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HomeMy WebLinkAbout11-09-2022 Administration Committee Meeting Complete Agenda PacketC)C6SAN ORANGE COUNTY SANITATION DISTRICT ORANGE COUNTY SANITATION DISTRICT SPECIAL NOTICE REGARDING CORONAVIRUS (COVID-19) AND ATTENDANCE AT PUBLIC MEETINGS Governor Newsom signed Assembly Bill (AB) 361 on September 16, 2021, which, in part, addresses the conduct of public meetings in light of the continued State of Emergency order. Effective October 1, 2021, AB 361 suspends the requirements located in California Government Code, Section 54953, Subdivision (b), Paragraph (3) specifically pertaining to the conduct of public meetings. As such, the Orange County Sanitation District (OC San) Board of Directors has determined that due to the size of OC San's Board of Directors (25), and the health and safety of the members, the Board of Directors will be participating in meetings of the Board telephonically and via Internet accessibility. PUBLIC PARTICIPATION Your participation is always welcome. OC San offers several ways in which to interact during meetings. You will find information as to these opportunities below. ONLINE MEETING PARTICIPATION You may join the meeting live via Teams on your computer or similar device or web browser by using the link below: Click here to join the meeting We suggest testing joining a Teams meeting on your device prior to the commencement of the meeting. For recommendations, general guidance on using Teams, and instructions on joining a Teams meeting, please click here. Please mute yourself upon entry to the meeting. Please raise your hand if you wish to speak during the public comment section of the meeting. The Clerk of the Board will call upon you by using the name you joined with. Meeting attendees are not provided the ability to make a presentation during the meeting. Please contact the Clerk of the Board at least 48 hours prior to the meeting if you wish to present any items. Additionally, camera feeds may be controlled by the meeting moderator to avoid inappropriate content. HOW TO PARTICIPATE IN THE MEETING BY TELEPHONE To join the meeting from your phone: Dial (213) 279-1455 When prompted, enter the Phone Conference ID: 983 562 394# All meeting participants may be muted during the meeting to alleviate background noise. If you are muted, please use *6 to unmute. You may also mute yourself on your device. Please raise your hand to speak by using *5 during the public comment section of the meeting. The Clerk of the Board will call upon you by using the last 4 digits of your phone number as identification. NOTE: All attendees will be disconnected from the meeting at the beginning of Closed Session. If you would like to return to the Open Session portion of the meeting, please login or dial -in to the Teams meeting again and wait in the Lobby for admittance. VIEW THE MEETING ONLINE ONLY The meeting will be available for online viewing only at: https://ocsd.legistar.com/Calendar.aspx HOW TO SUBMIT A COMMENT You may provide verbal comment in real time during the meeting. In order to provide a verbal comment, please raise your hand as described above or alert the Clerk of the Board before or during the public comment period. You may also submit your comments and questions in writing for consideration in advance of the meeting by using the eComment feature available online at: https://ocsd.legistar.com/Calendar.aspx or sending them to OCSanClerk(o)_ocsan.gov with the subject line "PUBLIC COMMENT ITEM # (insert the item number relevant to your comment)" or "PUBLIC COMMENT NON -AGENDA ITEM". You may also submit comments and questions for consideration during the meeting by using the eComment feature available online at: https://ocsd.legistar.com/Calendar.aspx. The eComment feature will be available for the duration of the meeting. All written public comments will be provided to the legislative body and may be read into the record or compiled as part of the record. TECHNICAL SUPPORT PRIOR TO AND DURING MEETINGS For technical assistance before and during the meeting, please call 714-593-7431. For any other questions and/or concerns, please contact the Clerk of the Board's office at 714-593-7433. Thank you, in advance, for your patience in working with these technologies. We appreciate your interest in OC San! 10844 Avenue Fountainn Valley, CA 92708 OC6SAN714...2.241, ORANGE COUNTY SANITATION DISTRICT www.ocsan_gov November 2, 2022 NOTICE OF REGULAR MEETING ADMINISTRATION COMMITTEE ORANGE COUNTY SANITATION DISTRICT Wednesday, November 9, 2022 — 5:00 P.M. ACCESSIBILITY FOR THE GENERAL PUBLIC Your participation is always welcome. Specific information as to how to participate in this meeting is detailed in the Special Notice attached to this agenda. In general, OC San offers several ways in which to interact during meetings: you may join the meeting live via Teams on your computer or similar device or web browser, join the meeting live via telephone, view the meeting online, and/or submit comments for consideration before or during the meeting. The Regular Meeting of the Administration Committee of the Orange County Sanitation District will be held at the above location and in the manner indicated on Wednesday, November 9, 2022 at 5:00 p.m. Serving: Anaheim Brea Buena Park Cypress Fountain Valley Fullerton Garden Grove Huntington Beach Irvine La Habra La Palma Los Alam itos Newport Beach Orange Placentia Santa Ana Seal Beach Stanton Tustin Villa Park County of Orange Costa Mesa Sanitary District Midway City Sanitary District Irvine Ranch Water District Yorba Linda Water District Our Mission. To protect public health and the environment by providing effective wastewater collection, treatment, and recycling. ADMINISTRATION COMMITTEE MEETING DATE BOARD MEETING DATE 11 /09/22 11116122 12/14/22 12115122 ** JANUARY DARK 01/25/23 02/08/23 02/22/23 03/08/23 03/22/23 04/12/23 04/26/23 05/10/23 05/24/23 06/14/23 06/28/23 07/12/23 07/26/23 AUGUST DARK 08/23/23 09/13/23 09/27/23 10/11 /23 10/25/23 * Meeting will be held on the third Wednesday of the month ** Meeting will be held on the third Thursday of the month ROLL CALL ADMINISTRATION COMMITTEE Finance, Information Technology, Environmental Services and Human Resources Meeting Date: November 9, 2022 Time: 5:00 p.m. Adjourn: COMMITTEE MEMBERS (13) Glenn Parker, Chair Anthony Kuo, Vice -Chair Brad Aver Art Brown Kim Carr Rose Espinoza Patrick Harper Jordan Nefulda Andrew Nguyen David Shawver John Withers Chad Wanke Board Chair Ryan Gallagher (Board Vice -Chair) OTHERS Brad Hogin, General Counsel STAFF Jim Herberg, General Manager Rob Thompson, Assistant General Manager Lorenzo Tyner, Assistant General Manager Celia Chandler, Director of Human Resources Director of Engineering -KathyMillea, Riaz Moinuddin, Director of Operations & Maintenance Lan Wibor , Director of Environmental Services Kelly Lore, Clerk of the Board ORANGE COUNTY SANITATION DISTRICT Effective 10/19/2022 BOARD OF DIRECTORS Complete Roster ALTERNATE AGENCY/CITIES ACTIVE DIRECTOR DIRECTOR Anaheim Stephen Faessel Gloria Ma'ae Brea Glenn Parker Cecilia Hupp Buena Park Art Brown Connor Traut Cypress Paulo Morales Anne Hertz-Mallari Fountain Valley Patrick Harper Ted Bui Fullerton Jesus J. Silva Nick Dunlap Garden Grove Steve Jones John O'Neill Huntington Beach Kim Carr Dan Kalmick Irvine Anthony Kuo Farrah N. Khan La Habra Rose Espinoza Steve Simonian La Palma Marshall Goodman Nitesh Patel Los Alamitos VACANT Jordan Nefulda Newport Beach Brad Avery Joy Brenner Orange Kim Nichols Chip Monaco Placentia Chad Wanke Ward Smith Santa Ana Johnathan Ryan Hernandez Nelida Mendoza Seal Beach Sandra Massa-Lavitt Schelly Sustarsic Stanton David Shawver Carol Warren Tustin Ryan Gallagher Austin Lumbard Villa Park Chad Zimmerman Robert Collacott Sanitary/Water Districts Costa Mesa Sanitary District Bob Ooten Art Perry Midway City Sanitary District Andrew Nguyen Mark Nguyen Irvine Ranch Water District John Withers Douglas Reinhart Yorba Linda Water District Brooke Jones Tom Lindsey County Areas Board of Supervisors Donald P. Wagner Doug Chaffee OC6SAN ORANGE COUNTY SANITATION DISTRICT ADMINISTRATION COMMITTEE Regular Meeting Agenda Wednesday, November 9, 2022 - 5:00 PM Board Room Administration Building 10844 Ellis Avenue Fountain Valley, CA 92708 (714) 593-7433 ACCOMMODATIONS FOR THE DISABLED: If you require any special disability related accommodations, please contact the Orange County Sanitation District (OC San) 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 OC San's Administration Building located at 10844 Ellis Avenue, Fountain Valley, California, and on the OC San's website at www.ocsan.gov 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 at https://ocsd.legistar.com/Calendar.aspx or by contacting the Clerk of the Board at (714) 593-7433. 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@ocsan.gov at least 14 days before the meeting. FOR ANY QUESTIONS ON THE AGENDA, BOARD MEMBERS MAY CONTACT STAFF AT: General Manager: Jim Herberg, jherberg@ocsan.gov / (714) 593-7300 Asst. General Manager: Lorenzo Tyner, Ityner@ocsan.gov / (714) 593-7550 Asst. General Manager: Rob Thompson, rthompson@ocsan.gov / (714) 593-7310 Director of Human Resources: Celia Chandler, cchandler@ocsan.gov / (714) 593-7202 Director of Engineering: Kathy Millea, kmillea@ocsan.gov / (714) 593-7365 Director of Environmental Services: Lan Wiborg, Iwiborg@ocsan.gov / (714) 593-7450 Director of Operations & Maintenance: Riaz Moinuddin, rmoinuddin@ocsan.gov / (714) 593-7269 ADMINISTRATION COMMITTEE Regular Meeting Agenda Wednesday, November 9, 2022 CALL TO ORDER PLEDGE OF ALLEGIANCE ROLL CALL AND DECLARATION OF QUORUM: Clerk of the Board PUBLIC COMMENTS: Your participation is always welcome. Specific information as to how to participate in a meeting is detailed in the Special Notice attached to this agenda. In general, OC San offers several ways in which to interact during meetings: you may join the meeting live via Teams on your computer or similar device or web browser, join the meeting live via telephone, view the meeting online, and/or submit comments for consideration before or during the meeting. You may provide verbal comment in real time during the meeting. In order to provide a verbal comment, please raise your hand (directions provided in the Special Notice attached to this agenda) or alert the Clerk of the Board before or during the public comment period. You may submit your comments and questions in writing for consideration in advance of the meeting by using the eComment feature available online at: https://ocsd.legistar.com/Calendar.aspx or sending them to OCSanClerk@ocsan.gov with the subject line "PUBLIC COMMENT ITEM # (insert the item number relevant to your comment)"or "PUBLIC COMMENT NON -AGENDA ITEM". You may also submit comments and questions for consideration during the meeting by using the eComment feature available online at: https://ocsd.legistar.com/Ca/endar.aspx. The eComment feature will be available for the duration of the meeting. All written public comments will be provided to the legislative body and may be read into the record or compiled as part of the record. REPORTS: The 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 Committee, after one motion, without discussion. Any items withdrawn from the Consent Calendar for separate discussion will be considered in the regular order of business. APPROVAL OF MINUTES RECOMMENDATION: 2022-2584 Approve Minutes of the Regular Meeting of the Administration Committee held October 12, 2022. Originator: Kelly Lore Page 1 of 5 ADMINISTRATION COMMITTEE Regular Meeting Agenda Wednesday, November 9, 2022 K 3 Attachments: Agenda Report 10-12-2022 Administration Committee Minutes CONSOLIDATED FINANCIAL REPORT FOR THE FIRST QUARTER 2022-2386 ENDED SEPTEMBER 30, 2022 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, 2022. Originator: Lorenzo Tyner Attachments: Agenda Report Consolidated Financial Report for the First Quarter Ended 9/30/2022 SERVICENOW IT SERVICE MANAGEMENT LICENSE RENEWAL 2022-2590 RECOMMENDATION: A. Approve a Purchase Order to Insight Public Sector for the purchase of ServiceNow License Renewal using the OMNIA Partners Public Sector (formerly U.S. Communities) cooperative contract #4400006644 for a one-year contract for the period of December 30, 2022 through December 29, 2023 for a total amount not to exceed $112,408, plus tax and delivery (if applicable); and B. Approve a contingency of $11,241 (10%). Originator: Lorenzo Tyner Attachments: Agenda Report 4. GENERAL MANAGER APPROVED PURCHASES AND ADDITIONS TO 2022-2595 THE PRE -APPROVED OEM SOLE SOURCE LIST 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, 2022 to September 30, 2022; and B. Approve the following additions to the pre -approved OEM Sole Source List: • BEAMEX - Maintenance and Support for CMX Calibration Software and CMX Business Bridge Software Page 2 of 5 ADMINISTRATION COMMITTEE Regular Meeting Agenda Wednesday, November 9, 2022 • FORD HALL COMPANY INC. - Weir Wolf/Algae Sweep Automation Cleaning Equipment Parts and Service • MIDWAY MANUFACTURING & MACHINE - Custom Brackets & Fittings for Vehicles / Electric Carts and Portable Equipment • VAPEX ENVIRONMENTAL TECHNOLOGIES - SENTINEL Scrubber Monitor/Controller Products Originator: Attachments: NON -CONSENT: 4i .,1 Lorenzo Tyner Agenda Report COOPERATIVE PROCUREMENT AGREEMENTS RECOMMENDATION: Recommend to the Board of Directors to: f►��Ykb�•f:3'a Authorize the purchasing of information technology products, services, and solutions utilizing Cooperative Procurement Agreements (CPA) such as, but not limited to, OMNIA Partners Public Sector (formerly U.S. Communities), NASPO ValuePoint, and U.S. General Services Administration GSA Schedule 70/ GSA Multiple Award Schedule (MAS) for the period January 1, 2023 through December 31, 2023 for a total amount not to exceed $2,000,000, in accordance with Ordinance No. OCSD-56, Section 2.03(B) Cooperative Purchases, with two (2) one-year renewal options. Originator: Attachments: Lorenzo Tyner Agenda Report EMISSION REDUCTION CREDITS BROKER SOLICITATION RECOMMENDATION: Recommend to the Board of Directors to: 2022-2587 Approve the solicitation for an Emission Reduction Credits (ERCs) brokerage firm to identify and secure a buyer(s) for the sale of surplus Reactive Organic Gases (ROG) ERCs at the best available value and to handle all market evaluations of ERCs, negotiations, and financial transactions with all appropriate parties. Originator: Lan Wiborg Attachments: Agenda Report Presentation - Emission Reduction Credits Page 3 of 5 ADMINISTRATION COMMITTEE Regular Meeting Agenda Wednesday, November 9, 2022 7. ORANGE COUNTY SANITATION DISTRICT ANNUAL 2022-2387 COMPREHENSIVE FINANCIAL REPORT FOR THE YEAR END JUNE 30, 2022 RECOMMENDATION: Recommend to the Board of Directors to: Receive and file the Orange County Sanitation District's (OC San) Annual Comprehensive Financial Report (ACFR) for the year ended June 30, 2022, prepared by staff and audited by Davis Farr, Certified Public Accountants, along with the following reports prepared by Davis Farr: 1. Report to the Board of Directors; 2. Independent Accountants' Report on Agreed -Upon Procedures Applied to Appropriations Limit Worksheets; and 3. 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. Originator: Lorenzo Tyner Attachments: Aaenda Report Report to the Board of Directors Independent Accountant's Report on Applying Agreed -Upon Procedures Related to Appropriations Limit Calculation Report on Internal Control Over Financial Reporting Annual Comprehensive Financial Report for the Year Ended 6/30/2022 Presentation - Annual Comprehensive Financial Report Presentation - Davis Farr INFORMATION ITEMS: 8. HUMAN RESOURCES DEPARTMENT OVERVIEW 2022-2606 RECOMMENDATION: Information Item. Originator: Celia Chandler Attachments: Agenda Report Presentation - HR Department Update DEPARTMENT HEAD REPORTS: Page 4 of 5 ADMINISTRATION COMMITTEE Regular Meeting Agenda Wednesday, November 9, 2022 CLOSED SESSION: None. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: BOARD OF DIRECTORS INITIATED ITEMS FOR A FUTURE MEETING: At this time Directors may request staff to place an item on a future agenda. ADJOURNMENT: Adjourn the Committee meeting until the Regular Meeting of the Administration Committee on December 14, 2022 at 5:00 p.m. Page 5 of 5 Administration Building ADMINISTRATION COMMITTEE 10844 Ellis Avenue SAIV Fountain Valley, CA 92708 (714) 593 7433 ORANGE COUNTY SANITATION DISTRICT Agenda Report File #: 2022-2584 Agenda Date: 11/9/2022 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 October 12, 2022. 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. 1:7=111A%1LI11&3IF_1z117_1:713� :Z .7[1iMe , 0[SX911My_1,0i►49iZ! ATTACHMENT The following attachment(s) may be viewed on-line at the OC San website (www.ocsan.gov) with the complete agenda package: • Minutes of the Administration Committee meeting held October 12, 2022 Orange County Sanitation District Page 1 of 1 Printed on 11/1/2022 powered by LegistarTIM Orange County Sanitation District Minutes for the ADMINISTRATION COMMITTEE OC6SAN ORANGE COUNTY SANITATION DISTRICT CALL TO ORDER Wednesday, October 12, 2022 5:00 PM Board Room Administration Building 10844 Ellis Avenue Fountain Valley, CA 92708 (714) 593-7433 A regular meeting of the Administration Committee of the Orange County Sanitation District was called to order by Committee Chair Glenn Parker on Wednesday, October 12, 2022 at 5:01 p.m. in the Administration Building of the Orange County Sanitation District. Chair Parker stated that the meeting was being held telephonically and via Internet accessibility. Chair Parker led the flag salute. ROLL CALL AND DECLARATION OF QUORUM: The Clerk of the Board declared a quorum present as follows: PRESENT: Glenn Parker, Anthony Kuo, Brad Avery, Art Brown, Rose Espinoza, Ryan Gallagher, Patrick Harper, Andrew Nguyen, David Shawver, Chad Wanke and John Withers ABSENT: Kim Carr STAFF PRESENT: Kelly Lore, Clerk of the Board, and Joshua Martinez were present in the Board Room. 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; Riaz Moinuddin, Director of Operations and Maintenance; Lan Wiborg, Director of Environmental Services; Jennifer Cabral; Tanya Chong; John Frattali; Tina Knapp; Laura Maravilla; Rob Michaels; Wally Ritchie; Loc Trang; Thomas Vu; and Ruth Zintzun were in attendance telephonically. OTHERS PRESENT: Brad Hogin, General Counsel, was in attendance telephonically. PUBLIC COMMENTS: None. REPORTS: Chair Parker did not provide a report. General Manager Jim Herberg announced that the State of OC San would be held virtually on November 15, 2022 at 9.00 a.m. CONSENT CALENDAR: 1. APPROVAL OF MINUTES Originator: Kelly Lore 2022-2554 Page 1 of 4 ADMINISTRATION Minutes October 12, 2022 COMMITTEE MOVED, SECONDED, AND DULY CARRIED TO: Approve Minutes of the Regular Meeting of the Administration Committee held September 14, 2022. AYES: Glenn Parker, Anthony Kuo, Brad Avery, Art Brown, Ryan Gallagher, Patrick Harper, Andrew Nguyen, David Shawver, Chad Wanke and John Withers NOES: None ABSENT: Kim Carr and Rose Espinoza ABSTENTIONS: None Director Rose Espinoza arrived at the meeting at approximately 5:08 p.m. NON -CONSENT: 2. PLANT NO. 1 AND PLANT NO. 2 DATA CENTER NETWORK 2022-2552 EQUIPMENT REPLACEMENT Originator: Lorenzo Tyner IT Manager Rob Michaels provided a brief introduction to the item and stated that the sales tax added to the professional services should be removed in the recommendation. MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: A. Approve a Purchase Order Contract to ePlus Technology, Inc. for the Purchase of IT Hardware (Plant No. 1 and Plant No. 2 Data Center Network Equipment Replacement), Specification No. E-2022-134013D, for a total amount not to exceed $643,261.90, plus applicable sales tax; B. Approve a Purchase Order to ePlus Technology, Inc. using the U.S. General Services Administration's (GSA) Schedule 84 Contract Number GS-35F-303DA for the purchase of professional services to implement and configure the Plant No. 1 and Plant No. 2 Data Center Network, for a total amount not to exceed $90,433.60, in accordance with Ordinance No. OC SAN-56, Section 2.03(B) Cooperative Purchases; and C. Approve a contingency in the amount of $73,369.55 (10%) for both the Purchase Order Contract and Purchase Order. AYES: Glenn Parker, Anthony Kuo, Brad Avery, Art Brown, Rose Espinoza, Ryan Gallagher, Patrick Harper, Andrew Nguyen, David Shawver, Chad Wanke and John Withers NOES: None Page 2 of 4 ADMINISTRATION Minutes October 12, 2022 COMMITTEE ABSENT: Kim Carr ABSTENTIONS: None INFORMATION ITEMS: 3. FINANCIAL MANAGEMENT DIVISION 2022-2555 4. 5. Originator: Lorenzo Tyner Controller Wally Ritchie provided a PowerPoint presentation regarding the Financial Management division which included an overview of the following: the budget plan, revenue and accounts receivable, accounts payable, payroll, project controls, capital assets, treasury, financial reporting, insurance, and property management. ITEM RECEIVED AS AN: Information Item. HUMAN RESOURCES: RISK MANAGEMENT Originator: Celia Chandler Director of Human Resources Celia Chandler introduced Safety and Health Supervisor John Frattali who presented a PowerPoint presentation regarding Risk Management's core business functions including safety and health, emergency management, and physical security; and also provided a list of safety awards and recognition received in the last year. Information Item. HEADQUARTERS COMPLEX AT PLANT NO. 1, PROJECT NO. 2022-2558 P1-128A - QUARTERLY UPDATE Originator: Kathy Millea Director of Engineering Kathy Millea provided a PowerPoint presentation regarding the Headquarters Complex Project at Plant No. 1 which included an overview of the site plan, the building layout, an update of the progress made, as well as a look into the mass timber diagrid, a breakdown of those involved, a brief overview of the project timber and steel, upcoming activities, and the project status which included an overview of the budget and schedule. Lastly, Ms. Millea provided a quick tutorial on how to access the live camera footage and a slide on the "topping off beam" which is available to be signed by Directors and staff before installation. ITEM RECEIVED AS AN: Information Item. Page 3 of 4 ADMINISTRATION Minutes October 12, 2022 COMMITTEE DEPARTMENT HEAD REPORTS: None. CLOSED SESSION: None. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: None. BOARD OF DIRECTORS INITIATED ITEMS FOR A FUTURE MEETING: None. ADJOURNMENT: Chair Parker declared the meeting adjourned at 5:41 p.m. to the next Regular Administration Committee meeting to be held on Wednesday, November 9, 2022 at 5:00 p.m. Submitted by: Kelly A. Lore, MMC Clerk of the Board Page 4 of 4 Administration Building ADMINISTRATION COMMITTEE 10844 Ellis Avenue SAIV Fountain Valley, CA 92708 (714) 593 7433 ORANGE COUNTY SANITATION DISTRICT Agenda Report File #: 2022-2386 Agenda Date: 11/9/2022 Agenda Item No: 2. FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Assistant General Manager SUBJECT: CONSOLIDATED FINANCIAL REPORT FOR THE FIRST QUARTER ENDED SEPTEMBER 30, 2022 GENERAL MANAGER'S RECOMMENDATION IV:tole] 1TAIf•1a101�7_,11[61,01M - •- i 0FroIii3.10 i01 ona91 Rag re= on Receive and file the Orange County Sanitation District First Quarter Financial Report for the period ended September 30, 2022. BACKGROUND Included in this consolidated report are the following quarterly financial reports for the period ended September 30, 2022: • 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 (OC San) through the first quarter ended September 30, 2022. • Quarterly Treasurer's Report This section reports on financial portfolio performance with respect to OC San'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 OC San'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 Page 1 of 3 Printed on 11/1/2022 powered by LegistarTIM File #: 2022-2386 ADDITIONAL INFORMATION Agenda Date: 11 /9/2022 Agenda Item No: 2. The quarterly treasurer's report contained within the Consolidated Financial Reports for the First Quarter Ended September 30, 2022 is being submitted in accordance with OC San'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 Sentember 30. 2022 Liquid Operating Monies (%) Long -Term Operating Monies (%) Total Rate of Return Benchmark Total Rate of Return Benchmark 3 Months 0.35 0.46 701 -2.26 6 Months 0.39 0.57 -2.94 -3.20 9 Months 0.38 0.61 -5.78 -6.34 12 Months 0.38 0.62 -6.38 -6.98 Annualized Since Inception 30 Nov 2014 0.92 0.85 0.86 0.75 • 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 $109.4 M $745.9 M Market Value $109.5 M $700.2 M • Modified duration of the portfolio compared to the Benchmark: Liquid Operating Long -Term OC San Policy < 0.50 < 5.00 Benchmark 0.15 2.51 Portfolio 0.28 2.41 • Dollar change in value of the portfolio for a one percent (1 %) change in interest rates: Liquid Operating - $388,378 Long- Term - $17,250,024 • None of the portfolios are currently invested in reverse repurchase agreements. Orange County Sanitation District Page 2 of 3 Printed on 11/1/2022 powered by LegistarT" File #: 2022-2386 Agenda Date: 11/9/2022 Agenda Item No: 2. • The percent of the Liquid Operating Monies portfolio maturing within 90 days: 28.4% • 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 - Percent of portfolio - 1.8% Long- Term - Percent of portfolio - 0.8% Cost Maturity Moody S&P Fitch Date Virginia Electric Power Corp Callable Note $2,003,940.00 3/15/2023 A2 BBB+ A SLMA Student Loan Trust 2008-9 A $8,448.07 4/25/2023 Ba3 B- B AMRESCO Residential Securities 1999-1 A $87,577.91 6/25/2029 NR BBB A Virginia Electric Power Corp Callable Note $5,736,523.40 5/15/2027 A2 BBB+ A • All investments are in compliance with this policy and the California Government Code, except for the following Lehman Brother holdings that OC San 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 OC San to meet its operating expenditure requirements for the next six months. ATTACHMENT The following attachment(s) may be viewed on-line at the OC San website (www.ocsan.gov) with the complete agenda package: • Consolidated Financial Report for the First Quarter Ended September 30, 2022 Orange County Sanitation District Page 3 of 3 Printed on 11/1/2022 powered by LegistarTM Orange county Sanitation District First Quarter Financial Report For the period ended September 30, 2022 \1 `F A WE t x f - fo -,r, r t *h''; 1. l zc+n'Fh Orange County, California Table of Contents ExecutiveSummary....................................................................................................................1 Budget Review Section 1 — Consolidated Financial Reports.........................................................................1 Section 2 — Operating Budget Review Chart of Cost per Million Gallons by Department....................................................1 Chart of Collection, Treatment, & Disposal Expenses by Major Category ...............1 Divisional Contributions to Cost Per Million Gallons................................................2 Comparison of Expenses by Department................................................................3 Summary of Collection, Treatment, & Disposal Expenses by Major Category ......... 4 Summary of Revenues...........................................................................................5 Summary of Collection, Treatment, & Disposal Expenses by Line Item ..................6 Summary of Collection, Treatment, & Disposal Expenses by Process ....................8 Chartof Staffing Trends..........................................................................................9 Section 3 — Capital Improvement Program Budget Review Chart of Capital Improvement Program By Process Area and Project Driver ..........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 QuarterlyCOP Report.................................................................................................1 FY 2022-23 First Quarter Financial Report This Page Intentionally Left Blank Table of Contents Executive Summary Consolidated Financial Reports For the First Quarter Ended September 30, 2022 Included in this consolidated report are the following quarterly financial reports for the period ended September 30, 2022: • 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 Orange County Sanitation District (OC San) through the first quarter ended September 30, 2022. Contained within the Budget Review Sections 2 through 5 is the budget -to -actual status of the Collection, Treatment and Disposal Operations, Capital Improvement Program, Debt Service, and Self -Insurance Program. Also included is a Capital Assets Schedule as of September 30, 2022. The chart below provides for a summary of these activities. 100% 75% 50% 25% 0% First Quarter Results as a Percentage of Budget :$48-01M $1.OM $619K $27.7M $10AM Operating Operating Capital Debt Self Revenue Expense Outlays Service Insurance Various detail information can be found in this report. Below is a descriptive summary of these activities through September 30, 2022: a) Most major expense categories are anticipated to approximate budget. b) Total revenues are at 0.1 percent of the $508.0 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 82.3 percent of OC San's total budgeted revenue. Other, less material Page 1 Table of Contents FY 2022-23 First Quarter Financial Report revenue sources in comparison, that are tracking significantly lower than the proportionate budget through September 30 include Capital Assessments- IRWD, Capital Facilities Capacity Charges, Interest Earnings (Loss), CIP Reimbursements, Grant Revenue, and Other Revenues. Overall, total revenues are projected to approximate or be slightly below budget at year- end. More detailed information on revenues is provided within Section 1 — Pages 4 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 $48.0 million is currently tracking at 23.9 percent of the $201.1 million budget. In addition, net operating expenses have increased $5.1 million or 11.8 percent in comparison with the same period last year. Overall, staff expects the total operating costs to remain at or slightly below budget throughout the remainder of the year. More detailed information on operating expenses is provided within Section 1 — Pages 1 through 3. The total cost per million gallons is $2,891 based on flows of 180 million gallons per day. This is $88 per million gallons, or 3.0 percent higher 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 2022-23 has been revised to $268.8 million, or 100.2 percent of the board approved cash outlay of $268.2 million. The actual cash outlay spending through the first quarter is $27.7 million, or 10.3 percent of the total budgeted outlay. More detailed information on the CIP budget review can be found in Section 1 — Page 9 and Section 3. • First Quarter Treasurer's Report This section reports on financial portfolio performance with respect to OC San'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 OC San's money manager, Chandler Asset Management (Chandler). Chandler notes the Long -Term Portfolio quarterly return of negative 201 basis points outperformed the ICE BAML 1-5 Year US Corp/Govt Rated AAA -A Index return of negative 226 basis point, while the Liquid Operating Monies Portfolio quarterly return of 35 basis point underperformed the ICE BAML 3-Month US Treasury Bill Index return of 46 basis points. Chandler further notes that market volatility has intensified as financial conditions tighten and global central banks pursue monetary policies to combat persistently high inflation and maintain financial market stability. Labor markets and consumer balance sheets remain strong; however, inflation is weighing heavily Page 2 Table of Contents Executive Summary on consumer sentiment and beginning to impact discretionary spending. Corporate earnings have generally performed better than expected, but warnings are growing along with wider credit spreads. While evidence of slower economic conditions has begun to mount, we expect the Federal Reserve to continue to raise rates until a sustainable improvement in inflationary conditions has been achieved. Over the near -term, we expect financial market volatility to remain intensified and conditions tighter with persistent inflation, geopolitical risk, and the Fed's hawkish monetary policy. At the September meeting, the Federal Open Market Committee (FOMC) delivered the third 75-basis point increase to the Fed Funds Rate, increasing the range to 3.00% to 3.25%. The FOMC acknowledged spending and production are experiencing modest growth, offset by a robust labor market and elevated inflation metrics. We expect the Fed to continue to increase the federal funds rate in the near term until inflationary pressures weaken. In September, yields rose significantly across the curve. The 2-year Treasury yield increased 79 basis points to 4.28%, the 5-year Treasury yield rose 74 basis points to 4.09%, and the 10-year Treasury yield gained 64 basis points to 3.83%. The spread between the 2-year Treasury yield and 10-year Treasury yield became more inverted at -45 basis points at September month -end versus -30 basis points at August month -end. The spread was a positive 121 basis points one year ago. The spread between 3-month and 10-year treasuries widened to 56 basis points in September compared to just 27 basis points in August. The shape of the curve does not necessarily indicate an imminent recession but bears watching as a better predictor of recession over the medium -term. US Treasury yields rose sharply in September. On a year-to-date basis, the 2-year Treasury yield was up 355 basis points, the 5-year Treasury yield rose 283 basis points, and the 10-year Treasury yield gained 232 basis points. The spread between the 2-year Treasury yield and 10-year Treasury yield inverted to -45 basis points versus +78 basis points at year-end. The average historical spread (since 2003) is about 130 basis points. The spread between 3-month and 10-year treasuries was 56 basis points in September compared to about 148 basis points at the start of the year. The Consumer Price Index (CPI) increased more than expected in September, with increases were broad based led by gains in shelter, food, and medical care while prices for gasoline and used cars declined. Headline CPI increased 8.2% year -over -year in September, versus expectations for an 8.1 % increase, and down from an 8.3% year -over -year gain in August. Core CPI, which excludes food and energy, increased 6.6% from a year ago, the highest level since 1982. The Personal Consumption Expenditures (PCE) index rose 6.2% in August, higher than consensus estimates of up 6.0%, but down from a 6.4% increase last month. Core PCE was up 4.9% year -over -year in August, versus up 4.7% year -over -year in July. Persistently elevated inflation is likely to keep the Federal Page 3 Table of Contents FY 2022-23 First Quarter Financial Report Reserve on the path of tightening monetary policy as long as it continues to run well above the Fed's longer -run target of around 2.0%. Economic Outlook The debate over whether the US economy is poised for a hard or soft landing continues to evolve with economic data available to support both outcomes, contributing to elevated market volatility. Geopolitical risks remain acute with the energy crisis in Europe and the long-term implications of the Russia/Ukraine conflict a well -documented calamity, China continuing to implement its zero COVID policy and face a housing crisis, and the United Kingdom confronting market stress due to its expansionary fiscal plans and tightening monetary policy, all contributing to market angst. The backdrop in the United States is more constructive on a relative basis with the most recent payrolls report showing job growth of 263k on the month, a three-month moving average of 372k, and the unemployment rate down to 3.5%. Despite two quarters in a row of negative GDP growth in the first half of 2022, softening ISM Manufacturing and stable ISM Services releases, exhibiting the transition of the economy away from the impact of COVID, the mosaic of data in the domestic economy remains inconsistent with a recession in Chandler's view. However, the risk of a deteriorating economy in the first half of 2023 remains as financial conditions continue to become more restrictive. The pace of the Federal Reserve's Quantitative Tightening (QT) increased to $95 billion per month and the Fed Funds rate moved higher by 1.50% during the quarter to a current range of 3.00% to 3.25%. Future increases in the Fed Funds rate are forecasted in November and December and it is likely the terminal Fed Funds rate is at least 4.5% in this cycle as inflation metrics continue to run well above the Federal Reserve's 2% objective. Core CPI on a year over year basis ticked up by 0.3pp in September to 6.6% and core PCE inflation, as of August, ticked up 0.2pp on an annualized basis from the prior month to 4.9% year -over -year. The Chandler team forecasts inflation will moderate in coming months but remain challenged to approach the Federal Reserve's 2% objective over the next 12 to 24 months, signaling monetary policy will need to be maintained in a restrictive setting over an intermediate time horizon. One of the more significant adjustments to financial conditions during the quarter was the move higher in both nominal and real interest rates, offset by the decline in breakeven inflation rates (Nominal Rate = Break Even Inflation Rate + Real Rate). Real rates had been in negative territory when financial conditions were exceptionally accommodative, and the Fed Funds rate was set close to the zero lower bound; Federal Reserve officials have noted an increase in real rates into positive territory would be consistent with tighter financial conditions and based on the change in rates during the quarter this objective has been achieved. Additionally, the move lower in US Treasury TIPS breakeven inflation rates is consistent with long-term inflation metrics remaining anchored; based on longer term inflation metrics market participants remain confident in the Federal Page 4 Table of Contents Executive Summary Reserve's ability to meet its objective of stable prices. Both investment grade and high yield credit spreads were relatively stable on a quarter over quarter basis, despite the volatility intraquarter, and significantly higher on a year-to-date basis. Market volatility is forecasted to remain elevated and correlated with the lack of visibility on the timing and magnitude of an improvement in inflation metrics and therefore when the Federal Reserve will be able to slow the pace of policy tightening. First Quarter Certificates of Participation (COP) Report The report includes a summary of each outstanding debt issuance and a comparative chart illustrating the COP rate history. Page 5 Table of Contents FY 2022-23 First Quarter Financial Report This Page Intentionally Left Blank Page 6 Table of Contents Consolidated Financial Reports First Quarter Financial Report September 30, 2022 The Financial Management Division is pleased to present the FY 2022-23 first quarter financial report. This report provides a comprehensive overview of the financial activities of the Orange County Sanitation District (OC San) 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, 2022, 23.9 percent, or $48.0 million of the FY 2022-23 net operating budget of $201.1 million has been expended. Net operating expenses increased from the same period last year by $5.1 million, or 11.8 percent, mainly due to an increase of $1.8 million in Operating Materials and Supplies, $1.6 million in Salaries and Benefits, $841,000 in Utilities, $776,000 in Contractual Services, $307,000 in Professional Services, and a decrease of $258,000 in indirect costs allocated out to capital projects, partially offset by a decrease of $336,000 in Repairs and Maintenance, $132,000 in Administrative Expenses, and $66,000 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 through the remainder of the year. At September 30, 2022, 0.1 percent, or $619,000 of the FY 2022-23 budgeted total revenues of $508.0 million has been recognized. Revenues decreased from the same period last year by $176.8 million, or 99.7 percent, mainly due to prior fiscal year receipt of $164.4 million from issuance of Revenue Refunding Certificates of Participation (COP), Series 2021A in the first quarter. Other decreases include $13.1 million in Interest Earnings, $1.0 million in Property Taxes, $511,000 in Capital Facilities Capacity Charges, $106,000 in Service Fees, and $77,000 in Power Sales, which are offset by an increase of $1.1 million in Permit Fees, $1.0 million in Intra District Sewer Use- IRWD, $97,000 in Capital Assessments-IRWD, and $57,000 in Inter District Sewer Use- SAWPA & SBSD. These and other variances that factor into this net increase in revenues are discussed in more detail below. Overall, staff expects the total revenues to approximate or be slightly below budget at the end of the fiscal year. Significant operating results as of September 30, 2022, include the following: • Salaries, Wages and Benefits — Personnel costs of $26.5 million are on target at 23.5 percent of the budget through the first quarter of FY 2022-23. The budget is based on a 5 percent vacancy factor, and staffing is 50 full-time equivalents (FTEs), or 7.7 percent below the total 647 FTEs approved in the FY 2022-23 budget. Salary and benefit costs are $1.6 million, or 6.4 percent higher than the $24.9 million incurred in the same period last year, mainly due to an increase of $2.7 million in Section 1 - Page 1 Table of Contents FY 2022-23 First Quarter Financial Report Salaries and Wages resulting from cost -of -living adjustments included in the current Memorandums of Understanding for all employee bargaining units, and is partially offset by decreases of $753,000 in Group Insurances and $395,000 in Retirement. Net operating personnel costs are expected to approximate budget throughout the remainder of the year. • Administrative Expenses — Administrative Expenses totaled $559,000, or 24.8 percent of the $2.3 million budget through September 30. These costs are $132,000, or 19.1 percent lower at September 30 in comparison with the prior year, mainly due to a decrease of $67,000 in Small Computer Items, $31,000 in Minor Furniture & Fixtures, and $27,000 in Memberships as a result of timing of payments. It is anticipated that administrative costs will approximate budget at year-end. • Printing and Publication Expenses — Printing and Publication Expenses totaled $65,000 or 8.0 percent of the $809,000 budget through September 30. These costs are $5,000, or 8.1 percent higher at September 30 in comparison with the prior year, primarily due to an increase in costs incurred for in-house printing and reproductions. Significant costs are expected in the third quarter when Prop 218 notifications for regional sewer service fees will be mailed. Printing and publication costs are expected to approximate budget at year-end. • Training and Meetings — Training and meetings of $39,000 is below target at 3.4 percent of the $1.2 million budget through September 30. This account is lower than the proportionate budget due to the timing and need for training throughout the year and the reduction of in -person training and meetings in response to the COVID- 19 pandemic. These costs have decreased over the same period last year by $66,000, or 62.8 percent. Total training and meeting costs are anticipated to be below budget at year-end. • Operating Materials and Supplies — Operating materials and supplies of $6.5 million is on target at 26.5 percent of the $24.5 million budget through September 30. Operating Materials and Supplies is higher than the prior year by $1.8 million, or 37.6 percent, mostly due to increases of $1.2 million in Chemical Coagulants resulting from increased usage and unit costs of cationic polymer, ferric chloride, and anionic polymer, $349,000 in Odor and Corrosion Control, $162,000 in Safety Equipment/Tools, and $102,000 in Tools. Based on current processes, operating materials and supplies are anticipated to approximate or be slightly above budget at year-end. • Contractual Services — Contractual services is on target at $4.9 million, or 24.3 percent of the $20.1 million budget through September 30. Solids Removal costs, budgeted at $13.7 million, comprise the majority of this expense category at $3.4 million, or 25.1 percent of its budget at September 30. Contractual Services is higher by $776,000, or 18.8 percent over the same period last year, mainly due to the increase of $512,000 in Solids Removal, $156,000 in Other Contractual Services, and $75,000 in Oxygen. County Service Fees totaled only $9,000, or 1.8 percent of the $519,000 budget through the first quarter, as the preponderance of Section 1 - Page 2 Table of Contents Consolidated Financial Reports these fees are billed by the County in the fourth quarter. Total contractual services costs are anticipated to approximate or be above budget at year-end. • Professional Services — Professional services costs totaled $1.2 million, or 15.4 percent of the $7.9 million budget through September 30. Professional services costs, such as Legal, Audit & Accounting, Engineering, Environmental Scientific Consulting, Energy Consulting, Industrial Hygiene Services, Labor Negotiation Services, and Other Professional Services, are proportionately low through September 30 due to a variety of factors such as timing of services and re- evaluation of need for services. These costs are $307,000, or 33.9 percent higher at September 30 in comparison with the prior year, mainly due to an increase of $211,000 in Software Program Consulting and $191,000 in Other Professional Services. It is anticipated that the costs for this category will be below budget at year-end. • Research and Monitoring — Research and monitoring costs totaled $597,000, or 35.2 percent of the $1.7 million budget through September 30. These costs are $21,000, or 3.6 percent higher at September 30 in comparison with the prior year, primarily due to an increase of $35,000 in Research costs reflecting the higher annual contribution to Southern California Coastal Water Research Project and research of SARS-CoV-2 presence in wastewater, offset by a decrease of $12,000 in Air Quality Monitoring costs for emissions testing. Total research and monitoring costs are anticipated to approximate budget at year-end. • Repairs and Maintenance — Repairs and maintenance costs totaled $7.3 million, or 22.6 percent of the $32.1 million budget through September 30. These costs are $336,000, or 4.4 percent lower at September 30 in comparison with the prior year, primarily due to a decrease in repair and maintenance services for dewatering centrifuges and electrical breakers and relays. It is anticipated that the costs for this category will approximate budget at year-end. • Utilities — Utilities costs totaled $4.0 million, or 31.3 percent of the $12.8 million budget through September 30. These costs are $841,000, or 26.6 percent higher at September 30 in comparison with the prior year, primarily due to an increase of $969,000 in Power due to greater electricity consumption and higher unit costs, partially offset by a decrease of $61,000 in Water and $51,000 in Natural Gas. It is anticipated that the costs will approximate or be above budget at year-end. • Other Operating Supplies — Other operating supplies costs totaled $934,000, or 21.1 percent of the $4.4 million budget through September 30. Property and General Liability Insurance, budgeted at $2.4 million, comprise the majority of this expense category at $606,000. Overall, Other Operating Supplies is $42,000, or 4.7 percent higher at September 30 in comparison with the prior year, primarily due to an increase of $71,000 in Property and General Liability Insurance, $16,000 in Freight, and $11,000 in Regulatory Operating Fees, which is partially offset by a decrease of $68,000 in Miscellaneous Operating Expenses. It is anticipated that other operating supplies costs will approximate budget at year-end. Section 1 - Page 3 Table of Contents FY 2022-23 First Quarter Financial Report • Revenues — Service Fees and Property Taxes — Through September 30, revenues from Service Fees are at negative $18,000, or 0.0 percent of the $308.5 million budget and Property Taxes are at $1.6 million, or 1.4 percent of the $109.8 million budget. These items comprise the majority of OC San's revenues and are mostly collected by the County through the property tax roll and distributed to OC San throughout the year based on a set distribution schedule that begins in November of each year. The decrease of $106,000, or 120.5 percent in service fee revenue over the prior year is primarily due to the timing of receipts and user fee refunds. The property tax revenue decrease of $1.0 million, or 39.8 percent over the prior year is a result of the timing of miscellaneous property tax receipts. These revenues are expected to approximate budget at year-end. • Revenues — Permit Fees — Permit Fees are at $4.6 million, or 37.0 percent of the $12.5 million budget. The revenues through the first quarter are higher than the same period last year by $1.1 million, or 30.7 percent, due to the fluctuation in the number of permittees from year to year as businesses establish or cease their operations and an increase in operation and maintenance charges based on flows received from these customers. Permit Fees revenues are expected to approximate or be above budget at year-end. • Revenues — Inter District Sewer Use — SAWPA and SBSD — Inter District Sewer Use-SAWPA and SBSD are at $747,000, or 24.8 percent of the $3.0 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 $57,000, or 8.3 percent, due to an increase in operation and maintenance charges based on flows received from these agencies. These revenues are expected to approximate budget at year-end. • Revenues — Intra District Sewer Use — IRWD — Intra District Sewer Use-IRWD are at $2.0 million, or 39.9 percent of the $5.1 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 $1.0 million, or 106.4 percent, primarily due to a decrease of $738,000 in interest income/(loss) allocated to IRWD and an increase of $315,000 in operating and maintenance charges to IRWD. These revenues are expected to be above budget at year-end. • Revenues — Capital Assessments — IRWD — Capital Assessments-IRWD are at $616,000, or 6.5 percent of the $9.4 million budget. The revenues through the first quarter are higher than the same period last year by $97,000, or 18.7 percent, mainly due to an increase in joint capital costs allocable to IRWD. It is estimated that IRWD capital assessments revenues will be below budget at year-end. • Revenues — Capital Facilities Capacity Charges (CFCC) — CFCC are at $2.9 million, or 16.4 percent of the $17.9 million budget. The revenues through the first quarter are lower than the same period last year by $511,000, or 14.8 percent, Section 1 - Page 4 Table of Contents Consolidated Financial Reports due to a decrease in capacity charges collected from local agencies, partially offset by an increase in supplemental charges assessed to industrial dischargers. These revenues are expected to approximate or be below budget at year-end. • Revenues — Interest Earnings (Loss) — Interest Earnings are at negative $12.5 million, or -86.3 percent of the $14.5 million budget. The revenues through the first quarter are lower than the same period last year by $13.1 million due to a negative total rate of return on securities held in the long-term investment portfolio, which is largely comprised of unrealized losses. It is estimated that interest earnings will be below budget at year-end. • Revenues — CIP Reimbursements — CIP Reimbursements are at $17,000, or 0.1 percent of the $11.8 million budget. This revenue is $17,000, or 100.0 percent higher than the same period last year and is proportionately low to the budget through the first quarter due to timing of reimbursements for construction projects, such as from Orange County Water District for J-117B Outfall Low Flow Pump Station and for P2-122 Headworks Modifications at Plant No. 2 for GWRS Final Expansion. These revenues are expected to be below budget at year-end. • Revenues — Wastehauler — Wastehauler revenues are at $195,000, or 26.0 percent of the $750,000 budget. This revenue is derived from fees charged to wastehaulers, allowing them to dump waste into OC San's system. The revenues through the first quarter are higher than the same period last year by $22,000, or 12.7 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 $79,000, or 19.8 percent of the $400,000 budget. This revenue is derived from public sales at OC San's Compressed Natural Gas (CNG) fueling station. The revenues through the first quarter are higher than the same period last year by $17,000, or 27.2 percent, due to an increase in compressed natural gas prices. These revenues are expected to approximate budget at year-end. • Revenues — Rents & Leases — Rents & Leases revenues are at $121,000, or 20.1 percent of the $600,000 budget. The revenues through the first quarter are lower than the same period last year by $5,000, or 4.4 percent. These revenues are expected to approximate budget at year-end. • Revenues — Other — Other revenues are at $196,000, or 1.5 percent of the $13.2 million budget. These revenues are $4,000, or 2.1 percent higher than the same period last year, primarily due to an increase of $12,500 in service charge penalties and interest and $12,000 in miscellaneous other revenue, partially offset by a decrease of $21,000 in deferred compensation administrative activities. These revenues are expected to be below budget at year-end. Section 1 - Page 5 Table of Contents FY 2022-23 First Quarter Financial Report $3,200 $3,000 $2,800 $2,600 $2,400 $2,200 $2,000 $1,800 $1,600 $1,400 Comparison of First Quarter Cost per Million Gallon Results with Budget Last Five Years rn � rn N EH N K3 00 O V N 63 N V Ln M M N HT _ n It(D N M N G3 N 661 V N EA N EA N W O N EFT 18-19 19-20 20-21 21-22 22-23 O Fiscal Year Budget O First Quarter As demonstrated in the preceding graph for the current and each of the last four fiscal years, the cost per million gallons at the end of the first quarter has been between 2.2 and 13.7 percent lower than the annual budget. The FY 2022-23 first quarter cost per million gallons of $2,891 is 3.0 percent lower when compared with this year's budget. The increase in cost per million gallons of $349 from the previous year is primarily due to an increase in operating expenses, which are 11.8 percent higher than the same period last year, and a decrease in flows, which are 1.7 percent lower than the same period last year. Staff believes that overall operating costs will be at or slightly below budget at year-end. The total cost per million gallons at September 30 is $2,891 based on flows of 180 million gallons per day. This is $88 per million gallons, or 3.0 percent lower than the budgeted cost per million gallons of $2,979. The lower cost per million gallons is due to net expenses being 4.6 percent lower than the proportionate budget through September 30, partially offset by flows of 180 million gallons per day being 2.5 percent less than the budgeted flow of 185 million gallons per day, which has an inverse relationship to cost per unit of collection, treatment, and disposal. More detailed information on operating revenues, costs, and related information is provided within Section 2. Section 1 - Page 6 Table of Contents Consolidated Financial Reports Following are data tables showing the last five years of Single Family Residential User Fees (SFR) and the cost per million gallons (MG) to collect, treat, and dispose of wastewater for the Orange County Sanitation District and similar agencies. The agencies used in the tables were determined to be those that most closely resembled OC San in terms of services provided and treatment levels. The summaries demonstrate that OC San's SFR and cost per MG are each one of the lowest in their respective groups. Benchmark Study Five -Year Single Family Residential Rate Agency San Francisco $ Vallejo Sanitation/Flood Control District $ Central Contra Costa Sanitary District $ City of San Diego $ City of Los Angeles $ Union Sanitary District $ Dublin San Ramon Services District $ East Bay MUD $ City of Hayward $ Sacramento County $ Irvine Ranch Water District $ Orange County Sanitation District $ Oro Loma Sanitary District $ City of Fresno $ Los Angeles County $ Rates as of July 2018 2019 2020 2021 2022 SFR SFR SFR SFR SFR Notes 988 1,076 1,169 1,270 1,270 585 656 715 747 769 567 598 598 660 690 573 573 573 573 687 (1) 561 597 636 636 636 (2) 407 421 421 524 530 (3) 423 447 469 486 496 410 423 439 457 475 394 412 430 446 463 444 444 444 444 444 309 313 313 313 357 (4) 335 339 339 343 347 256 275 296 318 342 309 309 309 309 309 (5) 191 196 213 226 226 (6) Notes: (1) - Data represents the base sewer fee plus the average usage of 9 hundred cubic feet per month. (2) - Data is for the typical SFR customer rate. (3) - Deferred rate increase for July 2020 incorporated into July 2021 rate. (4) - Data represents the usage of 10 hundred cubic feet per unit. (5) - Data represents the minimum SFR rate not including flow. (6) - Data represents the Average Service Charge Rates for the prior fiscal year. Section 1 - Page 7 Table of Contents FY 2022-23 First Quarter Financial Report Benchmark Study Five -Year Cost per MG Agency Svc. Trt. FY 16-17 Cost/MG FY 17-18 Cost/MG FY 18-19 Cost/MG FY 19-20 Cost/MG FY 20-21 Cost/MG Notes San Francisco B 2 $ 4,916 5,295 5,995 7,573 9,456 (1) Vallejo Sanitation/Flood Control District B 2 $ 4,745 5,393 6,137 8,682 9,108 (2) Central Contra Costa Sanitary District B 3 $ 6,081 5,588 3,980 5,284 6,513 (3) Union Sanitary District B 2 $ 4,039 4,757 4,838 5,655 5,569 City of San Diego B 3 $ 3,834 4,147 4,180 3,977 4,219 East Bay MUD T 2 $ 2,353 3,137 2,710 3,122 4,052 (4) Dublin San Ramon Services District B 3 $ 2,961 3,422 3,692 3,441 3,570 (5) Sacramento County T 3 $ 2,752 2,831 2,812 3,407 3,470 City of Los Angeles B 3 $ 2,487 2,329 3,046 3,021 2,763 (6) Orange County Sanitation District B 2 $ 2,055 2,069 2,275 2,422 2,428 Los Angeles County B 3 $ 1,965 2,077 2,264 2,343 2,338 (7) City of Fresno B 3 $ 1,796 1,813 1,945 1,993 2,100 Leaend for Service Provided and Treatment Level: B - Agency operates both collection and treatment facilities T - Agency provides treatment services but not collection 2 - Secondary treatment 3 - Advanced secondary or secondary with some tertiary treatment Notes: (1) - FY19-20 operating expense increased $2.9 million and average daily flow decreased 19.3MG per day. Combined stormwater/sewer system. (2) - In FY19-20, Agency updated FY18-19 Annual Comprehensive Financial Report treatment cost. (3) - FY18-19 operating expense decreased $36.4 million; $30.4 million due to an adjustment to the Agency's Other Post Employment Benefit Plan (OPEB) - Transition to CalPers Health Insurance. (4) - FY18-19 operating expense decreased $1.1 million. (5) - FY20-21 costs include both treatment and collection costs (Regional Fund 300 + Local Fund 200). (6) - FY17-18 influent flow has not been reduced by the amount of sludge discharged to the sewers from DCTW RP and LAGW RP. (7) - In FY19-20, Agency updated data for FY16-17 and after to include administrative costs. Section 1 - Page 8 Table of Contents Capital Outlay Review: $300,000,000 $250,000,000 $200,000,000 $150,000,000 $100,000,000 $50,000,000 $0 Consolidated Financial Reports 09/30/22 Actual Projected 2022-23 2022-23 Capital Outlay Capital Outlay Capital Outlay Cashflow Budget $27,661,618 $268,761,800 $268,167,361 As depicted by the preceding chart, Capital Outlays totaled $27.7 million, or 10.3 percent of the capital outlay cash flow budget for FY 2022-23 as of September 30, 2022. Costs are lower than the proportionate budget 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 Rehabilitation of Western Regional Sewers, which has a budget of $17.1 million but actual costs of $436,000, Primary Treatment Rehabilitation at Plant No. 2, which has a budget of $30.5 million but actual costs of $4.4 million, and Headquarters Complex, which has a budget of $61.2 million but actual costs of $4.2 million. Overall, the capital outlay costs of the capital improvement program are expected to approximate $268.8 million, or 100.2 percent of the capital outlay cash flow budget at year-end. More detailed information on the capital improvement program is provided within Section 3. Capital Assets Schedule and Debt Service Budget Review: Section 4 is the Capital Assets Schedule and Debt Service Section. This section shows the cost value of OC San's capital facilities at September 30, 2022, as well as the debt service costs resulting from the need to provide funding for the construction of capital facilities. Principal payments on debt issues are due in February, during the third quarter of each fiscal year. As of September 30, 2022, no principal payments have been made. Interest costs are expensed ratably throughout the fiscal year and are expected to approximate or exceed budget at year-end. Section 1 - Page 9 Table of Contents FY 2022-23 First Quarter Financial Report Self -Insurance Budget Review: Section 5 is the Self -Insurance Section. Through September 30, the Self -Insurance Fund revenues totaled $763,000, or 25.1 percent of the budget, while expenses are at $1.0 million, or 27.5 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. Section 1 - Page 10 Table of Contents Operating Budget Review Cost per Million Gallons by Department Budget and Actual September 30, 2022 $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 U U > NN C i N > - N C N U U O) 0LS N C U N C C N U E O N U N C N O C N +U+ O (B W m 2 a)C O E(n aU) C W m Q : 02 ❑ Budget ❑ Actual $90,000 $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 Collection, Treatment, & Disposal Expenses by Major Category Budget and Actual (in thousands) September 30, 2022 N N a)w' N N C O N N N N N N CD C O U N N d (ry U >� N d N d - C U U C _> 06 m 'U Z N M .� Q N N CO (n C O d c O KS O ui >� a) LL N d 0'j O) 3 (6 (6 CO .Q (6 >' > od .0 � 7 C od c6 a'y C U) U od i fl' OE n W N c ~ O 6 W MO a CL d CL Q Of ❑ Budget O Actual Section 2 - Page 1 Table of Contents FY 2022-23 First Quarter Financial Report Divisional Contributions to Cost Per Million Gallons For the Three Months Ended September 30, 2022 Flow in Million Gallons Flow in Million Gallons per Day Executive Management Department General Management Administration Board Services Public Affairs Subtotal Human Resources Department Human Resources Risk Management / Safety / Security Subtotal Administrative Services Department Administrative Services Consolidated Services Financial Management Contracts, Purchasing, & Materials Mgmt. Information Technology Subtotal Environmental Services Department Environmental Services Administration Resource Protection Laboratory, Monitoring and Compliance Subtotal Engineering Department Engineering Administration Planning Project Management Office Design Construction Management Subtotal Operations & Maintenance Department Operations & Maintenance Administration Collections Facilities O & M Fleet Services Plant No. 1 Operations Plant No. 2 Operations Plant No. 1 Maintenance Plant No. 2 Maintenance Subtotal Total Operating Expenses Cost Allocation Net Operating Requirements 09/30/20 09/30/21 Actual Actual 17,208.88 16,881.01 187.05 183.49 $ 27.48 12.13 15.66 55.27 44.53 50.30 94.83 7.45 90.21 58.14 68.44 239.80 464.04 35.19 81.70 167.64 284.53 16.89 46.52 61.22 86.01 93.03 303.67 1.87 182.77 25.00 479.38 252.10 334.45 292.54 1,568.11 2,770.45 (291.38) $ 2,479.07 2022-23 Annual 09/30/22 Budget Actual 67,525.00 16,593.98 185.00 180.37 $ 23.95 $ 24.24 $ 30.23 13.24 18.45 13.93 15.45 25.54 19.04 52.64 68.23 63.20 56.78 69.13 60.39 61.39 70.78 63.60 118.17 139.91 123.99 8.46 99.65 57.79 66.20 258.93 491.03 77.06 81.17 134.18 292.41 19.03 52.29 61.42 95.39 100.80 328.93 2.11 207.21 33.22 472.08 258.82 365.77 208.51 1,547.72 2,830.90 (289.16) $ 2,541.74 9.12 123.59 66.36 77.33 221.78 498.18 75.55 106.84 153.77 336.16 20.48 62.68 66.63 106.65 128.35 384.79 9.96 279.87 36.49 562.81 281.97 395.67 292.25 1,859.02 3,286.29 (307.46) $ 2,979.00 8.77 115.63 65.52 80.58 298.14 568.64 80.66 83.32 141.96 305.94 13.07 60.05 63.17 88.29 108.64 333.22 6.92 253.21 38.44 599.79 279.08 380.49 216.73 i�jl��:1• 3,169.65 (278.59) $ 2,891.06 Section 2 - Page 2 Table of Contents Operating Budget Review Comparison of Expenses by Department For the Three Months Ended September 30, 2022 2022-23 09/30/20 09/30/21 Year to Date Budget % Department and Division Actual Actual Budget 09/30/22 Realized Executive Management Department General Management Administration $ 472,840 $ 404,349 $ 1,637,010 $ 501,556 30.64% Board Services 208,682 223,424 1,245,834 231,087 18.55% Public Affairs 269,532 260,880 1,724,830 315,870 18.31% Subtotal 951,054 888,653 4,607,674 1,048,513 22.76% Human Resources Department Human Resources 766,293 958,474 4,668,135 1,002,179 21.47% Risk Management / Safety / Security 865,640 1,036,367 4,779,373 1,055,358 22.08% Subtotal 1,631,933 1,994,841 9,447,508 2,057,537 21.78% Administrative Services Department Administrative Services 128,223 142,803 615,905 145,607 23.64% Consolidated Services 1,552,414 1,682,124 8,345,184 1,918,778 22.99% Financial Management 1,000,514 975,550 4,480,931 1,087,246 24.26% Contracts, Purchasing, & Materials Mgmt. 1,177,730 1,117,496 5,221,431 1,337,121 25.61% Information Technology 4,126,727 4,371,010 14,975,496 4,947,265 33.04% Subtotal 7,985,608 8,288,983 33,638,947 9,436,017 28.05% Environmental Services Department Environmental Services Administration 605,630 1,300,804 5,101,551 1,338,538 26.24% Resource Protection 1,406,037 1,370,315 7,214,640 1,382,612 19.16% Laboratory, Monitoring and Compliance 2,884,969 2,265,054 10,383,475 2,355,693 22.69% Subtotal 4,896,636 4,936,173 22,699,666 5,076,843 22.37% Engineering Department Engineering Administration 290,687 321,307 1,382,867 216,940 15.69% Planning 800,525 882,657 4,232,470 996,510 23.54% Project Management Office 1,053,555 1,036,763 4,499,180 1,048,306 23.30% Design 1,480,157 1,610,199 7,201,590 1,465,148 20.34% Construction Management 1,600,982 1,701,689 8,667,018 1,802,848 20.80% Subtotal 5,225,906 5,552,615 25,983,125 5,529,752 21.28% Operations & Maintenance Department Operations & Maintenance Administration 32,176 35,582 672,570 114,772 17.06% Collections Facilities O & M 3,145,299 3,497,911 18,898,442 4,201,833 22.23% Fleet Services 430,164 560,789 2,463,959 637,916 25.89% Plant No. 1 Operations 8,249,611 7,969,217 38,003,504 9,952,926 26.19% Plant No. 2 Operations 4,338,364 4,369,141 19,040,302 4,631,041 24.32% Plant No. 1 Maintenance 5,755,499 6,174,589 26,717,339 6,313,806 23.63% Plant No. 2 Maintenance 5,034,229 3,519,798 19,733,896 3,596,423 18.22% Subtotal 26,985,342 26,127,027 125,530,012 29,448,717 23.46% Total Operating Expenses 47,676,479 47,788,292 221,906,932 52,597,379 23.70% Cost Allocation (5,014,470) (4,881,091) (20,762,230) (4,623,173) 22.27% Net Operating Requirements $ 42,662,009 $ 42,907,201 $ 201,144,702 $ 47,974,206 23.85% Section 2 - Page 3 Table of Contents FY 2022-23 First Quarter Financial Report Summary of Collection, Treatment, & Disposal Expenses by Major Category For the Three Months Ended September 30, 2022 Expense Expense Increase Increase Percent Budget Through Through (Decrease) (Decrease) Budget Remaining Description 2022-23 09/30/22 09/30/21 $ % Realized Budget Salary & Wages $ 88,436,482 20,939,929 18,215,401 $ 2,724,528 14.96% 23.68% $ 67,496,553 Employee Benefits 24,335,100 5,595,642 6,722,842 (1,127,200) -16.77% 22.99% 18,739,458 Administrative Expenses 2,253,179 559,114 690,850 (131,736) -19.07% 24.81% 1,694,065 Printing & Publication 809,332 64,676 59,812 4,864 8.13% 7.99% 744,656 Training & Meetings 1,161,096 39,367 105,855 (66,488) -62.81% 3.39% 1,121,729 Operating Materials & Supplies 24,478,657 6,497,295 4,723,103 1,774,192 37.56% 26.54% 17,981,362 Contractual Services 20,142,002 4,898,184 4,122,065 776,119 18.83% 24.32% 15,243,818 Professional Services 7,865,171 1,213,536 906,554 306,982 33.86% 15.43% 6,651,635 Research & Monitoring 1,695,550 597,122 576,520 20,602 3.57% 35.22% 1,098,428 Repairs & Maintenance 32,135,374 7,253,046 7,589,125 (336,079) -4.43% 22.57% 24,882,328 Utilities 12,803,268 4,006,879 3,166,046 840,833 26.56% 31.30% 8,796,389 Other Materials, Supplies, and Services 5,791,721 932,589 910,119 22,470 2.47% 16.10% 4,859,132 Net Cost Allocation (20,762,230) (4,623,173) (4,881,091) 257,918 -5.28% 22.27% (16,139,057) Net Operating Requirements 201,144,702 47,974,206 42,907,201 5,067,005 11.81% 23.85% 153,170,496 Gallonage Flow (MG) 67,525.00 16,593.98 16,881.01 (287.03) -1.70% Gallonage Flow (MGD) 185.00 180.37 183.49 (3.12) -1.70% Gallonage Flow ($'s /MG) $2,979.00 $2,891.06 $2,541.74 $349.32 13.74% Section 2 - Page 4 Table of Contents Operating Budget Review Summary of Revenues For the Three Months Ended September 30, 2022 Description Budget 2022-23 Revenue Through 09/30/22 Percent Budget Realized Remaining Budget Revenue Through 09/30/21 Increase (Decrease) $ Increase (Decrease) % Service Fees $ 308,534,310 $ (18,076) -0.01% $ 308,552,386 $ 88,169 $ (106,245) -120.50% Permit Fees 12,500,918 4,624,814 37.00% 7,876,104 3,538,798 1,086,016 30.69% Inter District Sewer Use-SAWPA & SBSD 3,018,000 747,136 24.76% 2,270,864 689,950 57,186 8.29% Intra District Sewer Use-IRWD 5,063,872 2,019,895 39.89% 3,043,977 978,535 1,041,360 106.42% Capital Assessments-IRWD 9,439,000 616,238 6.53% 8,822,762 519,265 96,973 18.68% Capital Facilities Capacity Charges 17,923,749 2,933,749 16.37% 14,990,000 3,444,252 (510,503) -14.82% Debt Proceeds - - N/A - 164,350,308 (164,350,308) -100.00% Property Taxes 109,776,020 1,557,310 1.42% 108,218,710 2,588,124 (1,030,814) -39.83% Interest Earnings (Loss) 14,504,000 (12,519,930) -86.32% 27,023,930 584,166 (13,104,096) -2243.21% CIP Reimbursements 11,782,925 16,789 0.14% 11,766,136 - 16,789 100.00% Wastehauler 750,000 195,307 26.04% 554,693 173,229 22,078 12.74% Grant Revenue 464,000 - 0.00% 464,000 - - 0.00% CNG Sales 400,000 79,032 19.76% 320,968 62,139 16,893 27.19% Rents & Leases 600,000 120,509 20.08% 479,491 126,002 (5,493) -4.36% Other Revenues 13,216,010 196,386 1.49% 13,019,624 192,388 3,998 2.08% Power Sales 25,000 18,956 75.82% 6,044 95,659 (76,703) -80.18% Other Sales 50,000 31,285 62.57% 18,715 16,790 14,495 86.33% Total Revenues $ 508,047,804 $ 619,400 0.12% $ 507,428,404 $ 177,447,774 $(176,828,374)-99.65% Section 2 - Page 5 Table of Contents FY 2022-23 First Quarter Financial Report Summary of Collection, Treatment, & Disposal Expenses by Line Item For the Three Months Ended September 30, 2022 Expense Percent Expense Increase Increase Budget Through Budget Remaining Through (Decrease) (Decrease) Description 2022-23 09/30/22 Expensed Budget 09/30/21 $ % Salaries, Wages & Benefits Salaries & Wages $ 88,436,482 $ 20,939,929 23.68% $ 67,496,553 $ 18,215,401 $ 2,724,528 14.96% Employee Benefits Retirement 12,120,500 2,697,594 22.26% 9,422,906 3,093,021 (395,427) -12.78% Group Insurances 10,742,800 2,413,974 22.47% 8,328,826 3,166,984 (753,010) -23.78% Tuition & Certification Reimb 87,000 27,970 32.15% 59,030 36,258 (8,288) -22.86% Edu. degrees, Cert. & Lic. 621,800 147,806 23.77% 473,994 171,241 (23,435) -13.69% Uniform Rental 102,200 24,157 23.64% 78,043 21,468 2,689 12.53% Workers' Compensation 518,500 129,624 25.00% 388,876 195,000 (65,376) -33.53% Unemployment Insurance 21,300 419 1.97% 20,881 5,329 (4,910) -92.14% EMT Supplemental Benefits 121,000 154,098 127.35% (33,098) 33,541 120,557 359.43% Total Benefits 24,335,100 5,595,642 22.99% 18,739,458 6,722,842 (1,127,200) -16.77% Salaries, Wages & Benefits 112,771,582 26,535,571 23.53% 86,236,011 24,938,243 1,597,328 6.41% Matl, Supplies, & Services Administrative Expenses Memberships 689,610 269,902 39.14% 419,708 297,157 (27,255) -9.17% Office Exp - Supplies 60,343 7,105 11.77% 53,238 10,209 (3,104) -30.40% Postage 35,720 6,835 19.13% 28,885 6,079 756 12.44% Books & Publications 41,698 3,542 8.49% 38,156 7,116 (3,574) -50.22% Forms 608 - 0.00% 608 - N/A Small Computer Items 1,005,500 199,778 19.87% 805,722 266,865 (67,087) -25.14% Minor Furniture & Fixtures 419,700 71,952 17.14% 347,748 103,424 (31,472) -30.43% Subtotal 2,253,179 559,114 24.81% 1,694,065 690,850 (131,736) -19.07% Printing & Publication Repro -In -House 185,432 36,915 19.91% 148,517 33,067 3,848 11.64% Printing -Outside 404,850 3,141 0.78% 401,709 1,253 1,888 150.68% Notices & Ads 219,000 24,620 11.24% 194,380 25,492 (872) -3.42% Photo Processing 50 - 0.00% 50 - - N/A Subtotal 809,332 64,676 7.99% 744,656 59,812 4,864 8.13% Training & Meetings Meetings 127,446 5,237 4.11% 122,209 2,521 2,716 107.74% Training 1,033,650 34,130 3.30% 999,520 103,334 (69,204) -66.97% Subtotal 1,161,096 39,367 3.39% 1,121,729 105,855 (66,488) -62.81% Operating Mat'Is & Supplies Chemical Coagulants 12,103,086 3,365,105 27.80% 8,737,981 2,180,689 1,184,416 54.31% Odor& Corrosion Control 7,893,286 2,013,285 25.51% 5,880,001 1,664,150 349,135 20.98% Disinfection 198,500 74,668 37.62% 123,832 15,505 59,163 381.57% Chemicals - Misc & Cogen 435,000 84,810 19.50% 350,190 113,537 (28,727) -25.30% Gasoline, Diesel & Oil 805,385 192,037 23.84% 613,348 174,189 17,848 10.25% Tools 865,500 275,004 31.77% 590,496 172,561 102,443 59.37% Safety equipment/tools 1,101,932 305,522 27.73% 796,410 143,035 162,487 113.60% Solv, Paints & Jan. Supplies 134,986 31,563 23.38% 103,423 41,001 (9,438) -23.02% Lab Chemicals & Supplies 680,319 122,517 18.01% 557,802 148,769 (26,252) -17.65% Misc. Operating Supplies 184,163 32,784 17.80% 151,379 54,543 (21,759) -39.89% Property Tax Fees 76,500 - 0.00% 76,500 15,124 (15,124) -100.00% Subtotal 24,478,657 6,497,295 26.54% 17,981,362 4,723,103 1,774,192 37.56% Contractual Services Solids Removal 13,740,000 3,442,782 25.06% 10,297,218 2,930,718 512,064 17.47% Other Waste Disposal 1,217,200 191,752 15.75% 1,025,448 195,545 (3,793) -1.94% Groundskeeping 200,000 50,742 25.37% 149,258 42,842 7,900 18.44% Janitorial 659,488 262,980 39.88% 396,508 205,762 57,218 27.81% Outside Lab Services 357,000 38,421 10.76% 318,579 62,775 (24,354) -38.80% Oxygen 476,000 191,632 40.26% 284,368 116,806 74,826 64.06% County Service Fee 518,782 9,174 1.77% 509,608 6,820 2,354 34.52% Temporary Services 574,400 67,211 11.70% 507,189 88,528 (21,317) -24.08% Security Services 1,716,007 428,463 24.97% 1,287,544 413,613 14,850 3.59% Other 683,125 215,027 31.48% 468,098 58,656 156,371 266.59% Subtotal 20,142,002 4,898,184 24.32% 15,243,818 4,122,065 776,119 18.83% (Continued) Section 2 - Page 6 Table of Contents Operating Budget Review Summary of Collection, Treatment, & Disposal Expenses by Line Item For the Three Months Ended September 30, 2022 Expense Percent Expense Increase Increase Budget Through Budget Remaining Through (Decrease) (Decrease) Description 2022-23 09/30/22 Expensed Budget 09/30/21 $ % Continued: Professional Services Legal Audit & Accounting Engineering Enviro Scientific Consulting Software Prgm Consulting Energy Consulting Advocacy Efforts Industrial Hygiene Services Labor Negotiation Services Other Subtotal Research & Monitoring Environmental Monitoring Air Quality Monitoring Research Subtotal Repairs & Maintenance Materials & Services Svc. Mtc. Agreements Subtotal Utilities Telephone Diesel For Generators Natural Gas Power Water Subtotal Other Operating Supplies Outside Equip Rental Insurance Premiums Prop & Gen Liab Insurance Freight Misc. Operating Expense Regulatory Operating Fees Subtotal General Mgr Contingency & Reappropriations Other Non-Oper Expense Total Materials, Supplies & Services Total Expenditures 1,472,000 237,982 16.17% 1,234,018 282,360 (44,378) -15.72% 230,000 33,000 14.35% 197,000 67,925 (34,925) -51.42% 1,755,000 143,466 8.17% 1,611,534 173,922 (30,456) -17.51% 879,221 4,126 0.47% 875,095 5,029 (903) -17.96% 710,500 337,236 47.46% 373,264 126,466 210,770 166.66% 50,000 6,750 13.50% 43,250 - 6,750 N/A 181,000 58,636 32.40% 122,364 36,034 22,602 62.72% 100,000 - 0.00% 100,000 12,539 (12,539) -100.00% 90,000 - 0.00% 90,000 609 (609) -100.00% 2,397,450 392,340 16.36% 2,005,110 201,670 190,670 94.55% 7,865,171 1,213,536 15.43% 6,651,635 906,554 306,982 33.86% 900,000 42,339 4.70% 857,661 44,425 (2,086) -4.70% 220,000 - 0.00% 220,000 11,960 (11,960) -100.00% 575,550 554,783 96.39% 20,767 520,135 34,648 6.66% 1,695,550 597,122 35.22% 1,098,428 576,520 20,602 3.57% 23,295,979 4,163,285 17.87% 19,132,694 4,156,180 7,105 0.17% 8,839,395 3,089,761 34.95% 5,749,634 3,432,945 (343,184) -10.00% 32,135,374 7,253,046 22.57% 24,882,328 7,589,125 (336,079) -4.43% 521,267 124,328 23.85% 396,939 127,570 (3,242) -2.54% 55,000 (2,173) -3.95% 57,173 10,971 (13,144) -119.81% 1,577,000 340,567 21.60% 1,236,433 391,613 (51,046) -13.03% 9,774,042 3,293,626 33.70% 6,480,416 2,324,218 969,408 41.71% 875,959 250,531 28.60% 625,428 311,674 (61,143) -19.62% 12,803,268 4,006,879 31.30% 8,796,389 3,166,046 840,833 26.56% 100,000 12,573 12.57% 87,427 6,807 5,766 84.71% 42,000 42,954 102.27% (954) 36,633 6,321 17.25% 2,425,500 606,244 24.99% 1,819,256 534,994 71,250 13.32% 150,000 45,538 30.36% 104,462 29,346 16,192 55.18% 328,124 49,186 14.99% 278,938 117,447 (68,261) -58.12% 1,371,000 177,328 12.93% 1,193,672 166,333 10,995 6.61% 4,416,624 933,823 21.14% 3,482,801 891,560 42,263 4.74% 1.241.047 134,050 (1,234) 109,135,350 26,061,808 221,906,932 52,597,379 0.00% 1,241,047 N/A -0.92% 135,284 18,559 (19,793) -106.65% 23.88% 83,073,542 22,850,049 3,211,759 14.06% 23.70% 169,309,553 47,788,292 4,809,087 10.06% Cost Allocation (20,762,230) (4,623,173) 22.27% (16,139,057) (4,881,091) 257,918 5.28% Net Operating Requirements $ 201,144,702 $ 47,974,206 23.85% $ 153,170,496 $ 42,907,201 $ 5,067,005 11.81% Section 2 - Page 7 Table of Contents FY 2022-23 First Quarter Financial Report Summary of Collection, Treatment, & Disposal Expenses by Process For the Three Months Ended September 30, 2022 Increase Increase Actual Actual (Decrease) (Decrease) 09/30/22 09/30/21 $ % Process: Preliminary Treatment $ 1,982,667 $ 2,493,867 $ (511,200) -20.50% Primary Treatment 5,386,247 4,552,762 833,485 18.31% Secondary Treatment 3,078,948 2,794,068 284,880 10.20% Cryogenic Plant (Plant 2) 464,553 223,764 240,789 107.61 % Effluent Disposal 259,341 301,692 (42,351) -14.04% Solids Handling 12,846,549 12,289,770 556,779 4.53% Cogeneration 7,569,655 5,783,139 1,786,516 30.89% Utilities 1,051,039 1,046,548 4,491 0.43% Electrical Distribution 546,163 841,308 (295,145) -35.08% Miscellaneous Buildings 3,616,737 2,912,045 704,692 24.20% External Location 556,739 115,355 441,384 382.63% Nerissa Vessel 53,854 60,426 (6,572) -10.88% Laboratory 3,995,350 3,594,592 400,758 11.15% Collections 6,566,364 5,897,865 668,499 11.33% Net Operating Requirements $ 47,974,206 $ 42,907,201 $ 5,067,005 11.81% Section 2 - Page 8 Table of Contents 700 650 600 550 500 450 Operating Budget Review Staffing Trends Full Time Equivalents (FTE) September 30, 2022 6/30/19 6/30/20 6/30/21 6/30/22 9/30/22 ❑ Actual ❑ Vacant At September 30, 2022, the total head count was 605 employees, or a full time equivalency of 597. Section 2 - Page 9 Table of Contents FY 2022-23 First Quarter Financial Report This Page Intentionally Left Blank Section 2 - Page 10 Table of Contents Capital Improvement Program Budget Review Capital Improvement Program By Process Area and Project Driver For the Three Months Ended September 30, 2022 ❑ Collections Facilities: 17.7% ❑ Liquid Treatment: 49.3% ■ Solids Handling & Digestion: 5.5% ❑ Utility Systems: 1.1 % ❑ Support Facilities: 21.2% ❑ Other: 5.2% Total Capital Improvement Outlays by Process Area - $27,661,618 ❑ Rehabilitation and Replacement: 74.9% ❑ Strategic Initiatives: 13.7% ❑ Additional Capacity: 3.1 % ❑ Regulatory: 8.3% Total Capital Improvement Outlays by Project Driver - $27,661,618 Section 3 - Page 1 Table of Contents FY 2022-23 First Quarter Financial Report Summary of Capital Improvement Construction Requirements - Current Year For the Three Months Ended September 30, 2022 2022-23 2022-23 2022-23 Cashflow Actual at Projected Budget 9/30/2022 Outlay Collection System Improvement Projects Collections Facilities Santa Ana Trunk Sewer Rehabilitation 2,200,761 125,916 1,839,900 Greenville -Sullivan Trunk Improvements 543,619 29,478 606,700 Taft Branch Capacity Improvements 908,634 423,524 1,136,400 Newhope-Placentia Trunk Replacement 1,605,022 223,536 2,935,100 Knott - Miller Holder - Artesia Branch Rehabiliation 186,776 6,106 71,000 Westminster Blvd Force Main Replacement 5,482,851 1,935,028 7,717,000 Rehabilitation of Western Regional Sewers 17,143,810 435,663 18,056,600 Interstate 405 Widening Project Impacts on OC San Sewers 71,348 3,318 3,400 Seal Beach Pump Station Replacement 1,199,570 16,385 1,111,000 Bay Bridge Pump Station Replacement 2,410,280 587,908 2,592,300 Newport Beach Pump Station Pressurization Improvements 1,145,097 3,580 831,900 Fairview Trunk Sewer Rehabilitation 604,156 5,988 333,000 MacArthur Pump Station Rehabilitation 50,828 - - Gisler Red -Hill Interceptor & Baker Force Main Rehabilitation 9,688,402 48,633 2,340,700 MacArthur Force Main Improvement 312,173 77,910 337,400 Edinger Pump Station Replacement 653,066 43,194 964,200 Small Construction Projects Program - Collections 5,576,407 500,803 5,172,100 Planning Studies Program - Collections 470,544 4,443 428,300 Sunflower and Red Hill Interceptor Repairs 3,325,654 412,447 4,421,800 Subtotal - Collections Facilities 53,578,998 4,883,860 50,898,800 Revenue Area 14 Bay Bridge Pumping Station Rehabilitation (3.62%) 90,529 22,082 97,400 Newport Beach Pump Station Pressurization Improve (0.27%) 3,100 10 2,300 Subtotal - Revenue Area 14 93,629 22,092 99,700 Total Collection System Improvement Projects 53,672,627 4,905,952 50,998,500 (Continued) Section 3 - Page 2 Table of Contents Capital Improvement Program Budget Review Summary of Capital Improvement Construction Requirements - Current Year For the Three Months Ended September 30, 2022 Treatment & Disposal Projects Headworks Headworks Rehabilitation at Plant 1 Headworks Modifications at P2 for GWRS Final Expansion Subtotal - Headworks Primary Treatment 2022-23 2022-23 2022-23 Cashflow Actual at Projected Budget 9/30/2022 Outlay 34,978,474 6,347,232 36,904,100 4,930,162 979,057 4,470,800 39,908,636 7,326,289 41,374,900 Primary Sedimentation Basins 3-5 Replacement at Plant 1 2,729,469 151,829 2,796,400 Primary Sedimentation Basins 6-31 Reliability Improv at P1 2,629,590 241,078 4,159,600 Primary Treatment Rehabilitation at Plant 2 30,540,736 4,392,780 30,951,200 Subtotal - Primary Treatment 35,899,795 4,785,687 37,907,200 Secondary Treatment Activated Sludge-1 Aeration Basin & Blower Rehab at P1 1,096,586 53,360 1,195,500 Return Activated Sludge Piping Replacement at Plant 2 1,233,062 278,871 302,100 Activated Sludge Aeration Basin Rehabilitation at Plant 2 297,355 23,049 106,500 Subtotal - Secondary Treatment 2,627,003 355,280 1,604,100 Solids Handling & Digestion Digester Ferric Chloride Piping Replacement at Plant 1 Interim Food Waste Receiving Facility TPAD Digester Facility at Plant 2 Digesters Rehabilitation at Plant No. 2 Subtotal - Solids Handling & Digestion Ocean Outfall Systems Ocean Outfall System Rehabilitation 120-inch Ocean Outfall Rehabilitation Sodium Bisulfite Station Rehabilitation at Plant 2 Emergency Overflow Pipes & Windwall Rehabilitation at P2 Subtotal - Ocean Outfall Systems 89,718 10,139 10,444,999 1,843,647 12,388,503 19,862,965 38,022 167,537 117,242 20,185,766 105,569 320 1,045,230 362,872 1,513,991 1,154,044 149,500 10,300 9,513,300 1,786,800 11,459,900 13,527,200 19,627 100,900 - 87,900 1,173,671 13,716,000 (Continued) Section 3 - Page 3 Table of Contents FY 2022-23 First Quarter Financial Report Summary of Capital Improvement Construction Requirements - Current Year For the Three Months Ended September 30, 2022 2022-23 2022-23 2022-23 Cashflow Actual at Projected Budget 9/30/2022 Outlay Utility Systems Electrical Power Distribution System Improvements 2,119,310 166,112 921,800 Digester Gas Facilities Rehabilitation 146,143 29,676 663,400 Natural Gas Pipelines Replacement at Plants 1 and 2 78,826 74,685 78,100 Central Generation Engine Overhauls at Plants 1 and 2 1,494,195 69,568 9,918,800 Power Building Structural Seismic Improv at Plants 1 & 2 215,186 1,067 43,300 Uninterruptable Power Supply Improvements at Plant 1 1,931,267 (34,438) 247,100 Industrial Control System & IT Data Center Relocation at P1 219,007 - - Subtotal - Utility Systems 61203,934 306,670 11,872,500 Information Management Systems Process Control Systems Upgrades 7,701,063 378,398 3,903,300 Project Management Information System 670,937 9,324 237,200 Information Technology Capital Program 3,007,946 530,132 3,493,000 EAM Software and Process Implementation 383,371 11,944 265,300 Subtotal - Information Management Systems 11,763,317 929,798 7,898,800 Strategic & Master Planning Planning Studies Program 4,680,829 196,174 5,083,300 Subtotal - Strategic & Master Planning 4,680,829 196,174 5,083,300 Water Management Projects GWRS Final Expansion Coordination 272,062 31,909 287,700 Subtotal - Water Management Projects 272,062 31,909 287,700 Research Research Program 6,001,774 100,080 543,400 Subtotal - Research 6,001,774 100,080 543,400 (Continued) Section 3 - Page 4 Table of Contents Capital Improvement Program Budget Review Summary of Capital Improvement Construction Requirements - Current Year For the Three Months Ended September 30, 2022 Support Facilities Small Construction Projects Program Operations & Maintenance Capital Program Headquarters Complex South Perimeter Security & Utility Improvements at Plant 1 Support Buildings Seismic Improvements at Plant 1 Administrative Facilities & Power Building 3A Demolition Collections Yard Relocation Operations and Maintenance Complex at Plant 2 Subtotal - Support Facilities Others Capital Improvement Program Management Services Subtotal - Others Additional Charges to CIP Completed at 6/30/22 Total Treatment and Disposal Projects Capital Equipment Purchases Total Collection, Treatment and Disposal Projects and Capital Equipment Purchases Less: Savings and Deferrals Net Collection, Treatment and Disposal Projects and Capital Equipment Purchases 2022-23 2022-23 2022-23 Cashflow Actual at Projected Budget 9/30/2022 Outlay 15,340,569 761,528 10,890,700 1,629,669 75,073 1,537,700 61,197,823 4,235,285 61,631,500 3,738,937 743,956 2,901,700 769,029 2,581 648,900 62,055 - - 168,066 6,934 182,800 832,402 25,582 875,000 83,738,550 5,850,939 78,668,300 324,865 7,797 297,500 324,865 7,797 297,500 - - 100,000 223,995,034 22,578,285 210,813,600 6,949,700 177,381 6,949,700 284,617,361 27,661,618 268,761,800 (16,450,000) - - $268,167,361 $ 27,661,618 $268,761,800 Section 3 - Page 5 Table of Contents FY 2022-23 First Quarter Financial Report Summary of Capital Improvement Construction Requirements - Project Life For the Three Months Ended September 30, 2022 Collection System Improvement Projects Collections Facilities Santa Ana Trunk Sewer Rehabilitation Greenville -Sullivan Trunk Improvements Taft Branch Capacity Improvements Newhope-Placentia Trunk Replacement Yorba Linda Dosing Station Installation Santa Ana Canyon South River Trunk Rebabilitation Knott - Miller Holder - Artesia Branch Rehabiliation Westminster Blvd Force Main Replacement Rehabilitation of Western Regional Sewers Interstate 405 Widening Project Impacts on OC San Sewers Seal Beach Pump Station Replacement Los Alamitos Sub -Trunk Extension Crystal Cove Pump Station Rehabilitation Bay Bridge Pump Station Replacement Newport Beach Pump Station Pressurization Improvements Fairview Trunk Sewer Rehabilitation MacArthur Pump Station Rehabilitation Main Street Pump Station Rehabilitation Gisler Red -Hill Interceptor & Baker Force Main Rehabilitation MacArthur Force Main Improvement North Trunk Improvements Edinger Pump Station Replacement Slater Pump Station Rehabilitation Small Construction Projects Program - Collections Operations & Maintenance Capital Program - Collections Planning Studies Program - Collections Sunflower and Red Hill Interceptor Repairs Subtotal - Collections Facilities Current Total Approved June 30, 2022 Year Projected Remaining Project Accumulated Projected Cost at Future Budget Cost Cost June 30, 2023 Budget 54,620,000 182,469 1,839,900 2,022,369 52,597,631 48,600,000 68,831 606,700 675,531 47,924,469 24,300,000 1,035,786 1,136,400 2,172,186 22,127,814 112,000,000 108,787,808 2,935,100 111,722,908 277,092 11,266,000 - - - 11,266,000 16,276,000 - - 16,276,000 28,317,000 - 71,000 71,000 28,246,000 43,000,000 34,186,462 7,717,000 41,903,462 1,096,538 101,000,000 27,752,574 18,056,600 45,809,174 55,190,826 500,000 292,050 3,400 295,450 204,550 87,000,000 7,663,266 1,111,000 8,774,266 78,225,734 116,799,000 - - - 116,799,000 13,903,000 - - - 13,903,000 102,162,800 10,176,020 2,592,300 12,768,320 89,394,480 3,191,360 714,752 831,900 1,546,652 1,644,708 19,300,000 123,946 333,000 456,946 18,843,054 9,329,000 - - - 9,329,000 37,663,000 - - - 37,663,000 44,400,000 2,169,842 2,340,700 4,510,542 39,889,458 7,150,000 589,229 337,400 926,629 6,223,371 10,854,000 - - - 10,854,000 17,300,000 155,738 964,200 1,119,938 16,180,062 28,511,000 16,480 - 16,480 28,494,520 9,489,000 3,267,693 5,172,100 8,439,793 1,049,207 568,000 270,754 - 270,754 297,246 1,371,000 379,436 428,300 807,736 563,264 7,000,000 1,694,005 4,421,800 6,115,805 884,195 955,870,160 199,527,141 50,898,800 250,425,941 705,444,219 Revenue Area 14: Bay Bridge Pumping Station Rehabilitation (3.62%) 3,837,200 382,208 97,400 479,608 3,357,592 Newport Beach Pump Station Pressurization Improve (0.27%) 8,640 1,935 2,300 4,235 4,405 Subtotal - Revenue Area 14 3,845,840 384,143 99,700 483,843 3,361,997 Total Collection System Improvement Projects 959,716,000 199,911,284 50,998,500 250,909,784 708,806,216 (Continued) Section 3 - Page 6 Table of Contents Capital Improvement Program Budget Review Summary of Capital Improvement Construction Requirements - Project Life For the Three Months Ended September 30, 2022 Current Total Approved June 30, 2022 Year Projected Remaining Project Accumulated Projected Cost at Future Budget Cost Cost June 30, 2023 Budget Treatment & Disposal Projects Headworks Headworks Rehabilitation at Plant 1 340,000,000 68,730,878 36,904,100 105,634,978 234,365,022 Headworks Modifications at P2 for GWRS Final Expansion 30,400,000 24,319,296 4,470,800 28,790,096 1,609,904 Subtotal - Headworks 370,400,000 93,050,174 41,374,900 134,425,074 235,974,926 Primary Treatment Primary Sedimentation Basins 3-5 Replacement at Plant 1 Primary Sedimentation Basins 6-31 Reliability Improv at P1 Primary Treatment Rehabilitation at Plant 2 B/C-Side Primary Clarifiers Rehabilitation at Plant 2 Subtotal - Primary Treatment Secondary Treatment Activated Sludge-1 Aeration Basin & Blower Rehab at P1 Return Activated Sludge Piping Replacement at Plant 2 Activated Sludge Aeration Basin Rehabilitation at Plant 2 Subtotal - Secondary Treatment Solids Handling & Digestion Digester Ferric Chloride Piping Replacement at Plant 1 Interim Food Waste Receiving Facility TPAD Digester Facility at Plant 2 Digester P, Q, R, and S Replacement Digesters Rehabilitation at Plant No. 2 Truck Loading Bay Odor Control Improvements at Plant 2 Subtotal - Solids Handling & Digestion Ocean Outfall Systems Ocean Outfall System Rehabilitation 120-inch Ocean Outfall Rehabilitation Sodium Bisulfite Station Rehabilitation at Plant 2 Emergency Overflow Pipes & Windwall Rehabilitation at P2 Subtotal - Ocean Outfall Systems 183,000,000 830,406 2,796,400 3,626,806 179,373,194 14,000,000 2,386,965 4,159,600 6,546,565 7,453,435 188,000,000 56,597,712 30,951,200 87,548,912 100,451,088 306,093,000 - - - 306,093,000 691,093,000 59,815,083 37,907,200 97,722,283 593,370,717 280,000,000 202,873 1,195,500 1,398,373 278,601,627 10,000,000 9,103,909 302,100 9,406,009 593,991 65,600,000 69,817 106,500 176,317 65,423,683 355,600,000 9,376,599 1,604,100 10,980,699 344,619,301 1,260,000 948,606 149,500 1,098,106 161,894 6,300,000 1,348,671 10,300 1,358,971 4,941,029 475,000,000 15,113,088 9,513,300 24,626,388 450,373,612 171,359,000 - - - 171,359,000 40,632,000 240,209 1,786,800 2,027,009 38,604,991 7,600,000 - - - 7,600,000 702,151,000 17,650,574 11,459,900 29,110,474 673,040,526 166,000,000 100,967,433 13,527,200 114,494,633 51,505,367 64,968,000 - - - 64,968,000 5,000,000 59,345 100,900 160,245 4,839,755 4,370,000 - 87,900 87,900 4,282,100 240, 338,000 101, 026, 778 13, 716,000 114,742,778 125, 595,222 (Continued) Section 3 - Page 7 Table of Contents FY 2022-23 First Quarter Financial Report Summary of Capital Improvement Construction Requirements - Project Life For the Three Months Ended September 30, 2022 Utility Systems Electrical Power Distribution System Improvements Digester Gas Facilities Rehabilitation Natural Gas Pipelines Replacement at Plants 1 and 2 Central Generation Engine Overhauls at Plants 1 and 2 Power Building Structural Seismic Improv at Plants 1 & 2 Central Generation Rehabilitation at Plant 1 Uninterruptable Power Supply Improvements at Plant 1 12.47 kV Switchgear Replacement at CenGen at Plant 1 Industrial Control System & IT Data Center Relocation at P1 Central Generation Rehabilitation at Plant 2 Subtotal - Utility Systems Information Management Systems Process Control Systems Upgrades Project Management Information System Information Technology Capital Program EAM Software and Process Implementation Subtotal - Information Management Systems Strategic & Master Planning Planning Studies Program Subtotal - Strategic & Master Planning Water Management Projects GWRS Final Expansion Coordination Subtotal - Water Management Projects Research Research Program Subtotal - Research Current Total Approved June 30, 2022 Year Projected Remaining Project Accumulated Projected Cost at Future Budget Cost Cost June 30, 2023 Budget 27,700,000 3,064,884 921,800 3,986,684 23,713,316 173,000,000 16,305,089 663,400 16,968,489 156,031,511 2,150,000 2,095,716 78,100 2,173,816 (23,816) 44,000,000 4,375,021 9,918,800 14,293,821 29,706,179 5,400,000 23,811 43,300 67,111 5,332,889 33,302,000 - - - 33,302,000 7,000,000 1,481,688 247,100 1,728,788 5,271,212 15,388,000 - - - 15,388,000 5,700,000 - 5,700,000 53,108,000 53,108,000 366,748,000 27,346,209 11,872,500 39,218,709 327,529,291 37,000,000 954,396 3,903,300 4,857,696 32,142,304 2,280,000 1,486,363 237,200 1,723,563 556,437 10,000,000 815,948 3,493,000 4,308,948 5,691,052 9,200,000 6,664,411 265,300 6,929,711 2,270,289 58,480,000 9,921,118 7,898,800 17,819,918 40,660,082 27,281,000 5,590,365 5,083,300 10,673,665 16,607,335 27,281,000 5,590,365 5,083,300 10,673,665 16,607,335 1,399,997 1,105,262 287,700 1,392,962 7,035 1,399,997 1,105,262 287,700 1,392,962 7,035 10,000,000 2,617,245 543,400 3,160,645 6,839,355 10,000,000 2,617,245 543,400 3,160,645 6,839,355 (Continued) Section 3 - Page 8 Table of Contents Capital Improvement Program Budget Review Summary of Capital Improvement Construction Requirements - Project Life For the Three Months Ended September 30, 2022 Support Facilities Small Construction Projects Program Operations & Maintenance Capital Program Laboratory Rehabilitation at Plant 1 Headquarters Complex South Perimeter Security & Utility Improvements at Plant 1 Support Buildings Seismic Improvements at Plant 1 Administrative Facilities & Power Building 3A Demolition Collections Yard Relocation Operations and Maintenance Complex at Plant 2 Subtotal - Support Facilities Others Capital Improvement Program Management Services Subtotal - Others Additional Charges to CIP Completed at 6/30/22 Total Treatment and Disposal Projects Capital Equipment Purchases Total Collection, Treatment and Disposal Projects and Capital Equipment Purchases Current Total Approved June 30, 2022 Year Projected Remaining Project Accumulated Projected Cost at Future Budget Cost Cost June 30, 2023 Budget 80,511,000 19,373,667 10,890,700 30,264,367 50,246,633 15,054,000 1,586,585 1,537,700 3,124,285 11,929,715 100,000,000 - - - 100,000,000 167,500,000 74,108,146 61,631,500 135,739,646 31,760,354 8,150,000 4,437,929 2,901,700 7,339,629 810,371 23,730,000 82,062 648,900 730,962 22,999,038 8,910,000 - - - 8,910,000 1,900,000 3,487 182,800 186,287 1,713,713 84,000,000 226,529 875,000 1,101,529 82,898,471 489,755,000 99,818,405 78,668,300 178,486,705 311,268,295 700,000 423,335 297,500 720,835 (20,835) 700,000 423,335 297,500 720,835 (20,835) - 100,000 100,000 (100,000) 3,313,945,997 427,741,147 210,813,600 638,554,747 2,675,391,250 16,278,248 - 6,949,700 6,949,700 9,328,548 $4,289,940,245 $627,652,431 $268,761,800 $896,414,231 $3,393,526,014 Section 3 - Page 9 Table of Contents FY 2022-23 First Quarter Financial Report This Page Intentionally Left Blank Section 3 - Page 10 Table of Contents Capital Assets Schedule & Debt Service Budget Review Capital Assets Schedule & Debt Service Budget Review For the Three Months Ended September 30, 2022 Capital Assets Schedule CONSTRUCTION IN PROGRESS (CIP): Collection System Treatment Plant Subtotal PROPERTY, PLANT & EQUIPMENT (at cost): Land and Property Rights Collection Lines and Pump Stations Treatment Facilities Effluent disposal facilities Solids disposal facilities General and administrative facilities Leased sewage collection facilities Excess purchase price over book value on acquired assets Subtotal Balance 07/01 /22 Year -to -Date Activity Balance 09/30/22 $ 169,154,138 $ 4,905,952 $ 174,060,090 382,973,407 22,755,666 405,729,073 552,127,545 27,661,618 579,789,163 57,680,623 - 57,680,623 900,839,423 - 900,839,423 2,826,642,906 - 2,826,642,906 96,972,016 - 96,972,016 3,463,236 - 3,463,236 261,393,327 - 261,393,327 86,747 - 86,747 19,979,000 - 19,979,000 4,167,057,278 - 4,167,057,278 Total Property, Plant & Equipment & CIP $ 4,719,184,823 $ 27,661,618 $ 4,746,846,441 Debt Service Budget Review 2022-23 Year -to -Date Remaining Budget Payments % of Budget Budget Principal Payments by Debt Issue: 2010A BABs 2010C BABs 2014A COP 2015A COP 2016A COP 2017A COP 2021A COP 2022A COP Subtotal Principal Payments Interest Expense by Debt Issue: 2010A BABs 2010C BABs 2014A COP 2015A COP 2016A COP 2017A COP 2021A COP 2022A COP Subtotal Interest Expense Total Debt Service 8,655,000 - 0.00% 8,655,000 5,110,000 - 0.00% 5,110,000 16,270,000 - 0.00% 16,270,000 30,035,000 - 0.00% 30,035,000 2,986,574 991,837 33.21% 1,994,737 6,724,010 2,233,155 33.21% 4,490,855 2,391,750 597,875 25.00% 1,793,875 6,375,500 1,593,850 25.00% 4,781,650 6,281,550 1,570,375 25.00% 4,711,175 3,290,750 822,775 25.00% 2,467,975 6,402,000 1,600,500 25.00% 4,801,500 4,081,000 1,022,328 25.05% 3,058,672 38,533,134 10,432,695 27.07% 28,100,439 $ 68,568,134 $ 10,432,695 15.22% $ 58,135,439 Section 4 - Page 1 Table of Contents FY 2022-23 First Quarter Financial Report This Page Intentionally Left Blank Section 4 - Page 2 Table of Contents Revenues: In -Lieu Premiums Service Department Allocations Total Revenues Expenses: Benefits/Claims Legal Services Professional Services Subtotal Policy Premium Expense Total Expenses Excess Revenue (Expense) Beginning Reserves Ending Reserves Self Insurance Budget Review General Liability and Property Fund Budget Review For the Three Months Ended September 30, 2022 Percent Actual of Budget Remaining Actual 2022-23 Through Through 2022-23 Through Increase Budget 09/30/22 09/30/22 Budget 09/30/21 (Decrease) $ 2,425,000 $ 606,244 25.00% $ 1,818,756 $ 534,994 $ 71,250 10,000 2,220 22.20% 7,780 1,776 444 2,435,000 608,464 24.99% 1,826,536 536,770 71,694 20,000 40,000 40,000 - 20,000 3,872 80,000 43,872 2,820,000 739,312 2,900,000 783,184 (465,000) (174,720) 98,465,000 98,000,000 $ 98,000,000 $ 97,825,280 200.00% (20,000) 115 39,885 0.00% 40,000 - - 19.36% 16,128 5,913 (2,041) 54.84% 36,128 6,028 37,844 26.22% 2,080,688 613,157 126,155 27.01% 2,116,816 619,185 163,999 $ (290,280) (82,415) (92,305) 98,000,000 - $ 97,917,585 $ (92,305) Section 5 - Page 1 Table of Contents FY 2022-23 First Quarter Financial Report Revenues: In -Lieu Premiums Service Department Allocations Total Revenues Expenses: Benefits/Claims Legal Services Professional Services Subtotal Policy Premium Expense Total Expenses Excess Revenue (Expense) Beginning Reserves Ending Reserves Workers' Compensation Fund Budget Review For the Three Months Ended September 30, 2022 Actual 2022-23 Through Budget 09/30/22 $ 518,500 $ 129,625 90,000 24,699 608,500 154,324 390,000 120,523 60,000 20,816 70,000 12,414 520,000 153,753 270,000 77,346 790,000 231,099 (181,500) (76,775) 2,181,500 2,000,000 $ 2,000,000 $ 1,923,225 Percent of Budget Remaining Through 2022-23 09/30/22 Budget Actual Through Increase 09/30/21 (Decrease) 25.00% $ 388,875 $ 195,000 $ (65,375) 27.44% 65,301 22,425 2,274 25.36% 454,176 217,425 (63,101) 30.90% 269,477 105,782 14,741 34.69% 39,184 - 20,816 17.73% 57,586 15,553 (3,139) 29.57% 366,247 121,335 32,418 28.65% 192,654 66,589 10,757 29.25% 558,901 187,924 43,175 $ (104,725) 29,501 (106,276) 2,000,000 - $ 2,029,501 $ (106,276) Section 5 - Page 2 Table of Contents October 31, 2022 STAFF REPORT Quarterly Treasurer's Report For the Period Ended September 30, 2022 SUMMARY Section 17.0 of the Orange County Sanitation District's (OC San) Investment Policy includes quarterly reporting requirements for OC San's two investment portfolios. These two funds, the "Liquid Operating Monies," and the "Long -Term Operating Monies" are managed by Chandler Asset Management, OC San's external money manager. The ongoing monitoring of OC San's investment program by staff and Callan Associates, OC San's independent investment advisor, indicates that OC San's investments are in compliance with OC San'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 OC San to meet budgeted expenditures for the next six months. OC San'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 OC San's portfolios, as of September 30, 2022. The Liquid Operating Monies portfolio, with an average maturity of 102 days, consists entirely of high quality fixed income investments consistent with OC San's investment policy. Portfolio Performance Summary The following table presents a performance summary of OC San's portfolios as compared to their benchmarks as of September 30, 2022. Table of Contents Quarterly Treasurer's Report For the Period Ended September 30, 2022 Page 2 of 4 Portfolio Performance Summary As of September 30, 2022 Liquid Operating Monies (%) Long -Term Operating Monies (%) Total Rate of Return Benchmark0) Total Rate of Return Benchmark0) 3 Months 0.35 0.46 -2.01 -2.26 6 Months 0.39 0.57 -2.94 -3.20 9 Months 0.38 0.61 -5.78 -6.34 12 Months 0.38 0.62 -6.38 -6.98 Annualized Since inception 30 Nov 2014 0.92 0.85 0.86 0.75 Market Value $109.5 M $700.2 M Average Quality "AA,17"Aa1" 11AA"P'Aa1" Current Yield (%) 2.0 1.7 Estimated Yield to Maturity (%) 3.5 4.3 Quarterly Deposits (Withdrawals) ($75.0 M) $0.0 M Estimated Annual Income $2.2 M $11.7 M (1) Benchmarks: ■ Liquid Operating Portfolio: ICE BAML 3-Month Treasury Bill Index ■ Long -Term Operating Portfolio: ICE BAML Corp/Govt. 1-5 Year Bond Index Portfolio Market Values Comparative marked -to -market quarter -end portfolio values are shown in the following table, and in the attached bar chart. Quarter Ending Liquid Operating Monies ($M) Long -Term Operating Monies ($M) 31 Dec 21 230.9 742.2 31 Mar 22 155.8 720.7 31 Jun 22 183.9 714.1 31 Sep 22 109.5 700.2 Table of Contents Quarterly Treasurer's Report For the Period Ended September 30, 2022 Page 3 of 4 Orange County Sanitation District Investment Account Balances as of September 30, 2022 Investment Accounts Book Balances September 30, 2022 Estimated Yield (%) Chandler/U.S. Bank — Long -Term Portfolio $699,920,416 4.42 Chandler/U.S. Bank — Short -Term Portfolio 109,469,457 3.53 State of California LAIF 55,660,315 1.51 PARS Section 115 Trust - Moderate 8,341,697 -6.32 PARS Section 115 Trust - Balanced 4,127,683 -6.83 Banc of California — General 3,000,000 0.45 Banc of California — Sweep 3,558,666 0.02 Banc of California — Workers' Compensation 69,125 0.45 Banc of California — Property, Liability Claim, Exp 50,000 0.45 Union Bank — Mount Langley 472,802 0.59 Union Bank — Bandilier 253,996 0.59 BNY Mellon OCIP Reserve 250,000 0.00 Petty Cash 3,000 0.00 TOTAL $885,1771-57 3.94 Debt Service Reserves w/Trustees 26 7 2 2.73 Orange County Sanitation District Cost of Funds on Debt Issues as of September 30, 2022 Cost of Funds Issue Description Outstanding COP Balance Annual Interest Rate (%) 2010A Fixed 80,000,000 3.68 2010C Fixed 157,000,000 4.11 2014A Fixed 47,835,000 2.34 2015A Fixed 127,510,000 3.30 2016A Fixed 131,965,000 3.02 2017A Fixed 65,815,000 2.55 2021A Fixed 128,040,000 1.06 2022A Fixed 81,620,000 1.59 TOTAL $819,785,000 Weighted Avg. Cost of Funds 2.81 Table of Contents Quarterly Treasurer's Report For the Period Ended September 30, 2022 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. Chandler/U.S. Bank Custody Transaction History —Consolidated 11. Callan Quarterly Review 12. Chandler Quarterly Review 13. Rating Agency Comparisons 14. PARS Section 115 Trust Quarterly Review Table of Contents CHANDLER ASSET ASSET MANAGEMENT September 30, 2022 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 Reca Market volatility has intensified as financial conditions tighten and global central banks pursue monetary policies to combat persistently high inflation and maintain financial market stability. Labor markets and consumer balance sheets remain strong; however, inflation is weighing heavily on consumer sentiment and beginning to impact discretionary spending. Corporate earnings have generally performed better than expected, but warnings are growing along with wider credit spreads. While evidence of slower economic conditions has begun to mount, we expect the Federal Reserve to continue to raise rates until a sustainable improvement in inflationary conditions has been achieved. Over the near -term, we expect financial market volatility to remain intensified and conditions tighter with persistent inflation, geopolitical risk, and the Fed's hawkish monetary policy. At the September meeting, the Federal Open Market Committee (FOMC) delivered the third 75-basis point increase to the Fed Funds Rate, increasing the range from 3.00% to 3.25%. The FOMC acknowledged spending and production are experiencing modest growth, offset by a robust labor market and elevated inflation metrics. We expect the Fed to continue to increase the federal funds rate in the near term until inflationary pressures weaken. In September, yields rose significantly across the curve. The 2-year Treasury yield increased 79 basis points to 4.28%, the 5-year Treasury yield rose 74 basis points to 4.09%, and the 10-year Treasury yield gained 64 basis points to 3.83%. The spread between the 2-year Treasury yield and 10-year Treasury yield became more inverted at -45 basis points at September month -end versus -30 basis points at August month -end. The spread was a positive 121 basis points one year ago. The spread between 3-month and 10-year treasuries widened to 56 basis points in September compared to just 27 basis points in August. The shape of the curve does not necessarily indicate an imminent recession but bears watching as a better predictor of recession over the medium -term. US Treasury yields rose sharply in September. On a year-to-date basis, the 2-year Treasury yield was up 355 basis points, the 5-year Treasury yield rose 283 basis points, and the 10-year Treasury yield gained 232 basis points. The spread between the 2-year Treasury yield and 10-year Treasury yield inverted to -45 basis points versus +78 basis points at year-end. The average historical spread (since 2003) is about 130 basis points. The spread between 3-month and 10-year treasuries was 56 basis points in September compared to about 148 basis points at the start of the year. Table of Contents CHANDLER ASSET ASSET MANAGEMENT Consumer Prices The Consumer Price Index (CPI) increased more than expected in September, with increases were broad based led by gains in shelter, food, and medical care while prices for gasoline and used cars declined. Headline CPI increased 8.2% year -over - year in September, versus expectations for an 8.1% increase, and down from an 8.3% year -over -year gain in August. Core CPI, which excludes food and energy, increased 6.6% from a year ago, the highest level since 1982. The Personal Consumption Expenditures (PCE) index rose 6.2% in August, higher than consensus estimates of up 6.0%, but down from a 6.4% increase last month. Core PCE was up 4.9% year -over -year in August, versus up 4.7% year -over -year in July. Persistently elevated inflation is likely to keep the Federal Reserve on the path of tightening monetary policy as long as it continues to run well above the Fed's longer -run target of around 2.0%. Retail Sales Retail sales were up 8.2% year -over -year in September, slowing from August's 9.4% year -over -year gain that surprised to the upside, Retail sales growth is starting to reflect the headwinds from higher prices as consumers dip into savings and assume more debt. The Conference Board's Consumer Confidence Index rose for the second month in a row to 108.0 in September, with gains in both the present situation and future expectation components. The strength was tied directly to the consumer's assessment of the labor market, which continues to reflect the demand for labor outstripping supply. Labor Market The U.S. economy added 263,000 jobs in September, surpassing market expectations of 255,000, and gains were revised upward by 11,000 for the prior two months. Trends in employment remain strong, with the three-month moving average payrolls at 372,000 and the six-month moving average at 360,000. Hiring was widespread, with solid increases in education and health services, leisure and hospitality, and professional and business services. The unemployment rate fell to 3.5% from 3.7%, as the labor participation rate edged down to 62.3% in September from 62.4% in August. The U-6 underemployment rate, which includes those who are marginally attached to the labor force and employed part time for economic reasons dropped to 6.7% from 7.0% last month. Average hourly earnings rose 5.0% year -over -year in September compared to 5.2% year -over -year in August, a constructive development for the inflation outlook. The strong September labor report bolsters the case for the Fed to continue raising the federal funds rate. Housing Starts Total housing starts increased 12.2% to an annual rate of 1,575,000 in August, from a revised 1,404,000 units in July. Single-family home starts increased 3.4% and multi -family homes increased 28% month -over -month. On a year -over - year basis, total housing starts decreased 0.1% reflecting a shift from single-family units to more affordable multi -family units as homebuyers struggle with a combination of elevated prices and higher mortgage rates. Mortgage rates for a 30- year fixed-rate loan are higher than they have been since 2007 at 6.7%. According to the Case-Shiller 20-City Home Price Index, the year -over -year increase receded from 18.7% in June to 16.1% in July, clearly displaying the impact of higher mortgage rates which have reduced demand for homebuying as affordability has declined. 2 Table of Contents C3% CHANDLER ASSET MANAGEMENT TREASURY YIELDS 9/30/2022 6/30/2022 CHANGE 3 Month 3.27 1.67 2 Year 4.28 2.96 3 Year 4.29 3.01 5 Year 4.09 3.04 7 Year 3.99 3.07 10 Year . 3.83 3.02 30 Year 3.78 3.19 Persistent Inflationary Pressures Remain in the US Economy ECONOMIC INDICATOR Trade Balance Gross Domestic Product Unemployment Rate Prime Rate Refinitiv/CoreCommodityCRB Index Oil (West Texas Int.) Consumer Price Index (y/o/y) Producer Price Index (y/o/y) Euro/Dollar Source: Bloomberg 1.60 1.32 1.28 1.05 0.92 0.81 0.59 Current Release Prior Release One Year Ago (67.40) $Bln AUG 22 (0.60%)JUN 22 3.50% SEP 22 6.2S% SEP 22 268.29 SEP 22 $79.49 SEP 22 8.20% SEP 22 11.50% SEP 22 0.98 SEP 22 (70.46) $Bln JUL 22 (1.60%) MAR 22 3.70% AUG 22 5.50% AUG 22 290.41 AUG 22 $89.55 AUG 22 8.30% AUG 22 12.80% AUG 22 1.01 AUG 22 (71.43) $Bln AUG 21 7.00%JUN 21 4.70% SEP 21 3.2S% SEP 21 228.92 SEP 21 $75.03 SEP 21 5.40% SEP 21 11.80% SEP 21 1.16 SEP 21 3 Table of Contents CHANDLER ASSET ASSET MANAGEMENT Performance Attribution Long -Term Portfolio The OC Sanitation Long -Term Portfolio generated a negative total return of -2.01% during the quarter, outperforming the -2.26% return of the ICE Bank of America 1-5 Year US Corporate and Government AAA -A Index by 25 basis points during the three-month period ending September 30, 2022. Financial conditions continued to tighten and interest rates moved higher, with the Fed Funds rate increasing by another 1.50% during the quarter. The term structure positioning of the portfolio, relative to the benchmark, as well as the overall up in quality bias of the Corporate portion of the allocation were positive contributors to the relative outperformance of the portfolio during the quarter. Multiple securities were purchased in the Treasury, Asset Backed, and Corporate portions of the allocation to keep the portfolio structured consistent with Chandler targets. The purchased securities ranged in maturity from July 2025 to September 2027. Several securities were sold, and one matured, to facilitate the new positions in the portfolio. The sector allocation was relatively stable over the reporting period, the Chandler team is focused on optimizing the underlying mix of securities within the respective sector allocations. The two largest adjustments were the 1.1% increase in the Corporate allocation, to 26.4% of the portfolio, partially offset by the 0.9% decline in the money market allocation to 0.2% of the portfolio. The duration of the portfolio was stable, ending the quarter unchanged at 2.41 years. The Chandler team if focused on keeping the overall duration of the portfolio consistent with the benchmark and altering the term structure of the portfolio to assist in generating positive relative returns versus the benchmark. Liquid Portfolio The Liquidity Portfolio generated a total quarterly return of 0.35% compared to the 0.46% return of the ICE Bank of America 3-month US Treasury Bill Index. Several securities were purchased in the Treasury, Agency, and Corporate portfolios of the allocation. The purchased securities ranged in maturity from November 2022 to June 2023. A few securities matured and a net $75 million was withdrawn from the portfolio during the quarter. The sector allocation evolved linked to the large cash withdrawal during the reporting period. Some of the larger changes include the 13.7% reduction in the US Treasury allocation, to 63.3% of the portfolio, partially offset by the 6.3% increase in the Corporate allocation, to 13.0% of the portfolio. The duration of the portfolio contracted moderately, currently 0.28 years compared to 0.33 years at the end of the prior quarter. The duration of the portfolio is driven by the cash flow needs of OC Sanitation and is poised to remain in a range over the coming quarters. Table of Contents CHANDLER ASSET ASSET MANAGEMENT Economic Outlook The debate over whether the US economy is poised for a hard or soft landing continues to evolve with economic data available to support both outcomes, contributing to elevated market volatility. Geopolitical risks remain acute with the energy crisis in Europe and the long-term implications of the Russia/Ukraine conflict a well -documented calamity, China continuing to implement its zero COVID policy and face a housing crisis, and the United Kingdom confronting market stress due to its expansionary fiscal plans and tightening monetary policy, all contributing to market angst. The backdrop in the United States is more constructive on a relative basis with the most recent payrolls report showing job growth of 263k on the month, a three-month moving average of 372k, and the unemployment rate down to 3.5%. Despite two quarters in a row of negative GDP growth in the first half of 2022, softening ISM Manufacturing and stable ISM Services releases, exhibiting the transition of the economy away from the impact of COVID, the mosaic of data in the domestic economy remains inconsistent with a recession in Chandler's view. However, the risk of a deteriorating economy in the first half of 2023 remains as financial conditions continue to become more restrictive. The pace of the Federal Reserve's Quantitative Tightening (QT) increased to $95 billion per month and the Fed Funds rate moved higher by 1.50% during the quarter to a current range of 3.00% to 3.25%. Future increases in the Fed Funds rate are forecasted in November and December and it is likely the terminal Fed Funds rate is at least 4.5% in this cycle as inflation metrics continue to run well above the Federal Reserve's 2% objective. Core CPI on a year over year basis ticked up by 0.3pp in September to 6.6% and core PCE inflation, as of August, ticked up 0.2pp on an annualized basis from the prior month to 4.9% year -over -year. The Chandler team forecasts inflation will moderate in coming months but remain challenged to approach the Federal Reserves 2% objective over the next 12 to 24 months, signaling monetary policy will need to be maintained in a restrictive setting over an intermediate time horizon. One of the more significant adjustments to financial conditions during the quarter was the move higher in both nominal and real interest rates, offset by the decline in breakeven inflation rates (Nominal Rate = Break Even Inflation Rate + Real Rate). Real rates had been in negative territory when financial conditions were exceptionally accommodative, and the Fed Funds rate was set close to the zero lower bound; Federal Reserve officials have noted an increase in real rates into positive territory would be consistent with tighter financial conditions and based on the change in rates during the quarter this objective has been achieved. Additionally, the move lower in US Treasury TIPS breakeven inflation rates is consistent with long-term inflation metrics remaining anchored; based on longer term inflation metrics market participants remain confident in the Federal Reserve's ability to meet its objective of stable prices. Both investment grade and high yield credit spreads were relatively stable on a quarter over quarter basis, despite the volatility intra- quarter, and significantly higher on a year-to-date basis. Market volatility is forecasted to remain elevated and correlated with the lack of visibility on the timing and magnitude of an improvement in inflation metrics and therefore when the Federal Reserve will be able to slow the pace of policy tightening. Table of Contents CHANDLER ASSET ASSET MANAGEMENT Strategy Strategy highlights for the Long -Term portfolio in coming months • Focus on risk management and optimizing the underlying mix of securities within the portfolio; maintain an up in quality bias. • Opportunistically focus on dislocated securities in the Corporate and Asset Backed allocation to enhance the total return opportunity of the portfolio over the upcoming market cycle. o Take advantage of wider new issue concessions in the Corporate and Asset Backed sectors to help differentiate the relative performance of the portfolio. o Continue to avoid adding exposure to Agency sector at longer maturity points until relative value improves. Focus on shorter maturity Agency exposure where relative value is reasonable. Strategy highlights for the Liquidity portfolio in coming months Focus on upcoming liquidity needs based on the cash flow forecast; ensure maturing securities offset cash flow needs. • Opportunistically add longer duration Corporate, Negotiable CD, and Commercial paper beyond the six-month maturity point to enhance the total return of the strategy. Table of Contents CHANDLER ASSET MANAGEMENT Comoliance Issues Orange County Sanitation District Long Term Assets managed by Chandler Asset Management are in full compliance with state law and with the investment policy Category U.S. Treasuries Federal Agencies Supranational Obligations Municipal Securities Corporate Medium Term Notes Non- Agency Asset -Backed Securities, Mortgage -Backed Securities, CMOs Negotiable Certificates of Deposit (NCD) Certificates of Deposit Banker's Acceptances Commercial Paper Mutual Fund & Money Market Mutual Fund Local Agency Investment Fund (LAIF) Orange County Treasurer's Money Market Commingled Investment Pool (OCCI P) Repurchase Agreements Reverse Repurchase Agreements Prohibited Securities Downgrade Avg Duration Max Per Holding Max Per Issuer Maximum Maturity Standard 10% minimum; 5 years max maturity Comment Complies 20% max per agency of the U.S. Government, which does not provide the full faith and credit of the U.S. government; 5 years max maturity; Securities, obligations, participations, or other instruments of, or issued by, or fully guaranteed Complies as to principal and interest by the US Government, a federal agency, or a US Government -sponsored enterprise "AA" rated or better by a NRSRO; 30% max; 5 years max maturity; U.S. dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed bythe International Bankfor Reconstruction and Complies Development ("I BRD"), the International Finance Corporation ("I FC") or the Inter -American Development Bank ("I AD B") "A" rated or higher by a NRSRO; or as otherwise approved by the Board of Directors; Taxable or tax-exempt Complies municipal bonds issued byanyofthe50states; 10%max; 5% max issuer; 5 years max maturity "A" rating category or better by a NRSRO; 30% max; 5% max per issuer; 5 years max maturity; Issued by corporations organized and operatingwithin the U.S. or issued by depository institutions licensed by the U.S. or any state and Complies operating within the U.S. with AUM >$500 million "AA" rating category or better by a NRSRO; 20% max(combined MBS/CMO/ABS); 5%max issuer (except U.S. governmentor its agencies); 5 years max maturity; Mortgage pass -through security, collateralized mortgage Complies obligation, mortgage -backed or other pay -through bond, equipment lease -backed certificate, consumer receivable pass -through certificate, or consumer receivable -backed bond "A" rating or better long term debt by a NRSRO; or highest short term rating for deposits by a NRSRO; or as otherwise approved by the Board of Directors; 30%max; 5% max issuer; 5 years max maturity; Negotiable certificates of Complies deposit issued by a nationally or state -chartered bank or state of federal savings and loan association, as defined by Section 5102 ofthe California Financial Code 5% max issuer; 5 years max maturity; Secured (collateralized) time deposits issued by a nationally or state - chartered bank or state or federal savings and loan association, as defined by Section 5102 ofthe California Complies Financial Code and having a net operating profit in thetwo most recently completed fiscal years; Collateral must comply with California Government Code A-1 rated or highest short term rating by a NRSRO; 40%max; 5% max issuer; 180 days max maturity; Acceptance is Complies eligible for purchase by the Federal Reserve System A-1 rated or better by a NRSRO; "A" long term debt rating or better by a NRSRO; Issued by a domestic corporation organized and operating in the U.S. with assets >$500 million; 40%max; 5%max issuer; 10%max ofthe Complies outstanding commercial paper of any single issuer; 270 days max maturity Highest rating or "AAA" rated by two NRSROs; or SEC registered adviser with AUM >$500 million and experience> than 5 years; 20% max in Mutual Funds; 10%max per one Mutual Fund; 20% max per issuer on Money Market Complies Mutual Funds and are not subject to the 10%stipulation No more than the statutory maximum maybe invested in LAIF; Not used by investment adviser; Investment of OCSD funds in LAIF shall be subject to investigation and due diligence prior to investing, and on a continual basis to a level Complies of review pursuant to the policy 15%max; Not used by investment adviser; Orange County Treasurer's Money Market Commingled Investment Pool; Investment of OCSID funds in OCCIP would be subject to investigation and due diligence prior to investing and on Complies continual basis to a level of review pursuant to the policy 20% max; 102%collateral ization Complies 5% max, 90 days max maturity Complies Mortgage Derivatives, which i ncl ude i nterest-only payments (I Os) and pri nci pa I -only payments (POs); Inverse Complies floaters, and RE-REMICS (Real Estate Mortgage Investment Conduits) If securities owned by the OCSD are downgraded below the quality required by the Investment Policy, it shall be OCSD's policy to review the credit situation and make a determination as to whether to sell or retain such securities in the portfolio. If a decision is made to retain the downgraded securities in the portfolio, their presence in the Complies portfolio will be monitored and reported quarterly to the OCSD General Manager, the Administration Committee and Board of Directors Not to exceed 60 months - (80%to 120%of the benchmark) Complies 5% max of the total debt outstanding of any issuer per individual holding Complies 5% max per issuer (except Supranationals, U.S. Government, Agencies, Mutual Funds); 20% max per issuer on Money Complies Market Mutual Funds 5 years max maturity Complies* *The portfolio has eighteen (18) securities with maturities greater than 5 years including four (4) CMOs and sixteen (14) MBS. All securities were inherited from the previous manager and complied at time of purchase. Table of Contents CHANDLER ASSET MANAGEMENT Orange County Sanitation District Liquid Assets managed by Chandler Asset Management are in full compliance with state law and with the investment policy Category U.S. Trea s u ri es Federal Agencies Supranational Obligations Municipal Securities Corporate Medium Term Notes Non- Agency Asset -Backed Securities, Mortgage -Backed Securities, CMOs Negotiable Certificates of Deposit (NCD) Certificates of Deposit Banker's Acceptances Commercial Paper Mutual Fund & Money Market Mutual Fund Local Agency Investment Fund (LAIF) Orange County Treasurer's Money Market Commingled Investment Pool (OCCI P) Repurchase Agreements Reverse Repurchase Agreements Prohibited Securities Downgrade Avg Duration Max Per Holding Max Per Issuer Maximum Maturity Standard 10% minimum; 1 year max maturity Comment Complies 20% max per agency of the U.S. Government, which does not provide the ful I faith and credit of the U.S. government; 1 year max maturity; Securities, obligations, participations, or other instruments of, or issued by, or fully guaranteed Complies as to principal and interest by the US Government, a federal agency, or a US Government -sponsored enterprise "AA" rated or better by a NRSRO; 30% max; 1 year max maturity; U.S. dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed bythe International Bankfor Reconstruction and Complies Development ("IBIRD"), the International Finance Corporation ("I FC") o r the Inter -American Development Bank ("I ADB") "A" rated or higher by a NRSRO; or as otherwise approved by the Board of Directors; Taxable or tax-exempt municipal Complies bonds issued by any ofthe 50 states; 10% max; 5%max issuer; 1 year max maturity "A" rating category or better by a NRSRO; 30%max; 5% max per issuer; 1 year max maturity; Issued by corporations organized and operatingwithin the U.S. or issued byclepository institutions licensed bythe U.S. or anystateand Complies operati ng withi n the U.S. with AUM >$500 million "AA" rating category or better by a NRSRO; 20% max (combined MBS/CMO/ABS); 5% max issuer (except U.S. government or its agencies); 1 year max maturity; Mortgage pass -through security, collateralized mortgage Complies obligation, mortgage -backed or other pay -through bond, equipment lease -backed certificate, consumer receivable pass through certificate, or consumer receivable -backed bond "A" rating or better long term debt by a NRSRO; or highest short term rating for deposits by a NRSRO; or as otherwise approved by the Board of Directors; 30% max; 5% max issuer; 1 year max maturity; Negotiable certificates of deposit Complies issued by a nationally or state -chartered bank or state of federal savings and loan association, as defined by Section 5102 ofthe California Financial Code 5% max issuer; 1 year max maturity; Secured (collateralized) time deposits issued by a nationally or state -chartered bank or state or federal savings and loan association, as defined by Section 5102 ofthe California Financial Code and Complies having a net operating profit in the two most recently completed fiscal years; Collateral must comply with California Government Code A-1 rated or highest short term rating by a NRSRO; 40% max; 5% max issuer; 180 days max maturity; Acceptance is Complies eligible for purchase by the Federal Reserve System A-1 rated or better by a NRSRO; "A" longterm debt rating or better by a NRSRO; Issued by a domestic corporation organized and operating in the U.S. with assets >$500 million; 40%max; 5%maxissuer; 10% max of the outstanding Complies commercial paper of any single issuer; 270 days max maturity Highest rating or "AAA" rated by two NRSROs; or SEC registered adviser with AUM >$500 million and experience >than 5 years; 20% max in Mutual Funds; 10% max per one Mutual Fund; 20% max per issuer on Money Market Mutual Complies Funds and are not subject to the 10% stipulation No more than the statutory maximum maybe invested in LAIF; Not used by investment adviser; Investment of OCSD funds in LAIF shall be subject to investigation and due diligence prior to investing, and on a continual basis to a level Complies of review pursuant to the policy 15%max; Not used by investment adviser; Orange County Treasurer's Money Market Commingled Investment Pool; Investment of OCSD funds in OCCIP would be subject to investigation and due diligence prior to investing and on Complies continual basis to a level of review pursuant to the policy 20% max; 102 % col I atera I i zati on Complies 5% max, 90 days max maturity Complies Mortgage Derivatives, which include interest -only payments (IOs) and principal -only payments (POs); Inverse floaters, Complies and RE-REMICS (Real Estate Mortgage Investment Conduits) If securities owned by the OCSD are downgraded below the quality required by the Investment Policy, it shall beOCSD's policy to review the credit situation and make a determination as to whether to sell or retain such securities in the portfolio. If a decision is made to retain the downgraded securities in the portfolio, their presence in the portfolio will Complies be monitored and reported quarterly to the OCSD General Manager, the Administration Committee and Board of Directors Not to exceed 180 days 5% max of the total debt outstanding of any issuer per individual holding Complies Complies 5% max per issuer (except Supranationals, U.S. Government, Agencies, Mutual Funds); 20% max per issuer on Money Complies Market Mutual Funds 1 year max maturity Complies Table of Contents CHANDLER ASSET MANAGEMENT OCSD Lehman Exposure Assets managed by Chandler Asset Management are in full compliance with state law and with the investment policy Category Standard Comment Treasury Issues 5 years maximum maturity Complies Supranational or better by 1 of 3 NRSROs; 30%maximum; 5% max; 5 years maturity; Includes only: IADB, IBRD, and IFC per Complies CAA" GC 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 Complies (excluding MBS/govt agency); 5 years max maturity 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% Complies maximum; 5% max issuer; 5 years max maturity CDs/TDS 5% max issuer; 5 years max maturity Complies Banker's Acceptances A-1, or equivalent highest short 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 Complies issuer; 270 days max maturity Money Market Fund Highest rating by 2 of 3 NRSROs; 20% maximum; 10%max issuer Complies Repurchase Agreements 102% collateral ization Complies Reverse Repurchase Agreements 5% maximum, 90 days max maturity LAI F Not us ed by i nves tment a dvi s er Avg Duration Not to exceed 60 months - (80%to 120%of the benchmark) Maximum Maturity 5 years maximum maturity Complies Complies Complies Complies *Account holds $2 million face value (cusip 525ESCOY6) and $600,000 face value (cusip 525ESCIB7) of defaulted Lehman Bros Holdings that were purchased by the previous manager. Complied at time of purchase. Defaulted Bonds OC SAN Lehman Exposure - Account #10284 Common Stock - SLHOPNTA4 Lehman Brothers, Inc Open Position Long Exposure 60,641.49 11/21/2014 57,942.64 0.42 25,621.03 72.7096 NR/NR 0.00 0.00096 Due 09/30/2022 0.0096 57,942.64 0.00% 0.00 (32,221.61) NR 0.00 57,842.64 25,621.03 72.70% NR/NR 0.00 TOTAL Common Stock 60,641.49 0.00% 57,842.64 0.00% 0.00 (32,221.61) NR 0.00 Corporate 525ESCIB7 Lehman Brothers Note -Defaulted 600,000.00 09/19/2008 316,145.76 0.37 2,220.00 6.3096 NR/NR 0.32 0.00096 Due 01/24/2023 0.0096 316,145.76 0.00% 0.00 (313,925.76) NR 0.00 525ESCOY6 Lehman Brothers Note -Defaulted 2,000,000.00 09/18/2008 1,018,441.83 0.37 7,400.00 21.00% NR/NR 27.08 0.00096 Due 10/22/2049 0.0096 1,018,441.83 0.0096 0.00 (1,011,041.83) NR 0.00 1,334,SB7.59 9,620.00 27.30% NR/NR 20.90 TOTAL Corporate 2,600,000.00 0.00% 2,334,587.59 0.00% 0.00 (2,324,967.59) NR 0.00 1,392,430.23 35,241.03 100.00% NR/NR 5.71 TOTAL PORTFOLIO 2,660,641.49 MGM 1,392,430.23 0.00% 0.00 (1,357,189.20) NR 0.00 TOTAL MARKET VALUE PLUS ACCRUALS 35,241.03 9 Table of Contents C3% CHANDLER ASSET MANAGEMENT Ratings Orange County 5anitakian Rlsknck LonigTerm Sepcemher 30, 2022 ue. June SO, 2022 W.0% 70A% 63.0% 50-0% 40.0% 30-0% 20.0% 10J0% 0.0% AAA AA A cA NR ■ 04i3Q+22 ■ 06i3CV22 OW30122 69.1% 3k% 203% 40% 6.5% 06130122 69.5% 3;0% 20.5% 40% 6.1% S�: Wx ri'a jra .vs nrange founty 5anitakion Rlsknck LlquW Sept —her 30, 2022 ue_June 30, 2022 70.0% 63 A9f Min% d0A% 3UA% Min% 10 A4f 0.0% AAA AA A 'A, NR 0 0913CV22 ■ 06130122 09130122 29A% 5M% 9.27E 1.0% 4A% 06/30122 33.1% 61A% 4A% 1.1% 4A% 5h : SSPiN -a+ to Table of Contents C3% CHANDLER ASSET MANAGEMENT $800,000,000 $700,000,000 $600,000,000 $500,000,000 $400,000,000 $300,000,000 $200,000,000 $100,000,000 OC SAN Investment Program Quarter End Portfolio Value spa OP��a ✓44 sPa OP�4d °o s�'o60 4;, ✓<, sPa 00 4,-� �'� s�°a 00 4", ✓�0.'o s�0a 00 4;,r <, s�Oa 60 4"d ✓<, s�0a 60 4� ,dVO s�Oa60 -tld ✓4o s�°a Kp0 V-'v1y1AI's ,S,'S;I6,161616 Ij1�1�5;j9,41s1s 'q 1919-pip10"-1p�1�7�1�1������ HISTORICAL YIELD CURVE 4.50% 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0 00% -r - --------- --------------------------------------------------------------------------------- ------------ --------------------------------------------------- ----------------------------------------------------------------------------- ------------------------ ------------------------------------------------------------------- --SEPTEMBER 2022—0—JUNE 2022—*--SEPTEMBER 2021 a' 6' 1P a' S 10 a'O '%O 7jO yi. yr yr yr yr yr 11 Table of Contents Orange County Sanitation District Liquid Account#10282 PORTFOLIO CHARACTERISTICS Portfolio Summary As of September 30, 2022 ACCOUNT SUMMARY TOP ISSUERS Average Modified Duration 0.28 Beg. Values End Values Government of United States 63.3% as of 8/31/22 as of 9/30/22 Toronto Dominion Holdings 4.6% Average Coupon 1.01% Market Value 139,137,845 109,269,117 Royal Bank of Canada 4.6% Average Purchase YTM 2.01% Accrued Interest 171418 , 187551 , Federal Home Loan Bank 4.5% Total Market Value 139,309,263 109,456,669 Average Market YTM 3.53% Income Earned 198,175 193,741 Westpac Banking Corp NY 3.7% Average S&P/Moody Rating AA+/Aa1 Cont/WD -30,000,000 First American Govt Obligation 2.9% Par 140,101,243 110,213,314 MUFG Bank Ltd/NY 2.3% Average Final Maturity 0.28 yrs Book Value 139,620,558 109,798,166 United Parcel Service ° 2.2/° Average Life 0.26 yrs Cost Value 139,155,066 109,353,707 Total 88.1% SECTOR ALLOCATION US Treasury = Neg CD 15.1% Corporate E 13.0% Agency' 5.6% Money Mkt Fd 12.9% PERFORMANCE REVIEW 63.3 % MATURITY DISTRIBUTION 80% 60 40% 20% 0-.25 .25-.5 .5-1 1-1.5 1.5-2 2-2.5 2.5-3 3+ Maturity (Yrs) CREDIT QUALITY (S&P) AA (59.6%) AAA (29.4%) Annualized TOTAL RATE OF RETURN 1M 3M YTD 1YR 2YRS 3YRS SYRS 10YRS 11/30/2014 Orange County Sanitation District Liquid 0.11% 0.35% 0.38% 0.38% 0.25% 0.61% 1.18% N/A 0.92% ICE BofA 3-Month US Treasury Bill Index 0.25% 0.46% 0.61% 0.62% 0.34% 0.59% 1.15% N/A 0.85% Chandler Asset Manaeement - CONFIDENTIAL Paee 1 Execution Time: 10/3/2022 7:52:53 PM Table of Contents Orange County Sanitation District Long Term Account#10268 PORTFOLIO CHARACTERISTICS Portfolio Summary As of September 30, 2022 ACCOUNT SUMMARY TOP ISSUERS Average Modified Duration 2.41 Beg. Values End Values Government of United States 33.4% as of 8/31/22 as of 9/30/22 Federal National Mortgage Assoc 8.2% Average Coupon 1.70% Market Value 708,662,403 697,508,524 Federal Home Loan Mortgage Corp 6.1% Average Purchase YTM 1.67% Accrued Interest 2770382 ,, 2660393 ,, Federal Home Loan Bank 5.5% Total Market Value 711,432,785 700,168,917 Average Market YTM 4.42% Income Earned 995,278 1,003,500 Inter -American Dev Bank 3.8% Average S&P/Moody Rating AA/Aa1 Cont/WD 316,446 Intl Bank Recon and Development 2.7% Par 743,329,104 745,156,450 Hyundai Auto Receivables 1.9% Average Final Maturity 2.78 yrs Book Value 743,189,104 744,446,682 John Deere ABS 1.6% Average Life 2.54 yrs Cost Value 744,463,916 745,928,650 Total 63.3% SECTOR ALLOCATION US Treasury Corporate Agency 19.0% ABS- 12.1% Supras- 6.5% CMO' 1.5% Neg CD 0.9% Money Mkt Fd 0.2% MBS 0.0% PERFORMANCE REVIEW _ 33.4% 26.4% MATURITY DISTRIBUTION 35 % 30% 25% 20% 15% 10% 5% % 0-.25 .25-.5 .5-1 1-2 2-3 3-4 4-5 5+ Maturity (Yrs) CREDIT QUALITY (S&P) AA (60.1%) A118..,,,,, B (0.0%) BBB (0.8%) NR (3.6%) .5%) Annualized TOTAL RATE OF RETURN 11M 3M YTD 1YR 2YRS 3YRS SYRS 10YRS 11/30/2014 Orange County Sanitation District Long Term -1.63% -2.01% -5.78% -6.38% -3.28% -0.70% 0.65% N/A 0.86% ICE BofA 1-5 Yr AAA -A US Corp & Govt Index -1.78% -2.26% -6.34% -6.98% -3.63% -0.92% 0.49% N/A 0.75% ICE BofA 1-5 Yr US Corp & Govt Index -1.85% -2.20% -6.68% -7.32% -3.64% -0.90% 0.57% N/A 0.85% Chandler Asset Manaeement - CONFIDENTIAL Paee 1 Execution Time: 10/3/2022 TS1:28 PM Table of Contents Balance Orange County Sanitation District Investment Transactions and Balances in the State of California Local Agency Investment Fund September 30, 2022 Par Value Book Value Market Value Rate Yield 9/1/2022 $50,760,315 $50,760,315 $50,760,315 1.51 1.51 Deposits: 9/30/2022 30,000,000 30,000,000 30,000,000 1.51 1.51 Total Deposits 30,000,000 30,000,000 30,000,000 1.51 1.51 Quarterly Interest Distribution - - - 1.51 1.51 Withdrawals: 9/6/2022 (2,800,000) (2,800,000) (2,800,000) 1.51 1.51 9/7/2022 (1,500,000) (1,500,000) (1,500,000) 1.51 1.51 9/14/2022 (1,600,000) (1,600,000) (1,600,000) 1.51 1.51 9/20/2022 (2,900,000) (2,900,000) (2,900,000) 1.51 1.51 9/21/2022 (6,800,000) (6,800,000) (6,800,000) 1.51 1.51 9/22/2022 (4,700,000) (4,700,000) (4,700,000) 1.51 1.51 9/28/2022 (4,800,000) (4,800,000) (4,800,000) 1.51 1.51 Total Withdrawals (25,100,000) (25,100,000) (25,100,000) 1.51 1.51 Balance 9/30/2022 $55,660,315 $55,660,315 $55,660,315 1.51 1.51 Table of Contents Industry Name Cash Equivalents FIRST AMERICAN SHORT TERM FDS U. S. GOVERNMENT Cash Equivalents Total Fixed Income FINANCE FIXED INCOME FUNDS OTHER INDUSTRIAL PRIVATE PLACEMENTS SHORT TERM FUNDS U. S. GOVERNMENT US AGY - LONG TERM ISSUES UTILITY Fixed Income Total Grand Total U.S. Bank Asset Summary - Liquid As of 09/30/2022 Shares/Units Cost Basis Market Value Percent of Total Unrealized Gain/Loss 3,225,313.9900 3,225,313.99 3,225,313.99 2.95 - 10,000,000.0000 9,917,672.22 9,959,300.00 9.11 41,627.78 13,225, 313.9900 13,142,986.21 13,184, 613.99 12.07 41, 627.78 5,998,000.0000 6,058,094.18 5,980,066.56 5.47 (78,027.62) 2,500,000.0000 2,479,919.65 2,493,975.00 2.28 14,055.35 2,400,000.0000 2,407,152.00 2,400,000.00 2.20 (7,152.00) 2,255,000.0000 2,259,126.65 2,239,846.40 2.05 (19,280.25) 14, 000, 000.0000 13, 948, 658.28 13, 924,110.00 12.74 (24, 548.28) 60,000,000.0000 59,283,593.76 59,305,200.00 54.28 21,606.24 7,835,000.0000 7,770,236.12 7,756,608.45 7.10 (13,627.67) 2,000,000.0000 2,003,940.00 1,980,080.00 1.81 (23,860.00) 96,988,000.0000 96,210,720.64 96,079,886.41 87.93 (130,834.23) 110,213, 313.9900 109,353,706.85 109, 264, 500.40 100.00 (89, 206.45) 1 of 1 Table of Contents Industry Name Cash Equivalents FIRST AMERICAN SHORT TERM FDS Cash Equivalents Total U.S. Bank Asset Summary - Long -Term As of 09/30/2022 Shares/Units 1,310,134.1700 Cost Basis Market Value Percent of Total Unrealized Gain/Loss 1,310,134.17 1,310,134.17 0.19 1,310,134.1700 1,310,134.17 1,310,134.17 0.19 - Fixed Income CONSUMER DISCRETIONARY 24,554,000.0000 24,578,759.23 23,039,556.24 3.30 (1,539,202.99) CONSUMER STAPLES 8,070,000.0000 8,060,858.95 7,612,793.10 1.09 (448,065.85) FINANCE 102,200,000.0000 101,141,271.26 92,446,776.70 13.26 (8,694,494.56) FOREIGN FIXED INCOME 9,500,000.0000 9,582,015.00 9,114,025.00 1.31 (467,990.00) HEALTH CARE 4,000,000.0000 3,904,703.05 3,539,920.00 0.51 (364,783.05) INDUSTRIAL 4,735,000.0000 4,730,811.55 4,609,102.10 0.66 (121,709.45) INFORMATION TECHNOLOGY 19,922,000.0000 20,678,047.96 19,285,808.86 2.77 (1,392,239.10) MTG RELATED SECURITY 98,920,460.5800 99,547,151.33 95,380,541.11 13.68 (4,166,610.22) PRIVATE PLACEMENTS 20,400,000.0000 20,261,550.90 18,514,180.75 2.66 (1,747,370.15) SHORT TERM FUNDS 6,000,000.0000 6,000,302.58 5,993,400.00 0.86 (6,902.58) SUPRANATIONAL 50,440,000.0000 50,333,542.85 45,436,211.00 6.52 (4,897,331.85) U. S. GOVERNMENT 238,253,046.8300 236,237,853.22 220,359,479.57 31.60 (15,878,373.65) U.S. GOVERNMENT TIPS 12,976,808.0000 12,832,088.09 12,532,741.63 1.80 (299,346.46) US AGY - LONG TERM ISSUES 140,740,000.0000 142,303,253.25 132,664,402.90 19.03 (9,638,850.35) UTILITY 5,735,000.0000 5,736,523.40 5,413,782.65 0.78 (322,740.75) Fixed Income Total 746,446,315.4100 745,928,732.62 695,942,721.61 99.81 (49,986,011.01) Grand Total 747,756,449.5800 747,238,866.79 697,252,855.78 100.00 (49,986,011.01) 1 of 1 Table of Contents BNY MELLON Statement of Assets Held by Asset Classification Shares/Par Value Asset Descrip CASH AND SHORT TERM CASH BALANCE Total CASH AND SHORT TERM ACCOUNT TOTALS Total Market Value Plus Total Accrued Income 250,000.00 Statement of Transactions by Transaction Date Statement Period 09/01/2022 Through 09/30/2022 Account 300282 Base Currency = USD OCSD LIBERTY MUTUAL Accrued Estimated Market Market Price Market Value Cost Average Cost Income Income Yield 250,000.00 250,000.00 0.00000 0.00 0.00 0.00% 250,000.00 250,000.00 0.00 0.00 0.00% 250,000.00 250,000.00 0.00 0.00 0.00% Realized Transaction Date Transaction Description Income Principal Cost Gains/Losses No Transactions This Period Cumulative realized capital gain and loss position from 12/31/2021 for securities held in principal of account: Short Term: 237.61 * Long Term: 0.00 * * The above gain and loss position does not include transactions where tax cost information is incomplete or unavailable. 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. Table of Contents U.S. Bank Investment Listing - Yield As of 09/30/2022 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 2.8593% 3,225,313.9900 1.00 3,225,313.99 3,225,313.99 Cash Equivalents 31846V567 FIRST AM GOVT OB FD CL Z 2.8593% 1,310,134.1700 1.00 1,310,134.17 1,310,134.17 Cash Equivalents 912796YR4 U S TREASURY BILL 11/22/22 2.9420% 10,000,000.0000 N/A N/A 99.59 9,917,672.22 9,959,300.00 Fixed Income 00440EAP2 CHUBB INA HLDGS INC 2.700% 3/13/23 2.7197% 2,000,000.0000 A3 A 99.28 1,937,000.00 1,985,520.00 Fixed Income 00440EAS6 ACE INA HOLDING 3.150% 3/15/25 3.2834% 2,000,000.0000 A3 A 95.94 2,203,740.00 1,918,740.00 Fixed Income 023135BW5 AMAZON COM INC 0.450% 5/12/24 0.4800% 5,490,000.0000 Al AA 93.74 5,481,984.60 5,146,490.70 Fixed Income 023135CF1 AMAZON COM 3.300% 4/13/27 3.4953% 2,000,000.0000 Al AA 94.41 1,996,540.00 1,888,240.00 Fixed Income 02582JJT8 AMERICAN EXPRESS 3.390% 5/17/27 3.5040% 6,620,000.0000 N/A AAA 96.75 6,618,535.66 6,404,651.40 Fixed Income 02665WCJ8 AMERICAN HONDA MTN 3.450% 7/14/23 3.4784% 845,000.0000 A3 A- 99.18 843,538.15 838,104.80 Fixed Income 02665WCQ2 AMERICAN HONDA MTN 3.625% 10/10/23 3.6569% 2,000,000.0000 A3 A- 99.13 1,998,320.00 1,982,540.00 Fixed Income 02665WCZ2 AMERICAN HONDA MTN 2.400% 6/27/24 2.4988% 1,219,000.0000 A3 A- 96.05 1,213,843.63 1,170,800.74 Fixed Income 02665WEA5 AMERICAN HONDA MTN 1.500% 1/13/25 1.6159% 6,000,000.0000 A3 A- 92.83 5,979,632.85 5,569,740.00 Fixed Income 03215PFN4 AMRESCO 3.60934% 6/25/29 3.8691% 116,624.7700 N/A BBB 93.29 87,577.91 108,794.58 Fixed Income 037833AZ3 APPLE INC 2.500% 2/09/25 2.6188% 3,922,000.0000 AAA AA+ 95.46 4,154,496.16 3,744,058.86 Fixed Income 037833CU2 APPLE INC 2.850% 5/11/24 2.9220% 3,000,000.0000 AAA AA+ 97.54 3,017,760.00 2,926,050.00 Fixed Income 05601XAC3 BMW VEHICLE LEASE 1.100% 3/25/25 1.1427% 2,400,000.0000 N/A AAA 96.26 2,399,641.20 2,310,288.00 Fixed Income 05602RAD3 BMW VEH OWNER TR 3.210% 8/25/26 3.2987% 2,530,000.0000 AAA AAA 97.31 2,529,868.44 2,461,993.60 Fixed Income 06051GEU9 BANK OF AMERICA MTN 3.300% 1/11/23 3.3082% 2,000,000.0000 A2 A- 99.75 2,018,300.00 1,995,020.00 Fixed Income 06051GHF9 BANK OF AMERICA 3.550% 3/05/24 3.5782% 6,675,000.0000 A2 A- 99.21 6,770,625.75 6,622,467.75 Fixed Income 06051GHY8 BANK OF AMERICAN MTN 2.015% 2/13/26 2.1981% 2,500,000.0000 A2 A- 91.67 2,583,450.00 2,291,700.00 Fixed Income 06051GJD2 BANK AMER CORP MTN 1.319% 6/19/26 1.4860% 2,250,000.0000 A2 A- 88.76 2,254,432.50 1,997,100.00 Fixed Income 06367WB85 BANK OF MONTREAL MTN 1.850% 5/01/25 2.0108% 7,000,000.0000 A2 A- 92.00 7,226,940.00 6,440,140.00 Fixed Income 06368FAC3 BANK OF MONTREAL MTN 1.250% 9/15/26 1.4620% 3,000,000.0000 A2 A- 85.50 2,994,647.40 2,564,970.00 Fixed Income 06406HCQO BANK OF NEW YORK MTN 3.950% 11/18/25 4.0617% 1,500,000.0000 Al A 97.25 1,537,365.00 1,458,750.00 Fixed Income 06406RAM9 BANK OF NY MTN 1.850% 1/27/23 1.8620% 1,585,000.0000 Al A 99.36 1,589,501.40 1,574,808.45 Fixed Income 084664CZ2 BERKSHIRE HATHAWAY 2.300% 3/15/27 2.5271% 6,875,000.0000 AA2 AA 91.01 6,873,693.75 6,257,075.00 Fixed Income 09247XAL5 BLACKROCK INC 3.500% 3/18/24 3.5510% 1,000,000.0000 AA3 AA- 98.56 1,036,330.00 985,630.00 Fixed Income 09690AAC7 BMW VEHICLE LEASE 0.330% 12/26/24 0.3398% 2,070,000.0000 AAA N/A 97.13 2,069,786.38 2,010,570.30 Fixed Income 14913R2V8 CATERPILLAR FINL MTN 3.400% 5/13/25 3.5184% 3,485,000.0000 A2 A 96.64 3,480,574.05 3,367,764.60 Fixed Income 14913R3A3 CATERPILLAR FINL MTN 3.600% 8/12/27 3.8130% 3,250,000.0000 A2 A 94.42 3,213,062.50 3,068,487.50 Fixed Income 24422EUM9 JOHN DEERE MTN 3.650% 10/12/23 3.6755% 1,250,000.0000 A2 A 99.31 1,250,237.50 1,241,337.50 Fixed Income 24422EWK1 DEERE JOHN MTN 4.150% 9/15/27 4.2765% 2,000,000.0000 A2 A 97.04 1,972,620.00 1,940,860.00 Fixed Income 3130AOF70 F H L B DEB 3.375% 12/08/23 3.4165% 10,000,000.0000 AAA AA+ 98.78 10,269,043.75 9,878,400.00 Fixed Income 3130A1XJ2 F H L B 2.875% 6/14/24 2.9493% 11,110,000.0000 AAA AA+ 97.48 11,589,031.30 10,830,250.20 Fixed Income 313OA2UW4 F H L B DEB 2.875% 9/13/24 2.9574% 2,500,000.0000 AAA AA+ 97.21 2,635,950.00 2,430,325.00 Fixed Income 313OA4CH3 F H L B DEB 2.375% 3/14/25 2.4856% 5,225,000.0000 AAA AA+ 95.55 5,526,848.25 4,992,435.25 Fixed Income 313383YJ4 F H L B DEB 3.375% 9/08/23 3.4060% 10,000,000.0000 AAA AA+ 99.09 10,211,831.00 9,909,000.00 Fixed Income 313385S80 F H L B DISC NTS 12/12/22 0.0000% 5,000,000.0000 N/A N/A 99.34 4,966,597.22 4,966,950.00 Fixed Income 3133EKWV4 F F C B DEB 1.850% 7/26/24 1.9362% 5,000,000.0000 AAA AA+ 95.55 5,048,280.00 4,777,450.00 Fixed Income 3133TCE95 F H L M C MLTCL MTG 3.744% 8/15/32 3.8662% 3,020.2000 N/A N/A 96.84 3,023.37 2,924.72 Fixed Income 31348SWZ3 F H L M C #786064 2.262% 1/01/28 2.3068% 1,126.4600 N/A N/A 98.06 1,099.03 1,104.61 Fixed Income 3135GO3U5 F N M A DEB 0.625% 4/22/25 0.6858% 14,000,000.0000 AAA AA+ 91.13 13,996,711.60 12,757,920.00 1 of 5 Table of Contents U.S. Bank Investment Listing - Yield As of 09/30/2022 Asset Category CUSIP Asset Short Name Yield Shares/Units Moody's S&P Rating Price Cost Basis Market Value Fixed Income 3135GO4Z3 F N M A 0.500% 6/17/25 0.5532% 9,905,000.0000 AAA AA+ 90.38 9,884,496.65 8,952,238.05 Fixed Income 3135GO5G4 FNMA 0.250% 7/10/23 0.2577% 6,775,000.0000 AAA AA+ 97.01 6,760,433.75 6,572,224.25 Fixed Income 3135GO5X7 FNMA 0.375% 8/25/25 0.4194% 7,945,000.0000 AAA AA+ 89.42 7,907,817.40 7,104,021.75 Fixed Income 3135GO6G3 FNMA 0.500% 11/07/25 0.5615% 8,255,000.0000 AAA AA+ 89.05 8,225,447.10 7,351,407.70 Fixed Income 3135GOV34 FNMA 2.500% 2/05/24 2.5622% 5,000,000.0000 AAA AA+ 97.57 4,980,850.00 4,878,650.00 Fixed Income 3135GOX24 FNMA 1.625% 1/07/25 1.7224% 10,000,000.0000 AAA AA+ 94.35 10,157,936.40 9,434,600.00 Fixed Income 31371 NUC7 F N M A #257179 4.500% 4/01/28 4.6334% 5,700.1400 N/A N/A 97.12 6,028.47 5,535.98 Fixed Income 31376KT22 F N M A #357969 5.000% 9/01/35 4.9771 % 43,750.0600 N/A N/A 100.46 47,031.31 43,951.31 Fixed Income 3137BFE98 F H L B GTD REMIC 3.171% 10/25/24 3.2624% 5,000,000.0000 N/A N/A 97.20 5,378,515.62 4,859,900.00 Fixed Income 313713SRE5 F H L M C MLTCL MTG 3.120% 9/25/26 3.2938% 5,000,000.0000 N/A AAA 94.72 5,214,062.50 4,736,100.00 Fixed Income 3137EAEN5 F H L M C 2.750% 6/19/23 2.7802% 10,000,000.0000 AAA AA+ 98.91 9,956,500.00 9,891,300.00 Fixed Income 3137EAEPO F H L M C 1.500% 2/12/25 1.6006% 12,335,000.0000 AAA AA+ 93.72 12,510,182.05 11,559,868.60 Fixed Income 3137EAES4 F H L M C M T N 0.250% 6/26/23 0.2572% 1,250,000.0000 AAA AA+ 97.19 1,214,137.50 1,214,850.00 Fixed Income 3137EAEU9 F H L M C M T N 0.375% 7/21/25 0.4180% 5,030,000.0000 AAA AA+ 89.72 5,004,950.60 4,512,664.50 Fixed Income 3137EAEX3 F H L M C M T N 0.375% 9/23/25 0.4205% 7,660,000.0000 AAA AA+ 89.19 7,636,943.40 6,831,647.60 Fixed Income 3138EG6F6 F N M A #AL0869 4.500% 6/01/29 4.6210% 3,944.1100 N/A N/A 97.38 4,171.29 3,840.85 Fixed Income 31394JY35 F H L M C MLTCL MT 9.50001% 9/25/43 9.3565% 418,226.0400 N/A N/A 101.53 473,640.99 424,641.63 Fixed Income 31397QREO F N M A GTD REMIC 2.472% 2/25/41 3.7800% 79,124.4500 N/A N/A 99.58 79,099.75 78,790.54 Fixed Income 31403DJZ3 F N M A #745580 5.000% 6/01/36 4.9611 % 44,350.7200 N/A N/A 100.78 47,677.02 44,698.43 Fixed Income 31403GXF4 F N M A #748678 5.000% 10/01/33 5.1148% 750.3700 N/A N/A 97.76 806.64 733.53 Fixed Income 31406PQY8 F N M A #815971 5.000% 3/01/35 4.9612% 66,214.9600 N/A N/A 100.78 71,181.09 66,733.42 Fixed Income 31406XWT5 F N M A #823358 1.948% 2/01/35 1.9410% 18,758.8400 N/A N/A 100.36 18,612.29 18,826.37 Fixed Income 31407BXH7 F N M A #826080 5.000% 7/01/35 4.9612% 8,702.1500 N/A N/A 100.78 9,354.79 8,770.20 Fixed Income 3141OF4V4 F N M A #888336 5.000% 7/01/36 4.9611% 73,186.4400 N/A N/A 100.79 78,675.44 73,760.95 Fixed Income 31417YAY3 F N M A #MA0022 4.500% 4/01/29 4.6212% 6,667.6900 N/A N/A 97.38 7,051.73 6,492.86 Fixed Income 36225CAZ9 G N M A I I #080023 1.750% 12/20/26 1.7641% 7,177.1000 N/A N/A 99.20 7,295.66 7,119.54 Fixed Income 36225CC20 G N M A I I #080088 3.000% 6/20/27 3.0375% 5,090.3300 N/A N/A 98.77 5,201.68 5,027.57 Fixed Income 36225CN28 G N M A I I #080408 2.875% 5/20/30 2.9103% 26,109.6000 N/A N/A 98.79 25,844.41 25,793.15 Fixed Income 36225CNM4 G N M A I I #080395 2.875% 4/20/30 2.9106% 3,046.8300 N/A N/A 98.78 3,019.20 3,009.57 Fixed Income 36225DCB8 G N M A I I #080965 1.625% 7/20/34 1.6555% 20,771.8500 N/A N/A 98.16 20,758.87 20,389.65 Fixed Income 362554AC1 GM FIN CONS AUTO 0.680% 9/16/26 0.7217% 1,705,000.0000 AAA AAA 94.22 1,704,956.52 1,606,382.80 Fixed Income 362585AC5 GM FIN CONS ALIT 3.100% 2/16/27 3.1991% 2,330,000.0000 AAA AAA 96.90 2,329,513.03 2,257,793.30 Fixed Income 36265MAC9 GM FIN AUTO LSNG TR 1.900% 3/20/25 1.9684% 5,020,000.0000 AAA N/A 96.53 5,019,956.83 4,845,555.00 Fixed Income 36266FAC3 GM FIN AUTO LSNG 3.420% 6/20/25 3.4876% 3,035,000.0000 N/A AAA 98.06 3,034,683.45 2,976,212.05 Fixed Income 380146AC4 GM FIN CONS AUTO 1.260% 11/16/26 1.3249% 1,590,000.0000 N/A AAA 95.11 1,589,861.83 1,512,169.50 Fixed Income 40139LBD4 GUARDIAN LIFE MTN 1.250% 5/13/26 1.4332% 3,250,000.0000 AA1 AA+ 87.22 3,124,290.00 2,834,487.50 Fixed Income 43813GAC5 HONDAAUTO 0.270% 4/21/25 0.2782% 1,399,041.8300 AAA N/A 97.07 1,399,016.23 1,357,993.94 Fixed Income 43813KAC6 HONDA AUTO 0.370% 10/18/24 0.3783% 2,133,347.3100 N/A AAA 97.81 2,133,033.93 2,086,563.00 Fixed Income 43815BAC4 HONDA AUTO REC OWN 1.880% 5/15/26 1.9789% 3,930,000.0000 AAA AAA 95.00 3,929,408.93 3,733,539.30 Fixed Income 43815GAC3 HONDA AUTO REC 0.880% 1/21/26 0.9304% 2,290,000.0000 AAA N/A 94.58 2,289,517.27 2,165,973.60 Fixed Income 438516CBO HONEYWELL 1.350% 6/01/25 1.4668% 5,000,000.0000 A2 A 92.04 5,119,000.00 4,601,900.00 Fixed Income 44891VAC5 HYUNDAI AUTO LEASE 0.330% 6/17/24 0.3383% 4,155,000.0000 AAA AAA 97.55 4,154,376.75 4,053,077.85 2of5 Table of Contents U.S. Bank Investment Listing - Yield As of 09/30/2022 Asset Category CUSIP Asset Short Name Yield Shares/Units Moody's S&P Rating Price Cost Basis Market Value Fixed Income 44891WAC3 HYUNDAI AUTO LEASE 1.160% 1/15/25 1.2051% 2,895,000.0000 AAA AAA 96.26 2,894,936.02 2,786,582.25 Fixed Income 448977ADO HYUNDAI AUTO REC 2.220% 10/15/26 2.3149% 4,300,000.0000 N/A AAA 95.90 4,299,834.45 4,123,657.00 Fixed Income 44933LAC7 HYUNDAI AUTO REC 0.380% 9/15/25 0.3931% 2,100,000.0000 N/A AAA 96.66 2,099,779.08 2,029,776.00 Fixed Income 44934KAC8 HTUNDAI AUTO REC TR 0.380% 1/15/26 0.3988% 6,040,000.0000 N/A AAA 95.30 6,038,666.97 5,755,878.40 Fixed Income 44935FAD6 HYUNDAI AUTO REC TR 0.740% 5/15/26 0.7844% 1,600,000.0000 N/A AAA 94.34 1,599,642.88 1,509,392.00 Fixed Income 45814OBD1 INTEL CORP 2.875% 5/11/24 2.9505% 5,000,000.0000 Al A+ 97.44 5,025,900.00 4,872,100.00 Fixed Income 4581XODN5 INTER AMER BK M T N 0.625% 7/15/25 0.6928% 5,050,000.0000 AAA AAA 90.21 5,071,967.50 4,555,807.00 Fixed Income 4581XODV7 INTER AMER BK M T N 0.875% 4/20/26 0.9872% 13,370,000.0000 AAA AAA 88.63 13,308,765.40 11,849,964.70 Fixed Income 4581XODZ8 INTER AMER BK M T N 0.500% 9/23/24 0.5387% 10,775,000.0000 AAA AAA 92.82 10,767,026.50 10,001,678.25 Fixed Income 459058JBO INTL BK M T N 0.626% 4/22/25 0.6877% 6,245,000.0000 AAA AAA 91.03 6,220,831.85 5,684,761.05 Fixed Income 459058JL8 INTL BK M T N 0.500% 10/28/25 0.5621% 15,000,000.0000 AAA AAA 88.96 14,964,951.60 13,344,000.00 Fixed Income 46625HJH4 JPMORGAN CHASE CO 3.200% 1/25/23 3.2103% 2,000,000.0000 Al A- 99.68 2,042,640.00 1,993,600.00 Fixed Income 46647PAUO JPMORGAN CHASE CO 3.797% 7/23/24 3.8496% 2,500,000.0000 Al A- 98.63 2,632,175.00 2,465,825.00 Fixed Income 46647PBH8 JPMORGAN CHASE CO 2.005% 3/13/26 2.1893% 3,500,000.0000 Al A- 91.58 3,602,345.00 3,205,300.00 Fixed Income 46647PCBO JPMORGAN CHASE CO SR 1.578% 4/22/27 1.8278% 5,000,000.0000 Al A- 86.33 4,498,450.00 4,316,550.00 Fixed Income 47787JAC2 JOHN DEERE OWNER 2.320% 9/15/26 2.4277% 3,010,000.0000 AAA N/A 95.57 3,009,334.19 2,876,506.50 Fixed Income 47787NAC3 JOHN DEERE OWNER 0.510% 11/15/24 0.5202% 735,636.5600 AAA N/A 98.04 735,524.45 721,203.37 Fixed Income 47788UAC6 JOHN DEERE OWNER 0.360% 9/15/25 0.3747% 2,300,000.0000 AAA N/A 96.09 2,299,557.94 2,209,955.00 Fixed Income 47789QAC4 JOHN DEERE OWN 0.520% 3/16/26 0.5504% 2,820,000.0000 AAA N/A 94.48 2,819,748.46 2,664,195.00 Fixed Income 47800AAC4 JOHN DEERE OWNR TR 3.740% 2/16/27 3.8309% 3,140,000.0000 AAA N/A 97.63 3,139,700.13 3,065,456.40 Fixed Income 525ESCOY6 LEHMAN BIRTH HLD ESC 0.0000% 2,000,000.0000 - 1,016,889.29 - Fixed Income 525ESCIB7 LEHMAN BIRTH MTN ES 0.00001% 1/24/13 0.0027% 600,000.0000 N/A N/A 0.37 315,678.37 2,220.00 Fixed Income 55380TXV7 MUFG BANK LTD C D 0.300% 10/31/22 0.3007% 2,500,000.0000 99.76 2,479,919.65 2,493,975.00 Fixed Income 58769KAD6 MERCEDES BENZ AUTO 0.400% 11/15/24 0.4144% 3,315,000.0000 N/A AAA 96.52 3,314,749.72 3,199,671.15 Fixed Income 58989V2D5 MET TOWER MTN 1.250% 9/14/26 1.4533% 3,745,000.0000 AA3 AA- 86.01 3,741,554.60 3,221,111.95 Fixed Income 59217GEE5 MET LIFE GLOB MTN 1.950% 1/13/23 1.9632% 2,255,000.0000 AA3 AA- 99.33 2,259,126.65 2,239,846.40 Fixed Income 59217GER6 MET LIFE GLOB MTN 1.875% 1/11/27 2.1478% 5,920,000.0000 AA3 AA- 87.30 5,913,251.20 5,168,041.60 Fixed Income 61744YAN8 MORGAN STANLEY MTN 3.125% 1/23/23 3.1353% 1,998,000.0000 Al A- 99.67 1,997,154.18 1,991,446.56 Fixed Income 61747YEA9 MORGAN STANLEY 0.790% 5/30/25 0.8583% 8,885,000.0000 Al A- 92.04 8,889,710.25 8,177,754.00 Fixed Income 65479JAD5 NISSAN AUTO 1.930% 7/15/24 1.9373% 927,926.1200 AAA AAA 99.62 927,877.13 924,427.84 Fixed Income 668151-2J7 NORTHWESTERN MTN 4.000% 7/01/25 4.1067% 7,485,000.0000 AAA AA+ 97.40 7,482,455.10 7,290,539.70 Fixed Income 69353RFL7 PNC BANK NA MTN 3.500% 6/08/23 3.5201% 5,000,000.0000 A2 A 99.43 4,993,318.05 4,971,500.00 Fixed Income 747525AFO QUALCOMM INC 3.450% 5/20/25 3.5642% 8,000,000.0000 A2 A 96.80 8,479,891.80 7,743,600.00 Fixed Income 78012U3M5 ROYAL BK CDA N Y C D 1.350% 2/14/23 1.3635% 3,000,000.0000 99.01 3,000,000.00 2,970,270.00 Fixed Income 78012UW43 ROYAL BK OF C D 0.270% 10/20/22 0.2704% 2,000,000.0000 99.84 1,986,927.04 1,996,860.00 Fixed Income 78013XZU5 ROYAL BANK OF MTN 2.550% 7/16/24 2.6593% 6,500,000.0000 Al A 95.89 6,581,445.00 6,232,915.00 Fixed Income 780151<71-11 ROYAL BANK OF MTN 1.150% 6/10/25 1.2744% 4,000,000.0000 Al A 90.24 4,013,620.00 3,609,520.00 Fixed Income 78445JAA5 S L M A 2.71382% 4/25/23 2.7355% 8,482.4900 B1 B- 99.21 8,448.07 8,415.31 Fixed Income 79466LAG9 SALESFORCE COM INC 0.625% 7/15/24 0.6705% 1,350,000.0000 A2 A+ 93.21 1,349,311.50 1,258,348.50 Fixed Income 808513AT2 CHARLES SCHWAB CORP 2.650% 1/25/23 2.6600% 4,000,000.0000 A2 A 99.62 3,987,840.00 3,984,920.00 Fixed Income 808513BN4 SCHWAB CHARLES 0.750% 3/18/24 0.7932% 2,785,000.0000 A2 A 94.55 2,783,607.50 2,633,161.80 Fixed Income 808513BYO CHARLES SCHWAB CORP 2.450% 3/03/27 2.7301% 2,325,000.0000 A2 A 89.74 2,322,489.00 2,086,455.00 3of5 Table of Contents U.S. Bank Investment Listing - Yield As of 09/30/2022 Asset Category CUSIP Asset Short Name Yield Shares/Units Moody's S&P Rating Price Cost Basis Market Value Fixed Income 86959RTWO SVENSKA C D 0.255% 10/14/22 0.2553% 6,000,000.0000 99.89 6,000,302.58 5,993,400.00 Fixed Income 89114QCA4 TORONTO DOMINION MTN 2.650% 6/12/24 2.7594% 3,000,000.0000 Al A 96.04 3,000,570.00 2,881,110.00 Fixed Income 89114TZN5 TORONTO DOMINION MTN 1.950% 1/12/27 2.2413% 2,000,000.0000 Al A 87.00 1,984,582.40 1,740,040.00 Fixed Income 89114TZT2 TORONTO DOMINION MTN 2.800% 3/10/27 3.1076% 5,000,000.0000 Al A 90.10 4,960,350.00 4,505,050.00 Fixed Income 89114WJB2 TORONTO DOMINION C D 0.270% 10/20/22 0.2704% 2,000,000.0000 99.84 1,987,255.53 1,996,840.00 Fixed Income 89114WW68 TORONTO DOMINION C D 2.680% 4/28/23 2.7085% 3,000,000.0000 98.95 3,000,000.00 2,968,380.00 Fixed Income 89236TJK2 TOYOTA MTR CR MTN 1.125% 6/18/26 1.2861% 7,285,000.0000 Al A+ 87.48 7,281,794.60 6,372,553.75 Fixed Income 89236TJZ9 TOYOTA MOTOR MTN 3.050% 3/22/27 3.3121% 2,000,000.0000 Al A+ 92.09 1,945,900.00 1,841,740.00 Fixed Income 89237VAB5 TOYOTA AUTO RECV 0.440% 10/15/24 0.4474% 1,511,729.9900 AAA AAA 98.35 1,511,613.60 1,486,756.21 Fixed Income 89238LAC4 TOYOTA LEASE OWNER 1.960% 2/20/25 2.0338% 6,125,000.0000 N/A AAA 96.37 6,124,035.93 5,902,785.00 Fixed Income 89239CAC3 TOYOTA LEASE OWNER 0.420% 10/21/24 0.4363% 3,185,000.0000 AAA N/A 96.27 3,184,957.00 3,066,167.65 Fixed Income 90331HPL1 US BANK NA MTN 2.050% 1/21/25 2.1774% 7,270,000.0000 Al AA- 94.15 7,254,514.90 6,844,486.90 Fixed Income 911312AQ9 UNITED PARCEL SVC 2.450% 10/01/22 2.4500% 2,400,000.0000 WR N/R 1.00 2,407,152.00 2,400,000.00 Fixed Income 9128283J7 U S TREASURY NT 2.125% 11/30/24 2.2231% 16,500,000.0000 AAA N/A 95.59 16,783,886.72 15,771,690.00 Fixed Income 912828U57 U S TREASURY NT 2.125% 11/30/23 2.1777% 4,000,000.0000 AAA N/A 97.58 3,937,343.74 3,903,120.00 Fixed Income 912828V80 U S TREASURY NT 2.250% 1/31/24 2.3116% 7,500,000.0000 AAA 97.34 7,491,503.91 7,300,200.00 Fixed Income 912828W48 U S TREASURY NT 2.125% 2/29/24 2.1907% 10,000,000.0000 AAA N/A 97.00 9,911,718.75 9,700,000.00 Fixed Income 912828WJ5 U S TREASURY NT 2.500% 5/15/24 2.5738% 7,000,000.0000 AAA N/A 97.13 7,193,046.88 6,799,310.00 Fixed Income 912828W UO U S TREASURY I P S 0.125% 7/15/24 0.1294% 12,976,808.0000 AAA N/A 96.58 12,832,088.09 12,532,741.63 Fixed Income 912828XX3 U S TREASURY NT 2.000% 6/30/24 2.0800% 5,000,000.0000 AAA N/A 96.16 5,028,710.94 4,807,800.00 Fixed Income 912828YH7 U S TREASURY NT 1.500% 9/30/24 1.5823% 14,000,000.0000 AAA N/A 94.80 13,859,296.88 13,272,140.00 Fixed Income 912828Z78 U S TREASURY NT 1.500% 1/31/27 1.6733% 18,500,000.0000 AAA N/A 89.64 17,870,410.15 16,583,585.00 Fixed Income 912828ZL7 U S TREASURY NT 0.375% 4/30/25 0.4140% 12,000,000.0000 AAA N/A 90.58 11,998,515.63 10,869,840.00 Fixed Income 91282CAM3 U S TREASURY NT 0.250% 9/30/25 0.2813% 6,500,000.0000 AAA N/A 88.88 6,477,656.25 5,776,875.00 Fixed Income 91282CBA8 U S TREASURY NT 0.125% 12/15/23 0.1314% 1,500,000.0000 AAA N/A 95.16 1,498,007.81 1,427,340.00 Fixed Income 91282CBC4 U S TREASURY NT 0.375% 12/31/25 0.4241% 10,000,000.0000 AAA N/A 88.43 9,943,320.32 8,842,600.00 Fixed Income 91282CBG5 U S TREASURY NT 0.125% 1/31/23 0.1265% 60,000,000.0000 AAA N/A 98.84 59,283,593.76 59,305,200.00 Fixed Income 91282CBH3 U S TREASURY NT 0.375% 1/31/26 0.4257% 18,000,000.0000 AAA N/A 88.09 17,781,875.00 15,855,480.00 Fixed Income 91282CBT7 U S TREASURY NT 0.750% 3/31/26 0.8447% 10,000,000.0000 AAA N/A 88.79 9,943,359.37 8,879,300.00 Fixed Income 91282CCF6 U S TREASURY NT 0.750% 5/31/26 0.8493% 7,500,000.0000 AAA N/A 88.31 7,443,750.00 6,623,475.00 Fixed Income 91282CCW9 U S TREASURY NT 0.750% 8/31/26 0.8552% 8,000,000.0000 AAA N/A 87.70 7,874,375.01 7,015,920.00 Fixed Income 91282CCX7 U S TREASURY NT 0.375% 9/15/24 0.4042% 10,500,000.0000 AAA N/A 92.77 10,377,363.28 9,740,850.00 Fixed Income 91282CDG3 U S TREASURY NT 1.125% 10/31/26 1.2689% 19,250,000.0000 N/A N/A 88.66 19,119,013.68 17,067,050.00 Fixed Income 91282CDR9 U S TREASURY NT 0.750% 12/31/23 0.7834% 5,000,000.0000 AAA N/A 95.73 5,000,195.31 4,786,550.00 Fixed Income 91282CDZ1 U S TREASURY NT 1.500% 2/15/25 1.6002% 5,000,000.0000 AAA N/A 93.74 4,812,890.63 4,686,900.00 Fixed Income 91282CEN7 U S TREASURY NT 2.750% 4/30/27 2.9140% 17,000,000.0000 AAA N/A 94.37 16,417,148.43 16,043,070.00 Fixed Income 91282CEW7 U S TREASURY NT 3.250% 6/30/27 3.3722% 20,500,000.0000 AAA N/A 96.38 20,645,273.45 19,756,875.00 Fixed Income 91282CFE6 U S TREASURY NT 3.125% 8/15/25 3.2240% 5,000,000.0000 AAA N/A 96.93 4,826,171.88 4,846,500.00 Fixed Income 91324PEC2 UNITEDHEALTH 1.150% 5/15/26 1.2995% 4,000,000.0000 A3 A+ 88.50 3,904,703.05 3,539,920.00 Fixed Income 92348KAV5 VERIZON MASTER TR 3.720% 7/20/27 3.7569% 2,750,000.0000 N/A AAA 99.02 2,749,879.00 2,723,022.50 Fixed Income 927804FN9 VIRGINIA ELEC PWR 2.750% 3/15/23 2.7777% 2,000,000.0000 A2 BBB+ 99.00 2,003,940.00 1,980,080.00 Fixed Income 927804GH1 VIRGINIA ELEC PWR CO 3.750% 5/15/27 3.9725% 5,735,000.0000 A2 BBB+ 94.40 5,736,523.40 5,413,782.65 4of5 Table of Contents U.S. Bank Investment Listing - Yield As of 09/30/2022 Asset Category CUSIP Asset Short Name Yield Shares/Units Moody's S&P Rating Price Cost Basis Market Value Fixed Income 931142ERO WALMART INC 1.050% 9/17/26 1.2034% 1,725,000.0000 AA2 AA 87.26 1,721,739.75 1,505,148.75 Fixed Income 931142EX7 WALMART INC 3.950% 9/09/27 4.0687% 4,995,000.0000 AA2 AA 97.08 4,989,807.70 4,849,295.85 Fixed Income 96130ALA4 WESTPAC BKG C D 0.300% 10/26/22 0.3006% 4,000,000.0000 99.79 3,974,475.71 3,991,760.00 Total Consolidated 806.517.356.18 61118 i&l Table of Contents U.S. Bank Asset Detail - Consolidated As of 09/30/2022 CUSIP Asset Short Name Price Shares/Units Cost Basis Market Value Percent of Total Unrealized Gain/Loss Cash Equivalents 31846V567 FIRST AM GOVT OB FD CL Z 1.00 3,225,313.9900 3,225,313.99 3,225,313.99 0.40 31846V567 FIRST AM GOVT OB FD CL Z 1.00 1,310,134.1700 1,310,134.17 1,310,134.17 0.16 - 912796YR4 U S TREASURY BILL 11/22/22 99.59 10,000,000.0000 9,917,672.22 9,959,300.00 1.23 41,627.78 Cash Equivalents Total 14,535,448.1600 14,453,120.38 14,494,748.16 1.80 41,627.78 Fixed Income 00440EAS6 ACE INA HOLDING 3.150% 3/15/25 95.94 2,000,000.0000 2,203,740.00 1,918,740.00 0.24 (285,000.00) 023135CF1 AMAZON COM 3.300% 4/13/27 94.41 2,000,000.0000 1,996,540.00 1,888,240.00 0.23 (108,300.00) 023135BW5 AMAZON COM INC 0.450% 5/12/24 93.74 5,490,000.0000 5,481,984.60 5,146,490.70 0.64 (335,493.90) 02582JJT8 AMERICAN EXPRESS 3.390% 5/17/27 96.75 6,620,000.0000 6,618,535.66 6,404,651.40 0.79 (213,884.26) 02665WEA5 AMERICAN HONDA MTN 1.500% 1/13/25 92.83 6,000,000.0000 5,979,632.85 5,569,740.00 0.69 (409,892.85) 02665WCZ2 AMERICAN HONDA MTN 2.400% 6/27/24 96.05 1,219,000.0000 1,213,843.63 1,170,800.74 0.15 (43,042.89) 02665WCJ8 AMERICAN HONDA MTN 3.450% 7/14/23 99.18 845,000.0000 843,538.15 838,104.80 0.10 (5,433.35) 02665WCQ2 AMERICAN HONDA MTN 3.625% 10/10/23 99.13 2,000,000.0000 1,998,320.00 1,982,540.00 0.25 (15,780.00) 03215PFN4 AMRESCO 3.60934% 6/25/29 93.29 116,624.7700 87,577.91 108,794.58 0.01 21,216.67 037833AZ3 APPLE INC 2.500% 2/09/25 95.46 3,922,000.0000 4,154,496.16 3,744,058.86 0.46 (410,437.30) 037833CU2 APPLE INC 2.850% 5/11/24 97.54 3,000,000.0000 3,017,760.00 2,926,050.00 0.36 (91,710.00) 06051GJD2 BANK AMER CORP MTN 1.319% 6/19/26 88.76 2,250,000.0000 2,254,432.50 1,997,100.00 0.25 (257,332.50) 06051GHF9 BANK OF AMERICA 3.550% 3/05/24 99.21 6,675,000.0000 6,770,625.75 6,622,467.75 0.82 (148,158.00) 06051GEU9 BANK OF AMERICA MTN 3.300% 1/11/23 99.75 2,000,000.0000 2,018,300.00 1,995,020.00 0.25 (23,280.00) 06051GHY8 BANK OF AMERICAN MTN 2.015% 2/13/26 91.67 2,500,000.0000 2,583,450.00 2,291,700.00 0.28 (291,750.00) 06368FAC3 BANK OF MONTREAL MTN 1.250% 9/15/26 85.50 3,000,000.0000 2,994,647.40 2,564,970.00 0.32 (429,677.40) 06367WB85 BANK OF MONTREAL MTN 1.850% 5/01/25 92.00 7,000,000.0000 7,226,940.00 6,440,140.00 0.80 (786,800.00) 06406HCQO BANK OF NEW YORK MTN 3.950% 11/18/25 97.25 1,500,000.0000 1,537,365.00 1,458,750.00 0.18 (78,615.00) 06406RAM9 BANK OF NY MTN 1.850% 1/27/23 99.36 1,585,000.0000 1,589,501.40 1,574,808.45 0.20 (14,692.95) 084664CZ2 BERKSHIRE HATHAWAY 2.300% 3/15/27 91.01 6,875,000.0000 6,873,693.75 6,257,075.00 0.78 (616,618.75) 09247XAL5 BLACKROCK INC 3.500% 3/18/24 98.56 1,000,000.0000 1,036,330.00 985,630.00 0.12 (50,700.00) 05602RAD3 BMW VEH OWNER TR 3.210% 8/25/26 97.31 2,530,000.0000 2,529,868.44 2,461,993.60 0.31 (67,874.84) 09690AAC7 BMW VEHICLE LEASE 0.330% 12/26/24 97.13 2,070,000.0000 2,069,786.38 2,010,570.30 0.25 (59,216.08) 05601XAC3 BMW VEHICLE LEASE 1.100% 3/25/25 96.26 2,400,000.0000 2,399,641.20 2,310,288.00 0.29 (89,353.20) 14913R2V8 CATERPILLAR FINL MTN 3.400% 5/13/25 96.64 3,485,000.0000 3,480,574.05 3,367,764.60 0.42 (112,809.45) 14913R3A3 CATERPILLAR FINL MTN 3.600% 8/12/27 94.42 3,250,000.0000 3,213,062.50 3,068,487.50 0.38 (144,575.00) 808513BYO CHARLES SCHWAB CORP 2.450% 3/03/27 89.74 2,325,000.0000 2,322,489.00 2,086,455.00 0.26 (236,034.00) 808513AT2 CHARLES SCHWAB CORP 2.650% 1/25/23 99.62 4,000,000.0000 3,987,840.00 3,984,920.00 0.49 (2,920.00) 00440EAP2 CHUBB INA HLDGS INC 2.700% 3/13/23 99.28 2,000,000.0000 1,937,000.00 1,985,520.00 0.25 48,520.00 24422EWK1 DEERE JOHN MTN 4.150% 9/15/27 97.04 2,000,000.0000 1,972,620.00 1,940,860.00 0.24 (31,760.00) 3133EKWV4 F F C B DEB 1.850% 7/26/24 95.55 5,000,000.0000 5,048,280.00 4,777,450.00 0.59 (270,830.00) 3130A1XJ2 F H L B 2.875% 6/14/24 97.48 11,110,000.0000 11,589,031.30 10,830,250.20 1.34 (758,781.10) 3130A4CH3 F H L B DEB 2.375% 3/14/25 95.55 5,225,000.0000 5,526,848.25 4,992,435.25 0.62 (534,413.00) 3130A2UW4 F H L B DEB 2.875% 9/13/24 97.21 2,500,000.0000 2,635,950.00 2,430,325.00 0.30 (205,625.00) 313383YJ4 F H L B DEB 3.375% 9/08/23 99.09 10,000,000.0000 10,211,831.00 9,909,000.00 1.23 (302,831.00) 1 of 5 Table of Contents U.S. Bank Asset Detail - Consolidated As of 09/30/2022 CUSIP Asset Short Name Price Shares/Units Cost Basis Market Value Percent of Total Unrealized Gain/Loss 3130AOF70 F H L B DEB 3.375% 12/08/23 98.78 10,000,000.0000 10,269,043.75 9,878,400.00 1.22 (390,643.75) 313385S80 F H L B DISC NTS 12/12/22 99.34 5,000,000.0000 4,966,597.22 4,966,950.00 0.62 352.78 3137BFE98 F H L B GTD REMIC 3.171% 10/25/24 97.20 5,000,000.0000 5,378,515.62 4,859,900.00 0.60 (518,615.62) 3137EAEPO F H L M C 1.500% 2/12/25 93.72 12,335,000.0000 12,510,182.05 11,559,868.60 1.43 (950,313.45) 3137EAEN5 F H L M C 2.750% 6/19/23 98.91 10,000,000.0000 9,956,500.00 9,891,300.00 1.23 (65,200.00) 3137EAES4 F H L M C M T N 0.250% 6/26/23 97.19 1,250,000.0000 1,214,137.50 1,214,850.00 0.15 712.50 3137EAEU9 F H L M C M T N 0.375% 7/21/25 89.72 5,030,000.0000 5,004,950.60 4,512,664.50 0.56 (492,286.10) 3137EAEX3 F H L M C M T N 0.375% 9/23/25 89.19 7,660,000.0000 7,636,943.40 6,831,647.60 0.85 (805,295.80) 31348SW Z3 F H L M C #786064 2.262% 1 /01 /28 98.06 1,126.4600 1,099.03 1,104.61 0.00 5.58 31394JY35 F H L M C MLTCL MT 9.50001 % 9/25/43 101.53 418,226.0400 473,640.99 424,641.63 0.05 (48,999.36) 3137BSRE5 F H L M C MLTCL MTG 3.120% 9/25/26 94.72 5,000,000.0000 5,214,062.50 4,736,100.00 0.59 (477,962.50) 3133TCE95 F H L M C MLTCL MTG 3.744% 8/15/32 96.84 3,020.2000 3,023.37 2,924.72 0.00 (98.65) 3135GO5G4 F N M A 0.250% 7/10/23 97.01 6,775,000.0000 6,760,433.75 6,572,224.25 0.81 (188,209.50) 3135GO5X7 F N M A 0.375% 8/25/25 89.42 7,945,000.0000 7,907,817.40 7,104,021.75 0.88 (803,795.65) 3135GO4Z3 F N M A 0.500% 6/17/25 90.38 9,905,000.0000 9,884,496.65 8,952,238.05 1.11 (932,258.60) 3135GO6G3 F N M A 0.500% 11/07/25 89.05 8,255,000.0000 8,225,447.10 7,351,407.70 0.91 (874,039.40) 3135GOX24 F N M A 1.625% 1/07/25 94.35 10,000,000.0000 10,157,936.40 9,434,600.00 1.17 (723,336.40) 3135GOV34 F N M A 2.500% 2/05/24 97.57 5,000,000.0000 4,980,850.00 4,878,650.00 0.60 (102,200.00) 31371 NUC7 F N M A #257179 4.500% 4/01/28 97.12 5,700.1400 6,028.47 5,535.98 0.00 (492.49) 31376KT22 F N M A #357969 5.000% 9/01/35 100.46 43,750.0600 47,031.31 43,951.31 0.01 (3,080.00) 31403DJZ3 F N M A #745580 5.000% 6/01/36 100.78 44,350.7200 47,677.02 44,698.43 0.01 (2,978.59) 31403GXF4 F N M A #748678 5.000% 10/01/33 97.76 750.3700 806.64 733.53 0.00 (73.11) 31406PQY8 F N M A #815971 5.000% 3/01/35 100.78 66,214.9600 71,181.09 66,733.42 0.01 (4,447.67) 31406XWT5 F N M A #823358 1.948% 2/01/35 100.36 18,758.8400 18,612.29 18,826.37 0.00 214.08 31407BXH7 F N M A #826080 5.000% 7/01/35 100.78 8,702.1500 9,354.79 8,770.20 0.00 (584.59) 3141OF4V4 F N M A #888336 5.000% 7/01/36 100.79 73,186.4400 78,675.44 73,760.95 0.01 (4,914.49) 3138EG6F6 F N M A #AL0869 4.500% 6/01/29 97.38 3,944.1100 4,171.29 3,840.85 0.00 (330.44) 31417YAY3 F N M A #MA0022 4.500% 4/01/29 97.38 6,667.6900 7,051.73 6,492.86 0.00 (558.87) 3135GO3U5 F N M A DEB 0.625% 4/22/25 91.13 14,000,000.0000 13,996,711.60 12,757,920.00 1.58 (1,238,791.60) 31397QREO F N M A GTD REMIC 2.472% 2/25/41 99.58 79,124.4500 79,099.75 78,790.54 0.01 (309.21) 36225CAZ9 G N M A 1 1 #080023 1.750% 12/20/26 99.20 7,177.1000 7,295.66 7,119.54 0.00 (176.12) 36225CC20 G N M A 1 1 #080088 3.000% 6/20/27 98.77 5,090.3300 5,201.68 5,027.57 0.00 (174.11) 36225CNM4 G N M A 1 1 #080395 2.875% 4/20/30 98.78 3,046.8300 3,019.20 3,009.57 0.00 (9.63) 36225CN28 G N M A 1 1 #080408 2.875% 5/20/30 98.79 26,109.6000 25,844.41 25,793.15 0.00 (51.26) 36225DCB8 G N M A 1 1 #080965 1.625% 7/20/34 98.16 20,771.8500 20,758.87 20,389.65 0.00 (369.22) 36266FAC3 GM FIN AUTO LSNG 3.420% 6/20/25 98.06 3,035,000.0000 3,034,683.45 2,976,212.05 0.37 (58,471.40) 36265MAC9 GM FIN AUTO LSNG TR 1.900% 3/20/25 96.53 5,020,000.0000 5,019,956.83 4,845,555.00 0.60 (174,401.83) 362585AC5 GM FIN CONS AUT 3.100% 2/16/27 96.90 2,330,000.0000 2,329,513.03 2,257,793.30 0.28 (71,719.73) 362554AC1 GM FIN CONS AUTO 0.680% 9/16/26 94.22 1,705,000.0000 1,704,956.52 1,606,382.80 0.20 (98,573.72) 380146AC4 GM FIN CONS AUTO 1.260% 11/16/26 95.11 1,590,000.0000 1,589,861.83 1,512,169.50 0.19 (77,692.33) 40139LBD4 GUARDIAN LIFE MTN 1.250% 5/13/26 87.22 3,250,000.0000 3,124,290.00 2,834,487.50 0.35 (289,802.50) 43813GAC5 HONDAAUTO 0.270% 4/21/25 97.07 1,399,041.8300 1,399,016.23 1,357,993.94 0.17 (41,022.29) 2of5 Table of Contents U.S. Bank Asset Detail - Consolidated As of 09/30/2022 CUSIP Asset Short Name Price Shares/Units Cost Basis Market Value Percent of Total Unrealized Gain/Loss 43813KAC6 HONDA AUTO 0.370% 10/18/24 97.81 2,133,347.3100 2,133,033.93 2,086,563.00 0.26 (46,470.93) 43815GAC3 HONDA AUTO REC 0.880% 1/21/26 94.58 2,290,000.0000 2,289,517.27 2,165,973.60 0.27 (123,543.67) 43815BAC4 HONDA AUTO REC OWN 1.880% 5/15/26 95.00 3,930,000.0000 3,929,408.93 3,733,539.30 0.46 (195,869.63) 438516CBO HONEYWELL 1.350% 6/01/25 92.04 5,000,000.0000 5,119,000.00 4,601,900.00 0.57 (517,100.00) 44934KAC8 HTUNDAI AUTO REC TR 0.380% 1/15/26 95.30 6,040,000.0000 6,038,666.97 5,755,878.40 0.71 (282,788.57) 44891VAC5 HYUNDAI AUTO LEASE 0.330% 6/17/24 97.55 4,155,000.0000 4,154,376.75 4,053,077.85 0.50 (101,298.90) 44891WAC3 HYUNDAI AUTO LEASE 1.160% 1/15/25 96.26 2,895,000.0000 2,894,936.02 2,786,582.25 0.35 (108,353.77) 44933LAC7 HYUNDAI AUTO REC 0.380% 9/15/25 96.66 2,100,000.0000 2,099,779.08 2,029,776.00 0.25 (70,003.08) 448977ADO HYUNDAI AUTO REC 2.220% 10/15/26 95.90 4,300,000.0000 4,299,834.45 4,123,657.00 0.51 (176,177.45) 44935FAD6 HYUNDAI AUTO REC TR 0.740% 5/15/26 94.34 1,600,000.0000 1,599,642.88 1,509,392.00 0.19 (90,250.88) 45814OBD1 INTEL CORP 2.875% 5/11/24 97.44 5,000,000.0000 5,025,900.00 4,872,100.00 0.60 (153,800.00) 4581XODZ8 INTER AMER BK M T N 0.500% 9/23/24 92.82 10,775,000.0000 10,767,026.50 10,001,678.25 1.24 (765,348.25) 4581XODN5 INTER AMER BK M T N 0.625% 7/15/25 90.21 5,050,000.0000 5,071,967.50 4,555,807.00 0.56 (516,160.50) 4581XODV7 INTER AMER BK M T N 0.875% 4/20/26 88.63 13,370,000.0000 13,308,765.40 11,849,964.70 1.47 (1,458,800.70) 459058J1-8 INTL BK M T N 0.500% 10/28/25 88.96 15,000,000.0000 14,964,951.60 13,344,000.00 1.65 (1,620,951.60) 459058JBO INTL BK M T N 0.626% 4/22/25 91.03 6,245,000.0000 6,220,831.85 5,684,761.05 0.70 (536,070.80) 24422EUM9 JOHN DEERE MTN 3.650% 10/12/23 99.31 1,250,000.0000 1,250,237.50 1,241,337.50 0.15 (8,900.00) 47789QAC4 JOHN DEERE OWN 0.520% 3/16/26 94.48 2,820,000.0000 2,819,748.46 2,664,195.00 0.33 (155,553.46) 47788UAC6 JOHN DEERE OWNER 0.360% 9/15/25 96.09 2,300,000.0000 2,299,557.94 2,209,955.00 0.27 (89,602.94) 47787NAC3 JOHN DEERE OWNER 0.510% 11/15/24 98.04 735,636.5600 735,524.45 721,203.37 0.09 (14,321.08) 47787JAC2 JOHN DEERE OWNER 2.320% 9/15/26 95.57 3,010,000.0000 3,009,334.19 2,876,506.50 0.36 (132,827.69) 47800AAC4 JOHN DEERE OWNR TR 3.740% 2/16/27 97.63 3,140,000.0000 3,139,700.13 3,065,456.40 0.38 (74,243.73) 46647PBH8 JPMORGAN CHASE CO 2.005% 3/13/26 91.58 3,500,000.0000 3,602,345.00 3,205,300.00 0.40 (397,045.00) 46625HJH4 JPMORGAN CHASE CO 3.200% 1/25/23 99.68 2,000,000.0000 2,042,640.00 1,993,600.00 0.25 (49,040.00) 46647PAUO JPMORGAN CHASE CO 3.797% 7/23/24 98.63 2,500,000.0000 2,632,175.00 2,465,825.00 0.31 (166,350.00) 46647PCBO JPMORGAN CHASE CO SR 1.578% 4/22/27 86.33 5,000,000.0000 4,498,450.00 4,316,550.00 0.54 (181,900.00) 525ESCOY6 LEHMAN BRTH HLD ESC - 2,000,000.0000 1,016,889.29 - - (1,016,889.29) 525ESCIB7 LEHMAN BRTH MTN ES 0.00001% 1/24/13 0.37 600,000.0000 315,678.37 2,220.00 0.00 (313,458.37) 58769KAD6 MERCEDES BENZ AUTO 0.400% 11/15/24 96.52 3,315,000.0000 3,314,749.72 3,199,671.15 0.40 (115,078.57) 59217GER6 MET LIFE GLOB MTN 1.875% 1/11/27 87.30 5,920,000.0000 5,913,251.20 5,168,041.60 0.64 (745,209.60) 59217GEE5 MET LIFE GLOB MTN 1.950% 1/13/23 99.33 2,255,000.0000 2,259,126.65 2,239,846.40 0.28 (19,280.25) 58989V2D5 MET TOWER MTN 1.250% 9/14/26 86.01 3,745,000.0000 3,741,554.60 3,221,111.95 0.40 (520,442.65) 61747YEA9 MORGAN STANLEY 0.790% 5/30/25 92.04 8,885,000.0000 8,889,710.25 8,177,754.00 1.01 (711,956.25) 61744YAN8 MORGAN STANLEY MTN 3.125% 1/23/23 99.67 1,998,000.0000 1,997,154.18 1,991,446.56 0.25 (5,707.62) 55380TXV7 MUFG BANK LTD C D 0.300% 10/31/22 99.76 2,500,000.0000 2,479,919.65 2,493,975.00 0.31 14,055.35 65479JAD5 NISSAN AUTO 1.930% 7/15/24 99.62 927,926.1200 927,877.13 924,427.84 0.11 (3,449.29) 668151-2J7 NORTHWESTERN MTN 4.000% 7/01/25 97.40 7,485,000.0000 7,482,455.10 7,290,539.70 0.90 (191,915.40) 69353RFL7 PNC BANK NA MTN 3.500% 6/08/23 99.43 5,000,000.0000 4,993,318.05 4,971,500.00 0.62 (21,818.05) 747525AFO QUALCOMM INC 3.450% 5/20/25 96.80 8,000,000.0000 8,479,891.80 7,743,600.00 0.96 (736,291.80) 780151<71-11 ROYAL BANK OF MTN 1.150% 6/10/25 90.24 4,000,000.0000 4,013,620.00 3,609,520.00 0.45 (404,100.00) 78013XZU5 ROYAL BANK OF MTN 2.550% 7/16/24 95.89 6,500,000.0000 6,581,445.00 6,232,915.00 0.77 (348,530.00) 78012U3M5 ROYAL BK CDA N Y C D 1.350% 2/14/23 99.01 3,000,000.0000 3,000,000.00 2,970,270.00 0.37 (29,730.00) 3of5 Table of Contents U.S. Bank Asset Detail - Consolidated As of 09/30/2022 CUSIP Asset Short Name Price Shares/Units Cost Basis Market Value Percent of Total Unrealized Gain/Loss 78012UW43 ROYAL BK OF C D 0.270% 10/20/22 99.84 2,000,000.0000 1,986,927.04 1,996,860.00 0.25 9,932.96 78445JAA5 S L M A 2.71382% 4/25/23 99.21 8,482.4900 8,448.07 8,415.31 0.00 (32.76) 79466LAG9 SALESFORCE COM INC 0.625% 7/15/24 93.21 1,350,000.0000 1,349,311.50 1,258,348.50 0.16 (90,963.00) 808513BN4 SCHWAB CHARLES 0.750% 3/18/24 94.55 2,785,000.0000 2,783,607.50 2,633,161.80 0.33 (150,445.70) 86959RTWO SVENSKA C D 0.255% 10/14/22 99.89 6,000,000.0000 6,000,302.58 5,993,400.00 0.74 (6,902.58) 89114WJB2 TORONTO DOMINION C D 0.270% 10/20/22 99.84 2,000,000.0000 1,987,255.53 1,996,840.00 0.25 9,584.47 89114WW68 TORONTO DOMINION C D 2.680% 4/28/23 98.95 3,000,000.0000 3,000,000.00 2,968,380.00 0.37 (31,620.00) 89114TZN5 TORONTO DOMINION MTN 1.950% 1/12/27 87.00 2,000,000.0000 1,984,582.40 1,740,040.00 0.22 (244,542.40) 89114QCA4 TORONTO DOMINION MTN 2.650% 6/12/24 96.04 3,000,000.0000 3,000,570.00 2,881,110.00 0.36 (119,460.00) 89114TZT2 TORONTO DOMINION MTN 2.800% 3/10/27 90.10 5,000,000.0000 4,960,350.00 4,505,050.00 0.56 (455,300.00) 89237VAB5 TOYOTA AUTO RECV 0.440% 10/15/24 98.35 1,511,729.9900 1,511,613.60 1,486,756.21 0.18 (24,857.39) 89239CAC3 TOYOTA LEASE OWNER 0.420% 10/21/24 96.27 3,185,000.0000 3,184,957.00 3,066,167.65 0.38 (118,789.35) 89238LAC4 TOYOTA LEASE OWNER 1.960% 2/20/25 96.37 6,125,000.0000 6,124,035.93 5,902,785.00 0.73 (221,250.93) 89236TJZ9 TOYOTA MOTOR MTN 3.050% 3/22/27 92.09 2,000,000.0000 1,945,900.00 1,841,740.00 0.23 (104,160.00) 89236TJK2 TOYOTA MTR CR MTN 1.125% 6/18/26 87.48 7,285,000.0000 7,281,794.60 6,372,553.75 0.79 (909,240.85) 912828W UO U S TREASURY I P S 0.125% 7/15/24 96.58 12,976,808.0000 12,832,088.09 12,532,741.63 1.55 (299,346.46) 91282CFE6 U S TREASURY NT 3.125% 8/15/25 96.93 5,000,000.0000 4,826,171.88 4,846,500.00 0.60 20,328.12 91282CBG5 U S TREASURY NT 0.125% 1/31/23 98.84 60,000,000.0000 59,283,593.76 59,305,200.00 7.35 21,606.24 91282CBA8 U S TREASURY NT 0.125% 12/15/23 95.16 1,500,000.0000 1,498,007.81 1,427,340.00 0.18 (70,667.81) 91282CAM3 U S TREASURY NT 0.250% 9/30/25 88.88 6,500,000.0000 6,477,656.25 5,776,875.00 0.72 (700,781.25) 91282CBH3 U S TREASURY NT 0.375% 1/31/26 88.09 18,000,000.0000 17,781,875.00 15,855,480.00 1.97 (1,926,395.00) 912828ZL7 U S TREASURY NT 0.375% 4/30/25 90.58 12,000,000.0000 11,998,515.63 10,869,840.00 1.35 (1,128,675.63) 91282CCX7 U S TREASURY NT 0.375% 9/15/24 92.77 10,500,000.0000 10,377,363.28 9,740,850.00 1.21 (636,513.28) 91282CBC4 U S TREASURY NT 0.375% 12/31/25 88.43 10,000,000.0000 9,943,320.32 8,842,600.00 1.10 (1,100,720.32) 91282CBT7 U S TREASURY NT 0.750% 3/31/26 88.79 10,000,000.0000 9,943,359.37 8,879,300.00 1.10 (1,064,059.37) 91282CCF6 U S TREASURY NT 0.750% 5/31/26 88.31 7,500,000.0000 7,443,750.00 6,623,475.00 0.82 (820,275.00) 91282CCW9 U S TREASURY NT 0.750% 8/31/26 87.70 8,000,000.0000 7,874,375.01 7,015,920.00 0.87 (858,455.01) 91282CDR9 U S TREASURY NT 0.750% 12/31/23 95.73 5,000,000.0000 5,000,195.31 4,786,550.00 0.59 (213,645.31) 91282CDG3 U S TREASURY NT 1.125% 10/31/26 88.66 19,250,000.0000 19,119,013.68 17,067,050.00 2.12 (2,051,963.68) 912828Z78 U S TREASURY NT 1.500% 1/31/27 89.64 18,500,000.0000 17,870,410.15 16,583,585.00 2.06 (1,286,825.15) 91282CDZ1 U S TREASURY NT 1.500% 2/15/25 93.74 5,000,000.0000 4,812,890.63 4,686,900.00 0.58 (125,990.63) 912828YH7 U S TREASURY NT 1.500% 9/30/24 94.80 14,000,000.0000 13,859,296.88 13,272,140.00 1.65 (587,156.88) 912828XX3 U S TREASURY NT 2.000% 6/30/24 96.16 5,000,000.0000 5,028,710.94 4,807,800.00 0.60 (220,910.94) 912828W48 U S TREASURY NT 2.125% 2/29/24 97.00 10,000,000.0000 9,911,718.75 9,700,000.00 1.20 (211,718.75) 912828U57 U S TREASURY NT 2.125% 11/30/23 97.58 4,000,000.0000 3,937,343.74 3,903,120.00 0.48 (34,223.74) 9128283,17 U S TREASURY NT 2.125% 11/30/24 95.59 16,500,000.0000 16,783,886.72 15,771,690.00 1.96 (1,012,196.72) 912828V80 U S TREASURY NT 2.250% 1/31/24 97.34 7,500,000.0000 7,491,503.91 7,300,200.00 0.91 (191,303.91) 912828WJ5 U S TREASURY NT 2.500% 5/15/24 97.13 7,000,000.0000 7,193,046.88 6,799,310.00 0.84 (393,736.88) 91282CEN7 U S TREASURY NT 2.750% 4/30/27 94.37 17,000,000.0000 16,417,148.43 16,043,070.00 1.99 (374,078.43) 91282CEW7 U S TREASURY NT 3.250% 6/30/27 96.38 20,500,000.0000 20,645,273.45 19,756,875.00 2.45 (888,398.45) 911312AQ9 UNITED PARCEL SVC 2.450% 10/01/22 1.00 2,400,000.0000 2,407,152.00 2,400,000.00 0.30 (7,152.00) 91324PEC2 UNITEDHEALTH 1.150% 5/15/26 88.50 4,000,000.0000 3,904,703.05 3,539,920.00 0.44 (364,783.05) 4of5 Table of Contents U.S. Bank Asset Detail - Consolidated As of 09/30/2022 CUSIP Asset Short Name Price Shares/Units Cost Basis Market Value Percent of Total Unrealized Gain/Loss 90331HPL1 US BANK NA MTN 2.050% 1/21/25 94.15 7,270,000.0000 7,254,514.90 6,844,486.90 0.85 (410,028.00) 92348KAV5 VERIZON MASTER TR 3.720% 7/20/27 99.02 2,750,000.0000 2,749,879.00 2,723,022.50 0.34 (26,856.50) 927804FN9 VIRGINIA ELEC PWR 2.750% 3/15/23 99.00 2,000,000.0000 2,003,940.00 1,980,080.00 0.25 (23,860.00) 927804GH1 VIRGINIA ELEC PWR CO 3.750% 5/15/27 94.40 5,735,000.0000 5,736,523.40 5,413,782.65 0.67 (322,740.75) 931142ERO WALMART INC 1.050% 9/17/26 87.26 1,725,000.0000 1,721,739.75 1,505,148.75 0.19 (216,591.00) 931142EX7 WALMART INC 3.950% 9/09/27 97.08 4,995,000.0000 4,989,807.70 4,849,295.85 0.60 (140,511.85) 96130ALA4 WESTPAC BKG C D 0.300% 10/26/22 99.79 4,000,000.0000 3,974,475.71 3,991,760.00 0.49 17,284.29 Fixed Income Total 843,434,315.4100 842,139,453.26 792,022,608.02 98.20 (50,116,845.24) Grand Total 857,969,763.5700 856,592,573.64 806,517,356.18 100.00 (50,075,217.46) 61178 i Table of Contents Transaction Type Acquisitions PURCHASED PAR VALUE OF NORTHWESTERN MUTUAL 4.000% 7/01/25 /J.P. MORGAN SECURITIES LLC/XOFF 7,485,000 PAR VALUE AT 99.966 % PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED PAR VALUE OF JOHN DEERE OWNR TR 0.00001% 2/16/27 /RBC CAPITAL MARKETS, LLC/3,140,000 PAR VALUE AT 99.99045 % PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED PAR VALUE OF U S TREASURY BILL 11/22/22 /NOMURA SECURITIES INTERNATIONA/10,000,000 PAR VALUE AT 99.1767222 % PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z U.S. Bank Transaction History 07/01 /22 - 09/30/22 Entry Date CUSIP Id Net Cash Amt Price Units Cost Gain Loss 7/1/2022 668151-2J7 (7,482,455.10) 0.999660 7,485,000.00 7,482,455.10 0.00 7/5/2022 31846V567 (6,153.26) 1.000000 6,153.26 6,153.26 0.00 7/5/2022 31846V567 (3,489.88) 1.000000 3,489.88 3,489.88 0.00 7/7/2022 31846V567 (81,250.00) 1.000000 81,250.00 81,250.00 0.00 7/11/2022 31846V567 (33,000.00) 1.000000 33,000.00 33,000.00 0.00 7/11/2022 31846V567 (63,968.75) 1.000000 63,968.75 63,968.75 0.00 7/12/2022 31846V567 (19,500.00) 1.000000 19,500.00 19,500.00 0.00 7/13/2022 31846V567 (21,986.25) 1.000000 21,986.25 21,986.25 0.00 7/13/2022 31846V567 (45,000.00) 1.000000 45,000.00 45,000.00 0.00 7/14/2022 31846V567 (14,576.25) 1.000000 14,576.25 14,576.25 0.00 7/15/2022 31846V567 (469,020.31) 1.000000 469,020.31 469,020.31 0.00 7/15/2022 31846V567 (9,096.29) 1.000000 9,096.29 9,096.29 0.00 7/18/2022 31846V567 (5,307.50) 1.000000 5,307.50 5,307.50 0.00 7/18/2022 31846V567 (3,000,000.00) 1.000000 3,000,000.00 3,000,000.00 0.00 7/18/2022 31846V567 (5,103,479.17) 1.000000 5,103,479.17 5,103,479.17 0.00 7/18/2022 31846V567 (202,426.38) 1.000000 202,426.38 202,426.38 0.00 7/19/2022 31846V567 (2,500,000.00) 1.000000 2,500,000.00 2,500,000.00 0.00 7/20/2022 47800AAC4 (3,139,700.13) 0.999905 3,140,000.00 3,139,700.13 0.00 7/21/2022 31846V567 (83,948.75) 1.000000 83,948.75 83,948.75 0.00 7/21/2022 31846V567 (2,040.46) 1.000000 2,040.46 2,040.46 0.00 7/25/2022 31846V567 (32,000.00) 1.000000 32,000.00 32,000.00 0.00 7/25/2022 31846V567 (156,631.71) 1.000000 156,631.71 156,631.71 0.00 7/25/2022 31846V567 (38,203.90) 1.000000 38,203.90 38,203.90 0.00 7/26/2022 31846V567 (46,250.00) 1.000000 46,250.00 46,250.00 0.00 7/27/2022 31846V567 (14,661.25) 1.000000 14,661.25 14,661.25 0.00 7/28/2022 31846V567 (10,000,000.00) 1.000000 10,000,000.00 10,000,000.00 0.00 7/29/2022 912796YR4 (9,917,672.22) 0.991767 10,000,000.00 9,917,672.22 0.00 8/1/2022 31846V567 (42,063,750.00) 1.000000 42,063,750.00 42,063,750.00 0.00 8/1/2022 31846V567 (256,875.00) 1.000000 256,875.00 256,875.00 0.00 8/2/2022 31846V567 (5,503.83) 1.000000 5,503.83 5,503.83 0.00 1 of 25 Table of Contents Transaction Type PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED PAR VALUE OF U S TREASURY NT 3.000% 6/30/27 /J.P. MORGAN SECURITIES LLC/6,000,000 PAR VALUE AT 101.2421875 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED PAR VALUE OF U S TREASURY NT 3.000% 6/30/27 /CITIGROUP GLOBAL MARKETS INC./6,000,000 PAR VALUE AT 101.18359383 % PURCHASED PAR VALUE OF VERIZON MASTER TR 3.560% 7/20/27 /BOFA SECURITIES, INC./FXD INC/2,750,000 PAR VALUE AT 99.9956 % PURCHASED PAR VALUE OF VIRGINIA ELEC PWR CO 3.750% 5/15/27 /US BANCORP INVESTMENTS INC./2,735,000 PAR VALUE AT 100.079 % PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED PAR VALUE OF CATERPILLAR FINL MTN 3.600% 8/12/27 /TRUIST SECURITIES, INC./2,000,000 PAR VALUE AT 99.715 % PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED PAR VALUE OF MORGAN STANLEY MTN 3.125% 1/23/23 /PERSHING LLC/1,110,000 PAR VALUE AT 99.919 % PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED PAR VALUE OF JPMORGAN CHASE CO SR 1.578% 4/22/27 /CITIGROUP GLOBAL MARKETS INC./5,000,000 PAR VALUE AT 89.969 % PURCHASED PAR VALUE OF MORGAN STANLEY MTN 3.125% 1/23/23 /MARKETAXESS CORP/MTXX 888,000 PAR VALUE AT 100.006 % PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED PAR VALUE OF U S TREASURY NT 3.000% 6/30/27 /BMO CAPITAL MARKETS CORP/BONDS/XOFF 5,000,000 PAR VALUE AT 100.2460938 % PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z U.S. Bank Transaction History 07/01 /22 - 09/30/22 Entry Date CUSIP Id Net Cash Amt Price Units Cost Gain Loss 8/2/2022 31846V567 (2,647.34) 1.000000 2,647.34 2,647.34 0.00 8/5/2022 31846V567 (62,500.00) 1.000000 62,500.00 62,500.00 0.00 8/8/2022 91282CEW7 (6,074,531.25) 1.012422 6,000,000.00 6,074,531.25 0.00 8/9/2022 31846V567 (49,025.00) 1.000000 49,025.00 49,025.00 0.00 8/10/2022 91282CEW7 (6,071,015.63) 1.011836 6,000,000.00 6,071,015.63 0.00 8/11/2022 92348KAV5 (2,749,879.00) 0.999956 2,750,000.00 2,749,879.00 0.00 8/11/2022 927804GH1 (2,737,160.65) 1.000790 2,735,000.00 2,737,160.65 0.00 8/12/2022 31846V567 (92,512.50) 1.000000 92,512.50 92,512.50 0.00 8/15/2022 31846V567 (493,782.89) 1.000000 493,782.89 493,782.89 0.00 8/15/2022 31846V567 (3,941.13) 1.000000 3,941.13 3,941.13 0.00 8/16/2022 31846V567 (8,654.84) 1.000000 8,654.84 8,654.84 0.00 8/18/2022 31846V567 (190,057.08) 1.000000 190,057.08 190,057.08 0.00 8/18/2022 31846V567 (967,933.60) 1.000000 967,933.60 967,933.60 0.00 8/19/2022 14913R3A3 (1,994,300.00) 0.997150 2,000,000.00 1,994,300.00 0.00 8/22/2022 31846V567 (103,152.02) 1.000000 103,152.02 103,152.02 0.00 8/22/2022 31846V567 (30,653.36) 1.000000 30,653.36 30,653.36 0.00 8/24/2022 61744YAN8 (1,109,100.90) 0.999190 1,110,000.00 1,109,100.90 0.00 8/24/2022 31846V567 (960,082.82) 1.000000 960,082.82 960,082.82 0.00 8/25/2022 46647PCBO (4,498,450.00) 0.899690 5,000,000.00 4,498,450.00 0.00 8/25/2022 61744YAN8 (888,053.28) 1.000060 888,000.00 888,053.28 0.00 8/25/2022 31846V567 (34,979.05) 1.000000 34,979.05 34,979.05 0.00 8/26/2022 91282CEW7 (5,012,304.69) 1.002461 5,000,000.00 5,012,304.69 0.00 8/26/2022 31846V567 (5,000,000.00) 1.000000 5,000,000.00 5,000,000.00 0.00 8/29/2022 31846V567 (30,000.00) 1.000000 30,000.00 30,000.00 0.00 2of25 Table of Contents Transaction Type PURCHASED PAR VALUE OF U S TREASURY NT 3.000% 6/30/27 /BMO CAPITAL MARKETS CORP/BONDS/XOFF 3,500,000 PAR VALUE AT 99.64062514 % PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED PAR VALUE OF WALMART INC 3.950% 9/09/27 /BARCLAYS CAPITAL INC. FIXED IN/2,885,000 PAR VALUE AT 99.978 % PURCHASED PAR VALUE OF WALMART INC 3.950% 9/09/27 /BARCLAYS CAPITAL INC. FIXED IN/2,885,000 PAR VALUE AT 99.978 % PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED PAR VALUE OF CATERPILLAR FINL MTN 3.600% 8/12/27 /BMO CAPITAL MARKETS CORP/BONDS/1,250,000 PAR VALUE AT 97.501 % PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED PAR VALUE OF DEERE JOHN MTN 4.150% 9/15/27 /TD SECURITIES (USA)/MTXX 2,000,000 PAR VALUE AT 98.631 % PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED PAR VALUE OF U S TREASURY NT 2.750% 4/30/27 /CITIGROUP GLOBAL MARKETS INC./XOFF 5,000,000 PAR VALUE AT 93.84375 % U.S. Bank Transaction History 07/01 /22 - 09/30/22 Entry Date CUSIP Id Net Cash Amt Price Units Cost Gain Loss 8/31/2022 91282CEW7 (3,487,421.88) 0.996406 3,500,000.00 3,487,421.88 0.00 8/31/2022 31846V567 (2,512,326.68) 1.000000 2,512,326.68 2,512,326.68 0.00 9/2/2022 31846V567 (8,091.17) 1.000000 8,091.17 8,091.17 0.00 9/2/2022 31846V567 (2,937.28) 1.000000 2,937.28 2,937.28 0.00 9/6/2022 31846V567 (146,962.50) 1.000000 146,962.50 146,962.50 0.00 9/8/2022 31846V567 (168,750.00) 1.000000 168,750.00 168,750.00 0.00 9/9/2022 931142EX7 (2,105,442.40) 0.997840 2,110,000.00 2,105,442.40 0.00 9/9/2022 931142EX7 (2,884,365.30) 0.999780 2,885,000.00 2,884,365.30 0.00 9/12/2022 31846V567 (70,000.00) 1.000000 70,000.00 70,000.00 0.00 9/13/2022 14913R3A3 (1,218,762.50) 0.975010 1,250,000.00 1,218,762.50 0.00 9/13/2022 31846V567 (1,626,441.67) 1.000000 1,626,441.67 1,626,441.67 0.00 9/14/2022 31846V567 (124,828.13) 1.000000 124,828.13 124,828.13 0.00 9/14/2022 31846V567 (4,500,000.00) 1.000000 4,500,000.00 4,500,000.00 0.00 9/15/2022 31846V567 (27,500.00) 1.000000 27,500.00 27,500.00 0.00 9/15/2022 31846V567 (427,104.35) 1.000000 427,104.35 427,104.35 0.00 9/15/2022 31846V567 (180,271.33) 1.000000 180,271.33 180,271.33 0.00 9/16/2022 31846V567 (8,654.84) 1.000000 8,654.84 8,654.84 0.00 9/19/2022 31846V567 (223,759.08) 1.000000 223,759.08 223,759.08 0.00 9/20/2022 31846V567 (12,507.19) 1.000000 12,507.19 12,507.19 0.00 9/20/2022 31846V567 (27,680.59) 1.000000 27,680.59 27,680.59 0.00 9/21 /2022 31846V567 (105,184.61) 1.000000 105,184.61 105,184.61 0.00 9/22/2022 24422EWK1 (1,972,620.00) 0.986310 2,000,000.00 1,972,620.00 0.00 9/23/2022 31846V567 (8,022.22) 1.000000 8,022.22 8,022.22 0.00 9/23/2022 31846V567 (4,000,000.00) 1.000000 4,000,000.00 4,000,000.00 0.00 9/23/2022 31846V567 (41,300.00) 1.000000 41,300.00 41,300.00 0.00 9/26/2022 31846V567 (35,402.67) 1.000000 35,402.67 35,402.67 0.00 9/26/2022 31846V567 (25,254.46) 1.000000 25,254.46 25,254.46 0.00 9/27/2022 91282CEN7 (4,692,187.50) 0.938438 5,000,000.00 4,692,187.50 0.00 3of25 Table of Contents Transaction Type PURCHASED PAR VALUE OF U S TREASURY NT 3.125% 8/15/25 /J.P. MORGAN SECURITIES LLC/XOFF 5,000,000 PAR VALUE AT 96.5234376 % PURCHASED PAR VALUE OF F H L M C M T N 0.250% 6/26/23 /MARKETAXESS CORP/MTXX 1,250,000 PAR VALUE AT 97.131 % PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z PURCHASED PAR VALUE OF F H L B DISC NTS 12/12/22 /WELLS FARGO SECURITIES, LLC/XOFF 5,000,000 PAR VALUE AT 99.3319444 % PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z Total Acquisitions Dispositions SOLD UNITS OF FIRST AM GOVT OB FD CL Z SOLD UNITS OF FIRST AM GOVT OB FD CL Z PAID DOWN PAR VALUE OF F H L M C #786064 2.262% 1/01/28 JUNE FHLMC DUE 7/15/22 PAID DOWN PAR VALUE OF F H L M C MLTCL MTG 3.725% 8/15/32 PAID DOWN PAR VALUE OF JOHN DEERE OWNER 0.510% 11/15/24 PAID DOWN PAR VALUE OF NISSAN AUTO 1.930% 7/15/24 PAID DOWN PAR VALUE OF TOYOTA AUTO RECV 0.440% 10/15/24 MATURED PAR VALUE OF COOPERATIEVE C D 0.330% 7/18/22 3,000,000 PAR VALUE AT 100 % PAID DOWN PAR VALUE OF HONDA AUTO 0.370% 10/18/24 SOLD PAR VALUE OF F H L B DEB 3.250% 6/09/23 /NOMURA SECURITIES INTERNATIONA/5,000,000 PAR VALUE AT 100.06 % MATURED PAR VALUE OF U S TREASURY BILL 7/19/22 2,500,000 PAR VALUE AT 100 % PAID DOWN PAR VALUE OF G N M A I 1 #080023 1.750% 12/20/26 JUNE GNMA DUE 7/20/22 PAID DOWN PAR VALUE OF G N M A 1 1 #080088 2.000% 6/20/27 JUNE GNMA DUE 7/20/22 PAID DOWN PAR VALUE OF G N M A 1 1 #080395 1.875% 4/20/30 JUNE GNMA DUE 7/20/22 PAID DOWN PAR VALUE OF G N M A 1 1 #080408 1.875% 5/20/30 JUNE GNMA DUE 7/20/22 PAID DOWN PAR VALUE OF G N M A 1 1 #080965 1.625% 7/20/34 JUNE GNMA DUE 7/20/22 SOLD UNITS OF FIRST AM GOVT OB FD CL Z PAID DOWN PAR VALUE OF F H L M C MLTCL MT 9.50001% 9/25/43 U.S. Bank Transaction History 07/01 /22 - 09/30/22 Entry Date CUSIP Id Net Cash Amt Price Units Cost Gain Loss 9/28/2022 91282CFE6 (4,826,171.88) 0.965234 5,000,000.00 4,826,171.88 0.00 9/29/2022 3137EAES4 (1,214,137.50) 0.971310 1,250,000.00 1,214,137.50 0.00 9/29/2022 31846V567 (26,785,055.21) 1.000000 26,785,055.21 26,785,055.21 0.00 9/30/2022 313385580 (4,966,597.22) 0.993319 5,000,000.00 4,966,597.22 0.00 9/30/2022 31846V567 (150,625.00) 1.000000 150,625.00 150,625.00 0.00 (192,569,028.58) 193,629,699.55 192,569,028.58 - 7/1 /2022 7/12/2022 7/15/2022 7/15/2022 7/15/2022 7/15/2022 7/15/2022 7/18/2022 7/18/2022 7/18/2022 7/19/2022 7/20/2022 7/20/2022 31846V567 31846V567 31348SWZ3 3133TCE95 47787NAC3 65479JAD5 89237VAB5 21684XUU8 43813KAC6 313383QR5 912796X20 36225CAZ9 36225CC20 7,482,455.10 451.19 20.93 45.20 55,263.05 180,598.57 161,637.34 3,000,000.00 192,938.54 5,003,000.00 2,494,714.69 1.000000 1.000000 0.000000 0.000000 0.000000 0.000000 0.000000 1.000000 0.000000 1.000600 1.000000 170.65 0.000000 112.02 0.000000 7/20/2022 36225CNM4 36.22 0.000000 7/20/2022 36225CN28 1,037.00 0.000000 7/20/2022 36225DCB8 540.45 0.000000 7/20/2022 31846V567 3,109,987.73 1.000000 7/25/2022 31394JY35 9,601.87 1.134585 (7,482,455.10) (451.19) (20.93) (45.20) (55,263.05) (180,598.57) (161,637.34) (3,000,000.00) (192,938.54) (5,000,000.00) (2,500,000.00) (170.65) (112.02) (36.22) (1,037.00) (540.45) (3,109,987.73) (9,601.87) (7,482,455.10) (451.19) (20.42) (45.25) (55,254.63) (180,589.03) (161,624.89) (3,000,000.00) (192,910.20) (5,083,350.00) (2,494,714.69) (173.47) (114.47) (35.89) (1,026.47) (540.11) (3,109,987.73) (10,874.12) 0.00 0.00 0.51 (0.05) 8.42 9.54 12.45 0.00 28.34 (80,350.00) 0.00 (2.82) (2.45) 0.33 10.53 0.34 0.00 (1,272.25) 4of25 Table of Contents Transaction Type PAID DOWN PAR VALUE OF F N M A #257179 4.500% 4/01/28 JUNE FNMA DUE 7/25/22 PAID DOWN PAR VALUE OF F N M A #357969 5.000% 9/01/35 JUNE FNMA DUE 7/25/22 PAID DOWN PAR VALUE OF F N M A #745580 5.000% 6/01/36 JUNE FNMA DUE 7/25/22 PAID DOWN PAR VALUE OF F N M A #748678 5.000% 10/01/33 JUNE FNMA DUE 7/25/22 PAID DOWN PAR VALUE OF F N M A #815971 5.000% 3/01/35 JUNE FNMA DUE 7/25/22 PAID DOWN PAR VALUE OF F N M A #823358 1.973% 2/01/35 JUNE FNMA DUE 7/25/22 PAID DOWN PAR VALUE OF F N M A #826080 5.000% 7/01/35 JUNE FNMA DUE 7/25/22 PAID DOWN PAR VALUE OF F N M A #888336 5.000% 7/01/36 JUNE FNMA DUE 7/25/22 PAID DOWN PAR VALUE OF F N M A #AL0869 4.500% 6/01/29 JUNE FNMA DUE 7/25/22 PAID DOWN PAR VALUE OF F N M A #MA0022 4.500% 4/01/29 JUNE FNMA DUE 7/25/22 PAID DOWN PAR VALUE OF F N M A GTD REMIC 2.472% 2/25/41 PAID DOWN PAR VALUE OF S L M A 2.71382% 4/25/23 MATURED PAR VALUE OF U S TREASURY BILL 7/28/22 10,000,000 PAR VALUE AT 100 % SOLD UNITS OF FIRST AM GOVT OB FD CL Z MATURED PAR VALUE OF U S TREASURY NT 0.125% 7/31/22 42,000,000 PAR VALUE AT 100 % SOLD UNITS OF FIRST AM GOVT OB FD CL Z SOLD PAR VALUE OF U S TREASURY NT 2.500% 3/31/23 /J.P. MORGAN SECURITIES LLC/5,000,000 PAR VALUE AT 99.6132812 % SOLD UNITS OF FIRST AM GOVT OB FD CL Z SOLD PAR VALUE OF U S TREASURY NT 1.625% 5/31/23 /NOMURA SECURITIES INTERNATIONA/1,000,000 PAR VALUE AT 98.742188 % SOLD PAR VALUE OF U S TREASURY NT 2.125% 11/30/23 /BMO CAPITAL MARKETS CORP/BONDS/5,000,000 PAR VALUE AT 98.5429688 SOLD UNITS OF FIRST AM GOVT OB FD CL Z SOLD PAR VALUE OF BERKSHIRE HATHAWAY 2.750% 3/15/23 /PERSHING LLC/2,500,000 PAR VALUE AT 99.72 % SOLD PAR VALUE OF U S TREASURY NT 0.125% 12/15/23 /WELLS FARGO SECURITIES, LLC/500,000 PAR VALUE AT 96.042968 % U.S. Bank Transaction History 07/01 /22 - 09/30/22 Entry Date CUSIP Id Net Cash Amt Price Units Cost Gain Loss 7/25/2022 31371NUC7 101.85 0.000000 (101.85) (107.72) (5.87) 7/25/2022 31376KT22 2,304.45 0.000000 (2,304.45) (2,477.28) (172.83) 7/25/2022 31403DJZ3 604.93 0.000000 (604.93) (650.30) (45.37) 7/25/2022 31403GXF4 4.20 0.000000 (4.20) (4.51) (0.31) 7/25/2022 31406PQY8 2,188.53 0.000000 (2,188.53) (2,352.67) (164.14) 7/25/2022 31406XWT5 270.92 0.000000 (270.92) (268.80) 2.12 7/25/2022 31407BXH7 61.53 0.000000 (61.53) (66.14) (4.61) 7/25/2022 31410F4V4 1,042.14 0.000000 (1,042.14) (1,120.30) (78.16) 7/25/2022 3138EG6F6 80.77 0.000000 (80.77) (85.42) (4.65) 7/25/2022 31417YAY3 159.19 0.000000 (159.19) (168.36) (9.17) 7/25/2022 31397QRE0 1,367.47 0.000000 (1,367.47) (1,367.04) 0.43 7/25/2022 78445JAA5 380.79 0.000000 (380.79) (379.24) 1.55 7/28/2022 912796559 9,974,739.48 1.000000 (10,000,000.00) (9,974,739.48) 0.00 7/29/2022 31846V567 9,917,672.22 1.000000 (9,917,672.22) (9,917,672.22) 0.00 8/1/2022 91282CAC5 42,000,000.00 1.000000 (42,000,000.00) (41,962,539.06) 37,460.94 8/1/2022 31846V567 45,000,000.00 1.000000 (45,000,000.00) (45,000,000.00) 0.00 8/8/2022 9128284D9 4,980,664.06 0.996133 (5,000,000.00) (4,930,820.31) 49,843.75 8/8/2022 31846V567 1,070,134.04 1.000000 (1,070,134.04) (1,070,134.04) 0.00 8/10/2022 912828R69 987,421.88 0.987422 (1,000,000.00) (951,445.31) 35,976.57 8/10/2022 912828U57 4,927,148.44 0.985430 (5,000,000.00) (4,900,976.57) 26,171.87 8/10/2022 31846V567 154,407.19 1.000000 (154,407.19) (154,407.19) 0.00 8/11/2022 084670BR8 2,493,000.00 0.997200 (2,500,000.00) (2,440,950.00) 52,050.00 8/11/2022 91282CBA8 480,214.84 0.960430 (500,000.00) (499,335.94) (19,121.10) 5of25 Table of Contents Transaction Type SOLD UNITS OF FIRST AM GOVT OB FD CL Z PAID DOWN PAR VALUE OF F H L M C #786064 2.262% 1/01/28 JULY FHLMC DUE 8/15/22 PAID DOWN PAR VALUE OF F H L M C MLTCL MTG 3.730% 8/15/32 PAID DOWN PAR VALUE OF JOHN DEERE OWNER 0.510% 11/15/24 PAID DOWN PAR VALUE OF NISSAN AUTO 1.930% 7/15/24 PAID DOWN PAR VALUE OF TOYOTA AUTO RECV 0.440% 10/15/24 PAID DOWN PAR VALUE OF HONDA AUTO 0.370% 10/18/24 SOLD PAR VALUE OF MERCK CO INC 2.800% 5/18/23 /MARKETAXESS CORP/965,000 PAR VALUE AT 99.604 % SOLD PAR VALUE OF MERCK CO INC 2.800% 5/18/23 /J.P. MORGAN SECURITIES LLC/1,035,000 PAR VALUE AT 99.576 % SOLD UNITS OF FIRST AM GOVT OB FD CL Z PAID DOWN PAR VALUE OF G N M A 1 1 #080023 1.750% 12/20/26 JULY GNMA DUE 8/20/22 PAID DOWN PAR VALUE OF G N M A 1 1 #080088 3.000% 6/20/27 JULY GNMA DUE 8/20/22 PAID DOWN PAR VALUE OF G N M A 1 1 #080395 2.875% 4/20/30 JULY GNMA DUE 8/20/22 PAID DOWN PAR VALUE OF G N M A 1 1 #080408 2.875% 5/20/30 JULY GNMA DUE 8/20/22 PAID DOWN PAR VALUE OF G N M A 1 1 #080965 1.625% 7/20/34 JULY GNMA DUE 8/20/22 PAID DOWN PAR VALUE OF HONDA AUTO 0.270% 4/21/25 SOLD PAR VALUE OF U S TREASURY NT 0.125% 12/15/23 /BMO CAPITAL MARKETS CORP/BONDS/XOFF 1,000,000 PAR VALUE AT 95.984375 % SOLD UNITS OF FIRST AM GOVT OB FD CL Z PAID DOWN PAR VALUE OF F H L M C MLTCL MT 9.50001% 9/25/43 PAID DOWN PAR VALUE OF F N M A #257179 4.500% 4/01/28 JULY FNMA DUE 8/25/22 PAID DOWN PAR VALUE OF F N M A #357969 5.000% 9/01/35 JULY FNMA DUE 8/25/22 PAID DOWN PAR VALUE OF F N M A #745580 5.000% 6/01/36 JULY FNMA DUE 8/25/22 PAID DOWN PAR VALUE OF F N M A #748678 5.000% 10/01/33 JULY FNMA DUE 8/25/22 PAID DOWN PAR VALUE OF F N M A #815971 5.000% 3/01/35 JULY FNMA DUE 8/25/22 U.S. Bank Transaction History 07/01 /22 - 09/30/22 Entry Date 8/11 /2022 8/15/2022 8/15/2022 8/15/2022 8/15/2022 8/15/2022 8/18/2022 8/18/2022 8/19/2022 CUSIP Id 31846V567 31348SWZ3 3133TCE95 47787NAC3 65479JAD5 89237VAB5 43813KAC6 58933YAF2 58933YAF2 8/19/2022 31846V567 8/22/2022 36225CAZ9 8/22/2022 36225CC20 8/22/2022 36225CNM4 8/22/2022 36225CN28 8/22/2022 36225DCB8 8/22/2022 43813GAC5 8/24/2022 91282CBA8 Net Cash Amt 2,506,073.13 30.28 39.35 69,193.67 159,830.84 153,717.92 189,283.57 961,178.60 1,030,611.60 957,762.90 144.90 Price 1.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.996040 0.995760 1.000000 0.000000 114.72 0.000000 33.24 0.000000 266.33 0.000000 572.12 0.000000 102,790.89 0.000000 959,843.75 0.959844 Units (2,506,073.13) (30.28) (39.35) (69,193.67) (159,830.84) (153,717.92) (189,283.57) (965,000.00) (1,035,000.00) (957,762.90) (144.90) (114.72) (33.24) (266.33) (572.12) (102,790.89) (1,000,000.00) Cost (2,506,073.13) (29.54) (39.39) (69,183.12) (159,822.40) (153,706.08) (189,255.76) (940,218.80) (1,008,421.20) (957,762.90) (147.29) (117.23) (32.94) (263.62) (571.76) (102, 789.01) (998,671.88) Gain Loss 0.00 0.74 (0.04) 10.55 8.44 11.84 27.81 20,959.80 22,190.40 0.00 (2.39) (2.51) 0.30 2.71 0.36 1.88 (38,828.13) 8/24/2022 31846V567 1,112,087.88 1.000000 (1,112,087.88) (1,112,087.88) 0.00 8/25/2022 31394JY35 6,429.03 0.336091 (6,429.03) (7,280.88) (851.85) 8/25/2022 31371 NUC7 103.44 0.000000 (103.44) (109.40) (5.96) 8/25/2022 31376KT22 569.01 0.000000 (569.01) (611.69) (42.68) 8/25/2022 31403DJZ3 1,170.93 0.000000 (1,170.93) (1,258.75) (87.82) 8/25/2022 31403GXF4 4.22 0.000000 (4.22) (4.54) (0.32) 8/25/2022 31406PQY8 1,473.01 0.000000 (1,473.01) (1,583.49) (110.48) 6of25 Table of Contents U.S. Bank Transaction History 07/01 /22 - 09/30/22 Transaction Type Entry Date CUSIP Id Net Cash Amt Price Units Cost Gain Loss PAID DOWN PAR VALUE OF F N M A #823358 1.973% 2/01/35 JULY 8/25/2022 31406XWT5 11,716.44 0.000000 (11,716.44) (11,624.90) 91.54 FNMA DUE 8/25/22 PAID DOWN PAR VALUE OF F N M A #826080 5.000% 7/01/35 JULY 8/25/2022 31407BXH7 315.56 0.000000 (315.56) (339.23) (23.67) FNMA DUE 8/25/22 PAID DOWN PAR VALUE OF F N M A #888336 5.000% 7/01/36 JULY 8/25/2022 31410F4V4 840.56 0.000000 (840.56) (903.60) (63.04) FNMA DUE 8/25/22 PAID DOWN PAR VALUE OF F N M A #AL0869 4.500% 6/01/29 JULY 8/25/2022 3138EG6F6 69.74 0.000000 (69.74) (73.76) (4.02) FNMA DUE 8/25/22 PAID DOWN PAR VALUE OF F N M A #MA0022 4.500% 4/01/29 JULY 8/25/2022 31417YAY3 176.94 0.000000 (176.94) (187.13) (10.19) FNMA DUE 8/25/22 PAID DOWN PAR VALUE OF F N M A GTD REMIC 2.472% 2/25/41 8/25/2022 31397QRE0 931.64 0.000000 (931.64) (931.35) 0.29 SOLD PAR VALUE OF JP MORGAN CHASE CO 2.700% 5/18/23 8/25/2022 46625HRL6 2,574,763.40 0.996040 (2,585,000.00) (2,476,714.35) 98,049.05 /MORGAN STANLEY & CO. LLC/MTXX 2,585,000 PAR VALUE AT 99.604 % SOLD UNITS OF FIRST AM GOVT OB FD CL Z 8/25/2022 31846V567 890,519.95 1.000000 (890,519.95) (890,519.95) 0.00 SOLD UNITS OF FIRST AM GOVT OB FD CL Z 8/25/2022 31846V567 1,888,363.68 1.000000 (1,888,363.68) (1,888,363.68) 0.00 MATURED PAR VALUE OF F Al62H L B DISC NTS 0.00001 % 8/26/22 8/26/2022 313385D45 4,985,212.50 1.000000 (5,000,000.00) (4,985,212.50) 0.00 5,000,000 PAR VALUE AT 100 % SOLD PAR VALUE OF U S TREASURY NT 0.125% 12/15/23 8/26/2022 91282CBA8 2,397,949.22 0.959180 (2,500,000.00) (2,496,679.69) (98,730.47) /CITIGROUP GLOBAL MARKETS INC./XOFF 2,500,000 PAR VALUE AT 95.9179688 % SOLD PAR VALUE OF U S TREASURY NT 2.125% 11/30/23 /NOMURA 8/26/2022 912828U57 2,462,695.31 0.985078 (2,500,000.00) (2,450,488.28) 12,207.03 SECURITIES INTERNATIONA/XOFF 2,500,000 PAR VALUE AT 98.5078124 % SOLD UNITS OF FIRST AM GOVT OB FD CL Z 8/26/2022 31846V567 163,587.18 1.000000 (163,587.18) (163,587.18) 0.00 SOLD UNITS OF FIRST AM GOVT OB FD CL Z 8/29/2022 31846V567 30,000.00 1.000000 (30,000.00) (30,000.00) 0.00 SOLD PAR VALUE OF JP MORGAN CHASE CO 2.700% 5/18/23 8/31/2022 46625HRL6 1,113,784.00 0.994450 (1,120,000.00) (1,104,443.20) 9,340.80 /GOLDMAN SACHS & CO. LLC/MTXX 1,120,000 PAR VALUE AT 99.445 % SOLD PAR VALUE OF JP MORGAN CHASE CO 2.700% 5/18/23 8/31/2022 46625HRL6 1,288,266.00 0.994800 (1,295,000.00) (1,240,752.45) 47,513.55 /MARKETAXESS CORP/MTXX 1,295,000 PAR VALUE AT 99.48 % SOLD PAR VALUE OF U S TREASURY NT 2.125% 11/30/23 /NOMURA 8/31/2022 912828U57 3,443,261.72 0.983789 (3,500,000.00) (3,434,824.22) 8,437.50 SECURITIES INTERNATIONA/XOFF 3,500,000 PAR VALUE AT 98.37890629 % SOLD PAR VALUE OF WALMART INC 3.400% 6/26/23 /MITSUBISHI 9/9/2022 931142EK5 3,873,986.00 0.998450 (3,880,000.00) (3,878,991.40) (5,005.40) UFJ SECURITIES USA/MTXX 3,880,000 PAR VALUE AT 99.845 % SOLD UNITS OF FIRST AM GOVT OB FD CL Z 9/9/2022 31846V567 1,089,071.26 1.000000 (1,089,071.26) (1,089,071.26) 0.00 SOLD PAR VALUE OF CHARLES SCHWAB CORP 2.650% 1/25/23 9/13/2022 808513AT2 2,741,337.50 0.996850 (2,750,000.00) (2,741,640.00) (302.50) /MARKETAXESS CORP/MTXX 2,750,000 PAR VALUE AT 99.685 % MATURED PAR VALUE OF INTER AMER DEV BK 1.750% 9/14/22 9/14/2022 4581XOCZ9 4,500,000.00 1.000000 (4,500,000.00) (4,300,785.00) 199,215.00 4,500,000 PAR VALUE AT 100 % PAID DOWN PAR VALUE OF F H L M C #786064 2.262% 1/01/28 9/15/2022 31348SWZ3 11.73 0.000000 (11.73) (11.44) 0.29 AUGUST FHLMC DUE 9/15/22 7of25 Table of Contents U.S. Bank Transaction History 07/01 /22 - 09/30/22 Transaction Type Entry Date CUSIP Id Net Cash Amt Price Units Cost Gain Loss PAID DOWN PAR VALUE OF F H L M C MLTCL MTG 3.738% 8/15/32 9/15/2022 3133TCE95 73.60 0.000000 (73.60) (73.68) (0.08) PAID DOWN PAR VALUE OF JOHN DEERE OWNER 0.510% 11/15/24 9/15/2022 47787NAC3 60,310.92 0.000000 (60,310.92) (60,301.73) 9.19 PAID DOWN PAR VALUE OF NISSAN AUTO 1.930% 7/15/24 9/15/2022 65479JAD5 168,390.51 0.000000 (168,390.51) (168,381.62) 8.89 PAID DOWN PAR VALUE OF TOYOTA AUTO RECV 0.440% 10/15/24 9/15/2022 89237VAB5 159,765.82 0.000000 (159,765.82) (159,753.52) 12.30 PAID DOWN PAR VALUE OF HONDA AUTO 0.370% 10/18/24 9/19/2022 43813KAC6 186,043.94 0.000000 (186,043.94) (186,016.61) 27.33 PAID DOWN PAR VALUE OF G N M A 1 1 #080023 1.750% 12/20/26 9/20/2022 36225CAZ9 152.50 0.000000 (152.50) (155.02) (2.52) AUGUST GNMA DUE 9/20/22 PAID DOWN PAR VALUE OF G N M A 1 1 #080088 3.000% 6/20/27 9/20/2022 36225CC20 436.82 0.000000 (436.82) (446.37) (9.55) AUGUST GNMA DUE 9/20/22 PAID DOWN PAR VALUE OF G N M A 1 1 #080395 2.875% 4/20/30 9/20/2022 36225CNM4 63.87 0.000000 (63.87) (63.29) 0.58 AUGUST GNMA DUE 9/20/22 PAID DOWN PAR VALUE OF G N M A 1 1 #080408 2.875% 5/20/30 9/20/2022 36225CN28 259.23 0.000000 (259.23) (256.60) 2.63 AUGUST GNMA DUE 9/20/22 PAID DOWN PAR VALUE OF G N M A 1 1 #080965 1.625% 7/20/34 9/20/2022 36225DCB8 352.11 0.000000 (352.11) (351.89) 0.22 AUGUST GNMA DUE 9/20/22 PAID DOWN PAR VALUE OF HONDA AUTO 0.270% 4/21/25 9/21/2022 43813GAC5 103,167.28 0.000010 (103,167.28) (103,165.39) 1.89 SOLD UNITS OF FIRST AM GOVT OB FD CL Z 9/22/2022 31846V567 1,945,347.78 1.000000 (1,945,347.78) (1,945,347.78) 0.00 MATURED PAR VALUE OF BANK NOVA C D 0.200% 9/23/22 9/23/2022 06417MRR8 4,000,000.00 1.000000 (4,000,000.00) (3,979,402.91) 20,597.09 4,000,000 PAR VALUE AT 100 % PAID DOWN PAR VALUE OF F H L M C MLTCL MT 9.50001% 9/25/43 9/26/2022 31394JY35 6,887.47 0.000000 (6,887.47) (7,800.06) (912.59) PAID DOWN PAR VALUE OF F N M A#257179 4.500% 4/01/28 9/26/2022 31371NUC7 100.89 0.000000 (100.89) (106.70) (5.81) AUGUST FNMA DUE 9/25/22 PAID DOWN PAR VALUE OF F N M A#357969 5.000% 9/01/35 9/26/2022 31376KT22 1,030.26 0.000000 (1,030.26) (1,107.53) (77.27) AUGUST FNMA DUE 9/25/22 PAID DOWN PAR VALUE OF F N M A#745580 5.000% 6/01/36 9/26/2022 31403DJZ3 1,012.15 0.000000 (1,012.15) (1,088.06) (75.91) AUGUST FNMA DUE 9/25/22 PAID DOWN PAR VALUE OF F N M A #748678 5.000% 10/01/33 9/26/2022 31403GXF4 4.24 0.000000 (4.24) (4.56) (0.32) AUGUST FNMA DUE 9/25/22 PAID DOWN PAR VALUE OF F N M A#815971 5.000% 3/01/35 9/26/2022 31406PQY8 531.64 0.000000 (531.64) (571.51) (39.87) AUGUST FNMA DUE 9/25/22 PAID DOWN PAR VALUE OF F N M A #823358 1.948% 2/01/35 9/26/2022 31406XWT5 9,163.48 0.000000 (9,163.48) (9,091.89) 71.59 AUGUST FNMA DUE 9/25/22 PAID DOWN PAR VALUE OF F N M A#826080 5.000% 7/01/35 9/26/2022 31407BXH7 201.01 0.000000 (201.01) (216.09) (15.08) AUGUST FNMA DUE 9/25/22 PAID DOWN PAR VALUE OF F N M A#888336 5.000% 7/01/36 9/26/2022 31410F4V4 827.21 0.000000 (827.21) (889.25) (62.04) AUGUST FNMA DUE 9/25/22 PAID DOWN PAR VALUE OF F N M A #AL0869 4.500% 6/01/29 9/26/2022 3138EG6F6 67.25 0.000000 (67.25) (71.12) (3.87) AUGUST FNMA DUE 9/25/22 PAID DOWN PAR VALUE OF F N M A#MA0022 4.500% 4/01/29 9/26/2022 31417YAY3 217.20 0.000000 (217.20) (229.71) (12.51) AUGUST FNMA DUE 9/25/22 8of25 Table of Contents Transaction Type PAID DOWN PAR VALUE OF F N M A GTD REMIC 2.472% 2/25/41 SOLD UNITS OF FIRST AM GOVT OB FD CL Z SOLD PAR VALUE OF U S TREASURY NT 0.125% 12/15/23 /BMO CAPITAL MARKETS CORP/BONDS/XOFF 1,000,000 PAR VALUE AT 95.050781 % SOLD PAR VALUE OF U S TREASURY NT 0.750% 12/31/23 /BMO CAPITAL MARKETS CORP/BONDS/XOFF 2,500,000 PAR VALUE AT 95.6132812 % SOLD UNITS OF FIRST AM GOVT OB FD CL Z MATURED PAR VALUE OF U S TREASURY BILL 9/29/22 28,000,000 PAR VALUE AT 100 % SOLD UNITS OF FIRST AM GOVT OB FD CL Z Total Dispositions Other INTEREST EARNED ON FIRST AM GOVT OB FD CL Z UNIT ON 0.0000 SHARES DUE 6/30/2022 INTEREST FROM 6/1/22 TO 6/30/22 INTEREST EARNED ON FIRST AM GOVT OB FD CL Z UNIT ON 0.0000 SHARES DUE 6/30/2022 INTEREST FROM 6/1/22 TO 6/30/22 INTEREST EARNED ON F N M A 1.625% 1/07/25 $1 PV ON 10000000.0000 SHARES DUE 7/7/2022 INTEREST EARNED ON BANK OF AMERICA MTN 3.300% 1/11/23 $1 PV ON 2000000.0000 SHARES DUE 7/11/2022 INTEREST EARNED ON F N M A 0.250% 7/10/23 $1 PV ON 6775000.0000 SHARES DUE 7/10/2022 INTEREST EARNED ON MET LIFE GLOB MTN 1.875% 1/11/27 $1 PV ON 5920000.0000 SHARES DUE 7/11/2022 INTEREST EARNED ON BMW VEH OWNER TR 3.210% 8/25/26 $1 PV ON 2530000.0000 SHARES DUE 6/25/2022 INTEREST EARNED ON BMW VEH OWNER TR 4.173% 8/25/26 $1 PV ON 8798.0800 SHARES DUE 6/25/2022 INTEREST EARNED ON TORONTO DOMINION MTN 1.950% 1/12/27 $1 PV ON 2000000.0000 SHARES DUE 7/12/2022 BOOK VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 65416.00 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI FED BASIS OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 65416.00 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI INTEREST EARNED ON AMERICAN HONDA MTN 1.500% 1/13/25 $1 PV ON 6000000.0000 SHARES DUE 7/13/2022 INTEREST EARNED ON MET LIFE GLOB MTN 1.950% 1/13/23 $1 PV ON 2255000.0000 SHARES DUE 7/13/2022 U.S. Bank Transaction History 07/01 /22 - 09/30/22 Entry Date CUSIP Id Net Cash Amt Price Units Cost Gain Loss 9/26/2022 31397QRE0 892.79 6,697.976355 (892.79) (892.51) 0.28 9/27/2022 31846V567 4,748,233.70 1.000000 (4,748,233.70) (4,748,233.70) 0.00 9/28/2022 91282CBA8 950,507.81 0.950508 (1,000,000.00) (998,671.87) (48,164.06) 9/28/2022 91282CDR9 2,390,332.03 0.956133 (2,500,000.00) (2,500,097.66) (109,765.63) 9/28/2022 31846V567 1,499,069.90 1.000000 (1,499,069.90) (1,499,069.90) 0.00 9/29/2022 912796U64 27,864,761.94 1.000000 (28,000,000.00) (27,864,761.94) 0.00 9/30/2022 31846V567 34,966,597.22 1.000000 (34,966,597.22) (34,966,597.22) 0.00 264,421,567.70 (265,172,172.93) (264,185,640.50) 235,927.20 7/1/2022 31846V567 6,153.26 0.000000 0.00 0.00 0.00 7/1/2022 31846V567 3,489.88 0.000000 0.00 0.00 0.00 7/7/2022 3135GOX24 81,250.00 0.000000 0.00 0.00 0.00 7/11/2022 06051GEU9 33,000.00 0.000000 0.00 0.00 0.00 7/11/2022 3135G05G4 8,468.75 0.000000 0.00 0.00 0.00 7/11/2022 59217GER6 55,500.00 0.000000 0.00 0.00 0.00 7/12/2022 05602RAD3 8,346.89 0.000000 0.00 0.00 0.00 7/12/2022 05602RAD3 (8,798.08) 0.000000 0.00 0.00 0.00 7/12/2022 89114TZN5 19,500.00 0.000000 0.00 0.00 0.00 7/13/2022 912828WU0 0.00 0.000000 0.00 0.00 0.00 7/13/2022 912828WU0 0.00 0.000000 0.00 65,416.00 0.00 7/13/2022 02665WEA5 45,000.00 0.000000 0.00 0.00 0.00 7/13/2022 59217GEE5 21,986.25 0.000000 0.00 0.00 0.00 9of25 Table of Contents Transaction Type PAR VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 65416.0000 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI STATE COST OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 65416.00 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI INTEREST EARNED ON AMERICAN HONDA MTN 3.450% 7/14/23 $1 PV ON 845000.0000 SHARES DUE 7/14/2022 INTEREST EARNED ON AMERICAN EXPRESS 3.390% 5/17/27 $1 PV ON 18701.5000 SHARES DUE 7/15/2022 $0.00283/PV ON 6,620,000.00 PV DUE 7/15/22 INTEREST EARNED ON F H L M C #786064 2.262% 1/01/28 $1 PV ON 2.2400 SHARES DUE 7/15/2022 MAY FHLMC DUE 7/15/22 INTEREST EARNED ON F H L M C MLTCL MTG 3.725% 8/15/32 $1 PV ON 9.8700 SHARES DUE 7/15/2022 $0.00310/PV ON 3,178.35 PV DUE 7/15/22 INTEREST EARNED ON HONDA AUTO REC OWN 1.880% 5/15/26 $1 PV ON 6157.0000 SHARES DUE 7/15/2022 $0.00157/PV ON 3,930,000.00 PV DUE 7/15/22 INTEREST EARNED ON HTUNDAI AUTO REC TR 0.380% 1/15/26 $1 PV ON 1912.6700 SHARES DUE 7/15/2022 $0.00032/PV ON 6,040,000.00 PV DUE 7/15/22 INTEREST EARNED ON HYUNDAI AUTO LEASE 0.330% 6/17/24 $1 PV ON 1142.6300 SHARES DUE 7/15/2022 $0.00027/PV ON 4,155,000.00 PV DUE 7/15/22 INTEREST EARNED ON HYUNDAI AUTO LEASE 1.160% 1/15/25 $1 PV ON 2798.5000 SHARES DUE 7/15/2022 $0.00097/PV ON 2,895,000.00 PV DUE 7/15/22 INTEREST EARNED ON HYUNDAI AUTO REC 0.380% 9/15/25 $1 PV ON 665.0000 SHARES DUE 7/15/2022 $0.00032/PV ON 2,100,000.00 PV DUE 7/15/22 INTEREST EARNED ON HYUNDAI AUTO REC 2.220% 10/15/26 $1 PV ON 7955.0000 SHARES DUE 7/15/2022 $0.00185/PV ON 4,300,000.00 PV DUE 7/15/22 INTEREST EARNED ON HYUNDAI AUTO REC TR 0.740% 5/15/26 $1 PV ON 986.6700 SHARES DUE 7/15/2022 $0.00062/PV ON 1,600,000.00 PV DUE 7/15/22 INTEREST EARNED ON INTER AMER BK M T N 0.625% 7/15/25 $1 PV ON 5050000.0000 SHARES DUE 7/15/2022 INTEREST EARNED ON JOHN DEERE OWN 0.520% 3/16/26 $1 PV ON 1222.0000 SHARES DUE 7/15/2022 $0.00043/PV ON 2,820,000.00 PV DUE 7/15/22 INTEREST EARNED ON JOHN DEERE OWNER 0.360% 9/15/25 $1 PV ON 690.0000 SHARES DUE 7/15/2022 $0.00030/PV ON 2,300,000.00 PV DUE 7/15/22 U.S. Bank Transaction History 07/01 /22 - 09/30/22 Entry Date CUSIP Id Net Cash Amt Price Units Cost Gain Loss 7/13/2022 912828WUO 0.00 0.000000 65,416.00 0.00 0.00 7/13/2022 912828WUO 0.00 0.000000 0.00 0.00 0.00 7/14/2022 02665WCJ8 14,576.25 0.000000 0.00 0.00 0.00 7/15/2022 02582JJT8 18,701.50 0.000000 0.00 0.00 0.00 7/15/2022 31348SWZ3 2.24 0.000000 0.00 0.00 0.00 7/15/2022 3133TCE95 9.87 0.000000 0.00 0.00 0.00 7/15/2022 43815BAC4 6,157.00 0.000000 0.00 0.00 0.00 7/15/2022 44934KAC8 1,912.67 0.000000 0.00 0.00 0.00 7/15/2022 44891 VAC5 1,142.63 0.000000 0.00 0.00 0.00 7/15/2022 44891 WAC3 2,798.50 0.000000 0.00 0.00 0.00 7/15/2022 44933LAC7 665.00 0.000000 0.00 0.00 0.00 7/15/2022 448977ADO 7,955.00 0.000000 0.00 0.00 0.00 7/15/2022 44935FAD6 986.67 0.000000 0.00 0.00 0.00 7/15/2022 4581XODN5 15,781.25 0.000000 0.00 0.00 0.00 7/15/2022 47789QAC4 1,222.00 0.000000 0.00 0.00 0.00 7/15/2022 47788UAC6 690.00 0.000000 0.00 0.00 0.00 10of25 Table of Contents U.S. Bank Transaction History 07/01 /22 - 09/30/22 Transaction Type Entry Date CUSIP Id Net Cash Amt INTEREST EARNED ON JOHN DEERE OWNER 0.510% 11/15/24 $1 PV 7/15/2022 47787NAC3 391.17 ON 391.1700 SHARES DUE 7/15/2022 $0.00042/PV ON 920,404.20 PV DUE 7/15/22 INTEREST EARNED ON JOHN DEERE OWNER 2.320% 9/15/26 $1 PV 7/15/2022 47787JAC2 5,819.33 ON 5819.3300 SHARES DUE 7/15/2022 $0.00193/PV ON 3,010,000.00 PV DUE 7/15/22 INTEREST EARNED ON MERCEDES BENZ AUTO 0.400% 11/15/24 $1 7/15/2022 58769KAD6 1,105.00 PV ON 1105.0000 SHARES DUE 7/15/2022 $0.00033/PV ON 3,315,000.00 PV DUE 7/15/22 INTEREST EARNED ON NISSAN AUTO 1.930% 7/15/24 $1 PV ON 7/15/2022 65479JAD5 2,310.76 2310.7600 SHARES DUE 7/15/2022 $0.00161/PV ON 1,436,746.04 PV DUE 7/15/22 INTEREST EARNED ON SALESFORCE COM INC 0.625% 7/15/24 $1 PV 7/15/2022 79466LAG9 4,218.75 ON 1350000.0000 SHARES DUE 7/15/2022 INTEREST EARNED ON TOYOTA AUTO RECV 0.440% 10/15/24 $1 PV 7/15/2022 89237VAB5 728.51 ON 728.5100 SHARES DUE 7/15/2022 $0.00037/PV ON 1,986,851.07 PV DUE 7/15/22 INTEREST EARNED ON U S TREASURY I P S 0.125% 7/15/24 $1 PV ON 7/15/2022 912828WU0 7,953.66 12725856.0000 SHARES DUE 7/15/2022 INTEREST EARNED ON COOPERATIEVE C D 0.330% 7/18/22 $1 PV 7/18/2022 21684XUU8 5,307.50 ON 3000000.0000 SHARES DUE 7/18/2022 INTEREST ON 7/18/2022 MATURITY INTEREST EARNED ON GM FIN CONS ALIT 3.100% 2/16/27 $1 PV ON 7/18/2022 362585AC5 6,019.17 6019.1700 SHARES DUE 7/16/2022 $0.00258/PV ON 2,330,000.00 PV DUE 7/16/22 INTEREST EARNED ON GM FIN CONS AUTO 0.680% 9/16/26 $1 PV 7/18/2022 362554AC1 966.17 ON 966.1700 SHARES DUE 7/16/2022 $0.00057/PV ON 1,705,000.00 PV DUE 7/16/22 INTEREST EARNED ON GM FIN CONS AUTO 1.260% 11/16/26 $1 PV 7/18/2022 380146AC4 1,669.50 ON 1669.5000 SHARES DUE 7/16/2022 $0.00105/PV ON 1,590,000.00 PV DUE 7/16/22 INTEREST EARNED ON HONDA AUTO 0.370% 10/18/24 $1 PV ON 7/18/2022 43813KAC6 833.00 833.0000 SHARES DUE 7/18/2022 $0.00031/PV ON 2,701,613.36 PV DUE 7/18/22 INTEREST EARNED ON ROYAL BANK OF MTN 2.550% 7/16/24 $1 PV 7/18/2022 78013XZU5 82,875.00 ON 6500000.0000 SHARES DUE 7/16/2022 RECEIVED ACCRUED INTEREST ON SALE OF F H L B DEB 3.250% 7/18/2022 313383QR5 17,604.17 6/09/23 INTEREST EARNED ON U S TREASURY BILL 7/19/22 $1 PV ON 7/19/2022 912796X20 5,285.31 2500000.0000 SHARES DUE 7/19/2022 2,500,000 PAR VALUE AT 100 % INTEREST EARNED ON G N M A 1 1 #080023 1.750% 12/20/26 $1 PV ON 7/20/2022 36225CAZ9 11.15 11.1500 SHARES DUE 7/20/2022 JUNE GNMA DUE 7/20/22 Price Units Cost Gain Loss 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 11 of 25 Table of Contents U.S. Bank Transaction History 07/01 /22 - 09/30/22 Transaction Type Entry Date CUSIP Id Net Cash Amt Price Units Cost Gain Loss INTEREST EARNED ON G N M A 11 #080088 2.000% 6/20/27 $1 PV ON 7/20/2022 36225CC20 9.59 0.000000 0.00 0.00 0.00 9.5900 SHARES DUE 7/20/2022 JUNE GNMA DUE 7/20/22 INTEREST EARNED ON G N M A 11 #080395 1.875% 4/20/30 $1 PV ON 7/20/2022 36225CNM4 4.97 0.000000 0.00 0.00 0.00 4.9700 SHARES DUE 7/20/2022 JUNE GNMA DUE 7/20/22 INTEREST EARNED ON G N M A 1 1 #080408 1.875% 5/20/30 $1 PV ON 7/20/2022 36225CN28 43.24 0.000000 0.00 0.00 0.00 43.2400 SHARES DUE 7/20/2022 JUNE GNMA DUE 7/20/22 INTEREST EARNED ON G N M A 11 #080965 1.625% 7/20/34 $1 PV ON 7/20/2022 36225DCB8 30.11 0.000000 0.00 0.00 0.00 30.1100 SHARES DUE 7/20/2022 JUNE GNMA DUE 7/20/22 INTEREST EARNED ON GM FIN AUTO LSNG 3.420% 6/20/25 $1 PV 7/20/2022 36266FAC3 8,649.75 0.000000 0.00 0.00 0.00 ON 8649.7500 SHARES DUE 7/20/2022 $0.00285/PV ON 3,035,000.00 PV DUE 7/20/22 INTEREST EARNED ON GM FIN AUTO LSNG TR 1.900% 3/20/25 $1 PV 7/20/2022 36265MAC9 7,948.34 0.000000 0.00 0.00 0.00 ON 7948.3400 SHARES DUE 7/20/2022 $0.00158/PV ON 5,020,000.00 PV DUE 7/20/22 INTEREST EARNED ON TOYOTA LEASE OWNER 0.420% 10/21/24 $1 7/20/2022 89239CAC3 1,114.75 0.000000 0.00 0.00 0.00 PV ON 1114.7500 SHARES DUE 7/20/2022 $0.00035/PV ON 3,185,000.00 PV DUE 7/20/22 INTEREST EARNED ON TOYOTA LEASE OWNER 1.960% 2/20/25 $1 7/20/2022 89238LAC4 10,004.16 0.000000 0.00 0.00 0.00 PV ON 10004.1600 SHARES DUE 7/20/2022 $0.00163/PV ON 6,125,000.00 PV DUE 7/20/22 INTEREST EARNED ON F H L M C M T N 0.375% 7/21/25 $1 PV ON 7/21/2022 3137EAEU9 9,431.25 0.000000 0.00 0.00 0.00 5030000.0000 SHARES DUE 7/21/2022 INTEREST EARNED ON HONDA AUTO 0.270% 4/21/25 $1 PV ON 7/21/2022 43813GAC5 361.13 0.000000 0.00 0.00 0.00 361.1300 SHARES DUE 7/21/2022 $0.00023/PV ON 1,605,000.00 PV DUE 7/21/22 INTEREST EARNED ON HONDA AUTO REC 0.880% 1/21/26 $1 PV 7/21/2022 43815GAC3 1,679.33 0.000000 0.00 0.00 0.00 ON 1679.3300 SHARES DUE 7/21/2022 $0.00073/PV ON 2,290,000.00 PV DUE 7/21/22 INTEREST EARNED ON US BANK NA MTN 2.050% 1/21/25 $1 PV ON 7/21/2022 90331HPL1 74,517.50 0.000000 0.00 0.00 0.00 7270000.0000 SHARES DUE 7/21/2022 INTEREST EARNED ON AMRESCO 2.39267% 6/25/29 $1 PV ON 7/25/2022 03215PFN4 232.54 0.000000 0.00 0.00 0.00 232.5400 SHARES DUE 7/25/2022 $0.00199/PV ON 116,624.77 PV DUE 7/25/22 INTEREST EARNED ON BMW VEH OWNER TR 3.210% 8/25/26 $1 PV 7/25/2022 05602RAD3 6,767.75 0.000000 0.00 0.00 0.00 ON 6767.7500 SHARES DUE 7/25/2022 $0.00268/PV ON 2,530,000.00 PV DUE 7/25/22 INTEREST EARNED ON BMW VEHICLE LEASE 0.330% 12/26/24 $1 PV 7/25/2022 09690AAC7 569.25 0.000000 0.00 0.00 0.00 ON 569.2500 SHARES DUE 7/25/2022 $0.00027/PV ON 2,070,000.00 PV DUE 7/25/22 INTEREST EARNED ON BMW VEHICLE LEASE 1.100% 3/25/25 $1 PV 7/25/2022 05601XAC3 2,200.00 0.000000 0.00 0.00 0.00 ON 2200.0000 SHARES DUE 7/25/2022 $0.00092/PV ON 2,400,000.00 PV DUE 7/25/22 12of25 Table of Contents U.S. Bank Transaction History 07/01 /22 - 09/30/22 Transaction Type Entry Date CUSIP Id Net Cash Amt Price Units Cost Gain Loss INTEREST EARNED ON CHARLES SCHWAB CORP 2.650% 1/25/23 $1 7/25/2022 808513AT2 89,437.50 0.000000 0.00 0.00 0.00 PV ON 6750000.0000 SHARES DUE 7/25/2022 INTEREST EARNED ON F H L B GTD REMIC 3.171% 10/25/24 $1 PV 7/25/2022 3137BFE98 13,212.50 0.000000 0.00 0.00 0.00 ON 5000000.0000 SHARES DUE 7/25/2022 INTEREST EARNED ON F H L M C MLTCL MT 9.50001 % 9/25/43 $1 PV 7/25/2022 31394JY35 2,389.53 0.000000 0.00 0.00 0.00 ON 2389.5300 SHARES DUE 7/25/2022 $0.00542/PV ON 441,144.41 PV DUE 7/25/22 INTEREST EARNED ON F H L M C MLTCL MTG 3.120% 9/25/26 $1 PV 7/25/2022 3137BSRE5 13,000.00 0.000000 0.00 0.00 0.00 ON 13000.0000 SHARES DUE 7/25/2022 $0.00260/PV ON 5,000,000.00 PV DUE 7/25/22 INTEREST EARNED ON F N M A #257179 4.500% 4/01/28 $1 PV ON 7/25/2022 31371 NUC7 22.52 0.000000 0.00 0.00 0.00 22.5200 SHARES DUE 7/25/2022 JUNE FNMA DUE 7/25/22 INTEREST EARNED ON F N M A #357969 5.000% 9/01/35 $1 PV ON 7/25/2022 31376KT22 198.56 0.000000 0.00 0.00 0.00 198.5600 SHARES DUE 7/25/2022 JUNE FNMA DUE 7/25/22 INTEREST EARNED ON F N M A #745580 5.000% 6/01/36 $1 PV ON 7/25/2022 31403DJZ3 196.41 0.000000 0.00 0.00 0.00 196.4100 SHARES DUE 7/25/2022 JUNE FNMA DUE 7/25/22 INTEREST EARNED ON F N M A #748678 5.000% 10/01/33 $1 PV ON 7/25/2022 31403GXF4 3.18 0.000000 0.00 0.00 0.00 3.1800 SHARES DUE 7/25/2022 JUNE FNMA DUE 7/25/22 INTEREST EARNED ON F N M A #815971 5.000% 3/01/35 $1 PV ON 7/25/2022 31406PQY8 293.37 0.000000 0.00 0.00 0.00 293.3700 SHARES DUE 7/25/2022 JUNE FNMA DUE 7/25/22 INTEREST EARNED ON F N M A #823358 1.973% 2/01/35 $1 PV ON 7/25/2022 31406XWT5 65.62 0.000000 0.00 0.00 0.00 65.6200 SHARES DUE 7/25/2022 JUNE FNMA DUE 7/25/22 INTEREST EARNED ON F N M A #826080 5.000% 7/01/35 $1 PV ON 7/25/2022 31407BXH7 38.67 0.000000 0.00 0.00 0.00 38.6700 SHARES DUE 7/25/2022 JUNE FNMA DUE 7/25/22 INTEREST EARNED ON F N M A #888336 5.000% 7/01/36 $1 PV ON 7/25/2022 31410F4V4 316.23 0.000000 0.00 0.00 0.00 316.2300 SHARES DUE 7/25/2022 JUNE FNMA DUE 7/25/22 INTEREST EARNED ON F N M A #AL0869 4.500% 6/01/29 $1 PV ON 7/25/2022 3138EG6F6 15.61 0.000000 0.00 0.00 0.00 15.6100 SHARES DUE 7/25/2022 JUNE FNMA DUE 7/25/22 INTEREST EARNED ON F N M A #MA0022 4.500% 4/01/29 $1 PV ON 7/25/2022 31417YAY3 27.08 0.000000 0.00 0.00 0.00 27.0800 SHARES DUE 7/25/2022 JUNE FNMA DUE 7/25/22 INTEREST EARNED ON F N M A GTD REMIC 2.472% 2/25/41 $1 PV 7/25/2022 31397QRE0 158.02 0.000000 0.00 0.00 0.00 ON 158.0200 SHARES DUE 7/25/2022 $0.00192/PV ON 82,316.35 PV DUE 7/25/22 INTEREST EARNED ON JPMORGAN CHASE CO 3.200% 1/25/23 $1 PV 7/25/2022 46625HJH4 32,000.00 0.000000 0.00 0.00 0.00 ON 2000000.0000 SHARES DUE 7/25/2022 INTEREST EARNED ON JPMORGAN CHASE CO 3.797% 7/23/24 $1 PV 7/25/2022 46647PAU0 47,462.50 0.000000 0.00 0.00 0.00 ON 2500000.0000 SHARES DUE 7/23/2022 INTEREST EARNED ON S L M A 2.71382% 4/25/23 $1 PV ON 7/25/2022 78445JAA5 60.13 0.000000 0.00 0.00 0.00 60.1300 SHARES DUE 7/25/2022 $0.00678/PV ON 8,863.28 PV DUE 7/25/22 INTEREST EARNED ON F F C B DEB 1.850% 7/26/24 $1 PV ON 7/26/2022 3133EKWV4 46,250.00 0.000000 0.00 0.00 0.00 5000000.0000 SHARES DUE 7/26/2022 13of25 Table of Contents U.S. Bank Transaction History 07/01 /22 - 09/30/22 Transaction Type Entry Date CUSIP Id Net Cash Amt Price Units Cost Gain Loss BOOK VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 7/27/2022 912828WU0 0.00 0.000000 0.00 0.00 0.00 72072.00 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI FED BASIS OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 7/27/2022 912828WU0 0.00 0.000000 0.00 72,072.00 0.00 72072.00 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI INTEREST EARNED ON BANK OF NY MTN 1.850% 1/27/23 $1 PV ON 7/27/2022 06406RAM9 14,661.25 0.000000 0.00 0.00 0.00 1585000.0000 SHARES DUE 7/27/2022 PAR VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 7/27/2022 912828WU0 0.00 0.000000 72,072.00 0.00 0.00 72072.0000 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI STATE COST OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 7/27/2022 912828WU0 0.00 0.000000 0.00 0.00 0.00 72072.00 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI INTEREST EARNED ON U S TREASURY BILL 7/28/22 $1 PV ON 7/28/2022 912796559 25,260.52 0.000000 0.00 0.00 0.00 10000000.0000 SHARES DUE 7/28/2022 10,000,000 PAR VALUE AT 100 % CASH DISBURSEMENT PAID TO OCS OUTGOING DOMESTIC WIRE 8/1/2022 (45,000,000.00) 0.000000 0.00 0.00 0.00 TO XX9645; PER DIR DTD 7/28/2022 INTEREST EARNED ON FIRST AM GOVT OB FD CL Z UNIT ON 0.0000 8/1/2022 31846V567 5,503.83 0.000000 0.00 0.00 0.00 SHARES DUE 7/31/2022 INTEREST FROM 7/1/22 TO 7/31/22 INTEREST EARNED ON FIRST AM GOVT OB FD CL Z UNIT ON 0.0000 8/1/2022 31846V567 2,647.34 0.000000 0.00 0.00 0.00 SHARES DUE 7/31/2022 INTEREST FROM 7/1/22 TO 7/31/22 INTEREST EARNED ON U S TREASURY NT 0.125% 1/31/23 $1 PV ON 8/1/2022 91282CBG5 37,500.00 0.000000 0.00 0.00 0.00 60000000.0000 SHARES DUE 7/31/2022 INTEREST EARNED ON U S TREASURY NT 0.125% 7/31/22 $1 PV ON 8/1/2022 91282CAC5 26,250.00 0.000000 0.00 0.00 0.00 42000000.0000 SHARES DUE 7/31/2022 INTEREST EARNED ON U S TREASURY NT 0.375% 1/31/26 $1 PV ON 8/1/2022 91282CBH3 33,750.00 0.000000 0.00 0.00 0.00 18000000.0000 SHARES DUE 7/31/2022 INTEREST EARNED ON U S TREASURY NT 1.500% 1/31/27 $1 PV ON 8/1/2022 912828Z78 138,750.00 0.000000 0.00 0.00 0.00 18500000.0000 SHARES DUE 7/31/2022 INTEREST EARNED ON U S TREASURY NT 2.250% 1/31/24 $1 PV ON 8/1/2022 912828V80 84,375.00 0.000000 0.00 0.00 0.00 7500000.0000 SHARES DUE 7/31/2022 INTEREST EARNED ON F N M A 2.500% 2/05/24 $1 PV ON 8/5/2022 3135GOV34 62,500.00 0.000000 0.00 0.00 0.00 5000000.0000 SHARES DUE 8/5/2022 PAID ACCRUED INTEREST ON PURCHASE OF U S TREASURY NT 8/8/2022 91282CEW7 (20,665.76) 0.000000 0.00 0.00 0.00 3.000% 6/30/27 RECEIVED ACCRUED INTEREST ON SALE OF U S TREASURY NT 8/8/2022 9128284D9 44,398.91 0.000000 0.00 0.00 0.00 2.500% 3/31/23 INTEREST EARNED ON APPLE INC 2.500% 2/09/25 $1 PV ON 8/9/2022 037833AZ3 49,025.00 0.000000 0.00 0.00 0.00 3922000.0000 SHARES DUE 8/9/2022 PAID ACCRUED INTEREST ON PURCHASE OF U S TREASURY NT 8/10/2022 91282CEW7 (21,725.54) 0.000000 0.00 0.00 0.00 3.000% 6/30/27 RECEIVED ACCRUED INTEREST ON SALE OF U S TREASURY NT 8/10/2022 912828R69 3,152.32 0.000000 0.00 0.00 0.00 1.625% 5/31/23 RECEIVED ACCRUED INTEREST ON SALE OF U S TREASURY NT 8/10/2022 912828U57 20,611.34 0.000000 0.00 0.00 0.00 2.125% 11/30/23 14of25 Table of Contents Transaction Type BOOK VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 83928.00 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI FED BASIS OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 83928.00 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI PAID ACCRUED INTEREST ON PURCHASE OF VIRGINIA ELEC PWR CO 3.750% 5/15/27 PAR VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 83928.0000 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI RECEIVED ACCRUED INTEREST ON SALE OF BERKSHIRE HATHAWAY 2.750% 3/15/23 RECEIVED ACCRUED INTEREST ON SALE OF U S TREASURY NT 0.125% 12/15/23 STATE COST OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 83928.00 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI INTEREST EARNED ON F H L M C 1.500% 2/12/25 $1 PV ON 12335000.0000 SHARES DUE 8/12/2022 INTEREST EARNED ON AMERICAN EXPRESS 3.390% 5/17/27 $1 PV ON 18701.5000 SHARES DUE 8/15/2022 $0.00283/PV ON 6,620,000.00 PV DUE 8/15/22 INTEREST EARNED ON BANK OF AMERICAN MTN 2.015% 2/13/26 $1 PV ON 2500000.0000 SHARES DUE 8/13/2022 INTEREST EARNED ON F H L M C #786064 2.262% 1/01/28 $1 PV ON 2.2000 SHARES DUE 8/15/2022 JUNE FHLMC DUE 8/15/22 INTEREST EARNED ON F H L M C MLTCL MTG 3.730% 8/15/32 $1 PV ON 9.7400 SHARES DUE 8/15/2022 $0.00311/PV ON 3,133.15 PV DUE 8/15/22 INTEREST EARNED ON HONDA AUTO REC OWN 1.880% 5/15/26 $1 PV ON 6157.0000 SHARES DUE 8/15/2022 $0.00157/PV ON 3,930,000.00 PV DUE 8/15/22 INTEREST EARNED ON HTUNDAI AUTO REC TR 0.380% 1/15/26 $1 PV ON 1912.6700 SHARES DUE 8/15/2022 $0.00032/PV ON 6,040,000.00 PV DUE 8/15/22 INTEREST EARNED ON HYUNDAI AUTO LEASE 0.330% 6/17/24 $1 PV ON 1142.6300 SHARES DUE 8/15/2022 $0.00027/PV ON 4,155,000.00 PV DUE 8/15/22 INTEREST EARNED ON HYUNDAI AUTO LEASE 1.160% 1/15/25 $1 PV ON 2798.5000 SHARES DUE 8/15/2022 $0.00097/PV ON 2,895,000.00 PV DUE 8/15/22 INTEREST EARNED ON HYUNDAI AUTO REC 0.380% 9/15/25 $1 PV ON 665.0000 SHARES DUE 8/15/2022 $0.00032/PV ON 2,100,000.00 PV DUE 8/15/22 U.S. Bank Transaction History 07/01 /22 - 09/30/22 Entry Date CUSIP Id Net Cash Amt Price Units Cost Gain Loss 8/11/2022 912828WU0 0.00 0.000000 0.00 0.00 0.00 8/11/2022 912828WU0 0.00 0.000000 0.00 83,928.00 0.00 8/11/2022 927804GH1 (20,227.60) 0.000000 0.00 0.00 0.00 8/11/2022 912828WU0 0.00 0.000000 83,928.00 0.00 0.00 8/11/2022 084670BR8 27,881.94 0.000000 0.00 0.00 0.00 8/11/2022 91282CBA8 97.34 0.000000 0.00 0.00 0.00 8/11/2022 912828WU0 0.00 0.000000 0.00 0.00 0.00 8/12/2022 3137EAEP0 92,512.50 0.000000 0.00 0.00 0.00 8/15/2022 02582JJT8 18,701.50 0.000000 0.00 0.00 0.00 8/15/2022 06051GHY8 25,187.50 0.000000 0.00 0.00 0.00 8/15/2022 31348SWZ3 2.20 0.000000 0.00 0.00 0.00 8/15/2022 3133TCE95 9.74 0.000000 0.00 0.00 0.00 8/15/2022 43815BAC4 6,157.00 0.000000 0.00 0.00 0.00 8/15/2022 44934KAC8 1,912.67 0.000000 0.00 0.00 0.00 8/15/2022 44891 VAC5 1,142.63 0.000000 0.00 0.00 0.00 8/15/2022 44891WAC3 2,798.50 0.000000 0.00 0.00 0.00 8/15/2022 44933LAC7 665.00 0.000000 0.00 0.00 0.00 15of25 Table of Contents U.S. Bank Transaction History 07/01 /22 - 09/30/22 Transaction Type Entry Date CUSIP Id Net Cash Amt Price Units Cost Gain Loss INTEREST EARNED ON HYUNDAI AUTO REC 2.220% 10/15/26 $1 PV 8/15/2022 448977AD0 7,955.00 0.000000 0.00 0.00 0.00 ON 7955.0000 SHARES DUE 8/15/2022 $0.00185/PV ON 4,300,000.00 PV DUE 8/15/22 INTEREST EARNED ON HYUNDAI AUTO REC TR 0.740% 5/15/26 $1 PV 8/15/2022 44935FAD6 986.67 0.000000 0.00 0.00 0.00 ON 986.6700 SHARES DUE 8/15/2022 $0.00062/PV ON 1,600,000.00 PV DUE 8/15/22 INTEREST EARNED ON JOHN DEERE OWN 0.520% 3/16/26 $1 PV 8/15/2022 47789QAC4 1,222.00 0.000000 0.00 0.00 0.00 ON 1222.0000 SHARES DUE 8/15/2022 $0.00043/PV ON 2,820,000.00 PV DUE 8/15/22 INTEREST EARNED ON JOHN DEERE OWNER 0.360% 9/15/25 $1 PV 8/15/2022 47788UAC6 690.00 0.000000 0.00 0.00 0.00 ON 690.0000 SHARES DUE 8/15/2022 $0.00030/PV ON 2,300,000.00 PV DUE 8/15/22 INTEREST EARNED ON JOHN DEERE OWNER 0.510% 11/15/24 $1 PV 8/15/2022 47787NAC3 367.68 0.000000 0.00 0.00 0.00 ON 367.6800 SHARES DUE 8/15/2022 $0.00042/PV ON 865,141.15 PV DUE 8/15/22 INTEREST EARNED ON JOHN DEERE OWNER 2.320% 9/15/26 $1 PV 8/15/2022 47787JAC2 5,819.33 0.000000 0.00 0.00 0.00 ON 5819.3300 SHARES DUE 8/15/2022 $0.00193/PV ON 3,010,000.00 PV DUE 8/15/22 INTEREST EARNED ON MERCEDES BENZ AUTO 0.400% 11/15/24 $1 8/15/2022 58769KAD6 1,105.00 0.000000 0.00 0.00 0.00 PV ON 1105.0000 SHARES DUE 8/15/2022 $0.00033/PV ON 3,315,000.00 PV DUE 8/15/22 INTEREST EARNED ON NISSAN AUTO 1.930% 7/15/24 $1 PV ON 8/15/2022 65479JAD5 2,020.30 0.000000 0.00 0.00 0.00 2020.3000 SHARES DUE 8/15/2022 $0.00161/PV ON 1,256,147.47 PV DUE 8/15/22 INTEREST EARNED ON TOYOTA AUTO RECV 0.440% 10/15/24 $1 PV 8/15/2022 89237VAB5 669.24 0.000000 0.00 0.00 0.00 ON 669.2400 SHARES DUE 8/15/2022 $0.00037/PV ON 1,825,213.73 PV DUE 8/15/22 INTEREST EARNED ON U S TREASURY NT 1.500% 2/15/25 $1 PV ON 8/15/2022 91282CDZ1 37,500.00 0.000000 0.00 0.00 0.00 5000000.0000 SHARES DUE 8/15/2022 INTEREST EARNED ON GM FIN CONS ALIT 3.100% 2/16/27 $1 PV ON 8/16/2022 362585AC5 6,019.17 0.000000 0.00 0.00 0.00 6019.1700 SHARES DUE 8/16/2022 $0.00258/PV ON 2,330,000.00 PV DUE 8/16/22 INTEREST EARNED ON GM FIN CONS AUTO 0.680% 9/16/26 $1 PV 8/16/2022 362554AC1 966.17 0.000000 0.00 0.00 0.00 ON 966.1700 SHARES DUE 8/16/2022 $0.00057/PV ON 1,705,000.00 PV DUE 8/16/22 INTEREST EARNED ON GM FIN CONS AUTO 1.260% 11/16/26 $1 PV 8/16/2022 380146AC4 1,669.50 0.000000 0.00 0.00 0.00 ON 1669.5000 SHARES DUE 8/16/2022 $0.00105/PV ON 1,590,000.00 PV DUE 8/16/22 INTEREST EARNED ON HONDA AUTO 0.370% 10/18/24 $1 PV ON 8/18/2022 43813KAC6 773.51 0.000000 0.00 0.00 0.00 773.5100 SHARES DUE 8/18/2022 $0.00031/PV ON 2,508,674.82 PV DUE 8/18/22 RECEIVED ACCRUED INTEREST ON SALE OF MERCK CO INC 8/18/2022 58933YAF2 6,755.00 0.000000 0.00 0.00 0.00 2.800% 5/18/23 16 of 25 Table of Contents U.S. Bank Transaction History 07/01 /22 - 09/30/22 Transaction Type Entry Date CUSIP Id Net Cash Amt PAID ACCRUED INTEREST ON PURCHASE OF CATERPILLAR FINL MTN 8/19/2022 14913R3A3 (1,400.00) 3.600% 8/12/27 RECEIVED ACCRUED INTEREST ON SALE OF MERCK CO INC 8/19/2022 58933YAF2 7,325.50 2.800% 5/18/23 INTEREST EARNED ON G N M A 1 1 #080023 1.750% 12/20/26 $1 PV ON 8/22/2022 36225CAZ9 10.90 10.9000 SHARES DUE 8/20/2022 JULY GNMA DUE 8/20/22 INTEREST EARNED ON G N M A 1 1 #080088 3.000% 6/20/27 $1 PV ON 8/22/2022 36225CC20 14.10 14.1000 SHARES DUE 8/20/2022 JULY GNMA DUE 8/20/22 INTEREST EARNED ON G N M A 1 1 #080395 2.875% 4/20/30 $1 PV ON 8/22/2022 36225CNM4 7.53 7.5300 SHARES DUE 8/20/2022 JULY GNMA DUE 8/20/22 INTEREST EARNED ON G N M A 1 1 #080408 2.875% 5/20/30 $1 PV ON 8/22/2022 36225CN28 63.81 63.8100 SHARES DUE 8/20/2022 JULY GNMA DUE 8/20/22 INTEREST EARNED ON G N M A 1 1 #080965 1.625% 7/20/34 $1 PV ON 8/22/2022 36225DCB8 29.38 29.3800 SHARES DUE 8/20/2022 JULY GNMA DUE 8/20/22 INTEREST EARNED ON GM FIN AUTO LSNG 3.420% 6/20/25 $1 PV 8/22/2022 36266FAC3 8,649.75 ON 8649.7500 SHARES DUE 8/20/2022 $0.00285/PV ON 3,035,000.00 PV DUE 8/20/22 INTEREST EARNED ON GM FIN AUTO LSNG TR 1.900% 3/20/25 $1 PV 8/22/2022 36265MAC9 7,948.34 ON 7948.3400 SHARES DUE 8/20/2022 $0.00158/PV ON 5,020,000.00 PV DUE 8/20/22 INTEREST EARNED ON HONDA AUTO 0.270% 4/21/25 $1 PV ON 8/22/2022 43813GAC5 361.13 361.1300 SHARES DUE 8/21/2022 $0.00023/PV ON 1,605,000.00 PV DUE 8/21/22 INTEREST EARNED ON HONDA AUTO REC 0.880% 1/21/26 $1 PV 8/22/2022 43815GAC3 1,679.33 ON 1679.3300 SHARES DUE 8/21/2022 $0.00073/PV ON 2,290,000.00 PV DUE 8/21/22 INTEREST EARNED ON TOYOTA LEASE OWNER 0.420% 10/21/24 $1 8/22/2022 89239CAC3 1,114.75 PV ON 1114.7500 SHARES DUE 8/20/2022 $0.00035/PV ON 3,185,000.00 PV DUE 8/20/22 INTEREST EARNED ON TOYOTA LEASE OWNER 1.960% 2/20/25 $1 8/22/2022 89238LAC4 10,004.16 PV ON 10004.1600 SHARES DUE 8/20/2022 $0.00163/PV ON 6,125,000.00 PV DUE 8/20/22 PAID ACCRUED INTEREST ON PURCHASE OF MORGAN STANLEY MTN 8/24/2022 61744YAN8 (2,986.98) 3.125% 1 /23/23 RECEIVED ACCRUED INTEREST ON SALE OF U S TREASURY NT 8/24/2022 91282CBA8 239.07 0.125% 12/15/23 INTEREST EARNED ON AMRESCO 3.3056% 6/25/29 $1 PV ON 8/25/2022 03215PFN4 321.26 321.2600 SHARES DUE 8/25/2022 $0.00275/PV ON 116,624.77 PV DUE 8/25/22 INTEREST EARNED ON BMW VEH OWNER TR 3.210% 8/25/26 $1 PV 8/25/2022 05602RAD3 6,767.75 ON 6767.7500 SHARES DUE 8/25/2022 $0.00268/PV ON 2,530,000.00 PV DUE 8/25/22 Price Units Cost Gain Loss 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 17of25 Table of Contents Transaction Type INTEREST EARNED ON BMW VEHICLE LEASE 0.330% 12/26/24 $1 PV ON 569.2500 SHARES DUE 8/25/2022 $0.00027/PV ON 2,070,000.00 PV DUE 8/25/22 INTEREST EARNED ON BMW VEHICLE LEASE 1.100% 3/25/25 $1 PV ON 2200.0000 SHARES DUE 8/25/2022 $0.00092/PV ON 2,400,000.00 PV DUE 8/25/22 INTEREST EARNED ON F H L B GTD REMIC 3.171% 10/25/24 $1 PV ON 13212.5000 SHARES DUE 8/25/2022 $0.00264/PV ON 5,000,000.00 PV DUE 8/25/22 INTEREST EARNED ON F H L M C MLTCL MT 9.50001 % 9/25/43 $1 PV ON 2337.5200 SHARES DUE 8/25/2022 $0.00542/PV ON 431,542.54 PV DUE 8/25/22 INTEREST EARNED ON F H L M C MLTCL MTG 3.120% 9/25/26 $1 PV ON 13000.0000 SHARES DUE 8/25/2022 $0.00260/PV ON 5,000,000.00 PV DUE 8/25/22 INTEREST EARNED ON F N M A 0.375% 8/25/25 $1 PV ON 7945000.0000 SHARES DUE 8/25/2022 INTEREST EARNED ON F N M A #257179 4.500% 4/01/28 $1 PV ON 22.1400 SHARES DUE 8/25/2022 JULY FNMA DUE 8/25/22 INTEREST EARNED ON F N M A #357969 5.000% 9/01/35 $1 PV ON 188.9600 SHARES DUE 8/25/2022 JULY FNMA DUE 8/25/22 INTEREST EARNED ON F N M A #745580 5.000% 6/01/36 $1 PV ON 193.8900 SHARES DUE 8/25/2022 JULY FNMA DUE 8/25/22 INTEREST EARNED ON F N M A #748678 5.000% 10/01/33 $1 PV ON 3.1600 SHARES DUE 8/25/2022 JULY FNMA DUE 8/25/22 INTEREST EARNED ON F N M A #815971 5.000% 3/01/35 $1 PV ON 284.2500 SHARES DUE 8/25/2022 JULY FNMA DUE 8/25/22 INTEREST EARNED ON F N M A #823358 1.973% 2/01/35 $1 PV ON 65.1700 SHARES DUE 8/25/2022 JULY FNMA DUE 8/25/22 INTEREST EARNED ON F N M A #826080 5.000% 7/01/35 $1 PV ON 38.4100 SHARES DUE 8/25/2022 JULY FNMA DUE 8/25/22 INTEREST EARNED ON F N M A #888336 5.000% 7/01/36 $1 PV ON 311.8900 SHARES DUE 8/25/2022 JULY FNMA DUE 8/25/22 INTEREST EARNED ON F N M A #AL0869 4.500% 6/01/29 $1 PV ON 15.3000 SHARES DUE 8/25/2022 JULY FNMA DUE 8/25/22 INTEREST EARNED ON F N M A #MA0022 4.500% 4/01/29 $1 PV ON 26.4800 SHARES DUE 8/25/2022 JULY FNMA DUE 8/25/22 INTEREST EARNED ON F N M A GTD REMIC 2.472% 2/25/41 $1 PV ON 198.2600 SHARES DUE 8/25/2022 $0.00245/PV ON 80,948.88 PV DUE 8/25/22 PAID ACCRUED INTEREST ON PURCHASE OF JPMORGAN CHASE CO SR 1.578% 4/22/27 U.S. Bank Transaction History 07/01 /22 - 09/30/22 Entry Date CUSIP Id Net Cash Amt 8/25/2022 09690AAC7 569.25 8/25/2022 05601XAC3 8/25/2022 3137BFE98 8/25/2022 31394JY35 8/25/2022 3137BSRE5 8/25/2022 3135G05X7 8/25/2022 31371NUC7 8/25/2022 31376KT22 8/25/2022 31403DJZ3 8/25/2022 31403GXF4 8/25/2022 31406PQY8 8/25/2022 31406XWT5 8/25/2022 31407BXH7 8/25/2022 31410F4V4 8/25/2022 3138EG6F6 8/25/2022 31417YAY3 8/25/2022 31397QREO 8/25/2022 46647PCBO Price Units Cost Gain Loss 0.000000 0.00 0.00 0.00 2,200.00 0.000000 0.00 0.00 0.00 13,212.50 0.000000 0.00 0.00 0.00 2,337.52 0.000000 0.00 0.00 0.00 13,000.00 0.000000 0.00 0.00 0.00 14,896.88 0.000000 0.00 0.00 0.00 22.14 0.000000 0.00 0.00 0.00 188.96 0.000000 0.00 0.00 0.00 193.89 0.000000 0.00 0.00 0.00 3.16 0.000000 0.00 0.00 0.00 284.25 0.000000 0.00 0.00 0.00 65.17 0.000000 0.00 0.00 0.00 38.41 0.000000 0.00 0.00 0.00 311.89 0.000000 0.00 0.00 0.00 15.30 0.000000 0.00 0.00 0.00 26.48 0.000000 0.00 0.00 0.00 198.26 0.000000 0.00 0.00 0.00 (26,957.50) 0.000000 0.00 0.00 0.00 18of25 Table of Contents U.S. Bank Transaction History 07/01 /22 - 09/30/22 Transaction Type Entry Date CUSIP Id Net Cash Amt Price Units Cost Gain Loss PAID ACCRUED INTEREST ON PURCHASE OF MORGAN STANLEY MTN 8/25/2022 61744YAN8 (2,466.67) 0.000000 0.00 0.00 0.00 3.125% 1 /23/23 RECEIVED ACCRUED INTEREST ON SALE OF JP MORGAN CHASE CO 8/25/2022 46625HRL6 18,805.88 0.000000 0.00 0.00 0.00 2.700% 5/18/23 INTEREST EARNED ON F H L B DISC NTS 0.00001 % 8/26/22 $1 PV ON 8/26/2022 313385D45 14,787.50 0.000000 0.00 0.00 0.00 5000000.0000 SHARES DUE 8/26/2022 5,000,000 PAR VALUE AT 100 % PAID ACCRUED INTEREST ON PURCHASE OF U S TREASURY NT 8/26/2022 91282CEW7 (25,169.84) 0.000000 0.00 0.00 0.00 3.000% 6/30/27 RECEIVED ACCRUED INTEREST ON SALE OF U S TREASURY NT 8/26/2022 91282CBA8 614.75 0.000000 0.00 0.00 0.00 0.125% 12/15/23 RECEIVED ACCRUED INTEREST ON SALE OF U S TREASURY NT 8/26/2022 9128281-157 12,628.07 0.000000 0.00 0.00 0.00 2.125% 11 /30/23 BOOK VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 8/29/2022 912828WU0 0.00 0.000000 0.00 0.00 0.00 90688.00 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI FED BASIS OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 8/29/2022 912828WU0 0.00 0.000000 0.00 90,688.00 0.00 90688.00 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI PAR VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 8/29/2022 912828WU0 0.00 0.000000 90,688.00 0.00 0.00 90688.0000 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI STATE COST OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 8/29/2022 912828WU0 0.00 0.000000 0.00 0.00 0.00 90688.00 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI INTEREST EARNED ON U S TREASURY NT 0.750% 8/31/26 $1 PV ON 8/31/2022 91282CCW9 30,000.00 0.000000 0.00 0.00 0.00 8000000.0000 SHARES DUE 8/31/2022 INTEREST EARNED ON U S TREASURY NT 2.125% 2/29/24 $1 PV ON 8/31/2022 912828W48 106,250.00 0.000000 0.00 0.00 0.00 10000000.0000 SHARES DUE 8/31/2022 PAID ACCRUED INTEREST ON PURCHASE OF U S TREASURY NT 8/31/2022 91282CEW7 (19,164.40) 0.000000 0.00 0.00 0.00 3.000% 6/30/27 RECEIVED ACCRUED INTEREST ON SALE OF JP MORGAN CHASE CO 8/31/2022 46625HRL6 8,652.00 0.000000 0.00 0.00 0.00 2.700% 5/18/23 RECEIVED ACCRUED INTEREST ON SALE OF JP MORGAN CHASE CO 8/31/2022 46625HRL6 10,003.88 0.000000 0.00 0.00 0.00 2.700% 5/18/23 RECEIVED ACCRUED INTEREST ON SALE OF U S TREASURY NT 8/31/2022 912828U57 18,695.36 0.000000 0.00 0.00 0.00 2.125% 11/30/23 INTEREST EARNED ON FIRST AM GOVT OB FD CL Z UNIT ON 0.0000 9/1/2022 31846V567 8,091.17 0.000000 0.00 0.00 0.00 SHARES DUE 8/31/2022 INTEREST FROM 8/1/22 TO 8/31/22 INTEREST EARNED ON FIRST AM GOVT OB FD CL Z UNIT ON 0.0000 9/1/2022 31846V567 2,937.28 0.000000 0.00 0.00 0.00 SHARES DUE 8/31/2022 INTEREST FROM 8/1/22 TO 8/31/22 INTEREST EARNED ON BANK OF AMERICA 3.550% 3/05/24 $1 PV 9/6/2022 06051 GHF9 118,481.25 0.000000 0.00 0.00 0.00 ON 6675000.0000 SHARES DUE 9/5/2022 INTEREST EARNED ON CHARLES SCHWAB CORP 2.450% 3/03/27 $1 9/6/2022 808513BY0 28,481.25 0.000000 0.00 0.00 0.00 PV ON 2325000.0000 SHARES DUE 9/3/2022 INTEREST EARNED ON F H L B DEB 3.375% 9/08/23 $1 PV ON 9/8/2022 313383YJ4 168,750.00 0.000000 0.00 0.00 0.00 10000000.0000 SHARES DUE 9/8/2022 19of25 Table of Contents Transaction Type RECEIVED ACCRUED INTEREST ON SALE OF WALMART INC 3.400% 6/26/23 INTEREST EARNED ON TORONTO DOMINION MTN 2.800% 3/10/27 $1 PV ON 5000000.0000 SHARES DUE 9/10/2022 BOOK VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 4992.00 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI FED BASIS OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 4992.00 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI INTEREST EARNED ON CHUBB INA HLDGS INC 2.700% 3/13/23 $1 PV ON 2000000.0000 SHARES DUE 9/13/2022 INTEREST EARNED ON F H L B DEB 2.875% 9/13/24 $1 PV ON 2500000.0000 SHARES DUE 9/13/2022 INTEREST EARNED ON JPMORGAN CHASE CO 2.005% 3/13/26 $1 PV ON 3500000.0000 SHARES DUE 9/13/2022 PAID ACCRUED INTEREST ON PURCHASE OF CATERPILLAR FINL MTN 3.600% 8/12/27 PAR VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 4992.0000 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI RECEIVED ACCRUED INTEREST ON SALE OF CHARLES SCHWAB CORP 2.650% 1/25/23 STATE COST OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 4992.00 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI INTEREST EARNED ON F H L B DEB 2.375% 3/14/25 $1 PV ON 5225000.0000 SHARES DUE 9/14/2022 INTEREST EARNED ON INTER AMER DEV BK 1.750% 9/14/22 $1 PV ON 4500000.0000 SHARES DUE 9/14/2022 INTEREST EARNED ON MET TOWER MTN 1.250% 9/14/26 $1 PV ON 3745000.0000 SHARES DUE 9/14/2022 INTEREST EARNED ON ACE INA HOLDING 3.150% 3/15/25 $1 PV ON 2000000.0000 SHARES DUE 9/15/2022 INTEREST EARNED ON AMERICAN EXPRESS 3.390% 5/17/27 $1 PV ON 18701.5000 SHARES DUE 9/15/2022 $0.00283/PV ON 6,620,000.00 PV DUE 9/15/22 INTEREST EARNED ON BANK OF MONTREAL MTN 1.250% 9/15/26 $1 PV ON 3000000.0000 SHARES DUE 9/15/2022 INTEREST EARNED ON BERKSHIRE HATHAWAY 2.300% 3/15/27 $1 PV ON 6875000.0000 SHARES DUE 9/15/2022 INTEREST EARNED ON F H L M C #786064 2.262% 1/01/28 $1 PV ON 2.1500 SHARES DUE 9/15/2022 JULY FHLMC DUE 9/15/22 INTEREST EARNED ON F H L M C MLTCL MTG 3.738% 8/15/32 $1 PV ON 9.6400 SHARES DUE 9/15/2022 $0.00312/PV ON 3,093.80 PV DUE 9/15/22 U.S. Bank Transaction History 07/01 /22 - 09/30/22 Entry Date CUSIP Id Net Cash Amt Price Units Cost Gain Loss 9/9/2022 931142EK5 26,750.44 0.000000 0.00 0.00 0.00 9/12/2022 89114TZT2 70,000.00 0.000000 0.00 0.00 0.00 9/13/2022 912828WU0 0.00 0.000000 0.00 0.00 0.00 9/13/2022 912828WU0 0.00 0.000000 0.00 4,992.00 0.00 9/13/2022 00440EAP2 27,000.00 0.000000 0.00 0.00 0.00 9/13/2022 3130A2UW4 35,937.50 0.000000 0.00 0.00 0.00 9/13/2022 46647PBH8 35,087.50 0.000000 0.00 0.00 0.00 9/13/2022 14913R3A3 (3,875.00) 0.000000 0.00 0.00 0.00 9/13/2022 912828WU0 0.00 0.000000 4,992.00 0.00 0.00 9/13/2022 808513AT2 9,716.67 0.000000 0.00 0.00 0.00 9/13/2022 912828WU0 0.00 0.000000 0.00 0.00 0.00 9/14/2022 3130A4CH3 62,046.88 0.000000 0.00 0.00 0.00 9/14/2022 4581XOCZ9 39,375.00 0.000000 0.00 0.00 0.00 9/14/2022 58989V2D5 23,406.25 0.000000 0.00 0.00 0.00 9/15/2022 00440EAS6 31,500.00 0.000000 0.00 0.00 0.00 9/15/2022 02582JJT8 18,701.50 0.000000 0.00 0.00 0.00 9/15/2022 06368FAC3 18,750.00 0.000000 0.00 0.00 0.00 9/15/2022 084664CZ2 79,062.50 0.000000 0.00 0.00 0.00 9/15/2022 31348SWZ3 2.15 0.000000 0.00 0.00 0.00 9/15/2022 3133TCE95 9.64 0.000000 0.00 0.00 0.00 20 of 25 Table of Contents Transaction Type INTEREST EARNED ON HONDA AUTO REC OWN 1.880% 5/15/26 $1 PV ON 6157.0000 SHARES DUE 9/15/2022 $0.00157/PV ON 3,930,000.00 PV DUE 9/15/22 INTEREST EARNED ON HTUNDAI AUTO REC TR 0.380% 1/15/26 $1 PV ON 1912.6700 SHARES DUE 9/15/2022 $0.00032/PV ON 6,040,000.00 PV DUE 9/15/22 INTEREST EARNED ON HYUNDAI AUTO LEASE 0.330% 6/17/24 $1 PV ON 1142.6300 SHARES DUE 9/15/2022 $0.00027/PV ON 4,155,000.00 PV DUE 9/15/22 INTEREST EARNED ON HYUNDAI AUTO LEASE 1.160% 1/15/25 $1 PV ON 2798.5000 SHARES DUE 9/15/2022 $0.00097/PV ON 2,895,000.00 PV DUE 9/15/22 INTEREST EARNED ON HYUNDAI AUTO REC 0.380% 9/15/25 $1 PV ON 665.0000 SHARES DUE 9/15/2022 $0.00032/PV ON 2,100,000.00 PV DUE 9/15/22 INTEREST EARNED ON HYUNDAI AUTO REC 2.220% 10/15/26 $1 PV ON 7955.0000 SHARES DUE 9/15/2022 $0.00185/PV ON 4,300,000.00 PV DUE 9/15/22 INTEREST EARNED ON HYUNDAI AUTO REC TR 0.740% 5/15/26 $1 PV ON 986.6700 SHARES DUE 9/15/2022 $0.00062/PV ON 1,600,000.00 PV DUE 9/15/22 INTEREST EARNED ON JOHN DEERE OWN 0.520% 3/16/26 $1 PV ON 1222.0000 SHARES DUE 9/15/2022 $0.00043/PV ON 2,820,000.00 PV DUE 9/15/22 INTEREST EARNED ON JOHN DEERE OWNER 0.360% 9/15/25 $1 PV ON 690.0000 SHARES DUE 9/15/2022 $0.00030/PV ON 2,300,000.00 PV DUE 9/15/22 INTEREST EARNED ON JOHN DEERE OWNER 0.510% 11/15/24 $1 PV ON 338.2800 SHARES DUE 9/15/2022 $0.00042/PV ON 795,947.48 PV DUE 9/15/22 INTEREST EARNED ON JOHN DEERE OWNER 2.320% 9/15/26 $1 PV ON 5819.3300 SHARES DUE 9/15/2022 $0.00193/PV ON 3,010,000.00 PV DUE 9/15/22 INTEREST EARNED ON JOHN DEERE OWNR TR 6.85667% 2/16/27 $1 PV ON 17941.6100 SHARES DUE 9/15/2022 $0.00571/PV ON 3,140,000.00 PV DUE 9/15/22 INTEREST EARNED ON MERCEDES BENZ AUTO 0.400% 11/15/24 $1 PV ON 1105.0000 SHARES DUE 9/15/2022 $0.00033/PV ON 3,315,000.00 PV DUE 9/15/22 INTEREST EARNED ON NISSAN AUTO 1.930% 7/15/24 $1 PV ON 1763.2400 SHARES DUE 9/15/2022 $0.00161/PV ON 1,096,316.63 PV DUE 9/15/22 U.S. Bank Transaction History 07/01 /22 - 09/30/22 Entry Date CUSIP Id Net Cash Amt Price Units Cost Gain Loss 9/15/2022 43815BAC4 6,157.00 0.000000 0.00 0.00 0.00 9/15/2022 44934KAC8 1,912.67 0.000000 0.00 0.00 0.00 9/15/2022 44891 VAC5 1,142.63 0.000000 0.00 0.00 0.00 9/15/2022 44891 WAC3 2,798.50 0.000000 0.00 0.00 0.00 9/15/2022 44933LAC7 665.00 0.000000 0.00 0.00 0.00 9/15/2022 448977ADO 7,955.00 0.000000 0.00 0.00 0.00 9/15/2022 44935FAD6 986.67 0.000000 0.00 0.00 0.00 9/15/2022 47789QAC4 1,222.00 0.000000 0.00 0.00 0.00 9/15/2022 47788UAC6 690.00 0.000000 0.00 0.00 0.00 9/15/2022 47787NAC3 338.28 0.000000 0.00 0.00 0.00 9/15/2022 47787JAC2 5,819.33 0.000000 0.00 0.00 0.00 9/15/2022 47800AAC4 17,941.61 0.000000 0.00 0.00 0.00 9/15/2022 58769KAD6 1,105.00 0.000000 0.00 0.00 0.00 9/15/2022 65479JAD5 1,763.24 0.000000 0.00 0.00 0.00 21 of 25 Table of Contents U.S. Bank Transaction History 07/01 /22 - 09/30/22 Transaction Type Entry Date CUSIP Id Net Cash Amt INTEREST EARNED ON TOYOTA AUTO RECV 0.440% 10/15/24 $1 PV 9/15/2022 89237VAB5 612.88 ON 612.8800 SHARES DUE 9/15/2022 $0.00037/PV ON 1,671,495.81 PV DUE 9/15/22 INTEREST EARNED ON U S TREASURY NT 0.375% 9/15/24 $1 PV ON 9/15/2022 91282CCX7 19,687.50 10500000.0000 SHARES DUE 9/15/2022 INTEREST EARNED ON VIRGINIA ELEC PWR 2.750% 3/15/23 $1 PV 9/15/2022 927804FN9 27,500.00 ON 2000000.0000 SHARES DUE 9/15/2022 INTEREST EARNED ON GM FIN CONS ALIT 3.100% 2/16/27 $1 PV ON 9/16/2022 362585AC5 6,019.17 6019.1700 SHARES DUE 9/16/2022 $0.00258/PV ON 2,330,000.00 PV DUE 9/16/22 INTEREST EARNED ON GM FIN CONS AUTO 0.680% 9/16/26 $1 PV 9/16/2022 362554AC1 966.17 ON 966.1700 SHARES DUE 9/16/2022 $0.00057/PV ON 1,705,000.00 PV DUE 9/16/22 INTEREST EARNED ON GM FIN CONS AUTO 1.260% 11/16/26 $1 PV 9/16/2022 380146AC4 1,669.50 ON 1669.5000 SHARES DUE 9/16/2022 $0.00105/PV ON 1,590,000.00 PV DUE 9/16/22 INTEREST EARNED ON BLACKROCK INC 3.500% 3/18/24 $1 PV ON 9/19/2022 09247XAL5 17,500.00 1000000.0000 SHARES DUE 9/18/2022 INTEREST EARNED ON HONDA AUTO 0.370% 10/18/24 $1 PV ON 9/19/2022 43813KAC6 715.14 715.1400 SHARES DUE 9/18/2022 $0.00031/PV ON 2,319,391.25 PV DUE 9/18/22 INTEREST EARNED ON SCHWAB CHARLES 0.750% 3/18/24 $1 PV 9/19/2022 808513BN4 10,443.75 ON 2785000.0000 SHARES DUE 9/18/2022 INTEREST EARNED ON WALMART INC 1.050% 9/17/26 $1 PV ON 9/19/2022 931142ER0 9,056.25 1725000.0000 SHARES DUE 9/17/2022 INTEREST EARNED ON G N M A I I #080023 1.750% 12/20/26 $1 PV ON 9/20/2022 36225CAZ9 10.69 10.6900 SHARES DUE 9/20/2022 AUGUST GNMA DUE 9/20/22 INTEREST EARNED ON G N M A I I #080088 3.000% 6/20/27 $1 PV ON 9/20/2022 36225CC20 13.82 13.8200 SHARES DUE 9/20/2022 AUGUST GNMA DUE 9/20/22 INTEREST EARNED ON G N M A I I #080395 2.875% 4/20/30 $1 PV ON 9/20/2022 36225CNM4 7.45 7.4500 SHARES DUE 9/20/2022 AUGUST GNMA DUE 9/20/22 INTEREST EARNED ON G N M A I I #080408 2.875% 5/20/30 $1 PV ON 9/20/2022 36225CN28 63.18 63.1800 SHARES DUE 9/20/2022 AUGUST GNMA DUE 9/20/22 INTEREST EARNED ON G N M A I I #080965 1.625% 7/20/34 $1 PV ON 9/20/2022 36225DCB8 28.61 28.6100 SHARES DUE 9/20/2022 AUGUST GNMA DUE 9/20/22 INTEREST EARNED ON GM FIN AUTO LSNG 3.420% 6/20/25 $1 PV 9/20/2022 36266FAC3 8,649.75 ON 8649.7500 SHARES DUE 9/20/2022 $0.00285/PV ON 3,035,000.00 PV DUE 9/20/22 INTEREST EARNED ON GM FIN AUTO LSNG TR 1.900% 3/20/25 $1 PV 9/20/2022 36265MAC9 7,948.34 ON 7948.3400 SHARES DUE 9/20/2022 $0.00158/PV ON 5,020,000.00 PV DUE 9/20/22 Price Units Cost Gain Loss 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 22 of 25 Table of Contents Transaction Type INTEREST EARNED ON TOYOTA LEASE OWNER 0.420% 10/21/24 $1 PV ON 1114.7500 SHARES DUE 9/20/2022 $0.00035/PV ON 3,185,000.00 PV DUE 9/20/22 INTEREST EARNED ON TOYOTA LEASE OWNER 1.960% 2/20/25 $1 PV ON 10004.1600 SHARES DUE 9/20/2022 $0.00163/PV ON 6,125,000.00 PV DUE 9/20/22 INTEREST EARNED ON VERIZON MASTER TR 4.836% 7/20/27 $1 PV ON 11082.5000 SHARES DUE 9/20/2022 $0.00403/PV ON 2,750,000.00 PV DUE 9/20/22 INTEREST EARNED ON HONDA AUTO 0.270% 4/21/25 $1 PV ON 338.0000 SHARES DUE 9/21/2022 $0.00023/PV ON 1,502,209.11 PV DUE 9/21/22 INTEREST EARNED ON HONDA AUTO REC 0.880% 1/21/26 $1 PV ON 1679.3300 SHARES DUE 9/21/2022 $0.00073/PV ON 2,290,000.00 PV DUE 9/21/22 INTEREST EARNED ON TOYOTA MOTOR MTN 3.050% 3/22/27 $1 PV ON 2000000.0000 SHARES DUE 9/22/2022 PAID ACCRUED INTEREST ON PURCHASE OF DEERE JOHN MTN 4.150% 9/15/27 INTEREST EARNED ON BANK NOVA C D 0.200% 9/23/22 $1 PV ON 4000000.0000 SHARES DUE 9/23/2022 INTEREST ON 9/23/22 MATURITY INTEREST EARNED ON F H L M C M T N 0.375% 9/23/25 $1 PV ON 7660000.0000 SHARES DUE 9/23/2022 INTEREST EARNED ON INTER AMER BK M T N 0.500% 9/23/24 $1 PV ON 10775000.0000 SHARES DUE 9/23/2022 INTEREST EARNED ON AMRESCO 3.60934% 6/25/29 $1 PV ON 350.7800 SHARES DUE 9/25/2022 $0.00301/PV ON 116,624.77 PV DUE 9/25/22 INTEREST EARNED ON BMW VEH OWNER TR 3.210% 8/25/26 $1 PV ON 6767.7500 SHARES DUE 9/25/2022 $0.00268/PV ON 2,530,000.00 PV DUE 9/25/22 INTEREST EARNED ON BMW VEHICLE LEASE 0.330% 12/26/24 $1 PV ON 569.2500 SHARES DUE 9/25/2022 $0.00027/PV ON 2,070,000.00 PV DUE 9/25/22 INTEREST EARNED ON BMW VEHICLE LEASE 1.100% 3/25/25 $1 PV ON 2200.0000 SHARES DUE 9/25/2022 $0.00092/PV ON 2,400,000.00 PV DUE 9/25/22 INTEREST EARNED ON F H L B GTD REMIC 3.171% 10/25/24 $1 PV ON 13212.5000 SHARES DUE 9/25/2022 $0.00264/PV ON 5,000,000.00 PV DUE 9/25/22 INTEREST EARNED ON F H L M C MLTCL MT 9.50001 % 9/25/43 $1 PV ON 2302.7000 SHARES DUE 9/25/2022 $0.00542/PV ON 425,113.51 PV DUE 9/25/22 U.S. Bank Transaction History 07/01 /22 - 09/30/22 Entry Date CUSIP Id Net Cash Amt 9/20/2022 89239CAC3 1,114.75 9/20/2022 89238LAC4 10,004.16 9/20/2022 92348KAV5 11,082.50 9/21/2022 43813GAC5 338.00 9/21/2022 43815GAC3 1,679.33 9/22/2022 89236TJZ9 30,500.00 9/22/2022 24422EWK1 (3,227.78) 9/23/2022 06417MRR8 8,022.22 9/23/2022 3137EAEX3 14,362.50 9/23/2022 4581XODZ8 26,937.50 9/26/2022 03215PFN4 350.78 9/26/2022 05602RAD3 6,767.75 9/26/2022 09690AAC7 569.25 9/26/2022 05601 XAC3 2,200.00 9/26/2022 3137BFE98 13,212.50 9/26/2022 31394JY35 2,302.70 Price Units Cost Gain Loss 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 0.000000 0.00 0.00 0.00 23 of 25 Table of Contents Transaction Type INTEREST EARNED ON F H L M C MLTCL MTG 3.120% 9/25/26 $1 PV ON 13000.0000 SHARES DUE 9/25/2022 $0.00260/PV ON 5,000,000.00 PV DUE 9/25/22 INTEREST EARNED ON F N M A #257179 4.500% 4/01/28 $1 PV ON 21.7500 SHARES DUE 9/25/2022 AUGUST FNMA DUE 9/25/22 INTEREST EARNED ON F N M A #357969 5.000% 9/01/35 $1 PV ON 186.5800 SHARES DUE 9/25/2022 AUGUST FNMA DUE 9/25/22 INTEREST EARNED ON F N M A #745580 5.000% 6/01/36 $1 PV ON 189.0100 SHARES DUE 9/25/2022 AUGUST FNMA DUE 9/25/22 INTEREST EARNED ON F N M A #748678 5.000% 10/01/33 $1 PV ON 3.1400 SHARES DUE 9/25/2022 AUGUST FNMA DUE 9/25/22 INTEREST EARNED ON F N M A #815971 5.000% 3/01/35 $1 PV ON 278.1100 SHARES DUE 9/25/2022 AUGUST FNMA DUE 9/25/22 INTEREST EARNED ON F N M A #823358 1.948% 2/01/35 $1 PV ON 45.3300 SHARES DUE 9/25/2022 AUGUST FNMA DUE 9/25/22 INTEREST EARNED ON F N M A #826080 5.000% 7/01/35 $1 PV ON 37.1000 SHARES DUE 9/25/2022 AUGUST FNMA DUE 9/25/22 INTEREST EARNED ON F N M A #888336 5.000% 7/01/36 $1 PV ON 308.3900 SHARES DUE 9/25/2022 AUGUST FNMA DUE 9/25/22 INTEREST EARNED ON F N M A #AL0869 4.500% 6/01/29 $1 PV ON 15.0400 SHARES DUE 9/25/2022 AUGUST FNMA DUE 9/25/22 INTEREST EARNED ON F N M A #MA0022 4.500% 4/01/29 $1 PV ON 25.8200 SHARES DUE 9/25/2022 AUGUST FNMA DUE 9/25/22 INTEREST EARNED ON F N M A GTD REMIC 2.472% 2/25/41 $1 PV ON 208.2900 SHARES DUE 9/25/2022 $0.00260/PV ON 80,017.24 PV DUE 9/25/22 PAID ACCRUED INTEREST ON PURCHASE OF U S TREASURY NT 2.750% 4/30/27 BOOK VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY - 728.00 UNITS DECREASE TO ADJUST FOR CHANGE IN CPI FED BASIS OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY - 728.00 UNITS DECREASE TO ADJUST FOR CHANGE IN CPI PAID ACCRUED INTEREST ON PURCHASE OF U S TREASURY NT 3.125% 8/15/25 PAR VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY - 728.0000 UNITS DECREASE TO ADJUST FOR CHANGE IN CPI RECEIVED ACCRUED INTEREST ON SALE OF U S TREASURY NT 0.125% 12/15/23 RECEIVED ACCRUED INTEREST ON SALE OF U S TREASURY NT 0.750% 12/31/23 STATE COST OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY - 728.00 UNITS DECREASE TO ADJUST FOR CHANGE IN CPI U.S. Bank Transaction History 07/01 /22 - 09/30/22 Entry Date CUSIP Id Net Cash Amt Price Units Cost Gain Loss 9/26/2022 3137BSRE5 13,000.00 0.000000 0.00 0.00 0.00 9/26/2022 31371NUC7 21.75 0.000000 0.00 0.00 0.00 9/26/2022 31376KT22 186.58 0.000000 0.00 0.00 0.00 9/26/2022 31403DJZ3 189.01 0.000000 0.00 0.00 0.00 9/26/2022 31403GXF4 3.14 0.000000 0.00 0.00 0.00 9/26/2022 31406PQY8 278.11 0.000000 0.00 0.00 0.00 9/26/2022 31406XWT5 45.33 0.000000 0.00 0.00 0.00 9/26/2022 31407BXH7 37.10 0.000000 0.00 0.00 0.00 9/26/2022 31410F4V4 308.39 0.000000 0.00 0.00 0.00 9/26/2022 3138EG6F6 15.04 0.000000 0.00 0.00 0.00 9/26/2022 31417YAY3 25.82 0.000000 0.00 0.00 0.00 9/26/2022 31397QRE0 208.29 0.000000 0.00 0.00 0.00 9/27/2022 91282CEN7 (56,046.20) 0.000000 0.00 0.00 0.00 9/28/2022 912828WU0 0.00 0.000000 0.00 0.00 0.00 9/28/2022 912828WU0 0.00 0.000000 0.00 (728.00) 0.00 9/28/2022 91282CFE6 (18,682.07) 0.000000 0.00 0.00 0.00 9/28/2022 912828WU0 0.00 0.000000 (728.00) 0.00 0.00 9/28/2022 91282CBA8 358.61 0.000000 0.00 0.00 0.00 9/28/2022 91282CDR9 4,585.60 0.000000 0.00 0.00 0.00 9/28/2022 912828WU0 0.00 0.000000 0.00 0.00 0.00 24 of 25 Table of Contents Transaction Type INTEREST EARNED ON U S TREASURY BILL 9/29/22 $1 PV ON 28000000.0000 SHARES DUE 9/29/2022 28,000,000 PAR VALUE AT 100 % PAID ACCRUED INTEREST ON PURCHASE OF F H L M C M T N 0.250% 6/26/23 CASH DISBURSEMENT PAID TO OCS OUTGOING DOMESTIC WIRE TO XX9645; PER DIR DTD 9/27/2022 INTEREST EARNED ON U S TREASURY NT 0.250% 9/30/25 $1 PV ON 6500000.0000 SHARES DUE 9/30/2022 INTEREST EARNED ON U S TREASURY NT 0.750% 3/31/26 $1 PV ON 10000000.0000 SHARES DUE 9/30/2022 INTEREST EARNED ON U S TREASURY NT 1.500% 9/30/24 $1 PV ON 14000000.0000 SHARES DUE 9/30/2022 Total Other U.S. Bank Transaction History 07/01 /22 - 09/30/22 Entry Date CUSIP Id Net Cash Amt 9/29/2022 912796U64 9/29/2022 3137EAES4 9/30/2022 9/30/2022 91282CAM3 9/30/2022 91282CBT7 9/30/2022 912828YH7 135,238.06 (807.29) (30,000,000.00) 8,125.00 37,500.00 105,000.00 (71,852,539.12) Price 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 Units 0.00 0.00 0.00 0.00 0.00 0.00 Cost 0.00 0.00 0.00 0.00 0.00 0.00 Gain Loss 0.00 0.00 0.00 0.00 0.00 316,368.00 316,368.00 - 25 of 25 Table of Contents I I Callan September 30, 2022 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 the Appendix section in your investment measurement service quarterly review report for Important Information and Disclosures. Table of Contents Orange County Sanitation District Executive Summary for Period Ending September 30, 2022 Asset Allocation September 30, 2022 June 30, 2022 Market Value Weight Net New Inv. Inv. Return Market Value Weight Chandler Long Term Operating Fund 699,920,416 86.48% 0 (13,547,207) 713,467,623 79.51% Chandler Liquid Operating Monies 109,469,457 13.52% (75,000,000) 582,096 183,887,361 20.491% Total Fund $809,389,873 100.0% $(75,000,000) $(12,965,111) $897,354,984 100.0% Performance Last Last Last Last Last 3 5 7 Quarter Year Years Years Years Domestic Fixed Income Long Term Operating Fund" (1.90%) (6.28%) (0.60%) 0.74% 0.90% Chandler (1.90%) (6.28%) (0.60%) 0.74% 0.90% Blmbg Govt/Cred 1-5 Year Idx (2.16%) (7.29%) (0.90%) 0.55% 0.76% ML 1-5 Govt/Corp (2.21 %) (7.32%) (0.90%) 0.57% 0.78% Liquid Operating Monies" 0.39% 0.40% 0.63% 1.19% 1.01 % Chandler 0.39% 0.40% 0.63% 1.19% 1.01 % Citigroup 3-Month Treasury Bill 0.45% 0.63% 0.57% 1.13% 0.92% Total Fund (1.56%) (5.13%) (0.40%) 0.82% 0.87% Target* (1.67%) (5.76%) (0.60%) 0.68% 0.81% * Current Quarter Target = 80.0% MIL 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, $75 million was withdrawn from the Liquid Operating Monies. Organizational Issues N/A Fixed Income Market Snapshot The Bloomberg Municipal Bond Index fell 3.5% for the quarter and is down 12.1 % YTD. The shorter duration 1-10 Year Blend fell 2.3% for the quarter and is down 7.7% YTD. The ratio of AAA Municipal yields to the 10-year U.S. Treasury fell to 86%, down from 92% at the end of 2Q. The 4.0% yield -to -worst of the Bloomberg Municipal Bond Index is the highest since 2009. The 10-year U.S. Treasury briefly touched an intra-quarter high of 4.0% in late September, the highest since 2008, before closing the quarter at 3.8%. At quarter -end, the yield curve was inverted by about 40 bps with the 10-year at 3.8% and the 2-year at 4.2%. The Bloomberg U.S. Aggregate Bond Index fell 4.8% in 3Q, bringing its YTD return to a startling-14.6%, a historical Table of Contents Callan Orange County Sanitation District worst for the first nine months of a year. Notably, the sharp sell-off has eroded gains over the past 10 years; the Aggregate's 10-year annualized gain is now a muted 0.9%. Mortgages and corporates underperformed U.S. Treasuries, with mortgage -backed securities doing especially poorly, underperforming like -duration U.S. Treasuries by 160 bps on poor technicals and rising rates. The yield -to -worst of the Aggregate Index climbed to 4.75%, up sharply from 1.75% at the beginning of the year. TIPS (Bloomberg TIPS: -5.1%; -13.6% YTD) were not immune from the sell-off. High yield corporates (Bloomberg High Yield: -0.6%) fared better, but the Index is down a similar 14.7% YTD. The yield -to -worst was 9.7% as of quarter -end. Investment Manager Performance The Long Term Operating Fund recorded a loss of 1.90% in the third quarter, which outperformed the 2.21% decline of the ICE Corp/Gov 1-5 Year Index. Over the trailing one-year period, the portfolio also outperformed its benchmark, declining 6.28% versus a 7.32% loss for the index. The fund ranks in the bottom quartile among peers over the trailing one-, three-, five-, and seven-year periods. Rising interest rates continued to plague fixed income portfolios in the third quarter. Treasury yields rose across the curve and credit spreads widened in the third quarter. The Long Term Operating Fund benefited from a higher quality bias compared to the benchmark during the period. The two largest sector adjustments in the quarter were an increase of 1.1 % to corporate credit and a 0.9% reduction to the money market. The portfolio had less than 30% invested in credit (26%) and less than the permissible 20% invested in the combination of asset -backed securities (12%), commercial mortgage backed securities (0%), and CMOs (2%) as of September 30, 2022 (see page 20). The Liquid Operating Portfolio declined by 35 basis points in the third quarter, trailing the Citigroup 3-Month Treasury Bill Index's return of 0.45%. Over the trailing year, the fund has returned 0.25%, behind the index's return of 0.63%. Cordially, Alexander Ford Vice President, Fund Sponsor Consulting Callan LLC Table of Contents Table of Contents September 30, 2022 Capital Market Review 1 Active Management Overview Market Overview 7 Domestic Fixed Income 8 Asset Allocation 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 Callan Table of Contents Capital Market Review Table of Contents Capital Markets Overview 3Q22 U.S. EQUITY Worst three-quarter start to year in decades The S&P 500 Index fell 4.9% in 3Q22; all major U.S. indices across styles and market cap ranges were negative except for the Russell 2000 Growth Index, which gained 0.24%. During the quarter, all sectors posted negative returns except for Energy (+2%) and Consumer Discretionary (+4%). The return for Consumer Discretionary was aided by an exceptional July when the sector was up more than 18% Returns for Real Estate and Communication Services were the worst, down 11 % and 13%, respectively. Small cap (Russell 2000) outpaced large cap (Russell 1000) and growth outperformed value during the quarter, a reversal from previous quarters this year. Continued concerns around inflation and a potential recession, along with geopolitical headlines, contributed to a volatile and risk -averse environment. More market difficulties; no place to hide The pullback of the U.S. equity markets was reminiscent of other periods marked by bearish sentiment, such as 2008 (Global Financial Crisis) and 2020 (start of pandemic). High inflation and interest rates continued to pressure the markets. While some inflationary data (particularly around energy) seemed to soften, other data points around food, shelter, and services remained elevated. U.S. equity did not provide a safe haven for investors. Like most other asset classes, it has not generated YTD gains and continues to be overshadowed by the outsized outperformance of commodities. `Relief rally' but not for active managers The market experienced a "relief rally" in late June to August based on optimism that inflation had peaked, lessening the urgency for continued rate hikes. The rally was marked by a rebound of cyclical growth companies, and unprofitable companies outperformed profitable companies by wide margins across caps. Active managers underperformed significantly during this period. S&P Sector Returns, Quarter Ended 9/30/22 4.4% -12.7% 9 qo/ U.S. Equity: Quarterly Returns Russell3000 -4.5% Russell 1000 -4.6% Russell 1000 Growth -3.6% Russell 1000 Value -5.6% ■ S&P 500 -4.9% I Russell Midcap Russell 2500 Russell 2000 U.S. Equity: One -Year Returns -3.4 % -2.8% -2.2% Russell3000 -17.6% W Russell 1000 -17.2% Russell 1000 Growth -22.6% N& Russell 1000 Value -11.4% S&P 500 -15.5% Russell Midcap -19.4% Russell 2500 -21.1 % Russell 2000 -23.5% Sources: FTSE Russell, S&P Dow Jones Indices -11.0% Communication Consumer Consumer Energy Financials Health Care Industrials Information Materials Real Estate Utilities Services Discretionary Staples Technology Source: S&P Dow Jones Indices Callan Table of Contents Capital Markets Overview (continued) 3Q22 GLOBAL EQUITY Market turmoil around the world Global and global ex-U.S. equity markets waned for three straight quarters due to inflation, rising rates, and fears of global recession. Geopolitical and macro factors plague market Political instability in Italy and the U.K. as a result of prime minister departures weighed on the market. U.K. equities lost confidence as its newly elected prime minister Liz Truss announced her economic policy. China's COVID-19 lockdowns and growing concerns around the property sector sapped sentiment and economic activity. Growth vs. value switch places globally Growth outpaced value in developed markets but lagged value in emerging markets. Rate -sensitive sectors in developed markets (e.g., Communication Services and Real Estate) were challenged given the tightening cycle by global central banks. The profitability of Chinese internet companies has compressed due to lockdowns and regulation, and a cyclical downturn in electronics weakened Taiwan and Korean semiconductors. U.S. dollar vs. other currencies Growth and the interest rate differential as well as its safe - haven status fueled the U.S. dollar to its highest level in decades. The dollar gained vs. the euro and the yen by about 6%. The case for global ex-U.S. equities Diversification: Global ex-U.S. equities remain a good diversifier to other public markets investments. Valuations/Yield: Valuation of U.S. stocks took off after the Global Financial Crisis (GFC); many of the tailwinds have dissipated -rates, inflation, and liquidity. Developed ex-U.S. stocks continue to be undervalued and currently provide a 1.6% yield premium to U.S. stocks (MSCI EAFE 3.5% vs. S&P 500 1.9%). Economic exposure: Emerging market and developing economies' contribution to global GDP has increased while advanced economies' share has steadily decreased since the GFC. U.S. companies do not provide significant exposure to non- U.S. economies Global Equity: Quarterly Returns MSCI EAFE -9.4% MSCI ACWI -6.8% MSCI World -6.2% _ MSCI ACWI ex USA -9.9% MSCI World ex USA -9.2% MSCI ACWI ex USA SC -8.4% MSCI World ex USA SC -9.5% MSCI Europe ex UK -9.9% MSCI United Kingdom -10.8% MSCI Pacific ex Japan -8.8% MSCI Japan -7.7% MSCI Emerging Markets -11.6% MSCI China -22.5% MSCI Frontier Markets -6.5% - Global Equity: One -Year Returns MSCI EAFE -25.1 % MSCI ACWI -20.7% MSCI World -19.6% MSCI ACWI ex USA -25.2% MSCI World ex USA -23.9% MSCI ACWI ex USA SC -28.9% MSCI World ex USA SC -30.8% MSCI Europe ex UK -27.8% MSCI United Kingdom MSCI Pacific ex Japan MSCI Japan -29.3% MSCI Emerging Markets -28.1% MSCI China -35.4% -14.1% -18.8% - MSCI Frontier Markets -25.2% Source: MSCI Callan Table of Contents Capital Markets Overview (continued) 3Q22 U.S. FIXED INCOME Bonds hit hard as rates rose sharply (again) Bloomberg US Aggregate saw its worst nine -month return in its history —as did trailing 1-, 3-, 5- and 10-year returns! 10-year annualized return for Aggregate is a mere 0.9%. Yield curve inverted at quarter -end; 10-year at 3.83% and 2- year at 4.22% 10-year at 4% briefly in late September; first time since 2009 TIPS underperformed nominal Treasuries, and 10-year breakeven spreads fell to 2.11 % from 2.33% as of 6/30/22. Fed raised rates by 150 bps during the quarter, bringing target to 3.0% to 3.25%. Median expectation from Fed is 4.4% at year-end and 4.6% at the end of 2023. Longer -term expectations are much lower. Volatility climbed to levels not seen since early 2020. Spread sectors underperformed Mortgages had worst month ever vs. like -duration U.S. Treasuries in September; underperformed by 169 bps for 3Q. Corporates also underperformed: 33 bps of excess return; Bloomberg Corporate Bond Index yield -to -worst 5.7% High yield fared better and loans posted a positive return. Bloomberg High Yield Corp yield -to -worst 9.7% MUNICIPAL BONDS Municipal bond returns hurt by rising rates Lower quality continued to underperform. BBB: -4.1 %; AAA: -3.5% (YTD BBB:-14.9%; AAA:-11.7%) Valuations relative to U.S. Treasuries at fair value 10-year AAA Muni/1 0-year U.S. Treasury yield ratio roughly 87%; in line with 10-year average Municipal Bond Index after-tax yield = 6.8% (source: Morgan Stanley) Supply/demand Outflows of $91.5 billion YTD—highest cycle outflow since data series began in 1992 YTD issuance down 14% vs. last year Credit quality remains stable to improving State revenues up more than 18% vs. 2021 Number of defaults lower than 2021 and concentrated in senior living and industrial revenue bonds U.S. Fixed Income: Quarterly Returns Bloomberg Gov/Cr 1-3 Yr Bloomberg Interm Gov/Cr Bloomberg Aggregate Bloomberg Long Gov/Cr -9.0% Bloomberg Universal CS Leveraged Loans -4.5% = 14 1.2% Bloomberg High Yield -0.6% Bloomberg TIPS -5.1% U.S. Fixed Income: One -Year Returns Bloomberg Gov/Cr 1-3 Yr -5.1% ■ Bloomberg Interm Gov/Cr -10.1% _ Bloomberg Aggregate -14.6% Bloomberg Long Gov/Cr -27.4% Bloomberg Universal -14.9% CS Leveraged Loans -2.6% - Bloomberg High Yield -14.1 % Bloomberg TIPS-11.6% U.S. Treasury Yield Curves t9/30/22 t6/30/22 9/30/21 5 10 15 20 25 30 Maturity (Years) Sources: Bloomberg, Credit Suisse Callan Table of Contents Capital Markets Overview (continued) 3Q22 GLOBAL FIXED INCOME Negative returns driven by broad interest rate increases U.S. dollar continued to appreciate vs. yen, euro, and pound Bank of Japan intervened to support currency for first time since 1998. Pound hit record low vs. U.S. dollar Double-digit negative returns were widespread across developed markets. U.K. government bonds were hard-hit on UK's "mini -budget" fiasco. ICE BofA U.K. Gilts Index -20.6% in 3Q Emerging market debt returns also sharply negative Most countries in the USD-denominated JPM EMBI Global Diversified Index posted negative returns, hurt by rising rates in the U.S. JPM GBI-EM Global Diversified also fell due largely to EM currency depreciation vs. the U.S. dollar. Global Fixed Income: Quarterly Returns Bloomberg Global Aggregate -6.9% Bloomberg Global Agg (hdg) -3.3% ■ Bloomberg Global High Yield -2.7% ■ Bloomberg Global Agg ex US -8.8% JPM EMBI Global Diversified -4.6% - JPM GBI-EM Global Diversified -4.7% - JPM EMBI GI Div/JPM GBI-EM GI Div -4.6% - JPM CEMBI -3.2% ■ Global Fixed Income: One -Year Returns Bloomberg Global Aggregate -20.4% - Bloomberg Global Agg (hdg)-12.1%. Bloomberg Global High Yield -19.7% Bloomberg Global Agg ex US -24.8% - JPM EMBI Global Diversified -24.3% JPM GBI-EM Global Diversified -20.6% JPM EMBI GI Div/JPM GBI-EM GI Div -22.5% wr� JPM CEMBI -18.9% F Change in 10-Year Global Government Bond Yields 2Q22 to 3Q22 U.S. Treasury Germany U.K. Canada -5 bps' Japan 11 bps Sources: Bloomberg, JP Morgan Callan Table of Contents Active Management Overview Table of Contents 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, 2022 10th Percentile 25th Percentile Median 75th Percentile 90th Percentile Index (41) (33) (56)� (81)� (52) (74)� 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 (3.07) 0.36 (7.39) (4.24) (6.46) 3.88 (3.78) (1.51) (8.48) (4.39) (7.81) 3.44 (4.65) (3.10) (9.30) (4.56) (9.03) 3.07 (5.61) (4.62) (10.43) (4.70) (10.03) 1.54 (6.97) (5.95) (11.47) (4.87) (10.36) (0.80) (4.88) (2.19) (9.36) (4.75) (9.95) 3.23 Range of Separate Account Manager Returns by Asset Class One Year Ended September 30, 2022 40% - 30% - 20% - 10% 0% 7 .r (10%) - (20%) - (30%) - (40%) - (50%) - (46) (46) (69) ♦ (42) (60) (79) 10th Percentile 25th Percentile Median 75th Percentile 90th Percentile Index 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 (6.91) (11.20) (21.33) (13.65) (13.82) 27.86 (10.54) (14.57) (23.23) (14.07) (23.90) 24.63 (16.68) (19.78) (25.79) (14.47) (25.82) 17.91 (24.91) (25.92) (28.84) (14.86) (27.68) 8.85 (31.86) (32.71) (34.00) (15.48) (29.52) 5.08 (15.47) (23.50) (25.13) (14.60) (28.27) 19.15 Callan Orange County Sanitation District 7 Table of Contents Domestic Fixed Income Active Management Overview The 10-year U.S. Treasury briefly touched an intra-quarter high of 4.0% in late September, the highest since 2008, before closing the quarter at 3.83%. At quarter -end, the yield curve was inverted by about 40 bps. with the 10-year at 3.8% and the 2-year at 4.2%. The Bloomberg US Aggregate Bond Index fell 4.8% in 3Q, bringing its YTD loss to 14.6%, a historical worst for the first nine months of a year. Mortgages and corporates underperformed U.S. Treasuries, with mortgage -backed securities doing especially poorly, underperforming like -duration U.S. Treasuries by 160 bps on poor technicals and rising rates. The yield -to -worst of the Aggregate Index climbed to 4.75%, up sharply from 1.75% at the beginning of the year. TIPS (Bloomberg TIPS: -5.1%; -13.6% YTD) were not immune from the sell-off. High yield corporates (Bloomberg High Yield: -0.6%) fared better, but the Index is down a similar 14.7% YTD. Separate Account SWIP Groin Median Returns for Quarter 5% 0% (10%) (15%) Defensive Intermed Core Core Plus Extended Bank High Yield Bond Maturity Loans Separate Accniinf Stulc (:rnun Morlinn Rcfnrnc for One Ye 0% (5%) (10%) N (15%) C L W (20%) (25%) (30%) (35%) Callan Defensive Intermed Core Core Plus Extended Bank High Yield Bond Maturity Loans Orange County Sanitation District 8 Table of Contents Asset Allocation Table of Contents Investment Manager Asset Allocation The table below contrasts the distribution of assets across the Fund's investment managers as of September 30, 2022, with the distribution as of June 30, 2022. 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, 2022 June 30, 2022 Market Value Weight Net New Inv. Inv. Return Market Value Weight Chandler Long Term Operating Fund 699,920,416 86.48% 0 (13,547,207) 713,467,623 79.51 % Chandler Liquid Operating Monies 109,469,457 13.52% (75,000,000) 582,096 183,887,361 20.49% Total Fund $809,389,873 100.0% $(75,000,000) $(12,965,111) $897,354,984 100.0% Callan Orange County Sanitation District 10 Table of Contents Investment Manager Returns The table below details the rates of return for the Fund's investment managers over various time periods ended September 30, 2022. 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, 2022 Last Last Last Last Last 3 5 7 Quarter Year Years Years Years Domestic Fixed Income Long Term Operating Fund (1.90%) (6.28%) (0.60%) 0.74% 0.90% Chandler (1.90%) (6.28%) (0.60%) 0.74% 0.90% Blmbg Govt/Cred 1-5 Year Idx (2.16%) (7.29%) (0.90%) 0.55% 0.76% ML 1-5 Govt/Corp (2.21 %) (7.32%) (0.90%) 0.57% 0.78% Liquid Operating Monies^ 0.39% 0.40% 0.63% 1.19% 1.01 % Chandler 0.39% 0.40% 0.63% 1.19% 1.01 % Citigroup 3-Month Treasury Bill 0.45% 0.63% 0.57% 1.13% 0.92% Total Fund (1.56%) (5.13%) (0.40%) 0.82% 0.87% Target* (1.67%) (5.76%) (0.60%) 0.68% 0.81% Current Quarter Target = 80.0% ICE 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. Callan Orange County Sanitation District 11 Table of Contents Investment Manager Returns The table below details the rates of return for the Fund's investment managers over various time periods ended September 30, 2022. 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, 2022 Last 10 Years Domestic Fixed Income Long Term Operating Fund 0.80% Blmbg Govt/Cred 1-5 Year Idx 0.88% ML 1-5 Govt/Corp 0.91 % Last Last 15 27 Years Years 2.20% 3.70% 2.01 % 3.52% 2.03% 3.54% Liquid Operating Monies^ 0.75% 0.82% 2.36% Citigroup 3-Month Treasury Bill 0.66% 0.65% 2.09% Total Fund 0.76% Target' 0.86% 1.92% 1.76% Current Quarter Target = 80.0% ICE 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. 3.49% 3.26% Callan Orange County Sanitation District 12 Table of Contents 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. 12/2021- 9/2022 2021 2020 2019 2018 Domestic Fixed Income Long Term Operating Fund (5.68%) (0.79%) 4.42% 4.70% 1.60% Chandler (5.68%) (0.79%) 4.42% 4.70% 1.60% Blmbg Govt/Cred 1-5 Year Idx (6.62%) (0.97%) 4.71 % 5.01 % 1.38% ML 1-5 Govt/Corp (6.68%) (0.87%) 4.65% 5.08% 1.40% Liquid Operating Monies^ 0.40% 0.15% 0.84% 2.39% 1.90% Chandler 0.40% 0.15% 0.84% 2.39% 1.90% Citigroup 3-Month Treasury Bill 0.62% 0.05% 0.58% 2.25% 1.86% Total Fund (4.64%) (0.61%) 3.73% 4.26% 1.72% Target* (5.24%) (0.68%) 3.82% 4.51 % 1.49% Current Quarter Target = 80.0% ICE 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. Callan Orange County Sanitation District 13 Table of Contents 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. 12/2021- 9/2022 2021 2020 2019 2018 Domestic Fixed Income Long Term Operating Fund (5.68%) (0.79%) 4.42% 4.70% 1.60% Blmbg Govt/Cred 1-5 Year Idx (6.62%) (0.97%) 4.71 % 5.01 % 1.38% ML 1-5 Govt/Corp (6.68%) (0.87%) 4.65% 5.08% 1.40% Liquid Operating Monies^ 0.40% 0.15% 0.84% 2.39% 1.90% Citiarouo 3-Month Treasury Bill 0.62% 0.05% 0.58% 2.25% 1.86% Total Fund (4.64%) (0.61%) 3.73% 4.26% 1.72% Target* (5.24%) (0.68%) 3.82% 4.51 % 1.49% Current Quarter Target = 80.0% ICE 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. Callan Orange County Sanitation District 14 Table of Contents 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 0.94% 0.92% 0.90% 0.88% 0.86% F- 0.84% N ry 0.82% 0.80% 0.78% 0.76% 0.74% • • 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% Standard Deviation Seven Year Annualized Risk vs Return Asset Classes vs Asset Class Median 1.30% 1.20% 1.10% F- 1.00% N ry 0.90% 0.80% r- 0.70% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% 1.8% 2.0% 2.2% Standard Deviation Callan Orange County Sanitation District 1 F Table of Contents Manager Analysis Table of Contents Long Term Operating Fund Period Ended September 30, 2022 Investment Philosophy Chandler Asset Management's Short Term Bond strategy is driven by quantitative models and focuses on active duration management, sector selection and term structure. The strategy seeks to achieve consistent above -benchmark returns with low volatility relative to the style's performance benchmark. The firm has a unique focus on high quality fixed income management, and places risk control as a higher objective than return. Assets were transferred in kind to Chandler on 12/l/2014. Previous performance reflects PIMCO. Quarterly Summary and Highlights • Long Term Operating Fund's portfolio posted a (1.90)% return for the quarter placing it in the 92 percentile of the Callan Short Term Fixed Income group for the quarter and in the 85 percentile for the last year. • Long Term Operating Fund's portfolio outperformed the ICE Corp/Gov 1-5 Yr by 0.31 % for the quarter and outperformed the ICE Corp/Gov 1-5 Yr for the year by 1.04%. Performance vs Callan Short Term Fixed Income (Gross) 6% 4% 2% 0% (2%) (4%) (6%) (8%) 0 Quarterly Asset Growth Beginning Market Value $713,467,623 Net New Investment $0 Investment Gains/(Losses) $-13,547,207 Ending Market Value $699,920,416 42)� B�4 97 ♦ A 9 9)1"B 9 5)�A 8 3)�B 8 99)�g�g; 98)♦ B9 �A(8 97) ♦ ■ B(9 ) ) Last Quarter Last Last 3 Years Last 5 Years Last 7-3/4 Last 7 Years Last 10 Years Last 27 Years Year Years 10th Percentile (0.70) (3.84) 0.45 1.51 1.71 1.71 1.64 3.90 25th Percentile (0.95) (4.36) 0.22 1.22 1.40 1.36 1.41 3.68 Median (1.17) (4.90) (0.07) 1.06 1.23 1.20 1.19 3.48 75th Percentile (1.35) (5.79) (0.24) 0.89 1.12 1.02 1.05 3.27 90th Percentile (1.88) (6.57) (0.52) 0.73 0.91 0.85 0.85 2.99 Long Term Operating Fund •A (1.90) (6.28) (0.60) 0.74 0.97 0.90 0.80 3.70 Blmbg Govt/Cred 1-5 Year Idx ■ B (2.16) (7.29) (0.90) 0.55 0.88 0.76 0.88 3.52 ICE Corp/Gov 1-5 Yr ♦ (2.21) (7.32) (0.90) 0.57 0.91 0.78 0.91 3.54 0.8% 0.6% 0.4% c 0.2% N 0.0% (0.2%) N ry (0.4%) (0.6%) (0.8%) Relative Return vs ICE Corp/Gov 1-5 Yr 15 2016 2017 2018 2019 2020 2021 2022 - Long Term Operating Fund 3.0% 2.5% (n 2.0% c N 1.5% 1.0% 0.5% 0 Callan Short Term Fixed Income (Gross) Annualized Seven Year Risk vs Return 1 2 3 4 5 Standard Deviation Callan Orange County Sanitation District 17 Table of Contents 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) 8% 6% 4% 2% 0% 2% 4% 6% 8% 0 25p AB 9"B1 5; 87-1-0A 6�j.*6 76U]*A 4 B OVA B 97 W A( 5) 9 •A1 ( " 12/21- 9/22 2021 2020 2019 10th Percentile (3.38) 0.74 5.11 5.47 25th Percentile (3.88) 0.14 4.62 4.95 Median (4.39) (0.22) 3.96 4.52 75th Percentile (5.36) (0.46) 3.58 4.06 90th Percentile (6.03) (0.82) 2.43 3.57 Long Term Operating Fund •A (5.68) (0.79) 4.42 4.70 Blmbg Govt/Cred 1-5 Year Idx ■ B (6.62) (0.97) 4.71 5.01 ICE Corp/Gov 1-5 Yr ♦ (6.68) (0.87) 4.65 5.08 2018 2017 2016 2015 2014 2013 2.00 2.30 2.82 1.17 1.50 1.20 1.82 1.76 2.19 1.02 1.27 0.80 1.69 1.30 1.55 0.90 1.11 0.65 1.54 0.95 1.16 0.76 0.87 0.40 1.33 0.66 1.04 0.62 0.73 0.29 1.60 1.18 1.58 0.85 1.98 (1.77) 1.38 1.27 1.56 0.97 1.42 0.28 1.40 1.28 1.62 1.05 1.51 0.32 Cumulative and Quarterly Relative Returns vs ICE Corp/Gov 1-5 Yr 1.2% 1.0% 3 0.8% 0.6% ry 0.4% 0.2% N 0.0% tY (0.2%) i (0.4%) (0.6%) 3 (0.8%) L'f (1.0%) (1.2%) ------- -------- -------- ------ -------- -------- ---------------- -------- --- ------- -------- -------- ------ -------- -------- ---------------- -------- --- ------- -------- -------- ------ J -------- ------- I -------- I= ------ ------ - ------ -------- -------- -------- 12 2013 2014 2015 2016 2017 2018 2019 2020 2021 Long Term Operating Fund Blmbg Govt/Cred 1-5 Year Idx Callan Short Fixed Inc Risk Adjusted Return Measures vs ICE Corp/Gov 1-5 Yr Rankings Against Callan Short Term Fixed Income (Gross) Seven Years Ended September 30, 2022 1.0 0.8 0.6 0.4 0.2 0.0 (0.2) B 92 A(68) •A78 ■ B(100) (0.4) Alpha 10th Percentile 0.86 25th Percentile 0.53 Median 0.36 75th Percentile 0.18 90th Percentile 0.01 Long Term Operating Fund •A 0.10 Blmbg Govt/Cred 1-5 Year Idx (0.02) Sharpe Ratio 0.32 0.21 0.13 0.02 (0.06) (0.02) (0.08) Excess Return Ratio 0.63 0.49 0.34 0.24 0.07 0.28 (0.23) 2022 6% 5% 4% 3% 2% 1% 0% (1 %) (2%) (3%) (4%) (5%) (6%) ) )0) C7 C 3 C y N m iv m X m C ul Callan Orange County Sanitation District 18 Table of Contents 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, 2022 7 6- 5- 4- 3- 2- 1 0 (6) (10) (25) (29) (79) (72) (90) (1) Average Effective Coupon OA Duration Life Yield Rate Convexity 10th Percentile 2.40 2.96 5.80 3.20 0.08 25th Percentile 2.02 2.68 5.42 2.83 0.06 Median 1.77 2.14 5.05 2.35 0.04 75th Percentile 1.61 1.87 4.76 1.89 0.02 90th Percentile 0.95 1.34 4.30 1.70 (0.02) Long Term Operating Fund • 2.41 2.54 - 1.70 - ICE Corp/Gov 1-5 Yr 2.53 2.68 4.58 2.04 0.09 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. US Trsy Corp (incl 144A) Gov Related ABS Other CMOs Cash CMBS RMBS Sector Allocation September 30, 2022 33.4 25.8 65.1 26.4 5 0.7 26.3 19.0 2.6 8.7 12.1 14.5 7.4 1.5 0.2 0.7 1111110 5.6 0.1 0% 10% 20% 30% 40% 50% 60% 70% 80% Long Term Operating Fund Callan Short Term Fixed Income ICE Corp/Gov 1-5 Yr Quality Ratings vs Callan Short Term Fixed Income Trsy AAA AA+ AA AA- A+ A A - 10th Percentile 25th Percentile Median 75th Percentile 90th Percentile Long Term Operating Fund • ICE Corp/Gov 1-5 Yr Weighted Average Quality Rating AA+ AA AA A+ A AA AA Callan Orange County Sanitation District 19 Table of Contents Long Term Operating Fund Portfolio Characteristics Summary As of September 30, 2022 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. ABS 12% Other 7% US Trsy 33% Gov Related 19% CMOs 2% Sector Allocation Cash 0% Corp (incl 144A) 26% Corp (incl 144A) 26% US Trsy 65% v Related 9% Long Term Operating Fund ML:Corp/Gov 1-5 Yr Weighted Average: Duration Duration Distribution 0 Long Term Operating Fund: 2.41 80% 0 ML:Corp/Gov 1-5 Yr: 2.53 O70%---------------------------------------- ------------- ---------------------------- 61.9 O 60%------------- --------------- - 53?J------------- ---------------------------- d50%---------------------------------------- ---------------------------- 0 40% -- 39=4--3fr4--------------- ---------------------------- C30%------------- -------------- ---------------------------- 2 20%------------- -------------- ------------------------------ a)0-10%--6sr-------- -------------- ---------------------------- 0% - 1.6 0.2 0.0 0.0 0.0 0.0 0.0 <1 1-3 3-5 5-7 7-10 >10 Years Duration Quality Distribution 100% 1 Weighted Average: Quality Long Term Operating Fund: AA ML:Corp/Gov 1-5 Yr: AA O --------------- - 70.2 60%JLsik 60.1 -------------- 0 40% -------------- ° JB� ------ ---------------------- � 12.3 0% 0.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 16 0.0 AAA AA A BBB BB B CCC CC C N/R Quality Rating Callan Orange County Sanitation District 20 Table of Contents Chandler -Liquid Operating Money Period Ended September 30, 2022 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 0.35% return for the quarter placing it in the 69 percentile of the Callan Money Market Funds group for the quarter and in the 65 percentile for the last year. • Liquid Operating Money Net's portfolio underperformed the Citigroup 3-Month Treasury Bill by 0.10% for the quarter and underperformed the Citigroup 3-Month Treasury Bill for the year by 0.39%. Performance vs Callan Money Market Funds (Net) 3% Quarterly Asset Growth Beginning Market Value $183,887,361 Net New Investment $-75,000,000 Investment Gains/(Losses) $582,096 Ending Market Value $109,469,457 22)�(12 33)f?7�(69 13) 16) (28 20) " (28 25) � (29 26 ) � (30 18)"(25 (65 (3%) Last Quarter Last Last 3 Years Last 5 Years Last 7-3/4 Last 7 Years Last 10 Years Last 27 Years Year Years 10th Percentile 0.53 0.67 0.66 1.27 1.18 1.26 0.97 2.28 25th Percentile 0.47 0.58 0.48 1.07 0.84 0.93 0.60 2.07 Median 0.41 0.47 0.40 0.92 0.65 0.72 0.50 1.93 75th Percentile 0.30 (0.74) 0.33 0.81 0.57 0.62 0.43 1.83 90th Percentile (0.02) (2.17) 0.12 0.65 0.47 0.52 0.34 1.72 Liquid Operating Money Net • 0.35 0.25 0.47 1.04 0.78 0.86 0.60 2.21 Citigroup 3-Month Treasury Bill ♦ 0.45 0.63 0.57 1.13 0.84 0.92 0.66 2.09 Relative Returns vs Callan Money Market Funds (Net) Citigroup 3-Month Treasury Bill Annualized Seven Year Risk vs Return 0.40% 0.30% u� 0.20% c 0.10% N 0.00% N (0.10%) (0.20%) (0.30%) 5 2016 2017 2018 2019 2020 2021 2022 - Liquid Operating Money Net 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% (0.5%) (1.0%) 0 0 1 2 3 4 5 6 7 Standard Deviation Callan Orange County Sanitation District 21 Table of Contents 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) 4% 3% 2% 1% 0% (1 %) (2%) 3°/ 27®28 12�23 26®24 30®35 t °) 12/21- 9/22 2021 2020 2019 10th Percentile 0.67 0.19 1.70 3.20 25th Percentile 0.57 0.04 0.62 2.32 Median 0.47 0.01 0.34 1.96 75th Percentile (0.54) 0.01 0.27 1.76 90th Percentile (1.96) (0.03) 0.19 1.50 Liquid Operating Money Net • 0.28 (0.00) 0.69 2.24 Citigroup 3-Month Treasury Bill ♦ 0.62 0.05 0.58 2.25 2018 2017 2016 2015 2014 2013 1.89 1.42 1.32 0.28 0.35 0.30 1.72 0.91 0.39 0.06 0.03 0.04 1.53 0.61 0.14 0.01 0.01 0.01 1.31 0.42 0.05 0.01 0.01 0.01 1.07 0.23 0.01 0.00 0.00 0.00 1.75 0.76 0.32 0.07 (0.06) (0.02) 1.86 0.84 0.27 0.03 0.03 0.05 Cumulative and Quarterly Relative Returns vs Citigroup 3-Month Treasury Bill 0.35% - N 0.25% - 0.20% - ------------------------ - --------------------- 0.15% --- ------------- ---- N 0.10%--------------------------- - ----------------------------- 0.05% ------------------ - T 0.00% -((0.05%) ------ --------------------- - d (0.10%)---------------------------- - 12 2013 2014 2015 2016 2017 2018 2019 2020 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, 2022 2 1 0 (1) (2) (3) 4 2021 2022 •1 (32) 0.6% 0.4% 0.2% S. v (0.0%) c (0.2%) (0.4%) iv (0.6%) (0.8%) CD CJ (1.0%) c (1.2%) (1.4%) () Alpha Sharpe Excess Return Ratio Ratio 10th Percentile 0.72 0.23 0.28 25th Percentile 0.03 (0.04) 0.03 Median (0.19) (0.54) (2.13) 75th Percentile (0.29) (0.85) (2.99) 90th Percentile (0.41) (1.20) (3.32) Liquid Operating Money Net • (0.10) (0.20) (0.43) Callan Orange County Sanitation District 22 Table of Contents Callan Research/Education Table of Contents ,nn,,0Callan I n s t i t u t e Education 2nd Quarter 2022 Quarterly Highlights 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/research-library to see all of our publications, and www.callan.com/blog to view our blog. For more information contact Barb Gerraty at 415-274-3093 / institute@callan.com. New Research from Callan's Experts Research Cafe: ESG Interview Series I Mark Wood of Callan dis- cusses with Jon Hale, Director of ESG Strategy at Morningstar, the evolving definition of sustainable investments. Research Cafe: Private Equity I In this session, private equity ex- perts Ashley Kahn and Jonathan Farr provide actionable insights for institutional investors to help them negotiate with private equity managers, and offer private equity managers crucial information about how their peers determine fees and terms. This session also includes a special feature on credit line usage. Investinq in Data Centers: The Real Assets of the Diqital Lauren Sertich discusses investing in data centers, a growing sec- tor in which institutional investors have more investment options as the universe of qualified managers/operators rapidly expands. Do Active Fixed Income Managers Add Value With Sector Rotation? I Kevin Machiz analyzes whether institutional investors could take a DIY approach to strategic sector allocations and forego sector rotation within fixed income and still achieve results compa- rable to active managers. Our study found that the average manager has added value with sector rotation. Blog Highlights SEC Proposes Rule to Enhance and Standardize Climate - Related Disclosures I The U.S. Securities and Exchange Commission unveiled its proposed rule amendments designed to improve and standardize disclosures around climate change risks for public companies. Unprecedented Territory —and the Inherent Limits of Diversification I Stock and bond markets around the globe were down together for the first four months of 2022. How often does that happen? Did diversification fail us? Risina Interest Rates Spur Look at Structured Credit Structured credit has seen increased interest from institutional in - vestors as they explore ways to adapt their fixed income portfolios for an expected environment of rising rates. Hedge Fund Strategies: A Guide for Institutional Investors Hedge fund strategies are beginning to see renewed interest from institutional investors seeking diversification benefits and downside protection. But these strategies can be complex; this explainer educates investors about investing in these strategies. Quarterly Periodicals Private Equity Update, 1Q22 I A high-level summary of private equity activity in the quarter through all the investment stages Active vs. Passive Charts, 1Q22 I A comparison of active man- agers alongside relevant benchmarks over the long term Market Pulse Flipbook, 1Q22 I A quarterly market reference guide covering trends in the U.S. economy, developments for insti- tutional investors, and the latest data on the capital markets Capital Markets Review, 1Q22 I Analysis and a broad overview of the economy and public and private markets activity each quar- ter across a wide range of asset classes Hedge Fund Update, 1Q22 I Commentary on developments for hedge funds and multi -asset class (MAC) strategies Real Assets Update,1 Q22 I A summary of market activity for real assets and private real estate during the quarter Private Credit Update, 1Q22 I A review of performance and fun- draising activity for private credit during the quarter Research I Education I Dialogue Table of Contents Events Education A complete list of all upcoming events can be found on our web - site: callan.com/events-education. Please mark your calendar and look forward to upcoming invitations: October Regional Workshop Oct. 18, 2022 — Denver, CO Oct. 20, 2022 — San Francisco, CA 2023 National Conference April 2-4, 2023 —Scottsdale, AZ For more information about events, please contact Barb Gerraty: 415-274-3093 / gerraty@callan.com Education: By the Numbers 50+ Unique pieces of research the Institute generates each year 525 Attendees (on average) of the Institute's annual National Conference 3 0 0 Total attendees of the "Callan j7 College" since 1994 Founded in 1994, the "Callan College" offers educational sessions for industry professionals involved in the investment decision -mak- ing process. Introduction to Investments September 20-22 —Virtual This program familiarizes institutional investor trustees and staff and asset management advisers with basic investment theory, ter- minology, and practices. Our virtual session is held over three days with virtual modules of 2.5-3 hours, while the in -person session lasts one -and -a -half days. This course is designed for individuals with less than two years of experience with asset -management oversight and/or support responsibilities. Virtual tuition is $950 per person and includes instruction and digital materials. In -person tuition is $2,350 per person and includes instruction, all materials, breakfast and lunch on each day, and dinner on the first evening with the instructors. Additional information including registration can be found at: callan.com/events/ "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 Officer Callan Institute V @CallanLLC ® Callan Table of Contents Definitions Table of Contents 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. Callan 27 Table of Contents 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. Callan 28 Table of Contents 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 pa r. Average Years to Expected Maturity - This is a measure of the market -value -weighted average of the years to expected maturity across all of the securities in the portfolio. Expected years to maturity takes into account any put or call options embedded in the security, any expected sinking -fund paydowns or any expected mortgage principal prepayments. Average Years to Stated Maturity - The average years to stated maturity is the market value weighted average time to stated maturity for all securities in the portfolio. This measure does not take into account imbedded options, sinking fund paydowns, or prepayments. Current Yield - The current yield is the current annual income generated by the total portfolio market value. It is equal to the total portfolio coupon payments per year divided by the current total portfolio market value. Callan 29 Table of Contents Fixed Income Portfolio Characteristics Duration Dispersion - Duration dispersion is the market -value weighted standard deviation of the portfolio's individual security durations around the total portfolio duration. The higher the dispersion, the more variable the security durations relative to the total portfolio duration ("barbellness"), and the smaller the dispersion, the more concentrated the holdings' durations around the overall portfolio's ("bulletness"). The purpose of this statistic is to gauge the "bulletness" or "barbellness" of a portfolio relative to its total duration and to that of its benchmark index. Effective Yield - The effective yield is the actual total annualized return that would be realized if all securities in the portfolio were held to their expected maturities. Effective yield is calculated as the internal rate of return, using the current market value and all expected future interest and principal cash flows. This measure incorporates sinking fund paydowns, expected mortgage principal prepayments, and the exercise of any "in -the -money" imbedded put or call options. Weighted Average Life - The weighted average life of a security is the weighted average time to payment of all remaining principal. It is calculated by multiplying each expected future principal payment amount by the time left to the payment. This amount is then divided by the total amount of principal remaining. Weighted average life is commonly used as a measure of the investment life for pass -through security types for comparison to non -pass -through securities. Callan 30 Table of Contents Disclosures Table of Contents Callan I Quarterly List as of June 30, 2022 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 ongoing 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. abrdn (Aberdeen Standard Investments) Acadian Asset Management LLC Adams Street Partners, LLC AEGON USA Investment Management Inc. AllianceBernstein Allianz Allspring Global Investments American Century Investments Amundi US, Inc. Antares Capital LP AQR Capital Management Ares Management LLC Ariel Investments, LLC Aristotle Capital Management, LLC Atlanta Capital Management Co., LLC AXA Investment Managers Baillie Gifford International, LLC Baird Advisors Barings LLC Baron Capital Management, Inc. Barrow, Hanley, Mewhinney & Strauss, LLC BentallGreenOak Black Creek Investment Management Inc. BlackRock Blackstone Group (The) Blue Vista Capital Management, LLC BNY Mellon Asset Management Boston Partners Brandes Investment Partners, L.P. Brandywine Global Investment Management, LLC Brookfield Asset Management Brown Brothers Harriman & Company Brown Investment Advisory & Trust Company Capital Group Carillon Tower Advisers CastleArk Management, LLC Callan June 30, 2022 Table of Contents Chartwell Investment Partners J.P. Morgan CIBC Asset Management Inc, Janus ClearBridge Investments, LLC Jennison Associates LLC Cohen & Steers Capital Management, Inc. Jobs Peak Advisors Columbia Threadneedle Investments North America KeyCorp Credit Suisse Asset Management, LLC Lazard Asset Management Crescent Capital Group LP LGIM America DePrince, Race & Zollo, Inc. Lincoln National Corporation Dimensional Fund Advisors L.P. Longview Partners Doubleline Loomis, Sayles & Company, L.P. Duff & Phelps Investment Management Co. Lord Abbett & Company DWS LSV Asset Management EARNEST Partners, LLC MacKay Shields LLC Epoch Investment Partners, Inc. Macquarie Asset Management Fayez Sarofim & Company Manning & Napier Advisors, LLC Federated Hermes, Inc. Manulife Investment Management Fidelity Institutional Asset Management Marathon Asset Management, L.P. Fiera Capital Corporation McKinley Capital Management, LLC First Hawaiian Bank Wealth Management Division Mellon First Sentier Investors MetLife Investment Management Fisher Investments MFS Investment Management Franklin Templeton MidFirst Bank Fred Alger Management, LLC MLC Asset Management GAM (USA) Inc. Mondrian Investment Partners Limited GlobeFlex Capital, L.P. Montag & Caldwell, LLC GoldenTree Asset Management, LP Morgan Stanley Investment Management Goldman Sachs MUFG Union Bank, N.A. Golub Capital Natixis Investment Managers Guggenheim Investments Neuberger Berman GW&K Investment Management Newton Investment Management Harbor Capital Group Trust Ninety One North America, Inc. Hardman Johnston Global Advisors LLC Nomura Asset Management U.S.A. Inc. Heitman LLC Northern Trust Asset Management Hotchkis & Wiley Capital Management, LLC Nuveen Impax Asset Management LLC P/E Investments Income Research + Management Inc. Pacific Investment Management Company Insight Investment Pantheon Ventures Intech Investment Management LLC Parametric Portfolio Associates LLC Intercontinental Real Estate Corporation Partners Group (USA) Inc. Invesco Pathway Capital Management, LP Callan June 30, 2022 2 Table of Contents Peregrine Capital Management, LLC PFM Asset Management LLC PGIM Fixed Income PGIM Quantitative Solutions LLC Pictet Asset Management PineBridge Investments Polen Capital Management, LLC Principal Global Investors Putnam Investments, LLC RBC Global Asset Management Regions Financial Corporation Richard Bernstein Advisors LLC Robeco Institutional Asset Management, US Inc. Rothschild & Co. Asset Management US S&P Dow Jones Indices Schroder Investment Management North America Inc. Segall Bryant & Hamill SLC Management Smith Graham & Co. Investment Advisors, L.P. State Street Global Advisors Strategic Global Advisors, LLC 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 Voya Walter Scott & Partners Limited Washington Capital Management, Inc. WCM Investment Management Wellington Management Company, LLP Western Asset Management Company LLC Westfield Capital Management Company, LP Westwood Holdings Group, Inc. William Blair & Company LLC Callan June 30, 2022 3 Table of Contents IINVESTMENT REPORT ,itCHANDLER ASSET MANAGEMENT Orange County Sanitation District Period Ending September 30, 2022 CHANDLER ASSET MANAGEMENT, INC. 1 800.317.4747 1 www.chandlerasset.com 11 AL Table of Contents ITable of Contents SECTION 1 SECTION 2 SECTION 3 SECTION 4 SECTION 5 Economic Update Account Profile Consolidated Information Portfolio Holdings Transactions As of September 30, 2022 1 QJ1 Table of Contents Section 1 1 Economic Update 2 Ci► Table of Contents I Economic Update ■ Market volati I ity has intensified as financial conditions tighten and global central banks pursue monetary policies to combat persistently high inflation and maintain financial market stability. Labor markets and consumer balance sheets remain strong; however, inflation is weighing heavily on consumer sentiment and beginning to impact discretionary spending. Corporate earnings have generally performed better than expected, but warnings are growing along with wider credit spreads. While evidence of slower economic conditions has begun to mount, we expect the Federal Reserve to continue to raise rates until a sustainable improvement in inflationary conditions has been achieved. Over the near -term, we expect financial market volatility to remain intensified and conditions tighter with persistent inflation, geopolitical risk, and the Fed's hawkish monetary policy. At the September meeting, the Federal Open Market Committee (FOMC) delivered the third 75-basis point increase to the Fed Funds Rate, increasing the range to 3.00% to 3.25%. The FOMC acknowledged spending and production are experiencing modest growth, offset by a robust labor market and elevated inflation metrics. We expect the Fed to continue to increase the federal funds rate in the near term until inflationary pressures weaken. In September, yields rose significantly across the curve. The 2-year Treasury yield increased 79 basis points to 4.28%, the 5- year Treasury yield rose 74 basis points to 4.09%, and the 10-year Treasury yield gained 64 basis points to 3.83%. The spread between the 2-year Treasury yield and 10-year Treasury yield became more inverted at -45 basis points at September month -end versus -30 basis points at August month -end. The spread was a positive 121 basis points one year ago. The spread between 3-month and 10-year treasuries widened to 56 basis points in September compared to just 27 basis points in August. The shape of the curve does not necessarily indicate an imminent recession but bears watching as a better predictor of recession over the medium -term. 3 CJ" Table of Contents 0 0 0 c v C c M s U 0 2 Employment Nonfarm Payroll (000's) 1,400 1,200 1,000 800 600 400 200 0 -200 SPp OPc �dr ✓�,� ')O �1 '-)O 7 Source: US Department of Labor —Non-farm Payroll (000's) 3 month average (000's) SPp� OPc� �ar� ✓�'h � SPp� Unemployment Rate 16.0% - - - Underemployment Rate (U6) Unemployment Rate (U3) 12.0% ` • - 8.0% 4.0% 0.0% SPp` 6, /1;1dr 1/0 SPp OPc 21dr ✓�,h SPp Source: US Department of Labor The U.S. economy added 263,000jobs in September, surpassing market expectations of 255,000, and gains were revised upward by 11,000for the prior two months. Trends in employment remain strong, with the three-month moving average payrolls at 372,000 and the six-month moving average at 360,000. Hiring was widespread, with solid increases in education and health services, leisure and hospitality, and professional and business services. The unemployment rate fell to 3.5% from 3.7%, as the labor participation rate edged down to 62.3% in September from 62.4% in August. The U-6 underemployment rate, which includes those who are marginally attached to the labor force and employed part time for economic reasons dropped to 6.7% from 7.0% last month. Average hourly earnings rose 5.0% year -over -year in September compared to 5.2% year -over -year in August, a constructive development for the inflation outlook. The strong September labor report bolsters the case forthe Fed to continue raising the federal funds rate. 4 Q1 Table of Contents Inflation 10.0% 9.0% 8.0% 7.0% c 6.0% u 5.0% 3L 4.0% 0 } 3.0% 2.0% 1.0% 0.0% Consumer Price Index (CPI) CPI YOY % Change - - - Core CPI YOY % Change • • •.... • SPp'>')0 OPc2ldr� O O 7 Source: US Department of Labor 0 . ft , f Personal Consumption Expenditures (PCE) 10.0% - 9.0% PCE Price Deflator YOY % Change 8.0% - - . PCE Core Deflator YOY % Change 7.0% - a IF 6.0% v 5.0% 0 >- 4.0% 0 ' 3.0% 2.0% - 1.no/ - 0.0% Source: US Department of Commerce The Consumer Price Index (CPI) increased more than expected in September, up 8.2% year -over -year versus consensus expectations for8.1%, but down slightly from 8.3% in August. The Core CPI, which excludes volatile food and energy components, jumped to 6.6% year -over -year, up from 6.3% in August and the highest level since 1982. The report included widespread increases, particularly in food, shelter, and medical care services. Owners' equivalent rent, which is a major contributor to CPI and tends to lag, was up 6.7% year -over -year. The Personal Consumption Expenditures (PCE) index rose 6.2% in August, higher than consensus estimates of up 6.0%, but down from a 6.4% increase last month. Core PCE was up 4.9% year -over -year in August, versus up 4.7% year -over -year in July. Persistently elevated inflation is likely to keep the Federal Reserve on the path of tightening monetary policy as long as it continues to run well above the Fed's longer -run target of around 2.0%. 5 Q1 Table of Contents I Consumer Retail Sales YOY % Change 60.0% 50.0% v 40.0% s 0 30.0% o} 20.0% 10.0% — 0.0 0 J1111111MOU11 Ob Source: US Department of Commerce Consumer Confidence 140 130 120 a J 110 x a 100 90 80 O O l 1 1 1 Source: The Conference Board Advance retail sales were flat for the month but up 8.2% year -over -year in September, slowing from August's 9.4% year -over -year gain that surprised to the upside. Retail sales growth is starting to reflect the headwinds from higher prices as consumers dip into savings and assume more debt. The Conference Board's Consumer Confidence Index rose for the second month in a row to 108.0 in September, with gains in both the present situation and future expectations components. The strength was tied directly to the consumer's assessment of the labor market, which continues to reflect the demand for labor outstripping supply. 6 Q1 Table of Contents Economic Activity Leading Economic Indicators (LEI) 1.2% 1.0% 0.8% v 0.6% o� s 0.4% u 0.2% 5; 0.0% 2 -0.2% -0.4% -0.6% -0.8% 10 �o� FP6 �0 1)0 �7 Source: The Conference Board Chicago Fed National Activity Index (CFNAI) 4.00 3.00 2.00 a 1.00 s c 0.00 M -2.00 �P6 �e� �o� FP6 . �0 �0 Source: Federal Reserve Bank of Chicago The Conference Board's Leading Economic Index (LEI) remained in negative territory at -0.3% in August, following a decline to -0.5% in July. This is the sixth straight month -over -month decline for the index. With the year -over -year index now at -1.0% in August and average workweek in manufacturing having contracted for four of the last six months, the Conference Board stated that US economic activity is expected to continue to slow more broadly and is likelyto contract. The Chicago Fed National Activity Index (CFNAI) fell to zero in Augustfrom +0.29 in July indicating a moderation in economic growth over the month. On a 3-month moving average basis, the CFNAI increased to 0.01 in August from -.08 in each of the last two months. 7 Q1 Table of Contents I Housing Housing Starts 2000 1800 w 1600 0 v 1400 c 1200 3 1000 800 v c 600 400 0 200 0 06 �O 1O �1 Source: US Department of Commerce q S&P/Case-Shiller 20 City Composite Home Price Index 24.0% 21.0% 18.0% 0 15.0% c f0 12.0% e 3;� 9.0 0 6.0 3.0 0.0% Source: S&P Total housing starts increased 12.2% to an annual rate of 1,575,000 in August, from a revised 1,404,000 units in July. Single-family home starts increased 3.4% and multi -family homes increased 28% month -over -month. On a year -over -year basis, total housing starts decreased 0.1% reflecting a shift from single-family units to more affordable multi -family units as homebuyers struggle with a combination of elevated prices and higher mortgage rates. Mortgage rates for a 30-year fixed-rate loan are higher than they have been since 2007 at 6.7%. According to the Case-Shiller 20-City Home Price Index, the year -over -year increase receded from 18.7% in June to 16.1% in July, clearly displaying the impact of higher mortgage rates which have reduced demand for homebuying as affordability has declined. 8 Q1 Table of Contents I Manufacturing 66 64 62 60 58 56 54 52 50 48 46 44 42 40 Institute of Supply Management Purchasing Manager Index �Pc, �dr, ✓�'7, ')0 )0 Source: Institute for Supply Management Industrial Production 20.0% 15.0% 10.0% s u 5.0 % 0 } 0.0% -5.0% -10.0% ti01 �06` �0 130 �I Source: Federal Reserve '1 The Institute for Supply Management (ISM) manufacturing index plunged nearly two points to 50.9 in September, the lowest since May 2020 and disappointing relative to consensus expectations of 52.0. Readings above 50.0 are indicative of expansion in the manufacturing sector. New orders declined significantly, reflecting lower demand for goods as consumers shift to spending on services. Total industrial production declined by -0.2% in August, following a downwardly revised increase of 0.5% in July. Capacity utilization fell to 80.0% in August from 80.2% in July, a rate that is 0.4 percentage points above its long -run (1972-2021) average. 9 Q1 Table of Contents IGross Domestic Product (GDP) Personal Consumption Expenditures Gross Private Domestic Investment Net Exports and Imports Federal Government Expenditures State and Local (Consumption and Gross Investment) 40.0% 35.0% 30.0% 2.0% 2.1% 0.9% 1.4% 25.0% 20.0% 15.0% 1.8% 5.1% 1.0% -2.8% 10.0% 5.0% 0.05.0% -1.1% -0.2% -3.1% 1.2% -10.0% -0.5% 0.0% -0.4% -0.2% -15.0% -20.0% -25.0% 0.5% -0.2% 0.0% -0.1% -30.0% -35.0% Gross Domestic Product (GDP) � GDP QOQ % Change GDP YOY % Change Total 2.7% 7.0% -1.6% -0.6% ✓4'�. 1 HOC, ✓�'1% HOC,' ✓472. HOC, ✓47) O00, ✓��. ��°C, ✓�''�. 1> > 41� 'l9 '19 �1 Source: US Department of Commerce Source: US Department of Commerce According to the third estimate, U.S. GDP was unrevised at -0.6% annualized in the second quarter. Personal consumption expenditures rose, primarily due to spending on services. The largest negative contribution was from a drop in gross residential investment as the housing sector diminished sharply. The second quarter decline followed a first quarter contraction of -1.6%. Although many market participants link two quarters in a row of negative GDP growth with a recession, an official declaration by the National Bureau of Economic Research is unlikely given the mosaic of data and the strength of the labor market. The consensus estimate calls for 1.9% growth in the third quarter and 1.7% growth for the full year 2022. 10 Q1 Table of Contents Federal Reserve Federal Reserve Balance Sheet Assets 10,000,000 9,000,000 8,000,000 7,000,000 0 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 — c0 cz c� c1 c1 c1 c1 c1 c1) c1 c1 c,' c� 9 O 1 � �' St S 6 8 9 O 1 Source: Federal Reserve 3.50% — 3.00% 2.50% 2.00% } 1.50% 1.00% 0.50% 0.00% Source: Bloomberg Effective Federal Funds Rate do do +'o do +'o +'o +'o do do do do do �z �Z �' �Z P1 �Z P1 �z P1 �z �� �� O .l � .:' 9 S G > 8 9 O .l At the September meeting, the Federal Open Market Committee (FOMC) delivered the third 75-basis point increase to the Fed Funds Rate, increasing the range to 3.00% to 3.25%. The FOMC acknowledged spending and production are experiencing modest growth, offset by robust labor market and elevated inflation metrics. The FOMC remains data dependent to meet its long-term 2% inflation objective. The Fed also released new economic projections showing a significant slowdown in the economy later in 2022 and 2023. The Fed has reduced its $9trillion balance sheet holdings by $87.1 billion since the start of the program and will increase the rate of decrease to $95 billion a month in September. As inflation metrics begin to moderate, we believe the Federal Reserve will decelerate their pace of tightening, but a material decline in inflation in the short-term is unlikely. 11 Q1 Table of Contents Bond Yields US Treasury Note Yields 4.5% 4.0% •••• 2-Year 3.5 % 5-Year ° 10-Year 3.0% 2.5% v 2.0% 1.5% 1.0% 0.5% • • 0.0% .... ... SPp� OPc� dr� ✓4V) sPp� OPc� 2ldr� ✓4�� SO z O 0 7 1 1 1 Source: Bloomberg US Treasury Yield Curve 4.5 4.0% 3.5% 3.0% �-_- ---- - ----•• , 2.5% • d 2.0% • 1.5% Sep-22 1.0% - - - Jun-22 0.5% • • • • Sep-21 0.0% Source: Bloomberg At the end of September, the 2-year Treasury yield was 400 basis points higher, and the 10-Year Treasury yield was about 234 basis points higher, year -over -year. The spread between the 2-year Treasury yield and 10-year Treasury yield became more inverted at -45 basis points at September month -end versus -30 basis points at August month -end. The average historical spread (since 2003) is about 130 basis points. The spread between 3-month and 10-year treasuries widened to 56 basis points in September compared to just 27 basis points in August. The shape of the yield curve does not indicate an imminent recession but bears watching as a better predictor of recession overthe medium -term. 12 C1" Table of Contents V 14 Section 2 1 Account Profile 13 Qj,,"1, Table of Contents IObjectives As of September 30, 2022 Investment Objectives The investment objectives of the Orange County Sanitation District are first, to provide safety of principal to ensure the preservation of capital in the overall portfolio; second, to provide sufficient liquidity to meet all operating requirements; and third, to earn a commensurate rate of return consistent with the constraints imposed by the safety and liquidity objectives. Chandler Asset Management Performance Objective Liquid Operating Monies — will be compared to the 3-month T-Bill rate and operate with a maximum maturity of one year. Long -Term Operating Monies — will be compared to the ICE BofA 1-5 Year Corporate Government Rated AAA —A Index. Strategy In order to achieve these objectives, the portfolio invests in high quality fixed income securities consistent with the investment policy and California Government Code. 14 C,'J Table of Contents Compliance As of September 30, 2022 Orange County Sanitation District Long Term Assets managed by Chandler Asset Management are in full compliance with state law and with the investment policy Category Standard Comment U.S. Treasuries 10%minimum; 5 years max maturity Complies 20% max per agency of the U.S. Government, which does not provide the full faith and credit of the U.S. government; 5 years max Federal Agencies maturity; Securities, obligations, participations, or other instruments of, or issued by, or fully guaranteed as to principal and interest Complies by the US Government, a federal agency, or a US Government -sponsored enterprise "AA" rated or better by a NRSRO; 30%max; 5 years max maturity; U.S. dollar denominated senior unsecured unsubordinated Supranational Obligations obligations issued or unconditionally guaranteed bythe International Bankfor Reconstruction and Development ("IBRD"), the Complies International Finance Corporation ("IFC") or the Inter -American Development Bank ("IADB") "A" rated or higher by a NRSRO; or as otherwise approved by the Board of Directors; Taxable or tax-exempt municipal bonds issued Municipal Securities Complies by any of the 50 states; 10% max; 5% max issuer; 5 years max maturity "A" rating category or better by a NRSRO; 30%max; 5% max per issuer; 5 years max maturity; Issued by corporations organized and Corporate Medium Term Notes operating within the U.S. or issued by depository institutions licensed by the U.S. or any state and operating within the U.S. with AUM Complies >$500 million "AA" rating category or better by a NRSRO; 20% max(combined MBS/CMO/ABS); 5% max issuer (except U.S. government or its Non -Agency Asset -Backed Securities, agencies) ; 5 years max maturity; Mortgage pass -through security, collateralized mortgage obligation, mortgage -backed or other pay Complies Mortgage -Backed Securities, CMOs through bond, equipment lease -backed certificate, consumer receivable pass -through certificate, or consumer receivable -backed bond "A" rating or better longterm debt by a NRSRO; or highest short term rating for deposits by a NRSRO; or as otherwise approved by the Negotiable Certificates of Deposit (NCD) Board of Directors; 30%max; 5% max issuer; 5 years max maturity; Negotiable certificates of deposit issued by a nationally or state- Complies chartered bank or stateof federal savings and loan association, as defined by Section 5102 of the California Financial Code 5% max issuer; 5 years max maturity; Secured (collateralized) time deposits issued by a nationally or state -chartered bank or state Certificates of Deposit or federal savings and loan association, as defined by Section 5102 of the California Financial Codeand having a net operating profit Complies in the two most recently completed fiscal years; Collateral must comply with California Government Code A-1 rated or highest short term rating by a NRSRO; 40% max; 5% max issuer; 180 days max maturity; Acceptance is eligible for Banker's Acceptances Complies purchase by the Federal Reserve System A-1 rated or better by a NRSRO; "A" long term debt rating or better by a NRSRO; Issued by a domestic corporation organized and Commercial Paper operating in theU.S.with assets >$500 million; 40%max; 5% max issuer; 10%max of the outstanding commercial paper of any Complies single issuer; 270 days max maturity 15 Q1 Table of Contents Compliance Orange County Sanitation District Long Term Assets managed by Chandler Asset Management are in full compliance with state law and with the investment policy As of September 30, 2022 Category Standard Comment Highest rating or "AAA" rated by two NRSROs; or SEC registered adviser with AUM >$500 million and experience>than 5 years; 20% Mutual Fund & Money Market Mutual Fund max in Mutual Funds; 10%max per one Mutual Fund; 20% max per issuer on Money Market Mutual Funds and are not subject to the Complies 10%stipulation No morethan the statutory maximum may be invested in LAIF; Not used by investment adviser; Investment of OCSD funds in LAIF shall Local Agency Investment Fund (LAIF) be subjectto investigation and due diligence prior to investing, and on a continual basis to a level of review pursuantto the policy Complies Orange County Treasurer's Money 15%max; Not used by investment adviser; Orange County Treasurer's Money Market Commingled Investment Pool; Investment of Market Commingled Investment Pool OCSD funds in OCCIP would be subjectto investigation and due diligence prior to investing and on continual basis to a level of review Complies (OCCIP) pursuantto the policy Repurchase Agreements 20% max; 102% col I atera I i zati on Complies Reverse Repurchase Agreements 5% max, 90 days max maturity Complies Prohibited Mortgage Derivatives, which include interest -only payments (IOs) and principal -only payments (POs); Inverse floaters, and RE- Complies REMICS (Real Estate Mortgage Investment Conduits) If securities owned by the OCSD are downgraded below the quality required by the Investment Policy, it shall be OCSD's policy to reviewthe credit situation and make a determination as to whether to sell or retain such securities in the portfolio. If a decision is Securities Downgrade made to retain the downgraded securities in the portfolio, their presence in the portfolio will be monitored and reported quarterly to Complies the OCSD General Manager, the Administration Committee and Board of Directors Avg Duration Not to exceed 60 months - (80%to 120% of the benchmark) Complies Max Per Holding 5%max of the total debt outstanding of any issuer per individual holding Complies Max Per Issuer 5%max per issuer (except Supranationals, U.S. Government, Agencies, Mutual Funds); 20% max per issuer on Money Market Mutual Complies Funds Maximum Maturity 5 years max maturity Complies* *The portfolio has eighteen (18) securities with maturities greater than 5 years including four (4) CMOs and sixteen (14) M85. All securities were inherited from the previous manager and complied at time of purchase. 16 CJJJ Table of Contents Portfolio Characteristics As of September 30, 2022 Orange County Sanitation District Long Term Average Maturity (yrs) 2.64 2.78 2.74 Average Modified Duration 2.51 2.41 2.41 Average Purchase Yield n/a 1.67% 1.55% Average Market Yield 4.41% 4.42% 3.14% Average Quality" AAA AA/Aa1 AA/Aa1 Total Market Value 700,168,917 714,123,387 *ICE BofA 1-5 YrAAA-A US Corp & Govt 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 in the Treasury, Asset Backed, and Corporate portions of the allocation to keep the portfolio structured consistent with Chandler targets. The purchased securities ranged in maturity from July 2025 to September 2027. Several securities were sold, and one matured, to facilitate the new positions in the portfolio. 17 C�'u Table of Contents I Sector Distribution September 30, 2022 US Treasury 33.4% Supranational 6.5% Negotiable CD 0.9% Mortgage Pass Money Market Thru Fund 0.0% 0.2% Orange County Sanitation District Long Term ABS 12.1% Corporate 26.4% Agency 19.0% CIVIC) 1.5% US Treasury 32.8% Supranational 7.2 % Negotiable CD 0.8% Mortgage Pass Thru 0.1% June 30, 2022 Money Market Corporate Fund 25.3% 1.1% As of September 30, 2022 The sector allocation was relatively stable over the reporting period, the Chandler team is focused on optimizing the underlying mix of securities within the respective sector allocations. The two largest adjustments were the 1.1% increase in the Corporate allocation, to 26.4% of the portfolio, partially offset by the 0.9% decline in the money market allocation to 0.2% of the portfolio. ABS 11.5% CMO 1.5% Agency 19.8% 18 Q1 Table of Contents Issuers Orange County Sanitation District Long Term - Account #10268 As of September 30, 2022 Government of United States US Treasury 33.40% Federal National Mortgage Association Agency 8.17% Federal Home Loan Bank Agency 5.47% Federal Home Loan Mortgage Corp Agency 4.70% Inter -American Dev Bank Supranational 3.78% Intl Bank Recon and Development Supranational 2.73% Hyundai Auto Receivables ABS 1.92% John Deere ABS ABS 1.65% Bank of America Corp Corporate 1.56% Federal Home Loan Mortgage Corp CIVIC) 1.44% 1P Morgan Chase & Co Corporate 1.44% Royal Bank of Canada Corporate 1.41% Honda Motor Corporation Corporate 1.38% Honda ABS ABS 1.34% Toronto Dominion Holdings Corporate 1.31% Bank of Montreal Chicago Corporate 1.29% Toyota Lease Owner Trust ABS 1.28% Charles Schwab Corp/The Corporate 1.25% Metlife Inc Corporate 1.20% Toyota Motor Corp Corporate 1.18% Morgan Stanley Corporate 1.17% Qualcomm Inc Corporate 1.12% GM Financial Automobile Leasing Trust ABS 1.12% Northwestern Mutual Glbl Corporate 1.05% Amazon.com Inc Corporate 1.01% US Bancorp Corporate 0.98% Hyundai Auto Lease Securitization ABS 0.98% Apple Inc Corporate 0.96% Caterpillar Inc Corporate 0.93% American Express ABS ABS 0.92% Wal-Mart Stores Corporate 0.91% Berkshire Hathaway Corporate 0.90% Svenska Handelsbanken NY Negotiable CD 0.86% Dominion Resources Inc Corporate 0.78% GM Financial Securitized Term Auto Trust ABS 0.77% PNC Financial Services Group Corporate 0.72% Intel Corp Corporate 0.70% Federal Farm Credit Bank Agency 0.68% 19 Cli Table of Contents Issuers Orange County Sanitation District Long Term — Account #10268 Honeywell Corp BMW Vehicle Lease Trust Chubb Corporation United Health Group Inc Deere & Company Mercedes-Benz Auto Lease Trust Guardian Life Global Funding Verizon Master Trust BMW ABS Toyota ABS Bank of New York First American Govt Obligation Fund Class-Z Salesforce.com Inc BlackRock Inc/New York Nissan ABS Federal National Mortgage Association AMRESCO Residental Securities Corp Federal National Mortgage Association GNMA SLM Corp Federal Home Loan Mortgage Corp TOTAL Corporate ABS Corporate Corporate Corporate ABS Corporate ABS ABS ABS Corporate Money Market Fund Corporate Corporate ABS Mortgage Pass Thru CMO CMO Mortgage Pass Thru ABS Mortgage Pass Thru As of September 30, 2022 0.66% 0.62% 0.56% 0.51% 0.46% 0.46% 0.41% 0.39% 0.35% 0.21% 0.21% 0.19% 0.18% 0.14% 0.13% 0.04% 0.02 % 0.01 % 0.01% 0.00% 0.00% 100.00% 20 Ci' Table of Contents Quality Distribution 70.0% 60.0 % 50.0% 40.0 % 30.0% 20.0% 10.0 % 0.0 % AAA 09/30/22 06/30/22 Source: S&P Ratings Orange County Sanitation District Long Term September 30, 2022 vs. June 30, 2022 AA A ■ 09/30/22 <A 06/30/22 17.5% 60.1% 18.0% 0.8% 18.8% 59.5% 18.1% 0.4% NR As of September 30, 2022 21 Q11 Table of Contents Quality Distribution 80.0 % 70.0% 60.0 % 50.0% 40.0 % 30.0% 20.0% 10.0 % 0.0% AAA 09/30/22 06/30/22 Source: Moody's Ratings As of September 30, 2022 Orange County Sanitation District Long Term September 30, 2022 vs. June 30, 2022 AA A <A NR ■ 09/30/22 06/30/22 69.1% 3.6% 20.8% 0.0% 6.5% 69.5% 3.8% 20.5% 0.0% 6.1% 22 Q11 Table of Contents I Duration Distribution 40.0 % 35.0% 30.0% 25.0% 20.0% 15.0 % 10.0 % 5.0 % 0.0% 0 - 0.25 Portfolio Benchmark* Orange County Sanitation District Long Term Portfolio Compared to the Benchmark 0.25-0.50 0.50-1 1-2 ■ Orange County Sanitation District Long Term Wr 2-3 3-4 4-5 ■ ICE BofA 1-5 Yr AAA -A US Corp & Govt Index 1.2% 1.2% 8.0% 30.3% 29.0% 17.6% 12.7% 0.0% 0.0% 1.6% 35.4% 27.3% 22.1% 13.6% As of September 30, 2022 5+ 0.0% 0.0% `ICE BofA 1-5 Vr AAA -A US Corp & Govt Index The duration of the portfolio was stable, ending the quarter unchanged at 2.41 years. The Chandler team if focused on keeping the overall duration of the portfolio consistent with the benchmark and altering the term structure of the portfolio to assist in generating3 positive relative returns versus the benchmark. Table of Contents IInvestment Performance Orange County Sanitation District Long Term Total Rate of Return Annualized Since Inception November 30, 2014 2.00 % 1.00 % 0.00 % -1.00% -2.00 % -3.00% -4.00% -5.00 % -6.00 % -7.00 % -8.00 % As of September 30, 2022 12 months 2 years 3 years 5 years 10 years Since Inception ■ Orange County Sanitation District Long Term ICE BofA 1-5 Yr AAA -A US Corp & Govt Index 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 -2.01% -6.38% -3.28% -0.70% 0.65% N/A 0.86% ICE BofA 1-5 Yr AAA -A US Corp & Govt Index -2.26% -6.98% -3.63% -0.92% 0.49% N/A 0.75% 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. 24 Q1 Table of Contents Compliance As of September 30, 2022 Orange County Sanitation District Liquid Assets managed by Chandler Asset Management are in full compliance with state law and with the investment policy Category Standard Comment U.S. Treasuries 10% minimum; 1 year max maturity Complies 20% max per agency of the U.S. Government, which does not provide the ful I faith and credit of the U.S. government; 1 year max Federal Agencies maturity; Securities, obligations, participations, or other instruments of, or issued by, or fully guaranteed as to principal and Complies interest by the US Government, a federal agency, or a US Government -sponsored enterprise "AA" rated or better by a NRSRO; 30% max; 1 year max maturity; U.S. dollar denominated senior unsecured unsubordinated Supranational Obligations obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development ("IBRD"), the Complies International Finance Corporation ("IFC") or the Inter -American Development Bank ("IADB") "A" rated or higher by a NRSRO; or as otherwise approved by the Board of Directors; Taxable or tax-exempt municipal bonds Municipal Securities Complies issued by any of the 50 states; 10%max; 5% max issuer; 1 year max maturity "A" rating category or better by a NRSRO; 30% max; 5% max per issuer; 1 year max maturity; Issued by corporations Corporate Medium Term Notes organized and operatingwithin the U.S. or issued by depository institutions licensed by the U.S. or any state and operating Complies within the U.S. with AUM >$500 million "AA" rating category or better by a NRSRO; 20% max (combined MBS/CMO/ABS); 5% max issuer (except U.S. government or its Non- Agency Asset -Backed Securities, agencies) ; 1 year max maturity; Mortgage pass -through security, collateralized mortgage obligation, mortgage -backed or Complies Mortgage -Backed Securities, CMOs other pay -through bond, equipment lease -backed certificate, consumer receivable pass -through certificate, or consumer receivable -backed bond "A" rating or better longterm debt by a NRSRO; or highest short term rating for deposits by a NRSRO; or as otherwise approved Negotiable Certificates of Deposit by the Board of Directors; 30% max; 5% max issuer; 1 year max maturity; Negotiable certificates of deposit issued by a Complies (NCD) nationally or state -chartered bank or state of federal savings and loan association, as defined by Section 5102 of the California Financial Code 5% max issuer; 1 year max maturity; Secured (collateralized) time deposits issued by a nationally or state -chartered bank or Certificates of Deposit state or federal savings and loan association, as defined by Section 5102 of the California Financial Code and having a net Complies operating profit in the two most recently completed fiscal years; Collateral must comply with California Government Code Banker's Acceptances A-1 rated or highest shortterm rating by a NRSRO; 40%max; 5% max issuer; 180 days max maturity; Acceptance is eligible for Complies purchase by the Federal Reserve System A-1 rated or better by a NRSRO; "A" long term debt rating or better by a NRSRO; Issued by a domestic corporation organized Commercial Paper and operating in the U.S. with assets > $500 million; 40% max; 5%max issuer; 10%max of the outstanding commercial paper Complies of any single issuer; 270 days max maturity 25 Q1 Table of Contents Compliance Orange County Sanitation District Liquid Assets managed by Chandler Asset Management are in full compliance with state law and with the investment policy As of September 30, 2022 Category Standard Comment Mutual Fund & Money Market Mutual Highest rating or "AAA" rated by two NRSROs; or SEC registered adviser with AUM >$500 million and experience >than 5 years; Fund 20% max in Mutual Funds; 10% max per one Mutual Fund; 20% max per issuer on Money Market Mutual Funds and are not Complies subject to the 10%stipulation No more than the statutory maximum maybe invested in LAIF; Not used by investment adviser; Investment of OCSD funds in Local Agency Investment Fund (LAIF) LAIF shall be subjectto investigation and due diligence prior to investing, and on a continual basis to a level of review Complies pursuantto the policy Orange County Treasurer's Money 15% max; Not used by investment adviser; Orange County Treasurer's Money Market Commingled Investment Pool; Market Commingled Investment Pool Investment of OCSD funds in OCCIP would be subjectto investigation and due diligence prior to investing and on continual Complies (OCCIP) basis to a level of review pursuantto the policy Repurchase Agreements 20% max; 102% col I atera I i zati on Complies Reverse Repurchase Agreements 5% max, 90 days max maturity Complies Prohibited Mortgage Derivatives, which include interest -only payments (IOs) and principal -only payments (POs); Inverse floaters, and RE- Complies REMICS (Real Estate Mortgage Investment Conduits) If securities owned by the OCSD are downgraded belowthe quality required by the Investment Policy, it shall be OCSD's policy to reviewthe credit situation and make a determination as to whether to sell or retain such securities in the portfolio. If a Securities Downgrade decision is madeto retain the downgraded securities in the portfolio, their presence in the portfolio will be monitored and Complies reported quarterly to the OCSD General Manager, the Administration Committee and Board of Directors Avg Duration Not to exceed 180 days Complies Max Per Holding 5% max ofthetotal debt outstanding of any issuer per individual holding Complies Max Per Issuer 5% max per issuer (except Supranationals, U.S. Government, Agencies, Mutual Funds); 20% max per issuer on Money Market Complies Mutual Funds Maximum Maturity 1 year max maturity Complies 26 CJJJ Table of Contents Portfolio Characteristics As of September 30, 2022 Orange County Sanitation District Liquid Average Maturity (yrs) 0.15 0.28 0.34 Average Modified Duration 0.15 0.28 0.33 Average Purchase Yield n/a 2.01% 1.24% Average Market Yield 2.74% 3.53% 1.86% Average Quality" AAA AA+/Aa1 AA+/Aaa Total Market Value 109,456,669 183,920,263 *ICE BofA 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. Several securities were purchased in the Treasury, Agency, and Corporate portfolios of the allocation. The purchased securities ranged in maturity from November 2022 to June 2023. A few securities matured and a net $75 million was withdrawn from the portfolio during the quarter. 27 C�'u Table of Contents Sector Distribution US Treasury 63.3% September 30, 2022 Agency 5.6% Orange County Sanitation District Liquid Corporate 13.0 % Money Market Fund 2.9% Negotiable CD US Treasury 15.1% 77.0% As of September 30, 2022 June 30, 2022 Agency 2.7% Corporate The sector allocation evolved linked to the large cash withdrawal during the reporting period. Some of the larger changes include the 13.7% reduction in the US Treasury allocation, to 63.3% of the portfolio, partially offset by the 6.3% increase in the Corporate allocation, to 13.0% of the portfolio. iney Market Fund 0.9 % Negotiable CD 12.7% 28 CI® Table of Contents Issuers Orange County Sanitation District Liquid — Account #10282 As of September 30, 2022 Government of United States US Treasury 63.30% Toronto Dominion Holdings Negotiable CD 4.57% Royal Bank of Canada Negotiable CD 4.57% Federal Home Loan Bank Agency 4.54% Westpac Banking Corp NY Negotiable CD 3.66% First American Govt Obligation Fund Class-Z Money Market Fund 2.95% MUFG Bank Ltd/NY Negotiable CD 2.29% United Parcel Service Corporate 2.22% Metlife Inc Corporate 2.06% Bank of America Corp Corporate 1.84% 1P Morgan Chase & Co Corporate 1.83% Morgan Stanley Corporate 1.83% Dominion Resources Inc Corporate 1.81% Bank of New York Corporate 1.44% Federal Home Loan Mortgage Corp Agency 1.11% TOTAL 100.00% 29 Cift Table of Contents Quality Distribution 70.0% 60.0 % 50.0% 40.0 % 30.0% 20.0% 10.0 % 0.0% AAA 09/30/22 06/30/22 Source: S&P Ratings As of September 30, 2022 Orange County Sanitation District Liquid September 30, 2022 vs. June 30, 2022 AA A <A NR ■ 09/30/22 06/30/22 29.4% 59.6% 9.2% 1.8% 0.0% 33.1% 61.4% 4.4% 1.1% 0.0% 30 Cif Table of Contents Quality Distribution 100.0 % 90.0% 80.0 % 70.0% 60.0 % 50.0% 40.0 % 30.0% 20.0% 10.0 % 0.0% AAA 09/30/22 06/30/22 Source: Moody's Ratings As of September 30, 2022 Orange County Sanitation District Liquid September 30, 2022 vs. June 30, 2022 AA A <A NR ■ 09/30/22 06/30/22 87.0% 2.1% 11.0% 0.0% 0.0% 93.3% 1.2% 5.5% 0.0% 0.0% 31 Cif Table of Contents I Duration Distribution 120.0% 100.0 % 80.0 % 60.0 % 40.0% 20.0% 0.0% Orange County Sanitation District Liquid Portfolio Compared to the Benchmark 0-0.25 0.25-0.50 0.50-1 1-1.5 ■ Orange County Sanitation District Liquid 1.5-2 2-2.5 2.5-3 ■ ICE BofA 3-Month US Treasury Bill Index Portfolio 28.4% 67.7% 3.9% 0.0% 0.0% 0.0% 0.0% Benchmark* 100.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% As of September 30, 2022 3+ 0.0% 0.0% 'ICE BofA 3-Month US Treasury Bill Index The duration of the portfolio contracted moderately, currently 0.28 years compared to 0.33 years at the end of the prior quarter. The duration of the portfolio is driven by the cash flow needs of OC Sanitation and is poised to remain in a range 32 Q1 over the coming quarters. Table of Contents Investment Performance Orange County Sanitation District Liquid Total Rate of Return Annualized Since Inception November 30, 2014 1.40% 1.20% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% 12 months 2 years 3 years ■ Orange County Sanitation District Liquid As of September 30, 2022 5 years 10 years Since Inception ■ ICE BofA 3-Month US Treasury Bill Index Annualized TOTAL RATE OF RETURN 3 months 12 months 2 years 3 years 5 years 10 years Since Inception Orange County Sanitation District Liquid 0.35% 0.38% 0.25% 0.61% 1.18% N/A 0.92% ICE BofA 3-Month US Treasury Bill Index 0.46% 0.62% 0.34% 0.59% 1.15% N/A 0.85% 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. 33 Q1 Table of Contents Compliance OCSD Lehman Exposure Assets managed by Chandler Asset Management are in full compliance with state law and with the investment policy As of September 30, 2022 Category Standard Comment Treasury Issues 5 years maximum maturity Complies Supranational or better by 1 of NRSROs; 30% maximum; 5% max; 5 years maturity; Includes only: IADB, IBRD, and IFC per Complies CAA" GC U.S. Agencies 20% max issuer; 5 years maximum maturity Complies U.S. Corporate (MTNs) "A" or better longterm 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 Complies (excluding MBS/govt agency); 5 years max maturity Negoti a bl e 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% Complies maximum; 5% max issuer; 5 years max maturity CDs/TDS 5% max issuer; 5 years max maturity Complies Banker's Acceptances A-1, or equivalent highest short 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 longterm debt issued; 25% maximum; 5% max Complies issuer; 270 days max maturity Money Market Fund Highest rating by 2 of 3 NRSROs; 20% maximum; 10% max issuer Complies Repurchase Agreements 102% collateral ization Complies Reverse Repurchase Agreements 5% maximum, 90 days max maturity Complies LAI F Not used by i nvestment a dvi ser Complies Avg Duration Not to exceed 60 months - (80%to 120%of the benchmark) Complies Maximum Maturity 5 years maximum maturity Complies *Accountholds $2 million face value (cusip 525ESCOy6) and $600,000 face value (cusip 525ESC1B7) of defaulted Lehman Bros Holdings that were purchased by the previous manager. Complied at time of purchase. 34 Q1 Table of Contents Portfolio Characteristics As of September 30, 2022 OC SAN Lehman Exposure Average Maturity (yrs) 5.71 6.11 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 35,241 361021 *Portfolio is S&P and Moody's, respectively. 35 Cj" Table of Contents V 14 Section 3 1 Consolidated Information 36 cjj�";s Table of Contents Portfolio Characteristics Orange County Sanitation District Consolidated Average Maturity (yrs) Modified Duration Average Purchase Yield Average Market Yield Average Quality* Total Market Value * Portfolio is S&P and Moody's respectively. 2.44 2.12 1.71% 4.30% AA+/Aa 1 809,660,827 2.24 1.98 1.49 2.88 AA+/Aa 1 898,079,671 As of September 30, 2022 37 c�'u Table of Contents Sector Distribution September 30, 2022 US Treasury 37.4% Supranational 5.6% Negotiable CD 2.8% Mortgage Pass Money Market Thru Fund 0.0% 0.6% Orange County Sanitation District Consolidated ABS 10.5% Corporate 24.6 % icy CMO 1.3 % in Stock US Treasury 41.9% Supranational 5.7% Negotiable CD 3.3 % June 30, 2022 As of September 30, 2022 ABS r 9.1% Mortgage Pass Money Market Thru Fund 0.0% 1.1% Agency 16.3% CMO 1.2% :ommon Stock 0.0% ,porate .1.5 % 38 Cift Table of Contents V 14 Section 4 1 Portfolio Holdings 39 cjj�";s Table of Contents Holdings Report As of September 30, 2022 Orange County Sanitation District Long Term - Account #10268 78445JAA5 SLM Student Loan Trust 2008-9 A 8,482.49 08/22/2008 8,448.07 99.21 8,415.28 0.00% Ba3 / B- 0.57 3.777% Due 04/25/2023 3.86% 8,481.17 5.57% 60.52 (65.89) B 0.00 44891VAC5 Hyundai Auto Lease Trust 2021-B A3 4,155,000.00 06/08/2021 4,154,376.75 97.56 4,053,701.10 0.58% Aaa / AAA 1.72 0.330% Due 06/17/2024 0.34% 4,154,735.06 4.63% 609.40 (101,033.96) NR 0.57 65479JAD5 Nissan Auto Receivables Owner 2019-C A3 927,926.12 10/16/2019 927,877.13 99.62 924,413.92 0.13% Aaa / AAA 1.79 1.930% Due 07/15/2024 1.94% 927,907.60 3.76% 795.95 (3,493.68) NR 0.21 89237VAB5 Toyota Auto Receivables Trust 2020-C A3 1,511,729.99 07/21/2020 1,511,613.60 98.35 1,486,848.23 0.21% Aaa / AAA 2.04 0.440% Due 10/15/2024 0.44% 1,511,673.72 4.45% 295.63 (24,825.49) NR 0.41 43813KAC6 Honda Auto Receivables Trust 2020-3 A3 2,133,347.31 09/22/2020 2,133,033.93 97.82 2,086,870.21 0.30% NR/AAA 2.05 0.370% Due 10/18/2024 0.38% 2,133,234.27 4.54% 285.04 (46,364.06) AAA 0.52 89239CAC3 Toyota Lease Owner Trust 2021-B A3 3,185,000.00 07/27/2021 3,184,957.00 96.29 3,066,839.69 0.44% Aaa / NR 2.06 0.420% Due 10/21/2024 0.42% 3,184,977.28 4.78% 408.74 (118,137.59) AAA 0.86 47787NAC3 John Deere Owner Trust 2020-B A3 735,636.56 07/14/2020 735,524.45 98.05 721,302.67 0.10% Aaa / NR 2.13 0.510% Due 11/15/2024 0.52% 735,595.05 4.85% 166.74 (14,292.38) AAA 0.45 58769KAD6 Mercedes-Benz Auto Lease Trust 2021-B A3 3,315,000.00 06/22/2021 3,314,749.72 96.54 3,200,363.99 0.46% NR/AAA 2.13 0.400% Due 11/15/2024 0.40% 3,314,873.25 4.75% 589.33 (114,509.26) AAA 0.80 09690AAC7 BMW Vehicle Lease Trust 2021-2 A3 2,070,000.00 09/08/2021 2,069,786.38 97.15 2,010,973.97 0.29% Aaa / NR 2.24 0.330% Due 12/26/2024 0.34% 2,069,884.32 4.51% 113.85 (58,910.35) AAA 0.68 44891WAC3 Hyundai Auto Lease Trust 2022-A A3 2,895,000.00 01/11/2022 2,894,936.02 96.28 2,787,285.74 0.40% Aaa / AAA 2.30 1.160% Due 01/15/2025 1.16% 2,894,955.99 4.51% 1,492.53 (107,670.25) NR 1.12 89238LAC4 Toyota Lease Owner Trust 2022-A A3 6,125,000.00 02/23/2022 6,124,035.93 96.40 5,904,512.25 0.84% NR/AAA 2.39 1.960% Due 02/20/2025 1.98% 6,124,281.81 4.67% 3,668.19 (219,769.56) AAA 1.35 36265MAC9 GM Financial Auto Lease Trust 2022-1 A3 5,020,000.00 02/15/2022 5,019,956.83 96.55 4,846,895.34 0.69% Aaa / NR 2.47 1.900% Due 03/20/2025 1.91% 5,019,968.90 4.71% 2,914.39 (173,073.56) AAA 1.24 05601XAC3 BMW Vehicle Lease Trust 2022-1 A3 2,400,000.00 01/11/2022 2,399,641.20 96.29 2,310,876.00 0.33% NR/AAA 2.48 1.100% Due 03/25/2025 1.11% 2,399,756.14 4.76% 440.00 (88,880.14) AAA 1.02 43813GAC5 Honda Auto Receivables Trust 2021-1 A3 1,399,041.83 02/17/2021 1,399,016.23 97.08 1,358,230.39 0.19% Aaa / NR 2.56 0.270% Due 04/21/2025 0.27% 1,399,029.57 4.95% 104.93 (40,799.18) AAA 0.62 36266FAC3 GM Financial Auto Lease Trust 2022-2 A3 3,035,000.00 05/03/2022 3,034,683.45 98.09 2,977,098.27 0.43% NR/AAA 2.72 3.420% Due 06/20/2025 3.45% 3,034,739.96 4.76% 3,171.58 (57,641.69) AAA 1.46 47788UAC6 John Deere Owner Trust 2021-A A3 2,300,000.00 03/02/2021 2,299,557.94 96.11 2,210,438.00 0.32% Aaa / NR 2.96 0.360% Due 09/15/2025 0.37% 2,299,749.56 4.92% 368.00 (89,311.56) AAA 0.86 44933LAC7 Hyundai Auto Receivables Trust 2021-A A3 2,100,000.00 04/20/2021 2,099,779.08 96.68 2,030,208.60 0.29% NR / AAA 2.96 0.380% Due 09/15/2025 0.38% 2,099,882.49 4.59% 354.67 (69,673.89) AAA 0.79 40 Q1 Table of Contents Holdings Report As of September 30, 2022 Orange County Sanitation District Long Term - Account #10268 44934KAC8 Hyundai Auto Receivables Trust 2021-B A3 6,040,000.00 07/20/2021 6,038,666.97 95.32 5,757,340.08 0.82% NR / AAA 3.30 0.380% Due 01/15/2026 0.39% 6,039,167.58 4.99% 1,020.09 (281,827.50) AAA 1.02 43815GAC3 Honda Auto Receivables Trust 2021-4 A3 2,290,000.00 11/16/2021 2,289,517.27 94.61 2,166,598.77 0.31% Aaa / NR 3.31 0.880% Due 01/21/2026 0.89% 2,289,643.96 4.70% 559.78 (123,045.19) AAA 1.43 47789QAC4 John Deere Owner Trust 2021-B A3 2,820,000.00 07/13/2021 2,819,748.46 94.50 2,664,973.32 0.38% Aaa / NR 3.46 0.520% Due 03/16/2026 0.52% 2,819,830.92 4.71% 651.73 (154,857.60) AAA 1.33 44935FAD6 Hyundai Auto Receivables Trust 2021-C A3 1,600,000.00 11/09/2021 1,599,642.88 94.36 1,509,825.62 0.22% NR/AAA 3.62 0.740% Due 05/15/2026 0.75% 1,599,741.20 4.93% 526.22 (89,915.58) AAA 1.37 43815BAC4 Honda Auto Receivables Trust 2022-1 A3 3,930,000.00 02/15/2022 3,929,408.93 95.03 3,734,702.58 0.53% Aaa / AAA 3.62 1.880% Due 05/15/2026 1.89% 3,929,519.41 4.81% 3,283.73 (194,816.83) NR 1.73 05602RAD3 BMW Vehicle Owner Trust 2022-A A3 2,530,000.00 05/10/2022 2,529,868.44 97.34 2,462,745.01 0.35% Aaa / AAA 3.90 3.210% Due 08/25/2026 3.23% 2,529,884.22 4.81% 1,353.55 (67,139.21) NR 1.70 362554AC1 GM Financial Securitized Term 2021-4 A3 1,705,000.00 10/13/2021 1,704,956.52 94.24 1,606,814.17 0.23% Aaa / AAA 3.96 0.680% Due 09/16/2026 0.68% 1,704,968.60 5.04% 483.08 (98,154.43) NR 1.34 47787JAC2 John Deere Owner Trust 2022-A A3 3,010,000.00 03/10/2022 3,009,334.19 95.59 2,877,403.48 0.41% Aaa / NR 3.96 2.320% Due 09/16/2026 2.34% 3,009,437.78 5.00% 3,103.64 (132,034.30) AAA 1.67 448977ADO Hyundai Auto Receivables Trust 2022-A A3 4,300,000.00 03/09/2022 4,299,834.45 95.93 4,124,929.80 0.59% NR/AAA 4.04 2.220% Due 10/15/2026 2.23% 4,299,862.20 4.62% 4,242.67 (174,932.40) AAA 1.72 380146AC4 GM Financial Auto Receivables 2022-1 A3 1,590,000.00 01/11/2022 1,589,861.83 95.13 1,512,625.85 0.22% NR /AAA 4.13 1.260% Due 11/16/2026 1.27% 1,589,890.88 4.79% 834.75 (77,265.03) AAA 1.40 362585AC5 GM Financial Securitized ART 2022-2 A3 2,330,000.00 04/05/2022 2,329,513.03 96.93 2,258,499.29 0.32% Aaa / AAA 4.38 3.100% Due 02/16/2027 3.13% 2,329,579.54 4.92% 3,009.58 (71,080.25) NR 1.72 47800AAC4 John Deere Owner Trust 2022-B A3 3,140,000.00 07/12/2022 3,139,700.13 97.65 3,066,345.02 0.44% Aaa / NR 4.38 3.740% Due 02/16/2027 3.77% 3,139,716.89 4.86% 5,219.38 (73,371.87) AAA 2.16 02582JJT8 American Express Credit Trust 2022-2 A 6,620,000.00 05/17/2022 6,618,535.66 96.77 6,406,174.00 0.92% NR/AAA 4.63 3.390% Due 05/17/2027 3.42% 6,618,710.79 4.75% 9,974.13 (212,536.79) AAA 2.44 92348KAV5 Verizon Master Trust 2022-5 A1A 2,750,000.00 08/02/2022 2,749,879.00 99.05 2,723,765.00 0.39% NR/AAA 4.81 3.720% Due 07/20/2027 3.75% 2,749,885.09 4.51% 3,125.83 (26,120.09) AAA 1.79 87,960,441.47 84,858,015.64 12.13% Aaa / AAA 3.16 TOTAL ABS 87,971,164.30 1.63% 87,963,565.20 4.74% 53,227.65 (3,105,549.56) Aaa 1.32 Agency 3137EAEN5 FHLMC Note 10,000,000.00 Various 9,956,500.00 98.93 9,892,980.00 1.42% Aaa / AA+ 0.72 2.750% Due 06/19/2023 2.84% 9,993,706.21 4.27% 77,916.66 (100,726.21) AAA 0.70 41 Q11 Table of Contents Holdings Report As of September 30, 2022 Orange County Sanitation District Long Term - Account #10268 3135GO5G4 FNMA Note 6,775,000.00 07/08/2020 6,760,433.75 97.13 6,580,394.90 0.94% Aaa / AA+ 0.78 0.250% Due 07/10/2023 0.32% 6,771,248.69 4.04% 3,810.94 (190,853.79) AAA 0.76 313383YJ4 FHLB Note 10,000,000.00 Various 10,211,831.00 99.10 9,910,270.01 1.42% Aaa / AA+ 0.94 3.375% Due 09/08/2023 2.89% 10,042,633.30 4.36% 21,562.50 (132,363.29) NR 0.91 3130AOF70 FHLB Note 10,000,000.00 Various 10,269,043.75 98.80 9,879,530.01 1.43% Aaa / AA+ 1.19 3.375% Due 12/08/2023 2.79% 10,064,649.09 4.42% 105,937.50 (185,119.08) AAA 1.14 3135GOV34 FNMA Note 5,000,000.00 02/27/2019 4,980,850.00 97.59 4,879,705.00 0.70% Aaa / AA+ 1.35 2.500% Due 02/05/2024 2.58% 4,994,774.38 4.36% 19,444.44 (115,069.38) AAA 1.30 3130AM2 FHLB Note 11,110,000.00 Various 11,589,031.30 97.52 10,833,972.05 1.56% Aaa / AA+ 1.71 2.875% Due 06/14/2024 1.96% 11,273,441.42 4.40% 94,936.49 (439,469.37) NR 1.63 3133EKWV4 FFCB Note 5,000,000.00 08/13/2019 5,048,280.00 95.59 4,779,355.00 0.68% Aaa / AA+ 1.82 1.850% Due 07/26/2024 1.65% 5,017,731.15 4.40% 16,701.39 (238,376.15) AAA 1.76 313OA2UW4 FHLB Note 2,500,000.00 09/12/2019 2,635,950.00 97.26 2,431,437.50 0.35% Aaa / AA+ 1.96 2.875% Due 09/13/2024 1.73% 2,553,055.47 4.35% 3,593.75 (121,617.97) AAA 1.87 3135GOX24 FNMA Note 10,000,000.00 Various 10,157,936.40 94.36 9,435,770.00 1.35% Aaa / AA+ 2.27 1.625% Due 01/07/2025 1.28% 10,075,129.33 4.26% 37,916.66 (639,359.33) AAA 2.18 3137EAEPO FHLMC Note 12,335,000.00 Various 12,510,182.05 93.94 11,587,042.61 1.66% Aaa / AA+ 2.37 1.500% Due 02/12/2025 1.20% 12,418,977.13 4.22% 25,183.96 (831,934.52) AAA 2.28 313OA4CH3 FHLB Note 5,225,000.00 03/19/2020 5,526,848.25 95.60 4,994,849.20 0.71% Aaa / AA+ 2.45 2.375% Due 03/14/2025 1.18% 5,373,436.36 4.28% 5,859.98 (378,587.16) AAA 2.35 3135GO3U5 FNMA Note 14,000,000.00 Various 13,996,711.60 91.14 12,759,684.00 1.83% Aaa / AA+ 2.56 0.625% Due 04/22/2025 0.63% 13,998,336.96 4.32% 38,645.84 (1,238,652.96) AAA 2.48 3135GO4Z3 FNMA Note 9,905,000.00 06/17/2020 9,884,496.65 90.39 8,953,555.42 1.28% Aaa / AA+ 2.72 0.500% Due 06/17/2025 0.54% 9,893,871.54 4.29% 14,307.22 (940,316.12) AAA 2.64 3137EAEU9 FHLMC Note 5,030,000.00 07/21/2020 5,004,950.60 89.73 4,513,383.79 0.65% Aaa / AA+ 2.81 0.375% Due 07/21/2025 0.48% 5,015,937.18 4.30% 3,667.71 (502,553.39) AAA 2.73 3135GO5X7 FNMA Note 7,945,000.00 08/25/2020 7,907,817.40 89.43 7,105,181.72 1.02% Aaa / AA+ 2.90 0.375% Due 08/25/2025 0.47% 7,923,412.08 4.29% 2,979.38 (818,230.36) AAA 2.83 3137EAEX3 FHLMC Note 7,660,000.00 09/23/2020 7,636,943.40 89.25 6,836,710.86 0.98% Aaa / AA+ 2.98 0.375% Due 09/23/2025 0.44% 7,646,246.94 4.25% 638.33 (809,536.08) AAA 2.90 3135GO6G3 FNMA Note 8,255,000.00 11/09/2020 8,225,447.10 89.07 7,352,645.95 1.05% Aaa / AA+ 3.11 0.500% Due 11/07/2025 0.57% 8,236,612.61 4.30% 16,510.00 (883,966.66) AAA 3.01 142,303,253.25 132,726,468.02 19.03% Aaa / AA+ 2.01 TOTAL Agency 140,740,000.00 1.40% 141,293,199.84 4.30% 489,612.75 (8,566,731.82) Aaa 1.94 42 Q1 Table of Contents Holdings Report As of September 30, 2022 Orange County Sanitation District Long Term - Account #10268 3137BFE98 FHLMC K041 A2 5,000,000.00 07/01/2021 5,378,515.62 97.23 4,861,440.00 0.70% Aaa / AAA 2.07 3.171% Due 10/25/2024 0.72% 5,234,090.46 4.58% 13,212.50 (372,650.46) AAA 1.87 3137BSRE5 FHLMC K059A2 5,000,000.00 02/18/2022 5,214,062.50 94.75 4,737,585.00 0.68% NR/AAA 3.99 3.120% Due 09/25/2026 1.98% 5,185,650.57 4.58% 13,000.00 (448,065.57) AAA 3.57 03215PFN4 AMRESCO Residential Securities 1999-1 A 116,624.77 05/20/2011 87,577.91 98.58 114,966.36 0.02% NR / BBB 6.74 3.313% Due 06/25/2029 7.12% 105,814.08 4.92% 64.40 9,152.28 A 0.02 3133TCE95 FHLMC FSPC E3 A 3,020.20 03/11/1998 3,023.37 96.84 2,924.72 0.00% Aaa / AA+ 9.88 3.771% Due 08/15/2032 3.73% 3,021.11 4.05% 9.49 (96.39) AAA 0.77 31397QREO FNMA FNR 2011-3 FA 79,124.45 12/20/2010 79,099.75 101.78 80,530.49 0.01% Aaa / AA+ 18.42 3.053% Due 02/25/2041 3.06% 79,109.34 3.51% 40.26 1,421.15 AAA 0.12 31394JY35 FHLMC FSPC T-58 2A 418,226.04 06/09/2011 473,640.99 107.56 449,854.38 0.06% Aaa / AA+ 21.00 6.500% Due 09/25/2043 5.40% 454,245.05 3.29% 453.08 (4,390.67) AAA 2.43 11,235,920.14 10,247,300.95 1.47% Aaa / AAA 3.97 TOTAL CMO 10,616,995.46 1.59% 11,061,930.61 4.52% 26,779.73 (814,629.66) Aaa 2.65 Corporate 808513AT2 Charles Schwab Corp Callable Note Cont 12/25/2022 4,000,000.00 05/21/2019 3,987,840.00 99.62 3,984,920.00 0.57% A2 / A 0.32 2.650% Due 01/25/2023 2.74% 3,998,949.69 3.83% 19,433.33 (14,029.69) A 0.32 00440EAP2 Chubb INA Holdings Inc Note 2,000,000.00 05/24/2018 1,937,000.00 99.28 1,985,520.00 0.28% A3 / A 0.45 2.700% Due 03/13/2023 3.42% 1,994,128.64 4.32% 2,700.00 (8,608.64) A 0.44 69353RFL7 PNC Bank Callable Note Cont 5/9/2023 5,000,000.00 Various 4,993,318.05 99.43 4,971,490.00 0.72% A2 / A 0.69 3.500% Due 06/08/2023 3.53% 4,999,083.77 4.34% 54,930.56 (27,593.77) A+ 0.67 02665WCJ8 American Honda Finance Note 845,000.00 07/11/2018 843,538.15 99.18 838,102.27 0.12% A3 / A- 0.79 3.450% Due 07/14/2023 3.49% 844,770.78 4.51% 6,235.40 (6,668.51) A 0.76 02665WCQ2 American Honda Finance Note 2,000,000.00 Various 1,998,320.00 99.13 1,982,548.00 0.29% A3 / A- 1.03 3.625% Due 10/10/2023 3.64% 1,999,650.95 4.50% 34,437.50 (17,102.95) A 0.98 24422EUM9 John Deere Capital Corp Note 1,250,000.00 11/28/2018 1,250,237.50 99.31 1,241,337.50 0.18% A2 / A 1.03 3.650% Due 10/12/2023 3.64% 1,250,050.25 4.34% 21,418.40 (8,712.75) A 0.99 06051GHF9 Bank of America Corp Callable Note 1X 3/5/2023 6,675,000.00 Various 6,770,625.75 99.22 6,622,894.95 0.95% A2 / A- 1.43 3.550% Due 03/05/2024 3.16% 6,685,376.68 4.90% 17,113.96 (62,481.73) AA- 1.36 09247XAL5 Blackrock Inc Note 1,000,000.00 05/09/2019 1,036,330.00 98.58 985,840.00 0.14% Aa3 / AA- 1.47 3.500% Due 03/18/2024 2.69% 1,010,954.39 4.51% 1,263.89 (25,114.39) NR 1.41 43 Q1 Table of Contents Holdings Report As of September 30, 2022 Orange County Sanitation District Long Term - Account #10268 8085136N4 Charles Schwab Corp Callable Note Cont 2/18/2024 2,785,000.00 03/16/2021 2,783,607.50 94.59 2,634,398.34 0.38% A2 / A 1.47 0.750% Due 03/18/2024 0.77% 2,784,321.54 4.60% 754.27 (149,923.20) A 1.43 458140BD1 Intel Corp Callable Note Cont 3/11/2024 5,000,000.00 05/09/2019 5,025,900.00 97.47 4,873,250.00 0.70% Al / A+ 1.61 2.875% Due 05/11/2024 2.76% 5,007,737.70 4.52% 55,902.78 (134,487.70) A+ 1.54 037833CU2 Apple Inc Callable Note Cont 3/11/2024 3,000,000.00 05/17/2019 3,017,760.00 97.56 2,926,743.00 0.42% Aaa / AA+ 1.61 2.850% Due 05/11/2024 2.72% 3,005,330.02 4.43% 33,250.00 (78,587.02) NR 1.54 023135BW5 Amazon.com Inc Note 5,490,000.00 05/10/2021 5,481,984.60 93.77 5,147,698.50 0.74% Al / AA 1.62 0.450% Due 05/12/2024 0.50% 5,485,692.45 4.49% 9,538.88 (337,993.95) AA- 1.57 891140CA4 Toronto Dominion Bank Note 3,000,000.00 06/12/2019 3,000,570.00 96.05 2,881,458.00 0.41% Al / A 1.70 2.650% Due 06/12/2024 2.65% 3,000,193.64 5.10% 24,070.83 (118,735.64) AA- 1.62 02665WCZ2 American Honda Finance Note 1,219,000.00 07/10/2019 1,213,843.63 96.07 1,171,103.05 0.17% A3/A- 1.74 2.400% Due 06/27/2024 2.49% 1,217,192.99 4.78% 7,639.07 (46,089.94) A 1.67 79466LAG9 Salesforce.com Inc Callable Note Cont 7/15/2022 1,350,000.00 06/29/2021 1,349,311.50 93.24 1,258,675.20 0.18% A2 / A+ 1.79 0.625% Due 07/15/2024 0.64% 1,349,590.91 4.60% 1,781.25 (90,915.71) NR 1.74 78013XZU5 Royal Bank of Canada Note 6,500,000.00 09/10/2019 6,581,445.00 95.92 6,234,566.00 0.90% Al / A 1.79 2.550% Due 07/16/2024 2.28% 6,530,110.25 4.95% 34,531.25 (295,544.25) AA- 1.71 46647PAUO JP Morgan Chase & Co Callable Note 1X 7/23/2023 2,500,000.00 09/12/2019 2,632,175.00 98.64 2,466,117.50 0.35% Al/A- 1.81 3.797% Due 07/23/2024 2.35% 2,527,732.31 5.01% 17,930.28 (61,614.81) AA- 1.71 02665WEA5 American Honda Finance Note 6,000,000.00 Various 5,979,632.85 92.81 5,568,450.01 0.80% A3/A- 2.29 1.500% Due 01/13/2025 1.62% 5,984,160.53 4.86% 19,500.00 (415,710.52) A 2.19 90331HPL1 US Bank NA Callable Note Cont 12/21/2024 7,270,000.00 01/16/2020 7,254,514.90 94.06 6,838,278.32 0.98% Al / AA- 2.31 2.050% Due 01/21/2025 2.10% 7,262,854.99 4.80% 28,979.03 (424,576.67) AA- 2.20 037833AZ3 Apple Inc Note 3,922,000.00 07/14/2021 4,154,496.16 95.48 3,744,556.95 0.54% Aaa / AA+ 2.36 2.500% Due 02/09/2025 0.81% 4,075,689.95 4.54% 14,162.78 (331,133.00) NR 2.24 00440EAS6 Chubb INA Holdings Inc Note 2,000,000.00 10/28/2020 2,203,740.00 95.95 1,918,998.00 0.27% A3 / A 2.46 3.150% Due 03/15/2025 0.78% 2,114,308.73 4.92% 2,800.00 (195,310.73) A 2.32 06367WB85 Bank of Montreal Note 7,000,000.00 08/12/2021 7,226,940.00 92.02 6,441,057.00 0.93% A2 / A- 2.59 1.850% Due 05/01/2025 0.96% 7,158,053.49 5.19% 53,958.33 (716,996.49) AA- 2.45 14913R2V8 Caterpillar Financial Service Note 3,485,000.00 05/10/2022 3,480,574.05 96.71 3,370,507.30 0.49% A2 / A 2.62 3.400% Due 05/13/2025 3.44% 3,481,143.45 4.75% 45,421.17 (110,636.15) A 2.44 747525AFO Qualcomm Inc Callable Note Cont 2/20/2025 8,000,000.00 Various 8,479,891.80 96.81 7,744,712.00 1.12% A2 / A 2.64 3.450% Due 05/20/2025 1.63% 8,370,789.19 4.75% 100,433.33 (626,077.19) NR 2.45 61747YEA9 Morgan Stanley Callable Note Cont 5/30/2024 8,885,000.00 05/26/2021 8,889,710.25 92.06 8,179,762.01 1.17% Al/A- 2.67 0.790% Due 05/30/2025 0.77% 8,887,613.46 5.01% 23,592.14 (707,851.45) A 2.56 44 Q11 Table of Contents Holdings Report As of September 30, 2022 Orange County Sanitation District Long Term - Account #10268 438516CBO Honeywell Intl Callable Note Cont 5/1/2025 5,000,000.00 06/23/2020 5,119,000.00 92.05 4,602,565.00 0.66% A2 / A 2.67 1.350% Due 06/01/2025 0.85% 5,063,363.64 4.54% 22,500.00 (460,798.64) A 2.56 78015K7H1 Royal Bank of Canada Note 4,000,000.00 Various 4,013,620.00 90.25 3,610,060.00 0.52% Al / A 2.70 1.150% Due 06/10/2025 1.10% 4,005,187.84 5.07% 14,183.33 (395,127.84) AA- 2.58 66815L2J7 Northwestern Mutual Glbl Note 7,485,000.00 06/27/2022 7,482,455.10 97.42 7,291,610.06 1.05% Aaa / AA+ 2.75 4.000% Due 07/01/2025 4.01% 7,482,668.72 5.01% 74,850.00 (191,058.66) AAA 2.54 06406HCQO Bank of New York Callable Note Cont 10/18/2025 1,500,000.00 04/05/2022 1,537,365.00 97.34 1,460,085.00 0.21% Al / A 3.14 3.950% Due 11/18/2025 3.20% 1,532,238.17 4.87% 21,889.58 (72,153.17) AA- 2.86 06051GHY8 Bank of America Corp Callable Note Cont 2/13/2025 2,500,000.00 03/04/2021 2,583,450.00 91.68 2,292,010.00 0.33% A2 / A- 3.38 2.015% Due 02/13/2026 1.14% 2,550,255.70 5.41% 6,716.67 (258,245.70) AA- 3.17 46647PBH8 JP Morgan Chase & Co Callable Note Mthly 3/13/2025 3,500,000.00 Various 3,602,345.00 91.59 3,205,716.50 0.46% Al/A- 3.45 2.005% Due 03/13/2026 1.24% 3,563,345.86 5.43% 3,508.75 (357,629.36) AA- 3.25 40139LBD4 Guardian Life Glob Fun Note 3,250,000.00 02/09/2022 3,124,290.00 87.25 2,835,560.00 0.41% Aa1 / AA+ 3.62 1.250% Due 05/13/2026 2.21% 3,143,081.70 5.16% 15,572.92 (307,521.70) NR 3.44 91324PEC2 United Health Group Inc Callable Note Cont 4/15/2026 4,000,000.00 Various 3,904,703.05 88.53 3,541,256.00 0.51% A3 / A+ 3.62 1.150% Due 05/15/2026 1.74% 3,917,646.25 4.62% 17,377.78 (376,390.25) A 3.46 89236TJK2 Toyota Motor Credit Corp Note 7,285,000.00 06/15/2021 7,281,794.60 87.51 6,374,986.94 0.91% Al / A+ 3.72 1.125% Due 06/18/2026 1.13% 7,282,619.65 4.84% 23,448.59 (907,632.71) A+ 3.55 06051GJD2 Bank of America Corp Callable Note Cont 6/19/2025 2,250,000.00 06/24/2021 2,254,432.50 88.77 1,997,392.50 0.29% A2/A- 3.72 1.319% Due 06/19/2026 1.27% 2,253,028.26 5.41% 8,408.63 (255,635.76) AA- 3.52 58989V2D5 Met Tower Global Funding Note 3,745,000.00 09/07/2021 3,741,554.60 86.05 3,222,411.47 0.46% Aa3 / AA- 3.96 1.250% Due 09/14/2026 1.27% 3,742,275.38 5.20% 2,210.59 (519,863.91) AA- 3.76 06368FAC3 Bank of Montreal Note 3,000,000.00 Various 2,994,647.40 85.53 2,566,011.00 0.37% A2 / A- 3.96 1.250% Due 09/15/2026 1.29% 2,995,764.24 5.35% 1,666.67 (429,753.24) AA- 3.76 931142ERO Wal-Mart Stores Callable Note Cont 08/17/2026 1,725,000.00 09/08/2021 1,721,739.75 87.29 1,505,769.75 0.22% Aa2 / AA 3.97 1.050% Due 09/17/2026 1.09% 1,722,416.44 4.59% 704.38 (216,646.69) AA 3.80 59217GER6 Metlife Note 5,920,000.00 01/03/2022 5,913,251.20 87.50 5,179,881.60 0.74% Aa3 / AA- 4.28 1.875% Due 01/11/2027 1.90% 5,914,223.23 5.17% 24,666.67 (734,341.63) AA- 4.00 89114TZN5 Toronto -Dominion Bank Note 2,000,000.00 01/25/2022 1,984,582.40 87.04 1,740,794.00 0.25% Al / A 4.29 1.950% Due O1/12/2027 2.11% 1,986,685.19 5.38% 8,558.33 (245,891.19) AA- 3.99 808513BYO Charles Schwab Corp Callable Note Cont 2/3/2027 2,325,000.00 03/O1/2022 2,322,489.00 89.78 2,087,389.65 0.30% A2 / A 4.42 2.450% Due 03/03/2027 2.47% 2,322,780.53 5.06% 4,430.42 (235,390.88) A 4.09 45 Q11 Table of Contents Holdings Report As of September 30, 2022 Orange County Sanitation District Long Term - Account #10268 89114TZT2 Toronto -Dominion Bank Note 5,000,000.00 03/09/2022 4,960,350.00 90.18 4,508,840.00 0.65% Al/A 4.44 2.800% Due 03/10/2027 2.97% 4,964,782.11 5.31% 8,166.67 (455,942.11) NR 4.08 084664CZ2 Berkshire Hathaway Callable Note Cont 2/15/2027 6,875,000.00 03/07/2022 6,873,693.75 91.05 6,259,873.13 0.90% Aa2 / AA 4.46 2.300% Due 03/15/2027 2.30% 6,873,836.82 4.54% 7,027.78 (613,963.69) A+ 4.15 89236TJZ9 Toyota Motor Credit Corp Note 2,000,000.00 06/03/2022 1,945,900.00 92.13 1,842,570.00 0.26% Al / A+ 4.48 3.050% Due 03/22/2027 3.67% 1,949,488.11 5.04% 1,525.00 (106,918.11) A+ 4.10 023135CF1 Amazon.com Inc Callable Note Cont 3/13/2027 2,000,000.00 04/25/2022 1,996,540.00 94.43 1,888,540.00 0.27% Al / AA 4.54 3.300% Due 04/13/2027 3.34% 1,996,839.79 4.68% 30,800.00 (108,299.79) AA- 4.08 46647PCBO JP Morgan Chase & Co Callable Note Cont 4/22/2026 5,000,000.00 08/23/2022 4,498,450.00 86.40 4,320,205.00 0.62% Al / A- 4.56 1.578% Due 04/22/2027 4.45% 4,509,359.67 5.46% 34,847.50 (189,154.67) AA- 4.25 927804GH1 Virginia Electric Power Corp Callable Note Cont. 5,735,000.00 Various 5,736,523.40 94.44 5,416,242.98 0.78% A2 / BBB+ 4.62 4/15/2027 3.74% 5,736,496.97 5.11% 72,284.90 (320,253.99) A 4.12 3.750% Due 05/15/2027 14913R3A3 Caterpillar Financial Service Note 3,250,000.00 Various 3,213,062.50 94.46 3,069,943.50 0.44% A2 / A 4.87 3.600% Due 08/12/2027 3.85% 3,213,510.66 4.89% 15,925.00 (143,567.16) A 4.37 931142EX7 Wal-Mart Stores Callable Note Cont 09/09/2027 4,995,000.00 Various 4,989,807.70 96.93 4,841,568.59 0.69% Aa2 / AA 4.95 3.950% Due 09/09/2027 3.97% 4,989,870.26 4.65% 12,057.38 (148,301.67) AA 4.42 24422EWK1 John Deere Capital Corp Note 2,000,000.00 09/20/2022 1,972,620.00 97.09 1,941,782.00 0.28% A2 / A 4.96 4.150% Due 09/15/2027 4.46% 1,972,755.47 4.82% 5,302.78 (30,973.47) A 4.41 26.38% 197,341,973.64 183,616,048.57 (13,093,952.84 Al / A+ 2.86 TOTAL Corporate 196,516,000.00 2.22% 196,710,001.41 4.86% 1,070,408.75 ) A+ 2.68 Money Market Fund 31846V567 First American Govt Obligation MMKT Class-Z 1,310,134.17 Various 1,310,134.17 1.00 1,310,134.17 0.19% Aaa/AAA 0.00 2.72% 1,310,134.17 2.72% 0.00 0.00 AAA 0.00 1,310,134.17 1,310,134.17 0.19% Aaa / AAA 0.00 TOTAL Money Market Fund 1,310,134.17 2.72% 1,310,134.17 2.72% 0.00 0.00 Aaa 0.00 Mortgage Pass Thru 36225CAZ9 GNMA Pool# G2 80023 7,177.10 08/08/1997 7,295.96 99.24 7,122.39 0.00% Aaa / AA+ 4.22 1.790% Due 12/20/2026 1.68% 7,194.20 3.67% 10.71 (71.81) AAA 1.74 36225CC20 GNMA Pool# G2 80088 5,090.32 08/11/1997 5,201.67 98.81 5,029.74 0.00% Aaa / AA+ 4.72 3.510% Due 06/20/2027 3.37% 5,107.94 4.64% 14.89 (78.20) AAA 1.82 46 C11% Table of Contents Holdings Report As of September 30, 2022 Orange County Sanitation District Long Term - Account #10268 31348SWZ3 FHLMC FH 786064 1,126.45 02/18/2000 1,099.02 98.09 1,104.89 0.00% Aaa / AA+ 5.26 2.227% Due 01/01/2028 2.41% 1,121.28 5.88% 2.09 (16.39) AAA 1.08 31371NUC7 FNMA FN 257179 5,700.13 12/05/2011 6,028.46 97.14 5,537.26 0.00% Aaa / AA+ 5.51 4.500% Due 04/01/2028 3.72% 5,810.90 5.84% 21.38 (273.64) AAA 1.98 31417YAY3 FNMA Pool# FN MA0022 6,667.68 12/05/2011 7,051.72 97.40 6,494.39 0.00% Aaa / AA+ 6.51 4.500% Due 04/01/2029 3.76% 6,811.94 5.57% 25.00 (317.55) AAA 2.24 3138EG6F6 FNMA FN AL0869 3,944.11 12/05/2011 4,171.29 97.40 3,841.76 0.00% Aaa / AA+ 6.67 4.500% Due 06/01/2029 3.77% 4,030.80 5.55% 3.45 (189.04) AAA 2.29 36225CNM4 GNMA Pool# G2 80395 3,046.83 03/15/2000 3,019.20 98.84 3,011.43 0.00% Aaa / AA+ 7.56 3.510% Due 04/20/2030 3.59% 3,039.85 4.80% 8.91 (28,42) AAA 3.29 36225CN28 GNMA Pool# G2 80408 26,109.64 03/15/2000 25,844.44 98.85 25,809.22 0.00% Aaa / AA+ 7.64 3.510% Due 05/20/2030 3.60% 26,042.14 4.78% 76.37 (232.92) AAA 3.12 31403GXF4 FNMA Pool# FN 748678 750.37 06/10/2013 806.64 97.88 734.46 0.00% Aaa / AA+ 11.01 5.000% Due 10/01/2033 4.16% 780.99 5.56% 3.13 (46.53) AAA 3.55 36225DCB8 GNMA Pool# G2 80965 20,771.84 07/19/2004 20,758.86 98.24 20,405.96 0.00% Aaa / AA+ 11.81 1.590% Due 07/20/2034 1.59% 20,766.72 4.71% 27.52 (360.76) AAA 2.83 31406XWT5 FNMA Pool# FN 823358 18,758.84 01/11/2006 18,612.29 100.36 18,826.30 0.00% Aaa / AA+ 12.35 2.027% Due 02/01/2035 2.08% 18,696.54 2.86% 31.69 129.76 AAA 0.59 31406PQY8 FNMA Pool# FN 815971 66,214.97 06/10/2013 71,181.10 100.91 66,814.48 0.01% Aaa / AA+ 12.42 5.000% Due 03/01/2035 4.21% 69,065.51 4.73% 275.90 (2,251.03) AAA 3.81 31407BXH7 FNMA Pool# FN 826080 8,702.16 06/10/2013 9,354.80 100.90 8,780.87 0.00% Aaa / AA+ 12.76 5.000% Due 07/01/2035 4.22% 9,081.00 4.73% 36.26 (300.13) AAA 3.82 31376KT22 FNMA FN 357969 43,750.05 06/10/2013 47,031.30 100.58 44,005.07 0.01% Aaa / AA+ 12.93 5.000% Due 09/01/2035 4.22% 45,665.30 4.82% 42.53 (1,660.23) AAA 3.88 31403DJZ3 FNMA Pool #745580 44,350.71 06/10/2013 47,677.01 100.91 44,752.97 0.01% Aaa / AA+ 13.68 5.000% Due 06/01/2036 4.26% 46,337.65 4.73% 184.79 (1,584.68) AAA 3.90 31410F4V4 FNMA Pool# FN 888336 73,186.46 06/10/2013 78,675.47 100.91 73,850.92 0.01% Aaa / AA+ 13.76 5.000% Due 07/01/2036 4.25% 76,473.19 4.73% 304.94 (2,622.27) AAA 3.87 353,809.23 336,122.11 0.05% Aaa / AA+ 11.90 TOTAL Mortgage Pass Thru 335,347.66 3.81% 346,025.95 4.67% 1,069.56 (9,903.84) Aaa 3.39 c�4,.F 47 �, Table of Contents Holdings Report As of September 30, 2022 Orange County Sanitation District Long Term - Account #10268 Negotiable CD 86959RTWO Svenska Handelsbanken NY Yankee CD 6,000,000.00 10/15/2021 6,000,302.58 99.89 5,993,382.00 0.86% P-1 / A-1+ 0.04 0.255% Due 10/14/2022 0.25% 6,000,010.81 3.09% 14,917.50 (6,628.81) F-1+ 0.04 6,000,302.58 5,993,382.00 0.86% Aaa / AAA 0.04 TOTAL Negotiable CD 6,000,000.00 0.25% 61000,010.81 3.09% 14,917.50 (6,628.81) Aaa 0.04 Supranational 4581XODZ8 Inter -American Dev Bank Note 10,775,000.00 09/15/2021 10,767,026.50 92.88 10,008,251.00 1.43% Aaa / AAA 1.98 0.500% Due 09/23/2024 0.52% 10,769,740.11 4.29% 1,197.22 (761,489.11) NR 1.93 459058JBO Intl. Bank Recon & Development Note 6,245,000.00 04/15/2020 6,220,831.85 91.04 5,685,547.92 0.81% Aaa / AAA 2.56 0.625% Due 04/22/2025 0.70% 6,232,637.98 4.36% 17,238.80 (547,090.06) NR 2.48 4581XODN5 Inter -American Dev Bank Note 5,050,000.00 01/13/2021 5,071,967.50 90.23 4,556,493.80 0.65% Aaa / AAA 2.79 0.625% Due 07/15/2025 0.53% 5,063,619.31 4.38% 6,663.19 (507,125.51) NR 2.71 459058JL8 Intl. Bank Recon & Development Note 15,000,000.00 Various 14,964,951.60 88.98 13,346,265.00 1.91% Aaa / AAA 3.08 0.500% Due 10/28/2025 0.55% 14,977,313.55 4.37% 31,875.00 (1,631,048.55) AAA 2.98 4581XODV7 Inter -American Dev Bank Note 13,370,000.00 04/13/2021 13,308,765.40 88.72 11,861,730.30 1.70% Aaa / AAA 3.56 0.875% Due 04/20/2026 0.97% 13,326,505.33 4.33% 52,319.41 (1,464,775.03) AAA 3.42 50,333,542.85 45,458,288.02 6.51% Aaa / AAA 2.87 TOTAL Supranational 50,440,000.00 0.67% 50,369,816.28 4.34% 109,293.62 (4,911,528.26) Aaa 2.78 US Treasury 912828U57 US Treasury Note 4,000,000.00 Various 3,926,302.08 97.57 3,902,656.00 0.56% Aaa / AA+ 1.17 2.125% Due 11/30/2023 2.53% 3,982,243.98 4.28% 28,565.58 (79,587.98) AAA 1.13 91282CBA8 US Treasury Note 1,500,000.00 12/29/2020 1,498,007.81 95.18 1,427,637.00 0.20% Aaa / AA+ 1.21 0.125% Due 12/15/2023 0.17% 1,499,188.37 4.27% 553.28 (71,551.37) AAA 1.18 91282CDR9 US Treasury Note 5,000,000.00 12/28/2021 5,000,195.31 95.75 4,787,500.00 0.69% Aaa / AA+ 1.25 0.750% Due 12/31/2023 0.75% 5,000,122.00 4.28% 9,476.90 (212,622.00) AAA 1.22 912828V80 US Treasury Note 7,500,000.00 Various 7,491,503.91 97.36 7,301,662.50 1.05% Aaa / AA+ 1.34 2.250% Due 01/31/2024 2.27% 7,497,629.01 4.31% 28,430.70 (195,966.51) AAA 1.29 912828W48 US Treasury Note 10,000,000.00 04/24/2019 9,911,718.75 97.03 9,702,730.00 1.39% Aaa / AA+ 1.42 2.125% Due 02/29/2024 2.32% 9,974,278.30 4.31% 18,197.51 (271,548.30) AAA 1.37 912828WJ5 US Treasury Note 7,000,000.00 06/10/2019 7,193,046.88 97.16 6,800,934.00 0.98% Aaa / AA+ 1.62 2.500% Due 05/15/2024 1.91% 7,063,490.97 4.33% 66,100.54 (262,556.97) AAA 1.55 912828XX3 US Treasury Note 5,000,000.00 07/12/2019 5,028,710.94 96.18 4,808,985.00 0.69% Aaa / AA+ 1.75 2.000% Due 06/30/2024 1.88% 5,010,109.04 4.29% 25,271.74 (201,124.04) AAA 1.68 48 Q1 Table of Contents Holdings Report As of September 30, 2022 Orange County Sanitation District Long Term - Account #10268 912828WUO US Treasury Inflation Index Note 12,976,808.00 Various 12,865,480.17 96.59 12,534,272.89 1.79% Aaa / AA+ 1.79 0.125% Due 07/15/2024 0.21% 12,956,819.81 2.07% 3,438.21 (422,546.92) AAA 1.77 91282CCX7 US Treasury Note 10,500,000.00 Various 10,377,363.28 92.80 9,743,674.50 1.39% Aaa / AA+ 1.96 0.375% Due 09/15/2024 0.81% 10,412,391.28 4.25% 1,740.33 (668,716.78) AAA 1.91 912828YH7 US Treasury Note 14,000,000.00 Various 13,859,296.88 94.83 13,275,934.00 1.90% Aaa / AA+ 2.00 1.500% Due 09/30/2024 1.72% 13,941,217.43 4.22% 576.92 (665,283.43) AAA 1.94 9128283J7 US Treasury Note 16,500,000.00 Various 16,783,886.72 95.62 15,776,838.00 2.27% Aaa / AA+ 2.17 2.125% Due 11/30/2024 1.76% 16,624,201.16 4.26% 117,832.99 (847,363.16) AAA 2.07 91282CDZ1 US Treasury Note 5,000,000.00 05/06/2022 4,812,890.63 93.75 4,687,500.00 0.67% Aaa / AA+ 2.38 1.500% Due 02/15/2025 2.92% 4,839,673.31 4.30% 9,578.80 (152,173.31) AAA 2.29 912828ZL7 US Treasury Note 12,000,000.00 Various 11,998,515.63 90.60 10,872,192.00 1.56% Aaa / AA+ 2.58 0.375% Due 04/30/2025 0.38% 11,999,204.27 4.25% 18,831.52 (1,127,012.27) AAA 2.52 91282CFE6 US Treasury Note 5,000,000.00 09/27/2022 4,826,171.88 96.95 4,847,655.00 0.70% Aaa / AA+ 2.88 3.125% Due 08/15/2025 4.42% 4,826,667.59 4.26% 19,955.84 20,987.41 AAA 2.70 91282CAM3 US Treasury Note 6,500,000.00 10/16/2020 6,477,656.25 88.89 5,777,635.50 0.83% Aaa / AA+ 3.00 0.250% Due 09/30/2025 0.32% 6,486,460.21 4.23% 44.64 (708,824.71) AAA 2.93 91282CBC4 US Treasury Note 10,000,000.00 Various 9,943,320.32 88.44 8,844,140.00 1.26% Aaa / AA+ 3.25 0.375% Due 12/31/2025 0.50% 9,961,373.60 4.22% 9,476.90 (1,117,233.60) AAA 3.16 91282CBH3 US Treasury Note 18,000,000.00 Various 17,781,875.00 88.09 15,856,884.00 2.27% Aaa / AA+ 3.34 0.375% Due 01/31/2026 0.63% 17,851,646.86 4.24% 11,372.28 (1,994,762.86) AAA 3.24 91282CBT7 US Treasury Note 10,000,000.00 Various 9,943,359.37 88.81 8,880,860.00 1.27% Aaa / AA+ 3.50 0.750% Due 03/31/2026 0.87% 9,960,300.06 4.22% 206.04 (1,079,440.06) AAA 3.39 91282CCF6 US Treasury Note 7,500,000.00 06/18/2021 7,443,750.00 88.34 6,625,485.00 0.95% Aaa / AA+ 3.67 0.750% Due 05/31/2026 0.91% 7,458,303.32 4.22% 18,903.69 (832,818.32) AAA 3.54 91282CCW9 US Treasury Note 8,000,000.00 Various 7,874,375.01 87.73 7,018,752.00 1.00% Aaa / AA+ 3.92 0.750% Due 08/31/2026 1.08% 7,898,837.82 4.18% 5,138.13 (880,085.82) AAA 3.78 91282CDG3 US Treasury Note 19,250,000.00 Various 19,119,013.68 88.71 17,076,097.50 2.45% Aaa / AA+ 4.09 1.125% Due 10/31/2026 1.27% 19,140,647.40 4.16% 90,626.69 (2,064,549.90) AAA 3.90 912828Z78 US Treasury Note 18,500,000.00 Various 17,870,410.15 89.68 16,591,466.00 2.38% Aaa / AA+ 4.34 1.500% Due O1/31/2027 2.25% 17,931,563.14 4.12% 46,752.72 (1,340,097.14) AAA 4.11 91282CEN7 US Treasury Note 17,000,000.00 Various 16,417,148.44 94.43 16,052,386.00 2.32% Aaa / AA+ 4.58 2.750% Due 04/30/2027 3.53% 16,434,705.33 4.09% 195,638.58 (382,319.33) AAA 4.20 49 cif Table of Contents Holdings Report Orange County Sanitation District Long Term - Account #10268 As of September 30, 2022 91282CEW7 US Treasury Note 20,500,000.00 Various 20,645,273.45 96.43 19,768,888.00 2.85% Aaa / AA+ 4.75 3.250% Due 06/30/2027 3.09% 20,640,923.08 4.08% 168,372.96 (872,035.08) AAA 4.31 33.40% 249,089,272.54 232,962,764.89 (16,429,232.45 Aaa / AA+ 3.02 TOTAL US Treasury 251,226,808.00 1.64% 249,391,997.34 4.10% 895,083.49 ) Aaa 2.87 745,928,649.87 100.00% 697,508,524.37 Aa1 / AA 2.78 TOTAL PORTFOLIO o 745,156,449.59 1.67% 744,446,681.61 a 4.42 /0 2:660:393.05 (46,938,157.24 Aaa 2.41 TOTAL MARKET VALUE PLUS ACCRUALS 700,168,917.42 50 Ci' Table of Contents Holdings Report As of September 30, 2022 Orange County Sanitation District Liquid - Account #10282 313385S80 FHLB Discount Note 5,000,000.00 09/29/2022 4,966,597.22 99.35 4,967,500.00 4.54% P-1 / A-1+ 0.20 3.250% Due 12/12/2022 3.32% 4,967,500.00 3.32% 0.00 0.00 F-1+ 0.20 3137EAES4 FHLMC Note 1,250,000.00 09/28/2022 1,214,137.50 97.21 1,215,062.50 1.11% Aaa / AA+ 0.74 0.250% Due 06/26/2023 4.22% 1,214,403.15 4.13% 824.65 659.35 AAA 0.72 6,180,734.72 6,182,562.50 5.65% Aaa / AAA 0.31 TOTAL Agency 6,250,000.00 3.49% 6,181,903.15 3.48% 824.65 659.35 Aaa 0.30 Corporate 911312AQ9 UPS Note 2,400,000.00 04/25/2022 2,407,152.00 100.00 2,400,000.00 2.22% A2 / A 0.00 2.450% Due 10/01/2022 1.75% 2,400,000.00 2.45% 29,400.00 0.00 NR 0.00 06051GEU9 Bank of America Corp Note 2,000,000.00 04/25/2022 2,018,300.00 99.75 1,995,028.00 1.84% A2 / A- 0.28 3.300% Due 01/11/2023 1.98% 2,007,206.95 4.17% 14,666.67 (12,178.95) AA- 0.28 59217GEE5 Metlife Note 2,255,000.00 03/09/2022 2,259,126.65 99.33 2,239,844.15 2.06% Aa3 / AA- 0.29 1.950% Due 01/13/2023 1.73% 2,256,393.41 4.31% 9,527.38 (16,549.26) AA- 0.28 61744YAN8 Morgan Stanley Note 1,998,000.00 Various 1,997,154.18 99.67 1,991,440.57 1.83% Al/A- 0.32 3.125% Due 01/23/2023 3.22% 1,997,365.89 4.16% 11,793.75 (5,925.32) A 0.31 46625HJH4 JP Morgan Chase Note 2,000,000.00 02/03/2022 2,042,640.00 99.68 1,993,604.00 1.83% Al/A- 0.32 3.200% Due 01/25/2023 0.98% 2,014,051.82 4.19% 11,733.33 (20,447.82) AA- 0.32 06406RAM9 Bank of NY Mellon Corp Callable Note Cont 1/2/2023 1,585,000.00 03/09/2022 1,589,501.40 99.36 1,574,802.11 1.44% Al / A 0.33 1.850% Due 01/27/2023 1.49% 1,586,409.53 3.84% 5,212.89 (11,607.42) AA- 0.32 927804FN9 Virginia Electric Power Corp Callable Note Cont 2,000,000.00 06/01/2022 2,003,940.00 99.00 1,980,080.00 1.81% A2 / BBB+ 0.45 12/15/2022 2.38% 2,001,515.38 4.97% 2,444.44 (21,435.38) A 0.45 2.750% Due 03/15/2023 14,317,814.23 14,174,798.83 13.03% Al / A 0.27 TOTAL Corporate 14,238,000.00 1.94% 14,262,942.98 3.97% 84,778.46 (88,144.15) A+ 0.27 Money Market Fund 31846V567 First American Govt Obligation MMKT Class-Z 3,225,313.99 Various 3,225,313.99 1.00 3,225,313.99 2.95% Aaa / AAA 0.00 2.72% 3,225,313.99 2.72% 0.00 0.00 AAA 0.00 3,225,313.99 3,225,313.99 2.95% Aaa / AAA 0.00 TOTAL Money Market Fund 3,225,313.99 2.72% 3,225,313.99 2.72% 0.00 0.00 Aaa 0.00 51 Q1 Table of Contents Holdings Report Orange County Sanitation District Liquid - Account #10282 Negotiable CD AL As of September 30, 2022 78012UW43 Royal Bank of Canada Yankee CD 2,000,000.00 05/26/2022 1,986,927.04 99.84 1,996,862.00 1.83% P-1 / A-1+ 0.05 0.270% Due 10/20/2022 1.88% 1,998,310.30 3.09% 5,175.00 (1,448.30) F-1+ 0.05 89114WJB2 Toronto Dominion Yankee CD 2,000,000.00 05/27/2022 1,987,255.53 99.84 1,996,834.00 1.83% P-1 / A-1+ 0.05 0.270% Due 10/20/2022 1.85% 1,998,341.47 3.12% 5,175.00 (1,507.47) F-1+ 0.05 96130ALA4 Westpac Banking Corp NY Yankee CD 4,000,000.00 05/25/2022 3,974,475.71 99.79 3,991,776.00 3.66% P-1 / A-1+ 0.07 0.300% Due 10/26/2022 1.80% 3,995,856.45 3.14% 11,333.33 (4,080.45) F-1 0.07 55380TXV7 MUFG Bank Yankee CD 2,500,000.00 04/26/2022 2,479,919.65 99.76 2,493,977.50 2.29% P-1 / A-1 0.08 0.300% Due 10/31/2022 1.85% 2,496,795.69 3.10% 7,250.00 (2,818.19) F-1 0.08 78012U3M5 Royal Bank of Canada Yankee CD 3,000,000.00 02/11/2022 3,000,000.00 99.01 2,970,264.00 2.74% P-1 / A-1+ 0.38 1.350% Due 02/14/2023 1.35% 3,000,000.00 3.96% 25,762.50 (29,736.00) F-1+ 0.37 89114WW68 Toronto Dominion Yankee CD 3,000,000.00 04/29/2022 3,000,000.00 98.95 2,968,374.00 2.74% P-1 / A-1+ 0.58 2.680% Due 04/28/2023 2.68% 3,000,000.00 4.48% 34,616.67 (31,626.00) F-1+ 0.56 16,428,577.93 16,418,087.50 15.08% Aaa / AAA 0.22 TOTAL Negotiable CD 16,500,000.00 1.90% 16,489,303.91 3.52% 89,312.50 (71,216.41) Aaa 0.21 US Treasury 912796YR4 US Treasury Bill 10,000,000.00 07/28/2022 9,917,672.22 99.63 9,963,094.44 9.10% P-1 / A-1+ 0.15 2.555% Due 11/22/2022 2.61% 9,963,094.44 2.61% 0.00 0.00 F-1+ 0.14 91282CBG5 US Treasury Note 60,000,000.00 Various 59,283,593.76 98.84 59,305,260.00 54.19% Aaa / AA+ 0.34 0.125% Due 01/31/2023 1.76% 59,675,607.17 3.63% 12,635.87 (370,347.17) AAA 0.33 69,201,265.98 69,268,354.44 63.30% Aaa / AA+ 0.31 TOTAL US Treasury 70,000,000.00 1.89% 69,638,701.61 3.48% 12,635.87 (370,347.17) Aaa 0.30 109,353,706.85 109,269,117.26 100.00% Aal / AA+ 0.28 TOTAL PORTFOLIO 110,213,313.99 2.01% 109,798,165.64 3.53% 187,551.48 (529,048.38) Aaa 0.28 TOTAL MARKET VALUE PLUS ACCRUALS 109,456,668.74 52 Q11 Table of Contents Holdings Report OC SAN Lehman Exposure - Account #10284 Common Stock As of September 30, 2022 SLHOPNTA4 Lehman Brothers, Inc Open Position Long Exposure 60,641.49 11/21/2014 57,842.64 0.42 25,621.03 72.70% NR/NR 0.00 0.000% Due09/30/2022 0.00% 57,842.64 0.00% 0.00 (32,221.61) NR 0.00 57,842.64 25,621.03 72.70% NR / NR 0.00 TOTAL Common Stock 60,641.49 0.00% 57,842.64 0.00% 0.00 (32,221.61) NR 0.00 Corporate 525ESCIB7 Lehman Brothers Note -Defaulted 600,000.00 09/19/2008 316,145.76 0.37 2,220.00 6.30% NR/NR 0.32 0.000% Due 01/24/2023 0.00% 316,145.76 0.00% 0.00 (313,925.76) NR 0.00 525ESCOY6 Lehman Brothers Note -Defaulted 2,000,000.00 09/18/2008 1,018,441.83 0.37 7,400.00 21.00% NR/NR 27.08 0.000% Due 10/22/2049 0.00% 1,018,441.83 0.00% 0.00 (1,011,041.83) NR 0.00 1,334,587.59 9,620.00 27.30% NR/NR 20.90 TOTAL Corporate 2,600,000.00 0.00% 1,334,587.59 0.00% 0.00 (1,324,967.59) NR 0.00 1,392,430.23 35,241.03 100.00% NR/NR 5.71 TOTAL PORTFOLIO 2,660,641.49 0.00% 1,392,430.23 0.00% 0.00 (1,357,189.20) NR 0.00 TOTAL MARKET VALUE PLUS ACCRUALS 35,241.03 53 Cift Table of Contents V 14 Section 5 1 Transactions 54 ��` Table of Contents Transaction Ledger June 30, 2022 through September 30, 2022 ACQUISITIONS Purchase 07/01/2022 668151-2J7 Purchase 07/20/2022 47800AAC4 Purchase 08/08/2022 91282CEW7 Purchase 08/10/2022 91282CEW7 Purchase 08/11/2022 92348KAV5 Purchase 08/11/2022 927804GH1 Purchase 08/19/2022 14913R3A3 Purchase 08/25/2022 46647PCBO Purchase 08/26/2022 91282CEW7 Purchase 08/31/2022 91282CEW7 Purchase 09/09/2022 931142EX7 Purchase 09/09/2022 931142EX7 Purchase 09/13/2022 14913R3A3 Purchase 09/22/2022 24422EWK1 Orange County Sanitation District Long Term - Account #10268 7,485,000.00 Northwestern Mutual Glbl Note 99.966 4% Due:07/01/2025 3,140,000.00 John Deere Owner Trust 2022-B A3 99.990 3.74% Due: 02/16/2027 6,000,000.00 US Treasury Note 101.242 3.25% Due: 06/30/2027 6,000,000.00 US Treasury Note 101.184 3.25% Due:06/30/2027 2,750,000.00 Verizon Master Trust 2022-5 A1A 99.996 3.72% Due:07/20/2027 2,735,000.00 Virginia Electric Power Corp Callable Note Cont. 100.079 4/15/2027 3.75% Due: 05/15/2027 2,000,000.00 Caterpillar Financial Service Note 99.715 3.6% Due: 08/12/2027 5,000,000.00 JP Morgan Chase & Co Callable Note Cont 89.969 4/22/2026 1.578% Due:04/22/2027 5,000,000.00 US Treasury Note 100.246 3.25% Due:06/30/2027 3,500,000.00 US Treasury Note 99.641 3.25% Due:06/30/2027 2,110,000.00 Wal-Mart Stores Callable Note Cont 09/09/2027 99.784 3.95% Due: 09/09/2027 2,885,000.00 Wal-Mart Stores Callable Note Cont 09/09/2027 99.978 3.95% Due: 09/09/2027 1,250,000.00 Caterpillar Financial Service Note 97.501 3.6% Due: 08/12/2027 2,000,000.00 John Deere Capital Corp Note 98.631 4.15% Due:09/15/2027 As of September 30, 2022 4.01% 7,482,455.10 0.00 7,482,455.10 0.00 3.77% 3,139,700.13 0.00 3,139,700.13 0.00 2.97% 6,074,531.25 20,665.76 6,095,197.01 0.00 2.99% 6,071,015.63 21,725.54 6,092,741.17 0.00 3.75% 2,749,879.00 0.00 2,749,879.00 0.00 3.73% 2,737,160.65 20,227.60 2,757,388.25 0.00 3.66% 1,994,300.00 1,400.00 1,995,700.00 0.00 4.45% 4,498,450.00 26,957.50 4,525,407.50 0.00 3.19% 5,012,304.69 25,169.84 5,037,474.53 0.00 3.33% 3,487,421.88 19,164.40 3,506,586.28 0.00 4.00% 2,105,442.40 0.00 2,105,442.40 0.00 3.95% 2,884,365.30 0.00 2,884,365.30 0.00 4.17% 1,218,762.50 3,875.00 1,222,637.50 0.00 4.46% 1,972,620.00 3,227.78 1,975,847.78 0.00 55 Q1 Table of Contents I Transaction Ledger Orange County Sanitation District Long Term - Account #10268 June 30, 2022 through September 30, 2022 As of September 30, 2022 Purchase 09/27/2022 91282CEN7 5,000,000.00 US Treasury Note 93.844 4.23% 4,692,187.50 56,046.20 4,748,233.70 0.00 2.75% Due: 04/30/2027 Purchase 09/28/2022 91282CFE6 5,000,000.00 US Treasury Note 96.523 4.42% 4,826,171.88 18,682.07 4,844,853.95 0.00 3.125% Due:08/15/2025 Subtotal 61,855,000.00 60,946,767.91 217,141.69 61,163,909.60 0.00 Security 09/26/2022 912828WUO 317,096.00 US Treasury Inflation Index Note 100.000 317,096.00 78.63 317,174.63 0.00 Contribution 0.125% Due: 07/15/2024 Subtotal 317,096.00 317,096.00 78.63 317,174.63 0.00 TOTAL ACQUISITIONS 62,172,096.00 61,263,863.91 217,220.32 61,481,084.23 0.00 DISPOSITIONS Sale 07/18/2022 313383QR5 Sale 08/08/2022 9128284D9 Sale 08/10/2022 912828R69 Sale 08/10/2022 912828U57 Sale 08/11/2022 084670BR8 Sale 08/11/2022 91282CBA8 Sale 08/18/2022 58933YAF2 Sale 08/19/2022 58933YAF2 5,000,000.00 FHLB Note 100.060 3.25% Due:06/09/2023 5,000,000.00 US Treasury Note 99.613 2.5% Due: 03/31/2023 1,000,000.00 US Treasury Note 98.742 1.625% Due:05/31/2023 5,000,000.00 US Treasury Note 98.543 2.125% Due:11/30/2023 2,500,000.00 Berkshire Hathaway Callable Note Cont 1/15/2023 99.720 2.75% Due: 03/15/2023 500,000.00 US Treasury Note 96.043 0.125% Due:12/15/2023 965,000.00 Merck & Co Note 99.604 2.8% Due: 05/18/2023 1,035,000.00 Merck & Co Note 99.576 2.8% Due: 05/18/2023 2.87% 5,003,000.00 17,604.17 5,020,604.17 -12,571.40 2.76% 4,980,664.06 44,398.91 5,025,062.97 -11,991.98 2.67% 987,421.88 3,152.32 990,574.20 -4,760.44 2.52% 4,927,148.44 20,611.34 4,947,759.78 -47,940.92 3.28% 2,493,000.00 27,881.94 2,520,881.94 141.55 0.17% 480,214.84 97.34 480,312.18 -19,483.26 3.41% 961,178.60 6,755.00 967,933.60 251.61 3.41% 1,030,611.60 7,325.50 1,037,937.10 -35.94 56 Q11 Table of Contents Transaction Ledger As of September 30, 2022 Orange County Sanitation District Long Term - Account #10268 June 30, 2022 through September 30, 2022 Sale 08/24/2022 91282CBA8 1,000,000.00 US Treasury Note 95.984 0.17% 959,843.75 239.07 960,082.82 -39,568.43 0.125% Due:12/15/2023 Sale 08/25/2022 46625HRL6 2,585,000.00 JP Morgan Chase Callable Note Cont 3/18/2023 99.604 3.36% 2,574,763.40 18,805.88 2,593,569.28 5,095.36 2.7% Due: 05/18/2023 Sale 08/26/2022 912828U57 2,500,000.00 US Treasury Note 98.508 2.52% 2,462,695.31 12,628.07 2,475,323.38 -25,267.15 2.125% Due:11/30/2023 Sale 08/26/2022 91282CBA8 2,500,000.00 US Treasury Note 95.918 0.17% 2,397,949.22 614.75 2,398,563.97 -100,587.38 0.125% Due:12/15/2023 Sale 08/31/2022 46625HRL6 1,295,000.00 JP Morgan Chase Callable Note Cont 3/18/2023 99.480 3.36% 1,288,266.00 10,003.88 1,298,269.88 773.55 2.7% Due: 05/18/2023 Sale 08/31/2022 46625HRL6 1,120,000.00 JP Morgan Chase Callable Note Cont 3/18/2023 99.445 3.36% 1,113,784.00 8,652.00 1,122,436.00 277.02 2.7% Due: 05/18/2023 Sale 08/31/2022 912828U57 3,500,000.00 US Treasury Note 98.379 2.52% 3,443,261.72 18,695.36 3,461,957.08 -40,068.51 2.125% Due:11/30/2023 Sale 09/09/2022 931142EK5 3,880,000.00 Wal-Mart Stores Callable Note Cont 5/26/2023 99.845 3.41% 3,873,986.00 26,750.44 3,900,736.44 -5,853.73 3.4% Due: 06/26/2023 Sale 09/13/2022 808513AT2 2,750,000.00 Charles Schwab Corp Callable Note Cont 99.685 2.74% 2,741,337.50 9,716.67 2,751,054.17 -7,828.37 12/25/2022 2.65% Due: 01/25/2023 Sale 09/28/2022 91282CBA8 1,000,000.00 US Treasury Note 95.051 0.17% 950,507.81 358.61 950,866.42 -48,947.41 0.125% Due:12/15/2023 Sale 09/28/2022 91282CDR9 2,500,000.00 US Treasury Note 95.613 0.75% 2,390,332.03 4,585.60 2,394,917.63 -109,729.38 0.75% Due: 12/31/2023 Subtotal 45,630,000.00 45,059,966.16 238,876.85 45,298,843.01-468,095.21 Maturity 09/14/2022 4581XOCZ9 4,500,000.00 Inter -American Dev Bank Note 100.000 4,500,000.00 0.00 4,500,000.00 0.00 1.75% Due: 09/14/2022 Subtotal 4,500,000.00 4,500,000.00 0.00 4,500,000.00 0.00 57 c>t'u Table of Contents Transaction Ledger Orange County Sanitation District Long Term - Account #10268 June 30, 2022 through September 30, 2022 Transaction Settlement CLISIP Quantity Security Description Price Acq/Disp A Type Date Yield Security 09/30/2022 912828WUO 728.00 US Treasury Inflation Index Note 99.904 0.13% Withdrawal 0.125% Due: 07/15/2024 As of September 30, 2022 728.00 0.19 728.19 1.11 Subtotal 728.00 728.00 0.19 728.19 1.11 TOTAL DISPOSITIONS 50,130,728.00 49,560,694.16 238,877.04 49,799,571.20-468,094.10 58 Cift Table of Contents I Transaction Ledger June 30, 2022 through September 30, 2022 ACQUISITIONS Purchase 07/29/2022 912796YR4 Purchase 08/24/2022 61744YAN8 Purchase 08/25/2022 61744YAN8 Purchase 09/29/2022 313385S80 Purchase 09/29/2022 3137EAES4 Orange County Sanitation District Liquid - Account #10282 10,000,000.00 US Treasury Bill 2.555% Due:11/22/2022 1,110,000.00 Morgan Stanley Note 3.125% Due:01/23/2023 888,000.00 Morgan Stanley Note 3.125% Due:01/23/2023 5,000,000.00 FHLB Discount Note 3.25% Due: 12/12/2022 1,250,000.00 FHLMC Note 0.25% Due:06/26/2023 As of September 30, 2022 99.177 2.61% 9,917,672.22 0.00 9,917,672.22 0.00 99.919 3.31% 1,109,100.90 2,986.98 1,112,087.88 0.00 100.006 3.10% 888,053.28 2,466.67 890,519.95 0.00 99.332 3.32% 4,966,597.22 0.00 4,966,597.22 0.00 97.131 4.22% 1,214,137.50 807.29 1,214,944.79 0.00 Subtotal 18,248,000.00 18,095,561.12 6,260.94 18,101,822.06 0.00 TOTAL ACQUISITIONS 18,248,000.00 18,095,561.12 6,260.94 18,101,822.06 0.00 DISPOSITIONS Maturity 07/18/2022 21684XUU8 Maturity 07/19/2022 912796X20 Maturity 07/28/2022 912796S59 Maturity 07/31/2022 91282CAC5 Maturity 08/26/2022 313385D45 Maturity 09/23/2022 06417MRR8 3,000,000.00 Cooperative Rabobank UA Yankee CD 100.000 3,000,000.00 5,307.50 3,005,307.50 0.00 0.33% Due: 07/18/2022 2,500,000.00 US Treasury Bill 100.000 2,500,000.00 0.00 2,500,000.00 0.00 0.651% Due: 07/19/2022 10,000,000.00 US Treasury Bill 100.000 10,000,000.00 0.00 10,000,000.00 0.00 0.671% Due:07/28/2022 42,000,000.00 US Treasury Note 100.000 42,000,000.00 0.00 42,000,000.00 0.00 0.125% Due:07/31/2022 5,000,000.00 FHLB Discount Note 100.000 5,000,000.00 0.00 5,000,000.00 0.00 1.17% Due:08/26/2022 4,000,000.00 Bank of Nova Scotia Houston Yankee CD 100.000 4,000,000.00 8,022.22 4,008,022.22 0.00 0.2% Due: 09/23/2022 59 cif Table of Contents Transaction Ledger As of September 30, 2022 Orange County Sanitation District Liquid - Account #10282 June 30, 2022 through September 30, 2022 Transaction Settlement CLISIP Quantity Security Description Price Accl/Disp Amount Interest Total Amount Gain/Loss Type Date Yield Pur/Sold Maturity 09/29/2022 912796U64 28,000,000.00 US Treasury Bill 100.000 28,000,000.00 0.00 28,000,000.00 0.00 1.107% Due: 09/29/2022 Subtotal 94,500,000.00 94,500,000.00 13,329.72 94,513,329.72 0.00 TOTAL DISPOSITIONS 94,500,000.00 94,500,000.00 13,329.72 94,513,329.72 0.00 60 c�'u Table of Contents IImportant Disclosures As of September 3O,2022 2022 Chandler Asset Management, Inc, An Independent Registered Investment Adviser. Information contained herein is confidential. Prices are provided by ICE Data Services Inc ("IDS"), an independent pricing source. In the event IDS does not provide a price or if the price provided is not reflective of fair market value, Chandler will obtain pricing from an alternative approved third party pricing source in accordance with our written valuation policy and procedures. Our valuation procedures are also disclosed in Item 5 of our Form ADV Part 2A. 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. 61 cJ" Table of Contents Benchmark Disclosures As of September 30, 2022 ICE BofA 3-Month US Treasury Bill Index The ICE BofA 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. ICE BofA 1-5 Yr AAA -A US Corp & Govt Index The ICE BofA 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 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. ICE BofA 1-5 Yr US Corp & Govt Index The ICE BofA 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 schedule, and a minimum amount outstanding of $1 billion for US Treasuries and $250 million for all other securities. 62 Q1 Table of Contents Rating Agency Comparisons A summary of investment grade ratings are listed below. More complete descriptions of Moody's and Standard & Poor's ratings are included in the following pages. Quality/Grade Moody's Standard & Poor's Fitch Best Quality Aaa AAA AAA High Quality Aal AA+ AA+ Aa2 AA AA Aa3 AA- AA - Upper Medium Grade Al A+ A+ A2 A A A3 A- A - Medium Grade Baal BBB+ BBB+ Baa2 BBB BBB Baa3 BBB- BBB1 Moody's - Investment Grade "Aaa" - Bonds rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk. Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. "Aa" - Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in Aaa securities. "A" - Bonds which are rated A possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present which suggest a susceptibility to impairment sometime in the future. Table of Contents "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, "Al" would be the strongest group of A securities and "AY 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 "AX 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 Ratinq 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. Table of Contents 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. PUBLIC PARS AGENCY ■ RETIREMENT SERVICES TRUSTED SOLUTIONS. LASTING RESULTS. +/ ORANGE COUNTY SANITATION DISTRICT PARS 115 Trust -Pension Rate Stabilization Program Client Review October 20, 2022 Table of Contents CONTACTS AGENCY PARS � RE,ERVICESRE�MENT S H 1 G HMARK° TRUSTED SOLUTIONS. LASTING RESULTS. CAPITAL MANAGEMENT Mitch Barker Keith Stribling, CFA Executive Vice President Senior Portfolio Manager (949) 310-4876 (949) 553-2591 mbarker@pars.org keith.stribling@highmarkcapital.com Will Rogers, RPA Client Services Coordinator (800) 540-6369 x161 wrogers@pars.org PURU` PARS AGENCY RETIREMENT SERVICES TRUSTED SOLUTIONS. LASTING RESULTS. ORANGE COUNTY SANITATION DISTRICT 2 Table of Contents PARS 115 TRUST TEAM PUBLIC AGMCY PARS ' Serves as record -keeper, consultant, • RETIREMEM Monitors plan compliance 5ERV1 and central point of contact (IRS/GASB/State Government Code) TRUSTED SOLUTIONS. LASTING RESULTS. . Sub -trust accounting • Processes contributions/disbursements • Coordinates all agency services • Hands-on, dedicated support teams 38 2,000+ 1,000+ 490+ 500 K+ $6.0 B Years of Experience Plans under Public Agency 115 Trust Clients Plan Participants Assets under (1984-2022) Administration Clients Administration embank. • 5th largest commercial bank and one of the nation's largest trustees for Section 115 trusts • Safeguard plan assets • Oversight protection as plan fiduciary • Custodian of assets 159 $9.OT Years of Experience Assets under Trust (1863-2022) Custody PUBU` AGPARS ENCY RETIREMENT SERVICES TRUSTED SOLUTIONS. LASTING RESULTS. HIGHMARK® CAPITAL MANAGEMENT • Investment sub -advisor to trustee U.S. Bank • Investment policy assistance • Uses open architecture • Active and passive platform options • Customized portfolios (with minimum asset level) 103 $17.6B Years of Experience Assets under (1919-2022) Management & Advisement ORANGE COUNTY SANITATION DISTRICT 1 3 Table of Contents PARS PLANS AND PROGRAMS 1 Pension Rate Stabilization Program (PRSP) - client A pension prefunding trust designed specifically to address GASB 68 liabilities on its financial statements and stabilize future costs. 2 OPEB Trust Program - eligible An OPEB prefunding trust designed to address OPEB liabilities and increase investment rates of return (discount rate). 3 Alternate Retirement System (ARS) An alternative to Social Security for part-time employees offered to provide a valuable benefit for employees and permanent payroll savings to the Agency. 4 Supplemental Defined Contribution Plan A locally designed retirement plan offered in addition to PERS or 37-Act retirement system with the goal of attracting and retaining select employees to the Agency. 5 Accumulated Leave Plan A Defined Contribution solution that reduces leave balances on an annual basis during employment and minimizes total payout amounts. �R"` PARS AGENCY RETIREMENT SERVICES TRUSTED SOLUTIONS. LASTiNGRESULTS. ORANGE COUNTY SANITATION DISTRICT 4 Table of Contents PARS IRS -APPROVED SECTION 115 TRUST Retiree Medical Benefits Assets can be used to: Subaccounts OPEB and pension assets are individually sub -accounted, and can be divided by dept., bargaining group, or cost center. OAnytime Access Trust funds are available anytime; OPEB for OPEB and pension for pension. PUB"PARS AGENCY RETIREMENT SERVICES TRUSTED SOLUTIONS. LASTING RESULTS. General Fund prefund either or both Financial Stability Assets in the PARS Section 115 Combination Trust can be used to address unfunded liabilities. ,111 Economies -of -Scale OPEB and pension assets aggregate and reach lower fees on tiered schedule sooner - saving money! Pension Pension Rate Stabilization Program Assets can be used to: Flexible Investing Allows separate investment strategies for OPEB and pension subaccounts. No Set Up Cost or Minimums No set-up costs, no minimum annual contribution amounts, and no fees until assets are added. ORANGE COUNTY SANITATION DISTRICT 5 Table of Contents 115 TRUST — OPEB/PENSION CLIENT LIST Updated October ,o„ SPECIAL DISTRICTS (114) Agoura Hills/Calabasas Community Center Authority Alameda County Mosquito Abatement District Alpine Fire Protection District Beach Cities Health District Bighorn -Desert View Water Agency Bodega Bay Public Utilities District Calaveras County Water District California Joint Powers Insurance Authority California Joint Powers Risk Management Authority Central Contra Costa Sanitary District Central Contra Costa Transit Authority Coastline Regional Occupational Program Coastside Fire Protection District Colusa Mosquito Abatement District Contra Costa County EEs' Retirement Association Contra Costa Mosquito and Vector Control District Crestline Village Water District Delta Diablo Desert Recreation District East Bay Regional Park District East Contra Costa Fire Protection District East Orange County Water District Eastern Sierra Community Services District Eastern Sierra Transit Authority El Dorado Hills County Water (& Fire) District Fallbrook Public Utility District Fresno Irrigation District Fresno Metropolitan Flood Control District Glenn-Colusa Irrigation District Goleta Cemetery District Goleta West Sanitary District Great Basin Unified Air Pollution Control District Greater Vallejo Recreation District Hayward Area Recreation & Park District Hesperia Fire Protection District Housing Authority of the County of Butte Housing Authority of the County of Contra Costa Housing Authority of the County of San Bernardino Housing Authority of the County of Santa Cruz Humboldt Bay Fire Joint Powers Authority - PARS NEfIREMFM SMVIM Humboldt Bay Municipal Water District Humboldt No. 1 Fire Protection District Menlo Park Fire Protection District Mesa Water District Metropolitan Transportation Commission Midpeninsula Regional Open Space District Mid -Peninsula Water District Mojave Desert Air Quality Management District Montecito Fire Protection District Monterey Bay Unified Air Pollution Control District Monterey County Mosquito Abatement District Moraga-Orinda Fire Protection District Mosquito & Vector Mgmt Dist. of Santa Barbara Co. Municipal Pooling Authority Municipal Water District of Orange County Napa County Mosquito Abatement District Nevada County Consolidated Fire District North Central Fire Protection District North County Fire Protection District Novato Sanitary District Orange County Fire Authority Orange County LAFCO Orange County Mosquito and Vector Control District Orange County Sanitation District Orange County Water District Orchard Dale Water District Public Agency Risk Sharing Authority of CA (PARSAC) Pebble Beach Community Services District Placentia Library District Placer County Air Pollution Control District Placer County Resource Conservation District Rancho Cucamonga Fire Protection District Rancho Murieta Community Services District Redwood Empire Municipal Insurance Fund (REMIF) Regional Housing Authority Rowland Water District Sacramento Area Flood Control Agency San Andreas Sanitary District San Elijo Joint Powers Authority San Mateo County Mosquito & Vector Control District Santa Barbara County Law Library Santa Cruz Regional 9-1-1 JPA Santa Fe Irrigation District Sewer Authority Mid-Coastside Shasta Valley Cemetery District South Coast Water District South Montebello Irrigation District South Orange County Wastewater Authority South Placer Fire Protection District Southern Marin Fire Protection District State Water Contractors Superior Court of CA, County of Imperial Superior Court of CA, County of Inyo Superior Court of CA, County of Kern Superior Court of CA, County of Marin Superior Court of CA, County of Merced Superior Court of CA, County of Orange Superior Court of CA, County of San Mateo Superior Court of CA, County of Shasta Superior Court of CA, County of Siskiyou Superior Court of CA, County of Sonoma Sweetwater Springs Water District Three Valleys Municipal Water District Twentynine Palms Water District Union Sanitary District Ventura Regional Sanitation District Walnut Valley Water District West Bay Sanitary District West County Wastewater District Western Riverside Council of Governments Yolo-Solano Air Quality Management District Yorba Linda Water District beU�ai MR DISTRICTS (3) Shasta County Office of Education Sonoma County Office of Education Intelecom TRUSTED SOLUTIONS. LASTINO RESULTS. ORANGE COUNTY SANITATION DISTRICT Table of Contents 115 TRUST - OPEB/PENSION CLIENT LIST Updated October2022 CITIES & TOWNS (1S4) COUNTIES (3S) Alameda El Centro Los Altos Hills Rolling Hills Alpine Alhambra El Segundo Mammoth Lakes Rosemead Amador Anaheim Elk Grove Manhattan Beach Ross Calaveras Angels Camp Emeryville Merced San Anselmo Colusa Atherton Escondido Modesto San Jacinto Contra Costa Atwater Fairfax Monrovia San Leandro Humboldt Bakersfield Fairfield Morgan Hill San Ramon Imperial Beaumont Fort Bragg Morro Bay Santa Ana Inyo Bell Gardens Fountain Valley Napa Santa Clara Kern Benicia Fullerton National City Santa Clarita Kings Beverly Hills Galt Norco Sausalito Lake Bishop Garden Grove Norwalk Selma Lassen Brea Gilroy Novato Solana Beach Madera Brisbane Glendale Oakley South El Monte Mariposa Burlingame Glendora Orinda Stanton Mendocino Calabasas Goleta Oroville Stockton Merced Camarillo Grand Terrace Pacifica Taft Mono Capitola Grass Valley Palmdale Temecula Monterey Carmel Half Moon Bay Palo Alto Temple City Napa Chino Hills Hawthorne Pasadena Thousand Oaks Nevada Chula Vista Healdsburg Patterson Tiburon Placer Claremont Hemet Perris Tustin Plumas Colma Hercules Pico Rivera Twentynine Palms Riverside Commerce Hermosa Beach Piedmont Union City San Benito Corcoran Huntington Beach Pinole Upland Sanjoaquin Coronado Indian Wells Pittsburg Vallejo Shasta Costa Mesa Indio Placentia Villa Park Siskiyou Covina lone Pleasant Hill Walnut Solano Crescent City La Habra Pleasanton West Covina Sonoma Cudahy Lakeport Port Hueneme West Sacramento Sutter Cupertino La Mesa Rancho Cucamonga Westminster Tehama Cypress La Quinta Redding Winters Trinity Daly City Laguna Niguel Redwood City Woodland Tulare Dana Point Lake Forest Rialto Woodside Yolo Del Rey Oaks Lakewood Richmond Yountville Yuba Dinuba Lemon Grove Rio Vista Yuba City Duarte Livermore Ripon Yucca Valley Dublin Lodi Riverside P,aL,c Los Alamitos Rohnert Park AGENCY IIEn Emuff OARS SERVI�S ORANGE COUNTY SANITATION DISTRICT TRUSTED SOLUTIONS. LASTiNGRESULTS. Table of Contents 115 TRUST - OPEB/PENSION CLIENT LIST SCHOOL DISTRICTS (S7) Alisal Union School District Alta Loma School District Auburn Union School District Bass Lake Joint Union Elementary School District Bellflower Unified School District Beverly Hills Unified School District Brea Olinda Unified School District Calistoga Joint Unified School District Campbell Union High School District Compton Unified School District Corning Union Elementary School District Coronado Unified School District Cotati-Rohnert Park Unified School District El Dorado Union High School District El Monte Union High School District Folsom Cordova Unified School District Fontana Unified School District Fowler Unified School District Hermosa Beach City School District Hesperia Unified School District Hughes -Elizabeth Lakes Union E. School District John Swett Unified School District Lakeside Union School District (San Diego) Le Grand Union HSD Lemon Grove School District Lindsay Unified School District Madera Unified School District Manteca Unified School District Moreno Valley Unified School District Napa Valley Unified School District Natomas Unified School District Newport -Mesa Unified School District - PARS NEfIREMFM SMVIM Ocean View School District (Ventura) Ontario -Montclair School District Orcutt Union School District Palmdale School District Palos Verdes Peninsula Unified School District Placer Union High School District Porterville Unified School District Poway Unified School District Red Bluff Joint Union High School District Red Bluff Union Elementary School District River Delta Unified School District Riverdale Joint Unified School District Roseville Joint Union High School District Updated October 2022 San Bruno Park School District San Dieguito Union High School District San Marino Unified School District Santa Barbara Unified School District Santa Rita Union School District Taft Union HSD Trona Joint Unified School District Upland USD Visalia Unified School District Westside Union School District Whittier City School District Wilsona School District COMMUNITY COLLEGE DISTRICTS (19) Allan Hancock CCD Citrus CCD Coast CCD Grossmont-Cuyamaca CCD Hartnell CCD Imperial CCD Marin CCD Palo Verde CCD Pasadena Area CCD Rancho Santiago CCD Rio Hondo CCD San Bernardino CCD San Luis Obispo County CCD (Cuesta) Shasta-Trinity-Tehama Joint CCD State Center CCD Victor Valley CCD West Valley -Mission CCD Yosemite CCD Yuba CCD TRUSTED SOLUTIONS. LASTiNGRESULTS. ORANGE COUNTY SANITATION DISTRICT 8 Table of Contents SUMMARY OF AGENCY'S PENSION PLAN Plan Type: IRC Section 115 Irrevocable Exclusive Benefit Trust Trustee Approach: Discretionary Plan Effective Date: November 17, 2021 Plan Administrator: General Manager Current "OC SAN Al" Investment Strategy: Moderate HighMark PLUS (Active) Strategy; Individual Account Current "OC SAN 1131" Investment Strategy: Balanced HighMark PLUS (Active) Strategy; Individual Account AS OF SEPTEMBER 30, 2022: OC SAN Al OC SAN B1 TOTAL Initial Contribution: January 2022: $10,000,000 January 2022: $5,000,000 January 2022: $15,000,000 Additional Contributions: $0 $0 $0 Total Contributions: $10,000,000 $5,000,000 $15,000,000 Disbursements: $0 $0 $0 Total Investment Earnings: ($1,629,803) ($858,159) ($2,487,962) Account Balance: $8,341,697 $4,127,683 $12,469,379 PUB"PARS AGENCY RETIREMENT SERVICES TRUSTED SOLUTIONS. LASTING RESULTS. ORANGE COUNTY SANITATION DISTRICT 9 Table of Contents SUMMARY OF AGENCY'S TOTAL PENSION PLAN HISTORY OF CONTRIBUTIONS. DISBURSEMENTS. AND TOTAL ASSETS AS OF SEPTEMBER 30. 2022: $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Plan Month Ending .EN� IIEnKEMEfYr SERVICES PARS TRUSTED SOLUTIONS. LASTING RESULTS. Jan-22 $15,000,000 $0 $14,910,223 Feb-22 $0 $0 $14,649,008 Mar-22 $0 $0 $14,623,146 Apr-22 $0 $0 $13,784,198 May-22 $0 $0 $13,810,584 Jun-22 $0 $0 $13,070,591 Jul-22 $0 $0 $13,715,516 Aug-22 $0 $0 $13,339,975 Sep-22 $0 $0 $12,469,379 ORANGE COUNTY SANITATION DISTRICT 10 Table of Contents ►4 �5 PENSION FUNDING STATUS As of June 30, 2021, Orange County Sanitation District's ARBA pension plan is funded as *: Total Pension Liability Fiduciary Net Position (Asset) Net Pension Liability Funded Ratio Service Cost Discount Rate 2020 AC F R Valuation Date: July 1, 2019 $21,434,655 $0 $21,434,655 0.00% $576,661 (FY 19-20) 3.13% 2021 AC F R Valuation Date: June 30, 2020 $23,320,422 $0 $23,320,422 0.00% $730,496 (FY 20-21) 2.45% PUBLIC PARS Data from Agency's Annual Comprehensive Financial Report for FVE 2020 and 2021. AGENCY RETIREMENT SERVICES TRUSTED SOLUTIONS. LASTiNGRESULTS. ORANGE COUNTY SANITATION DISTRICT 11 Table of Contents ►4 �5 PENSION FUNDING STATUS As of June 30, 2021, Orange County Sanitation District's OCERS pension plan is funded as *: 2020 AC F R 2021 AC F R Valuation Date: Valuation Date: July 1, 2019 June 30, 2020 Approximate Total Pension Liability $46.4 M $63.2 M Proportionate Share for OCERS (0.97%) (1.63%) Fiduciary Net Position (Asset) $49.4 M $68.6 M Proportionate Share of Net Pension Liability ($3.1 M) ($5.4 M) Funded Ratio 106.64% 108.5% Employer Contribution Amount $8.7 M $8.5 M (FY 19-20) (FY 20-21) Discount Rate 7.00% 7.00% PUBLIC PARS Data from Agency's Annual Comprehensive Financial Report for FVE 2020 and 2021. AGENCY RETIREMENT SERVICES TRUSTED SOLUTIONS. LASTiNGRESULTS. ORANGE COUNTY SANITATION DISTRICT 12 Table of Contents PARS: OC Sanitation District October 20, 2022 Presented by Keith Stribling, CFA JHIGHMARKS CAPITAL MANAGEMENT ORANGE COUNTY SANITATION DISTRICT 1 13 Table of Contents DISCUSSION HIGHLIGHTS - OC Sanitation District Investment objective - OC Sanitation District Al Asset Allocation: PARS/Moderate Index PLUS (As of 9-30-2022) Allocation Target — 46.21 % stocks (40-60% range), 48.33% bonds (40-60% range), 5.46% cash (0-20% range) Large cap 25.56%, Mid -cap 4.54%, Small cap 7.04%, International 7.26%, REIT 1.81 % Performance: OC Sanitation District Al (as of 9-30-2022) gross of investment management fees, net of fund fees • 3-month: -4.40% • 6-months:-14.14% • Inception to date (1-1-22):-16.30% Investment objective- OC Sanitation District A2 Asset Allocation: PARS/Balanced (As of 9-30-2022) • Allocation Target — 55.53% stocks (50-70% range), 38.33% bonds (30-50% range), 6.14% cash (0-20% range) • Large cap 30.97%, Mid -cap 5.54%, Small cap 8.37%, International 8.60%; REIT 2.04% Performance: OC Sanitation District A2 (as of 9-30-2022) gross of investment management fees, net of fund fees • 3-month: -4.53% • 6-months:-15.29% • Inception to date (1-1-22):-17.18% Asset Allocation: • Recently lowered equities • Favoring value style over growth • Recently lowered high yield JHIGHMARK@ CAPITAL MANAGEMENT ORANGE COUNTY SANITATION DISTRICT 1 14 Table of Contents DISCUSSION HIGHLIGHTS - OC Sanitation District Economic Review ■ Aggressive fiscal policy... stoking inflation ■ Monetary policy changing... pullback on QE ■ Rate hikes to curb inflation expectations ■ Vaccines & now antiviral pills... even as covid surges possible light at the end of the covid tunnel? ■ Eventually global economies will improve... but Beijing lockdowns and the Moscow war hampering global recovery ■ Recession risks rising as yield curve steepens and inverts ■ Risks: Inflation... Inflation... inflation... still more covid hurdles; Fed tapering & Russian aggression with Ukraine & NATO; China slowing JHIGHMARKS CAPITAL MANAGEMENT ORANGE COUNTY SANITATION DISTRICT 1 15 Table of Contents PAI IOC SANITATION 115P-A1 {:.::465000} A HIGH1YlARK- Performance Report As of. September 3D, 2022 L AP, I rk, FAQ NMF Me N I Inception to Date 3 Months 6 Months 0110112022 Cash Equivalents .47 .61 .62 Lipper Money Market Funds Index .49 .62 .63 Total Fixed Income -3.81 -8.63 -11.95 Bloomberg US Aggregate Bd Index (USD) -4.75 -9.22 -14.61 Total Equities -5.43 -20.61 -22.39 Large Cap Funds -4.84 -21.10 -22.27 S&P 500 Composite Index -4.88 -20.2C -23.87 Mid Cap Funds -3.40 -19.71 -20.30 Russell Wdcap Index -3.44 -19.71 -24.27 Small Cap Funds -3.29 -18.55 -19.41 Russell 2000 Index (USD) -2.19 -19.01 -25A0 International Equities -10.57 -21.68 -26.76 MSCI EAFE Index (Net) -9.36 -22.51 -27.09 MSCI EM Free Index (Net USD) -11.57 -21.7C -27.16 Real Estate - ETFs 1 Sctr Fds -10.86 -24.44 -23.74 Wilshire REIT Index -10.23 -26.82 -29.66 Total Managed Portfolio -4.40 -14.14 -16.30 Returns are gross of fees not including account level advisory fees unless otherwise stated. Gross returns are presented before management and custodial fees but after all trading expenses, embedded and reflect the reinvestment of dividends and other income. Net returns are net of investment management fees in effect for the respective time period. Returns for periods over one year are annualized. An investor cannot invest directly in unmanaged indices. The information presented has been obtained from sources believed to be accurate and reliable. Past performance is not indicative of future returns Securities are not FDIC insured have no bank guarantee and ay lose value. HIGHMARK® CAPITAL MANAGEMENT ORANGE COUNTY SANITATION DISTRICT 16 Table of Contents ASSET ALLOCATION- OC Sanitation District Al JHIGHMARKS CAPITAL MANAGEMENT Ticker Investment Vehicle Equity 46.21 % Large Cap Core COFYX Columbia Contrarian Core Cl Y 4.73% VGIAX Vanguard Gro & Inc Admiral Shares 8.98% Large Cap Value DODGX Dodge & Cox Stock Fund 4.38% IVE iShares S&P 500 Value ETF 2.00% Large Cap Growth HNACX Harbor CP Appre Rtrmt Cl 2.74% PRUFX T. Rowe Price Growth Stock Fund 2.74% Mid Cap Growth IWR iShares Rusell Mid Cap ETF 4.54% Small Cap Value UBVFX Undiscovered Mgrs Behavrl R6 3.48% Small Cap Growth VBK Vanguard Small Cap Gr Vipers 3.56% International Core DFALX DFA Large Cap International Port 2.75% International Value DODFX Dodge & Cox International Stock Fund 0.80% International Growth MGRDX MFS International Growth Fund 0.81% Emerging Markets HHHFX Hartford Schrodr Mkts Eq 2.90% REIT VNQ Vngrd Index Tr Reit Viper Shs 1.81% Fixed Income 48.33% Short -Term VFSUX Vanguard Short -Term Corp Adm Fund 10.83% Intermediate -Term PTTRX PIMCO Total Return Instl Fund 12.17% PTRQX Prudential Total Return BD 12.16% DBLFX Doubleline Core Fixed Inc Cl 1 12.14% High Yield PHIYX PIMCO High Yield 1.02% Cash 5.46% FGZXX First Amern Govt Oblig Fd CL Z 5.46% TOTAL 100.00% ORANGE COUNTY SANITATION DISTRICT 1 17 Table of Contents PARS/0C SANITATION 115P-11111 (.... D658D1) Performance Report As of: September 3D, 2022 HIGHMARK- CAPI Ia4 MANAGEMENT 3 Months 6 Months Cash Equivalents .47 .61 Lipper Money Market Funds Index .49 .62 Total Fixed Income -3.87 -8.77 Bloomberg US Aggregate Bd Index (USID) -4.75 -9.22 Total Equities -5.42 -20-60 Large Cap Funds -4.&4 -21.09 S&P 50D Composite index -4.88 -2121) Mid Cap Funds -3.44 -19.71 Russell Midcap Index -3.44 -19.71 Small Cap Funds -3.29 -18.54 Russell 2000 Index (L)SD) -2.19 -19.01 International Equities -11).59 -21.70 MSC EAFE Index (Net) -9.36 -22.51 MSCI EM Free Index (Net USD) -11.57 -21.70 Real Estate - ETFs J Sctr Fds -10.85 -24.46 Wilshire RE IT Index -1 D.23 -26.02 Total Managed Portfolio ,4.53 -15.29 Returns are gross of fees not including account level advisory fees unless otherwise stated. Gross returns are presented before management and custodial fees but after all trading expenses, embedded and reflect the reinvestment of dividends and other income. Net returns are net of investment management fees in effect for the respective time period. Returns for periods over one year are annualized. An investor cannot invest directly in unmanaged indices. The information presented has been obtained from sources believed to be accurate and reliable. Past performance is not indicative of future returns Securities are not FDIC insured have no bank guarantee and ma lose value. HIGHMARK® Inception to Date 0V0112022 .62 _53 -12.11 -14.51 -2229 -2224 -23.97 -19.92 -2427 -10.13 -25.I G 26.90 27. D9 27.16 -23.53 -29.56 -17.18 CAPITAL MANAGEMENT ORANGE COUNTY SANITATION DISTRICT 1 18 Table of Contents ASSET ALLOCATION- OC Sanitation District A2 Ticker Investment Vehicle Weight Equity 55.53% Large Cap Core COFYX Columbia Contrarian Core Cl Y 5.77% VGIAX Vanguard Gro & Inc Admiral Shares 10.96% Large Cap Value DODGX Dodge & Cox Stock Fund 5.25% IVE iShares S&P 500 Value ETF 2.40% Large Cap Growth HNACX Harbor CP Appre Rtrmt Cl 3.29% PRUFX T. Rowe Price Growth Stock Fund 3.29% Mid Cap Growth IWR iShares Rusell Mid Cap ETF 5.54% Small Cap Value UBVFX Undiscovered Mgrs Behavrl R6 4.14% Small Cap Growth VBK Vanguard Small Cap Gr Vipers 4.23% International Core DFALX DFA Large Cap International Port 3.25% International Value DODFX Dodge & Cox International Stock Fund 0.92% International Growth MGRDX MFS International Growth Fund 0.93% Emerging Markets HHHFX Hartford Schrodr Mkts Eq 3.50% REIT VNQ Vngrd Index Tr Reit Viper Shs 2.04% Fixed Income 38.33% Short -Term VFSUX Vanguard Short -Term Corp Adm Fund 7.60% Intermediate -Term PTTRX PIMCO Total Return Instl Fund 9.96% PTRQX Prudential Total Return BD 9.95% DBLFX Doubleline Core Fixed Inc Cl 1 9.94% High Yield PHIYX PIMCO High Yield 0.89% Cash 6.14% FGZXX First Amern Govt Oblig Fd CL Z 6.14% TOTAL 100.00% JHIGHMARKS CAPITAL MANAGEMENT ORANGE COUNTY SANITATION DISTRICT 1 19 Table of Contents For Period Ending September 30, 2022 1-Month 3-Month Year -to- 1-Year 3-Year 5-Year 10-Year Fund Name Return Return Date Return Return Return Return Columbia Contrarian Core Inst3 -9.50 -5.67 -23.36 -16.97 8.44 8.36 11.61 Dodge & Cox Stock 1 -9.52 -7.19 -17.89 -13.09 8.46 7.29 11.39 Harbor Capital Appreciation Retirement -9.15 -1.80 -36.75 -33.57 8.36 9.90 12.86 iShares S&P 500 Value ETF -8.48 -5.86 -16.69 -9.80 4.93 6.00 9.45 Vanguard Growth & Income Adm -8.98 -4.48 -22.69 -13.85 8.64 9.26 11.80 T. Rowe Price Growth Stock 1 -9.49 -3.29 -38.69 -35.76 3.60 6.83 11.48 S&P 500 TR USD -9.21 -4.88 -23.87 -15.47 8.16 9.24 11.70 iShares Russell Mid -Cap ETF -9.28 ■ CAP -3.47 EQUITY FUNDS -24.35 -19.51 5.03 6.33 10.13 Russell Mid Cap TR USD -9.27 -3.44 -24.27 -19.39 5.19 6.48 10.30 Undiscovered Managers Behavioral Val R6 -9.95 -5.61 -13.07 -6.72 9.14 5.99 10.79 Vanguard Small -Cap Growth ETF -8.99 -0.79 -30.50 -30.09 2.82 5.65 9.15 Russell 2000 TR USD -9.58 -2.19 -25.10 -23.50 4.29 3.55 8.55 Dodge & Cox International Stock 1 -9.05 -10.69 -19.64 -17.71 0.25 -1.48 4.17 DFA Large Cap International 1 -9.44 -10.05 -25.80 -23.33 -0.75 -0.26 3.83 MFS International Growth R6 -7.89 -7.73 -25.61 -21.94 0.99 3.04 5.56 MSCI EAFE NR USD -9.35 -9.36 -27.09 -25.13 -1.83 -0.84 3.67 Hartford Schroders Emerging Mkts Eq F -10.82 -12.16 -29.54 -31.60 -2.63 -1.70 1.53 MSCI EM NR USD -11.72 -11.57 REAL ESTATE -27.16 FUNDS -28.11 -2.07 -1.81 1.05 1-Month 3-Month Year -to- 1-Year 3-Year 5-Year 10-Year Fund Name Return Return Date Return Return Return Return Vanguard Real Estate ETF -12.83 -10.98 -29.25 -18.71 -1.62 3.07 6.23 DoubleLine Core Fixed Income 1 -4.13 -4.08 -13.77 -13.96 -3.08 -0.31 1.36 PIMCO Total Return Instl -4.31 -4.82 -15.59 -15.65 -3.14 -0.30 1.05 Vanguard Short -Term Investment -Grade Adm -2.01 -1.87 -7.35 -7.98 -0.74 0.75 1.34 PGIM Total Return Bond R6 -4.82 -4.57 -16.77 -16.51 -3.72 -0.14 1.74 Bloomberg US Agg Bond TR USD -4.32 -4.75 -14.61 -14.60 -3.26 -0.27 0.89 PIMCO High Yield Instl -3.77 -0.50 -14.37 -13.79 -1.28 1.05 3.45 ICE BofA US High Yield Mstr II Index -4.02 -0.68 -14.62 -14.06 -0.67 1.41 3.90 Source: SEl Investments, Morningstar Investments Returns less than one year are not annualized. Past performance is no indication of future results. The information presented has been obtained from sources believed to be accurate and reliable. Securities are not FDIC insured, have no bank guarantee and may lose value. _� HIGHMARKS CAPITAL MANAGEMENT ORANGE COUNTY SANITATION DISTRICT 1 20 —�o ADMINISTRATIVE REVIEW 1 1 Future contributions 2 Future disbursement requests/options 3 Investment Guidelines Document - needed 4 Client Feedback 5 Employer Portal - Opted In PuBu` PARS AGENCY IIEn EMEw SERVICES TRUSTED SOLUTIONS. LASTING RESULTS. ORANGE COUNTY SANITATION DISTRICT 21 Table of Contents 1 , O 4 O ® 4 O O O EMPLOYER PORTAL Public Agency Retirement Services (PARS) has launched its new employer portal for the IRC Section 115 Trust. Features include: • Latest monthly account balance 0 Downloadable prior statements • Transaction history 0 Investment Performance employer.pars.org PUBLIC PARS AGENCY RETIREMENT SERVICES ■ TRUSTED SOLUTIONS. LASTiNGRESULTS. ORANGE COUNTY SANITATION DISTRICT 22 Table of Contents GASB COMPLIANCE • To assist our public agency clients with GASB compliance, PARS will be providing with the following: An individual trust statement of each agency's plan assets that shows a reconciliation of assets held at the beginning of the fiscal year through the end of the fiscal year, breaking out the appropriate plan contributions, benefit payments, expenses, and investment earnings Year-end audited financial statements of the Trust as a whole including Schedule of Changes in Fiduciary Net Position by Employer completed by CliftonLarsonAllen (CLA) that is intended to be compliant with GASB 67/68 requirements. Supporting SOC 1-Type 2 report on the controls over the calculation and allocation of additions and deductions to employer accounts within the Trust Investment allocation data and information on investment policies including target asset allocations and allowable asset class allocation ranges RIREIC PARS AGENCY RETIREMENT SERVICES TRUSTED SOLUTIONS. LASTiNGRESULTS. ORANGE COUNTY SANITATION DISTRICT 23 Table of Contents JHIGHMARK 0 CAPITAL MANAGEMENT WHY THE PARS DIVERSIFIED CONSERVATIVE PORTFOLIO? Comprehensive Investment Solution HighMark® Capital Management, Inc.'s (HighMark) diversified investment portfolios are designed to balance return expectations with risk tolerance. Key features include: sophisticated asset allocation and optimization techniques, four layers of diversification (asset class, style, manager, and security), access to rigorously screened, top tier money managers, flexible investment options, and experienced investment management. Rigorous Manager Due Diligence Our manager review committee utilizes a rigorous screening process that searches for investment managers and styles that have not only produced above -average returns within acceptable risk parameters, but have the resources and commitment to continue to deliver these results. We have set high standards for our investment managers and funds. This is a highly specialized, time consuming approach dedicated to one goal: competitive and consistent performance. Flexible Investment Options In order to meet the unique needs of our clients, we offer access to flexible implementation strategies: HighMark Plus utilizes actively managed mutual funds while Index Plus utilizes index -based securities, including exchange -traded funds. Both investment options leverage HighMark's active asset allocation approach. Risk Management The portfolio is constructed to control risk through four layers of diversification - asset classes (cash, fixed income, equity), investment styles (large cap, small cap, international, value, growth), managers and securities. Disciplined mutual fund selection and monitoring process helps to drive return potential while reducing portfolio risk. INVESTMENT OBJECTIVE I Efficient Frontier To provide a consistent level of Capital Appre inflation -protected income over Balanced the long-term. The major portion Moderate of the assets will be fixed � Moderately Conservative income related. Equity securities 3 are utilized to provide inflation Conservative protection. Risk (Standard Deviation) ASSET ALLOCATION - CONSERVATIVE PORTFOLIO Strategic Range Policy Tactical 5 - 20%� 15% Fixed Income 60 - 95% 80% 81 % v ciation ANNUALIZED TOTAL RETURNS Emross of beddednvestment Fund Fees)Management Fees, but Net of HighMark Plus Composite (Active) Index Plus Composite (Passive) Current Quarter* � -6.46% Current Quarter*�-5.61% Blended Benchmark*,** -5.26% Blended Benchmark*,** -5.26% Year To Date*--11.36% Year To Date* --10.67% Blended Benchmark*,** -9.66% Blended Benchmark*,** -9.66% -1 Y -10.88% 1 Year -9.97% Blended Benchmark** -8.85% Blended Benchmark** -8.85% 6 Year 0.60% 3 Year 0.66% Blended Benchmark** 0.89% Blended Benchmark** 0.89% 5 Y 2.15% 5 Year 2.02% Blended Benchmark** 2.21 % Blended Benchmark** 2.21 % 10 Year 10 Yea 2.76`� Blended Benchmark** 2.83% Blended Benchmark** 2.83% Returns less than one year are not annualized. **Breakdown for Blended Benchmark: From 10/1/2012 - Present: 7.5 % S&P500, 1.5 % Russell Mid Cap, 2.5 % Russell 2000, 1 % MSCI EM (net), 2 % MSCI EAFE (net), 52.25 % Bloomberg US Agg, 25.75 % ICE BofA 1-3 Yr US Corp/Gov't, 2 % ICE BofA US High Yield Master ll, 0.5 % Wilshire REIT, and 5 % FTSE 1 Mth US T-Bill. From 4/112007- 9/30/2012, the blended benchmark was 12 % S&P 500; 1 % Russell 2000, 2 % MSCI EAFE (net), 40 % ICE BofA 1-3 Year Corp./Govt, 40 % Bloomberg US Agg, 5 % FTSE 1 Mth US T-Bill. Prior to April 2007: the blended benchmark was 15 % S&P 500, 40 % ICE BofA 1-3Yr Corp/Gov, 40 % Bloomberg US Agg, and 5 % FTSE 1 Mth US T-Bill. ANNUAL RETURNS (Gross of Investment Management Fees, but Net of Embedded Fund Fees) HighMark Plus Composite (Active) Index Plus Composite (Passive) -9.04%1 2008 -6.70°V 2009 15.59% 2009 10.49% 2010 8.68% 2010 7.67% 2011 2.19% 2011 3.70% 2012 8.45% 2012 6.22% 2013 3.69% 2013 3.40% 2014 3.88% 2014 4.32% 2015 0.29% 2015 0.06% 2016 4.18% 2016 3.75% 2017 6.73% 2017 5.52% 2018 -1.35% 2018 -1.09% 2019 11.05% 2019 10.37% 2020 9.03% 2020 8.56% 2021 2.20% 2021 1.97% PORTFOLIO FACTS HighMark Plus (Active) Index Plus (Passive) Composite Inception Date 07/2004 Composite Inception Date 07/2004 No of Holdings in Portfolio 20 No of Holdings in Portfolio 13 Table of Contents HOLDINGS HighMark Plus (Active) Columbia Contrarian Core 13 Vanguard Growth & Income Adm Dodge & Cox Stock Fund iShares S&P 500 Value ETF Harbor Capital Appreciation - Retirement T. Rowe Price Growth Stock - I iShares Russell Mid -Cap ETF Vanguard Real Estate ETF Index Plus (Passive) iShares Core S&P 500 ETF iShares S&P 500 Value ETF iShares S&P 500 Growth ETF iShares Russell Mid -Cap ETF Vanguard Real Estate ETF iShares Russell 2000 Value ETF iShares Russell 2000 Growth ETF iShares Core MSCI EAFE ETF Undiscovered Managers Behavioral Value-R6 Vanguard FTSE Emerging Markets ETF Vanguard Small Cap Growth ETF Vanguard Short -Term Invest -Grade Adm DFA Large Cap International Portfolio iShares Core U.S. Aggregate Dodge & Cox International Stock Vanguard High -Yield Corp Adm MFS International Growth - R6 First American Government Obligations Z Hartford Schroders Emerging Markets Eq Vanguard Short -Term Invest -Grade Adm PIMCO High Yield Instl PIMCO Total Return Fund - Inst PGIM Total Return Bond - R6 DoubleLine Core Fixed Income - I First American Government Obligations Z STYLE Intl Stocks 2.4o Mid Cap 1.4% Large Cap Growth 1.6% Large Cap Core 4.2 % _ Short -Term Bond 18.0% High Yield 1.1% Holdings are subject to change at the discretion of the investment manager. Large Cap Value Cash 1 8 � Real Estate 4,7 / 0.5 % \ Small Cap 2.4 % Interm-Term Bond 61.9% The performance records shown represent size -weighted composites of tax exempt accounts that meet the following criteria: Accounts are managed by HighMark with full investment authority according to the PARS Conservative active and passive objectives. The adviser to the PARS portfolios is US Bank, and HighMark serves as sub -adviser to US Bank to manage these portfolios. US Bank may charge clients as much as 0.60% annual management fee based on a sliding scale. US Bank pays HighMark 60% of the annual management fee for assets sub -advised by HighMark under its sub -advisory agreement with US Bank. The 0.36% paid to HighMark, as well as other expenses that may be incurred in the management of the portfolio, will reduce the portfolio's returns. Assuming an investment for five years, a 5% annual total return, and an annual sub -advisory fee rate of 0.36% deducted from the assets at market at the end of each year, a $10 million initial value would grow to $12.53 million after fees (Net -of -Fees) and $12.76 million before fees (Gross -of -Fees). Gross returns are presented before management and custodial fees but after all trading expenses and reflect the reinvestment of dividends and other income. A client's return will be reduced by the advisory fees and other expenses it may incur as a client. Additional information regarding the firm's policies and procedures for calculating and reporting performance results is available upon request. Performance results are calculated and presented in U.S. dollars and do not reflect the deduction of investment advisory fees, custody fees, or taxes but do reflect the deduction of trading expenses. Returns are calculated based on trade -date accounting. Blended benchmarks represent HighMark's strategic allocations between equity, fixed income, and cash and are rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other earnings. An investor cannot invest directly in an index. The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI EAFE Index is a free float - adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a free float -adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Russell Midcap Index measures the performance of the mid - cap segment of the U.S. equity universe. The Russell 2000 Index measures the performance of the small -cap segment of the U.S. equity universe. The ICE BofA U.S. High Yield Master II Index tracks the performance of below investment grade U.S. dollar -denominated corporate bonds publicly issued in the U.S. domestic market. Wilshire REIT index measures U.S. publicly traded Real Estate Investment Trusts. The unmanaged Bloomberg U.S. Aggregate Bond Index is generally representative of the U.S. taxable bond market as a whole. The ICE BofA 1-3 Year U.S. Corporate & Government Index tracks the bond performance of the ICE BofA U.S. Corporate & Government Index, with a remaining term to final maturity less than 3 years. The unmanaged FTSE 1-Month U.S. Treasury Bill Index tracks the yield of the 1-month U.S. Treasury Bill. HighMark Capital Management, Inc. (HighMark), an SEC -registered investment adviser, is a wholly owned subsidiary of MUFG Union Bank, N.A. (MUB). HighMark manages institutional separate account portfolios for a wide variety of for -profit and nonprofit organizations, public agencies, and public and private retirement plans. MUB, a subsidiary of MUFG Americas Holdings Corporation, provides certain services to HighMark and is compensated for these services. Past performance does not guarantee future results. Individual account management and construction will vary depending on each client's investment needs and objectives. Investments employing HighMark strategies are NOT insured by the FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by the Bank or any Bank affiliate, and MAY lose value, including possible loss of principal. Table of Contents J HIGHMARK° CAPITAL MANAGEMENT WHY THE PARS DIVERSIFIED MODERATELY CONSERVATIVE PORTFOLIO? Comprehensive Investment Solution HighMark® Capital Management, Inc.'s (HighMark) diversified investment portfolios are designed to balance return expectations with risk tolerance. Key features include: sophisticated asset allocation and optimization techniques, four layers of diversification (asset class, style, manager, and security), access to rigorously screened, top tier money managers, flexible investment options, and experienced investment management. Rigorous Manager Due Diligence Our manager review committee utilizes a rigorous screening process that searches for investment managers and styles that have not only produced above -average returns within acceptable risk parameters, but have the resources and commitment to continue to deliver these results. We have set high standards for our investment managers and funds. This is a highly specialized, time consuming approach dedicated to one goal: competitive and consistent performance. Flexible Investment Options In order to meet the unique needs of our clients, we offer access to flexible implementation strategies: HighMark Plus utilizes actively managed mutual funds while Index Plus utilizes index -based securities, including exchange -traded funds. Both investment options leverage HighMark's active asset allocation approach. Risk Management The portfolio is constructed to control risk through four layers of diversification - asset classes (cash, fixed income, equity), investment styles (large cap, small cap, international, value, growth), managers and securities. Disciplined mutual fund selection and monitoring process helps to drive return potential while reducing portfolio risk. INVESTMENT OBJECTIVE To provide current income, with capital appreciation as a secondary objective. The major 0 portion of the assets is K committed to income -producing 3 securities. Market fluctuations should be expected. Efficient Frontier 11 �Iapitaliation Balanced Moderate Moderately Conservative Conservative Risk (Standard Deviation) ASSET ALLOCATION - MODERATELY CONSERVATIVE PORTFOLIO Strategic Range Policy Tactical Equity 20 - 40% Alp% 29% Fixed Income 50 - 80% 65% 66% Cash 0 - 20% ANNUALIZED TOTAL RETURNS Emross of beddednvestment Fund Fees)Management Fees, but Net of HighMark Plus Composite (Active) Index Plus Composite (Passive) Current Quarter* �-8.10%J Current Quarter:� -7.28% Blended Benchmark*,** -7.44% Blended Benchmark*,** -7.44% Year To Date-12.84%' Year To Date*lllll-12.25% Blended Benchmark*,**-12.03% Blended Benchmark*,**-12.03% -11.85% 1 Year-10.69% Blended Benchmark**-10.30% Blended Benchmark**-10.30% 3 Year 1.82% 3 Yea 1.86% Blended Benchmark** 2.07% Blended Benchmark** 2.07% 5 Year 3.24% 5 Yea 3.14% Blended Benchmark** 3.37% Blended Benchmark** 3.37% 10 Year Blended Benchmark** 4.29% Blended Benchmark** 4.29% *Returns less than one year are not annualized. **Breakdown for Blended Benchmark: From 10/1/2012 - Present: 15.5 % S&P500, 3 % Russell Mid Cap, 4.5% Russell 2000, 2 % MSCI EM (net), 4 % MSCI EAFE (net), 49.25% Bloomberg US Agg, 14 % ICE BofA 1- 3 Yr US Corp/Gov't, 1.75% ICE BofA US High Yield Master II, 1 % Wilshire REIT, and 5 % FTSE 1 Mth US T-Bill. From 4/1/2007 - 9/30/2012: the blended benchmark was 25 % S&P 500; 1.5 % Russell 2000, 3.5 % MSCI EAFE (net), 25 % ICE BofA 1-3 Year Corp ./Govt, 40 % Bloomberg US Agg, 5 % FTSE 1 Mth US T-Bill. Prior to April 2007, the blended benchmark was 30 % S&P 500, 25 % ICE BofA 1-3Yr Corp/Gov, 40% Bloomberg US Agg, and 5% FTSE 1 Mth US T-Bill. (Gross of Investment Management Fees, but Net of Embedded ANNUAL RETURNS Fund Fees) HighMark Plus Composite (Active) Index Plus Composite (Passive) 2008 e 2008 2009 18.71 % 2009 11.92% 2010 10.46% 2010 9.72% 2011 1.75% 2011 3.24% 2012 10.88% 2012 8.24% 2013 7.30% 2013 6.78% 2014 4.41 % 2014 5.40% 2015 0.32% 2015 -0.18% 2016 4.94% 2016 5.42% 2017 9.56% 2017 8.08% 2018 -2.60% 2018 -2.33% 2019 13.73% 2019 13.53% 2020 10.76% 2020 9.74% 2021 5.15% 2021 5.33% PORTFOLIO FACTS HighMark Plus (Active) Index Plus (Passive) Composite Inception Date 08/2004 Composite Inception Date 05/2005 No of Holdings in Portfolio 20 No of Holdings in Portfolio 13 Table of Contents HOLDINGS HighMark Plus (Active) Index Plus (Passive) Columbia Contrarian Core 13 iShares Core S&P 500 ETF Vanguard Growth & Income Adm iShares S&P 500 Value ETF Dodge & Cox Stock Fund iShares S&P 500 Growth ETF iShares S&P 500 Value ETF iShares Russell Mid -Cap ETF Harbor Capital Appreciation - Retirement Vanguard Real Estate ETF T. Rowe Price Growth Stock - I iShares Russell 2000 Value ETF iShares Russell Mid -Cap ETF iShares Russell 2000 Growth ETF Vanguard Real Estate ETF iShares Core MSCI EAFE ETF Undiscovered Managers Behavioral Value-R6 Vanguard FTSE Emerging Markets ETF Vanguard Small Cap Growth ETF Vanguard Short -Term Invest -Grade Adm DFA Large Cap International Portfolio iShares Core U.S. Aggregate Dodge & Cox International Stock Vanguard High -Yield Corp Adm MFS International Growth - R6 First American Government Obligations Z Hartford Schroders Emerging Markets Eq Vanguard Short -Term Invest -Grade Adm PIMCO High Yield Instl PIMCO Total Return Fund - Inst PGIM Total Return Bond - R6 DoubleLine Core Fixed Income - I First American Government Obligations Z STYLE Large Cap Value 3.8 % Cash 5.4% Intl Stocks 5.1% Mid Cap 2.7% Large Cap Growth 3.3% Large Cap Core 8.2% Short -Term Bond 13.5% High Yield 1.0% Holdings are subject to change at the discretion of the investment manager. Estate 1.1 % - Small Cap 4.4 % Interm-Term Bond 51.5% The performance records shown represent a size -weighted composite of tax exempt accounts that meet the following criteria: Accounts are managed by HighMark with full investment authority according to the PARS Moderately Conservative active and passive objectives. The adviser to the PARS portfolios is US Bank, and HighMark serves as sub -adviser to US Bank to manage these portfolios. US Bank may charge clients as much as 0.60% annual management fee based on a sliding scale. US Bank pays HighMark 60% of the annual management fee for assets sub -advised by HighMark under its sub -advisory agreement with US Bank. The 0.36% paid to HighMark, as well as other expenses that may be incurred in the management of the portfolio, will reduce the portfolio's returns. Assuming an investment for five years, a 5% annual total return, and an annual sub -advisory fee rate of 0.36% deducted from the assets at market at the end of each year, a $10 million initial value would grow to $12.53 million after fees (Net -of -Fees) and $12.76 million before fees (Gross -of -Fees). Gross returns are presented before management and custodial fees but after all trading expenses and reflect the reinvestment of dividends and other income. A client's return will be reduced by the advisory fees and other expenses it may incur as a client. Additional information regarding the firm's policies and procedures for calculating and reporting performance results is available upon request. Performance results are calculated and presented in U.S. dollars and do not reflect the deduction of investment advisory fees, custody fees, or taxes but do reflect the deduction of trading expenses. Returns are calculated based on trade -date accounting. Blended benchmarks represent HighMark's strategic allocations between equity, fixed income, and cash and are rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other earnings. An investor cannot invest directly in an index. The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI EAFE Index is a free float -adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a free float -adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Russell Midcap Index measures the performance of the mid -cap segment of the U.S. equity universe. The Russell 2000 Index measures the performance of the small -cap segment of the U.S. equity universe. The ICE BofA U.S. High Yield Master II Index tracks the performance of below investment grade U.S. dollar -denominated corporate bonds publicly issued in the U.S. domestic market. Wilshire REIT index measures U.S. publicly traded Real Estate Investment Trusts. The unmanaged Bloomberg U.S. Aggregate Bond Index is generally representative of the U.S. taxable bond market as a whole. The ICE BofA 1-3 Year U.S. Corporate & Government Index tracks the bond performance of the ICE BofA U.S. Corporate & Government Index, with a remaining term to final maturity less than 3 years. The unmanaged FTSE 1-Month U.S. Treasury Bill Index tracks the yield of the 1-month U.S. Treasury Bill. HighMark Capital Management, Inc. (HighMark), an SEC -registered investment adviser, is a wholly owned subsidiary of MUFG Union Bank, N.A. (MUB). HighMark manages institutional separate account portfolios for a wide variety of for -profit and nonprofit organizations, public agencies, and public and private retirement plans. MUB, a subsidiary of MUFG Americas Holdings Corporation, provides certain services to HighMark and is compensated for these services. Past performance does not guarantee future results. Individual account management and construction will vary depending on each client's investment needs and objectives. Investments employing HighMark strategies are NOT insured by the FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by the Bank or any Bank affiliate, and MAY lose value, including possible loss of principal. Table of Contents _ JHIGHMARK@ CAPITAL MANAGEMENT WHY THE PARS DIVERSIFIED MODERATE PORTFOLIO? Comprehensive Investment Solution HighMark® Capital Management, Inc.'s (HighMark) diversified investment portfolios are designed to balance return expectations with risk tolerance. Key features include: sophisticated asset allocation and optimization techniques, four layers of diversification (asset class, style, manager, and security), access to rigorously screened, top tier money managers, flexible investment options, and experienced investment management. Rigorous Manager Due Diligence Our manager review committee utilizes a rigorous screening process that searches for investment managers and styles that have not only produced above -average returns within acceptable risk parameters, but have the resources and commitment to continue to deliver these results. We have set high standards for our investment managers and funds. This is a highly specialized, time consuming approach dedicated to one goal: competitive and consistent performance. Flexible Investment Options In order to meet the unique needs of our clients, we offer access to flexible implementation strategies: HighMark Plus utilizes actively managed mutual funds while Index Plus utilizes index -based securities, including exchange -traded funds. Both investment options leverage HighMark's active asset allocation approach. Risk Management The portfolio is constructed to control risk through four layers of diversification - asset classes (cash, fixed income, equity), investment styles (large cap, small cap, international, value, growth), managers and securities. Disciplined mutual fund selection and monitoring process helps to drive return potential while reducing portfolio risk. INVESTMENT OBJECTIVE Efficient Frontier To provide current income and �Capitaliation moderate capital appreciation. 1� It is expected that dividend and 6 Balanced Moderate interest income will comprise a significant portion of total return, Moderately Conservative although growth through capital Conservative appreciation is equally important. Risk (Standard Deviation) ASSET ALLOCATION - MODERATE PORTFOLIO Strategic Range Policy Tactical Equity 40 - 60% 50% 48% Fixed Income 40 - 60% 45% 46% Cas� 0 - 20% M5% i 6% i ANNUALIZED TOTAL RETURNS Emross of beddednvestment Fund Fees)Management Fees, but Net of HighMark Plus Composite (Active) Index Plus Composite (Passive) Current Quarter* _= -10.16% I Current Quarter -9.45% Blended Benchmark*,** -9.86% Blended Benchmark*,** -9.86% Year To Dat -14.71 % Year To Date*-14.32% Blended Benchmark*,** -14.34% Blended Benchmark*,**-14.34% 1 Year -12.97% 1 Year-11.58% Blended Benchmark** -11.49% Blended Benchmark**-11.49% 3 Year 3.51% Yea 3.48% Blended Benchmark** 3.77% Blended Benchmark** 3.77% 5 Year 4.77% Yea 4.59% Blended Benchmark** 4.92% Blended Benchmark** 4.92% 10 Year 6.01 %1 5.85°� Blended Benchmark** 6.19% Blended Benchmark** 6.19% *Returns less than one year are not annualized. **Breakdown for Blended Benchmark: From 10/1/2012- Present: 26.5 % S&P500, 5 % Russell Mid Cap, 7.5 % Russell 2000, 3.25 % MSCI EM (net), 6 % MSCI EAFE (net), 33.50 % Bloomberg US Agg, 10 % ICE BofA 1-3 Yr US Corp/Gov't, 1.50 % ICE BofA US High Yield Master II, 1.75 % Wilshire REIT, and 5 % FTSE 1 Mth US T-Bill. From 4/1/2007- 9/30/2012: the blended benchmark was 43 % S&P 500; 2 % Russell 2000, 5 % MSCI EAFE (net), 15 % ICE BofA 1-3 Year Corp./Govt, 30 % Bloomberg US Agg, 5 % FTSE 1 Mth US T-Bill. Prior to April 2007: the blended benchmark was 50 % S&P 500, 15 % ICE BofA 1-3Yr Corp/Gov, 30 % Bloomberg US Agg, and 5 % FTSE 1 Mth US T-Bill. ANNUAL RETURNS (Gross of Investment Management Fees, but Net of Embedded Fund Fees) HighMark Plus Composite (Active) Index Plus Composite (Passive) 2008 -22.88%1 2008 8.14% 2009 21.47% 2009 16.05% 201 12.42% 11.77% 2011 0.55% 2011 2.29% 2012 12.25% 10.91 % 2013 13.06% 2013 12.79% 2014 9==N� 4.84% 2014 5.72% 2015 0.14% 2015 -0.52% 2016 6.45% 2016 7.23% 2017 13.19% 2017 11.59% 2018 -4.03% 2018 -4.03% 2019 17.71% 2019 17.52% 2020 12.92% 2020 11.23% 2021 9.31% 2021 10.18% PORTFOLIO FACTS HighMark Plus (Active) Index Plus (Passive) Composite Inception Date 10/2004 Composite Inception Date 05/2006 No of Holdings in Portfolio 20 No of Holdings in Portfolio 13 Table of Contents HOLDINGS HighMark Plus (Active) Index Plus (Passive) Columbia Contrarian Core 13 iShares Core S&P 500 ETF Vanguard Growth & Income Adm iShares S&P 500 Value ETF Dodge & Cox Stock Fund iShares S&P 500 Growth ETF iShares S&P 500 Value ETF iShares Russell Mid -Cap ETF Harbor Capital Appreciation - Retirement Vanguard Real Estate ETF T. Rowe Price Growth Stock - I iShares Russell 2000 Value ETF iShares Russell Mid -Cap ETF iShares Russell 2000 Growth ETF Vanguard Real Estate ETF iShares Core MSCI EAFE ETF Undiscovered Managers Behavioral Value-R6 Vanguard FTSE Emerging Markets ETF Vanguard Small Cap Growth ETF Vanguard Short -Term Invest -Grade Adm DFA Large Cap International Portfolio iShares Core U.S. Aggregate Dodge & Cox International Stock Vanguard High -Yield Corp Adm MFS International Growth - R6 First American Government Obligations Z Hartford Schroders Emerging Markets Eq Vanguard Short -Term Invest -Grade Adm PIMCO High Yield Instl PIMCO Total Return Fund - Inst PGIM Total Return Bond - R6 DoubleLine Core Fixed Income - I First American Government Obligations Z STYLE Casl 6.0% Intl Stocks 7.9 % Mid Cap 4.5% Large Cap Growth 5.6% Large Cap Core 14.0% Holdings are subject to change at the discretion of the investment manager. Large Cap Value Real Estate 6.4%_ —1.8% Short -Term Bond 10.7% Interm-Term Bond 34.8% The performance records shown represent size -weighted composites of tax exempt accounts that meet the following criteria: Accounts are managed by HighMark with full investment authority according to the PARS Moderate active and passive objectives. The adviser to the PARS portfolios is US Bank, and HighMark serves as sub -adviser to US Bank to manage these portfolios. US Bank may charge clients as much as 0.60% annual management fee based on a sliding scale. US Bank pays HighMark 60% of the annual management fee for assets sub -advised by HighMark under its sub -advisory agreement with US Bank. The 0.36% paid to HighMark, as well as other expenses that may be incurred in the management of the portfolio, will reduce the portfolio's returns. Assuming an investment for five years, a 5% annual total return, and an annual sub - advisory fee rate of 0.36% deducted from the assets at market at the end of each year, a $10 million initial value would grow to $12.53 million after fees (Net -of -Fees) and $12.76 million before fees (Gross -of -Fees). Gross returns are presented before management and custodial fees but after all trading expenses and reflect the reinvestment of dividends and other income. A client's return will be reduced by the advisory fees and other expenses it may incur as a client. Additional information regarding the firm's policies and procedures for calculating and reporting performance results is available upon request. Performance results are calculated and presented in U.S. dollars and do not reflect the deduction of investment advisory fees, custody fees, or taxes but do reflect the deduction of trading expenses. Returns are calculated based on trade -date accounting. Blended benchmarks represent HighMark's strategic allocations between equity, fixed income, and cash and are rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other earnings. An investor cannot invest directly in an index. The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI EAFE Index is a free float -adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a free float -adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Russell Midcap Index measures the performance of the mid -cap segment of the U.S. equity universe. The Russell 2000 Index measures the performance of the small -cap segment of the U.S. equity universe. The ICE BofA U.S. High Yield Master II Index tracks the performance of below investment grade U.S. dollar -denominated corporate bonds publicly issued in the U.S. domestic market. Wilshire REIT Index measures U.S. publicly traded Real Estate Investment Trusts. The unmanaged Bloomberg U.S. Aggregate Bond ndex is generally representative of the U.S. taxable bond market as a whole. The ICE BofA 1-3 Year U.S. Corporate & Government Index tracks the bond performance of the ICE BofA U.S. Corporate & Government Index, with a remaining term to final maturity less than 3 years. The unmanaged FTSE 1-Month U.S. Treasury Bill Index tracks the yield of the 1- month U.S. Treasury Bill. HighMark Capital Management, Inc. (HighMark), an SEC -registered investment adviser, is a wholly owned subsidiary of MUFG Union Bank, N.A. (MUB). HighMark manages institutional separate account portfolios for a wide variety of for -profit and nonprofit organizations, public agencies, and public and private retirement plans. MUB, a subsidiary of MUFG Americas Holdings Corporation, provides certain services to HighMark and is compensated for these services. Past performance does not guarantee future results. Individual account management and construction will vary depending on each client's investment needs and objectives. Investments employing HighMark strategies are NOT insured by the FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by the Bank or any Bank affiliate, and MAY lose value, including possible loss of principal. Table of Contents _ JHIGHMARK@ CAPITAL MANAGEMENT WHY THE PARS DIVERSIFIED BALANCED PORTFOLIO? Comprehensive Investment Solution HighMark® Capital Management, Inc.'s (HighMark) diversified investment portfolios are designed to balance return expectations with risk tolerance. Key features include: sophisticated asset allocation and optimization techniques, four layers of diversification (asset class, style, manager, and security), access to rigorously screened, top tier money managers, flexible investment options, and experienced investment management. Rigorous Manager Due Diligence Our manager review committee utilizes a rigorous screening process that searches for investment managers and styles that have not only produced above -average returns within acceptable risk parameters, but have the resources and commitment to continue to deliver these results. We have set high standards for our investment managers and funds. This is a highly specialized, time consuming approach dedicated to one goal: competitive and consistent performance. Flexible Investment Options In order to meet the unique needs of our clients, we offer access to flexible implementation strategies: HighMark Plus utilizes actively managed mutual funds while Index Plus utilizes index -based securities, including exchange -traded funds. Both investment options leverage HighMark's active asset allocation approach. Risk Management The portfolio is constructed to control risk through four layers of diversification - asset classes (cash, fixed income, equity), investment styles (large cap, small cap, international, value, growth), managers and securities. Disciplined mutual fund selection and monitoring process helps to drive return potential while reducing portfolio risk. INVESTMENT OBJECTIVE To provide growth of principal and income. While dividend and interest income are an important component of the objective's total return, it is expected that capital appreciation will comprise a larger portion of the total return. Efficient Frontier �Capftliation o Balanced m Moderate m Moderately Conservative 3 Conservative Risk (Standard Deviation) ASSET ALLOCATION - BALANCED PORTFOLIO Strategic Range Policy Tactical Equity 50 - 70% 60% Fixed Income 30 - 50% 35% 36% Cash 0 - 20% �5% (Gross of Investment ; Management Fees, but Net of ANNUALIZED TOTAL RETURNS Embedded Fund Fees HighMark Plus Composite (Active) Current Quarter* -11.24% 1 Blended Benchmark*,** -11.09% Year To Date* i -15.71 % Blended Benchmark*,** -15.55% 1 Year -13.63% Blended Benchmark** -12.19% 3 Year 4.28% Blended Benchmark** 4.58% 5 Ye 5.51 % Index Plus Composite (Passive) Current Quarter*=10.66% Blended Benchmark*,**-11.09% Year To Date* �15.47% Blended Benchmark*,**-15.55% 1 Year ,M� -12.17% Blended Benchmark**-12.19% 3 Year 4.28% Blended Benchmark** 4.58% 5 Year 5.26% Blended Benchmark** 5.67% Blended Benchmark** 5.67% 10 Year 6.90% 10 Year 6.68. Blended Benchmark** 7.13% Blended Benchmark** 7.13% Returns less than one year are not annualized. *`Breakdown for Blended Benchmark: From 10/1/2012 - Present: 32 % S&P500, 6 % Russell Mid Cap, 9 % Russell 2000, 4 % MSCI EM (net), 7 % MSCI EAFE (net), 27 % Bloomberg US Agg, 6.75% ICE BofA 1-3 Yr US Corp/Gov't, 1.25 % ICE BofA US High Yield Master Il, 2 % Wilshire REIT, and 5 % FTSE 1 Mth US T-Bill. From 4/1/2007 - 9/30/2012: the blended benchmark was 51 % S&P 500; 3 % Russell 2000, 6 % MSCI EAFE (net), 5 % ICE BofA 1-3 Year Corp./Govt, 30 % Bloomberg US Agg, 5 % FTSE 1 Mth US T-Bill. Prior to April 2007: the blended benchmark was 60 % S&P 500, 5 % ICE BofA 1-3Yr Corp/Gov, 30 % Bloomberg US Agg, and 5 % FTSE 1 Mth US T-Bill. ANNUAL RETURNS (Gross of Investment Management Fees, but Net of Embedded Fund Fees) HighMark Plus Composite (Active) Index Plus Composite (Passive) 2008-25.72% 2008 3.22M 2009 21.36% 2010 14.11% 2011 -0.46% 2012 13.25% 2013 2014 2015 2016 2017 2018 2019 2020 2021 PORTFOLIO FACTS HighMark Plus (Active) Composite Inception Date No of Holdings in Portfolio 2009 17.62% 12.76% 2011 1.60% 16.61% 2013 4.70% 2014 0.04% 2015 6.81% 2016 15.46% 2017 -4.88% 2018 19.85% 2019 13.85% 2020 11.44% 2021 Index Plus (Passive) 10/2006 Composite Inception Date 20 No of Holdings in Portfolio 11.93% 15.63% 6.08% -0.81 % 8.26% 13.39% -5.05% 19.59% 12.07% 12.63% 10/2007 13 Table of Contents HOLDINGS HighMark Plus (Active) Columbia Contrarian Core 13 Vanguard Growth & Income Adm Dodge & Cox Stock Fund iShares S&P 500 Value ETF Harbor Capital Appreciation - Retirement T. Rowe Price Growth Stock - I iShares Russell Mid -Cap ETF Vanguard Real Estate ETF Index Plus (Passive) iShares Core S&P 500 ETF iShares S&P 500 Value ETF iShares S&P 500 Growth ETF iShares Russell Mid -Cap ETF Vanguard Real Estate ETF iShares Russell 2000 Value ETF iShares Russell 2000 Growth ETF iShares Core MSCI EAFE ETF Undiscovered Managers Behavioral Value-R6 Vanguard FTSE Emerging Markets ETF Vanguard Small Cap Growth ETF Vanguard Short -Term Invest -Grade Adm DFA Large Cap International Portfolio iShares Core U.S. Aggregate Dodge & Cox International Stock Vanguard High -Yield Corp Adm MFS International Growth - R6 First American Government Obligations Z Hartford Schroders Emerging Markets Eq Vanguard Short -Term Invest -Grade Adm PIMCO High Yield Instl PIMCO Total Return Fund - Inst PGIM Total Return Bond - R6 DoubleLine Core Fixed Income - I First American Government Obligations Z STYLE Holdings are subject to change at the discretion of the investment manager. Real Estate Large Cap Value 2 0 % 7.7% _ i Intl Stocks 9.4 % Mid Cap 5.5% Large Cap Growth 6.8 Large Cap Core 17.0 % Small Cap 8.6% Interm-Term Bond 27.6% High Yield 0.9% The performance records shown represent size -weighted composites of tax exempt accounts that meet the following criteria Accounts are managed by HighMark with full investment authority according to the PARS Balanced active and passive objectives. The composite name has been changed from PARS Balanced/Moderately Aggressive to PARS Balanced on 5/1/2013. The adviser to the PARS portfolios is US Bank, and HighMark serves as sub -adviser to US Bank to manage these portfolios. US Bank may charge clients as much as 0.60 % annual management fee based on a sliding scale. US Bank pays HighMark 60 % of the annual management fee for assets sub -advised by HighMark under its sub -advisory agreement with US Bank. The 0.36% paid to HighMark, as well as other expenses that may be incurred in the management of the portfolio, will reduce the portfolio's returns. Assuming an investment for five years, a 5 % annual total return, and an annual sub -advisory fee rate of 0.36% deducted from the assets at market at the end of each year, a $10 million initial value would grow to $12.53 million after fees (Net -of -Fees) and $12.76 million before fees (Gross -of -Fees). Gross returns are presented before management and custodial fees but after all trading expenses and reflect the reinvestment of dividends and other income. A client's return will be reduced by the advisory fees and other expenses it may incur as a client. Additional information regarding the firm's policies and procedures for calculating and reporting performance results is available upon request. Performance results are calculated and presented in U.S. dollars and do not reflect the deduction of investment advisory fees, custody fees, or taxes but do reflect the deduction of trading expenses. Returns are calculated based on trade -date accounting. Blended benchmarks represent HighMark's strategic allocations between equity, fixed income, and cash and are rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other earnings. An investor cannot invest directly in an index. The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI EAFE Index is a free float - adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a free float -adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Russell Midcap Index measures the performance of the mid - cap segment of the U.S. equity universe. The Russell 2000 Index measures the performance of the small -cap segment of the U.S. equity universe. The ICE BofA U.S. High Yield Master II Index tracks the performance of below investment grade U.S. dollar -denominated corporate bonds publicly issued in the U.S. domestic market. Wilshire REIT index measures U.S. publicly traded Real Estate Investment Trusts. The unmanaged Bloomberg U.S. Aggregate Bond Index is generally representative of the U.S. taxable bond market as a whole. The ICE BofA 1-3 Year U.S. Corporate & Government Index tracks the bond performance of the ICE BofA U.S. Corporate & Government Index, with a remaining term to final maturity less than 3 years. The unmanaged FTSE 1-Month U.S. Treasury Bill Index tracks the yield of the 1-month U.S. Treasury Bill. HighMark Capital Management, Inc. (HighMark), an SEC -registered investment adviser, is a wholly owned subsidiary of MUFG Union Bank, N.A. (MUB). HighMark manages institutional separate account portfolios for a wide variety of for -profit and nonprofit organizations, public agencies, and public and private retirement plans. MUB, a subsidiary of MUFG Americas Holdings Corporation, provides certain services to HighMark and is compensated for these services. Past performance does not guarantee future results. Individual account management and construction will vary depending on each client's investment needs and objectives. Investments employing HighMark strategies are NOT insured by the FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by the Bank or any Bank affiliate, and MAY lose value, including possible loss of principal. Table of Contents - JHIGHMARK@ CAPITAL MANAGEMENT WHY THE PARS DIVERSIFIED INVESTMENT OBJECTIVE Efficient Frontier CAPITAL APPRECIATION PORTFOLIO? To provide growth of principal. Comprehensive Investment Solution The major portion of the assets BalanCadpital Appreciation HighMark® Capital Management, Inc.'s (HighMark) are invested in equity securities y Moderate diversified investment portfolios are designed to and market fluctuations are Moderately Conservative balance return expectations with risk tolerance. a expected. 3 Key features include: sophisticated asset allocation of Conservative and optimization techniques, four layers of diversification (asset class, style, manager, and Risk (Standard Deviation) security), access to rigorously screened, top tier ASSET ALLOCATION — CAPITAL APPRECIATION PORTFOLIO money managers, flexible investment options, and experienced investment management. Strategic Range Policy Tactical Equity 65 - 85% _____% 72% Rigorous Manager Due Diligence Fixed Income 10 - 30% 20% 20% Our manager review committee utilizes a rigorous 8% screening process that searches for investment managers and styles that have not only produced (Gross of Investment Management Fees, but Net of ANNUALIZED TOTAL RETURNS Embedded Fund Fees) above -average returns within acceptable risk parameters, but have the resources and commitment Consolidated Composite Current Quarter*�12.59% to continue to deliver these results. We have set high standards for our investment managers and funds. Blended Benchmark*,** -12.84% This is a highly specialized, time consuming Year To Date* — -17.12% approach dedicated to one goal: competitive and Blended Benchmark*,** -17.27% consistent performance. 1 Year = -14.04% Blended Benchmark** -13.26% Flexible Investment Options 3 Year 5.30% In order to meet the unique needs of our clients, Blended Benchmark** 5.59% we offer access to flexible implementation strategies: 5 Year 6.42% HighMark Plus utilizes actively managed mutual funds while Index Plus utilizes index -based Blended Benchmark** 6.60% securities, including exchange -traded funds. Both 10 Yeariiiiii 8.03% investment options leverage HighMark's active asset Blended Benchmark** 8.36% allocation approach. annualized. Blended one525% R0.5%Russeleturns less ll MIUS Cap, 16%Bl Bloomberg USA g,3% ICE BofA 153 Yell 2000,an MSCII EM(net), 11025%MSCI EAFE Corp/Gov't, 1 % ICE BofA US High Yield Master II, 2 % Wilshire REIT, and 5 % FTSE 1 Mth US T-Bill. Risk Management ANNUAL RETURNS (Gross of Investment Management Fees, but Net of Embedded The portfolio is constructed to control risk through Fund Fees) four layers of diversification — asset classes (cash, Consolidated Composite fixed income, equity), investment styles (large cap, 2008 N/4 small cap, international, value, growth), managers 2009 23.77% and securities. Disciplined mutual fund selection and 2010 12.95% monitoring process helps to drive return potential 2011 -1.35% while reducing portfolio risk. 2012 13.87% 2013 20.33% 2014 6.05% 2015 -0.26% 2016 8.79% 2017 16.72% 2018 -5.82% 2019 22.62% 2020 14.50% 2021 14.96% PORTFOLIO FACTS Consolidated Composite Composite Inception Date 01/2009 No of Holdings in Portfolio 20 Table of Contents HOLDINGS HighMark Plus (Active) Index Plus (Passive) Columbia Contrarian Core 13 iShares Core S&P 500 ETF Vanguard Growth & Income Adm iShares S&P 500 Value ETF Dodge & Cox Stock Fund iShares S&P 500 Growth ETF iShares S&P 500 Value ETF iShares Russell Mid -Cap ETF Harbor Capital Appreciation — Retirement Vanguard Real Estate ETF T. Rowe Price Growth Stock - I iShares Russell 2000 Value ETF iShares Russell Mid -Cap ETF iShares Russell 2000 Growth ETF Vanguard Real Estate ETF iShares Core MSCI EAFE ETF Undiscovered Managers Behavioral Value-R6 Vanguard FTSE Emerging Markets ETF Vanguard Small Cap Growth ETF Vanguard Short -Term Invest -Grade Adm DFA Large Cap International Portfolio iShares Core U.S. Aggregate Dodge & Cox International Stock Vanguard High -Yield Corp Adm MFS International Growth - R6 First American Government Obligations Z Hartford Schroders Emerging Markets Eq Vanguard Short -Term Invest -Grade Adm PIMCO High Yield Instl PIMCO Total Return Fund - Inst PGIM Total Return Bond - R6 DoubleLine Core Fixed Income - I First American Government Obligations Z STYLE Holdings are subject to change at the discretion of the investment manager. Large Cap Value Real Estate 9.4 % 2.0% Small Cap 10.0 % Cash 8.5 % rI nterm-Term Bond F 16.1 % Intl Stocks High Yield 0.8 13.2 Short -Term Bond 3.3 % Mid Cap � 6.9% Large Cap Core Large Cap Growth 21 5 % 8.3 % The performance records shown represent a size -weighted composite of tax exempt accounts that meet the following criteria: Accounts are managed by HighMark with full investment authority according to the PARS Capital Appreciation active and passive objectives. The adviser to the PARS portfolios is US Bank, and HighMark serves as sub -adviser to US Bank to manage these portfolios. US Bank may charge clients as much as 0.60% annual management fee based on a sliding scale. US Bank pays HighMark 60 % of the annual management fee for assets sub -advised by HighMark under its sub -advisory agreement with US Bank. The 0.36 % paid to HighMark, as well as other expenses that may be incurred in the management of the portfolio, will reduce the portfolio's returns. Assuming an investment for five years, a 5 % annual total return, and an annual sub - advisory fee rate of 0.36% deducted from the assets at market at the end of each year, a $10 million initial value would grow to $12.53 million after fees (Net -of -Fees) and $12.76 million before fees (Gross -of -Fees). Gross returns are presented before management and custodial fees but after all trading expenses and reflect the reinvestment of dividends and other income. A client's return will be reduced by the advisory fees and other expenses it may incur as a client. Additional information regarding the firm's policies and procedures for calculating and reporting performance results is available upon request. Performance results are calculated and presented in U.S. dollars and do not reflect the deduction of investment advisory fees, custody fees, or taxes but do reflect the deduction of trading expenses. Returns are calculated based on trade -date accounting. Blended benchmarks represent HighMark's strategic allocations between equity, fixed income, and cash and are rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other earnings. An investor cannot invest directly in an index. The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI EAFE Index is a free float -adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a free float -adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Russell Midcap Index measures the performance of the mid -cap segment of the U.S. equity universe. The Russell 2000 Index measures the performance of the small -cap segment of the U.S. equity universe. The ICE BofA U.S. High Yield Master II Index tracks the performance of below investment grade U.S. dollar -denominated corporate bonds publicly issued in the U.S. domestic market. Wilshire REIT index measures U.S. publicly traded Real Estate Investment Trusts. The unmanaged Bloomberg U.S. Aggregate Bond Index is generally representative of the U.S. taxable bond market as a whole. The ICE BofA 1-3 Year U.S. Corporate & Government Index tracks the bond performance of the ICE BofA U.S. Corporate & Government Index, with a remaining term to final maturity less than 3 years. The unmanaged FTSE 1-Month U.S. Treasury Bill Index tracks the yield of the 1-month U.S. Treasury Bill. HighMark Capital Management, Inc. (HighMark), an SEC -registered investment adviser, is a wholly owned subsidiary of MUFG Union Bank, N.A. (MUB). HighMark manages institutional separate account portfolios for a wide variety of for -profit and nonprofit organizations, public agencies, and public and private retirement plans. MUB, a subsidiary of MUFG Americas Holdings Corporation, provides certain services to HighMark and is compensated for these services. Past performance does not guarantee future results. Individual account management and construction will vary depending on each client's investment needs and objectives. Investments employing HighMark strategies are NOT insured by the FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by the Bank or any Bank affiliate, and MAY lose value, including possible loss of principal. Table of Contents FY 2022-23 First Quarter Financial Report This Page Intentionally Left Blank Table of Contents October 31, 2022 STAFF REPORT Certificates of Participation (COP) Quarterly Report for the Period Ended September 30, 2022 Summary The Orange County Sanitation District (OC San) 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. There remains no variable interest rate COPs at OC San. Following are the current outstanding debt issues of OC San: In May 2010, OC San issued $80 million of fixed rate Build America Bonds (BABs), Series 2010A at a true interest cost of 3.68 percent for the issue. In December 2010, OC San issued $157 million of fixed rate BABs, Series 2010C at a true interest cost of 4.11 percent for the issue. In August 2014, OC San issued $85.09 refunding a portion of Series 2007B debt. percent. million of fixed rate COPs, Series 2014A, The true interest cost for the issue is 2.34 In February 2015, OC San 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, OC San issued $145.88 million of fixed rate COPs, 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, OC San 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 July 2021, OC San issued $133.51 million of fixed rate COPs, Series 2021A, refunding $61.575 million of the Series 2011 A fixed rate debt and $102.2 million of the Series 2018A fixed rate debt. The true interest cost for the issue is 1.06 percent. Table of Contents Quarterly COP Report For the Period Ended September 30, 2022 Page 2 of 2 In February 2022, OC San issued $81.62 million of fixed rate COPs, Series 2022A, refunding $100.645 million of the Series 2012A fixed rate debt and $6.67 million of the Series 2012B fixed rate debt. The true interest cost for the issue is 1.59 percent. Additional Information The graph entitled, "COP Rate History Report," shows the various fixed interest rates of OC San's eight debt issues. Attachment 1. Graph - COP Rate History Report Table of Contents 5.00 4.00 3.00 w Q 2.00 1.00 OC SAN COP RATE HISTORY REPORT SEPTEMBER 2022 N N N N N N N N N N N N N N N N N N p. 4 �' N N 3 _ Of 61 m 6 6 N O O z° z° ❑ N 7 T n Q Q N y DATE N 16 c 6 N N N N M N Series 2010A Fixed --*--Series 2010C Fixed t Series 2014A Fixed t Series 2015A Fixed Series 2016A Fixed t Series 2017A Fixed —49— Series 2021 A Fixed --*—Series 2022A Fixed Table of Contents FY 2022-23 First Quarter Financial Report This Page Intentionally Left Blank Orange County Sanitation District Financial Management Division 10844 Ellis Avenue Fountain Valley, California 92708-7018 714.962.2411 1 www.ocsan.gov 09/30/22 Administration Building ADMINISTRATION COMMITTEE 10844 Ellis Avenue SAIV Fountain Valley, CA 92708 (714) 593 7433 ORANGE COUNTY SANITATION DISTRICT Agenda Report File #: 2022-2590 Agenda Date: 11/9/2022 Agenda Item No: 3. FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Assistant General Manager SUBJECT: SERVICENOW IT SERVICE MANAGEMENT LICENSE RENEWAL GENERAL MANAGER'S RECOMMENDATION RECOMMENDATION: A. Approve a Purchase Order to Insight Public Sector for the purchase of ServiceNow License Renewal using the OMNIA Partners Public Sector (formerly U.S. Communities) cooperative contract #4400006644 for a one-year contract for the period of December 30, 2022 through December 29, 2023 for a total amount not to exceed $112,408, plus tax and delivery (if applicable); and B. Approve a contingency of $11,241 (10%). BACKGROUND The Orange County Sanitation District's (OC San) Information Technology (IT) division utilizes ServiceNow Information Technology Service Management (ITSM) software to track, manage, and deliver IT assets and services. The IT division processes nearly 1,000 service requests and incidents per month utilizing this software. All system changes are documented and approved through ServiceNow for auditing purposes. The ITSM system is the primary system used to track the division's day-to-day operations and ensures that all activities are conducted effectively and efficiently with available resources. Staff is requesting a contingency of 10% to cover any additional software license increases during this one-year contract. Additional licenses may be required to comply with contractor staffing changes. RELEVANT STANDARDS • Protect OC San assets • Participate in local, state, and national cooperative purchasing programs Orange County Sanitation District Page 1 of 2 Printed on 11/1/2022 powered by LegistarTIM File #: 2022-2590 PROBLEM Agenda Date: 11/9/2022 Agenda Item No: 3. The existing ServiceNow ITSM licenses expire on December 30, 2022. OC San needs the renewal to continue to utilize the software. PROPOSED SOLUTION Renew OC San's ServiceNow ITSM software licenses for one year. TIMING CONCERNS Renewal of the ServiceNow ITSM software licenses should occur prior to December 30, 2022, to ensure software availability without disruption. RAMIFICATIONS OF NOT TAKING ACTION Access to the ServiceNow ITSM software would become unavailable for OC San staff. OC San's IT division would no longer be able to track and manage its portfolio of IT services, including assets, service requests, incidents, and change requests. PRIOR COMMITTEE/BOARD ACTIONS November 2021 - Board of software subscription of the contingency of 10% ($47,451). ADDITIONAL INFORMATION 107M CEQA N/A Directors authorized a Purchase Order for the implementation and ServiceNow ITSM software platform for $474,505; and approved a FINANCIAL CONSIDERATIONS This request complies with authority levels of OC San's Purchasing Ordinance. This item has been budgeted. (FY2022-23 & 2023-24 Budget, Section 8, Page 48, Information Technology Capital Program (M-MC-IT)). ATTACHMENT The following attachment(s) may be viewed on-line at the OC San website (www.ocsan.gov) with the complete agenda package: N/A Orange County Sanitation District Page 2 of 2 Printed on 11/1/2022 powered by LegistarTM Administration Building ADMINISTRATION COMMITTEE 10844 Ellis Avenue SAIV Fountain Valley, CA 92708 (714) 593 7433 ORANGE COUNTY SANITATION DISTRICT Agenda Report File #: 2022-2595 Agenda Date: 11/9/2022 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 IV:tole] 1TAIf•1a101�7_,11[61,01M - • i 0FIrmi3.1: 1 01 o a 91 Ragre= on A. Receive and file Orange County Sanitation District purchases made under the General Manager's authority for the period of July 1, 2022 to September 30, 2022; and B. Approve the following additions to the pre -approved OEM Sole Source List: • BEAMEX - Maintenance and Support for CMX Calibration Software and CMX Business Bridge Software • FORD HALL COMPANY INC. - Weir Wolf/Algae Sweep Automation Cleaning Equipment Parts and Service • MIDWAY MANUFACTURING & MACHINE - Custom Brackets & Fittings for Vehicles / Electric Carts and Portable Equipment • VAPEX ENVIRONMENTAL TECHNOLOGIES - SENTINEL Scrubber Monitor/Controller Products 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 (OC San) facilities because the parts and/or service can only be provided by the OEM or their designated representative. Orange County Sanitation District Page 1 of 4 Printed on 11/1/2022 powered by LegistarTIM File #: 2022-2595 Agenda Date: 11/9/2022 Agenda Item No: 4. RELEVANT STANDARDS • Quarterly financial reporting • Ensure the public's money is wisely spent PRIOR COMMITTEE/BOARD ACTIONS December 2016 - Minute Order 12(b) authorized the General Manager to ratify additions or deletions to the OEM Sole Source list on the General Manager's quarterly approved purchases agenda report. ADDITIONAL INFORMATION In accordance with Board purchasing policies, Ordinance No. OC SAN-56, 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 2022-23: Vendor Name Amount Department Description/Discussion BEC BUILDING $90,000.00 Operations & Convenience Blanket PO for Emergency ELECTRONIC Maintenance Response to Fire Alarm Systems at Plants 1 CONTROLS INC & 2 8/16/22 - 8/15/23 GM Article 2, Section 2.2 (b) (1) CHART $90,000.00 Operations & Convenience Blanket PO for Urgent Repair INTERNATIONAL, Maintenance for LOX Tank Systems and Portable Trailer INC /23/22 - 6/30/24 GM Article 2, Section 2.2 (b) (1) COOPER $86,753.95 Administrative 3tock Item Purchase of Two (2) Cooper MACHINERY Services enGen Engine Cylinder Heads Board SERVICES LLC pproved OEM Sole Source List M.O. /23/17, Item 9(B) CORTECH $61,139.00 Operations & Stock Item Purchase of One (1) SEEPEX ENGINEERING, INC., Maintenance Progression Cavity Pump with Drive Board A DXP COMPANY pproved OEM Sole Source List M.O. 12/14/16, Item 12(B) FLO-SYSTEMS, INC. $82,998.00 Operations & Purchase of Fairbanks Morse Pump for Seal Maintenance Beach Pump Station Board Approved OEM Sole Source List M.O. 8/28/19, Item 3(B) GEA MECHANICAL $50,934.48 Administrative Stock Item Purchase of GEA Westfalia EQUIPMENT US, Services entrifuge Parts Board Approved OEM Sole INC. Source List M.O. 9/23/23, Item 12(B) HACH COMPANY $59,725.08 Operations & Blanket PO to Provide Semi -Annual and Maintenance Annual Preventative Maintenance Site Visits o Service Specific Hach Equipment at Plants 1 & 2 7/1 /22 - 6/30/24 Board Approved OEM Sole Source List M.O. 12/14/16, Item 12(B) HOWDEN ROOTS 52,000.00 perations & lass 1 (18,000 Hour) Service for Four (4) LLC Maintenance [Blowers at Plant 1 Board Approved OEM ole Source List M.O. 12/14/16, Item 12(B) Orange County Sanitation District Page 2 of 4 Printed on 11/1/2022 powered by LegistarTM File #: 2022-2595 Agenda Date: 11/9/2022 Agenda Item No: 4. JAMISON $55,850.00 Operations & Trickling Filter C Component Replacement at ENGINEERING Maintenance Plant 2 Board Approved OEM Sole Source CONTRACTORS INC List M.O. 11/17/21, Item 14(B) JAMISON $90,000.00 Operations & Blanket PO for Routine and Emergency ENGINEERING Maintenance Repairs on Trickling Filters 9/23/22 - 6/30/23 CONTRACTORS INC Board Approved OEM Sole Source List M.O. 11/17/21, Item 14(B) LUXER ONE $50,173.00 Administrative Blanket PO to Provide and Install Automated Services Locker Systems Including Software Integration and On -Site Training 12/26/22 - 12/25/23 with 4 Optional Renewal Periods Specification No. S-2022-1338 MISCO WATER $91,360.00 Administrative Stock Purchase of Two (2) Philadelphia Services Mixer Gearboxes Specification No. RFQ 0791 NATIONAL AUTO $56,054.76 Operations & Purchase of New 2023 Ford Transit T250 FLEET GROUP* Maintenance Cargo Van Approved CORF Budget FY 1/22 Sourcewell Contract# 091521-NAF, in ccordance with Ordinance OC SAN-56 Section 2.03 (B) Cooperative Purchases NATIONAL AUTO $56,054.76 Operations & Purchase of New 2023 Ford Transit T250 FLEET GROUP* Maintenance argo Van Approved CORF Budget FY 1/22 Sourcewell Contract# 091521-NAF, in ccordance with Ordinance OC SAN-56 Section 2.03 (B) Cooperative Purchases PARAMOUNT $69,801.19 Operations & Purchase of One (1) Primary Treatment PLASTIC Maintenance Scrubber Acid Tank Specification No. S-2021 FABRICATORS 1298 PRIMARY GAS $80,000.00 Environmental Blanket PO to Provide Laboratory Gases to SOLUTIONS, LLC Services he Laboratory at Plant 1 9/16/22 - 6/30/23 ith 4 Optional Renewal Periods Specification No. C-2022-1317-R QUINCY $57,750.00 Operations & Purchase of Quincy Compressor Duplex COMPRESSOR Maintenance Rotary Vane Vacuum Pump Unit Board Approved OEM Sole Source List M.O. /28/18, Item 13(B) SCHWING BIOSET $91,589.78 Administrative Stock Item Purchase of Sludge Transfer Services Pump Parts Board Approved OEM Sole Source List M.O. 12/14/16, Item 12(B) T AND D $90,000.00 Administrative Convenience Blanket PO to Provide COMMUNICATIONS, Services elecom Cabling at Plants 1 & 2 9/23/22 - INC. /22/24 GM Article 2, Section 2.2 (b) (1) UTILITY SYSTEMS, $78,200.00 Engineering Blanket PO to Provide Flow Monitoring SCIENCE & ervices at the Greenville Trunk Sewer, SOFTWARE INC MacArthur Pump Station, and Edinger Pump Station 8/1/22 - 7/31/23 with 1 Optional Renewal Period Specification No. S-2022- 1325 Orange County Sanitation District Page 3 of 4 Printed on 11/1/2022 powered by LegistarTM File #: 2022-2595 Agenda Date: 11/9/2022 Agenda Item No: 4. VERTECH $65,000.00 Operations & Blanket PO to Provide Software INDUSTRIAL Maintenance Maintenance and Support Services 7/1/22 - SYSTEMS, LLC /30/23 with 4 Optional Renewal Periods Sole Source Justification 2559 Reason: Unique Product/Service WAYNE PERRY INC $97,100.00 Operations & Blanket PO for UST Certification, Maintenance Maintenance, and Designated Operator Services 7/1/22 - 6/30/23 with 4 Optional Renewal Periods Specification No. S-2022- 1324 *Due to industry vehicle supply being low, purchases were made individually as vehicles became available from the vendor. Additionally, in accordance with Board purchasing policies, Ordinance No. OC SAN-56, 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 2022-23: Vendor Name Amount Department Description/Discussion JAMISON $238,750.00 Operations & Primary Sedimentation Basin F Dome Post ENGINEERING Maintenance Repairs at Plant 2 Specification No. TOB-2022 CONTRACTORS INC 1335-R of Master Service Contract S-2021- 1234BD-3 J R FILANC $74,135.00 Operations & Basin Storm Drain and Curb Repair CONSTRUCTION Maintenance throughout Plant 1 (MP-584) Specification No. OB-2022-1339 of Master Service Contract S- 021-1234BD-2 ATTACHMENT The following attachment(s) may be viewed on-line at the OC San website (www.ocsan.gov) with the complete agenda package: N/A Orange County Sanitation District Page 4 of 4 Printed on 11/1/2022 powered by LegistarTM Administration Building ADMINISTRATION COMMITTEE 10844 Ellis Avenue SAIV Fountain Valley, CA 92708 (714) 593 7433 ORANGE COUNTY SANITATION DISTRICT Agenda Report File #: 2022-2582 Agenda Date: 11/9/2022 Agenda Item No: 5. FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Assistant General Manager SUBJECT: COOPERATIVE PROCUREMENT AGREEMENTS GENERAL MANAGER'S RECOMMENDATION RECOMMENDATION: Recommend to the Board of Directors to: Authorize the purchasing of information technology products, services, and solutions utilizing Cooperative Procurement Agreements (CPA) such as, but not limited to, OMNIA Partners Public Sector (formerly U.S. Communities), NASPO ValuePoint, and U.S. General Services Administration GSA Schedule 70/ GSA Multiple Award Schedule (MAS) for the period January 1, 2023 through December 31, 2023 for a total amount not to exceed $2,000,000, in accordance with Ordinance No. OCSD-56, Section 2.03(B) Cooperative Purchases, with two (2) one-year renewal options. 1 :(r1:Z9111 Z I III] The Orange County Sanitation District (OC San) desires to utilize the CPA as providers of technology products, services, and solutions. The CPAs are needed to provide technology solutions based on competitive contract pricing, breadth of product offerings, availability, and the ease of using online ordering systems. Large capital items will be procured through the bidding process and all purchases continue to follow the existing approval and procurement processes in accordance with OC San's Purchasing Ordinance. These CPAs provide deep discounts not normally available through OC San's bid process. To properly maintain and provide solutions to OC San's facilities, the Information Technology (IT) division has a need to purchase technology products, services, and solutions. Such item requirements have been forecasted based upon projected obsolete equipment, historical product failure rates, and new items to address general capacity, redundancy, or security. Since technology changes frequently, it is not appropriate to stock these items in OC San's warehouses. IT currently uses vendors providing technology items and recurring maintenance support and services using GSA Schedule 70/ GSA Multiple Award Schedule (MAS) Contract, NASPO ValuePoint, and OMNIA Partners Public Sector (Formerly known as U.S. Communities Government Purchasing Alliance). Purchases include: • Networking and telephony equipment • Servers and desktop computers Orange County Sanitation District Page 1 of 4 Printed on 11/1/2022 powered by LegistarTIM File #: 2022-2582 Agenda Date: 11/9/2022 Agenda Item No: 5. • Data storage and backup appliances • Software licenses and maintenance agreements • Consulting services • Disaster recovery and cyber security solutions • Printers, scanners, and monitors • Computer peripherals • Uninterruptible power supply components Example OMNIA Partners Public Sector contracts include: • Insight Public Sector Contract: Technology Products, Services and Solutions - Contract Number: 4400006644, Lead Agency: County of Fairfax, Virginia • Graybar Contract: Electrical, Lighting, Data Communications and Security Products and Related Products, Services and Solutions- Contract # EV2370, Lead Agency: City of Kansas City, MO Example NASPO ValuePoint contracts include: • Cisco Contract # AR3227 with multiple contract holders for Data Communications, Lead Agency: State of Utah • HP, Inc.: Computer Equipment, Peripherals & Related Services - Master Agreement Number: MNNVP-133, Lead State: Minnesota Example U.S. General Services Administration GSA Schedule 70/ GSA Multiple Award Schedule (MAS) include: • e-Plus Technology, Inc. Contract: Internet Security, LAN/WAN, Project Mgmt., System Design, System Implement, System Integration, System Management, System Security, etc. Brands: IT Consult, IT Service, IT Training- Contract Number: GS-35F-0673N • EC America Contract: Various Software, Services and Hardware -Contract Number: # GS-35F- 0511T RELEVANT STANDARDS • Ensure the public's money is wisely spent • Participate in local, state, and national cooperative purchasing programs • Maintain a culture of improving efficiency to reduce the cost to provide the current service level or standard PROBLEM The procurement process for information technology items and services for OC San involves many efforts and associated costs. IT and Purchasing work diligently in finding ways to streamline the procurement process while minimizing cost concomitant of the procurement of technology items. Orange County Sanitation District Page 2 of 4 Printed on 11/1/2022 powered by LegistarT" File #: 2022-2582 Agenda Date: 11/9/2022 Agenda Item No: 5. PROPOSED SOLUTION OC San's purchasing power is limited, therefore, utilizing other large agencies' cooperative agreement(s) who have completed a vetted procurement process is a viable and economical solution. TIMING CONCERNS Maintenance and deployment of new systems and solutions is imperative for continued support of plant operations and maintenance initiatives without delay. RAMIFICATIONS OF NOT TAKING ACTION Risk of being unable to maintain/deploy or delay IT projects supporting plant operations and maintenance. Increased costs related to the procurement of technology items. PRIOR COMMITTEE/BOARD ACTIONS October 2019 - Board authorized the purchasing of information technology products, services, and solutions utilizing Cooperative Procurement Agreements (CPA) from U.S. General Services Administration (GSA) IT Schedule 70, National Association of State Procurement Officials ValuePoint Cooperative Purchasing Organization, and OMNIA Partners, Public Sector (formerly U.S. Communities) for the period January 1, 2020 through December 31, 2020 for a total amount not to exceed $2,000,000, in accordance with Ordinance No. OCSD-52, Section 2.03(8) Cooperative Purchases, with two (2) one-year renewal options. ADDITIONAL INFORMATION The State of California Procurement Division is the central purchasing authority for all State departments and local government agencies. With a massive marketplace and billions of dollars in purchasing power, they can offer a lower procurement cost to California's State, county, city, special district, education, and other government entities through their Leveraged Procurement Agreements (LPAs). LPAs <http://www.dgs.ca.gov/pd/Programs/Leveraged.aspx> allow entities/agencies to buy directly from suppliers through existing contracts and agreements. Upon utilization of each contract under these LPAs, OC San staff verifies competitiveness of pricing based upon volume purchasing through these cooperatives. CEQA N/A FINANCIAL CONSIDERATIONS This request complies with authority levels of OC San's Purchasing Ordinance. This item has been budgeted. (FY2022-23 & 2023-24 Budget, Section 8, Page 49, Information Technology Capital Program (M-MC-IT)). Orange County Sanitation District Page 3 of 4 Printed on 11/1/2022 powered by LegistarT" File #: 2022-2582 Agenda Date: 11 /9/2022 Agenda Item No: 5. ATTACHMENT The following attachment(s) may be viewed on-line at the OC San website (www.ocsan.gov) with the complete agenda package: N/A Orange County Sanitation District Page 4 of 4 Printed on 11/1/2022 powered by LegistarT" Administration Building ADMINISTRATION COMMITTEE 10844 Ellis Avenue SAIV Fountain Valley, CA 92708 (714) 593 7433 ORANGE COUNTY SANITATION DISTRICT Agenda Report File #: 2022-2587 Agenda Date: 11/9/2022 Agenda Item No: 6. FROM: James D. Herberg, General Manager Originator: Lan C. Wiborg, Director of Environmental Services SUBJECT: EMISSION REDUCTION CREDITS BROKER SOLICITATION GENERAL MANAGER'S RECOMMENDATION RECOMMENDATION: Recommend to the Board of Directors to: Approve the solicitation for an Emission Reduction Credits (ERCs) brokerage firm to identify and secure a buyer(s) for the sale of surplus Reactive Organic Gases (ROG) ERCs at the best available value and to handle all market evaluations of ERCs, negotiations, and financial transactions with all appropriate parties. BACKGROUND Orange County Sanitation District (OC San) holds a portfolio of Air Quality ERCs including, but not limited to, Reactive Organic Gases (ROGs). ERCs are treated as an interchangeable commodity. To acquire an air quality permit for new projects that result in an increase in emissions, the owner of the project is required to offset the difference in emissions with ERCs. Following a comprehensive review of future Capital Improvement Program (CIP) needs, it has been determined that OC San has a surplus of ROG credits. If OC San takes a conservative approach and retains twice the number of ROG credits that could be needed for future projects, the remaining amount of credits available for sale is 360 lbs./day (pollutant emissions are determined on a pound per day basis). Based on preliminary market assessment and trends in air quality regulations, staff believes that the value of ROG credits will remain stable for the foreseeable future. In fact, the fair market value of ROG credits has not changed since 2020. For this reason, OC San requests to secure a brokerage firm to sell the surplus credits at fair market value. RELEVANT STANDARDS • Ensure that investment proposals and decisions are based on clearly defined standards • Comply with environmental permit requirements • 24/7/365 treatment plant reliability Orange County Sanitation District Page 1 of 3 Printed on 11/2/2022 powered by LegistarTIM File #: 2022-2587 Agenda Date: 11/9/2022 Agenda Item No: 6. PROBLEM OC San has a surplus of ROG credits which is unlikely to increase or decrease in value for the foreseeable future. It is of no immediate or future benefit to OC San to continue holding these surplus credits. PROPOSED SOLUTION Solicit and secure an ERC brokerage firm to identify and secure buyer(s) for the sale of OC San's surplus ROG ERCs (up to 360 lbs. per day) at the current fair market value and handle all market evaluation of ERCs, negotiations, and financial transactions with all appropriate parties. III►hIIL1[rZ916]P[a]4N►1.1 The value of ROG credits has remained stable since 2020 at an average market value of $4,750 lb./day. Additionally, the value does not appear to fluctuate with short- or long-term inflationary indices. Given the current economic climate, the proceeds from the sale of the surplus credits may enable OC San to reinvest the revenue and achieve greater gains from this asset. RAMIFICATIONS OF NOT TAKING ACTION The surplus credits will remain unused by OC San for the foreseeable future and the monetary value of the credits will remain inaccessible for reinvestment. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION Presently, OC San has a current ROG credit holding of 442 lbs./day. OC San recommends selling over 80% of its current holdings (360 lbs./day) leaving 82 lbs./day. Future CIP project needs are covered with the remaining ROG credits, which is sufficient to account for a full replacement of an entire treatment plant from scratch. The total value of the surplus ROG credits taking into account the transactional costs will vary at the time of sale. CEQA N/A FINANCIAL CONSIDERATIONS N/A Orange County Sanitation District Page 2 of 3 Printed on 11/2/2022 powered by LegistarTM File #: 2022-2587 Agenda Date: 11 /9/2022 Agenda Item No: 6. ATTACHMENT The following attachment(s) may be viewed on-line at the OC San website (www.ocsan.gov) with the complete agenda package: • Presentation Orange County Sanitation District Page 3 of 3 Printed on 11/2/2022 powered by LegistarTM 11/1/2022 a Essential Emission Public Services Reduction Credits gig r Orphan Shutdowns 11/1/2022 Reactive •(ROG)Surplus sz ■Surplus ROGs (lbs/day) ■Retain for Future Expansion Projects (lbs/day)' 360 * Pollutant emissions are determined on a pound per day Qb/day) basis 3 Recommend to the Board of Directors to: Approve the solicitation for an Emission Reduction Credits (ERCs) brokerage firm to identify and secure a buyer(s) for the sale of surplus Reactive Organic Gases (ROG) ERCs at the best available value and to handle all market evaluations of ERCs, negotiations, and financial transactions with all appropriate parties. M Administration Building ADMINISTRATION COMMITTEE 10844 Ellis Avenue SAIV Fountain Valley, CA 92708 (714) 593 7433 ORANGE COUNTY SANITATION DISTRICT Agenda Report File #: 2022-2387 Agenda Date: 11/9/2022 Agenda Item No: 7. FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Assistant General Manager SUBJECT: ORANGE COUNTY SANITATION DISTRICT ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE YEAR END JUNE 30, 2022 GENERAL MANAGER'S RECOMMENDATION IV:tole] 1TAIf•1a101�7_,11[61,01M - • i 0FIrmi3.10 i1 ona91 Rag re= on Receive and file the Orange County Sanitation District's (OC San) Annual Comprehensive Financial Report (ACFR) for the year ended June 30, 2022, prepared by staff and audited by Davis Farr, Certified Public Accountants, along with the following reports prepared by Davis Farr: 1. Report to the Board of Directors; 2. Independent Accountants' Report on Agreed -Upon Procedures Applied to Appropriations Limit Worksheets; and 3. 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. BACKGROUND The ACFR for the year ended June 30, 2022 is attached for the Administration Committee's consideration. Included within the report are OC San's financial statements for the year ended June 30, 2022, 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) may be viewed on-line at the OC San website (www.ocsan.gov) 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 • Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Orange County Sanitation District Page 1 of 2 Printed on 11/1/2022 powered by LegistarTIM File #: 2022-2387 Agenda Date: 11/9/2022 Agenda Item No: 7. Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards Annual Comprehensive Financial Report for the Year Ended June 30, 2022 Presentations Orange County Sanitation District Page 2 of 2 Printed on 11/1/2022 powered by LegistarT" 0 1 DavisFar r CERTIFIED PUBLIC ACCOUNTANTS To the Board of Directors Orange County Sanitation District Fountain Valley, California Davis Farr LLP 18201 Von Karman Avenue I Suite 1100 1 Irvine, CA 92612 Main: 949.474.2020 1 Fax: 949.263.5520 We have audited the financial statements of Orange County Sanitation District (OC San) as of and for the year ended June 30, 2022, and have issued our report thereon dated October 25, 2022. Professional standards require that we advise you of the following matters relating to our audit. Our Responsibility in Relation to the Financial Statement Audit As communicated in our engagement letter dated April 22, 2022, our responsibility, as described by professional standards, is to form and express an opinion about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of your respective responsibilities. Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control over financial reporting. Accordingly, as part of our audit, we considered the internal control of OC San solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures for the purpose of identifying other matters to communicate to you. Planned Scope and Timing of the Audit We conducted our audit consistent with the planned scope and timing we previously communicated to you in our letter dated July 5, 2022. Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firm, as appropriate, and our firm have complied with all relevant ethical requirements regarding independence under the American Institute of Certified Public Accountants ("AICPA") independence standards, contained in the Code of Professional Conduct. Significant Risks Identified For purposes of designing our audit procedures, we identified the following significant risks: The new lease accounting standard, Governmental Accounting Standards Board (GASB) Statement No. 87. As a result, we reviewed OC San's inventory of leases, reviewed a sample of lease agreements, tested the calculations of the lease transactions, and ensured OC San's lease disclosure footnotes are accurate and complete in accordance with the new standard. • The 2021A and 2022A Wastewater Refunding Revenue Bonds. As a result, we reviewed bond documents and journal entries recording the bonds to ensure the new refunded debt transactions were recorded correctly and ensured the financial statement contain complete and accurate disclosures of the new debt. • The recording of capital assets. As a result, we selected a sample of at least 65% of outstanding construction projects and met with OC San's personnel do determine the status of the project. We will also select a sample of project expenses and review the transactions to ensure they meet the criteria for capitalization. Qualitative Aspects of the Entity's Significant Accounting Practices Significant Accounting Policies Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by OC San is included in Note 1 to the financial statements. As described in Note 1 to the financial statements, during the year, the entity changed its method of accounting for leases by adopting Governmental Accounting Standards Board (GASB) Statement No. 87, Leases, in the fiscal year 2022. No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus. Significant Accounting Estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management's current judgments. Those judgments are normally based on 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 markedly from management's current judgments. The most sensitive accounting estimates affecting the financial statements include: • Judgments involving the useful lives and depreciation methodology to use for capital assets • Judgments concerning which capital project expenditures should be capitalized and depreciated versus expensed in the financial statements and judgments concerning which projects should be placed in service • Estimates involving the calculation of the net pension liability and related transactions • Estimates involving the calculation of the other post -employment benefit (OPEB) liability and related transactions Financial Statement Disclosures Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting OC San's financial statements relate to: • The disclosure of investment fair value in note 2 to the financial statements • The disclosure of pensions in note 6 to the financial statements The disclosure of OPEB in note 7 to the financial statements Significant Difficulties Encountered during the Audit We encountered no significant difficulties in dealing with management relating to the performance of the audit. Uncorrected and Corrected Misstatements For purposes of this communication, professional standards also require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole and each applicable opinion unit. There were no uncorrected misstatements identified during the audit. In addition, professional standards require us to communicate to you all material, corrected misstatements that were brought to the attention of management as a result of our audit procedures. There were no material misstatements noted as a result of our audit procedures. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to OC San's financial statements or the auditor's report. No such disagreements arose during the course of the audit. Representations Requested from Management We have requested certain written representations from management, which are included in the attached letter dated October 25, 2022. Management's Consultations with Other Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters. Other Significant Matters, Findings, or Issues In the normal course of our professional association with OC San, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, significant events or transactions that occurred during the year, operating and regulatory conditions affecting the entity, and operational plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as OC San's auditors. Other Information Included in the Annual Comprehensive Financial Report Pursuant to professional standards, our responsibility as auditors for other information, whether financial or nonfinancial, included in OC San's annual reports, does not extend beyond the information identified in the audit report, and we are not required to perform any procedures to corroborate such other information. However, in accordance with such standards, we have read the information and considered whether such information, or the manner of its presentation, was materially inconsistent with its presentation in the financial statements. Our responsibility also includes communicating to you any information which we believe is a material misstatement of fact. Nothing came to our attention that caused us to believe that such information, or its manner of presentation, is materially inconsistent with the information, or manner of its presentation, appearing in the financial statements. This report is intended solely for the information and use of the Board of Directors, and management of OC San and is not intended to be and should not be used by anyone other than these specified parties. Irvine, California October 25, 2022 DavisFarr CERTIFIED PUBLIC ACCOUNTANTS Davis Farr LLP 18201 Von Karman Avenue I Suite 1100 1 Irvine, CA 92612 Main: 949.474.2020 1 Fax: 949.263.5520 INDEPENDENT ACCOUNTANT'S REPORT The Board of Directors Orange County Sanitation District Fountain Valley, California We have performed the procedures enumerated below on Orange County Sanitation District (OC San) appropriations limit worksheets for compliance with the requirements of Section 1.5 of Article XIIIB of the California Constitution for the year ended June 30, 2022. OC San is responsible for compliance with Section 1.5 of Article XIIIB of the California Constitution. OC San has agreed to and acknowledged that these procedures are appropriate to meet the intended purpose of evaluating compliance with the requirements of Section 1.5 of Article XIIIB of the California Constitution and the League of California Cities publication entitled Article XIIIB Appropriations Limitation Uniform Guidelines for the year ended June 30, 2022. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes. The procedures and the associated findings are as follows: We obtained the worksheets referred to above 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 the 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. Results: No exceptions were noted as a result of our procedures. 2. We recalculated the mathematical computations reflected in OC San's worksheets. Results: No exceptions were noted as a result of our procedures. 3. We compared the current year information used to determine the current year limit and agreed it to worksheets prepared by OC San and information provided by the State Department of Finance. Results: No exceptions were noted as a result of our procedures. 4. We compared the amount of the prior year appropriations limit presented in the worksheets to the amount adopted by the Board of Directors for the prior year. Results: No exceptions were noted as a result of our procedures. The Board of Directors Orange County Sanitation District Fountain Valley, California We were engaged by OC San to perform this agreed -upon procedures engagement and conducted our engagement in accordance with 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 worksheets referred to above. 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 appropriation limit for the base year, as defined by the League publication entitled Article XIIIB Appropriations Limitation Uniform Guidelines. We are required to be independent of OC San and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed -upon procedures engagement. This report is intended solely for the information and use of the Board of Directors and Management of OC San and is not intended to be, and should not be, used by anyone other than the specified party. X��7 L-A-P Irvine, California October 25, 2022 •�• DavisFarr CERTIFIED PUBLIC ACCOUNTAN75 Board of Directors Orange County Sanitation District Fountain Valley, California ❑avis Farr LLP 18201 Von Karmen Avenue I Suite 1100 1 Irvine. CA 92612 M a i n: 949.474.2 020 1 Fa x: 949.263.552 0 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 Independent Auditor's Report 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 as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the Orange County Sanitation District's (OC San) basic financial statements, and have issued our report thereon dated October 25, 2022. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the OC San'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 opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the OC San's internal control. Accordingly, we do not express an opinion on the effectiveness of the OC San'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 the entity'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 the Orange County Sanitation District'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. 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 the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. J4� �e- 4-� Irvine, California October 25, 2022 _ J q orange coi IHnHow IM■■E.■L :m ■ffoMm" """lu J, s v/ init8tlon DI Dmpp( Renni OC6SAN Orange County, California ORANGE COUNTY SANITATION DISTRICT ORANGE COUNTY SANITATION DISTRICT ORANGE COUNTY, CALIFORNIA ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2022 Prepared By: Administrative Services Department Financial Management Division Wally Ritchie Controller (THIS PAGE LEFT INTENTIONALLY BLANK) ORANGE COUNTY SANITATION DISTRICT Annual Comprehensive Financial Report Table of Contents For the Year Ended June 30, 2022 Paqe INTRODUCTORY SECTION (Unaudited): Letterof Transmittal..................................................................................................................... i-viii GFOA Certificate of Achievement............................................................................................... ix Boardof Directors........................................................................................................................ x OrganizationalChart.................................................................................................................... A Mapof Service Area.................................................................................................................... xii FINANCIAL SECTION Independent Auditor's Report...................................................................................................... 1-3 Management Discussion and Analysis — Required Supplementary Information (Unaudited) .... 4-10 Basic Financial Statements: Statement of Net Position................................................................................................... 12 Statement of Revenues, Expenses, and Change in Net Position ...................................... 13 Statement of Cash Flows.................................................................................................... 14 Notes to Basic Financial Statements.................................................................................. 15-47 Required Supplementary Information (Unaudited): 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 Change in Net Position ............ 59 Combining Area Schedule of Cash Flows.......................................................................... 60 STATISTICAL SECTION (Unaudited): 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 OperatingIndicators.................................................................................................................... 80 OTHER DATA & TRENDS (Unaudited): 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 Insurancein Force....................................................................................................................... 87 (THIS PAGE LEFT INTENTIONALLY BLANK) Table of Contents OC6SAN1 Ellis Avenue Fountainuntain Valley, CA 92708 714.962.2411 ORANGE COUNTY SANITATION DISTRICT www.ocsan.gov October 25, 2022 The Board of Directors of the Orange County Sanitation District, Orange County, California Subject: Letter of Transmittal Submitted herewith is the Annual Comprehensive Financial Report of the Orange County Sanitation District (OC San), Orange County, California for the fiscal year ended June 30, 2022. This report includes the financial position and activity of individual revenue areas, as described within the Governmental Structure below, as of June 30, 2022 and was prepared by the Financial Management Division of OC San'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 OC San. 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 OC San. 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 OC San'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 OC San is conducted annually by independent certified public accountants. OC San selected the accounting firm of Davis Farr LLP to perform the audit for the year ended June 30, 2022. The auditor's report on OC San'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 OC San's basic financial statements for the year ended June 30, 2022. 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. GOVERNMENTALSTRUCTURE The Orange County Sanitation District encompasses the central and northwest section of Orange County. OC San 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. OC San was originally incorporated in 1954 as seven separate public corporations, or districts, with two additional districts added in 1985 and 1986. In April of 1998, at OC San'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 Serving: Anaheim B rea Buena Park Cypress Fountain Valley Fullerton Garden Grove Huntington Beach Irvine La Habra La Palma Los Alamitos Newport Beach Orange Placentia Santa Ana Seal Beach Stanton Tustin Villa Park County of Orange Costa Mesa Sanitary District Midway City Sanitary District Irvine Ranch Water District Yorba Linda Water District Our Mission: To protect public health and the environment by providing effective wastewater collection, treatment, and recycling. Table of Contents 6SAN ORANGE COUNTY SANITATIOM DISTRICT 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. OC San is managed by an administrative organization composed of directors appointed by the agencies or cities which are serviced by OC San. 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, receive 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 OC San's wastewater collection, treatment, and recycling program is to protect the public's health and the environment, preserving the beneficial uses of coastal waters and maintaining air quality. The objectives of operating the treatment and reclamation plants are to process and pass on for purification or dispose of the treated wastewater and the separated solids in accordance with federal, state, and local laws including the Environmental Protection Agency. OC San sewerage system includes approximately 388 miles of sewers that convey wastewater generated within OC San's boundaries to OC San's two 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 2022-23, both plants are projected to receive a combined average daily wastewater flow of 185 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 OC San, 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 30 million gallons (113,000 cubic meters) per day of the GWRS water are pumped into injection wells to create a seawater intrusion barrier. Approximately 10 million gallons (38,000 cubic meters) are conveyed to injection wells located in Santa Ana. Another 60 million gallons (227,000 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 No. 1 and No. 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 with over 500 ports through which treated wastewater is slowly released at a depth of 200 feet. ECONOMIC CONDITIONS AND OUTLOOK Before the COVID-19 pandemic and shutdown beginning in March 2020, California's economy was growing at a relatively low, but steady rate. The stay-at-home orders effectively shut down large portions of the state and Orange County economies. California suffered higher job losses than the nation because of its relatively greater stringency than other states in the attempt to reduce COVID-19 infections and deaths. The California rebound in job growth in the aftermath of the COVID recession is likely to be short-lived. Since more people are moving out of the state than those moving in, California lost population in 2021. Table of Contents 6SAN ORANGE COUNTY SANITATIOM DISTRICT In June 2022, Chapman University forecasted Orange County's 2022 total payroll employment to increase 5.1 percent over the prior year, or the addition of 81,000 payroll jobs in 2022, following an increase of 3.1 percent in 2021. Payroll employment in Orange County experienced a steep decline and rapid recovery from the COVID-19 recession as compared to previous recessions. According to the California Employment Development Department (EDD), Orange County saw an increase of approximately 3.6 percent in payroll jobs from August 2021 to August 2022. During this same time period, unemployment in Orange County decreased from 6.0 percent to 3.0 percent while the unemployment in California as a whole decreased from 7.2 percent to 4.1 percent. According to Chapman University, the total number of residential permits in Orange County is forecasted to decline from 7,500 units in 2021 to 6,600 in 2022, a drop of 11.7 percent. Most of this decrease is occurring because of a sharp spike of 2,500 multi -family units that were permitted in early 2021. Higher mortgage rates are forecasted to reduce sales of existing homes from 38,600 in 2021 to 30,700 in 2022, a drop of 20.5 percent. This drop in sales is occurring not only because there is a lower supply of homes for sale but also because it's taking longer to sell a home. The average number of days to sell a home in the County has increased from 19 days in mid -February 2022 to 38 days at the end of May 2022. That average of 38 days to sell a home compares to 22 days in May 2021. With the mortgage rate forecasted to increase to 6.5 percent by year-end, Chapman's projections show that the County's affordability index will decline steeply to an all-time low of 57 as compared to 65 in California and 112 in the U.S. Higher mortgage rates will also place downward pressure on home prices. MAJOR INITIATIVES Following are the Orange County Sanitation District's current major initiatives as outlined in the General Manager's work plan for FY 2022-23: 1. Business Principles • Rate Study - In preparation for establishing a new five-year rate program, conduct a five-year rate study to determine customers' fair and equitable share of collection, treatment, and disposal costs. Develop an accurate rate model which ensures full cost recovery and provides support to the Proposition 218 notifications. This comprehensive rate study allocates costs to Flow, Biochemical Oxygen Demand, and Total Suspended Solids for the purpose of billing different customer classes including high flow and high strength dischargers and will be applicable to all fees and charges including annexation fees and urban runoff fees. Study to be completed by December 31, 2022. • Asset Management Plan - Create an annual Asset Management Plan documenting the condition for the collection system, treatment plants, and upcoming maintenance or capital projects by December 31, 2022. • Interagency Agreements for Wastewater Service - Conduct an analysis of consolidated agreements set to expire to determine affected agencies, potential risks, opportunities, and a path moving forward by June 30, 2023. 2. Environmental Stewardship • Food Waste Treatment - Continue to meet on a quarterly basis with potential food waste pre- processors on the feasibility of potential food waste process technology and siting logistics. Collaborate with CASA to draft uniform standards for food waste slurry with an update to the Board of Directors by December 31, 2022. • Urban Runoff Optimization Study - Advertise for a Request for Proposal for an interagency study among OC San, Orange County Water District, and Orange County Watersheds to study the feasibility of accepting additional dry weather urban runoff and potential stormwater harvesting by October 31, 2022. Table of Contents 6SAN ORANGE COUNTY SANITATIOM DISTRICT • Energy Resilience - Investigate energy storage options to build resilience and offer potential cost savings. Work with the consultant as part of the Energy Master Plan Study and report to the Board of Directors by June 30, 2023. • Fleet Long-term Strategy - The current fleet of vehicles is aging and will be subject to new regulations that will require a change in the way vehicles are fueled and will require significant new infrastructure facility changes. Staff will prepare a study based on probable adopted requirements outlining fleet procurements and infrastructure changes necessary to meet the new requirements by December 31, 2022. • Headquarters Educational Display - Develop an educational display for the headquarters building to illustrate OC San's reuse and recycling efforts in support of the environment and public health. Have plan approved and in production by June 30, 2023, for installation by December 2023. • Member Agency Outreach Program - Develop an outreach program for member agencies regarding inflow and infiltration, FOG, and saltwater issues within their sewer systems. The program will aim to educate, inform, and reduce these elements affecting the local and regional sewer system by June 2023. • Industrial Users Award Program - Develop an award program with the qualifying criteria for an Industrial Users Award Program for consideration by the Board of Directors by December 31, 2022. 3. Wastewater Management • Supercritical Water Oxidization - Complete the commissioning and begin demonstration of the pilot project by June 30, 2023, subject to regulatory permitting. • Chemical Sustainability Policy - Utilize the recently produced Chemical Sustainability Study to perform testing for dosage reduction or chemical substitution and report back to the Board of Directors by June 30, 2023. • GWRS Final Expansion - Headworks Modifications at Plant No. 2 for GWRS Final Expansion will be substantially completed by January 2023. OC San will host a celebration to commemorate OC San's achievement of reusing 100 percent of the reclaimable flow upon completion of the Groundwater Replenishment System's Final Expansion. Celebrate the milestone and acknowledge the accomplishment with staff and stakeholders by June 2023. 4. Workplace Environment • Scanning & Paper Reduction - Continue implementation of the trusted system in the Contracts, Purchasing, and Finance divisions while incorporating a fully digital processes to reduce the use of paper by June 30, 2023. • Emergency Management - Support countywide emergency preparedness, response, and recovery efforts by partnering with entities, such as the Water Emergency Response Organization of Orange County, Orange County Sheriff's Department, and local fire departments, to plan and continue to conduct two emergency preparedness exercises by June 30, 2023. • Warehouse Modernization - Implement remote warehousing at Plant No. 2 to allow for the demolition of the current warehouse facility for construction of new digesters. Relocate the Plant No. 2 Warehouse staff and inventory to Plant No. 1 by June 2023. Advertise Warehouse Stations and Demolition at Plant No. 2, FE21-05, for construction bids by March 31, 2023. • Centralized Training Program - Develop a Centralized Training Program with levels of service to be implemented by June 30, 2023. iv Table of Contents 6SAN ORANGE COUNTY SANITATIOM DISTRICT Strategic Planning In November 2021, the Board of Directors adopted a new comprehensive strategic plan to steer OC San's efforts. The Strategic Plan developed by the Board of Directors and staff defines the strategic initiatives to be pursued by OC San and provides a basis for long-term financial, capital, and operational planning. In addition, it provides for long-term continuity of vision as Board and staff members change over the many years it takes to deliver public works infrastructure. The Strategic Plan is updated every two years to align policy and execution expectations with OC San's two-year budget cycle. Driven by our Mission, Vision and Core Values, this Strategic Plan continues OC San's aggressive efforts to protect the public health of the more than 2.6 million people we serve while protecting the environment where we live. The Strategic Plan is broken down into four broad categories with fifteen policy areas that define our responsibilities and the services we provide. These areas are: • Business Principles • Budget Control and Fiscal Discipline • Asset Management • Cybersecurity • Property Management • Organizational Advocacy and Outreach • Environmental Stewardship • Energy Independence • Climate and Catastrophic Event Resiliency • Food Waste Treatment • Water Reuse • Environmental Water Quality, Stormwater Management and Urban Runoff • Wastewater Management • Chemical Sustainability • Biosolids Management • Constituents of Emerging Concern • Workplace Environment • Resilient Staffing • Safety and Physical Security The Strategic Plan is not a radical departure from the current direction, but rather the well-defined iterative update to the direction of OC San. With the adoption of the Strategic Plan, staff also update the Asset Management Plan, Capital Improvement Plan, and Financial Plan that are the basis of the two-year budget adopted by the Board of Directors. The Budget goals and the General Manager's work plan are the accountability steps that measure achievable progress toward the strategic initiatives listed in the Strategic Plan. v Table of Contents 6SAN ORANGE COUNTY SANITATIOM DISTRICT SERVICE EFFORTS AND ACCOMPLISHMENTS The following service efforts and accomplishments were achieved by OC San during the year ended June 30, 2022: • Epic Award - 2022 California Association of Public Information Officers • Paul B. Clark Award - 2022 California Association of Public Information Officers • Platinum Peak Performance Award - 2022 National Association of Clean Water Agencies • Award of Distinction - 2022 Communicator Award • American Inhouse Design Award - 2022 Graphic Design USA • Outstanding Wastewater Treatment Award - 2022 American Society of Civil Engineers • Honor Award - 2022 American Academy of Environmental Engineers & Scientists • Large Plant Safety Award - 2022 California Water Environmental Association (CWEA) • Operator of the Year - Anthony Chang - 2022 California Water Environmental Association • Excellence in Information Technology Practices - 2021 MISAC • District Transparency Certificate of Excellence - 2021 Special District Leadership Foundation • Certificate of Achievement for Excellence in Financial Reporting - 2021 Government Finance Officers Association • Distinguished Budget Presentation Award - 2021 Government Finance Officers Association • Excellence in Procurement - 2021 California Association of Public Procurement Officers • Large Plant Safety Award - 2021 Santa Ana River Basin Section (SARBS) • Advocacy Achievement Award - 2021 WateReuse ACCOUNTING AND BUDGETARY CONTROLS OC San's accounting records are maintained on the accrual basis. In developing and evaluating OC San'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 OC San's internal accounting controls adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions. Each year, OC San'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 OC San during the year. The budgetary level of control, the level at which expenses cannot exceed budget, is exercised at the individual department level. OC San has adopted a Purchasing Ordinance that establishes requirements and procedures for the purchase of goods, services, and public work projects. vi Table of Contents 6SAN ORANGE COUNTY SANITATIOM DISTRICT 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: A cash flow criterion has been established at a level 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 criterion will be established as the sum of an amount equal to six months operations and maintenance expenses and the total of the annual debt certificate of participation (COP) service payments due in August each year. Operating Contingency Reserve: An operating contingency criterion has been established to provide for non -recurring operating expenditures that were not anticipated when the annual budget was considered and adopted. The level of this criterion has been established at an amount equal to ten percent of the current fiscal year's annual operating budget. Capital Improvement Reserve: A capital improvement criterion has been maintained to fund annual increments of the capital improvement program (CIP). The target level of this criterion has been established at one half of the average annual cash outlay of the capital improvement program through the year 2030. Levels higher and lower than the target can be expected while the long-term financing and capital improvement programs are being finalized. Catastrophic Loss or Self -Insurance Reserves: A catastrophic loss or self-insurance criterion has been maintained for property damage including fire, flood, and earthquake, for general liability and for workers' compensation. This reserve criterion is intended to work with purchased insurance policies, FEMA, and state disaster reimbursements. Based on the plant infrastructure replacement value, the level of this criterion has been set to fund OC San's non -reimbursed costs, estimated to be $100 million. Capital Replacement/Renewal Reserve Policy: A capital replacement/renewal criterion policy has been established to provide funding to replace or refurbish the current collection, treatment, and recycling facilities at the end of their useful economic lives. The current replacement value of these facilities is estimated to be $11.6 billion. The reserve criterion level had been established at $75 million. Debt Service Reserves: A debt service criterion policy has been established at ten percent of the outstanding COP issues. Other debt service reserves are required to be under the control of a trustee by the provisions of the certificate of participation issues. These funds are not available for the general needs of OC San and must be maintained at specified levels. Accumulated Funds exceeding the targets specified by OC San policy will be maintained for Capital Improvements and Rate Stabilization. These funds will be applied to future years' CIP needs due to the timing of the actual CIP outlays, in order to maintain rates or to moderate annual fluctuations. As of June 30, 2022, OC San was in compliance with the Accumulated Funds and Reserves Policy with designated cash and investments totaling $984 million, and have been earmarked for the following specific purposes in accordance with OC San's reserve policy: Designated Cash and Investments Cash Flow Contingency $134 million Self -Insurance 100 million Capital Improvements 659 million Debt Service Requirements 91 million Total Designated Cash and Investments $ 984 million vii Table of Contents OC6SAN ORANGE COUNTY SANITATIOM DISTRICT CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the Orange County Sanitation District for OC San's Annual Comprehensive Financial Report for the year ended June 30, 2021. This was the twenty-seventh consecutive year that OC San has received this award. In order to be awarded a Certificate of Achievement, a governmental unit must publish an easily readable and efficiently organized Annual Comprehensive Financial Report, whose contents conform to program standards. Such reports must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current Annual Comprehensive Financial Report continues to meet the Certificate of Achievement Program requirements and we are submitting it to GFOA to determine its eligibility for another certificate. ACKNOWLEDGMENTS This report could not have been accomplished without the dedicated services of the Financial Management Division staff, and I would like to especially express my appreciation to Kim Cardenas, Accounting Supervisor, and the staff who assisted in its preparation. I would also like to thank OC San's Board of Directors and the General Manager for their interest and support in conducting the financial operations of OC San in a responsible and progressive manner. Respectfully submitted, Wally Ritchie Controller viii Table of Contents Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to Orange County Sanitation District California For its Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2021 Executive Director/CEO ix Table of Contents ORANGE COUNTY SANITATION DISTRICT Board of Directors As of June 30, 2022 Agency Active Director Alternate Director Cities: Anaheim Stephen Faessel Gloria Ma'ae Brea Glenn Parker Cecilia Hupp Buena Park Art Brown Connor Traut Cypress Paulo Morales Anne Hertz-Mallari Fountain Valley Patrick Harper Ted Bui Fullerton Jesus Silva Nick Dunlap Garden Grove Steve Jones John O'Neill Huntington Beach Kim Carr Dan Kalmick Irvine Anthony Kuo Farrah Khan La Habra Rose Espinoza Steve Simonian La Palma Marshall Goodman Nitesh Patel Los Alamitos Ron Bates Vacant Newport Beach Brad Avery Joy Brenner Orange Kim Nichols Chip Monaco Placentia Chad Wanke Ward Smith Santa Ana Johnathan Hernandez Nelida Mendoza Seal Beach Sandra Massa-Lavitt Schelly Sustarsic Stanton David Shawver Carol Warren Tustin Ryan Gallagher Austin Lumbard Villa Park Chad Zimmerman Robert Collacott Sanitary Water Districts: Costa Mesa Sanitary District Robert Ooten Art Perry Midway City Sanitary District Andrew Nguyen Mark Nguyen Irvine Ranch Water District John Withers Douglas Reinhart Yorba Linda Water District Brooke Jones Tom Lindsey County Areas: Member of the Board Donald Wagner Doug Chaffee of Supervisors x Table of Contents ORANGE COUNTY SANITATION DISTRICT Organizational Chart As of June 30, 2022 General Counsel Office General Management Administration Human Environmental Operations & Services Administration Board Services Resources Administrative Services Engineering Maintenance Administration Administration Administration Risk Collection Facilities Public Affairs Management/ Consolidated Resource Protection Planning Operations & Safety/Security Services Maintenance Financial Laboratory, Project Management Monitoring and Management Fleet Services Compliance Contracts, Purchasing Plant No. 1 & Materials Design Operations Management Information Construction Plant No. 2 Technology Management Operations Plant No. 1 Maintenance Plant No. 2 Maintenance A Table of Contents r BUEN) LA PARK I LMI RESS J LOS ALAMITOS 01 ncnA LJ WESIMIN z HUNTING BEACI Pacific Ocean ORANGE COUNTY SANITATION DISTRICT Map of Service Area As of June 30, 2022 LA HABRA BREA FULLER ANAHEIM SA TA ANA NTA'IN LLEY COSTA MESA YORBA LINDA VILLA rj— PARK ORANGE l . I TUSTIN I) OC San Service Area (area enlarged) 1' Orange County. California maps not to scale Emergency Outtaii 1.5 mile long 6.5 tool diameter NEWPORT BEACH Offshore Pipeline 5 miles long N 10-foot diameter 0 1 25 2.5 5 � Service area boundary Miles Approximately - Map Not to Scale Sewer pipelines DISCLAIMER: Map prepared by the Orange county Sanitation District. This map is intended Reclamation Plant No. 1 (P1) for graphical representation only. No level Of Treatment Plant No. 2 (P2) accuracy is claimed. Portions of this derived product contain geographical information copyrighted by Rand McNally Pump stations All Rights Reserved. Revised December 2019 n Unincorporated Orange County (white areas) XII Table of Contents DavisFarr CERTIFIED PUBLIC ACCOUNTANTS Board of Directors Davis Farr LLP 18201 Von Korman Avenue I Suite 1100 1 Irvine, CA 92612 Main: 949.474.2020 1 Fax: 949.263.5520 Independent Auditor's Report Orange County Sanitation District Fountain Valley, California Report on the Audit of the Financial Statements Opinion We have audited the financial statements of the Orange County Sanitation District (OC San), as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise OC San's basic financial statements as listed in the table of contents. In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the Orange County Sanitation District, as of June 30, 2022, and the respective changes in financial position and cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of OC San and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Emphasis of Matter As described further in Note 1 to the financial statements, during the year ended June 30, 2022, OC San implemented Governmental Accounting Standards Board (GASB) Statement No. 87. Our opinion is not modified with respect to this matter. Responsibilities of Management for the Financial Statements OC San's management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for 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. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about OC San's ability to continue as a going concern for one year after the date that the financial statements are issued. Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance Table of Contents but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit 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 OC San's internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about OC San's ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control -related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, Proportionate Share of the Net Pension Liability (Asset) - OCERS Pension Plan, Schedule of District Contributions - OCERS Pension Plan, Total Pension Liability - Additional Retiree Benefit Account, Changes in Total Pension Liability - Additional Retiree Benefit Account, Total OPEB Liability - Post -Employment Medical Benefits Plan, and Changes in Total OPEB Liability - Post -Employment Medical Benefits Plan be presented to supplement the basic financial statements. Such information is the responsibility of management and, 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. 2 Table of Contents Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise OC San's basic financial statements. The Combining Area Schedule of Net Position, Combining Area Schedule of Revenues, Expenses, and Change in Net Position, and Combining Area Schedule of Cash Flows are presented for purposes of additional analysis and are not a required part of the basic financial statements. The Combining Area Schedule of Net Position, Combining Area Schedule of Revenues, Expenses, and Change in Net Position, and Combining Area Schedule of Cash Flows 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 Schedule of Net Position, Combining Area Schedule of Revenues, Expenses, and Change in Net Position, and Combining Area Schedule of Cash Flows are fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Information Management is responsible for the other information included in the Annual Comprehensive Financial Report. The other information comprises the Introductory Section, Statistical Section, and Other Data and Trends but does not include the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 25, 2022, on our consideration of OC San's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering OC San's internal control over financial reporting and compliance. Irvine, California October 25, 2022 3 Table of Contents ORANGE COUNTY SANITATION DISTRICT Management Discussion and Analysis (Unaudited) June 30, 2022 This section of the financial statements of the Orange County Sanitation District (OC San) is management's narrative overview and analysis of the financial activities of OC San for the fiscal year ended June 30, 2022. 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, 2022, OC San's assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources by $2,815.2 million (net position). Of this amount, $881.5 million represents unrestricted net position, which may be used to meet OC San's ongoing obligations to citizens and creditors. • Total net position increased $104.8 million, or 3.9 percent over the prior year. • Net capital assets, consisting of non -depreciable capital assets and depreciable capital assets net of accumulated depreciation, increased $54.2 million, or 2.0 percent over the prior year. ■ Net investment in capital assets increased $85.4 million, or 4.9 percent over the prior year. ■ Restricted net position increased $44.4 million, or 69.7 percent over the prior year. ■ Unrestricted net position decreased $25.0 million, or 2.8 percent under the prior year. ■ Total outstanding bonded debt decreased by $89.8 million, or 9.9 percent from the prior year, to $819.8 million. Overview of the Basic Financial Statements OC San 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, OC San'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 Governmental Accounting Standards Board (GASB) Codification of Governmental Accounting and Financial Reporting Standards, OC San's financial statements include a Statement of Net Position; Statement of Revenues, Expenses, and Change in Net Position; and a Statement of Cash Flows. The Statement of Net Position includes OC San's assets, deferred outflows 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 OC San's creditors (liabilities). It also provides the basis for computing the rate of return, evaluating the capital structure of OC San, and assessing the liquidity and financial flexibility of OC San. The Statement of Revenues, Expenses, and Change in Net Position accounts for the current year's revenues and expenses. This Statement measures the success of OC San's operations over the past year and can be used to determine OC San's creditworthiness. It also highlights OC San'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. rd Table of Contents ORANGE COUNTY SANITATION DISTRICT Management Discussion and Analysis (Unaudited) June 30, 2022 Net Position As previously noted, net position increased $104.8 million, or 3.9 percent over the net position for FY 2020-21, to $2,815.2 million in FY 2021-22. (Dollars in thousands) June 30, Percentage June 30, 2021, Increase Increase 2022 as restated (Decrease) (Decrease) Assets Current and other assets $ 1,196,213 $ 1,069,922 $ 126,291 11.8% Net capital assets 2,762,026 2,707,824 54,202 2.0% Total assets 3,958,239 3,777,746 1805493 4.8% Deferred outflows of resources 59,839 75,770 (15,931) -21.0% Total assets and deferred outflows of resources 4,018,078 3,853,516 164,562 4.3% Liabilities Current liabilities 174,119 128,315 45,804 35.7% Noncurrent liabilities 898,632 957,074 (58,442) -6.1% Total liabilities 1,072,751 1,085,389 (12,638) -1.2% Deferred inflows of resources 130,140 57,745 72,395 125.4% Total liabilities and deferred inflows of resources 1,202,891 1,143,134 59,757 5.2% Net position Net investment in capital assets 1,825,490 1,740,102 85,388 4.9% Restricted for OCERS pension benefits 108,179 63,748 44,431 69.7% Unrestricted 881,518 906,532 (25,014) -2.8% Total net position $ 2,815,187 $ 2,710,382 $ 104,805 3.9% 5 Table of Contents ORANGE COUNTY SANITATION DISTRICT Management Discussion and Analysis (Unaudited) June 30, 2022 Current and other assets increased $126.3 million, or 11.8 percent, due primarily to net cash provided by operations of $178.3 million, proceeds from property taxes of $118.8 million, increase in OCERS net pension asset of $110.1 million, receipt of capital facilities capacity charges of $17.7 million, and interest received of $11.9 million, offset by capital outlays of $191.9 million, unrealized investment losses of $46.8 million, interest paid of $40.5 million, and bonded debt retirements of $33.9 million. Net capital assets increased $54.2 million, or 2.0 percent, due mostly to the ongoing capital improvement program construction in progress additions of $185.0 million and capital equipment of $1.5 million, offset by depreciation of $130.5 million, $1.0 million of prior capital project expenses that were written off as expense, and $0.8 million loss on disposal of assets. Included in total capital outlay additions is the Headquarters Complex with incurred project costs of $35.7 million in FY 2021-22 and a total project budget of $154.8 million. This project is constructing the new Headquarters Building on the north side of Ellis Avenue to house administrative, engineering, resource protection, and environmental compliance staff. Collection system projects include the Rehabilitation of Western Regional Sewers, which incurred outlays of $9.0 million in FY 2021-22 with a total project budget of $82.0 million through the projected completion in FY 2026-27. This project is to replace or rehabilitate a portion of the sewers and manholes located in OC San's northwestern service area. See page 9 for the Schedule of Capital Assets and listing of other major capital additions for FY 2021-22. Deferred outflows of resources decreased $15.9 million, or 21.0 percent from the prior year, primarily due to a $11.2 million decrease 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, and a $4.7 million decrease for the difference between carrying amount of the retired debt and the acquisition price of COP Series. Deferred inflows of resources increased $72.4 million, or 125.4 percent over the prior year, primarily due to a $70.9 million increase in pension deferred outflows attributable to the change in projected and actual earnings on pension plan investments and differences between expected and actual experiences, and a $1.9 increase in the difference between carrying amount of the retired debt and the acquisition price of COP Series. Net investment in capital assets increased $85.4 million, or 4.9 percent over the prior year, primarily as a result of the net increase in capital assets of $54.2 million coupled with a $31.2 million decrease in related debt. Restricted net position increased $44.4 million, or 69.7 percent, due to the increase in amounts restricted for Orange County Employees Retirement System (OCERS) pension benefits. Unrestricted net position decreased $25.0 million, or 2.8 percent, due to the overall increase in net position of $104.8 million, offset by the increase in net investment in capital assets of $85.4 million and the increase in restricted net position of $44.4 million. C.1 Table of Contents ORANGE COUNTY SANITATION DISTRICT Management Discussion and Analysis (Unaudited) June 30, 2022 Change in Net Position The change in net position decreased $66.6 million in FY 2021-22, or 38.8 percent under the prior year's increase in net position. (Dollars in thousands) June 30, Percentage June 30, 2021, Increase Increase 2022 as restated (Decrease) (Decrease) Revenues: Operating revenues Service charges Permit and inspection fees Total operating revenues Non -operating revenues Property taxes Investment and interest income (loss) Contrib. from other governments Other Total non -operating revenues 91,691 123,115 (31,424) -25.5% Total revenues 420,786 459,815 (39,029) -8.5% Expenses: Operating expenses other than depreciation and amortization Depreciation and amortization Non -operating expenses Total expenses Income before capital contributions Capital contributions Increase in net position Beginning net position Ending net position $ 327,824 $ 335,569 $ (7,745) -2.3% 1,271 1,131 140 12.4% 329,095 336,700 (7,605) -2.3% 119,186 110,245 8,941 8.1 % (35,335) 1,694 (37,029) -2185.9% 6,227 4,309 1,918 44.5% 1,613 6,867 (5,254) -76.5% 156,115 168,018 (11,903) -7.1% 130,465 116,452 14,013 12.0% 55,484 37,909 17,575 46.4% 342,064 322,379 19,685 6.1 % 78,722 137,436 (58,714) -42.7% 26,083 33,936 (7,853) -23.1% 104,805 171,372 (66,567) -38.8% 2,710,382 2,539,010 171,372 6.7% $ 2,815,187 $ 2,710,382 $ 104,805 3.9% As previously stated, an enterprise fund is used to account for the operations of OC San, which is financed and operated in a manner similar to private business enterprises. This allows OC San 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 Table of Contents ORANGE COUNTY SANITATION DISTRICT Management Discussion and Analysis (Unaudited) June 30, 2022 Sources of Revenue Functional Expenses June 30, 2022 June 30, 2022 0 -8% 2 ° 8% 9% ■ Collection 9% System ■ User Fees ■ Treatment & ■ Taxes Levied 28% Disposal ■ Depreciation & Interest Income 36% Amortization ■ Other 41 178% Interest 38% Expense ■ Other Operating revenues decreased $7.7 million, or 2.3 percent in FY 2021-22 from the prior year, primarily because of a decrease in service charges to Irvine Ranch Water District (IRWD) of $8.9 million as a result of the ended solids handling agreement (Note 8), offset by an increase in other sewer user fee revenues of $1.2 million. Non -operating revenues decrease of $31.4 million, or 25.5 percent, primarily consists of a $37.0 million or 2185.9 percent decline in investment and interest income/(loss) due to unrealized losses in the investment portfolios, and a $5.3 million or 76.5 percent decrease in other revenues mainly because of a prior year reduction of $4.0 million in estimated pollution remediation liability. This decrease is offset by a $8.9 million or 8.1 percent increase in property taxes revenue attributable to increased home sales and a rise in total assessed valuation of 4.4 percent over the prior year, and a $1.9 million or 44.5 percent increase in contributions from other governments due to higher IRWD capital outlay revolving fund requirements. Operating expenses other than depreciation and amortization decreased $11.9 million, or 7.1 percent from the prior year. The majority of this decrease is from a reduction in salaries and benefits of $17.8 million or 23.8 percent over the prior year. When including the salaries and benefits capitalized within the capital improvement program, total operating salaries and benefits costs were $73.2 million, a $17.4 million or 19.2 percent decrease from the prior year total of $90.6 million, reflective of the $20.3 million or 1304.6 percent decrease in retirement expenses as a result of the change in projected and actual earnings on pension plan investments and changes of assumptions, somewhat offset by increases of $1.0 million or 1.2 percent in salaries and wages and $1.8 million or 308.5 percent in retiree insurance. The decrease is offset by increases of $2.5 million or 10.9 percent in contractual services, $1.8 million or 24.1 percent in other expenses, and $1.3 million or 12.8 percent in utilities. Non -operating expenses increased $17.6 million, or 46.4 percent, primarily resulting from an increase of $22.3 million in contributions to other governments for the integration adjustment of Revenue Area 14's equity share in OC San's Joint Works Treatment Facilities based on the flows discharged to OC San, offset by a decrease of $4.8 million or 13.8 percent in interest expense due to debt repayments and refundings. Capital contributions decreased $7.9 million, or 23.1 percent from the prior year, due to a $8.6 million or 52.4 percent decrease in capital contributions from other governments, reflective of reimbursements from Orange County Water District (OCWD) for Groundwater Replenishment System costs, offset by an increase of $0.7 million or 4.2 percent in capital facility capacity charges for connection fees collected from cities and supplemental capital facilities capacity charges assessed to industrial dischargers. E-1 Table of Contents ORANGE COUNTY SANITATION DISTRICT Management Discussion and Analysis (Unaudited) June 30, 2022 Capital Assets At June 30, 2022, OC San had a net investment of $2.8 billion in capital assets. This represents a net increase (including additions and deletions) of $54.2 million, or 2.0 percent over the prior year. Schedule of Capital Assets (Net of Depreciation and Amortization) (Dollars in thousands) June 30, Percentage June 30, 2021, Increase Increase 2022 as restated (Decrease) (Decrease) Land Construction in progress Sewage collection facilities Sewage treatment facilities Effluent disposal facilities Solids disposal facilities General and administrative facilities Leased sewage collection facilities Capital assets, net $ 57,681 $ 57,681 $ - 0.0% 552,128 401,200 150,928 37.6% 451,978 470,729 (18, 751) -4.0% 1,610,427 1,689,476 (79, 049) -4.7% 27,362 28,784 (1,422) -4.9% 248 258 (10) -3.9% 62,146 59,609 2,537 4.3% 56 87 (31) -35.6% $ 2,762,026 $ 2,707,824 $ 54,202 2.0% Major capital asset additions for the current fiscal year included the following: • $35.7 million Headquarters Complex (P1-128) • $32.1 million Headworks Rehabilitation at Plant No. 1 (P1-105) • $23.6 million Ocean Outfall System Rehabilitation (J-117) • $20.9 million Primary Treatment Rehabilitation at Plant No. 2 (P2-98) • $ 9.0 million Rehabilitation of Western Regional Sewers (3-64) • $ 8.9 million TPAD Digester Facility at Plant 2 (P2-128) • $ 7.2 million Bay Bridge Pump Station Replacement (5-67) • $ 6.5 million Westminster Blvd Force Main Replacement (3-62) • $ 5.8 million Headworks Modifications at P2 for GWRS Final Expansion (P2-122) • $ 5.5 million Newhope-Placentia Trunk Replacement (2-72) More detailed information about OC San's capital assets is provided in Notes 1 and 3 of the Notes to Basic Financial Statements. 9 Table of Contents ORANGE COUNTY SANITATION DISTRICT Management Discussion and Analysis (Unaudited) June 30, 2022 Debt Administration At June 30, 2022, OC San had $819.8 million outstanding in bonded debt, a net decrease of $89.8 million, or 9.9 percent from the prior year. This reduction consisted of the accumulation of principal payments made in accordance with the schedule of debt service payments and the refunding of $61.6 million of Series 2011A Revenue Refunding Certificates of Participation (COP) and $102.2 million of 2018A Revenue Refunding Certificate Anticipation Notes with Series 2021A Refunding Revenue Obligations issued in the amount of $133.5 million in July 2021 and the refunding of $100.6 million of Series 2012A COP and $6.7 million of Series 2012B COP with Series 2022A Wastewater Refunding Revenue Obligations issued in the amount of $81.6 million in February 2022. During OC San's most recent debt refundings, Moody's, Standard and Poor's, and Fitch Ratings all reaffirmed their AAA rating of the Orange County Sanitation District. OC San's long-range financing plan is designed to maintain this high rating. Over the next ten years, OC San is projecting over $3.1 billion in future treatment plant and collection system capital improvements. In accordance with OC San's long-term debt fiscal policy, OC San will restrict long-term borrowing to capital improvements that cannot be financed from current revenue. No new debt issuances are being proposed to assist with the funding of the system improvements scheduled over this time period. For more information on long-term debt activities, see Note 5 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 2.9 percent in June 2022, a decrease from the rate of 6.5 percent in June 2021. ■ Inflation for the Los Angeles -Long Beach -Anaheim area increased 8.6 percent in June 2022 over the prior year June 2021 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 increased from the 0.3 percent earnings rate in FY 2020-21 to 2.6 percent for FY 2021-22. All of these factors are considered in preparing OC San's biennium budget. OC San's user fee schedule was increased by 1.2 percent for FY 2021-22 over the prior year. The Single Family Residential (SFR) fee, which is the underlying rate for all other user rates, is applicable to OC San's largest customer base: the SFR fee increased by $4.00, from $339.00 to $343.00. The revenue from sewer fees is necessary to support OC San's cash flow needs for operating costs, debt service, and capital improvement outlays. Capital improvement costs are projected to total $3.1 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 OC San'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 Table of Contents ORANGE COUNTY SANITATION DISTRICT BASIC FINANCIAL STATEMENTS 11 Table of Contents ORANGE COUNTY SANITATION DISTRICT Statement of Net Position June 30, 2022 Current assets: Cash and cash equivalents $ 85,703,593 Investments 885,219,814 Accounts receivable, net of allowance for uncollectibles $319,716 14,041,178 Accrued interest receivable 2,675,681 Connection fees receivable 1,273,182 Property tax receivable 2,148,801 Current portion of lease receivable 358,512 Inventories 9,474,749 Prepaid expenses 2,940,349 Total current assets 1,003,835,859 Noncurrent assets: Restricted: Cash and cash equivalents 883,131 Investments 12,229,509 Accrued interest receivable 8,592 Net pension asset - OCERS 178,731,245 Unrestricted: Non -depreciable capital assets 609,808,168 Depreciable capital assets, net of accumulated depreciation 2,152,218,003 Noncurrent portion of lease receivable 513,899 Other noncurrent assets, net 10,344 Total noncurrent assets 2,954,402,891 Total assets 3,958,238,750 Deferred outflows of resources: Deferred outflows related to refundings 17,033,814 Deferred outflows related to pensions 42,805,483 Total deferred outflows of resources 59,839,297 Total assets and deferred outflows of resources 4,018,078,047 Current liabilities: Accounts payable 15,936,120 Accrued expenses 22,153,861 Retentions payable 12,708,958 Interest payable 16,055,500 Due to other governmental agency 54,695,465 Current portion of long-term obligations 52,569,390 Total current liabilities 174,119,294 Noncurrent liabilities: Noncurrent portion of long-term obligations 876,171,575 Total OPEB liability 2,077,772 Total pension liability - ARBA 20,382,770 Total noncurrent liabilities 898,632,117 Total liabilities 1,072,751,411 Deferred inflows of resources: Deferred inflows related to refundings 1,951,850 Deferred inflows related to leases 842,461 Deferred inflows related to pensions 127,345,284 Total deferred inflows of resources 130,139,595 Total liabilities and deferred inflows of resources 1,202,891,006 Net position: Net investment in capital assets 1,825,489,845 Restricted for OCERS pension benefits 108,179,040 Unrestricted 881,518,156 Total net position $ 2,815,187,041 See Accompanying Notes to Basic Financial Statements. 12 Table of Contents ORANGE COUNTY SANITATION DISTRICT Statement of Revenues, Expenses, and Change in Net Position For the Year Ended June 30, 2022 Operating revenues: Service charges $ 327,823,935 Permit and inspection fees 1,271,229 Total operating revenues 329,095,164 Operating expenses other than depreciation and amortization: Salaries and benefits 57,003,571 Utilities 11,045,546 Supplies, repairs and maintenance 47,082,069 Contractual services 25,114,551 Feasibility studies 6,490,382 Other operating expenses 9,378,574 Total operating expenses other than depreciation and amortization 156,114,693 Operating income before depreciation and amortization 172,980,471 Depreciation and amortization 130,465,222 Operating income 42,515,249 Non -operating revenues: Property taxes 119,185,888 Investment and interest income (loss) (35,334,636) Contributions from other governments 6,226,509 Other non -operating revenues 1,612,614 Total non -operating revenues 91,690,375 Non -operating expenses: Interest 30, 026, 862 Contributions to other governments 23,622,471 Loss on disposal of assets 1,798,103 Other non -operating expenses 36,389 Total non -operating expenses 55,483,825 Income before capital contributions 78,721,799 Capital contributions: Capital facilities capacity charges 18,282,752 Capital contributions from other governments 7,800,179 Total capital contributions 26,082,931 Change in net position 104,804,730 Total net position - beginning 2,710,382,311 Total net position - ending $ 2,815,187,041 See Accompanying Notes to Basic Financial Statements. 13 Table of Contents ORANGE COUNTY SANITATION DISTRICT Statement of Cash Flows For the Year Ended June 30, 2022 Cash flows from operating activities Receipts from customers and users $ 363,947,383 Payments to employees (86,266,769) Payments to suppliers (99,373,913) Net cash provided by operating activities 178,306,701 Cash flows from noncapital financing activities: Proceeds from property taxes 118,799,909 Receipts for other activities 1,152,996 Net cash provided by noncapital financing activities 119,952,905 Cash flows from capital and related financing activities: Capital facilities capacity charges 17,667,474 Contributions from other governments 8,206,813 Receipts from lease agreements 440,162 Additions to capital assets (191,912,464) Principal payments on debt obligations (304,965,000) Interest paid (40,469,300) Proceeds from debt issuance 272,127,209 Debt issuance costs (986,623) Net cash used in capital and related financing activities (239,891,729) Cash flows from investing activities: Proceeds from sale of investments 491,511,650 Purchases of investments (572,066,870) Interest received 11,838,582 Net cash used in investing activities (68,716,638) Net decrease in cash and cash equivalents (10,348,761) Cash and cash equivalents, beginning of year 96,935,485 Cash and cash equivalents, end of year $ 86,586,724 Reconciliation of operating income to net cash provided by operating activities: Operating income (loss) $ 42,515,249 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation and amortization 130,465,222 Bad debt expense (net recoveries) (104,744) (Increase)/decrease in operating assets and deferred outflows: Accounts receivable 8,923,858 Inventories (1,089,417) Prepaid expenses (405,916) Net pension asset - OCERS (110,087,867) Deferred outflows related to pensions 11,248,696 Increase/(decrease) in operating liabilities and deferred inflows: Accounts payable (250,254) Accrued expenses 1,652,607 Due to other governmental agency 26,033,105 Compensated absences (205,652) Claims and judgments 940,400 Total OPEB liability 745,244 Total pension liability - ARBA (2,937,652) Deferred inflows related to pensions 70,863,822 Net cash provided by operating activities $ 178,306,701 Noncash activities: Unrealized gain (loss) on the fair value of investments $ (46,809,220) Capital assets acquired through accounts payable 12,286,303 Capital facilities capacity charges acquired 615,278 See Accompanying Notes to Basic Financial Statements. 14 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements For the Year Ended June 30, 2022 (1) Summary of Significant Accounting Policies Reporting Entity The Orange County Sanitation District (OC San) 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 central and northwest portion of the County of Orange, California. OC San is overseen by a Board comprised of directors appointed by the agencies and cities which are serviced by OC San. OC San'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 OC San'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 OC San, 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 OC San'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. OC San 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 OC San 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 OC San's operations. OC San is considered to be financially accountable for the Corporation which is governed by a board comprised entirely of OC San'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, 2022, other than principal and interest payments on outstanding certificates of participation, revenue obligations, and notes (see Note 5). OC San is independent of and overlaps other formal political jurisdictions. There are many governmental entities, including the County of Orange, that operate within OC San'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). 15 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 Measurement Focus and Basis of Accounti OC San 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 OC San 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, OC San 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 Eauivalents Investments with original maturities of three months or less when purchased, money market mutual funds, and external investment pools that can be withdrawn on demand are considered to be cash equivalents. Investments 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 $319,716 at June 30, 2022. Unbilled sewer services through June 30, 2022 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. 16 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 Inventories Inventories, which are held for consumption and not resale, are stated at cost on a weighted -average basis and are expensed when used. Prepaid Expenses Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid expenses. Prepaid expenses are recorded as expenses when consumed rather than when purchased. 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 $10,000 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. 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. OC San 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. Leased assets are defined as assets with an initial, individual cost of more than $50,000 and an estimated useful life of at least one year. Such assets are recorded at the present value of the lease liability. Leased sewage collection facilities are amortized using the straight-line method over the lease term, which is currently 3 years. Restricted Assets Certain assets are classified as restricted because their use is limited by applicable debt covenants or other legal agreements. Restricted cash and investments are maintained in separate trustee bank accounts. When both restricted and unrestricted resources are available for use, it is OC San's policy to use restricted resources first, then unrestricted resources as they are needed, except in the case of restricted amounts in the Section 115 pension trust, for which OC San will specifically identify amounts to be utilized to fund OCERS pension benefits. Amortization Premiums on wastewater refunding revenue obligations are amortized to interest expense over the respective terms of the installment obligations based on the effective interest method (Note 5). 17 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 Deferred Outflows/Inflows of Resources In addition to assets, the statement of net position includes a separate section for deferred outflows of resources. Deferred outflows of resources represent a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense) until then. In addition to liabilities, the statement of net position includes a separate section for deferred inflows of resources. Deferred inflows of resources represent an acquisition of net assets that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. OC San has three items that qualify for reporting in these categories, related to refundings, pensions, and leases. For refundings resulting in defeasance of debt, the difference between the reacquisition price and the net carrying amount of the old debt is reported as a deferred outflow of resources or a deferred inflow 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. Deferred outflows and inflows related to pensions represent differences between estimated and actual investment earnings, changes in actuarial assumptions, and other pension related changes. Deferred inflows related to leases is associated with the lease receivable from building lease agreements, which is recognized as revenue over the life of the lease terms. 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 three categories: Net Investment in Capital Assets — This amount consists of capital assets, net of accumulated depreciation/amortization and reduced by the outstanding balances of borrowings or other debt that are attributable to the acquisition, construction, or improvement of those assets. Deferred outflows of resources and deferred inflows of resources that are attributable to the acquisition, construction, or improvement of those assets or related debt are included in this component of net position. Restricted — This amount consists of restricted assets for which constraints are placed on asset use either by external parties or by laws or regulations of other governments. OC San's restricted net position reflects restricted cash and investments and accrued interest in the pension trust, the OCERS net pension asset, and corresponding deferred outflows and inflows. Unrestricted — This amount represents the residual of amounts not classified in the other category and represents the net position available for OC San. Compensated Absences OC San'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. All accrued and unused vacation or personal leave is paid to the employee upon termination or retirement of the employee. Accrued and unused sick leave is paid to the employee at a percentage rate based on years of service, as stated in the Memorandum of Understanding for each bargaining group. 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. 18 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 Claims and Judgments OC San 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. Pensions OC San 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 OC San. For purposes of measuring the net pension asset/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 OC San'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. Deferred outflow and inflow of resources related to pensions result from changes in the components of the net pension asset/liability and are applicable to a future reporting period (Note 6). 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. OC San 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 OC San 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 OC San's system, directly or indirectly, or an existing structure or category of use is increased. This charge is to pay for OC San 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. OC San'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. Self -Insurance Plans For the year ended June 30, 2022, OC San was self -insured for portions of workers' compensation, property damage, and general liability. The self-insurance portion of the workers' compensation 19 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 exposure is the $1 million 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 $1 million per occurrence deductible with outside excess property insurance coverage to $25 million. The self-insurance portion of the property damage exposure covering earthquake is the 5% per structure, minimum $5 million deductible with outside excess insurance coverage to $25 million on covered structures. OC San has insured several 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 $750,000 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 $250,000 per loss deductible under the outside pollution liability insurance coverage to $10 million. The main changes to insurance coverage during the fiscal year ended June 30, 2022, were increases to deductibles on some lines of coverage due to insurance market conditions and rates. During the past three fiscal years there have been no settlements in excess of covered amounts. Claims against OC San 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 and general liability estimated loss accruals are actuarially determined. The estimate of the claims liability also includes any amounts for incremental and nonincremental claim adjustment expenses. OC San management believes that there are no unrecorded claims as of June 30, 2022 that would materially affect the financial position of OC San. Deferred Compensation Plan OC San offers its employees a deferred compensation plan established in accordance with Internal Revenue Code Section 457. The plan permits all employees of OC San 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. The plan assets are administered by an outside party and are not subject to the claims of OC San's general creditors. In accordance with GASB Statement No. 97, the plan's assets and liabilities are not included within OC San's financial statements. New Accountina Pronouncements OC San implemented the following GASB Statements for the year ended June 30, 2022: • GASB Statement No. 87, Leases, GASB Statement No. 92, Omnibus 2020, and Implementation Guide 2019-3, Leases. Implementation of this Standard resulted in restating beginning balances as of July 1, 2021 to recognize a lease liability and leased capital asset of $86,747 and a lease receivable and deferred inflow of resources of $1,263,608. • GASB Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans —an amendment of GASB Statements No. 14 and No. 84, and a supersession of GASB Statement No. 32. 20 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 The following GASB Statements have been issued but are not yet effective for the year ended June 30, 2022. OC San is assessing what financial statement impact, if any, these Statements will have: • GASB Statement No. 94, Public -Private and Public -Public Partnerships and Availability Payment Arrangements, effective for the fiscal year ending June 30, 2023. • GASB Statement No. 96, Subscription -Based Information Technology Arrangements, effective for the fiscal year ending June 30, 2023. • GASB Statement No. 99, Omnibus 2022, effective for the fiscal year ending June 30, 2023. • GASB Statement No. 100, Accounting Changes and Error Corrections — an amendment of GASB Statement No. 62, effective for the fiscal year ending June 30, 2024. • GASB Statement No. 101, Compensated Absences, effective for the fiscal year ending June 30, 2025. (2) Cash and Investments Cash and investments as of June 30, 2022 are classified within the accompanying Statement of Net Position as follows: Statement of Net Position: Current assets, unrestricted: Cash and cash equivalents $ 85,703,593 Investments 885,219,814 Subtotal - current, unrestricted 970,923,407 Noncurrent assets, restricted: Cash and cash equivalents 883,131 Investments 12,229,509 Subtotal - restricted 13,112,640 Total cash and investments $ 984,036,047 Cash and investments consist of the following as of June 30, 2022: Cash on hand $ 3,000 Deposits with financial institutions 4,219,079 Managed portfolio - cash and investments 966,701,328 Subtotal - unrestricted cash and investments 970,923,407 Monies held by trustees: Fiscal agent - cash and cash equivalents 50,641 Pension trust - cash and investments 13,061,999 Subtotal - restricted cash and investments 13,112,640 Total cash and investments $ 984,036,047 21 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 Investments Authorized by the California Government Code and OC San's Investment Polic The following table identifies the investment types that are authorized by the California Government Code and OC San's investment policy. This table and the subsequent tables identify certain provisions of either the California Government Code or OC San's investment policy (whichever is more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. Investment Type - Authorized by the California Government Code Local Agency Bonds U.S. Treasury Obligations California State Treasury Obligations U.S. Agency Securities Banker's Acceptances Commercial Paper Negotiable Certificates of Deposit Certificates of Deposit Repurchase Agreements Reverse Repurchase Agreements Corporate Medium -Term Notes Mutual Funds Money Market Mutual Funds Mortgage Pass -Through Securities/ CMO/Asset-Backed Securities County Investment Pools Local Agency Investment Fund (LAIF) Supranational Obligations Public Bank Obligations Maximum Maximum Investment Maximum Percentage in a Single Maturity (1)(3) of Portfolio (1) Issuer(1) 5 years 10% (2) 5% (2) 5 years No limit No limit 5 years No limit No limit 5 years No limit 20% (2) 180 days 40% 5% (2) 270 days 40% 5% (2) 5 years 30% 5% (2) 5 years No limit 5% (2) 1 year 20% (2) 5% (2) 90 days (2) 5% (2) 5% (2) 5 years 30% 5% (2) N/A 20% 10% N/A 20% 20% 5 years 20% 5% (2) N/A 15% (2) 15% (2) N/A No limit No limit 5 years 30% 30% 5 years No limit 5% (2) Notes (1) Restrictions are in accordance with the California Government Code unless indicated otherwise. (2) The restriction is in accordance with OC San'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 OC San's external money manager for the long-term investment portfolio. The duration ofthe long-term investment portfolio can never exceed 60 months. Investments purchased fort he short-term portfolio are subject to the maturity restrictions noted in this table. 22 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 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 OC San's investment policy. The following table identifies the investment types that are authorized for investments held by OC San'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 Maximum Percentage Investment in a the Debt Covenant Agreement Maturity of Portfolio Single Issuer U.S. Treasury Obligations No Limit No limit No limit U.S. Agency Securities No Limit No limit No limit State and Local Agency Bonds No Limit No limit No limit Certificates of Deposit No Limit No limit No limit Banker's Acceptances 180 days No limit No limit Repurchase Agreements 1 year No limit No limit Investment Agreements No Limit No limit No limit Forward Purchase Agreements No Limit No limit No limit Reserve Fund Put Agreements No Limit No limit No limit Guaranteed Investment Contracts No Limit No limit No limit Commercial Paper 270 days No limit No limit Money Market Mutual Funds N/A No limit No limit Local Agency Investment Fund (LAIF) N/A No limit No limit Investments in Pension Trust During the fiscal year ended June 30, 2022, OC San established an Internal Revenue Service (IRS) Section 115 trust to fund OCERS pension benefits. The tax-exempt irrevocable trust assets are to be used exclusively for payment of OCERS pension liabilities. OC San has restricted cash and investments held in the trust administered by Public Agency Retirement Services (PARS), with US Bank as the trustee, and managed by HighMark Capital under guidelines approved by OC San. OC San has two pension trust portfolios: Moderate and Balanced. Both portfolios are constructed to control risk through four layers of diversification — asset classes (cash, fixed income, equity), investment styles (large cap, small cap, international, value, growth), managers, and securities. Disciplined mutual fund selection and monitoring process helps to drive return potential while reducing portfolio risk. The primary goal of the Moderate objective is to provide current income and moderate capital appreciation. It is expected that dividend and interest income will comprise a significant portion of total return, although growth through capital appreciation is equally important. The strategic ranges are as follows: Equity (40% - 60%), Fixed Income (40% — 60 %), and Cash (0% — 20%) The primary goal of the Balanced objective is to provide growth of principal and income. While dividend and interest income are important components of the objective's total return, it is expected that capital appreciation will comprise a larger portion of the total return. The strategic ranges are as follows: Equity (50% - 70%), Fixed Income (30% — 50 %), and Cash (0% — 20%) 23 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 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 OC San 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. OC San monitors the interest rate risk inherent in its managed portfolio by measuring the duration of its portfolio. The duration of monies held for shorter term purposes is recommended by OC San's Treasurer and is based on OC San'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 OC San's Treasurer and is based on OC San'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. Following is a table which summarizes OC San's managed portfolio investments by purpose and type with the duration as of June 30, 2022: Duration Duration Investment Type Fair Value (in years) (in months) Short -Term Portfolio: U.S. Treasury Notes $ 101,119,140 0.374 4.48 Local Agency Investment Fund 71,940,943 0.852 10.22 U.S. Treasury Bills 40,375,825 0.193 2.32 Negotiable Certificates of Deposits 23,353,320 0.369 4.43 Corporate Medium -Term Notes 12,207,447 0.505 6.06 U.S. Agency Securities 4,986,650 0.155 1.86 Money Market Mutual Funds 1,601,161 - - Short-term portfolio subtotal 255,584,486 0.479 5.75 Long -Term Portfolio: U.S. Treasury Notes 220,576,935 2.830 33.97 U.S. Agency Securities* 140,563,670 2.151 25.81 Corporate Medium -Term Notes 179,392,731 2.591 31.09 Asset Backed Securities/CMO/Mortgage Pass -Through* 92,678,024 1.604 19.25 Supranationals 51,217,412 2.791 33.49 U.S. Treasury Inflation -Protected Securities (TIPS) 12,781,600 2.042 24.51 Money Market Mutual Funds 7,939,410 - - Negotiable Certificates of Deposits 5,967,060 0.287 3.45 Long-term portfolio subtotal 711,116,842 2.406 28.87 Total managed investment portfolio $966,701,328 * Includes highly sensitive securities. 24 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 OC San monitors the interest rate risk inherent in its other investments using maturity of the investments. Following is a table of these investments, all held by trustees, as of June 30, 2022: 12 Months or Less Cash equivalents held by fiscal agents: Money Market Mutual Funds $ 50,641 Cash equivalents held by fiscal agents subtotal 50,641 Cash equivalents and investments held by pension trust: Money Market Mutual Funds 832,490 Mutual Funds - Equity 6,595,407 Mutual Funds - Fixed Income 5,634,102 Cash equivalents and investments held by pension trust subtotal 13,061,999 Total held by trustees $ 13,112,640 Investments with Fair Values Hiahly Sensitive to Interest Rate Fluctuations OC San'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 $10,955,259 including $10,565,365 of mortgage pass -through securities, $323,565 of U.S. agency securities, and $66,329 of U.S. government backed mortgage pools. Fair Value of Investments OC San 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. 25 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 At June 30, 2022, OC San had the following fair value measurements: Investment Type Investments in Short -Term Portfolio: U.S. Treasury Notes U.S. Treasury Bills Negotiable Certificates of Deposits Corporate Medium -term Notes U.S. Agency Securities Investments in Long -Term Portfolio: U.S. Treasury Notes U.S. Agency Securities Corporate Medium -term Notes Supranationals Asset Backed Securities/CMO/Mortgage Pass -Through Negotiable Certificates of Deposits U.S. Treasury Inflation Protected Securities (TIPS) Investments Held By Pension Trust: Mutual Funds - Equity Mutual Funds - Fixed Income Fair Value Hierarchy Totals Investments Not Subject To Fair Value Hierarchy: Local Agency Investment Fund (LAIF) Money Market Mutual Funds (Short -Term Portfolio) Money Market Mutual Funds (Long -Term Portfolio) Money Market Mutual Funds (Held by Fiscal Agent) Money Market Mutual Funds (Held by Pension Trust) Total Investment Portfolio Quoted Prices in Active Markets for Identical Assets Fair Value Level 1 Other Observable Unobservable Inputs Inputs Level Level $ 101,119,140 $ $ 101,119,140 $ 40, 375, 825 40, 375, 825 23,353,320 23,353,320 12,207,447 12,207,447 4,986,650 4,986,650 220, 576, 935 220, 576, 935 140,563,670 140,563,670 179,392,731 179,392,731 51,217,412 51,217,412 92, 678, 024 92, 678, 024 5,967,060 5,967,060 12, 781, 600 12, 781, 600 6,595,407 6,595,407 5,634,102 5,634,102 $ $ 897,449,323 $ 71, 940, 943 1,601,161 7,939,410 50,641 ❑Q') AOn y aia,u i,s,yna US Bank is the custodial bank for all of OC San'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. Disclosures Relatina 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, OC San's investment policy, or debt agreements, and the actual rating as of year-end for each investment type: 26 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 Investment Type and the Lowest Rating Reported at Year End Fair Value Investments with no legal minimum rating & no required disclosure: U.S. Treasury Obligations $ 374,853,500 U.S. Agency Securities - GNMA 66,329 Subtotal $ 374,919,829 Investments with no legal minimum rating: U.S. Agency Securities (other than GNMA): Rating of AA+ (Standard & Poor's) 140,563,670 Rating of P-1 (Moodys) 4,986,650 Negotiable Certificates of Deposits: Rating ofA-1 ((Standard & Poor's) 9,462,380 Rating ofP-1 (Moodys) 15,884,840 Rating of F-1 (Fitch) 3,973,160 Local Agency Investment Fund (LAIF): Not rated 71,940,943 Invested with pension trust: Money Market Mutual Funds: Rating ofAaa-mf (Moodys) 832,490 Mutual Funds - Equity. Not rated 6,595,407 Mutual Funds - Fixed Income: Not rated 5,634,102 Subtotal 259,873,642 Investments with a legal minimum rating (or its equivalent) ofA: Corporate Medium -Term Notes: Rating of AA+ (Standard & Poor's) 6,824,175 Rating ofAa2 (Moodys) 8,390,709 Rating of Aa3 (Moodys) 11,931,609 Rating of Al (Moodys) 29,639,308 Rating ofA+ (Fitch) 8,993,506 Rating ofA2 (Moodys) 37,641,872 Rating ofA(Standard & Poor's) 22,556,639 Rating of A- (Standard & Poor's)* 43,343,472 Rating ofA3 (Moodys)' 17,320,628 Rating of BBB+ (Standard & Poor's)* 4,955,860 Not rated 2,400 Subtotal 191,600,178 Investments with a legal minimum rating (or its equivalent) of AA: Asset Backed Securities/CMO/Mortgage Pass -Through: Rating ofAaa (Moodys) 47,879,008 Rating of AAA (Standard & Poor's) 43,740,067 Rating of AA+ (Standard and Poor's) 874,434 Rating of BBB (Standard and Poor's)* 109,346 Rating of B (Standard & Poor's)* 8,840 Supranational Obligations: Rating ofAaa (Moodys) 51,217,412 Subtotal 143,829,107 Investments with a legal minimum rating (or its equivalent) of AAA: Money Market Mutual Funds: Rating ofAaa (Moodys) 9,540,571 Invested with fiscal agents: Money Market Mutual Funds: Rating of Aaa-mf (Moodys) 50,641 Subtotal 9,591,212 Total $ 979,813,968 * Investment was in compliance with legal requirements at the time it was purchased. 27 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 Concentration of Credit Risk Limitations on the amount that OC San is allowed to invest in any one issuer have been identified previously in the section "Investments Authorized by the California Government Code and OC San's Investment Policy" and in the section "Investments Authorized by Debt Agreements". OC San follows whichever guideline is the most restrictive. As of June 30, 2022, OC San had the following investments representing five percent or more of total investments: Name of Issuer Fair Value % of Total Federal National Mortgage Association (FNMA) $ 58,775,979 6.00% 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 OC San'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 understate 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 OC San'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, 2022, in accordance with OC San's investment policy, none of OC San's investments were held with a counterparty. All of OC San's investments were held with an independent third party custodian bank registered in the name of OC San. OC San uses US Bank as a third party custody and safekeeping service for its investment securities. Investment in State Investment Pool OC San 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 OC San's investment in this pool is reported in the accompanying financial statements at amounts based upon OC San'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, 2022. 28 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 (3) Capital Assets Capital asset activity for the year ended June 30, 2022 is as follows: Beginning Balance at Ending July 1, 2021, Additions / Deletions / Balance at as restated Transfers Transfers June 30, 2022 Capital assets not depreciated: Cost: Land $ 57,680,623 $ - $ - $ 57,680,623 Construction in progress 401,200,044 184,959,868 (34,032,367) 552,127,545 Total nondepreciable assets 458,880,667 184,959,868 (34,032,367) 609,808,168 Depreciable capital assets: Cost: Sewage collection facilities 897,488,748 3,350,675 - 900,839,423 Sewage treatment facilities 2,842,786,854 18,024,088 (34,168,036) 2,826,642,906 Effluent disposal facilities 96,972,016 - - 96,972,016 Solids disposal facilities 3,463,236 - - 3,463,236 General and administrative facilities 248,712,229 13,131,197 (450,099) 261,393,327 Leased sewage collection facilities 86,747 - - 86,747 Excess purchase price over book value on acquired assets 19,979,000 - - 19,979,000 Subtotal 4,109,488,830 34,505,960 (34,618,135) 4,109,376,655 Accumulated depreciation: Sewage collection facilities (426,759,812) (22,101,671) - (448,861,483) Sewage treatment facilities (1,153,310,761) (96,324,057) 33,419,565 (1,216,215,253) Effluent disposal facilities (68,188,450) (1,421,962) - (69,610,412) Solids disposal facilities (3,204,845) (9,718) - (3,214,563) General and administrative facilities (189,102,641) (10,577,197) 432,514 (199,247,324) Leased sewage collection facilities - (30,617) - (30,617) Excess purchase price over book value on acquired assets (19,979,000) - - (19,979,000) Subtotal (1,860,545,509) (130,465,222) 33,852,079 (1,957,158,652) Net depreciable assets 2,248,943,321 (95,959,262) (766,056) 2,152,218,003 Net capital assets $2,707,823,988 $ 89,000,606 $ (34,798,423) $2,762,026,171 For the fiscal year ended June 30, 2022, capital asset additions of $34.5 million in depreciable capital assets are $0.5 million more than the $34.0 million transferred from Construction in Progress due to $1.5 million of capital equipment purchases, partially offset b y $1.0 million of prior capital project expenses that were written off as expense. The beginning balance at July 1, 2021 was restated for leased sewage collection facilities due to GASB 87 implementation. 29 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 4) Lease Receivable OC San is a lessor in three noncancellable leases for building office space. The lessees are required to make fixed monthly payments ranging from $8,196 to $16,367 per month. OC San recognized $421,147 in lease revenue and $48,965 in interest revenue during the current fiscal year related to these agreements. As of June 30, 2022, the lease receivable is $872,411 and deferred inflows of resources is $842,461. (5) Long -Term Liabilities The following is a summary of the changes in long-term liabilities for the year ended June 30, 2022: Beginning Balance, July 1, Ending Balance, Due w ithin Long-term as restated Additions Deletions June 30 one year amount Compensated absences $ 10,512,315 $ 9,905,917 $ (10,111,569) $ 10,306,663 $ 8,592,057 $ 1,714,606 Claims and judgments 4,332,897 3,282,705 (2,342,305) 5,273,297 406,360 4,866,937 Lease liability 86,747 - (28,589) 58,158 30,789 27,369 Certificates of participation / revenue obligations 909,620,000 215,130,000 (304,965,000) 819,785,000 30,035,000 789,750,000 Unamortized premium 53,495,534 56,997,209 (17,174,896) 93,317,847 13,505,184 79,812,663 Totals $ 978,047,493 $285,315,831 $ (334,622,359) $928,740,965 $52,569,390 $876,171,575 Compensated Absences OC San's policies related to compensated absences are described in Note 1. OC San's liability at June 30, 2022 is $10,306,663 with an estimated $8,592,057 to be paid or used within the next fiscal year. Claims and Judgments Payable OC San 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, 2022 and 2021: Claims and judgments payable at July 1 Claims incurred during the fiscal year Changes in estimates for claims of prior years Payments on claims during the fiscal year Claims and judgments payable at June 30 Less: current portion 9n91-99 9n9n-91 $ 4, 332, 897 $ 3, 740, 721 3,103, 355 895,011 179,350 250,807 (2,342,305) (553,642) 5,273,297 4,332,897 (406 360) (448 800) Total long-term claims and judgments payable $4,866,937 $3,884,097 30 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 Lease Liability On April 13, 2021, OC San entered into a three-year lease agreement as lessee for property access used to operate a chemical dosing site as part of OC San's sewer collection facilities. Required monthly payments range from $2,680 to $2,800 per month. OC San's lease liability at June 30, 2022 is $58,158. The future principal and interest lease payments as of June 30, 2022 are as follows: Year Ending June 30, Principal Interest Total 2023 $ 30,789 $ 2,211 $ 33,000 2024 27,369 631 28,000 Total $ 58,158 $ 2,842 $ 61,000 Certificates of Participation / Revenue Obligations OC San issued certificates of participation and revenue obligations 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 OC San. Certificates of participation and revenue obligations at June 30, 2022 are summarized as follows: Amount 2010A wastewater revenue obligations $ 80,000,000 2010C wastewater revenue obligations 157,000,000 2014A wastewater refunding revenue obligations 47,835,000 2015A wastewater refunding revenue obligations 127,510,000 2016A wastewater refunding revenue obligations 131,965,000 2017A wastewater refunding revenue obligations 65,815,000 2021A wastewater refunding revenue obligations 128,040,000 2022A wastewater refunding revenue obligations 81,620,000 Total certificates of participation / revenue obligations $ 819,785,000 Outstanding Certificates of Participation and Revenue Obligations All of the outstanding debt of OC San 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, 2022, the coverage ratio for senior lien debt was 3.56. May 2010 Wastewater Revenue Obligations, Series 2010A On May 18, 2010, OC San 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 reimburse OC San 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, OC San expected to receive a cash subsidy from the United States Treasury equal to 35 percent of the interest payable with respect to these revenue 31 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 obligations, resulting in lower net costs. On March 1, 2013, the federal government implemented certain automatic spending cuts known as the sequester. As a result of the sequester, federal subsidy payments on Build America Bonds have been reduced annually from a high of 8.7 percent for the federal fiscal year end September 30, 2013 to a low of 5.7 percent for the federal fiscal year end September 30, 2022. 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. December 2010 Wastewater Revenue Obligations, Series 2010C On December 8, 2010, OC San 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 reimburse OC San 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, OC San expected to receive a cash subsidy from the United States Treasury equal to 35 percent of the interest payable with respect to these revenue obligations, resulting in lower net costs. Similar to 2010 C Series A certificates of participation, the sequester also reduced the federal subsidy on these Build America Bonds from a high of 8.7 percent for the federal fiscal year end September 30, 2013 to a low of 5.7 percent for the federal fiscal year end September 30, 2022. 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. August 2014 Wastewater Refunding Revenue Obligations, Series 2014A On August 7, 2014, OC San completed the sale of $85,090,000 of wastewater refunding revenue obligations. The obligations were issued to partially refund $93,930,000 of the outstanding principal balance of the 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, OC San completed the sale of $127,510,000 of wastewater refunding revenue obligations. The obligations were issued to partially refund $152,990,000 of the outstanding principal balance of the 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, OC San completed the sale of $145,880,000 of wastewater refunding revenue obligations. The obligations were issued to partially refund $162,780,000 of the outstanding principal balance of the 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. 32 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 February 2017 Wastewater Refunding Revenue Obligations, Series 2017A On February 1, 2017, OC San completed the sale of $66,370,000 of wastewater refunding revenue obligations. The obligations were issued to refund the $91,620,000 outstanding principal balance of the 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. 2021 Wastewater Refunding Revenue Obligations, Series 2021A On July 29, 2021, OC San completed the sale of $133,510,000 of wastewater refunding revenue obligations. The obligations were issued to refund the $61,575,000 outstanding principal balance of the 2011 Series A certificates of participation and to refund the $102,200,000 outstanding principal balance of the 2018 Series A revenue refunding certificate anticipation notes. The stated interest rate on the obligations is fixed at 5 percent. Annual principal payments are due on February 1, beginning February 1, 2022 through February 1, 2036. The aggregate difference in debt service between the refunding debt and the refunded debt is a positive amount of approximately $6,137,682. The total future payments for the new debt provide a net present value gain of approximately $7,544,537 to refund the old debt. The trust agreement for the certificates does not require the establishment of a reserve. 2022 Wastewater Refunding Revenue Obligations, Series 2022A On February 1, 2022, OC San completed the sale of $81,620,000 of wastewater refunding revenue obligations. The obligations were issued to refund the $100,645,000 outstanding principal balance of the 2012 Series A certificates of participation and to refund the $6,670,000 outstanding principal balance of the 2012 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, 2031 through February 1, 2033. The aggregate difference in debt service between the refunding debt and the refunded debt is a positive amount of approximately $20,044,755. The total future payments for the new debt provide a net present value gain of approximately $20,710,478 to refund the old debt. The trust agreement for the certificates does not require the establishment of a reserve. 33 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 Annual Amortization Reauirements The annual requirements to amortize all debt related to certificates of participation and revenue obligations as of June 30, 2022 are as follows: Year Ending June 30, 2023 2024 2025 2026 2027 2028-2032 2033-2037 2038-2042 2043-2047 Total Pension Benefits Principal $ 30, 035, 000 31,580,000 33,120, 000 34,830,000 36,445, 000 235, 035, 000 281, 205, 000 125, 260, 000 12.275. 000 Estimated Interest Total $ 38, 243, 969 36,742,219 35,163, 219 33,507,219 31,765,719 127, 546,133 64, 265, 071 15, 440, 206 613,809 $ 68, 278, 969 68, 322, 219 68, 283, 219 68, 337, 219 68, 210, 719 362, 581,133 345, 470, 071 140, 700, 206 12, 888, 809 $ 819, 785, 000 $ 383, 287, 564 $ 1, 203, 072, 564 OC San 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 OC San. A summary of pension amounts for OC San's plans at June 30, 2022 is presented below: OCERS ARBA Total Net pension asset - OCERS $ 178,731,245 $ - $ 178,731,245 Deferred outflows - pensions 38,925,439 3,880,044 42,805,483 Total pension liability - ARBA - 20,382,770 20,382,770 Deferred inflows - pensions 122,548,235 4,797,049 127,345,284 Pension expense (credit) (21,874,488) 1,486,708 (20,387,780) A. Orange County Employees Retirement System (OCERS) Plan Description: All qualified permanent and probationary employees are eligible to participate in OC San'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 34 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 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 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. Benefits are determined by plan formula, age, years of service and final average salary (FAS) as follows: Plan H Plan B Plan U After 9/21/79 Prof/Sup: After 10/1/10 Hire Date Prof/Sup*: Before 10/1/10 OCEA: After 8/1/11 On or after 1/1/2013 OCEA*: Before 8/1/11 501: After 7/1/11 501*: Before 7/1/11 All: Before 1/1/2013 Final Average Compensation (FAS) Highest 36 months Highest 36 months Highest 36 months Normal Retirement Age Age 55 Age 57.5 Age 67 Service Requirement Age 70, any years Age 70, any years Age 70, any years Eligibility Age 50, 10 years Age 50, 10 years Age 52, 5 years Benefit percent per year 2 5% per year of FAS for 1.667% per year of FAS for 2.5% per year of FAS for of service for normal every year of service credit every year of service credit every year of service credit retirement age Benefit Adjustments Reduced before age 55 Reduced before age 57.5 Reduced before age 67 Public Employees Pension FAS Limitation Internal Revenue Code Internal Revenue Code Reform Act (PEPRA): 120% Section 401(a)(17) Section 401(a)(17) 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. 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. 35 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 At the December 31, 2021 measurement date, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits 564 Inactive employees entitled to but not yet receiving benefits 135 Active employees Total 620 1,319 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 OC San were $8,537,920 for the year ended June 30, 2022. Contribution rates in effect for the fiscal year ended June 30, 2022 are as follows: Plan H Plan B Plan U Employer Contribution Rate, 7/1/21 - 6/30/22 13.22% 11.23% 9.88% Employee Contribution Rate, 7/1/21 - 6/30/22 (2) 6.69-12.80% (1) 7.52-13.02% 7.16-14.24% Paid by Employer for Employee 3.50% 0.00% 0.00% (1) Net of employer paid portion of 3.5%. (2) Employee rates are determined bythe age of entry into the retirement system. For the year ended June 30, 2022, the contributions and average employer's contribution rate as a percentage of covered payroll were as follows: Average Employee (Paid Employer Employer by Employer) Contribution Plans Contributions Contributions Rate (%) Plan H 4,521,215 1,182,559 7.70% Plan B 792,177 - 1.07% Plan U 3,224,528 - 4.35% Total $ 8,537,920 $ 1,182,559 Pension Assets/Liabilities: As of June 30, 2022, OC San reported a net pension asset of $178,731,245 for its proportionate share of OCERS' net pension liability. The net pension asset was measured as of December 31, 2021 and the total pension asset used to calculate the net pension asset was determined by an actuarial valuation as of that date. OC San's proportion of the net pension asset was based on a projection of OC San's long-term share of contributions to the pension plan relative to the projected contribution of all participating employers, actuarially determined. 36 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 At December 31, 2021, OC San's proportion of the net pension liability was negative (8.718%), which was a decrease of 7.089% from its proportion measured as of December 31, 2020. The change in OC San's proportion of the net pension liability during the fiscal year ended June 30, 2022 was caused by contributions and projections noted above. Pension Expense and Deferred Outflows/Inflows of Resources Related to Pensions: For the year ended June 30, 2022, OC San recognized pension expense of negative ($21,874,488) for its proportionate share of the pension expense. At June 30, 2022 OC San reported its share of deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Difference between expected and actual experience Net difference between projected and actual investment earnings on pension plan investments Changes of assumptions (1) Employer contributions paid to OCERS subsequent to the measurement date Total Deferred Outflows Deferred Inflows of of Resources Resources $ 15, 066,130 $ 18, 908, 781 103,639,454 11, 884, 767 11,974,542 - 38, 925, 439 $ 122, 548, 235 (1) The monetaryeffects of changes in actuarial assumptions and method totals $11,884,767 for deferred outflows and $0 for deferred inflows of resources. These changes include: • adjustments to the mortality tables, • retirement assumptions for deferred vested members (age at retirement59, increase of4.00% in reciprocity, and an increase in compensation increases), • % in the rate of marriage for male and female members at retirement or pre -retirement death, • an increase in the Consumer Price Indexof2.75% peryear, maximum increase is 3%, • and a slight increase of .50% in salaries per year. Detail for these changes is available in the Segal Actuarial Valuation for December 31, 2021, Section 3. This report is available on the OCERS website at www.ocers.org. The $11,974,542 reported as deferred outflows of resources related to pensions resulting from OC San's contributions to OCERS subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2023. 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 Ending June 30, Amount 2023 $ (17,995,653) 2024 (34,332,197) 2025 (24,155, 775) 2026 (17,294,791) 2027 (1,818,922) Total $ (95,597,338) 37 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 Actuarial Assumptions and Methods: The total pension liability in the December 31, 2021 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 2.50% Projected salary increases 4.00% to 11.00% Cost of living adjustment 2.75% of retirement income OCERS Economic and Demographic Assumptions: On August 17, 2020, the OCERS Board adopted the following significant changes to the economic and demographic actuarial assumptions, used to establish retirement contribution rates effective July 1, 2021: • Reduced the assumed rate of price inflation from 2.75% to 2.50%. • Adopted the use of Public Retirement Plans Mortality tables (PUB-2010) published by the Society of Actuaries. 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, 2021 were based on the Amount -Weighted Above -Median Mortality Tables (adjusted for OCERS experience), projected generationally with the two-dimensional mortality improvement scale MP-2019, 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, 2017 through December 31, 2019. Further details of the experience study can be found in the OCERS Annual Comprehensive Financial Report, 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. 38 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 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, 2021: Asset Class Target Allocation Long -Term Expected Real Rate of Return (Arithmetic) Large Cap Equity 23.10% 5.43% Small Cap Equity 1.90% 6.21 % International Developed Equity 13.00% 6.67% Emerging Markets Equity 9.00% 8.58% Core Bonds 9.00% 1.10% High Yield Bonds 1.50% 2.91 % TIPS 2.00% 0.65% Emerging Market Debt 2.00% 3.25% Corporate Credit 1.00% 0.53% Long Duration Fixed Income 2.50% 1.44% Real Estate 3.01 % 4.42% Private Equity 13.00% 9.41 % Value Added Real Estate 3.01% 7.42% Opportunistic Real Estate 0.98% 10.18% Energy 2.00% 9.68% Infrastructure (Core Private) 1.50% 5.08% Infrastructure (Non -Core Private) 1.50% 8.92% CTA - Trend Following 2.50% 2.38% Global Macro 2.50% 2.13% Private Credit 2.50% 5.47% Alternative Risk Premia 2.50% 2.50% Total 100.00% Discount Rate: The discount rate used to measure the total pension liability was 7.00% for the year ended December 31, 2021. 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, 2021. Sensitivitv of the Proportionate Share of Net Pension Liabilitv to Chanaes in the Discount Rate: The following table represents OC San's proportionate share of the net pension liability calculated using the discount rate of 7.00%, as well as what OC San'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: 1 % Decrease Current Discount Rate 1 % Increase Net Pension Asset (Liability) (6.00%) (7.00%) (8.00%) December 31, 2021 $ 63,706,305 $ 178,731,245 $ 272,487,228 39 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 Pension Plan Fiduciary Net Position: Detailed information about OCERS' fiduciary net position is available in a separately issued OCERS Annual Comprehensive 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 OC San ARBA plan is a single -employer defined benefit plan which was administered by OCERS until February 29, 2008, when OC San began direct administration. This benefit was established by the OC San 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 OC San medical plan. The plan is a funded on a pay-as-you-go plan from general funds and is administered by OC San. 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 OC San 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, OC San provides health insurance coverage for 2'/2 months per year of service (see Note 7 — Other Post -Employment 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 $10 per month x years of service $10 per month x years of service year of service for up to a maximum of 25 years up to a maximum of 25 years normal retirement age Service requirement Age 50 or over with 10 or more years Age 50 or over with 10 or more years eligibility Any age with 30 or more years Any age with 30 or more years Age 70 or over, any years Age 70 or over, any years Benefit payments Monthly for life Monthly for life Benefit schedule Immediately after retiree health Immediately upon retirement insurance coverage ends * OCEA: Administrative, Clerical, Engineering, and Technical Services employee groups, bargaining unit OCEA. No cost of living adjustment is provided to benefit recipients. 40 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 At the July 1, 2021 actuarial valuation date, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits 410 Active employees 559 Total 969 Contributions: There are no employee contributions for this plan; OC San covers 100% of the cost. OC San utilizes a pay-as-you-go method for funding the plan. Contributions to the plan from OC San were $1,039,040 for the year ended June 30, 2022. Pension Liabilities: As of June 30, 2022, OC San reported a total pension liability of $20,382,770 for its ARBA plan. The total pension liability was determined by an actuarial valuation as of July 1, 2021. OC San 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, 2021 to the measurement date of June 30, 2022. The actuarial valuation performed as of July 1, 2021, 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: Beginning balance at July 1, 2021 Changes in the year: Service cost Interest on total pension liability Difference between expected and actual experience Changes of assumptions Benefit payments Net changes Ending balance at June 30, 2022 Total Pension Liability Increase (Decrease) $ 23,320,422 835,711 496,575 898,171 (4,129, 069) (1,039,040) (2,937,652) $ 20, 382, 770 41 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 Pension Expense and Deferred Outflows/Inflows of Resources Related to Pension: For the year ended June 30, 2022, OC San recognized pension expense of $1,486,708 for its ARBA plan. At June 30, 2022, OC San reported its share of deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Difference between expected and actual experience Changes of assumptions (1) Total of Resources of Resources $ 1,220,088 $ 1,293,597 2,659,956 3,503,452 $ 3,880,044 $ 4,797,049 (1) The monetary effects of changes in actuarial assumptions and method totals $2,659,956 for deferred outflows and $3,503,452 for deferred inflows of resources. These changes include passage of time, a change in the discount rate from 1.92% to 3.69%, change in actuarial system, census and other losses. Amounts reported as deferred outflows of resources and deferred inflows of resources related to ARBA pensions will be recognized in pension expense as follows: Year Ending June 30, Amount 2023 $ 154,422 2024 39,918 2025 (168,334) 2026 (307,005) 2027 (342, 288) 2028 (293,718) Total $ (917,005) Actuarial Assumptions and Methods: The total pension liability in the July 1, 2021 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Investment rate of return 3.75% per annum Discount rate 1.92% per annum as of July 1, 2021 (valuation date) 3.69% per annum as of June 30, 2022 (measurement date) Inflation rate 2.75% 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, 2021 were based on the Pub-2010 General Employee and Healthy Retiree Amount -Weighted Above -Median Mortality Tables for males or females, projected generationally with the two-dimensional mortality improvement scale M P-2019. 42 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 Discount Rate: The discount rate used to measure the total pension liability was 1.92% as of the valuation date, July 1, 2021, and 3.69% as of the measurement date, June 30, 2022. Because there are no assets held in a trust, the discount rate is based on the 20-year, tax exempt general obligation municipal bonds with an average rating of AA/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 3.69% 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 (2.69%) or 1 percentage point higher (4.69%) than the current rate: 1% Decrease Current Discount Rate 1% Increase Total Pension Liability (2.69%) (3.69%) (4.69%) June 30, 2022 $ 23,220,938 $ 20,382,770 $ 18,049,120 (7) Other Post -Employment Benefits (OPEB) Plan Description: The post -employment medical benefits plan is a single -employer defined benefit plan administered by OC San. This plan was established and may be modified only by action of the OC San Board of Directors. Stand-alone financial statements are not issued. Benefits Provided: OC San offers medical insurance to active and retired employees, as well as their qualified dependents. All retirees may choose coverage in an OC San medical plan, with retirees paying the full premium. However, for employees hired prior to July 1, 1988, medical benefits begin immediately at retirement with OC San paying 2.5 months of premium for each year of continuous service toward the cost of coverage under OC San 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, 2022, premiums ranged between $218 and $4,021 per month, depending on the plan and number of dependents covered. At the July 1, 2021 actuarial valuation date, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits (includes 30 with premiums paid by OC San and 63 under age 65 paying premiums) 93 Active employees eligible for premiums paid by OC San 3 Total 96 Contributions: There are no employee contributions to this plan; OC San 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 OC San pays for a period (see above). OC San utilizes a pay-as-you-go method for funding the plan. Contributions to the plan from OC San were $458,191 and the estimated implicit subsidy was $1,054,160, resulting in total payments of $1,512,351, and retirees contributed $1,187,798 for the year ended June 30, 2022. 43 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 OPEB Liabilities: As of June 30, 2022, OC San reported total OPEB liability of $2,077,772 for its post -employment retiree medical benefits plan. The total OPEB liability was determined by an actuarial valuation as of July 1, 2021. OC San 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, 2021 to the measurement date of June 30, 2022. The actuarial valuation performed as of July 1, 2021 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: Beginning balance at July 1, 2021 Changes in the year: Service cost Interest on total OPEB liability Difference between expected and actual experience Changes of assumptions Benefit payments (1) Net changes Ending balance at June 30, 2022 Total OPEB Liability Increase (Decrease) $ 1,332,528 8,426 57,237 2,477,916 (285,984) (1,512,351) 745,244 $ 2,077,772 (1) As part of the July 1, 2021 actuarial valuation report, Demsey, Filliger & Associates prepared a projection of the expected annual cost to the District to pay OPEB benefits. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB: For the year ended June 30, 2022, OC San recognized OPEB expense of $2,257,595 for its post -employment retiree medical benefits plan. At June 30, 2022 OC San reported $0 for its share of deferred outflows/inflows of resources related to OPEB. 44 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 Actuarial Assumptions and Methods: The total OPEB liability in the July 1, 2021 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Investment rate of return 3.75% per annum Discount rate 3.69% per annum Inflation rate 2.75% per annum Healthcare cost trend rate 4.00% for 2022-2023, 5.20% for 2024-2069, and 4.00% for 2070 and later; Medicare ages: 4.00% for all years Projected salary increases 3.00% per annum The mortality assumptions used in the total OPEB liability at July 1, 2021 were based on the Pub- 2010 General Employee and Healthy Retiree Amount -Weighted Above -Median Mortality Tables for males or females, projected generationally with the two-dimensional mortality improvement scale M P-2019 Actuarial assumptions used in the July 1, 2021 valuation were based on a review of plan experience during the period July 1, 2019 through June 30, 2021. Discount Rate: The discount rate used to measure the total OPEB liability was 1.92% as of the valuation date, July 1, 2021, and 3.69% as of the measurement date, June 30, 2022. 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 3.69% 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 (2.69%) or 1 percentage point higher (4.69%) than the current rate: 1% Decrease Current Discount Rate 1% Increase Total OPEB Liability (2.69%) (3.69%) (4.69%) June 30, 2022 $ 2,187,621 $ 2,077,772 $ 1,976,245 Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rates: The following table represents the total OPEB liability, 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 or 1 percentage point higher than the current healthcare cost trend rate: Total OPEB Liability 1% Decrease (1) Current Trend Rate (2) 1% Increase (3) June 30, 2022 $ 1,964,288 $ 2,077,772 $ 2,199, 237 (1) 3.00% for 2022-2023, 4.20% for 2024-2069, and 3.00% for 2070 and later years; Medicare ages: 3.00% for all years (2) 4.00% for 2022-2023, 5.20% for 2024-2069, and 4.00% for 2070 and later years; Medicare ages: 4.00% for all years (3) 5.00% for 2022-2023, 6.20% for 2024-2069, and 5.00% for 2070 and later years; Medicare ages: 5.00% for all years 45 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 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 OC San and IRWD. At the time of Revenue Area 14's creation, OC San 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 OC San and IRWD, IRWD paid OC San $34,532,000 for an initial 15 million gallons per day capacity in OC San's joint treatment facilities (with an ultimate collection capacity of 32 million gallons per day) and for a pro-rata interest in real property (based on flow of 32 million 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. The excess of purchase price over the assets' book value was fully amortized as of June 30, 2017. 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 OC San's joint capital outlay revolving fund budget requirements and certain capital improvements during the term of the agreement, for which contributions of $5,819,876 were recorded as contributions from other governments during the fiscal year ended June 30, 2022. IRWD also agreed to fund the annual integration adjustment of Revenue Area 14's equity share in OC San's Joint Works Treatment Facilities based on the flows discharged to OC San. Integration contributions credited to IRWD of $23,622,471 from Revenue Area 14 were recognized and reported as contributions to other governments during the fiscal year ended June 30, 2022. These contributions received from or credited to IRWD for their agreed -upon share of capital assets and equity share in OC San'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 OC San was entered on April 28, 2010. IRWD agreed to pay OC San for an interim solids handling charge which includes annual capital and quarterly operating expense components designed to compensate OC San for IRWD's share of the cost of operating and maintaining the existing facilities for the treatment of solids. The initial term of this agreement ended on December 31, 2021, as IRWD solids handling facilities are operational and all nonemergency discharges of wastewater solids residuals by IRWD to the OC San Wastewater System have ceased. Solids capital handling charges of $317,096 were reported as operating revenue in the Consolidated Revenue Area, and solids operating and maintenance charges of $170,596 were reported as operating revenue in Revenue Area No. 14 during the fiscal year ended June 30, 2022. Amounts charged to IRWD are based on estimates, with a reconciled adjustment recorded in the subsequent year. 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 $54,695,465 was reported in due to other governmental agency as of June 30, 2022. 46 Table of Contents ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2022 Annual Cash Reserve Reauirement The cash reserve contribution requirement from IRWD is $8.6 million at June 30, 2022, in accordance with Amendment No. 2 to the Agreement between IRWD and OC San Acquiring Ownership Interests, Assigning Rights, and Establishing Obligations. This cash reserve requirement is recognized as a liability to IRWD. (9) Commitments and Contingencies Construction Commitments OC San has active construction projects to add additional capacity, improve treatment, or replace/rehabilitate existing assets. At June 30, 2022, the outstanding commitments with contractors totaled $444,827,487. Litigation Certain claims involving disputed construction costs have arisen in the ordinary course of business. Additionally, OC San 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 OC San. 47 Table of Contents (THIS PAGE LEFT INTENTIONALLY BLANK) 48 Table of Contents ORANGE COUNTY SANITATION DISTRICT REQUIRED SUPPLEMENTARY INFORMATION 49 Table of Contents 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) Fiscal Year Ended June 30, 2015 2016 2017 2018 2019 2020 2021 2022 Proportion of the net pension liability 1.13% 0.74% (0.20%) (0.80%) 0.47% (0.97%) (1.63%) (8.72%) (asset) Proportionate share of the net $ 57,418,760 $ 42,439,759 $ (10,384,508) $ (39,571,100) $ 29,029,147 $ (49,446,615) $ (68,643,378) $ (178,731,245) pension liability (asset) Covered payroll (2) $ 58,641,163 $ 59,789,927 $ 60,000,017 $ 62,341,796 $ 66,475,479 $ 71,395,906 $ 73,290,519 $ 73,539,248 Proportionate share of the net pension liability (asset) as a ° 97.92 /° ° 70.98 /° ° (17.31 /°) ° (63.47 /°) ° 43.67 /° ° (69.26 /°) ° (93.66 /°) ° (243.04 /°) percentage of covered payroll OCERS' fiduciary net position as a percentage of the 89.61% 92.74% 101.70% 105.96% 95.86% 106.64% 108.50% 121.74% total pension liability (1) The amounts presented were determined as of the measurement date December 31. Data for fiscal years ended June 30, 2013 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. 50 Table of Contents ORANGE COUNTY SANITATION DISTRICT Schedule of District Contributions Orange County Employees Retirement System (OCERS) Pension Plan Last 10 Fiscal Years (1) Fiscal Year Ended June 30, 2015 2016 2017 2018 2019 2020 2021 2022 Contractually $ 17,201,569 $ 12,222,849 $ 7,709,734 $ 7,525,655 $ 7,769,431 $ 8,739,661 $ 8,479,429 $ 8,537,920 required contribution Contributions in relation to the contractually required contribution (17,201,569) (12,222,849) (7,709,734) (7,525,655) (7,769,431) (8,739,661) (8,479,429) (8,537,920) Contribution deficiency (excess) $ - $ - $ - $ - $ - $ - $ - $ Covered payroll (2) $ 60,025,942 $ 60,595,474 $ 62,266,907 $ 65,390,144 $ 69,101,109 $ 69,688,759 $ 72,191,190 $ 74,053,285 Contributions as a percentage of 28.66% 20.17% 12.38% 11.51 % 11.24% 12.54% 11.75% 11.53% covered payroll (1) The amounts presented for each fiscal year were determined as of June 30. Data for fiscal years ended June 30, 2013 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 qo into the determination of retirement benefits are included. 51 Table of Contents ORANGE COUNTY SANITATION DISTRICT Total Pension Liability (3) Additional Retiree Benefit Account (ARBA) Last 10 Fiscal Years (1) Fiscal Year Ended June 30, 2015 2016 2017 2018 2019 2020 2021 2022 Total pension liability $ 16,680,614 $ 18,313,122 $ 18,467,361 $ 20,831,172 $ 21,577,464 $ 21,434,655 $ 23,320,422 $ 20,382,770 Covered -employee $ 62,139,375 $ 62,977,577 $ 65,120,945 $ 68,126,103 $ 71,948,599 $ 74,602,862 $ 78,413,423 $ 79,472,505 payroll (2) Total pension liability as a percentage of 26.84% 29.08% 28.36% 30.58% 29.99% 28.73% 29.74% 25.65% covered -employee payroll (1) The amounts presented for each fiscal year were determined as of June 30. Data for fiscal years ended June 30, 2013 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) There are no assets in a trust compliant with GASB codification P22.101. OC San 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. 52 Table of Contents ORANGE COUNTY SANITATION DISTRICT Changes in Total Pension Liability (2) Additional Retiree Benefit Account (ARBA) Last 10 Fiscal Years (1) Fiscal Year Ended June 30, 2016 2017 2018 2019 2020 2021 2022 Beginning balance at July 1 $ 16,680,614 $ 18,313,122 $ 18,467,361 $ 20,831,172 $ 21,577,464 $ 21,434,655 $ 23,320,422 Changes in the year: Service cost 270,223 278,330 553,795 570,409 576,661 703,496 835,711 Interest on total pension 626,386 593,711 649,192 663,852 608,775 530,599 496,575 liability Difference between expected and actual - - - - (2,263,797) - 898,171 experience Changes of assumptions 1,230,327 (70,952) 1,889,274 328,481 1,823,672 1,619,642 (4,129,069) Benefit payments (494,428) (646,850) (728,450) (816,450) (888,120) (967,970) (1,039,040) Net changes 1,632,508 154,239 2,363,811 746,292 (142,809) 1,885,767 (2,937,652) Ending balance at June 30 $ 18,313,122 $ 18,467,361 $ 20,831,172 $ 21,577,464 $ 21,434,655 $ 23,320,422 $ 20,382,770 (1) The amounts presented for each fiscal year were determined as of June 30. Data for fiscal years ended June 30, 2013 through 2015 is not available in a comparable format. (2) OC San 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. 53 Table of Contents ORANGE COUNTY SANITATION DISTRICT Total OPEB Liability (3) Post -Employment Medical Benefits Plan Last 10 Fiscal Years (1) Fiscal Year Ended June 30, 2017 2018 2019 2020 2021 2022 Total OPEB liability $ 6,398,694 $ 5,025,395 $ 4,013,291 $ 2,483,644 $ 1,332,528 $ 2,077,772 Covered -employee payroll (2) $65,120,945 $68,126,103 $71,948,599 $74,602,862 $78,413,423 $79,472,505 Total OPEB liability as a percentage of covered- 9.83% 7.38% 5.58% 3.33% 1.70% 2.61 % employee payroll (1) The amounts presented for each fiscal year were determined as of June 30. Data for fiscal years ended June 30, 2013 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) There are no assets in a trust compliant with GASB codification P52.101. OC San 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. 54 Table of Contents ORANGE COUNTY SANITATION DISTRICT Changes in Total OPEB Liability (3) Post -Employment Medical Benefits Plan Last 10 Fiscal Years (1) Fiscal Year Ended June 30, 2018 2019 2020 2021 2022 Beginning balance at July 1 $ 6,398,694 $ 5,025,395 $ 4,013,291 $ 2,483,644 $ 1,332,528 Changes in the year: Service cost 18,182 16,489 4,334 5,238 8,426 Interest on total OPEB liability 177,395 159,195 98,047 45,840 57,237 Difference between expected - - (115,924) - 2,477,916 and actual experience Changes of assumptions (95,279) 78,935 88,289 41,063 (285,984) Benefit payments (2) (1,473,597) (1,266,723) (1,604,393) (1,243,257) (1,512,351) Net changes (1,373,299) (1,012,104) (1,529,647) (1,151,116) 745,244 Ending balance at June 30 $ 5,025,395 $ 4,013,291 $ 2,483,644 $ 1,332,528 $ 2,077,772 (1) The amounts presented for each fiscal year were determined as of June 30. Data for fiscal years ended June 30, 2013 through 2017 is not available in a comparable format. (2) Benefit payments include implicit subsidy associated with benefits paid. (3) OC San 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. 55 Table of Contents (THIS PAGE INTENTIONALLY LEFT BLANK) M. Table of Contents ORANGE COUNTY SANITATION DISTRICT SUPPLEMENTARY INFORMATION 57 Table of Contents ORANGE COUNTY SANITATION DISTRICT Combining Area Schedule of Net Position June 30, 2022 Current assets: Cash and cash equivalents Investments Accounts receivable, net of allowance for uncollectibles $319,716 Accrued interest receivable Connection fees receivable Property tax receivable Current portion of lease receivable Inventories Prepaid expenses Total current assets Noncurrent assets: Restricted: Cash and cash equivalents Investments Accrued interest receivable Net pension asset - OCERS Unrestricted: Non -depreciable capital assets Depreciable capital assets, net of accumulated depreciation Noncurrent portion of lease receivable Other noncurrent assets, net Total noncurrent assets Total assets Deferred outflows of resources: Deferred outflows related to refundings Deferred outflows related to pensions Total deferred outflows of resources Total assets and deferred outflows of resources Current liabilities: Accounts payable Accrued expenses Retentions payable Interest payable Due to other governmental agency Current portion of long-term liabilities Total current liabilities Noncurrent liabilities: Noncurrent portion of long-term liabilities Total OPEB liability Total pension liability - ARBA Total noncurrent liabilities Total liabilities Deferred inflows of resources: Deferred inflows related to refundings Deferred inflows related to leases Deferred inflows related to pensions Total deferred inflows of resources Total liabilities and deferred inflows of resources Net position: Net investment in capital assets: Collection system Treatment and disposal land Treatment and disposal system Capital -related liabilities Subtotal Restricted for OCERS pension benefits Unrestricted Total net position Revenue Consolidated Area No. 14 Revenue Area Totals $ 4,827,979 $ 80,875,614 $ 85,703,593 49,867,486 835,352,328 885,219,814 - 14,041,178 14,041,178 2,675,681 2,675,681 1,273,182 1,273,182 2,148,801 2,148,801 358,512 358,512 9,474,749 9,474,749 - 2,940,349 2,940,349 54,695,465 949,140,394 1,003,835,859 - 883,131 883,131 12,229,509 12,229,509 8,592 8,592 - 178,731,245 178,731,245 12,158,830 597,649,338 609,808,168 58,812,329 2,093,405,674 2,152,218,003 - 513,899 513,899 - 10,344 10,344 70,971,159 2,883,431,732 2,954,402,891 125,666,624 3,832,572,126 3,958,238,750 - 17,033,814 17,033,814 42,805,483 42,805,483 - 59,839,297 59,839,297 125,666,624 3,892,411,423 4,018,078,047 - 15,936,120 15,936,120 22,153,861 22,153,861 12,708,958 12, 708,958 - 16,055,500 16,055,500 54,695,465 - 54,695,465 - 52,569,390 52,569,390 54,695,465 119,423,829 174,119,294 - 876,171,575 876,171,575 2,077,772 2,077,772 20,382,770 20,382,770 - 898,632,117 898,632,117 54,695,465 1,018,055,946 1,072,751,411 - 1,951,850 1,951,850 842,461 842,461 127,345,284 127, 345,284 - 130,139,595 130,139,595 54,695,465 1,148,195,541 1,202, 891,006 13,039,221 557,245,324 570,284,545 1,702,487 52,037,181 53,739,668 56,229,451 2,081,772,507 2,138,001,958 - (936,536,326) (936,536,326) 70, 971,159 1,754, 518,686 1,825,489,845 - 108,179,040 108,179,040 - 881,518,156 881,518,156 $ 70,971,159 $ 2,744,215,882 $ 2,815,187,041 58 Table of Contents ORANGE COUNTY SANITATION DISTRICT Combining Area Schedule of Revenues, Expenses, and Change in Net Position For the Year Ended June 30, 2022 Operating revenues: Service charges Permit and inspection fees Total operating revenues Operating expenses other than depreciation and amortization: Salaries and benefits Utilities Supplies, repairs and maintenance Contractual services Feasibility studies Other operating expenses Total operating expenses other than depreciation and amortization Operating income (loss) before depreciation and amortization Depreciation and amortization Operating income (loss) Non -operating revenues: Property taxes Investment and interest income (loss) Contributions from other governments Other non -operating revenues Total non -operating revenues Non -operating expenses: Interest Contributions to other governments Loss on disposal of assets Other non -operating expenses Total non -operating expenses Income (loss) before capital contributions Capital contributions: Capital facilities capacity charges Capital contributions from other governments Total capital contributions Change in net position Total net position - beginning Revenue Consolidated Area No. 14 Revenue Area Totals $ 2,194,925 $ 325,629,010 $ 327,823,935 14,390 1,256,839 1,271,229 2,209,315 326,885,849 329,095,164 2,480,475 54,523,096 57,003,571 315,443 10,730,103 11,045,546 1,436,056 45,646,013 47,082,069 906,215 24,208,336 25,114,551 144,425 6,345,957 6,490,382 201,530 9,177,044 9,378,574 5,484,144 150,630,549 156,114,693 (3,274,829) 176,255,300 172,980,471 4,782,120 125,683,102 130,465,222 (8,056,949) 50,572,198 42,515,249 4,364,469 114,821,419 119,185,888 (1,312,689) (34,021,947) (35,334,636) 5,829,203 397,306 6,226,509 35,362 1,577,252 1,612,614 8,916,345 82,774,030 91,690,375 - 30,026,862 30,026,862 23,622,471 - 23,622,471 59,280 1,738,823 1,798,103 897 35,492 36,389 23,682,648 31,801,177 55,483,825 (22,823,252) 101,545,051 78,721,799 - 18,282,752 18,282,752 181,338 7,618,841 7,800,179 181,338 25,901,593 26,082,931 (22,641,914) 127,446,644 104,804,730 93.613.073 2.616.769.238 2.710.382.311 Total net position - ending $ 70,971,159 $ 2,744,215,882 $ 2,815,187,041 59 Table of Contents ORANGE COUNTY SANITATION DISTRICT Combining Area Schedule of Cash Flows For the Year Ended June 30, 2022 Cash flows from operating activities: Receipts from customers and users Payments to employees Payments to suppliers Net cash provided by (used in) operating activities Cash flows from noncapital financing activities: Proceeds from property taxes Receipts for other activities Net cash provided by (used in) noncapital financing activities Cash flows from capital and related financing activities: Capital facilities capacity charges Contributions from other governments Receipts from lease agreements Additions to capital assets Disposal of capital assets Principal payments on debt obligations Interest paid Proceeds from debt issuance Debt issuance costs Net cash provided by (used in) capital and related financing activities Cash flows from investing activities: Proceeds from sale of investments Purchases of investments Interest received Net cash provided by (used in) investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year Reconciliation of operating income (loss) to net cash provided by (used in) operating activities: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization Bad debt expense (net recoveries) (Increase)/decrease in operating assets and deferred outflows: Accounts receivable Inventories Prepaid expenses Net pension asset - OCERS Deferred outflows related to pensions Increase/(decrease) in operating liabilities and deferred inflows: Accounts payable Accrued expenses Due to other governmental agency Compensated absences Claims and judgments Total OPEB liability Total pension liability - ARBA Deferred inflows related to pensions Net cash provided by (used in) operating activities Noncash activities: Unrealized gain (loss) on the fair value of investments Capital assets acquired through accounts payable Capital facilities capacity charges acquired Revenue Consolidated Area No. 14 Revenue Area Eliminations Totals $ 28,242,420 $ 335,704,963 $ $ 363,947,383 (2,480,475) (83,786,294) (86,266,769) (3,003,669) (96,370,244) (99,373,913) 22,758,276 155,548,425 178,306,701 4,364,469 114,435,440 118,799,909 22,528 1,130,468 1,152,996 4,386,997 115,565,908 119,952,905 - 17,667,474 - 17,667,474 (17,611,930) 8,016,147 17,802,596 8,206,813 11,001 429,161 - 440,162 (5,819,875) (191,912,464) 5,819,875 (191,912,464) 23,622,471 - (23,622,471) - - (304,965,000) (304,965,000) - (40,469,300) (40,469,300) - 272,127,209 272,127,209 - (986,623) (986,623) 201,667 (240,093,396) (239,891,729) (1,485,774) 492,997,424 491,511,650 (24,375,977) (547,690,893) (572,066,870) 450,551 11,388,031 11,838,582 (25,411,200) (43,305,438) (68,716,638) 1,935,740 (12,284,501) (10,348,761) 2,892,239 94,043,246 96,935,485 $ 4,827,979 $ 81,758,745 $ $ 86,586,724 $ (8,056,949) $ 50,572,198 $ - $ 42,515,249 4,782,120 125,683,102 - (104,744) 130,465,222 (104,744) - 8,923,858 8,923,858 - (1,089,417) (1,089,417) - (405,916) (405,916) - (110,087,867) (110,087,867) - 11,248,696 11,248,696 (250,254) (250,254) - 1,652,607 1,652,607 26, 033,105 - 26, 033,105 - (205,652) (205,652) - 940,400 940,400 - 745,244 745,244 - (2,937,652) (2,937,652) - 70,863,822 70,863,822 $ 22,758,276 $ 155,548,425 $ $ 178,306,701 $ (1,764,386) $ (45,044,834) $ (46,809,220) 12,286,303 12,286,303 615,278 615,278 Table of Contents ORANGE COUNTY SANITATION DISTRICT STATISTICAL SECTION This part of the Annual Comprehensive Financial Report of the Orange County Sanitation District (OC San) presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about OC San's overall financial health. Contents Pages Financial Position and Trends These schedules contain current and trend information to help the reader understand OC San's financial position and how OC San's financial performance and well-being have changed over time. 62 - 66 Revenue Capacity These schedules contain information to help the reader assess OC San's most significant revenue source of sewer service fees. 67 - 69 Debt Capacity These schedules present information to help the reader assess the affordability of OC San's current levels of outstanding debt and OC San's ability to issue additional debt in the future. All of OC San's debt is recorded in a proprietary fund; consequently, many of 70 - 72 the schedules which are applicable to governmental funds are not presented. Operating Information These schedules contain data to help the reader understand how the information in OC San's financial report relates to the services it provides and the activities it performs. 73 - 76 Demographic and Economic Factors These schedules offer demographic information to help the reader understand the environment within which OC San's financial activities take place. 77 - 80 61 Table of Contents $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 Fiscal Year 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 ORANGE COUNTY SANITATION DISTRICT Net Position by Component (Dollars in Thousands) Last Ten Fiscal Years O Net Investment in Capital Assets O Restricted for Pension Benefits O Unrestricted Net Investment in Restricted for Capital Assets Pension Benefits (4) Unrestricted (4) $ 1,180,298 $ - $ 520,427 1,204,706 - 617,589 1,327,384 - 434,460 1,429,269 - 489,303 1,504,898 17,112 519,215 1,568,118 23,893 602,778 1,647,723 16,837 695,942 1,678,041 52,844 808,125 1,740,102 63,748 906,532 1,825,490 108,179 881,518 Total Net Position 1,700,725 1,822,295 1,761,844 1,918,572 (2) 2,041,225 2,194,789 (3) 2,360,502 2,539,010 2,710,382 2,815,187 Notes (1) Beginning net position restated due to implementation of GASB 68. (2) Beginning net position restated due to implementation of GASB 73. (3) Beginning net position restated due to implementation of GASB 75. (4) FY 2016-17 to 2020-21 net position restated to reflect amounts restricted for OCERS pension benefits. Source: Orange County Sanitation District's Financial Management Division. 62 Table of Contents ORANGE COUNTY SANITATION DISTRICT Revenues and Gross Capital Contributions by Source (Dollars in Thousands) Last Ten Fiscal Years lie ❑ Operating Revenue ❑ Non -Operating Revenue ❑ Capital Contributions Operating Revenue Non -Operating Revenue Permit & Fiscal Service Inspection Total Property Total Non- Capital Year Charges Fees Operating Taxes Interest Other (1) Operating Contributions 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 4,055 101,473 21,633 2018-19 317,291 1,199 318,490 99,534 29,102 27,197 155,833 23,797 2019-20 339,895 1,169 341,064 104,492 33,669 6,731 144,892 29,034 2020-21 335,569 1,131 336,700 110,245 1,694 11,176 123,115 33,936 2021-22 327,824 1,271 329,095 119,186 (35,335) 7,840 91,691 26,083 Notes (') FY 2017-18 to 2020-21 restated to reflect capital contributions from other governments. Source: Orange County Sanitation District's Financial Management Division. 63 Table of Contents $300,000 $275,000 $250,000 $225,000 $200,000 $175,000 $150,000 $125,000 $100,000 $75,000 $50,000 $25,000 $0 Fiscal Year 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 ORANGE COUNTY SANITATION DISTRICT Expenses by Type (Dollars in Thousands) Last Ten Fiscal Years 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 ❑ Operating Expense ❑ Non -Operating Expense Operating Expense Non -Operating Expense Salaries & Maint & Depr & Total Interest Total Non - Benefits Utilities Other Amort Operating Expense Other Operating $ 76,878 $ 6,403 $ 66,536 $ 63,907 $ 213,724 $ 42,315 $ 37,335 $ 79,650 79,179 6,381 60,887 99,805 246,252 40,450 1,317 41,767 79,657 7,246 62,323 94,186 243,412 34,112 3,168 37,280 75,576 7,246 70,679 90,502 244,003 27,597 6,482 34,079 74,291 6,119 69,843 96,320 246,573 25,648 53,270 78,918 67,418 7,298 70,840 97,399 242,955 35,011 1,483 36,494 85,506 7,733 73,347 102,239 268,825 34,466 29,116 63,582 82,917 8,622 76,794 113,888 282,221 33,833 20,428 54,261 74,772 9,789 83,457 116,452 284,470 34,837 3,072 37,909 57,004 11,046 88,065 130,465 286,580 30,027 25,457 55,484 Source: Orange County Sanitation District's Financial Management Division. 64 Table of Contents ORANGE COUNTY SANITATION DISTRICT Change in Net Position (Dollars in Thousands) Last Ten Fiscal Years $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Ending Net Position by Fiscal Year Fiscal Total Total Year Revenues Expenses 2012-13 $ 396,481 $ 293,374 2013-14 409,589 288,019 2014-15 414,743 280,692 2015-16 441,650 278,082 2016-17 448,144 325,491 2017-18 440,605 279,449 2018-19 498,120 332,407 2019-20 514,990 336,482 2020-21 493,751 322,379 2021-22 446,869 342,064 Change in Beginning Ending Net Position Net Position Net Position $103,107 $1,597,618 $ 1,700,725 121,570 1,700,725 1,822,295 134,051 1,627,793 (1) 1,761,844 163,568 1,755,004 (2) 1,918,572 122,653 1,918,572 2,041,225 161,156 2,033,633 (3) 2,194,789 165,713 2,194,789 2,360,502 178,508 2,360,502 2,539,010 171,372 2,539,010 2,710,382 104,805 2,710,382 2,815,187 Notes (1) Beginning net position restated due to implementation of GASB 68. (2) Beginning net position restated due to implementation of GASB 73. (3) Beginning net position restated due to implementation of GASB 75. Source: Orange County Sanitation District's Financial Management Division. 65 Table of Contents ORANGE COUNTY SANITATION DISTRICT Cash and Investment Reserve Balances (Dollars in Millions) Last Ten Fiscal Years Capital Debt Cash Flow Self- Improvement Service Fiscal Year Contingency Insurance Program Requirements Total 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 2019-20 178 57 552 94 881 2020-21 128 100 639 94 961 2021-22 134 100 659 91 984 Notes 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: 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 Debt Service Requirements Reserve is held pursuant to the provisions of certificates of participation issues, and the monies are not available for the general needs of the Orange County Sanitation District. Source: Orange County Sanitation District's Financial Management Division. 0 Table of Contents ORANGE COUNTY SANITATION DISTRICT Sewer Service Fees Single Family Residence Rate Last Nine Fiscal Years and Next Fiscal Year 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. 400 350 m m LL M 3 300 c c Q LL 250 N 200 150 Sewer Service Fiscal Year Charge 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 2020-21 339.00 2021-22 343.00 2022-23 347.00 Annual Sewer Service Fees Single Family Residence 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Fiscal Year Source: Orange County Sanitation District's Financial Management Division. 67 Table of Contents ORANGE COUNTY SANITATION DISTRICT Number of Accounts and Revenues by Customer Class (Dollars in Millions) Last Ten Fiscal Years Residential/Commercial Industrial 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 (1) Revenue Revenues Accounts Revenue Revenues 2012-13 883,477 $ 259.8 96% 527 $ 10.8 4% 2013-14 873,308 269.0 96% 489 14.4 4% 2014-15 824,465 260.5 95% 467 14.2 5% 2015-16 863,317 278.0 95% 450 12.6 5% 2016-17 859,869 281.2 96% 466 13.8 4% 2017-18 871,338 288.4 95% 473 17.9 5% 2018-19 871,312 291.9 94% 476 9.4 6% 2019-20 904,886 306.8 97% 473 12.8 3% 2020-21 908,219 307.9 96% 467 12.6 4% 2021-22 900,327 308.8 96% 462 12.6 4% $350,000,000 $300,000,000 $250,000,000 $200,000,000 $150, 000, 000 $100, 000, 000 $50,000,000 $0 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 O Residential/Commercial Users ■ Industrial Users Notes (1) - Number of equivalent single-family dwellings is an estimate, calculated by dividing residential/commercial revenue by the sewer service fee for each fiscal year. Source: Orange County Sanitation District's Financial Management Division. 68 Table of Contents Customer ORANGE COUNTY SANITATION DISTRICT Principal Sewer Service Customers For the Current Fiscal Year and Nine Years Ago House Foods America Corp. (West) Nor -Cal Beverage Co. Inc. (Main) Stremicks Heritage Foods, LLC Pulmuone Foods USA (Wildwood), Inc. (East) Newport Fab, LLC (TowerJazz Semiconductor) House Foods America Corp. (East) MCP Foods, Inc. Ameripec, Inc. Expo Dyeing and Finishing, Inc. Brea Power II, LLC Kimberly-Clark Worldwide, Inc. Dean Foods Co. of CA Inc. Schreiber Foods Inc. Pepsi -Cola Bottling Group Fiscal Year Ended 6/30/22 Fiscal Year Ended 6/30/13 Industrial % to Total Industrial % to Total Permittee Service Permittee Service Service Charge Service Charge Charges Rank Revenue Charges Rank Revenue $ 1,290,694 1 0.39% $ 953,542 2 0.31% 1,002,810 2 0.31% 416,000 9 0.14% 910,602 3 0.28% 986,405 1 0.33% 800,560 4 0.24% 574,797 6 0.19% 744,655 5 0.23% 446,894 8 0.15% 706,314 6 0.22% 480,671 7 0.15% 870,130 5 0.29% 434,275 8 0.13% 382,099 9 0.12% 334,976 10 0.10% 903,947 3 0.30% 890,943 4 0.29% 473,289 7 0.16% 394,930 10 0.13% $ 7,087,656 2.17% $ 6,910,877 2.29% 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. Source: Orange County Sanitation District's Financial Management Division. .• Table of Contents 70% 60% 50% 40% 30% 20% 10% 0% ORANGE COUNTY SANITATION DISTRICT Ratio of Annual Debt Service to Total Expenses (Dollars in Thousands) Last Ten Fiscal Years 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Fiscal Year Principal (1) 2012-13 $ 23,965 2013-14 39,590 2014-15 27,875 2015-16 29,405 2016-17 35,575 2017-18 32,140 2018-19 31,655 2019-20 32,730 2020-21 30,430 2021-22 33,875 Ratio of Debt Total Service to Total Total Debt Operating Operating Interest (2) Service (3) Expenses (4) Expenses $ 53,640 $ 77,605 $ 149,817 51.80% 53,163 92,753 146,447 63.34 53,586 81,461 149,226 54.59 50,301 79,706 153,501 51.93 47,143 82,718 150,253 55.05 43,466 75,606 145,556 51.94 44,481 76,136 166,586 45.70 43,664 76,394 168,332 45.38 42,061 72,491 168,018 43.14 40,564 74,439 156,115 47.68 Notes (1) - Excludes principal reductions due to debt refundings. (2) - Excludes amortization of premium/discount and deferred amount. (3) - Debt consists of certificates of participation, revenue obligations, and anticipation notes. (4) - Excludes depreciation and amortization expense. Source: Orange County Sanitation District's Financial Management Division. 70 Table of Contents ORANGE COUNTY SANITATION DISTRICT Debt Coverage Ratios (Dollars in Millions) Last Ten Fiscal Years The Orange County Sanitation District has no legal debt limits as imposed by state legislation. OC San 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. 4.50 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 2011-12 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Operating & Non -Operating Revenues: Service Charges, Net of Refunds -Regional Service Charges, Net of Refunds -Local (1) Industrial Sewer Service Charges SAW PA Assessment IRWD Assessment Ad Valorem Taxes Interest Earnings (2) Other Revenues (3) Total Revenues Operating Expenses (4) Net Revenues Debt Service Requirements Principal Payments Interest Payments Total Debt Service Requirements Coverage Ratios Ending Reserves (5) Fiscal Year Ending June 30, 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 $ 259.8 $ 269.0 $ 260.5 $ 278.0 $ 281.2 $ 288.4 $ 291.9 $ 306.8 $ 307.9 $ 308.8 5.8 5.7 5.5 5.7 1.3 (0.1) - - - - 10.8 14.4 14.2 12.6 13.8 17.9 9.4 12.8 12.6 12.6 2.7 2.4 2.7 3.2 3.3 2.7 2.9 2.6 2.8 2.8 25.6 19.6 26.4 26.6 36.0 9.9 36.3 20.8 16.0 8.6 79.2 74.9 79.8 84.4 88.3 94.2 99.5 104.5 110.2 119.2 (3.9) 6.5 4.8 9.2 3.1 3.2 29.1 33.7 1.7 (35.3) 3.7 3.0 3.2 4.0 4.8 2.8 5.2 4.8 8.6 4.1 383.7 395.5 397.1 423.7 431.8 419.0 474.3 486.0 459.8 420.8 149.8 146.4 149.2 153.5 150.3 145.6 166.6 168.3 168.0 156.1 $ 233.9 $ 249.1 $ 247.9 $ 270.2 $ 281.5 $ 273.4 $ 307.7 $ 317.7 $ 291.8 $ 264.7 $ 24.0 $ 39.6 $ 27.9 $ 29.4 $ 35.6 $ 32.1 $ 31.7 $ 32.7 $ 30.4 $ 33.9 53.6 53.2 53.6 50.3 47.1 43.5 44.4 43.7 42.1 40.5 $ 77.6 $ 92.8 $ 81.5 $ 79.7 $ 82.7 $ 75.6 $ 76.1 $ 76.4 $ 72.5 $ 74.4 3.01 2.68 3.04 3.39 3.40 3.62 4.04 4.16 4.02 3.56 $ 465.0 $ 542.0 $ 428.0 $ 428.0 $ 404.0 $ 580.0 $ 663.0 $ 787.0 $ 867.0 $ 893.0 Notes (1) - Local Sewer transferred to East Orange County Water District in FY2016-17. (2) - Interest earnings include unrealized gains and losses from investments adjusted to market value. (3) - FY 2017-18 to 2020-21 other revenues restated to remove capital contributions from other governments. (4) - Operating expenses exclude depreciation and amortization expenses. (5) - Excludes debt service reserves in accordance with the Orange County Sanitation District's reserve policy. Source: Orange County Sanitation District's Financial Management Division. 71 Table of Contents Fiscal Year 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 ORANGE COUNTY SANITATION DISTRICT Ratios of Outstanding Debt Last Ten Fiscal Years (5) Total Outstanding Debt $ 1,325,928,512 1,278,998,124 1,241,140,357 1,206,722,347 1,140,679,773 1,095,737,610 1,050,502,373 1,004,215,901 963,115,533 913,102,847 (3) Median Family Income (1) $ 84,100 84,900 85,900 85,000 88,000 92,700 97,900 103,000 106,700 119,100 Debt as a Percentage of Median Family Inrmmn 0.006% 0.007% 0.007% 0.007% 0.008% 0.008% 0.009% 0.010% 0.011 % 0.013% (4) Population Estimate (2) 2,472,122 2,491,268 2,521,803 2,548,745 2,578,681 2,609,419 2,607,092 2,589,011 2,550,763 2,557,216 Debt per Capita 536.35 513.39 492.16 473.46 442.35 419.92 402.94 387.88 377.58 357.07 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 Table of Contents Fiscal Year 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Millions of Gallons of Wastewater Treated Per Day 200 198 187 183 188 185 191 188 182 179 ORANGE COUNTY SANITATION DISTRICT Comparison of the Volume of Wastewater Treated With Revenues and Expenses Last Ten Fiscal Years Collection, Treatment & Disposal Cost per Million Gallons $ 1,906.01 1,936.64 2,070.97 2,110.43 2,054.56 2,069.30 2,274.73 2,421.83 2,428.28 2,254.66 Total Operating Costs (In Thousands) $ 213,724 246,252 243,412 244,003 246,573 242,955 268,825 282,221 284,470 286,580 Total Total Total Non -Operating Operating Non -Operating Costs Revenues Revenues(l) (In Thousands) (In Thousands) (In Thousands) $ 79,650 $ 304,576 $ 79,108 41,767 301,459 94,037 37,280 302,450 94,637 34,079 315,428 108,248 78,918 313,282 118,511 36,494 317,499 101,473 63,582 318,490 155,833 54,261 341,064 144,892 37,909 336,700 123,115 55,484 329,095 91,691 Total expenses in FY 2021-22 increased $49 million, or 16.6 percent since FY 2012-13, primarily as a result of expansion of the Capital Improvement Program (CIP) and increase in operational services levels with OC San's decision beginning in FY 2002-03 to maximize existing secondary treatment facilities as OC San moved from a 50/50 mix of primary and secondary effluent treatment to meeting secondary treatment standards as of December 31, 2012. The majority of the increase in expenses is due to depreciation expense as a result of the expansion in capital facilities. Increases were also realized in repairs, maintenance, utilities, and other operating costs in order to deliver required levels of service. In FY 2021-22, personnel expenses decreased 23.8 percent over the prior year. This decrease is mainly due to the difference between projected and actual investment earnings on OCERS plan investments that have been recognized as pension expense. There was no change in the number of full-time equivalent positions authorized from the prior year. As depicted from the chart above, actual wastewater treatment flows were 200 mgd in FY 2012-13. The last several years of California's record -breaking drought and water conservation efforts have resulted in FY 2021-22 flows of only 179 mgd, a decrease of 21 mgd or 10.5 percent since FY 2012-13. Notes "I FY 2017-18 to 2020-21 restated to remove capital contributions from other governments. Source: Orange County Sanitation District's Financial Management Division. 73 Table of Contents 700 600 500 400 300 200 100 0 ORANGE COUNTY SANITATION DISTRICT Authorized Full-time Equivalents (FTE) by Function Last Ten Fiscal Years 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 General Management (1) ❑ Environmental Services (3) ❑ Operations and Maintenance General Management (1) Human Resources (2) Administrative Services (2) Environmental Services (3) Facilities Support Services (3) Engineering Operations and Maintenance Total FTEs ❑ Human Resources (2) ❑ Administrative Services (2) ❑ Facilities Support Services (3) ❑ Engineering Fiscal Year Ending June 30, 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 12 12 14 15 15 15 14 15 18 15 16 18 16 27 27 27 27 27 26 26 111 110 111 98 99 99 100 101 101 102 - - - - 91 91 91 92 93 93 81 78 76 63 - - - - - - 125 123 123 127 116 116 116 121 117 116 281 283 284 294 279 287 288 284 284 287 626 624 624 624 627 635 636 640 639 639 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, Divisional reorganization created Environmental Services and eliminated Facilities Support Services. Source: Orange County Sanitation District's Financial Management Division. 74 Table of Contents 350,000 300,000 250,000 200,000 150,000 100.000 ORANGE COUNTY SANITATION DISTRICT Biosolids Produced Last Ten Fiscal Years Wet Tonnage by Fiscal Year 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Fiscal Year Wet Tonnaae 2012-13 274,957 2013-14 279,362 2014-15 275,943 2015-16 283,052 2016-17 288,771 2017-18 284,039 2018-19 254,616 2019-20 209,000 2020-21 198,306 2021-22 186,128 Notes (1) Beginning in Fiscal Year 2018-19, biosolids produced were reduced due to the commissioning of dewatering centrifuges at both treatment plants. Source: Orange County Sanitation District's Environmental Compliance Division. 75 Table of Contents ORANGE COUNTY SANITATION DISTRICT Capital Asset Statistics Last Ten Fiscal Years Miles of Trunk & Number Primary Secondary Fiscal Subtrunk of Pump Treatment Treatment Year Sewers Stations Capacity (1) Capacity (1) 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 2019-20 388 17 376 332 2020-21 388 17 376 332 2021-22 388 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 76 Table of Contents ORANGE COUNTY SANITATION DISTRICT Demographic Statistics Covering The Entire County of Orange (i) Last Ten Fiscal Years Total (4) (5) (2) Personal Per Capita Median Public (6) Fiscal Population Income Personal Family School Unemployment Year Estimates (In Thousands) Income Income Enrollment Rate 2012-13 3,082,000 $ 166,370,000 (3) $ 53,981 $ 84,100 501,801 6.1% 2013-14 3,114,000 179,141,000 (3) 57,528 84,900 500,487 5.2% 2014-15 3,148,000 193,081,000 (3) 61,334 85,900 497,116 4.3% 2015-16 3,183,000 200,783,000 (3) 63,080 85,000 493,030 4.4% 2016-17 3,194,000 205,052,000 (3) 64,199 88,000 490,430 3.8% 2017-18 3,221,000 212,902,000 (3) 66,098 92,700 485,835 3.3% 2018-19 3,222,000 221,803,000 (3) 68,840 97,900 478,823 3.0% 2019-20 3,194,000 236,303,000 (3) 73,983 103,000 473,612 13.6% 2020-21 3,153,764 255,824,000 (3) 81,117 106,700 456,572 6.5% 2021-22 3,162,245 267,143,000 (3),(7) 84,479 119,100 448,729 2.9% Notes and Data Sources (1) - The Orange County Sanitation District services 479 square miles or 60% of the total 799 square miles that make up the boundaries of Orange County. (2) - Data Source: Demographic Research Unit, California Department of Finance. (3) - Data Source: A. Gary Anderson Center for Economic Research, Chapman University. (4) - Data Source: U.S. Department of Housing and Urban Development. (5) - Data Source: California Department of Education, Educational Demographics Unit. (6) - Data Source: State of California, Employment Development Department as of June 30 of each fiscal year. (7) - Forecasted number. 77 Table of Contents ORANGE COUNTY SANITATION DISTRICT Estimated Population Served by the Orange County Sanitation District June 30, 2022 Anaheim Brea Buena Park Costa Mesa Cypress Fountain Valley Fullerton Garden Grove Huntington Beach Irvine La Habra La Palma Los Alamitos Newport Beach Orange Placentia Santa Ana Seal Beach Stanton Tustin Villa Park Westminster Yorba Linda Subtotal Cities (1) Estimated Population Served in Unincorporated Areas (2) Data Sources Population as of January 1, 2022 341,245 46,872 83,430 111,394 49,810 56,564 142,732 170,526 196,100 310,250 61,792 15,332 11,873 83,727 137,676 51,204 308,459 24,846 39,275 79,535 5,782 90,393 67,233 2,486,050 71,166 2.557.216 (1) Demographic Research Unit, State of California Department of Finance (2) Center for Demographic Research, California State University, Fullerton. 78 Table of Contents Employers University of California, Irvine Walt Disney Co. County of Orange Providence (St. Joseph Health) Kaiser Permanente Albertsons Southern California Hoag Memorial Hospital Walmart Inc. Target Corp. MemorialCare Boeing Co. Bank of America Corp. Cedar Fair LP Total ORANGE COUNTY SANITATION DISTRICT Principal Orange County Employers (1) For the Current Fiscal Year and Nine Years Ago Fiscal Year Ended 6/30/22 Percentage of Number of Total County Employees (2) Rank Employment (3) 26,182 1 1.71 % 25,000 2 1.63% 18,139 3 1.19% 13,079 4 0.86% 8,800 5 0.58% 7,853 6 0.51 % 7,051 7 0.46% 6,300 8 0.41 % 6,000 9 0.39% 5,490 10 0.36% 123,894 8.10% Fiscal Year Ended 6/30/13 Percentage of Number of Total County Employees (4) Rank Employment (5) 21,800 2 1.42% 25,000 1 1.63% 17,257 3 1.13% 11,679 4 0.76% 6,300 6 0.41 % 5,400 9 5,545 8 6,873 5 6,000 7 5,200 10 111,054 0.35% 0.36% 0.45% 0.39% 0.34% 7.24% Notes & Data Sources (1) - Data is for the entire county of Orange. (2) - Data Source: Orange County Business Journal Book of Lists published November 2021 (3) - Data Source: State of California, Employment Development Department - Percentage is calculated by dividing employees by total employment of 1,529,500 as of June 2022. (4) - Data Sources: Orange County Business Journal Book of Lists published November 2012; County of Orange (5) - Data Source: State of California, Employment Development Department - Percentage is calculated by dividing employees by total employment of 1,533,100 as of June 2013. 79 Table of Contents ORANGE COUNTY SANITATION DISTRICT Operating Indicators June 30, 2022 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: Consolidated Revenue Area Orange County (unincorporated areas) Cities: Anaheim Brea Buena Park Costa Mesa Cypress Fountain Valley Fullerton Garden Grove Special Districts: Costa Mesa Sanitary District Midway City Sanitary District Yorba Linda Water District Revenue Area No. 14 Orange County (unincorporated areas) Cities: Irvine Orange Tustin Special District: Irvine Ranch Water District Governing Body: Authorized Full -Time Equivalent Employees: Operational Date: Authority: Services: Service Area: Population Served: Total Miles of Sewers (including force mains): On -Plant Pumping Stations: Off -Plant Pumping Stations: Huntington Beach Santa Ana Irvine Seal Beach La Habra Stanton La Palma Tustin Los Alamitos Villa Park Newport Beach Westminster Orange Yorba Linda Placentia 25-member Board of Directors 639 July 1, 1954 California Health & Safety Code Section 4700 et. seq. Wastewater collection, treatment, and disposal 479 square miles 2.6 million 388 miles 2 15 Wastewater System Treatment Capacities (Million Gallons per Day) Actual Flows Existing Primary Existing Secondary FY21-22 Treatment Capacity Treatment Capacity Plant 1 120 208 182 Plant 2 59 168 150 Total 7272 M 332 Source: Orange County Sanitation District's Financial Management Division. :1 Table of Contents 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 Orange County Sanitation District's debt covenants beyond what is allowed to be reported in the Statistical Section. 81 Table of Contents ORANGE COUNTY SANITATION DISTRICT Cash and Investment Portfolio As of June 30, 2022 Net Unrealized Cost Market Value Gain/(Loss) Shares Par Base Base % of Total Base INVESTMENT PORTFOLIO: CASH & CASH EQUIVALENTS (U.S. DOLLAR): FIRST AMERICAN SHORT TERM FDS 9,540,571 9,540,571 9,540,571 1.07% - SUBTOTAL - CASH & CASH EQUIVALENTS 9,540,571 9,540,571 9,540,571 1.07% - FIXED INCOME SECURITIES (U.S. DOLLAR): CONSUMER DISCRETIONARY 24,554,000 24,578,759 23,545,990 2.63% (1,032,769) CONSUMER STAPLES 6,955,000 6,950,043 6,737,402 0.75% (212,641) FINANCE 113,700,000 114,087,704 108,406,909 12.12% (5,680,795) FIXED INCOME FUNDS OTHER 2,500,000 2,479,920 2,482,200 0.28% 2,280 HEALTH CARE 6,000,000 5,853,343 5,619,260 0.63% (234,083) INDUSTRIAL 7,135,000 7,137,964 7,130,624 0.80% (7,340) INFORMATION TECHNOLOGY 19,922,000 20,678,047 19,771,315 2.21% (906,732) MTG RELATED SECURITY 95,040,678 95,671,610 92,674,850 10.36% (2,996,760) PRIVATE PLACEMENTS 15,170,000 15,038,222 13,858,374 1.55% (1,179,848) SHORT TERM FUNDS 27,000,000 26,928,364 26,838,180 3.00% (90,184) SUPRANATIONAL 54,940,000 54,660,227 51,217,412 5.72% (3,442,815) U.S. AGENCY 152,325,000 153,961,317 147,124,764 16.44% (6,836,553) U.S. GOVERNMENT 374,753,180 371,829,526 362,075,074 40.47% (9,754,452) UTILITY 12,660,440 12,515,720 12,781,600 1.43% 265,880 U.S. GOVERNMENT TIPS 5,000,000 5,003,303 4,955,860 0.55% (47,443) SUBTOTAL - FIXED INCOME SECURITIES 917,655,298 917,374,069 885,219,814 98.93% (32,154,255) TOTAL INVESTMENT PORTFOLIO $ 927,195,869 926,914,640 894,760,385 100.00% $ (32,154,255) DEMAND DEPOSITS AND CASH ON HAND 4,222,079 4,222,079 MONIES HELD WITH FISCAL AGENTS 50,641 50,641 MONIES WITH THE LOCAL AGENCY INVESTMENT FUND 72,879,233 71,940,943 MONIES WITH THE SECTION 115 TRUST 14,971,231 13,061,999 TOTAL CASH AND INVESTMENTS $ 1,019,037,824 $ 984,036,047 Source: US Bank and Orange County Sanitation District's Financial Management Division. 82 Table of Contents ORANGE COUNTY SANITATION DISTRICT Property Tax Rates - Direct and Overlapping Governments Last Ten Fiscal Years Tax Rate OC San 1958 General Fiscal Basic Obligation Total Year Levu Rnnrk Tax Rnfa 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% OC San's Average Share of Basic Levy 1.64% 1.65% 1.63% 1.62% 1.61 % 1.59% 1.59% 1.58% 1.59% 1.61 % Notes 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 OC San general obligation bonds (which were paid in full in fiscal year 1998-99). Source: Orange County Auditor -Controller's Office. 83 Table of Contents $600,000,000 $500,000,000 $400,000,000 $300,000,000 $200,000,000 $100,000,000 $0 Fiscal Year ORANGE COUNTY SANITATION DISTRICT Assessed and Estimated Actual Value of Taxable Property (Dollars In Thousands) Last Ten Fiscal Years 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 O Secured Secured Unsecured O Unsecured Total Percent Change in Assessed Value 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% 2019-20 461,217,033 7,489,937 468,706,970 5.77% 2020-21 486,958,908 7,289,732 494,248,640 5.45% 2021-22 506,709,716 9,445,337 516,155,053 4.43% 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. Source: Orange County Auditor -Controller's Office. 84 Table of Contents ORANGE COUNTY SANITATION DISTRICT Property Tax and User Fee Levies and Collections (Dollars in Thousands) Last Ten Fiscal Years $420,000 $400,000 $380,000 $360,000 $340,000 $320,000 $300,000 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 ❑ Total Tax and User Fee Levy ❑ Total Tax and User Fee Collection Total Tax Current Tax Fiscal and User and User Fee Year Fee Levy Collection 2012-13 $340,298 $ 340,156 2013-14 356,607 356,108 2014-15 362,978 362,927 2015-16 371,502 370,170 2016-17 381,226 380,078 2017-18 386,538 385,673 2018-19 394,641 393,809 2019-20 401,604 400,865 2020-21 405,878 405,053 2021-22 418,400 416,869 (1) Percent Total Tax % of Total % of Pass - of Levy Delinquent and User Fee Collection Outstanding Delinquencies Through Collected Collection Collection to Levy Delinquencies to Levy Payments 99.96 $ 64 $ 340,220 99.98 $ 142 0.04 $ 14,687 99.86 76 356,184 99.88 499 0.14 7,274 99.99 108 363,035 100.02 51 0.01 8,447 (2) 99.64 637 370,807 99.81 1,332 0.36 9,199 (2) 99.70 608 380,686 99.86 1,148 0.30 9,751 99.78 741 386,414 99.97 865 0.22 11,353 99.79 786 394,595 99.99 832 0.21 12,524 99.82 931 401,796 100.05 739 0.18 13,469 99.80 1,035 406,088 100.05 825 0.20 15,034 99.63 1,177 418,046 99.92 1,531 0.37 18,433 Notes (1) Upon dissolution of California redevelopment agencies during fiscal year 2011-12, property tax increment formerly remitted to OC San 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, OC San 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. Source: Orange County Auditor -Controller's Office. 85 Table of Contents ORANGE COUNTY SANITATION DISTRICT Property Value and Construction Covering The Entire County of Orange (1) (Dollars In Thousands) Last Ten Fiscal Years Non - Assessed Residential Residential Property Value (2) Construction (3) Construction (3) Fiscal Calendar No. of Year Value Year Value Units Value 2012-13 $ 432,902,274 2013 $ 1,521,280 10,453 $ 2,653,728 2013-14 447,749,156 2014 1,993,154 10,636 2,640,484 2014-15 476,303,290 2015 2,196,000 10,897 2,834,000 2015-16 504,650,360 2016 2,487,000 12,134 3,160,000 2016-17 531,052,158 2017 2,062,000 10,294 3,217,000 2017-18 563,662,044 2018 3,507,000 8,105 2,776,000 2018-19 598,901,016 2019 3,144,000 10,294 2,650,000 2019-20 632,758,256 2020 1,929,000 5,907 1,884,000 2020-21 663,241,179 2021 1,802,000 7,471 2,368,000 2021-22 689,088,931 2022 1,822,000 6,599 2,157,000 Total Construction Value (3) $ 4,175,008 4,633,638 5,030,000 5,647,000 5,279,000 6,283,000 5,794,000 3,813,000 4,170,000 3,979,000 (4) Notes and Data Sources (1) - The Orange County Sanitation District services 479 square miles or 60% of the total 799 square miles that make up the boundaries of Orange County. (2) - Data Source: Orange County Auditor -Controller's Office. (3) - Data Source: A. Gary Anderson Center for Economic Research, Chapman University. (4) - Forecasted number. :. Table of Contents ORANGE COUNTY SANITATION DISTRICT Insurance in Force As of June 30, 2022 Type Insurer Deductible Limit 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 $1 million per $25 million / occurrence Insurance Program occurrence Boiler & Machinery Public Entity Property $25,000 to $100 million / occurrence Insurance Program $350,000 (multiple insurers) Earthquake Multiple insurers 5% per structure, $25 million (certain structures only) min. $5 million Crime Insurance Alliant Crime Insurance Program $25,000 $5 million Cyber Insurance Lloyd's of London (Beazley) $250,000 $2 million $500,000 for Breach Response Excess Great American Insurance Co. $750,000 $40 million / occurrence General Liability (first $10 million layer); and annual aggregate Gemini Insurance Co. ($15 million layer, excess $10 million) Arch Insurance Company ($5 million layer, excess $25 million) Great American Insurance Co. ($10 million layer, excess $30 million) Travel & Accident Federal Insurance Co. None Accidental Death & Dismembermen Class 1: Elected Officials $500,000 per occurrence Class 2: Employees 1OX annual 1 OX annual salary, up to $500,000 per occurrence Excess Workers' Public Risk Innovation, Solutions, $1 million Unlimited statutory coverage Compensation and Management (PRISM) each accident each accident, each employee $4 million employer's liability Pollution Liability Ironshore Specialty Insurance Co. $250,000 $10 million per loss Watercraft Liability Atlantic Specialty Insurance Co. $2,500 bodily injury $10 million $10,000 all other Hull & Machinery Atlantic Specialty Insurance Co. $10,000 $600,000 Pollution Liability Great American Insurance Co. $25,000 $5 million Source: Orange County Sanitation District's Financial Management Division. 87 (THIS PAGE INTENTIONALLY LEFT BLANK) :: ORANGE COUNTY SANITATION DISTRICT FINANCIAL MANAGEMENT DIVISION 10844 Ellis Avenue Fountain Valley, California 92708-7018 714.962.2411 1 www.ocsan.gov 06/30/22 11/1/2022 Annual Comprehensive Financial Report (ACFR) For the Year Ended June 30, 2022 1 • Provides financial condition and performance for fiscal year ended June 30, 2022. • GFOA Excellence in Financial Reporting Award — 27 consecutive years. • Independent auditor — Davis Farr, LLP. 2 11/1/2022 Total Net Position: $2.8 billion (Dollars in thousands) June 30, Percentage June 30, 2021, Increase Increase 2022 as restated (Decrease) (Decrease) Total assets & deferred outflows 4,018,078 3,853,516 164,562 4.3% Total liabilities & deferred inflows 1,202,891 1,143,134 59,757 5.2% Net position Net investment in capital assets 1,825,490 1,740,102 85,388 4.9% Restricted for OCERS pension benefits 108,179 63,748 44,431 69.7% Unrestricted 881,518 906,532 (25,014) -2.8% Total net position $ 2,815,187 $ 2,710,382 $ 104,805 3.9% 3 Increase in Net Position: $104.8 million (Dollars in thousands) June 30, Percentage June 30, 2021, Increase Increase 2022 as restated (Decrease) (Decrease) Total revenues 420,786 459,815 (39,029) -8.5% Total expenses 342,064 322,379 19,685 6.1% Income before capital contributions 78,722 137,436 (58,714) -42.7% Capital contributions 26,083 33,936 (7,853) -23.1% Increase in net position 104,805 171,372 (66,567) -38.8% Beginning net position 2,710,382 2,539,010 171,372 6.7% Ending net position $ 2,815,187 $ 2,710,382 $ 104,805 3.9% 4 ACFR page 5 ACFR page 7 2 11/1/2022 (Dollars in Thousands) $3.000.000 $2,500.000 $2.000.000 $1.500 000 II $1.000 000 $500 000 $0 2012-13 20'r314 2014-15 2015'16 2016-17 2011-18 2018-19 2019-20 2020-21 2021-22 ® Net Investment in Capital Assets 0 Restricted for Pension Benefits D Unrestricted AC F R page 62 5 (Dollars in thousands) June 30, June 30, Increase %Increase 2022 2021 (Decrease) (Decrease) Operating expenses Salaries and benefits 57,004 74,772 (17,768) -23.8% Utilities 11,045 9,789 1,256 12.8% Supplies, repairs and maintenance 47,082 47,545 (463) -1.0% Contractual services 25,114 22,653 2,461 10.9% Feasibility studies 6,490 5,704 786 13.8% Other 9,379 7,555 1,824 24.1% Total operating expenses $ 156,114 $ 168,018 $ (11,904) -7.1% I ACFR page 13 5 3 11/1/2022 Major capital asset additions: • $35.7 million Headquarters Complex (P1-128) • $32.1 million Headworks Rehabilitation at Plant No. 1 (P1-105) • $23.6 million Ocean Outfall System Rehabilitation (J-117) • $20.9 million Primary Treatment Rehabilitation at Plant No. 2 (132-98) • $ 9.0 million Rehabilitation of Western Regional Sewers (3-64) ACFR page 9 Cash and investments: $984.0 million — Increase: $23.4 million (Dollars in thousands) Cash on hand Deposits with financial institutions Managed portfolio - cash and investments Held by trustees - cash and investments June 30, June 30, Increase %Increase 2022 2021 (Decrease) (Decrease) 3 7 (4) -57.1 % 4,219 1,649 2,570 155.9% 966,701 958,983 7,718 0.8% 13,113 0 13,113 100.0% Total cash and investments $ 984,036 $ 960,639 $ 23,397 2.4% ACFR page 21 I M 11/1/2022 11/1/2022 Audit Reports Issued Annual Comprehensive Financial Report ❑ Unmodified audit opinion ❑ Emphasis of opinion for implementation of lease standard ❑ The financial statements and footnotes are presented fairly, in all material respects, in accordance with generally accepted accounting principles * I Davis 11/1/2022 Audit Reports Issued ❑ Government Auditing Standards Letter ❑ No material instances of noncompliance ❑ No material weaknesses or significant deficiencies in internal controls _ Agreed Upon Procedures ❑ Appropriations (GANN) Limit ❑ Indemnity Agreement Bond Comfort Letters 01DavisFarr 3 Audit Reports Issued Communication to Those in Governance ❑Auditor risk assessment: Implementation of new lease accounting standard Issuance of debt: 2021 A and 2022A Wastewater Refunding Revenue Bonds ❑ Capital asset transactions ❑ No auditor detected errors in the accounting records ❑ No difficulties in performing our audit procedures * I Davis 4 2 11/1/2022 5 Overview of Audit Approach Substantive testing of all material assets and liabilities using 3rd party confirmations and other procedures Evaluation of internal controls for key accounting cycles and information systems Analytical testing of revenues and expenditures with substantive testing when the change from the prior year was material Compliance testing of investments, debt, and disbursements DavisFarr Upcoming Changes in Standards GASB 94: Public -Private and Public -Public Partnership and Availability Payment Arrangements — FY 22/23 GASB 96: Subscription -Based Information Technology Arrangements — FY 22/23 GASB 100: Accounting Changes and Error Corrections — FY 23/24 GASB 101: Compensated Absences — FY 24/25 •p• I Davis 3 11/1/2022 Questions? 11 Jennifer Farr, CPA I Partner Davis Farr LLP 1 18201 Von Karman Ave, Suite 1100 1 Irvine, CA 92612 ,0, Dav is �a r r Phone: 949.474.2020 1 Email:jfarr@davisfarr.com Administration Building ADMINISTRATION COMMITTEE 10844 Ellis Avenue SAIV Fountain Valley, CA 92708 (714) 593 7433 ORANGE COUNTY SANITATION DISTRICT Agenda Report File #: 2022-2606 Agenda Date: 11/9/2022 Agenda Item No: 8. FROM: James D. Herberg, General Manager Originator: Celia Chandler, Director of Human Resources SUBJECT: HUMAN RESOURCES DEPARTMENT OVERVIEW GENERAL MANAGER'S RECOMMENDATION RECOMMENDATION: Information Item. BACKGROUND Each month, staff provides an informational presentation on topics of interest to the Board of Directors. This month's topic: Orange County Sanitation District Human Resources Department Overview. RELEVANT STANDARDS • Cultivate a highly qualified, well -trained, and diverse workforce • Plan for and execute succession, minimizing vacant position times • Provide professional growth and development ATTACHMENT The following attachment(s) may be viewed on-line at the OC San website (www.ocsan.gov) with the complete agenda package: • Presentation Orange County Sanitation District Page 1 of 1 Printed on 11/1/2022 powered by LegistarTIM 11/1/2022 Overview Employee & Labor HR Operations Relations Risk Management f 1 2 Highlight: OC San University OC San Business Systems EMMEW Leadership Technology Communication Partnerships for the Future Highlight: Labor Relations 'I , -,Mw� .. - I"- -�, I 3 Recognized Unions 6 Collective Bargaining Agreements 3-Year Agreements (through 2025) 11/1/2022 100 <: 1p4%a. 100% 8c" 6Q_ 58% 51% 44% 40% 40% 40% 33% 33% 33% 29% 23% 20% — — 0% EXECUTIVE MANAGER SUPERVISOR PROFESSIONAL PARA- TRADES PROFESSIONAL ■ 2022 ■ 2025 Highlight: Resilient Workforce � rt rr Vocational CFC San "U" Internship Student Partnerships Internship Recruitment and Selection Employee Development 6 11/1/2022 Highlight: Centralized Training r6 r I ACWA APWA AQMD ASCE BOD CARB CASA ORANGE COUNTY SANITATION DISTRICT COMMON ACRONYMS Association of California LOS Water Agencies American Public Works MGD Association Air Quality Management District MOU American Society of Civil NACWA Engineers Biochemical Oxygen Demand NEPA California Air Resources Board NGOs California Association of Sanitation Agencies NPDES CCTV Closed Circuit Television I NWRI California Environmental CEQA Quality Act O & M Capital Improvement CIP Program OCCOG California Regional Water CRWQCB Quality Control Board OCHCA CWA Clean Water Act OCSD California Water Environment CWEA Association OCWD EIR Environmental Impact Report OOBS EMT Executive Management Team I OSHA EPA US Environmental Protection I PCSA Agency FOG Fats, Oils, and Grease I PDSA gpd gallons per day PFAS GWRS Groundwater Replenishment PFOA System ICS Incident Command System PFOS IERP Integrated Emergency POTW Response Plan JPA Joint Powers Authority Ippm LAFCO Local Agency Formation I PSA Commission Level Of Service RFP Request For Proposal Million Gallons Per Day RWQC Re Tonal Water Qualit Memorandum of SARFP Understanding National Association of Clean SARI Water Agencies National Environmental Policy SARW Act Non -Governmental SAWP Organizations National Pollutant Discharge SCADA Elimination System B g y Control Board A Santa Ana River Flood Protection Agency Santa Ana River Interceptor Santa Ana Regional Water QCB Quality Control Board A Santa Ana Watershed Project Authority Supervisory Control And Data Acquisition National Water Research Southern California Institute SCAP Alliance of Publicly Owned Treatment Works Operations & Maintenance SCA South Coast Air Qualit Orange County Council of SOC Governments Orange County Health Care SRF Agency Orange County Sanitation SSM District Orange County Water District ISSO QMD y Management District WA South Orange County Wastewater Authority Clean Water State Revolving Fund P Sewer System Management Plan Sanitary Sewer Overflow Ocean Outfall Booster Station 1SWRCState Water Resources B Occupational Safety and TDS Health Administration Professional Consultant/Construction TMDL Services Agreement Professional Design Services TSS Agreement Per- and Polyfluoroalkyl Substances WDR Perfluorooctanoic Acid IWEF Perfluorooctanesulfonic Acid WERF Publicly Owned Treatment WIFIA Works parts per million 1WIIN Professional Services I WRDA Agreement Control Board Total Dissolved Solids Total Maximum Daily Load Total Suspended Solids Waste Discharge Requirements Water Environment Federation Water Environment & Reuse Foundation Water Infrastructure Finance and Innovation Act Water Infrastructure Improvements for the Nation Act Water Resources Development Act ORANGE COUNTY SANITATION DISTRICT GLOSSARY OF TERMS ACTIVATED SLUDGE PROCESS — A secondary biological wastewater treatment process where bacteria reproduce at a high rate with the introduction of excess air or oxygen and consume dissolved nutrients in the wastewater. BENTHOS — The community of organisms, such as sea stars, worms, and shrimp, which live on, in, or near the seabed, also known as the benthic zone. BIOCHEMICAL OXYGEN DEMAND (BOD) — The amount of oxygen used when organic matter undergoes decomposition by microorganisms. Testing for BOD is done to assess the amount of organic matter in water. BIOGAS — A gas that is produced by the action of anaerobic bacteria on organic waste matter in a digester tank that can be used as a fuel. BIOSOLIDS — Biosolids are nutrient rich organic and highly treated solid materials produced by the wastewater treatment process. This high -quality product can be recycled as a soil amendment on farmland or further processed as an earth -like product for commercial and home gardens to improve and maintain fertile soil and stimulate plant growth. CAPITAL IMPROVEMENT PROGRAM (CIP) — Projects for repair, rehabilitation, and replacement of assets. Also includes treatment improvements, additional capacity, and projects for the support facilities. COLIFORM BACTERIA — A group of bacteria found in the intestines of humans and other animals, but also occasionally found elsewhere, used as indicators of sewage pollution. E. coli are the most common bacteria in wastewater. COLLECTIONS SYSTEM — In wastewater, it is the system of typically underground pipes that receive and convey sanitary wastewater or storm water. CERTIFICATE OF PARTICIPATION (COP) — A type of financing where an investor purchases a share of the lease revenues of a program rather than the bond being secured by those revenues. CONTAMINANTS OF POTENTIAL CONCERN (CPC) — Pharmaceuticals, hormones, and other organic wastewater contaminants. DILUTION TO THRESHOLD (D/T) — The dilution at which the majority of people detect the odor becomes the D/T for that air sample. GREENHOUSE GASES (GHG) — In the order of relative abundance water vapor, carbon dioxide, methane, nitrous oxide, and ozone gases that are considered the cause of global warming ("greenhouse effect"). GROUNDWATER REPLENISHMENT SYSTEM (GWRS) — Ajoint water reclamation project that proactively responds to Southern California's current and future water needs. This joint project between the Orange County Water District and OCSD provides 70 million gallons per day of drinking quality water to replenish the local groundwater supply. LEVEL OF SERVICE (LOS) — Goals to support environmental and public expectations for performance. N-NITROSODIMETHYLAMINE (NDMA) — A N-nitrosamine suspected cancer -causing agent. It has been found in the GWRS process and is eliminated using hydrogen peroxide with extra ultra -violet treatment. NATIONAL BIOSOLIDS PARTNERSHIP (NBP) —An alliance of the NACWA and WEF, with advisory support from the EPA. NBP is committed to developing and advancing environmentally sound and sustainable biosolids management practices that go beyond regulatory compliance and promote public participation to enhance the credibility of local agency biosolids programs and improved communications that lead to public acceptance. PER- AND POLYFLUOROALKYL SUBSTANCES (PFAS) — A large group (over 6,000) of human -made compounds that are resistant to heat, water, and oil and used for a variety of applications including firefighting foam, stain and water-resistant clothing, cosmetics, and food packaging. Two PFAS compounds, perfluorooctanesulfonic acid (PFOS) and perfluorooctanoic acid (PFOA) have been the focus of increasing regulatory scrutiny in drinking water and may result in adverse health effects including developmental effects to fetuses during pregnancy, cancer, liver damage, immunosuppression, thyroid effects, and other effects. PERFLUOROOCTANOIC ACID (PFOA) — An ingredient for several industrial applications including carpeting, upholstery, apparel, floor wax, textiles, sealants, food packaging, and cookware (Teflon). PERFLUOROOCTANESULFONIC ACID (PFOS) — A key ingredient in Scotchgard, a fabric protector made by 3M, and used in numerous stain repellents. PLUME — A visible or measurable concentration of discharge from a stationary source or fixed facility. PUBLICLY OWNED TREATMENT WORKS (POTW) — A municipal wastewater treatment plant. SANTA ANA RIVER INTERCEPTOR (SARI) LINE — A regional brine line designed to convey 30 million gallons per day of non - reclaimable wastewater from the upper Santa Ana River basin to the ocean for disposal, after treatment. SANITARY SEWER — Separate sewer systems specifically for the carrying of domestic and industrial wastewater. SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT (SCAQMD) — Regional regulatory agency that develops plans and regulations designed to achieve public health standards by reducing emissions from business and industry. SECONDARY TREATMENT — Biological wastewater treatment, particularly the activated sludge process, where bacteria and other microorganisms consume dissolved nutrients in wastewater. SLUDGE — Untreated solid material created by the treatment of wastewater. TOTAL SUSPENDED SOLIDS (TSS) — The amount of solids floating and in suspension in wastewater. ORANGE COUNTY SANITATION DISTRICT GLOSSARY OF TERMS TRICKLING FILTER — A biological secondary treatment process in which bacteria and other microorganisms, growing as slime on the surface of rocks or plastic media, consume nutrients in wastewater as it trickles over them. URBAN RUNOFF — Water from city streets and domestic properties that carry pollutants into the storm drains, rivers, lakes, and oceans. WASTEWATER — Any water that enters the sanitary sewer. WATERSHED — A land area from which water drains to a particular water body. OCSD's service area is in the Santa Ana River Watershed.