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Home My WebLink About1999-05-12,, I / 1 1 FILED IN THE Off!CE OF THE SECRETARY ORANGE COIJNTY SANITATION DISTRICT '{ DRAFT MAY 2 6 1999 ' {J /( ·· ·MtNtJ-TES OF FINANCE. ADMINISTRATION AND HUMAN RESOURCES COMMITTEE MEETING Orange County Sanitation District Wednesday, May 12, 1999, 5:00 p.m. A meeting of the Finance, Administration and Human Resources Committee of the Orange County Sanitation District was held on May 12, 1999 at 5:00 p.m., in the District's Administrative Office. (1) The roll was called and a quorum declared present, as follows: FAHR COMMITTEE MEMBERS: OTHERS PRESENT: Directors Present: Thomas Saltarelli, Chair Mark Leyes, Vice Chair Shawn Boyd Shirley McCracken James W. Silva Peer Swan, Board Vice Chair John J. Collins, Past Board Chair Jan Debay, Board Chair Directors Absent: John M. Gullixson Mark A. Murphy (2) APPOINTMENT OF CHAIR PRO TEM No appointment was necessary. (3) PUBLIC COMMENTS There were none. Tom Woodruff, General Counsel Toby Weissert, Carollo Engineers Don Hughes Ryal Wheeler STAFF PRESENT: Don McIntyre, General Manager Blake Anderson, Assistant General Manager Mike Peterman, Director of Human Resources Gary Streed, Director of Finance Michelle Tuchman, Director of Communications Bob Ooten, Director of Operations & Maintenance Steve Kozak, Financial Manager Greg Mathews, Assistant to the General Manager Mike White, Controller Lisa Tomko, Human Resources Manager Dawn McKinley, Senior Human Resources Analyst Penny Kyle, Committee Secretary OCSD • P.O. Box 8127 • Fountain Valley, CA 92728-8127 • (714) 962-2411 Minutes of the Finance, Administration and Human Resources Committee Meeting Page 2 May 12, 1999 (4) RECEIVE, FILE AND APPROVE MINUTES OF PREVIOUS MEETING It was moved, seconded and duly carried to approve the minutes of the workshop held on April 10, 1999, and the minutes of the April 14, 1999 Finance, Administration and Human Resources Committee meeting. Director Shirley McCracken abstained. (5) REPORT OF THE COMMITTEE CHAIR The Committee Chair had no report. (6) REPORT OF THE GENERAL MANAGER The General Manager had no report. (7) REPORT OF ASSISTANT GENERAL MANAGER The Assistant General Manager had no report. (8) REPORT OF DIRECTOR OF FINANCE The Director of Finance had no report. (9) REPORT OF DIRECTOR OF HUMAN RESOURCES The Director of Human Resources Mike Peterman had no report. (10) REPORT OF DIRECTOR OF COMMUNICATIONS The Director of Communications, Michelle Tuchman, briefly reported on media activity at the District. (11) REPORT OF GENERAL COUNSEL General Counsel Tom Woodruff had no report. (12) CONSENT CALENDAR ITEMS (Items A-E) A. FAHR99-29: Receive and file Treasurer's Report for the month of April 1999: The Treasurer's Report was handed out at the FAHR Committee meeting in accordance with the Board-approved Investment Policy, and in conformance to the Government Code requirement to have monthly reports reviewed within 30 days of month end. Minutes of the Finance, Administration and Human Resources Committee Meeting Page 3 May 12, 1999 B. FAHR99-30: Receive and file Certificates of Participation (COP) Monthly Report. C. FAHR99-31: Receive and file Employment Status Report as of April 21, 1999. D. FAHR99-32: Receive and file the Quarterly Investment Management Program Report for the period January 1, 1999 through March 31, 1999. E. FAHR99-33: Receive and file the Third Quarter Financial and Operational Report for the period ending March 31, 1999. END OF CONSENT CALENDAR Consideration of items deleted from Consent Calendar, if any. Motion: Moved, seconded and duly carried to approve the recommended actions for items specified as 12(A) through 12(E) under Consent Calendar. (13) ACTION ITEMS (ITEM A) A. FAHR99-34: Authorize the selection of a new Medical Insurance Company to replace United HealthCare's Point-of-Service Plan and PacifiCare's Health Maintenance Organization Plan effective July 1, 1999. Motion: Moved, seconded, and unanimously carried, to defer this item for consideration with other items in closed session as Agenda Item No. 19. Motion: Moved, seconded, and unanimously carried, to add Agenda Item No. 13A to Closed Session, as new Agenda Item No. 19A(2), pursuant to Government Code Section 54954.2(b), which matter needs immediate attention and arose subsequent to the publication of the agenda, to wit: Labor Negotiations Meet and Confer, pursuant to Government Code Section 54957.6. Motion: Moved, seconded, and unanimously carried to go out of order and into Closed Session. (19) CLOSED SESSION The Chair reported to the Committee the need for a Closed Session, as authorized by Government Code Section 54957.6, to discuss and consider the items that are specified as Item No. 19A(1) on the published Agenda, and Item No. 13A, as added to the Closed Session Agenda as Item No. 19A(2). The Committee convened in Closed Session at 5:19 p.m. At 6:07 p.m., the Committee reconvened in regular session. It was moved, seconded, and duly carried to approve the recommendation of the Staff contained in Report FAHR99-34, Agenda Item No. 13A, relating to selection of a new medical insurance plan. Confidential Minutes of the Closed Session held by the Finance, Administration and Human Resources Committee have been prepared in accordance with California Government Code Minutes of the Finance, Administration and Human Resources Committee Meeting Page4 May 12, 1999 Section 54957 .2, and are maintained by the Board Secretary in the Official Book of Confidential Minutes of Board and Committee Closed Meetings. A report of the action taken will be publicly reported at the time the approved action becomes final re Agenda Item No. 19A(1 ). (13) ACTION ITEMS (Items 8-0) B. FAHR99-35: Adopt Ordinance No. OCSD 99-09, An Ordinance of the Board of Directors of Orange County Sanitation District, Providing for a Comprehensive Capital Facilities Connection Charge Program. Motion: Moved, seconded, and duly carried to approve Staffs recommendation that a new comprehensive Connection Fee Program and Ordinance, containing elements as outlined by Staff, be ,sidopted. C. FAHR99-36: Adopt Resolution No. OCSD 99-_, urging the California Legislature to modify the "County Sanitation District Act" to increase the maximum monthly compensation allowed for Directors. Motion: Moved, seconded, and duly carried to approve Staffs recommendation, amending the Resolution, under the same or similar provisions as allowed for Directors of Water Districts and Utility Districts. D. FAHR99-37: Approve expanding the District's Computer Financial Assistance Program to Directors, providing for a maximum loan of $3,000; 10% down payment; 24 months repayment period; interest rate at 5%; and no increase in the aggregate maximum loan fund of $150,000. There was extended discussion among the Directors, including the noting of a lack of necessity for such a Program. No action was taken, and the Chair directed Staff to remove it from the pending issues list. (14) INFORMATIONAL PRESENTATION There were no informational presentations (15) OTHER BUSINESS. COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY There was no other business discussed. (16) MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND STAFF REPORT There were none. Minutes of the Finance, Administration and Human Resources Committee Meeting Page 5 May 12, 1999 (17) MATTERS WHICH A DIRECTOR WOULD LIKE STAFF TO REPORT ON AT A SUBSEQUENT MEETING There were none. (18) CONSIDERATION OF UPCOMING MEETINGS The next FAHR Committee meeting is scheduled for June 9, 1999 at 5:00 p.m. (20) ADJOURNMENT The Chair declared the meeting adjourned at approximately 8:10 p.m. Ab itted by: ,J ~{/1,t Penny M. le FAHR Committee S H:\wp.dta\agenda'FAHR'Fahr99\99mins\051299 MIN.doc '· ORANGE COUNTY SANITATION DISTRICT Connection Fee Structure May 26, 1999 • Review of financial rates and charges • Understand connection fee methodology • Understand key issues / assumptions • Understand new connection fee policies 1 • Continue capital investment equalization method • Assign wet weather facility costs to residential development • Assign tiered fees for MFR and SFR based upon bedrooms • Assign low, average and high demand commercial fees • Allow SIUs to pay-as-they-use • Charge for all governmental uses • Remove time limit for demolished facilities with proof of payment • Review fee and method routinely • Phase-in plan for high demand uses 2 ' Background Review Use of Funds Source of Funds • Operation and • Existing Users maintenance of existing facilities • Capital replacement • All Users and improvement of existing facilities • Capital construction • New Users to accommodate growth ( capacity) 3 $ E-xisting and New Users are G~ouped into 5 Categories for Rates d Charges User Sewer Service Connection Category Charge Fee Residential X X Commercial X X Industrial X X Local Gov't X State & Federal X X Connection Fees Reduce the , vnthly Charge to Existing Users Connection Fee User Charge 4 Item Planning Horizon CIP Budget Projected Flow Flow per Household Number of Connections Flow per 1 , 000 sq ft for Commercial Users Agency Riverside OCSD (Existing) Sacramento Walnut Creek San Diego Los Angeles (County) San Jose Oakland Los Angeles (City) Phoenix San Francisco 0 2020 Plan Strategic Plan 30 yrs 20 yrs $1.48 billion $1.51 billion 399 MGD 352 MGD 399 gpd 260 gpd 1,000,000 1,354,000 80 gal 150 gal (20%) (58%) Connection Fee ($) $1,000 $2,000 $3,000 $4,000 E!l District D Local Agency 5 1ndustrial Connection Fee 'c Co 'J}arison for a High Strength Wustrial User Agency Connection Fee (Millions of Dollars) n $01 n $n2 n $3 n Concord 12.5 Sacramento 11.8 San Diego I 1.5 Los Angeles (County) I 1.2 Based on: Oakland I 0.85 • Flow 150,000 gpd San Jose I 0.71 • BOD 1,090 mg/L Los Angeles (City) I 0.71 • TSS 270 mg/L OCSD (Existing) I------------, • 130,000 sq ft of 0.061 _________ .. 1.5 Riverside IJ 0.057 improved building area Phoenix D o.o3o San Francisco 0 ,_-_-_-..!. Rescinded Excess Capacity Charge 1ndustrial Connection Fee Comparison for a Low Strength 'dustrial User Agency Connection Fee (Millions of Dollars) n $"1 n $n2 n $n3 Concord 11.6 San Diego 11.5 Sacramento 11.0 Los Angeles (County) I 0.78 Based on: Oakland 10.58 • Flow 150,000 gpd San Jose I 0.58 • BOD 350 mg/L Los Angeles (City) I 0.52 • TSS 270 mg/L OCSD (Existing) I. to]'(:::~ o.99 • 130,000 sq ft of Riverside •0.057 improved building area Phoenix •0.030 San Francisco 0 1,:-_-_-..!. Rescinded Excess Capacity Charge 6 • "Pay for what you use" • Consider "pay as you go" • Consider tiered residential rates and fees • Reduce up-front costs Connection Fee Methodology 7 Guiding Philosophy of Alternative C nection Fee Methods Method Guiding Philosophy Existing Method "All users past, present and future pay the same" Alternative "All users from now on pay the same" I Replacement Valuel I Cost of Newl Lot Existing FacilitiesJ + L Facilities J Fee=-------------- [ Existing + New ] Connections * * Single Family Residential equivalents 8 ~apital Cost Items are Allocated to Ne Users Based on Connection eMethod Connection Fee Cost Method Capital Cost Item $ in Million CIE Alternative "Buy-in" Cost $ 110 ? Existing Facilities 763 ✓ Additional Capacity 514 ✓ ✓ GWR System 121 ✓ ? Cooperative Projects 154 ✓ ? Replacement / 727 ✓ Improvement * * Includes Support Facilities Ex·sting Capital Investment E · alization Fee Method Capital Cost Item Existing Facilities Additional Capacity GWR System (Reclamation) Cooperative Projects Replacement / Improvement Total Capital Requirements Number of Existing and New Users / EDUs Average Cost Per EDU $ in Millions 2020 Strategic Master Plan Plan $ 777 $ 763 886 514 77 121 154 519 727 $2,259 $2,279 1,000,000 1,354,000 $2,260 $1,680 9 t" C t· ~rna1ve onnecion R Mth d ·ee e 0 $ in Millions Capital Cost Item On-Site Regional Total "Buy-in" Cost -$ 110 $ 110 Additional Capacity $ 514 514 514 GWR System -121 121 Cooperative Projects --154 Improved Treatment --48 Total Capital Requirements $ 514 $ 745 $ 947 Number of New EDUs 442,000 442,000 442,000 Average Cost Per EDU $1,165 $1,690 $2,145 Key Issues 10 , ., 0 Connection Fees for Government Agencies 0 How to Charge for New Non-Residential Connections 0 Tiered Residential Connection Fees 0 Impact of Wet Weather 0 Credit for Demolished Facilities • State and federal agencies included • Local agencies excluded • Schools • Cities • County • Revenue Area 13 is exception 11 • Include state and federal agencies • Include regional or county facilities • Include local agencies • Not charging government agencies may violate Prop. 218 • Not charging government agencies burdens local ratepayer • Unimproved property acreage • Size of sewer lateral • 125± land use codes • Simplification to combine land use codes into similar flow and strength categories • Simplification to "high, average and low demand" commercial categories 12 Recommended Approach for Non-Residential Connection Fees Pays Unit Billing Component For Charge Method "Basic Fee" Average $ / 1000 One- Use sq ft Time Flow / Strength High $ for Annual Factor Demand Q, BOD, User Connection TSS Fee tl~antages of Recommended Connection Fee Method • Fair to all users, who "pay for what they use" • Easy to understand, explain and administer • Conforms to RAC input to consider commercial / industry incentives by reducing up-front charges 13 • Flows increase during wet weather • Inflow • Infiltration • Amount of increase is proportional to sewers • Residential laterals are 55% of sewer length • Local sewers are 40%, of sewer length • Residential connection fees should pay for wet weather capacity • Wet weather facilities are all flow related • Flow related facilities are $1.1 billion at2020 • Wet weather facilities increase Single Family Residential (SFR) fees $140 to $1,820 total • Non-Residential fee range decreases proportionately to $675 / 1,000 sq ft 14 Number of Relationships to 1 EDU Bedrooms SFR MFR 0 0.32 1 0.62 0.50 2 0.81 0.70 3 1.00 0.89 4 1.19 1.08 5+ 1.39 Summary of Proposed and Existing R idential Connection Fees User Category Single-Family Residential 5+ BDR House 4 BDR House 3 BDR House 2 BDR House 1 BDR House Multi-Family Residential 4+ BDR Apartment 3 BDR Apartment 2 BDR Apartment 1 BDR Apartment Studio Apartment Proposed $2,530 2,165 1,820 1,475 1,130 $1,965 1,620 1,275 910 580 Existing $2,360 $2,360 15 • One-time fees are based on estimates • Cash flow does not match production • Currently 800 significant industrial / commercial users (SIUs) • RAC and Business Council concerned • Reduction would reduce "move-in" costs • SIU user fees based on actual use • Add connection fee component for above average demand • Allocate 2020 asset values to flow, biochemical oxygen demand (BOD), suspended solids (SS) • Determine 2020 plant loading • Allocate unit cost for 30-year useful life • Assign time value to money 16 Summary of Proposed and Existing · ·n-Residential Connection Fees Proposed OCSD Typical Industrial / Base Rate Current Commercial User (1,000 sq ft) Rate Low Demand $ 110 $ 472 Average Demand 675 472 High Demand 1,600 472 ~ummary of Proposed and Ex· ting Non-Residential vnnection Fees Low Demand Connections Nurseries Warehouses Parking Structures RV Storage Churches Truck Terminals RV Parks Lumber/ Construction Yards High Demand Connections Restaurants Supermarkets Car Washes Coin Laundry Amusement Parks Shopping Centers with Restaurants 17 Example Over Time Base Annual Quantity Fee Fee@5% 30 Years 130,000 sq ft $87,750 $ 87,750 150,000 gal/ dy $ 26,200 786,000 1 , 090 mg I L BOD 64,000 1,920,000 270 mg IL SS 11,000 330,000 Total $87,750 $101,200 $3,123,750 Compare Flow & Strength Based $ 1,891,914 One-Time Fee Coin arison of Existing and Proposed Ca mercial Connection Fees $14,000 ---------13_8_00 ___ A Proposed 13,000 13,600 ' Ll One-Time 2,000 Connection Fee $11,000 sq ft 1,000 0 1,600 1,600 • 472 472 191 88 Restaurant Car Wash • Existing r026 675 !472 472 350 11° 34 Warehouse Office Bldg 18 Cr~dit for Demolished eructures • Existing policy • Application within 2 years of demolition • Credit at current rates • Fee for additional demand • Alternative policies • Extend time period for application • Remove time limit • Require proof of prior payments • District has no records • Continue capital investment equalization method • Assign wet weather facility costs to residential development • Assign tiered fees for MFR and SFR based upon bedrooms • Assign low, average and high demand commercial fees 19 (cont'd) • Allow SIUs to pay-as-they-use • Charge for all governmental uses • Remove time limit for demolished facilities with proof of payment • Review fee and method routinely • Phase-in plan for high demand uses tSteps 0 FAHR Committee May12 0 Board Meeting, Consensus May26 • Develop Prop. 218 Mail-out June 5 • First Reading June 23 • Public Hearing July 21 • Second Reading July 21 • New Connection Fees Effective Sept. 1 20 ROLL CALL FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE Meeting Date: May 12, 1999 Time: 5:00 p.m. Adjourn: COMMITTEE MEMBERS THOMAS R SALTARELLI (Chair) ................................................ . MARK LEYES (Vice Chair) ........................................................... . SHAWN BOYD ............................................................................. .. JOHN M. GULLIXSON ................................................................. .. SHIRLEY MC CRACKEN .............................................................. . MARK A. MURPHY ....................................................................... . JAMES W. SILVA .......................................................................... . JAN DEBAY (Board Chair) ........................................................... . PEER SWAN (Board Vice Chair) .................................................. . JOHN J. COLLINS (Past Board Chair) ......................................... . OTHERS TOM WOODRUFF, General Counsel ................................................ _!:::::.._ TOBY WEISSERT, Carollo Engineers ............................................. .__L.. STAFF DON MCINTYRE, General Manager .................. -•••••.•..••.•..••••••••••••••• _L BLAKE ANDERSON, Assistant General Manager .......................... -L ED HODGES, Director of General Services Administration .......... . DAVID LUDWIN, Director of Engineering ....................................... -==- BOB OOTEN, Director of Operations & Maintenance ..................... _i.::::::.. MIKE PETERMAN, Director of Human Resources .......................... ~ GARY STREED, Director of Finance ............................................... ...J.::::::.... MICHELLE TUCHMAN, Director of Communications ..................... _L_ PATRICK MILES, Director of Information Technology................... - ROBERT GHIRELLI, Director of Technical Services ...................... -==- STEVE KOZAK, Financial Manager ................................................ .....J:::::::_ MIKE WHITE, Controller .................................................................. ..L.... GREG MATHEWS, Assistant to the General Manager .................... ~ LISA TOMKO, Human Resources Manager .................................... ~ DAWN MCKINLEY, Sr. Human Resources Analyst ........................ _L_ PENNY KYLE, Committee Secretary ............................................... ~ P(A((;}I~ c: Lynda Heller .. MEMORANDUM TO: Thomas L. Woodruff FROM: Gregory E. Simonian DATE: May 10, 1999 RE: Directors' Compensation Matrix -Orange County Sanitation District Pursuant to your recent inquiry, attached as Exhibit "A" is a proposed matrix delineating the five (5) categories of information pertaining to various statutes which address director compensation. 104573\1 May 10, 1999 Page2 Code Title And Code Section** County Sanitation District Act Health & Safety Code §4733 California Water Districts Water Code §34741 County Water Districts Water Code §30507 Municipal Water Districts Water Code §71255 Sanitary District Act of 1923 Health & Safety Code §6489 Community Services District Government Code §61207 Compensation for City Council Members Government Code §36516 Date of Last Amendment 1986 1981 1981 1981 1986 1982 1984 Base Amount for Maximum Number Cost of Living or Meeting/Service of Compensable Similar Compensation Per Meeting/Service Compensation Day Days Escalator Provision $100.00* 6 per month None $100.00* 6 per month None $100.00* 6 per month None $100.00* 6 per month None $100.00* 6 per month None $100.00* 6 per month None May Not Exceed an Amount Equal to 5% For Each Monthly Salary Monthly Salary Year From the Between Between Operative Date of $300 -$1,000 $300 -$1,000 the Last Depending on City Depending on City Adjustment Population Population Specifically Prohibits Automatic Future Increases in Salary * Together with any expenses incurred in the performance of his or her duties required or authorized by the board. May 10, 1999 Page 3 Code Title And Code Section Municipal Utility District Act Government Code §11908 Municipal Utility District Act/Boards Having Seven Directors Government Code §11908.1 Municipal Utility District Act/Boards Owning & Operating Electric Distribution System For At Least 8 Years & Having Population of 250,000 Or More Government Code §11908.2 Date of Last Base Amount for Amendment Meeting/Service Compensation Per Day 1982 $100.00 $100.00 1987 $600 Salary Per Month* Subject to Annual Adjustments 1987 $100.00 Maximum Number Cost of Living or of Compensable Similar Meeting/Service Compensation Days Escalator Provision 6 per month None Specifically 6 per month Prohibits Automatic Future Increases in Salary -OR- May Increase Salaries By Not More Than 5% For Each Year $600 Salary Per Following the Month* Subject to Operative Date of Annual Adjustments the Last Adjustment, Commencing With the Year Following Adoption of the Salary or Increase May Increase the Compensation Per Day By Not More Than 5% For Each Year Following the 10 per month* Operative Date of the Last Adjustment Specifically Prohibits Automatic Future Increases in Salary May 10, 1999 Page4 Code Title And Code Section Irrigation Districts Water Code §21166 Districts Containing 500,000+ Acres Water Code §22840 Code Title And Code Section Financial Supervision of Districts Date of Last Amendment 1998 1997 Date of Last Amendment Compensation of 1988/1989/1992 Water District Directors Water Code §20200, et seq. Base Amount for Maximum Number Cost of Living or Meeting/Service of Compensable Similar Compensation Per Meeting/Service Compensation Day Days Escalator Provision $100.00* 6 per month In Districts That Produce or Distribute Electric Power, One of the Following: a) $100 per day None or b) Monthly Salary Not to Exceed $600.00 Per Month or c) Annual Salary Not to Exceed $15,000 In an Amount That Does Not Exceed the None Salary of a Member of the Imperial County Board of Supervisors Base Amount for Maximum Number Cost of Living or Meeting/Service of Compensable Similar Compensation Per Meeting/Service Compensation Day Days Escalator Provision May Increase the Compensation Per Day By An Amount Not To Exceed 5% $100.00 10 per mos For Each Year Following the Operative Date of the Last Adjustment of Compensation, For Up To 1.Q Days In Month I ' May 10, 1999 Page 5 Code Title And Code Section Public Utility District Act Public Utilities Code §16002 Date of Last Amendment 1983 Base Amount for Meeting/Service Compensation Per Day Such Compensation As Approved By the Board, Not Exceeding $4,800 Per Year Ma~imum Number Cost of Living or of Compensable Similar Meeting/Service Compensation Days Escalator Provision Such Compensation As Approved By the None Board, Not Exceeding $4,800 Per Year I AGENDA REGULAR MEETING OF THE FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE ORANGE COUNTY SANITATION DISTRICT WEDNESDAY, MAY 12, 1999, AT 5:00 P.M. ADMINISTRATIVE OFFICE 10844 Ellis Avenue Fountain Valley, California 92708 In accordance with the requirements of California Government Code Section 54954. 2, this agenda has been posted in the main lobby of the District's Administrative Offices not less than 72 hours prior to the meeting date and time above. All written materials relating to each agenda item are available for public inspection in the Offlce of the Board Secretary. In the event any matter not listed on this agenda is proposed to be submitted to the Committee for discussion and/or action, it will be done in compliance with Section 54954.2(b) as an emergency item or that there is a need to take immediate action which need came to the attention of the Committee subsequent to the posting of the agenda, or as set forth on a supplemental agenda posted in the manner as above, not less than 72 hours prior to the meeting date. (1) ROLL CALL (2) APPOINTMENT OF CHAIR PRO TEM, IF NECESSARY (3) PUBLIC COMMENTS All persons wishing to address the Finance, Administration and Human Resources Committee on specific agenda items or matters of general interest should do so at this time. As determined by the Chair, speakers may be deferred until the specific item is taken for discussion and remarks may be limited to five minutes. Matters of interest addressed by a member of the public and not listed on this agenda cannot have action taken by the Committee except as authorized by Section 54954.2(b). April 14, 1999 (4) APPROVE MINUTES OF PREVIOUS MEETING Approve minutes of the workshop held on April 10, 1999 and the April 14, 1999, Finance, Administration and Human Resources Committee meeting. (5) REPORT OF COMMITTEE CHAIR (6) REPORT OF GENERAL MANAGER (7) REPORT OF ASSISTANT GENERAL MANAGER' (8) REPORT OF DIRECTOR OF FINANCE (9) REPORT OF DIRECTOR OF HUMAN RESOURCES (10) REPORT OF DIRECTOR OF COMMUNICATIONS (11) REPORT OF GENERAL COUNSEL (12) CONSENT CALENDAR ITEMS (a-e) Consideration of motion to approve all agenda items appearing on the Consent Calendar not specifically removed from same, as follows: AH matters placed on the consent calendar are considered as not requiring discussion or further explanation and unless any particular item is requested to be removed from the consent calendar by a Director, staff member or -member of the public in attendance, there will be no separate discussion of these items. All items on the consent calendar will be enacted by one action approving all motions, and casting a unanimous ballot for resolutions included on the consent calendar. All items removed from the consent calendar shall be considered in the regular order of business. Members of the public who wish to remove an item from the consent calendar shall, upon rec9gnition by the chair, state their name, address and designate by number the item to be removed from the consent calendar. The Chair will determine if any items are to be deleted from the consent calendar. a. FAHR99-29: Receive and file Treasurer's Report for the month of April 1999: The Treasurer's Report will be handed out at the FAHR Committee meeting in accordance with the Board-approved Investment Policy, and in conformance to the Government Code requirement to have monthly reports reviewed within 30 days of month end. 2 b. FAHR99-30: c. FAHR99-31: d. FAHR99-32: e. FAHR99-33 April 14, 1999 Receive and file Certificates of Participation (COP) Monthly Report. Receive and file Employment Status Report as of April 21, 1999. Receive and file the Quarterly Investment Management Program Report for the period January 1, 1999 through March 31, 1999. Receive and file the Third Quarter Financial and Operational Report for the period ending March 31, 1999. END OF CONSENT CALENDAR Consideration of items deleted from Consent Calendar, if any. (13) ACTION ITEMS (a-d) a. FAHR99-34: b. FAHR99-35: c. FAHR99-36: d. FAHR99-37: Authorize the selection of a new Medical Insurance Company to replace United HealthCare's Point-of-Service Plan and PacifiCare's Health Maintenance Organization Plan effective July 1, 1999. (Lisa Tomko -10 minutes) Adopt Ordinance No. OCSD-09, An Ordinance of the Board of Directors of Orange County Sanitation District, Providing for a Comprehensive Capital Facilities Connection Charge Program. (Gary Streed -30 minutes) Adopt Resolution No. OCSD 99-_, urging the California Legislature to modify the "County Sanitation District Acr to increase the maximum monthly compensation allowed for Directors. (Gary Streed -5 minutes) Approve expanding the District's computer financial assistance program to Directors providing for a maximum loan of $3,000; 10% down payment; 24 months repayment period; interest rate at 5%; and no increase in the aggregate maximum loan fund of $150,000.00. (Gary Streed -5 minutes) (14) INFORMATIONAL PRESENTATIONS (15) OTHER BUSINESS, COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY 3 (16) MATTERS WHICI--I A DIRECTOR WOULD LIKE STAFF TO REPORT ON AT A SUBSEQUENT MEETING April 14, 1999 (17) MATTERS WHICH A Dl'RECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND STAFF REPORT (18) FUTURE MEETING DATES The next Finance, Administration and Human Resources Committee Meeting is scheduled for June 9, 1999, at 5:00 p.m. (19) CLOSED SESSION During the course of conducting the business set forth on this agenda as a regular meeting of the Committee, the Chair may convene the Committee in closed session to consider matters of pending real estate negotiations, pending or potential litigation, or personnel matters, pursuant to Government Code Sections 54956.8, 54956.9, 54957 or 54957.6, as noted. Reports relating to (a) purchase and sale of real property; (b) matters of pending or potential litigation; (c) employee actions or negotiations with employee representatives; or which are exempt from public disclosure under the California Public Records Act, may be reviewed by the Committee during a permitted closed session and are not available for public inspection. At such time as final ~ctions are taken by the Committee on any of these ~ub·ect~, the minutes will reflect all re uired disclosures of information. A. Convene in closed session. 1. Confer with District's Negotiator re pending MOU Labor Negotiations with S&PMT Group, Government Code Section 54957.6. (Mike Peterman -30 minutes) 2. Reconvene in regular session. 3. Consideration of action, if any, on matters considered in closed session. (20) ADJOURNMENT Notice To Committee Members: For any questions on the agenda or to place any items on the agenda, Committee members should contact the Committee Chair or Secretary ten days in advance of the Committee meeting. Committee Chair: Committee Secretary: Thomas Saltarelli Penny Kyle 4 (949) 833-9200 (714) 593-7130 \ May 12, 1999 June Consider 1999-2000 Budgets Action June Consider 1999-2000 User Fees Action June Retiree Medical Premiums Action June Renewal of All-Risk Property Insurance Action June Consolidated Purchasing & Delegation of Authority Action Policy June Adjustments to Salary Ranges and Job Action Classifications July Annual Review of Investment Policy Action July Annual Communications Survey Information July Data Warehousing Demonstration Information July Quarterly Report of General Manager Approved Action Purchases August No meeting anticipated N/A CSOOC • P.O. Box 8127 • Fountain Valley, CA 92728-8127 • (714) 962-2411 1-·l I 'i MINUTES OF A SPECIAL MEETING OF THE FINANCE. ADMINISTRATION AND HUMAN RESOURCES COMMITTEE Orange County Sanitation District Saturday, April 10, 1999, 9:00 a.m. A meeting of the Finance, Administration and Human Resources Committee of the Orange County Sanitation District was held on April 10, 1999 at 9:00 a.m., in the District's Administrative Office. (1) The roll was called and a quorum declared present, as follows: FAHR COMMITTEE MEMBERS: OTHERS PRESENT: Directors Present: Thomas Saltarelli, Chair Mark Leyes, Vice Chair Shawn Boyd Shirley McCracken Mark A. Murphy Peer Swan, Board Vice Chair John J. Collins, Past Board Chair Jan Debay, Board Chair Directors Absent: John M. Gullixson James W. Silva Other Directors Present Steve Anderson Don Bankhead Lynn Daucher Norman Z. Eckenrode James Ferryman Peter Green Jack Mauller Joy L. Neugebauer Charles E. Sylvia Tom Woodruff, General Counsel Toby Weissert, Carollo Engineers Steve McDonald, Carollo Engineers Doris Roush, City of Anaheim Del Boyer, City of Anaheim STAFF PRESENT: Don McIntyre, General Manager Blake Anderson, Assistant General Manager David Ludwin, Director of Engineering Bob Ooten, Director of Operations & Maintenance Gary Streed, Director of Finance Robert Ghirelli, Director of Technical Services Michelle Tuchman, Director of Communications Steve Kozak, Financial Manager Mike White, Controller Jim Herberg, Engineering Supervisor OCSD • P .0. Box 8127 • Fountain Valley, CA 92728-8127 • (714) 962-2411 Minutes of Special Meeting of the FAHR Committee Page2 April 10, 1999 (2) APPOINTMENT OF CHAIR PRO TEM No appointment was necessary. (3) PUBLIC COMMENTS There were none. (4) ACTION ITEM a. FAHR99-09A: Develop a new comprehensive connection fee program and ordinance which contains the following elements: 1. Base fees will be determined by type of development and are calculated per 1 , 000 square feet for non-residential development and per unit for residential development; 2. Three categories of Commercial connection fees will be developed: low demand, average demand and high demand. 3. Significant Industrial Users (Class I Permittees) will be charged demand- based connection fees as a part of their on-going annual use charges, rather than only as a one-time up front charge. 4. Residential fees will be tiered based upon number of bedrooms and SFR or MFR development. 5. Connection fees will continue to be collected by local sewering agencies at the time the building permit is issued. 6. Credit for demolished structures will be granted only when the developer can prove that prior connection fees were paid, and credit will be provided only for the amount actually paid. 7. The new connection fee program should be reported to the RAC prior to final consideration by the Board. Discussion and Workshop District staff, and Steve McDonald of Carollo Engineers, conducted a FAHR Committee Workshop regarding connection fees which focused on the above elements. All Board Members were invited to attend. The purpose of the workshop was to provide the Directors with comprehensive information for future decision-making regarding the connection fee program. ' t Minutes of Special Meeting of the FAHR Committee Page 3 April 10, 1999 Discussions included continuing to use the "capital investment equalization" method of fee calculation, assigning wet-weather facilities costs to appropriate users, developing tiered fees for residential connections, developing categories of fees for non-residential users, allowing significant industrial/commercial users to pay annually, considering a fee for regional governmental facilities, requiring a periodic review of the process, allowing the Board to grant exceptions and developing an implementation or phase-in plan. A copy of the revised presentation is attached. Motion: Moved, seconded and duly carried to refer this item back to the FAHR Committee for further review at their May meeting, and recommendation to the Board of Directors. (5) OTHER BUSINESS, COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY There was no other business discussed. (6) MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND STAFF REPORT There were none. (7) MATTERS WHICH A DIRECTOR WOULD LIKE STAFF TO REPORT ON AT A SUBSEQUENT MEETING There were none. (8) CONSIDERATION OF UPCOMING MEETINGS The next regularly scheduled FAHR Committee meeting will be held on April 14, 1999 at 5:00 p.m. (9) CLOSED SESSION There was no closed session. Minutes of Special Meeting of the FAHR Committee Page4 April 10, 1999 (10) ADJOURNMENT The Chair declared the meeting adjourned at approximately 12:00 noon. Submitted by: ~ H:\wp.dla\agenda\FAHR\Fa/riP\QQmins'IJ4..10-00M/N.doc MINUTES OF FINANCE. ADMINISTRATION AND HUMAN RESOURCES COMMITTEE MEETING Orange County Sanitation District Wednesday, April 14, 1999, 5:00 p.m. A meeting of the Finance, Administration and Human Resources Committee of the Orange County Sanitation District was held on April 14, 1999 at 5:00 p.m., in the District's Administrative Office. (1) The roll was called and a quorum declared present, as follows: FAHR COMMITTEE MEMBERS: STAFF PRESENT: (2) Directors Present: Thomas Saltarelli, Chair Mark Leyes, Vice Chair Shawn Boyd James W. Silva Jan Debay, Board Chair Peer Swan, Board Vice Chair John J. Collins, Past Board Chair Directors Absent: John M. Gullixson Shirley McCracken Mark A. Murphy APPOINTMENT OF CHAIR PRO TEM No appointment was necessary. (3) PUBLIC COMMENTS There were none. Don McIntyre, General Manager Blake Anderson, Assistant General Manager Mike Peterman, Director of Human Resources Gary Streed, Director of Finance Michelle Tuchman, Director of Communications Patrick Miles, Director of Information Technology Bob Ooten, Director of Operations & Maintenance Lisa Tomko, Human Resources Manager Steve Kozak, Financial Manager Greg Mathews, Assistant to the General Manager Mike White, Controller Dawn McKinley, Senior Human Resources Analyst Rob Thompson, Plant Automation Manager Penny Kyle, Committee Secretary Ryal Wheeler, Maintenance & Operations Foreman OTHERS PRESENT: Terry Andrus, Assistant General Counsel Toby Weissert, Carollo Engineers OCSO • P.O. Box 8127 • Fountain Valley, CA 92728-8127 • (714) 962-2411 Minutes of the Finance, Administration and Human Resources Committee Meeting Page 2 April 14, 1999 (4) RECEIVE, FILE AND APPROVE DRAFT MINUTES OF PREVIOUS MEETING It was moved, seconded and duly carried to approve the minutes of the March 10, 1999, Finance, Administration and Human Resources Committee as drafted. (5) REPORT OF THE COMMITTEE CHAIR Chairman Saltarelli commented on the workshop held on April 10, 1999. All but nine Directors attended the workshop. (6) REPORT OF THE GENERAL MANAGER General Manager Don McIntyre had no report. (7) REPORT OF ASSISTANT GENERAL MANAGER Assistant General Manager Blake Anderson briefly reported on an item that would be placed on the April 28th Board agenda regarding a possible purchase of Tule Ranch/Magan Ranch site in Kem County to be used as a biosolids land application site. (8) REPORT OF DIRECTOR OF FINANCE Mr. Streed advised that several reports were placed before the Directors just prior to the meeting. • The Treasurer's Report for March was placed before the Committee prior to the meeting in accordance with the Investment Policy and Government Code requirements. • Revised agenda verbiage for the Santa Ana Watershed Project Authority item • Equity Adjustment Report • Staff Report on the Y2K Contingency Plan • CIP Budget List • Revised Connection Fee Workshop slides (9) REPORT OF DIRECTOR OF HUMAN RESOURCES The Director of Human Resources Mike Peterman had no report. (10) REPORT OF DIRECTOR OF COMMUNICATIONS Director of Communications Michelle Tuchman reported that new security measures have been installed throughout the plant. To help protect employees, the District is keeping the front gates closed during the day except between 6:00 a.m. -8:00 a.m and during the lunch hour. Anyone needing to get into the facility will be stopped by the Security Guard and asked to sign in the log book. During Committee and Board meetings the gate will be opened. \ Minutes of the Finance, Administration and Human Resources Committee Meeting Page 3 April 14, 1999 A trip is being planned to go to Chino Basin on May 15th• Also, the second annual Legislator's Day is scheduled to be held on June 25th• This will be a morning program, and the topics will be watershed management and the groundwater replenishment program. Ms. Tuchman also reported that she was assisting in the coordination of interviews for our staff and staff of Orange County Water District with a reporter from Comcast Cable. OCN's Prime Story did a segment on groundwater replenishment on April 1st. She further reported that staff believes ABC's 20/20 program may be working on a story on biosolids handling nationwide. (11) REPORT OF GENERAL COUNSEL Assistant General Counsel had no report. (12) CONSENT CALENDAR ITEMS (Items A-F) A. FAHR99-18: B. FAHR99-19: C. FAHR99-20: D. FAHR99-21: E. FAHR99-22: F. FAHR99-23: Receive and file Treasurer's Report for the month of March 1999: The Treasurer's Report was handed out at the FAHR Committee meeting in accordance with the Board-approved Investment Policy, and in conformance to the Government Code requirement to have monthly reports reviewed within 30 days of month end. Receive and file Certificates of Participation (COP) Monthly Report. Receive and file Employment Status Report as of March 25, 1999. Approve changes and additions to Human Resources Policies and Procedures as authorized by Resolution No. 98-33. Receive and file report of General Manager-approved purchases in amounts exceeding $50,000 in accordance with Board purchasing policy. Renew the District's Excess Worker's Compensation Insurance Program for the three-year period May 1, 1999 to May 1, 2022, with a rate guarantee of $0.612 per $100 of annual payroll for each fiscal year. END OF CONSENT CALENDAR Consideration of items deleted from Consent Calendar, if any. There were none. Motion: Moved, seconded and duly carried to approve the recommended actions for items specified as 12(A) through 12(F) under Consent Calendar. Minutes of the Finance, Administration and Human Resources Committee Meeting Page 4 April 14, 1999 (13) ACTION ITEMS (Items A-E) A. FAHR99-24: (1) Require SAWPA to pay the O&M charges for 1996-97, 1997-98, and 1998-99 in accordance with the 1996 Agreement; and, (2) Authorize staff to negotiate an agreement with SAWPA to include a) the amounts already paid by SAWPA to the District for a currently unneeded 1/101h of 1 mgd of additional capacity be accepted as payment in full for the 1996-97 and 1997-98 charges; b) that SAWPA's treatment and disposal capacity be reducecl to 9 mgd; and, c) that the 1998-99 charges be collected over a reasonable period of time. Motion: Moved, seconded and duly carried to approve the amended motion as follows: (1) Require SAWPA (Santa Ana Regional Watershed Project Authority) to pay the O&M charges for 1996-97, 1997-98 and 1998-99 in accordance with the 1996 Agreement; and (2) Authorize staff to negotiate an agreement with SAWPA to structure a payment plan for the charges it owes the District which may include: a) crediting against the amount owed, amounts already paid by SAWPA to the District for a currently unneeded 1110th of 1 mgd of additional treatment and disposal capacity, thus reducing SAWPA's capacity to 9 mgd; b) collecting the amount owed over time; and c) relating the payment of the amount owed to parallel discussions on SAWPA prepaying for 3 mgd of anticipated capacity needs to accommodate future brine discharges from new groundwater treatment projects. 8. FAHR99-25: (1) Approve FGIC proposal for 20 basis points annual commitment fee for the Standby Bond Purchase Agreement for the Series uc" COPs, effective May 1, 1999 through September 1, 2002; and (2) Authorize the Director of Finance to execute an Amendment to the Standby Bond Purchase Agreement for the revised annual commitment fee of 20 basis points for tne Series uc" COPs, for the period May 1, 1999 to September 1, 2002. Motion: Moved, seconded and duly carried to approve staffs recommendation. C. FAHR99-26: Authorize the General Manager to enter into a Professional Services Agreement with Commercial Resources Tax Group, Inc., to review sewer service fees and Assessor's data for a total fee not to exceed $1 million. Motion: Moved, seconded and duly carried to approve staffs recommendation. D. FAHR99-27: Approve Equity Adjustment Policy dated July 1, 1999. Motion: Moved, seconded and duly carried to approve staffs recommendation. E. FAHR99-28: Approve a compensation package for District staff to support Year 2000 contingency plan execution (during New Year's Eve weekend 2000) comprised of: (a) $250 for all onsite standby staff; (b) $250 for all on-call standby staff; (c) $250 for all normally scheduled support staff; (d) Time and a half overtime for all hours worked between 6:00 p.m. December 31, 1999 and 6:00 a.m. January 3, 2000; and (e) District supplied food and beverage for the required weekend duration, for an estimated cost of $1.400. Motion: Moved, seconded and duly carried to approve staffs recommendation. Minutes of the Finance, Administration and Human Resources Committee Meeting Page 5 April 14, 1999 (14) INFORMATJONAL PRESENTATION a. Park Place Area Service Transfer Blake Anderson, Assistant General Manager, gave a slide presentation regarding the various solutions and impacts for this issue. The Committee is scheduled to consider an action item at the May meeting. b. Preliminary Budget Status Report Mike White, Controller, gave a brief report on the status of the1999/2000 budget. (15) OTHER BUSINESS, COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY There was no other business discussed. (16) MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND STAFF REPORT There were none. (17) MATTERS WHICH A DIRECTOR WOULD LIKE STAFF TO REPORT ON AT A SUBSEQUENT MEETING There were none. (18) CONSIDERATION OF UPCOMING MEETINGS The next FAHR Committee meeting is scheduled for May 12, 1999 at 5:00 p.m. (19) CLOSED SESSION The Chair reported to the Committee the need for a Closed Session, as authorized by Government Code Sections 54957.6, to discuss and consider the item that is specified as Item 19(A)(1) on the published Agenda. The Committee convened in closed session at 7:32 p.m. Confidential Minutes of the Closed Session held by the Finance, Administration and Human Resources Committee have been prepared in accordance with California Government Code Section 54957.2, and are maintained by the Board Secretary in the Official Book of Confidential Minutes of Board and Committee Closed Meetings. No reportable action was taken re Agenda Item 19 (A)(1 ). At approximately 7:37 p.m., the Committee reconvened in regular session. Minutes of the Finance, Administration and Human Resources Committee Meeting Page 6 April 14, 1999 (20) ADJOURNMENT The Chair declared the meeting adjourned at approximately 7:37 p.m. Submitted by: ,,, ~t•Vt/f, •• t FAHR COMMITTEE Meeting Date To Bd. 05/12/99 N/A AGENDA ~EPORT Item Number Iter:n Nur:nber lcJ. I A_) Orange County Sanitation District FROM: Gary Streed, Director of Finance Originator: Steve Kozak, Financial Manager SUBJECT: CERTIFICATES OF PARTICIPATION (COP) MONTHLY REPORT - APRIL 1999 (FAHR99-30) GENERAL MANAGER'S RECOMMENDATION Receive and file Certificates of Participation (COP) Monthly Report for the month of April 1999. SUMMARY Since June 1995, the daily rate COP program remarketing agents have been PaineWebber for the Series "A" and the 1993 Refunding COPs, and J.P. Morgan for the Series "C" COPs. Most fixed rate Series "8" COPs have been refunded and the 1992 Refunding COPs have always been remarketed by PaineWebber in a weekly mode. PROJECT/CONTRACT COST SUMMARY None. BUDGET IMPACT D This item has been budgeted. D This item has been budgeted, but there are insufficient funds. D This item has not been budgeted. [gl Not applicable (information item) ADDITIONAL INFORMATION For the month of April 1999, graphical and tabular reports are attached. The first graph entitled, "OCSD COP Rate History Report," shows the variable interest rates on each of the daily rate COPs since the last report, and the effective fixed rate for the two refunding issues which are covered by an interest rate exchange agreement commonly called a "swap." llradon\data1\wp.dtalagenda\FAHR\Fahr99\99ar\FAHR99-30.doc ReYised: 1 /5198 Page 1 The second bar chart entitled, "Comparative Daily COP Rate History Report," shows the performance of the District's Daily Rate COPs as compared to a composite index rate, which represents the average rate of six similar variable rate daily reset borrowings. The third bar chart entitled, "COP Rate History, Comparison of Highest & Lowest Rates," compares the performance (monthly average interest rate) of the District's Daily Rate COPs with the highest and lowest monthly average rates from among six similar variable rate daily reset COPs. The table entitled, "Daily COP Rate Comparisons," shows the monthly variable interest rate performance of the District's Daily Rate OOPs as compared to the composite index. Estimated annual interest payments calculated for a standard $100 million par amount, are also shown. Variable rates historically rise at the end of each calendar quarter, and especially at year-end, because of business taxes and statements. The rates decline to prior levels immediately in the following month. Staff maintains continuous rate monitoring and ongoing dialog with the remarketing agents to keep the Committee fully informed about developments in the program as they occur and at each meeting. ALTERNATIVES None. CEQA FINDINGS None. ATTACHMENTS 1. Graph -Comparative Daily COP Rate History Report 2. Graph -OCSD COP Daily Rate History Report 3. Graph -COP Rate History, Comparison of Highest & Lowest 4. Tabular-Daily COP Rate Comparison GGS:SK:lc \lradonldata1'twp.dtalagenda\FAHR\Fahr99199ar\FAHR99-30.doc Revised: 1 /5198 Page2 G> "O iil t C "C )> Ill RATE(%) iil !!. -4 a. ~ m C" Ill '< ~ 0 N w .1:1,. ?' a, .,, :::, -:r 1G 0 0 0 0 0 0 0 Ill N ::, I\) 0 0 0 0 0 0 0 0 0 -"' 6 06-May-98 ~ 8 Isl IC ig ~ 20-May-98 _co s· Ill ~ ::, ~ 0 "' 03-Jun-98 "O $ • s:: -t m 17-Jun-98 :r en -t lo I 01-Jul-98 T I I I 1' I T I I 0 --1 15-Jul-98 t I i ---ck_ I * I • I I 0 CJ) 29-Jul-98 t I I I~ I * I • I I C 12-Aug-98 t I ~ I I l I ' I I 0 0 26-Aug-98 f I l~I I l I ' I I "tJ ++ 09-Sep-98 C )> 23-Sep-98 -)>lJ )> r--m G)-· ""CJ -< :::, 07-Oct-98 (1)(1) ~~ ~~ 11>(1) 21-Oct-98 CT CT .r -I (1) .., 04-Nov-98 ...li, m 18-Nov-98 + I ~I * _. I ICO:C co - ++ 02-Dec-98 co CJ) -I enc_ 16-Dec-98 0 01J ~ 0, G)~ 30-Dec-98 roo :::, .., ~ ::0 ~:::, 13-Jan-99 II) m "O 27-Jan-99 ""CJ 0 10-Feb-99 + I ~ 1 I I * I • I I ::0 24-Feb-99 '' ' ~ ' --I 10-Mar-99 24-Mar-99 07-Apr-99 21-Apr-99 I- Prepared by Finance, 5/4/99, 10:46 AM COMPARATIVE DAILY COP RA TE HISTORY REPORT APRIL, 1999 6.00 ~-___.'.=::=================~~---, 5.00 -1---------------------------------------------l 4.00 --;,e. -~ 3.00 ~ 2.00 1.00 0.00 DATE CX) CX) CX) CX) CX) CX) CX) CX) a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, ~ C: "3 ci ci 1:f > ci C: .0 ..: ..: I'll ::, ::, Q) 0 Q) I'll Q) I'll C. ~ ., ., <( en 0 z C ., u.. ~ <( EIOCSD • COMPOSITE INDEX G:\excel.dta\fin\2220\geggi\Finance\dailycopintrate.xls COP RATE HISTORY COMPARISON OF HIGHEST & LOWEST RATES 3.20 ~----------~~~~~~~~~~~~~~~~~~----------, -~ -w t-~ 3.10 3.00 2.90 2.80 2.70 2.60 2.50 2.40 2.30 2.20 I ••• HIGH LOW ILEHISCE BTnRWO l!I Highest rate G:\excel.dta\fin\2220'Qeggi\Finance\RATEHIST_HILO_bargraph D OCSD/J.P. Morgan ILEH/SCE 51!/IRWD • OCSD/PaineWebber 0 Lowest rate LEH/SCE JPnRWO,OCSD Prepared by Finance, 5/4/99, 10:48 AM Prepared by Finance, 5/4/99, 10:47 AM May-98 Jun-98 Jul-98 Aug-98 Sep-98 Oct-98 Nov-98 Dec-98 Jan-99 Feb-99 Mar-99 Apr-99 AVERAGE DAILY COP RATE COMPARISONS(%) MAY, 1998 -APRIL, 1999 OCSD $100M $98.SM $46M Series"A" Series"C" Series 93 Ref PaineWebber J.P. Morgan PaineWebber 3.56 3.60 3.56 3.28 3.30 3.28 2.80 2.86 2.80 2.43 2.44 2.43 3.27 3.33 3.27 3.06 3.00 3.06 2.94 2.91 2.94 3.11 3.07 3.11 2.84 2.87 2.84 2.30 2.28 2.30 2.72 2.66 2.72 2.88 2.83 2.88 2.93% 2.93% 2.93% ESTIMATED ANNUAL INTEREST PAYMENTS PER $100M PAR AMOUNT $ 2,932,500 $ 2,929,167 $ 2,932,500 "'FOOTNOTE Composite index consists of the following COP transactions: . IRWD, Series 86, $60M, Smith Barney • IRWD, Series 93 "A" Refunding, $87.6M, Bankers Trust • IRWD, Series 93 "B" Refunding, $41.8M, J.P. Morgan . IRWD, Series 95 Refunding, $117.SM, PaineWebber Composite Index"' 3.57 3.27 2.79 2.40 3.24 3.02 2.96 3.09 2.87 2.32 2.70 2.86 2.92% $ 2,924,167 • Western Riverside Co. Reg. Wastewater Auth., Series 96, $25.4M, PaineWebber • Orange Co., Irvine Coast Asst. Dist. 88-1, $94.SM, J.P. Morgan • SCE, $192M, Lehman G:\excel.dta\fin\2220\geggi\Finance\COPdaily$rate comparison f ,, FAH R CO M-MITTEE AGE NDA REPO RT Orange County Sanitation District FROM ; Mike Peterman, Director of Human Resources Originator: Meeting Date To Bel. of Dir. 5/12/99 Item Number SUBJECT: EMPLOYMENT STATUS REPORT AS OF APRIL 21, 1999 (FAHR99-31) GENERAL MANAGER'S RECOMMENDATION Receive and file the Employment Status Report. SUMMARY Total FTE headcount at the District as of April 21, 1999 was 507.75. PROJECT/CONTRACT COST SUMMARY Not applicable. BUDGET IMPACT D This item has been budgeted. (Line item: ) D This item has been budgeted, but there are insufficient funds. D This item has not been budgeted. 1:8] Not applicable (information item) ADDITIONAL INFORMATION The District had a full-time equivalent (FTE) headcount of 507.75 as of April 21, 1999. The actual number of employees was 518. The annual turnover rate is 5.9%. There was one new employee hired in April, 1999: • Collection Facilities Worker I (Collection Facilities Maintenance) ALTERNATIVES Not applicable. \llaclonldata1 w,p.dtalagenda\FAHR\Fahi99199ar\FAHR99.31.dot R8Yised: 8/20/98 Page 1 CEQA 'flNDINGS Not applie.able. ATTACHMENTS April 21 , 1999 Employment Status Report. Performance compared to 5-Year Staffing Plan. 1\rad0f1\dala1 >Np.cltalag"!ld•IF,~f illlf-~ hi99\99af\f ~-\-1F.."1!,,~J.,jq, rlw111eu .. 8/20/98 Employment Status Report Run Date· 21-Apr-99 Regular Regul•r Total Vacant Positions Regular Part-time Part-time FTE Positions FTE FTE FTE FTE w/ln 6 yr plan ~ Full-time 20hours 30hours Contract lntem LOA Count FY98-99 98-99 99-00 00-01 01•12 (FY99-00J 11 O -General Management Admin 4.00 0.00 0.00 0.00 0.00 0.00 4.00 0.50 4.50 4.50 4.50 4.50 0.50 Total General Management 4.00 0.00 0.00 0.00 0.00 0.00 4.00 0.50 4.50 4.50 4.50 4.50 0.50 21 O -Finance Administration 4.00 0.00 0.00 0.00 0.00 0.00 4.00 0.00 4.00 4,00 4.00 4.00 0.00 220 -Accounting 16.00 0.00 0.00 0.00 0.00 0.00 16.00 2.00 18.00 17.50 16.00 14.50 1.50 230 -Purchasing & Warehousing 14.00 0.50 0.00 0.00 0.00 0.00 14.50 1.50 16.00 15.00 15.00 15.00 0.50 Total Finance 34.00 0.50 0.00 0.00 0.00 0.00 34.50 3.50 38.00 36.50 35.00 33.50 2.00 310 -Communications 8.00 0.00 0.75 0.00 0.00 0.00 8.75 1.00 9.75 9.75 9.75 9 75 1.00 Total Communications 8.00 0.00 0.75 0.00 0.00 0.00 8.75 1 9.75 9.75 9.75 9.75 1.00 41 O -General Services Ad min 5.00 0.00 0.00 0.00 0.00 1.00 6.00 0.00 6.00 6.00 6.00 6.00 0.00 420 -Collection Facilities Mtce 16.50 0.00 0.00 0.00 0.00 1.00 17.50 1.00 18.50 18.50 18.50 18.50 1 00 430 -Plant Maintenance 31.50 0.00 0,00 0.00 0.00 0.00 31.50 7.00 38.50 28.50 28.50 27.50 -3.00 Total General Services 53.00 0.00 0.00 0.00 0.00 2.00 55.00 8.00 63.00 53.00 53.00 52.00 -2.00 51 O -Human Resources Admin 5.00 0.50 0.75 0,00 0.00 0.00 6.25 0.50 6.75 6.75 6.75 6.50 a.so 520 -Education & Training 4.00 0.00 0.00 0,00 0.00 0.00 4.00 0.00 4.00 4.00 4.00 3.00 0.00 Total Human Resources 9.00 0.50 0.75 0.00 0.00 0.00 10.25 0.50 10.75 10.75 10.75 9.5 0.50 61 O -Technical Services Admin 2.00 0.00 0.00 0.00 2.00 0.00 4.00 1.00 5.00 4.00 4.00 4.00 0.00 620 -Environmental Compliance & Monito 1700 0,00 0.00 0,00 o.oo 1.00 18.00 3.50 21.50 18.50 18.50 18.50 0.50 630 -Environmental Laboratory 28.00 2.50 0.00 0.00 0.00 0.00 30.50 -0.50 30.00 29.00 29.00 28.00 -1.50 640 -Source Control 34.00 0.00 0.75 0.00 0.00 0,00 34.75 2.00 36.75 35.75 34.75 33.75 1.00 530 -Safety & Emergency Response 4.00 0.00 0.00 0.00 0.00 0,00 4.00 1.50 5.50 5.50 5.00 5.00 1.50 Total Technical Services 85.00 2.50 0.75 0.00 2.00 1.00 91.25 7.50 98.75 92.75 91.25 89.25 1.50 710 -Engineering Administration 3.00 0.00 0.00 0.00 0.00 0.00 3.00 0.00 3.00 3.00 3.00 3.00 0.00 720 -Planning & Design Engineering 26.00 0.00 0.75 0.00 0.50 1.00 28.25 3.25 31.50 31.50 31.50 31.50 3.25 730 -Construction Management 34.00 0,00 0.75 0.00 0.00 1.00 35.75 2.75 38.50 37.50 37,50 37.50 1.75 Total Engineering 63.00 0.00 1.50 0.00 a.so 2.00 67 6 73.00 72.00 72.00 72.00 5.00 810 -O & M Administration 2.00 0.00 0.00 0.00 0.00 0.00 2.00 0.00 2.00 2.00 2.00 2.00 0.00 820 -O & M Process Support 8.00 0.00 0.00 0.50 0.50 o.oo 9.00 1.25 10.25 9.25 8,25 8.25 0,25 830 -Plant 1 Operations 31 .00 0.00 0.00 0.00 0.00 3.00 34.00 3.00 37.00 35.00 35.00 35.00 1.00 840 -Plant 2 Operations 41 .00 0.00 0.00 0.00 0.00 0.00 41.00 0.00 41.00 37.00 37.00 37.00 -4.00 850 -Mechanical Mtce 45.50 0.00 0.00 0.00 0.00 1.00 46.50 5.00 51.50 48.50 47.50 45.50 2.00 860 -Electrical & Instrumentation Mtce 57.50 0.00 0.00 0.00 0,00 0.00 57.50 1.00 58.50 57.50 56.50 56,50 0,00 870 -Cogeneration 9.00 0.00 0.00 1.00 0.00 1.00 11.00 2.00 13.00 13.00 13.00 13.00 2.00 880 -Air Quality & Special Projects 8.00 o.oo 0.00 0.00 1.00 0.00 9.00 -1.00 8.00 7.00 7.00 7.00 -2.00 Total Operations & Maintenance 202.00 0.00 0.00 1.50 1.50 5.00 210.00 11.25 221.25 209.25 206.25 204.25 -0.75 910 -IT Admin 2.00 0.00 0,00 0.00 0.00 0,00 2.00 2.00 4.00 4.00 4.00 4.00 2.00 920 -IT User Support 6.00 0.00 0.00 0,00 0.00 0.00 6.00 1.00 7.00 8.00 8.00 8.00 2.00 930 -IT Network Support 6.00 0.00 0.00 0.00 0.00 0.00 6.00 -1.00 5.00 6.00 6.00 6.00 0.00 940 -IT Programming 6.00 0.00 0.00 0.00 0,00 0.00 6.00 0.00 6.00 7 00 7.00 7.00 1.00 950 -Plant Automation 7.00 0.00 0.00 0.00 0,00 0.00 7.00 1.00 8.00 8.00 8.00 8.00 1.00 Total Information Technology 27.00 0.00 0.00 0.00 0.00 0.00 27.00 3.00 30.00 33.00 33.00 33.00 6.00 Total Staffing 485.00I 3.50( 3.751 1.50( 4.001 10.00 507.75 41.25 549.00 521.50 515.50 507.75 13.75 g:\excol.dtalhr\51 0lstoeves\EMPDIV9S-99 Performance to 5-Year Staffing Plan 570 560 . -·-""-~-·-·-·-·----·-·-550 J_ -------·-·-_·------~ 540 530 I ·~ .... ... ---... 520 ... 510 500 490 I I • FTE Headcount -· • · -5 Year Staffing Plan I 480 • I • ' J A S O N D J F M A M J J A S O N D J F M A M J I FY 97-98 I I FY 98-99 I • I • ....... FAMR COMMITTEE Meeting Date 05/12/99 AGENDA REPORT Itl!m!dJber I~ Orange County Sanitation District FROM: Gary Streed, Director of Finance Originator: Steve Kozak, Financial Manager SUBJECT: QUARTERLY INVESTMENT MANAGEMENT PROGRAM REPORT FOR THE PERIOD JANUARY 1, 1999 THROUGH MARCH 31, 1999 (FAHR99-32) GENERAL MANAGER'S RECOMMENDATION Receive and file the Quarterly Investment Management Program Report for the period January 1, 1999 through March 31, 1999. SUMMARY Section 15.0 of the District's Investment Policy includes monthly and quarterly reporting requirements for the District's two investment portfolios. These two funds, the "Liquid Operating Monies," and the "Long-Term Operating Monies," are managed by PIMCO, the District's external money manager. The ongoing monitoring of the District's investment program by staff and Callan Associates, the District's independent investment advisor, indicates that the District's investments are in compliance with the District's adopted Investment Policy and the California Government Code, and that overall performance has tracked with benchmark indices. In addition, sufficient funds are available for the District to meet its operating expenditure requirements for the next six months. The District's portfolios do not include any reverse repurchase agreements or derivative securities. PROJECT/CONTRACT COST SUMMARY N/A BUDGET IMPACT D This item has been budgeted. D This item has been budgeted, but there are insufficient funds. D This item has not been budgeted. [8l Not applicable (information item) H:lwp.dlalagenda\FAHR\Fahr99199ar\FAHR99-32.doc Rl!llised: 1 /5198 Page 1 To Bd. 05/26/99 Itl!m Number ADDITIONAL INFORMATION Performance Reports The Quarterly Strategy Review, prepared by PIMCO, and the Investment Measurement Review, prepared by Callan Associates, are attached for reference. Also attached are two comparative bar charts which depict the sector diversification of the District's portfolios, as of December 31, 1998, and March 31 , 1999. The Liquid Operating Monies portfolio, with an average maturity of less than 90 days, consists entirely of cash equivalent investments such as U.S. Treasuries and corporate, discount notes. Portfolio Performance Summary The following table presents a performance summary of the District's portfolios as compared to their benchmarks for the period January 1 through March 31 , 1999. Portfolio Performance Summary Quarter Ended March 31, 1999' Liquid Operating Monies Long-Term Operating Monies(%) (%) . w 1-·Total Rate Total Rate-o~ . cJkMiiirk1 :, !\ I' ~, = -· I otRelum 'Benchmar.k'.WJ~ ".ir Retl:iti:i;;,," " -3·Mor,ths 1.2 1.1 0.4 0.4 6 Months 2.5 2.3 1.0, 0.9 9 Months 4.0 3.5 4:9 4.7 12 Months 5.5 4.9 6.8 6.4 Since inception 30 Sept. 95 5.6 5.2 6.9 6.5 - -.:r-....-;ji :pi:, Market Value per PIMCO 31 Mar. 99 $18.SM 305.8 Average Quality "AA+" "AAA" Current Yield .S.75 6:15% Estimated Yield to Maturity' 4.83 5,32 Quarterly Depo~its (Withdrawals) Estimated Annual lnc·ome $1 .1M $18.8M (1) Benchmarks: • Liquid Operating Portfolio: 3-Month Treasury Bill Index • Long-Term Operating Portfolio: Merrill Lynch Corp/Govt 1-5 Year Bond Index Market Recap The U.S. economy continued its rapid growth during the first quarter of 1999 amid heightened concerns that the Federal Reserve would boost interest rates to keep inflation subdued. However, with few signs that inflation was actually increasing, and with reluctance to curtail growth in the U.S., short-term interest rates were left unchanged by the Fed in the first quarter. H:lwp.dta\agenda\FAHR\Fahr99199ar\FAHR99-32.doc Rl!Yised: 115198 Page2 \ As depicted in the attached comparative graph of the "Historical Yield Curve," the yield on the 30-year Treasury benchmark jumped 53 basis points when compared to the end of the fourth quarter 1998 (5.09%), ending the first quarter at 5.62%. This was near the level last reached in August 1998 before turbulence in global financial markets sparked investor movement toward the relative safety of U.S. dollar-denominated assets, and pushed yields below 5%. Shorter rates showed little or no change. The 3-month Treasury rate increased by 2 basis points (4.46% vs. 4.44%), and the 6-month rate remained unchanged at 4.52%. However, intermediate rates (from 1 to 10 years) jumped dramatically; a 19 basis point increase for the 1-year rate (4.70% vs. 4.51 %), and a 59 basis point increase for the 10-year rate (5.23% vs. 4.64%). For the Long-Term Operating Monies portfolio, PIMCO maintained a weighted maturity or duration, slightly above the duration index (2.4 vs. 2.3 years), emphasizing holdings in mortgage-backed bonds, investment grade corporate notes, and U.S. Agency debentures. These investments contributed incremental yield to the portfolio when compared to the all-Treasury benchmark yields. The performance of the portfolio matched its benchmark (0.4%) for the first quarter. For the Liquid Operating Monies Portfolio, PIMCO used a duration posture slightly above index (approximately 109 days vs. 90 days), emphasizing slightly longer short-term U.S. Agency discount notes and high-quality corporate securities than the index. This added returns to the portfolio, which slightly outperformed its benchmark (1.2% vs. 1.1 %) for the first quarter. Portfolio Market Values Comparative marked-to-market quarter-end portfolio values are shown in the table below, and in the attached bar chart. ALTERNATIVES N/A Quarter Ending 31 March 98 30June 98 30 Sept. 98 31 Dec. 98 31 March 99 H:lwp.dta\agenda\FAHR\Fahr99199ar\FAHR~2.dcx: Revised: 115198 Long-Tenn Liquid Operating Operating Monies Monies (SM) (SM) 17.8 306.0 18.1 311 .5 18.4 282.8 18.6 304.5 18.8 305.8 Page3 CEQA FINDINGS NIA ATTACHMENTS 1. PIMCO Report 2. Callan Report 3. Three Comparative Bar Charts 4. Historical Yield Curve Graph SK:lc H:lwp.dta\agenda\FAHR\Fahr99\99ar\FAHR99-32.doc RIIYised: 1 /5198 Page4 Prepared by Finance, 4/29/99, 7:52 AM $350,000,000 $300,000,000 $250,000,000 $200,000,000 $150,000,000 $100,000,000 $50,000,000 - OCSD Investment Management Program Quarter End Portfolio Values (Marked-to-Market) $0 l itY • • • 14 •••1 31 Mar 98 30 Jun 98 30 Sep 98 31 Dec 98 31 Mar 99 lo Liquid Operating Monies !fl Long-Term Operating Monies I G:\excel.dta\fin\2220\geggi\Finance\investmgmtprogram --....... Prepared by Finance, 4/29/99, 8:08 AM 100 90 80 70 .-. '#. 60 .._... +J C 50 Q) u L-40 Q) a.. 30 20 10 - I 0 . 0 0 Govt OCSD Liquid Operating Monies Portfolio Investment Diversification 0 0 0 0 0 0 0 0 100100 Mtg Corp Non US$ Other Net Cash Equivalent G:\excel.dta\fin\2220\geggi\Finance\Portfolio short term D 12/31/98 ~· 3/31/99 Prepared by Finance, 4/29/99, 8:56 AM OCSD Long-Term Operating Monies Portfolio Investment Diversification 100 i---------------- 90 ,---------------_J 80 ,--------------- ---70 r---------------_J ~ 60 ~54-szi---------------_J +J C Q) ~ Q) 0... 50 40 30 20 10 11 11 0 I , r«:«1 .,,_., ..,.,... Govt Mtg Corp G:\excel.dta\fin\2220\geggi\Finance\Portfolio long term graph 28 28 0 0 0 0 r:«:«:I l Non US$ Other Net Cash Equivalent D 12/31/98 ~ 3/31/99 -- Prepared by Finance, 4/27/99, 1 :27 PM 6.00 5.75 5.50 5.25 -~ C ..J 5.00 w s: 4.75 4.50 4.25 4.00 0 E M 0 E u, ... >, """ I HISTORICAL YIELD CURVE I ... ... >, >, N M ... >, -.:I' ... >, an ... >, t-- -+-30-Sep-98 ---6-31-Dec-98 -a-31-Mar-99 G:\excel.dta\fin\2220\geggi\Finance\HistoricalTREASURYyieldcurve ... >, 0 """ ... >, 0 N ... >, 0 M FAHR COMMITTEE AGENDA REPORT Meeting Date To Bel. of Dir. 5/12/99 5/26/99 Orange County Sanitation District FROM: Gary G. Streed, Director of Finance Originator: Michael D. White, Controller SUBJECT: Third Quarter Financial and Operational Report (FAHR99-33) GENERAL MANAGER'S RECOMMENDATION Receive and file the Third Quarter Financial and Operational Report for the period ending March 31, 1999. SUMMARY Attached in a separately bound document is the District's Third Quarter Financial and Operational Report for the period ended March 31, 1999. This report is a consolidation of both the financial and operational accomplishments of the District Through the third quarter of the 1998-99 fiscal year. Contained within the Mid-Year Financial Report are budget summary reviews of the Joint Operating & Working Capital Funds, the Capital Improvement Program, individual Revenue Areas, and the self-insurance funds. Also contained within this report is the status of the divisional performance objectives and workplan milestones identified in the 1998-99 Approved Budget. As indicated within the Overview Section of this report, 70.14 percent, or $31,701,000 of the 1998-99 net joint operating budget of $45.2 million has been expended. Net costs have decreased 1.21 percent in comparison with the same period last year. The total cost per million gallons at March 31, 1999 is $476.56 based on flows of 66,521.09 million gallons, or 243 million gallons per day. This is $9, or 1.87 percent below the budgeted cost per million gallons of $485.63. Capital improvement outlays through March 31 were 40.8 percent of budget, or $29,464,000. PROJECT/CONTRACT COST SUMMARY NIA H:lwp.dta\agenda\FAHR\Fahr99199ar\FAHR99-33.doc Revised: 115198 Page 1 Item Number BUDGET IMPACT D This item has been budgeted. (Line item: ) D This item has been budgeted, but there are insufficient funds. D This item has not been budgeted. C8J Not applicable (information item) ATTACHMENTS District's Third Quarter Financial and Operational Report for the period ended March 31, 1999. H:lwp.dtalagenda\FAHR\Fahr99199ar\FAHR99-33.doc ReYi&ed: 115198 ., Page2 FAHR COMMITTEE AGENDA REPORT Orange County Sanitation District FROM: Mike Peterman, Director of Human Resources Originator: Meeting~ 5/12/99 Item Nu)ber"-13(a. SUBJECT: SELECTION OF NEW MEDICAL INSURANCE PLAN (FAHR99-34) GENERAL MANAGER'S RECOMMENDATION: To Bd. of Dir. lt:el')l Number Authorize the selection of new Medical Insurance Company to replace United HealthCare's Point-of-Service Plan and PacifiCare's Health Maintenance Organization Plan effective July 1, 1999. SUMMARY The District's contracts with medical insurance providers United HealthCare and PacifiCare will expire on June 30, 1999. In preparation for expected rate increases of 30% to 125% from United HealthCare, Human Resources staff asked the District's insurance broker, FHI Insurance Services, to research and obtain bids from other carriers as well as our current providers. We were also interested in finding a plan that would offer the benefits of both a point-of-service plan and an HMO so that a covered employee could select the level of benefit and cost most suitable for their needs. FHI and Human Resources staff held preliminary meetings with five insurance carriers and bids were received. At that point, three were eliminated from consideration due to non-comparable benefits, services or rates. Two insurance carriers, Health Net and Blue Cross, were found to have reasonable price quotations and comparable benefits to our current plans. Both also had similar physician networks to United HealthCare and PacifiCare, excellent customer service reputations and point-of-service (POS) and health maintenance organization (HMO) benefit levels. Staff and FHI Insurance Services met with the Labor Management Committee (LMC) to discuss the two alternatives for consideration by their represented members. After presentation by the LMC to their individual groups, an agreement will be made with the represented employee units to recommend either Blue Cross or Health Net POS and HMO plans to replace United HealthCare and PacifiCare medical coverage. Although representing an increase in District's cost of 6% -7%, this is substantially less than the increase we would have incurred by staying with United HealthCare. A recommendation for Blue Cross or Health Net will be provided to the FAHR Committee with a Supplemental Agenda Report. \lradonldata1 'twp.dtalagenda\F AHR\Fahr99199ar\F AHR99-34.dot ReYised: 8/20/98 Page 1 PROJECT/CONTRACT COST SUMMARY The annual cost for medical insurance will increase approximately $151,465 {6.5%). BUDGET IMPACT X This item has been budgeted. (Line item: ) D This item has been budgeted, but there are insufficient funds. D This item has not been budgeted. D Not applicable {information item) ADDITIONAL INFORMATION N/A ALTERNATIVES N/A CEQA FINDINGS N/A ATTACHMENTS NIA \\ladon\data1'twp.dtalagenda\FAHR\Fahr99\99ar\FAHR99-34.dot R811isad: ll/20lll8 Page2 FAHR COMMITTEE Meeting Date To Bd. of Dir. 5/12/99 5/26/99 AGENDA REPORT Item Num)ber Item Number 13ft' Orange County Sanitation District FROM: Gary Streed, Director of Finance SUBJECT: ADJUSTING DIRECTORS' COMPENSATION (FAHR99-36) GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 99-_, urging the California Legislature to modify the "County Sanitation District Act" to increase the maximum monthly compensation allowed for Directors. SUMMARY Sanitation District Directors are compensated in accordance with Resolution No. OCSD 98-3. This Resolution restates the provisions of Section 4733 of the California Health and Safety Code which allows the District Board to set compensation within certain limits. Those limits are $100 per day of service, not to exceed $600 per month. It is interesting to note that the current limits were last changed effective January 1, 1987. Based upon the Los Angeles-Anaheim-Riverside Area Average CPI for all urban consumers, the $100 per meeting in 1987 would be equivalent to $141 today. The Steering Committee has asked staff and General Counsel to investigate and to pursue actions necessary to increase these maximums. Toward that end, General Counsel met last weekend with the California Association of Sanitation Agencies (CASA) Legislative Committee and Executive Director. CASA expressed its willingness to support such a legislative effort and to find a sponsor for the bill. General Counsel will update the Committee at the meeting. PROJECT/CONTRACT COST SUMMARY No impact in 1998-99. Future impact uncertain until a definite change is proposed. BUDGET IMPACT D This item has been budgeted. (Line item: ) [8J This item has been budgeted, but there are insufficient funds. D This item has not been budgeted. D Not applicable (information item) llradonldata1\wp.dtalagendalFAHRIFahr99\99arlFAHR99-36.doc ReYised: 8/20/98 Page 1 ADDITIONAL INFORMATION None. ALTERNATIVES Take no action and leave compensation as it is. CEQA FINDINGS N/A ATTACHMENTS 1. Resolution No. OCSD-98-3. \lradonldata1'twp.dta\agendalFAHR\Fahr99199ar\FAHR99-36.doc Rellised: 8f20l9B Page2 ·r ,, ' RESOLUTION NO. OCSD 98-3 ESTABLISHING COMPENSATION AND REIMBURSEMENT i=OR EXPENSES FOR DIRECTORS A RESOLUTION OF THE BOARD OF DIRECTORS OF ORANGE COUNTY SANITATION DISTRICT ESTABLISHING THE COMPENSATION AND EXPENSE REIMBURSEMENT POLICIES FOR ITS DIRECTORS WHEREAS, Section 4733 of the California Health & Safety Code provides that the District Board has the power to fix the amount of compensation per meeting to be paid each member of the Board, or for each day's service rendered as a member by request of the Board. NOW, THEREFORE, the Board of Directors of Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1: That each Director shall receive the sum of One Hundred ($100.00) Dollars for attendance at each meeting of the Board of Directors, or for each day's service rendere·d as a member of the Board, by request of the Board, provided that each Director shall not receive more than the sum of Six Hundred ($600.00) Dollars per month as such compensation from the District. Each day's service rendered as a member of the District's Board shall be deemed to include, but not be limited to: A. Attendance as a member of any Committee established by the District and appointed by the Chair of the District. B. Attendance at any Committee Meeting when expressly invited to attend said Committee Meeting by the Chair of the District. C. Attendance at conferences with state and/or federal legislators regarding District business, when approved by action of the Board of Directors. D. Attendance at a meeting, hearing, or conference for business of the District, when approved by action of the Board of Directors, or when designated by the General Manager, with the concurrence of the Chair, when deemed to be in the best interests of the District. 2090-300 64278_1 1 ..... Section 2: Each Director shall be reimbursed at the rate per mile established by the United States Internal Revenue Service as allowable for mileage expense deduction for use of personal vehicle or business of the District. As said allowable rate established by the Internal Revenue Service is periodically changed, said changes in the reimbursement rate shall become effective on the first day of the month following the month in which the change is announced by the Internal Revenue Service . .. -Section 3: When traveling on the business of the District, the Director shall be entitled to reimbursement of expenses necessarily incurred in the course of said travel, in accordance with the following schedule: A. 8. C. D. E. Commercial Transportation -Per actual invoice. Hotel -Room rate per actual statement for occupancy. Registration -Actual cpst of conference or meeting registration fee. Ground Transportation -As itemized. Telephone Service -As itemized. F. Meals, Gratuities and Incidentals -$40.00 per day. In those cases where the actual cost of the Director's personal meals and incidentals required during the course of the conference or meeting exceeds the per diem, reimbursement will be based upon actual expenditures. Section 4: No Director shall receive pay for attendance at any meeting, such as Committee Meetings, which is scheduled immediately preceding, immediately succeeding, or concurrent with, a regularly-scheduled District Board Meeting. Section 5: This Resolution shall become effective July 1, 1998. 2090-300 84276_1 2 \ \ I FAHR COMMITTEE AGENDA REPORT Orange County Sanitation District FROM: Gary G. Streed, Director of Finance Meeting Date To Bd. of Dir. 5/12/99 5/26/99 Item Number SUBJECT: COMPUTER LOAN PROGRAM FOR DIRECTORS (FAHR99-37) GENERAL MANAGER'S RECOMMENDATION Approve expanding the District's computer financial assistance program to Directors providing for a maximum loan of $3,000; 10% down payment; 24 months repayment period; interest rate at 5%; and no increase in the aggregate maximum loan fund of $150,000.00. SUMMARY In July 1997, the Directors authorized a loan program to encourage employees to purchase computers. The goal of the program was to encourage employees to become more proficient with computers and thereby increase their performance and efficiency. Over the past two years, 141 employees have participated in this program with a total loan amount of approximately $275,000. There have been no loan defaults, and the outstanding balance is $117,781. The significant features of the program are: • $3,000 loan maximum • 90% of purchase price maximum ~ 2-year maximum repayment period program • 5% interest rate per year • System configurations are approved by Director of Information Technology • Repayment by payroll deduction Some Directors have expressed an interest in participating in this program, and staff recommends expanding the program to allow this. Loan repayments would be deducted from monthly Director compensation payments. Staff and General Counsel have reviewed the FPPC guidelines related to the Political Reform Act and determined that there are no reporting or violation issues as this plan is provided to all District employees. H:lwp.dtalagenda\FAHR\Fahr99199ar\FAHR99-37.doc Revised: 8/20/98 Page 1 PROJECT/CONTRACT COST SUMMARY N/A BUDGET IMPACT D This item has been budgeted. D This item has been budgeted, but there are insufficient funds. D This item has not been budgeted. ~ Not applicable (information item) ADDITIONAL INFORMATION None. ALTERNATIVES N/A CEQA FINDINGS N/A ATTACHMENTS 1. Computer Loan Program GGS:lc H:lwp.dlalagenda\FAHRIF•hr99199ar\FAHR99-37.doc Revised: 8/20/98 Page2 Employee Name: ORANGE COUNTY SANITATION DISTRICT COMPUTER FINANCIAL ASSISTANCE PROGRAM Participation and Loan Agreement Social Security #: EE#: The above named employee (participant) of the Orange County Sanitation District (OCSD) has been provided a copy of the OCSD Computer Financial Assistance Program and hereby elects to purchase a computer and/or certain related equipment and/or software as specified on the attached Employee's Computer Specification Sheet and to participate in the financing arrangement offered under the Program and further agrees to and accepts the following terms and conditions: 1. The total price of the equipment to be purchased is $ ____ and is identified on the attached Employee's Computer Specification Sheet. The participant provides a down payment equal to ten percent of the total price of the equipment to the vendor. 2. OCSD agrees to loan to the participant, at a 5% rate of interest, the amount of $ ___ _, not to exceed $3,000.00 /fora period not to exceed 24 months to purchase the computer equipment shown on the Employee's Computer Specification Sheet. 3. Participant authorizes OCSD to deduct $ ___ from each paycheck of the participant beginning ___ until the amount identified in Paragraph 2 has been paid in full. Participant may elect to pay the remaining unpaid balance at any time prior to the last payroll deduction. 4. Participant agrees not to sell, trade, or otherwise dispose of the Equipment until the loan has been paid in full. Participant also agrees that any reassignment or transfer of the Equipment or this Agreement will result in cancellation of the Agreement. Violation of these provisions will require participant to immediately pay to OCSD the remaining amount due on the loan. 5. Upon termination of the participant from the employment of OCSD for any reason, any remaining amount to be paid to OCSD under this Agreement shall immediately become due and payable. Participant hereby authorizes OCSD to withhold from his/her final pay, including sick leave, vacation leave, personal leave and compensatory time payoff, any amount remaining under this Agreement. If such participant's final pay is not sufficient to cover said balance, then such participant shall personally be responsible for paying the balance to OCSD within 10 (ten) days of termination. 6. All warranties and service or maintenance contract shall be between the vendor and the participant. Participant shall deal directly with the vendor, and in no event shall participant look to OCSD for any claims relating to warranty, service or maintenance. 7. This Agreement may be changed only by written document signed by OCSD and the participant and supersedes any and all written or oral agreements, proposals, and communication concerning the Program. 8. In the event either party hereto brings any suit against the other party to enforce any rights under this Agreement, the prevailing party in such suit shall recover from the other party its reasonable attorney's fees and costs incurred in connection therewith. Accepted: Participant's Signature Date Approved: Director of Finance I Accounting Date ORANGE COUNTY SANITATION DISTRICT COMPUTER FINANCIAL ASSISTANCE PROGRAM POLICY PURPOSE The Financial Assistance Program for purchasing computer equipment is provided to assist employees in developing and/or increasing computer skills which will enhance performance and prepare for the Districts plans to implement progressive information technology systems. EMPLOYEE ELIGIBILITY Regular and part-time employees, in good standing, who have completed six months of services with the District are eligible for loans under this program. Participants must agree to comply with all requirements and provisions. LOAN LIMITATIONS • Loans will be made to employees on a first-come, first-serve basis, until the $250,000 loan fund is depleted . As funds become available through loan repayment, additional loans will be processed. • A written agreement between the District and the participant is required. The Participation and Loan Agreement outlines the responsibilities of the participant, terms of the agreement, payroll deduction arrangements, and other conditions of the plan. • The purchase of games, entertainment software, computer furniture is not allowed with loan funds. • All computer equipment purchases must be approved by the Director of Information Technology before the loan is issued. LOAN CRITERIA The provisions of the Computer Financial Assistance Program are as follows: • A maximum of $3,000 will be lent to eligible employees for purchase and/or upgrade of systems and peripherals determined to be eligible under the plan. An employee may apply for another loan when a previous loan has been repaid. • Due to administrative costs, the minimum loan amount will be $500. POLICY LOAN CRITERIA continued: • Loan payments will be made through payroll deductions. Each loan will be repaid over a maximum period of two years and will be issued at a 5% interest rate. Early repayments or shorter payback periods are acceptable at an employee's request. • Payment will be determined by the amount financed, plus interest, over the finance period. (A fully amortized loan schedule will be supplied to each participant in the program.) • Loans are due and payable in full upon termination of employment for any reason. Any remaining loan balance will be deducted from the final paycheck. Outstanding balances will be paid within 10 days of termination. SYSTEM CRITERIA Computers and peripheral hardware/software conforming to the District's internal Window-based system standards are required equipment for Information Technology approval. RESTRICTIONS ON TRANSFER OR ASSIGNMENT Each participant in the Program agrees that equipment and software purchased with District funding remain the property of the employee or a member of the employee's family. Any reassignment or transfer of the equipment until the loan is repaid violates the agreement and cancels the right to participate in the plan. ORANGE COUNTY SANITATION DISTRICT COMPUTER FINANCIAL ASSISTANCE PROGRAM LOAN APPLICATION PROCEDURES • Obtain an explanation of the Policies of the Computer Financial Assistance Program, a Computer Specification Sheet, and a Participation and Loan Agreement Form from Human Resources. • Obtain a quotation ( or invoice) from a vendor for the hardware and/or software purchases to be funded by the program. • Submit the completed Computer Specification Sheet (with quote or invoice attached), and the Participation and Loan Agreement Form to Human Resources. • Human Resources will route the Specification Sheet along with quote or invoice to the Director of Information Technology for approval. Human Resources will notify the employee if equipment requested is not approved. • After approval, Human Resources will verify employment, calculate payroll deductions, prepare the Participation and Loan Agreement, prepare the loan schedule, acquire employee signature on the Participation and Loan Agreement, prepare Payment Request Voucher, and route all to the Director of Finance for approval. • Normally, within two weeks after approval by the Director of Finance, a check will be prepared and issued to either: The employee for the purchase price (per invoice received), less the 10% down payment amount, for reimbursement of purchased, approved equipment. (Note: Employees purchasing equipment before approval by the Director of Information Technology risk non-reimbursement.) OR The employee and the vendor jointly (per quote received), for purchase of approved equipment in the amount of the agreed upon price, less the 10% down payment. • Human Resources will notify the employee that the check is ready and available for pick-up in Human Resources. ORANGE COUNTY SANITATION DISTRICT COMPUTER FINANCIAL ASSISTANCE PROGRAM Employee's Computer Specification Sheet Employee Name: Employee Number: Title: Department: _Ex_t_: ___ _ Check one: • Addition to Existing System • New System Vendor Name: Check one: • Quote Attached (pay vendor) • Receipt Attached (pay employee) COMPUTER EQUIPMENT PRICE Sub Total: Shipping/Handling: Tax: TOTAL PURCHASE PRICE: Less 10% Down Payment: TOTAL LOAN AMOUNT: (Not to exceed $3,000) Employee Signature Date System Configurations Checked Date • Approved • Denied Director of Information Technology Date (Please return form to Janet Gray, Human Resources Dept.) DISTRIBUTION FAHR COMMITTEE MEETING PACKAGE Full Agenda Package 45 Committee 13 & Mailing List Donald F. McIntyre 1 Blake P. Anderson 1 (3-hole punched) Dan Dillon 1 Marc Dubois 1 Jeff Esber 1 Ed Hodges 1 Steve Kozak 1 Penny Kyle 2 David Ludwin 1 Greg Mathews 1 Partick Miles 1 Bob Ooten 1 Mike Peterman 1 Gary Streed 1 Michelle Tuchman 1 (3-hole punched) Robert Ghirelli 1 Mike White 1 (3-hole punched) Cagle, Brad 1 Lisa Tomko 1 Bob Geggie 1 Jim Herberg 1 Patricia Jank 1 Lenora Crane 1 File 1 Extras 5 (for meeting hand-out, if necessary) Notices and Agenda Onl~ 12 Posting 1 Jean Tappan 1 Anna Ubaldini 1 Frankie Woodside 1 Patricia Magnante 1 Janet Gray 1 Security 1 Extras 5 (for meeting hand-out, if necessary) Ron Zenk, Dist. 14 Treasurer's Report Only C H:\WP.DTA\ADMIN\BS\FAHR\DISTRIBUTIONLISTFAHR.DOC phone: (714) 962-2411 malling address: PD. eox 8127 R:iu$1n Valley, CA 92728-8127 stl'eet ddress: 10844 Ellis Av~nue Fountain Valley, CA 92708•7018 Mef!lber Agl!ilfcies • Cities Anaheim Brea .Buena Patk D;press Fouf!ltain Valley Fullerton G.ard,m Grove Huntmgt.cm Beaah Irvine LB Hebra La Pafn:,a Los AJamitr:Js Newpotc BEfaGh Orange Placentia Sa/fir.a Ana S_pa/ Be.sch 5/ianwn TusJ;in VII/a Park Yorba -Linda Cu~nty af Orange Sanitary Districts Gesea Mesa Midway City Water Dfstricts /r\1/rra Ranch ORANGE COUNTY SANITATION DISTRICT NOTICE OF MEETING FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE ORANGE COUNTY SANITATION DISTRICT WEDNESDAY, MAY 12, 1999 -5:00 P .M. DISTRICT'S ADMINISTRATIVE OFFICES 10844 ELLIS AVENUE FOUNTAIN VALLEY, CALIFORNIA 92708 A regular meeting of the Finance, Administration and Human Resources Committee of the Board of Directors of the Orange County Sanitation District, will be held at the above location, date and time. "To Protect the Public Health and the Environment through Excellence in Wastewater Systems" FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE MEETING DATES FAHR Committee Meeting Dates May 12, 1999 June 9, 1999 July 14, 1999 None Scheduled September 8, 1999 October 13, 1999 November 10, 1999 December 8, 1999 None Scheduled February 9, 2000 March 8, 2000 April 12, 2000 Board Meeting Dates May 26, 1999 June 23, 1999 July 21, 1999 August 25, 1999 September 22, 1999 October 27, 1999 November 17, 1999 December 15, 1999 January 26, 2000 February 23, 2000 March 22, 2000 April 26, 2000 ROLL CALL FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE Meeting Date: May 12, 1999 Time: 5:00 p.m. Adjourn: ____ _ COMMITTEE MEMBERS THOMAS R SALTARELLI (Chair) ................................................ . MARK LEYES (Vice Chair) ........................................................... . SHAWN BOYD .............................................................................. . JOHN M. GULLIXSON .•.........•.............•...•..••••.•...•....•........•.....•..••. SHIRLEY MC CRACKEN .............................................................. . MARK A. MURPHY ....................................................................... . JAMES W. SILVA .......................................................................... . JAN DE BAY (Board Chair) ........................................................... . PEER SWAN (Board Vice Chair) .................................................. . JOHN J. COLLINS (Past Board Chair) .•.•......•.•..........•....•.......•..•.. OTHERS TOM WOODRUFF, General Counsel •••••••••...•.••.•••••••••••••••••.•..•...•..•. TOBY WEISSERT, Carollo Engineers ............................................. __ STAFF DON MCINTYRE, General Manager ............................................... . BLAKE ANDERSON, Assistant General Manager ••••••••••••••••.•........ ED HODGES, Director of General Services Administration •••........ DAVID LUOWIN, Director of Engineering ...................................... . BOB OOTEN, Director of Operations & Maintenance ...•••••••••••••••••. MIKE PETERMAN, Director of Human Resources ........................ .. GARY STREED, Director of Finance .............................................. . MICHELLE TUCHMAN, Director of Communications .................... . PATRICK MILES, Director of Information Technology ................. .. ROBERT GHIRELLI, Director of Technical Services ..................... . STEVE KOZAK, Financial Manager .............................................. .. MIKE WHITE, Controller ................................................................. . GREG MATHEWS, Assistant to the General Manager •••••••••••••••••••• LISA TOMKO, Human Resources Manager ................................... . DAWN MCKINLEY, Sr. Human Resources Analyst ....................... . PENNY KYLE, Committee Secretary .............................................. . c: Lynda Heller Selection of New Medical Insurance Plan • United HealthCare's 3-year contract has expired • United proposed an increase of 43% for actives and 43% for retirees • 5 insurance providers were interviewed and submitted bids • 3 providers were eliminated for various reasons • 2 providers were presented to the Labor Management Committee: • Health Net and Blue Cross Notes: .. ,j °J!'Ums: • United HealthCare • 43% Increase for actives; 43% for retirees • $687,897 • Health Net • 7% Increase for actives; 26% for retirees • $160,518 • Blue Cross • 9% Increase for actives; 1 % for retirees • $151,191 Notes: l ORANGE COUNTY SANITATION DISTRICT Connection Fee Workshop April 10, 1999 -REVISED • Brief background review of financial rates and charges • Understand connection fee methodology • Discuss key issues / assumptions • Reach consensus on new connection fee policies 1· • • Continue capital investment equalization method • Assign wet weather facility costs to residential development • Develop tiered fees for MFR and SFR based upon bedrooms • Develop low, average and high demand commercial fees • Allow SI Us to pay-as-they-use (cont'd) • Consider charge for regional governmental uses • Remove time limit for demolished facilities with proof of payment • Review fee and method routinely • Provide Board with authority for adjustments • Develop implementation or phase-in plan 2 Background Review Use of Funds Source of Funds • Operation and • Existing Users maintenance of existing facilities • Capital replacement • All Users and improvement of existing facilities • Capital construction • New Users to accommodate growth ( capacity) User Sewer Service Connection Category Charge Fee Residential X X Commercial X X Industrial X X Local Gov't X State & Federal X X ,;:.·.~nnection Fees Reduce the .. ,, , .. $ , vnthly Charge to Existing Users Connection Fee User Charge _ .. ·hat's Changed From the 2 0 Master Plan Item 2020 Plan Strategic Plan Planning Horizon 30 yrs 20 yrs CIP Budget $1 .48 billion $1.51 billion Projected Flow 399 MGD 352 MGD Flow per Household 399 gpd 260 gpd Number of Connections 1,000,000 1,354,000 Flow per 1,000 sq ft 80 gal 150 gal for Commercial Users (20%) (58%) _':1-·Fi ~ CIP Accounts/or $1.51 Billion ·, · fn ';ystem Improvements (Yr 2000-2020) Cooperative Projects $154,000,000 10% GWRS $120,650,000 8% Support Facilities $13,560,000 1% Additional Capacity $513,575,000 34% Rehabilitation and Replacement $665,094,000 44% Improved Treatment $48,437,000 3% 5 · ... ~ , Jy Flow Contribi,tions 1998 Number Daily Flow 2020 Number Avg of Units or (Gallons) Avg of Units or Property Use MGD 1,000 sq ft Per Unit MGD 1,000 sq ft Residential 123 474,000 260 144 555,500 Multi Family Res 43 238,000 182 50 274,000 Commercial 63 420,000 150 86 570,000 IRWD 7 32 SAWPA 9 30 Wet Weather 10 10 Avg MGD Total 255 352 ..,,.=u.,,-=-t""e Advisory Committee (RAC) rkshops Conducted Sept Oct Dec Feb May Jun Jul Sep Oct 12 24 12 20 1 19 31 17 9 CD® 0 0 ®®® ®® ' ' ' ' ''' ' ' SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT 1996 1997 -6 ~C!JJiden~al Connection Fee v mparzson Agency Riverside OCSD (Existing) Sacramento Walnut Creek San Diego Los Angeles (County) San Jose Oakland Los Angeles (City) Phoenix Connection Fee ($) $1,000 $2,000 $3,000 $4,000 ~ District San Francisco o D Local Agency i ndustrial Connection Fee ~~-~ !JJarison for a High Strength · tlustrial User Agency Concord Sacramento San Diego Los Angeles (County) Oakland San Jose Los Angeles (City) OCSD (Existing) Riverside Phoenix San Francisco 0 Connection Fee (Millions of Dollars) $1 $2 $3 Based on: • Flow 150,000 gpd • BOD 1,090 mg/L • TSS 270 mg/L • 130,000 sq ft of improved building area 1_-_-_-.2. Rescinded Excess Capacity Charge 7 ndustrial Connection Fee ~{iibu1p,arison for a Low Strength "1}(dustrial User Agency Concord San Diego Sacramento Los Angeles (County) Oakland San Jose Los Angeles (City) OCSD (Existing) Riverside Phoenix San Francisco 0 Connection Fee (Millions of Dollars) $1 $2 $3 Based on: • Flow 150,000 gpd • BOD 350 mg/L • TSS 270 mg/L • 130,000 sq ft of improved building area 1_-_-_-..! Rescinded Excess Capacity Charge • "Pay for what you use" • Consider "pay as you go" • Consider tiered residential rates and fees • Reduce up-front costs -8 Connection Fee Methodology Method Guiding Philosophy Existing Method "All users past, present and future pay the same" Alternative "All users from now on pay the same" ~1xJ,sting "Capital Investment "fllllalization" Method CReplacement Valuel I Cost of Newl of Existing FacilitiesJ + L Facilities J Fee=--------------- [ Existing + New ] Connections* * Single Family Residential equivalents native Connection Fee Method I "Buy-in" Cost 7 least of New] Lot Existing Facilitie~ + L Facilities Fee=-------------- [connections ~ * Single Family Residential equivalents -_10 "Buy-In" Cost is the Value xisting Facilities to Serve New Users Value of Facilities to Serve New Users $11 O Million Total Value of Existing Facilities $763 Million . qpital Cost Items are Allocated to :,,JN?i Users Based on Connection ,.eMethod Connection Fee Capital Cost Item Cost Method $ in Million CIE Alternative "Buy-in" Cost $ 110 ? Existing Facilities 763 ✓ Additional Capacity 514 ✓ ✓ GWR System 121 ✓ ? Cooperative Projects 154 ✓ ? Replacement / 727 ✓ Improvement * * Includes Support Facilities -_11 $ in Millions Capital Cost Item 2020 Strategic Master Plan Plan Existing Facilities $ 777 $ 763 Additional Capacity 886 514 GWR System (Reclamation) 77 121 Cooperative Projects 154 Re lacement I Im rovement 519 727 Total Capital Requirements $2,259 $2,279 Number of Existing and New Users / EDUs 1,000,000 1,354,000 Average Cost Per EDU $2,260 $1,680 native Connection Fee Method $ in Millions Capital Cost Item Low Middle High "Buy-in" Cost $ 110 $ 110 Additional Capacity $ 514 514 514 GWR System 121 121 Cooperative Projects 154 Improved Treatment 48 Total Capital Requirements $ 514 $ 745 $ 947 Number of New EDUs 442,000 442,000 442,000 Average Cost Per EDU $1,165 $1,690 $2,145 _ _12 Discussion of Key Issues I Assumptions @ Connection Fees for Government Agencies @ How to Charge for New Non-Residential Connections @ Tiered Residential Connection Fees @ Impact of Wet Weather 0 Credit for Demolished Facilities -_13 • State and federal agencies included • Local agencies excluded • Schools • Cities • County • Revenue Area 13 is exception • Include state and federal agencies • Include regional or county facilities • Excludelocalagencies • Schools • Cities • Charging local agencies is tax transfer • Not charging regional facilities burdens local ratepayer -_14 ,t::~f!pJons Considered for ~-Residential Connection Fees • Unimproved property acreage • Size of sewer lateral • 125± land use codes • Simplification to combine land use codes into similar flow and strength categories • Simplification to "high, average and low" commercial categories Pays Unit Billing Component For Charge Method "Basic Fee" Average $ / 1000 One- Use sq ft Time Flow / Strength High $ for Annual Factor Demand Q, BOD, User Connection TSS Fee -_15 4....~~llj,antages of Recom1nended ~nection Fee Method • Fair to all users, who "pay for what they use" • Easy to understand, explain and administer • Conforms to RAC input to consider commercial I industry incentives by reducing up-front charges • Cash flow matches facilities need ~e Average Commercial A .. ~v~· nection Fee is Based on erage Usage Average Cost Categories Value of Facilities Equivalent Dwelling 260 gpd $1,680 Units (EDU) Average 150 gal/ Commercial 1,000 sq ft/ day $970 Usage (58%) (58°/o) --16 • Flows increase during wet weather • Inflow • Infiltration • Amount of increase is proportional to sewers • Residential laterals are 55% of sewer length • Local sewers are 40% of sewer length • Residential connection fees should pay for wet weather capacity ~(f:8 act of Wet Weatlier VJUstment • Wet weather facilities are all flow related • Flow related facilities are $1.1 billion at2020 • Wet weather facilities increase Single Family Residential (SFR) fees from $20 to $140 (to total of $1,700 to $1,820) • Non-Residential fee range decreases proportionately to $900 to $675 / 1,000 sq ft -.:17 ed Residential Connection Fee Number of Relationships to 1 EDU Bedrooms SFR MFR 0 0.32 1 0.62 0.50 2 0.81 0.70 3 1.00 0.89 4 1.19 1.08 5+ 1.39 uce Up-Front Fees • One-time fees are based on estimates • Cash flow does not match production • Currently 800 significant industrial / commercial users (SIUs) • RAC and Business Council concerned • · Reduction would reduce "move-in" costs -.:18 • SIU user fees based on actual use • Add connection fee component for above average demand • Allocate 2020 asset values to flow, biochemical oxygen demand (BOD), suspended solids (SS) • Determine 2020 plant loading • Allocate unit cost for 30-year useful life • Assign time value to money User Category Proposed Existing Single-Family Residential 5+ BDR House $2,530 4 BDR House 2,165 3 BDR House 1,820 $2,360 2 BDR House 1,475 1 BDR House 1,130 Multi-Family Residential · 4+ BDR Apartment $1,965 3 BDR Apartment 1,620 2 BDR Apartment 1,275 $2,360 1 BDR Apartment 910 Studio Apartment 580 -_19 ,. * S ~mary of Proposed and Existing ~-Residential Connection Fees Proposed OCSD Typical Industrial/ Base Rate Current Commercial User (1,000 sq ft) Rate Low Demand Average Demand High Demand Low Demand Connections Nurseries Warehouses Parking Structures RV Storage Churches Truck Terminals RV Parks Lumber/ Construction Yards $ 110 $ 675 1,600 High Demand Connections Restaurants Supermarkets Car Washes 472 472 472 Coin Laundry Amusement Parks Shopping Centers with Restaurants -20 Significant Industrial/ Daily Equiv to Commercial User Fee One-Time Flow Portion (gal I day) $ 0.00057 $ 3 BOD Portion (lb I day) 0.14461 811 SS Portion (lb / day) 0.16025 899 Base Annual Quantity Fee Fee@5% 30 Years 130,000 sq ft $87,750 $ 87,750 150,000 gal I dy $ 26,200 786,000 1,090 mg / L BOD 64,000 1,920,000 270 mg IL SS 11,000 330,000 Total $87,750 $ 101,200 $3,123,750 Compare Flow & Strength Based $1,891,914 One-Time Fee -21 r $14,000 13,000 13,600 13,800 t::. Proposed • Existing One-Time-2 000 Connection ' Fee 1,600 1,600 $ / 1,000 sq ft 1,000 r026 675 472 472 I472 472 350 191 88 11° 34 0 Restaurant Car Wash Warehouse Office Bldg ~~~edit for Demolished uctur~s • Existing policy • Application within 2 years of demolition • Credit at current rates • Fee for additional demand • Alternative policies • Extend time period for application • Remove time limit • Require proof of prior payments • District has no records -22 • Continue capital investment equalization method • Assign wet weather facility costs to residential development • Develop tiered fees for MFR and SFR based upon bedrooms • Develop low, average and high demand commercial fees • Allow SI Us to pay-as-they-use • Consider charge for regional governmental uses • Remove time limit for demolished facilities with proof of payment • Review fee and method routinely • Provide Board with authority for adjustments • Develop implementation or phase-in plan -23 0 FAHR Committee May 12 0 Board Meeting May 26 0 Develop Implementation Plan May 26 0 New Connection Fees Effective ? Questions -24 LAW OFFICES OF WOODRUFF, SPRADLIN & SMART A PROFESSIONAL CORPORATION MEMORANDUM /J~ H-~ rff#le_ Lt?~~ s;?e1-/97 TO : Chairman and Members of FAHR Committee Orange County Sanitation District FROM: General Counsel DATE: May 5, 1999 RE: Proposed Program re Financial Loans to Directors for Purchase of Computers The Steering Committee has recommended that the FAHR Committee and the Board of Directors favorably consider an expansion of the District's existing Program to grant loans for the purchase of computers and related software to the Members of the Board of Directors. We have been asked to provide an opinion as to the legality of these loans and any other restrictions or limitations that may apply. We have carefully reviewed this, and it is our opinion that there are no prohibitions and no restrictions that would prohibit the granting of a loan with the same terms and conditions as those granted to the District's employees. There is clearly sufficient consideration, and therefore, no gift of public funds would result. Likewise, the statute and implementing regulations of the Political Reform Act and the Fair Political Practices Commission have no provision that would bar this or require this to be reported as income to the Directors. We have also determined that the District's interest rate of 5% is in fact competitive with the market place loan rate offered by many of the major computer retailers as a sales incentive, and therefore, income would neither be imputed for tax purposes, nor would income be added for disclosure to the Fair Political Practices Commission. TLW:pj cc: Mr. D.F. McIntyre Mr. G. G. Streed 104380\1 THOMASL.WOODRUFF GENERAL COUNSEL FAHR COMM ITT-EE AG ENOA REPORT Orange County Sanitation District FROM: SUBJECT: Gary Streed, Director of Finance Originator: Steve Kozak, Financial Manager TREASURER'S REPORT FOR THE MONTH OF April 1999 GENERAL MANAGER'S RECOMMENDATION Receive and file Treasurer's Report for the month of April 1999. SUMMARY Meeting Date To Jt. Bds. 05/12/99 05/26/99 Item Number Item Number Pacific Investment Management Co. (PIMCO), serves as the District's professional external money manager, and Mellon Trust serves as the District's third-party custodian bank for the investment program. The District's Investment Policy, adopted by the Board, includes reporting requirements as listed down the left most column of the attached PIMCO Monthly Report for the "Liquid Operating Monies" and for the "Long-Term Operating Monies." The District's external money manager is operating in compliance with the requirements of the District's Investment Policy. The District's portfolio contains no reverse repurchase agreements. Historical cost and the current market ("mark-to-market") values are shown as estimated by both PIMCO and Mellon Trust. The slight differences are caused by differing assumptions regarding marketability at the estimate date. PROJECT/CONTRACT COST SUMMARY None. BUDGET IMPACT D This item has been budgeted. D This item has been budgeted, but there are insufficient funds. D This item has not been budgeted. [gl Not applicable (information item) C:\TEMP\TREARPT-May99.doc Revised: 10/17 /97 Page 1 ADDITIONAL INFORMATION Schedules are attached summarizing the detail for both the short-term and long-term investment portfolios. In addition, a consolidated report of posted investment portfolio transactions for the month of April 1999 is attached. The attached yield analysis report is presented as a monitoring and reporting enhancement. In this report, yield calculations based on book values and market values are shown for individual holdings, as well as for each portfolio. Mellon Trust, the District's custodian bank, is the source for these reports. Transactions that were pending settlement at month end may not be reflected. The District's investments are in compliance with the District's adopted Investment Policy, and the California Government Code. In addition, sufficient funds are available for the District to meet its operating expenditure requirements for the next six months. During the month of April, the District received approximately $22 million through the Orange County Tax Collector's property tax allocation cycle. The funds were deposited in LAIF to be available to meet current and projected cash flow requirements. The table below details the book balances of the District's funds at month-end. A graphical representation of month-end balances is shown by the attached bar chart. Funds/Accounts State of Calif. LAIF Union Bank Checking Account Union Bank Overnight Repurchase Agreement PIMCO -Short-term Portfolio PIMCO -Long-term Portfolio District 11 GO Bond Fund 921 Debt Service Reserves @ Trustees Petty Cash TOTAL ALTERNATIVES None. CEQA FINDINGS None. ATTACHMENTS 1. Monthly Investment Reports 2. Monthly Transaction Reports GGS:SK:lc C:ITEMPITREARPT-May99.doc Revised: 10/17/97 Book Balances Estimated April 30, 1999 Yield(%) $ 29,815,784 5.1 3,037,771 -- 3,039,357 4.0 18,599,656 5.9 302,500,725 4.5 7,841 5.1 32,196,818 6.3 4,400 -- $389,202,352 Page 2 Prepared by Finance, 5/10/99, 4:09 PM Monthly Treasurer's Report District Fund Balances $400,000,000 ---------------------------------, $300,000,000 I ~ $200,000,000 -i--t>-0<. ~.xXJ---10.)0&.XJt--_---k?x.~,"~(1-"----rxX>oOf------Q.,,.9<,,._;x,~,,..>t---------J;~,.>9-S«xf--1 $100,000,000 ---vv--n--------...;-· -x;o·t----1't"V"'.l'VVi-----cx>c:xx:>t----w $0 I [XXXX:>4 t'.VVVY>I rYYYX>f loot'Sot'Sool [XXXX>f [XXXX)tl I Nov,98 Dec,98 Jan, 99 E!1 PIMCO -Long-term ~ Debt Service Reserves 08ankAccts ElJ Dist 11 GO Bond Fund G:\excel.dta\fin\2220\geggi\Finance\monthly treasurers report Feb,99 Ill PIMCO -Short-term []LAIF II Petty Cash Mar, 99 Apr, 99 • MONTHLY REPORT ORANGE COUNTY SANITATION DISTRICT INVESTMENT MANAGEMENT PROGRAM PIMCO'S PERFORMANCE MONITORING & REPORTING (for the month ending 30 April 1999) Liquid Operating Monies (603) 15.1.1 PORTFOLIO COST AND MARKET VALUE Current Market Value Estimate: • rI~~r • Historical Cost: • PIMCO • Mellon 15.1.2 MODIFIED DURATION Of Portfolio: Of Index: 15.1.3 1 % INTEREST RATE CHANGE Dollar Impact (gain/loss) of 1 % Change: 15.1.4 REVERSE REPOS % of Portfolio in Reverse Repos: (see attached schedule) 15.1.5 PORTFOLIO MATURITY % of Portfolio Maturing within 90 days: 15.1.6 PORTFOLIO QUALITY Average Portfolio Credit Quality: 15.1.7 SECURITIES BELOW "A" RATING % of Portfolio Below "A": 15.1.8 INVESTMENT POLICY COMPLIANCE "In Compliance" 15.1.9 PORTFOLIO PERFORMANCE Total Rate of Return(%) by Period: 1 Month: 3 Months: 12 Months: Year-to-Date: H: L.. \FINANCE\21 0\K.OZAK1SAMPLELIQ0499.RPT $18,604,636 $18,599,656 $18,670,719 $18,670,722 0.29 0.20 $54,789 0% 56% "AA+" 0% Yes Portfolio Index 0.41 0.37 1.17 1.09 5.40 2.22 1.58 1.47 MONTHLY REPORT ORANGE COUNTY SANITATION DISTRICT INVESTMENT MANAGEMENT PROGRAM PIMCO'S PERFORMANCE MONITORING & REPORTING (for the month ending 30 April 1999) Long-Term Operating Monies (203) 15.1.1 PORTFOLIO COST AND MARKET VALUE Current Market Value Estimate: • ti~~~ • Historical Cost: • PIMCO • Mellon 15.1.2 MODIFIED DURATION Of Portfolio: Of Index: 15.1.3 1 % INTEREST RATE CHANGE Dollar Impact (gain/loss) of 1 % Change: 15.1.4 REVERSE REPOS % of Portfolio in Reverse Repos: (see attached schedule) 15.1.5 PORTFOLIO MATURITY % of Portfolio Maturing within 90 days: 15.1.6 PORTFOLIO QUALITY Average Portfolio Credit Quality: 15.1.7 SECURITIES BELOW "A" RATING % of Portfolio Below "A": 15.1.8 INVESTMENT POLICY COMPLIANCE "In Compliance" 15.1.9 PORTFOLIO PERFORMANCE Total Rate of Return(%) by Period: 1 Month: 3 Months: 12 Months: Year-to-Date: H: l.. \FJNANCE\21 0\KOZAK\SAMPLEL-T0499.RPT $302,917,502 $302,500,725 $304,905,185 $305,017,547 2.39 2.33 $7,331,412 0% 8% "AAA" 0% Yes Portfolio Index 0.32 0.33 0.22 0.24 6.59 6.29 0.75 0.75 OCSF075111 LIQUID OPER-PIMCO PORTFOLIO DISTRIBUTION CASH & CASH EQUIVALENTS COMMERCIAL PAPER -DISCOUNT FEDERAL HOME LOAN MORTGAGE -LE FNMA ISSUES -LESS THN lYR MUTUAL FUNDS TOTAL CASH & CASH EQUIVALENTS FIXED INCOME SECURITIES U.S. GOVERNMENTS U.S. AGENCIES BANKING & FINANCE INDUSTRIAL UTILITY -ELECTRIC TOTAL FIXED INCOME SECURITIES OTHER PORTFOLIO ASSETS PAYABLES/RECEIVABLES TOTAL OTHER PORTFOLIO ASSETS NET PORTFOLIO ASSETS MELLON TRUST PORTFOLIO SUMMARY BY SECTOR 30-APR-1999 COST 2,662,402.09 2,816,196.89 1,383,624.67 94,488.28 --·---------- 6, 956,711.93 3,325,265.63 3,699,104.60 2,409,385.50 863,753.00 1,416,501.00 ---------- 11, 714,009.73 289,556.23 289,556.23 18,960,277.89 MARKET VALUE 2,662,402.09 2,816,196.89 1,383,624.67 94,488.28 ------------ 6, 956,711.93 3,301,023.00 3,686,125.00 2,387,852.00 857,165.50 1,410,779.00 ------------ 11,642,944.50 289,556.23 ---------- 289,556.23 % OF TOTAL 14.09% 14.91% 7.32% 0.50% ------ 36. 83% 17.48% 19.51% 12.64% 4.54% 7. 47% ---- 61. 64% 1. 53% 1. 53% ====.: 18,889,212.66 100.00% Page 1 UNREALIZED GAIN/LOSS 0.00 0.00 0.00 0.00 0.00 -24,242.63 -12,979.60 -21,533.50 -6,587.50 -5,722.00 ----------- -71, 065. 23 0.00 0.00 -71,065.23 ESTIMATED ANNUAL INCOME 0.00 0.00 0.00 4,307.34 ------- 4, 307 .34 210,375.00 178,895.00 202,250.00 60,562.50 105,700.00 -------- 757, 782.50 0.00 0.00 762,08 9.84 BASE: USO HBll00 CURR YIELD 0.00 0.00 0.00 4.56 0.06 6.37 4.85 8.47 7.07 7.49 6.51 0.00 0.00 4 .03 OCSF075222 LONG TERM OPER-PIMCO PORTFOLIO DISTRIBUTION CASH & CASH EQUIVALENTS CASH RECEIVABLES PAYABLES COMMERCIAL PAPER -DISCOUNT MUTUAL FUNDS TOTAL CASH & CASH EQUIVALENTS FIXED INCOME SECURITIES U.S. GOVERNMENTS U.S. AGENCIES GNMA SINGLE FAMILY POOLS GNMA MULTI FAMILY POOLS FHLMC POOLS FHLMC MULTICLASS FNMA POOLS ASSET BACKED SECURITIES OTHER GOVERNMENT OBLIGATIONS MUTUAL FUNDS BANKING & FINANCE INDUSTRIAL UTILITY -ELECTRIC UTILITY -TELEPHONE TOTAL FIXED INCOME SECURITIES OTHER PORTFOLIO ASSETS PAYABLES/RECEIVABLES TOTAL OTHER PORTFOLIO ASSETS NET PORTFOLIO ASSETS MELLON TRUST PORTFOLIO SUMMARY BY SECTOR 30-APR-1999 COST 400.00 83,351.50 -22,909,019.80 12,364,712.42 1,059,411.59 ------------- -9,401,144.29 130,373,755.60 55,295,618.70 10,385,156.25 4,726,045.12 11,776,840.87 6,711,184.96 4,255,043.75 173,880.19 3,995,792.99 1,000,000.00 61,039,178.40 15,037,689.00 2,151,250.00 7,497,255.00 -----·---~- 314, 418,690.83 3,930,262.87 ------------ 3,930,262.87 308,947,809.41 MARKET VALUE 400.00 83,351.50 -22,909,019.80 12,364,712.42 1,059,411.59 ------------- -9,401,144.29 129,234,988.35 54,763,797 .25 10,432,695.00 4,701,758.22 11,653,521.04 6,751,595.92 4,251,150.00 174,639.71 4,020,314.97 997,430.00 60,925,513.12 14,321,080.90 2,123,060.00 7,550,325.00 % OF TOTAL 0.00% 0.03% -7.48% 4.04% 0.35% ------ -3. 07% 42.17% 17. 87% 3.40% 1. 53% 3 .80% 2.20% 1. 39% 0.06% 1.31% 0.33% 19.88% 4.67% 0.69% 2.46% 311,901,869.48 101.79% 3,930,262.87 1.28% 3,930,262.87 1. 28% 306,430,988.06 100.00% Page 1 UNREALIZED GAIN/LOSS 0.00 0.00 0.00 0.00 0.00 0.00 -1,138,767.25 -531, 821. 45 47,538.75 -24,286.90 -123,319.83 40,410.96 -3,893.75 759.52 24,521.98 -2,570.00 -113,665.28 -716,608.10 -28,190.00 53,070.00 ------------- -2,516,821.35 0.00 0.00 -2,516,821.35 ESTIMATED ANNUAL INCOME 0.00 0.00 0.00 0.00 48,294.27 --------- 48, 294. 27 8,203,780.09 3,431,783.12 682,500.00 321,021.59 811,696.11 423,731.91 245,847.60 10,780.57 231,000.18 62,000.00 3,647,660.23 1,162,527.00 164,000.00 450,000.00 ---------~-- 19,848,328.40 0.00 0.00 19,896,622.67 BASE: USO HBllOO CURR YIELD 0.00 0.00 0.00 0.00 4.56 -0.51 6.35 6.27 6.54 6.83 6.97 6.28 5.78 6.17 5.75 6.22 5.99 8.12 7. 72 5.96 6.36 0.00 0.00 6.49 YLDANAL YIELD ANALYSIS PAGE l OCSF075lll02 1999/04/30 RUN DATE 05/06/99 ORANGE CTY LIQUID OPERATING RUN TIME 10.17.50 =--======~==-:::-::-:-====:- PAR VALUE YTM AT CURRENT QUALITY MARKET TOTAL COST/ % TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD ~TING PRICE MARKET VALUE % TOTAL -.~------·-------------------------------------------------------------··------------- CASH & CASH EQUIVALENTS 94,488 .28 DREYFUS TREASURY CASH MGMT .000 4.559 AAA 100.000 94,488.28 1.35 996085247 94,488.28 .51 400,000.00 FEDERAL HOME LN MTG CORP DISC 4.766 .ooo P-1 98.616 394,464.44 5.67 313396FT5 MAT 05/18/1999 394,464.44 2.12 200,000.00 COCA COLA CO DISC 4.842 .ooo P-1 99 .133 198,266.67 2.85 19121ETB9 06/11/1999 198,266 ,67 1.07 900,000.00 GENERAL ELEC CAP DISC 4.860 .ooo P-1 98.760 888,840.00 12.77 36959JS53 05/05/1999 888,840.00 4.78 700,000.00 USAA CAP CORP DISC 4.872 .000 P-1 99.128 693,895.42 9.97 90328BTB7 06/11/1999 693,895.42 3.73 900,000.00 MONSANTO CO DISC 4.901 .ooo P-1 97.933 881,400.00 12.66 61166BWP8 09/23/1999 881,400.00 4.74 1,400,000.00 FEDERAL NATL MTG ASSN DISC 5.072 .ooo P-1 98.830 1,383,624.67 19.88 313588GA7 MAT 05/25/1999 1,383,624.67 7.44 2,450,000.00 FEDERAL HOME LN MTG CORP DISC 38.201 .000 P-1 98.846 2,421,732.45 34.81 313396FDO MAT 05/04/1999 2,421,732.45 13.02 --------------------------------- TOTAL CASH & CASH EQUIVALENTS 8.783 .. 17~ 6,956,711.93 100.00 6,956,711.93 37.4l FIXED INCOME SECURITIES 3,700,000.00 FEDERAL HOME LN BK CONS BDS 4.860 4.853 AAA 99.625 3,699,104.60 31.65 3133M7EW2 4.835% 01/28/2000 DD 01/28/99 3,686,125.00 19.82 500,000.00 DUKE ENERGY CORP 1ST & REF MTG 5.001 7.888 AA3 101.416 511,200.00 4.35 264399DB9 8.000% 11/01/1999 DD 11/01/94 507,080.00 2.73 500,000.00 CHRYSLER FINL CO LLC· 5.119 l ?..798 Al 103.532 529,010.00 4.44 171205AT4 13.250% 10/15/1999 517,660.00 2.78 850,000.00 PHILLIP MORRIS CO INC NTS 5.256 7.06!:i A;. 1(10.843 863,753.00 7.36 718154BX4 7.125% 12/01/1999 DD 12/01/92 857,165.50 4.61 YLDANAL YIELD ANALYSIS PAGE 2 OCSF07511102 1999/04/30 RUN DATE 05/06/99 ORANGE CTY LIQUID OPERATING RUN TIME 10.17.50 PAR VALUE YTM AT CURRENT QUALITY MARKET TOTAL COST/ % TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD RATING PRICE MARKET VALUE % TOTAL -------------------------------------------------··----------------------------------- 900,000.00 GENERAL MTRS ACCEP CORP MTN 5.305 6.207 A2 100.690 909,657.00 7.78 37042M7G2 6.250% 01/11/2000 DD 01/11/94 906,210.00 4.87 300,000.00 BEAR STEARN COS INC NTS 5.363 7.563 A2 100.815 303,930.00 2.59 073902AP3 7.625% 09/15/1999 DD 09/21/94 302,445.00 1.63 150,000.00 CITICORP SUB CAP NT 5.364 9.647 Al 101.068 151,663.50 1.30 173034DQ9 9.750% 08/01/1999 151,602.00 .82 900,000.00 LONG ISLAND LTG CO DEB 5.419 7.270 BAA3 100.411 905,301.00 7.76 542671CK6 7.300% 07/15/1999 DD 07/21/92 903,699.00 4.86 3,300,000.00 US TREASURY NOTES 5,585 6 .373 AAA 100.031 3,325,265.63 28.35 912827X72 06.375% 05/15/1999 DD 05/15/96 3,301,023.00 17.75 soo,000.00 TRANSAMERICA FIN MTN #SBOOllO 5.653 8.285 A3 101.987 515,125.00 4,37 89350MEP1 8.450% 01/12/2000 DD 01/12/95 509,935.00 2.74 --------------------------------- TOTAL FIXED INCOME SECURITIES 5.067 5.198 11,714,009.73 100.00 11,642,944.50 62.61 -------------------------------------- TOTAL 5.895 4.856 18,670,721.66 100.00 18,599,656.43 100.00 ====;::::: YLDANAL YIELD ANALYSIS PAGE 3 OCSF07522202 1999/04/30 RUN DATE 05/06/99 ORANGE CTY-LONG TERM OPERATING RUN TIME 10.17.50 PAR VALUE YTM AT CURRENT QUALITY MARKET TOTAL COST/ % TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD RATING PRICE MARKET VALUE % TOTAL --------------------------------------------------------------------------------------·-- CASH & CASH EQUIVALENTS 1,059,411.59 DREYFUS TREASURY CASH MGMT .ooo 4,559 AAA 100.000 1,059,411.59 7,89 996085247 1,059,411.59 ,33 900,000,00 GOLDMAN SACHS LP DISC 4,823 .ooo P-1 99.321 893,892.75 6,65 38142UTB8 06/11/1999 893,892.75 .27 7,400,000.00 FORD MTR CR CO DISC 4.840 .000 P-1 98.752 7,307,639.71 54.43 34539UUS9 07/26/1999 7,307,639.71 2.25 300,000.00 DU PONT DE NEMOUR DISC 4.847 .ooo P-1 99.027 297,080.00 2.21 26354BT44 06/04/1999 297,080.00 .09 900,000.00 DU PONT DE NEMOUR DISC 4,855 .000 P-1 99.078 891,702.75 6,64 26354BSR4 05/25/1999 891,702.75 ,27 1,300,000.00 FORD MTR CR CO DISC 4,860 .ooo P-1 99,383 1,291,976.83 9.62 34539USM5 05/21/1999 1,291,976.83 .40 1,300,000.00 NATIONAL RURAL DISC 4.868 .000 P-1 99.023 1,287,293.94 9.58 63743DTB7 06/11/1999 1,287,293.94 .40 400,000 .00 IBM DISC 4 ,879 .ooo P-1 98.782 395,126.44 2.94 45920ETR2 06/25/1999 395,126.44 .12 -------------------~------------------ TOTAL CASH & CASH EQUIVALENTS 4.260 .548 13,424,124.01 100.00 13,424,124.01 4.13 FIXED INCOME SECURITIES 2,000,000.00 BANKERS TR NY CORP GLOBAL NT ,000 5,857 A2 98,948 1,992,800.00 ,63 066365DW4 FLTG RT 05/11/2003 DD 05/11/98 1,978,960.00 .61 3,500,000.00 CHRYSLER FIN MTN .000 5,813 Al 99.890 3,498,635.00 1.12 17120QE80 FLTG RT 08/08/2002 DD 04/08/98 3,496,150.00 1.07 2,000,000.00 FORD MTR CR CO TERM ENHANCED ,000 5,115 Al 99.781 1,998,613.60 .63 345397SC8 FLTG RT 08/27/2006 DD 08/27/98 1,995,620.00 .61 3,950,000,00 GENERAL MTRS ACCEP CORP NTS .000 5,543 A2 99.348 3,918,768.50 1.25 370425QV5 FLTG RT 08/18/2003 DD 08/17/98 3,924,246.00 1.21 YLDANAL YIELD ANALYSIS PAGE 4 OCSF07522202 1999/04/30 RUN DATE 05/06/99 ORANGE CTY-LONG TERM OPERATING RUN TIME 10.17.50 -- PAR VALUE YTM AT CURRENT QUALITY MARKET TOTAL COST/ % TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD RATING PRICE MARKET VALUE % TOTAL --------------------~-------------------~------------------------------------------ 4,000,000.00 HELLER FINL MTN .ooo 5.226 A3 100.265 4,000,000.00 1.28 42333HJN3 FLTG RT 06/01/2000 DD 04/07/98 4,010,600.00 1.23 3,000,000.00 HELLER FINL MTN #TR 00246 .ooo 5,246 A3 100.214 3,000,000.00 .96 42333HLF7 FLTG RT 04/28/2003 DD 04/27/99 J,006,420.00 .92 4,000,000.00 HOUSEHOLD FIN CO MTN .ooo 5.945 A2 100.034 4,000,000.00 1.28 44181KZA5 FLTG RT 06/24/2003 DD 06/24/98 4,001,360.00 1.23 1,000,000.00 HOUSEHOLD FIN MTN SR J00570 .000 5. 745 A2 99.972 999,188.90 .32 44181KZT4 FLTG RT 08/01/2001 DD 09/04/98 999,720.00 .31 4,041,736.17 STUDENT LN MKTG ASSN 1997-1 Al .000 5.746 AAA 99.470 3,995,792.99 1.28 78442GAK2 VAR RT 10/25/2005 DD 03/20/97 4,020,314.97 1.24 7,189,630.00 US TREASURY INFLATION INDEX NT 3.699 3.639 AAA 99.625 7,166,473.77 2.29 9128273A8 3.625% 07/15/2002 DD 07/15/97 7,162,668.89 2.20 10,382,400.00 US TREASURY INFLATION INDEX NT 3 .728 3.499 AAA 96.469 10,103,375.00 3.21 9128272M3 3.375% 01/15/2007 DD 01/15/97 10,015,797.46 3.08 8,500,000.00 US TREASURY NOTES 4.179 6.086 AAA 102.703 9,034,223.67 2,79 9128272G6 06.250% 01/31/2002 DD 01/31/97 8,729,755.00 2-68 19,000,000.00 FEDERAL NATL MTG ASSN MTN 4.943 6.470 AAA 103.094 20,012,510.00 6,28 31364CZY7 6.670% 03/27/2002 DD 03/27/97 19,587,860.00 6.02 7,000,000.00 MORGAN STANLEY MTN ETR 00299 5 .170 5.148 AA3 100.031 6,996 ,129.00 2.24 61745ENL1 FLTG RT 04/15/2002 DD 04/15/99 7,002,170.00 2.15 5,ooo,ooo.oo US TREASURY BONDS 5 ,234 9.125 AAA 121.922 6,233,593.75 1.95 912810DE5 11.125% 08/15/2003 DD 07/05/83 6,096,100.00 1.87 31,500,000.00 US TREASURY NOTES 5.294 6.203 AAA 102.773 32,509,817.31 10.37 912827Z54 06.375% 09/30/2001 DD 09/30/96 32,373,495.00 9.95 17,100,000.00 US TREASURY NOTES 5 .366 7.107 AAA 105.531 18,388,684.02 5.78 912827D25 07.500% 11/15/2001 DD 11/15/91 18,045,801.00 5.55 5,500,ooo.oo US TREASURY NOTES 5.402 6.060 AAA 103.141 5,677,682.23 1. 81 9128273G5 06.250% 08/31/2002 DD 09/02/97 5,672,755.00 1.74 0,500,ooo.oo US TREASURY NOTES 5,533 o.:nG AAA 103.906 8,865,156.26 2,83 9128272SO 06,625% 04/30/2002 DD 04/30/97 8,832,010.00 2. 71 YLDANAL YIELD ANALYSIS PAGE 5 OCSF07522202 1999/04/30 RUN DATE 05/06/99 ORANGE CTY-LONG TERM OPERATING RUN TIME 10.17.50 --- PAR VALUE YTM AT CURRENT QUALITY MARKET TOTAL COST/ % TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD RATING PRICE MARKET VALUE % TOTAL --------------·---·---------------------------------------------------------------------·----- 5,200,000.00 US TREASURY BONDS 5.617 9.428 AAA 125.953 6,698,250.00 2.09 912810DGO 11.875% 11/15/2003 DD 10/05/83 6,549,556.00 2.01 1,500,000.00 ASSOCIATES CORP NA SR NTS 5.650 6.382 AA3 101. 841 1,543,215.00 .48 046003HY8 6.500% 07/15/2002 DD 07/11/97 1,527,615.00 .47 4,230,000.00 COMMIT TO PUR FNMA SF MTG 5.736 5.783 AAA 100.500 4,255,043.75 1.36 11F011651 VAR RT 05/25/2029 4,251,150.00 1.31 1,000,000.00 HELLER FINANCIAL INC NTS 5.760 5.765 A3 99.740 999,730.00 .31 42333HKJO 5.750% 09/25/2001 DD 09/25/98 997,400.00 .31 16,100,000.00 US TREASURY NOTES 5.783 6.273 AAA 103.625 16,581,067.03 5.34 9128272Wl 06.500% 05/31/2002 DD 06/02/97 16,683,625.00 5.13 2,005,000.00 SEARS ROEBUCK ACCEP CORP MTN 5.804 6.461 A2 101.218 2,060,739.00 .65 81240QGW6 6.540% 02/20/2003 DD 02/20/97 2,029,420.90 .62 5,ooo,ooo.oo US TREASURY NOTES 5.811 6.081 AAA 102.781 5,086,402.25 1.64 9128272L5 06.250% 02/28/2002 DD 02/28/97 5,139,050.00 1.58 3,000,000.00 SEARS ROEBUCK ACCEP CORP MTN 5.849 6.528 A2 101. 562 3,073,170.00 .97 81240QJA1 6.630% 07/09/2002 DD 07/09/97 3,046,860.00 .94 14,750,000.00 FEDERAL NATL MTG ASSN MTN 5.882 5.917 AAA 96.500 14,560,462.50 4.56 31364GLD9 5.710% 12/15/2008 DD 12/15/98 14,233,750.00 4.38 6,000,000.00 NATIONSBANK CHARLOTTE NC MTN 5.882 5.844 AAl 100.109 5,996,400.00 1.92 63858JDE6 5.850% 04/07/2000 DD 04/07/98 6,006,540.00 1.85 936,245.10 FHLMC MULTICL MTG P/C 1574 E 5.912 5.883 100.281 934,928.50 .30 3133T02D5 5.900% 06/15/2017 938,875.95 .29 1,144,085.15 CHASE MANHATTAN GRAN 95-B CL A 5.957 5,894 AAA 100.096 1,141,716.55 .36 161614AE2 5.900% 11/15/2001 DD 11/15/95 1,145,183.47 .35 2,500,000.00 MERRILL LYNCH NOTES 5.995 6.287 AA3 101.399 2,526,725.00 .81 59018SXP4 6.375% 10/01/2001 DD 10/03/97 2,534,975.00 .78 7,500,000.00 BELLSOUTH TELECOMMUNICATIONS 6.010 5.960 AAA 100.671 7,497,255.00 2.42 079867AX5 6.000% 06/15/2002 DD 06/15/98 7,550,325.00 2.32 1,250,000.00 GENERAL MTRS ACCEP CORP NTS 6.032 6.939 A2 102.678 1,283,862.50 .41 370425QFO 7.125% 05/01/2001 DD 05/01/97 1,283,475.00 .39 YLDANAL YIELD ANALYSIS PAGE 6 OCSF07522202 1999/04/30 RUN DATE 05/06/99 ORANGE CTY-LONG TERM OPERATING RUN TIME 10.17.50 ---=-- PAR VALUE YTM AT CURRENT QUALITY MARKET TOTAL COST/ % TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD RATING PRICE MARKET VALUE % TOTAL -----------------------------~--------------------------------------------------------- 1,000,000.00 GENERAL MTRS ACCEP CORP MTN 6.046 6.586 A2 101. 7 34 1,018,520.00 .32 37042WGK1 6.700% 04/30/2001 DD 04/25/96 1,017,340.00 .31 2,000,000.00 BANKBOSTON CORP SR NTS 6.133 6.107 A2 100.292 1,999,600.00 .64 06605TAL6 6.125% 03/15/2002 DD 03/12/99 2,005,840.00 .62 173,880 .20 FIFTH THIRD BK AUTO TR 96A CLA 6.200 6.173 AAA 100.437 173,880.19 .05 31677EAA4 6.200% 09/01/2001 DD 03/15/96 174,639.71 .05 1,000,000.00 POPULAR INC MTN tTR 00004 6.201 6.216 A3 99. 743 1,000,000.00 .31 73317PAD1 6.200% 04/30/2001 DD 04/21/99 997,430.00 .31 6,250,000.00 COMMIT TO PUR GNMA I SF 6.212 6.195 AAA 96.859 6,095,703.13 1.94 01N060650 6.000% 05/15/2029 6,053,687.50 1.86 2,soo,000.00 LEHMAN BROS HLDGS MTN TR 00252 6.232 6.359 BAAl 100.639 2,509,175.00 .80 52517PLM1 6.400% 08/30/2000 DD 09/26/97 2,515,975.00 .77 4,500,000.00 FEDERAL NATL MTG ASSN MTN 6.291 6.115 AAA 101.875 4,488,705.00 1.46 31364CXV5 6.230% 03/01/2002 DD 03/03/97 4,584,375.00 1.41 3,771,243.68 FHLMC MULTICLASS CTF E3 A 6 .316 6.276 AAA 100.771 3,775,368.46 1.21 3133TCE95 6.324% 08/15/2032 3,800,319.97 1.17 2,000,000.00 BEAR STEARNS COS INC 6.330 6.615 A2 102.041 2,031,960.00 ,65 073902AH1 6.750% 04/15/2003 2,040,820.00 .63 s,000,000.00 LEHMAN BROS HLDGS MTN #00196 6.364 6.591 BAAl 100.890 5,039,450.00 1.61 52517PJD4 6.650% 11/08/2000 DD 11/08/96 5,044,500.00 1. 55 1,305,000.00 BEAR STEARNS COS INC SR NTS 6.425 6.638 A2 101.693 1,317,619.35 .42 073902AW8 6.750% 05/01/2001 DD 04/26/96 1,327,093.65 .41 10,soo,000.00 COMMIT TO PUR GNMA SF MTG 6.478 6 .542 AAA 99.359 10,385,156.25 3.34 01N062656 6.500% 05/15/2029 10,432,695.00 3.21 2,000,000.00 FHLMC MULTICLASS CTF Tll A6 6.496 6.460 AAA 100.620 2,000,888.00 .64 3133TDPV2 6.500% 09/25/2018 2,012,400.00 .62 2,281,802.01 FHLMC MULTICLASS CTF SER 1620Z 6.557 6.460 AAA 92.872 2,125,662.07 .67 3133Tl7A4 6.000% 11/15/2023 DD 11/01/93 2,119,164.75 .65 8,000,000.00 FEDERAL NATL MTG ASSN MTN 6 .577 6 .475 AAA 102.312 8,012,576.00 2.62 31364CBD9 6.625% 04/18/2001 DD 04/18/96 8,184,960.00 2.52 YLDANAL OCSF07522202 ORANGE CTY-LONG TERM OPERATING PAR VALUE SECURITY ID SECURITY DESCRIPTION 9,000,000.00 PHILIP MORRIS COS NT 718154BB2 9,250% 02/15/2000 11,595,658.70 FHLMC GROUP #G5-0476 3128DDQ55 7.000% 02/01/2003 DD 02/01/98 3,000,000.00 GMAC MED TERM NTS 37042RKQ4 8.625% 1/10/2000 DD 1/10/95 2,730,244.84 GNMA II POOL #080088M 36225CC20 6.875% 06/20/2027 DD 06/01/97 1,904,532.35 GNMA II POOL #0080023 36225CAZ9 7.000% 12/20/2026 DD 12/01/96 2,500,000.00 US TREASURY BONDS 912810DJ4 13,250% 05/15/2014 DD 05/15/84 2,000,000.00 LONG ISLAND LTG CO DEB 542671CT7 8.200% 03/15/2023 DD 03/28/93 TOTAL FIXED INCOME SECURITIES TOTAL YTM AT BOOK 6.593 6.628 6.660 6.705 6.869 6.906 7.513 ----·---- 4.550 ------ 4.548 YIELD ANALYSIS 1999/04/30 CURRENT QUALITY MARKET YIELD RATING PRICE 9,005 A2 102,720 6.965 AAA 100.499 8.446 A2 102.117 6.804 AAA 101.047 6.862 AAA 102.016 8.419 AAA 157,375 7,725 BAA3 106.153 ------- 6 .130 ----6.090 PAGE RUN DATE RUN TIME TOTAL COST/ MARKET VALUE 9,903,780.00 9,244,800.00 11,776,840.87 11,653,521.04 3,227,070.00 3,063,510.00 2,789,968.95 2,758,830.50 1,936,076.17 1,942,927.72 4,029,030.31 3,934,375.00 2,151,250.00 2,123,060.00 --------------314,418,690.83 311,901,869.48 ----------·-- 327,842,814.84 325,325,993.49 7 05/06/99 10.17.50 % TYPE % TOTAL 2,96 2.84 3.73 3.58 .98 .94 ,88 .85 .62 .60 1.26 1.21 .68 ,65 ---------100,00 95.87 --·----- 100.00 100.00 ======= OCSGOOOlOO CS DOC-CONSOLIDATED SHARES/PAR VALUE SECURITY ID/ DESCRIPTION/ TRANS CODE BROKER ----------------------------- PURCHASES U.S. DOLLAR CASH & CASH EQUIVALENTS LIQUID OPER-PIMCO 200,000.00 COCA COLA CO DISC 19121ETB9 06/11/1999 B GOLDMAN SACHS & CO, NY 200,000.00 19121ETB9 FC 1,300,000.00 34539USM5 B LIQUID OPER-PIMCO COCA COLA CO DISC 06/11/1999 GOLDMAN SACHS & CO, NY LONG TERM OPER-PIMCO FORD MTR CR CO DISC 05/21/1999 CITIBANK CP IPA, NEW YORK LONG TERM OPER-PIMCO 1,300,000.00 FORD MTR CR CO DISC 34539USM5 05/21/1999 FC CITIBANK CP IPA, NEW YORK LONG TERM OPER-PIMCO 7,400,000.00 FORD MTR CR CO DISC 34539UUS9 07/26/1999 B CITIBANK CP IPA, NEW YORK LONG TERM OPER-PIMCO 7,400,000.00 FORD MTR CR CO DISC 34539UUS9 07/26/1999 FC 900,000.00 38142UTB8 B CITIBANK CP IPA, NEW YORK LONG TERM OPER-PIMCO GOLDMAN SACHS LP DISC 06/11/1999 GOLDMAN SACHS & CO, NY LONG TERM OPER-PIMCO 900,000.00 GOLDMAN SACHS LP DISC 38142UTB8 06/11/1999 MELLON TRUST POSTED TRANSACTIONS -LOCAL/BASE 01-APR-1999 -30-APR-1999 EFFECTIVE DATE/ SETTLE DATE/ COMPL DATE 07-APR-1999 07-APR-1999 07-APR-1999 07-APR-1999 07-APR-1999 05-APR-1999 05-APR-1999 05-APR-1999 05-APR-1999 05-APR-1999 23-APR-1999 23-APR-1999 23-APR-1999 23-APR-1999 23-APR-1999 21-APR-1999 21-APR-1999 21-APR-1999 21-APR-1999 Page 1 LOCAL AMOUNT/ COST/ GAIN LOSS -198,266.67 198,266.67 0.00 -198,266.67 -198,266.67 0.00 -1,291,976.83 1,291,976.83 0.00 -1,291,976.83 -1,291,976.83 0.00 -7,307,639.71 7,307,639.71 0.00 -7,307,639.71 -7,307,639.71 0.00 -893,892.75 893,892.75 0.00 -893,892.75 -893,892.75 BASE AMOUNT/ COST/ INV GAIN LOSS/ CURR GAIN LOSS -198,266.67 198,266.67 0.00 0.00 -198,266.67 0.00 0.00 0.00 -1,291,976.83 1,291,976.83 0.00 0.00 -1,291,976.83 0.00 0.00 0.00 -7,307,639.71 7,307,639.71 0.00 0.00 -7,307,639.71 0.00 0.00 0.00 -893,892.75 893,892.75 0.00 0.00 -893,892.75 0.00 BASE: USO TMlOO LOCAL PRICE/ BASE PRICE/ BASE XRATE/ 99.133335 99.133335 1.000000000 99.133335 99.133335 1.000000000 99.382833 99.382833 l.000000000 99.382833 99.382833 l.000000000 98.751888 98.751888 1.000000000 98.751888 98.751888 1.000000000 99.321416 99.321416 1.000000000 99.321416 99.321416 OCSGOOOlOO CS DOC-CONSOLIDATED SHARES/PAR VALUE SECURITY ID/ DESCRIPTION/ TRANS CODE BROKER ---------------- FC GOLDMAN SACHS & CO, NY LIQUID OPER-PIMCO 900,000.00 MONSANTO CO DISC 61166BWP8 09/23/1999 B GOLDMAN SACHS & CO, NY 900,000.00 61166BWP8 FC 700,000.00 90328BTB7 B 700,000.00 90328BTB7 FC LIQUID OPER-PIMCO MONSANTO CO DISC 09/23/1999 GOLDMAN SACHS & CO, NY LIQUID OPER-PIMCO USAA CAP CORP DISC 06/11/1999 GOLDMAN SACHS & CO, NY LIQUID OPER-PIMCO USAA CAP CORP DISC 06/11/1999 GOLDMAN SACHS & CO, NY LIQUID OPER-PIMCO 28,481.21 DREYFUS TREASURY CASH MGMT 996085247 B LIQUID OPER-PIMCO 28,481.21 DREYFUS TREASURY CASH MGMT 996085247 FC LONG TERM OPER-PIMCO 244,356.02 DREYFUS TREASURY CASH MGMT 996085247 B LONG TERM OPER-PIMCO 244,356.02 DREYFUS TREASURY CASH MGMT MELLON TRUST POSTED TRANSACTIONS -LOCAL/BASE 01-APR-1999 -30-APR-1999 EFFECTIVE DATE/ SETTLE DATE/ COMPL DATE ----------- 21-APR-1999 20-APR-1999 21-APR-1999 20-APR-1999 21-APR-1999 21-APR-1999 07-APR-1999 07-APR-1999 07-APR-1999 07-APR-1999 07-APR-1999 Ol-APR-1999 Ol-APR-1999 Ol-APR-1999 Ol-APR-1999 Ol-APR-1999 Ol-APR-1999 01-APR-1999 Ol-APR-1999 Page 2 LOCAL AMOUNT/ COST/ GAIN LOSS 0.00 -881,400.00 881,400.00 0.00 -881,400.00 -881,400.00 0.00 -693,895.42 693,895.42 0.00 -693,895.42 -693,895.42 0.00 -28, 481. 21 28,481.21 0.00 -28, 481. 21 -28,481.21 0.00 -244,356.02 244,356.02 0.00 -244,356.02 BASE AMOUNT/ COST/ INV GAIN LOSS/ CURR GAIN LOSS 0.00 0.00 -881,400.00 881,400.00 0.00 0.00 -881,400.00 0.00 0.00 0.00 -693,895.42 693,895.42 0.00 0.00 -693,895.42 0.00 0.00 0.00 -28,481.21 28,481.21 0.00 0.00 -28,481.21 0.00 0.00 0.00 -244,356.02 244,356.02 0.00 0.00 -244,356.02 BASE: USO TMlOO LOCAL PRICE/ BASE PRICE/ BASE XRATE/ ----------- 1.000000000 97.933333 97.933333 l.000000000 97.933333 97.933333 l.000000000 99.127917 99.127917 1.000000000 99.127917 99.127917 l.000000000 1.000000 1.000000 l.000000000 1.000000 1.000000 1.000000000 1.000000 1.000000 l.000000000 1.000000 OCSG000l00 MELLON TRUST CSDOC-CONSOLIDATED POSTED TRANSACTIONS -LOCAL/BASE BASE: USO 01-APR-1999 -30-APR-1999 TMl00 BASE AMOUNT/ SHARES/PAR VALUE EFFECTIVE DATE/ LOCAL AMOUNT/ COST/ LOCAL PRICE/ SECURITY ID/ DESCRIPTION/ SETTLE DATE/ COST/ INV GAIN LOSS/ BASE PRICE/ TRANS CODE BROKER COMPL DATE GAIN LOSS CURR GAIN LOSS BASE XRATE/ -~---------------------------------~----~----------------------------------------------------------------------- 996085247 01-APR-1999 -244,356.02 0.00 1.000000 FC 01-APR-1999 0.00 0.00 1.000000000 0.00 LONG TERM OPER-PIMCO 175,500.00 DREYFUS TREASURY CASH MGMT 07-APR-1999 -175,500.00 -175,500.00 1.000000 996085247 07-APR-1999 175,500.00 175,500.00 1.000000 B -----------0.00 0.00 l.000000000 0.00 LONG TERM OPER-PIMCO 175,500.00 DREYFUS TREASURY CASH MGMT 07-APR-1999 -175,500.00 -175,500.00 1.000000 996085247 07-APR-1999 -175,500.00 0.00 1.000000 FC 07-APR-1999 0.00 0.00 1.000000000 0.00 LIQUID OPER-PIMCO 7,837.91 DREYFUS TREASURY CASH MGMT 07-APR-1999 -7,837.91 -7,837.91 1.000000 996085247 07-APR-1999 7,837.91 7,837.91 1.000000 B -----------0.00 0.00 1.000000000 0.00 LIQUID OPER-PIMCO 7,837.91 DREYFUS TREASURY CASH MGMT 07-APR-1999 -7,837.91 -7,837.91 1.000000 996085247 07-APR-1999 -7,837.91 0.00 1.000000 FC 07-APR-1999 0.00 0.00 l.000000000 0.00 LIQUID OPER-PIMCO 33,125.00 DREYFUS TREASURY CASH MGMT 15-APR-1999 -33,125.00 -33,125.00 1.000000 99608524 7 15-APR-1999 33,125.00 33,125.00 1.000000 B -------0.00 0.00 1.000000000 0.00 LIQUID OPER-PIMCO 33,125.00 DREYFUS TREASURY CASH MGMT 15-APR-1999 -33,125.00 -33,125.00 1.000000 996085247 15-APR-1999 -33,125.00 0.00 1.000000 FC 15-APR-1999 0.00 0.00 1.000000000 0.00 LONG TERM OPER-PIMCO 1,167,650.52 DREYFUS TREASURY CASH MGMT 15-APR-1999 -1,167,650.52 -1,167,650.52 1.000000 996085247 15-APR-1999 1,167,650.52 1,167,650.52 1.000000 B -----------0.00 0.00 1.000000000 0.00 LONG TERM OPER-PIMCO Page 3 OCSGOOOlOO MELLON TRUST CS DOC -CONSOLIDATED POSTED TRANSACTIONS -LOCAL/BASE BASE: USD 01-APR-1999 -30-APR-1999 TMlOO BASE AMOUNT/ SHARES/PAR VALUE EFFECTIVE DATE/ LOCAL AMOUNT/ COST/ LOCAL PRICE/ SECURITY ID/ DESCRIPTION/ SETTLE DATE/ COST/ INV GAIN LOSS/ BASE PRICE/ TRANS CODE BROKER COMPL DATE GAIN LOSS CURR GAIN LOSS BASE XRATE/ ----------------------··-----------------------------------------------------------------------------------~------------1,167,650.52 DREYFUS TREASURY CASH MGMT 15-APR-1999 -1,167,650.52 -1,167,650.52 1.000000 996085247 15-APR-1999 -1,167,650.52 0.00 1.000000 FC 15-APR-1999 0.00 0.00 1.000000000 0.00 LONG TERM OPER-PIMCO 78,883.00 DREYFUS TREASURY CASH MGMT 16-APR-1999 -78,883 .00 -78,883.00 1.000000 996085247 16-APR-1999 78,883.00 78,883.00 1.000000 B ----------0 .00 0.00 1.000000000 0.00 LONG TERM OPER-PIMCO 78,883.00 DREYFUS TREASURY CASH MGMT 16-APR-1999 -78,883.00 -78,883.00 1.000000 996085247 16-APR-1999 -78,883.00 0.00 1.000000 FC 16-APR-1999 0.00 0.00 1.000000000 0.00 LONG TERM OPER-PIMCO 265,000.00 DREYFUS TREASURY CASH MGMT 19-APR-1999 -265,000.00 -265,000.00 1.000000 996085247 19-APR-1999 265,000.00 265,000.00 1.000000 B -----------0.00 0.00 1.000000000 0.00 LONG TERM OPER-PIMCO 265,000.00 DREYFUS TREASURY CASH MGMT 19-APR-1999 -265,000.00 -265,000.00 1.000000 996085247 19-APR-1999 -265,000.00 0.00 1.000000 FC 19-APR-1999 0.00 0.00 l.000000000 0.00 LONG TERM OPER-PIMCO 283,725.40 DREYFUS TREASURY CASH MGMT 20-APR-1999 -283,725.40 -283,725.40 1.000000 99608524 7 20-APR-1999 283,725.40 283,725.40 1.000000 B -----~-----0.00 0.00 1.000000000 0.00 LONG TERM OPER-PIMCO 283,725.40 DREYFUS TREASURY CASH MGMT 20-APR-1999 -283,725.40 -283,725.40 1.000000 996085247 20-APR-1999 -283, 725. 40 0.00 1.000000 FC 20-APR-1999 0.00 0.00 1.000000000 0.00 LIQUID OPER-PIMCO 18,600.00 DREYFUS TREASURY CASH MGMT 21-APR-1999 -18,600.00 -18,600.00 1.000000 996085247 21-APR-1999 18,600.00 18,600.00 1.000000 B -----------0.00 0.00 1.000000000 0.00 Page 4 OCSGOOOlOO MELLON TRUST CSDOC-CONSOLIDATED POSTED TRANSACTIONS -LOCAL/BASE BASE: USO 01-APR-1999 -30-APR-1999 TMlOO BASE AMOUNT/ SHARES/PAR VALUE EFFECTIVE DATE/ LOCAL AMOUNT/ COST/ LOCAL PRICE/ SECURITY ID/ DESCRIPTION/ SETTLE DATE/ COST/ INV GAIN LOSS/ BASE PRICE/ TRANS CODE BROKER COMPL DATE GAIN LOSS CURR GAIN LOSS BASE XRATE/ -------------------------------------------------------------------------------------------------------------~-------- LIQUID OPER-PIMCO 18,600.00 DREYFUS TREASURY CASH MGMT 21-APR-1999 -18,600.00 -18,600 .00 1.000000 996085247 21-APR-1999 -18,600.00 0 .00 1.000000 FC 21-APR-1999 0.00 0.00 1.000000000 0.00 LONG TERM OPER-PIMCO 92,529.29 DREYFUS TREASURY CASH MGMT 22-APR-1999 -92,529.29 -92,529.29 1.000000 996085247 22-APR-1999 92,529.29 92,529.29 1.000000 B -----------0.00 0.00 1.000000000 0.00 LONG TERM OPER-PIMCO 92,529.29 DREYFUS TREASURY CASH MGMT 22-APR-1999 -92,529.29 -92,529.29 1.000000 996085247 22-APR-1999 -92,529.29 0.00 1.000000 FC 22-APR-1999 0.00 0.00 1.000000000 0.00 LONG TERM OPER-PIMCO 319,976.36 DREYFUS TREASURY CASH MGMT 26-APR-1999 -319,976.36 -319,976.36 1.000000 996085247 26-APR-1999 319,976.36 319,976.36 1.000000 B ---------~ 0.00 0.00 1.000000000 0.00 LONG TERM OPER-PIMCO 319,976.36 DREYFUS TREASURY CASH MGMT 26-APR-1999 -319,976.36 -319,976.36 1.000000 996085247 26-APR-1999 -319,976.36 0.00 1.000000 FC 26-APR-1999 0.00 0.00 1.000000000 0.00 LONG TERM OPER-PIMCO 139,812.59 DREYFUS TREASURY CASH MGMT 27-APR-1999 -139,812.59 -139,812.59 1.000000 996085247 27-APR-1999 139,812.59 139,812.59 1.000000 B -----------0.00 0.00 1.000000000 0.00 LONG TERM OPER-PIMCO 139,812.59 DREYFUS TREASURY CASH MGMT 27-APR-1999 -139,812.59 -139,812.59 1.000000 996085247 27-APR-1999 -139,812.59 0.00 1.000000 FC 27-APR-1999 0.00 0.00 1.000000000 0.00 LONG TERM OPER-PIMCO 281,572.50 DREYFUS TREASURY CASH MGMT 30-APR-1999 -281,572.50 -281,572.50 1.000000 996085247 30-APR-1999 281,572.50 281,572.50 1.000000 B -----~----0.00 0.00 1.000000000 0.00 Page 5 MELLON TRUST OCSG000100 CSDOC-CONSOLIDATED POSTED TRANSACTIONS -LOCAL/BASE 01-APR-1999 -30-APR-1999 SHARES/PAR VALUE SECURITY ID/ DESCRIPTION/ TRANS CODE BROKER EFFECTIVE DATE/ SETTLE DATE/ COMPL DATE LONG TERM OPER-PIMCO 281,572.50 DREYFUS TREASURY CASH MGMT 996085247 FC U.S. DOLLAR FIXED INCOME SECURITIES LONG TERM OPER-PIMCO 7,000,000.00 MORGAN STANLEY DEAN WITTER NA5422699 FLTG RATE ll-MAR-2003 USDlOOO B MIDLAND BK, LONDON LONG TERM OPER-PIMCO 7,000,000.00 MORGAN STANLEY DEAN WITTER NA5422699 FLTG RATE ll-MAR-2003 USDlOOO IB LONG TERM OPER-PIMCO -7,000,000.00 MORGAN STANLEY DEAN WITTER NA5422699 FLTG RATE ll-MAR-2003 USDlOOO BC MIDLAND BK, LONDON LONG TERM OPER-PIMCO -7,000,000.00 MORGAN STANLEY DEAN WITTER NA5422699 FLTG RATE ll-MAR-2003 USDlOOO IBC LONG TERM OPER-PIMCO 7,000,000.00 MORGAN STANLEY DEAN WITTER NA5422699 FLTG RATE ll-MAR-2003 USDlOOO B MIDLAND BK, LONDON LONG TERM OPER-PIMCO 7,000,000.00 MORGAN STANLEY DEAN WITTER NA5422699 FLTG RATE ll-MAR-2003 USDlOOO IB LONG TERM OPER-PIMCO -7,000,000.00 MORGAN STANLEY DEAN WITTER NA5422699 FLTG RATE ll-MAR-2003 USDlOOO 30-APR-1999 30-APR-1999 30-APR-1999 12-APR-1999 15-APR-1999 12-APR-1999 15-APR-1999 12-APR-1999 15-APR-1999 12-APR-1999 15-APR-1999 12-APR-1999 15-APR-1999 12-APR-1999 15-APR-1999 12-APR-1999 15-APR-1999 Page 6 LOCAL AMOUNT/ COST/ GAIN LOSS -281,572.50 -281,572.50 0.00 -6,981,800.00 6,981,800.00 0.00 -35,303.82 0.00 0.00 6,981,800.00 -6,981,800.00 0.00 35,303.82 0.00 0.00 -6,981,800.00 6,981,800.00 0.00 -35,303.82 0.00 0.00 6,981,800.00 -6,981,800.00 BASE AMOUNT/ COST/ INV GAIN LOSS/ CURR GAIN LOSS -281,572.50 0.00 0.00 0.00 -6,981,800.00 6,981,800.00 0.00 0.00 -35,303 .82 0.00 0.00 0.00 6,981,800.00 -6,981,800.00 0.00 0.00 35,303.82 0.00 0.00 0.00 -6,981,800.00 6,981,800.00 0.00 0.00 -35,303.82 0.00 0.00 0.00 6,981,800.00 -6,981,800.00 BASE: USO TMlOO LOCAL PRICE/ BASE PRICE/ BASE XRATE/ 1.000000 1.000000 1.000000000 99.740000 99.740000 l.000000000 99.740000 99.740000 1.000000000 99.740000 99.740000 l.000000000 99.740000 99.740000 l.000000000 99.740000 99.740000 l.000000000 99.740000 99.740000 1.000000000 99.740000 99.740000 MELLON TRUST OCSG000100 CSDOC-CONSOLIDATED POSTED TRANSACTIONS -LOCAL/BASE 01-APR-1999 -30-APR-1999 SHARES/PAR VALUE SECURITY ID/ DESCRIPTION/ TRANS CODE BROKER ---------------- BC MIDLAND BK, LONDON LONG TERM OPER-PIMCO EFFECTIVE DATE/ SETTLE DATE/ COMPL DATE -7,000,000.00 MORGAN STANLEY DEAN WITTER 12-APR-1999 NA5422699 FLTG RATE ll-MAR-2003 USDlOOO 15-APR-1999 IBC ----------- LONG TERM OPER-PIMCO 6,250,000.00 COMMIT TO PUR GNMA I SF 01N060650 6.000% 05/15/2029 B GOLDMAN SACHS & CO, NY LONG TERM OPER-PIMCO 2,230,000.00 COMMIT TO PUR FNMA SF MTG 11F011651 5.812% 05/25/2029 B BEAR STEARNS & CO INC, NY LONG TERM OPER-PIMCO 2,000,000.00 COMMIT TO PUR FNMA SF MTG 11F011651 5.812% 05/25/2029 B GOLDMAN SACHS & CO, NY LIQUID OPER-PIMCO 150,000.00 CITICORP SUB CAP NT 173034DQ9 9.750% 08/01/1999 14-APR-1999 24-MAY-1999 14-APR-1999 25-MAY-1999 14-APR-1999 25-MAY-1999 21-APR-1999 26-APR-1999 B MERRILL LYNCH PIERCE FENNER SM LIQUID OPER-PIMCO 150,000.00 CITICORP SUB CAP NT 173034DQ9 9.750% 08/01/1999 IB LIQUID OPER-PIMCO 150,000.00 CITICORP SUB CAP NT 173034DQ9 9.750% 08/01/1999 FC MERRILL LYNCH, FIX INCOME LONG TERM OPER-PIMCO 90,846.95 FNMA POOL #0020105 21-APR-1999 26-APR-1999 21-APR-1999 26-APR-1999 OPER 26-APR-1999 12-MAR-1999 Page 7 LOCAL AMOUNT/ COST/ GAIN LOSS 0.00 35,303.82 0.00 0.00 -6,095,703.13 6,095,703.13 0.00 -2,242,543.75 2,242,543.75 0.00 -2,012,500.00 2,012,500.00 0.00 -151,663.50 151,663.50 0.00 -3,453.13 0.00 0.00 -155,116.63 -155,116.63 0.00 -91,102.46 BASE AMOUNT/ COST/ INV GAIN LOSS/ CURR GAIN LOSS 0.00 0.00 35,303.82 0.00 0.00 0.00 -6, 095, 703 .13 6,095,703.13 0.00 0.00 -2,242,543.75 2,242,543.75 0.00 0.00 -2,012,500.00 2,012,500.00 0.00 0.00 -151,663.50 151,663.50 0.00 0.00 -3,453.13 0.00 0.00 0.00 -155,116.63 0.00 0.00 0.00 -91,102.46 BASE: USO TMlOO LOCAL PRICE/ BASE PRICE/ BASE XRATE/ ----------- 1.000000000 99.740000 99.740000 1.000000000 97.531250 97.531250 1.000000000 100.562500 100.562500 1.000000000 100.625000 100.625000 1.000000000 101.109000 101.109000 1.000000000 101.109000 101.109000 1.000000000 101.109000 101.109000 1.000000000 100.281250 OCSGOOOlOO MELLON TRUST CSDOC-CONSOLIDATED POSTED TRANSACTIONS -LOCAL/BASE BASE: USO Ol-APR-1999 -30-APR-1999 TMlOO BASE AMOUNT/ SHARES/PAR VALUE EFFECTIVE DATE/ LOCAL AMOUNT/ COST/ LOCAL PRICE/ SECURITY ID/ DESCRIPTION/ SETTLE DATE/ COST/ INV GAIN LOSS/ BASE PRICE/ TRANS CODE BROKER COMPL DATE GAIN LOSS CURR GAIN LOSS BASE XRATE/ -------------------------------------------------~----------------------------------------------------------------- 31360YKS2 6.072% 11/01/2024 DD 02/01/85 26-APR-1999 91,102.46 91,102.46 100.281250 B PRUDENTIAL SECURITIES INC -----------0.00 0.00 1.000000000 0.00 LONG TERM OPER-PIMCO 90,846.95 FNMA POOL #0020105 12-MAR-1999 -386.86 -386.86 100.281250 31360YKS2 6.072% 11/01/2024 DD 02/01/85 26-APR-1999 0.00 0.00 100.281250 IB -----------0.00 0.00 1.000000000 0.00 LONG TERM OPER-PIMCO 90,846.95 FNMA POOL #0020105 12-MAR-1999 -91,102.46 -91,102.46 100.281250 31360YKS2 6.072% 11/01/2024 DD 02/01/85 26-APR-1999 91,102.46 91,102.46 100.281250 B PRUDENTIAL SECURITIES INC ----------0.00 0.00 1.000000000 0.00 LONG TERM OPER-PIMCO 90,846.95 FNMA POOL #0020105 12-MAR-1999 -370.01 -370.01 100.281250 31360YKS2 6.072% 11/01/2024 DD 02/01/85 26-APR-1999 0.00 0.00 100.281250 IB -----------0.00 0.00 l.000000000 0.00 LONG TERM OPER-PIMCO 90,846.95 FNMA POOL #0020105 12-MAR-1999 -91,472.47 -91,472.47 100.281250 31360YKS2 6.072% 11/01/2024 DD 02/01/85 26-APR-1999 -91,472.47 0.00 100.281250 FC PRUDENTIAL SECURITIES INC 26-APR-1999 0.00 0.00 1.000000000 0.00 LONG TERM OPER-PIMCO 809,188.55 FNMA POOL #0047935 12-MAR-1999 -8ll,464.39 -8ll,464.39 100.281250 313612HLO 5.839% 05/01/2027 DD 05/01/87 26-APR-1999 8ll,464.39 8ll,464.39 100.281250 B PRUDENTIAL SECURITIES INC --·---------0.00 0.00 l.000000000 0.00 LONG TERM OPER-PIMCO 809,188.55 FNMA POOL #0047935 12-MAR-1999 -3,291.82 -3,291.82 100.281250 313612HLO 5.839% 05/01/2027 DD 05/01/87 26-APR-1999 0.00 0.00 100.281250 IB -----------0.00 0.00 1.000000000 0.00 LONG TERM OPER-PIMCO 809,188.55 FNMA POOL #0047935 12-MAR-1999 -814,756.21 -814,756.21 100.281250 313612HLO 5.839% 05/01/2027 DD 05/01/87 26-APR-1999 -814,756.21 0.00 100.281250 FC PRUDENTIAL SECURITIES INC 26-APR-1999 0.00 0.00 1.000000000 0.00 LONG TERM OPER-PIMCO Page 8 OCSGOOOlOO MELLON TRUST CS DOC-CONSOLIDATED POSTED TRANSACTIONS -LOCAL/BASE BASE: USO Ol-APR-1999 -30-APR-1999 TMlOO BASE AMOUNT/ SHARES/PAR VALUE EFFECTIVE DATE/ LOCAL AMOUNT/ COST/ LOCAL PRICE/ SECURITY ID/ DESCRIPTION/ SETTLE DATE/ COST/ INV GAIN LOSS/ BASE PRICE/ TRANS CODE BROKER COMPL DATE GAIN LOSS CURR GAIN LOSS BASE XRATE/ -------------------------~---------------------------------------------- 366,757.31 FNMA POOL #0062938 12-MAR-1999 -367,788.81 -367,788.81 100.281250 31362J4XO 5.839% 03/01/2027 DD 06/01/88 26-APR-1999 367,788.81 367,788.81 100.281250 B PRUDENTIAL SECURITIES INC -----------0.00 0.00 1.000000000 0.00 LONG TERM OPER-PIMCO 366,757.31 FNMA POOL #0062938 12-MAR-1999 -1,491.99 -1,491.99 100.281250 31362J4XO 5.839% 03/01/2027 DD 06/01/88 26-APR-1999 0.00 0.00 100.281250 IB -----------0.00 0.00 1.000000000 0.00 LONG TERM OPER-PIMCO 366,757.31 FNMA POOL #0062938 12-MAR-1999 -369,280.80 -369,280.80 100.281250 31362J4XO 5.839% 03/01/2027 DD 06/01/88 26-APR-1999 -369,280.80 0.00 100.281250 FC PRUDENTIAL SECURITIES INC 26-APR-1999 0.00 0.00 1.000000000 0.00 LONG TERM OPER-PIMCO 99,965.39 FNMA POOL #0077648 12-MAR-1999 -100,246.54 -100,246.54 100.281250 313624HZ4 5.617% 03/01/2018 DD 06/01/89 26-APR-1999 100,246.54 100,246.54 100.281250 B PRUDENTIAL SECURITIES INC --------~-0.00 0.00 1.000000000 0.00 LONG TERM OPER-PIMCO 99,965.39 FNMA POOL #0077648 12-MAR-1999 -403.47 -403.47 100.281250 313624HZ4 5.617% 03/01/2018 DD 06/01/89 26-APR-1999 0.00 0.00 100.281250 IB -----------0.00 0.00 1.000000000 0.00 LONG TERM OPER-PIMCO 99,965.39 FNMA POOL #0077648 12-MAR-1999 -100,650.01 -100,650.01 100.281250 313624HZ4 5.617% 03/01/2018 DD 06/01/89 26-APR-1999 -100,650.01 0.00 100.281250 FC PRUDENTIAL SECURITIES INC 26-APR-1999 0.00 0.00 l.000000000 0.00 LONG TERM OPER-PIMCO 514,435.31 FNMA POOL #0190012 12-MAR-1999 -515,882.16 -515,882.16 100.281250 31368HAM5 6.153% 11/01/2027 DD 09/01/93 26-APR-1999 515,882.16 515,882.16 100.281250 B PRUDENTIAL SECURITIES INC ------·-----0.00 0.00 l.000000000 0.00 LONG TERM OPER-PIMCO 514,435.31 FNMA POOL #0190012 12-MAR-1999 -2,092.75 -2,092.75 100.281250 31368HAM5 6.153% 11/01/2027 DD 09/01/93 26-APR-1999 0.00 0.00 100.281250 IB ------·-~--0.00 0.00 1.000000000 0.00 Page 9 MELLON TRUST OCSG000100 CSDOC-CONSOLIDATED POSTED TRANSACTIONS -LOCAL/BASE 01-APR-1999 -30-APR-1999 SHARES/PAR VALUE SECURITY ID/ DESCRIPTION/ TRANS CODE BROKER EFFECTIVE DATE/ SETTLE DATE/ COMPL DATE LONG TERM OPER-PIMCO 514,435.31 FNMA POOL #0190012 12-MAR-1999 31368HAM5 6.153% 11/01/2027 DD 09/01/93 26-APR-1999 FC PRUDENTIAL SECURITIES INC 26-APR-1999 LONG TERM OPER-PIMCO 118,808.29 FNMA POOL #0292879 31373GJY5 5.925% 07/01/2024 DD B PRUDENTIAL SECURITIES LONG TERM OPER-PIMCO 12-MAR-1999 08/01/94 26-APR-1999 INC ----------- 118,808.29 FNMA POOL #0292879 12-MAR-1999 31373GJY5 5.925% 07/01/2024 DD 08/01/94 26-APR-1999 IB LONG TERM OPER-PIMCO 118,808.29 31373GJY5 FC FNMA POOL #0292879 5.925% 07/01/2024 DD PRUDENTIAL SECURITIES 12-MAR-1999 08/01/94 26-APR-1999 INC 26-APR-1999 3,000,000.00 42333HLF7 B 3,000,000.00 42333HLF7 FC 2,000,000.00 542671CT7 B LONG TERM OPER-PIMCO HELLER FINL MTN #TR 00246 FLTG RT 04/28/2003 DD 04/27/99 CHASE SECURITIES, NEW YORK LONG TERM OPER-PIMCO HELLER FINL MTN #TR 00246 FLTG RT 04/28/2003 DD 04/27/99 CHASE SECURITIES, NEW YORK LONG TERM OPER-PIMCO LONG ISLAND LTG CO DEB 8.200% 03/15/2023 DD 03/28/93 BNY CAPITAL MARKETS INC, NEW Y LONG TERM OPER-PIMCO 2,000,000.00 LONG ISLAND LTG CO DEB 542671CT7 8.200% 03/15/2023 DD 03/28/93 IB 20-APR-1999 27-APR-1999 20-APR-1999 27-APR-1999 27-APR-1999 28-APR-1999 03-MAY-1999 28-APR-1999 03-MAY-1999 Page 10 LOCAL AMOUNT/ COST/ GAIN LOSS -517,974.91 -517,974.91 0.00 -119, 142. 44 119,142.44 0.00 -488.85 0.00 0.00 -119, 631.29 -119,631.29 0.00 -3,000,000.00 3,000,000.00 0.00 -3,000,000.00 -3,000,000.00 0.00 -2,151,250.00 2,151,250.00 0.00 -21,866.67 0.00 0.00 BASE AMOUNT/ COST/ INV GAIN LOSS/ CURR GAIN LOSS -517,974.91 0.00 0.00 0.00 -119,142.44 119,142.44 0.00 0.00 -488.85 0.00 0.00 0.00 -119,631.29 0.00 0.00 0.00 -3,000,000.00 3,000,000.00 0.00 0.00 -3,000,000.00 0.00 0.00 0.00 -2,151,250.00 2,151,250.00 0.00 0.00 -21,866.67 0.00 0.00 0.00 BASE: USO TMlOO LOCAL PRICE/ BASE PRICE/ BASE XRATE/ 100.281250 100.281250 l.000000000 100.281250 100.281250 1.000000000 100.281250 100.281250 1.000000000 100.281250 100.281250 1.000000000 100.000000 100.000000 1.000000000 100.000000 100.000000 l.000000000 107.562500 107.562500 1.000000000 107.562500 107.562500 l.000000000 OCSG000100 MELLON TRUST CS DOC-CONSOLIDATED POSTED TRANSACTIONS -LOCAL/BASE 01-APR-1999 -30-APR-1999 SHARES/PAR VALUE SECURITY ID/ DESCRIPTION/ TRANS CODE BROKER EFFECTIVE DATE/ SETTLE DATE/ COMPL DATE LONG TERM OPER-PIMCO 7,000,000.00 MORGAN STANLEY MTN ETR 00299 61745ENL1 FLTG RT 04/15/2002 DD 04/15/99 B MORGAN STANLEY & CO INC, NY LONG TERM OPER-PIMCO 7,000,000.00 MORGAN STANLEY MTN ETR 00299 61745ENL1 FLTG RT 04/15/2002 DD 04/15/99 FC MORGAN STANLEY & CO INC, NY LONG TERM OPER-PIMCO 1,000,000.00 POPULAR INC MTN #TR 00004 73317PAD1 6.200% 04/30/2001 DD 04/21/99 B MERRILL LYNCH PIERCE FENNER SM LONG TERM OPER-PIMCO -1,000,000.00 POPULAR INC MTN #TR 00004 73317PAD1 6.200% 04/30/2001 DD 04/21/99 BC MERRILL LYNCH PIERCE FENNER SM PAY UPS LONG TERM OPER-PIMCO 1,000,000.00 POPULAR INC MTN #TR 00004 73317PAD1 6.200% 04/30/2001 DD 04/21/99 B MERRILL LYNCH PIERCE FENNER SM LONG TERM OPER-PIMCO 1,000,000.00 POPULAR INC MTN #TR 00004 73317PAD1 6.200% 04/30/2001 DD 04/21/99 FC MERRILL LYNCH, FIX INCOME OPER U.S. DOLLAR FIXED INCOME SECURITIES LONG TERM OPER-PIMCO 14.00 FHLMC MULTICLASS CTF E3 A 3133TCE95 6.324% 08/15/2032 PU LONG TERM OPER-PIMCO 14.00 FHLMC MULTICLASS CTF E3 A 12-APR-1999 15-APR-1999 12-APR-1999 15-APR-1999 15-APR-1999 15-APR-1999 21-APR-1999 15-APR-1999 21-APR-1999 15-APR-1999 21-APR-1999 15-APR-1999 21-APR-1999 21-APR-1999 0l-APR-1999 0l-APR-1999 01-APR-1999 Page 11 LOCAL AMOUNT/ COST/ GAIN LOSS -6,996,129.00 6,996,129.00 0.00 -6,996,129.00 -6,996,129.00 0.00 -1,000,000.00 1,000,000.00 0.00 1,000,000.00 -1,000,000.00 0.00 -1,000,000.00 1,000,000.00 0.00 -1,000,000.00 -1,000,000.00 0.00 -14.00 14 .00 0.00 -14.00 BASE AMOUNT/ COST/ INV GAIN LOSS/ CURR GAIN LOSS -6,996,129.00 6,996,129.00 0.00 0.00 -6,996,129.00 0.00 0.00 0.00 -1,000,000.00 1,000,000.00 0.00 0.00 1,000,000.00 -1,000,000.00 0.00 0.00 -1,000,000.00 1,000,000.00 0.00 0.00 -1,000,000.00 0.00 0.00 0.00 -14.00 14.00 0.00 0.00 -14.00 BASE: USD TMl00 LOCAL PRICE/ BASE PRICE/ BASE XRATE/ 99.944700 99.944700 l.000000000 99.944700 99.944700 1.000000000 100.000000 100.000000 1.000000000 100.000000 100.000000 1.000000000 100.000000 100.000000 l.000000000 100.000000 100.000000 l.000000000 100.000000 100.000000 1.000000000 100.000000 OCSGOOOlOO MELLON TRUST CS DOC-CONSOLIDATED POSTED TRANSACTIONS -LOCAL/BASE 01-APR-1999 -30-APR-1999 SHARES/PAR VALUE EFFECTIVE DATE/ SETTLE DATE/ COMPL DATE SALES SECURITY ID/ DESCRIPTION/ TRANS CODE BROKER ---------------------- 3133TCE95 6.324% 08/15/2032 FC LONG TERM OPER-PIMCO ---·-------- Ol-APR-1999 30-APR-1999 11,352.33 FHLMC MULTICLASS CTF SER 1620Z Ol-APR-1999 3133Tl7A4 6.000% 11/15/2023 DD 11/01/93 01-APR-1999 PU LONG TERM OPER-PIMCO 11,352.33 3133Tl 7A4 FC FHLMC MULTICLASS CTF SER 1620Z 01-APR-1999 6.000% 11/15/2023 DD 11/01/93 Ol-APR-1999 LONG TERM OPER-PIMCO 13,100.00 US TREASURY INFLATION 9128272M3 3.375% 01/15/2007 DD PU LONG TERM OPER-PIMCO 13,100.00 US TREASURY INFLATION 9128272M3 3.375% 01/15/2007 DD FC LONG TERM OPER-PIMCO 9,030.00 US TREASURY INFLATION 9128273A8 3.625% 07/15/2002 DD PU LONG TERM OPER-PIMCO 9,030.00 US TREASURY INFLATION 9128273A8 3.625% 07/15/2002 DD FC 28-APR-1999 INDEX NT 15-JAN-1999 01/15/97 15-JAN-1999 INDEX NT 15-JAN-1999 01/15/97 15-JAN-1999 30-APR-1999 INDEX NT 15-JAN-1999 07/15/97 15-JAN-1999 INDEX NT 15-JAN-1999 07/15/97 15-JAN-1999 30-APR-1999 U.S . DOLLAR CASH & CASH EQUIVALENTS LIQUID OPER-PIMCO -100,000.00 FEDERAL HOME LN MTG CORP DISC 23-APR-1999 313396FD0 MAT 05/04/1999 26-APR-1999 S MERRILL LYNCH PIERCE FENNER SM----------- Page 12 LOCAL AMOUNT/ COST/ GAIN LOSS ------ -14. 00 0.00 -11,352.33 11,352.33 0.00 -11,352.33 -11,352.33 0.00 -13,100.00 13,100.00 0.00 -13,100.00 -13,100.00 0.00 -9,030.00 9,030.00 0.00 -9,030.00 -9,030.00 0.00 98,846.22 -98,846.22 0.00 BASE AMOUNT/ COST/ INV GAIN LOSS/ CURR GAIN LOSS 0.00 0.00 0.00 -11,352.33 11,352.33 0.00 0.00 -11,352.33 0.00 0.00 0.00 -13,100.00 13,100.00 0.00 0.00 -13,100.00 0.00 0.00 0.00 -9,030.00 9,030.00 0.00 0.00 -9,030.00 0.00 0.00 0.00 98,846.22 -98,846.22 0.00 0.00 BASE: USO TMlOO LOCAL PRICE/ BASE PRICE/ BASE XRATE/ ----------- 100.000000 1.000000000 100.000000 100.000000 1.000000000 100.000000 100.000000 l.000000000 100.000000 100.000000 1.000000000 100.000000 100.000000 1.000000000 100.000000 100.000000 1.000000000 100.000000 100.000000 1.000000000 98.846220 98.846220 1.000000000 OCSG000100 MELLON TRUST CS DOC-CONSOLIDATED POSTED TRANSACTIONS -LOCAL/BASE 0l-APR-1999 -30-APR-1999 SHARES/PAR VALUE SECURITY ID/ DESCRIPTION/ TRANS CODE BROKER EFFECTIVE DATE/ SETTLE DATE/ COMPL DATE LIQUID OPER-PIMCO -100,000.00 FEDERAL HOME LN MTG CORP DISC 313396FD0 MAT 05/04/1999 IS -100,000.00 313396FD0 FC LIQUID OPER-PIMCO FEDERAL HOME LN MTG CORP DISC MAT 05/04/1999 MERRILL LYNCH PIERCE FENNER SM LONG TERM OPER-PIMCO -1,291,976.83 DREYFUS TREASURY CASH MGMT 996085247 s LONG TERM OPER-PIMCO -1,291,976.83 DREYFUS TREASURY CASH MGMT 996085247 FC LONG TERM OPER-PIMCO -1,876,615.14 DREYFUS TREASURY CASH MGMT 996085247 s LONG TERM OPER-PIMCO -1,876,615.14 DREYFUS TREASURY CASH MGMT 996085247 FC LONG TERM OPER-PIMCO -107,639.70 DREYFUS TREASURY CASH MGMT 996085247 s LONG TERM OPER-PIMCO -107,639.70 DREYFUS TREASURY CASH MGMT 996085247 FC 23-APR-1999 26-APR-1999 23-APR-1999 26-APR-1999 26-APR-1999 05-APR-1999 05-APR-1999 05-APR-1999 05-APR-1999 05-APR-1999 21-APR-1999 21-APR-1999 21-APR-1999 21-APR-1999 21-APR-1999 23-APR-1999 23-APR-1999 23-APR-1999 23-APR-1999 23-APR-1999 Page 13 LOCAL AMOUNT/ COST/ GAIN LOSS 1,049.56 0.00 0.00 99,895.78 99,895.78 0.00 1,291,976.83 -1,291,976.83 0.00 1,291,976.83 1,291,976.83 0.00 1,876,615.14 -1,876,615.14 0.00 1,876,615.14 1,876,615.14 0.00 107,639.70 -107,639.70 0.00 107,639.70 107,639.70 0.00 BASE AMOUNT/ COST/ INV GAIN LOSS/ CURR GAIN LOSS 1,049.56 0.00 0.00 0.00 99,895.78 0.00 0.00 0.00 1,291,976.83 -1,291,976.83 0.00 0.00 1,291,976.83 0.00 0.00 0.00 1,876,615.14 -1,876,615.14 0.00 0.00 1,876,615.14 0.00 0.00 0.00 107,639.70 -107,639.70 0.00 0.00 107,639.70 0.00 0.00 BASE: USO TMl00 LOCAL PRICE/ BASE PRICE/ BASE XRATE/ 98.846220 98.846220 1.000000000 98.846220 98.846220 1.000000000 1.000000 1.000000 1.000000000 1.000000 1.000000 1.000000000 1.000000 1.000000 l.000000000 1.000000 1.000000 1.000000000 1.000000 1.000000 1.000000000 1.000000 1.000000 1.000000000 OCSGOOOlOO CS DOC-CONSOLIDATED SHARES/PAR VALUE SECURITY ID/ DESCRIPTION/ TRANS CODE BROKER LIQUID OPER-PIMCO -55,220.85 DREYFUS TREASURY CASH MGMT 996085247 s LIQUID OPER-PIMCO -55,220.85 DREYFUS TREASURY CASH MGMT 996085247 FC U.S. DOLLAR FIXED INCOME SECURITIES LONG TERM OPER-PIMCO -6,250,000.00 COMMIT TO PUR GNMA SF MTG 01N060643 6.000% 04/15/2029 S GOLDMAN SACHS & CO, NY LONG TERM OPER-PIMCO 6,250,000.00 COMMIT TO PUR GNMA SF MTG 01N060643 6.000% 04/15/2029 SC GOLDMAN SACHS & CO, NY -2,230,000.00 11F011644 s -2,000,000.00 11F011644 s LONG TERM OPER-PIMCO COMMIT TO PUR FNMA SF MTG VAR RT 04/25/2029 BEAR STEARNS & CO INC, NY LONG TERM OPER-PIMCO COMMIT TO PUR FNMA SF MTG VAR RT 04/25/2029 GOLDMAN SACHS & CO, NY LONG TERM OPER-PIMCO MELLON TRUST POSTED TRANSACTIONS -LOCAL/BASE 01-APR-1999 -30-APR-1999 EFFECTIVE DATE/ SETTLE DATE/ COMPL DATE 26-APR-1999 26-APR-1999 26-APR-1999 26-APR-1999 26-APR-1999 14-APR-1999 22-APR-1999 14-APR-1999 22-APR-1999 14-APR-1999 26-APR-1999 14-APR-1999 26-APR-1999 LOCAL AMOUNT/ COST/ GAIN LOSS 55,220.85 -55,220.85 0.00 55,220.85 55,220.85 0.00 6,102,294.92 -6,009,765.63 92,529.29 -6,102,294.92 6,009,765.63 -92,529.29 2,243,676.17 -2,236,639.26 7,036.91 2,013,515.63 -2,005,954.49 7,561.14 -90,846.95 FNMA POOL #0020105 31360YKS2 6.072% 11/01/2024 DD S GOLDMAN SACHS & CO, NY 14-APR-1999 02/01/85 26-APR-1999 91,460.88 -91,102.46 358.42 LONG TERM OPER-PIMCO -90,846.95 FNMA POOL #0020105 14-APR-1999 370.01 Page 14 BASE AMOUNT/ COST/ INV GAIN LOSS/ CURR GAIN LOSS 0.00 55,220.85 -55,220.85 0.00 0.00 55,220.85 0.00 0.00 0.00 6,102,294.92 -6,009,765.63 92,529.29 0.00 -6,102,294.92 6,009,765.63 -92,529.29 0.00 2,243,676.17 -2,236,639.26 7,036.91 0.00 2,013,515.63 -2,005,954.49 7,561.14 0.00 91,460.88 -91,102.46 358.42 0.00 370.01 BASE: USD TMlOO LOCAL PRICE/ BASE PRICE/ BASE XRATE/ 1.000000 1.000000 1.000000000 1.000000 1.000000 l.000000000 97.636718 97.636718 l.000000000 97.636718 97.636718 l.000000000 100. 613281 100.613281 1.000000000 100.675782 100.675782 1.000000000 100.675781 100.675781 1.000000000 100.675781 OCSGOOOlOO MELLON TRUST CS DOC-CONSOLIDATED POSTED TRANSACTIONS -LOCAL/BASE BASE: USO Ol-APR-1999 -30-APR-1999 TMlOO BASE AMOUNT/ SHARES/PAR VALUE EFFECTIVE DATE/ LOCAL AMOUNT/ COST/ LOCAL PRICE/ SECURITY ID/ DES CR I PT ION/ SETTLE DATE/ COST/ INV GAIN LOSS/ BASE PRICE/ TRANS CODE BROKER COMPL DATE GAIN LOSS CURR GAIN LOSS BASE XRATE/ ---------------------------~------------------------------------------------------------------------------------ 31360YKS2 6.072% 11/01/2024 DD 02/01/85 26-APR-1999 0.00 0.00 100.675781 IS ------~--0.00 0.00 l.000000000 0.00 LONG TERM OPER-PIMCO -90,846.95 FNMA POOL #0020105 14-APR-1999 91,830.89 91,830.89 100.675781 31360YKS2 6.072% 11/01/2024 DD 02/01/85 26-APR-1999 91,830.89 0.00 100.675781 FC GOLDMAN SACHS & CO, NY 26-APR-1999 0.00 0.00 1.000000000 0.00 LONG TERM OPER-PIMCO -9 9 , 96 5 . 3 9 FNMA POOL #0077648 14-APR-1999 100,640.94 100,640.94 100.675781 313624HZ4 5.941% 03/01/2018 DD 06/01/89 26-APR-1999 -100,246.54 -100,246.54 100.675781 s GOLDMAN SACHS & CO, NY -----------394.40 394.40 l.000000000 0.00 LONG TERM OPER-PIMCO -99, 965. 39 FNMA POOL #0077648 14-APR-1999 403.47 403.47 100.675781 313624HZ4 5.941% 03/01/2018 DD 06/01/89 26-APR-1999 0.00 0.00 100.675781 IS -----------0.00 0.00 l.000000000 0.00 LONG TERM OPER-PIMCO -99,965.39 FNMA POOL #0077648 14-APR-1999 101,044.41 101,044.41 100.675781 313624HZ4 5.941% 03/01/2018 DD 06/01/89 26-APR-1999 101,044.41 0.00 100.675781 FC GOLDMAN SACHS & CO, NY 27-APR-1999 0.00 0.00 1.000000000 0.00 LONG TERM OPER-PIMCO -514,435.31 FNMA POOL #0190012 14-APR-1999 517,911.77 517,911.77 100.675781 31368HAM5 VAR RT 11/01/2027 DD 09/01/93 26-APR-1999 -515,882.16 -515,882.16 100.675781 s GOLDMAN SACHS & CO, NY -----------2,029.61 2,029.61 1.000000000 0.00 LONG TERM OPER-PIMCO -514,435.31 FNMA POOL #0190012 14-APR-1999 2,092.75 2,092.75 100.675781 31368HAM5 VAR RT 11/01/2027 DD 09/01/93 26-APR-1999 0.00 0.00 100.675781 IS --~-------0.00 0.00 1.000000000 0.00 LONG TERM OPER-PIMCO -118,808.29 FNMA POOL #0292879 14-APR-1999 119,611.17 119,611.17 100.675781 31373GJY5 5.925% 07/01/2024 DD 08/01/94 26-APR-1999 -119, 142. 44 -119,142.44 100.675781 s GOLDMAN SACHS & CO, NY ---------·--468.73 468.73 1.000000000 0.00 LONG TERM OPER-PIMCO Page 15 OCSGOOOlOO MELLON TRUST CS DOC-CONSOLIDATED POSTED TRANSACTIONS -LOCAL/BASE 01-APR-1999 -30-APR-1999 SHARES/PAR VALUE SECURITY ID/ DESCRIPTION/ TRANS CODE BROKER EFFECTIVE DATE/ SETTLE DATE/ COMPL DATE -118,808.29 FNMA POOL #0292879 14-APR-1999 31373GJY5 5.925% 07/01/2024 DD 08/01/94 26-APR-1999 IS LONG TERM OPER-PIMCO -118,808.29 FNMA POOL #0292879 14-APR-1999 31373GJY5 5.925% 07/01/2024 DD 08/01/94 26-APR-1999 FC GOLDMAN SACHS & CO, NY 26-APR-1999 LONG TERM OPER-PIMCO -7,000,000.00 MORGAN ST DEAN WITTER SR NOTES 12-APR-1999 61745ELT6 FLTG RT 02/23/2000 DD 02/23/98 15-APR-1999 S HSBC SECS INC, NEW YORK ----------- LONG TERM OPER-PIMCO -7,000,000.00 MORGAN ST DEAN WITTER SR NOTES 12-APR-1999 61745ELT6 FLTG RT 02/23/2000 DD 02/23/98 15-APR-1999 IS LONG TERM OPER-PIMCO 7,000,000.00 MORGAN ST DEAN WITTER SR NOTES 12-APR-1999 61745ELT6 FLTG RT 02/23/2000 DD 02/23/98 15-APR-1999 SC HSBC SECS INC, NEW YORK ----------- LONG TERM OPER-PIMCO 7,000,000.00 MORGAN ST DEAN WITTER SR NOTES 12-APR-1999 61745ELT6 FLTG RT 02/23/2000 DD 02/23/98 15-APR-1999 ISC --------- LONG TERM OPER-PIMCO -7,000,000.00 MORGAN ST DEAN WITTER SR NOTES 12-APR-1999 61745ELT6 FLTG RT 02/23/2000 DD 02/23/98 15-APR-1999 S HSBC SECS INC, NEW YORK ----------- LONG TERM OPER-PIMCO -7,000,000.00 MORGAN ST DEAN WITTER SR NOTES 12-APR-1999 61745ELT6 FLTG RT 02/23/2000 DD 02/23/98 15-APR-1999 IS ----------- Page 16 LOCAL AMOUNT/ COST/ GAIN LOSS ------ 488. 85 0.00 0.00 120,100.02 120,100.02 0.00 7,005,537.00 -7,003,710.00 1,827.00 50,178.33 0.00 0.00 -7,005,537.00 7,003,710.00 -1,827.00 -50,178.33 0.00 0.00 7,005,537.00 -7,003,710.00 1,827.00 50,178.33 0.00 0.00 BASE AMOUNT/ COST/ INV GAIN LOSS/ CURR GAIN LOSS ------ 488. 85 0.00 0.00 0.00 120,100 .02 0.00 0.00 0.00 7,005,537.00 -7,003,710.00 1,827.00 0.00 50,178.33 0.00 0.00 0.00 -7,005,537.00 7,003,710.00 -1,827.00 0.00 -50,178.33 0.00 0.00 0.00 7,005,537.00 -7,003,710.00 1,827.00 0.00 50,178.33 0.00 0.00 0.00 BASE: USO TMlOO LOCAL PRICE/ BASE PRICE/ BASE XRATE/ ------------ 100.675781 100.675781 1.000000000 100.675781 100.675781 l.000000000 100.079100 100.079100 1.000000000 100.079100 100.079100 l.000000000 100.079100 100.079100 1.000000000 100.079100 100.079100 l.000000000 100.079100 100.079100 1.000000000 100.079100 100.079100 l.000000000 MELLON TRUST OCSGOOOlOO CSDOC-CONSOLIDATED POSTED TRANSACTIONS -LOCAL/BASE 01-APR-1999 -30-APR-1999 SHARES/PAR VALUE SECURITY ID/ DESCRIPTION/ TRANS CODE BROKER LONG TERM OPER-PIMCO EFFECTIVE DATE/ SETTLE DATE/ COMPL DATE -7,000,000.00 MORGAN ST DEAN WITTER SR NOTES 12-APR-1999 61745ELT6 FLTG RT 02/23/2000 DD 02/23/98 15-APR-1999 FC CHEMICAL BK/BROKER & DEALER, N 15-APR-1999 PRINCIPAL PAYMENTS U.S. DOLLAR FIXED INCOME SECURITIES LONG TERM OPER-PIMCO -152,584.82 CHASE MANHATTAN GRAN 95-B CL A 15-APR-1999 161614AE2 5.900% 11/15/2001 DD 11/15/95 15-APR-1999 PD ----------- LONG TERM OPER-PIMCO -152,584.82 CHASE MANHATTAN GRAN 95-B CL A 15-APR-1999 161614AE2 5.900% 11/15/2001 DD 11/15/95 15-APR-1999 FC 15-APR-1999 LONG TERM OPER-PIMCO -717,522.98 FHLMC GROUP #G5-0476 3128DDQ55 7.000% 02/01/2003 DD PD 01-APR-1999 02/01/98 01-APR-1999 LONG TERM OPER-PIMCO -717,522.98 FHLMC GROUP #G5-0476 3128DDQ55 7.000% 02/01/2003 DD FC 01-APR-1999 02/01/98 01-APR-1999 15-APR-1999 LONG TERM OPER-PIMCO 78,889.50 FHLMC MULTICLASS CTF E3 A 3133TCE95 6.324% 08/15/2032 PDC LONG TERM OPER-PIMCO -20.50 FHLMC MULTICLASS CTF E3 A 3133TCE95 6.324% 08/15/2032 PD LONG TERM OPER-PIMCO 20.50 FHLMC MULTICLASS CTF E3 A 3133TCE95 6.324% 08/15/2032 01-MAR-1999 Ol-MAR-1999 01-MAR-1999 01-MAR-1999 01-MAR-1999 01-MAR-1999 Page 17 LOCAL AMOUNT/ COST/ GAIN LOSS 7,055,715.33 7,055,715.33 0.00 152,584.82 -152,268.92 315.90 152,584.82 152,584.82 0.00 717,522.98 -728, 734. 28 -11,211.30 717,522.98 717,522.98 0.00 -78,889.50 78,975.79 86.29 20.50 -20.52 -0.02 -20.50 20.52 BASE AMOUNT/ COST/ INV GAIN LOSS/ CURR GAIN LOSS 7,055,715.33 0.00 0.00 0.00 152,584.82 -152,268.92 315.90 0.00 152,584.82 0.00 0.00 0.00 717,522.98 -728, 734. 28 -11,211.30 0.00 717,522.98 0.00 0.00 0.00 -78,889.50 78,975.79 86.29 0.00 20.50 -20.52 -0.02 0.00 -20.50 20.52 BASE: USO TMlOO LOCAL PRICE/ BASE PRICE/ BASE XRATE/ 100.079100 100.079100 1.000000000 100.000000 100.000000 1.000000000 100.000000 100.000000 1.000000000 100.000000 100.000000 1.000000000 100.000000 100.000000 1.000000000 100.000000 100.000000 1.000000000 100.000000 100.000000 1.000000000 100.000000 100.000000 OCSGOOOlOO MELLON TRUST CS DOC-CONSOLIDATED POSTED TRANSACTIONS -LOCAL/BASE Ol-APR-1999 -30-APR-1999 SHARES/PAR VALUE SECURITY ID/ DESCRIPTION/ TRANS CODE BROKER EFFECTIVE DATE/ SETTLE DATE/ COMPL DATE PDC LONG TERM OPER-PIMCO -78,903.50 FHLMC MULTICLASS CTF E3 A 3133TCE95 6.324% 08/15/2032 PD LONG TERM OPER-PIMCO -78,903.50 FHLMC MULTICLASS CTF E3 A 3133TCE95 6.324% 08/15/2032 FC LONG TERM OPER-PIMCO -83,351.50 FHLMC MULTICLASS CTF E3 A 3133TCE95 6.324% 08/15/2032 PD LONG TERM OPER-PIMCO -45,881.85 FHLMC MULTICL MTG P/C 1574 E 3133T02D5 5.900% 06/15/2017 PD LONG TERM OPER-PIMCO -45,881.85 FHLMC MULTICL MTG P/C 1574 E 3133T02D5 5.900% 06/15/2017 FC LONG TERM OPER-PIMCO 01-MAR-1999 01-MAR-1999 01-MAR-1999 01-MAR-1999 15-APR-1999 01-APR-1999 01-APR-1999 Ol-APR-1999 01-APR-1999 01-APR-1999 Ol-APR-1999 15-APR-1999 -20,272.89 FIFTH THIRD BK AUTO TR 96A CLA 15-APR-1999 31677EAA4 6.200% 09/01/2001 DD 03/15/96 15-APR-1999 PD ----------- LONG TERM OPER-PIMCO -20,272.89 31677EAA4 FC FIFTH THIRD BK AUTO TR 96A CLA 15-APR-1999 6.200% 09/01/2001 DD 03/15/96 15-APR-1999 LONG TERM OPER-PIMCO -94,714.95 GNMA II POOL #0080023 15-APR-1999 01-APR-1999 Page 18 LOCAL AMOUNT/ COST/ GAIN LOSS 0.02 78,903.50 -78,989.80 -86.30 78,903.50 78,903.50 0.00 83,351.50 -83,442.67 -91.17 45,881.85 -45,817.33 64.52 45,881.85 45,881.85 0.00 20,272.89 -20,272.89 0.00 20,272.89 20,272.89 0.00 94,714.95 BASE AMOUNT/ COST/ INV GAIN LOSS/ CURR GAIN LOSS 0.02 0.00 78,903.50 -78,989.80 -86.30 0.00 78,903.50 0.00 0.00 0.00 83,351.50 -83,442.67 -91.1 7 0.00 45,881.85 -45,817.33 64.52 0.00 45,881.85 0.00 0.00 0.00 20,272.89 -20,272.89 0.00 0.00 20,272.89 0.00 0.00 0.00 94,714.95 BASE: USO TMlOO LOCAL PRICE/ BASE PRICE/ BASE XRATE/ ----------- 1.000000000 100.000000 100.000000 1.000000000 100.000000 100.000000 1.000000000 100.000000 100.000000 1.000000000 100.000000 100.000000 l.000000000 100.000000 100.000000 1.000000000 100.000000 100.000000 1.000000000 100.000000 100.000000 l.000000000 100.000000 OCSGOOOlOO MELLON TRUST CS DOC-CONSOLIDATED POSTED TRANSACTIONS -LOCAL/BASE Ol-APR-1999 -30-APR-1999 SHARES/PAR VALUE SECURITY ID/ DESCRIPTION/ TRANS CODE BROKER EFFECTIVE DATE/ SETTLE DATE/ COMPL DATE 36225CAZ9 7.000% 12/20/2026 DD 12/01/96 01-APR-1999 PD ----------- LONG TERM OPER-PIMCO 94,714.95 GNMA II POOL #0080023 01-APR-1999 36225CAZ9 7.000% 12/20/2026 DD 12/01/96 01-APR-1999 PDC ---------- LONG TERM OPER-PIMCO -94,710.10 GNMA II POOL #0080023 01-APR-1999 36225CAZ9 7.000% 12/20/2026 DD 12 /01/96 01-APR-1999 PD ----------- LONG TERM OPER-PIMCO -94,710.10 GNMA II POOL #0080023 01-APR-1999 36225CAZ9 7.000% 12/20/2026 DD 12/01/96 01-APR-1999 FC 20-APR-1999 LONG TERM OPER-PIMCO -162,239.31 GNMA II POOL #080088M 36225CC20 6.875% 06/20/2027 DD PD LONG TERM OPER-PIMCO -162,239.31 GNMA II POOL #080088M 36225CC20 6.875% 06/20/2027 DD FC LONG TERM OPER-PIMCO 01-APR-1999 06/01/97 01-APR-1999 01-APR-1999 06/01/97 01-APR-1999 20-APR-1999 -340,961.39 STUDENT LN MKTG ASSN 1997-1 Al 25-APR-1999 78442GAK2 VAR RT 10/25/2005 DD 03/20/97 25-APR-1999 PD ----------- -340,961.39 78442GAK2 FC MATURITIES LONG TERM OPER-PIMCO STUDENT LN MKTG ASSN 1997-1 Al 25-APR-1999 VAR RT 10/25/2005 DD 03/20/97 25-APR-1999 26-APR-1999 Page 19 LOCAL AMOUNT/ COST/ GAIN LOSS ---------- -96,283.67 -1,568.72 -94,714.95 96,283.67 1,568.72 94,710.10 -96,278.74 -1,568.64 94,710.10 94,710.10 0.00 162,239.31 -165, 788. 30 -3,548.99 162,239.31 162,239.31 0.00 340,961.39 -337,085.62 3,875.77 340,961.39 340,961 .39 0 .00 BASE AMOUNT/ COST/ INV GAIN LOSS/ CURR GAIN LOSS ---------- -96,283.67 -1,568.72 0.00 -94,714.95 96,283.67 1,568.72 0.00 94,710.10 -96,278.74 -1,568.64 0.00 94,710.10 0.00 0.00 0.00 162,239.31 -165,788.30 -3,548.99 0.00 162,239.31 0.00 0.00 0.00 340,961.39 -337,085.62 3,875.77 0.00 340,961.39 0.00 0.00 0.00 BASE: USD TMlOO LOCAL PRICE/ BASE PRICE/ BASE XRATE/ ----------- 100.000000 1.000000000 100.000000 100.000000 1.000000000 100.000000 100.000000 1.000000000 100.000000 100.000000 1.000000000 100.000000 100.000000 1.000000000 100.000000 100.000000 1.000000000 100.000000 100.000000 1.000000000 100.000000 100.000000 l.000000000 OCSGOOOlOO MELLON TRUST CS DOC-CONSOLIDATED POSTED TRANSACTIONS -LOCAL/BASE Ol-APR-1999 -30-APR-1999 SHARES/PAR VALUE SECURITY ID/ DESCRIPTION/ TRANS CODE BROKER -----~---------------------- U.S . DOLLAR CASH & CASH EQUIVALENTS LIQUID OPER-PIMCO -900,000.00 AMERICAN EX CR CP DISC 02581SR78 04/07/1999 MT BOND MATURITY LIQUID OPER-PIMCO -900,000.00 FORD MTR CR CO DISC 34539URM6 04/21/1999 MT BOND MATURITY LONG TERM OPER-PIMCO -7,200,000.00 FORD MTR CR CO DISC 34539URP9 04/23/1999 MT BOND MATURITY U.S. DOLLAR FIXED INCOME SECURITIES LONG TERM OPER-PIMCO EFFECTIVE DATE/ SETTLE DATE/ COMPL DATE 07-APR-1999 07-APR-1999 07-APR-1999 21-APR-1999 21-APR-1999 21-APR-1999 23-APR-1999 23-APR-1999 23-APR-1999 -3,000,000.00 HELLER FINL INC SR NT 27-APR-1999 423328AZ6 FLTG RT 04/27/1999 DD 04/27/94 27-APR-1999 MT BOND MATURITY 27-APR-1999 INTEREST U.S. DOLLAR LIQUID OPER-PIMCO 900,000.00 AMERICAN EX CR CP DISC 02581SR78 04/07/1999 IT LONG TERM OPER-PIMCO 2,000,000.00 BEAR STEARNS COS INC 073902AH1 6.750% 04/15/2003 IT LONG TERM OPER-PIMCO 07-APR-1999 07-APR-1999 07-APR-1999 15-APR-1999 15-APR-1999 15-APR-1999 152,584.82 CHASE MANHATTAN GRAN 95-B CL A 15-APR-1999 161614AE2 5.900% 11/15/2001 DD 11/15/95 15-APR-1999 IT 15-APR-1999 LONG TERM OPER-PIMCO Page 20 LOCAL AMOUNT/ COST/ GAIN LOSS 889,857.00 -889,857.00 0.00 889,962.00 -889,962.00 0.00 7,166,120.00 -7,166,120.00 0.00 3,000,000.00 -2,999,310.00 690.00 10,143.00 10,143.00 0.00 67,500.00 67,500.00 0.00 6,375.28 6,375.28 0.00 BASE AMOUNT/ COST/ INV GAIN LOSS/ CURR GAIN LOSS 889,857.00 -889,857.00 0.00 0.00 889,962.00 -889,962.00 0.00 0.00 7,166,120.00 -7,166,120.00 0.00 0.00 3,000,000.00 -2,999,310.00 690.00 0.00 10,143.00 0.00 0.00 0.00 67,500.00 0.00 0.00 0.00 6,375.28 0.00 0.00 0.00 BASE: USO TMlOO LOCAL PRICE/ BASE PRICE/ BASE XRATE/ 100.000000 100.000000 1.000000000 100.000000 100.000000 1.000000000 100.000000 100.000000 l.000000000 100.000000 100.000000 1.000000000 0.000000 0.000000 1.000000000 0.000000 0.000000 l.000000000 0.000000 0.000000 l.000000000 OCSGOOOlOO MELLON TRUST CS DOC-CONSOLIDATED POSTED TRANSACTIONS -LOCAL/BASE Ol-APR-1999 -30-APR-1999 SHARES/PAR VALUE SECURITY ID/ DESCRIPTION/ TRANS CODE BROKER EFFECTIVE DATE/ SETTLE DATE/ COMPL DATE 3,500,000.00 CHRYSLER FIN MTN 21-APR-1999 17120QE80 FLTG RT 08/08/2002 DD 04/08/98 15-APR-1999 IT 21-APR-1999 LIQUID OPER-PIMCO 500,000.00 CHRYSLER FINL CO LLC 171205AT4 13.250% 10/15/1999 IT 15-APR-1999 15-APR-1999 15-APR-1999 LONG TERM OPER-PIMCO 717,522.98 FHLMC GROUP #G5-0476 3128DDQ55 7.000% 02/01/2003 DD IT 15-APR-1999 02/01/98 01-APR-1999 15-APR-1999 LONG TERM OPER-PIMCO 78,903.50 FHLMC MULTICLASS CTF E3 A 3133TCE95 6.324% 08/15/2032 IT LONG TERM OPER-PIMCO 14.00 FHLMC MULTICLASS CTF E3 A 3133TCE95 6.324% 08/15/2032 IT LONG TERM OPER-PIMCO 2,000,000.00 FHLMC MULTICLASS CTF Tll A6 3133TDPV2 6.500% 09/25/2018 IT LONG TERM OPER-PIMCO 45,881.85 FHLMC MULTICL MTG P/C 1574 E 3133T02D5 5.900% 06/15/2017 IT LONG TERM OPER-PIMCO 15-APR-1999 Ol-MAR-1999 15-APR-1999 30-APR-1999 01-MAR-1999 30-APR-1999 26-APR-1999 25-JAN-1999 26-APR-1999 15-APR-1999 Ol-APR-1999 15-APR-1999 11,352.33 3133Tl7A4 IT FHLMC MULTICLASS CTF SER 1620Z 28-APR-1999 6.000% 11/15/2023 DD 11/01/93 Ol-APR-1999 28-APR-1999 Page 21 LOCAL AMOUNT/ COST/ GAIN LOSS --------- 17,277.61 17,277.61 0.00 33,125.00 33,125.00 0.00 71,826.89 71,826.89 0.00 20,247.07 20,247.07 0.00 14.00 14.00 0.00 10,833.33 10,833.33 0.00 4,828.79 4,828.79 0.00 11,352.33 11,352.33 0.00 BASE AMOUNT/ COST/ INV GAIN LOSS/ CURR GAIN LOSS --------- 17,277.61 0.00 0.00 0.00 33,125.00 0.00 0.00 0.00 71,826.89 0.00 0.00 0.00 20,247.07 0.00 0.00 0.00 14.00 0 .00 0.00 0.00 10,833.33 0.00 0.00 0.00 4,828.79 0.00 0.00 0.00 11,352.33 0.00 0.00 0.00 BASE: USD TMlOO LOCAL PRICE/ BASE PRICE/ BASE XRATE/ ----------- 0.000000 0.000000 1.000000000 0.000000 0.000000 l.000000000 0.000000 0.000000 1.000000000 0.000000 0.000000 1.000000000 0.000000 0.000000 1.000000000 0.000000 0.000000 1.000000000 0.000000 0.000000 1.000000000 0.000000 0.000000 l.000000000 OCSG000100 MELLON TRUST CS DOC-CONSOLIDATED POSTED TRANSACTIONS -LOCAL/BASE 01-APR-1999 -30-APR-1999 SHARES/PAR VALUE SECURITY ID/ DESCRIPTION/ TRANS CODE BROKER EFFECTIVE DATE/ SETTLE DATE/ COMPL DATE LONG TERM OPER-PIMCO 8,000,000.00 FEDERAL NATL MTG ASSN MTN 19-APR-1999 31364CBD9 6.625% 04/18/2001 DD 04/18/96 18-APR-1999 IT 19-APR-1999 LONG TERM OPER-PIMCO 20,272.89 FIFTH THIRD BK AUTO TR 96A CLA 15-APR-1999 31677EAA4 6.200% 09/01/2001 DD 03/15/96 15-APR-1999 IT 15-APR-1999 LIQUID OPER-PIMCO 900,000.00 FORD MTR CR CO DISC 34539URM6 04/21/1999 IT LONG TERM OPER-PIMCO 7,200,000.00 FORD MTR CR CO DISC 34539URP9 04/23/1999 IT LONG TERM OPER-PIMCO 94,710.10 GNMA II POOL #0080023 21-APR-1999 21-APR-1999 21-APR-1999 23-APR-1999 23-APR-1999 23-APR-1999 20-APR-1999 36225CAZ9 7.000% 12/20/2026 DD 12/01/96 01-APR-1999 IT 20-APR-1999 LONG TERM OPER-PIMCO 162,239.31 GNMA II POOL #080088M 20-APR-1999 36225CC20 6.875% 06/20/2027 DD 06/01/97 01-APR-1999 IT 20-APR-1999 LIQUID OPER-PIMCO 900,000.00 GENERAL MTRS ACCEP CORP MTN 01-APR-1999 37042M7G2 6.250% 01/11/2000 DD 01/11/94 01-APR-1999 IT Ol-APR-1999 LONG TERM OPER-PIMCO 3,000,000.00 GMAC MED TERM NTS 01-APR-1999 37042RKQ4 8.625% 1/10/2000 DD 1/10/95 01-APR-1999 IT 01-APR-1999 Page 22 LOCAL AMOUNT/ COST/ GAIN LOSS 265,000.00 265,000.00 0.00 1,003.12 1,003.12 0.00 10,038.00 10,038.00 0.00 33,880.00 33,880.00 0.00 10,204.47 10,204.47 0.00 16,571.52 16,571.52 0.00 28,125.00 28,125.00 0.00 129,375.00 129,375.00 0.00 BASE AMOUNT/ COST/ INV GAIN LOSS/ CURR GAIN LOSS 265,000.00 0.00 0.00 0.00 1,003.12 0.00 0.00 0.00 10,038.00 0.00 0.00 0.00 33,880.00 0.00 0.00 0.00 10,204.47 0.00 0.00 0.00 16,571.52 0.00 0.00 0.00 28,125.00 0.00 0.00 0.00 129,375.00 0.00 0.00 0.00 BASE: USO TMlOO LOCAL PRICE/ BASE PRICE/ BASE XRATE/ 0.000000 0.000000 1.000000000 0.000000 0.000000 1.000000000 0.000000 0.000000 1.000000000 0.000000 0.000000 1.000000000 0.000000 0.000000 1.000000000 0.000000 0.000000 1.000000000 0.000000 0.000000 1.000000000 0.000000 0.000000 1.000000000 OCSGOOOlOO MELLON TRUST CS DOC-CONSOLIDATED POSTED TRANSACTIONS -LOCAL/BASE 01-APR-1999 -30-APR-1999· SHARES/PAR VALUE SECURITY ID/ DESCRIPTION/ TRANS CODE BROKER EFFECTIVE DATE/ SETTLE DATE/ COMPL DATE LONG TERM OPER-PIMCO 1,000,000.00 GENERAL MTRS ACCEP CORP MTN 37042WGK1 6.700% 04/30/2001 DD 04/25/96 IT LONG TERM OPER-PIMCO 01-APR-1999 01-APR-1999 01-APR-1999 3,000,000.00 HELLER FINL INC SR NT 27-APR-1999 423328AZ6 FLTG RT 04/27/1999 DD 04/27/94 27-APR-1999 IT 27-APR-1999 LONG TERM OPER-PIMCO 2,500,000.00 MERRILL LYNCH NOTES 59018SXP4 6.375% 10/01/2001 DD 10/03/97 IT 01-APR-1999 01-APR-1999 01-APR-1999 LONG TERM OPER-PIMCO 6,000,000.00 NATIONSBANK CHARLOTTE NC MTN 63858JDE6 5.850% 04/07/2000 DD 04/07/98 IT 07-APR-1999 07-APR-1999 07-APR-1999 LONG TERM OPER-PIMCO 340,961.39 STUDENT LN MKTG ASSN 1997-1 Al 26-APR-1999 78442GAK2 VAR RT 10/25/2005 DD 03/20/97 25-APR-1999 IT 26-APR-1999 LONG TERM OPER-PIMCO 13,100.00 US TREASURY INFLATION INDEX NT 30-APR-1999 9128272M3 3.375% 01/15/2007 DD 01/15/97 15-JAN-1999 IT 30-APR-1999 LONG TERM OPER-PIMCO 8,500,000.00 US TREASURY NOTES 9128272SO 06.625% 04/30/2002 DD IT LONG TERM OPER-PIMCO 9,030.00 US TREASURY INFLATION 9128273A8 3.625% 07/15/2002 DD IT 30-APR-1999 04/30/97 30-APR-1999 30-APR-1999 INDEX NT 30-APR-1999 07/15/97 15-JAN-1999 30-APR-1999 Page 23 LOCAL AMOUNT/ COST/ GAIN LOSS 33,500.00 33,500.00 0.00 39,126.60 39,126.60 0.00 79,687.50 79,687.50 0.00 175,500.00 175,500.00 0.00 54,269.57 54,269.57 0.00 13,100.00 13,100.00 0.00 281,562.50 281,562.50 0.00 9,030.00 9,030.00 0.00 BASE AMOUNT/ COST/ INV GAIN LOSS/ CURR GAIN LOSS 33,500.00 0.00 0.00 0.00 39,126.60 0.00 0.00 0.00 79,687.50 0.00 0.00 0.00 175,500.00 0.00 0.00 0.00 54,269.57 0.00 0.00 0.00 13,100.00 0.00 0.00 0.00 281,562.50 0.00 0.00 0.00 9,030.00 0.00 0.00 BASE: USO TMlOO LOCAL PRICE/ BASE PRICE/ BASE XRATE/ 0.000000 0.000000 1.000000000 0.000000 0.000000 1.000000000 0.000000 0.000000 1.000000000 0.000000 0.000000 1.000000000 0.000000 0.000000 1.000000000 0.000000 0.000000 1.000000000 0.000000 0.000000 1.000000000 0.000000 0.000000 1.000000000 OCSG000l00 CS DOC-CONSOLIDATED SHARES/PAR VALUE SECURITY ID/ DESCRIPTION/ TRANS CODE BROKER 0.00 990000PJ4 CD LONG TERM OPER-PIMCO SHORT TERM FDS INT ADJ NET OF OVERNIGHT INTEREST AND OVERDRAFT EXPENSES LIQUID OPER-PIMCO 0.00 DREYFUS TREASURY CASH MGMT 996085247 IT LONG TERM OPER-PIMCO 0.00 DREYFUS TREASURY CASH MGMT 996085247 IT MELLON TRUST POSTED TRANSACTIONS -LOCAL/BASE 01-APR-1999 -30-APR-1999 EFFECTIVE DATE/ SETTLE DATE/ COMPL DATE 30-APR-1999 30-APR-1999 30-APR-1999 0l-APR-1999 01-APR-1999 01-APR-1999 0l-APR-1999 0l-APR-1999 0l-APR-1999 Page 24 LOCAL AMOUNT/ COST/ GAIN LOSS 10.00 10.00 0.00 356.21 356.21 0.00 1,793.52 1,793.52 0.00 BASE AMOUNT/ COST/ INV GAIN LOSS/ CURR GAIN LOSS 0.00 10.00 0.00 0.00 0.00 356.21 0.00 0.00 0.00 1,793.52 0.00 0.00 0.00 BASE: USD TMl00 LOCAL PRICE/ BASE PRICE/ BASE XRATE/ 0.000000 0.000000 1.000000000 0.000000 0.000000 1.000000000 0.000000 0.000000 1.000000000 . ---- STATE OF CALIFORNIA) ) SS. COUNTY OF ORANGE ) Pursuant to California Government Code Section 54954.2, I hereby certify that the Notice and the Agenda for the Finance, Administration, and Human Resources Committee meeting to be held on '-1,J ktr / .Z , 199 '1, was duly posted for public inspection in the main lobby of the District's offices on ~ /4;, 199/. IN WITNESS WHEREOF, I have hereunto set my hand this {f .$ day of H:\ WP .DT A \ADMIN\BS\FORMS\AGENDA CERTIFICATION-FAHR COMMITTEE.DOC ' . ' FAHR COMMITTEE AGENDA REPORT Orange County Sanitation District FROM: Gary Streed, Director of Finance M~eting Date To Bd. of Dir. 5/12/99 5/26/99 Item Number SUBJECT: CONNECTION FEE CALCULATION METHODS AND POLICIES (FAHR99-35) GENERAL MANAGER'S RECOMMENDATION Adopt Ordinance No. OCSD-09, an Ordinance of the Board of Directors of Orange County Sanitation District, Providing for a Comprehensive Capital Facilities Connection Charge Program. SUMMARY It is recommended that a new comprehensive connection fee program and ordinance which contains the following elements be adopted: 1. Base fees will be determined by type of development and are calculated per 1 , 000 square feet of building for non-residential development and per unit for residential development. 2. Three categories of Commercial connection fees will be developed: low demand, average demand and high demand. 3. Significant Industrial Users (Class I Permittees) will be charged demand- based connection fees as a part of their on-going annual use charges, rather than only as a one-time up front charge. These fees will include an interest component. 4. Residential fees will be tiered based upon number of bedrooms for single- family residential (SFR) and multi-family residential (MFR) development. 5. Connection fees will continue to be collected by local sewering agencies at the time the building permit is issued. 6. Credit for demolished structures will be granted only when the developer can prove that prior connection fees were paid, and credit will be provided only for the amount actually paid. 7. Connection fees will continue to not be charged for local agency facilities such as schools and libraries. Connection fees will continue to be charged for state and federal facilities. Connection fees will begin to be charged for county and regional facilities that serve more than one OCSD Revenue Area. H:lwp.dta\agenda\FAHR\Fahr99199ar\FAHR00-35.dcc Revised: 8/20/98 Page 1 8. The fee changes will be phased over the next 24 months. Capital facilities connection fees, or connection fees for short, have been one-time fees collected in order to cover the costs of providing sewerage facilities to serve the property. Today, connection fees are collected for the District by member cities and sanitary districts when building permits are issued. These fees were revisited as a part of the Rate Advisory Committee's (RAC) work for the Strategic Plan. The discussion and recommendations are in the "Determination of Financial Rates and Charges" report prepared by the Strategic Plan Consultants and previously distributed to the Djrectors. The main connection fee discussion points can be found on pages 1-3, 4-7, 9-7 and A-18. The enclosed staff report contains supplemental information. The RAC did not develop a specific connection fee calculation method, but did give staff guidelines in several areas. The enclosed revised Staff Report summarizes the alternatives, the evaluations, and the recommendations. At the February FAHR Committee meeting, staff presented a proposal to change the calculation method for connection fees, to change what costs were included in connection fees, and to base the connection fees upon the new Strategic Plan capital improvement program. The Committee requested a workshop in order to devote more time to reviewing the changes. The workshop was conducted April 10, 1999. All of the Directors were invited to attend the workshop for information and feedback. Staff and consultants presented the background, the recommended changes and the alternatives. Connection fees are adopted by Ordinance. Staff recommends the enclosed draft Ordinance be presented at the May 1999 Board meeting for a first reading. The second reading would be at the June Board meeting and the Ordinance could become effective as early as August 1, 1999. However, staff is also recommending a phase in of the increased fees to allow the development community time to prepare. Schedules are attached to aid in the discussion of implementation. PROJECT/CONTRACT COST SUMMARY N/A BUDGET IMPACT [8J This item has been budgeted. D This item has been budgeted, but there are insufficient funds. D This item has not been budgeted. D Not applicable (information item) H:lwp dta\agenda\FAHR\Fahl99\99ai\f'AHR99-35.doc Revised: 8/20/98 Page2 ADDITIONAL INFORMATION See enclosed Staff Report. ALTERNATIVES See enclosed Staff Report. CEQA FINDINGS NIA ATTACHMENTS 1. Staff Report 2. Implementation Alternative Schedules GGS:lc H:lwp.dlalagenda\FAHR\Fahr99199ar\FAHR99-35.doc Revised:8120198 Page 3 (Revised) May 3, 1999 STAFF REPORT Connection Fee Alternatives Capital facilities connection fees, or connection fees for short, have been one-time fees collected in order to cover the costs of providing sewerage facilities to serve the property. Today, connection fees are collected for the District by member cities and sanitary districts when building permits are issued. These fees were revisited as a part of the Rate Advisory Committee's (RAC) work for the Strategic Plan. The RAC did not develop a specific connection fee calculation method, but did give staff guidelines in several areas: • The existing calculation method should be changed. • There should be different residential fees to reflect different impacts. • The economic and social benefits of commercial/industrial development should be considered. • Collection methods besides "one-time, up-front" should be considered. • Costs of facilities related to wet-weather flows should be shared on the basis of wet- weather flow increases. • New users should pay for new capacity. Existing Program The existing method of calculation was developed as a part of the 1989 Master Plan, also called the 2020 VISION Master Plan. Future users are charged their share of all facilities, both existing and future, that will be in place in 2020 as if all facilities and all users came into the system on that date. This calculation method is sometimes called the "capital investment equalization method". If the value of all the facilities is projected to be $2,360,000,000, and the total number of users is projected to be 1,000,000, then the connection fee is $2,360. One of the most significant assumptions in 1989 was that the non-residential use factor per 1,000 square feet of building is 20% of single-family residential use. This results in a non-residential connection fee of $472 ($2,350 x 20%) per 1,000 square feet in this example. This calculation method can also be described as "all users, past, present and future, pay the same." RAC Program The RAC recommended that capital costs be categorized and that different user types pay for different categories of costs. Cost categories were developed for existing net assets, additional dry weather capacity, additional wet weather capacity, improved Connection Fee Alternatives Page 2 of 9 May 3, 1999 treatment and rehabilitation/reconstruction. The following table explains the allocation of these cost categories to user groups. Cost Category • Existing Assets Less Debt • Dry Weather Capacity • Wet Weather Capacity • Improved Treatment • Rehab/Reconstruction Allocation of Costs • Current users have paid for support facilities, etc; all new users will also pay a share • All new users will pay • New residential and new non- residential users will pay based upon comparative length of sewers within each group • Current and new users will pay • Current and new users will pay By leaving the existing assets cost category out of this calculation, this allocation method can be changed to one best described as, "all users from now on pay the same," and/or as, "future users will only pay for future capacity." Significant Changes Several things have changed since the 1989 adoption of the "2020 VISION Master Plan" that impact the calculation of connection fees. The Strategic Plan proposed a capital improvement plan through 2020 that is approximately equal to the "2020 Vision" projects, but there are 10 fewer years in the planning horizon. The planned daily flow for a single-family residence, or an equivalent dwelling unit, has been reduced, based upon experience and metering, from 399 gallons to 260 gallons. The total average daily flow into the plants at 2020 has been reduced from 399,000,000 to 352,000,000 gallons. The total number of equivalent dwelling units that are projected to be connected in 2020 has therefore increased from 1,000,000 to 1,354,000. However, the change that has the most impact on non-residential connection fees, is that the average daily flow per 1,000 square feet has been calculated at 150 gallons per day, rather than the 80 gallons per day that had been assumed historically. This change alone would result in a near doubling of the non-residential connection fee. Discussion Several methods of implementing the RAC recommendations were evaluated and the resulting rates were calculated. User Fee Basis -With the intention of developing consistency between the flow and strength based user fee program and connection fees, fees were calculated based upon the flow, BOD and SS assumptions used to determine user fees. (BOD, biochemical oxygen demand, and SS, microscopic suspended solids, are common measurements of wastewater strength.) Estimated flows and strength were the result of surveys and Connection Fee Alternatives Page 3 of 9 May 3, 1999 studies performed by the Strategic Plan consultants. This resulted in 30 separate connection fees ranging from $79/1,000 sq. ft. for a drive-in theater, to $6,828/1,000 sq. ft. for a conventional car wash. High connection fees per 1,000 square feet for restaurants have been mitigated by some agencies by providing incentives. Restaurants that install grease traps and do not install garbage disposals have had the BOD and SS assumptions reduced by 50%. These incentives are certainly worth pursuing, and will be a part of future user fee discussions, where they may be more appropriate. To be effective, such a program must include some sort of monitoring or inspection by staff or by another agency. The highest rate calculated is for conventional car washes. A 25% reduction in assumed flow can be granted for a car wash that installs a water recycling system. This incentive is already a part of the user fee structure and program adopted last year. The general use of the property would need to be known at the time building permits are issued, in order to determine most accurately which of the 30 fees to use. The range of fees from lowest to highest is 8,500%, and the maximum increase from current fees is 1,330%. Some would consider these percentages excessive. This option most closely matches the RAC presentation. Summary User Fee Basis -This was a two-step process. Connection fees were first computed per 1,000 sq. ft. of development as above. Those uses with reasonably close fees were then combined and consolidated. The number of different fees was reduced from 30 to 15, and the range was from $80/1,000 sq. fl. to $6,800/1,000 sq. fl. This option is very close to the user fee basis for an individual property and should be easier to administer but still results in very significant fee increases. Average Use Basis -Because city staff collect connection fees on our behalf and because the actual use of the property is often unknown, alternative connection fee calculation methods were evaluated. Since one of our goals was to develop a fee that reflected use, we considered whether the size of the connection, or the lateral, was a good indicator. While the exact use, or the strength of use, could not be determined, certainly the maximum use could. We discovered that there are generally only two sizes of commercial laterals, that they are determined principally by ease of cleaning, and that they are established by building codes. While these facts eliminated lateral size as a fee factor, they also supported a minimum number of fees because the maximum use from most developments would be approximately the same. Potential maximum use is the basis for our current connection fee structure and results in the same fee as average use. The average fee would be $654 per 1,000 sq. ft. of building interior. Variances between user fee based and average use based fees range from $575 below average to $6,174 above average per 1,000 square feet. Master Plan Land Use Basis -The master plan or strategic plan process predicts future flows and future capacity requirements based upon land use. Cities and counties adopt land use plans for future developments within their spheres of influence. Each of these land uses is assigned a flow coefficient per acre. Following are the consultants' Connection Fee Alternatives Page 4 of 9 May 3, 1999 flow assumptions for the current Strategic Plan effort and the number of acres in each land use category at the theoretical service area build-out in 2118: Land Use Category Gallons Per Acre/Day Total Acres 1. Estate Residential 727 27,238 2. Low Density Residential 1,488 76,345 3. Medium Density Residential 3,451 19,909 4. Medium High Density Residential 7,516 3,754 5. Commercial/Office 2,262 19,851 6. Industrial 3,167 18,886 7. High Density lnd./Comm. 5,429 5,952 8. Institutional 2,715 9,617 Advantages of the land use method are: 1 ) the fee is based on the same flow projections as the Strategic Plan; 2) the actual property use does not need to be known when the connection permit is issued; 3) it is easy to administer; 4) the fee does vary to reflect different flow demands; 5) adjusting the connection fee for user BOD and SS differences may be of little real benefit as the actual influent concentrations at the headworks approximate residential strength and facilities are built to treat the average influent strength. A disadvantage of this method is that the fee is based upon average flow generated for acreage and does not change for the size of the building, or the actual type of use, so long as the land use category does not change. In total, this may be a minor issue, but connection fee variances for individual projects are significant. Fees resulting from the use of acreage and master planning flow coefficients are: Land Use Category Estate Residential Low density Residential Medium Density Residential Medium High Density Residential High Density Residential Commercial/Office Industrial Institutional High Density lnd./Comm. Proposed Basis Fee Per Acre $16,978 23,767 20,371 40,734 Fee Per Unit $3,187 1,814 1,754 1,754 1,647 Staff and consultants have reviewed and reconsidered each of the alternatives in the light of the comments by the FAHR Committee, the City of Anaheim and District staff. A Connection Fee Alternatives Page 5 of 9 May 3, 1999 proposal was developed which takes the best from the various other alternatives and retains consistency with the current calculation method. The base fee is proposed to continue to be calculated on the "capital investment equalization method." Total capital costs of 2020 will be allocated to all users at 2020 to calculate the base fee. Differences in non-residential use per 1,000 square feet will be accommodated in two ways: Rates will be adopted for very low uses such as warehouses and parking structures; and rates will be adopted for very high uses, such as restaurants and car washes. Significant Industrial/Commercial Users, those requiring Class I permits from our Source Control Division, will pay an ongoing capital charge on their quarterly invoices for their individual demand that exceeds the average allowed in the base connection fee. This proposal is easy for the local agencies to administer, recognizes that not all users place the same demand on the system, recognizes that the exact use of a property is often unknown when building permits are issued, acknowledges that most users have similar demands, and reduces the significant up-front charges faced by a large user. Reduced Up-Front Payments Connection fees based upon flow and strength can be significant for certain users. The fee for a food processing plant that relocated to Orange County recently could have been $1.4 million based upon a projected ultimate flow of 150,000 gallons a day a combined 1,700 pounds of BOD and SS. Because of the amount of this up-front fee, input from our member city and other legislators and the pending Strategic Plan, this fee was put aside by the Directors. One of the concerns expressed was that collecting such a significant fee in a lump sum before the business was producing income placed a considerable cash flow burden on a new business. Another issue was what happened to the fees if the business failed or moved, since the business is not allowed to sell or move their right to use the system. A third concern dealt with the accuracy of the initial flow projections, subsequent increases and decreases in flows and the computation of connection fees in those instances. The current proposal is for these Significant Industrial/Commercial Users, SIUs or Class I Permitees, to pay a base connection fee per 1,000 square feet of building. This base fee will allow them to discharge an average quantity and strength of wastewater. For use above this, a fee per gallon or per pound would be added to their quarterly invoice for use, which will continue to be based upon actual flow and strength. In this way, accurate impacts and uses are established as the basis for the connection fee, cash flow matches production for the business, up-front costs are minimized, fees stop if the business moves or quits and increased use generates additional "connection fees." In order to compensate the District for the lost up-front funds and to provide for the "time value of money," an interest component will be included in the rates per gallon and pound. Connection Fee Alternatives Page 6 of 9 May 3, 1999 Tiered Residential Fees The RAC recommended that residential connection fees be tiered to reflect differing demands on the sewerage system. One of the best ways to predict sewer use is by the number of bedrooms because that correlates to the number of potential occupants. Additionally, adding a bedroom requires a building permit and would trigger additional connection fees. Consultants and staff analyzed census data and Assessors Office data to determine the mix of bedrooms in the single-family residential (SFR) and multi- family residential (MFR) service area to determine the standard bedroom size for each, as well as the number of existing and projected units. The result of this analysis is shown below assuming that the MFR average daily flow is 70% of the SFR flow, the same assumption used in determining user fees. No. of Bedrooms 0 1 2 3 4 5 SFR Ratio .615 .808 1.000 1.192 1.385 MFR Ratio .327 .508 .700 .890 1.084 These ratios can be applied to any of the fee calculation options, and any residential land use category. Additional Alternative For the past several years, connection fees have been collected for the District by the city or sanitary district. Generally, the permit is issued by the Building Department and the local agency retains 5% of the connection fee. When a non-residential project is started before the actual tenant mix, or type of tenants, is known, such as in the case of a strip mall , an industrial park or a shopping center, two of our alternatives cannot be used. Additionally, if there is a significant change in the type of use after the connection fee is paid, we are not aware of it as there may be no building permit or additional square feet of building. A possible source of accurate use information is the Certificate of Occupancy process. It may be possible to move all, or a portion, of the connection fee collection to this process. Of course, arrangements will need to be made or negotiated with each of the agencies. This could possibly increase the amount of the connection fee, would definitely increase the impact on the collecting agencies and may not be acceptable to every agency. Credit for Demolished Structures For many years, the connection fee ordinance has allowed credit for structures demolished up to two years prior to issuance of new building permit. The credit is Connection Fee Alternatives Page 7 of 9 May 3, 1999 determined to be an amount equal to the current connection fee for the demolished structure. Thus, if 25 single.family homes were demolished and replaced with 75 single.family homes, the developer would only be required to purchase 50 new permits. This credit is allowed whether or not connection fees were ever paid, and regardless of the amount of connection fees actually paid. (In no event is a refund ever granted.) Recently, two separate developers have challenged the two-year period. The basic argument put forth by the lawyers for each of these developers is that the previous buildings paid for the capacity they used, either through connection fees or property taxes. Connection fees in this area, formerly District No. 2, were adopted in 1973 at $50 per 1,000 square feet. Prior to passage of Proposition 13 in 1978, each District also levied a separate property tax for capital improvements. The other view is that sewage treatment facilities are planned and constructed based upon flow trends and demands. When a building is demolished, flows decrease. After some reasonable period, planners need to be able to know that the flow decrease is "permanent," and that future capacity needs will be met through connection fees. At the present time, the District has a protest and a subsequent Tolling Agreement concerning a huge project in the City of Anaheim, contiguous to the Fullerton City line, where the former Northrop aerospace facilities were demolished and new industrial projects were constructed in place of the original buildings. The new builder has paid the entire fee but has protested it. Both parties have agreed to take no legal action to resolve this, pending the connection fee study and report that resulted from the RAC process and the Strategic Plan and the final adoption of a new comprehensive Connection Fee Ordinance by the District. It would appear that the Directors have four options: 1. Remove the two-year provision and provide, instead, that if the owner establishes proof of payment of a connection charge by the current or any prior owner of the property, then a credit for the amount paid would be allowed against the current charge. (Whether or not the current owner of the Northrop property can prove prior payments is not known. The District has no records as connection fees are paid at the local sewering agency.) 2. Remove the two-year provision and provide, instead, that any new replacement building would not be required to pay any capital facility charge so long as the new use was no more than the previous demand. (This would effectively negate the payment and Tolling Agreement for the Northrop property and would require the District to refund about $267,000 of the $556,000 paid, plus interest.) 3. Extend the time period to more than two years in which property owners must redevelop the property in order to receive a credit, because delays may be caused by the local permitting process, the economy, or other factors outside the control of the developer. Connection Fee Alternatives Page 8 of 9 May 3, 1999 4. Maintain the two-year period on the basis that it is a reasonable time in which to have redevelopment undertaken. Reduced Fee for Low Income or Senior Citizen Developments From time to time, the Directors have been asked to consider reducing or waiving the connection fee for various projects deemed socially desirable. Most often these are projects for senior citizens or to provide low-cost housing. It has not been uncommon for various other agencies to waive their fees for these projects. Nonetheless, the Directors have not granted these requests in the past. One reason for this practice has been the connection fee ordinance itself, which contains no language authorizing reductions or waivers. General Counsel has consistently advised that a new or amended ordinance would be required. Another reason is that the single residential connection fee was based upon all residential uses and fees being equal. There could ultimately be a shortfall in connection fee receipts, if fees were reduced for individual projects without an increase for others. Finally, the previous philosophy of connection fees was that they were to pay for peak demand and that peak demand potential was not affected by age or income of occupants. In 1998, the Board of District No. 7 did allow one congregate care facility to be designated a "commercial" development and to pay the fee per 1,000 square feet, rather than the fee per unit for the 87 rooms. In part, this decision was based upon the inclusion of a recreation room, a small theater, a medical examination room, and a separate mail room in the facility. Sometimes there are also common dining areas in these facilities. This decision was project specific, based upon the plans, and did not alter policy. The Directors have considered, but rejected, a special fee for residential units of less than 750 square feet in the past. Adoption of such a fee would be one method of granting a reduced fee to these low income or senior citizen projects. In the tiered residential connection fee described above, the connection fee for a one-bedroom unit would already be one-half of the standard three-bedroom single-family rate, while a studio apartment would be about one-third. The tiered residential connection fee should also serve to satisfy the demand for reduced fees for these types of developments. Governmental Uses Historically, local governmental agency buildings have not been charged a connection fee. (They do pay annual user fees.) These uses include county facilities, public schools, city halls, fire stations, police stations, etc. Revenue Area 13 is an exception in which all of these uses are charged connection fees. This exception developed during the formati on of then District No. 13 during the same time period as siting a new county jail in that area was being considered. State and federal buildings are charged for connection fees in all Revenue Areas. Connection Fee Alternatives Page 9 of 9 May 3, 1999 When a local agency is charged a connection fee, the funds are ultimately provided by the local taxpayers. They either pay the local agency or they pay the District through user fees. Thus, the people who benefit from the service pay the fees. When a regional facility is not charged a connection fee, there is no method in place for the District to collect user fees from the region. Thus, the capital costs must be collected from the local users. Charging regional facilities would then require the regional agency to raise the funds from its service area, which should be broader than the OCSD Revenue Area affected. Recommendations Staff recommends the adoption of a new comprehensive connection fee ordinance which contains the following elements. 1. Base fees will be determined by type of development and are calculated per 1,000 square feet for non-residential development and per unit for residential development. 2. Three categories of Commercial connection fees will be developed: low demand, average demand and high demand. The attached Proposed OCSD Connection Fee Schedule shows the rates for each category and a comparison with other agencies. 3. Significant Industrial Users (Class I Permittees) will be charged demand-based connection fees as a part of their on-going annual use charges, rather than only as a one-time up-front charge. These fees will include an interest component. The attached Proposed OCSD Connection Fee Schedule shows the rates per gallon and per pound that would be charged for additional demand. 4. Residential fees will be tiered based upon number of bedrooms for SFR and MFR development. 5. Connection fees will continue to be collected by local sewering agencies at the time the building permit is issued. 6. Credit for demolished structures will be granted only when the developer can prove that prior connection fees were paid, and credit will be provided only for the amount actually paid. 7. Connection fees will continue to not be charged for local agency facilities such as schools and libraries. Connection fees will continue to be charged for state and federal facilities. Connection fees will begin to be charged for county and regional facilities that serve more than one OCSD Revenue Area. 8. The fee changes will be phased over the next 24 months. GGS:lc H:\wp.dta \fin \21 O\crane\F AHR\F ahr99\May\ConnF eeStaffReport.doc 4/30/99 Proposed OCSD Connection Fee Schedule Proposed Description or Use Basis I Base Rate Single Family, 3 bedroom Unit 1,820 Multi Family, 2 bedroom Unit 1,275 Low Demand 1000 sq ft 110 Average Demand 1000 sq ft 675 High Demand 1000 sq ft 1,600 One Time Significant Industrial/Commercial User Daily Fee Eguivalent Flow Portion gal/day 0.00057 3 BOD Portion lb/day 0.14461 811 SS Portion lb/day 0.16025 899 Users that are required to obtain a permit from the Source Control Division, those with regulated or significant discharges would pay the daily fee as a part of their actual use charge which is caluclated each quarter. The charge would only apply to discharge above that allocated to the base rate connection fee. Currently the base use maximums are 25,000 gallons per day and 150 pounds each of BOD and SS. G:\excel.dta\fin\21 O\streed\old d copy\STRATPLN\conn fee sum4-5 OCSD Typical/Example Comparative Rates Current Sacramento LA County Cen Contra Rate Co San Dist City of LA San Dist Costa San -- 2,360 2,758 1,071 1,658 2,572 2,360 2,069 780 995 2,572 472 476 52 176 350 472 534 441 1,026 759 472 1,953 245 2,254 2,719 One Time Fee 5 3 3 7 764 188 143 156 427 171 225 204 3:32 PM Prop Type Calculated Whse Office Bldg Shop Ctr 4/30/99 11 :56AM Connection Fee Structure Implementation Alternative 1 Proposed Phased Fees Current Proposed Dollar Percent First Second Third Fourth Basis Fee Fee Change Change 1/1/2000 7/1/2000 1/1/2001 7/1/2001 -- Commercial 1,000 sq ft $472 Low Demand 1,000 sq ft $110 {$362) {77%) $380 $290 $200 $110 Average Demand 1,000 sq ft 675 203 43% 520 570 620 675 High Demand 1,000 sq ft 1,600 1,128 239% 750 1,030 1,310 1,600 Single Family Res Unit 2,360 5+ Bedrooms Unit 2,530 170 7% 2,400 2,440 2,480 2,530 4 Bedrooms Unit 2,165 (195) (8%) 2,310 2,260 2,210 2,165 3 Bedrooms Unit 1,820 {540) (23%) 2,230 2,100 1,970 1,820 2 Bedrooms Unit 1,475 (885) (38%) 2,140 1,920 1,700 1,475 1 Bedrooms Unit 1,130 (1,230) {52%) 2,050 1,740 1,430 1,130 Multi Family Res Unit 2,360 4+ Bedrooms Unit 1,965 (395) (17%) 2,260 2,160 2,060 1,965 3 Bedrooms Unit 1,620 (740) {31%) 2,180 2,000 1,820 1,620 2 Bedrooms Unit 1,275 (1,085) (46%) 2,090 1,820 1,550 1,275 1 Bedrooms Unit 910 (1,450) (61%) 2,000 1,640 1,280 910 Studio Unit 580 (1,780) (75%) 1,920 1,480 1,040 580 G:\excel.dta\fin\21 Olstreed\old d copy\STRA TPLN\conn fee imp Alt 1 4/30/99 Basis Commercial 1,000 sq ft Low Demand 1,000 sq ft Average Demand 1,000 sq ft High Demand 1,000 sq ft Single Family Res Unit 5+ Bedrooms Unit 4 Bedrooms Unit 3 Bedrooms Unit 2 Bedrooms Unit 1 Bedrooms Unit Multi Family Res Unit 4+ Bedrooms Unit 3 Bedrooms Unit 2 Bedrooms Unit 1 Bedrooms Unit Studio Unit Connection Fee Structure Implementation Phased Increases, Immediate Decreases Alternative 2 Immediate Current Proposed Dollar Percent Reduction First Fee Fee Change Change 7/1/1999 1/1/2000 -- $472 $110 ($362) (77%) $110 $110 675 203 43% 472 $520 1,600 1,128 239% 472 750 2,360 2,530 170 7% 2,360 2,400 2,165 (195) (8%) 2,165 2,165 1,820 (540) (23%) 1,820 1,820 1,475 (885) (38%) 1,475 1,475 1,130 (1,230) (52%) 1,130 1,130 2,360 1,965 (395) (17%) 1,965 1,965 1,620 (740) (31%) 1,620 1,620 1,275 (1,085) (46%) 1,275 1,275 910 (1,450) (61%) 910 910 580 (1,780) (75%) 580 580 G:\excel.dta\fin\210\streed\old d copy\STRATPLN\conn fee imp 11:55 AM Phased Increased Fees Second Third Fourth 7/1/2000 1/1/2001 7/1/2001 $110 $110 $110 $570 $620 $675 1,030 1,310 1,600 2,440 2,480 2,530 2,165 2,165 2,165 1,820 1,820 1,820 1,475 1,475 1,475 1,130 1,130 1,130 1,965 1,965 1,965 1,620 1,620 1,620 1,275 1,275 1,275 910 910 910 580 580 580 Alt2 4/30/99 Impact Of Strategic Plan Connection Fee Implementation Alternatives Page 1 of 2 A B C E F G H I J K L - Future Estimated Annual Conn Fee Connection Fee Changes, Alt 1 Current Percent Development Annual At Current Implement Phased Equally At 6 Months 12 Months Development To Total To 2020 Development Rates All 7/1/99 7/1-12/31/99 1/1-6)30/00 If1-12_/31/00 1/1-6/30/01 7 /1-6/30/02 Single Family Res Units 5+ 20,680 5% 6,731 337 795,320 852,610 397,660 404,400 411 ,140 417,880 852,610 4 107,653 28% 35 ,038 1,752 4,134,720 3,793,080 2,067,360 2,023,560 1,979,760 1,935,960 3,793,080 3 167,242 44% 54,433 2,722 6,423,920 4,954,040 3,211,960 3,035,030 2,858,100 2,681,170 4,954,040 2 76,187 20% 24,797 1,240 2,926,400 1,829,000 1,463,200 1,326 ,800 1,190,400 1,054,000 1,829 ,000 1 11,678 3% 3,801 190 448,400 214,700 224,200 194,750 165,300 135,850 214,700 Total SFR 383,440 100% 124,800 6,241 14,728,760 11,643,430 7,364,380 6,984,540 6,604,700 6,224,860 11,643,430 Multi Family Res Units 4+ -0% 3 18,583 11% 7,380 369 870,840 597,780 435,420 402,210 369,000 335,790 597,780 2 114,280 66% 45,384 2,269 5,354,840 2,892,975 2,677,420 2,371 ,105 2,064,790 1,758,475 2,892,975 1 15,098 9% 5,996 300 708,000 273,000 354,000 300,000 246,000 192,000 273,000 0 24,528 14% 9,741 487 1,149,320 282,460 574,660 467,520 360,380 253,240 282,460 Total MFR 172,489 100% 68,500 3,425 8,083,000 4,046,215 4,041 ,500 3,540,835 3,040,170 2,539,505 4,046,215 Commercial/Industrial Sq Feet Low Demand 99,244,282 25% 27,729 1,386 654,192 152,460 327,096 263,340 200,970 138,600 152,460 Average Demand 290,099,373 72% 81,053 4,053 1,913,016 2,735,775 956,508 1,053,780 1,155,105 1,256,430 2,735,775 High Demand 13,306,322 3% 3,718 186 87,792 297,600 43,896 69,750 95,790 121,830 297,600 Total Comm 402,649,977 100% 112,500 5,625 2,655,000 3,185,835 1,327,500 1,386,870 1,451,865 1,516,860 3,185,835 Total Conn Fee 25,466,760 18,875,480 12,733,380 11,912,245 11,096,735 10,281,225 18,875,480 Annual Conn Fee 25,466,760 18,875,480 24,645,625 21,377,960 18,875,480 % Diff From 7/99 Imp 35% 31% 13% 0% G:\excel.dta\fin\210\streed\old d copy\STRATPLN\conn fee imp 12:03 PM ,, 4/30/99 Impact Of Strategic Plan Connection Fee Implementation Alternatives Page 2 of 2 M N 0 p Q Connection Fee Changes, Alt 2 Decreases Immediately, Increases At 6 Mo 12 Months 7 /1-12/31 /99 1 /1-6/30/00 7 /1-12/31 /00 1 /1-6/30/01 7 /1-6/30/02 Single Family Res 5+ 397,660 404,400 411,140 417,880 852,610 4 1,896,540 1,896,540 1,896,540 1,896,540 3,793,080 3 2,477,020 2,477,020 2,477,020 2,477,020 4,954,040 2 914,500 914,500 914,500 914,500 1,829,000 1 107,350 107,350 107,350 107,350 214,700 Total SFR 5,793,070 5,799,810 5,806,550 5,813,290 11,643,430 Multi Family Res 4+ 3 298,890 298,890 298,890 298,890 597,780 2 1,446,488 1,446,488 1,446,488 1,446,488 2,892,975 1 136,500 136,500 136,500 136,500 273,000 0 141,230 141,230 141,230 141,230 282,460 Total MFR 2,023,108 2,023,108 2,023,108 2,023,108 4,046,215 Commercial/Industrial Low Demand 76,230 76,230 76,230 76,230 152,460 Average Demand 956,508 1,053,780 1,155,105 1,256,430 2,735,775 High Demand 43,896 69,750 95,790 121,830 297,600 Total Comm 1,076,634 1,199,760 1,327,125 1,454,490 3,185,835 Total Conn Fee 8,892,812 9,022,678 9,156,783 9,290,888 18,875,480 Annual Conn Fee 17,915,489 18,447,670 18,875,480 % Diff From 7/99 Imp -5% -2% 0% G:\excel.dta\fin\210\slreedlold d copy\STRATPLN\conn fee imp 12:03 PM -INVESTMENT MANAGEMENT PROGRAM Orang~ County Sanitation District STRA1EGY REVIEW FOR THE PERIOD January 1 -March 31, 1 999 I FINANCE, ADMINISTRATION & HUMAN RESOURCES COMMIT1EE MAY12,1999 840 Newport Center Drive Fbst Office Box 6430 Newport 'Beach California 92658-6430 949 · 640-3031 PACIFIC INVESTMENT MANAGEMENT COMPANY AGENDA BOND MARKET REVIEW II PERFORMANCE/ PORTFOLIO REVIEW Ill CURRENT OUTLOOK/ STRATEGY PACIFIC INVESTMENT MANAGEMENT COMPANY U.S. RATES EDGE UP U.S. INTEREST RATES INCREASE DURING FIRST QUARTER TREASURY MARKET LOSES APPEAL AS SAFE HAVEN STRONG U.S. GROWTH FUELS EXPECTATION OF FED TIGHTENING RATE INCREASE REVERSES 1998 TREND TOWARDS LOWER RATES 6.0 5.5 'o ~ il 5.0 :,-::: 4.5 4.0 100 50 -;;;- ~ 0 8'o C: ~ -50 u -100 ', ,, 30-Yr. T-Bond .. -·. --. ·-...-----------._. , __ , -·t--,. -, ·-... -\ 1H '98 ' .... \ 1-Yr. T-Bi/1 . ', '• ., 2H '98 :'\ ~ ......... ___ / \ 1~,;,ii€t~i.Ntciii;,!l~k ~lf:rii~tf · ·- ~'"' '""'' ,-1.'ii;?,..mllP, ~· ,1~,-;;_e;;.1h;;-a"n;I \l,i;,;,Hi" 56 59 -116 5.59% .,._,/ ... _\ 4.70% .. -.. 1Q '99 -150 '------------------------------' 3 Mos. 1 Yr. 2 Yrs. 5 Yrs. 10 Yrs. 30 Yrs. I • 1 ST QTR. ~ 19981 SOURCE: Bloomberg 3 PACIFIC INVESTMENT MANAGEMENT COMPANY STRATEGY RECAP -FOURTH QUARTER LONG-TERM OPERATING FUND Period Ended March 31, 1999 DURATION • MATURITY MIX • SECTOR /ISSUE • NEAR INDEX BROADER-THAN-INDEX BELOW-INDEX ALLOCATION TO CORPORATES CONTINUED EXPOSURE TO GOVERNMENT AND AGENCY SECURITIES MAINTAINED MORTGAGE WEIGHTING 4 • NEUTRAL • SLIGHT NEGATIVE • NET POSITIVE PACIFIC INVESTMENT MANAGEMENT COMPANY STRATEGY RECAP -FOURTH QUARTER LIQUID OPERATING FUND Period Ended December 31, 1998 DURATION • MATURITY MIX • SECTOR/ ISSUE • NEAR INDEX SLIGHTLY BROADER-THAN-INDEX MAINTAIN EXPOSURE TO AGENCY DISCOUNT NOTES AND COMMERCIAL PAPER 5 • NEUTRAL • SLIGHT POSITIVE • POSITIVE PACIFIC INVESTMENT MANAGEMENT COMPANY REVIEW OF PERFORMANCE Through March 31, 1999 • Long-Term Operating Fund 3/31/99 Market Value $305,760,415 • Liquid Operating Fund 3/31/99 Market Value $18,815,565 Orange County Sanitation District (L-T) (%) Merrill 1 -5 Year Gov't. I Corp. Index (%) Orange County Sanitation District (Liq-op) (%) 3 Month T-Bill (%) * Annualized. 6 Since* Inception 9/30/95 2 Yrs.* 1 Yr. 3 Mos. 6.9 7.9 6.8 0.4 6.5 7.4 6.4 0.4 Since* Inception 9/30/95 2 Yrs.* 1 Yr. 3 Mos. 5.6 5.6 5.5 1.2 5.2 5.1 4.9 1 .1 PACIFIC INVESTMENT MANAGEMENT COMPANY CURRENT OUTLOOK LONG TREASURY YIELD TO RANGE BETWEEN 4½ -6½% CONSUMER SLOWS GIVEN UNSTAINABLE SPENDING LEVELS i i FEDERAL RESERVE MAINTAINS NEUTRAL STANCE • Robust domestic market; uncertain global economies • Room to ease if economy slows sharply INFLATION REMAINS SUBDUED • Productivity gains offset labor cost pressures • Energy prices level off i ffi:iilr!01tGr, INTEREST RATE • DURATION NEAR-TO-SLIGHTLY-ABOVE INDEX SECTOR ISSUE SELECTION • OVERWEIGHT MORTGAGES UNDERWEIGHT CORPORATES UTILIZE AGENCY SECURITIES • USE PROPRIETARY ANALYTICS, EXTENSIVE CREDIT ANALYSIS 7 PACIFIC INVESTMENT MANAGEMENT COMPANY l 7 l _I _J l _l _j _J ' I .J J Callan Associates Inc. Investment Measurement Service Quarterly Review County Sanitation Districts of Orange County March 31, 1999 The following statistical analysis was prepared by Callan Associate Inc. utilizing secondary data from statements provided by the plan trustee and/or custodian CAI computer software and selected information in CAI's database. Thi report may also contain return and valuation from outside ources as directed by the client. CAI assumes no re ponsibility for the accuracy of these valuations or return methodologies. Reasonable care ha been taken to assure the accuracy of the CAI computer software and database. CAI disclaims responsibility financial or otherwise for the accuracy or completene of this report. Copyright 1999 by Callan Associates Inc. l I l j j SAN FRANCISCO NEW YORK CHICAGO ATLANTA DENVER CAILANASSOCIATESINC April 30, 1999 Mr. Steve Kozak Financial Manager County Sanitation Districts of Orange County 10844 Ellis A venue Fountain Valley, CA 92728 RUTHANN C. MOOMY. Ph.D .. CFA Sf.Nil)!{ VICE Pllf:SIDl•:NT RE: Quarterly Investment Management Program Report for the Period January 1, 1999 through March 31, 1999 Dear Steve, Background -Relationship between the District and Callan Associates The Sanitation District retained Callan Associates in February 1995 to assist with the formulation of an Investment Policy and the selection of an external investment manager. The Policy provides for two separate portfolios: one portfolio is very liquid and short term, the second portfolio is invested with a longer maturity. The District selected Pacific Investment Management Company (PIMCO) as the District's external money manager. After this initial project was completed, Callan was retained to provide ongoing performance monitoring of the external investment manager. Callan has assisted in an informal way on revising the Policy and supporting staff on investment related issues. Investment Performance Monitoring Callan Associates' performance monitoring provides value to the District in two ways: by being an independent observer, and by focussing on the total investment program. In the first way, Callan provides "checks and balances" for the external investment manager. We review the portfolios independently from PIMCO and provide our own assessment. In particular, Callan is able to compare the PIMCO results with other investment managers because Callan maintains a significant database of information on the performance of other investment managers. Callan s Quarterlv Review 5.50 EAST 8TH AVENUE, DENVER. COLORADO, 80203 TELEPHONE :J03.861.1900 FACSfMILE :lo:l.832.82:lo l ~l l l I l l J j Mr. Steve Kozak April 30, 1999 Page 2 of3 Capital Markets Review and Active Management Overview The first portion of the Callan Quarterly Report reviews recent events in the financial markets. The reason we begin with an overview of the returns on different asset classes is that once we all have an understanding of the market, clients will have realistic expectations for the return on their investment program. All asset classes are represented in the Capital Markets Review, even though the District is most interested in domestic fixed income. Page 2 provides the returns on fixed income styles arranged from the shortest maturity to the longest maturity, plus mortgage- only and high yield strategies. The upper graph shows the most recent quarter, while the lower graph shows the last year. From this graph on page 2 one can see that in the most recent quarter, longer maturity strategies were likely to underperform more liquid portfolios. The remainder of the exhibits in the first section focus on the total results for the District's portfolios. Page 3 focuses on both risk and return of the portfolios, and the time period since inception of the District's Investment Program (3Y2 years). The upper graph shows that the District's program (labeled Total Domestic Fixed Income) achieved a higher return with less risk than the benchmark of the Merrill 1-5 Year Government/Corporate Index. This graph provides an excellent summary of the District's total program to date. Manager Analysis The exhibits behind the second tab of the report focuses on the District's two portfolios managed by PIMCO. Page 6 covers the Liquid Operating portfolio that is compared to; (1) a benchmark of the 90-day Treasury bill, and (2) a peer group of money market funds, which are similar to the PIMCO account. The District's short-term portfolio has exceeded the return on the 90 day Treasury bill and ranks in the top 10 percent of money market funds. This page also summarizes several other statistics, showing the relative return for each quarter (lower left) and the risk versus return (lower right) and the Quarterly Asset Growth. District's Long Term Portfolio The Long Term Operating Fund, is reviewed on pages 7, 8, and 9. This portfolio is larger in size, and is structured to provide a higher rate of return, albeit at higher risk than the Liquid Operating portfolio. The returns are shown for various cumulative periods in the floating bar chart located on page 7. This floating bar chart is made up of all external managers who manage portfolios in a similar manner, which Callan defines as the Defensive Fixed Income Style. j Mr. Steve Kozak April 30, 1999 Page 3 of3 For the most recent quarter, PIMCO earned a return of 0.48 percent, which exceeds the benchmark return by 7 basis points. Relative to other Defensive Fixed Income Style managers, the PIMCO portfolio had a ranking at the 90th percentile for this quarter. Overall, PIMCO's longer term performance has resulted in a return of 6.9 percent for the last year. This ranks in the top 10 percent of all external investment managers in this style group. The portfolio's return since inception of 6.83 percent ranks in the 16th percentile. The key to interpreting shorter term performance is to understand whether the fixed income market is rewarding longer maturity holdings or not. During the past quarter, as well as the previous quarter, the returns for the segment of the market ranging from 1 to 5 years had a lower total return than 90 day Treasury bills. This result runs counter to expectations because theory tells us that longer maturity securities should yield higher returns than shorter term securities. However, longer term maturity securities will suffer price declines if interest rates rise, which is what happened in the last quarter. Interest rates rose by almost 50 basis points in the 3-5 year portion of the yield curve. Portfolio Characteristics The report covers more than just performance. Pages 8 and 9 are devoted to the portfolio characteristics, beginning with the sector breakdown on the top of page 8. The report provides extensive comparative data for the benchmark as well as the portfolio itself, and covers duration and quality in addition to sector allocation. The exhibits on portfolio characteristics add value in two ways: (1) they help to interpret performance; and (2) they facilitate confirmation that the portfolio is in compliance with guidelines. I would be happy to discuss the report in more detail. I am also available to attend a Board meeting if you wish. Yours truly, ~~- ~u\iann C. Moomy, Ph.D.,~ Senior Vice President 1 7 CAPITAL MARI<ET REVJEW I _] ._J i -j J J A PUBLICATION OF CALLAN ASSOCIATES INC. AND TIIE CALLAN INVESTMENTS INSTITIITE Heavyweights Fly to Never Land As a celebrated hero with seemingly invincible profits, the market's large cap sector continued its growing role as Peter Pan last quarter. Inspired by dreams of an earnings resurgence in 1999, faithful investors chased this Peter Pan further into the land of fantastic stock valuations during the first quarter. Embodied by Callan's Large Cap Index of the 150 largest U.S.-traded stocks (excluding ADRs and other foreign shares), this gravity-defying sector soared 6.43%, including dividends. Beyond the Large Cap Index, the smaller capitalization sectors could not manage to take wing during the quarter, despite their seemingly more responsible valuations. Drawing almost all of its strength from the large cap sector, the Callan Broad Market Index of the top 2,000 stocks gained 4.08% last quarter. The Callan Medium Cap Index, which represents the next largest 350 stocks after the Large Cap Index, edged up 1.97%. Holding the bottom 1,500 stocks of the Broad Market, the Callan Small Contents Foreign Stocks .............. . Foreign Bonds ............... . Alternative Investments .. . Real Estate .................... . 3 3 4 4 Cap Index actually fell 3.36%. Beneath the Broad Market, the next 1,000 largest stocks in the Callan Micro Cap Index tumbled 8.67%. Although the Fed often plays Tmker Bell sprinkling the magical dust of lower rates to help markets fly, the economy's unexpected strength during the quarter left the Fed sitting on its hands. Indeed, with unemployment reaching its lowest level since 1970, oil prices rising strongly, and the Asian recovery seeming to gain momentum, investors worried that the Captain Hook of inflation would soon appear. The Fed might then be forced to betray stocks with tighter monetary conditions. Of the Broad Market's eleven economic sectors, Technology seemed most oblivious to such a menace, zooming ahead 11.58% in the first quarter. Since 1995, this sector has gained 315% and continued on page 2 All Hail the Consumer! First Quaner 1999 Rising Rates Squeeze Bonds The U.S. bond market suffered in the first quarter, as the flight-to-quality fears of late 1998 subsided and investors moved out of Treasuries. Although the credit markets saw a rush out of Treasuries and into spread product, only the mortgage and high yield sectors were able to post gains in the first quarter. Powered by consumer spending, the strong economy combined with higher energy prices to contribute to a sharp rise in intermediate and long-term yields. Interest rates on U.S. Treasuries were forced up on average 50 basis points along the curve, as investors aban- doned hopes of more Fed interest rate cuts. The yield for the benchmark 30-year Treasury bond ended March at 5.63% -an in- crease of 54 basis points for the quar- ter and 91 bas is points from its all- time low of 4.72% on October 5th of last year. Rising rates hurt worst in the government sector. Spreads be- tween Treasuries and most other fixed-income secu- U.S. Fixed-Income Returns for Quarter Ended March 31, 1999 Last Quarter Lehman Bros LB Aggregate LB Govt/Corp LB Govt/Corp Inter LB Govt/Corp Long LB Govt LB Corp LB Mortgage Salomon Bros SB Broad Inv Gr SB Hi Grade LT Merrill Lynch ML Treas 1-3 ML Hi Yid Mstr -0.50 -1.19 -0.19 -3.37 -1.43 -0.71 0.99 -0.46 -2.81 0.60 1.08 rities narrowed, with the highest quality securities improving the most. While spreads have recovered to a degree, they remain much wider than they were prior to the Russian default last August. The Lehman Brothers Aggregate Bond Index (-0.50%) was helped significantly by the Lehman Brothers Mortgage Index ( +0.99% ). The outlook for mortgages improved dramati- cally, as prepayment fears dissipated with the rise in rates. The other component returns were negative, with the Lehman Broth- continued on page 2 The U.S. economy rocketed to a 6% gain in GDP during the fourth quarter of 1998, and preliminary data point to continuing strength in the first quarter of 1999. Tremendous optimism has allowed the free-spending American consumers to outspend their incomes making up for the loss of foreign buyers. The revised data show that the savings rate fell to zero in the fourth quarter and turned negative in the first quarter, as consumers appear to have spent every waking moment shopping at malls or purchasing cars. Motor vehicle sales reached 17 million (armual rate) in February and stayed up at 16.4 million in March (anything above 15 million is considered a good year). Real consumer spending rose by an estimated 4.5-5% during the first quarter, matching the robust gains of last year's fourth quarter. Consumer spending would have been even higher, but the unseasonably warm weather during January and February held down demand for heating fuel and electricity. The warm winter weather also kept construction activity humming along at unsea- sonably high rates. Consumer confidence and continuing low mortgage rates have pulled more first-time buyers into the market, while the current rate of homebuilding (1.8 million armual starts) is well above the pace needed to serve new household forma- tion. What could cause consumers to suffer a loss of confidence? The likely culprits would be a softening job market, a stock market decline, a pickup in inflation (and then interest rates), or perhaps a war. Desert Storm demonstrated how war can deflate continued on page 4 SAN FRANCJSCO MORRISTOWN CHICAGO ATLANTA DENVER 71 STEVENSON ST. SUITE 1300 SAN FRANCISCO CALIFORNIA 94105 415.974.5060 FAX 415.512.0524 www.callan.com 7 j 7 7 -1 I 1 I -' I _j j J _j I d Heavyweights from page I doubled its market weight in the Broad Market Index to over 20%. Weighing $452 billion after its 29.25% gain last quarter, Microsoft represented over 17% of this sector at quarter end. While America Online ( +89.53%) led the Internet mania with a $79 billion growth spurt last quarter, Fed Chairman Alan Greenspan linked the current buying frenzy oflnternet stocks with playing the lottery. No more pixie dust needed here. Other economic sectors joining the fun of flying last quarter were Energy (+5.56%), Financial (+5.45%), and Consumer Cyclical (+5.28%). Bolstered by oil prices rebounding smartly with OPEC's renewed resolve to cut production last quarter, Energy's oil & gas drilling & equipment industry (+29.42%) particularly regained some devoted fans. Within Financial 's Investment Banking and Brokerage industry (+45.00%), brokerages facilitating dreams of stock market riches via on-line trading, such as E*Trade Group (+149.30%) and Charles Schwab ( + 71.16% ), attracted the most zealous believers. As the Internet retail icon in Consumer Cyclicals, Amazon.com rocketed 60.80% higher to finish last quarter with a market cap of $27 billion -its followers hope to see Amazon's first dollar of quarterly profits in 1999. Once the darling of conservative investors, the Public Utility sector was grounded with a 10.27% loss. Notwithstanding this sector's high dividend yield of 4.6%, rising interest rates in the quarter frightened investors to look elsewhere for more imaginative growth. Despite renewed strength in the value investor's favored Energy and 11% 6% 4% 2% E 0% ::, .; a: -2% I -4% -6% -6% -10% ()o/, Capitalization Sector Performance First Quarter 1999 CAI Broad • 4.0S% 20% 40% 60% 80% Percent of Total Market Capltallzatlon Rising Rates Squeeze Bonds from page I e .. "' ii " 100% ers Government Index falling 1.43% and the Lehman Brothers Corporate Index slipping 0. 71 %. Long bonds suffered the greatest losses in the govern- ment sector. The investment grade corporate sector discriminated against lower rated credits, as a return to liquidity added more support to the higher rated issues. The high yield sector was the best performer in the first quarter-the Merrill Lynch High Yield Master Index reported a 1.08% gain. Positive eco- nomic news, improving liquidity, and relatively low levels of interest rates caused investors to jump back into the riskier securities. As with investment grade corporates, the high-yield sector favored higher rated issues. Concerns grew that an oversupply of corporate issues kept spreads wide when both in- vestment-grade and high-yield corporate debt resumed steady issuance over the quarter. March saw AT&T launch the largest ever corporate bond issue ($7 billion) and Charter Communications launch the largest ever high-yield bond issue ($3 billion). The credit markets have still not recovered completely from the liquidity driven crunch of the third quarter. Spreads have recovered somewhat, but they are still much wider than pre-third quarter levels. This perceived opportunity has led investors, anticipating a convergence in spreads, to shift money to the non-government sectors. Unfortunately, outside of mortgage and some corpo- rate securities, the U.S. bond market has not cooperated. -CMR- Economic Sector Performance -CAI Broad First Quarter 1999 Technology Energy Financials 11.58% Con5umer Cyclteal Transportation Communicalion Services Health Care Capital Goods Basic Materials Consumer Staples -1.75% Utiltties -10.27% -15% •10o/o -5% 5.56% 5.45% _____ _, 5.28% 0% Ae1Urn 5% 10% 15% Financial sectors, the growth-oriented investment styles continued to dominate performance last quarter. To isolate styles of growth and value, Callan divides its capitalization indices evenly by price-to-book, creating sub-sectors of growth- and value-oriented stocks. Looking at first-quarter comparisons, the Callan Large/Medium Cap U.S. Equity Returns for Quarter Growth Index advanced 6.42%, Ended March 31, 1999 while its value counterpart gained 4.34%. With the support of technology stocks, the Callan Small Cap Growth Index almost broke even (-0.86%). Lacking the allure of both size and growth, the Callan Small Cap Value Index suffered a 5.77% loss. -CMR- Broad Market CAI Broad Large Cap S&P 500 CAI Large DJIA Mid/Small Cap S&P MidCap 400 CAI Med CAI Small CAI Micro Exchange Indices NYSE AMEX NASDAQ Convertible Index FB Conv Sec Last Quarter 4.08 4.98 6.43 7.01 -6.38 1.97 -3.36 -8.67 1.68 3.40 12.34 3.88 U.S. Treasury Yield Curves: First Quarter 1999 6.0 _._ Beginning 1st Quarter 5.5 -•-End 1st Quarter __ .&, -------------_ ... --- 4.0----+----------------~ 0 5 10 15 20 25 30 Maturity (Years) Callan Associates Inc. 2 '7 7 l _] ' J J J Japan Leads Non-U.S. Equities International equity markets, as measured by the MSCI EAFE Index, advanced 1.39% (in dollar terms, unless otheiwise noted) during 1999's fir.a quarter. The surprising star of the first quarter was Japan, with the MSCI Ja- pan Index gaining 12.18%. This robust return for the quarter masked even stronger local market returns as the yen declined by 4.75% versus the dollar. European equities experienced a difficult quarter -the MSCI Europe Index fell 2.11%. Europe The European Central Bank left interest rates unchanged at 3%, though there is speculation that rates will need to be cut when unemployment rates rise and growth figures decline across the Eurozone. While helping to continue merger activity across Europe, these low interest rates coupled with rising long term rates in the U.S. translated into a strengthening dollar. The euro's first three months of trading showed the currency decline 8.1 % against the dollar. Although most EMU countries had positive local equity returns, the euro's Non-U.S. Equity Returns for Quarter Ended March 31, 1999 .fAEf U.S. Dollar Local Currency EAFE Europe U.S. Dollar Local Currency EAFE Pacilic U.S. Dollar Local Currency Emerging Markets U.S. Dollar United Kingdom Last Quarter 1.39 7.27 -2.11 4.31 11.19 15.30 12.44 poor performance pushed all but Finland into negative ter- ritory of total return. Nokia, Finland's largest stock, had another exceptional quarter (+29%), helping to push the MSCI Finland Index up 17.99%. Germany experi- enced a difficult quarter due largely to a decline in fourth quarter GDP. The MSCI Ger- many Index retreated 9.27%. Other countries posting dis- mal returns for the quarter were Portugal (-9.62%) and Belgium (-12.82%). The first quarter saw the UK's equity market perform well, with the MSCI UK Index returning 4.32%. The Bank of England cut interest rates to 5.5% in February, which helped to boost stock prices. Local returns were even higher as the British pound declined 2.97% versus the dollar. Japan Thanks to a very strong showing during March, Japan (+12.18%) was able to carry the MSCI EAFE Index in the first quarter. Japan's strength was surprising in the face of its seemingly relentless recession. High unemploy- ment and declining consumption, despite high savings, are causing concern that a needed recovery might elude Japan for some time. However, govern- ment efforts to shore up the ailing banking sector and stimulate the economy contributed to the country's strong equity performance. In addition, signs of change in corporate Japan, most notably layoffs and restructuring at some ma- jor Japanese corporations, are leading some to believe that a focus on increas- ing shareholder value is gaining prominence. Emerging Markets Emerging markets continued their rally, as the MSCI Emerging Markets Free Index posted a 12.44% gain in the first quarter. Performance was strong across all Emerging Market regions. Europe and the Middle East was the strongest performing region of emerging markets, as the MSCI EM Europe and Middle East Index returned 14.34%. -CMR- Stronger Dollar Undermines Foreign Bonds The first quarter was a turbulent one for the global bond markets. The Lehman Aggregate posted a loss of 0.50% while the Salomon Brothers Non- U.S. Government Bond Index posted a paltry 1.26% in local currency terms. Astrenghtening dollar hurt the non-U.S. index's unhedged U.S. return (-4.84% ). After a smooth introduction, the euro steadily depreciated against the dollar from its high of 1.18 on January 4th the first day of trading, closing the quarter at 1.09. The best performing market in dollar terms was Australia; the worst was Spain. Europe The euro's 8.1 % depre- ciation against the dollar hurt otherwise modest bond re- turns in the euro block. Mixed economic data created expec- tations that the European Cen- tral Banlc would cut interest rates. One of the loudest voices in support of a cut in rates, German finance minis- Global Fixed-Income Returns for Quarter Ended March 31, 1999 SB Non-U.S Govt U.S. Dollar Local Currency SB World Govt U.S. Dollar Local Currency Last Quarter -4.84 1.26 -3.86 0.42 ter Mr. Lafontaine, resigned his position during the quarter. Yield curves in the Eurozone, on balance, steepened slightly. The Bank of England cut interest rates 75 basis points during the quarter. The government bond yield curve has become less inverted as a result. Yields in the three-year maturity range were down 1 %, while yields rose slightly in the long end. Sterling depreciated 2.97% against the dollar contributing to a 3.13% decline in the country's government bond index. Dollar Bloc Canada and Australia posted the strongest returns for the first quarter, with gains of2.00% and 2.43%, respectively. Canadian yields increased across the curve by about 20 basis points. Economic news was better than expected, as GDP and retail sales strengthened and unemployment fell. On this positive news, the Bank of Canada continued to lower interest rates, effectively un- winding the 100 basis point increase implemented last August. A rise is com- modity prices helped fuel a rally in the Canadian dollar, which appreciated 1.53% versus the greenback. The Australian dollar gained 2.95% against the U.S. dollar on the recov- ery of commodity prices. The government bond index fell a modest 0.50 % during the quarter, as yields rose 40 basis points in 3 to 10-year maturities. Japan Yields on Japanese government bonds continued to move lower. The curve flattened during the quarter with the biggest changes in the 3 to 7-year maturi- ties where yields fell by 60 basis points. The Japanese government bond return of 3.24% was the best local currency performance in the developed markets. The yen's 4.75% drop against the dollar, however, knocked Japan's total return for a 1.66% loss in the quarter. Emerging Debt Emerging debt was the bright spot in the global bond markets in the first quarter. The JP Morgan EMBI+ returned 5.06%. Even with the devaluation of the Brazilian real, the Latin component outperformed the non-Latin (+5.4% vs. 3.7%, respectively). Brazil (+10.8%) and Venezuela (+9.2%) led the Latin markets. Russia recovered nicely from its selloff in 1998 with an 8.0% return during the quarter. -CMR- Callan Associates Inc. 3 7 7 1 .J I :.__.j J All Hail the Consumer! from page I consumer confidence enough to offset the potential burst of defense spending. .Job markets around the country remain very tight, and real wages are rising. lnflation remains benign, but the series of positive shocks to U.S. price levels - falling commodity prices, falling import prices, Asian recession -have offset rising labor costs. We may be close to the bottom of the inflation cycle. Finally, a stock market correction is high on many market-watchers' lists of probable events for 1999, with Internet stocks forming the bubble most susceptible to a pinprick. Evidence of a slowdown remains elusive, however, and aside from the war in Kosovo, the factors that could cause the mighty consumer to lose optimism remain hypothetical. Two of the largest sources of uncertainty and concern for the U.S. economy are the domestic manufacturing sector and the international markets. Both sec- tors are showing signs that things may be better than anticipated. The Purchas- ing Managers Index has risen sharply since December, when it fell to 45.1, its lowest reading since 1991. The Index rose to 54.3 in March, the third month in .a row above 50, which is the dividing line between expansion and contraction. Employment in manufacturing has not kept up, although the declining em- ployment in the face of rising production suggests continued strong gains in manufacturing productivity. Questions hang over exports, but evidence is ac- cumulating that stability has returned to many of the overseas financial mar- kets that were consumed by turmoil during the past 20 months. Optimism and investor dollars are finding their way back to markets such as Korea, Thailand, Hong Kong, Brazil, and even Japan. -CMR- Real Estate Corner Callan's private real estate database mean in l 999's first quarter returned 2.47%. The income component of the return maintains its momentum, but the appreciation component shows weakness due to a softening in the market largely caused by the reduced availability of financing. Transaction volume in early 1999, as tracked by Investment Property Re- port, is lagging 1998. In the first six weeks of 1998, 271 properties totaling $12.8 billion were traded, while for the same period this year only 192 proper- ties worth $7.6 billion traded hands. This represents a decline of 30% in num- ber of transactions and 40% in total value. REITs had been the dominant buyers in early 1998 with seventy percent of the dollar volume. Due to fundraising constraints this year, REITs were more focused on internal financial and operating issues. In fact, the Investment Property Report database shows REITs as increasingly being sellers of proper- ties in 1999, along with insurance companies and banks. The decreased com- petition for properties is providing enhanced opportunities, both in the core and value-added strategy segments. In fact, some REITs are looking to do joint ventures with the plan sponsor community as a source of capital for REIT growth. REITs declined for the fifth quarter in a row. In the first quarter, the NAREIT Index lost 5.92%. As reported in Institu- Real Estate Returns for Quarter Ended March 31, 1999 tional Real Estate Newsline, Callan Real Estate (Mean) smallerretail facilities, specifi-NAREIT Total Return cally Factory Outlets (-17 .22%) and Strip Centers (-10.26%), Last Quarter 2.47 -5.92 were the hardest hit sectors of the NAREIT Index. The strongest sectors during the quarter were Office (-0.58%), Apartments (-1.22%) and Hotels (-2.76%). REITs investing in mortgage-backed securities (less than 5% of the index) continued to be punished (-16.50%), after falling 18.04% in fourth quarter. Opportunistic funds have begun making strategic private equity placements in REITs and are negotiating to take some REITs private in an attempt to profit from the depressed valuations. -CMR• Alternative Investments Fund Raising Private equity fund raising started off this year slightly slower than last year. The first three months of 1999 yielded $11.7 billion in new commitments and 49 new partnerships. This compares to $13.4 billion and 51 partnerships in first quarter of 1998. The long-term historical average of approximately 20% of funding going to venture capital and 60% to buyout strategies held steady. Funds Closed January 1 through March 31, 1999 Strategy # of Funds $ Amt (mil) % Venture Capital 24 2,591 22.2 Acquisition/Buyout 18 7,402 63.5 Subordinated Debt 1 135 1.2 Restructuring 0 0 0.0 Other 3 1,126 9.7 Fund-Of-Funds 3 407 3.5 Totals 49 11,661 100.0 Source: The Private Equity Analyst and Buyouts A trend that Callan perceives among buy-side private equity managers and plan sponsors, is investors trying to improve the positioning of their port- folios' venture portions. The IPO success of new venture-backed Internet com- panies, combined with very full buyout allocations, has encouraged investors to enhance exposure in the emerging technology area. Access to high quality venture capital funds, which was never easy, is becoming more difficult. While subordinated (mezzanine) debt started slowly in the first quarter, we expect this strategy will post strong numbers this year. The credit crunch last year and continued uncertainty regarding capital market liquidity have improved the prospects for this sometimes overly competitive strategy. Ac- cording to Buyouts newsletter, six partnerships seeking $3.4 billion were in the market during the first quarter. Market Environment After a fourth quarter hiatus, buyout transactions are increasing. Securities Data Co. reports that 81 buyout transactions occurred in the first quarter, of which 41 deals announced values totaling $8.4 billion. Senior lenders are still cautious, lending only to about 3.5 times EBITDA, which will finance only about half or less of a typical transaction's capital structure. High-yield offerings in the first quarter totaled approximately $21 billion, versus $28 billion in the same period last year. According to The Wall Street Journal, only 73 initial public offerings occurred during the first quarter, down from 106 a year ago. While the appetite for Internet stocks is well publicized, overall the equity market for smaller companies continues to be risk averse. -CMR- The Capital Market Review is published quarterly for members of the institutional investment community, both domestic and international. The Capital Market Review focuses primarily on the latest quarterly perfor- mance of market indices and Callan style groups for each of the major asset classes used by institutional investors. Capital Market Review con- tributors are as follows: Janet Becker-Wold, Non-U.S. Fixed George Varino, U.S. Fixed-Income Gary Robertson, Real Estate Jay Kloepfer, Economy Jim McKee, U.S. Equity Gary Robertson, Alternative Investments Justin Toner, Non-U.S. Equity Matt McKenzie, Appendix Callan Associates Inc. is a privately-held and 100 percent employee- owned firm whose sole business is strategic asset management consult- ing as an independent, objective third party. Headquartered in San Fran- cisco, Callan also has regional offices in Chicago, Morristown, Atlanta and Denver. © 1999 Callan Associates Inc. Callan Associates Inc. 4 7 • CAPITAL MARKET REVIEW APPENDIXA ~l A PUBLICATION OF CALLAN ASSOCIATES INC. F1RST QUARTER 1999 U.S. EQUITY 7 Style Median and Index Returns* for Periods Ended March 31, 1999 Last Last Last3 Lasts Last 10 Last 15 Quarter Year Years Years Years Years Large Cap Equity Large Cap-Broad Style 3.50 13.80 25.22 23.35 18.41 18.10 Large Cap-Growth Style 6.30 26.46 29.53 25.47 19.90 19.23 Large Cap-Value Style 0.39 2.08 19.08 20.31 16.47 17.01 7 Aggressive Growth Style 7.44 20.67 16.63 20.87 20.09 19.72 Conrrarian Style 0.25 -4.35 16.92 18.95 15.50 15.98 Core Style 4.55 17.56 27.43 25.69 19.11 18.27 Yield Style -1.10 1.59 19.24 20.47 15.92 17.23 CAI Broad Market Index 4.08 14.53 25.29 24.06 17.94 17.48 CAI Large Cap Index 6.43 26.56 32.27 29.48 20.16 19.00 S&P500 4.98 18.46 28.07 26.25 18.97 18.47 NYSE 1.68 7.15 22.56 22.20 16.91 16.85 ~l Dow Jones Industrials 7.01 13.15 22.83 24.55 18.83 18.92 Mid Cap Equity Mid Cap-Broad Style -2.17 -1.38 15.61 17.93 17.26 16.85 -l Mid Cap-Growth Style 4.09 5.66 16.07 18.73 18.54 16.80 Mid Cap-Value Style -3.34 -12.78 14.37 15.81 15.87 16.79 CAI Medium Cap Index 1.97 3.27 19.18 19.12 16.01 16.51 S&P MidCap 400 -6.38 0.45 18.31 18.20 17.43 17.32 Small Cap Equity Small Cap-Broad Style -8.54 -18.40 9.72 13.46 14.74 14.83 Small Cap-Growth Style -6.06 -11.45 8.97 14.92 18.08 15.24 Small Cap-Value Style -10.95 -22.70 10.27 12.03 13.62 14.83 J CAI Small Cap Index -3.36 -10.24 11.09 13.94 13.38 13.98 CAI Micro Cap Index -8.67 -22.16 6.46 11.64 11.43 10.85 S&P 600 Small Cap Index -9.00 -19.13 8.98 12.32 11.59 10.36 Russell 2000 -5.42 -16.25 7.72 11.23 11.47 11.33 J NASDAQ 12.34 34.57 31.19 27.79 20.96 17.90 CAI Broad Market Sectors** Basic Materials -0.45 -16.76 0.71 7.05 8.66 11.23 _J Capital Goods 1.42 0.46 19.28 19.50 15.42 15.46 Communication Services 3.66 31.64 Consumer Cyclical 5.28 12.82 22.63 17.57 15.72 17.13 Consumer Staples -1.75 5.63 20.85 25.37 19.49 21.41 Energy 5.56 -4.16 14.26 16.49 12.60 12.80 Financials 5.45 3.45 29.57 28.97 20.50 18.93 Health Care 2.96 24.05 Utilities -10.27 -5.23 11.39 13.10 12.31 14.77 Technology 11.58 56.64 40.55 35.72 23.01 17.31 Transportation 3.83 -10.36 11.55 12.70 12.91 13.44 * Returns less than one year are not annualized. ** The economic sectors were reorganized to eliminate the Miscellaneous sector in performance measurements after June 30, 1996. As part of this reorganization, two new sectors, Communication Services and Health Care Services, were created. Consequently, sector comparisons of time periods beginning prior to June 30, 1996, with time periods beginning after that date may not be valid. U.S. Equity Index Characteristics as of March 31, 1999 Callan Callan Callan Callan Callan S&P Broad Large Medium Small Micro 500 j Cap Range ($MM) 45-452,330 8,364-452,330 2,224-19,951 45-8,885 10-872 272-452,330 # Issues 1,973 149 346 1,478 980 500 % of Callan Broad 100% 66% 20% 14% NIA NIA Wtd Avg Mkt Cap $85.2B $124.7B $9.IB $2.0B $0.2B $101.9B J Price/Book Ratio 857% 983% 632% 559% 273% 881% PIE Ratio (forecasted) 28.2 31.1 22.6 20.6 15.6 29.3 Dividend Yield 1.2% 1.1% 1.5% 1.1% 0.9% 1.3% 5-YrEamings (forecasted) 16.8% 16.8% 15.7% 18.8% 19.0% 15.7% . l III CAPITAL MARKET REVIEW APPENDIXB A PUBLICATION OF CALLAN ASSOCIATES INC. F1RST QUARTER 1999 U.S. FIXED INCOME l Style Median and Index Returns* for Periods Ended March 31, 1999 Last Last Last3 Last 5 Last 10 Last 15 Quarter Year Years Years Years Years Broad Fixed-Income Active Duration Style -I.JO 6.61 7.84 7.82 9.22 10.48 Core Bond Style -0.47 6.41 7.86 7.84 9.26 10.42 LB Aggregate -0.50 6.50 7.75 7.79 9.08 10.24 LB Govt/Corp -1.19 6.55 7.75 7.73 9.08 IO.IS LB Corp -0.71 6.18 8.01 8.36 9.65 11.01 LB Govt -1.43 6.67 7.66 7.53 8.90 9.86 SB Broad Investment Grade -0.46 6.50 7.76 7.81 9.13 10.27 Long Term Extended Maturity Style -3.09 6.92 9.92 9.89 ll.12 12.25 LB Gov/Corp Long -3.37 6.49 9.65 9.65 10.79 12.30 LB Gov Long -4.22 6.58 9.83 9.71 10.90 12.40 LB Corp Long -1.96 5.56 9.12 9.41 10.54 12.13 SB High Grade -2.81 5.85 9.02 9.17 10.39 12.12 Intermediate Term Intermediate Style 0.08 6.56 7.20 7.13 8.55 9.60 LB Gov/Corp Intermediate -0.19 6.57 7.00 7.00 8.38 9.26 LB Gov Intermediate -0.27 6.58 6.89 6.79 8.20 9.10 LB Corp Intermediate O.Ql 6.52 7.35 7.76 9.06 9.86 Short Term Defensive Style 0.77 6.16 6.38 6.33 7.68 8.67 Active Cash Style 1.22 5.60 5.75 5.71 6.36 7.12 Money Market Funds (net of fees) 1.08 4.86 4.98 4.95 5.16 ML Treasury 1-3 Year 0.60 6.09 6.30 6.22 7.30 8.13 90-day Treasury Bills 1.06 5.00 5.20 5.22 5.38 6.08 High Yield CAI High Yield Style 3.02 1.68 10.14 JO.SO JJ.74 12.03 LB Corp High Yield 1.85 0.38 8.58 9.40 10.62 11.65 ML High Yield Master 1.08 1.94 8.97 9.65 10.97 First Boston High Yield 1.65 -0.75 8.20 8.75 10.73 11.78 Mortgage/ Asset-Backed CAI Mortgages Style 0.93 6.60 8.00 8.04 9.46 JO.SJ LB Mortgage-Backed Securities 0.99 6.28 7.78 7.96 9.10 10.56 LB Asset-Backed Securities 0.69 6.66 7.08 6.94 Innation Consumer Price Index 0.44 1.70 1.82 2.25 2.94 3.12 Producer Price Index 0.08 -1.53 -0.96 0.51 0.97 1.12 * Returns less than one year are not annualized. U.S. Fixed-Income Index Characteristics as of March 31, 1999 Yield Modified Adj. Average % of % of Lehman Brothers Indices To Worst Duration Maturity LBG/C LB Aggregate LB Aggregate 6.04% 4.68 8.86 Yrs. 100.00 % 100.00 % J LB Govt/Corp 5.80 5.53 10.14 100.00 66.94 Intermediate 5.58 3.42 4.37 69.18 46.31 Long Term 6.32 10.27 23.09 30.82 20.63 LB Govt 5.45 5.30 8.98 66.60 44.58 J LB Corp 6.52 5.99 12.45 33.40 22.36 LB Mortgage 6.55 2.94 6.39 31.77 LB Asset-Backed Securities 5.87 3.14 3.79 1.29 LB Corp High Yield 10.48 4.75 8.15 7 ~ I l 7 I 7 -7 l _l j J I ,.J III CAPITAL MARKET REVIEW APPENDIXC A PUBLICATION OF CALLAN ASSOCIATES INC. F1RSTQUARTER 1999 INTERNATIONAL EQUITY Style Median and Index Returns* for Periods Ended March 31, 1999 Last Quarter International Equity Global Style 2.96 Non-U.S. Style 1.90 Core Style 1.80 Top Down Style 1.87 Bottom Up Style 2.72 MSCI EAFE-Unhedged 1.39 MSCI EAFE-Local 7.27 MSCI EAFE ex Japan-Unhedged -1.44 MSCI EAFE ex Japan-Local 4.50 MSCI World-Unhedged 3.57 MSCI World-Local 6.30 Pacific Equity Pacific Basin Style 9.50 Japan Style 13.90 Pacific Rim Style 4.98 MSCI Pacific-Unhedged 11.19 MSCI Pacific-Local 15.30 MSCI Japan-Unhedged 12.18 MSCI Japan-Local 17.78 Europe Equity Europe Style -1.60 MSCI Europe-Unhedged -2.11 MSCI Europe-Local 4.31 Emerging Markets Emerging Markets Database 8.59 MSCI Emerging Market Free 12.44 * Returns less than one year are not annualized. Return Attribution for EAFE Countries for Quarter Ended March 31, 1999 Country (by weight) Total Local Currency Japan 12.18% 17.78% -4.75% United Kingdom 4.32 7.51 -2.97 Germany -9.27 -1.31 -8.07 France -2.06 6.53 -8.06 Switzerland -6.58 0.67 -7.20 Netherlands -7.20 0.94 -8.06 Italy -3.01 5.49 -8.06 Spain -7.15 0.99 -8.06 Australia 7.67 4.58 2.95 Sweden 5.39 6.91 -1.42 Honk Kong 6.64 6.67 -0.03 Finland 17.99 28.33 -8.06 Belgium -12.82 -5.17 -8.07 Denmark -13.35 -6.27 -7.55 Singapore 10.24 15.48 -4.54 Portugal -9.62 -1.70 -8.06 Ireland -0.25 8.49 -8.06 Norway 10.13 I 1.71 -1.41 Austria -1.06 7.62 -8.07 New Zealand 7.52 6.50 0.96 Last Year 5.43 3.69 4.34 5.88 1.38 6.07 3.53 3.60 3.93 12.64 11.46 6.73 22.03 -8.78 10.40 1.63 15.48 2.57 5.09 4.57 4.43 -22.45 -20.95 New Zealand 0.2% Austria0.3 Norway0.4o/, Ireland 0.5o/- Portugal 0.6 Singapore 0.7'i'l Denmark 0.8o/ Belgium I .6o/, Finland 1.8% Hong Kong 2. I% Last3 Lasts Last 10 Last 15 Years Years Years Years 15.63 14.73 12.89 15.66 11.32 10.91 10.47 15.17 11.11 10.58 10.31 14.98 11.83 10.95 10.19 15.44 11.30 10.90 10.88 15.75 8.47 8.75 5.66 13.69 13.03 10.65 5.60 10.92 17.75 16.34 13.77 16.72 22.45 17.07 14.17 14.90 17.58 16.36 10.80 15.08 20.18 17.32 10.68 13.47 -5.95 -1.41 3.72 11.20 -5.64 -4.09 2.13 10.04 -13.78 -2.55 9.52 11.67 -8.73 -3.61 -2.80 8.86 -5.16 -1.02 -3.43 5.74 -8.85 -4.38 -4.11 8.50 -5.65 -1.62 -5.18 3.99 21.56 18.87 15.69 19.28 22.05 18.95 14.62 17.64 26.76 19.45 14.92 16.01 -5.39 -3.27 14.56 -9.52 -5.34 10.52 Country Weights---EAFE For Quarter Ended March 31, 1999 Switzerland 7.3% 7 7 l 7 l l I _ _j _ _j I ..J ;.__J I .J J II CAPITAL MARKET REVIEW APPENDIXD A PUBLICATION OF CALLAN ASSOCIAIBS INC. F1RST QUARTER 1999 INTERNATIONAL FIXED INCOME Style Median and Index Returns* for Periods Ended March 31, 1999 Last Last Last 3 Lasts Last 10 Last 15 Quarter Year Years Years Years Years Global Fixed Global Style -3.74 8.78 6.81 7.49 9.85 12.61 SB World Govt-Unhedged -3.86 9.99 5.48 7.00 8.84 SB World Govt-Local 0.42 7.54 8.89 8.41 9.26 Non-U.S. Fixed Non-U.S. Style -4.93 10.41 5.37 6.84 10.00 12.60 SB Non-U.S. Govt-Unhedged -4.84 11.64 4.35 6.78 8.90 SB Non-U.S. Govt-Local 1.26 7.80 9.44 8.80 9.21 Emerging Markets Fixed JPM Emerg Mkts Bond Index 5.06 -15.81 10.28 12.05 SB Brady Bond Index 5.46 -6.96 13.90 15.11 Return Attribution for Non-U.S. Government Country Weights-SB Non-U.S. Govt For Quarter Ended March 31, 1999 Indices for Quarter Ended March 31, 1999 Ireland 0.5t Portugal 0.6$1 Switzerland 0.7% Finland I .I Australia 1.l 'i'i Country (by weight) Total Local Currency** Japan -1.66% 3.24% -4.75% Germany -7.42 0.70 -8.07 France -7.64 0.46 -8.06 Italy -7.78 0.30 -8.06 United Kingdom -3.13 -0.16 -2.97 Spain -7.83 0.26 -8.06 Netherlands -7.37 0.76 -8.06 Canada 2.00 0.46 1.53 Belgium -7.46 0.66 -8.07 Sweden -0.43 1.01 -1.42 Denmark -6.15 1.52 -7.55 Austria -7.17 0.97 -8.07 Australia 2.43 -0.50 2.95 Finland -7.42 0.70 -8.06 Switzerland -6.47 0.78 -7.20 Portugal -7.60 0.50 -8.06 Ireland -7.25 0.89 -8.06 OTHER ASSET CLASSES Italy 11.8% Style Median and Index Returns* for Periods Ended March 31, 1999 Last Last Last3 Lasts Last 10 Quarter Year Years Years Years Balanced Accounts Asset Allocator Style 1.40 10.97 18.94 17.76 15.00 Domestic Balanced Database 1.45 8.19 16.35 16.10 14.06 Global Balanced Database 0.29 4.13 12.67 12.52 12.70 60% S&P 500 + 40% LB G/C 2.51 14.41 20.00 18.81 15.14 Convertibles Convertibles Database 3.64 6.01 14.95 13.85 13.69 First Boston Convertible Securities 3.88 2.30 11.65 12.33 12.08 Real Estate Callan Real Estate*** (mean; net of fees) 2.47 14.06 13.12 10.49 4.72 Callan Real Estate REIT Database -5.10 -18.96 10.72 9.55 10.71 NAREIT Total Return -5.92 -23.21 6.31 7.52 8.10 * Returns less than one year are not annualized . ** Derived from MSCI EAFE data *** Preliminary return Last 15 Years 15.08 14.57 14.01 15.39 13.52 12.60 6.14 7.81 Germany 12.1% 7 7 ) 1 I l J J J J J Active Management Overview Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Domestic Fixed-Income ..................................................... 2 Asset Class Risk and Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Investment Manager Asset Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Investment Manager Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Manager Analysis PIMCO-Liquid Operating Monies PIMCO-Liquid Operating Fund Bond Portfolio Characteristics Portfolio Characteristics Detail ............................................. 6 7 8 9 7 7 7 l j j J J 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 domestic equity manager database. 15% 10% 5%-(23) • 00 E Range of Separate Account Manager Returns by Asset Class One Quarter Ended March 31, 1999 11 • I I • (17)~ (67)•·.& ::, 0%--(69)' (87)- Q) i:.:: (.5'/,) -(41)[§ (IO'i:) - (15'7<) ~------------,-~----------,----------,,-,--------------....... -----,,,......,---~ Domestic Non-US Domestic Non-US Real Cush 10th Percentile 25th Percentile Median 75th Percentile 90th Percentile Index A Equity VS S&PS00 7.87 4.76 0.82 (5.03) (10.02) 4.98 Equity Fixed-Income vs vs MSCIEAFE LB AggrBd 5.66 1.08 3.47 0.59 1.90 (0.11) 0.72 (0.65) (0.57) ( l.21:<) 1.39 (0.50) Govt Bond Estate Equivalents vs vs vs CAI Intl. FI NCREIF Index 3 Mon T-Bills (3.28) 5.40 1.38 (4.22) 2.45 1.28 (4 93) 1.81 1.22 (5.81) 1.51 1.12 (6.53) 1.09 1.00 (4.84) 3.63 1.06 Range of Separate Account Manager Returns by Asset Class One Year Ended March 31, 1999 40% 30% (39)~ 20%-(22) .._ 00 (23)E?J E 10%- ::, (24)1 • : (44) (86) Q) 0% I. I i:.:: --I I (!()¼)- (20'1,,) - (30%) ~------------------------------------....... --,----~ Domestic Non-US Oomestk Non-US Real Cash 10th Percentile 25th Percentile Median 75th Percentile 90th Percentile Index A Equity vs S&PS00 26.53 17.33 3.98 (1 1 31) (22.08) 18.46 County Sanitation Districts Of Orange County Equity Fixed-Income vs vs MSCIEAFE LB AggrBd 8.65 7.22 5.85 6.81 3.69 6.41 0.44 5.97 (3.62) 5.20 6.07 6.50 Govt Bond Estate Equivalents vs VS vs CAI Intl. FI NCREIF Index 3 Mon T-Bills 12.41 29.59 6.10 11.40 20.52 5.84 10.41 12.42 5.60 8.80 9.54 5.35 6.57 5.78 4.88 11.64 16.59 5.00 7 l l I 1 j J -J Active Management vs the Index DOMESTIC FIXED-INCOME Active Management Overview The U.S. bond market suffered in the first quarter as the flight to quality fears of late 1998 subsided and investors moved out of Treasuries. Although Treasuries flocked into spread products, only the mortgage and high yield sectors were able to post gains. Overall, Fixed Income manager returns during the most recent quarter were varied, ranging from plus to minus 3%. The Intermediate Manager median return of 0.08% outperformed the Lehman Brothers Aggregate Index return of -0.50%. Core Managers performed slightly above the index but suffered losses for the quarter. The Extended Maturity Style and Active Duration Style groups underperformed the index for the quarter. Short Duration vs Long Long bonds suffered the greatest losses in the government sector with the rate increases. As a result, the Extended Maturity median manager returned -3.09% for the quarter. Active Cash and Defensive managers saw relatively healthy returns for the quarter as compared to their long counterparts with returns of 1.22% and 0.77% respectively. Mortgages and High Yield High Yield managers were rewarded by positive news on the economy, the increase in liquidity, and the relatively low level of interest rates. These factors caused investors to jump back into the riskier securities. Mortgage Backed Managers also fared well as interest rates on U.S. Treasuries were forced up and prepayment fears dissipated. Separate Account Style Group Median Returns for Quarter Ended March 31, 1999 Lehman Aggregate: (0.50'i,) Lehman Govt/Corp: (I.! 'Vi) 5%~--------------------------;_ __________ ~ rJJ s 3 0% 1---- Q) 0,:: 1.22% 0.77% 3.02% 0.08% (0.-H'Ji,) (0.07%) (3 (JlJ'lc) (:'i'ii) '--------------------------- 10% 8% rJJ s ;::, <J Q) 0,:: 4'7,, 2% 0% Active Defensive Intermed Core Core Extended Cash Bond Plus Maturity Separate Account Style Group Median Returns for One Year Ended March 31, 1999 Active Cash Defensive lntermed Core Bond Core Plus Extended Maturity County Sanitation Districts Of Orange County Active Mortfage High Duration Bae ed Yield Lehman Aggregate: Lehman Govt/Corp: Active Duration Mortgage Backed High Yield 6.50% 6.55% II 7 7 l 1 1 l l Asset Class Risk and Return The charts below show the three and one-half 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 CAI Total Asset Class Databases. In each case, the crosshairs on the chart represent the return and risk of the Total Fund. "' E ::, a) ~ 7.0¼ 6.8'ib 6.6¼ 6.47': 6.2'7v 6.0'7v 5.8% 5.6'7v 5.4% 5.2'7v 5.0% 0.0'7v 7.0% 6.5¼ 6.0% 5.5¼ 5.0¼ 111 4.5% Three And One-Half Year Annualized Risk vs Return Asset Classes vs Benchmark Indices Total Domestic Fixed-Income Lehman Brothers l-5yr Govt/Co Merrill L ncll 1-3 r Govl/Co 0.5% 1.0% 1.5% Standard Deviation 2.0% Three And One-Half Year Annualized Risk vs Return Asset Classes vs Asset Class Median J 2.5% I Total Domestic Fixed-Income l Defensive Fixed-Income Style H .., Money Market Median I 0.0% 0.2'7v 0.4% 0.6% 0.8'7v l.0'7v 1.2% l.4'ib 1.6¼ 1.8% 2.0'7o 2.2% 2.4% Standard Deviation County Sanitation Districts Of Orange County 7 l 7 7 l 1 _] _] _J J J J J J Investment Manager Asset Allocation /I The table below contrasts the distribution of assets across the Fund's investment managers as of March 31, 1999, with the distribution as of December 31, 1998. Asset Distribution Across Investment Managers Domestic Fixed Income Long Term Operating Fund Liquid Operating Monies Total Fund County Sanitation Districts Of Orange County March 31, 1999 Market Value Percent $324,436,789 100.0% 305,619,574 94.2% 18.817,215 5.8% $324,436,789 100.0% December 31, 1998 Market Value Percent $322,780,682 100.0% 304,174,252 94.2% 18,606,430 5.8% $322,780,682 100.0% Bll 7 l 1 l ] J J l Investment Manager Returns /I The table below details the rates of return for the plan's investment managers over various time periods ended March 31, 1999. 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 March 31, 1999 Last Last Last Last Last 2 3 3-1/2 Quarter Year Years Years Years Domestic Fixed Income 0.51% 6.81 % 7.62% 6.90% 6.76% Long Term Operating Fund 0.48% 6.90% 7.74% 6.96% 6.83% Liquid Operating Monies 1.13% 5.47% 5.56% 5.50% 5.56% Liquid Operating Monies ( 1) 1.09% 5.31% 5.41% 5.34% 5.40% Market Indicators LB l-5yr Govt/Corp 0.35% 6.40% 7.55% 6.72% 6.58% ML l-3yr Govt/Corp 0.72% 6.18% 6.87% 6.38% 6.31% ML l-5yr Govt/Corp 0.41% 6.48% 7.43% 6.65% 6.53% Treasury Bills 1.06% 5.00% 5.16% 5.20% 5.21% Total Fund 0.51% 6.81% 7.62% 6.90% 6.76% (1) Net of Fees. County Sanitation Districts Of Orange County l -1 "' = 1-, :::s ..... (I.) 0::: (I.) .::: ~ Q) 0::: PIM CO-LIQUID OPERA TING MONEY PERIOD ENDED MARC~ 31, 1999 /I Investment Philosophy • The Money Market Funds Database consists of actively managed short term funds . These funds invest in low-risk, highly liquid, short-term financial instruments. Quarterly Summary and Highlights • PIMCO-Liquid Operating Money's portfolio posted a 1.13% return for the quarter placing it in the 26 percentile of the Money Market Database group for the quarter and in the 1 percentile for the last year. • PIMCO-Liquid Operating Money's portfolio outperformed the T-Bls by 0.07% for the quarter and outperformed the T-Bls for the year by 0.47%. Quarterly Asset Growth Beginning Market Value $18,606,430 Net New Investment $-18 Investment Gains/(Losses) $210,802 Ending Market Value $18,817,215 Performance vs Money Market Database 7'7o 6'7o 5'7o 4'7o 3'7o - 2'7o l'lo (60) • (26 13t44 0% IO!h Percentile 25th Percentile Median 75th Percentile 90th Percentile PIM CO-Liquid Operating Money • A Net of Fees • B T-Bls * Last Quarter 1.18 1.14 1.08 J.02 0,95 1.13 1.09 1.06 (33) B(7) [§A(l) Last Year 5.25 5.08 4.86 4.63 4.40 5.47 5.31 5.00 Relative Return vs T-Bls 0.25% 0.20%- 0.15% • 0.10% 0.05%- 0.00% (0.05'/.) • (0 [()<;; J • 95 1996 1997 1998 99 I A(l) (30)§B(8) I A(2) (23)BB(IO) (25) B(9) ~A(ll Last 2 Years Last 3 Years Last 3-1/2 Years 5.38 5.35 5.38 5.21 5.19 5.21 5.00 4.98 5.02 4.78 4.77 4.81 4.57 4.55 4.60 5.56 5.50 5.56 5.41 5.34 5.40 5.16 5.20 5.21 Money Market Database Annualized Three And One-Half Year Risk vs Return "' E :::s a) 0::: 6.0'7o -------------------, 5.5% Cl 5.0% D 4.5% 4.0% C D 3.5% 3 .0% +---.-...... --,,----.--..----.---.---.---.---,,---t 0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45 0.50 0.55 I • PIMCO-Liquid Operating Money I County Sanitation Districts Of Orange County Standard Deviation 7 7 7 J J j PIMCO-LONG TERM OPERATING FUND PERIOD ENDED MARCH 31, 1999 /J Investment Philosophy II Defensive Style managers aim to minimize interest rate risk by investing predominantly in short to intermediate term securities. The average portfolio maturity is typically two to five years. Quarterly Summary and Highlights • PIMCO-Long Term Operating Fund's portfolio posted a 0.48 % return for the quarter placing it in the 90 percentile of the Defensive Fixed-Income Style group for the quarter and in the 6 percentile for the last year. • PIMCO-Long Term Operating Fund's portfolio outperformed the ML15 G/C by 0.07% for the quarter and outperformed the ML15 G/C for the year by 0.42%. Quarterly Asset Growth Beginning Market Value $304,174,252 Net New Investment $-44 Investment Gains/(Losses) $1 ,445,366 Ending Market Value $305,619,574 Performance vs Defensive Fixed-Income Style 9% 8% 7% 6'7,, ~(6) (23) 5% 47'.• 3% 2'il· - l'lo - (94)1. •1(90) ()'lo Last Quarter Last Ytiar I 0th Percentile 1.06 6.76 25th Percentile 0.96 6.45 Median 0.77 6.16 7 5th Percentile 0.62 5.99 90 th Percentile 0.47 5.57 PIMCO-Long Term Operating Fund • 0.48 6.90 ML15 G/C ... 0.41 6.48 Relative Return vs ML15 G/C 0.30%-.-...-----------------....---. 0.25% -1--1---------+------f---------+--I 0.20%- "' 0.15%-E ::I Q) ~ 0.10%- o.l 0.05%-.;::; ~ 0.00'/o Q) ~ (()_()5~;-J- 1010'1,.)·- (0 I 51;;) -t--t---,-----+-----f-----,.- (0.21Y,, l -------------------95 1996 1997 1998 I • PIMCO-Long Term Operating Fund I County Sanitation Districts Of Orange County 99 (14)8 '"' (26)a(l5) (38)~(16) Lasl. 2 Yea rs Last 3 Years Last 3-112 Years 7.70 7.06 6.91 7.14 6.67 6.62 6.93 6.38 6.36 6.72 6.33 6.26 6.14 5.90 5.87 7.74 6.96 6.83 7.43 6.65 6.53 Defensive Fixed-Income Style Annualized Three And One-Half Year Risk vs Return "' E ::I ti ~ 7.5% ..----------.-----------, 7.0% D PIMCO-L1.m0 Term O t:n!l inu Fund rr "' 6.5% [I a 6.0'lo a " a 5.5% 5.0% -1---...... --.-----;-----.----.----1 0.0 0.5 1.0 1.5 2.0 Standard Deviation 2.5 3.0 l 7 l j j J LONG TERM OPERATING FUND PORTFOLIO CHARACTERISTICS SUMMARY MARCH 31, 1999 /I 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 the different sectors. The second chart compares the duration distribution (or term structure). The last chart compares the distribution across quality cells. Global Bonds I¼ Assel Backed 2% Agencies 15% CMOs 3% Treasuries 41 '7v Corporates 24% TBAs 3% Sector Allocation Trcasuril:s 61% CorporaLcs 24% Long Term Operating Fund Lehman GovernmenUCorporate 1-5 Duration Distribution Weighted Average Duration 30% ~--------~----------~ • Long Term Operating Fund: 2.77 .9 25% ?1-~~-0 Lehman Government/Corporate 1-5: 2.37 ~ 20% .... 21.2% 20.3% 0 0... .... 15% 0 i5 10% V u .... V 0... 5% 0% <1.0 1.0-1.5 1.5-2.0 2.0-2.5 2.5-3.0 Years Duration Quality Distribution 100% ~--~---~------~--~--~ .9 ~ =-----,.__~ t:: 0 60% 0... .... 0 E 40% V u .... V 20% 0... 2J~%o.3% 1.4% 3.6%4.6% 0% Aaa+ Aaa Aal Aa2 Aa3 Al Moody's Rating 3.0-3.5 3.5-4.0 4.0+ Weighted Average Quality • Long Term Operating Fund: Aaa 0 Lehman Government/Corporate 1-5: Aaa ,_____ __________ ------- 2.4%2.4% 3.8% A2 A3 Baal <Baal * All Statistics shown on the page are dependent on the securities in the portfolio being recognized (by their Cusip) and priced. In this case 99% of the secunties in the portfolio (by market value) were recognized and priced. County Sanitation Districts Of Orange County LONG TERM OPERATING FUND II PORTFOLIO CHARACTERISTICS DETAIL MARCH 31, 1999 7 Weighted Average Portfolio Characteristics Total Fund, By Asset Class and By Sector 7 Ending Percent Market of Effective Effective OA OA Sector Value* Portfolfo Cou11on Maturitv Yield Duration Convexiti:: Qualiti:: Total Fund $318,805,647 100.0% 6.51 5.62 5.38 2.77 (0.05) Aaa Asset Backed $5,853,360 1.8% 5.21 1.33 5.26 0.13 0.00 Aaa Agencies $46,807,698 14.7% 6.33 4.87 5.54 3.62 (0.02) Aaa+ CMOs $9,029,158 2.8% 6.24 22.86 6.14 4.93 (0.01 l Aaa+ Corporates $76,267.324 23.9% 6.39 2.21 5.62 1.96 O.Q7 Al --, Global Bonds $1,973,280 0.6% 5.10 4.11 5.46 0.11 0.00 A3 Mortgages $27,656,749 8.7% 6.54 14.10 5.75 2.23 (0.50) Aaa+ TBAs $10,449,141 3.3% 6.50 30.12 6.65 5.27 (2.]0) Treasuries $129,444,978 40.6% 6.88 3.60 5.00 3.09 0.14 Aaa+ Total Fixed-Income $307,481,686 96.4% 6.57 5.82 5.40 2.87 (0.05) Aaa Cash Equivalents $11,323,961 3.6% 4.82 0.25 4.82 0.25 0.00 Aaa l 5 Largest Holdings Ending Percent Market of Effective OA OA Issuer Name ID'l.le Name Sector Value Portfolio Yield Duration Convexitv Qualiti:: United States Treas Nts Nt 6.375% 09/30/2001 D Treasuries $32,445,447 10.2% 5.08 2.30 O.Q7 Aaa+ Federal Natl Mtg Assn Medi Dtd 03/27/1997 Agencies $19,885,886 6.2% 5.43 2.70 0.09 Aaa+ United States Treas Nts Nt 7.50% 11/15/2001 Treasuries $18,573,917 5.8% 5.10 2.32 O.Q7 Aaa+ United States Treas Nts Nt 6.50% 05/31/2002 Treasuries $17,072,049 5.4% 5.16 2.79 0.10 Aaa+ ] Federal Natl Mtg Assn Medi 5.710% 12/15/2008 Dd 1 Agencies $14,560,061 4.6% 5.84 6.22 (0.25) Aaa+ 5 Lowest Rated Holdings (Moody's Rating) ] Ending Percent Market of Effective OA OA Issuer Name Issue Name Sector Value Portfolio Yield Duration Convexitv Qualili:: Lehman Brothers Hldgs Inc Nt 6.65% l 1/08/2000try Corporates $5,071,386 1.6% 6.16 I.SO 0.03 Baal _l Lehman Brothers Hldgs Inc Nt 6.4% 8/30/2000 Corporates $2,534,244 0.8% 6.14 1.33 0.02 Baal Heller Finl Inc Medium Ter Tranche # Tr 00225 D Corporates $998,978 0.3% 5.86 2.29 0.07 A3 Heller Finl Inc Fltg 6/01/2000 Corporates $4,034,634 1.3% 5.30 1.09 0.02 A3 Bankers Tr N Y Corp Global Nt Fltg Rate Global Bonds $1,989,056 0.6% 5.46 0.11 0.00 A3 J 5 Longest Duration Holdings Ending Percent J Market of Effective OA OA Issuer Name Issue Name Sector Value Portfolio Yield Duration Convexitv Qualitv Federal Home Ln Mtg Corp M Ser 1620 Cl 1620-Zfs G CMOs $2,147,729 0.7% 6.38 9.81 (0.65) Aaa United States Treas Nts Nt 3.375% 1/15/2007 Treasuries $10,053,899 3.2% 3.99 6.71 0.52 Aaa+ United States Treas Bds Deb 13.25% 05/15/14 Treasuries $4,069,888 1.3% 5.94 6.50 0.52 Aaa+ Gnma Tba Mpt 6.0% 30yr Tba Mortgages $6,073,250 1.9% 6.48 6.48 (1.()2) Aaa+ Federal Natl Mtg Assn Medi 5.710% 12/15/2008 Dd 1 Agencies $14,560,061 4.6% 5.84 6.22 (0.25) Aaa+ I 5 Holdings with Highest Effect Yield -· J Ending Percent Market of Effective OA OA , Issuer Name L-.sue Name Sector Value Portfolio Yield Duration Convexitv Qualiti:: I Commit To Pur Gnma Sf Mtg 6.500% 05/15/2029 TBAs $10,449,141 3.3% 6.65 5.27 (2.23) NIA ""--' Gnma Tba Mpt 6.0% 30yr Tba Mortgages $6,073,250 1.9% 6.48 6.48 (1.()2) Aaa+ Federal Home Ln Mtg Corp M Ser 1620 Cl 1620-Zfs G CMOs $2,147,729 0.7% 6.38 9.81 (0.65) Aaa Bear Stearns Cos Inc Shelf 6.750% 4/15/03 Corporates $2,100,470 0.7% 6.36 3.42 0.15 AZ Federal Home Ln Mtg Corp M 6.500% 09/25/2018tf Gt CMOs $2,026,527 0.6% 6.26 4.99 0.31 N/R Markel Value ·hown does not Include payable and rccclva cs. All Statistics shown on the page are dependent on the securities in the portfolio being recognized (by their Cusip) I and priced. In this case 99% of the securities in the portfolio (by market value) were recognized and priced. ~ County Sanitation Districts Of Orange County