under this Agreement,
Consultant shall adhere to the highest fiduciary standards, ethical practices and standards
of care and competence for their trade/profession. Consultant agrees to comply with all
applicable Federal, State and local laws and regulations.
23. Familiarity with Work By executing this Agreement, Consultant warrants that: 1) it has
investigated the work to be performed; 2) it has investigated the site of the work and is aware
of all conditions there; and 3) it understands the facilities, difficulties and restrictions of the
work under this Agreement. Should Consultant discover any latent or unknown conditions
materially differing from those inherent in the work or as represented by OCSD, it shall
immediately inform OCSD of this and shall not proceed, except at Consultant’s risk, until
written instructions are received from OCSD.
24. Right to Review Services, Facilities, and Records
24.1 OCSD reserves the right to review any portion of the Services performed by Consultant
under this Agreement, and Consultant agrees to cooperate to the fullest extent possible.
24.2 Consultant shall furnish to OCSD such reports, statistical data, and other information
pertaining to Consultant's Services as shall be reasonably required by OCSD to carry out
its rights and responsibilities under its agreements with its bondholders or noteholders and
any other agreement relating to the development of the project(s) and in connection with the
issuance of its official statements and other prospectuses with respect to the offering, sale,
and issuance of its bonds and other obligations.
24.3 The right of OCSD to review or approve drawings, specifications, procedures, instructions,
reports, test results, calculations, schedules, or other data that are developed by Consultant
shall not relieve Consultant of any obligation set forth herein.
25. Force Majeure Neither party shall be liable for delays caused by accident, flood, acts of
God, fire, labor trouble, war, acts of government or any other cause beyond its control, but
said party shall use reasonable efforts to minimize the extent of the delay. Work affected by
a Force Majeure condition may be rescheduled by mutual consent or may be eliminated
from the Agreement.
26. Severability If any section, subsection, or provision of this Agreement, or any agreement
or instrument contemplated hereby, or the application of such section, subsection, or
Orange County Sanitation District 8 of 10 Specification No. SSJ 2174
Version 080919
provision is held invalid, the remainder of this Agreement or instrument in the application of
such section, subsection or provision to persons or circumstances other than those to which
it is held invalid, shall not be affected thereby, unless the effect of such invalidity shall be to
substantially frustrate the expectations of the Parties.
27. Waiver The waiver of either party of any breach or violation of, or default under, any
provision of this Agreement, shall not be deemed a continuing waiver by such party of any
other provision or of any subsequent breach or violation of this Agreement or default
thereunder. Any breach by Consultant to which OCSD does not object shall not operate as
a waiver of OCSD’s rights to seek remedies available to it for any subsequent breach.
28. Remedies In addition to other remedies available in law or equity, if the Consultant fails to
make delivery of the goods or Services or repudiates its obligations under this Agreement,
or if OCSD rejects the goods or Services or revokes acceptance of the goods or Services,
OCSD may (1) terminate the Agreement; (2) recover whatever amount of the purchase price
OCSD has paid, and/or (3) “cover” by purchasing, or contracting to purchase, substitute
goods or Services for those due from Consultant. In the event OCSD elects to “cover” as
described in (3), OCSD shall be entitled to recover from Consultant as damages the
difference between the cost of the substitute goods or Services and the Agreement price,
together with any incidental or consequential damages.
29. Governing Law This Agreement shall be governed by and interpreted under the laws of
the State of California and the Parties submit to jurisdiction in Orange County, in the event
any action is brought in connection with this Agreement or the performance thereof.
30. Environmental Compliance Consultant shall, at its own cost and expense, comply with all
Federal, State, and local environmental laws, regulations, and policies which apply to the
Consultant, its sub-consultants, and the Services, including, but not limited to, all applicable
Federal, State, and local air pollution control laws and regulations.
31. Attorney’s Fees If any action at law or inequity or if any proceeding in the form of an
Alternative Dispute Resolution (ADR) is necessary to enforce or interpret the terms of this
Agreement, the prevailing party shall be entitled to reasonable attorney's fees, costs and
necessary disbursements in addition to any other relief to which it may be entitled.
32. Dispute Resolution
32.1 In the event of a dispute as to the construction or interpretation of this Agreement, or any
rights or obligations hereunder, the Parties shall first attempt, in good faith, to resolve the
dispute by mediation. The Parties shall mutually select a mediator to facilitate the resolution
of the dispute. If the Parties are unable to agree on a mediator, the mediation shall be
conducted in accordance with the Commercial Mediation Rules of the American Arbitration
Agreement, through the alternate dispute resolution procedures of Judicial Arbitration
through Mediation Services of Orange County ("JAMS"), or any similar organization or entity
conducting an alternate dispute resolution process.
32.2 In the event the Parties are unable to timely resolve the dispute through mediation, the
issues in dispute shall be submitted to arbitration pursuant to California Code of Civil
Procedure, Part 3, Title 9, Sections 1280 et seq. For such purpose, an agreed arbitrator
shall be selected, or in the absence of agreement, each party shall select an arbitrator, and
those two (2) 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 (3) 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
Orange County Sanitation District 9 of 10 Specification No. SSJ 2174
Version 080919
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.
33. Damage to OCSD's Property Any OCSD property damaged by Consultant will be subject
to repair or replacement by Consultant at no cost to OCSD.
34. OCSD Safety Standards OCSD requires Consultant and its subconsultants to follow and
ensure their employees follow all Federal, State and local regulations as well as OCSD
Safety Standards while working at OCSD locations. If during the course of the Agreement it
is discovered that OCSD Safety Standards do not comply with Federal, State or local
regulations, then the Consultant is required to follow the most stringent regulatory
requirement at no additional cost to OCSD. Consultant and all of its employees and
subconsultants, shall adhere to all applicable OCSD Safety Standards attached hereto in
Exhibit “D” and the Human Resources Policies in Exhibit “E”.
35. Freight (F.O.B. Destination) Consultant assumes full responsibility for all transportation,
transportation scheduling, packing, handling, insurance, and other services associated with
delivery of all products deemed necessary under this Agreement.
36. Assignments Consultant shall not delegate any duties nor assign any rights under this
Agreement without the prior written consent of OCSD. Any such attempted delegation or
assignment shall be void.
37. Conflict of Interest and Reporting
37.1 Consultant shall at all times avoid conflicts of interest or appearance of conflicts of interest
in performance of this Agreement.
37.2 Consultant affirms that to the best of its knowledge there exists no actual or potential conflict
between Consultant’s families, business or financial interest or its Services under this
Agreement, and in the event of change in either its private interests or Services under this
Agreement, it will raise with OCSD any question regarding possible conflict of interest which
may arise as a result of such change.
38. Third Party Rights Nothing in this Agreement shall be construed to give any rights or
benefits to anyone other than OCSD and Consultant.
39. Non-Liability of OCSD Officers and Employees No officer or employee of OCSD shall
be personally liable to Consultant, or any successor-in-interest, in the event of any default
or breach by OCSD or for any amount which may become due to Consultant or to its
successor, or for breach of any obligation of the terms of this Agreement.
40. Authority to Execute The persons executing this Agreement on behalf of the Parties
warrant that they are duly authorized to execute this Agreement and that by executing this
Agreement, the Parties are formally bound.
41. Read and Understood By signing this Agreement, Consultant represents that it has read
and understood the terms and conditions of the Agreement.
42. Entire Agreement This Agreement constitutes the entire agreement of the Parties and
supersedes all prior written or oral and all contemporaneous oral agreements,
understandings, and negotiations between the Parties with respect to the subject matter
Orange County Sanitation District 10 of 10 Specification No. SSJ 2174
Version 080919
hereof.
43. Notices All notices under this Agreement must be in writing. Written notice shall be
delivered by personal service or sent by registered or certified mail, postage prepaid, return
receipt requested, or by any other overnight delivery service which delivers to the noticed
destination and provides proof of delivery to the sender. Any facsimile notice must be
followed within three (3) days by written notice. Rejection or other refusal to accept or the
inability to deliver because of changed address 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: Darius Ghazi
Senior Buyer
Orange County Sanitation District
10844 Ellis Avenue
Fountain Valley, CA 92708-7018
Consultant: John J. Preston
166 Fox Ln
Calimesa, CA 92320
Each party shall provide the other party written notice of any change in address as soon as
practicable.
IN WITNESS WHEREOF, intending to be legally bound, the Parties hereto have caused this
Agreement to be signed by the duly authorized representatives.
ORANGE COUNTY SANITATION DISTRICT
Dated: _________________ By: ___________________________________
Chad Wanke
Chair, Administration Committee
Dated: _________________ By: ___________________________________
Clerk of the Board
Dated: _________________ By: ___________________________________
Ruth Zintzun
Purchasing and Contracts Manager
COMPANY
Dated: _________________ By: ___________________________________
______________________________________
Print Name and Title of Officer
Orange County Sanitation District
ADMINISTRATION COMMITTEE
Agenda Report
Administration Building
10844 Ellis Avenue
Fountain Valley, CA 92708
(714) 593-7433
File #:2019-711 Agenda Date:11/13/2019 Agenda Item No:9.
FROM:James D. Herberg, General Manager
Originator: Celia Chandler, Director of Human Resources
SUBJECT:
POSITION CHANGES FOR FISCAL YEAR 2019-20
GENERAL MANAGER'S RECOMMENDATION
RECOMMENDATION: Recommend to the Board of Directors to:
Approve a position exchange and corresponding salary upgrade from a vacant Senior Mechanic
(Salary Grade LOC67) position to Maintenance Specialist (Salary Grade PRO80).
BACKGROUND
Orange County Sanitation District (Sanitation District)management has evaluated its operations and
identified opportunities to optimize planned maintenance strategies in the Operations &Maintenance
(O&M)Department by creating a new Preventative Maintenance (PM)Optimization Group.Currently,
maintenance specialists schedule up to six hundred (600)incoming work orders per week.The
proposed PM Optimization Group will track,maintain,and manage assets throughout their lifecycle to
maximize reliability at the lowest possible costs;ensuring both planned and corrective (unplanned)
maintenance efforts are effective.
The proposed PM Optimization Group will require four position exchanges with no increase to the
overall number of full-time staff.Currently,the Sanitation District has four vacant budgeted positions
with job titles/pay that can be exchanged for the position titles and salaries needed to form the group.
Three of the four positions can be filled from vacant positions that are at a higher salary grade.One
of the positions will require an upgrade as requested in the recommended action above.The
proposed PM Optimization Group will be comprised of one Maintenance Supervisor and three
Maintenance Specialists.
Three position exchanges and salary downgrades were implemented through the meet and confer
process including:
·Engineering Manager (Salary Grade EM18)to Maintenance Supervisor (Salary Grade
SUP82);
·Principal Staff Analyst (Salary Grade PRO84)to Maintenance Specialist (Salary Grade
PRO80); and
·Principal I.T. Analyst (Salary Grade PRO87) to Maintenance Specialist (Salary Grade PRO80).
Orange County Sanitation District Printed on 11/6/2019Page 1 of 3
powered by Legistar™
File #:2019-711 Agenda Date:11/13/2019 Agenda Item No:9.
RELEVANT STANDARDS
·Plan for and execute succession, minimizing vacant position times
·Maintain and adhere to appropriate internal planning documents (Budget Update,Fiscal Year
2019-20)
·Maintain a proactive asset management program
·Maintain a culture of improving efficiency to reduce the cost to provide the current service level
or standard
PROBLEM
New and aging infrastructure in the Plants and collections system requires an increased level of
planned maintenance.The Sanitation District has a limited level of resources available to perform
this scheduled maintenance.With limited resources,the current maintenance schedules may
exceed the capacity to perform the work in an effective, timely, and economical manner.
PROPOSED SOLUTION
Conduct an in-depth assessment to optimize Sanitation District planned maintenance schedules.
Assign this effort to a new PM Optimization Group,which will consist of four positions in charge of
tracking,maintaining,and managing assets.Form this new group by downgrading three existing
vacancies and approve one vacant position exchange and corresponding salary upgrade.
TIMING CONCERNS
Staff recommends approval of the position change to allow establishment of the PM Optimization
Group during the current fiscal year to begin to address needs and proceed with the proposed
organizational structure without delays.
RAMIFICATIONS OF NOT TAKING ACTION
Deferring the requested position upgrade to the upcoming budget cycle for Fiscal Year 2020-21
would require that the position remain vacant and unutilized for the remainder of the current fiscal
year,a timeframe of approximately eight (8)months.This would delay the Sanitation District’s launch
of the PM Optimization Group,which is aimed to maximize efficiencies with the organization’s asset
management program.
PRIOR COMMITTEE/BOARD ACTIONS
June 2019 - Approved Budget Update, Fiscal Year 2019-20.
ADDITIONAL INFORMATION
The O &M Department is responsible for the reliability and maintenance of the Sanitation District’s
assets.To accomplish this,the Sanitation District utilizes a combination of routine preventative
maintenance, predictive maintenance, managed activities, and corrective maintenance.
Management has identified a need to create a new PM Optimization Group in the O&M Department.
Orange County Sanitation District Printed on 11/6/2019Page 2 of 3
powered by Legistar™
File #:2019-711 Agenda Date:11/13/2019 Agenda Item No:9.
Management has identified a need to create a new PM Optimization Group in the O&M Department.
This group will be tasked with conducting an in-depth assessment to optimize planned maintenance
strategies for new and existing assets and to establish maintenance approaches and strategies for
assets installed by capital improvement projects prior to beneficial occupancy.The PM Optimization
Program will track,maintain,and manage assets throughout their lifecycles from design,
construction,commissioning,beneficial occupancy,operations and maintenance,to the eventual
decommissioning or replacement of assets.
This will ensure that asset life cycle is maximized with the lowest risk to process failure by achieving
the intended reliability, at the lowest possible cost, and maximizing equipment availability.
CEQA
N/A
FINANCIAL CONSIDERATIONS
The recommended pay grade change represents a potential increased salary cost of $29,494 per year.The estimated
salary savings from downgrading other positions is $105,768 per year.The net savings for FY 2019-20 is $76,274 as a
result of the position changes.
ATTACHMENT
The following attachment(s)are included in hard copy and may also be viewed on-line at the OCSD website
(www.ocsd.com) with the complete agenda package:
·Preventative Maintenance Optimization Position Exchanges
Orange County Sanitation District Printed on 11/6/2019Page 3 of 3
powered by Legistar™
Proposed Position Change for Approval
Request Type Budgeted Position Current
Pay Grade
Annual Salary
(Range Max)
Current Barg
Unit Proposed Position Proposed
Pay Grade
Annual Salary
(Range Max)
Proposed
Barg Unit
Upgrade Senior Mechanic LOC67 96,366.40$ Local 501 Maintenance Specialist PRO80 125,860.80$ Professional
Salary Increase 29,494$
Position Exchanges
(Background Information Only)
Request Type Budgeted Position Current
Pay Grade
Annual Salary
(Range Max)
Current Barg
Unit Updated Position Updated
Pay Grade
Annual Salary
(Range Max)
Updated
Barg Unit
Downgrade Engineering Manager EM18 201,198.40$ N/A Maintenance Supervisor SUP82 132,204.80$ Supervisor
Downgrade Principal Staff Analyst PRO84 138,923.20$ Professional Maintenance Specialist PRO80 125,860.80$ Professional
Downgrade Principal Information Technology Analyst PRO87 149,572.80$ Professional Maintenance Specialist PRO80 125,860.80$ Professional
Salary Savings (105,768)$
Net Savings (76,274)$
PREVENTATIVE MAINTENANCE OPTIMIZATION POSITION EXCHANGES
November 2019
Orange County Sanitation District
ADMINISTRATION COMMITTEE
Agenda Report
Administration Building
10844 Ellis Avenue
Fountain Valley, CA 92708
(714) 593-7433
File #:2019-713 Agenda Date:11/13/2019 Agenda Item No:10.
FROM:James D. Herberg, General Manager
Originator: Kathy Millea, Director of Engineering
SUBJECT:
CLIMATE RESILIENCY STUDY, PROJECT NO. SP-152
GENERAL MANAGER'S RECOMMENDATION
RECOMMENDATION:
Information Item.
BACKGROUND
Governor's Executive Order #S-13-08 (EO-S-13-08)directs state agencies to plan for sea level rise
and climate impacts through coordination of the State Climate Adaptation Strategy.The Orange
County Sanitation District's (Sanitation District)Climate Change/Environmental Footprint Initiative
started in 2007 and has completed a detailed carbon footprint study.In addition,the Sanitation
District developed a strategy to respond to climate change regulations,public outreach and
education, as well as research initiatives related to energy efficiency and sustainable technologies.
The location of Plant No.2 and several pump stations along the coast make them vulnerable to
disruptions due to climate change impacts.Similar studies done by other agencies on extreme
events have shown that,in most cases,the costs of repairs were significantly higher than the costs of
mitigation and adaptation strategies.
Climate Resiliency Study,Project No.SP-152,which was awarded by the Board of Directors on
November 28,2018,conducted a site-specific climate risk assessment for the Sanitation District’s
coastal facilities and provided recommendations for mitigation and adaptation strategies.Staff will
present an overview of the study recommendations.
RELEVANT STANDARDS
·Maintain a proactive asset management program
·24/7/365 treatment plant reliability
·Protect Orange County Sanitation District assets
·Sustain 1, 5, 20-year planning horizons
Orange County Sanitation District Printed on 11/6/2019Page 1 of 2
powered by Legistar™
File #:2019-713 Agenda Date:11/13/2019 Agenda Item No:10.
PRIOR COMMITTEE/BOARD ACTIONS
November 2018 -Approved a Professional Services Agreement with Hazen and Sawyer to provide
engineering services for the Climate Resiliency Study,Project No.SP-152,for an amount not to
exceed $697,952; and approved a contingency of $69,795 (10%).
ADDITIONAL INFORMATION
The Environmental Protection Agency (EPA)is currently drafting the Sanitation District’s NPDES
Ocean Discharge Permit for renewal.The EPA has indicated that the new permit may include a
requirement to address impacts with climate change and sea level rise.This study would comply
with such requirements.
CEQA
The project is exempt from CEQA pursuant to CEQA Guidelines Section 15262 [Feasibility and
Planning Studies].A Notice of Exemption was filed with the OC Clerk-Recorder on December 3,
2018.
FINANCIAL CONSIDERATIONS
This item is informational and does not require any commitment of funds.
ATTACHMENT
The following attachment(s)are included in hard copy and may also be viewed on-line at the OCSD website
(www.ocsd.com) with the complete agenda package:
·SP-152 OCSD Climate Resiliency Executive Summary (separately bound document)
AN:sa:gc
Orange County Sanitation District Printed on 11/6/2019Page 2 of 2
powered by Legistar™
Orange County
Sanitation District
Climate Resiliency Study
Executive Summary 2019
Message from Our
Director of Engineering
Dear Orange County Residents,
For the past 65 years, the Orange County Sanitation District
(OCSD) has protected public health and the environment for
the coastal region of Southern California. We are responsible
for collecting, treating, and recycling wastewater, and have
become an acknowledged leader in resource recovery. This
includes our partnership with the Orange County Water District
on the Groundwater Replenishment System—the world’s largest
purification system for indirect potable reuse.
Our customers count on us around the clock and in every
situation, including during extreme weather and climate
conditions. We have operated through heavy storms that
threatened to overflow our sewers. High tides have carried
seawater into our coastal pump stations. And recent wildfires
have affected the lands around our service area. Throughout
these challenges we have remained resilient. We use each as
an opportunity to analyze possible risks and vulnerabilities in our
system, and better prepare for the next.
We pride ourselves on following the example of those who came
before us, making forward-thinking decisions and investments
to protect public health and the environment. To continue to look
towards the future, OCSD has developed a Climate Resiliency
Study. This study provides a comprehensive analysis of climate-
related, site-specific risk assessments of OCSD’s facilities using
the best available climate predictions, industry standards, and
geographical information systems. We worked alongside industry
experts to develop practical solutions that can be incorporated
immediately to improve the resiliency of our facilities or folded into
the design and construction of future projects.
This Executive Summary provides an overview of the information
obtained and generated during the preparation of the Climate
Resiliency Study. Together, we will use what we have learned
through this study to keep our facilities resilient, preserving
Orange County’s natural beauty and the communities we enjoy
long into the future.
Kathleen T. Millea, P.E.
Director of Engineering
“Our infrastructure
protects the environment
and Orange County’s
quality of life. We need
to make sure that these
important facilities can
withstand extreme
events.”
- Jim Herberg,
General Manager
i Climate Resiliency Study 2019
Table of Contents
Our Mission
To protect public health and the environment by providing
wastewater collection, treatment, and recycling.
IntroductionPage 1
Climate ResiliencyPage 2
VulnerabilitiesPage 3
Flooding and Tsunami ImpactsPage 7
Page 9
Protection Against Heat and FirePage 10
Toolbox of AdaptationsPage 4
Causes of Flooding in Orange CountyPage 5
Thinking Globally: How OCSD is Reducing Greenhouse
Gas Emissions
Page 11
Looking to the FuturePage 12
Building Level Flood ProtectionPage 6
Boundary Level Flood ProtectionPage 8
LONGBEACH
HUNTINGTONBEACH
NEWPORTBEACH
IRVINE
ANAHEIM
BUENAPARK
SEALBEACH
405
5
73
91
241
Pump stations
Treatment plants
FOUNTAINVALLEY
SANTAANA
ORANGE
VILLAPARK
WESTMINSTER
FULLERTON
Sewer pipes are used to
convey wastewater from cities and districts.
Pump stations lift wastewater to elevations
that enable gravity flow to the treatment plants.
Treatment plants breakdown wastes to
recover resources.
OCSD SERVICE AREA
WHO WE SERVE2.62.6
Million PeopleMillion People2020
CitiesCities
44
Special
Districts
Special
Districts
WHAT WE HAVE
389389
Miles of Sewer PipeMiles of Sewer Pipe
1515
Pump StationsPump Stations
22
Treatment PlantsTreatment Plants
WHAT WE DO185185
Million Gallons
of Wastewater
Per Day Into
Million Gallons
of Wastewater
Per Day Into
33
Valuable Resources:
Recycled Water,
Energy, and Reusable
Solids
Valuable Resources:
Recycled Water,
Energy, and Reusable
Solids
Parts of
Unincorporated
Orange County
Parts of
Unincorporated
Orange County
++
Introduction
The Orange County Sanitation District (OCSD) is a leader in regional wastewater
collection, treatment, recycling, and disposal.
1 Climate Resiliency Study 2019
Climate Resiliency Study 2019 2
Climate Resiliency
OCSD is constantly striving to be resilient, reliable, and forward-thinking. Recognizing the
value of our infrastructure and the risks posed by different forces of nature, we have conducted
a climate resiliency study to better prepare for the future.
International National RegionalStatewide
Climate forces considered as part of the study:
Due to the importance of climate conditions in future planning and capital investment, we
reviewed and analyzed a variety of climate-related studies as part of this effort. The climate
projections, including sea level rise, are based on the work of the Rising Seas Report and
California’s Fourth Climate Change Assessment as representing the “state of the science” for
Southern California.
Wildfires
CO2 Reduction
C02
Extreme Heat
TsunamiSea Level Rise and Flooding
Flooding threatens
infrastructure near the
coast and major channels,
including Plant No. 2
and a number of
pump stations.
Coastal infrastructure is
vulnerable to tsunamis.
Inland areas are subject
to higher temperatures
and longer heat waves.
Greenhouse gases,
such as carbon dioxide,
impact the earth’s
atmosphere and climate.
Fire and flying embers are
a risk to buildings near
heavy vegetation.
SIGNALHILL
LOSALAMITOS
Plant No. 1
Slater Ave PS
MainStreetPS
RockyPointPS
BayBridgePS
CrystalCovePS
Edinger PS
Westside PS
SealBeach PS
Yorba Linda PS
MacArthur PSCollege Ave PSPlant No. 2
Lido PS
Bitter Point PS
A Street PS
15th Street PS
Extreme Heat
Flooding
Flooding + Sea Level Rise
Tsunami
OCSD
PUMP STATIONS (PS)
AND TREATMENT PLANTS
Vulnerabilities
Maintaining safe and continuous operation of wastewater conveyance and treatment processes
during climate-related events is of high importance to OCSD. By focusing efforts on high
priority infrastructure and understanding site-specific risks, OCSD can provide resiliency and
adaptability within upgrades to infrastructure and facilities.
3
Toolbox of Adaptations
There are many adaptations that can be used to reduce the impacts of climate change
related events. Generally these adaptations involve updates to design guidelines and
practices, training and communication, and modifications or redundancies to operations.
Building-Level Adaptations for Flooding
At the building level, floodproofing seeks to prevent
water from entering a facility or coming in contact
with access points and infrastructure.
Asset-Level Adaptations for Flooding
At the asset level, floodproofing seeks to keep
operations running when flood water is at risk of
coming in contact with assets and infrastructure.
Building-Level Adaptations for Wildfires
At the building level, wildfire protection is included in
design guidelines and construction materials.
Operation and Redundancy Adaptations
Watertight hatches
Floodproof/watertight
electrical enclosures
Floodproof/watertight
pump/motor enclosures
Stop logs over flood pathways
(e.g., doors, windows, louvers)
Concrete barrier around facility
(e.g., wall or hump)
Concrete barrier around facility with
stop logs to cover opening
New doors and floors above flood level
Electric rooms above flood levels
Access routes above flood levels
Assets (e.g., pumps, motors, electrical
equipment) elevated above flood levels
Sandbagging around assets and/or
flood pathways
Securing tanks to floor to counter-
act buoyancy forces during flooding
Floodproofing electrical conduit
and wiring
Installing floodproof instrumentation
(e.g., valves, flow meters)
Training for flood, fire, and
tsunami response
Automatic controls for remote
operation in emergencies
Fireproof roofs and buildings
Louvers that prevent embers and
smoke from entering buildings
Clear fire barriers around buildings
Climate Resiliency Study 2019 4
Current Sea Level - 2019
Projected Future Sea Level - 2050
Projected Future Sea Level - 2070
5
Causes of Flooding in Orange County
Many of OCSD’s facilities are located near the coast, enclosed bays, or rivers, making
flooding a major risk to the services provided by OCSD.
Flood risk is expected to increase with climate change. Climate change is expected to result
in more extreme storms, increased flood depths, and raised sea levels. Tsunamis can cause
extensive inland flooding, which is worsened by sea level rise.
Storm Surge occurs when rainfall
and wind over the ocean create larger
waves that carry onto land. Storm
surge may cause or contribute to
flooding in coastal communities.
Sea Level Rise is a result of thermal
expansions caused by warming oceans and
melting of land ice as temperatures rise due
to climate change. Sea level rise increases
flooding during storms and king tide events.
Tsunamis are large and fast-moving
waves generated by earthquakes,
landslides, or volcanic eruptions.
Tsunamis not only can cause
flooding, but also may exert extreme
force that can damage infrastructure.
King Tide is the highest tide
caused by the combined effects
of the gravitational forces exerted
by the moon, sun, and rotation of
the earth. It can cause flooding in
coastal communities.
Storm Events exceeding
intensity or duration of the design
of local storm infrastructure may
cause flooding in streets
and communities.
Climate Resiliency Study 2019
Orange County Register, 2012
Orange County Register, 1983
Barrier Barrier
FLOODPATHWAY
Control Room
Hatch
FLOODPATHWAY
PUMP STATION
Pump Room
100-yr FEMA Flood+ 2070 SLR 3.7 ft
500-yr FEMA Floodwithout SLR 2019
100-yr FEMA Flood+ 2050 SLR 1.5 ft
100-yr FEMA Floodwithout SLR 2019
Existing
Hatch Waterproofed
Hatch
Hatches are one of the lowest entry points
into a facility, making them the first
vulnerability for flooding. Waterproofing
access points prevents water from
entering the facility.
Existing
Door
Waterproofed
Door
Important access points include doors,
louvers, and transformer enclosures.
Waterproofing barriers protect
access points and can be deployed
when necessary.
Climate Resiliency Study 2019 6
Building Level Flood Protection
Simple adaptations can be incorporated into individual facilities to protect against flooding.
Building level solutions generally protect a greater number of assets at a lower cost than asset
level solutions by preventing flood water from entering the facility.
SLR = Sea Level Rise
7
Possible Sewer Backups
If a pump station is unable
to operate, flow to and from
will be limited, and tributary
neighborhoods may see
sewer backups.
Safety and Access
If OCSD staff are unable to
safely drive or walk to flooded
or non-flooded facilities due
to flooded access roads,
facilities would be inoperable
and cause sewer backups
or environmental damage to
local waterways.
Water Quality Impacts and Environmental Damage
If a treatment plant is not able
to operate, an emergency
release of the raw or partially
treated wastewater may
be required. This would
cause negative water quality
impacts and damage to
aquatic environments and
nearby beaches.
Climate Resiliency Study 2019
Other impacts from flooding on OCSD infrastructure include electrical or mechanical failure and
unsafe conditions for operators and facility staff. An impacted OCSD facility can cause issues
upstream and downstream in the network and affect surrounding communities
and neighborhoods.
Flooding and Tsunami Impacts
Climate Resiliency Study 2019 8
A floodwall along
Brookhurst Street
is needed to
prevent flooding
with projected sea
level rise for 2070.
Additional
floodwalls along
the Talbert Channel
and Santa Ana
River will protect
Plant No. 2 from
flooding due to
maximum tsunami
risk for the region.
SA
N
T
A
A
N
A
R
I
V
E
R
TALBERTCHANNEL
BRO
O
K
H
U
R
S
T
S
T
R
E
E
T
HUNTINGTONBEACH
SA
N
T
A
A
N
A
R
I
V
E
R
Plant No. 2 is above
the 100-year floodplain,
but sea level rise
and tsunamis will
increase the flood risk.
These recommended
adaptations will protect
Plant No. 2 from
flooding due to sea
level rise and tsunami.
= 100-year flood
= Additional flooding - 2050
= Additional flooding - 2070
Floodgates
Floodwalls
A typical floodwall design to withstand storm
surge, waves, flooding, and tsunami.
Floodwall
Flood Side ProtectedSide
Plant No. 2 can treat up to 150 million gallons of wastewater per day and is located in a
low-lying area close to the Pacific Ocean coast of Orange County. Numerous facilities at
Plant No. 2 are at risk of flooding caused by extreme events such as a 500-year coastal flood
and tsunamis, and this risk is exacerbated by sea level rise. Floodgates and floodwalls are
recommended to protect Plant No. 2 from these risks.
Boundary Level Flood Protection
Elevated Risk of
Utility-Associated Wildfire
Extreme Risk of
Utility-Associated Wildfire
* Map data provided by the California Public Utilities Commission
OCSD Service Area
Extreme Heat
Temperatures across California have
been consistently rising due to climate
change. We’ve experienced higher average
temperatures during summer months,
more intense and longer heat waves, and
an increased frequency of extreme heat
days. Inland areas of Orange County and
urbanized areas have seen the largest
impacts of these rising temperatures. Higher
temperatures also dry out vegetation and
soil, creating fuel for wildfires.
Wildfires are a common threat
for California communities,
exacerbated by climate and land
use stressors. Fires that begin
in dry areas spread rapidly,
often carried by extreme Santa
Ana winds. Changes in weather
patterns reduce the frequency
of storms that could bring much-
needed moisture to slow the
spread of fires.
Wildfires
Extreme Heat and Wildfire Risks in
California
Climate Resiliency Study 2019 10
Protection Against Heat and Fire
Stucco coating over
concrete or block
walls provides a
fire-resistant
building exterior.
On-site storage of
chemicals and
supplies can keep
operations running
smoothly if fire
interrupts normal
delivery routes.
Generators, fuel, and
redundant power
feeds will keep
pumps and treatment
equipment running
during area-wide
electrical blackouts.
Fire-safe louvers prevent
embers and smoke carried
by high winds from entering
the building.
Metal or tile roofs provide
fire-resistance.
OCSD facilities are
located within low
wildfire risk areas of
Orange County.
Motors Electrical
Wiring
HVAC
Extreme heat and increased temperatures
can cause physical stress to materials and
operational stress on equipment, such as
electronics, electrical equipment, motors,
and chemical handling facilities. OCSD
systems are designed to withstand outdoor
temperatures up to 104°F (40°C).
Design Guidelines for OCSD
Equipment: 104°F (40°C)
The location and construction of OCSD pump stations and treatment plants are designed to
protect critical infrastructure from heat and fire.
C02
Climate Resiliency Study 201911
Thinking Globally: How OCSD is
Reducing Greenhouse Gas Emissions
OCSD implements measures to reduce greenhouse gas emissions to minimize contribution
to climate change and remain resilient in the face of potential future regulations.
The State of California aims to reduce
greenhouse gas emissions in the state
to 40% below 1990 levels by 2030. In an
effort to accomplish this, the California
Air Resources Board requires reporting
of greenhouse gas emissions. Most of
OCSD’s emissions are biogenic, sustainably
produced through on-site anaerobic
digestion of wastewater sludge, electricity
generation, and heating. The remainder are
below the 25,000 CO2 equivalent limit that
would require participation in the
Cap-and-Trade program. The many things
that we do to reduce emissions also
conserves natural resources and saves
money for our ratepayers.
Water recycling
Avoid emissions from pumping
imported water
Renewable energy sources
Solar panels designed for new
headquarters building
Low-emissions transportation
Fuel-efficient and electric vehicles,
compressed natural gas fueling
Energy and resource recovery
Methane produced during wastewater
treatment used as an energy source
High-efficiency assets
Variable frequency drives on motors;
occupancy sensors for lighting and HVAC
Battery storage system
Offset power demand during critical times
CALIFORNIA GOAL
Senate Bill 32
Reduce GHG emissions 40%
below 1990 levels by 2030
40%
Achieving Greenhouse Gas (GHG) Emission Goals at OCSD
We have reduced GHG emissions
using several different means
Climate Resiliency Study 2019 12
Looking to the Future
As infrastructure upgrades are planned and designed, there are opportunities to integrate resiliency measures and adaptations for flooding, sea level rise, tsunamis, extreme heat, and wildfires. Incorporating resiliency can also be applied program-wide
through updates to design guidelines and emergency response plans.
Orange County Sanitation District
Climate and Catastrophic Event Resilience Policy
The Sanitation District aims to design, maintain, and operate valuable wastewater assets that
withstand or adapt to adverse conditions in a reasonable manner that is both cost-effective
and sustainable for present and future generations. These adverse conditions include heavy
rains, flooding, sea level rise, earthquakes, tsunamis, extreme heat, wildfires, and electrical
grid interruptions.
Updating design guidelines to build potential
flood pathways of new facilities
to be above identified flood
elevations associated with sea
level rise
Resiliency Toolbox
Integrating deployment, operation, and maintenance
of adaptation strategies into
emergency response plan
Integrating climate resiliency into capital projects, even if resiliency is
not the main goal of the project
(e.g., a screening wall project that
also provides flood protection)
Reclamation Plant No. 1 (Administration Offices)
10844 Ellis Avenue • Fountain Valley, California 92708 • 714.962.2411
Treatment Plant No. 2
22212 Brookhurst Street • Huntington Beach, California 92646
Follow us on Facebook, Twitter,
Instagram, and Youtube @OCSewers