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HomeMy WebLinkAbout2000-07-12Draft MINUTES OF FINANCE. ADMINISTRATION AND HUMAN RESOURCES COMMITTEE MEETING Orange County Sanitation District Wednesday, July 12, 2000, 5:00 p.m. A meeting of the Finance, Administration and Human Resources Committee of the Orange County Sanitation District was held on July 12, 2000 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: Directors Present: Thomas R. Saltarelli, Chair Mark Leyes, Vice Chair Shawn Boyd Shirley McCracken Peer Swan Norm Eckenrode, Board Chair Peter Green, Vice Board Chair Jan Debay, Past Board Chair OTHERS PRESENT: Tom Nixon, General Counsel Toby Weissert Jeff Bower Juan Pittman Greg Harrington (2) APPOINTMENT OF CHAIR PRO TEM No appointment was necessary (3) PUBLIC COMMENTS There were no public comments. Directors Absent: John M. Gullixson Mark A. Murphy James W. Silva STAFF PRESENT: Blake Anderson, General Manager Gary Streed, Director of Finance Lisa Tomko, Director of Human Resources Steve Kozak, Financial Manager Mike White, Controller Greg Mathews, Asst. to the General Manager Barbara Collins, Senior Analyst Penny Kyle, Committee Secretary Brad Cagle, Accounting Manager (4) RECEIVE, FILE AND APPROVE MINUTES OF PREVIOUS MEETING It was moved, seconded and duly carried to approve the minutes of the June 14, 2000 Finance, Administration and Human Resources Committee meeting. Directors Eckenrode and Boyd abstained. FILED IN THE OFFICE OF THE SECRETARY ORANGE COUNTY ~ANITATION DISTRICT JUL 19 2000 ~< Minutes of the Finance, Administration and Human Resources Committee Meeting Page2 July 12, 2000 (5) REPORT OF THE COMMITTEE CHAIR Chair Saltarelli encouraged the Directors to attend the Groundwater Replenishment System Workshop on July 15 being held at the Orange County Water District. (6) REPORT OF THE GENERAL MANAGER General Manager Blake Anderson reported that Chris Reed of the Orange County Register has been working with staff on an article regarding biosolids that should be in Sunday's newspaper. (7) REPORT OF DIRECTOR OF FINANCE Director of Finance Gary Streed reported during the last 14 months there have been two downgrades in the investment portfolio but there have also been eight upgrades. (8) REPORT OF DIRECTOR OF HUMAN RESOURCES The Director of Human Resources had no report. (9) REPORT OF GENERAL COUNSEL General Counsel Tom Nixon had no report. (10) CONSENT CALENDAR. ITEMS a. FAHR00-56: Receive and file Treasurer's Report for the month of June 2000. b. FAHR00-57: Receive and file Certificate of Participation {COP) Monthly Report. c. FAHR00-58: Receive and file Employment Status Report as of June 19, 2000. d. FAHR00-59: Recommend to Board of Directors to receive and file 2000/01 Strategic Goals Workplans. e. FAHR00-60: Recommend to Board of Directors to adopt Resolution No. OCSD 00-XX, Declaration of Official Intent to Reimburse Certain of the District's Capital Reserve Funds for Expenditures Made in Advance for FY 2000-01 Capital Improvement Projects from Proceeds of a Future Long-Term Financing. END OE CONSENT CALENDAR Motion: It was moved, seconded and duly carried to approve the recommended actions for items specified as 10(a) through {e) under Consent Calendar. (11) ACTION ITEMS a. FAHR00-61: Recommend to Board of Directors to approve Amendment No. 3 to the Lease Agreement with Seaside Financial Corporation {Specification No. L-009-1} for lease of 18.09 acres of land at the northeast Minutes of the Finance, Administration and Human Resources Committee Meeting Page3 July 12, 2000 Motion: comer of Ward Streed and Garfield Avenue in the city of Fountain Valley for a one year period beginning September 1, 2000. It was moved, seconded and duly carried to recommend approval to the Board of Directors. b. FAHR00-62: Recommend to Board of Directors to adopt Resolution No. OCSD Motion: 00-XX, Authorizing the District's Treasurer to Invest and/or Reinvest District's Funds; Adopting District's Investment Policy Statement and Performance Benchmarks for FY 2000-01; and Repealing Resolution No. OCSD 99-14. Director McCracken requested several minor clarifications be made to the Investment Policy, as written. It was moved, seconded and duly carried to recommend approval to the Board of Directors, as clarified. c. FAHR00-63: Recommend to Board of Directors to: Motion: 1. Approve issuance of either the Series 2000 Refunding COPs (not- to-exceed $200 million), or the Series 2000 Refunding and Reimbursement COPs (not-to-exceed $230 million); and, 2. Adopt Resolution Authorizjng the Issuance of the Series 2000 COPs along with certain amendments to the District's outstanding Series 1992 and Series 1993 COPs. The Resolution requests that certain Authorized Officers be authorized to execute the proposed amendments and refunding documents substantially in the form attached, with such revisions as may be required or approved by such Authorized Officer. Execution of the Series 2000 Refunding and Reimbursement COPs will be subject to a not-to-exceed par amount of $230,000,000, a not-to-exceed underwriter's discount of 0.35% (or 35 basis points), and a maximum maturity not to exceed 35 years; and, 3. Direct staff to develop a plan for competitive selection of Remarketing Agents for the District's variable rate COPs following issuance and settlement of the Series 2000 COPs, and report back to the FAHR Committee. It was moved, seconded and duly carried to recommend approval to the Board of Directors for the issuance of Series 2000 Refunding and Reimbursement COPs, not to exceed $230 million; adopt a resolution authorizing the issuance of Series 2000 COPs along with certain amendments to the District's outstanding Series 1992 and 1993 COPs, and direct staff to develop a plan for competitive selection of Remarketing Agents for the District's variable rate COPs, and report back to the FAHR Committee. Minutes of the Finance, Administration and Human Resources Committee Meeting Page4 July 12, 2000 (12) lNFORMATIONAL PRESENTATIONS There were none. (13) OTHER BUSINESS, COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY There were none. (14) MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND STAFF REPORT Directors discussed several possible items to agendize at a future meeting, to be under the direction of Director Eckenrode and the General Manager. (15) CONSIDERATION OF UPCOMING MEETINGS The next FAHR Committee meeting is scheduled for September 13, 2000 at 5 p.m. (16) CLOSED SESSION It was announced that the Committee would meet in Closed Session with the District's Labor Negotiator, Director of Human Resources, as authorized by Government Code Section 54957.6, to discuss and consider labor negotiations with Local 501 and SPMT Units. The Committee convened in closed session at 6:10 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 actions were taken re Agenda Item No. 16(a)(1). At 6:25 p.m., the Committee reconvened in regular session. (17) ADJOURNMENT The Chair declared the meeting adjourned at approximately 6:25 p.m. Penny M. e FAHR Committee Seer H:\wp.dta\ager>da1FAHRIFAHR2000\2000 Mlnufaa'0712DO FAHR MIN.doc 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 H /.;? , 2ocO , was duly posted for public inspection in the main lobby of the District's offices on rl k , 200..Q IN WITNESS WHEREOF, I have hereunto set my hand this ff;t;:T--day of ~ ,2oo2___ \\RADON\DATA 1 \WP.DTA\ADMIN\BS\FORMS\AGENDA CERTIFICATION-FAHR COMMITTEE.DOC July 6, 2000 DISTRIBUTION FAHR COMMITTEE MEETING PACKAGE Full Agenda Package Committee & Mailing List Blake P. Anderson* Dan Dillon Marc Dubois Steve Kozak Penny Kyle David Ludwin Greg Mathews Patrick Miles* Bob Ooten Lisa Tomko* Gary Streed Communications* Robert Ghirelli Mike White* Brad Cagle Julie Matsumoto Bob Geggie Jeff Esber Patricia Jonk Lenora Crane Extras Notices and Agenda Only 45 19 1 1 1 1 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 5 (for meeting hand-out, if necessary) 7 Posting 1 Jean Tappan 1 Gail Cain 1 Rose Marsella 1 Frankie Woodside 1 Patricia Magnante 1 ~n~Gray 1 Security 1 Ron Zenk, Dist. 14 Treasurer's Report Only c H:\WP.DTA\ADMIN\BS\FAHR\DISTRIBUTIONLISTFAHR.DOC phone: (7141 962-2411 mailing address: P.O. Box8127 Fountain Valley, CA 92728-8127 street address: 1 0844 Ellis Avenue Fountain Valley, CA 92708-7018 Member Agencies • Cities Anaheim Brea Buena Park Cypress Fountain Valley Fullerton Garden Grove Huntington Beach Irvine La Habra La Palma Los Alamitos Newport Beach Orange Placentia Santa Ana Seal Beach Stanton Tustin Villa Park Yorba Linda County of Orange Sanitary Districts Costa Mesa Midway City Water Districts Irvine Ranch ORANGE COUNTY SANITATION DISTRICT July 6, 2000 NOTICE OF MEETING FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE ORANGE COUNTY SANITATION DISTRICT WEDNESDAY, JULY 12, 2000 -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 July 12, 2000 No Meeting Scheduled September 13, 2000 October 11, 2000 November 8, 2000 December 13, 2000 No Meeting Scheduled February 14, 2001 March 14, 2001 April 11, 2001 May 9, 2001 June 13, 2001 July 11, 2001 Board Meeting Dates July 19, 2000 August23,2000 September 27, 2000 October 25, 2000 November 15, 2000 December 20, 2000 January 24, 2001 February 28, 2001 March 28, 2001 April 25, 2001 May 23, 2001 June 27, 2001 July 18, 2001 ROLL CALL FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE Meeting Date: July 12. 2000 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 .......................................................................... . PEER SWAN ................................................................................. . NORMAN Z. ECKENRODE (Board Chair) .................................... .. PETER GREEN (Board Vice Chair) ............................................. . JAN DEBAY (Past Board Chair) ................................................. ... OTHERS TOM WOODRUFF, General Counsel ............................................... __ TOBY WEISSERT, Carollo Engineers ............................................. __ . STAFF BLAKE ANDERSON, General Manager .......................................... . DAVID LUDWIN, Director of Engineering ..................................... .. BOB OOTEN, Director of Operations & Maintenance .................... . LISA TOMKO, Director of Human Resources ................................ . GARY STREED, Director of Finance ............................................. .. 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 ................... . PENNY KYLE, Committee Secretary .............................................. . c: Lenora Crane July 6, 2000 August Dark September Consider Annexation Fee Policy Action September Comparison of budgeted costs and staffing with 1986 Information September Quarterly Investment Management Report Information September Quarterly General Manager Approved Purchases Action September 1999-2000 Year-End Operational Report Information October Update Human Resources Policies & Procedures Action October Consider Full-Scale Procurement Card Action November Consider Equity Salary Adjustments Action November 1999-2000 Comprehensive Annual Financial Report Action November 2000-01 161 Quarter Financial & Operational Report Action AGENDA REGULAR MEETING OF THE FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE ORANGE COUNTY SANITATION DISTRICT WEDNESDAY, JULY 12, 2000, 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 Office 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). July 12, 2000 (4) APPROVE MINUTES OF PREVIOUS MEETING Approve minutes of the June 14, 2000, Finance, Administration and Human Resources Committee meeting. (5) REPORT OF COMMITTEE CHAIR (6) REPORT OF GENERAL MANAGER (7) R~PORT OF DIRECTOR OF FINANCE (8) REPORT OF DIRECTOR OF HUMAN RESOURCES (9) REPORT OF GENERAL COUNSEL (10) CONSENT CALENDAR ITEMS Consideration of motion to approve all agenda items appearing on the Consent Calendar not specifically removed from same, as follows: f .4:11 matters pla.ced on the consent calendar are considered 'asnot requiring discussion or further exPianation a-nd"'"-! i unless any particular item is requested to be removed from the consent calendar by a Director, staff member or I j member of the public in attendance, there will be no separate discussion of these items. All items on the consent I l calendar will be enacted by one action approving all motions, and casting a unanimous ballot for resolutions 1 pncluded on the consent calendar. All items removed from the consent calendar shall be considered in the regular 4 ,order of business. I !Members of the public who wish to remove an item from the consent calendar shall, upon recognition by the chair, I 1state their name, address and designate by number the item to be removed from the consent calendar. i !The Chair will determine if any items are to be deleted from the consent calendar. I l.---.o--.... --··---·---····~~.....i...,_. ___ ........__,,.r·-····-~·-•••-r· .. ··---·---... •--;--·--··-·--···--···-· .. -·--·-"0 ' ___ _ a. FAHR00-56: Receive and file Treasurer's Report for the month of June 2000. The Treasurer's Report will be distributed 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 I I ~ b. FAHR00-57: c. FAHR00-58: d .. FAHR00-59: e. FAHR00-60: July 12, 2000 Receive and file Certificate of Participation (COP) Monthly Report. Receive and file Employment Status Report as of June 19, 2000. Recommend to Board of Directors to receive and file 2000/01 Strategic Goals Workplans. Recommend to Board of Directors to adopt Resolution No. OCSD 00-XX, Declaration of Official Intent to Reimburse Certain of the District's Capital Reserve Funds for Expenditures Made in Advance for FY 2000-01 Capital Improvement Projects from Proceeds of a Future Long-Term Financing. END OE CONSENT CALENDAR Consideration of items deleted from Consent Calendar, if any. (11) ACTION ITEMS a. FAHR00-61: b. FAHR00-62: c. FAHR00-63: Recommend to Board of Directors to approve Amendment No. 3 to the Lease Agreement with Seaside Financial Corporation (Specification No. L-009-1) for lease of 18.09 acres of land at the northeast comer of Ward Streed and Garfield Avenue in the city of Fountain Valley for a one year period beginning September 1, 2000. (Barbara Collins -10 minutes) Recommend to Board of Directors to adopt Resolution No. OCSD 00-XX, Authorizing the District's Treasurer to Invest and/or Reinvest District's Funds; Adopting District's Investment Policy Statement and Performance Benchmarks for FY 2000-01; and Repealing Resolution No. OCSD 99-14. (Steve Kozak -5 minutes) Recommend to Board of Directors to: 1. Approve issuance of either the Series 2000 Refunding COPs (not-to-exceed $200 million), or the Series 2000 Refunding and Reimbursement COPs (not-to-exceed $230 million); 2. Adopt Resolution Authorizing the Issuance of the Series 2000 COPs along with certain amendments to the District's outstanding Series 1992 and Series 1993 COPs. The Resolution requests that certain Authorized Officers be authorized to execute the proposed amendments and refunding documents substantially in the form attached, with such revisions as may be required or approved by such Authorized Officer. Execution of the Series 2000 Refunding and Reimbursement COPs will be subject to a not-to-exceed par amount of $230,000,000, a not-to-exceed underwriter's discount of 0.35% (or 35 basis points), and a maximum maturity not to exceed 35 years. 3 July 12, 2000 3. Direct staff to develop a plan for competitive selection of Remarketing Agents for the District's variable rate COPs following issuance and settlement of the Series 2000 COPs, and report back to the FAHR Committee. {Steve Kozak-15 minutes) {12) INFORMATIONAL PRESENTATIONS {13) OTHER BUSINESS. COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY {14) MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND STAFF REPORT {15) FUTURE MEETING DATES The next Finance, Administration and Human Resources Committee Meeting is scheduled for September 13, 2000, at 5 p.m. {16) CLOSED SESSION ! During the course "(if conducting the b1.i"sin:essset forth on this agenda .. as a regular meeting ofi'he ·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, L54957 or 54957.6, as noted. i !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 I not available for public inspection. Af such time as final actions are taken by the Committee on any of these jsubjects,. the minutes will refl.~ct a'I reguired <!!~plo~.~~s of info~!'ltiO_f!:.._,. ·~·-·-· A. Convene in closed session. 1. Confer with District's Labor Negotiators (Human Resources Representative and General Manager) re salaries, benefits, terms and conditions of employment for employees represented by IUOE -Local 501 and SPMT Unit (Government Code Section 54957.6). B. Reconvene in regular session. C. Consideration of action, if any, on matters considered in closed session. (17) ADJOURNMENT !Notice To Committee M~;b~~s: -···------····-~~-·-··-"'-------· . ···-·--1 I For any questions on the agenda or to place any items on the agenda, Committee members should contact the Committee I ~Chair or Secretary ten days in advance of the Committee meeting. i !committee Chair: Thomas Saltarelli (949) 833-9200 1 L~_f!lm~ee 2ec~etary·~·---·--Penny !.<~-·--· (?..~Ji~-~Z.13Q_·--·-··-·----·------' 4 I ' v MINUTES OF FINANCE. ADMINISTRATION AND HUMAN RESOURCES COMMITTEE MEETING Orange County Sanitation District Wednesday, June 14, 2000, 5:00 p.m. A meeting of the Finance, Administration and Human Resources Committee of the Orange County Sanitation District was held on June 14, 2000 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: Directors Present: Thomas R. Saltarelli, Chair Mark Leyes, Vice Chair James W. Silva Jan Debay, Board Chair Peer Swan, Board Vice Chair Shirley McCracken OTHERS PRESENT: Tom Woodruff, General Counsel Don Hughes Toby Weissert Jeff Bower Juan Pittman Ryal Wheeler (2) APPOINTMENT OF CHAIR PRO TEM No appointment was necessary (3) PUBLIC COMMENTS There were no public comments. Directors Absent: Shawn Boyd John M. Gullixson Mark A Murphy STAFF PRESENT: Blake Anderson, General Manager Bob Ooten, Director of Operations & Maintenance Gary Streed, Director of Finance Patrick Miles, Director of Information Technology Steve Kozak, Financial Manager Greg Mathews, Asst. to the General Manager Jean Tappan, Asst. Committee Secretary Brad Cagle, Accounting Manager (4) RECEIVE, FILE AND APPROVE MINUTES OF PREVIOUS MEETING It was moved, seconded and duly carried to approve the minutes of the May 10, 2000 Finance, Administration and Human Resources Committee meeting. Directors McCracken and Swan abstained. Director Swan clarified his comments to staff, made in advance of the May 10 meeting, as reported in the minutes. Minutes of the Finance, Administration and Human Resources Committee Meeting Page 2 June 14, 2000 \ (5) REPORT OF THE COMMITTEE CHAIR The Committee Chair indicated that there would be a short closed session. The next FAHR Committee meeting will be July 12, 2000. (6) REPORT OF THE GENERAL MANAGER General Manager Blake Anderson did not make a report. (7) REPORT OF DIRECTOR OF FINANCE Director of Finance Gary Streed reported briefly on some preliminary staff work that was done to answer the question, "What is different from 1985-86?" The Committee asked for additional information regarding changes at a future meeting. (8) REPORT OF DIRECTOR OF HUMAN RESOURCES The Director of Human Resources was not present. (9) REPORT OF GENERAL COUNSEL General Counsel Tom Woodruff had no report. (10) CONSENT CALENDAR ITEMS (Items a-e) a. FAHR00-48: Receive and file Treasurer's Report for the month of May 2000. The Treasurer's Report will be distributed 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. b. FAHR00-49: Receive and file Certificate of Participation (COP) Monthly Report. c. F AHR00-50: Receive and file Employment Status Report as of June 1, 2000. d. FAHR00-51: Recommend to Board of Directors to renew the District's All-Risk Property and Earthquake Insurance Program for the period July 1, 2000 to July 1, 2001, in an amount not to exceed $955,000. e. FAHR00-52: Recommend to Board of Directors to renew the District's Boiler & Machinery Insurance Program for the period July 1, 2000 to July 1, 2001, in an amount not to exceed $70, 792. END OF CONSENT CALENDAR Motion: It was moved, seconded and duly carried to approve the recommended actions for items specified as 11 (a) through (e) under Consent Calendar. Minutes of the Finance, Administration and Human Resources Committee Meeting Page 3 June 14, 2000 (11) ACTION ITEMS a. FAHR00-53: Recommend to Board of Directors to approve proposed Operating, Capital, DebVCOP Service and Self-Insurance Budgets for 2000-01 , as follows: Joint Works Operating/Working Capital Worker's Compensation Self-Insurance General Liability and Property Self-Insurance Collection System Operating Capital Improvement Program Debt/COP Service $46,000,000 412,500 1,919,000 9,545,000 83,526,000 40,737,000 Motion: It was moved, seconded and duly carried to recommend approval to the Board of Directors. b. FAHR00-54: Recommend to Board of Directors to authorize the Director of Finance to issue a Request for Proposals for Investment Banking Services, and report back with recommendations for selection of investment banker(s) for issuance of Reimbursement Certificates of Participation. After discussion, staff was directed to present additional information at the July 12 FAHR Committee meeting comparing the costs and benefits of, and alternatives to, including a portion of the proposed Reimbursement COPs with the Series 2000 Refunding COP issue. c. FAHR00-55: Recommend to Board of Directors to: 1. Approve selection of Dexia Credit Local de France (DCLF) as the Standby Liquidity Facility Bank for the Series 2000 Refunding COPs; and, 2. Approve selection of Texas Chase Bank or State Street Bank as Trustee Bank for the Series 2000 Refunding COPs based on lowest annual cost to the District, and direct staff to report to the Board on the successful bidder at the June Board meeting. Motion: It was moved, seconded and duly carried to recommend approval to the Board of Directors. (12) INFORMATIONAL PRESENTATIONS There were none. (13) OTHER BUSINESS, COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS , IF ANY There were none. Minutes of the Finance, Administration and Human Resources Committee Meeting Page4 June 14, 2000 (14) MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND STAFF REPORT There were none (15) CONSIDERATION OF UPCOMING MEETINGS The next FAHR Committee meeting is scheduled for July 12, 2000 at 5 p.m. (16) CLOSED SESSION The Chair reported that the Committee would meet in Closed Session, as authorized by Government Code Section 54957 .6, to discuss and consider labor negotiations with Local 501 and SPMT Units. The Committee convened in closed session at 6:07 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 actions were taken re Agenda Item No. 16(a)(1). At 6:14 p.m., the Committee reconvened in regular session. (17) ADJOURNMENT The Chair declared the meeting adjourned at approximately 6: 15 p.m. Tappan R Committee Assistant Secretary H:\wp.dlalsgenda\FAHR\FAHR2000\2000 MinutBsVJ61400 FAHR MIN.doc } FAHR COMMITTEE Meeting Date To Bd. of Dir. 07/12/00 N/A AGENDA REPORT Item Number Item Number FAHR00-57 Orange County Sanitation District FROM: Gary Streed, Director of Finance Originator: Steve Kozak, Financial Manager SUBJECT: CERTIFICATES OF PARTICIPATION (COP) MONTHLY REPORT - June 2000 GENERAL MANAGER'S RECOMMENDATION Receive and file Certificates of Participation (COP) Monthly Report for the month of June 2000. 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 "B" COPs have been refunded and the 1992 Refunding COPs have always been remarketed by PaineWebber in a weekly mode. During the month of June, the District's variable interest rate COPs performed at a slightly higher average interest cost than the benchmark composite index. Over the last year, the District's variable rate COPs performed at a slightly lower average interest cost than the benchmark. The benchmark composite index consists of several variable rate COPs issued by other utility agencies similar in par amount and credit quality to the District's COPs. 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. [8J Not applicable (information item) ADDITIONAL INFORMATION For the month of June 2000, 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 Aswap.:: H:lwp.dtalagendalFAHRIFAHR2~ Agenda ReportslFAHR~7.doc Revised: 8l20l98 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, "COP Rate History, Comparison of Monthly Averages," shows the monthly variable interest rate performance of the District's Daily Rate COPs 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 liquidity requirements. The rates tend to 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 may occur. ALTERNATIVES None. CEQA FINDINGS None. ATTACHMENTS 1. Graph -OCSD COP Daily Rate History Report 2. Graph -Comparative Daily COP Rate History Report 3. Graph -COP Rate History, Comparison of Highest & Lowest Rates 4. Tabular-COP Rate History, Comparison of Monthly Averages GGS:SK:lc H:\wp.dtalagendalFAHRIFAHR200nOOO Agenda Reports\FAHR00-57.doc R....;sed: 8120/98 Page2 G) "'O [ c iil "t:I l> Ill !!. -I RATE(%) [ ~ m tT Ill '< 5 0 CJ) .,, ::I 5" ~ Ill 07-Jul-99 ::I 0 0 _RI '° ~ ~ 21-Jul-99 IQ "fi ~ 3· 04-Aug-99 _8 Ill ::I 0 RI I\) $ 18-Aug-99 j\) )> .... -I "'O m s::: :i::: (jj 01-Sep-99 -I io ...... 0 15-Sep-99 0 29-Sep-99 en 13-0ct-99 c 0 27-0ct-99 0 10-Nov-99 "ti c Tt 24-Nov-99 -)> -)>"U r -m 08-Dec-99 c... -< Gl-· ::::J c en CD ::E~ 22-Dec-99 z ~ n> CD "Co-m O" CD 05-Jan-OO ... -t .., N m 19-Jan-OO 0 :I: 0 0 - ++ 02-Feb-OO en -t en<-16-Feb-OO 0 o· C'l :u ~ (j)s: 01-Mar-OO CDO ::::i..., ~ 15-Mar-OO :Al ::E::::i OJ m "O 29-Mar-OO "ti 0 12-Apr-OO :Al 26-Apr-OO -t 10-May-OO 24-May-OO 07-Jun-OO 21-Jun-OO I \ Prepared by Finance, 07/05/2000, 9:03 AM COMPARATIVE DAILY COP RATE HISTORY REPORT JUNE, 2000 4.00 -~ ~ w 3.00 I-<C 0::: 2.00 1.00 0.00 DATE m m m m m m 0 0 0 0 0 m m m m m C) 0 0 0 0 0 :; ci Q. ..... > ci c .D ...: ...: ~ :J °' u 0 °' (!l °' (!l 0. (!l • <( en 0 z 0 • LL ::::? <( ::::? tlOCSD D COMPOSITE INDEX G :\excel .dta\ fi n\2220\geggi\Finance\dailycopi ntrate .xis 0 0 c :J • 4.90 COP RATE HISTORY COMPARISON OF HIGHEST & LOWEST RATES 4.65 ---··-·--·----·······-···-···--·-------···---·-···---·-·······----------·-------·--················································-----······················· 4.40 4.15 .. ---....... -... -.. ----. ----. -... ----------------------.. ---··-· .... -·· --·. ---·-·· ....... --. -.... -----·-·---.. --. ---. -------·-.. ·--·-· ..... ·-.. --.... -----.. 3.90 ................................... _ ................... ··--------------------·-----------· --·· ···-·---·--··--· .... ----·-----------·····--· -··---------·---- ~ 3.65 ~ w I-<( 0::: 3.40 3.15 ............................................................................ -.. . 2.90 -----··-····----------------·-·-·--··-·---·-··-·--·····--------··········· 2.65 2.40 .... 2.15 ·-·- HIGH LOW ·-~ l!I Highest rate 0 OCSD/J.P. Morgan • OCSD/PaineWebber i;:i Lowest rate G:\excel.dta\fin\2220\geggl\Flnance\RATEH IST _HI LO _bargraph Prepared by Finance, 07/05/2000, 9:16 AM Prepared by Finance, 07/05/2000, 9:17 AM Jul-99 Aug-99 Sep-99 Oct-99 Nov-99 Dec-99 Jan-00 Feb-00 Mar-00 Apr-00 May-00 Jun-00 AVERAGE DAILY COP RA TE HISTORY COMPARISON OF MONTHLY AVERAGES JULY, 1999 -JUNE, 2000 OCSD $100M $98.5M $46M Series"A" Series"C" Series 93 Ref PaineWebber J.P. Morgan PaineWebber 2.35 2.36 2.35 2.82 2.82 2.82 2.98 2.97 2.98 2.99 3.01 2.99 3.36 3.30 3.36 2.93 3.01 2.93 2.51 2.53 2.51 1.95 1.97 1.95 3.20 3.18 3.20 3.46 3.44 3.46 4.76 4.80 4.76 4.10 4.10 4.10 3.12% I 3.12% I 3.12% ESTIMATED ANNUAL INTEREST PAYMENTS PER $100M PAR AMOUNT $ 3, 117,500 $ 3,124,167 $ 3, 117,500 *FOOTNOTE Composite index consists of the following COP transactions: . IRWD, Series 86, $60M, Smith Barney • IRWD, Series 93 "A" Refunding, $87.6M, Bankers Trust • IRWO, Series 93 "B" Refunding, $41.8M, J.P. Morgan • IRWD, Series 95 Refunding, $117 .8M, PaineWebber Composite Index• 2.36 2.83 2.98 3.03 3.38 2.97 2.50 1.99 3.22 3.49 4.73 4.11 3.13% $ 3,132,500 • 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 ·' I I FAHR COMMITrEE Meeting Date To Bel. of Dir. 07/12/00 07/26/00 AGENDA REPORT Item Number Item Number FAHR00-58 Orange County Sanitation District FROM: Lisa Tomko, Director of Human Resources & Employee Development Originator: John Weingarden, Human Resources Analyst SUBJECT: EMPLOYMENT STATUS REPORT AS OF JUNE 19, 2000. GENERAL MANAGER'S RECOMMENDATION Receive and file the Employment Status Report. SUMMARY Total FTE headcount at the District as of June 1, 2000 is 497.75. 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. [g} Not applicable (information item) ADDITIONAL INFORMATION The District had a full-time equivalent (FTE) headcount of 497.75 as of June 19, 2000. The actual number of employees was 508. There was one promotions during the month of June: • Dave Usher Sr. Mechanic to Lead Mechanic (Mechanical Maintenance) There was one new employee hired during the month of June. • Programmer Analyst (Programming and Database Systems) H:\wp.dta\agenda\FAHRIFAHR2000\2000 Agenda Reports\FAHR00-58.dot Revised: 8/20198 Page 1 ALTERNATIVES Not applicable. CEQA FINDINGS Not applicable. ATTACHMENTS June 19, 2000 Employment Status Report. Performance compared to 3-Year Staffing Plan. H:\wp.dtal.agenda\FAHRIFAHR200Cl2000 Agenda Reports\FAHR00-58.dot Revised: 8l20l98 Page2 06/19/200(}.-9:08 AM Employment Status Report Regular Regul;ir Actual Vac.111t Budget Pl<ln Pl<ln Positions Reguw Part-time Part-time FTE FTE FTE FTE wnn Flml pl<ln Full-time 20 hours 30 hours Contract Intern 119--00 00--01 01--02 1--0 110 -General Management Admin 3.00 0.00 0.00 0.00 0.00 4.00 4.00 4.00 1.00 Total General Mana ement 3.00 0.00 0.00 0.00 0.00 4.00 4.00 4.00 1.00 210 -Finance Administration 4.00 0.00 0.00 0.00 0.00 4.00 4.00 4.00 0.00 220 -Accounting 14.00 0.00 0.00 0.00 0.00 16.00 16.00 16.00 2.00 230 -Purchasing & Warehousing 14.00 1.50 0.00 0.00 0.00 17.50 17.50 17.50 2.00 Total Finance 32.00 1.50 0.00 0.00 0.00 37.50 37.50 37.60 4.00 310 -Communications 7.00 0.00 0.00 0.00 0.00 9.00 9.00 9.00 1.00 Total Communications 7.00 0.00 0.00 0.00 0.00 9.00 9.00 9.00 1.00 510-HR & Employee Development 9.00 0.00 0.75 0.00 0.00 10.25 10.25 10.25 0.50 Total Human Resources 9.00 0.00 0.75 0.00 0.00 10.25 10.25 10.25 0.50 610 -Technical Services Admin 2.00 0.00 0.00 0.00 0.00 2.00 2.00 2.00 0.00 620 -Environmental Compliance & Monitoring 18.00 0.00 0.00 0.00 1.00 20.50 20.50 20.50 1.50 630 -Environmental Laboratory 29.00 2.00 0.00 0.00 0.50 32.00 32.00 32.00 0.00 640 -Source Control 33.00 0.00 0.75 0.00 0.00 33.75 33.75 33.75 0.00 650 -Safety & Emergency Response 8.00 0.00 0.00 0.00 0.50 7.50 7.50 7.50 -1.00 0.00 Total Technical Services 90.00 2.00 0.75 0.00 2.00 95.75 95.75 95.75 0.50 710 -Engineering Administration 3.00 0.00 0.00 0.00 0.00 3.00 3.00 3.00 0.00 720 -Planning & Design Engineering 30.00 0.00 0.75 0.00 0.50 35.25 35.25 35.25 4.00 730 -Construction Management 36.00 0.00 0.00 0.00 0.00 36.75 36.75 36.75 --0.25 69.00 0.00 0.75 0.00 0.50 75.00 75.00 75.00 3.75 420 -Collection Facilities Mice 18.50 0.00 0.00 0.00 0.00 17.50 19.50 19.50 1.00 430 -Plant Maintenance 29.50 0.00 0.00 0.00 0.00 29.50 29.50 28.50 -1.00 810 -0 & M Administration 2.00 0.00 0.00 0.00 0.00 3.00 2.00 2.00 0.00 820 -0 & M Process Support 8.00 0.00 0.00 0.50 0.50 10.00 9.25 9.25 0.25 830 -Plant 1 Operations 32.00 0.50 0.00 0.00 0.00 33.33 34.33 34.33 1.83 840 -Plant 2 Operations 39.00 0.00 0.00 0.00 0.00 39.33 37.33 37.33 -1 .67 850 -Mechanical Mice 44.00 0.00 0.00 0.00 0.00 45.50 45.50 45.50 1.50 860 -Electrical & Instrumentation Mice 55.00 0.00 0.00 0.00 0.00 55.50 55.50 55.50 0.50 870 -Cogeneration 9.00 0.00 0.00 0.00 0.00 10.34 10.34 10.34 1.34 880 -Air Quality & Special Projects 9.00 0.00 0.00 0.00 0.50 10.00 9.50 9.50 0.00 Total 0 eratlons & Maintenance 246.00 0.50 0.00 0.50 1.00 252.75 251.75 3.75 910 -IT Admin 2.00 0.00 0.00 0.00 0.00 2.00 2.00 °2.00 0.00 930 -Customer & Network Support 12.00 0.00 0.00 0.00 0.00 15.00 15.00 15.00 3.00 940 -Programming & Database Sys 7.00 0.00 0.00 0.00 0.00 7.00 7.00 7.00 0.00 950 -Process Controls Integration 8.00 0.00 0.00 0.00 0.00 9.00 9.00 9.00 1.00 Total Information Technolo 29.00 0.00 0.00 0.00 0.00 33.00 33.00 4.00 Totiil,Statnn ~"!$ g:\excel.cfaVv\510\weingarden\3-Year stafting Ptilln 01/05/2000 9:08 AM Legend: hies • Vac.ne~: Bold • Reorg; Gray st\ilde • New PoslUon N-Ollg Bus Bus lJnll Uni Employ•• N..... Job Tlle 110 110-.Blake 110 110 -.GregoryR. 110 110 Vaconl 110 110 Tappen, J11n E. 110 110 Mel~. Donald F. 110 Total 210 210 Slreed, Gary G. 210 210 Creno, Lonono 210 210 K-.SlephenV. 210 210 Gaggie, Robert 210Tatal 220 220 Welngardon, Jom W. 220 220 Acfuo.,,_, 220 220 Cagle, Bnldey H. 220 220 Diian. OIMy L. 220 220 Wlile, Michael D. 220 220 AIJjlor, Rose L. 220 220 -·Maria 220 220 Spnngneyer, Mary M. 220 220 Ai<*idge, 1Mhm R. 220 220 Esber, Jeffrey A. 220 220 Ecitll Howell 220 220 Jlie Pritchard 220 220 Forman, KyrN>ei1)1 R. 220 220 Green, Nono H. 220 220 Jolmon, Undo J. 220 220 Mina, POflia A. 220 220 Sinmons, DoMa M. 220 Tot .. 230 230 Fewy, Ann Morie 230 230 Mohef. Cl'ristine W. 230 Dlbojs, M•n:us • 230 230 Mon:ln. Clarice M. 2lO 310 LK ..... Dain 230 230 Ryan, Puoll 230 no Kardos, J ... A. 230 230 Gllch, Jofhy D. 230 230 Higo-. Myles S. 230 230 Me-. Dollld A. 230 230 Ortego, Robert L. 230 230 Beaz, Jesus 230 230 Fomwn, Meissa A. 230 230 MOfJIOll, Robert M. 230 230 ,_, Robert J. 230 230 H1nnoppel, Rick J. 230Tot .. Aast Ganenll Manager-Ops Asst. to the Gen. Mgr. Vecanl ExecUive Assistant 11 Ger....t Manager Oiredor of Finance E><eaitve Assislenl I Financial Manager Principal AcCO<rtant AccD<l'll~ Vacanf Ac-ng Manager Accolftjng Manager Controler Hllnan Rescuces Assist8" H.....,, Resowces Assistant HlnlOn Reso..-ces Assistant Principal Accotrtant Prlndpal Accotrtart Prlndpal Anancial Analyol Principal Financial Analyst Senior Aceolfting Cler1c Senior AcCOIDlng Clen. Senior Accolfting Cler1c SeniDI' AccO\fting Cler1c Senior Accolfting Cler1c E•oc.-ive Anlstn I Sacretary Secrotaoy storaslceeper Sitoreskeeper storask- storeskeeper st0<eskeeper Assistant storesk._ Asststort storoslceeper Assistant S14>eMsing Buyer W11ehouse &4>eNisor 310 310 Tuctmon, Mia-OirectorolConnvic.tions 310 310 l<ordos, Diome Grapllic SoNices Asn8" 310 310 Elzondo, Fawn F. Office Aide 310 310 Klzzlah, Elftce L. Office Aide 310 310 ScNegol, Rlchlrd E. Olflce Aide 310 310 K)'le, Pemy M. Secretory to Boord of Difector 310 230 H-, L)'ndo F. ~IY1 Anhln 310 310 l~v_ece_n1 _______ ~ISt. Adm/,.,;n-otMrAnatyst 310 310 Holebrand, Ingrid G. Serior MTfa Assist1nt 310 310 Smith, &rzenno A. Senior Office Aide 310Tot .. 410 410 Hodges, E<tMn E. 410 410 Nguyen, nut.J)' 410Tot .. Director ol Gen Admin, Serlllco Office Spedaist, from 640 In 98-99 420 420 ~'"'· Gary L. Col Fae Worker I 420 420 Arralz, Juan J. Col Fae Worker I 420 420 Howorth, Mic:hoel T. Col Fae Worker I 420 420 Jones, Larry J. Col Fae Worker I 420 420 Pier«tl. Derns C. Col Fae Worker I 420 420 V1cont Col Fae Worker I 1998-98 Budgol stall Plan 4.00 4.00 19.00 15.00 10,75 6.00 Actual FTE 1.00 1.00 1.00 1.00 4.00 1.00 1.00 1.00 1.00 4.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Decision Pkg& Approved Vacanc:les ___ 1_6.~00----- 1.00 1.00 0.50 0.75 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 0.25 ----=9~.o~o ----1,00 1.00 (1.00) Budget staffing Plan 1999-2000 1.00 1.00 1.00 ~ 4.00 1.00 1.00 1.00 1.00 4.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 16.00 1.00 1.00 0.50 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 17.50 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 9.00 1.00 ----=2~.o~o _-1!.!!!!J --~1_.o_o 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 420 420 ArrbriZ. Jose C. Col Fae Worker 11 1.00 1.00 1.00 1.00 1.00 1.00 1.00 420 420 Cholfs. Peter Col Fae Worker 11 1.00 420 420 ~nd.DonaldR. ColFocWorkerll 1.00 420 420 Hennoln, Victor R. Col Fae Worker 11 1.00 420 420 Navarro, Raymond Coll Fae Worker II 1.00 $.Year stalflng Plan 2000-2001 1.00 1.00 1.00 1.00 4.00 1.00 1.00 1.00 1.00 4.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 16.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 17.50 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 9.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 5-Yeor stalflng Plan 2001-2002 1.00 1.00 1.00 1.00 4.00 1.00 1.00 1.00 1.00 4.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 16.00 1.00 1.00 0.50 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 17.50 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 9.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 BU)'OUI. Delete poolllon, -31 !Transfer .75 FTI! . ._ ~ I 111.tprooldo f01 2al~l.oroplocahfl.o .. , ..... 1, T..,..,1<1.00 FTE from Engntoma Tninsfer1.00 FTE ll'am ~ Replacomon( Allri,,_ see romlquez lrsf to 430 •~m~~~~--~-~""'~9J~:§W'!!DBDUa•mmma~••~1gme;~~=•~l:m:D<ic:is!~~fi'""HOlD ·•····· ·•···-·.•.<;:,._<····;_ ..... •20 Gon:z.I.,., Jotn . ire;;..,;;, 1,00 j .Oo 1':00 1.00 420 420 PeltfSOR, JelfreyL. Foreman 1.00 1.00 1.00 1.00 420 420 Perrino, Roy LeodColFacWorker 1.00 1.00 1.00 1.00 420 420 Sandcnon,JoeD. LHdCollFocW<ris-1.00 (1.00f 1.00 1.00 420 420 Wlloms,Wo•erW. LoadCoUacWorker 1.00 1.00 1.00 1.00 420 420 """"11es. Nicholas J. Malntononce Manager o:so 0.50 0.50 0.50 420 420 McC.-r,MichlelJ. Moinlenoncel'lal'lnor 1.00 1.00 1.00 1.00 420 420 Biondo, Thomas M. Maintenance S'-""'1isor 1.00 1.00 1.00 1.00 420Tot.. 1850 17.50 ---17.50 19.50 19.50 430 430 D\rriaO, Alon P. llUlder 1 .00 1.00 1.00 1.00 430 430 p...,., R!UnL Btilder 1.00 1 00 1.00 1.00 430 430 Green, Richard Eqlipment Operator 1.00 1.00 1.00 1.00 430 430 Jones, Jeffrey L. Eqlipment ()penitor 1.00 1.00 1.00 1.00 430 430 Ray, L Elen Eql.ipment Operetor 1.00 1.00 1.00 1.00 Page 1017 07/05/2000 9:08 AM Legend! lilies • Vacancy; Bold • Reorg; GRy Shade • New PoslJon N-Orig Bus -~ Unit En!>!me H3111• Job Tiiie 430 430 Yolcoyama, Deen K. E~ Open1l0< 430 430 Hise, David C. FcnmAll 430 430 Tofolo, Ortondo A. Forwman 430 430 oni-os. Wilam Grotnlskeeper 19911-99 Budget Stalf Plan Aclu"' FTE 1.00 1.00 1.00 1,00 Decision Pl<g& Appnwed Vaearn;tes Budget Slafftng Plan 1999-2000 1.00 1.00 1.00 4 -i.ft., 1~.!~~~~~!:!~;-m;ifif~t$~f::~ ~;~Fr.;fi#l~-~ .. ~J.~;ffitw.l;: gjfu~ .. 1.-QQ~U: 430 430 Gomoz, Romon M. H._,., 430 410 Romtquoz, David AHoc:Wo ~I 430 430 L-.t, Jam W. H._,., 430 430 430 430 430 430 430 430 430 430 430 430 430 430 430 430 430 430 430 430 '30Tol"' 430 KOY11C5, 518\11111 430 AIJlo, Toolimo C. 430 DeAnda, Bemordo 430 DlnnonJ, Fredericlc C. 430 English, Roy C. 430 O'C<r.rJl>o, Margarita 430 Mrie, Eric 0. 430 MIOllles, Nicholas J. 430 F0<man, Chide M. 430 Caucil, Tony E. 430 Laughlin, Tlm M. 430 Keating, Brian M. 430 Ardibald, Scott A. 430 Broyles, Michael D. 430 Evans, Sloven W. 430 Frey, Char1os E. 430 Hanilon, Robert 430 Unsel, 5obby L. 430 Cerr¢ol, Marl< S. 430 Hon:llar, Donald C. 510 510 Pelonnan, Michael L. 510 510 510 510 510 510 510Tol"' Vacant 510 Budler, Jucftt1 M. 510 Reed, Jeffrey T. 510 Sleews, Patty A. 510Gnly,Jenell. 510 Toni!o, Use L. 510 McKlriey, Dawn M. 520 520 Eddy, Malt 520 520 Vacont 520 520 Martinez, Derise M. 520 520 Spancer, Richard L. 520 Toi .. 530 530 T....Oauiti, Karon A. 530 .530 Vooanl 530 530 Josway, T arri L. 530 530 CllmOhan, Polriclc 8. 530 530 Momson, Peter M. 410 410 To)iol', Roller! J. 520 520 flor>agan, Thomn II. Load Mechanic LoadWor1cer LaadWorller LaodWor1cer LaadWor1cer LoodWor1cer Madinlst Mainl:enance Managet" Malrtenance ~sor Pai~er Pairter Projod Speciaisl Senior Mechanic Senior Mecheric Senioc Mod\onlc Senior Mad\onlc Senior Mechanic Senior Mechaoic Welder Welder Director of HLJ'Mn ResOW"Ces to 1/15 HR Analyst al 1211199 for above Hwna.n Resotl'Ces Anatyst H'""8n ReSOU"cos Analyst Hi.man Re:sOl.l'ces Al\afyst Alrnln Reoo<rces Anlstart Htman ReSOlRes Manager Sr. Himan Resol.rces Analy<I Hll'Mll RosOl.rl:es Asslstanl Proj«I Speciall•I Human Resa1ces AsJlstanl Human ResOlrces Asslstart odfd budget for )osway H'"""" Resot6cu Assislart Intern Soloty I Erner Resp Manager Safely R"llf ...... &tive Sofcfy Representative Project Speciaisl Project Spec:lalst 530 Toi"' odfd budget for )oswoy 610 610 Dnd0<01Tedncol Services Oi"'cl"' of Toclricol Services 610 610 Ubeklnl, Amil 110Tolal 620 620 llroolcs, R-.Oco A. 620 620 Moore, Michael 0 . 620 620 Hiner, Doini'e E. 620 620 Nguyon, Hal 620 620 Sokamolo, Ken A. 620 620 McCorthy, Michael E. 620 620 Ha_,, LKOl/ln &ZO 610 Moro~. Torn 8. &20 &10 Sleams, Karan I. 620 &10 Thomas, Clwistina M. 410 410 McNoty, PatriclcW. 620 620 Marselo, Rose M. 620 620 Moore, Marion C. 620 620 Armslrong, Jeffrey L. 620 620 Mengel, Michael J. 620 620 Baroldl, Loyne T. 820 820 Collson, Usa. 620 620 Colston, James E. 640 640 VitXo, T1deo G. 620 620 O'Brlon, Fred J. 620 620 Holl"'IY, Wanda R. 620 620 Geringer, Thomas V. 620 620 Robertson, George L, 620Tol"' '30 810 -. GrlflOIY B. 630 630 Cerr¢ol, James A. 630 630 Dinger, cnitio S. 630 630 Phonsiri, Val'fl 630 630 Rood, Chartos E. 630 630 'lttjt....,,, Norman M. 630 630 M-..y, Serruel L. 630 630 Bklostoin, Lewie S. 630 630 C/11stensen, Kint>erly c. Exec:U.lw AssistarC I trsf deble lo 730 • 2.DO Associale Engineer II Env. C~ance & Monilor Mgr Envirornertal Spociaist II Envirornental Specials! II Enviromenlal Specialst 11 Environmental Anoly<I Environmental Management Sp"51' lnlom lnlom lnlem Serior Mrin. Asslst•rt Office Specials! Office Specialist Pr. Environmental Specieisl Pr. EJMronmeml Speci- Roptory Spociolsl Replory Speciaist RoP!ory Spedaisl Soiree Control Inspector II Scientist Secretouy Senior Envirornantal Speciaisl Senior Scientist lnlom Lob Analyst LobAnatjst Lab Analyst Lab Analyst Lob Analyst Lobonltory Manager Loboralory Slc>eMsor Labonllory 5'4>o<visor 38.50 6.50 1.00 1.00 1.00 1.00 1.DO 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 0.50 0.50 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.DO 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.DO 1.00 1.00 1.00 ~ 1.00 --~32~.5=0 ~ ___ 2~9~~5~0· 1.00 (0.50) 0.50 1.00 1,00 0.75 1.00 1.00 050 6.25 1.DO 1,00 a.so 1.00 0.50 1.00 1.00 0.75 1.00 1.00 0.50 6.25 1.00 ----'4.~7~5 ----'l~.o~o ----...!:!!!!. 1.00 1.00 1.00 1.00 1,00 4.00 1.00 1.50 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1-50 ___ 5._5_o ----'6~.o~o ~ 1.00 ___!.:2Q. ----=2.~00~ ~ 1.00 1,00 1,00 1.00 1 DO 1.00 1.00 0.50 0.50 0.50 1.00 1,00 1.00 1.00 1.DO 1.00 1.00 1.00 1.00 1.00 1.DO 1.DO (1.00) 7.50 1.00 1 00 2.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 0.50 0.50 0.50 100 1.00 1.00 1.00 1.00 1,00 1.00 1.00 1.00 1.00 1.00 1 00 1.00 19.50 ___ 2_1_.5~0 ~ ___ 2_0_.50_ o.so 1.00 1.00 1.00 1.00 1.DO 1.00 1.00 1.00 Page 2 of 7 0.50 1.00 1.00 1.00 1,00 1.00 1.00 1.00 1.00 5-Year sta""O Pion 2000-2D01 1.DO 1.00 1.00 1.00 1.DO 1.00 1.00 1.00 1.00 1.00 1.00 0.50 1.DO 1.DO 1.DO 1.00 1.00 1.DO 1.00 1.00 1.00 1.00 1,DO 1.00 29.50 1.00 1.00 1.00 0.75 1.00 1.00 0.50 6.25 1.00 1.00 1.00 1.00 4.00 1.DO 1.50 1.00 1.00 1.00 1.00 1,00 $.Year stalllng Pion 2001-2002 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.DO 1.00 1.00 1.00 0.50 1.DO 1.DO 1.00 1.00 1.00 1.00 1.DO 1.00 1 DO 1.DO 1.00 28.50 1.00 1.00 1.00 0.75 1.00 1.00 0.50 6.25 1.00 1.00 1.00 1.00 4.00 1.00 -usorReason 9S-99 budget 2.75 HRA, not 3.0 1.50 New Po#llon, Sof&ly Specialist 1.00 1.00 1.00 1.00 Transfer from GSA ---'1"00~ Transfer of Flanagon to TIRll-s position ----'~~5~o ~ 1.DO 1.00 1.00 2.00 1.00 1.00 1.00 1.DO 1.00 1.00 1.00 0.50 o.so 0.50 1.00 1.00 1.00 1.00 1,00 1.00 1.00 1.00 1.00 1.DO 1.00 1.00 20.50 0.50 1.00 1.00 1.00 1.00 1.00 1.00 1,DO 1.00 100 2.00 1 DO 1.DO 1.00 1.00 1.00 1.00 1.DO 0.50 0.50 0.50 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 100 Z0.50 Transfer 0.5 nE from 610 lo &20 Transf• 0.5 FTE from 810 to &20 Transfer 0.5 FTE from 610 lo &20 Buyc<.t, Oelelo position, JIJy 31 0.50 Transfer 0.5 nE from 610 lo &SO 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 D7~ 9:D8AM IAgend.: Illes • V.:mey: Bold • Reorg; °'3Y Sha.de • New Position New Ortg Bus Bus Uni Uni Emp!oxoo N..,.. Job Tille 630 630 McGee, Oiorles D. 630 630 T-y. Dariol R. 630 630 Ri-. Jije A. 630 630 w .... on. Kathy L. 630 630 Pi111, Antonino 630 630 P1Hon, Kim 630 630 Rozenstroten, -"" J. 630 630 Tsai, Y" 630 630 Yohya, Moyosar T. 630 630 Jc><*, Pebicie L. 630 630 Bel, Derise A. 630 630 Klr<lrler, Unda L. 630 630 L_.,ndo, Nonno C. 630 630 Undet, Debonlh L. 630 630 Loyo, Mlr1em 630 630 McKinley, Lor1nda 630 630 Nguyon, Cem a. 630 630 Poeske, Dione E. 630 630 Salgado, Hetty R. 630 630 Velencio, ~ 630 630 Von Wlndtemam, Mloilld 630 630 G.lvez, Elaine 630 630 Gerdes, Jom H. 630 630 Myen, Down K. 630 630 Rabago, Edcie 630Talal 640 640 Kawomoto, Mart< H. 640 640 T-. Mort< A. 640 640 P-er. Clvistophe M. 640 640 Sohonekl, Roya 640 640 Wobr, Thomas 640 640 Zedek, Michael I. 640 640 Evongolsta, Jeny F. 640 640 RenesCll, Mtana 640 640 Becerra, Maria 640 640 Kader, Hamel 640 640 Leisten, Cherie M. 640 640 MltdlOI. Beatrice A. 640 640 Nguyen, Hoenit-O•m T. 640 640 Spassoff, PatJ M. 640 640 Clvistensen, Kely J. 640 640 ~. James L. 640 640 T111n, Jone H. 640 640 Von Wlndtom.m, Lalnl A. 640 640 Canico, Deon M. 640 640 Chavez. Arnold G. 640 640 Dollidson, James R. 640 640 ~.Tome. 640 640 le, OUSlin 640 640 M11lenon, Mh:lwll D. 640 640 Mon1son, Frances C. 640 640 Reldoler, Michael 640 640 Seller, Merr11F. 640 640 ~.Mary S. 640 640 Telebl, MaNn 640 640 Benzie, James P. 640 640 Dewitt, R-ld L. 640 640 Enis, l>Mel S. 640 640 Foley, Tomothy D. 640 640 Brown, Michael C. 5'0 Tolal 710 710 LucMn. Dollid A. 710 710 c.in, Gell A. 710 710 Cho~. Cor1ne M. 710 Toi.al 720 720 Bi-. Brian 720 720 Patel, Sejol 720 720 Sevenancl, WertOiT. 720 720 720 loon, An<hi 720 720 Mileo, Kathleen T. 720 720 no 120 Ying, Moms c. 720 720 EloH, Jeri L 720 720 &oles. Jose l. 720 720 N-. ~ D. 720 720 Partier, Joen e. 720 720 Bellomausen, Jean L. i..boflllory &4>«11isor i..boflllory &4>er\/isor Office Spaciaist Principal Lab, & Res. Analyst Project Specialist Scientist Sclri51 SCientlst SQ enlist Secretary Senior Lab Analyst Senior Lab Analyst Senior i..b Analyst Senior Lab Analyst Senior Lob Analyst Serior Leb Analyst Senior Lob Analyst s.nlor lab Analyst Serior i..b Analyst s.nlor Lab Analyst Senl..-LOb Anaiyst Tec:lvical Serl/ices Assistart T ec:lvical Serl/ices Assisi art Teclrical Serl/ices Assistart T ec:lvical Services Assistart Associate Engineer II Associate Engineer II Associate Engineer Ill Associate Engineer Ill Associate Engineer Ill Associate Engineer Ill Engineering ~·Of En!jneering &4>eMsor Office Specialist Office Speciaist Office Spedaist Office Speciaist Office Specialist Office T echnieian Pr. Enllirormmal Spedalst Pr. EtMrOM\enlal Specioisl Project Speciaist Secretary S-ce Cortrol Inspector II S-ce Cortrol Inspector II Sowl:• Corool Inspector 11 Sowl:e Cortrol Inspector II Sotrce Corool Inspector II SolRa Cortrol Inspector II Sowce Corlrol lnsj)ector II Soln:e Comol Inspect..-II Soone Comol Inspector II S-Ce Corool lnsped..-11 S-Ce Cortrol Manager S-Ce Conrol ~­ Soone Cortrol Tedi Sou'ceCortrolTedt S-C.ConrolTedt T eclri~ Senilces ASslscart Director of eni;neen1111 EncUM! Assislorc I MINlgernert Analyst Associate Engneer II Associate Engineer Ill Associate Engineer Ill Engineer Engineer Aide 11 ~Aldell Engineer Aide II Engineer Aide II Engineer Aide Ill 1998-.99 Budget stall Plan 34.25 36.75 3.00 Actual FTE 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 0.50 1.00 0.50 1.00 1.00 Oe~sion Pkg& Approved Vacancies Budget staffing Plan 1999-2DDD 1.00 1.00 1.00 1.00 1,00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 0.50 1.00 0.50 1.00 1.00 u,.,.."' ,~· i.oo ' 1.00 1.00 0.50 0.50 0.50 0.50 0.50 0.50 ~~~3~1~.o~o ~ ~~~3~2~.o~o 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 075 33.75 1.00 1.00 100 3.00 1.00 1.00 0.75 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Page3 of 7 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1,00 1.00 1,00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 0.75 33.75 1.00 1.00 1.00 3.00 1.00 1.00 0.75 1.00 1,00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1,00 5-Year Slatllng Plan 2000-2001 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 0.50 1.00 0.50 1.00 1.00 0.50 0.50 0.50 32.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1,00 1.00 1,00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 0.75 33.75 1.00 1.00 1.00 3.00 1.00 1.00 0.75 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 5-Yur Sia~ Plan 2001-2002 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 0.50 1.00 0.50 1.00 1.00 1.00 1.00 0.50 0.50 0,50 32.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1,00 1.00 1.00 1.00 1.00 1,00 1.00 1.00 1.00 1.00 1.00 1.00 0.75 3175 1.00 1.00 1.00 3.00 1.00 1.00 0.75 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Status or RU50l1 Need to d$Ce anolher J.5 FTEs to got to !>-Year staffing pion run>ers sae 93-99 lncr of 4 FTE, disagroo WJ ebow 07Al5/2000 9:08 AM Legend: lilllcs • V~ Bold • Reorg; GRiy Shade • New Posttion -0!1g Bus Bus Uni u.. E!!!!!oyoo Name Job Tllo 720 120 Howard, Jil A 720 120 SI-. Douglas M. 120 120 Herberg, Jomes D. 120 720 Winsor, Charles F. Enj;neertng Assoclolo EniJnooring M1negor Englnoering ~­Ell\ll~ &.\'>eM"':' 1998-99 Budget Stall Plan Actual FTE 1.00 1.00 1.00 1.00 Decision P1<g& ,<wroved Vacancies Budget Staffing Plan 1999-2000 1.00 1.00 1.00 1.00 S-VHI' Statllng Plan 2000-2001 1.00 1.00 t.00 1.00 ~Year Slallklg Plan 2001·2002 1.00 1.00 1.00 1.00 St~us or Re-uon 720 720 Gow, J;ll L lntem o.so o.50 o.5-0 o~ 111~~~~a1~~~~~~1am~~·~~,~~~~~~iS!1~~~·~·~~~!@!i.im!llimll'QIDB=a~m '720 720 llordoris, AlllJe Prjncij>oJ &4l1nHringAssoc.. 1.00 1,00 1.00 t,00 720 720 ~. Robert L. PrindpOI &4l1neering Assoc, 1.00 1.00 1.00 1-00 720 120 Harris, Jomes R. Principal &4l1noertng Assoc. 1.00 1.00 1.00 1.00 120 120 Moy, Derris Prindpol &4l1neoring Assoc. 1.00 1.00 1.00 1.00 720 120 Rycnaw, Richard J. Princ:ipol &4l1neering Assoc. 1.00 1.00 1.00 1.00 120 720 Orel, Janot K. Secn!lary 1.00 1.00 1.00 1_00 720 720 Mitchel, P&UA Saicr&4l1neer 1.00 1.00 1.00 1.00 720 720 Pampst Alvin B. Se!Wor &4ll....,. 1.00 1.00 1.00 1.00 120 720 Thomslo, JOOll.lllell I(. Serlor Engineer 1.00 1.00 1.00 1.00 120 Tolal 27.25 ---'28.=25-. _-1:!!! ll.25 '---'3~5.,,.2-.5 ---'ll.2=5-. \,,,p,~:12.25 ~32.25127~) , ... -,.,.,.,,,.-,,,.,,-,,_,._,-, 730 730 Bod<, Michael C. Conslructlon Inspector 1.00 1.00 1.00 1.00 730 730 Boyer, R._,., F. Conslrucllon Inspector 1.00 1.00 1.00 1.00 730 730 Doss, Jony L. Construction Inspector 1.00 1.00 1.00 1.00 730 730 Ecldes, Leslie W. Conslrucllon Inspector 1.00 1.00 1.00 1.00 730 730 H .. 111,WilamW. ConslrUc:tionlMj>ector 1.00 1.00 1.00 1.00 730 730 Kittrol, Evorolte B-Construction IM1>0ctcr 1.00 1.00 1.00 1.00 730 730 Kovondo, EdWard R. ConslNcllon Inspector 1.00 1.00 1.00 1.00 730 730 McLomono, L1nyW. Construction Inspector 1.00 1.00 1.00 1.00 730 730 Savola, Efrain G. Construction IMjleetor 1.00 t.00 1.00 1.00 730 730 -· Moriquo Construction Inspector 1.00 1.00 1.00 1.00 730 730 Undor,JomD. ContrudionManeger 1.00 1.00 1_00 1.00 730 730 ~. Dalltd H. Engineer 1.00 1.00 1.00 1.00 730 730 Follonsteln,JomB. Engineer 1.00 1.00 1.00 1.00 730 730 Asher, Dean M. Eni;neer 1.00 1.00 1.00 1.00 730 730 Mi.thy, Umosh N. Engineer 1.00 1.00 1.00 1.00 730 730 Vecancies V11<:1ncie• 1.00 1.00 1.00 1.00 730 730 Firias,Ylnil<oE. EngineerAidel 1.00 1.00 1.00 1.00 730 730 Pan, Patricl< T. Engineer Aide Ill 1.00 1.00 1.00 1.00 730 730 C-s. L~sA EnJljneeringAssociato 1.00 1.00 1.00 1.00 730 730 Sa.-..:U,CesarL. EnglnoetingAssodete 1.00 1.00 1,00 1.00 730 730 Cervelone, Clvis A Engineering S\c>crlltsor 1.00 1.00 1.00 1.00 730 730 He~. Tod E. Engineering S<c>eMsor 1.00 1.00 1.00 1.00 730 730 -.Z, Barbara J. Office Spoc;eisl 1.00 1.00 1.00 1.00 730 730 Merchllgiono, Dellble F. Office Spectoisl 0.75 0.75 0.75 0.75 730 730 Kill<, S4aley E. Project Specieist 1.00 1.00 1.00 1.00 730 730 Pell<er, RORlldA ProjectSpecieisl 1.00 1.00 1.00 1.00 730 730 Coftnlnts, l.Jnd9 D. Secnilary 1.00 1.00 1.00 1.00 730 730 ~ .... Michllel J. Senor Construction Inspector 1.00 1.00 1.00 1.00 730 730 lojl, F1oriM Senor ConstrucliOll Inspector 1.00 1.00 1.00 1.00 730 730 L1whon,JamesD. SenorC-onlnspeclor 1.00 1.00 1.00 1.00 730 730 Mentink, Wayne L. Serior Construction lnsp<ctor 1.00 1.00 1.00 1.00 730 730 Peten,RoberiH. SeriorConslruclionlMjleetor 1.00 1.00 1.00 1.00 730 730 Rey,O.lltdL. SaricrConslrUc:tionlnspector 1.00 1.00 1.00 1.00 730 730 SoUlages, ~ R. Safier Canstrudlon Inspector 1.00 1.00 1.00 1.00 730 730 Tluo,GeorgeM. SeriorEngi,_ 1.00 1.00 1.00 1.00 730 730 Krte, TenyW. SpvsrCanstrudlonlnspedor 1.00 1.00 1.00 1.00 730 730 Lee, Chorles G. Spvsr Construction Inspector 1.00 1.00 1.00 1_00 730 Total lrsf dobble fram 810 • 38 38:00 ---'3"'5_"'7.=.5 ----1,!!!!_ 36.75 36.75 36.75 810 810 Ooten, Robert Director of Opcntions 1.00 1.00 1.00 1.00 810 810 Magnolia, Patricia J. Execmve Assislant I 1.00 1.00 1.00 1.00 110 Tolal 2.00 ---=2c:.:.oo=.o ----2.0D 2.0D 2.00 820 820 H-ngton, Micholo R. Associate Engineer Ill 1.00 1.00 1.00 1.00 820 820 Bl1'111, ShoblJir S. Engineer 1.00 1.00 1.00 1,00 820 820 H__,, David D. Engine« 1.00 1.00 1.00 1.00 820 820 Pwnscn, Gl9gQ T. Sciri!I 0.25 0.25 0.25 0.25 820 820 E-. Moll<A EnglneertnoMonegor 1.00 1.00 1.00 1.00 820 820 sctMm, Y-.e L. Envltornenal Spedoisl II 1.00 1.00 1.00 1.00 820 820 M1m"'8Z, David J. lnlem 0.50 820 820 ~son. C..olyn L 820 820 Knlemor, Lowoence P. 820 820 Coins, Barblra A 820 820 Heinz, Michael L. Sktelory Serlor Engineer Senior Anendol Analyst Sarior Scieo!lsl 1.00 1.00 1.00 0.25 1.00 1.00 1.00 1.00 1.00 1.00 0.25 1.00 1.00 1.00 120Tolal 830 830 Coak, Doug Op.alons II~. Cook 11.25 ---=9.~DO.=. ----1,!!!!_ D.33 10.00 0.33 1.00 1.00 1.00 1.00 1.00 9.25 D.33 1.00 1.00 1.00 1.00 1.00 ---=9.::25.=. J0Veron&YearSt11ft'mg Pliritn :ZOOO:Oi, 01~ D.33 830 830 F'*5, John P. 830 830 Brown, Sl1errel D. 830 830 Fi_,, Kalhy K 830 830 Ra~. Victoria L. 830 830 Babolelvori, Mohanmad A 830 830 Gerton, Slophen e. 830 830 Lonon, M°"'A 830 830 Mo~er. Theodore M. 830 830 Wade, Ronald L. 830 830 Doelderer, Thomos D. 830 830 Riccordo, Rihl 830 830 Barrett, Michael J. 830 830 Boyd, Moll< S. 830 830 Cortez, Ronald c. Sr. Openllons SuptJVlsor, Fnlas Control Center Clertc Corirol Coner Clertt C«lrol Corter Clot1t Clpofations ~- ~ons ~sor Operations~- Operelions ~-Oper9tlons ~sor Operolor In Training Openitcr In Trailing Ptent Operator Plant Operalor Ptonl Operator 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Page 4 of 7 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Buyo<l, Delete position, Mon:ll 31 07A)51200() 9:08 AM Legend: hies •Vacancy; Bold • Reorg; Gray Shade • New Position Now Ortg Bus Bus Uni Uni. Eircilap! Name Job llle 830 830 Davis, Jade L. 830 830 Hoeng, Tyler T. 830 830 Leclvler, Jesse J. 830 830 Lester, Edwin M. 830 830 Mendez, Thomas J. 830 830 Mtophy, Tracey L. 830 830 Plolong, Odaze 830 830 Wikerson, Dar1ene 830 830 Wong, Ken H. 830 830 Zeier, PatJa A. 830 830 Feny, Cynhia L 830 830 Bents, Michael A. 830 830 c.ntlo, Palrtdl M. 830 830 Dl.m, Craig o. 830 830 LH, TOii)' S. 830 830 Mansel, Selwyn D. 830 830 Mccam, Jomes 830 830 Reed, C11ar1es L. 830 830 Roberts, Mart< M. 830 830 Sekamolo, Sench A. 830 830 Spart<s, Dale E. 830 830 Vuong, Michael 830 Total 840 840 HHlz, David R. 830 830 Cook, Douglas L 840 840 Lebrul, Joan M. 840 840 Livingston, Robert A. 840 840 Kerels, Dean R. 840 840 Baxler, Arthony 840 840 HllWkins, Warren S. 840 840 Kovoldis, Jolvl 840 840 Michno, Robert 840 840 SclUlz, Frarl< G. IUO IUO Vacancies 840 840 ~. CIOI V. 840 840 -cua. Gerardo 840 840 Baqel, Waqar A. 840 840 Beadi, cart E. 840 840 Bihl, David A. 840 840 Chavez, Frarl< 840 840 Dysart, Doug M. 840 840 Givan, Tyrone C. 840 840 Hlllrison, Hylan D. 840 840 Klzanls, Robert G. 840 840 McGrath, Peter 840 840 Moine, Wllam M. 840 840 Moms, Robert M. 840 840 N1nOZ, Lydia 840 840 Pedcham, Kevin R. 840 840 Plesclo, Richard 0. 840 840 RHd, a..s L. 840 840 T-tr. ChrislOIJhe R. 840 840 Wigington, La......,.e A. 840 840 Woodward, Jeff W. 840 840 LoSlrdo, Unda 840 840 Biele, Catherine M. 840 840 Brown, Peter H. 840 840 Davidson, Glen E. 840 840 Elo, Jomes M. 840 840 Hauser, Doug W. 840 840 HID, Thomas A. 840 840 Kenerson, Roger A. 840 840 Pierce, Wilam F. 840 840 Remnon, Lym L 840 840 Spear$, James 140 Tolal 850 850 Raclca, Jom A. 850 850 Whe-. Ryal L. 850 850 Chafe, David M. 850 850 Miranda, Dario! R. 850 850 Nordgeri, Kort U. 850 850 TI...ie, Jomes G. 850 850 Wlkerson, I.any R. 850 850 Jones, Gerald R. 850 850 Walson, Simon L. 850 850 Chairez, Sergio 850 850 R~. Alan D. 850 850 Zuccolo, SIMno c: 850 850 S...wn, Moira E. 850 850 Chapman, BNce A. 850 850 Colamonico, Tlmolhy 850 850 Hams. Rancty E. 850 850 Key, Jeffrey L. 850 850 Aolds, Joarie M. 850 850 Cordova, Plilp F. 850 850 Jacobson, Tod H. Planl Operalor Plart Operalor Plart Operalor Plant Operalor Plant Operalor Planl Operator Plart Oporalor Plant Operalor Ptart Operalor Planl Oporalor Secretary Senior Plant Operalor Senior Planl Operator Senior Plant Operator Senior Planl Operolor Senior Plart Operalor Senior Planl Operator Senior Ptonl Operator Senior Plant Operalor Senior Plant Operalor Senior Plant Operalor Senior Ptort Operator Sr. Operallons ~or. Heinz Operallons Manager, Cook Control Center Cieri< Control Center Cter1< E.ppmont Operalor Operations S\4lervisor Operations S\4lervisor Operations S\4lervisor Operations S\4Jervisor Operations S\4lervisor Vacancies Operalor In Training Plant Operator Plart Oporalor Ptart Operalor Planl Operalor Ptort Oporalor Plant Operalor Planl Operalor Ptart Operalor Plart Operator Ptart Operalor Planl Operalor Plart Operator Plant Operalor Planl Operalor Plant Operator Planl Operolor Planl Clperalor Planl Operalor Plant Operalor Secretary Senior Ptonl Oporalor Senior Planl Operalor Senior Plant Operalor Senior Planl Operalor Senior Ptort Operalor Senior Planl Operalor Senior Planl Operalor Senior Planl Openilor Senior Planl Operalor Senior Ptart Operalor Foreman Foreman Lead Mechanic Lead Medlanic LeadModlanic Lead Mechanic Lead Mechanic M11tntenance Manager Mainlenance ~sor Mechanic Mechanic Mechanic Office Specialst Project Specials! Project Speciaisl Project Specials! Project Specials! Secretary Sol'lor Malol"""nce Worl<er Senior Malnl<nonco ~er 1998-99 Budget staff Plan 37.00 43.00 Aclual FTE 1.00 1.00 1.00 1 00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 33.33 1.00 0.3J 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1_00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1,00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Decision Pl<g& Approved V.ac~c.lttS 1.00 (1.00) Budget stalftng Plan 1999-2000 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1-00 1.00 1-00 1.00 1.00 1_00 1.00 1.00 JJ.JJ 1.00 0.33 1-00 1-00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1-00 1-00 1.00 1.00 1.00 1-00 1-00 1.00 1.00 1.00 1-00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1-00 1-00 1-00 1.00 1.00 1.00 1.00 1-00 1.00 1.00 ~--4~0~.3~3 _____l!:!!!!I ---'3~9~.3~3 1.00 1.00 1.00 1-00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1 00 0.50 0-50 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1-00 1.00 1_00 1.00 1.00 1.00 1_00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Page 5 of 7 S.Year stamng Plan 2000-2001 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 34.33 1.00 0.33 1.00 1.00 1.00 1.00 1,00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1_00 1_00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 37.3J 1.00 1.00 1.00 1.00 1.00 1.00 1.00 0.50 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 ~Year staffing Plan 2001-2002 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Buy<U, Dole!• po<ltlon, March 31 1.00 1.00 1.00 BuyO<t, Dolele position, April 1 ___ 34_._3_3 I ca mot go iib<Mi s. "'"to &i)iili;b. <:<>aldi.'33 I > 1.00 0.33 1.00 1.00 1.00 1.00 1.00 1.00 1.00 ~~~a....{:lo ." ~ 2 1• OYer by llne PoSlllons; some 1.00 Qpenilors COl*I be lnlnslomd lo pllnl one 1.00 due to """1ngo.soo nMsed 96-99plon, +3 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1-00 1.00 1.00 1_00 1.00 ---'3"'5"'.3"'3 can go to 38 38 38, see rev 96-99, loss buy Olt 1.00 1.00 1.00 1.00 1.00 1.00 1.00 0.50 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 07~ 9:08AM L_.i: lolcs • Vacancr, Bold• R-ir, Gray-• Now P- -Ottg ... -Uni U... EmploYH Namo Job Tiiie 850 850 M-.Y. Pal.I J. 850 850 ~.Luis A 850 850 M1son, CwUs R. 850 850 McReynolds, Roland T. 850 850 Romey, Kevin 850 850 Reews, Richard 850 850 Wiison, Michael 850 850 Anlnet1. Sergio A 850 850 Allston, Einllo 850 850 Bowdy, Patrick F. 850 850 Deca!ilro, Absalon G. 850 850 Filos, Robell F. 850 850 Fonlell, Daniel C. 850 850 Gltllnd, ~ 850 850 Hendy, Roy A 850 850 Llzorel<, LOITY E. 850 850 L-. Hef'fY E. 850 850 MllC1hew5, Teny A 850 850 Mey, Todd A 850 850 Mltlcovich, Jom 850 850 Part< Jr, Joseph w. 850 850 P-on. E-L. 850 850 Schaep, R.- 850 850 S111'4'son, Donald o. 850 850 Towns, Shane A 850 850 Usher, David A l50TOCal 860 860 Baum, llny 860 860 F'c*, R-S. 860 860 He~ves. Richard B. 860 860 Hinslllw, R01'81d J. 860 860 Hiner. Jom J. 860 860 lur:eNI, Efran G. 860 860 M~. R.-J. 860 860 Mclltlde, Scott M. 860 860 McB'oy, Tonvn E. 860 860 Myer, Jom T. 860 860 N-. T111111 T. 860 860 Nicolls, Dan P. 860 860 -·· seven o. 860 860 Rogan, Donald w. 860 860 Russel, Rick B. 860 860 Sainas, Vidor A 860 860 Sl11'4'SQO, -E. 860 860 &Dh, ~I<. 860 860 Wtlle, Cllarlos 860 860 Wiison, Mort< S. 860 860Z...,.s.0""11ri 860 860 Clldone, Oanlel R. 860 860 Clt1aun, L .. nch P. 860 860 TucUr. JOMph 860 860 Viii-. Dale J. 860 860 Alop, Jo-E. 860 860 Awty, llmolhy R. 860 860 Ching, .lie I<. 860 860 CNlson,J1mesW. 860 860 Cordel, Sleven A 860 860 F~. Victor M. 860 860 -· H.-t A 860 860 H1 .. er, James E. 860 860 Henlgstad, C811 A 860 860 Hoftrd, Sleven E. 860 860 Malk, IMlern s. 860 ll60 MIU, Miik 1160 860 N-. H\lln Hoang 860 860 Ol>org, Kemeth C. 860 860 Rea, Rory 860 860 Slepherls, Jom D. 1160 860 Tews, Richard J. 860 860 Waln, Wllam W. ll60 860 Aelllfl•. WBl/00 w, 860 860 Basgal, Timothy 0. ll60 860 (onimor, L~ T. 860 ll60 Rlploy, Glen 1160 860 Clll1c, James B. ll60 860 Iberra, Josa R. 860 860 51\H, MlchHl A 860 860 JonlS, GorWd R. 860 860 a..i.ue, George A. 860 860 Ramoy, Kemelh l. 860 860 Gerdes, Flcnnce L. 860 860 Broob, Peny D. 860 850 Blntl, Slephen J. 860 860 Lebrun, Benwrd M. 860 860 ~. E-ett l. 860 860 O'Neil, Cynlllle A. Senior Mllltorw.ce Wool<er SeniorM-noew- Sori« Mointenonce Woncer Soriot Mlllnl.,.nce Wod<er Sefior M1lnlenance W- Seniot MonlenonceWO<ter Senior M1lnlenonce Wool<et Senior Meclllnlc Senior Mechenlc Senior Meclllric SeniorMecl1el'lc SeriorMechllic SeniorMedllnlc SeniorMecllll'llc SenlorMect8nic SeniorMocllenic Senior Mechanic S.WorMocllenic SeniorMecl1el'lc Senor Mechanic Senior Mechenic S.Wor Mocllonic Setiior Mechanic Senior Meclllnlc Senior Mecllanic Senior Meclllnic Eledrtcal Mice Worl<ef Electrical Tech I Eleelricel Tech II Eledrical Tech II Electricel Tecll 11 ElectriceJ Tecll 11 Electrico\ Tech II Eledl1cal Tech II Electricel Tecll 11 Electrical Tech II EledrlceJ Tech II Eledrlcal Tech II Electricel Tech II Eledrtcei Tecll 11 Eledricol Tocll 11 Eletfrlcel Tech II Eledrle8I T ecll 11 EIKlriceJ Tecll 11 Eletfl1ce\Techll Electrical Tech II Electrical Tech II F_,, Forenwn F- lmtn.rnerUtion Mice WoriLer- IMlnmonteUon Tech II lnstnme!tlllon Tech II IMtnnlenletlon Tech II in91nrnerCalionTechll lnstnmertotionTechll inllrlmoftetJon Tecll 11 lnstnmenlotion Tech II IMlnmetettion Tech II lntlnmerUllonTechll lnstn.n.UHonTechll lnsln.IY*tlllionTechll instnmerUllon Tech II lnslnftWtllionTechll lnslnftWtotionTechll lnstn..-etionTecllll lnstnmerUllon Tech II ~etionTecllll lnolrllnertetionTecllll l .. d Elec Tech lead Elec Tech Leid Elee Tecll Leod Eloc Tech Leid lnstrwnert1tion Tech L01d ~etion Tech lead lnstJvnatlllon Tech Mlinlorw.ce Monager MairtenMlCe ~­ Mlinlenenc:• 5'4>eMsor Office Tech'idan Projec:( Specillst Project Sped- Project Specillst Projtct Specialst Se<tetory 1998-99 Budget SlalfPlan 52.50 Actual FTE Decision Ptog& Approved Va cane-Its Budget stalling Plan 1999-2000 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 ~--'~5~.s~o ____ _ __ 4_5_.5_o 1.00 1.00 1.00 1.00 1 00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1,00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1,00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 100 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1,00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 050 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1 00 Page 6 of 7 (1.00) 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 100 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 0.50 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 45.50 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 0.50 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1,00 1.00 31alus«RHSOl'I ___ 4_5_.511_ jeamo1goabove45.S due to tiuyoots 1.00 sb 47.5 46.544.5 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 0.50 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Buy<U, Delete position, Aptt 15 Buy<U, Delete position, J~ e l!uyoli, Delete posillon, Moy -rr 07'°5/2000 1:08 AM L8Q9nd: lalcs • Vac..cr. Bold • Rec:q: Gray Shade • New PoslUon Now Ortg -Bus Uni Uni Employoe Namo Jab 'DUii -T-170 llO 870 870 870 870 870 870 870 870 870 870 170 ZoRymkl, \/lclor llO Cook, 'DoUg 870 Befver, Lony 87D Bemer, Sldp E. 870 Btlseno, Anorio 870 Chesebro, Gregory L. 870 Leong, Fronk A. 870 Nelson, Kenl C. 870 Pone, 'Miiam A. 870 T~. RlelllrdA. 870 Von Voont, Dcrekl B. 870 Y-h. Ernest N. llr. Oponlloi1s ~..,,isor, ZotDlsld Oponllons...,_, Cool! Pllrc> Power Operolor P11rc> P""9f Openlor Pllrc> p....,.. Operotor Pllrc> Power Operolor Pllrc> Power Operator P11rc> POIW9r Operotor Pllrc> P-Operolor Pllrc> -Opoqtor Pirre> P-Opoqtor Pirre> Power Operolor 1998-39 Budgot stall Plan Actual FTE Decision Pkg& Approved Vacancies Bud gel staffing Plan 1999-2DDD S.Year stafftng Plan 2000-2DD1 ---'5~8."'50~ ----'5~7~.50~ ~ -~~55~.5=0 ---'5~5~.5~D 1.00 1.00 1.00 0.34 0.34 0.34 1.00 1.00 1.00 1.00 1.0D 1.00 1.00 1.DD 1.00 1.0D 1,00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 (1.00) 1.DD _--1.QQ. 1.00 5-Y.,.. Slafftng Plan 2DD1-20D2 55.50 1.00 0.34 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Stitus or Reuon I CalilOl llD abOYi 55.5 4ii IO IJU9W$, 56.5 170Totol __ _,1_,_,1."-00"' ----'1"-1 . .:::34::. ___j1:!!.Q) 10.34 1D.34 10.34 lc..-_go.._ID-lo~ 880 880 t>M, Tony H. 880 880 -· Joffl9y 880 880 Torres, E-rd M. 880 880 Hnd, Erice L. 880 880 Ip, Klis 880 880 Dao, CNoe D. 880 880 Velasco, Marco Polo S. 880 880 Hass, Hejga M. 880 880 Kogan, Vlacimr A. 830 830 Ratledge, Eclwin D. 1.00 1.00 1.00 1.00 1.DD 1.00 1.00 1.00 1.00 1.00 1.00 1.00 0.50 (0.25) 0.25 0.25 0.25 0.50 (D.25) 0,25 0.25 0.25 1.00 1.00 1.00 1.00 1.00 I.DD 1.00 1.00 1.DD 1.00 1.00 1.00 1.00 I.OD 1.00 1.00 1.00 1.DO 1.00 1.00 880 880 Rood, Brion K. HlmOll R"'°'""s M8iy>I So\ne Coriral Tech ---'1~:0"'0 ___ 1"'-.00= ___ _.1"'.00~ ----'1;:;.oo;;.· .{ 1 abo\19 rellised pion, ..... ttH o IBf In 96-99? ---=8."'0~D ---'1"'0~.0-=-D ~ ---'9"".5=D ---=9.o=5.:.D ---=S:"-5o"' ·1cl.fTen11y 2 oboVo 5-yeai stattlf!Q pion llOTotol 910 910 Miles, Palrick B. 1.00 1.00 1,00 1.00 1.DD 1.00 1.00 1.00 91D 910 Woodslde, Frorme 910 910 Cutllon, Rk:hard A. 910 910 Castilon, Richan! A. Director of Info. TecMalogy Exe<:Ulve Assistart I Project Speclalst __ _,1.:;:.D.=.D 1.00 1.00 1.00 Podlon,..becomevacWll-.d..- Prcjo<I Speciaist __ _,1.:::.0.=.0 .... 930 910 Total ___ 3._D_D __ _:;:4.:;:.D;::.D 3.0D 3.DO 3.00 PlanmWatdlD311M-;o 920 920 Gela, Neibert 920 920 Sargent, Meinde S. 920 920 Neius, Sharon 920 920 LeM>ke, Howard P. 920 920 Tron, Ht1/ Q, 920 920 Tn111, Ecith T. 120Total 930 930 Hemn, Mike J. C""lllier Har-re Specialsl Info SVcs Tech II Into SVcs Tech Ill lnformaLion Teclvlalogies Spvv PrDiJBrrmer PrC)iJ8rrmer Analyst 1.00 1.00 1.00 1.00 1.00 1.DO 1.00 1.00 1.00 I.DD 1.00 1.00 1.00 1.00 1.00 1.00 1.00 I.DD 1.0D 1.00 ___ 1_.00_ 1.00 1.00 1.00 5.00 6.DD 6.DO 6.00 6.00 Plan revised ID 5 a t 113-H ----1.00 1.00 1.00 ~~~· •t~~-fil't,~--~~~. 930 930 C•-. Mol11 Pr~ 1.00 1.00 1.00 .. 930 930 Ewngehlo. VldGI S. Pr-1.00 1.DO 1.00 1.00 930 930 Dimly, Rebell S, "'-M81yst 1.00 1.DO 1.00 1.00 930 930 Gemaz,Rt.ih .p,_.......-lyst 1.00 1.00 1.00 1.00 lM!~~~~~~~~mw;~~!!!l!l~~~~mw"mm~~miw.~;;mm~~flW'~~J1%}'m?~~~~~·~~'~~ma~~W§lm11~~~~~~~~~ 930 930 • WIJ""' J. Tolocorrmrl.,;,jj--;_Specioht 1,00 1.oO 1.00 llOT- !MO 940 Bol, R-M. !MO 940 C.c!V, Pongsai<ci !MO 940 Slolrder,JomW. MO MORaa,~ 940 940 H<ln, Pele< M. !MO !MO Cong, Jtme1 !MO !MD N-. ChroQ M. !MO Total 950 950 H--., Dal'ld P. 950 950 Steiger, Frri R. l50 120 Vac1nl 950 9SO ~. Ral>ertC. 950 950 Btoclr, Dorio! T. 9SO 950 Hyder. Sllem>hod GSO r:;o v..-1n1 950 950 W""'8n, Gary l 950 9$0Wob1ilet,WlbmF. l50Tat>I Grand Total Info 8'n:> Tech Ill Info SVcs Tech Ill lnformollon Tocmciooes S!>- ,,.._ Analrsl Prognimner Pl'ogntmw Alaly>I ~Anlllyol AssodoteEngi,.....111 Assodota ~Ill Ca>tol Sy:rlrt"" Enl/IM<F Ploflt A&tomoUO!I Monoge< PrDiJBnmor Pr- ~"'"'"" """""-Prcloct 5!><ci•l51 __ _;::5.'-"D~O ---=6~.0.:.D ~ 1.00 1.00 1.00 1.00 1.00 1,00 1.00 ___ 6_.00 ____ . .,;6.o::D=..0 ~ u o 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 ---'-'1."'00=----"-1~.oo=-~ 542.50 508.75 10.25 98-99 Budgd Plan 542.50 jonly the 1998-99 numbers were changed. No adjustments were carried forward in 1998-99 budget Originel 5 yeu plan 549.00 Page 7 of 7 ~.OD t.00 1.00 1.00 1.00 1.00 1.00 1.00 7.DD 1.00 1.00 1.00 1,DO 1.00 1.00 f.00 1.00 I.DO 9.0D 518.00 521.50 521.50 a.DO I.DO Plonte-MedlDSo tM-U t.00 1.00 1,00 1.00 1.00 1.00 1.00 1.00 I.DO 1.00 1.00 1.00 1.00 1.00 7.DO 7.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 9.00 9.00 517.25 514.25 515.50 507.50 515.50 507.50 FAHR COMMITTEE Meeting Date ToJt. Bds. 7/12/00 AGENDA REPOltT Item Number Item Number FAHR00-59 Orange County Sanitation District FROM: Blake Anderson, General Manager Originator: Greg Mathews, Assistant to the General Manager SUBJECT: PROPOSED FY 2000-01 STRATEGIC GOALS WORKPLAN GENERAL MANAGER'S RECOMMENDATION Receive and file 2000-01 Strategic Goals Workplan. SUMMARY The Strategic Goals Workplan is an annual planning tool designed to assist staff in reaching best-in-class status. The attached represents an internal tool utilized by management for the purpose of evaluating major program accomplishments. The Workplan details projects, programs, objectives and tasks designed to achieve these District-wide Strategic Goals: • Consistently Employ Strategic and Tactical Resource Planning. • Develop and Maintain an Effective and Efficient Workforce. • Consistently Apply Appropriate Technology. • Consistently Deliver Excellent Public Health and Environment Protection. • Consistently Deliver an Excellent Level of Service. The FY '00-01 Workplan development process is a continuation of our due-diligence efforts to identify major project undertaken each year. In prior years, both the Board of Directors and District staff have suggested an increased focus on core business during the workplan development period. As a result, we continue to refine our development process to ensure we are attentive to the vital few projects that can make a significant operational difference. The results of this exercise have shown that the vast majority of District effort is dedicated to core business, with limited time available for the re-engineering efforts associated with the Strategic Goals. An historical look at our Workplan products indicate fewer and fewer pages associated with each annual revision; yet we believe this on-going development has ultimately resulted in less quantity but higher quality. It is clear that Strategic Goals are critical to the success of this agency. It is also clear that as the District re-engineers and "right-sizes," it will be increasingly difficult to balance the need for strategic goal work with core business functions. PROJECT/CONTRACT COST SUMMARY Not Applicable. H:\wp.dtalagenda\FAHRIFAHR200<1l2000 Agenda ReportslFAHR00-59.doc ReYised: 1/5198 Page 1 BUDGET IMPACT 0 This item has been budgeted. (line item: ) 0 This item has been budgeted, but there are insufficient funds. 0 This item has not been budgeted. 1:8,l Not applicable (information item) ADDITIONAL INFORMATION Not Applicable. ALTERNATIVES Not Applicable. CEQA FINDINGS Not Applicable. ATIACHMENTS 1. FY 2000-01 Workplan Report H:lwp.dtalagenda\FAHRIFAHR2000.2000 Agenda Reports\FAHR00-59.doc R8'1ised: 115198 Page2 FAHR COMMITTEE AGENDA REPORT Orange County Sanitation District FROM: Gary G. Streed, Director of Finance Originator: Steve Kozak, Financial Manager Meeting Date To Bel. of Dir. 07/U/OO 07/19/00 Itern Nuniber Item Number FAHR00-60 SUBJECT: DECLARATION OF DISTRICT'S OFFICIAL INTENT TO REIMBURSE THE DISTRICT'S EXISTING CAPITAL RESERVE FUNDS FOR CERTAIN EXPENDITURES MADE IN ADVANCE OF, AND IN ANTICIPATION OF, CAPITAL IMPROVEMENT EXPENDITURES, FROM PROCEEDS OF A FUTURE LONG-TERM BORROWING GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 00-XX, "Declaration of Official Intent to Reimburse Certain of the District's Capital Reserve Funds for Expenditures Made in Advance for FY 2000-01 Capital Improvement Projects from Proceeds of a Future Long-Term Financing." SUMMARY Adoption of the "Reimbursement Resolution" will allow the District to use proceeds from a future long-term borrowing to reimburse capital reserve funds which were used to fund District capital projects. PROJECT/CONTRACT COST SUMMARY N/A 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. [gJ Not applicable (information item) H:lwp.dtalagenda\FAHR\FAHR2000\2000 Agenda ReportslFAHR00-60.doc Revised: 8/20/98 Page 1 ADDITIONAL INFORMATION Under provisions of U.S. Treasury Regulation 1.150-2, local public agencies may use proceeds from long-term borrowings to reimburse those capital reserve funds which were advanced to fund preliminary expenditures, such as design, engineering and similar costs, for capital projects. The Regulations permit up to 20% of the aggregate par amount of bond proceeds from a new issue to be used for reimbursement of preliminary project expenditures, providing the public agency has declared its intent to do so prior to debt issuance. As part of preparations for a new capital financing program to support the Strategic Plan Update Capital Improvement Program, it is necessary to update the District's intent to reimburse reserve funds. Adoption of the attached "Reimbursement Resolution" will ensure that the District can include monies in upcoming borrowings to reimburse reserve funds for expenditures made in advance of available COP proceeds. The Board of Directors has adopted similar Resolutions in 1997, 1998, AND 1999. ALTERNATIVES None. CEQA FINDINGS NIA ATTACHMENTS 1. Resolution No. OCSD 00-XX H:lwp.dtalagenda\FAHR\FAHR2C>00.2000 Agenda Reports\FAHR00-60.doc Revised: 8/20198 Page2 RESOLUTION NO. OCSD 00-XX DECLARATION OF OFFICIAL INTENT TO REIMBURSE CERTAIN OF THE DISTRICT'S CAPITAL RESERVE FUNDS FOR EXPENDITURES MADE IN ADVANCE FOR FISCAL YEAR 2000-01 CAPITAL IMPROVEMENT PROJECTS FROM PROCEEDS OF A FUTURE LONG-TERM FINANCING A RESOLUTION OF THE BOARD OF DIRECTORS OF ORANGE COUNTY SANITATION DISTRICT AUTHORIZING FUTURE CAPITAL EXPENDITURES TO BE REIMBURSED FROM FUTURE LONG-TERM FINANCING WHEREAS, the Board of Directors, by adoption of Resolution No. 94-81 on July 13, 1994; Resolution No. 97-28 on July 30, 1997; Resolution No. OCSD 98-32 on July 1, 1998; and Resolution No. OCSD 99-08 on June 23, 1999, previously declared its official intent to reimburse its then existing capital reserve funds and accounts for certain expenditures made in advance of and in anticipation of issuing indebtedness for capital improvements to be acquired, constructed, or paid for, by or on behalf of the District during the Fiscal Year; and, WHEREAS, the District ("Issuer") intends to acquire and/or construct, or otherwise improve, certain capital improvements during Fiscal Year 2000-01, and later, all as more particularly described on Exhibit "A", attached hereto and incorporated herein by reference (the "Project"); and, WHEREAS, Issuer expects to pay certain expenditures (the "Reimbursement Expenditures") in connection with the Project prior to the issuance of indebtedness for the purpose of financing costs associated with the Project, on a long-term basis; and, WHEREAS, the Issuer reasonably expects that the debt obligations, in an amount not to exceed $100 million, will be issued, and that certain of the proceeds of such debt obligations will be used to reimburse the Issuer for Reimbursement Expenditures. NOW, THEREFORE, the Board of Directors of Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE AND ORDER: 1 Section 1: That the Issuer finds and determines that the foregoing Recitals are true and correct. Section 2: That this Declaration is made solely for purposes of establishing compliance with the requirements of Section 1.150-2 of the U.S. Treasury Regulations. This Resolution Declaration does not bind the Issuer to make any expenditure, incur any indebtedness, or proceed with the Project. Section 3: That the Issuer hereby declares its official intent to use proceeds of indebtedness to reimburse itself for the Reimbursement Expenditures. PASSED AND ADOPTED at a regular meeting of the Board of Directors held July 19, 2000. Chair ATTEST: Board Secretary 122782\1 2 Exhibit "A" Project Summary Replacement I Improved Item Rehabilitation Treatment ~~~~~~~~~~~~~~~~~ Collections Facilities $ 10,265,000 $ 119,000 Headworks $ 985,000 $ 33,000 Primary Treatment $ 1, 115,000 $ 124,000 Solids Handling & Digestion $ 6,892,000 $ 714,000 Secondary Treatment $ 1,216,000 $ 368,000 Ocean Outfall Systems $ 810,000 $ Utility Systems $ 2,940,000 $ 1,389,000 Odor Control Related Projects $ 1,088,000 $ 212,000 Plant Automation & Computerization $ 1,726,000 $ 3,271,000 Process Related Special Projects $ 49,000 $ 1,124,000 Miscellaneous & Support Projects $ 4,079,000 $ 597,000 Water Management Projects $ $ 2,329,000 Equipment $ 874,000 $ 874,000 Total $ 32,039,000 $ 11,154,000 Page 1 of 7 Additional Capacity $ 10,523,000 $ $ 6,646,000 $ 526,000 $ 434,000 $ 914,000 $ $ $ 156,000 $ $ $ 3,776,000 $ 874,000 $ 23,849,000 Support $ 297,000 $ $ 364,000 $ 4,774,000 $ $ $ 100,000 $ $ 5,885,000 $ 2,423,000 $ 2,351,000 $ $ 290,000 $ 16,484,000 Budget $ 21,204,000 $ 1,018,000 $ 8,249,000 $ 12,906,000 $ 2,018,000 $ 1,724,000 $ 4,429,000 $ 1,300,000 $ 11 ,038,000 $ 3,596,000 $ 7,027,000 $ 6, 105,000 $ 2,912,000 $ 83,526,000 2000-01 Budget Summary of Capital Requirements -Collection System Improvement Projects Collections Santa Ana Trunk Sewer Rehab. Pumpstation SCADA Communications Study Continuous Feed Chemical Treatment Facility Phase 2 Corrosion Assessment Trunk Sewer Mapping Project Carbon Canyon Dam Interceptor Parallel Sewer Carbon Cnyn Sewer and Pump Sin. Abandonment Santa Ana River Interceptor Relief Sewer Rehabilitation of Outlying Pump Stations Santa Ana River Interceptor Realignment and Protec Taft Branch Improvements Atwood Sublrunk Improvements Euclid Relief Improvements -Reach ·A· Replacement Of Miller Holder Trunk Sewer SipMn Orange-Western Subtrunk Relief Sewer Rehabilitation of the Magnolia Trunk Sewer Rehabilitation of Magnolia Trunk Sewer. Phase 2 Miller-Holder Trunk Sewer System, Reach 1 RehabiNtation of the Seal Beach Pump Station Rehabilitation of the Westside Pump Station Mods. lo Magnolia Relief Sewer in Western Ave. Big Canyon Offsile Sewer Rehabilitation Replacement of Back Bay Trunk Sewer Replacement of the Bitter Point Pump Station Replacement of the Rocky Point Pump Station Rehabilitation of the 14th Street Pump Station Rehabilitation of the •A· Street Pump Station Rehabilitation of the Bay B<idge Pump Station Rehabilitation of the Crystal Cove Pump Station Abandonment of AB Trunk, Watson and Cal. Sewers Goldenwest Trunk Sewer Replacement Heil Avenue Interceptor Warner Avenue Relief Sewer Lateral and sewer abandoment at Pacific Coast Hwy. Rehabilitation of the Edinger Pump Station Capital Improvements, Collections Collections Total Revenue Area 7 Rehabilitation lo Outlying Pump Stations -Area 7 Racquet Hill Pump Station Abandonment Sunflower Interceptor Manhole Rehab. Tustin Airbase -Armstrong Subtrunk Sewer Project Project Phase Project Number 7/1/00 Status 01-17 Planning Revised 01-95 Planning Continuing 01-96 Planning New 01-97 ConstJknpl. New 01-98 Planning Continuing 02-21-1 Planning Continuing 02-24-1 Design Continuing 02-31 Planning Continuing 02-37 Design Revised 02-41 Design Revised 02-49 Planning New 02-50 Planning Continuing 02-52 Design Continuing 03-2-1 ConstJlmpl. Continuing 03-25 Design New 03-35R ConstJlmpl. Revised 03-35R-2 ConstJlmpl. New 03-3S-1 ConstJlmpl. Revised 03-51 Planning New 03-52 Design New 03-9-1 ConstJlmpl. Continuing 05-43 Planning New 05-46 Design Continuing 05-49 Design New 05-50 Design New 05-51 Design New 05-52 Design New 05-53 Design New 05-54 Design New 06-13 Planning Revised 11-17-3 ConstJlmpl. Revised 11-20 Constllmpl. Revised 11-22 Planning Revised 11-23-1 Design New 11-28 Planning New 11-99 Planning New 02-37 Design Revised 07-14-3 Planning Revised 07-21 Design Revised 07-27 RA ]Design Revised Page 2 of7 Total Est Cost 2000..()1 Project to Date Cash flow Budget 6130/00 Budget 7,494.000 80,000 64,000 146,000 146,000 308,000 119,000 . 68,000 68,000 362,000 128,000 234,000 5,007,000 51,000 210,000 2,685,000 81.000 43,000 11,853,000 66,000 146,000 804,000 691,000 15.000 49,787,000 1.722,000 1.475.000 4,742,000 7,000 1,890,000 58,000 92,000 10,831,000 17,000 1,996,000 119,000 49,000 1,232,000 46,000 1,186,000 10,354,000 8,140,000 2.214,000 12,127,000 49,000 10,697,000 7,035,000 3,662,000 3,083.000 1,619,000 209,000 136.000 73,000 2,714.000 38,000 8,095,000 187,000 1,768,000 3.480,000 98,000 4.124,000 118,000 2.211.000 188,000 2.248,000 193,000 1,094,000 72,000 306,000 46,000 2,176,000 110,000 4,507,000 2.027,000 1.310,000 3,711,000 806,000 1,944,000 3,399,000 144,000 177,000 129,000 51.000 1,449,000 25,000 500,000 14,000 177,435,000 21,694,000 15,843,000 396,000 340,000 4,000 126,000 32.000 66,000 5,387,000 131.000 1.731,000 72,000 234,000 Future Page Budget Number 7,350,000 12 13 189,000 14 15 16 4.746,000 17 2.561,000 18 11,641,000 19 98,000 20 46,590,000 21 4,735,000 22 1,740,000 23 10,814,000 24 1,828,000 25 26 27 12,078,000 28 29 3,083,000 30 1,619,000 31 32 2,676,000 33 S,140,000 34 3,382,000 35 4,006,000 36 2,023,000 37 2,055,000 38 1.022.000 39 260,000 40 2,066,000 41 1,170,000 42 961,000 43 3,078,000 44 78,000 45 1,424,000 46 466,000 47 139,899,000 52,000 48 28.000 49 5,256,000 so 1,425,000 51 CIP Project Detail Sheets Summary of Capital Requirements -Collection System Improvement Projects Revenue Area 7 (Contd.) Gisler-Red HiU Trunk Relocation McGaw Subtrunk Sewer & Pump Station Abandonment Gisler-Redhill Trunk Improvements, Reach "A' Gisler-Redhill System Improvements. Reach B Tustin Trunk Improvements Orange Trunk Improvements West Trunk Improvements Gisler-Redhill/North Trunk Improvements Replacemeol or the College Ave. Pump Station Rel\abililation of the MacArthur Pump Station Main-Baker Force Main VentilaUon Revenue Area 7 Total Revenue Area 14 Tustin Airbase -Armstrong Subtrunk Sewer Revenue Area 14 Total Total Collection Systems Projects Project Project Phase Project Number 711100 Status 07-32 Planning Re\lised 07-35 Design New 07-36 Planning Continuing 07-37 Planning New 07-38 Planning New 07-39 Planning Continuing 07-40 Planning New 07-41 Planning Continuing 07-47 Planning New 07-49 Design New 07-50 ConstJtmpl. New 07-27 RA1Cesign Re\lised Page 3of7 Total Est Cost 2000.{11 Project to Date Cashflow Future Budget 6130100 Budget Budget 5,704.000 11.000 5,693,000 1,273,000 46,000 23,000 1,204,000 4,026,000 20,000 236,000 3,no,ooo 5,013.000 69,000 4,944,000 3.656,000 59,000 3,597,000 3,942,000 19,000 166,000 3,757,000 496,000 9,000 487,000 5.704,000 25.000 228,000 5,451,000 4,717,000 4,717,000 1,354,000 1,354,000 30,000 30,000 43,554,000 696,000 1,123,000 41,735,000 4,621,000 198,000 588,000 3,835,000 4,621,000 1~.000 3,1135,000 225,611,000 22,588,000 17,554,000 185,469,000 Page Number 52 53 54 55 56 57 SB 59 60 61 62 63 2000-01 Budget Summary of Capital Requirements -Treatment and Disposal Projects Collections Facilities Bushard Trunk Sewer Rehabilitation Co-op Projects. Inflow/Infill. Reduction District-wide Geographical Information System (GIS) SSO Training Facility Collections Facilities Total Headworks Grit Auger Replacement SunHcwer Drive Replacement Headworks Rehabilitalion/Reruroishment Headworks Improvements at Plant No. 2 1-feadworb: To1al Primary Treatment Facilities Modificalions for Odor Control Pri. Clarifiers 16-31 & Related Facilities Wasle Sides!ream Pump Station Upgrade Circular Clarifier Drive ReplacemenUupgrade Sludge Density Meler Upgrades Sludge Level Measurement Device lnstal!alion Primary Tntairenl Total Secondary Treatment Sec. Treat. Monitoring & Cnll1 Sys. Upgrade Rehab Trickling Filters & Construct New Clarifiers Activated Sludge Plant Rehabilitation Oxygen Plant ReplacemenURehabiltaUon Activated Sludge Aeration Basin Selector Study Se0X1daiy Trealmenl Total Solids Handling & Digestion Oewatering Belt Press Rebuild Dewatering Bell Press Extension Rehabilitation of Digesters at Plant No. 2 Solids Storage and Truck Loading Facility Digestion & Dewa!ering Rehab JRefurbishmen! Dewatering Belt Press Rebuild ·High Rate Digester Mix Pumps Mech. Seals Bel! Press Automation Sludge Grinder Replacement Tule Ranch Aquisition/Biosolids Managment Needs Solids Handling & Og:estion Total Project Project Phase Project Number 711100 Status 1-2-4 Planning Continuing J-73 Planning Revised J-76 Design New J-82 Planning Continuing J-52 Cons!llmpl. Revised P1-62 Planning Continuing P1-71 Planning New P2·66 Design Revised J-71-2 Design New P1·37 Design Continuing P1-81 Design Continuing P2-85 Const Jim pl. New SP-70 Planning New SP-73 Cons!llmpl. New J-31-4 Design Revised P1-76 Planning Revised P1-82 Design New SP-72 Planning New SP-74 Planning New P1-79 Cons!llmpl. Conunuing P1-79 Cons!llmpl. New P2-39 Conslllmpl. Revised P2-60 ConstJlmpl. Continuing P2-81 Planning New SP-37 Constllmpl. Continuing SP-JO Cons!./lmpl. Continuing SP-41 Cons111mpl. Continuing SP-76 Cons!.llmpl. Continuing SP-79 Construction/lmplC:Ontinuing Page 4of7 Total Est Cost Project toDate Budget 6130100 30,630,000 106,000 144,750,000 291,000 2.500,000 64,000 177,944,000 397,000 1,068,000 123.000 407,000 76,000 4,330,000 74,118,000 216,000 79,943,000 417,000 276,000 29,000 75,450,000 3,058,000 1,069,000 55,000 5,64Q,OOO 800,000 364,000 83,799,000 3,142,000 4,317,000 430.000 21,001,000 21.000 3.745,000 110,000 510,000 29,684,000 451,000 526,000 80,000 230,000 17,234,000 7.500,000 15,120,000 958,000 7,800.000 624,000 105,000 517,000 92,000 175,000 84,000 224.000 2.000 9,850,000 3,500,000 52,503,000 12,321,000 2000--01 Cashflow Future Page Budget Budget Number 534,000 29,990,000 64 2,752,000 141,707.000 65 300,000 2,200,000 66 64,000 67 3,650,000 173,897,000 609,000 356,000 66 247,000 85,000 69 30,000 4,300,000 70 133,000 73,767,000 71 1,018,000 78,508,000 247,000 72 6,647,000 65,745,000 73 567,000 447,000 74 344,000 5.496,000 75 80,000 720.000 76 364,000 T7 8,l49,000 72,408,000 901,000 2.986,000 78 494,000 20.466,000 79 312,000 3.433,000 BO 110,000 81 200,000 310,000 82 2,018,000 27.215,000 210,000 238,000 63 230,000 84 3,929,000 5.605.000 85 2.632,000 11,530,000 86 66,000 7,734,000 87 326,000 393,000 89 425,000 88 91,000 90 222,000 91 4,774,000 1,576,000 92 12.906,000 27.276,000 CIP Project Detail Sheets Summary of Capital Requirements -Treatment and Disposal Projects Project Total Est. Cost 2000-01 Project Phase Project Project to Date Cashflow Future Page Number 7/1/00 Status Budget 6/30/00 Budget Budget Number Ocean Outfall Systems Outfall Flow Meler Replacement J-66 ConstJlmpl. Revised 1.123,000 76,000 380,000 667,000 93 Peak Flow Management J-67 Planning Revised 4,055.000 54.000 484,000 3,517,000 94 Effluent Pumping Station Annex J-77 Design Continuing 28,346,000 146,000 859,000 27,341,000 95 Oa!an OudallSystemsTolal 33,525,0DO 276,000 1,724,000 31,525,000 Utility Systems Electrical Power System Studies J-25-4 Design Continuing 3,216.000 1.215,000 488,DOO 1,513,000 96 Slandby Power and Reliability Modifications J-33-1 Design Continuing 17,370,000 5,719,000 1,528,000 10,123,000 97 Cable Tray Improvements at Plants 1 & 2 J-47 Constllmpl. Revised 26,878,000 682,000 57.000 26,139,000 98 lmpr. to Cen-Gen Slarting Air System J-63 ConstJlmpl. Continuing 141,000 79,000 62,000 99 Storm Crain Oalabase Development and Tagging J-71-5 Planning New 100,000 100,000 10 Central Generation Automation J-79 Planning New 2,964,000 101,000 2,863,000 101 Chemical Facility Mods. at Plant No. 1 P1-46-2 Constllmpl. Revised 3,768,000 3,069,000 699,000 102 Plant Utilities Rehabililation/Refur!Jishment P1-74 Planning New 3,360,000 3,360,000 103 Modifications 10 EJec. & Control Systems P2-47-1 ConslJlmpl. Revised 2,615,000 2,102,000 483,000 30,000 104 High Pressure Compressed Air System P2-61 ConstJlmpl. Conlinuing 409,000 335,000 74,000 104 Gas Compressor Addifion at Plant No. 2 P2-79 Design Revised 907,000 13,000 299,000 595,000 106 UUlities Rehabililation and Refurbishment P2-82 Planning Revised 3,394,000 87,000 312.000 2,995,000 107 Underground Storage Tank Leak Detection Upgrade SP-69 Conslllmpt. New 120,000 120,000 108 East and West RAS Elevator Upgrade SP-75 ConstJlmpl. New 106,000 106,000 109 UliWl'f Systems Toe.I 65,349,000 13,301,000 4,429,000 47;618,000 Odor Control Related Projects Facilities Modiftcations ror Odor Con trot J-71-1 Design New 384,000 37,000 347,000 110 Facilities Modifications for Odor Control J-71-3 Design New 2,686,000 90,000 380,000 2,216,000 111 Comprehensive Odor Control Assessment J-71-4 Planning New 3,466,000 20,000 70,000 3,376,000 112 Automation or roul air system condensate drainage J-71-6 Planning New 73,000 73,000 113 Saubber Chem. Feed System Mods. SP-04 Constllmpl. Continuing 796,000 366,000 430,000 114 Od"' Con~ Rel a led Projects T o"I 7,405,000 513,000 1,300,000 5,592,000 Plant Automation & Computerization Computerized Facility Recs. & Dwg. System J-25-1 Design Continuing 4,956,000 3,221,000 909,000 826,000 115 Power Monitoring and Control Systems J-33-3 Planning Revised 3,355,000 374,000 2,981,000 116 Plant Reinvention I Aulomation Project J-42 Design Continuing 25,760,000 4.847,000 2,660,000 18,253,000 117 CMMS Programming SP-04 Constllmpl. Continuing 490,000 305,000 129,000 56,000 122 Document Management SP-01 Planning Continuing 864,000 305,000 559,000 118 Oala Integration SP-02 Design Continuing 4,334,000 1,948,000 559,000 1,827,000 120 ..... SP-03 Planning Continuing Strategic Information Architecture (SIA) 724,000 270,000 157.000 297,000 121 lntranel Application Development SP-OS Design Revised 300,000 74,000 136,000 90,000 123 Internet E-mail Browsing {Website) SP-09 ConstJlmpl. Revised 300,000 170,000 91,000 39,000 126 Ne.twork Backbone Upgrade Continuation SP-08 Const.ii mp!. Continuing 1,497,000 608,000 134,000 755.000 125 Voice-Oala Building Rewiring SP-07 Conslllmpl. Revised 679,000 629,000 50,000 124 Records Management Program SP-01 Design Continuing 255,000 90,000 165,000 119 Source Conlrol Programming SP-13 Constllmpl. Continuing 577,000 334,000 BO.ODO 163,000 127 Page 5of7 2000-01 Budget Summary of Capital Requirements -Treatment and Disposal Projects Project Project Phase Project Number 7/1/00 Status Plant Automation & Computerization (Co ntd.) Geographic Information Syslem Aulomalion Report Publishing Field Fiber Optic Upgrades Field Fiber Optic Tenninal Standardization SCADA Commun1calions • Ethernet Study Replacement of lnterplant Fiber Oplics Windows 2000 Migration Office 2000 Upgrade SCADA Syslem Replacement Study SCADA Graphics Tagging Update Plant 2 Dewatering PLC SCADA Upgrade FIS Upgrade lnfonnation Technology Disaster Recovery Specialized Process Networl< Plant Automalon & Compulerizalton Total Process Related Special Projects Slandard Specifications Revisions and Updates Thennal Insulation Management Program Plant O&M Manual & SOP Project -Phase I Hazardous Energy Control Procedures Managed Maintenance Program Special Projects for FY 2000-01: Solids Processing Spc Proj 00-01 : Odor Control/Regulatory Compliance Special Projects for FY 2000-2001: Liquid Slreams Process Relalod Special ProiedS T olal Miscellaneous & Support Projects Facilities Engineering Projects • Joint Facilities Engineering Projects • Plant 2 Facilities Engineering Projects -Plant 1 Area Classification Studies Strategic Plan -Phase 2 Strategic Plan Program EIR Modifications to Existing Mech. Systems HVAC Equipment Replacemenr at Plants No. 1 and 2 Landscape and llTigalion al Plant No. 2 Security System Improvements Small Cap. Equip. Replacement Project Warehouse Reinvention Project Process Salety Management Compliance Program Miscellaneous & Support Projects Totai SP-15 SP-36 SP-32 SP-31 SP-41 SP-44 SP-59 SP-58 SP-61 SP-62 SP-03 SP-64 SP-65 SP-60 J-44R J-78 SP-53 SP-54 SP-68 SP-66 SP-67 SP-71 FE-J FE-P2 FE-Pl J-35 J-40-3 J-40-4 J-62 J-80 P2-84 SP--06 SP-34 SP-77 SP-78 Planning Revised Design Continuing Const./lmpl. Conlinuing ConstJlmpl. Conlinuing Planning Continuing ConstJlmpl. Revised ConstJlmpl. New ConstJlmpl. New Planning New ConstJlmpl. New ConstJtmpl. New ConstJlmpl. New Design New Design New ConsLJlmpl. Conlinuing Planning New Planning Revised ConstJlmpl. Revised ConstJlmpl. New ConstJlmpl. Continuing Constllmpl. New Construction/lmpltlew Planning Conlinuing Planning Continuing Planning Conlinuing Design Conlinuing Planning Continuing Planning Continuing Design Continuing Design New Planning New Const./lmpl. Conlinuing ConstJlmpl. Revised Constructionllmpltlew Const./lmpi. New Page 6 of7 Total Est Cost Project to Date Budget 6/30/00 4, 157.000 75.000 195.000 115,000 660.000 376.000 325.ooo 115,000 157,000 499,000 54.000 333,000 69,000 310.000 670.000 281,000 1,851.000 140,000 107.000 53,845,000 13,537,DOO 200,000 800,000 4,000,000 10,000 1,190,000 100,000 870,000 675,000 417,000 651.000 215,000 8,601,000 527,000 20,000,000 1,000,000 20,000,000 1.000.000 20,000,000 1,000,000 27,919,000 680,000 2,194,000 1.931.000 1.119,000 860,000 2,694,000 329.000 757,000 20,000 810,000 2,000 1,334,000 470,000 740.000 240,000 600.000 30,000 98,1S6,000 7,533,000 2000-01 Cashflow Future Page Budget Budget Number 978.000 3.104.000 128 39.000 41.000 131 284.000 130 210.000 129 157,000 132 445,000 133 333.000 135 69,000 134 310,000 137 458.000 212.000 138 281,000 139 1,281,000 570,000 140 91.000 49,000 141 100,000 7,000 136 11,038,000 29,270,000 20,000 180,000 142 49,000 751,000 143 1.608,000 2,382,000 144 447,000 643,000 145 348,000 522,000 148 258,000 146 651,000 147 215,000 149 3,596,000 4,478,000 1,042,000 17.958,000 150 1,042.000 17,958,000 152 1,042.000 17,958,000 151 1,278,000 25,961,000 153 96,000 167,000 154 33.000 226,000 155 476,000 1,889,000 156 737,000 157 128,000 680,000 158 383.000 480,000 159 500,000 160 240,000 360,000 161 30,000 162 7,027,000 83,637,000 CIP Project Detail Sheets Summary of Capital Requirements -Treatment and Disposal Projects Water Management Projects • Groundwater Replenishment System Waler Conservation long Term Permanent Monitoring Program water Management ProjedsTotal Tola! Treatment and Disposal Projects Capital Equipment Purchases Total Collection, Treatment and Disposal Projects Project Project Phase Project Number 7/1/00 Status J-36 Planning Revised J-72 Planning Continuing J-73-2 Planning New Page 7of7 Total Est. Cost Project to Date Budget 6/30/00 178,222,000 2.222.000 4,644,000 743,000 5,000,000 187,86J;,000 2,!HjS,000 878,660,000 55,380,000 51,876,000 2,964,000 1,156,147,000 80,932,000 2000-01 Cashflow Future Budget Budget 2,329,000 173,671,000 4t8,000 3,483,000 3,358,000 1.642,000 6, 105,000 178,796,000 63,060,000 760,220,000 2,912,000 46,000,000 83,526,000 991,689,000 Page Number 163 164 165 FAHR COMMITTEE AGENDA REPORT Orange County Sanitation District FROM: Bob Ooten, Director of Operations and Maintenance Originator: Barbara Collins, Senior O&M Analyst Meeting Date 7/12/00 Item Number FAHR00-61 SUBJECT: SEASIDE FINANCIAL LEASE AGREEMENT AT PLANT NO. 1 GENERAL MANAGER'S RECOMMENDATION ToJt. Brd. 7/26/00 Item Number Approve Amendment No. 3 to the Lease Agreement with Seaside Financial Corporation (Specification No. L-009-1) for lease of 18.09 acres of land at the northeast comer of Ward Street and Garfield Avenue in the city of Fountain Valley, for one year. SUMMARY The District currently has a lease with Seaside Financial for approximately 18 acres of land at the corner of Garfield and Ward in Fountain Valley. Seaside Financial uses this land for a Self-Storage facility and recreational vehicle storage. The lease will expire on August 30, 2000. The District will receive $85,000 per year, or 13.5% of all revenues generated by the tenant, whichever amount is greater. The Orange County Water District and OCSD are participating in the Groundwater Replenishment System (GWRS). When this construction project begins in 2001, OCSD will require the northern 600 feet of the leased land, and potentially more for contractor staging. At a later date, the District will require more of this 18-acre parcel. As design plans are finalized, OCSD will inform Seaside Financial of further land requirements and the lease will be renegotiated accordingly. PROJECT/CONTRACT COST SUMMARY NA 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. [8J Not applicable (information item) ADDITIONAL INFORMATION None ALTERNATIVES H:lwp.dta\agendalFAHRIFAHR200C1.2000 Agenda Reports\FAHR00-81.doc Page 1 Vacate the property at this time and do not renew the lease. Negotiate the lease month to month. CEQA FINDING·S None Required ATTACHMENTS None H:lwp.dtalagenda\FAHRIFAH~ Agenda Reports\FAHR00-61 .doc Page 2 FAHR COMMITTEE Meeting Date To. Bd. 07/12/00 07/19/00 AGENDA REPORT Item Number Item Number FAHR00-62 Orange County Sanitation District FROM: Gary Streed, Director of Finance Originator: Steve Kozak, Financial Manager SUBJECT: ANNUAL REVIEW AND ADOPTION OF THE DISTRICTS INVESTMENT POLICY STATEMENT AND DELEGATION OF INVESTMENT AUTHORITY TO THE DIRECTOR OF FINANCEfTREASURER GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD-00-XX, Authorizing the District's Treasurer to Invest and/or Reinvest District's Funds; Adopting District's Investment Policy Statement and Performance Benchmarks for FY 2000-01; and Repealing Resolution No. OCSD-99-14. SUMMARY This agenda item presents the annual review of the District's Investment Policy Statement to the FAHR Committee for consideration in the Committee's capacity as the oversight committee for the Investment Policy (Section 16.2). With adoption of the attached Resolution, the Board of Directors would readopt the District's current Investment Policy Statement, portfolio performance benchmarks, and monitoring and reporting requirements for FY 2000-01. The District's Investment Policy Statement is recommended for adoption for 2000-01, with no policy changes from 1999-2000. The submitted Investment Policy Statement has received the Investment Policy Certification of Excellence Award from the Municipal Treasurer's Association of the United States and Canada. 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. [8] Not applicable (information item) H:\wp.dtalagenda\FAHR\FAHR2000'QOOO Agenda Reports\FAHR00-62,doc Revised: 1/5/98 Page 1 ADDITIONAL INFORMATION Background The District's current Investment Policy Statement was reviewed and approved by the Finance, Administration and Human Resources Committee (FAHR) on July 7, 1999, and adopted by the Board of Directors on July 21, 1999 (Resolution No. 99-14). The Investment Policy governs the investment activities of Pacific Investment Management Company (PIMCO), the District's external money manager, on behalf of the District. On May 28, 1999, the District's Investment Policy Statement received the Investment Policy Certification of Excellence Award from the Municipal Treasurer's Association of the United States and Canada. A copy of the letter of certification is included in the Investment Policy Statement. The District received its first Award of Excellence for the Investment Policy Statement in December 1996. Each MTA certification is valid for three years. The attached Investment Policy document consists of the Policy Statement itself, and the following eight appendices: A Summary of Investment Authorization B. Treasury Management Procedures C. Investment Manager Certification D. Investment Pool Questionnaire (LAIF) E. Board Resolution No. OCSD-00-XX F. Sample Monthly & Quarterly Investment Program Monitoring Reports G. Sections of the California Government Code Pertinent to Investing Public Funds H. Glossary of Investment Terms Annual Review of Investment Policy The Investment Policy includes the requirement that the District shall review its Investment Policy annually (Sections 1.2 and 16.1 ). Likewise, Section 53646 of the California Government Code (the "Code") requires local agencies to review their investment policy annually, and readopt their policy at a public meeting. This staff report presents the annual review of the District's Investment Policy Statement to the FAHR Committee for consideration in the Committee's capacity as the oversight committee for the District's investment program (Section 16.2). With adoption of the attached Resolution, the Board of Directors would readopt the District's current Investment Policy Statement, portfolio performance benchmarks, and monitoring and reporting requirements. The District's Investment Policy Statement is recommended for adoption for 2000-01, with no policy changes from 1999-2000. H:lwp.dta\agenda\FAHRIFAHR20002000 Agenda Reports\FAHR00-62.doc Revised: 115198 Page2 Annual Delegation of Investment Authority Effective January 1, 1997, Section 53607 of the Code states that governing boards of local agencies may only delegate authority to invest and/or reinvest agency funds to the agency's Treasurer for a one-year period. With adoption of the attached Resolution, the Board of Directors would renew its delegation of investment authority to the Director of Finance/Treasurer for a one-year period in compliance with the requirements of Section 53607. Each year, the Board of Directors will consider similar actions along with the annual reconsideration of the District's Investment Policy. Ongoing Monitoring Program Staff continues to monitor pending legislative and regulatory proposals in the public finance area for their potential impact on the District's existing financial programs. For example, AB 1423, introduced in February 1999, proposed revisions to the Code which would require local agencies to submit copies of their 2nd and 4th quarterly investment reports to the California Debt and Investment Advisory Commission, and require the Commission to maintain comprehensive information on local agency investments of public funds. While AB 1423 failed passage, another bill, AB 943, was introduced to require the same local agency reporting requirements as AB 1423. At present, AB 943 remains in the Senate Local Government Committee. Staff will continue to keep the Committee informed of the status of this, and other proposals, as they may develop. ALTERNATIVES None. CEQA FINDINGS N/A ATTACHMENTS 1. Orange County Sanitation District's 2000-01 Investment Policy Statement 2. Resolution No. OCDS-00-XX H:lwp.dtalagenda\FAHRIFAHR20CJa.2000 Agenda Reports\FAHR00-62.doc Revised: 115/98 Page3 RESOLUTION NO. OCSD-00-XX AUTHORIZING THE DISTRICT'S TREASURER TO INVEST AND/OR REINVEST DISTRICT'S FUNDS, AND ADOPTING DISTRJCT'S INVESTMENT POLICY STATEMENT AND PERFORMANCE BENCHMARKS A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT, AUTHORIZING THE DISTRICT'S TREASURER TO INVEST AND/OR REINVEST DISTRICT'S FUNDS, AND ADOPTING DISTRICT'S INVESTMENT POLICY STATEMENT AND PERFORMANCE BENCHMARKS; AND REPEALING RESOLUTION NO. OCSD 99-14 *************** WHEREAS, on July 21, 1999, the Board of Directors adopted Resolution No. 99-14, readopting the District's Investment Policy Statement, and establishing specific performance benchmarks and objectives, together with a schedule of frequency of investment performance reports; and, WHEREAS, pursuant to California Government Code Section 53607, the Board of Directors may delegate authority to invest and/or reinvest District's funds to the Treasurer for a one-year period; and, WHEREAS, pursuant to California Government Code Section 53646, the District is required to review its Investment Policy annually and readopt its Policy at a public meeting, which Policy will establish specific pe~ormance benchmarks and objectives, and specific monitoring and reports. NOW, THEREFORE, the Board of Directors of the Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1: That the authority of the Board of Directors to invest or reinvest District's surplus funds, or to sell or exchange securities so purchased, or to deposit for safekeeping the funds and investments of the Districts with depositories, as provided for in California Government Code Sections 53608 and 53630, is hereby delegated to the District's Treasurer for a one-year period commencing on the date this Resolution is adopted, as authorized by California Government Code Section 53607. Section 2: That the Board of Directors hereby adopt the Investment Policy Statement of the Orange County Sanitation District, as set forth in Exhibit "A," attached hereto and incorporated herein by reference. Section 3: That the Board of Directors hereby adopt the following specific performance benchmarks for their two investment funds in accordance with Section 14.0 of the District's Investment Policy: LIQUID OPERATING MONIES: The Short-Term Operating Fund will be compared to the three month T-Bill rate, and the Callan Active Cash Flow Income Style Group. The Callan Active Cash Flow Income Style Group represents a peer group of managers who operate with a maximum maturity of one year. LONG-TERM OPERATING MONIES: The Long-Term Operating Fund will be compared to the Merrill Lynch Government and Corporate One-to-Five Year Maturity Index and to the Callan Defensive Fixed Income Style Group. Section 4: That the Board of Directors hereby adopt a performance monitoring and reporting schedule, as required by Section 15.0 of the District's Investment Policy, which schedule is attached hereto as Exhibit "B," and incorporated herein by reference. Section 5: That Resolution No. OCSD 99-14 is hereby repealed. PASSED AND ADOPTED at regular meeting held July 19, 2000. Chair ATIEST: Board Secretary \\RADON\pA TA 1 \WP .DT A\FIN\21 O\CRANEllNVEST .PL Y\INVESTPOLICYRES0699.DOC Exhibit "B" FY 2000 -01 Performance Monitoring & Reporting Schedule For the FAHR Committee The Monthly Treasurer's The Quarterly Investment and Board of Directors Report to be presented Management Program meetings of: for the month of: Report to be presented for the period of: July 2000 June 2000 August July April -June 2000 September August October September November October July -Sept 2000 December November January 2001 December 2000 February January 2001 Oct -Dec 2000 March February April March May April Jan -March 2001 June May H: .. IFINANCE\21 O\KOZAK\EXHIBITB POLICY REFERENCE 15.1.1 15.1.2 15.1.3 15.1.4 15.1.5 15.1.6 15.1.7 15.1.8 15.1.9 ADDL** ADDL** ADDL** ADDL** 15.1.10 .. ~ *M =Monthly *Q = Quarterly EXHIBIT "B" ORANGE COUNTY SANTIATION DISTRICT PERFORMANCE MONITORING & REPORTING FOR THE DISTRICT'S INVESTMENT PROGRAM PERFORMANCE CHARACTERISTIC Cost and market value of the portfolio (monthly mark-to-market). Modified duration of the portfolio compared to benchmark. Dollar change in value of the portfolio for a 1 % change in interest rate. Percent of portfolio invested in reverse repurchase agreements, and a schedule which matches the maturity of such reverse repurchase agreements with the cash flows which are available to repay them at maturity. For the Liquid Operating Monies account only, the percent of portfolio maturing within 90 days. Average portfolio credit quality. Percent of portfolio with credit ratings below "A" by any rating agency, and a description of such securities. Listing of any transaction or holdings which do not comply with this policy or with the California Government Code. Time-weighted total rate of return for the portfolio for the prior three months, twelve months, year-to-date, and since inception compared to the benchmark returns for the same periods. Comparison of portfolio performance to market index benchmark. Comparison of Manager's performance to peer group benchmark. Monitoring of organizational and structural changes of investment management firm. Audit portfolios for compliance with investment policy guidelines. .. REPORTING PARTY* PIMCO MELLON CALLAN M,Q M,Q Q M,Q Q M,Q Q M,Q M,Q Q M,Q Q M,Q Q M,Q M,Q Q M,Q Q Q Q Q OCSD will report if sufficient funds are available for It to meet operating expenditure requirements for the next six months, or if not, state the reason for the shortfall . **ADDL= Monitoring of Additional Peformance Characteristics H:\wp.dta\fin\21 O\crane\INVEST. PL Y\Montlorlng Rpt2000.doc FAHR COMMITTEE Meeting Date To Bel. of Dir. 07/12/00 07/19/00 AGENDA REPORT Item Number Item Number FAHR00-63 Orange County Sanitation District FROM: Gary Streed, Director of Finance Originator: Steve Kozak, Financial Manager SUBJECT: RESTRUCTURING OF THE DISTRICT'S EXISTING CERTIFICATES OF PARTICIPATION -ISSUANCE OF SERIES 2000 CERTIFICATES OF PARTICIPATION GENERAL MANAGER'S RECOMMENDATION 1 . Approve issuance of either the Series 2000 Refunding COPs (not-to-exceed $200 million), or the Series 2000 Refunding and Reimbursement COPs (not-to-exceed $230 million). 2. Adopt Resolution Authorizing the Issuance of the Series 2000 COPs along with certain amendments to the District's outstanding Series 1992 and Series 1993 COPs. The Resolution requests that certain Authorized Officers be authorized to execute the proposed amendments and refunding documents substantially in the form attached, with such revisions as may be required or approved by such Authorized Officer. Execution of the Series 2000 Refunding and Reimbursement COPs will be subject to a not-to-exceed par amount of $230,000,000, a not-to-exceed underwriter's discount of 0.35% (or 35 basis points), and a maximum maturity not to exceed 35 years. 3. Direct staff to develop a plan for competitive selection of Remarketing Agents for the District's variable rate COPs following issuance and settlement of the Series 2000 COPs, and report back to the FAHR Committee. SUMMARY Staff has been implementing a Board-approved plan to restructure and modernize the District's existing Certificates of Participation (COP) long-term borrowings, which includes issuance of the Series 2000 Refunding COPs, and substitution of modernized and simplified bond documents for the Series 1992 and Series 1993 COPs. This agenda item reports on the progress and status of the COP restructuring and refinancing plan, presents recommendations for Board adoption to complete the refinancing and restructuring plan, and reports back to the FAHR Committee with additional information regarding certain issues discussed by the Committee at their June meeting. The draft Resolution Authorizing Issuance of the Series 2000 COPs, the Preliminary Official Statement, draft copies of key issuance documents (Master Agreement for District Obligations, Installment Purchase Agre~ment, and Trust Agreement) and the Financing Schedule are included in this package. Because of the voluminous nature of llradonldata 1 lwp.dla\fin\21 O\crane\F AHRIF ahr2000\July\COP STATUS REPORT-July.doc Revised: 8/20198 Page 1 the bond documents, they are listed in this report, but some have not been included in this package. All of the bond documents are available for review by contacting Steve Kozak at (714) 593-7555. Upon the request of any Director, copies of these bond documents will either be delivered or made available at the District's Administrative Office. All of the bond documents will be available for review before and during the FAHR Committee and Board of Director's meetings. PROJECT/CONTRACT COST SUMMARY The COP refinancing is expected to reduce the overall cost of borrowing over the life of the issue. The present value savings resulting from elimination of credit enhancement and lower cost liquidity, is estimated at $1.4 million. These cashflow savings will cover all costs related to the refunding of and amendments to the prior COPs, and will generate positive net present value savings relative to the refunded COPs. BUDGET IMPACT D This item has been budgeted. D This item has been budgeted, but there are insufficient funds. fZl This item has not been budgeted. D Not applicable (information item) ADDITIONAL INFORMATION Background The modernization of the District's existing COP program is based on a comprehensive refunding and restructuring strategy to realign the COP legal documents to reflect the District's consolidated organization structure as a single Sanitation District. The strategy includes a two-phase process: 1) Refund the Series "A," "B," and "C" COPs through a single Series 2000 Refunding COP offering, backed by the District's "AA" category credit rating; and 2) Substitute modernized bond documents for the synthetic fixed rate 1992 and 1993 Refunding COPs that will conform to the Series 2000 Refunding COP bond documents and will put the 1992 and 1993 Refunding COPs on parity with (rather than senior to) the Series 2000 Refunding COPs. With this strategy, the District is viewed as a single credit structure by the rating agencies; the legal structure for all of the District's existing COPs is streamlined; and issuance of future debt is facilitated. The balance of this report updates the Finance, Administration & Human Resources Committee on the progress made by the finance team on both phases of the COP restructuring and refinancing plan since the June FAHR Committee meeting; responds to Committee direction to provide additional information regarding the addition of a reimbursement component to the Series 2000 COPs, and competitive selection of Remarketing Agents for the ·District's variable rate debt; and presents recommendations for Committee action. llradon\data1\wp.dtalfin\210\crane\FAHR\Fahr2000Wuly\COP STATUS REPORT-July.doc Revised: 8120196 Page2 Phase I -Series 2000 Refunding COPs The Series 2000 COPs will be issued to "current refund" the District's $80.5 million of the Series "A" COPs, and the $83.8 million of the Series "C" COPs, as well as to advance refund the District's $15.395 million of the Series "B" COPs. These amounts represent all outstanding COPs for these three Series as of August 1, 2000. In addition, if so directed by the FAHR Committee, the Series 2000 COPs will include approximately $45.8 million of reimbursement financing which will reimburse the District for qualified capital expenditures for the Joint Works Facilities (approximately $41.4 million) and individual district projects (approximately $4.4 million) during FY 97-98. The refunding of the Series "A," "B," and "C" COPs (in conjunction with the amendments to the Series 1992 and Series 1993 COPs, described below) will allow the District to consolidate three existing liens into a single lien, while modernizing and streamlining the District's legal documents. These improvements are intended to: • align the District's COP legal documentation with the consolidated District, • allow the District to secure formal "Aa" category credit ratings, • eliminate the need for costly credit enhancement related to the refunded COPs; and • facilitate future District COP offerings, as needed. Eliminating the need for credit enhancement and securing lower cost liquidity facilities with respect to the Series "A" and "C" COPs are expected to produce over $1.4 million of present value savings. These cash flow savings will cover all costs related to the refunding of and amendments to the prior COPs, and will generate positive net present value savings relative to the refunded Series "A," "B," and "C" COPs. Reimbursement Financing Component As directed by the Committee, staff has developed additional information about including a reimbursement component in the Series 2000 COPs to reimburse the District for previous capital expenditures funded from District reserve funds. Under the IRS Code, the maximum recapture period for a reimbursement financing would begin 36 months prior to the issuance of the Reimbursement COPs. As discussed by the Committee, staff reviewed the oldest 12-month portion of the recapture period (months 36 through 25). As mentioned above, this corresponds to FY 1997-98, when approximately $45.8 million was expended. Months 24 through 1 remain eligible for reimbursement in a future COP issue. Since the Series 2000 COPs will be issued as daily variable rate certificates, the critical first step to determine the feasibility of including a reimbursement component in the Series 2000 COPs, was to determine if the liquidity provider, Dexia Credit Local de France, could provide liquidity up to $230 million to support both the refunding and the reimbursement components together. The finance team approached Dexia with the request for additional capacity. Following their credit analysis, Dexia indicated that they could provide a $230 million Standby Certificate Purchase facility, but requested a 1 basis point increase (from 13.5 to 14.5 llradonldata1 \wp.dta\fin\21 Olcrane\FAHRIFahr2000\July\COP STATUS REPORT .July .doc Revised: B/20/98 Page 3 basis points) in the annual fee to compensate the bank for the additional liquidity support exposure. Staff negotiated a counterproposal of a % basis adjustment; a 50% reduction (from 14.5 to 14 basis points) from the bank's proposal. Since the second most responsive of the original liquidity provider proposals was 16.5 basis points, the fee adjustment remains reasonable. By way of comparison, the annual cost of the $185 million Standby Certificate Purchase facility at 13.5 basis points is $249, 750. The annual cost of the $230 million Standby Certificate Purchase facility at 14 basis points is $322,000. This corresponds to a $72,250 annual fee increase to support a $45.8 million increase in the par amount of the COPs. The legal documents, agreements, and offering statement developed for issuance of the Series 2000 Refunding COPs would be revised to incorporate the Reimbursement portion. Additional legal costs would be negligible for these minor revisions. The rating agencies have reviewed the issuance of the additional debt as part of the Series 2000 COPs, and have indicated their continued support for a "AA" category rating. Reimbursement proceeds would be returned to the District's Capital Reserves and invested. At current yields, the approximately $45 million reimbursement proceeds could be expected to generate an additional $2.5 million in annual interest earnings for the District's investment portfolio. Year-end cash and investment balances would be reduced $100 million from the recently approved FY 2000-01 budget. The underwriting fee related to the reimbursement component would be limited to the costs of initial placement of the bonds and any related per bond regulatory fees and expenses, which in aggregate are not expected to exceed 0.2% (or 20 basis points) of the additional par amount of the Series 2000 Refunding and Reimbursement COPs offered ($90 ,000). Note that certain of the District and underwriter expenses associated with issuance of the incremental bonds are subject either to caps and/or volume discounts (including rating agency fees, California Debt and Investment Advisory Committee fees, etc.) If the Committee directs staff to incorporate the reimbursement of a 12-month portion of prior District capital expenditures (as described above), the reimbursement component will be structured as an integrated part of the Series 2000 COPs. The supporting legal documentation required for issuance of the Series 2000 COPs, with or without the reimbursement component, are listed below. Adoption of the attached Board Resolution approves all supporting legal documentation required for issuance of the Series 2000 COPs. l\radon\data1 \wp.dtalfin\21 OlcranelFAHRIFahr2000\July\COP ST A TUS REPORT-July .doc Revised: 8/20/98 Page 4 Series 2000 COPs • Master Agreement for District Obliaations • Installment Purchase Aareement • Trust Agreement • Escrow Aareement • Standby Certificate Purchase Aareement • International Swap Dealers Association Master AQreement • Schedule to ISDA Master AQreement • Swap Confirmation • Official Statement • Certificate Purchase AQreement, Series "A" Refundina and Series "C" Refundina • Certificate Purchase AQreement, Series "B" Advance RefundinQ • Remarketing Agreement Phase II -Series 1992 and 1993 Refunding COPs Execution of the proposed Series 2000 COP refunding is contingent upon completion of certain amendments to the District's Series 1992 and Series 1993 COPs, including the addition of a daily interest rate mode to the multi-modal legal documents supporting the Series 1992 COPs. As of August 1, 2000, the Series 1992 COPs will be outstanding in the amount of $124.17 million and the Series 1993 COPs will be outstanding in the amount of $43.6 million. As previously discussed with the FAHR Committee, amendments to the Series 1992 COPs and Series 1993 COPs will complete the Phase II portion of the proposed refunding and modernization program. Upon completion of the proposed amendments and delivery of the Series 2000 COPs, all District COPs will be on a common lien, with modernized documents reflecting the consolidated District. In addition to requesting approval of the legal documentation for the Series 2000 COPs, the attached Resolution requests approval of the following documentation required for the amendments to and reoffering of the Series 1992 COPs and Series 1993 COPs: Series 1992 COPs Series 1993 COPs • Reformed Aareement for Acquisition & Construction • Reformed Ai:ireement for Acauisition & Construction • Reformed Trust Aareement • Reformed Trust AQreement • Amendment No. 1 to Interest Rate Swap Aareement • Amended and Restated Interest Rate Swap AQreement • Reformed Standby Certificate Purchase Aareement • Amended and Restated Reimbursement Agreement • Reofferina Memorandum • ReofferinQ Memorandum • Amended and Restated Remarketina Aareement • Amended and Restated RemarketinQ AQreement • First Sunnlemental Trust Agreement • Amendment No. 1 to Liauidity Guaranty Agreement Remarketing Agents Another topic discussed by the FAHR Committee at their June meeting, was the proposal and timing for a competitive selection process for Remarketing Agents for the District's variable rate COPs. An RFP process could be conducted either before or after the Series 2000 COPs are issued. llradon\dala1\wp.dla\fin\210\crane\FAHR\Fahr2000\July\COP STATUS REPORT-July.doc Revised: 8/20/98 Page 5 Competitive selection of a remarketing agent prior to issuance of the Series 2000 COPs would delay completion of the transaction by at least 30 to 60 days. Such a delay will defer the financial benefits of the transaction, and subject the District to the risk of losing Dexia CLF as the Liquidity provider for the Series 2000 COPs, at a very favorable negotiated fee. Tb maintain the current schedule, the District would proceed with the proposed Series 2000 COPs with PaineWebber as the initial remarketing agent. Closing the Series 2000 COPs on the current financing schedule does not preclude a subsequent process to competitively select a remarketing agent. In this instance, following the close and settlement of the Series 2000 COPs, staff would prepare a plan, including an RFP and a list of potential remarketing agents, for substitution of remarketing agents for selected COPs, and report back to the Committee. Staff recommends that issuance of the Series 2000 COPs be completed according to schedule, and following completion of the Series 2000 issue, conduct an RFP process for competitive selection of substitute remarketing agents for one or more of the District's variable rate COPs. New Financing Team Following substitution of remarketing agents for one or more of the District's variable rate COPs, staff would prepare a plan and RFP process to select a new finance team, including underwriters, bond counsel, and financial advisor, to structure and issue future "new money" borrowings to support the Strategic Plan CIP. One or more of these future COP issues also could include additional reimbursement amounts described above for months 24 through 1. If the Committee desires, this process can take place in conjunction with the competitive selection of a team of underwriters to assist the District with future COP financings. Financing Schedule A detailed financing schedule for issuance of the Series 2000 Refunding COPs, and substitution of bond documents for the Series 1992 and Series 1993 COPs, is attached for your Committee's review. The following is a summary of upcoming project milestones: July • FAHR and Board approve all Phase I and II documents August • Price and market Series 2000 COPs • Close all refunding components ALTERNATIVES 1. Include no reimbursement amounts in this COP issue. 2. Include all reimbursement amounts in this COP issue. 3. Issue no COPs, and fund the capital program from user fees. \lradon\data11wp.dtalfin\210\crane\FAHR\Fahr2000\July\COP STATUS REPORT-July.doc Revised: 8/20/98 Page 6 , CEQA FINDINGS N/A ATTACHMENTS 1 . Resolution Authorizing Issuance of the Series 2000 COPs and Authorizing Delivery of Amended, and Restated Documents for the Series 1992 and Series 1993 COPs 2. Preliminary Official Statement, Series 2000 COPs 3. Master Agreement for District Obligations 4 . Installment Purchase Agreement, Series 2000 COPs 5. Trust Agreement, Series 2000 COPs 6. Financing Schedule SVK \\radon\dala1\wp.dlalfin\210\cranelFAHR\Fahr2000\July\COP STATUS REPORT-July.doc Revised: 6120/98 Page 7 RESOLUTION NO. OCSD 00----- RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT AUTHORIZING THE EXECUTION AND DELIVERY BY THE DISTRICT OF SPECIFIED AGREEMENTS, DOCUMENTS AND INSTRUMENTS WITH RESPECT TO THE EXECUTION AND DELIVERY OF ORANGE COUNTY SANITATION DISTRICT CERTIFICATES OF PARTICIPATION (2000 REFUNDING PROJECT), AUTHORIZING THE EXECUTION AND DELIVERY OF SUCH CERTIFICATES EVIDENCING PRINCIPAL IN AN AGGREGATE AMOUNT OF NOT TO EXCEED $ , AUTHORIZING THE DISTRIBUTION OF A 2000 OFFICIAL STATEMENT IN CONNECTION THEREWITH AND AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND CERTIFICATES AND RELATED ACTIONS, AUTHORIZING THE EXECUTION AND DELIVERY BY THE DISTRICT OF AMENDMENTS TO SPECIFIED AGREEMENTS, DOCUMENTS AND INSTRUMENTS WITH RESPECT TO COUNTY SANITATION DISTRICT NOS.1, 2, 3, 5, 6, 7 AND 11 OF ORANGE COUNTY, CALIFORNIA REFUNDING CERTIFICATES OF PARTICIPATION, 1992, AND AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND CERTIFICATES AND RELATED ACTIONS, AND AUTHORIZING THE EXECUTION AND DELIVERY BY THE DISTRICT OF AMENDMENTS TO SPECIFIED AGREEMENTS, DOCUMENTS AND INSTRUMENTS WITH RESPECT TO COUNTY SANITATION DISTRICT NOS.1, 2, 3, 5, 6, 7 AND 11 OF ORANGE COUNTY, CALIFORNIA REFUNDING CERTIFICATES OF PARTICIPATION, 1993, AND AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND CERTIFICATES AND RELATED ACTIONS WHEREAS, the Board of Directors of the Orange County Sanitation District (the "District") is presently considering refinancing certain of its obligations and restructuring, simplifying and making more consistent certain of its obligations; WHEREAS, the District previously financed the acquisition, construction and installation of certain improvements to its wastewater system (the "Project") through the incurrence of certain obligations pursuant to an Agreement for Acquisition and Construction, dated as of November 1, 1990 (the "Series A Agreement for Acquisition and Construction"), an Agreement for Acquisition and Construction, dated as of May 1, 1991 (the "Series B Agreement for Acquisition and Construction") and an Agreement for Acquisition and Construction, dated as of July 1, 1992 (the "Series C Agreement for Acquisition and Construction"); WHEREAS, in order to finance the Project, the District caused to be executed and delivered County Sanitation District Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California, Certificates of Participation (Capital Improvement Program, 1990-92 Series A) (the DOCSLAl :351670.6 41758-7 MM3 "Series A Certificates") in the aggregate principal component of $100,000,000 and currently outstanding in the aggregate principal component of $83,300,000, County Sanitation District Nos. 1, 2, 3, 5, 6, 7 and 11 of Orange County, California, Certificates of Participation (Capital Improvement Program, 1990-92 Series B) in the aggregate principal component of $117 ,555,000 and currently outstanding in the aggregate principal component of $18,695,000 (the "Series B Certificates") and County Sanitation District Nos. 1, 2, 3, 5, 6, 7 and 11 of Orange County, California, Certificates of Participation (Capital Improvement Program, 1990-92 Series C) in the aggregate principal component of $98,500,000 and currently outstanding in the aggregate principal component of $86,200,000 (the "Series C Certificates" and together with the Series A Certificates and the Series B Certificates, the "Prior Certificates"); WHEREAS, in order to achieve credit enhancement and liquidity cost savings, the District desires to refinance the Project by exercising its option to prepay certain installment payments to be made by the District pursuant to the Series A Agreement for Acquisition and Construction, the Series B Agreement for Acquisition and Construction and the Series C Agreement for Acquisition and Construction; WHEREAS, in order to refinance the Prior Certificates, the District desires to purchase the Project from the Orange County Sanitation District Financing Corporation (the "Corporation"), and the Corporation desires to sell the Project to the District, for the installment payments (the "2000 Installment Payments") to be made by the District pursuant to an Installment Purchase Agreement (such Installment Purchase Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "2000 Installment Purchase Agreement"); WHEREAS, the District desires to establish and declare the conditions and terms upon which obligations such as the Installment Purchase Agreement, and the Installment Payments and the interest thereon payable under the Installment Purchase Agreement, are to be incurred and secured, pursuant to a Master Agreement for District Obligations, by and between the District and the Corporation (such Master Agreement for District Obligations, in the form presented to this meeting, with such -changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Master Agreement"); WHEREAS, the Corporation proposes to assign without recourse certain of its rights under and pursuant to the Installment Purchase Agreement to State Street Bank & Trust Company of California, N.A., as trustee (the "Trustee") pursuant to a Trust Agreement among the Trustee, the Corporation and the District (such Trust Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "2000 Trust Agreement"); WHEREAS, in consideration of such assignment and the execution and entering into of this Trust Agreement, the Trustee has agreed to execute and deliver certificates of participation (the "2000 Certificates"), evidencing direct, undivided fractional interests in the Installment Payments, and the interest thereon, payable under the Installment Purchase Agreement; WHEREAS, in order to secure the timely payment of the principal and interest evidenced by the 2000 Certificates and to provide a source of payment for the purchase of 2000 DOCSLAI :351670.6 41758-7 MM3 -2- Certificates tendered by the owners thereof when such purchase is required in accordance with the terms of the Trust Agreement, the District proposes to enter into a Standby Certificate Purchase Agreement with Dexia Credit Local de France, acting through its New York Agency (the "2000 Bank"), pursuant to which the Bank will provide liquidity for the 2000 Certificates (such Standby Certificate Purchase Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "2000 Standby Certificate Purchase Agreement"); WHEREAS, PaineWebber Incorporated, as underwriter, has submitted to the District and the Corporation a proposal to purchase certain of the 2000 Certificates in the form of a Certificate Purchase Agreement, Series A Refunding and Series C Refunding (such Certificate Purchase Agreement, Series A Refunding and Series C Refunding, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "2000 Certificate Purchase Agreement, Series A Refunding and Series C Refunding"); WHEREAS, PaineWebber Incorporated, as underwriter, has submitted to the District and the Corporation a proposal to purchase certain of the 2000 Certificates in the form of a Certificate Purchase Agreement, Series B Advance Refunding (such Certificate Purchase Agreement, Series B Advance Refunding, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "2000 Certificate Purchase Agreement, Series B Advance Refunding"); WHEREAS, the funds to pay the principal, and premium and interest, evidenced by the Series B Certificates through the prepayment date thereof will be applied to such purpose pursuant to an Escrow Agreement by and between the District and Chase Bank of Texas, National Association, as escrow bank (such Escrow Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "2000 Escrow Agreement"); WHEREAS, the District desires to enter into an interest rate swap with PaineWebber Trading Inc. (the "2000 Counterparty") and Wachovia Bank, N.A. (the "2000 Contingent Swap Counterparty"), the terms and conditions of which shall be set forth in the ISDA ~faster Agreement (Multicurrency-Cross Border), as amended and supplemented by the Schedule to the Master Agreement (Multicurrency-Cross Border) (the "Schedule") and a Confirmation (the "Confirmation"), pursuant to which the District will pay a fixed rate to the 2000 Counterparty, and the 2000 Counterparty or the 2000 Contingent Swap Counterparty will pay a variable interest rate to the District (such ISDA Master Agreement, as so amended and supplemented by the Schedule and the Confirmation, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "2000 Interest Rate Swap Agreement"); WHEREAS, in order to provide for the remarketing of 2000 Certificates tendered pursuant to the terms of the Trust Agreement, the District desires to enter into a Remarketing Agreement with PaineWebber Incorporated (such Remarketing Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "2000 Remarketing Agreement"); DOCSLAI :351670.6 41758-7 MM3 -3- WHEREAS, a form of the Official Statement to be distributed in connection with the public offering of the 2000 Certificates has been prepared (such Official Statement in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "2000 Official Statement"); WHEREAS, pursuant to a Trust Agreement, dated as of October 1, 1992 (the "1992 Original Trust Agreement"), by and among State Street Bank & Trust Company of California, N .A., as trustee (the "1992 Trustee") and the County Sanitation District No. 1 of Orange County, California, County Sanitation District No. 2 of Orange County, California, County Sanitation District No. 3 of Orange County, California, County Sanitation District No. 5 of Orange County, California, County Sanitation District No. 6 of Orange County, California, County Sanitation District No. 7 of Orange County, California, and County Sanitation District No. 11 of Orange County, California (collectively, the "Predecessor Districts"), the 1992 Trustee executed and delivered the County Sanitation District Nos. 1, 2, 3, 5, 6, 7 and 11 of Orange County, California, Refunding Certificates of Participation, 1992 Series (the "1992 Certificates") in the aggregate principal component of $160,600,000 and currently outstanding in the aggregate principal component of $129,110,000; WHEREAS, the District desires to modify and amend the 1992 Original Trust Agreement pursuant to a First Supplemental Trust Agreement, by and between the 1992 Trustee and the District, as successor by consolidation to the Predecessor Districts (such First Supplemental Trust Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "1992 First Supplemental Trust Agreement") (as so modified and amended, the "1992 First Supplemented Trust Agreement"); WHEREAS, the 1992 Certificates evidence direct and proportionate interests in the installment payments (the "1992 Installment Payments") to be paid by the District, as successor by consolidation to the Predecessor Districts, under the Amendatory Agreement for Acquisition and Construction, dated as of October 1, 1992 (the "1992 Agreement for Acquisition and Construction"), by and among the Predecessor Districts; WHEREAS, in order to secure the timely payment of the principal and interest evidenced by the 1992 Certificates and to provide a source of payment for the purchase of 1992 Certificates tendered by the owners thereof when such purchase is required in accordance with the terms of the Trust Agreement, the District entered into a Standby Certificate Purchase Agreement, dated as of January 30, 1996 (the "1992 Standby Certificate Purchase Agreement"), with Barclays Bank PLC, New York Branch (the "1992 Bank") and the 1992 Trustee, pursuant to which the 1992 Bank provides liquidity for the 1992 Certificates; WHEREAS, the District entered into an Interest Rate Swap Agreement with AIG Financial Products Corp. (the "1992 Counterparty") pursuant to which the District pays a fixed rate to the 1992 Counterparty and the 1992 Counterparty pays the variable interest rate on the 1992 Certificates to the District (the "1992 Interest Rate Swap Agreement"); WHEREAS, the District entered into a Liquidity Guaranty Agreement with AIG Financial Products Corp. (the "1992 Liquidity Guarantor") pursuant to which the 1992 Liquidity DOCSLAI :351670.6 41758-7 MM3 -4- Guarantor provides assurance as to the liquidity support for the 1992 Certificates after the expiration of the 1992 Standby Certificate Purchase Agreement (the "1992 Liquidity Guaranty Agreement"); WHEREAS, the District proposes to restructure, simplify and make more consistent certain of its obligations, including the 1992 Agreement for Acquisition and Construction, and the instruments pursuant to which interests in such obligations, or the payments to be made thereunder, were executed and delivered, including the 1992 Original Trust Agreement, the 1992 First Supplemented Trust Agreement, 1992 Standby Certificate Purchase Agreement, the 1992 Interest Rate Swap Agreement and the 1992 Liquidity Guaranty Agreement; WHEREAS, to that end, the District desires to modify, amend, reform and restate the 1992 Agreement for Acquisition and Construction pursuant to a Reformed Agreement for Acquisition and Construction, by and between the District, as successor by consolidation to the Predecessor Districts, and the Corporation (such Reformed Agreement for Acquisition and Construction, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "1992 Reformed Agreement for Acquisition and Construction"); WHEREAS, to that end, the District desires to modify, amend, reform and restate the 1992 First Supplemented Trust Agreement pursuant to a Reformed Trust Agreement, by and between the 1992 Trustee and the District, as successor by consolidation to the Predecessor Districts (such Reformed Trust Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "1992 Reformed Trust Agreement"); WHEREAS, to that end, the District desires to modify and amend the 1992 Standby Certificate Purchase Agreement pursuant to a Reformed Standby Certificate Purchase Agreement, among the District, as successor by consolidation to the Predecessor Districts, the 1992 Trustee and the 1992 Bank (such Reformed Standby Certificate Purchase Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "1992 Reformed Standby Certificate Purchase Agreement"); WHEREAS, to that end, the District desires to modify and amend the 1992 Interest Rate Swap Agreement pursuant to an Amendment No. 1 to Interest Rate Swap Agreement, by and between the District, as successor by consolidation to the Predecessor Districts and the 1992 Counterparty (such Amendment No. 1 to Interest Rate Swap Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "1992 Amendment No. 1 to Interest Rate Swap Agreement"); WHEREAS, to that end, the District desires to modify and amend the 1992 Liquidity Guaranty Agreement pursuant to an Amendment No. 1 to Liquidity Guaranty Agreement, by and between the District, as successor by consolidation to the Predecessor Districts and the 1992 Liquidity Guarantor (such Amendment No. 1 to Liquidity Guaranty Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to DOCSLAl :351670.6 41758-7 MM3 -5- this Resolution, being referred to herein as the "1992 Amendment No. 1 to Liquidity Guaranty Agreement"); WHEREAS, in order to provide for the remarketing of 1992 Certificates tendered pursuant to the terms of the 1992 Reformed Trust Agreement, the District desires to enter into an Amended and Restated Remarketing Agreement with Paine Webber Incorporated (such Amended and Restated Remarketing Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "1992 Amended and Restated Remarketing Agreement"); WHEREAS, in order to reflect such amendments and modifications, a form of the Reoffering Memorandum with respect to the 1992 Certificates has been prepared (such Reoffering Memorandum in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "1992 Reoffering Memorandum"); WHEREAS, pursuant to a Trust Agreement, dated as of September 1, 1993 (the "1993 Original Trust Agreement"), by and among Texas Commerce Bank National Association, now known as Chase Bank of Texas, National Association, as trustee (the "1993 Trustee") and the Predecessor Districts, the 1993 Trustee executed and delivered the County Sanitation District Nos. 1, 2, 3, 5, 6, 7 and 11 of Orange County, California, Refunding Certificates of Participation, 1993 Series (the "1993 Certificates") in the aggregate principal component of $46,000,000 and currently outstanding in the aggregate principal component of $43,950,000; WHEREAS, the 1993 Certificates evidence direct and proportionate interests in the installment payments (the "1993 Installment Payments") to be paid by the District, as successor by consolidation to the Predecessor Districts, under the Amendatory Agreement for Acquisition and Construction, dated as of September 1, 1993 (the "1993 Agreement for Acquisition and Construction"), by and among the Predecessor Districts; WHEREAS, in order to secure the payment under certain circumstances of the purchase price of the 1993 Certificates, the District entered into a Reimbursement Agreement, dated as of September 1, 1993 (the "1993 Reimbursement Agreement"), by and among the Predecessor Districts and Societe Generale, New York Branch (the "1993 Bank"); WHEREAS, the District entered into an Interest Rate Swap Agreement with Societe Generale, New York Branch (the "1993 Counterparty") pursuant to which the District pays a fixed rate to the 1993 Counterparty and the 1993 Counterparty pays the variable interest rate on the 1993 Certificates to the District (the "1993 Interest Rate Swap Agreement"); WHEREAS, the District proposes to restructure, simplify and make more consistent certain of its obligations, including the 1993 Agreement for Acquisition and Construction, and the instruments pursuant to which interests in such obligations, or the payments to be made thereunder, were executed and delivered, including the 1993 Original Trust Agreement, 1993 Reimbursement Agreement and the 1993 Interest Rate Swap Agreement; WHEREAS, to that end, the District desires to modify, amend, reform and restate the 1993 Agreement for Acquisition and Construction pursuant to a Reformed Agreement for DOCS LA I :351670.6 41758-7 MM3 -6- Acquisition and Construction, by and between the District, as successor by consolidation to the Predecessor Districts, and the Corporation (such Reformed Agreement for Acquisition and Construction, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "1993 Reformed Agreement for Acquisition and Construction"); WHEREAS, to that end, the District desires to modify, amend, reform and restate the 1993 Original Trust Agreement pursuant to a Reformed Trust Agreement, by and between the 1993 Trustee and the District, as successor by consolidation to the Predecessor Districts (such Reformed Trust Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "1993 Reformed Trust Agreement"); WHEREAS, to that end, the District desires to modify and amend the 1993 Reimbursement Agreement pursuant to an Amended and Restated Reimbursement Agreement, by and between the District, as successor by consolidation to the Predecessor Districts and the 1993 Bank (such Amended and Restated Reimbursement Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "1993 Amended and Restated Reimbursement Agreement"); WHEREAS, to that end, the District desires to modify and amend the 1993 Interest Rate Swap Agreement pursuant to an Amended and Restated Interest Rate Swap Agreement, by and between the District, as successor by consolidation to the Predecessor Districts and the 1993 Counterparty (such Amended and Restated Interest Rate Swap Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "1993 Amended and Restated Interest Rate Swap Agreement"); WHEREAS, in order to provide for the remarketing of 1993 Certificates tendered pursuant to the terms of the 1993 Reformed Trust Agreement, the District desires to enter into an Amended and Restated Remarketing Agreement with Paine Webber Incorporated (such Amended and Restated Remarketing Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "1993 Amended and Restated Remarketing Agreement"); WHEREAS, in order to reflect such amendments and modifications, a form of the Reoffering Memorandum with respect to the 1993 Certificates has been prepared (such Reoffering Memorandum in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "1993 Reoffering Memorandum"); WHEREAS, there have been prepared and submitted to this meeting forms of: DOCSLA1:351670.6 41758-7 MM3 (a) the 2000 Installment Purchase Agreement; (b) the Master Agreement; -7- (c) the 2000 Trust Agreement; (d) the 2000 Standby Certificate Purchase Agreement; (e) the 2000 Certificate Purchase Agreement, Series A Refunding and Series C Refunding; (f) the 2000 Certificate Purchase Agreement, Series B Advance Refunding; (g) the 2000 Escrow Agreement; (h) the 2000 Interest Rate Swap Agreement; (i) the 2000 Remarketing Agreement; G) the 2000 Official Statement; (k) 1992 Reformed Agreement for Acquisition and Construction; (1) 1992 First Supplemental Trust Agreement; (m) 1992 Reformed Trust Agreement; (n) 1992 Reformed Standby Certificate Purchase Agreement; (o) 1992 Amendment No. 1 to Interest Rate Swap Agreement; (p) 1992 Amendment No. 1 to Liquidity Guaranty Agreement; (q) 1992 Amended and Restated Remarketing Agreement; (r) 1992 Reoffering Memorandum; (s) 1993 Reformed Agreement for Acquisition and Construction; (t) 1993 Reformed Trust Agreement; (u) 1993 Amended and Restated Reimbursement Agreement; (v) 1993 Amended and Restated Interest Rate Swap Agreement; (w) 1993 Amended and Restated Remarketing Agreement; and (x) 1 993 Reoffering Memorandum; WHEREAS, all acts, conditions and things required by the Constitution and laws of the State of California to exist, to have happened and to have been performed precedent to and in connection with the consummation of the financing authorized hereby do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the DOCSLAl:351670.6 41758-7 MM3 -8- District is now duly authorized and empowered, pursuant to each and every requirement of law, to consummate such financing for the purpose, in the manner and upon the terms herein provided; NOW, THEREFORE, the Board of Directors of Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1. All of the recitals herein contained are true and correct and the Board so finds. Section 2. The 2000 Installment Purchase Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth herein, be and the same is hereby approved. The Chair of the Board of Directors, and such other member of the Board of Directors as the Chair may designate, the General Manager of the District .and the Director of Finance of the District, and such other officer of the District as the Director of Finance may designate (the "Authorized Officers") are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the 2000 Installment Purchase Agreement in the form submitted to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the 2000 Installment Purchase Agreement by such Authorized Officer; provided, however, that such changes, insertions and omissions shall not authorize an aggregate principal amount of 2000 Installment Payments in excess of $ , shall not result in the term of the 2000 Installment Purchase Agreement exceeding 35 years. Section 3. The Master Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the Master Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Master Agreement by such Authorized Officer. Section 4. The 2000 Trust Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the 2000 Trust Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the 2000 Trust Agreement by such Authorized Officer. Section 5. The execution and delivery of 2000 Certificates evidencing principal in an aggregate amount of not to exceed $ payable in the years and in the amounts, and evidencing principal of and interest on the 2000 Installment Payments as specified in the 2000 Trust Agreement as finally executed, are hereby authorized and approved. DOCSLAI :351670.6 41758-7 MM3 -9- Section 6. The 2000 Standby Certificate Purchase Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the 2000 Standby Certificate Purchase Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the 2000 Standby Certificate Purchase Agreement by such Authorized Officer. Section 7. The 2000 Certificate Purchase Agreement, Series A Refunding and Series C Refunding, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the 2000 Certificate Purchase Agreement, Series A Refunding and Series C Refunding in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the 2000 Certificate Purchase Agreement, Series A Refunding and Series C Refunding by such Authorized Officer; provided, however, that the underwriter's discount for the sale of the 2000 Certificates shall not exceed 0.35% of the aggregate amount of principal evidenced by such 2000 Certificates. Section 8. The 2000 Certificate Purchase Agreement, Series B Advance Refunding, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the 2000 Certificate Purchase Agreement, Series B Advance Refunding in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the 2000 Certificate Purchase Agreement, Series B Advance Refunding by such Authorized Officer; provided, however, that the underwriter's discount for the sale of the 2000 Certificates shall not exceed 0.35% of the aggregate amount of principal evidenced by such 2000 Certificates. Section 9. The 2000 Escrow Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the 2000 Escrow Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the 2000 Escrow Agreement by such Authorized Officer. Section 10. The Board of Directors hereby finds and determines that the execution and delivery of the 2000 Interest Rate Swap Agreement is designed to reduce the amount of rate risk and enhance the relationship between risk and return with respect to the investment or program of investment in connection with, or incident to, the 2000 Interest Rate Swap Agreement. The 2000 Interest Rate Swap Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The DOCSLAI :351670.6 41758-7 MM3 -10- • Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the 2000 Interest Rate Swap Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the 2000 Interest Rate Swap Agreement by such Authorized Officer. Section 11. The 2000 Remarketing Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the 2000 Remarketing Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the 2000 Remarketing Agreement by such Authorized Officer. Section 12. The 2000 Official Statement, in substantially the form presented to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to certify that the 2000 Official Statement has been "deemed final" for purposes of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute the 2000 Official Statement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the 2000 Official Statement by such Authorized Officer. The use of the 2000 Official Statement in connection with the offering and sale of the 2000 Certificates in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, is hereby authorized and approved. Section 13. The 1992 Reformed Agreement for Acquisition and Construction, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the 1992 Reformed Agreement for Acquisition and Construction in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the 1992 Reformed Agreement for Acquisition and Construction by such Authorized Officer. Section 14. The 1992 First Supplemental Trust Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the 1992 First Supplemental Trust Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, DOCSLA1:351670.6 41758-7 MM3 -11- such requirement or approval to be conclusively evidenced by the execution of the 1992 First Supplemental Trust Agreement by such Authorized Officer. Section 15. The 1992 Reformed Trust Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the 1992 Reformed Trust Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the 1992 Reformed Trust Agreement by such Authorized Officer. Section 16. The 1992 Reformed Standby Certificate Purchase Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the 1992 Reformed Standby Certificate Purchase Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the 1992 Reformed Standby Certificate Purchase Agreement by such Authorized Officer. Section 17. The 1992 Amendment No. 1 to Interest Rate Swap Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the 1992 Amendment No. 1 to Interest Rate Swap Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the 1992 Amendment No. 1 to Interest Rate Swap Agreement by such Authorized Officer. Section 18. The 1992 Amendment No. 1 to Liquidity Guaranty Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the 1992 Amendment No. 1 to Liquidity Guaranty Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the 1992 Amendment No. 1 to Liquidity Guaranty Agreement by such Authorized Officer. Section 19. The 1992 Amended and Restated Remarketing Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the 1992 Amended and Restated Remarketing Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the 1992 Amended and Restated Remarketing Agreement by such Authorized Officer. DOCSLAI :351670.6 41758-7 MM3 -12- Section 20. The 1992 Reoffering Memorandum, in substantially the form presented to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to certify that the 1992 Reoffering Memorandum has been "deemed final" for purposes of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute the 1992 Reoffering Memorandum in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the 1992 Reoffering Memorandum by such Authorized Officer. The use of the 1992 Reoffering Memorandum in connection with the 1992 Certificates in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, is hereby authorized and approved. Section 21. The 1993 Reformed Agreement for Acquisition and Construction, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the 1993 Reformed Agreement for Acquisition and Construction in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the 1993 Reformed Agreement for Acquisition and Construction by such Authorized Officer. Section 22. The 1993 Reformed Trust Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the 1993 Reformed Trust Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the 1993 Reformed Trust Agreement by such Authorized Officer. Section 23. The 1993 Amended and Restated Reimbursement Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the 1993 Amended and Restated Reimbursement Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the 1993 Amended and Restated Reimbursement Agreement by such Authorized Officer. Section 24. The 1993 Amended and Restated Interest Rate Swap Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the 1993 Amended and Restated Interest Rate Swap Agreement in the form presented to this DOCSLAI :351670.6 41758-7 MM3 -13- meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the 1993 Amended and Restated Interest Rate Swap Agreement by such Authorized Officer. Section 25. The 1993 Amended and Restated Remarketing Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the 1993 Amended and Restated Remarketing Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the 1993 Amended and Restated Remarketing Agreement by such Authorized Officer. Section 26. The 1993 Reoffering Memorandum, in substantially the form presented to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to certify that the 1993 Reoffering Memorandum has been "deemed .final" for purposes of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute the 1993 Reoffering Memorandum in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the 1993 Reoffering Memorandum by such Authorized Officer. The use of the 1993 Reoffering Memorandum in connection with the 1993 Certificates in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, is hereby authorized and approved. Section 27. The Authorized Officers are, and each of them hereby is, authorized and directed to execute and deliver any and all documents and instruments and to do and cause to be done any and all acts and things necessary or proper for carrying out the execution and delivery of the 2000 Certificates and the transactions contemplated by the agreements or documents referenced herein and this Resolution. Section 28. All actions heretofore taken by the officers and employees of the District with respect to the execution, delivery and sale of the 2000 Certificates, or in connection with or related to any of the agreements or documents referenced herein, are hereby approved, confirmed and ratified. Section 29. This Resolution shall take effect immediately upon its adoption. DOCSLAl:351670.6 41758-7 MM3 -14- PASSED AND ADOPTED at a regular meeting held ____ , 2000. ATTEST: Board Secretary DOCSLAl :351670.6 41758-7 MM3 Chair -15- STATE OF CALIFORNIA ) ) SS COUNTY OF ORANGE ) I, Secretary of the Board of Directors of the Orange County Sanitation District, do hereby certify that the foregoing Resolution No. OCSD 00-___ _ was passed and adopted at a regular meeting of said Board on the day of ___ _ 2000, by the following vote, to wit: AYES: NOES: ABSTENTIONS: ABSENT: IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of Orange County sanitation District No. 1, California, this __ day of , 2000. DOCSLA1:351670.6 41758-7 MM3 Secretary, Board of Directors of Orange County Sanitation District HD&W Draft-July 6, 2000 NEW ISSUE -BOOK-ENTRY ONLY RATINGS: Moody's: Standard & Poor's: Fitch: (See "Ratings" herein) In the opinion of Orrick, Herrington & Sutcliffe LLP, Special Counsel, based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, compliance with certain covenants, interest evidenced by the Certificates (2000 Refunding Project) is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of I 986 and is exempt from Stale of California personal income taxes. In the further opinion of Special Counsel, interest evidenced by the Certificates (2000 Refunding Project) is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes, although Special Counsel observes that such interest is included in adjusted current earnings in calculating corporate alternative minimum taxable income. Special Counsel expresses no opinion regarding any other tax consequences related to the ownership or disposition of, or the accrual or receipt of interest evidenced by, the Certificates (2000 Refunding Project). See "Tax Matters" herein. Dated: Date of Delivery $ ___ _ Orange County Sanitation District Refunding Certificates of Participation (2000 Refunding Project) Price: 100% Due: August l, __ The Orange County Sanitation District Refunding Certificates of Participation (2000 Refunding .Project) (the ' Certificates (2000 Refunding Project)'') are being executed and delivered pursuant to a Trust Agreement, dated as of 1, 2000, (the "Trust Agreement") by and among State Street Bank and Trust Company of California, N.A. as trustee (the "Trustee"), the Orange County Sanitation District Financing Corporation (the "Corporation") and the Orange County Sanitation District (the "Oistrict"). The Certificates (2000 Refunding Project) are being executed and delivered to currently refund the outstanding principal amount of the Certificates of Participation (Capital Improvement Program, 1990-92 Series A) (the "1990 Series A Certificates") and the Certificates of Participation (Cap·ital bnJ?rove~en_t Program, 1990-92 _Se~ies C) (t~e "1992 Serit;s .c qertifieat~s") and to advance refund all of tbe outstanding pnnc1pal amount of the District s Certificates of Partlcrpat1ou (Cap1taJ Improvement Program, 1990- 92 Ser~es B) (ibe "1991 Series B C~rtificates" and, tog~er with the Series 1990 A. Certificates and the -Serie~ .1?92 C Certrficates, the "Refunded Certificates"), each of which were executed and delivered to finance the acqumt1on, construction and installation of certain improvements to the District's san:ltation system (the "Project"), to finance a reserve fund for the Certificates (2000 Refunding Project) and to pay costs of issuance of the Certificates (2000 Refunding Project), as more fully described herein. See "Plan of Refunding" herein. The District will acquire the Project from the Corporation pursuant to an Installment Purchase Agreement, dated as of l, 2000 (the "Installment Purchase Agreement"), by and between the District and the Corporation. The Certificates (2000 Refunding Project) are payable from Installment Payments and the interest thereon paid by the District pursuant to the Installment Purchase Agreement. The District's obligation to make Installment Payments, and the interest thereon, and other payments required under the Installment Purchase Agreement is a special obligation of the District; payable solely from Net Revenues and other funds as provided m the Master Agreement for District Obligations, dated as of 1, 2000, by and between the District and the Corporation (the ''Master Agreement") and the TnStallment Purchase Agreement, consisting primarily of aU income and revenue received by the District from the operation or ownership of the Wastewater System remainin(T after 1:myment of Maintenance and Operation Costs, as further described m "Security and Sources of Payment for the Certificates (2000 Refunding Project)" herein. All of the Corporation's right, title and interest m and to the Installment Purchase Agreement, rnclud.ing the right to receive Installment Payments and interest thereon under the Installment Purchase Agreement, are assipted to the Trustee under the Trust Agreement for the benefit of the Owners of the Certificates (2000 Refunding Project). The Distri_ct has p~eviously exec~ted an,d d!!Livered _its Refunding ~~rti~cates of Parti~ipation, 1992 Series (~e "1992 Refundmg Cemficates") and its Refundmg Certrficates of Partmr,ation, l993 Senes (the "1993 Refunding Certificates '' and together with the 1992 Refunding Certificates, the 'Outstanding Senior Obligations"), which Outs~andi~g Senior Obligations are to be. paya;ble on. a P,arity wit~ ~e Certificates \2000 .Refundino Project) ~s provided m the Master Agreement. See "Fmanc1al Obligations -Ex1stmg Indebtedness ' herem. See ;JSo Appendix C -"Summary of Principal Legal Documents -Master Agreement'' herem. The Certificates (2000 Refunding Project) will initially bear interest at the Daily Rate Mode and be executed and delivered in the denominations of$100,000 and whole multiples thereof, except that one Series 2000 Certificate may be in the amount of $100,000 and a whole multiple of $5,000 in excess thereof. While in the Daily Rate Mode and Weekly Rate Mode, the interest evidenced by tne Certificates (2000 Refunding Project) will be computed on the basis of the actual days elapsed and a 365 or 366-day year, as applicable. Interest evidenced by the Certificates (2000 Refundin~ Project) will be payable on the first Business Day of each calendar month, commencing on September__, 2u00. 4687v2 While the Daily Rate Mode and Weekly Rate Mode are in effect, Owners of the Certificates (2000 Refunding Project) (other than Bank Certificates (described herein)) may elect to have their Certificates (2000 Refunding Project) (or portions thereof in Authorized Denominations) purchased at a purchase price equal to the princir,al amount thereof, without premium, plus any accrued but unpaid interest to the Purchase Date (the "Purchase Price'). Subject to certain termination events described herein, payment of the Purchase Price will be funded by a Standby Certificate Purchase Agreement, dated as of l, 2000 (the "Standby Certificate Purchase Agreement"), by and between Dexia Credit LocaJ de France (the "Bank" and the Distrkt. The obligation of the Bank to purchase tendered but unremarketed Certificates (2000 Refunding Project) is subject to termmation upon the occurrence of certain events of defauJr. See "Standby Certificate Purchase Agreement" herein. The Certificates (2000 Refunding Project) are being delivered in fully registered form and, when issued, will be registered in the name of Cede & Co. as nominee of The Depository Trust Company New York, New York ("DTC"). Individual purchases of the Certificates (2000 Refunding Project may be made in book-entry form only. Purchasers will not receive Certificates (2000 Refunding Project) representing tlieir interest in the Certificates (2000 Refunding Project) JJurchased. Payments of principal, premium if any, purchase pr-ice and interest on the Certificates (2000 Refunding Project) will by payable by Sta e Street Bank and Trust Company of California, N.A. to OTC wliicb is obligated in tum to remit such principal, premium, if any purchase price and interest to the DTC Participants for subsequent disbursement to the Beneficial Owners of the Certificates (2000 Refundin&; Project) as more fully described herein. See "The Certificates (2000 Refunding Project)" and Appendix D -'Book-Entry System" herein. The Certificates (2000 Refunding Project) are subject to optional and mandatory sinking fund prepayment prior to. ~aturity a~ more fully d~scribed herein .. See '.'The C~rtificates (2000 ~efunding Project) -Prepayment ProvlSlons" herem. The Certificates (2000 Refundrng Project) are also subject to mandatory tender for purchase in certain circumstances, induding conversion to a different Mode, all as more particularly described herein. THE OBLJGATION OF THE DISTRICT TO PAY THE TNSTALLMENT PAYMENTS, AND THE LNTEREST THEREON AND OTHER PAYMENTS REQUIRED TO BE MADE BY IT UNDER THE INSTALLMENT PURCHASE AGREEMENT rs A SPECIAL OBLlGA T!ON OF THE DISTRICT PAY ABLE, IN THE MANNER PROVIDED IN THE INSTALLMENT PURCHASE AGREEMENT, SOLELY FROM NET REVENUES AND OTHER FUNDS PROVIDED FOR IN THE INSTALLMENT PURCHASE AGREEMENT AND THE MASTER AGREEMENT AND DOES NOT CONSTITUTE A DEBT OF THE DISTRICT OR OF THE STA TE OF CALIFORNIA, OR OF ANY POLITICAL SUBDNISTON THEREOF, JN CONTRAVENTION OF ANY CONSTJTUTlONAL OR TA TUTOR Y DEBT LIMITATION OR RESTRICTION. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE DISTRICT OR THE STATE OF CALIFORNIA, OR ANY POLJTJCAL SUBDNISION THEREOF, lS PLEDGED TO THE PAYMENT OF THE £NSTALLMENT PAYMENTS, OR THE lNTEREST THEREON, OR OTHER PAYMENTS REQUIRED TO BE MADE PURSUANT TO THE lNSTALLMENT PURCHASE AGREEMENT. The cover page contains information for quick reference only. It is not a summary of this issue. Potential purchasers must read the entire Official Statement to obtain information essential to making an informed investment decision. The Certiticates (2000 Refunding Project) are offered when, as and if delivered and received by the Underwriter, subject to the approval of Orrick. Herrington & Sutcliffe, LLP, Los Angeres California, pecial Counsel, and certain other conclitions. Certain legal matters will be passed upon for the Underwriter by its counsel. Hawkins, Delafield & Wood, Los Angeles, California, and for the District by Woodruff µradlin and Smart a Professional Corporation, Orange, California. It is anticipated thatthc Certificates (2000 Refunding Project) in. book-entry form will be available for delivery to DTC in New York, New York on or about 2000. Paine Webber Incorporated Dated: _____ , 2000 4687v2 ii 4687v2 MAP OF THE DISTRICT [TO COME] ORANGE COUNTY SANITATION DISTRICT, CALIFORNIA Board of Directors Norman Z. Eckenrode, Chair -Placentia Peter Green, Vice Chair -Huntington Beach Shirley McCracken -Anaheim Charles E. Sylvia -Los Alamitos Jan Dehay -Newport Beach Mark A. Murphy -Orange Lynn Daucher-Brea Jack Mauller -Buena Park Anna L. Piercy -Cypress Pat McGuigan -Santa Ana Shawn Boyd -Seal Beach Brian Donahue -Stanton Guy Carrozza -Fountain Valley Don Bankhead -Fullerton Mark Leyes -Garden Grove Christina Shea -Irvine Thomas R. Saltarelli -Tustin Russell Patterson -Villa Park John M. Gullixson -Yorba Linda James M. Ferryman -Costa Mesa Sanitary District Joy L. Neugebauer -Midway City Sanitary District Jim Silva -Member of the Orange County Board of Peer A. Swan -Irvine Ranch Water District Steve Anderson -La Habra Paul Walker-La Palma Supervisors 4687v2 Executive Management of the District Blake P. Anderson, General Manager Gary G. Streed, Director of Finance David A. Ludwin, Director of Engineering Robert P. Ghirelli, PhD., Director of Technical Services Robert Ooten, Director of Operations & Maintenance Patrick B. Miles, Director of Information Technology Lisa M. Tomko, Director of Human Resources Special Services Special Counsel Orrick, Herrington & Sutcliffe LLP Los Angeles, California District General Counsel Thomas L. Woodruff, Esq. Woodruff, Spradlin and Smart, a Professional Corporation Orange, California Trustee State Street Bank and Trust Company of California, N.A. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Certificates (2000 Refunding Project) by any person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale. The information set forth herein has been provided by the District and other sources that are believed by the District to be reliable. The Underwriter has provided the following sentence for inclusion in this Official Statement. The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. No dealer, broker, salesperson or other person has been authorized to give any information or to make any representations other than those contained in this Official Statement. If given or made, such other information or representations must not be relied upon as having been authorized by the District, the Corporation or the Underwriter. This Official Statement is not to be construed as a contract with the purchasers of the Certificates. Statements contained in this Official Statement which involve estimates, projections, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of facts. The information and expressions of opinion herein are subject to change without notice and neither delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the District or the Corporation since the date hereof. This Official Statement is submitted with respect to the sale of the Certificates (2000 Refunding Project) referred to herein and may not be reproduced or used, in whole or in part, for any other purpose, unless authorized in writing by the District. All summaries of the documents and laws are made subject to the provisions thereof and do not purport to be complete statements of any or all such provisions. Preparation of this Official Statement and its distribution have been duly authorized and approved by the District and the Corporation. ln connection with the offering of the Certificates (2000 Refunding Project), the Underwriter may over-allot or effect transactions which .stabilize or maintain the market price of the Certificates (2000 Refunding Project) at a level above that which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time. The Underwriter may offer and sell the Certificates (2000 Refunding Project) to certain dealers, institutional investors and others at prices lower than the public offering prices stated on the cover page hereof and .such public offering prices may be changed from time to time by the Underwriter. 4687v2 TABLE OF CONTENTS Page INTRODUCTION ......................................................................................................•................................................. 1 GENERAL .................•................................................................................................................................................ 1 THE DISTRICT··························································································································································· 1 SECURITY AND SOURCES OF PAYMENT FOR THE CERTIFICATES (2000 REFUNDING PROJECT) .................................. 2 THE CERTIFICATES (2000 REFUNDING PROJECT) ..................................................................................................... 3 BOOK-ENTRY SYSTEM .............................................................................................................................................. 3 ADDITIONAL OBLIGATIONS ...................................................................................................................................... 4 RESERVE FUND ............................................................................................................•............................................ 4 INTEREST RA TE MODES ............................................................................................................................... ······-·····. 4 OPTIONAL TENDER RIGHT ....................................................................................... ················································· 4 REDEMPTION AND MANDATORY TENDER PROVISIONS ............................................................................................. 5 STANDBY CERTIFICATE PURCHASE AGREEMENT ...................................................................................................... 5 TAX MATTERS ·························································································································································· 5 MISCELLANEOUS ...................................................................................................................................................... 5 PLAN OF REFUNDING .............................................................................................................................................. 6 THE CERTIFICATES (2000 REFUNDING PROJECT) ............................................................................................ 7 GENERAL ................................................................................................................................................................... 7 OPTIONAL TENDER PROVISIONS ............................................................................................................................... 8 MANDATORY TENDER PROVISIONS ........................................................................................................................ 10 TENDER AND PURCHASE OF CERTIFICATES (2000 REFUNDING PROJECT) ............................................................... 11 CONVERSION TO OTHER MODES ...................•........................................................................•................................ 12 PREPAYMENT PROVISIONS ....................................................................................................................................... 12 SECURITY AND SOURCES OF PAYMENT FOR THE CERTIFICATES (2000 REFUNDING PROJECT) ....... 14 INSTALLMENT PAYMENTS ...................................................................................................................................... 14 NET REVENUES ....................................................................................................................................................... 15 RATE STABILIZATION ACCOUNT ........................ -.................................................................................................... 16 ALLOCATION OF REVENUES .................................................................................................................................... 16 RATE COVENANT ..................................•................................................................................................................. 17 RESERVE FUND ....................................................................................................................................................... 17 L!MITA TIONS ON ISSUANCE OF ADDITIONAL OBLIGATIONS .................................................................................... 18 INSURANCE .............................................................................................................................................................. 20 SWAP AGREEMENT ............................................................................................................................•.................... 20 ALLOCATION OF INSTALLMENT PAYMENTS .................................•.......................................................................... 20 STANDBY CERTIFICATE PURCHASE AGREEMENT ........................................................................................ 21 EVENTS OF DEFAULT ................................................................................................................................................ 22 CONSEQUENCES OF EVENTS OF DEFAULT ............................................................................................................... 23 THE BANK ................................................................................................................................................................ 23 THE DISTRICT .......................................................................................................................................................... 24 BACKGROUND ........................................................................................................................................................ 24 0RGANIZA TION AND ADMINJSTRA TION ................................................................................................................... 25 SERVICES ................................................................................................................................................................ 25 SERVICE AREA ........................................................................................................................................................ 26 EMPLOYEES ............................................................................................................................................................ 27 4687v2 INSURANCE ............................................................................................................................................................. 28 EXISTING FACILITIES .............................................................................................................................................. 28 PERMITS, LICENSES AND OTHER REGULATIONS ..................................................................................................... 30 CAPITAL IMPROVEMENT PROGRAM ........................................................................................................................ 31 DISTRICT REVENUES ............................................................................................................................................ 36 CAPITAL FACILITIES CAPACITY CHARGES .............................................................................................................. 36 ADDITIONAL REVENUES ......................................................................................................................................... 38 WASTEWATER TREATMENT HISTORY ... M••················································· .. ··························································· 40 CUSTOMERS ............................................................................................................................................................ 40 ASSESSED VALUATION ........................................................................................................................................... 42 TAX LEVIES AND DELINQUENCIES .......................................................................................................................... 42 BUDGETARY PROCESS ............................................................................................................................................ 43 RESERVES ....................................... ······································••••M••··--·····························································--········ 44 SUMMARY OF OPERATING DATA ............................................................................................................................ 44 PROJECTED OPERATING DATA ................................................................................................................................ 45 MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATING DATA ...................................................................... 47 INVESTMENT OF DISTRICT FUNDS ........................................................................................................................... 47 FINANCIAL OBLIGATIONS .................................................................................................................................... 49 EXISTING INDEBTEDNESS ........................................................................................................................................ 49 ANTICIPATED FINANCINGS ..................................................................................................................................... 51 DIRECT AND OVERLAPPING BONDED DEBT ............................................................................................................ 51 THE CORPORATION ............................................................................................................................................... 52 LIMITATIONS ON TAXES AND REVENUES ....................................................................................................... 52 VERIFICATION OF ARITHMETICAL AND MATHEMATICAL COMPUTATIONS ......................................... 55 LEGAL MA TIERS .................................................................................................................................................... 55 ABSENCE OF LITIGATION .................................................................................................................................... 55 FINANCIAL ST A TEMENTS ..................................................................................................................................... 56 TAX MA TIERS ......................................................................................................................................................... 56 RATINGS ................................................................................................................................................................... 57 UNDERWRITING ..................................................................................................................................................... 58 MISCELLANEOUS .................................................................................................................................................... 58 APPENDIX A-AUDITED COMBINED FINANCIAL STATEMENTS OF THE ORANGE COUNTY SANITATION DISTRICT FOR FISCAL YEARS ENDING JUNE 30, 1999 AND 1998 ............................................ A-1 APPENDIX B-THE COUNTY OF ORANGE--ECONOMIC AND DEMOGRAPHIC INFORMATION .................... B-1 APPENDIX C-SUMMARY OF PRINCIPAL LEGAL DOCUMENTS ......................................................................... C-1 APPENDIX D-BOOK-ENTRY SYSTEM ...................................................................................................................... D-1 APPENDIX E-FORM OF APPROVING OPINION OF SPECIAL COUNSEL ........................................................... E-1 ii 4687v2 OFFICIAL STATEMENT $ _____ _ ORANGE COUNTY SANITATION DISTRICT Refunding Certificates of Participation (2000 Refunding Project) INTRODUCTION This introduction contains only a brief summary of certain of the terms of the Certificates (2000 Refunding Project) being offered and a brief description of the Official Statement. All statements contained in this introduction are qualified in their entirety by reference to the entire Official Statement. References to, and summaries of provisions of the Constitution and laws of the State of California (the "State") and any documents referred to herein do not purport to be complete and such references are qualified in their entirety by reference to the complete provisions. All capitalized terms used in this Official Statement and not otherwise defined herein have the meanings set forth in the Trust Agreement. See Appendix C-"Summary of Principal Legal Documents-Trust Agreement" herein. General This Official Statement, including the cover page and all appendices hereto, provides certain information concerning the sale and delivery of $ aggregate principal amount of the Orange County Sanitation District Refunding Certificates of Participation (2000 Refunding Project) (the "Certificates (2000 Refunding Project)") evidencing direct and proportionate interests in the right to receive Installment Payments (the "Installment Payments") and the interest thereon, to be made by the Orange County Sanitation District (the "District") pursuant to the Installment Purchase Agreement, dated as of I, 2000 (the "Installment Purchase Agreement"), to be entered into by and between the District and the Orange County Sanitation District Financing Corporation (the "Corporation"). Installment Payments under the Installment Purchase Agreement are payable solely from Net Revenues (as defined hereinafter) as provided in the Master Agreement for District Obligations, dated as of __ 1, 2000 (the "Master Agreement"), by and between the District and the Corporation. The Certificates (2000 Refunding Project) are to be executed and delivered pursuant to a Trust Agreement, dated as of -----1, 2000 (the "Trust Agreement"), among the District, the Corporation and State Street Bank and Trust Company of California, N.A., as trustee (the "Trustee"). Proceeds from the sale of the Certificates (2000 Refunding Project) will be used for the purpose of current refunding the outstanding principal amount of the District's Certificates of Participation (Capital Improvement Program, 1990-92 Series A) (the "1990 Series A Certificates") and the Certificates of Participation (Capital Improvement Program, 1990-92 Series C) (the "1992 Series C Certificates") and advance refunding all of the outstanding principal amount of the District's Certificates of Participation (Capital Improvement Program, 1990-92 Series B) (the "1991 Series B Certificates"), all of which were executed and delivered to finance the acquisition, construction and installation of certain improvements to the District's Wastewater System (the "Wastewater System"), to finance a reserve fund for the Certificates (2000 Refunding Project) and to pay costs of issuance of the Certificates (2000 Refunding Project). See "Plan of Refunding" herein. The District The District is a public agency responsible for regional wastewater collection, treatment and disposal. The District is the third largest wastewater discharger west of the Mississippi River. The District 4687v2 provides service to approximately 2.4 million people in the northern and central portion of the County of Orange (the "County") treating 240 million gallons per day ("mg/d") of wastewater. The District's service area was originally formed in 1954 pursuant to the County Sanitation District Act, as amended, being Section 4700 et seq. of the Health and Safety Code of the State. The service area of the District originally consisted of seven independent special districts in the County which were responsible for matters relating to their individual districts. These special districts were jointly responsible for the treatment and disposal facilities which they each used. Two additional districts were formed and additional service areas were added in 1985 and 1986. In April 1998, at the request of the District's Board of Directors, the Board of Supervisors of Orange County (the "Board") passed Resolution No. 98-140 effective July 1, 1998 (the "Resolution") approving the consolidation of the then existing nine special districts into a new, single sanitation district to be known as the Orange County Sanitation District. This action was designed to simplify governance structures, reduce the size of the District's Board of Directors, ease administrative processes, streamline decision-making and consolidate accounting and auditing processes. Pursuant to the Resolution and Government Code Section 57500, the predecessor special districts transferred and assigned all of their powers, rights, duties, obligations, functions and properties to the District, including their obligations to repay the outstanding certificates of participation. The boundaries of the nine predecessor special districts were initially used by the District to delineate separate revenue areas (the "Revenue Areas") for budgeting and accounting purposes and in order to facilitate the imposition of fees and charges imposed by the District. See "The District," "District Revenues" and "Financial Obligations" herein. Security and Sources of Payment for the Certificates (2000 Refunding Project) The Certificates (2000 Refunding Project) are payable from Installment Payments paid by the District pursuant to the Installment Purchase Agreement. The obligation of the District to pay the Installment Payments and the interest thereon and other payments required to be made by it under the Installment Purchase Agreement in a special obligation of the District payable, in the manner provided under the Installment Purchase Agreement, solely from Net Revenues, and other funds as provided in the Trust Agreement and the Master Agreement. Net Revenues generally consist of all income and revenue received by the District from the operation or ownership of the Wastewater System remaining after payment of Maintenance and Operation Costs, all as further provided in the Master Agreement. In December 1992, the predecessor special districts issued $160,600,000 aggregate principal amount of variable rate certificates of participation (the "1992 Refunding Certificates") to advance refund the remaining outstanding principal balance of the 1986 Certificates of Participation (the "1986 Certificates") and $38,350,000 of the outstanding principal balance of the 1991 Series B Certificates of Participation. In September 1993, the predecessor special districts issued $46,000,000 aggregate principal amount of variable rate certificates of participation (the "1993 Refunding Certificates" and together with the 1992 Refunding Certificates the "Outstanding Senior Obligations") which, together with other funds, were used to advance refund $39,740,000 of the outstanding principal balance of the 1991 Series B Certificates. In connection with the issuance of the Outstanding Senior Obligations, the predecessor special districts entered into two separate interest rate swap agreements whereby the special districts agreed to pay the swap providers a fixed amount and the swap providers agreed to pay the special districts a floating amount equal to the interest rates evidenced by the respective Outstanding Senior Obligations. The Outstanding Senior Obligations, including the District's obligation to the swap providers, are to be payable on a parity with the Certificates (2000 Refunding Project), as provided in the Master 2 4687v2 Agreement. See "Financial Obligations -Existing Indebtedness" herein and Appendix C -"Summary of Principal Legal Documents -Master Agreement" attached hereto. The term "Senior Obligations" as used in this Official Statement refers to the Certificates (2000 Refunding Project), the Outstanding Senior Obligations and any additional Senior Obligations payable on a parity basis to the Installment Payments as provided in the Master Agreement. Senior Obligations, together with any Subordinate Obligations payable on a subordinate basis to the Installment Payments issued as provided in the Master Agreement are referred to collectively as the "Obligations." Pursuant to the Master Agreement [and the Installment Purchase Agreement], the District will, to the extent permitted by law, fix, prescribe and collect fees and charges for the services and facilities of the Wastewater System which will be at least sufficient to yield during each Fiscal Year (a) Net Revenues equal to 125% of Debt Service on Senior Obligations for such Fiscal Year and (b) Net Operating Revenues equal to 100% of Debt Service on all Obligations for such Fiscal Year. The District may make adjustments from time to time in such fees and charges and may make such classification thereof as it deems necessary, but shall not reduce the fees and charges then in effect unless the Revenues and Net Revenues from such reduced fees and charges will at all times be sufficient to meet the requirements of the Master Agreement. See "Security and Source of Payment for the Certificates (2000 Refunding Project) -Rate Covenant" herein. The obligation of the District to pay the Installment Payments and the interest thereon, and other payments required to be made by it under the Installment Purchase Agreement is a special obligation of the District payable, in the manner provided in the Installment Purchase Agreement and the Master Agreement, solely from Net Revenues and other funds provided for in the Master Agreement and the Installment Purchase Agreement, and does not constitute a debt of the District or of the State, or of any political subdivision thereof, in contravention of any constitutional or statutory debt limitation or restriction. Neither the faith and credit nor the taxing power of the District or the State or any political subdivision thereof, is pledged to the payment of the Installment Payments, or the interest thereon, or other payments required to be made under the Installment Purchase Agreement. See "Security and Sources of Payment for the Certificates (2000 Refunding Project)" herein. The Certificates (2000 Refunding Project) The Certificates (2000 Refunding Project) will be prepared in the form of fully registered Certificates (2000 Refunding Project) in Authorized Denominations. The Certificates (2000 Refunding Project) will initially bear interest at the Daily Rate Mode and while in a Daily Rate Mode or Weekly Rate Mode, will be delivered in the denomination of $100,000 and whole multiples thereof, except that one Series 2000 Certificate may be in the amount of $100,000 and a whole multiple of $5,000 in excess thereof (each an "Authorized Denomination"). So long as the Certificates (2000 Refunding Project) are in the DTC book-entry system, the interest, principal, purchase price and prepayment premiums, if any, due with respect to the Certificates (2000 Refunding Project) will be payable by the Trustee, or its agent, to DTC or its nominee. DTC, in turn, will make payments pursuant to its procedures as described under Appendix D -"Book-Entry System" herein. Book-Entry System The Certificates (2000 Refunding Project) will be executed and delivered in book-entry form only and, when delivered, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"), which will act as securities depository for the 3 4687v2 Certificates (2000 Refunding Project). Individual purchases of the Certificates (2000 Refunding Project) will be made in book-entry form only. Purchasers of the Certificates (2000 Refunding Project) will not receive certificates representing their ownership interests in the Certificates (2000 Refunding Project) purchased. Principal and interest payments on the Certificates (2000 Refunding Project) are payable directly to DTC by the Trustee. Upon receipt of payments of principal and interest, DTC will in turn distribute such payments to the beneficial Owners of the Certificates (2000 Refunding Project). See "The Certificates (2000 Refunding Project)-General" and Appendix D-"Book-Entry System." Additional Obligations In addition to the Certificates (2000 Refunding Project) and the Outstanding Senior Obligations, the District may at any time incur additional Obligations payable on a parity or on a subordinate basis to the payment by the District of the Installment Payments upon satisfaction of conditions provided in the Master Agreement. See "Security and Sources of Payment for the Certificates (2000 Refunding Project) - Limitations on Issuance of Additional Obligations" herein. Reserve Fund The Trust Agreement provides for the funding of the Reserve Fund in an amount equal to the Reserve Requirement, which is defined as an amount equal to the least of (i) the maximum amount of remaining Installment Payments, and the interest thereon, coming due in any one year; (ii) I 0% of the proceeds of the Certificates (2000 Refunding Project); or (iii) 125% of the average amount of remaining Installment Payments, and the interest thereon, coming due in each year. Amounts in the Reserve Fund may be used to pay principal of and interest with respect to the Certificates (2000 Refunding Project) to the extent that amounts in the Principal Account and Interest Account are insufficient therefor. A portion of the proceeds of the Certificates (2000 Refunding Project) will be deposited into the Reserve Fund sufficient to satisfy the Reserve Requirement as defined in the Trust Agreement. See Appendix C - "Summary of Principal Legal Documents-Trust Agreement." Interest Rate Modes The Certificates (2000 Refunding Project) will initially bear interest at the Daily Rate Mode. Upon satisfaction of certain conditions provided in the Trust Agreement, the Certificates (2000 Refunding Project) may be converted to the Weekly Rate Mode, the Extended Rate Mode or the Fixed Rate Mode (each, a "Mode."). Interest on the Certificates (2000 Refunding Project) during the Daily Rate Mode and Weekly Rate Mode will be payable on the first Business Day of each calendar month (each, an "Interest Payment Date"). See "The Certificates (2000 Refunding Project)" herein. Optional Tender Right While the Daily Rate Mode is in effect, Owners of Certificates (2000 Refunding Project) (other than Bank Certificates) may elect to have their Certificates (2000 Refunding Project) (or portions thereof in Authorized Denominations) purchased at a purchase price equal to the principal amount thereof, without premium, plus any accrued but unpaid interest to the Purchase Date ("Purchase Price") on any Business Day upon delivery of a written notice of tender meeting the requirements set forth in the Trust Agreement to the Remarketing Agent and the Trustee not later than 9:45 a.m. (New York City time) on such Business Day. 4 4687v2 While the Weekly Rate Mode is in effect, Owners of Certificates (2000 Refunding Project) (other than Bank Certificates) may elect to have their Certificates (2000 Refunding Project) (or portions thereof in Authorized Denominations) purchased at the Purchase Price on any Business Day upon delivery of a written notice of tender meeting the requirements set forth in the Trust Agreement to the Remarketing Agent and the Trustee not later than 5:00 p.m. (New York City time) on a Business Day not less than seven days prior to the Purchase Date. See "The Certificates(2000 Refunding Project) -Optional Tender Provisions". Redemption and Mandatory Tender Provisions The Certificates (2000 Refunding Project) will be subject to mandatory sinking fund and optional prepayment prior to maturity as more fully described herein. See "The Certificates (2000 Refunding Project) -Prepayment Provisions" herein. The Certificates (2000 Refunding Project) are also subject to mandatory tender for purchase in certain circumstances, including conversion to a different Mode, all as more particularly described under the caption "The Certificates (2000 Refunding Project) -Mandatory Tender Provisions" herein. Standby Certificate Purchase Agreement Subject to certain termination events upon an Event of Default, payment of the Purchase Price of the Certificates (2000 Refunding Project) will be funded by the Standby Certificate Purchase Agreement, dated as of 1, 2000 (the "Standby Certificate Purchase Agreement") to be entered into by and between the District and Dexia Credit Local de France (the "Bank"). The Standby Certificate Purchase Agreement is subject to termination upon notice to the Owners of mandatory tender for purchase under certain circumstances as provided in the Standby Certificate Purchase Agreement. See "The Certificates (2000 Refunding Project) -Mandatory Tender Provisions" and "Standby Certificate Purchase Agreement" herein. The Standby Certificate Purchase Agreement relates only to the Certificates (2000 Refunding Project) and will not, under any circumstances, provide for the payment of principal and interest evidenced by, or the Purchase Price of, Additional Obligations or Outstanding Senior Obligations. Tax Matters In the opinion of Orrick, Herrington & Sutcliffe LLP, Special Counsel, based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, compliance with certain covenants, interest evidenced by the Certificates (2000 Refunding Project) is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 and is exempt from State personal income taxes. In the further opinion of Special Counsel, interest evidenced by the Certificates (2000 Refunding Project) is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes, although Special Counsel observes that such interest is included in adjusted current earnings in calculating corporate alternative minimum taxable income. Special Counsel expresses no opinion regarding any other tax consequences related to the ownership or disposition of, or the accrual or receipt of interest evidenced by, the Certificates (2000 Refunding Project). See "Tax Matters" and see the proposed form of opinion of Special Counsel set forth in Appendix E herein. Miscellaneous 5 4687v2 The Certificates (2000 Refunding Project) will be offered when, as and if executed and delivered, and received by the Underwriter, subject to the approval as to their legality by Special Counsel and certain other conditions. It is anticipated that the Certificates (2000 Refunding Project) in definitive form will be available for delivery to OTC on or about , 2000. The Certificates (2000 Refunding Project) are initially exempt from the rules of the Securities and Exchange Commission relating to continuing disclosure of annual financial information and certain material events. The District's Comprehensive Annual Financial Reports are available upon request from Gary Streed, Director of Finance, Orange County Sanitation District, 10844 Ellis A venue, Fountain Valley, California 92708-7018. The descriptions herein of the Trust Agreement, the Master Agreement, the Installment Purchase Agreement and the Standby Certificate Purchase Agreement and any other agreements relating to the Certificates (2000 Refunding Project) are qualified in their entirety by reference to such documents. Copies of the documents are on file and available for inspection at the corporate trust office of the Trustee at [725 S. Figueroa Street, Suite 3100, Los Angeles, California 90017-540 I]. All capitalized terms used in this Official Statement and not otherwise defined herein have the same meanings as in the Trust Agreement, the Master Agreement and the Installment Purchase Agreement. See Appendix C - "Summary of Principal Legal Documents [-Trust Agreement," and "-Master Agreement"] for definitions of certain words and terms used but not otherwise defined herein. PLAN OF REFUNDING To finance the acquisition, construction and installation costs of certain improvements to the District's Wastewater System, the District caused the execution and delivery of its (i) Certificates of Participation (Capital Improvement Program, 1990-92 Series A) in the original principal amount of $100,000,000(the"1990 Series A Certificates"), of which $83,300,000 currently remains outstanding; (ii) Certificates of Participation (Capital Improvement Program, 1990-92 Series C) in the original principal amount of $98,500,000 (the "1992 Series C Certificates"), of which $86,200,000 currently remains outstanding; and (iii) Certificates of Participation (Capital Improvement Program, 1990-92 Series B) in the original principal amount of $117,550,000 (the "1991 Series B Certificates"). 1991 Series B Certificates in the principal amount of $86,255,000 were refunded in two series of certificates of participation referred to as Outstanding Senior Obligations in this Official Statement. The District plans to current refund the 1990 Series A Certificates and the 1992 Series C Certificates and to advance refund the remaining $18,695,000 principal amount of 1991 Series B Certificates with a portion of the proceeds of the Certificates (2000 Refunding Project). Such refunded portion of the 1991 Series B Certificates, the 1992 Series A Certificates and the 1992 Series C Certificates are referred to as the "Refunded Certificates." See "Financial Obligations -Existing Indebtedness" herein for additional information regarding the Outstanding Senior Obligations. Upon delivery of the Certificates (2000 Refunding Project), a portion of the proceeds, together with certain other amounts will be deposited in an escrow fund (the "Escrow Fund") established under the Escrow Agreement, dated as of I, 2000 (the "Escrow Agreement"), by and among the District, the Corporation and [ ] as escrow agent for the [Refunded Certificates] thereunder. Moneys in the Escrow Fund will be invested in direct general obligations of, or obligations on which the payment of the principal of and interest are unconditionally guaranteed by the United States of America, the interest on and principal of which will be sufficient to pay the principal and interest evidenced by the 1991 Series B Certificates due to and including August 1, 2001, to pay the prepayment price of the 1991 Series B Certificates on August 1, 2001, to pay the principal and interest evidenced by the 1992 Series A 6 4687v2 Certificates and the 1992 Series C Certificates due to and including and to pay the prepayment price of the 1992 Series A Certificates and the 1992 Series C Certificates on . See "Verification of Arithmetical and Mathematical Computations" herein. The table below sets forth the estimated sources and uses of the proceeds of the Certificates (2000 Refunding Project). Estimated Sources and Uses of Proceeds of the Certificates (2000 Refunding Project) Sources Certificate Proceeds Existing Funds Total Sources Uses Escrow Fund for Refunded Certificates Reserve Fund Costs oflssuance11 l Total Uses $ $ ======- $ $ ====== <1l Costs of issuance include, among other things, fees of rating agencies, underwriter's discount, initial fees of the Trustee and the Escrow Agent, initial fees for the Standby Certificate Purchase Agreement and Bond Counsel fees. THE CERTIFICATES (2000 REFUNDING PROJECT) General The Certificates (2000 Refunding Project) will be prepared in the form of fully registered Certificates (2000 Refunding Project) in Authorized Denominations. The Certificates (2000 Refunding Project) will initially bear interest at the Daily Rate Mode and while in a Daily Rate Mode or Weekly Rate Mode, will be delivered in the denomination of $100,000 and whole multiples thereof, except that one Series 2000 Certificate may be in the amount of $100,000 and a whole multiple of $5,000 in excess thereof. So long as the Certificates (2000 Refunding Project) are in the DTC book-entry system, the interest, principal and prepayment premiums, if any, due with respect to the Certificates (2000 Refunding Project) will be payable by the Trustee, or its agent, to DTC or its nominee. DTC, in tum, will make payments pursuant to its procedures as described under Appendix D-"Book-Entry System" herein. The Certificates (2000 Refunding Project) will be dated the date of initial delivery and will mature on August I, 2019. During the Daily Rate Mode and Weekly Rate Mode, payment of interest with respect to the Certificates (2000 Refunding Project) will be payable on the first Business Day of each calendar month commencing on August 1, 2000. While the Certificates (2000 Refunding Project) are in the Daily Rate Mode or the Weekly Rate Mode, interest evidenced by the Certificates (2000 Refunding Project) will be computed on the basis of the actual days elapsed and a 365 or 366-day year, as applicable. Upon satisfaction of the requirements provided in the Trust Agreement, the Certificates (2000 Refunding Project) may be converted to the Weekly Rate Mode, Extended Rate Mode or the Fixed Rate Mode as provided in the Trust Agreement. Notwithstanding the foregoing, the interest on Installment Payments evidenced by Bank Certificates shall accrue at the Bank Certificate Rate, calculated as 7 4687v2 provided in the Trust Agreement. See Appendix C -"Summary of Principal Legal Documents -Trust Agreement." The Certificates (2000 Refunding Project) will initially bear interest in the Daily Rate Mode until converted to another Mode as provided in the Trust Agreement or until becoming Bank Certificates (at which time they will evidence interest at the Bank Certificate Rate until such time as they are no longer Bank Certificates). Daily Rate Periods will be for one day. Weekly Rate Periods will be from Wednesday of each week to but excluding Wednesday of the following week, except that (i) in the case of a conversion of the Certificates (2000 Refunding Project) to a Weekly Rate Mode from an Extended Rate Mode, the initial Weekly Rate Period upon such conversion shall be from the Conversion Date to but excluding Wednesday of the following week, (ii) in the case of a conversion of the Certificates (2000 Refunding Project) from a Weekly Rate Mode to an Extended Rate Mode, the last Weekly Rate Period will end on the Conversion Date, and (iii) in the case the Weekly Rate Mode is in effect as of the stated Principal Payment Date for the Certificates (2000 Refunding Project), the last Weekly Rate Period will end on such stated Principal Payment Date. The Remarketing Agent will determine the Daily Rate for each Daily Rate Period that is a Business Day not later than 9:45 a.m. (New York City time) on such Business Day. The Daily Rate for any Daily Rate Period that is not a Business Day shall be the Daily Rate established for the immediately preceding Business Day. The Remarketing Agent will determine the Weekly Rate for each Weekly Rate Period not later than 4:00 p.m. (New York City time) on the last Business Day which is immediately prior to the commencement date of the Weekly Rate Period to which such Weekly Rate relates. The Daily Rate or Weekly Rate so determined will be the lowest rate of interest which, in the judgment of the Remarketing Agent, would cause the Certificates (2000 Refunding Project) to produce as nearly as practicable a bid equal to the principal evidenced thereby, plus accrued interest evidenced thereby, under prevailing market conditions as of the date of determination of such Daily Rate or Weekly Rate. Notwithstanding the foregoing, in no event will any Daily Rate or Weekly Rate exceed the Maximum Rate. Notice of [Daily Rates] and Weekly Rates shall be given by the Remarketing Agent to the Trustee by telephone (followed by notice in writing by an authorized officer of the Remarketing Agent) not later than 5:00 p.m. on the date of determination. The Trustee shall inform the Owners of the Certificates (2000 Refunding Project) and the Bank of each Daily Rate and Weekly Rate upon request. All determinations of Daily Rates and Weekly Rates as provided in the Trust Agreement will be conclusive and binding upon the District, the Trustee, the Bank and the Owners of the Certificates (2000 Refunding Project). The District, the Trustee, the Bank and the Remarketing Agent will not be liable to the Owner of any Series 2000 Certificate for failure to give any notice required above or for failure of the Owner of any Series 2000 Certificate to receive any such notice. Optional Tender Provisions Optional Tenders While Daily Rate Mode in Effect. While the Daily Rate Mode is in effect, Owners of Certificates (2000 Refunding Project) (other than Bank Certificates) may elect to have their Certificates (2000 Refunding Project) (or portions thereof in Authorized Denominations) purchased at the Purchase Price on any Business Day upon delivery of a written notice of tender meeting the requirements set forth in the Trust Agreement to the Remarketing Agent and the Trustee not later than 9:45 a.m. (New 8 4687v2 York City time) on such Business Day. The determination of the Trustee as to whether a notice of tender has been properly delivered in accordance with the Trust Agreement will be conclusive and binding upon the Owner. Not later than 10:00 a.m. on the date of receipt of any such notice of tender, the Trustee [Remarketing Agent] will notify the Bank of the principal evidenced by Certificates (2000 Refunding Project) or portions thereof to be tendered and remarketed and that such Certificates (2000 Refunding Project) or portions thereof are to be tendered and remarketed on such date. Such notice will be given by telephone, telegram, telecopy, telex or other similar communication and will be promptly confirmed in writing. The Remarketing Agent will offer for sale and use its best efforts to find purchasers for all Certificates (2000 Refunding Project) or portions thereof properly tendered. The terms of any sale by the Remarketing Agent of tendered Certificates (2000 Refunding Project) will provide for the purchase of the remarketed Certificates (2000 Refunding Project) at the Purchase Price and the payment of such Purchase Price to the Trustee by the Remarketing Agent in immediately available funds against delivery of the remarketed Certificates (2000 Refunding Project) to the Trustee at or before 11 :30 a.m. on the Purchase Date. Notwithstanding the foregoing, the Remarketing Agent will not offer for sale any Series 2000 Certificate if (i) notice of any optional or mandatory prepayment or any conversion from the Daily Rate Mode to another Mode has been given to the Owner of such Series 2000 Certificate pursuant to the provisions of the Trust Agreement, or (ii) any defeasance of such Series 2000 Certificate in accordance with the provisions of the Trust Agreement has occurred, unless the Remarketing Agent has advised the person in writing to whom the offer is made of such occurrence and the effect of the same on the rights of the Owner of such Series 2000 Certificate, including, but not limited to, the rights of such Owner to tender such Series 2000 Certificate, as described in the conversion notice from the Trustee to the Owner of such Series 2000 Certificate. Optional Tenders While Weekly Rate Mode in Effect. While the Weekly Rate Mode is in effect, Owners of Certificates (2000 Refunding Project) (other than Bank Certificates) may elect to have their Certificates (2000 Refunding Project) (or portions thereof in Authorized Denominations) purchased at the Purchase Price on any Business Day upon delivery of a written notice of tender meeting the requirements set forth in the Trust Agre.ement to the Remarketing Agent and the Trustee not later than 5 :00 p.m. (New York City time) on a Business Day not Jess than seven days prior to the Purchase Date. Not later than 4:30 p.m. on the Business Day immediately following the date of receipt of any notice of tender, the Trustee [Remarketing Agent] will notify the Bank of the principal evidenced by Certificates (2000 Refunding Project) or portions thereof to be tendered and remarketed and the date on which such Certificates (2000 Refunding Project) or portions thereof are to be tendered and remarketed. Such notice will be given by telephone, telegram, telecopy, telex or other similar communication and will be promptly confirmed in writing. The Remarketing Agent will offer for sale and use its best efforts to find purchasers for all Certificates (2000 Refunding Project) or portions thereof properly tendered. The terms of any sale by the Remarketing Agent of tendered Certificates (2000 Refunding Project) will provide for the purchase of the remarketed Certificates (2000 Refunding Project) at the Purchase Price and the payment of such Purchase Price to the Trustee by the Remarketing Agent in immediately available funds against delivery of the remarketed Certificates (2000 Refunding Project) to the Trustee at or before 11:30 a.m. on the Purchase Date. Notwithstanding the foregoing, the Remarketing Agent will not offer for sale any Series 2000 Certificate if (i) notice of any optional or mandatory prepayment or any conversion from the Weekly Rate 9 4687v2 Mode to another Mode has been given to the Owner of such Series 2000 Certificate pursuant to the provisions of the Trust Agreement, or (ii) any defeasance of such Series 2000 Certificate in accordance with the provisions of the Trust Agreement has occurred, unless the Remarketing Agent has advised the person in writing to whom the offer is made of such occurrence and the effect of the same on the rights of the Owner of such Series 2000 Certificate, including, but not limited to, the rights of such Owner to tender such Series 2000 Certificate, as described in the conversion notice from the Trustee to the Owner of such Series 2000 Certificate. Mandatory Tender Provisions On Conversion Dates. The Certificates (2000 Refunding Project) will be subject to mandatory tender for purchase on each Conversion Date, and the Owners shall not be entitled to retain such Certificates (2000 Refunding Project). Notice of conversion to another Mode will be given to the Owners in the manner provided with respect to optional conversion between Variable Rate Modes in the Trust Agreement. Notice of conversion to the Fixed Rate Mode will be given to the Owners in the manner provided with respect to conversion to the Fixed Rate Mode therein. The provisions with respect to purchase of tendered Certificates (2000 Refunding Project) therein will be applicable to the purchase, payment for and registration and delivery of tendered Certificates (2000 Refunding Project). Any Series 2000 Certificate not tendered for purchase on a Conversion Date, as required in the Trust Agreement will be deemed tendered and purchased on such Conversion Date, and thereafter the Owner thereof will have no further rights under the Trust Agreement except to receive such Purchase Price. After Each Extended Rate Period The Certificates (2000 Refunding Project) will be subject to mandatory tender for purchase on the day following the last day of each Extended Rate Period, and the Owners will not be entitled to retain such Certificates (2000 Refunding Project). The Trustee will, not less than 10 days prior to each such mandatory tender date, mail by first class mail, postage prepaid, a notice to all of the Owners of the Certificates (2000 Refunding Project), which notice will set forth mandatory tender date and state (i) that the Certificates (2000 Refunding Project) are subject to mandatory tender for purchase (without the right to retain) on such mandatory tender date at a Purchase Price equal to the principal evidenced thereby plus accrued interest evidenced thereby, (ii) that the Certificates (2000 Refunding Project) will be deemed purchased on such mandatory tender date, and thereafter the Owner will have no further rights under the Trust Agreement except to receive such Purchase Price, and (iii) that on and after the last Business Day that is at least four days prior to such mandatory tender date, the Trustee, upon request of an Owner, will inform such Owner of the duration of the Extended Period commencing on such mandatory tender date and the Extended Rate relating thereto. The provisions of the Trust Agreement will be applicable to the purchase, payment for and registration and delivery of the Certificates. Any Series 2000 Certificate not tendered for purchase on such a mandatory tender date, as required by the Trust Agreement, will be deemed tendered and purchased on such mandatory tender date, and thereafter the Owner thereof will have no further rights under the Trust Agreement except to receive such Purchase Price. Upon Expiration or Substitution of Liquidity Facility or Event of Default with Respect Thereto. Prior to conversion of the Certificates (2000 Refunding Project) to the Fixed Rate Mode, the Certificates (2000 Refunding Project) shall be subject to mandatory tender for purchase at the Purchase Price: (i) Liquidity Facility; 4687v2 on the last Business Day which is at least five days prior to expiration of the 10 (ii) on the fifth Business Day following the Trustee's receipt of a Notice of Mandatory Tender from the Bank; and (iii) if the Certificates (2000 Refunding Project) are in the Daily Rate Mode or the Weekly Rate Mode, on the last Business Day which is at least five days prior to the substitution of a Substitute Liquidity Facility for the Standby Certificate Purchase Agreement pursuant to the provisions of the Trust Agreement. The Owners may not elect to retain their Certificates (2000 Refunding Project) in the event of mandatory tender upon expiration or substitution of liquidity facility or event of default, as described above. Notice of Mandatory Purchase. Notice of mandatory tender of the Certificates (2000 Refunding Project), stating the date on which and time at which the Certificates (2000 Refunding Project) are required to be tendered for purchase, will be given by first class mail, postage prepaid by the Trustee to the Owners of the Certificates (2000 Refunding Project) not less than five Business Days prior to the date on which the Certificates (2000 Refunding Project) are to be purchased pursuant to the Trust Agreement or as soon as practicable after the Trustee's receipt of a Notice of Mandatory Tender from the Bank, with respect to a purchase pursuant to paragraph (ii) above. A copy of such notice will be sent to the District, the Remarketing Agent and the Bank. Notice having been so given, such mandatory tender will occur on the date provided in such notice whether or not a Substitute Liquidity Facility is provided after such initial notice has been given. Tender and Purchase of Certificates (2000 Refunding Project) Before 4:00 p.m. on the Purchase Date and upon receipt by the Trustee of 100% of the aggregate Purchase Price of the tendered Certificates (2000 Refunding Project), the Trustee will pay the Purchase Price of such Certificates (2000 Refunding Project) to the Owners thereof at its Principal Office or by bank wire transfer. Such payments will be made in immediately available funds. Payments of such Purchase Price are to be made from the following sources in the order of priority indicated: (i) the proceeds of the sale of the Certificates (2000 Refunding Project) which have been remarketed by the Remarketing Agent; and (ii) moneys paid pursuant to draws on the Standby Certificate Purchase Agreement to pay the Purchase Price of Certificates (2000 Refunding Project). The Remarketing Agent will offer for sale and use its best efforts to find purchasers for all Certificates (2000 Refunding Project) or portions thereof properly tendered. The terms of any sale by the Remarketing Agent of tendered Certificates (2000 Refunding Project) will provide for the purchase of the remarketed Certificates (2000 Refunding Project) at the Purchase Price and the payment of such Purchase Price to the Trustee by the Remarketing Agent in immediately available funds against delivery of the remarketed Certificates (2000 Refunding Project) to the Trustee at or before 11 :30 a.m. on the Purchase Date. Notwithstanding the foregoing, the Remarketing Agent will not offer for sale any Series 2000 Certificate if (i) notice of any optional or mandatory prepayment or any conversion from the Weekly Rate Mode to another Mode has been given to the Owner of such Series 2000 Certificate pursuant to the provisions of the Trust Agreement, or (ii) any defeasance of such Series 2000 Certificate in accordance with the provisions of the Trust Agreement has occurred, unless the Remarketing Agent has advised the person in writing to whom the offer is made of such occurrence and the effect of the same on the rights of 11 4687v2 the Owner of such Series 2000 Certificate, including, but not limited to, the rights of such Owner to tender such Series 2000 Certificate, as described in the conversion notice from the Trustee to the Owner of such Series 2000 Certificate. Conversion to Other Modes Optional Conversion Between Variable Rate Modes. At the option of the District and upon delivery of an Opinion of Counsel to the effect that such conversion will not, in and of itself, adversely affect the exclusion from gross income of interest evidenced by the Certificates (2000 Refunding Project) for federal income tax purposes, all of the Certificates (2000 Refunding Project) may be converted from the then current Variable Rate Mode to another Variable Rate Mode as provided in the Trust Agreement. In the case of conversion from the Daily Rate Mode to another Variable Rate Mode, the Conversion Date shall be an Interest Payment Date for the Daily Rate Mode. In the case of conversion from the Weekly Rate Mode to another Variable Rate Mode, the Conversion Date shall be an Interest Payment Date for the Weekly Rate Mode. In the case of a conversion from the Extended Rate Mode to another Variable Rate Mode, the Conversion Date will be the day following the last day of the Extended Rate Period. Notwithstanding the delivery of notice of the conversion pursuant to the Trust Agreement, conversion to a new Variable Rate Mode will not take effect unless all of the conditions provided in the Trust Agreement are satisfied. Conversion to the Fixed Rate Mode. All of the Certificates (2000 Refunding Project) may be converted from the then current Variable Rate Mode to the Fixed Rate Mode at the option of the District as provided in the Trust Agreement. The Conversion Date for any conversion of Certificates (2000 Refunding Project) to the Fixed Rate Mode will be, if the conversion is from the Daily Rate Mode or the Weekly Rate Mode, the first Business Day of a calendar month, and, if the conversion is from the Extended Rate Mode, the day following the last day of an Extended Rate Period. Notwithstanding the delivery of notice of the conversion pursuant to the Trust Agreement, conversion to the Fixed Rate Mode will not take effect unless all of the conditions provided in the Trust Agreement are satisfied. Prepayment Provisions Optional Prepayment. While the Daily Rate Mode or the Weekly Rate Mode is in effect, the Certificates (2000 Refunding Project) will be subject to prepayment prior to their stated Principal Payment Date, on any Interest Payment Date, at the option of the District, as a whole or in part in Authorized Denominations, from and to the extent of prepaid Installment Payments paid pursuant to the Installment Purchase Agreement, at a prepayment price equal to the principal evidenced thereby, plus accrued interest evidenced thereby to the date fixed for prepayment, without premium. Mandatory Sinking Fund Account Prepayment. The Certificates (2000 Refunding Project) are subject to repayment prior to their stated Principal Payment Date, in part, from Mandatory Sinking Account Payments, on each August 1 specified below, at a prepayment price equal to the principal evidenced thereby, plus accrued interest evidenced thereby to the date fixed for prepayment, without premium. The principal evidenced by such Certificates (2000 Refunding Project) to be so prepaid and the dates therefor will be as follows: 12 4687v2 Mandatory Mandatory Date Sinking Fund Date Sinking Fund (August 1) Amount (August 1) Amount 2000 $ 2009 $ 2001 2010 2002 2011 2003 2012 2004 2013 2005 2014 2006 2015 2007 2016 2008 2017 2018 2019* *Stated Maturity Date. The amount of each such prepayment will be reduced as directed by the District, to the extent possible, in Authorized Denominations, in the event and to the extent of any and all prepayments of Certificates (2000 Refunding Project), other than prepayments made as described in the preceding paragraph. Selection of Certificates (2000 Refunding Project) for Prepayment. Whenever less than all the Outstanding Certificates (2000 Refunding Project) are to be prepaid on any one date, the Trustee shall select the Certificates (2000 Refunding Project) to be prepaid by lot in any manner that the Trustee deems fair and appropriate, which decision shall be final and binding upon the District, the Corporation and the Owners. Notwithstanding the foregoing, all Bank Certificates shall be prepaid prior to the prepayment of any other Certificates (2000 Refunding Project). The Trustee will promptly notify the District in writing of the numbers of the Certificates (2000 Refunding Project) so selected for prepayment on such date. For purposes of such selection, any Series 2000 Certificate may be prepaid in part in Authorized Denominations. Notice of Prepayment. When prepayment of Certificates (2000 Refunding Project) is authorized pursuant to the Trust Agreement, the Trustee will give notice, at the expense of the District, of the prepayment of the Certificates (2000 Refunding Project). The notice of prepayment will specify the Certificates (2000 Refunding Project) or designated portions thereof (in the case of prepayment of the Certificates (2000 Refunding Project) in part but not in whole) which are to be prepaid, the date of prepayment, the place or places where the prepayment will be made, including the name and address of any paying agent, the prepayment price, the CUSIP numbers assigned to the Certificates (2000 Refunding Project) to be prepaid, and the numbers of the Certificates (2000 Refunding Project) to be prepaid in whole or in part and, in the case of any Series 2000 Certificate to be prepaid in part only, the principal evidenced by such Certificates (2000 Refunding Project) to be prepaid. Such notice of prepayment will further state that on the specified date there shall become due and payable upon each Series 2000 Certificate or portion thereof being prepaid the prepayment price and that from and after such date interest evidenced thereby will cease to accrue and be payable. The actual receipt by an Owner or by any of the securities depositories or information services specified in the Trust Agreement of any notice of such prepayment shall not be a condition precedent to 13 4687v2 prepayment, and neither failure to receive such notice nor any defect therein shall affect the validity of the proceedings for the prepayment of such Certificates (2000 Refunding Project) or the cessation of interest evidenced thereby on the date fixed for prepayment. A certificate by the Trustee that notice of prepayment has been given to Owners or to any of the securities depositories or information services specified in the Trust Agreement as provided therein shall be conclusive as against all parties, and no Owner whose Series 2000 Certificate is called for prepayment may object thereto or object to the cessation of interest evidenced thereby on the fixed prepayment date by any claim or showing that said Owner failed to actually receive such notice of prepayment. If notice of prepayment has been duly given as aforesaid and funds for the payment of the prepayment price of the Certificates (2000 Refunding Project) to be prepaid are held by the Trustee, then on the Prepayment Date designated in such notice, the Certificates (2000 Refunding Project) so called for prepayment will become payable at the prepayment price specified in such notice; and from and after the date so designated interest evidenced by the Certificates (2000 Refunding Project) so called for prepayment will cease to accrue, such Certificates (2000 Refunding Project) will cease to be entitled to any benefit or security under the Trust Agreement and the Owners of such Certificates (2000 Refunding Project) will have no rights in respect thereof except to receive payment of the prepayment price; and such moneys will be pledged to such prepayment. The Trustee will, upon surrender for payment of any of the Certificates (2000 Refunding Project) to be prepaid, pay such Certificates (2000 Refunding Project) at the prepayment price thereof. SECURITY AND SOURCES OF PAYMENT FOR THE CERTIFICATES (2000 REFUNDING PROJECT) Installment Payments Pursuant to the Installment Purchase Agreement, the acquisition, construction and installation of certain improvements to the District's Wastewater System (the "Project") will be acquired by the District from the Corporation. The District has covenanted to, subject to any rights of prepayment under the Installment Purchase Agreement and Master Agreement, pay to the Corporation, solely from Net Revenues and from no other sources, the Purchase Price in Installment Payments, with interest thereon as provided in the Installment Purchase Agreement and Master Agreement. The obligation of the District to make the Installment Payments, and payments of interest thereon, and other payments required to be made by it under the Installment Purchase Agreement and Master Agreement, solely from Net Revenues, is absolute and unconditional, and until such time as the Installment Payments, payments of interest thereon, and such other payments shall have been paid in full (or provision for the payment thereof shall have been made pursuant to the Installment Purchase Agreement and Master Agreement), the District has covenanted that it will not discontinue or suspend any Installment Payments when due, whether or not the Project or any part thereof is operating or operable or has been completed, or its use is suspended, interfered with, reduced or curtailed or terminated in whole or in part, and such Installment Payments, payments of interest thereon, and other payments shall not be subject to reduction whether offset or otherwise and shall not be conditional upon the performance or nonperformance by any party of any agreement or any cause whatsoever. The District's obligation to make Installment Payments from Net Revenues is on a parity with the District's obligation to make payments with respect to its Outstanding Senior Obligations. See "-Net Revenues" below. Pursuant to the Trust Agreement, the Corporation has assigned to the Trustee for the benefit of the Owners of the Certificates (2000 Refunding Project) substantially all of its rights, title and interest in the Installment Purchase Agreement, including its right to receive Installment Payments and the interest thereon. 14 4687v2 The obligation of the District to pay the Installment Payments, and the interest thereon, and other payments required to be made by it under the Installment Purchase Agreement and Master Agreement, is a special obligation of the District payable, in the manner provided in the Installment Purchase Agreement, solely from Net Revenues and other funds provided for in the Trust Agreement, and does not constitute a debt of the District, the State or of any political subdivision thereof, in contravention of any constitutional or statutory debt limitation or restriction. Neither the faith and credit nor the taxing power of the District, the State or any political subdivision thereof, is pledged to the payment of the Installment Payments, or the interest thereon, or other payments required to be made under the Installment Purchase Agreement. See "Security and Sources of Payment for the Certificates (2000 Refunding Project)" herein. Net Revenues The District is obligated to make Installment Payments solely from Net Revenues as provided in the Master Agreement, which consist of Revenues remaining after payment of costs paid by the District for maintaining and operating the Wastewater System ("Maintenance and Operation Costs"). Revenues are defined in the Master Agreement to mean, for any period, all income and revenue received by the District during such period from the operation or ownership of the Wastewater System, determined in accordance with generally accepted accounting principles, including all fees and charges received by the District during such period for the services of the Wastewater System, investment income received during such period (but only to the extent that such investment income is generally available to pay costs with respect to the Wastewater System, including Maintenance and Operation Costs), Net Proceeds of business interruption insurance received during such period, Ad Valorem Taxes received during such period, payments under the Agreement Acquiring Ownership Interests, Assigning Rights and Establishing Obligations, entered into on February 13, 1986, and amendment No. 1 thereto dated December 10, 1986, by and between predecessor County Sanitation District No. 14 of Orange County and the Irvine Ranch Water District (the "IRWD Agreement") received during such period and all other money received during such period howsoever derived by the District from the operation or ownership of the Wastewater System or arising from the Wastewater System (including any standby or availability charges), but excluding (a) Capital Facilities Capacity Charges, (b) payments received under Financial Contracts, and ( c) refundable deposits made to establish credit and advances or contributions in aid of construction (which, for purposes of he Master Agreement, shall not include payments under the IRWD Agreement); provided, however, that (i) Revenues shall be increased by the amounts, if any, transferred during such period from the Rate Stabilization Account to the Revenue Account and shall be decreased by the amounts, if any, transferred during such period from the Revenue Account to the Rate Stabilization Account, and (ii) Revenues shall include Capital Facilities Capacity Charges collected during such period to the extent that such Capital Facilities Capacity Charges could be properly expended on a Capital Facilities Capacity Charges Eligible Project for which the proceeds of Subject Obligations were used or are available to be used. See "District Revenues -Additional Revenues" herein. The District's obligation to make the Installment Payments from its Net Revenues is on a parity with the District's obligation to make payments with respect to its other outstanding obligations described as Senior Obligations and all Reimbursement Obligations with respect to Senior Obligations, as provided in the Master Agreement. Pursuant to the Master Agreement, the District pledges all Net Revenues to the payment of the Senior Obligations and Reimbursement Obligations with respect to Senior Obligations, and the Net Revenues will not be used for any other purpose while any of the Senior Obligations or Reimbursement Obligations with respect to Senior Obligations remain unpaid; provided, however, that out of the Net Revenues there may be apportioned such sums for such purposes as are expressly permitted by the Master Agreement. This pledge shall constitute a first lien on the Net Revenues for the payment of the Senior Obligations and Reimbursement Obligations with respect to Senior Obligations. 15 4687v2 The term Senior Obligations, generally means all revenue bonds or notes (including bond anticipation notes and commercial paper) of the District authorized, executed, issued and delivered under and pursuant to applicable law, the Installment Purchase Agreement and all other contracts (including financial contracts) or leases of the District authorized and executed by the District under and pursuant to applicable law, the installment, lease or other payments under which are, in accordance with the provisions of the Master Agreement, payable from Net Revenues on a parity with the payments under the Master Agreement. The District may at any time incur Subordinate Obligations; provided, however, that prior to incurring such Subordinate Obligations, the District will have determined that the incurrence thereof will not materially adversely affect the District's ability to comply with the requirements of the Master Agreement. The District may at any time incur Reimbursement Obligations with respect to Subordinate Obligations. For a description of the District's Outstanding Senior Obligations and Subordinate Obligations, see "Financial Obligations -Existing Indebtedness" herein. The District may, in connection with the incurrence of Subordinate Obligations, pledge Net Revenues to the payment of Subordinate Obligations and Reimbursement Obligations with respect to Subordinate Obligations; provided, however, that such pledge, and any lien created thereby, shall be junior and subordinate to the pledge of, and lien on, Net Revenues for the payment of Senior Obligations and Reimbursement Obligations with respect to Senior Obligations. Rate Stabilization Account In order to avoid fluctuations in its fees and charges of the Wastewater System, from time to time the District may deposit in the Rate Stabilization Account from Net Revenues such amounts as the District deems necessary or appropriate. From time to time, the District may also transfer moneys from the Rate Stabilization Account to the Revenue Account to be used by the District, first to pay all Maintenance and Operations Costs as and when the same shall be due and payable. In addition, any such amount transferred from the Rate Stabilization Account to the Revenue Account by the District is included as Revenues for any period, but such transferred amount is excluded from determining Operating Revenues for any period. Revenues will be decreased by the amounts, if any, transferred from the Revenue Account to the Rate Stabilization Account. There are presently no funds in the Rate Stabilization Account. Allocation of Revenues In order to carry out and effectuate the pledge of Net Revenues under the Master Agreement as described above, the District agrees and covenants that all Operating Revenues received by the District will be deposited when and as received in the Revenue Account. Additionally, amounts may, from time to time as the District deems necessary or appropriate, be transferred from the Rate Stabilization Account and deposited in the Revenue Account, as described above under "-Rate Stabilization Account." The District will pay from the Revenue Account all Maintenance and Operations Costs (including amounts reasonably required to be set aside in contingency reserves for Maintenance and Operations Costs, the payment of which is not immediately required) as and when the same shall be due and payable. After having paid, or having made provisions for the payment of, Maintenance and Operations Costs, the District shall set aside and deposit or transfer, as the case may be, from the Revenue Account such amounts at such times as provided in the Master Agreement in the following order of priority: 16 4687v2 (1) Senior Obligation Payment Account; (2) Senior Obligation Reserve Funds; (3) Subordinate Obligation Payment Account; (4) Subordinate Obligation Reserve Funds; and (5) Rate Stabilization Account. Amounts required or permitted to be deposited or transferred as described in items 2, 3, 4 and 5 above, shall not be so deposited or transferred unless the District shall have determined that there will be sufficient Net Revenues available to make the required deposits or transfers on the dates on which such deposits or transfers are required to be made as described above. So long as the District has determined that Net Revenues will be sufficient to make all of the deposits or transfers required to be made pursuant to paragraphs 1, 2, 3, 4 and 5 above, on the dates on which such deposits or transfers are required to be made, Net Revenues on deposit in the Revenue Account may from time to time be used for any purpose for which the District funds may be legally applied. For additional information, see Appendix C - "Summary of Principal Legal Documents-Master Agreement." Rate Covenant Pursuant to the Master Agreement, the District will, to the extent permitted by law, fix, prescribe and collect fees and charges for the services of the Wastewater System which will be at least sufficient to yield during each Fiscal Year (a) Net Revenues equal to 125% of Debt Service on Senior Obligations for such Fiscal Year and (b) Net Operating Revenues equal to 100% of Debt Service on all Obligations for such Fiscal Year. The District may make adjustments from time to time in such fees and charges and may make such classification thereof as it deems necessary, but will not reduce the fees and charges then in effect unless the Revenues and Net Revenues from such reduced fees and charges will at all times be sufficient to meet the requirements of the Master Agreement. In addition, the District has covenanted in the Master Agreement to prepare and adopt an annual budget for the Wastewater System for each Fiscal Year. Such budget will set forth in reasonable detail the Revenues anticipated to be derived in such Fiscal Year and the expenditures anticipated to be paid or provided for therefrom in such Fiscal Year, including, without limitation, the amounts required to pay or provide for the payment of the Maintenance and Operations Costs during such Fiscal Year, the amounts required to pay or provide for the payment of Obligations during such Fiscal Year and the amounts required to pay or provide for the payment of all other claims or obligations required to be paid from Revenues in such Fiscal Year, and will show that Revenues and Net Revenues will be at least sufficient to satisfy the requirements of the Master Agreement. On or before September 1 of each Fiscal Year, commencing September 1, 2000, the District will file with the Trustee, as assignee of the Corporation, a copy of the adopted budget for such Fiscal Year. See Appendix C -"Summary of Principal Legal Documents -Master Agreement" for additional information. Reserve Fund The Trust Agreement provides for the funding of the Reserve Fund in an amount equal to the Reserve Requirement, which is defined as an amount equal to the least of (i) the maximum amount of 17 4687v2 remaining Installment Payments, and the interest thereon, coming due in any one year; (ii)l0% of the proceeds of the Certificates (2000 Refunding Project); or (iii) 125% of the average amount of remaining Installment Payments, and the interest thereon, coming due in each year. Amounts in the Reserve Fund may be used to pay principal of and interest with respect to the Certificates (2000 Refunding Project) to the extent that amounts in the Principal Account and Interest Account are insufficient therefor. A portion of the proceeds of the Certificates (2000 Refunding Project) will be deposited into the Reserve Fund sufficient to satisfy the Reserve Requirement as defined in the Trust Agreement. See Appendix C - "Summary of Principal Legal Documents -Trust Agreement." Limitations on Issuance of Additional Obligations Senior Obligations. The District may at any time incur Senior Obligations payable from Net Revenues as provided in the Master Agreement on a parity with all other Senior Obligations theretofore incurred but only subject to the following conditions under the Master Agreement: 4687v2 (1) Upon the incurrence of such Senior Obligations, no Event of Default shall be continuing under the terms of the Master Agreement; and (2) Subject to the provisions of the Master Agreement, the District shall have received either one of the following: (i) A written Certificate of the District certifying that, for a 12 consecutive calendar month period during the 24 consecutive calendar month period ending in the calendar month prior to the incurrence of such Senior Obligations (which 12 consecutive calendar month period shall be specified in such certificate or certificates); (A) Net Revenues, as shown by the books of the District, shall have amounted to at least 125% of Maximum Annual Debt Service on all Senior Obligations to be outstanding immediately after the incurrence of such Senior Obligations, and (B) Net Operating Revenues, as shown by the books of the District, shall have amounted to at least 100% of Maximum Annual Debt Service on all Obligations to be outstanding immediately after the incurrence of such Senior Obligations. For purposes of demonstrating compliance with the foregoing, Net Revenues and Net Operating Revenues may be adjusted for (x) any changes in fees and charges for the services of the Wastewater System which have been adopted and are in effect on the date such Senior Obligations are incurred, but which, during all or any part of such 12 consecutive calendar month period, were not in effect, (y) customers added to the Wastewater System subsequent to such 12 consecutive calendar month period but prior to the date such Senior Obligations are incurred, and (z) the estimated change in available Net Revenues and Net Operating Revenues which will result from the connection of existing residences or businesses to the Wastewater System within one year following completion of any project to be funded or any system to be acquired from the proceeds of such Senior Obligations; or 18 (ii) A certificate or certificates from one or more Consultants which, when taken together, project that, for each of the two Fiscal Years next succeeding the incurrence of such Senior Obligations; (A) Net Revenues will amount to at least 125% of Maximum Annual Debt Service on all Senior Obligations to be outstanding immediately after the incurrence of such Senior Obligations, and (B) Net Operating Revenues will amount to at least I 00% of Maximum Annual Debt Service on all Obligations to be outstanding immediately after the incurrence of such Senior Obligations. For purposes of demonstrating compliance with the foregoing, Net Revenues and Net Operating Revenues may be adjusted for (x) any changes in fees and charges for the services of the Wastewater System which have been adopted and are in effect on the date such Senior Obligations are incurred or will go into effect prior to the end of such two Fiscal Year period, (y) customers expected to be added to the Wastewater System prior to the end of such two Fiscal Year period, and (z) the estimated change in available Net Revenues and Net Operating Revenues which will result from the connection of existing residences or businesses to the Wastewater System within one year following completion of any project to be funded or any system to be acquired from the proceeds of such Senior Obligations. For purposes of preparing the certificate or certificates described above, the Consultant may rely upon financial statements prepared by the District that have not been subject to audit by an independent certified public accountant if audited financial statements for the period are not available. The provisions described above in paragraph (2) need not be complied with if the Senior Obligations being incurred are Short-Term Obligations excluded from the calculation of Assumed Debt Service pursuant to clause (H) of the definition thereof. See Appendix C -"Summary of Legal Documents -Definitions" herein. The determination of Net Revenues for use in the calculation described above is more fully described in Appendix C -"Summary of Principal Legal Documents -Master Agreement -Incurrence of Obligations" attached hereto. The provisions described in paragraph (2) above need not be complied with for such portion of such Senior Obligations incurred for the purpose of providing funds to refund or refinance such Obligations if (i) a portion (which may be all) of the Senior Obligations are incurred for the purpose of providing funds to refund or refinance any Obligations, (ii) upon such refunding or refinancing, debt service on such refunded or refinanced Obligations, or debt service on bonds, notes or other obligations of an entity other than the District, the debt service on which is payable from Obligation Payments for such Obligations (the "Related Bonds"), will no longer be included in the calculation of Assumed Debt Service either because such Obligations, or the Related Bonds of such Obligations, will have been paid in full or because such debt service is disregarded pursuant to clause (L) of the definition of Assumed Debt Service, and (iii) Assumed Debt Service in each Fiscal Year for the portion of such Senior Obligations incurred for the purpose of providing funds to refund or refinance such Obligations is less than or equal to 105% of Assumed Debt Service in such Fiscal Year for such Obligations being refunded or refinanced (assuming for such purposes that debt service on such refunded or refinanced Obligations, or debt service on the Related Bonds of such Obligations, is not disregarded pursuant to clause (L) of the definition of Assumed Debt Service). See Appendix C -"Summary of Principal Legal Documents -Master Agreement" attached hereto for additional information. 19 4687v2 The District may at any time incur Reimbursement Obligations with respect to Senior Obligations. Subordinate Obligations. The District may at any time incur Subordinate Obligations upon satisfaction of the conditions provided in the Master Agreement. See Appendix C -"Summary of Legal Documents -Master Agreement" herein for a description of such conditions. Insurance The District will procure and maintain or cause to be procured and maintained casualty insurance on the Wastewater System with responsible insurers, or provide self insurance (which may be provided in the form of risk-sharing pools), in such amounts and against such risks (including accident to or destruction of the Wastewater System) as are usually covered in connection with facilities similar to the Wastewater System. The District will procure and maintain such other insurance which it shall deem advisable or necessary to protect its interests and the interests of the Corporation. See Appendix C - "Summary of Principal Legal Documents -Master Agreement" herein. Swap Agreement The District, PaineWebber Trading Inc. ("Paine Webber") and (the "Contingent Swap Provider") will enter into a Swap Agreement dated as of __ , 2000 (the "Swap Agreement") with respect to$ principal amount of the Certificates (2000 Refunding Project) pursuant to which the District will be obligated to the Swap Provider (or the Contingent Swap Provider in the event of an event of default or termination event with respect to PaineWebber under the Swap Agreement) for a fixed payment and the Swap Provider (or the Contingent Swap Provider) will be obligated to the District for an amount approximately equal to the Variable Rate on the Certificates (2000 Refunding Project) through August 1, 2001. The District's obligations under the Swap Agreement, including its obligations for any amounts due upon and following the occurrence of a termination event or an event of default under the Swap Agreement are on a parity with its obligations with respect to the Certificates (2000 Refunding Project) and its Outstanding Senior Obligations. Allocation of Installment Payments The table below sets forth the estimated Installment Payments, together with the estimated interest thereon, assuming the only prepayments made are the mandatory prepayments described under "The Certificates (2000 Refunding Project) -Prepayment Provisions" herein. Also set forth are the payments due on Outstanding Senior Obligations. 20 4687v2 Installment Payment Date 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 $ Estimated Installment Payments of the District Installment Payments(ll Principal Interest $ Outstanding Senior Obligation Payments<2l Princi2al Interest 5,290,000.00 4,584,862.50 5,570,000.00 8,879,595.00 6,125,000.00 8,573,925.00 6,610,000.00 8,237,452.50 7,140,000.00 7,874,557.50 11,955,000.00 7,482,742.50 12,665,000.00 6,866, 760.00 13,465,000.00 6,213,847.50 14,260,000.00 5,519,010.00 15,210,000.00 4,729,065.00 16,165,000.00 3,886,395.00 5,295,000.00 2,990,722.50 7,170,000.00 2,698,335.00 20,240,000.00 2,302,380.00 8,200,000.00 1,181,040.00 8,600,000.00 807,120.00 9, 100,000.00 414,960.00 Total $ 9,874,862.50 14,449,595.00 14,698,925 .00 14,847,452.50 15,014,557.50 19,437,742.50 19,531, 760.00 19,678,847.50 19,779,010.00 19,939,065.00 20,051,395.00 8,285,722.50 9,868,335.00 22,542,3 80.00 9,381,040.00 9,407,120.00 9,514,960.00 <1l Based on an assumed interest rate of 4% per annum, except that the interest rate with respect to$ of the Certificates (2000 Refunding Project) through August 1, 2001, is calculated at the interest rate swap rate of __ %. The figures set forth are rounded and, therefore, the totals may not add precisely. <2l Reflects combined debt service on Outstanding Senior Obligations based on long-dated interest rate swap rate of 5.55% for the 1992 Refunding Certificates and long-dated interest rate swap rate of 4.56% for the 1993 Refunding Certificates. See "Financial Obligations -Existing Indebtedness" herein. STANDBY CERTIFICATE PURCHASE AGREEMENT The following is a summary of certain provisions of the Standby Certificate Purchase Agreement. This summary does not purport to be comprehensive. The Standby Certificate Purchase Agreement relates only to the Certificates (2000 Refunding Project) and will not, under any circumstances, provide for the payment of the Purchase Price of Additional Obligations or any Outstanding Senior Obligations. Reference should be made to the Standby Certificate Purchase Agreement for its complete terms. Capitalized terms used under this heading not defined elsewhere in this Official Statement will have the meanings set forth in the Standby Certificate Purchase Agreement. 21 4687v2 Events of Default The occurrence of any of the following events (including the expiration of any specified time) shall constitute an "Event of Default," unless waived by the Bank in writing: (i) failure of the District to pay when due any amount due under the Standby Certificate Purchase Agreement or under the Trust Agreement, the Master Agreement, the Installment Purchase Agreement, the Custody Agreement, the Remarketing Agreement, the Certificates (2000 Refunding Project) and any exhibits, instruments or agreements relating thereto (the "Related Documents"); (ii) the District shall fail to observe or perform certain specified covenants or agreements contained in the Standby Certificate Purchase Agreement; (iii) failure of the District to observe or perform any of the covenants, conditions or provisions of the Standby Certificate Purchase Agreement (other than as specified in (i) and (ii) above) and to remedy such failure within thirty (30) days after receipt by the District of written notice of such failure; (iv) any representation or warranty made by the District herein, in any Related Document or in any certificate, financial or other statement furnished by the District pursuant to the Standby Certificate Purchase Agreement shall prove to have been untrue or incomplete in any material respect when made; (v) default by the District in the payment of amounts owed by it in respect of the Certificates or in respect of the principal of or interest on any of its Certificates (2000 Refunding Project) or default by the District in the payment of any Debt (as defined in the Standby Certificate Purchase Agreement) in an aggregate amount in excess of $1,000,000 (or, with respect to any Debt owed to the Bank, in any amount), as and when the same shall become due, or default under any mortgage, agreement or other instrument under or pursuant to which such Debt is incurred or issued, and continuance of such default beyond the period of grace, if any, allowed with respect thereto which, in any such case, would give rise to the right of acceleration of any such Certificate (2000 Refunding Project) or Debt; (vi)any event of default shall have occurred and be continuing under any Related Document; (vii) entry or filing of any judgment, writ or warrant of attachment or of any similar process in an amount in excess of $1,000,000 against the District or against any of its property and which is of such consequence as will impair the ability of the District to conduct its business and failure of the District, to vacate, bond, stay or contest in good faith such judgment, writ, warrant of attachment or other process or failure to pay or satisfy such judgment within sixty (60) days; (viii) the District shall commence a voluntary case or other proceeding seeking liquidation, reorganization, dissolution, rehabilitation or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any corporate action to authorize any of the foregoing; (ix) appointment of a trustee in bankruptcy, custodian or receiver for the District or all or part of its property and failure to obtain discharge of such within thirty (30) days after such appointment; (x) an involuntary case or other proceeding shall be commenced against the District seeking liquidation, reorganization, dissolution, rehabilitation or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law or under any other law of the State of California now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property and such involuntary case or other proceeding shall remain undismissed or unstayed for a period of 60 days; or the District or any court or governmental authority having jurisdiction over the District shall have declared a moratorium or taken similar action with respect to any of the District's debts; (xi) (a) teh Standby Certificate Purchase Agreement or any provision thereof or (b) any provision of any agreement, instrument or document evidencing any Debt of the District or pursuant to which any such Debt has been issued or incurred which relates to or affects any security provided to the holder thereof or the payment thereof or constitutes an event of default or similar provision thereunder shall at any time for any reason cease to be valid and 22 4687v2 binding on the District or shall be declared to be null and void by any court or governmental authority having jurisdiction over the District in each case pursuant to a final judgment or order or the validity or enforceability of any of the foregoing shall be contested by the District; (xii) the ratings, if any, assigned by any two of Fitch, Moody's and S&P (or if only one such Rating Agency is then rating the Certificates (2000 Refunding Project), such Rating Agency) to Senior Obligations or debts secured by Senior Obligations shall, in any case, be reduced below "A3," "A-" and "A-," respectively, and within 60 days of the later of such reductions the District shall not have effected the conversion of the Certificates to a Fixed Rate and paid all amounts due hereunder; or (xiii) the ratings, if any, assigned by Fitch, Moody's and S&P to Senior Obligations or debt secured by Senior Obligations shall, in any such case, be withdrawn (other than by reason of maturity,redemption or defeasance of such debt), suspended, reduced below "BBB-," "Baa3"and "BBB-" respectively, or revoked. Consequences of Events of Default Upon the occurrence and continuance of any Event of Default the Bank may: (i)give written notice of such Event of Default (a "Notice of mandatory Tender") to the Trustee, the District and the Remarketing Agent and request the Trustee to give notice of mandatory tender for purchase of Certificates (2000 Refunding Project) in accordance with their terms and prohibit the remarketing of the Certificates (2000 Refunding Project), thereby causing the Bank's obligations under this Agreement to terminate at the close of business on the seventh day thereafter; (ii) give written notice of such Event of Default to the Trustee and directing the Trustee to effect the redemption of all Bank Certificates in accordance with the Trust Agreement; in the event that the Bank shall have given a Notice of Mandatory Tender to the Trustee, the Bank shall remain obligated to purchase Certificates (2000 Refunding Project) that are tendered as a result thereof and any Certificates (2000 Refunding Project) so purchased by the Bank shall likewise be subject to redemption in accordance with the Trust Agreement; (iii) cure any default, event of default or event of non performance under this Agreement or under any of the Related Documents (in which event the District shall reimburse the Bank therefore); and (iv) take any other action or remedy permitted by law to enforce the rights of the Bank hereunder and under the Certificates (2000 Refunding Project) and any Related Document. Notwithstanding clauses (i), (ii), (iii) or (iv) as described above, the Bank's obligation to purchase Certificates (2000 Refunding Project) under the Standby Certificate Purchase Agreement shall terminate immediately without any action on the part of the Bank upon the occurrence of a Termination Event. The rights and remedies of the Bank specified in the Standby Certificate Purchase Agreement are for the sole and exclusive benefit, use and protection of the Bank, and the Bank is entitled, but shall have no duty or obligation to the District, the Trustee, the Certificateholders or otherwise, (i) to exercise or to refrain from exercising any right or remedy reserved to the Bank under the Standby Certificate Purchase Agreement, or (ii) to cause the Trustee or any other party to exercise or refrain from exercising any right or remedy available to it under any of the Related Documents. THE BANK The following information has been furnished by the Bank. Such information has not been reviewed by the District, the Corporation or the Underwriter, and no representation as to the accuracy or completeness of such information is made by the District, the Corporation or the Underwriter. 4687v2 [TO COME] 23 THE DISTRICT Background The Orange County Sanitation District is a public agency responsible for regional wastewater collection, treatment and disposal. The District is the third largest wastewater discharger west of the Mississippi River. The District provides services to approximately 2.4 million people in the northern and central portion of the County by treating 240 mg/d of wastewater. The District serves approximately 92% of the County population in 470 square miles, or 59% of the County. The service area which comprises the District was originally formed in 1954 pursuant to the County Sanitation District Act, as amended, Section 4700 et seq. of the Health and Safety Code of the State. The service area of the District originally consisted of seven independent special districts in the County which were responsible for matters relating to their individual districts. These special districts were jointly responsible for the treatment and disposal facilities which they each used. The seven independent districts were successors to the Joint Outfall Sewer Organization, which was formed in 1923 among the Cities of Anaheim, Santa Ana, Fullerton, and Orange, and the sanitary districts of Placentia, Buena Park, La Habra, and Garden Grove. The Joint Outfall Sewer Organization constructed a treatment plant and outfall in the early 1920's to serve its members. It was reorganized in 1947 and 1948 into seven county sanitation districts -Districts Nos. 1, 2, 3, 5, 6, 7 and 11. These prior districts were formed based on engineers' analyses of the gravity flows in the service area. District No. 13 was formed in 1985 and District No. 14 was added in 1986. These districts were co-participants in a Joint Agreement which provided for the joint construction, ownership, and operation of the prior districts' joint facilities. In April 199 8, at the request of the District's Board of Directors, the Board of Supervisors of Orange County (the "Board") passed Resolution No. 98-140 approving the consolidation of the then existing nine special districts into a new, single sanitation district, to be known as the Orange County Sanitation District. This action was designed to simplify governance structures, reduce the size of the District's Board of Directors, ease administrative processes, streamline decision-making and consolidate accounting and auditing processes. The consolidation was effective on July 1, 1998. Pursuant to the Resolution and 9overnment Code Section 57500, the prior districts transferred and assigned all of their powers, rights, duties, obligations, functions and properties to the District. In addition, the District assumed all obligations of the prior districts which were several and not joint. See "Financial Obligations -Existing Indebtedness" herein. The boundaries of the nine previous districts were initially used by the District to delineate separate Revenue Areas for budgeting and accounting purposes and in order to facilitate the imposition of fees and charges imposed by the District. See "District Revenues -Service Charges" herein. The District is managed by an administrative organization composed of a Board of Directors appointed by twenty-five member cities and agencies which are serviced by the District. The District is responsible for construction and maintenance of a major portion of the wastewater collection, treatment and disposal facilities within its boundaries, [although the District may allocate costs of construction and maintenance to individual Revenue Areas based on gallons of sewage flow.] Revenue Area No. 7 is responsible for approximately 200 miles of local sewers in its service area, whereas local sanitary districts, water districts and cities are responsible for local sewers in the remainder of the District's service area. 24 4687v2 Organization and Administration The District is independent of and overlaps other formal political jurisdictions. There are many governmental entities, including the County, that operate within the District's jurisdiction. These entities are exclusively responsible for the administration of their own fiscal affairs, and the District is not entitled to operating surpluses of, or responsible for operating deficits of, any of the other entities. The twenty-five member Board of Directors is comprised of representatives from twenty-one cities, unincorporated areas of the County and three special districts, including mayors of cities, members of city councils, directors of independent special districts and one member from the Orange County Board of Supervisors. Several board committees, made up of members of the Board of Directors, consider topics for action by the Board and make recommendations to the Board. The Chair and the Vice Chair of the Board are elected every year by a majority of the Board, and serve at the pleasure of the majority of the Board. The District has a general manager, general counsel, administrative and operating staff, with offices located at Reclamation Plant No. 1 in Fountain Valley. The District currently employs an administrative and operating staff of 519 under the direction of the General Manager, Blake P. Anderson, P.E., who has served in that capacity since May 2000. Prior to that time, Mr. Anderson served as the Assistant General Manager for five years and also served as Director of Operations, Director of Technical Services and Director of Engineering during his tenure with the District since 1980. Gary G. Streed is the District's Director of Finance/Treasurer. Over the past several years, he has held various senior positions within the accounting department and served as Chief Administrative Assistant in the General Manager's office. In October 1989, Mr. Streed was appointed Director of Finance. He has been with the District since 1967. David A. Ludwin, P.E., is the District's Director of Engineering, and has been employed by the District since 1995. Robert P. Ghirelli, Ph.D., has served as Director of Technical Services for the District since 1998. Robert J. Ooten, P .E., serves as the Director of Operations and Maintenance and has served in that capacity for seventeen years. Patrick B. Miles is the District's Director of Information Technology and joined the District in 1998. Lisa M. Tomko is the District's Director of Human Resources and has been employed by the District since 1996. Thomas L. Woodruff, Esq., of Woodruff, Spradlin & Smart, is the District's General Counsel and has served in that capacity since 1975. Woodruff, Spradlin & Smart is located in Orange, California and provides legal services on a contractual basis. Services The District owns and operates regional wastewater collection, treatment, and disposal facilities for the metropolitan area in the northern and central portion of the County. The District receives wastewater from the collection systems of the cities, sanitary districts and unincorporated areas of the County located within the District. See "The District-Service Areas" herein. Generally, local agency systems collect wastewater from residential and industrial customers and convey the wastewater to District trunk sewer pipelines for conveyance to the District's treatment plants. The District has never experienced an interruption in its services. 25 4687v2 The District's staff are responsible for operating and maintaining the District's infrastructure, although some operations are provided by external contractors. Plant No. 2's cryogenic system is operated under a contract with Air Products and Chemicals, Inc. which expires in 2004. All supplies, including chemicals which are essential to the operation and maintenance of the facilities of the District, are in plentiful supply at reasonable prices. In addition, the District has sufficient standby systems in the event of equipment failures or system outages. Service Area The map on the inside cover page of this Official Statement shows the District's boundaries, Revenue Areas and the selected cities located within the District. District boundaries were originally established in 194 7 and 1948 based on drainage basins. As the existing cities have grown and new areas have incorporated, city limits have come to overlap District boundaries. The District currently serves an approximately 471 square-mile area including 23 of the County's 33 cities and unincorporated areas of the County. The District serves a population of approximately 2.4 million residents and owns sanitary sewerage facilities with a replacement value of approximately $1.3 billion. The following table sets forth the estimated populations of cities and unincorporated areas served by the District as of January I, 1999 [UPDATE?]. 26 4687v2 Employees Estimated Populations of Cities and Unincorporated Areas Served by the Orange County Sanitation District as of January 1, 1999 City Population Anaheim 306,300 Brea 36,400 Buena Park 75,900 Costa Mesa 105,600 Cypress 48,500 Fountain Valley 56,400 Fullerton 126,800 Garden Grove 156,500 Huntington Beach 196,700 Irvine 136,600 La Habra 55,800 La Palma 16,400 Los Alamitos 12,050 Newport Beach 74,000 Orange 127,600 Placentia 49,150 Santa Ana 315 ,000 Seal Beach 27,200 Stanton 33,850 Tustin 66,800 Villa Park 6,625 Westminister 86,200 Yorba Linda 61,800 Cities Subtotal 2,178,175 Unincorporated Area 208,200 Total 2,386 375 A 1996 study requested by the District by outside consultants determined that District staffing levels were higher than those found in other private-sector wastewater treatment facilities of comparable size and concluded that efforts were needed to improve workforce flexibility through training and the use of technology. During Fiscal Year 1996-97, a District Assessment and Reinvention Team ("DART") was formed with the goals of reducing costs, improving quality of employee work life and utilizing the best available technology to increase operating efficiency and productivity. As a result of an enhanced training program and the implementation of workforce flexibility, the District has reduced staffing levels, primarily through attrition, from 616 full-time equivalent ("FTE") positions in Fiscal Year 1996-97 to a projected 508 FTE positions in Fiscal Year 2001-02, a 17 .5% reduction. As of January 31, 2000, the District had a FTE staff of 497, and 507 actual number of employees. Certain employees in the District are represented by recognized employee organizations, which include the following: the Orange County Employee Association ("OCEA"), the International Union of 27 4687v2 Operating Engineers -Local 501 ("Local 501 ") and the Supervisory Professional Management Team ("SPMT"). As of March 27, 2000, 102 employees of the District were members of OCEA, 180 were members of Local 501 and 164 were members of SPMT. The OCEA has represented various bargaining units since 1979 and a three-year contract is currently in force which was effective in December 1999 and expires in November 2002. Local 501 has represented the operations and maintenance bargaining unit since October 1985 and is currently negotiating with the District to renew its contract for a five-year term. The District has a one-year agreement with the SPMT which expires in June 2000. For a description of the Orange County Employee's Retirement System, in which the District participates, and the District's deferred compensation plan, see Note 7 to the Audited Combined Financial Statements of the Orange County Sanitation District for Fiscal Years Ending June 30, 1999 and 1998, set forth in Appendix A. The District has no significant or unusual liabilities and costs associated with other employee benefits, such as vacation, sick leave and other post-employment benefit liabilities. Insurance The District has in force basic all risk property and casualty insurance, including theft, flood, boiler, machinery and earthquake losses to the Wastewater System and in addition maintains business interruption insurance for $100,000,000. The District is self-insured for portions of workers' compensation, property damage and general liability. The self-insured portion for property damage covering fire, flood and other disasters is $25,000 per occurrence with outside excess insurance coverage to $300 million for fire, flood and other disasters. The self-insured portion for property damage covering earthquakes is $100,000 or 5% per unit of insurance, whichever is greater, with outside insurance coverage to $65 million. The District also maintains outside comprehensive boiler and machinery insurance with a $100 million per occurrence combined limit with deductibles ranging from $25,000 to $100,000. The self-insured portion of workers' compensation is $250,000 per person per occurrence with outside excess insurance coverage to the statutory limit. The District is substantially self-insured for general liability coverage. During the past three years there have been no settlements in excess of covered amounts. District management believes that there are no unrecorded claims that would materially affect the financial position of the District. For more information regarding the District's insurance coverage, see Note 1 to the Audited Combined Financial Statements of the Orange County Sanitation District for Fiscal Years ending June 30, 1999 and 1998 set forth in Appendix A. Existing Facilities The District's Wastewater System presently consists of two wastewater treatment plants, an influent metering and diversion structure, twenty-two pump stations, various interplant pipelines and connections, and the ocean outfall facilities. The District's Wastewater System includes approximately 450 miles of sewers within 12 trunk sewer systems, 200 miles of local sewers in Revenue Area No. 7, two treatment plants, two discharge outfalls and two emergency weir outlets. The existing treatment plants have a rated primary treatment capacity of 276 million gallons per day, including standby capacity. Treatment Plant No. 1 ("Plant No. l ")is located in the City of Fountain Valley, about four miles from the coast, adjacent to the Santa Ana River. Secondary treatment capabilities are provided by a trickling filter plant and a conventional air activated sludge plant. Up to 15 million gallons per day ("mg/d") of secondary treated effluent is conveyed to an Orange County Water District (the "OCWD") plant for tertiary treatment prior to ground water recharge. 28 4687v2 Treatment Plant No. 2 ("Plant No. 2") is located in the City of Huntington Beach, 1,500 feet from the ocean, at the mouth of the Santa Ana River. Secondary treatment capabilities are provided by a pure oxygen activated sludge plant. The District employs several phases in the treatment of wastewater. The first phase, preliminary treatment, removes debris such as eggshells, sand and biodegradable items. Following extraction, these materials are sent to a solid-waste landfill. In the next phase, primary treatment, wastewater is pumped to large settling basins. The liquids are separated from the remaining solids which settle or float as the wastewater passes through large settling basins called clarifiers. The settled solids are sent to solids treatment facilities. Approximately half of the primary treated wastewater flows into the ocean outfall pumping station where it is blended with secondary treated wastewater before being discharged into the ocean. The other half is sent to secondary treatment for further processing. During secondary treatment, the wastewater is placed in aeration basins to which naturally occurring bacteria are added to remove most of the remaining dissolved and suspended microscopic organic solids. The treated wastewater from both plants is mixed together at Plant No. 2, where it is then pumped through the ocean outfall pipe that extends five miles offshore. The following table sets forth the treatment plants' current and future treatment capacities. Plant No. 1 Plant No. 2 Aggregate Treatment Plant Facilities Wastewater System Treatment Capacities (MGD) 1999 Actual Flows 89 152 241 Existing Primary Treatment Capacity 108 168 276 Existing Secondary Planned Treatment Capacity Total Capacity OJ 80 208 90 144 170 352 (1) The District's "Planned Total Capacity" is based on the Strategic Plan, which estimated the District's requirements to meet future expected primary and secondary capacity demands. The District has the capability to divert a portion of the influent flow from Plant No. 1 to Plant No. 2 through interplant connections. A portion of the flow destined for Plant No. 2 can also be diverted to Plant No. 1. The treated wastewater from Plant No. 1 flows by gravity to the outfall system through interconnecting Jines. The combined Plant No. 1 and Plant No. 2 effluent is then pumped through a 120- inch diameter ocean outfall which is approximately five miles long. The last mile of the outfall pipe is a diffuser that dilutes the wastewater with seawater in a ratio of 148 parts seawater to one part treated wastewater at an average depth of 185 feet. The 120-inch outfall has a capacity of 480 million gallons per day at high tide. A smaller 78-inch diameter outfall that terminates at a shallower depth is still maintained, although it is reserved for use in emergencies. This smaller outfall is estimated to have a capacity of approximately 230 million gallons a day. There is an interplant gas pipeline between Plant No. 1 and Plant No. 2 which allows digester gas (which is used as fuel for many of the facilities' engines) from one plant to be used at the other to balance the supply and demand, which results in efficient gas utilization. 29 4687v2 Permits, Licenses and Other Regulations The Wastewater System is subject to regulations imposed by the 1972 Clean Water Act, Public Law 92-500 (the "Clean Water Act"), the California Environmental Quality Act of 1970, as amended ("CEQA") and the Federal Clean Air Act. The regulatory requirements are administered by the United States Environmental Protection Agency (the "EPA") and the California Regional Water Quality Control Board ("RWQCB"). Regulations of these agencies deal primarily with the quality of effluent which may be discharged from the treatment plants and the nature of waste material discharged into the collection system. The District currently has all applicable permits and licenses necessary to operate its facilities. The Clean Water Act directed the EPA to monitor and to regulate the discharge of pollution into navigable water ways and to enforce the requirements that all wastewater treatment plants in the nation provide full secondary treatment for sewage. In 1977, Congress amended the Clean Water Act to allow waivers of secondary treatment standards for certain ocean dischargers if they can demonstrate, to the satisfaction of the EPA, that significant adverse environmental impacts would not occur. The District currently operates under the terms and conditions of a modified National Pollution Discharge Elimination System ("NPDES") permit, pursuant to Section 30l(h) of the Clean Water Act and issued jointly by the RWQCB and the EPA. The permit was initially issued in 1985 and was the first modified Section 301(h) permit issued to a major wastewater treatment facility. The permit allows deep ocean discharge of a treated effluent blend resulting from advanced primary and secondary treatment and is awarded only when a district or agency is able to show there has been no degradation of the ocean environment from its discharge. In addition, a final EIR must be approved by the EPA and the R WQCB before a Section 301(h) permit will be issued. The District's current permit, which includes the Section 301(h) waiver of secondary treatment requirements, was issued on May 6, 1998, expires on June 6, 2003 and is renewable every five years. All conditions imposed by the permit are being successfully met. There is no guarantee that the modified Section 301 (h) permit will be renewed in the future or that Congress will not revoke the amendment which allows waivers of full secondary treatment of wastewater. The additional costs resulting from an unmodified Section 30l(h) permit would have a substantial impact on future capital plans of the District because such an unmodified permit would require l 00% secondary treatment of wastewater. If renewal of the secondary treatment waiver is disallowed in the future, the District projects that through 2020, $400 million in capital facilities costs would be required to add additional secondary treatment capacity to the Wastewater System, and operating costs would be increased by $11 million annually. In October 1999, in compliance with CEQA, the Board approved the Strategic Plan (described below) which incorporates the District's Final Program Environmental Impact Report (the "EIR"). The Board approved a treatment plan for the collection system which allows a discharge of a blend of primary and secondary effluent to meet the requirements as established in the District's current NPDES permit (the "Ocean Plan"). The South Coast Air Quality Management District ("AQMD") is the regional governmental agency charged with implementing the Federal Clean Air Act. AQMD permits are required before a sewage treatment improvement project can be constructed. Such permits are project specific and contain construction process requirements, required equipment and standards for predicted air quality. After construction is completed, the AQMD issues an operation permit. These permits are also project specific and contain air quality standards and other appropriate operational guidelines. Most of the District's facilities are enclosed in order to trap emissions, which are cleaned by air scrubbers that remove odors. In addition, the District has implemented an air quality risk reduction program which includes a twenty-year 30 4687v2 plan to improve treatment plant operations and reduce industrial toxic pollutants. The District currently has all necessary AQMD permits to operate the Wastewater System. For a two-month period during the summer of 1999, eight miles of beaches in Huntington Beach were closed by the Orange County Health Care Agency ("OCHCA") due to excessive levels of bacteria in the water. A three-month interagency source investigation did not identify a definitive source of the contamination, but determined that the District was not at fault. Although the initial "signature" of the pollution strongly suggested sewage contamination, the District's review concluded that none of its facilities caused the excessive bacteria levels and that there was no adverse impact on the capacity of the Wastewater System. Other agencies are continuing to investigate the source of the contamination through ongoing studies on the local watershed. Capital Improvement Program The Strategic Plan. The District's 1989 master plan consisted of a 30-year plan of action for managing wastewater activities to the year 2020, entitled "2020 Vision, Action Plan for Wastewater Management and Environmental Protection 1990-2020" (the "Master Plan"). The Master Plan integrated research facilities planning, environmental analysis, toxic control, water conservation and reclamation, sludge reuse, other wastewater programs and financial planning into a single unified approach. In connection with the preparation of the Master Plan, an in-depth land use study was performed, resulting in the creation of a uniform land use classification system and a map of the service area of the District. This land use study included the collection and compilation of the latest available land use plans, reports, maps and studies from the cities within the District and the County, and interviews with the planning directors or key staff within the District. Land use planning within the District's service area is the responsibility of the County for unincorporated areas and cities for areas within their boundaries. The District has recently updated the Master Plan with a strategic plan (the "Strategic Plan") which extends the planning process to the year 2020. The Strategic Plan revises many of the assumptions used to develop the Master Plan including population and land-use projections, the level of building activity in the service area and the volume of wastewater treated. Land use designations and unit flow factors were used to project wastewater flows in the District's trunk sewers for present conditions, through the year 2020 and at ultimate build-out of the service area. These flows were included in a computer model of the District's Wastewater System which identified future sewer capacity improvements. A twenty-year collection system Capital Improvement Program ("CIP") was developed to implement the required sewer capacity improvements. The District evaluated four wastewater treatment scenarios for inclusion in the Strategic Plan before deciding on a preferred alternative. All of the alternatives considered would, at a minimum, meet standards set by the Ocean Plan and the District's 1998 ocean discharge permit. Full secondary and partial secondary treatment scenarios were considered, with and without operation of the Groundwater Replenishment System (the "GWRS"). See "The Groundwater Replenishment System" below. Diversion of the District's secondary effluent to the GWRS was a prominent consideration in the treatment scenarios. In addition, the Strategic Plan considered potential changes in the regulatory climate for the beneficial reuse of biosolids. The District determined that a comprehensive review of other options to reduce or manage flows should be considered because the construction of a second ocean outfall would involve significant environmental, technical and financial considerations. The District adopted the Preferred Alternative scenario (the "Preferred Alternative") which continues partial secondary treatment to meet the requirements of the District's 1998 ocean discharge permit and provides for implementation oftheGWRS. 31 4687v2 The Strategic Plan includes the following elements: Phase I Phase II Phase III Phase I focuses on the collection and disposal facilities, including: investigation and repair of the District's 120-inch primary outfall ("Outfall No. 2"), management of peak hydraulic discharge through the year 2020 and through "ultimate," planning for the design and construction of the District's collection and disposal facilities and determination of equitable financial charges and fee schedules for the District. Phase II focuses on the treatment facilities, including planning for the design, construction and operation of the District's wastewater treatment facilities and the reuse of wastewater and biosolids, including addressing of regulatory concerns and requirements. Phase III involves the completion of the environmental studies required by CEQA with specific emphasis on the near-term planning horizon of five to ten years from the Strategic Plan date of adoption. Studies on a preferred level of wastewater treatment and in-sourcing of the ocean monitoring program have been prepared and incorporated in the Strategic Plan. Water and air regulatory agencies require that all wastewater facilities be designed to meet the needs of anticipated growth and provide a reasonable reserve capacity. The District's strategic planning process has met these requirements by shifting its approach for the development of master plans from a "size and build" approach to a broad- based, multi-agency cooperative evaluation process. The District's planning process incorporated an analysis of population growth, dry weather and peak wet weather flows and the maximum use of existing facilities . The population of the District's service area is projected to grow to 2.6 million by the year 2020. Average flow rates at both treatment plants are projected to increase to 352 million gallons a day by 2020 (208 million gallons a day of treatment at Plant No. I and 144 million gallons a day at Plant No. 2), up 48% from the 1990 flow. The District expects to meet future demands on the Wastewater System through the CIP. This program has been developed to satisfy anticipated regulatory requirements, increased population, additional treatment requirements, conservation, energy and other resource savings considerations, odor control improvements, and air quality protection needs. There are currently 34 projects in the planning phase, 77 projects in the design phase and 45 projects in the construction phase. The following table sets forth the major CIP project expenditures through 2020 with and without the District's participation in the GWRS: 32 4687v2 Estimated Capital Costs Through 2020 ($Millions) <1> Project New Collection System Rehabilitation-Existing Facilities Water Conservation and Long-Term Reduction Projects<2J Miscellaneous Support Facilities New Treatment Phase I Only GWRS Total Capital Cost Outfall Cost<3> Total Capital Cost with Outfall ( 1) All costs are estimated as of 1998 and are derived from the Strategic Plan. Cost WithGWRS $ 180 670 150 14 380 120 1500 $1500 Cost Without GWRS $ 180 670 150 14 360 1400 150 $1600 (2) Cooperative programs budget including manhole plugging, toilet retrofit contribution and local sewer repairs. (3) Cost of new 120-inch outfall. Not included with GWRS, which provides 100 mg/d. For further information concerning the District's CIP, see the Strategic Plan which is available for review and inspection at the offices of the District. The following table lists the various recommendations of the Strategic Plan regarding CIP projects for the District's Fiscal Year 1999-00 budget, for the following ten Fiscal Years and five-year summaries of Fiscal Years 2011-2016 and Fiscal Years 2016-2020. 33 4687v2 INSERT CHART HERE 34 4687v2 The GWRS. The District has taken a multi-jurisdictional approach to planning for capital facilities because many of the methods for reducing or managing flows involve other jurisdictions. One such project is the GWRS. The District and the OCWD are currently evaluating this joint project that may become the largest reclamation project in the nation. If completed as planned, the GWRS would initially reclaim approximately 96 mg/d during Phase I (2001-02) of the project, 155 mg/d during Phase II (2009- 10) and 15 5 mg/d during Phase III (2018-20) of secondary treated effluent received from the District. The District has proposed matching OCWD funding for this project and has budgeted $122 million over a six-year period. The GWRS would delay the need to modify the existing ocean outfall or to build a second outfall at a potential cost of $150 million. Integrated Emergency Response Program. Growing awareness of the threat to public utilities from natural disasters such as earthquakes, floods and other perils has made preparedness for these and other events a high priority for the planners, engineers, and managers of the District. In recognition of the potential damage which could occur in the wake of a major earthquake, flood, or other disaster, the District has implemented an Integrated Emergency Response Program (the "IERP"). The IERP is a two- volume plan which contains policies, plans and procedures preparing for, and responding to, emergencies. The District also has analyzed disaster preparedness issues and policies within the Strategic Plan. Earthquakes are considered to be the most potentially devastating natural disaster events which confront the District. The disaster preparedness plan included in the Strategic Plan reviews two possible major earthquake scenarios: an 8.3 Richter magnitude ("M") earthquake on the southern San Andreas fault system and an M 7.0 earthquake on the Newport-Inglewood fault zone, which includes Plant No. 2. An M 8.3 earthquake on the southern San Andreas fault, while on the whole more destructive than the M 7.0 Newport-Inglewood fault event, would probably result in less damage in the District's service area due to the distance of the fault from most of the service area. However, damage from such a major earthquake on the San Andreas fault would be extensive. Also, the plan indicates that an M 7 .0 earthquake on the Newport-Inglewood fault within five miles of the District's sewerage facilities could cause major destruction to those facilities. The disaster preparedness plan in the Strategic Plan indicates that it would not be economically feasible to upgrade all of the existing sanitary sewerage facilities to survive an earthquake of this magnitude along the Newport-Inglewood fault. The IERP outlines the policies and employee actions to be taken before, during and after an earthquake, earthquake response guidelines and damage assessment procedures. The Strategic Plan analyzes the vulnerability of the sanitary sewerage facilities and operations of the District and plans a risk reduction program wherein the vulnerability of many of the District's sanitary sewerage facilities to an earthquake can be reduced by recommended retrofit construction measures. The Strategic Plan also recommends that designs of existing major structures which were constructed prior to development of current seismic design standards be reviewed and the structures strengthened, if necessary. Pursuant to the Strategic Plan, all recent and future projects have been, and will be, designed to the same high earthquake construction code standards as set for other essential services, such as hospitals and fire stations. The Army Corps of Engineers' "All-River Plan" has mitigated any future flooding of the Santa Ana River system and potential threats to the District's Wastewater System. Also, both Plant No. 1 and Plant No. 2 are surrounded by 3-foot to 6-foot high walls, built to federal standards. The disaster preparedness plan in the Strategic Plan investigates the damage potential posed by coastal flooding, tsunamis (large ocean waves generated by seismic activity) and windstorms. However, 35 4687v2 based on available information, the District does not consider any of such events to be a significant threat to the District's Wastewater System. The Strategic Plan also makes recommendations regarding fire protection of the Wastewater System and most of the structures at Plant No. 1 and Plant No. 2 are constructed of fire-resistant materials. The IERP describes the procedures needed to respond to a possible disaster. For more information regarding emergency response policies, the disaster preparedness plan described in the Strategic Plan and the IERP can be reviewed at the District's office. DISTRICT REVENUES Capital Facilities Capacity Charges General. The District has the power to establish fees and charges for services of the Wastewater System. Such fees and charges are established by the District's board of directors and are not subject to review or approval by any other agencies. In Fiscal Year 1997-98, a Rate Advisory Committee (the "RAC") was established comprised of representatives from industrial, commercial and residential users. The goal of the RAC was to examine the then current rate structure and, if needed, develop recommendations for change. The RAC analyzed the District's rate structure to determine whether its then current sewer service user fees (now known as "Capital Facilities Capacity Charges") were equitable among residences and industry. This review resulted in a proposal to expand the number of non-residential user categories from one to twenty-three and to provide for gradual rate increases in seven of the nine Revenue Areas. The increase in the number of categories provided a more equitable fee structure and also provided for future reductions in single- family residential Capital Facilities Capacity Charges. The Capital Facilities Capacity Charges for those categories were based on the average flow and strength of wastewater discharged for each property type. This rate structure was "revenue neutral," so that the total Capital Facilities Capacity Charges for each Revenue Area remained approximately the same. The Board approved the RAC rate structure recommendations which provided gradual increases, beginning in Fiscal Year 1997-98, over the succeeding five years for seven of the District's nine Revenue Areas. On June 28, 2000, the District adopted Ordinance No. OCSD-13 (the "2000 Ordinance") which revises the rate structure adopted by the Board in 1997 for residential users and certain industrial users said ordinance to be effective July 1, 2000. The 2000 Ordinance reaffirmed the basis for the establishment of the prior rates for the 1999-00 fiscal year and that these rates do not exceed the actual cost to the District to provide its services. The 2000 Ordinance does not replace the rate structure adopted by the Board in 1997, but sets aside the higher rates until the District determines that they are necessary and appropriate. The District collects Capital Facilities Capacity Charges from property owners through the semi- annual property tax bill distributed by the County in all Revenue Areas, except Revenue Area No. 14. Pursuant to the IRWD Agreement, the District receives payments from the Irvine Ranch Water District (the "IRWD") which directly collects fees from customers through a monthly billing procedure in Revenue Area No. 14. The District has covenanted in the Master Agreement to fix, prescribe and collect fees and charges to satisfy certain coverage requirements as further described under "Security and Sources of Payment for the Certificates (2000 Refunding Project) -Rate Covenant" herein. 36 4687v2 Residential User Fees. Pursuant to the 2000 Ordinance, residential Capital Facilities Capacity Charges for all Revenue Areas, except Revenue Area No. 14, for Fiscal Years 2000-01 and 2001-02, will be lower than the rate structure adopted by the Board in 1997. Revenue Area No. 14 is funded through fees paid directly to the District by the IRWD pursuant to the IRWD Agreement and its fees were not affected by the 2000 Ordinance. The lower Capital Facilities Capacity Charges for Fiscal Year 2000-01 were based on the single-family residential rate of $78 per year which was the rate previously adopted by the Board in 1997 for Revenue Area No. 3. Capital Facilities Capacity Charges in Revenue Area No. 7 will remain at $73 per year for Fiscal Year 2000-01. Beginning in Fiscal Year 2001-02, Capital Facilities Capacity Charges for all Revenue Areas except Revenue Area No. 14 will be $80 per year. In furtherance of the District's future plans to consolidate all Revenue Areas and all Capital Facilities Capacity Charges to a uniform amount, the District determined that it would use reserve funds to meet necessary operational expenses to allow for the setting of lower rates for Fiscal Years 2000-0 l and 2001-02. The table below sets forth the five-year Capital Facilities Capacity Charges rate schedule for single-family residences by Revenue Area. Annual Capital Facilities Capacity Charges Single Family Residence Rate Five Year Rate Schedule Fiscal Years 1997-98 through 2001-02 Revenue Areas<1> 1997-98 1998-99 1999-00 2000-01 2001-02 l $ 91.36 $ 96.41 $110.04 $78.00 $80.00 2 73.00 74.00 76.00 78.00 80.00 3 75.00 75 .50 76.00 78.00 80.00 5 96.75 84.50 87.50 78.00 80.00 6 78.00 79.00 80.00 78.00 80.00 7 55.00 60.00 66.00 73.00 80.00 11 70.00 80.00 90.00 78.00 80.00 13 100.00 100.00 100.00 78.00 80.00 (1) The average total of fees and charges for Revenue Area No. 14 are $70.80 per year per single-family residential unit and are levied and collected directly by the IRWD on a monthly basis. The IRWD subsequently pays fees to the District on a quarterly basis pursuant to the IR WD Agreement. Source: Orange County Sanitation District. The table below sets forth Fiscal Year 1998-1999 total average yearly Capital Facilities Capacity Charges for single-family residences within the District, together with local agency fees and property tax charges and comparable Capital Facilities Capacity Charges, local agency fees and property taxes charged to single-family residences within the jurisdictions of certain other cities and districts within the State. 37 4687v2 Comparison of Total Sewer Service Charges for Single-Family Residences Annual Level Property Size<2l Sewer Service of Treatment(% )<3> Collection Tax Entity (mg/d) Charge 1 2 3 Resi::ionsibility Income East Bay MUD 8012) $313 100 No Yes San Francisco 80 275 100 Yes No San Diego 180 268 40 50 10 Yes No San Jose 120 228 100 Yes No Walnut Creek 35 227 100 Yes Yes Sacramento 143 208 100 No Yes Los Angeles (City) 350 166 90 10 Yes No Orange County Sanitation DistrictH> 240 136 50 50 No Yes Los Angeles (County) 475 110 40 50 10 No Yes ( 1) Total includes user fees (treatment/disposal) or Capital Facilities Capacity Charges, local agency charges and property taxes. (2) Average amount of wastewater treated daily. (3) Primary, secondary and tertiary levels of treatment are represented. (4) Orange County Sanitation District Capital Facilities Capacity Charges adjusted to current average. Source: Orange County Sanitation District Rate Advisory Committee for 1997-98. Industrial Capital Facilities Capacity Charges. The District charges industrial Capital Facilities Capacity Charges to customers discharging high-strength or high-volume wastes into the sewer systems. Customers subject to industrial Capital Facilities Capacity Charges are billed directly by the District. The fee charged to each customer is based on the customer's sewage volume, the concentration of suspended solids and biochemical oxygen demand. Pursuant to the 2000 Ordinance, rates for each component factor were revised for certain industrial users in order to be consistent with the rates charged to residential users. Total industrial Capital Facilities Capacity Charges in Fiscal Year 1998-99 were approximately $5.8 million. Industrial Capital Facilities Capacity Charges are applied to both the operating and capital funds. Additional Revenues The District has several sources of additional revenue, including property taxes, Capital Facilities Capacity Charges, capacity rights, permit and inspection fees and interest earnings. Property Taxes. The District receives approximately three percent of the one-percent County ad valorem property tax levy, based on the allocation procedure under State law. County property tax revenue allocated to the District varied during Fiscal Year 1996-97 through Fiscal Year 1998-99. Property tax revenues in Fiscal Year 1996-97 were $28.2 million, $31.3 in Fiscal Year 1997-98 and $32.8 in Fiscal Year 1998-99. Current projections indicate that property tax revenues received by the District will increase by approximately 2% per year. The apportionment of the ad valorern tax is pursuant to a revenue program adopted by the District in April 1979 to comply with the EPA, the RWQCB, legal and contractual requirements and Board policy. All Revenue Areas except Revenue Area Nos. 13 and 14 receive a share of the District's portion of the property tax levy. 38 4687v2 Capital Facilities Capacity Charges. Capital facilities connection charges are one-time fees with two components, paid at the time property is developed and connected to the Wastewater System. The fees are imposed by the District pursuant to Section 54 71 of the California Health and Safety Code and are levied to pay a portion of the District's capital costs and for access to capacity in the Wastewater System. Currently, the District has Capital Facilities Capacity Charges of $1,820 per residential unit (three-bedroom); [however, under the current industrial use ordinance, additional Capital Facilities Capacity Charges can be imposed on industrial users who place larger than average demand on the Wastewater System.] Member cities and sanitary districts collect Capital Facilities Capacity Charges for the District when building permits are issued. Capital Facilities Capacity Charges are reviewed annually to reflect the changes in the value of the Wastewater System to which a new customer is connecting. On December 15, 1999, the Board approved District Ordinance No. OCSD 99-11 (the "1999 Ordinance") which established a comprehensive capital facilities capacity charge. The 1999 Ordinance, effective as of January 1, 2000, renamed connection fees as Capital Facilities Capacity Charges and provided a more equitable schedule of fees among industrial, commercial and residential users. Pursuant to the 2000 Ordinance, Capital Facilities Capacity Charges were revised for high demand industrial users in five incremental increases from 1999-200 I. Pursuant to an agreement with the IRWD, the IRWD is not required to pay Capital Facilities Capacity Charges related to development in the Downcoast Area (as defined in the agreement dated March 9, 1988, by and between the District and the IRWD, the "Downcoast Agreement") and in exchange, the IRWD provides funding to Revenue Area No. 5 for the construction costs of certain wastewater collection, transmission, treatment and disposal facilities to the used by the IRWD. Sale of Capacity. The District has entered into agreements with the Santa Ana Watershed Project Authority ("SA WPA ") whereby wastewater from Upper Santa Ana River Basin dischargers can be transported through the District's Santa Ana River Interceptor to the District's treatment facilities. This program was developed in the early l 970's. The agreements establish control mechanisms regarding the quality of wastes deposited into the Wastewater System. At the present time, SA WPA has purchased and paid for 30 million gallons a day of capacity rights in the District's Santa Ana River Interceptor and 8 million gallons a day of capacity in the District's treatment plants. Additional treatment plant capacity can be purchased in increments at the District's current replacement cost. SA WPA also makes an annual capital replacement payment equal to 3% of the accumulated total value of its capacity rights. The Santa Ana River Interceptor Line ("SARI") was built in the Chino Basin Preserve Area in order to remove dairy farm wastes and accommodate future urban development. Salts in the washwater generated from the cleaning of cows and milking equipment were leaching into the groundwater in the Chino Basin and the SARI was built to divert the washwater from this area. However, due to the nature of the Chino Basin Preserve, the development of any infrastructure in the area to accommodate the SARI was limited. The current SARI multi-phase project is designed to connect several dairies to the SARI. Future expansions of this project could include connecting other dairies and other waste streams with the SARI line. In addition, removing the washwater from the Chino Basin is critical to the success of the GWRS because allowing water from GWRS to percolate in the groundwater with washwater would undermine the credibility and effectiveness of the GWRS project. See "The District -Capital Improvement Program" herein. Orange County Bankruptcy Settlement. As of February 24, 2000, the District has received approximately $65 million in settlement revenues from the Orange County bankruptcy litigation fund due to the settlement of claims arising from the 1994 Orange County bankruptcy. Settlement recoveries and 39 4687v2 repayments by the County have resulted in the District recovering 94% of the amount it had on deposit with the Orange County Investment Pool at the time of the Orange County bankruptcy. No additional revenues are expected from this settlement. Wastewater Treatment History The average yearly influent flow to the District has remained relatively stable for the preceding five years. The wastewater flow for Fiscal Year 1994-95 was 243 mg/d and for Fiscal Year 1998-99 was 241 mg/d. The peak for the last five years was 254 mg/din Fiscal Year 1997-98. Customers The historical number of customers served by the District for the Fiscal Years 1994-95 through 1998-99 and the projected number of customers served by the District for the Fiscal Years 1999-00 through 2003-04, identified in Equivalent Dwelling Units ("EDUs"), are set forth in the table below. Fiscal Year 1994-95 1995-96 1996-97(1) 1997-98(!) 1998-99 Historical and Projected Equivalent Dwelling Units Fiscal Years 1994-95 through 2003-04 Number ofEDUs Fiscal Year 861,761 1999-00 858,076 2000-01 849,576 2001-02 814,001 2002-03 851,770 2003-04 Source: Orange County Sanitation District. Projected EDUs 854,620 857,470 860,320 863,170 866,020 (I) [EDUs for Fiscal Years 1996-97 and 1997-98 were reduced because certain commercial users were entitled to refunds of portions of their Capital Facilities Capacity Charges based on their documentation that their actual usage was less than what was calculated using the District's square footage formulas. The establishment of more equitable rates pursuant to the RAC since Fiscal Year 1997-98 have limited the number and dollar amount of future rebates to commercial users.] The following table shows the number of residential and commercial customers and industrial customers and the approximate percentages of Capital Facilities Capacity Charges revenues derived from the combined residential and commercial use and industrial use for the last five fiscal years. 40 4687v2 Fiscal Year 1994-95 1995-96 1996-97 1997-98 1998-99 Number of Accounts and Revenues by Customer Class for the Fiscal Years Ending June 30 Residential/Commercial Percentage of Capital Facilities Number of Equivalent Capacity Number of Single-Family Charge Customer Dwellings Revenues Accounts 861,761 91.8% 945 858,076 88.3 935 849,576 89.8 892 814,001 91.6 869 851,770 92.2 678<1> Industrial Percentage of Capital Facilities Capacity Charge Total Revenues Revenue 8.2 $6,009,756 11.7 6,974,638 10.2 6,605,147 8.4 6,015,150 7.8 5,658,135 C1> [Certain industrial users were placed on the tax bill beginning in Fiscal Year 1998-99.] Source: Orange County Sanitation District. The ten largest industrial customers of the District for the Fiscal Year ended June 30, 1999 are shown in the table below. These industrial customers paid a total of $2, 170,517 for services of the District, or approximately 41 % of the District's $5,303,855 total revenues received from industrial customers, and approximately 3.14% of the District's total Capital Facilities Capacity Charges revenues of $66,923,358. Largest Customers of the District for the Fiscal Year Ended June 30, 1999 User Kimberly Clark Adohr Farms MCP Foods Favorite Foods Disneyland AERA Energy Rockwell Sundor Brands Knotts Berry Farm Foods Dean Foods TOTAL Service Charges $ 518,458 358,870 291,377 208,902 193,851 144,871 134,148 110,108 109,216 100,716 $2,170,517 Percentage of Total Capital Facilities Capacity Charge Revenues 0.75% 0.52 0.42 0.30 0.28 0.21 0.19 0.16 0.16 0.15 3.14% Source: Orange County Sanitation District 41 4687v2 Assessed Valuation The assessed valuation of property in the County is established by the County Assessor, except for public utility property which is assessed by the State Board of Equalization. Due to changes in assessment required under State Constitution Article XIIIA, the County assessment roll no longer purports to be proportional to market value. See "Limitations on Taxes and Revenues" herein. Generally, property can be reappraised to market value only upon a change in ownership or completion of new construction. The assessed value of property that has not incurred a change of ownership or new construction must be adjusted annually to reflect inflation at a rate not to exceed 2% per year based on the State consumer price index. In the event of declining property value caused by substantial damage, destruction, economic or other factors, the assessed value must be reduced temporarily to reflect market value. For the definition of full cash value and more information on property tax limitations and adjustments, see "Limitations on Taxes and Revenues" herein. The County Assessor determines and enrolls a value for each parcel of taxable real property in the County every year. The value review may result in a reduction in value. Taxpayers in the County also may appeal the determination of the County Assessor with respect to the assessed value of their property. In 1999, approximately 6,326 assessment appeals were filed in the County. As of February 2000, the balance of pending applications was 7,438. This included current and prior years' filings. Determinations of value are made by a three-member Assessment Appeals Board or a Hearing Officer. Waivers extending the statutory two-year processing deadline are obtained from the County for applications approaching this time limit. The table below shows a five-year history of assessed valuations in the District since Fiscal Year 1994-95. Over the years shown, assessed valuations in the District have increased at an average rate of 2.17% per fiscal year. Assessed Valuations of Property in the District Fiscal Years 1994-95 through 1998-99 (Secured Roll) Fiscal Year 1994-95 1995-96 1996-97 1997-98 1998-99 ($Billions) Value $131.3 129.9 129.6 128.4 134.7 Source: County of Orange Auditor-Controller. Tax Levies and Delinquencies Property taxes are based on assessed valuation which is determined as described under "District Revenues -Assessed Valuation" herein. In accordance with the California Revenue and Taxation Code, the County tax collector collects secured tax levies for each Fiscal Year. Property taxes on the secured roll are due in two installments, on November 1 and February I. If unpaid, such taxes become delinquent after December 10 and April 10, respectively, and a ten percent penalty attaches to any delinquent 42 4687v2 payment. In addition, property on the secured roll with respect to which taxes are delinquent is declared tax-defaulted on or about June 30. Such property may thereafter be redeemed by payment of the delinquent taxes and the delinquency penalty, plus costs and redemption penalty of one and one-half percent per month to the time of redemption. If taxes are unpaid for a period of five years or more, the tax-defaulted property is subject to sale by the County Treasurer-Tax Collector. Property taxes on the unsecured roll are due as of the January 1 lien date and become delinquent, if unpaid, on August 31. A ten percent penalty attaches to delinquent taxes on property on the unsecured roll and an additional penalty of one and one-half percent per month begins to accrue on November 1. The taxing authority has four ways of collecting unsecured personal property taxes: (1) a civil action against the taxpayer; (2) filing a certificate in the office of the County Clerk specifying certain facts in order to obtain a judgment lien on certain property of the taxpayer; (3) filing a certificate of delinquency for recordation in the County Recorder's office in order to obtain a lien on certain property of the taxpayer; and ( 4) seizure and sale of personal property, improvements or possessory interests belonging or assessed to the taxpayer. The table below shows a five-year history of the District's total ad valorem property tax levies, and the percent of delinquencies. Fiscal Year 1994-95 1995-96 1996-97 1997-98 1998-99 Total Property Tax Levies and Delinquencies in the District for Fiscal Years 1994-95 through 1998-99 Total Tax and Capital Facilities Capacity Charge Levy $91,562,000 91,844,000 89,794,000 90,953,000 98,557,000 Total Tax and Capital Facilities Capacity Charge Collection $88,533,000 91,065,000 82,369,000 78,873,000 93,686,000 Source: Orange County Auditor-Controller's Office. % of Delinquencies to Tax Levy 3.21% 1.86 2.44 3.34 2.10 The District currently participates in the County's Teeter Plan whereby each participating local agency receives annually l 00% of the secured property tax levies to which it otherwise entitled, regardless of whether the County has actually collected the levies. Budgetary Process The District's operating fund budget relies on revenues from property taxes and Capital Facilities Capacity Charges, both of which are collected on the property tax bill. See "Financial Information - Revenues." The District receives tax revenues from the County in eight allocations, with the largest receipts in December and April. The District operates on a Fiscal Year beginning each July 1. The operating fund budgets include funds to cover the dry period of each tax year, i.e., the period from the beginning of the Fiscal Year until the first taxes are received. The dry-period requirement is budgeted at one-half of the annual operating fund budgeted expenditures. The District uses the accrual method of accounting in its budgets. The District has conformed to its budgets for the last five fiscal years and is conforming to its budget for the current fiscal year. 43 4687v2 The District's annual budget preparation process begins in January of each year and concludes in June upon its adoption. The General Manager reviews the final operating budgets and then distributes them to the Directors and District Committees for consideration. The Board of Directors then adopts the proposed annual budgets, with any revisions, in June of each year. Budgetary control is exercised at the individual Department level and administrative policies provide guidelines on budget transfers and the authorization necessary to implement transfers. A budget adjustment is a transfer which does not change the total appropriated amount within a Revenue Area and does not require Board action. Approval may be granted by the General Manager or the Department Head in certain circumstances. Department Heads have the discretion to reapportion funds between certain line items within a division but may not exceed total appropriated amounts for each department. They may also transfer staff across divisional lines. The General Manager and Board of Directors must approve additional capital outlay items. A budget amendment is an adjustment to the total appropriated amount within a Revenue Area which was not included in the original budget. These supplemental appropriations require formal action by the Board of Directors. Prior year reserves or fund balances may be appropriated to fund items not previously included in the adopted budget. Reserves or fund balances exceeding minimum amounts required by fiscal policies may be appropriated if it is determined to be in the best interest of the District. Directors may also appropriate reserves in case of emergencies or unusual circumstances. Reserves In 1998, the District revised its reserve policy and established eight separate reserve funds for its retained earnings. The Cash Flow Reserve was established to fund operation, maintenance and certificates of participation debt service expenses for the first half of the fiscal year. The Operating Contingency Reserve was established to provide for non-recurring expenditures that were not anticipated when the annual budget and Capital Facilities Capacity Charges were adopted. This fund is equal to ten percent of the District's annual budget. The Capital Improvement Reserve was established to fund annual increments of the capital improvement program with a target level at one half of the average annual capital improvement program through the year 2020. The Catastrophic Loss, or Self-Insurance Reserve is established for property damage including fire, flood and earthquake, general liability and workers' compensation. The level of reserve in this fund is maintained at a level to fund the District's non-reimbursed costs which are estimated to be $57 million. The Short-Term Capital Fund Reserve was created for specific short-term capital improvements such as the GWRS. The Capital Replacement/Renewal Reserve was established to provide thirty percent of the funding to replace or refurbish the current collection, treatment and disposal facilities. The initial reserve level for this fund was established at $50 million and is augmented by interest earnings and a portion of the annual Capital Facilities Capacity Charges. Debt Service Reserves are controlled by a trustee pursuant to the provisions of certificates of participation issues and is not available for the general needs of the District. The Rate Stabilization Reserve accumulates all available funds which exceed the targets for all other reserves. These funds are applied to future years' needs and must be maintained at specified levels. There is currently no established target for this reserve. As of June 30, 1999, the District's designated retained earnings totaled $376 million. See Appendix A -"Audited Combined Financial Statements of the Orange County Sanitation District for Fiscal Years Ending June 30, 1999 and 1998" herein. Summary of Operating Data 44 4687v2 Set forth in the table below is a summary of historic operating results for the District for fiscal years 1994-95 through 1998-99. The information presented in the summary should be read in conjunction with the financial statements and notes. See Appendix A -"Audited Combined Financial Statements of the Orange County Sanitation District for Fiscal Years Ending June 30, 1999 and 1998" herein. The operating data include Capital Facility Capacity Charges as revenue rather than as contributed equity as presented in the financial statements and do not include depreciation and amortization expenses. Accordingly, the selected operating data do not present the results of operations as determined under generally accepted accounting principles. Summary of Historical District Revenues and Financial Information for Fiscal Years 1994-95 through 1998-99 ($Millions) 1994-95 1995-96 1996-97 1997-98 1998-99 Revenues: Residential Capital Facilities $ 62.6 $ 62.0 $ 55.9 $ 50.2 $ 61.6 Capacity Charges<1i Industrial Capital Facilities 7.6 6.3 6.3 6.4 5.8 Capacity Charges Revenue Area No. 14 fees 7.9 3.2 4.6 4.7 3.2 Ad Valorem Taxes 27.3 29.3 28.2 31.3 32.8 Interest Eamings<2) 18.5 20.2 21.0 26.4 23.7 Capital Facilities Capacity Charges<3> 6.6 9.5 9.7 11.3 8.8 Total Revenues $130.6 $130.5 $125.7 $130.2 $135.8 Operations and Maintenance Expenses 55.3 57.6 54.4 49.9 49.4 Net Revenues $ 75.3 $ 72.9 $ 71.3 $ 80.4 $ 86.5 Debt Service $ 35.1 $ 31.5 $ 31.1 $ 31.3 $ 30.6 Cash Funded CIP $ 33.5 $ 54.2 $ 48.8 $ 49.3 $ 49.0 Ending Reserves<4> $348.0 $340.0 $316.0 $340.0 $343.0 Coverage Ratios 2.15x 2.32x 2.29x 2.57x 2.83x (1) Net ofrebates to commercial users. (2) Cash basis. Excludes any unrealized gains or losses reported in the District's Comprehensive Annual Financial Reports. (3) Prior to January 1, 2000, these charges were referred to as connection fees. (3) Excludes any Debt Service Reserve Funds. Source: Orange County Sanitation District. Projected Operating Data The table below sets forth projected operating results of the District for fiscal years 1999-00 through 2003-04. The preparation of such projections was based upon certain assumptions and certain forecasts with respect to conditions that may occur in the future. While the District believes that these 45 4687v2 assumptions and forecasts are reasonable for the purposes of the projected selected operating data, it makes no representations that they will in fact occur. To the extent that actual future conditions differ from those assumed herein, the data will vary. Some of the more significant assumptions and considerations include the following: (i) Total wastewater flows for Fiscal Year 1999-00 are budgeted to decrease to 250 mg/d from the prior year budget of 255 mg/d. The cost to treat and dispose of 1 million gallons is estimated at $482 per million gallons of wastewater treated, a decrease from $486 in Fiscal Year 1998-99. (ii) Capital Facilities Capacity Charges and annexation fees, were reevaluated [and revised] as part of the Strategic Plan. (iii) The District will issue ($150] million in Certificates of Participation for the CIP in Fiscal Year 2000-01. This is ($80] million greater than the Fiscal Year 2000-01 portion of the five-year debt issuance schedule of [$470] million approved as part of the Fiscal Year 1997-98 Capital Facilities Capacity Charges adoption process in order to provide a 50/50 mix with pay-as- you-go funding and to recover prior reserve reductions. (iv) Pursuant to the 2000 Ordinance, residential Capital Facilities Capacity Charges for all Revenue Areas except Revenue Area No . 14, for Fiscal Years 2000-01 and 2001-02 will be lower than the Capital Facilities Capacity Charges adopted by the Board in 1997. See "District Revenues -Capital Facilities Capacity Charges" herein. (v) Property tax revenues in Fiscal Year 1999-00 are being projected at a 5.0% increase and will continue to rise a result of resales and new development. Summary of Projected District Revenues and Financial Information for Fiscal Years 1999-00 through 2003-04 ($Millions) 1999-00 2000-01 2001-02 2002-03 2003-04 Revenues: Residential Capital Facilities Capacity Chargeso> Industrial Capital Facilities Capacity Charges Revenue Area No. 14 fees Ad Valorem Taxes Interest Earnings Capital Facilities Capacity Charges Total Revenues Operations and Maintenance Expenses Net Revenues 4687v2 $ 68.1 5.4 32.9 25.0 5.2 $136.6 53.4 $ 83 .2 $ 71.8 5.5 33.6 28.7 5.2 $144.8 54.5 --$ 90.3 46 $ 75.5 $ 79.1 $ 83.0 5.7 5.8 6.0 5.8 6.6 3.9 34.3 35.0 35.7 23.5 26.3 21.2 5.2 5.2 5.2 $150.0 $158.0 $155.0 55.6 56.7 57.8 $ 94.4 $101.3 $ 97 .2 Debt Service $ 29.3 $ 34.2 $ 39.3 $ 46.2 $ 49.8 Coverage Ratios 2.84x 2.64x 2.40x 2.19x l.95x Management's Discussion and Analysis of Operating Data The District's projected outlay for the Fiscal Year 1999-00 capital improvement program is $78. 7 million, an increase of 8.7% over the prior year, pursuant to the Strategic Plan. In Fiscal Year 1999-00, the District will have a $1.2 million, or 2. 75% decrease in Joint Operating costs, which is comprised of Treatment Plant Operations, Maintenance and Administration. The decrease is primarily attributable to the projected reduction in the number of full-time staff from 543 in Fiscal Year 1998-99 to approximately 518 in Fiscal Year 1999-00. The Joint Operating budget for Fiscal Year 1999-00 is $44.0 million compared to $45.2 million in Fiscal Year 1998-99. The District and the OCWD are currently evaluating a joint project that may become the largest reclamation project in the nation. If completed as planned, the GWRS would reclaim approximately 100 million gallons of water per ~:lay. The District has proposed matching OCWD funding for this project and has budgeted $122 million over a six-year period. The GWRS would delay the need to modify the existing ocean outfall or to build a second outfall at a potential cost of $150 million. The GWRS will impact the District's other CIP projects whether or not the District participates in this project. See "The District -Capital Improvement Program" herein. In Fiscal Year 1997-98, DART completed its Reinvention Report which provided cost-saving recommendations which were implemented the following year. See "The District-Employees" herein. Estimated savings are a five-year return of $3,290,000 with annual savings of $1,440,000 thereafter. See "The District -Employees" herein. The District has received a renewal of the five-year modified National Pollution Discharge Elimination System permit. See "The District -Permits, Licenses and Other Regulations" herein. The permit continues to allow 50% secondary treatment of the influent flow, thereby eliminating costs of attaining full secondary treatment. The District's staff estimates the additional capital costs to attain full secondary treatment of $250 million (in 1989 dollars) and annual additional operation and maintenance costs of up to $50 million a year by 2020 (in 1989 dollars). See "The District -Permits, Licenses and Other Regulations" herein. Investment of District Funds State statutes authorize the District to invest in obligations of the United States Government, state and local governmental agencies, negotiable certificates of deposits, bankers acceptances, commercial paper, reverse repurchase agreements and a variety of other investment instruments which are allowable under California Government Code Section 53600 et seq. As a result of the Orange County bankruptcy and the District's prior investment in the County pool, the District has revised its investment policies and its funds are now managed by an external money manager, Pacific Investment Management Company ("PIMCO"). Mellon Trust ("Mellon Trust") serves as the District's independent custodian bank for its investment program. Callan Associates ("Callan") serves as the District's independent investment advisor. 47 4687v2 At [January 31, 2000][UPDATE], the externally managed portfolio consisted of a short-term investment pool of $19,450,083 with maturities to 180 days, and a long-term investment pool of $279,211,886 with maturities to five years. Investments consist of United States Government securities, corporate bonds and commercial paper. The District also invests a portion of its funds in the California Local Agency Investment Fund ("LAIF"). The District's portfolio contains no reverse repurchase agreements. Deposits in banks are maintained in financial institutions which provide deposit protection on the bank balance from the Federal Depository Insurance Corporation. The California Government Code requires State banks and savings and loans to secure local government deposits by pledging government securities equal to 110% of the deposits or by pledging first trust deed mortgage notes equal to 150% of the deposits. The District's Investment Policy requires that the District invest public funds in a manner which ensures the safety and preservation of capital while meeting reasonable anticipated operating expenditure needs, achieving a reasonable rate of return and conforming to all state and local statutes governing the investment of public funds. The primary objectives, in order, of the District's investment activities are safety, liquidity and return on investments. The table below provides a summary of the District's portfolio distribution as of [January 31,] 2000: %OF PORTFOLIO DISTRIBUTION COST MARKET VALUE TOTAL Cash & Cash Equivalents United States Commercial Paper -Discount $ 2,678,474.50 $ 2,678,474.50 13.63% Treasury Bills -Less Than I Year 3,411,181.67 3,411,181.67 17.36 Federal Home Loan Mortgage-Less Than 1 Year 1,199,291.67 1,199,291.67 6.10 FNMA Issues -Less Than I Year 2,485,301.39 2,496,450.00 12.70 Fed Home Loan Bank-Less Than I Year 3,697,194.17 3,697,194.17 18.81 Mutual Funds 134,632.92 134,632.92 0.69 Total United States 13,606,076.32 13,617,224.93 69.29 Total Cash and Cash Equivalents 13,606,076.32 13,617,224.93 69.29% Fixed Income Securities United States United States Agencies $ 999,200.00 $ 999,840.00 5.09% Asset Backed Securities (Car Loan) 905,913.00 903,069.00 4.60 Banking & Finance 1,497' 145.50 1,494,611.00 7.61 Industrial 1,935,205.00 1,925,803.00 9.80 Utility -Telephone 512,080.00 509,535.00 2.59 Total United States 5,849,543.50 5,832,858.00 29.68 Total Fixed Income Securities $ 5,849,543.50 $ 5,832,858.00 29.68% 48 4687v2 Other Portfolio Assets Pay ables/Receivables $ 202,020.35 $ 202,020.35 1.03% Total Other Portfolio Assets $ 202,020.35 $ 202,020.35 1.03% Net Portfolio Assets $19,657,640.17 $19,652, 103.28 100.00% Source: Mellon Trust. FINANCIAL OBLIGATIONS Existing Indebtedness The District has the power and authority to incur debt pursuant to Section 4764 of the Act. In September 1992, the State Legislature enacted Senate Bill 844 which reduced the special district ad valorem property tax revenues not pledged to debt service by 3 5 percent. As a result, the District dedicated all future property tax revenues to the payment of debt service on their current and future outstanding debt issues. As of January 1999, the District had no outstanding general obligation bonds. The table below describes the District's outstanding certificates of participation as of June 1, 2000. Outstanding Certificates of Participation Debt at June 1, 2000 Amount Outstanding Issued Issue Date Balance Final Maturity 1990 Series A Certificates<1l $100,000,000 215190 $ 83,300,000 8/1/15 1991 Series B Certificates(ll 117,555,000 5/1/91 18,695,000 8/1/04 1992 Series C Certificates<1l 98,500,000 911192 86,200,000 8/1/17 1992 Refunding Certificates 160,600,000 12/3/92 129, 110,000 8/1/13 1993 Refunding Certificates 46,000,000 9/2/93 43,950,000 8/1/16 Total Long-Term Debt $522,655,000 $361,255,000 (1) The oustanding principal amount of the 1990 Series A, 1992 Series C and the 1991 Series B Certificates will be refunded by the Certificates (2000 Refunding Project). 1992 Refw1ding Certificates. In December 1992, the District issued the 1992 Refunding Certificates pursuant to a Trust Agreement, dated as of October 1, 1992, as amended by the First Supplemental Trust Agreement dated as of 1,2000 by and among the Trustee and the predecessor districts (collectively, the "1992 Trust Agreement") to advance refund the remaining outstanding principal balance of the 1986 Certificates and a portion of the outstanding principal balance of the 1991 Series B Certificates. In connection with the execution and delivery of the 1992 Refunding Certificates, the predecessor districts entered into an Amendatory Agreement for Acquisition and Construction, dated as of October 1, 1992 (the "1992 Agreement") pursuant to which the predecessor districts agreed to pay installment payments in amounts sufficient to pay the 1992 Refunding Certificates, a Standby Certificate Purchase Agreement, dated as of January 30, 1993, by and among the predecessor distrcits, the Trustee and Barclays Bank PLC (the "1992 Bank") in order to provide for payment of the 49 4687v2 purchase price of tendered and unremarketed 1992 Refunding Certificates (the "1992 Reimbursement Agreement"), and an interest rate swap agreement (the "1992 Swap Agreement") with AIG Financial Products Corp. (the "1992 Swap Provider") whereby the 1992 Swap Provider agreed, subject to the terms of the 1992 Swap Agreement, to pay to the predecessor districts a floating amount equal to the interest rate evidenced by the 1992 Refunding Certificates and the predecessor districts agreed to pay to 1992 Swap Provider a fixed amount. The 1992 Refunding Certificates require annual payments of principal and interest (calculated at a rate of 5.55% per annum) ranging from $6,929,602 to $21, 152,22. Concurrently with the execution and delivery of the Certificates (2000 Refunding Project), the 1992 Trust Agreement is to be amended pursuant to the Reformed Trust Agreement, dated as of __ , 2000 (the "1992 Reformed Trust Agreement"), by and among the District, the Corporation and the Trustee, and the 1992 Agreement is to be amended pursuant to the Reformed Agreement for Acquisition and Construction, dated as of , 2000 ( the "1992 Reformed Agreement"), by and between the District and the Corporation. In addition, in connection with the execution of the 1992 Reformed Trust Agreement, the District and the 1992 Swap Provider will enter in Amendment No. 1 to the 1992 Interest Rate Swap Agreement, dated as of , 2000, and the District and the 1992 Bank will enter into the Amendment No. 1 to the Liquidity Guaranty Agreement, dated as of , 2000, and the Amendment No. 2 to the Letter of Credit and Reimbursement Agreement, dated as of ---2000. The obligations of the District under the 1992 Agreement, as amended under the 1992 Reformed Agreement, are to be secured under the Master Agreement on a parity with the Certificates (2000 Refunding Project) and the 1993 Certificates and other Outstanding Senior Obligations, including its obligations to the 1992 Bank and the 1992 Swap Provider. 1993 Refunding Certificates. In September 1993, the District issued the 1993 Refunding Certificates pursuant to a Trust Agreement, dated as of September 1, 1993, by and among Texas Commerce Bank National Association, as Trustee (the "1993 Trustee") and the predecessor districts (the "1993 Trust Agreement") to advance refund a portion of the outstanding principal balance of the 1991 Series B Certificates. In connection with the execution and delivery of the 1993 Refunding Certificates, the predecessor districts entered to an Amendatory Agreement for Acquisition and Construction, dated as of September 1, 1993 (the "1993 Acquisition Agreement") pursuant to which the predecessor districts agreed to pay installment payments in amounts sufficient to pay the 1993 Refunding Certificates, a Standby Agreement, dated as of September 1, 1993, by and among the predecessor districts, the 1993 Trustee and Societe General, New York Branch (the "1993 Bank") in order to provide for payment of the purchase price of tendered and unremarketed 1993 Refunding Certificates (the "1993 Reimbursement Agreement"), and an interest rate swap agreement (the "1993 Swap Agreement") with Societe General (the "1993 Swap Provider") whereby the 1993 Swap Provider agreed, subject to the terms of the 1993 Swap Agreement, to pay to the predecessor districts a floating amount equal to the interest rate evidenced by the 1993 Refunding Certificates and the predecessor districts agreed to pay to the 1993 Swap Provider a fixed amount. The 1993 Refunding Certificates require annual payments of principal and interest (calculated at rate of 4. 56 % per annum) ranging from $1,256,120 to $9,514,960 . Concurrently with the execution and delivery of the Certificates (2000 Refunding Project), the 1993 Trust Agreement is to be amended pursuant to the Reformed Trust Agreement, dated as of __ , 2000 (the "1993 Reformed Trust Agreement'), by and among the District, the Corporation and the 1993 Trustee, and the 1993 Acquisition Agreement is to be amended pursuant to the Reformed Agreement for Acquisition and Construction, dated as of __ , 2000 (the "1993 Reformed Acquisition Agreement"), by and between the District and the Corporation. In addition, in connection with the execution of the 1993 Reformed Trust Agreement, the District and the 1993 Swap Provider will enter 50 4687v2 into Amendment No. 1 to the 1993 Interest Rate Swap Agreement, dated as of __ , 2000, and the District and the 1993 Bank will enter into the Amendment No. 1 to the Reimbursement Agreement, dated as of _, 2000. The obligations of the District under the 1993 Acquisition Agreement, as amended under the 1993 Reformed Acquisition Agreement, are to be secured under the Master Agreement on a parity with the Certificates (2000 Refunding Project) and the 1992 Refunding Certificates and other Outstanding Senior Obligations, including its obligations to the 1993 Bank and the 1993 Swap Provider. Anticipated Financings Over the next ten years, the District projects $1,027.0 million in future joint capital improvements and in future collection system capital improvements. Fifty percent of these improvements are expected to be funded through current revenues and the balance will be funded through the issuance of new debt. In calendar year 2000, the District expects to issue approximately $150 million of certificate of participation debt, and a total of $664 million in certificates of participation over the next ten years. Payments with respect to any such indebtedness are expected to be issued as Additional Obligations under the Master Agreement on a parity with the Installment Payments. Direct and Overlapping Bonded Debt The table below presents the aggregate direct and overlapping bonded debt of the District. [TO COME] Direct and Overlapping Bonded Debt of the District (as of __ , 2000) Source: California Municipal Statistics, Inc. 51 4687v2 THE CORPORATION The Corporation was organized on April 26, 2000 as a nonprofit public benefit corporation pursuant to the Nonprofit Public Corporation law of the State. The Corporation's purpose is to render assistance to the District in its acquisition of equipment, real property and improvements on behalf of the District. Under its articles of incorporation, the Corporation has all powers conferred upon nonprofit public benefit corporations by the laws of the State, provided that it will not engage in any activity other than that which is necessary or convenient for, or incidental to the purposes for which it was formed. The Corporation is a separate legal entity from the District. It is governed by a twenty-five member Board of Directors (the "Board of Directors"). The Corporation has no employees. All staff work is performed by employees of the District. The members of the Corporation's Board of Directors are the Board of Directors of the Orange County Sanitation District. The District's Director of Finance and other District employees are available to provide staff support to the Corporation. The Corporation has not entered into any material financing arrangements other than those referred to in this Official Statement. Further information concerning the Corporation may be obtained from the Orange County Sanitation District office at 10844 Ellis Avenue, Fountain Valley, California, 92708-7018. LIMITATIONS ON TAXES AND REVENUES Property Tax Rate Limitations -Article XII/A. Article XIIIA of the State Constitution limits the taxing powers of State public agencies. Article XIIIA provides that the maximum ad valorem tax on real property cannot exceed 1 % of the "full cash value" which is defined as "the county assessor's valuation of real property as shown on the 1975-76 tax bill under "full cash value" or, thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment", subject to exceptions for certain circumstances of transfer or reconstruction and except with respect to certain voter approved debt. The "full cash value" is subject to annual adjustment to reflect increases, not to exceed 2% per year, or decreases in the consumer price index or comparable local data, or to reflect reduction in property value caused by damage, destruction or other factors. Article XIIIA requires a vote of two-thirds of the qualified electorate to impose special taxes, while generally precluding the imposition of any additional ad valorem, sales or transaction tax on real property. As amended, Article XIIIA exempts from the 1 % tax limitation any taxes above that level required to pay debt service on certain voter-approved general obligation bonds for the acquisition or improvement of real property. In addition, Article XIIIA requires the approval of two-thirds of all members of the State Legislature to change any State laws resulting in increased tax revenues. Appropriations Limitations. The State and most entities of local government are subject to an annual "appropriations limit" imposed by Article XIIIB of the State Constitution. Article XIIIB prohibits an entity of government from spending "appropriations subject to limitation" in excess of the appropriations limit imposed. Article XIIIB, originally adopted in 1979, was modified substantially by Propositions 98 and 111 in 1988 and 1990, respectively. "Appropriations subject to limitation" are authorizations to spend "proceeds of taxes", which consist of tax revenues, state subventions and certain other funds, including proceeds from regulatory licenses, user charges or other fees to the extent that such proceeds exceed "the cost reasonably borne by such entity in providing the regulation, product or 52 4687v2 service," but "proceeds of taxes" excludes tax refunds and some benefit payments such as unemployment insurance. No limit is imposed on appropriations of funds which are not "proceeds of taxes", such as reasonable user charges or fees, and certain other non-tax funds. Not included in the Article XIIIB limit are appropriations for the debt service costs of bonds existing or authorized by January 1, 1979, or subsequently authorized by the voters, appropriations required to comply with mandates of courts or the federal government and appropriations for qualified capital outlay projects. The appropriations limit may also be exceeded in certain cases of emergency. The appropriations limit for the District in each year is based on the District's limit for the prior year, adjusted annually for changes in the cost of living and changes in population, and adjusted, where applicable, for transfer of financial responsibility of providing services to or from another unit of government. The change in the cost of living is, at the District's option, either (1) the percentage change in State per capita personal income, or (2) the percentage change in the local assessment roll on nonresidential property. Either test is likely to be greater than the change in the cost of living index, which was used prior to Proposition I 11. Change in population is to be measured either within the jurisdiction of the District or the County as a whole. As amended by Proposition 111, the appropriations limit is tested over consecutive two-year periods. Any excess of the aggregate "proceeds of taxes" received by a District over such two-year period above the combined appropriations limits for those two years is to be returned to taxpayers by reductions in tax rates or fee schedules over the subsequent two years. As originally enacted in 1979, the District's appropriations limit was based on 1978-79 authorizations to expend proceeds of taxes and was adjusted annually to reflect changes in cost of living and population (using different definitions, which were modified by Proposition 111). Starting with Fiscal Year 1990-91, the District's appropriations limit was recalculated by taking the actual Fiscal Year 1986-87 limit, and applying the annual adjustments as if Proposition 111 had been in effect. The District does not anticipate that any such appropriations limitations will impair its ability to make its Installment Payments as required by the Installment Purchase Agreement. Proposition 62. On November 4, 1986, State voters approved Proposition 62, which added Sections 53720 et seq. to the California Government Code which: (i) requires that any tax for general governmental purposes imposed by local governmental entities, such as the District, be approved by resolution or ordinance adopted by a two-thirds vote of the governmental entity's legislative body and by a majority vote of the electorate of the governmental entity; (ii) requiresthat any special tax (defined as taxes levied for other than general governmental purposes) imposed by a local governmental entity be approved by a two-thirds vote of the voters within that jurisdiction; (iii) restricts the use of revenues from a special tax to the purposes or for the services for which the special tax was imposed; (iv) prohibits the imposition of ad valorem taxes on real property by local governmental entities except as permitted by Article XIIIA; (v) prohibits the imposition of transaction taxes and sales taxes on the sale of real property by local governmental entities; and (vi) requires that any tax imposed by a local governmental entity on or after August 1, 1985 be ratified by a majority vote of the electorate within two years of the adoption of the initiative or be terminated by November 15, 1988. On September 28, 1995, the State Supreme Court, in Santa Clara County Local Transportation Authority v. Guardino upheld the constitutionality of the portion of Proposition 62 requiring a two-thirds vote in order for a local government or district to impose a special tax, and by implication upheld a parallel provision requiring a majority vote in order for a local government or district to impose any general tax. The District has not imposed any taxes subject to the provisions of Proposition 62 and 53 4687v2 believes that it will not impair its ability to make its Installment Payments as required by the Installment Purchase Agreement. Proposition 218. On November 5, 1996, the voters of the State approved Proposition 218, a constitutional initiative, entitled the "Right to Vote on Taxes Act" ("Proposition 218 "). Proposition 218 adds Articles XIIIC and XIIID to the State Constitution and contains a number of interrelated provisions affecting the ability of local agencies, including the District, to levy and collect both existing and future taxes, assessments, fees and charges. Proposition 218 became effective on November 6, 1996. Senate Bill 919 was enacted to provide certain implementing provisions for Proposition 218 and became effective July 1, 1997. The District is unable to predict whether and to what extent Proposition 218 may be held to be constitutional or how its terms will be interpreted and applied by the courts. Proposition 218 could substantially restrict the District's ability to raise future revenues and could increase the District's costs to hold elections, calculate fees and assessments, notify the public and defend its fees and assessments in court. Further, as described below, Proposition 218 provides for broad initiative powers to reduce or repeal assessments, fees and charges. This initiative power is not limited by the terms of Proposition 218 to fees imposed after November 6, 1996 and absent other legal authority could result in retroactive reduction in any existing taxes, assessments or fees and charges, However, other than any impact resulting from the exercise of this initiative power, presently the District does not believe that the potential financial impact on the financial condition of the District as a result of the provisions of Proposition 218 will adversely affect the District's ability to pay the principal of and interest with respect to the Certificates (2000 Refunding Project) as and when due. Article XIIID of Proposition 218 also adds several prov1s1ons affecting "fees" and "charges" which are defined as "any levy other than an ad valorem tax, a special tax, or an assessment, imposed by a local government upon a parcel or upon a person as an incident of property ownership, including a Capital Facilities Capacity Charges or charge for a property related service." All new and, after June 30, 1998, existing property related fees and charges must conform to requirements prohibiting, among other things, fees and charges which (i) generate revenues exceeding the funds required to provide the property related service, (ii) are used for any purpose other than those for which the fees and charges are imposed, (iii) are for a service not actually used by, or immediately available to, the owner of the property in question, or (iv) are used for general governmental services, including police, fire or library services, where the service is available to the public at large in substantially the same manner as it is to property owners. Further, before any property related fee or charge may be initially imposed or increased, written notice must be given to the record owner of each parcel of land affected by such fee or charge. The District must then hold a hearing upon the proposed imposition or increase of such property based fee, and if written protests against the proposal are presented by a majority of the owners of the identified parcels, the District may not impose or increase the fee or charge. Moreover, except for fees or charges for sewer, water and refuse collection services, no property related fee or charge may be imposed or increased without majority approval by the property owners subject to the fee or charge or, at the option of the local agency, two-thirds voter approval by the electorate residing in the affected area. The District implemented a five-year plan beginning in Fiscal Year 1997-98 which provided for gradual increases in seven of the nine Revenue Areas. Although the District believed that this rate structure was not governed by Proposition 218, the District noticed the changes pursuant to Proposition 218, held hearings regarding the proposed Capital Facilities Capacity Charges increases and did not receive written protests by a majority of the owners of the affected parcels. Effective July 1, 2000, the District revised its rate structure to allow for the setting of lower rates in furtherance of its plans to consolidate all Revenue Areas and all fees to a uniform amount. See "District Revenues -Capital Facilities Capacity Charges" herein. The revised rate structure does not replace the rate structure adopted by the Board in 1997, but sets aside the 54 4687v2 higher rates until the District detennines that they are necessary and appropriate. Accordingly, the Proposition 218 hearing and notice procedures are not applicable with regard to the revised rate structure. Pursuant to the Master Agreement, the District will, to the extent permitted by law, fix, prescribe and collect fees and charges for the services of the Wastewater System which will be at least sufficient to yield during each Fiscal Year (a) Net Revenues equal to 125% of Debt Service on Senior Obligations for such Fiscal Year, and (b) Net Operating Revenues equal to 100% of Debt Service on all Obligations for such Fiscal Year. The District may make adjustments from time to time in such fees and charges and may make such classification thereof as it deems necessary, but shall not reduce the fees and charges then in effect unless the Revenues and Net Revenues from such reduced fees and charges will at all times be sufficient to meet the requirements of the Master Agreement. In the event that service charges are determined to be subject to Article XIIID, and proposed increased service charges cannot be imposed as a result of a majority protest, such circumstances may adversely effect the ability of the District to generate revenues in the amounts required by the Master Agreement, and to make Installment Payments representing principal and interest with respect to the Certificates (2000 Refunding Project) as provided in the Installment Purchase Agreement. VERIFICATION OF ARITHMETICAL AND MATHEMATICAL COMPUTATIONS Upon delivery of the Certificates (2000 Refunding Project), independent accountants, will deliver a report on the arithmetical accuracy of certain computations contained in schedules provided to them by the Underwriter relating to (a) the adequacy of the maturing principal of and interest on certain obligations and certain other moneys to pay all of the principal and prepayment premium represented by and the interest due with respect to the Refunded Certificates to be refunded (see "Plan of Refunding" herein) as such principal, prepayment premium and interest become due and payable, and (b) the computations of actuarial yield used by Special Counsel to support its opinion that the Certificates (2000 Refunding Project) are not arbitrage bonds within the meaning of Section 148 of the Code. has restricted its procedures to examining the arithmetical accuracy of certain computations and has not made any study or evaluation of the assumptions and information on which the computations are based and, accordingly, has not expressed an opinion on the data used, the reasonableness of the assumptions, or the achievability of the forecasted outcome. LEGAL MATTERS The validity of the Certificates (2000 Refunding Project) and certain other legal matters are subject to the approving opinion of Orrick, Herrington & Sutcliffe LLP, Los Angeles, California, Special Counsel. A complete copy of the proposed form of Special Counsel opinion is contained in Appendix E hereto. Special Counsel undertakes no responsibility for the accuracy, completeness or fairness of this Official Statement. Certain legal matters will be passed upon for the District by its counsel, Woodruff, Spradlin and Smart, a Professional Corporation, Orange, California and for the Underwriter by its counsel, Hawkins, Delafield & Wood, Los Angeles, California. ABSENCE OF LITIGATION There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body, pending or, to the best knowledge of the District, threatened against the District affecting the existence of the District or the titles of its directors or officers to their offices or seeking to restrain or to enjoin the sale or delivery of the Certificates (2000 Refunding 55 4687v2 Project), the application of the proceeds thereof in accordance with the Trust Agreement, or in any way contesting or affecting the validity or enforceability of the Certificates (2000 Refunding Project), the Trust Agreement, the Installment Purchase Agreement, the Standby Certificate Purchase Agreement or any action of the District contemplated by any of said documents, or in any way contesting the completeness or accuracy of this Official Statement, or contesting the powers of the District or its authority with respect to the Certificates (2000 Refunding Project) or any action of the District contemplated by any of said documents, nor, to the knowledge of the District is there any basis therefor. There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body pending or, to the best knowledge of the District, threatened against the District contesting or affecting the ability of the District to collect amounts from which Installment Payments are payable, or which would have a material adverse effect on the District, including the District's ability to make Installment Payments. FINANCIAL STATEMENTS The general purpose financial statements of the District included in Appendix A to this Official Statement have been audited by Moreland & Associates, Inc., independent certified public accountants. See Appendix A -"Audited Combined Financial Statements of the Orange County Sanitation District for Fiscal Years Ending June 30, 1999 and 1998" herein. The audited financial statements, including the footnotes thereto, should be reviewed in their entirety. Moreland & Associates, Inc. has not consented to the inclusion of its report as Appendix A and has not undertaken to update its report or to take any action intended or likely to elicit information concerning the accuracy, completeness or fairness of the statements made in this Official Statement, and no opinion is expressed by Moreland & Associates, Inc. with respect to any event subsequent to its report dated September 10, 1999. As a result of creating a consolidated entity, inter-district receivables and payables which were originally reported in the June 30, 1998 and prior audited financial statements, have been eliminated commencing with the June 30, 1999 audited financial statements. The District utilizes joint operating and capital outlay accounts to pay joint operating and construction costs of each revenue area. These joint costs are allocated to each Revenue Area based on the gallons of sewage flow. See Appendix A - "Audited Combined Financial Statements of the Orange County Sanitation District for Fiscal Years Ending June 30, 1999 and 1998" herein. TAX MATTERS In the opinion of Orrick, Herrington & Sutcliffe LLP, Los Angeles, California, Special Counsel, based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, compliance with certain covenants, interest evidenced by the Certificates (2000 Refunding Project) is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the "Code") and is exempt from State personal income taxes. Special Counsel is of the further opinion that interest evidenced by the Certificates (2000 Refunding Project) is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes, although Special Counsel observes that such interest is included in adjusted current earnings in calculating corporate alternative minimum taxable income. A complete copy of the proposed form of opinion of Special Counsel is set forth in Appendix E hereto. The Code imposes various restrictions, conditions and requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the Certificates 56 4687v2 (2000 Refunding Project). The District has covenanted to comply with certain restrictions designed to insure that interest evidenced by the Certificates (2000 Refunding Project) will not be included in federal gross income. Failure to comply with these covenants may result in interest evidenced by the Certificates (2000 Refunding Project) being included in gross income for federal income tax purposes, possibly from the date of execution and delivery of the Certificates (2000 Refunding Project). The opinion of Special Counsel assumes compliance with these covenants. Special Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken) or events occurring (or not occurring) after the date of execution and delivery of the Certificates (2000 Refunding Project) may adversely affect the value of, or the tax status of interest evidenced by, the Certificates (2000 Refunding Project). Further, no assurance can be given that pending or future legislation or amendments to the Code, if enacted into law, or any proposed legislation or amendments to the Code, will not adversely affect the value of, or the tax status of interest evidenced by, the Certificates (2000 Refunding Project). Prospective Series 2000 Certificate Owners are urged to consult their own tax advisors with respect to proposals to restructure the federal income tax. Certain requirements and procedures contained or referred to in the Trust Agreement, the Installment Purchase Agreement, the Tax Certificate, and other relevant documents may be changed and certain actions (including, without limitation, defeasance of the Certificates (2000 Refunding Project)) may be taken or omitted under the circumstances and subject to the terms and conditions set forth in such documents. Special Counsel expresses no opinion as to any Series 2000 Certificate or the interest evidenced thereby if any such change occurs or action is taken or omitted upon the advice or approval of special counsel other than Orrick, Herrington & Sutcliffe LLP. Although Special Counsel is of the opinion that interest evidenced by the Certificates (2000 Refunding Project) is excluded from gross income for federal income tax purposes and is exempt from State of California personal income taxes, the ownership or disposition of, or the accrual or receipt of interest evidenced by, the Certificates (2000 Refunding Project), may otherwise affect a Series 2000 Certificate Owner's federal or state tax liability. The nature and extent of these other tax consequences will depend upon the particular tax status of the Series 2000 Certificate Owner or the Series 2000 Certificate Owner's other items of income or deduction. Special Counsel expresses no opinion regarding any such other tax consequences. RATINGS Moody's Investors Service, Standard & Poor's Ratings Group and Fitch Investors Service, L.P. have rated the Bonds "_," "_" and "_," respectively. Such ratings reflect only the views of the rating agencies, and do not constitute a recommendation to buy, sell or hold the Certificates (2000 Refunding Project). Explanation of the significance of such ratings may be obtained only from the respective organizations at: Moody's Investors Service, 99 Church Street, New York, New York 10017; Standard & Poor's Ratings Group, 55 Water Street, New York, New York 10041; and Fitch Investors Service, L.P., One State Street Plaza, New York, New York 10004. There is no assurance that any such ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by the respective rating agencies, if in the judgment of any such rating agency circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price of the Certificates (2000 Refunding Project). 57 4687v2 UNDERWRITING The Certificates (2000 Refunding Project) are being purchased by PaineWebber Incorporated (the "Underwriter"). The Underwriter has agreed, subject to certain conditions, to purchase the Certificates (2000 Refunding Project) at a price of (which amount represents the principal amount of the Certificates (2000 Refunding Project) less an underwriter's discount of The Purchase Contracts relating to the Certificates (2000 Refunding Project) provide that the Underwriter will purchase all of the Certificates (2000 Refunding Project) if any are purchased, the obligation to make such purchase being subject to certain terms and conditions set forth in the Purchase Contracts, the approval of certain legal matters by counsel and certain other conditions. The Underwriter may offer and sell the Certificates (2000 Refunding Project) to certain dealers and others at prices lower than the offering price stated on the cover page. The offering price may be changed from time to time by the Underwriter. MISCELLANEOUS Included herein are brief summaries of certain documents and reports, which summaries do not purport to be complete or definitive, and reference is made to such documents and reports for full and complete statements of the contents thereof. Any statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. This Official Statement is not to be construed as a contract or agreement between the District and the purchasers or Owners of any of the Certificates (2000 Refunding Project). The execution and delivery of this Official Statement has been duly authorized by the District and the Corporation. 4687v2 ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION President ORANGE COUNTY SANITATION DISTRICT Chair of the Board of Directors 58 4687v2 APPENDIX A AUDITED COMBINED FINANCIAL STATEMENTS OF THE ORANGE COUNTY SANITATION DISTRICT FOR FISCAL YEARS ENDING JUNE 30, 1999 AND 1998 A-1 APPENDIXB THE COUNTY OF ORANGE-ECONOMIC AND DEMOGRAPIDC INFORMATION B-1 4687v2 APPENDIXC SUMMARY OF PRINCIPAL LEGAL DOCUMENTS C-1 4687v2 APPENDIXD BOOK-ENTRY SYSTEM DTC will act as secunties depository for the Certificates (2000 Refunding Project). The ownership of one or more fully registered Certificates (2000 Refunding Project) will be registered in the name of Cede & Co., as nominee for DTC. DTC is a limited-purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered pursuant to the provisions of Section 17 A of the Securities Exchange Act of I 934, as amended. DTC was created to hold securities of its participants (the "DTC Participants") and to facilitate the clearance and settlement of securities transactions among DTC Participants through electronic book-entry changes in accounts of the DTC Participants, thereby eliminating the need for physical movement of securities Certificates (2000 Refunding Project). DTC Participants include securities brokers and dealers, banks, trust companies, clearing corporations and other organizations, certain of which own DTC either directly or through their representatives. Access to the DTC system is also available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a DTC Participant, either directly or indirectly (the "Indirect Participants"). Purchases of Certificates (2000 Refunding Project) under the DTC system may be made through brokers and dealers who are or act through DTC Participants. Upon such purchase, the DTC Participant will receive a credit balance on the records of DTC. The Beneficial Owner will be recorded through the records of the DTC Participant or Indirect Participant. DTC Participants and Indirect Participants are required by DTC to provide Beneficial Owners with a written confirmation of their purchase containing details of the Certificates (2000 Refunding Project) acquired. Transfers of ownership interests in the Certificates (2000 Refunding Project) will be accomplished by book entries made by DTC and, in turn, by the DTC Participants who act on behalf of the Beneficial Owners and Indirect Participants. BENEFICIAL OWNERS WILL NOT RECEIVE PHYSICAL DELIVERY OF CERTIFICATES (2000 REFUNDING PROJECT) REPRESENTING THEIR OWNERSHIP INTEREST IN THE CERTIFICATES (2000 REFUNDING PROJECT) AND WILL NOT BE OR CONSIDERED TO BE OWNERS THEREOF UNDER THE TRUST AGREEMENT FOR PURPOSES OF REGISTRATION OR PAYMENT OR FOR ANY OTHER PURPOSE. The Trustee will make payments of principal and premium, if any, and interest with respect to the Certificates (2000 Refunding Project) to DTC or its nominee, Cede & Co., as Owner of the Certificates (2000 Refunding Project). The current practice of DTC is to credit the accounts of the OTC Participants immediately upon receipt of moneys in accordance with their respective holdings shown on the records of DTC. If appropriate, DTC Participants will forward such payments to Indirect Participants. Payments by DTC Participants or Indirect Participants to Beneficial Owners will be in accordance with standing instructions and customary practices such as those which are now the case for municipal securities held in bearer form or registered in "street name" for the accounts of customers and will be the responsibility of DTC Participants and Indirect Participants and not the responsibility of DTC, the Trustee or the Districts, subject to any statutory and regulatory requirements as may be in effect from time to time. The Trustee and the District, so long as a book-entry system is used for the Certificates (2000 Refunding Project), will send any notice of prepayment or other notices only to DTC or its nominee. Any failure of DTC to advise any DTC Participant, or of any DTC Participant or Indirect Participant to notify the Beneficial Owner, of any such notice and its content or effect will not affect the validity of the prepayment of such Certificate called for prepayment or of any other action premised on such notice. D-1 4687v2 prepayment of portions of the Certificates (2000 Refunding Project) by the District will reduce the outstanding principal amount of Certificates (2000 Refunding Project) held by DTC. In such event, DTC will implement, through its book-entry system, a prepayment by lot of Certificates (2000 Refunding Project) held for the account of DTC Participants in accordance with its own rules or other agreements with DTC Participants and then DTC Participants and Indirect Participants will implement a prepayment of the Certificates (2000 Refunding Project) for the Beneficial Owners. Any such selection of Certificates (2000 Refunding Project) to be prepaid will not be governed by the Trust Agreement and will not be conducted by the District or the Trustee. NEITHER THE DISTRICT NOR THE TRUSTEE WILL HA VE ANY RESPONSIBILITY OR OBLIGATION TO DTC PARTICIPANTS OR THE PERSONS FOR WHOM DTC PARTICIPANTS ACT AS NOMINEES WITH RESPECT TO THE PAYMENTS OR THE PROVIDING OF NOTICE TO DTC PARTICIPANTS, INDIRECT PARTICIPANTS OR BENEFICIAL OWNERS OR THE SELECTION OF PORTIONS OF THE CERTIFICATES (2000 REFUNDING PROJECT) FOR PREPAYMENT. The District and the Trustee cannot give any assurances that DTC, DTC Participants, Indirect Participants or others will distribute payments of principal of, prepayment premium, if any, and interest with respect to the Certificates (2000 Refunding Project) paid to DTC or its nominee, as the registered Owner, or any prepayment or other notice, to the Beneficial Owners or that they will do so on a timely basis or that DTC will serve and act in a manner described in this Official Statement. For every transfer and exchange of the Certificates (2000 Refunding Project), the Beneficial Owner may be charged a sum sufficient to cover any tax, fee or other governmental charge that may be imposed in relation thereto. DTC (or a successor securities depository) may determine to discontinue providing its service with respect to the Certificates (2000 Refunding Project) at any time by giving notice to the District and discharging its responsibilities with respect thereto under applicable law. The District, in their sole discretion and without the consent of any other person, may terminate the services of DTC (or a successor securities depository) with respect to the Certificates (2000 Refunding Project) if the District determine that a continuation of the book-entry system is not in the best interests of the Beneficial Owners of the Certificates (2000 Refunding Project). The District undertake no obligation to investigate matters that would enable the District to make such a determination. In the event that the book-entry system is discontinued as described above, the requirements of the Trust Agreement will apply. D-2 4687v2 APPENDIXE FORM OF APPROVING OPINION OF SPECIAL COUNSEL 4687v2 DOCSLAl :350031.2 41758-7 GHI MASTER AGREEMENT FOR DISTRICT OBLIGATIONS by and between the ORANGE COUNTY SANITATION DISTRICT and the ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION Dated as of ___ 1, 2000 TABLE OF CONTENTS ARTICLE I DEFINITIONS Section 1.01. Definitions .................................................................................................... 2 ARTICLE II PLEDGES; FUNDS AND ACCOUNTS Section 2.01. Pledge of Net Revenues ............................................................................. 14 Section 2.02. Establishment of Funds and Accounts ....................................................... 14 Section 2.03. Allocation of Revenues .............................................................................. 14 Section 2.04. Senior Obligation Payment Account ......................................................... 16 Section 2.05. Subordinate Obligation Payment Account.. ............................................... 16 Section 2.06. Rate Stabilization Account ........................................................................ 17 ARTICLE III INCURRENCE OF OBLIGATIONS Section 3.01. Senior Obligations ..................................................................................... 18 Section 3 .02. Subordinate Obligations ............................................................................. 19 ARTICLE IV COVENANTS Section 4.01. Punctual Payment.. ..................................................................................... 20 Section 4.02. Against Encumbrances ............................................................................... 20 Section 4.03. Against Sale or Other Disposition of Property .......................................... 20 Section 4.04. Maintenance and Operations of the Wastewater System; Budgets ........... 21 Section 4.05. Amount of Fees and Charges ..................................................................... 21 Section 4.06. Payment of Claims ..................................................................................... 22 Section 4.07. Compliance with Contracts ........................................................................ 22 Section 4.08. Insurance .................................................................................................... 22 Section 4.09. Accounting Records; Financial Statements and Other Reports ................. 22 Section 4.10. Protection of Security and Rights .............................................................. 23 Section 4.11. Payment of Taxes and Compliance with Govenunental Regulations ....... 23 Section 4.12. Collection of Fees and Charges; No Free Service ..................................... 23 Section 4.13. Eminent Domain Proceeds ......................................................................... 23 Section 4.14. Administrative Costs .................................................................................. 24 Section 4.15. Indemnification of Corporation ................................................................. 24 Section 4.16. Further Assurances ..................................................................................... 24 DOCSLAI :350031.2 41758-7 GH! TABLE OF CONTENTS (continued) ARTICLE V EVENTS OF DEFAULT AND REMEDIES Section 5.01. Events of Default ....................................................................................... 25 Section 5.02. Remedies on Default .................................................................................. 26 Section 5.03. Non-Waiver. ............................................................................................... 26 Section 5.04. Remedies Not Exclusive ............................................................................ 27 ARTICLE VI AMENDMENTS Section 6.01. Amendments ............................................................................................... 28 ARTICLE VII MISCELLANEOUS Section 7.01. Liability of District Limited ....................................................................... 30 Section 7.02. Limitation of Rights ................................................................................... 30 Section 7.03. Contract with Owners ................................................................................ 30 Section 7.04. Third-Party Beneficiaries ........................................................................... 30 Section 7.05. Notices ....................................................................................................... 30 Section 7 .06. Successor Is Deemed Included in all References to Predecessor .............. 31 Section 7.07. Waiver of Personal Liability ...................................................................... 31 Section 7.08. Article and Section Headings, Gender and References ............................. 31 Section 7.09. Partial Invalidity ......................................................................................... 31 Section 7.10. Law Governing .......................................................................................... 32 Section 7.11. Execution in Coimterparts .......................................................................... 32 DOCS LA I :3 5 0031 .2 41758-7 GHI ll MASTER AGREEMENT FOR DISTRICT OBLIGATIONS THIS MASTER AGREEMENT FOR DISTRICT OBLIGATIONS (this "Master Agreement"), is made and entered into as of 1, 2000, by and between the ORANGE COUNTY SANITATION DISTRICT, a county sanitation district organized and existing under the laws of the State of California (the "District"), and the ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION, a nonprofit public benefit corporation organized and existing under the laws of the State of California (the "Corporation"). WI TNE SSETH: WHEREAS, the District expects to have the need from time to time to finance or refinance the acquisition, construction and installation of improvements to its wastewater system; WHEREAS, the Corporation desires to assist the District with such financings and refinancings; WHEREAS, in order to accomplish such financings and refinancings, the District will incur obligations payable from net revenues of its wastewater system; WHEREAS, such obligations may be in the form of bonds of the District or may be in the form of installment purchase agreements, leases or other contracts by and between the District and the Corporation; WHEREAS, the District desires to establish and declare the conditions and terms upon which such obligations are to be incurred and secured; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and delivery of this Master Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Master Agreement; NOW, THEREFORE, in consideration of the covenants and provisions herein set forth and for other valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows: DOCSLAI :350031.2 41758-7 GHI 1 ARTICLE I DEFINITIONS Section 1.01. Definitions. Unless the context otherwise requires, the terms defined in this Section shall for all purposes hereof and of any amendment hereof or supplement hereto and of any report or other document mentioned herein or therein have the meanings defined herein, the following definitions to be equally applicable to both the singular and plural forms of any of the terms defined herein: "Accountant's Report" means a report signed by an Independent Certified Public Accountant. "Ad Valorem Taxes" means, for any period, the ad valorem property taxes received by the District during such period pursuant to Article XIIIA of the California Constitution and Section 95 et seq. of the California Revenue and Taxation Code, excluding any such taxes levied to pay any voter approved general obligation indebtedness of the District. "Administrative Costs" means the ordinary and necessary administrative costs and incidental expenses related to the Obligations and the Obligation Securities, including, but not limited to, Obligation Trustee fees and expenses (including fees and expenses of counsel thereto), Credit Facility Costs, remarketing fees, and fees incurred in connection with the calculation of arbitrage rebate due to the federal government with respect to the Obligations. "Assumed Debt Service" means, for any period, (a) for any Obligation other than Bonds, that portion of the Obligation Payments for such Obligation required to be made in such period, and (b) for Bonds, the sum of (i) the interest payable during such period on all such Outstanding Bonds, assuming that all Outstanding serial Bonds are retired as scheduled and that all Outstanding term Bonds are redeemed or paid from sinking fund payments as scheduled, (ii) that portion of the principal amount of all such Outstanding serial Bonds maturing on any principal payment date which falls in such period, and (iii) that portion of the principal amount of all Outstanding term Bonds required to be redeemed or paid on any redemption date which falls in such period (together with the redemption premiums, if any, thereon). For purposes of calculating Assumed Debt Service, the following assumptions shall be used: (A) in determining the principal amount due in each period, payment shall be assumed to be made in accordance with any amortization schedule established for such Obligations, including any scheduled payment at maturity or mandatory redemption or prepayment of Obligations on the basis of accreted value and, for such purpose, the scheduled payment at maturity or redemption payment or prepayment shall be deemed a principal payment; (B) in determining the interest due in each period, interest payable at a fixed rate shall be assumed to be made at such fixed rate and on the required payment dates; (C) if any outstanding Obligations constitute Variable Rate Indebtedness, the interest rate on such Obligations shall be assumed to be the greater of (x) the average interest rate on such Obligations during the 12 calendar months ending with the month DOCSLAl :350031.2 41758-7 GHl 2 preceding the date of calculation, or (y) the rate of interest on such Obligations on the date of calculation; (D) if Obligations proposed to be incurred will be Variable Rate Indebtedness, then (x) if interest on such Obligations is excluded from gross income for purposes of Federal income taxation, such Obligations shall be assumed to bear interest at the rate quoted in the most recently available short-term index of The Bond Market Association, or if that index is no longer published, another similar index selected by the District or, if the District fails to select a replacement index, an interest rate equal to 80% of the yield for outstanding United States Treasury bonds having an equivalent maturity as the Obligations proposed to be incurred, or if there are no such Treasury Bonds having equivalent maturities, 80% of the lowest prevailing prime rate of any of the five largest commercial banks in the United States, ranked by assets, and (y) if interest on such Obligations is not excluded from gross income for purposes of Federal income taxation, such Obligations shall be assumed to bear interest at an interest rate equal to 110% of the yield for outstanding United States Treasury bonds having an equivalent maturity as the Obligations proposed to be incurred, or if there are no such Treasury Bonds having equivalent maturities, 110% of the lowest prevailing prime rate of any of the five largest commercial banks in the United States, ranked by assets; (E) if any outstanding Obligations constitute Balloon Indebtedness (and such Obligations do not constitute Short-Term Obligations excluded from the calculation of Assumed Debt Service pursuant to clause (H), below) or if Obligations proposed to be incurred would constitute Balloon Indebtedness (and such Obligations would not constitute Short-Term Obligations excluded from the calculation of Assumed Debt Service pursuant to clause (H), below), then such amounts as constitute Balloon Indebtedness shall be treated as if the principal amount of such Obligations were amortized from the date originally incurred in substantially equal installments of principal and interest over a term of 30 years; the interest rate used for such computation shall be the rate quoted in the most recently available short-term index of The Bond Market Association, or if that ·index is no longer published, another similar index selected by the District, or if the District fails to select a replacement index, an interest rate equal to 80% of the yield for outstanding United States Treasury bonds having an equivalent maturity as the Obligations on the date incurred, or if there are no such United States Treasury bonds having equivalent maturities, 80% of the lowest prevailing prime rate of any of the five largest commercial banks in the United States, ranked by assets; (F) if any outstanding Obligations constitute Credit Enhanced Obligations or if Obligations proposed to be incurred would constitute Credit Enhanced Obligations, then Assumed Debt Service on such Obligations shall not be based upon the terms of any Reimbursement Obligations with respect to such Credit Enhanced Obligations except to the extent and for periods during which payments have been or will be required to be made pursuant to such Reimbursement Obligations due to the Credit Enhancer's having advanced funds for which it has not been fully reimbursed; (G) if any outstanding Obligations constitute Option Securities, or if any Obligation Securities payable from or evidencing interests in any outstanding Obligations DOCSLAJ :350031.2 41758-7 GHJ 3 (or the Obligation Payments payable under and pursuant to such Obligations) constitute Option Securities, or if Obligations proposed to be incurred would constitute Option Securities, or if Obligation Securities payable from or evidencing interests in Obligations proposed to be incurred( or the Obligation Payments payable under and pursuant to such Obligations) would constitute Option Securities, then (x) Assumed Debt Service on such Obligations shall not include amounts payable upon exercise by the Owner of such Option Securities of the option to tender such Option Securities for payment to the extent and for so long as a Liquidity Backer is required to provide the moneys necessary for such payment, and (y) Assumed Debt Service on such Obligations shall not be based upon the terms of any Reimbursement Obligations with respect to such Option Securities except to the extent and for periods during which payments have been or will be required to be made pursuant to such Reimbursement Obligations due to the Liquidity Backer's having advanced funds for which it has not been fully reimbursed; (H) if any outstanding Obligations constitute Short-Term Obligations or if Obligations proposed to be incurred would constitute Short-Term Obligations, and such Short-Term Obligations are or will be payable only out of Revenues of the Fiscal Year in which such Short-Term Obligations are incurred, then Debt Service on such Short-Term Obligations shall be disregarded and not included in calculating Assumed Debt Service; (I) if any outstanding Obligation constitutes a Financial Contract, then amounts payable by the District under such Financial Contract shall be added to Assumed Debt Service and amounts receivable by the District under such Financial Contract shall be subtracted from Assumed Debt Service; if the interest rate applicable to payments receivable by the District under such Financial Contract is a variable rate, such variable rate shall be calculated in accordance with clause (C), above; (J) if any Obligation proposed to be incurred will be a Financial Contract, then amounts payable by the District under such Financial Contract shall be added to Assumed Debt Service and amounts receivable by the District under such Financial Contract shall be subtracted from Assumed Debt Service; if the interest rate applicable to payments receivable by the District under such Financial Contract will be a variable rate, such variable rate shall be calculated in accordance with clause (D), above; (K) if amounts constituting accrued interest or capitalized interest have been deposited with an Obligation Trustee for Obligation Securities, then the interest payable from such amounts with respect to (x) the Obligations constituting such Obligation Securities, (y) the Obligations (or Obligation Payments) from which debt service on such Obligation Securities is payable, and (z) the Obligations (or Obligation Payments) interests in which are evidenced by such Obligation Securities, shall be disregarded and not included in calculating Assumed Debt Service; (L) if moneys or Defeasance Securities have been deposited by the District into a separate fund or account or are otherwise held by the District or by a fiduciary to be used to pay Debt Service on specified Obligations, or debt service on the Related Bonds of such Obligations, and such Obligations are discharged, or no longer outstanding, pursuant to the terms of the instrument under which they are issued or arise, DOCSLAI :350031.2 41758-7 GHI 4 then the Debt Service to be paid from such moneys or Defeasance Securities, or from the earnings thereon, shall be disregarded and not included in calculating Assumed Debt Service; (M) if investment earnings on amounts on deposit in an Obligation Reserve Fund are, pursuant to the terms of the instrument under which such Obligation Reserve Fund was established, required to be transferred therefrom and used to pay, or used as a credit against the payment of, Debt Service on specified Obligations, or debt service on the Related Bonds of such Obligations, then the projected investment earnings on such amounts, based on a reasonably determined rate of return, expected to be so used during such period shall be deducted from the Obligation Payments for such Obligations during such period; (N) the amount on deposit in an Obligation Reserve Fund on any date of calculation of Assumed Debt Service shall be deducted from the amount of principal due at the final maturity of the Obligations for which such Obligation Reserve Fund was established and in each preceding year until such amount is exhausted; and (0) with respect to Obligation Payments that are not comprised of separate payments of interest and principal but which, rather, are required pursuant to the instrument under which they arise to be paid in amounts sufficient to pay principal and interest on Related Bonds, for purposes of calculating Assumed Debt Service, interest payments and principal payments (whether at maturity or by redemption or prepayment) with respect to such Related Bonds shall be deemed to be interest payments and principal payments with respect to such Obligation Payments. "Balloon Indebtedness" means an Obligation, 50% or more of the principal of which matures or is payable on the same date and which is not required by the instrument pursuant to which such Obligation was incurred to be amortized by payment or redemption prior to such date. "Bonds" means Senior Bonds and Subordinate Bonds. "Capital Facilities Capacity Charges" means connection, capacity and other similar fees imposed by the District as charges to pay for capacity in the Wastewater System. "Capital Facilities Capacity Charge Eligible Project" means any improvements to the Wastewater System, the acquisition, construction and installation of which could be properly paid from Capital Facilities Capacity Charges. "Certificates" means Senior Certificates and Subordinate Certificates. "Consultant" means the consultant, consulting firm, engineer, architect, engineering firm, architectural firm, accountant or accounting firm retained by the District to perform the acts and carry out the duties provided for such consultant in this Master Agreement, in an Obligation, in an Obligation Security or in an Issuing Instrument. Such consultant, consulting firm, engineer, architect, engineering firm, architectural firm, accountant or accounting firm shall be recognized within its profession for work of the character required. DOCSLAI :350031.2 41758-7 GHI 5 "Corporation" means the Orange County Sanitation District Financing Corporation, a nonprofit public benefit corporation organized and existing under the laws of the State, and any successor thereto. "Credit Enhanced Obligations" means Obligations, the payments with respect to which, or the payments with respect to Related Bonds of which, are secured by a Credit Facility. "Credit Enhancer" means the Person issuing the Credit Facility securing payments with respect to Credit Enhanced Obligations or Related Bonds of such Credit Enhanced Obligations. "Credit Facility" means an irrevocable letter of credit, surety bond, insurance policy or other credit facility (a) securing payments with respect to Credit Enhanced Obligations, or Related Bonds of such Credit Enhanced Obligations, or (b) providing for amounts payable upon the optional or mandatory tender of an Option Security by the Owner thereof. "Credit Facility Agreement" means the agreement or arrangement pursuant to which a Credit Enhancer or Liquidity Backer is required to be reimbursed for draws on or payments under the Credit Facility issued by such Credit Enhancer or Liquidity Backer. "Credit Facility Costs" means any periodic fees and expenses payable to a Credit Enhancer or Liquidity Backer in consideration of such Person's providing the Credit Facility issued by such Person. "Debt Service" means, for any period, (a) for any Obligation other than Bonds, that portion of the Obligation Payments for such Obligation required to be made in such period, and (b) for Bonds, the sum of (i) the interest payable during such period on all such Outstanding Bonds, assuming that all Outstanding serial Bonds are retired as scheduled and that all Outstanding term Bonds are redeemed or paid from sinking fund payments as scheduled, (ii) that portion of the principal amount of all such Outstanding serial Bonds maturing on any principal payment date which falls in such period, and (iii) that portion of the principal amount of all Outstanding term Bonds required to be redeemed or paid on any redemption date which falls in such period (together with the redemption premiums, if any, thereon); provided, however, that, (A) if amounts constituting accrued interest or capitalized interest have been deposited with an Obligation Trustee for Obligation Securities, then the interest payable from such amounts with respect to (x) the Obligations constituting such Obligation Securities, (y) the Obligations (or Obligation Payments) from which debt service on such Obligation Securities is payable, and (z) the Obligations (or Obligation Payments) interests in which are evidenced by such Obligation Securities, shall be disregarded and not included in calculating Debt Service, (B) if moneys or Defeasance Securities have been deposited by the District into a separate fund or account or are otherwise held by the District or by a fiduciary to be used to pay Debt Service on specified Obligations, or debt service on the Related Bonds of such Obligations, and such Obligations are discharged, or no longer outstanding, pursuant to the terms of the instrument under which they are issued or arise, then the Debt Service to be paid from such moneys or Defeasance Securities, or from the earnings thereon, shall be disregarded and not included in calculating Debt Service, (C) if investment earnings on amounts on deposit in an Obligation Reserve Fund are, pursuant to the terms of the instrument under which such Obligation Reserve Fund was established, required to be transferred therefrom and used to pay, or used as a credit against the payment of, Debt DOCSLA! :350031.2 41758-7 GH! 6 Service on specified Obligations, or debt service on the Related Bonds of such Obligations, then the amount so transferred and used during such period shall be deducted from the Obligation Payments for such Obligations during such period, (D) the amount on deposit in an Obligation Reserve Fund on any date of calculation of Debt Service shall be deducted from the amount of principal due at the final maturity of the Obligations for which such Obligation Reserve Fund was established and in each preceding year until such amount is exhausted, and (E) with respect to Obligation Payments that are not comprised of separate payments of interest and principal but which, rather, are required pursuant to the instrument under which they arise to be paid in amounts sufficient to pay principal and interest on Related Bonds, for purposes of calculating Debt Service, interest payments and principal payments (whether at maturity or by redemption or prepayment) with respect to such Related Bonds shall be deemed to be interest payments and principal payments with respect to such Obligation Payments. "District" means the Orange County Sanitation District, a county sanitation district organized and existing under and by virtue of the laws of the State, and any successor thereto. "Event of Default" means an event described in Section 5.01 hereof. "Financial Contract" means any interest rate swap agreement, currency swap agreement, forward payment conversion agreement, future or contract entered into by the District with respect to any Obligation providing for payment based on levels of, or changes in, interest rates, currency exchange rates, stock or other indices, or a contract entered into by the District with respect to any Obligation to exchange cash flows or a series of payments, or a contract entered into by the District with respect to any Obligation, including, without limitation, interest rate floors or caps, options, rates or calls, to hedge payment, currency, rate, spread, or similar exposure or any similar contract entered into by the District with respect to any Obligation. "Fiscal Year" means, with respect to the District, the period beginning on July 1 of each year and ending on the next succeeding June 30, or any other twelve-month period selected and designated as the official Fiscal Year of the District. - "Generally Accepted Accounting Principles" means the uniform accounting and reporting procedures set forth in publications of the American Institute of Certified Public Accountants or its successor and the National Council on Governmental Accounting or its successor, or by any other generally accepted authority on such procedures, and includes, as applicable, the standards set forth by the Governmental Accounting Standards Board or its successor. "Independent Certified Public Accountant" means any firm of certified public accountants appointed by the District, which is independent pursuant to the Statement on Auditing Standards No. 1 of the American Institute of Certified Public Accountants. "IRWD Agreement" means the Agreement Acquiring Ownership Interests, Assigning Rights and Establishing Obligations, entered into on February 13, 1986, by and between County Sanitation District No. 14 of Orange County and the Irvine Ranch Water District, as originally executed and as it may from time to time be amended or supplemented in accordance with its terms. DOCSLAl :350031.2 41758-7 GHI 7 "Issuing Instrument" means, with respect to Obligation Securities (a) if such Obligation Securities are Bonds, the indenture, trust agreement, fiscal agent agreement or other instrument pursuant to which such Bonds are issued, (b) if such Obligation Securities are Related Bonds, the indenture, trust agreement, fiscal agent agreement or other instrument pursuant to which such Related Bonds are issued, ( c) if such Obligation Securities are a Contract, such Contract, and ( d) if such Obligation Securities are Certificates, the trust agreement or other instrument pursuant to which such Certificates are executed and delivered. "Liquidity Backer" means the Person issuing the Credit Facility providing for amounts payable upon the optional or mandatory tender of an Option Security by the Owner thereof. "Maintenance and Operations Costs" means, for any period, the costs paid by the District during such period for maintaining and operating the Wastewater System, calculated in accordance with Generally Accepted Accounting Principles, including (among other things) all expenses necessary to maintain and preserve the Wastewater System in good repair and working order, all administrative costs allocable to the operation of the Wastewater System, such as salaries and wages of employees, payments to its employee retirement systems (to the extent paid from Revenues), overhead, taxes (if any), insurance premiums, fees of auditors, accountants, attorneys or engineers, and all Administrative Costs paid by the District during such period, but excluding in all cases (a) depreciation, replacement and obsolescence charges or reserves therefor, (b) amortization of intangibles or other bookkeeping entries of a similar nature, (c) costs of capital additions, replacements, betterments, extensions or improvements to the Wastewater System which under Generally Accepted Accounting Principles are chargeable to a capital account or to a reserve for depreciation, and ( d) charges for the payment of any debt service on Obligations of the District. "Master Agreement" means this Master Agreement for District Obligations, dated as of ____ 1, 2000, by and between the District and the Corporation, as originally executed and as it may from time to time be amended or supplemented in accordance with the terms hereof. "Maximum Annual Debt Service" means, as of any date, with respect to Obligations, the maximum amount of Assumed Debt Service on such Obligations in the then current or any future Fiscal Year. "Net Proceeds" means, when used with respect to any insurance, self insurance or condemnation award, the proceeds from such insurance or condemnation award remaining after payment of all expenses (including attorneys' fees) incurred in the collection of such proceeds. "Net Operating Revenues" means for any period, the Operating Revenues for such period, less the Maintenance and Operations Costs for such period. "Net Revenues" means for any period, the Revenues for such period, less the Maintenance and Operations Costs for such period. "Obligation Payments" means Senior Obligation Payments and Subordinate Obligation Payments. DOCSLAI :350031.2 41758-7GH! 8 "Obligation Reserve Fund" means, with respect to Obligation Securities, any debt service reserve fund or account held by the Obligation Trustee for such Obligation Securities and established to secure the payment of such Obligation Securities or the payment of the Obligation Payments payable under and pursuant to the Obligations, interests in which are evidenced by such Obligation Securities. "Obligation Securities" means Senior Obligation Securities and Subordinate Obligation Securities. "Obligation Trustees" means Senior Obligation Trustees and Subordinate Obligation Trustees. "Obligations" means Senior Obligations and Subordinate Obligations. "Operating Revenues" means, for any period, all income and revenue received by the District during such period from the operation or ownership of the Wastewater System, determined in accordance with Generally Accepted Accounting Principles, including all fees and charges received during such period for the services of the Wastewater System, investment income received during such period (but only to the extent that such investment income is generally available to pay costs with respect to the Wastewater System, including Maintenance and Operations Costs), Net Proceeds of business interruption insurance received during such period, Ad Valorem Taxes received during such period, payments under the IRWD Agreement received during such period and all other money received during such period howsoever derived by the District from the operation or ownership of the Wastewater System or arising from the Wastewater System (including any standby or availability charges), but excluding (a) Capital Facilities Capacity Charges, (b) payments received under Financial Contracts, and ( c) refundable deposits made to establish credit and advances or contributions in aid of construction (which, for purposes hereof, shall not include payments under the IR WD Agreement); provided, however, that Operating Revenues shall include Capital Facilities Capacity Charges collected during such period to the extent that such Capital Facilities Capacity Charges could be properly expended on a Capital Facilities Capacity Charge Eligible Project for which the proceeds of Subject Obligations were used or are available to be used. "Option Securities" means Obligation Securities which by their terms, or by the terms of the Issuing Instrument pursuant to which they were issued, incurred or executed and delivered, may be or are required to be tendered by the Owner thereof for payment or purchase by the District or a third party prior to the stated maturity thereof. "Outstanding" means, with respect to Obligation Securities, such Obligation Securities as are, or as are deemed to be, outstanding, as determined pursuant to the provisions of the Issuing Instrument pursuant to which such Obligation Securities are issued, incurred or executed and delivered. "Owner" means, with respect to an Obligation Security, the Person who is, or who is deemed to be, the owner of such Obligation Security, as determined pursuant to the provisions of such Obligation Security or the Issuing Instrument pursuant to which such Obligation Security is issued, incurred or executed and delivered. DOCSLAI :350031.2 41758-7 GHI 9 "Permitted Encumbrances" means, with respect to the Wastewater System or any part thereof (a) liens for taxes or other governmental charges or levies not delinquent or that are being contested in good faith by the District, (b) covenants, easements, encumbrances, defects of title, reservations, restrictions and conditions existing at the time of delivery of the Certificates, ( c) defects, irregularities, encumbrances, easements, including easements for roads and public utilities and similar easements, rights of way, mineral conveyances, mineral reservations and clouds on title that do not materially impair the use of the property affected thereby for its intended purposes, (d) mechanics', workers', repairmen's, architects', engineers', surveyors', or carriers' liens or other similar liens provided that the same shall be discharged in the ordinary course of business and without undue delay or the validity of the same shall be contested in good faith with any pending execution thereof appropriately stayed, ( e) other liens, charges and encumbrances that, in the written opinion of counsel to the District, a copy of which is filed with each Obligation Trustee, do not materially impair the use of the Wastewater System (for purposes hereof, counsel to the District may rely upon a certificate of any engineer or any architect as to whether such liens, charges and encumbrances prevent or materially impair the use of the Wastewater System), and (f) encumbrances on property, plant and equipment comprising a part of the Wastewater System to the extent permitted by Section 4.02 hereof. "Person" means an individual, corporation, limited liability company, firm, association, partnership, trust, or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof. "Principal Amount" means, with respect to Obligation Securities (a) if such Obligation Securities are Bonds, the principal amount of such Bonds, as determined pursuant to the provisions of such Bonds or the Issuing Instrument pursuant to which such Bonds are issued, (b) if such Obligation Securities are Related Bonds, the principal amount of such Related Bonds, as determined pursuant to the provisions of such Related Bonds or the Issuing Instrument pursuant to which such Related Bonds are issued, ( c) if such Obligation Securities are a Contract, the principal amount of such Contract, or the principal amount of the Contract Payments payable under and pursuant to such Contract, as determined pursuant to the provisions of such Contract, and ( d) if such Obligation Securities· are Certificates, the principal amount of the Contract, or the principal amount of the Contract Payments payable under and pursuant to such Contract, evidenced by such Certificates, as determined pursuant to the provisions of such Certificates or the Issuing Instrument pursuant to which such Certificates are executed and delivered. "Reimbursement Obligation" means the obligation of the District, arising pursuant to a Credit Facility Agreement or otherwise, to repay amounts drawn on or paid under a Credit Facility, to pay interest on such amounts and to pay any other amounts in connection with such draw or payment; provided, however, that no portion of any such obligation shall be deemed to be a Reimbursement Obligation if the payment thereof would duplicate any amount payable to the Credit Enhancer or Liquidity Backer that issued such Credit Facility in such Credit Enhancer or Liquidity Backer's capacity as Owner of an Obligation Security. "Related Bonds" means, with respect to particular Obligations, bonds, notes or other obligations of a Person other than the District, the debt service on which is payable from Obligation Payments for such Obligations. DOCSLAI :350031.2 41758-7 GHI 10 "Revenues" means, for any period, all income and revenue received by the District during such period from the operation or ownership of the Wastewater System, determined in accordance with Generally Accepted Accounting Principles, including all fees and charges received during such period for the services of the Wastewater System, investment income received during such period (but only to the extent that such investment income is generally available to pay costs with respect to the Wastewater System, including Maintenance and Operations Costs), Net Proceeds of business interruption insurance received during such period, Ad Valorem Taxes received during such period, payments under the IRWD Agreement received during such period and all other money received during such period howsoever derived by the District from the operation or ownership of the Wastewater System or arising from the Wastewater System (including any standby or availability charges), but excluding (a) Capital Facilities Capacity Charges, (b) payments received under Financial Contracts, and ( c) refundable deposits made to establish credit and advances or contributions in aid of construction (which, for purposes hereof, shall not include payments under the IRWD Agreement); provided, however, that (i) Revenues shall be increased by the amounts, if any, transferred during such period from the Rate Stabilization Account to the Revenue Account and shall be decreased by the amounts, if any, transferred during such period from the Revenue Account to the Rate Stabilization Account, and (ii) Revenues shall include Capital Facilities Capacity Charges collected during such period to the extent that such Capital Facilities Capacity Charges could be properly expended on a Capital Facilities Capacity Charge Eligible Project for which the proceeds of Subject Obligations were used or are available to be used. "Senior Bonds" mean all revenue bonds or notes (including bond anticipation notes and commercial paper) of the District authorized, executed, issued and delivered under and pursuant to applicable law, the payments of which are, in accordance with the provisions hereof, payable from Net Revenues on a parity with the Senior Contract Payments. "Senior Certificates" means certificates of participation, receipts or other instruments evidencing interests in a Senior Contract, or in the Senior Contract Payments payable under and pursuant to such Senior Contract. "Senior Contract Payments" means the installment, lease or other payments of interest and principal or, if there are no separate payments of interest and principal, the installment, lease or other payments, payable by the District under and pursuant to its Senior Contracts. "Senior Contracts" means all contracts (including Financial Contracts) or leases of the District authorized and executed by the District under and pursuant to applicable law, the installment, lease or other payments under which are, in accordance with the provisions hereof, payable from Net Revenues on a parity with Senior Bonds. "Senior Obligation Payments" means (a) the debt service payments payable by the District under and pursuant to Senior Bonds, and (b) Senior Contract Payments. "Senior Obligation Securities" means, with respect to particular Senior Obligations (a) if such Senior Obligations are Senior Bonds that do not have Related Bonds, such Senior Bonds, (b) if such Senior Obligations are Senior Bonds that do have Related Bonds, such Related Bonds, ( c) if such Senior Obligations are a Senior Contract (i) that does not have Related Bonds, and (ii) DOCSLAI :350031.2 41758-7 GHI 11 interests in which, or interests in the Senior Contract Payments payable under and pursuant to which, are not evidenced by Senior Certificates, such Senior Contract, ( d) if such Senior Obligations are a Senior Contract that does have Related Bonds, such Related Bonds, and ( e) if such Senior Obligations are a Senior Contract, interests in which, or interests in the Senior Contract Payments payable under and pursuant to which, are evidenced by Senior Certificates, such Senior Certificates. "Senior Obligation Trustee" means, with respect to Senior Obligation Securities, the trustee, fiscal agent or other fiduciary authorized to act for the benefit and on behalf of the Owners of such Senior Obligation Securities. "Senior Obligations" means Senior Bonds and Senior Contracts. "Short-Term Obligations" means Obligations having an original maturity of less than or equal to one year and which are not renewable at the option of the District for a term greater than one year beyond the date of original incurrence. "State" means the State of California. "Subject Obligations" means, for any period, Obligations, any portion of the proceeds of which were expended or are available to be expended for a Capital Facilities Capacity Charge Eligible Project, and with respect to which (a) any portion of such Obligations were outstanding during such period, or (b) if such Obligations were refunded with the proceeds of refunding Obligations, any portion of such refunding Obligations were outstanding during such period. "Subordinate Bonds" means all revenue bonds or notes (including bond anticipation notes and commercial paper) of the District authorized, executed, issued and delivered under and pursuant to applicable law, the payments of which are, in accordance with the provisions hereof, payable from Net Revenues remaining after payment therefrom of the District's Senior Obligation Payments, on a parity with the District's Subordinate Contract Payments. "Subordinate Certificates" means certificates of participation, receipts or other instruments evidencing interests in a Subordinate Contract, or in the Subordinate Contract Payments payable under and pursuant to such Subordinate Contract. "Subordinate Contract Payments" means the installment, lease or other payments of interest and principal or, if there are no separate payments of interest and principal, the installment, lease or other payments, payable by the District under and pursuant to its Subordinate Contracts. "Subordinate Contracts" means all contracts (including Financial Contracts) or leases of the District authorized and executed by the District under and pursuant to applicable law, the installment, lease or other payments under which are, in accordance with the provisions hereof, payable from the Net Revenues remaining after payment therefrom of the District's Senior Obligation Payments, on a parity with the District's Subordinate Bonds. "Subordinate Obligation Payments" means (a) the debt service payments payable by the District under and pursuant to Subordinate Bonds, and (b) Subordinate Contract Payments. DOCSLA! :350031.2 41758-7 GH! 12 "Subordinate Obligation Securities" means, with respect to particular Subordinate Obligations (a) if such Subordinate Obligations are Subordinate Bonds that do not have Related Bonds, such Subordinate Bonds, (b) if such Subordinate Obligations are Subordinate Bonds that do have Related Bonds, such Related Bonds, ( c) if such Subordinate Obligations are a Subordinate Contract (i) that does not have Related Bonds, and (ii) interests in which, or interests in the Subordinate Contract Payments payable under and pursuant to which, are not evidenced by Subordinate Certificates, such Subordinate Contract, ( d) if such Subordinate Obligations are a Subordinate Contract that does have Related Bonds, such Related Bonds, and ( e) if such Subordinate Obligations are a Subordinate Contract, interests in which, or interests in the Subordinate Contract Payments payable under and pursuant to which, are evidenced by Subordinate Certificates, such Subordinate Certificates. "Subordinate Obligation Trustee" means, with respect to Subordinate Obligation Securities, the trustee, fiscal agent or other fiduciary authorized to act for the benefit and on behalf of the Owners of such Subordinate Obligation Securities. "Subordinate Obligations" means Subordinate Bonds and Subordinate Contracts. "Variable Rate Indebtedness" means any portion of any Obligation the interest rate on which is not established at the time of incurring such Obligation and has not, at some subsequent date, been established at a rate which is not subject to fluctuation or subsequent adjustment. "Wastewater System" means the whole and each and every part of the wastewater collection, treatment and disposal facilities of the District, all real and personal property, or any interest therein, constituting a part thereof and all additions, improvements, betterments and extensions thereto, whether existing as of the date of this Master Agreement or subsequently acquired, constructed or installed. DOCSLAI :350031.2 41758-7 GHI 13 ARTICLE II PLEDGES; FUNDS AND ACCOUNTS Section 2.01. Pledge of Net Revenues. Subject only to the provisions of this Master Agreement permitting the application thereof for the purposes and on the terms and conditions set forth herein, all Net Revenues are hereby pledged to the payment of the Senior Obligations and Reimbursement Obligations with respect to Senior Obligations, as provided herein, and the Net Revenues shall not be used for any other purpose while any of the Senior Obligations or Reimbursement Obligations with respect to Senior Obligations remain unpaid. Such pledge shall constitute a first lien on the Net Revenues for the payment of the Senior Obligations and Reimbursement Obligations with respect to Senior Obligations. Subject only to the provisions of this Master Agreement permitting the application thereof for the purposes and on the terms and conditions set forth herein, all Net Revenues are hereby pledged to the payment of the Subordinate Obligations and Reimbursement Obligations with respect to Subordinate Obligations, as provided herein, and the Net Revenues shall not be used for any other purpose while any of the Subordinate Obligations or Reimbursement Obligations with respect to Subordinate Obligations remain unpaid. Such pledge of the Net Revenues, and the lien thereon created hereby, shall be junior and subordinate to the pledge of, and lien on, the Net Revenues for the payment of the Senior Obligations and Reimbursement Obligations with respect to Senior Obligations. Section 2.02. Establishment of Funds and Accounts. The District hereby agrees to establish and maintain within its treasury, so long as any Obligations remain outstanding, a separate fund designated the "Operating Fund". Subject to the provisions of the following paragraph, the District hereby agrees to establish and maintain within the Operating Fund, so long as any Obligations remain outstanding, the following accounts: (a) Revenue Account; (b) Senior Obligation Payment Account; ( c) Subordinate Obligation Payment Account; and ( d) Rate Stabilization Account. Notwithstanding the foregoing, the District need only establish a Rate Stabilization Account if and when it deems the establishment of such account to be necessary or appropriate for the management of its financial affairs. Section 2.03. Allocation of Revenues. The District, in order to carry out and effectuate the pledge contained in Section 2.01 hereof, agrees and covenants that all Operating Revenues received by it shall be deposited when and as received in the Revenue Account. Additionally, amounts may, from time to time as the District deems necessary or appropriate, be transferred from the Rate Stabilization Account and deposited in the Revenue Account. The District shall pay from the Revenue Account all Maintenance and Operations Costs (including amounts reasonably required to be set aside in contingency reserves for Maintenance and Operations DOCSLAl :350031.2 41758-7 GHl 14 Costs, the payment of which is not immediately required) as and when the same shall be due and payable. After having paid, or having made provision for the payment of, Maintenance and Operations Costs, the District shall set aside and deposit or transfer, as the case may be, from the Revenue Account the amounts set forth below at the following times and in the following order of priority: (a) Senior Obligation Payment Account. On or before each date on which amounts are due and payable on any Senior Obligations and on each date on which any Reimbursement Obligations with respect to Senior Obligations are due and payable, the District shall transfer legally available Net Revenues to the Senior Obligation Payment Account in an amount which, together with other amounts on deposit therein, is at least sufficient to make the required payments with respect to such Senior Obligations or such Reimbursement Obligations. In the event that the District has insufficient Net Revenues to make all of the transfers contemplated by this paragraph (a), then such transfers shall be made, as nearly as practicable, pro rata, based on the respective principal amounts of the Senior Obligations and Reimbursement Obligations, payments with respect to which are required to be made. (b) Senior Obligation Reserve Funds. The District shall transfer to each Obligation Trustee for its Senior Obligation Securities, for deposit in the applicable Obligation Reserve Fund, legally available Net Revenues in an amount equal to the amount, if any, required to be deposited therein to build up or replenish such Obligation Reserve Fund as and to the extent required by (i) such Senior Obligation Securities, (iii) the Issuing Instrument pursuant to which such Senior Obligation Securities are issued, incurred or executed and delivered, and (iii) the Senior Contract, interests in the Senior Contract Payments payable under and pursuant to which are evidenced by such Senior Obligation Securities. In the event that there are insufficient Net Revenues to make all of the transfers contemplated by this paragraph (b ), then said transfers shall be made, as nearly as practicable, pro rata, based on the respective Outstanding Principal Amounts of the Senior Obligation Securities, deposits to the Obligation Reserve Funds for which are required to be made. ( c) Subordinate Obligation Payment Account. On or before each date on which amounts are due and payable on any Subordinate Obligations and on each date on which any Reimbursement Obligations with respect to Subordinate Obligations are due and payable, the District shall transfer legally available Net Revenues to the Subordinate Obligation Payment Account in an amount which, together with other amounts on deposit therein, is at least sufficient to make the required payments with respect to such Subordinate Obligations or such Reimbursement Obligations. In the event that the District has insufficient Net Revenues to make all of the transfers contemplated by this paragraph ( c ), then such transfers shall be made, as nearly as practicable, pro rat a, based on the respective principal amounts of the Subordinate Obligations and Reimbursement Obligations, payments with respect to which are required to be made. DOCSLAl :350031.2 41758-7 GHI 15 (d) Subordinate Obligation Reserve Funds. The District shall transfer to each Obligation Trustee for its Subordinate Obligation Securities, for deposit in the applicable Obligation Reserve Fund, legally available Net Revenues in an amount equal to the amount, if any, required to be deposited therein to build up or replenish such Obligation Reserve Fund as and to the extent required by (i) such Subordinate Obligation Securities, (iii) the Issuing Instrument pursuant to which such Subordinate Obligation Securities are issued, incurred or executed and delivered, and (iii) the Subordinate Contract, interests in the Subordinate Contract Payments payable under and pursuant to which are evidenced by such Subordinate Obligation Securities. In the event that there are insufficient Net Revenues to make all of the transfers contemplated by this paragraph (b ), then said transfers shall be made, as nearly as practicable, pro rata, based on the respective Outstanding Principal Amounts of the Subordinate Obligation Securities, deposits to the Obligation Reserve Funds for which are required to be made. (e) Rate Stabilization Account. The District may, from time to time as the District deems necessary or appropriate, transfer Net Revenues in the Revenue Account to the Rate Stabilization Account. Amounts required or permitted to be deposited or transferred pursuant to paragraph (b ), (c), (d) or (e), above, shall not be so deposited or transferred unless the District shall have determined that there will be sufficient Net Revenues available to make the required deposits or transfers pursuant to all subsections prior to said subsection on the dates on which such deposits or transfers are required to be made. So long as the District has determined that Net Revenues will be sufficient to make all of the deposits or transfers required to be made pursuant to paragraphs (a), (b), (c), (d) and (e), above, on the dates on which such deposits or transfers are required to be made, Net Revenues on deposit in the Revenue Account may from time to time be used for any purpose for which District funds may be legally applied. Section 2.04. Senior Obligation Payment Account. The District shall transfer from the Senior Obligation Payment Account to the appropriate Person the Senior Obligation Payments and the payments of Reimbursement Obligations with respect to Senior Obligations as and when due and payable. In the event there are insufficient amounts on deposit in the Senior Obligation Payment Account to make all of such Senior Obligation Payments and such Reimbursement Obligation payments, then said payments shall be made, as nearly as practicable, pro rata, based on the respective principal amounts of the Senior Obligation Payments and Reimbursement Obligations due and payable. Section 2.05. Subordinate Obligation Payment Account. The District shall transfer from Subordinate Obligation Payment Account to the appropriate Person the Subordinate Obligation Payments and the payments of Reimbursement Obligations with respect to Subordinate Obligations as and when due and payable. In the event there are insufficient amounts on deposit in the Subordinate Obligation Payment Account to make all of such Subordinate Obligation Payments and such Reimbursement Obligation payments, then said payments shall be made, as nearly as practicable, pro rata, based on the respective principal amounts of the Subordinate Obligation Payments and Reimbursement Obligations due and payable. DOCSLAI :350031.2 41758-7 GHI 16 Section 2.06. Rate Stabilization Account. Amounts on deposit in the Rate Stabilization Account may, from time to time as the District deems necessary or appropriate, be transferred to the Revenue Account and applied as provided in Section 2.03 hereof. DOCSLA1:35003 l .2 41758-7 GHI 17 ARTICLE III EXISTING OBLIGATIONS; ADDITIONAL OBLIGATIONS Section 3.01. Existing Obligations. (a) Definitions. Unless the context otherwise requires, the terms defined in this subsection shall for purposes of this Section have the meanings defined herein, the following definitions to be equally applicable to both the singular and plural forms of any of the terms defined herein: "1992 Agreement for Acquisition and Construction" means the Amendatory Agreement for Acquisition and Construction, dated as of Octqber 1, 1992, by and among the Predecessor Districts, as modified, amended, reformed and restated by the Reformed Agreement for Acquisition and Construction, dated as of 2000, by and between the District, as successor by consolidation to the Predecessor Districts, and the Corporation, as originally executed and as it may from time to time be modified or amended in accordance with the provisions thereof. "1992 Certificates" means the County Sanitation District Nos. 1, 2, 3, 5, 6, 7 and 11 of Orange County, California Refunding Certificates of Participation, 1992 Series, executed and delivered pursuant to the 1992 Trust Agreement. "1992 Installment Payments" means the installment payments required to be made by the District pursuant to Section 2.02 of the 1992 Agreement for Acquisition and Construction. "1992 Provider" means Barclays Bank PLC, New York Branch, and its successors and assigns. "1992 Standby Agreement" means the Standby Certificate Purchase Agreement, dated as of January 30, 1996, by and among the Predecessor Districts, State Street Bank and Trust Company of California, N.A., and Barclays Bank PLC, New York Branch, as amended by the --------· dated as of _ 2000, by and among the District, as successor by consolidation to the Predecessor Districts, State Street Bank and Trust Company of California, N.A., and Barclays Bank PLC, New York Branch, and as it may from time to time be further amended in accordance with the provisions thereof (including any renewal thereof or extension of the term thereof). "1992 Swap" means the Interest Rate Swap Agreement, dated as of October 1, 1992, among the Predecessor Districts and AIG Financial Products Corp., as amended by Amendment No. 1 to Interest Rate Swap Agreement, dated as of 2000, by and between the District and AIG Financial Products Corp., and as it may from time to time be further amended in accordance with the provisions thereof. "1992 Trust Agreement" means the Trust Agreement, dated as of October 1, 1992, by and among State Street Bank and Trust Company of California, N.A., and the Predecessor Districts, as modified and amended pursuant to the First Supplemental Trust Agreement, dated as of , 2000, by and between State Street Bank and Trust Company of California, N.A., and the District, as successor by consolidation to the Predecessor Districts, and as modified, amended, reformed and restated by the Reformed Trust Agreement, dated as of _____ . DOCSLAI :350031.2 41758-7 GHI 18 2000, by and among State Street Bank and Trust Company of California, N .A., the Corporation and the District, as originally executed and as it may from time to time be amended or supplemented in accordance with the provisions thereof. "1993 Agreement for Acquisition and Construction" means the Amendatory Agreement for Acquisition and Construction, dated as of October 1, 1993, by and among the Predecessor Districts, as modified, amended, reformed and restated by the Reformed Agreement for Acquisition and Construction, dated as of , 2000, by and between the District, as successor by consolidation to the Predecessor Districts, and the Corporation, as originally executed and as it may from time to time be modified or amended in accordance with the provisions thereof. "1993 Certificates" means the County Sanitation District Nos. 1, 2, 3, 5, 6, 7 and 11 of Orange County, California Refunding Certificates of Participation, 1993 Series, executed and delivered pursuant to the 1993 Trust Agreement. "1993 Installment Payments" means the installment payments required to be made by the District pursuant to Section 2.02 of the 1993 Agreement for Acquisition and Construction. "1993 Provider" means Societe Generale, New York Branch, and its successors and assigns. "1993 Standby Agreement" means the Reimbursement Agreement, dated as of September 1, 1993, by and among the Predecessor Districts and Societe Generale, New York Branch, as amended by the , dated as of 2000, by and between the District, as successor by consolidation to the Predecessor Districts, and Societe Generale, New York Branch, and as it may from time to time be further amended in accordance with the provisions thereof (including any renewal thereof or extension of the term thereof). "1993 Swap" means the Interest Rate Swap Agreement, dated as of September 1, 1993, among the Predecessor Districts and Societe Generale, New York Branch, as amended by [Amendment No. 1 to Interest Rate Swap Agreement], dated as of , 2000, by and between the District, [as successor by consolidation to the Predecessor Districts,] and Societe Generale, New Yark Branch, and as it may from time to time be further amended in accordance with the provisions thereof. "1993 Trust Agreement" means the Trust Agreement, dated as of September 1, 1993, by and among Texas Commerce Bank National Association, now known as Chase Bank of Texas, National Association, and the Predecessor Districts, as modified, amended, reformed and restated by the Reformed Trust Agreement, dated as of 2000, by and among Chase Bank of Texas, National Association, the Corporation and the District, as originally executed and as it may from time to time be amended or supplemented in accordance with the provisions thereof. "Predecessor Districts" means, collectively, County Sanitation District No. I of Orange County; California, County Sanitation District No. 2 of Orange County, California, County Sanitation District No. 3 of Orange County, California, County Sanitation District No. 5 of Orange County, California, County Sanitation District No. 6 of Orange County, California, DOCSLAl :350031.2 41758-7 GHI 19 County Sanitation District No. 7 of Orange County, California, and County Sanitation District No. 11 of Orange County, California. (b) The 1992 Certificates and the Agreements Relating Thereto. The 1992 Agreement for Acquisition and Construction constitutes a Senior Contract and, consequently, a Senior Obligation. The 1992 Installment Payments constitute Senior Contract Payments and, consequently, Senior Obligation Payments. The 1992 Certificates, which evidence direct, fractional undivided interests in the 1992 Installment Payments, constitute Senior Certificates and, consequently, Senior Obligation Securities. The 1992 Standby Agreement constitutes a Credit Facility Agreement and a Credit Facility. The obligation of the District to repay amounts drawn on or paid under the 1992 Standby Agreement, to pay interest on such amounts and to pay any other amounts in connection with such draw or payment constitutes a Reimbursement Obligation with respect to a Senior Obligation (the 1992 Agreement for Acquisition and Construction); provided, however, that no portion of any such obligation shall be deemed to be a Reimbursement Obligation if the payment thereof would duplicate any amount payable to the 1992 Provider in it's capacity as Owner of a 1992 Certificate. The 1992 Swap constitutes a Financial Contract entered into with respect to a Senior Obligation (the 1992 Agreement for Acquisition and Construction); the 1992 Swap therefore constitutes a Senior Contract and, consequently, a Senior Obligation. (c) The 1993 Certificates and the Agreements Relating Thereto. The 1993 Agreement for Acquisition and Construction constitutes a Senior Contract and, consequently, a Senior Obligation. The 1993 Installment Payments constitute Senior Contract Payments and, consequently, Senior Obligation Payments. The 1993 Certificates, which evidence direct, fractional undivided interests in the 1993 Installment Payments, constitute Senior Certificates and, consequently, Senior Obligation Securities. The 1993 Standby Agreement constitutes a Credit Facility Agreement and a Credit Facility. The obligation of the District to repay amounts drawn on or paid under the 1993 Standby Agreement, to pay interest on such amounts and to pay any other amounts in connection with such draw or payment constitutes a Reimbursement Obligation with respect to a Senior Obligation (the 1993 Agreement for Acquisition and Construction); provided, however, that no portion of any such obligation shall be deemed to be a Reimbursement Obligation if the payment thereof would duplicate any amount payable to the 1993 Provider in it's capacity as Owner of a 1993 Certificate. The 1993 Swap constitutes a Financial Contract entered into with respect to a Senior Obligation (the 1993 Agreement for Acquisition and Construction); the 1993 Swap therefore constitutes a Senior Contract and, consequently, a Senior Obligation. Section 3.02. Additional Senior Obligations. The District may at any time incur additional Senior Obligations payable from Net Revenues as provided herein on a parity with all other Senior Obligations theretofore incurred, but only subject to the following conditions, which are hereby made conditions precedent to the incurrence of such Senior Obligations: DOCSLAI :350031.2 41758-7 GHI 20 (a) Upon the incurrence of such Senior Obligations, no Event of Default shall be continuing under this Master Agreement. (b) Subject to the provisions of paragraph (c), below, the District shall have received either one of the following: (i) a Written Certificate of the District certifying that, for a 12 consecutive calendar month period during the 24 consecutive calendar month period ending in the calendar month prior to the incurrence of such Senior Obligations (which 12 consecutive calendar month period shall be specified in such certificate or certificates) (A) Net Revenues, as shown by the books of the District, shall have amounted to at least 125% of Maximum Annual Debt Service on all Senior Obligations to be outstanding immediately after the incurrence of such Senior Obligations, and (B) Net Operating Revenues, as shown by the books of the District, shall have amounted to at least 100% of Maximum Annual Debt Service on all Obligations to be outstanding immediately after the incurrence of such Senior Obligations. For purposes of demonstrating compliance with the foregoing, Net Revenues and Net Operating Revenues may be adjusted for (x) any changes in fees and charges for the services of the Wastewater System which have been adopted and are in effect on the date such Senior Obligations are incurred, but which, during all or any part of such 12 consecutive calendar month period, were not in effect, (y) customers added to the Wastewater System subsequent to such 12 consecutive calendar month period but prior to the date such Senior Obligations are incurred, and (z) the estimated change in available Net Revenues and Net Operating Revenues which will result from the connection of existing residences or businesses to the Wastewater System within one year following completion of any project to be funded or any system to be acquired from the proceeds of such Senior Obligations; or DOCS LA I :3 5 0031.2 41758-7GHI (ii) a certificate or certificates from one or more Consultants which, when taken together; project that, for each of the two Fiscal Years next succeeding the incurrence of such Senior Obligations (A) Net Revenues will amount to at least 125% of Maximum Annual Debt Service on all Senior Obligations to be outstanding immediately after the incurrence of such Senior Obligations, and (B) Net Operating Revenues will amount to at least 100% of Maximum Annual Debt Service on all Obligations to be outstanding immediately after the incurrence of such Senior Obligations. For purposes of demonstrating compliance with the foregoing, Net Revenues and Net Operating Revenues may be adjusted for (x) any changes in fees and charges for the services of the Wastewater System which have been adopted and are in effect on the date such Senior Obligations are incurred or will go into effect prior to the end of such two Fiscal Year period, (y) customers expected to be added to the Wastewater System prior to the end of such two Fiscal Year period, and (z) the estimated change in available Net Revenues and Net Operating Revenues which will result from the connection of existing residences or businesses to the Wastewater System within one year following completion of any project to be funded or any system to be acquired from the proceeds of such Senior Obligations. For purposes of preparing 21 the certificate or certificates described above, the Consultant may rely upon financial statements prepared by the District that have not been subject to audit by an independent certified public accountant if audited financial statements for the period are not available. The provisions of this paragraph (b) need not be complied with if the Senior Obligations being incurred are Short-Term Obligations excluded from the calculation of Assumed Debt Service pursuant to clause (H) of the definition thereof. (c) Notwithstanding the foregoing, if (i) a portion (which may be all) of Senior Obligations are incurred for the purpose of providing funds to refund or refinance any Obligations, (ii) upon such refunding or refinancing, debt service on such refunded or refinanced Obligations, or debt service on the Related Bonds of such Obligations, will no longer be included in the calculation of Assumed Debt Service either because such Obligations, or the Related Bonds of such Obligations, will have been paid in full or because such debt service is disregarded pursuant to clause (L) of the definition of Assumed Debt Service, and (iii) Assumed Debt Service in each Fiscal Year for the portion of such Senior Obligations incurred for the purpose of providing funds to refund or refinance such Obligations is less than or equal to I 05% of Assumed Debt Service in such Fiscal Year for such Obligations being refunded or refinanced (assuming for such purposes that debt service on such refunded or refinanced Obligations, or debt service on the Related Bonds of such Obligations, is not disregarded pursuant to clause (L) of the definition of Assumed Debt Service), the provisions of paragraph (b) above, need not be complied with for such portion of such Senior Obligations incurred for the purpose of providing funds to refund or refinance such Obligations. The District may at any time incur Reimbursement Obligations with respect to Senior Obligations. Section 3.03. Subordinate Obligations. The District may at any time incur Subordinate Obligations; provided, however, that prior to incurring such Subordinate Obligations, the District shall have determined that the incurrence thereof will not materially adversely affect the District's ability to comply with the requirements of Section 4.05 hereof. The District may at any time incur Reimbursement Obligations with respect to Subordinate Obligations. DOCSLAI :350031.2 41758-7 GHI 22 ARTICLE IV COVENANTS Section 4.01. Punctual Payment. The District will punctually pay or cause to be paid the Obligation Payments to become due in respect of all the Obligations, in strict conformity with the terms of the Obligations, the instruments pursuant to which the Obligations are incurred and this Master Agreement, according to the true intent and meaning thereof, but only out of Net Revenues as provided in this Master Agreement. The District will punctually pay or cause to be paid the amounts to become due in respect of all the Reimbursement Obligations, in strict conformity with the terms of the Credit Facilities pursuant to which the Reimbursement Obligations arise and this Master Agreement, according to the true intent and meaning thereof, but only out of Net Revenues as provided in this Master Agreement. Section 4.02. Against Encumbrances. (a) Except as otherwise provided in this Master Agreement, the District will not mortgage or otherwise encumber, pledge or place any charge upon the Wastewater System or any part thereof, except for Permitted Encumbrances. The District shall discharge or cause to be discharged, or shall make adequate provision to satisfy and discharge, within 60 days after the same become due and payable, all lawful costs, expenses, liabilities and charges relating to the maintenance, repair, replacement or improvement of the properties constituting the Wastewater System or the operation of the Wastewater System and lawful claims and demands for labor, materials, supplies or other objects that might by law become a lien upon the Wastewater System or Net Revenues if unpaid. Nothing contained in this Section shall require the District to pay or cause to be discharged, or make provision for the payment, satisfaction and discharge of, any lien, charge, cost, liability, claim or demand so long as the validity thereof is contested in good faith and by appropriate legal proceedings. (b) The District may incur obligations secured by a lien on (i) rolling stock comprising a part of the Wastewater System without limitation, and (ii) other property, plant and equipment comprising a part of the Wastewater System; provided, however, that the principal amount of such obligations outstanding at any one time shall not exceed 5% of the net property, plant and equipment of the Wastewater System (not taking into account any outstanding obligations with respect to rolling stock that is a part of the Wastewater System) as shown on the audited financial statements of the District for the most recent Fiscal Year for which audited financial statements are available. ( c) So long as any Obligations of the District are outstanding, the District will not issue any bonds or incur obligations payable from Revenues or secured by a pledge, lien or charge upon Revenues, except as provided herein. Section 4.03. Against Sale or Other Disposition of Property. The District will not sell, lease or otherwise dispose of the Wastewater System or any part thereof essential to the proper operation of the Wastewater System or to the maintenance of Revenues; provided, however, that (a) any real or personal property which has become non-operative or which is not needed for the efficient and proper operation of the Wastewater System, or any material or equipment which has become worn out, may be sold if such sale will not materially reduce Net Revenues and if the proceeds of such sale are deposited in the Operating Fund, and (b) if the fair DOCSLAI :350031.2 41758-7 GHI 23 market value of any item of real or personal property to be sold, leased or otherwise disposed of in any Fiscal Year in accordance w:ith the provisions of this Section shall be in excess of 1 % of net property, plant and equipment of the Wastewater System calculated in accordance with Generally Accepted Accounting Principles, or if the fair market value of any such item together with the fair market value of all other such items so sold, leased or disposed of in such Fiscal Year shall aggregate in excess of 1 % of net property, plant and equipment of the Wastewater System calculated in accordance with Generally Accepted Accounting Principles, then no such sale, lease or other disposition shall be effected without first obtaining the written confirmation of a Consultant that the conditions to such sale, lease or other disposal specified in this Section have been satisfied. The District will not enter into any agreement or lease which impairs the operation of the Wastewater System or any part thereof necessary to secure adequate Revenues for the payment of Obligations or which would otherwise impair the rights of the Corporation with respect to Revenues or the operation of the Wastewater System. Section 4.04. Maintenance and Operations of the Wastewater System; Budgets. The District will maintain and preserve the Wastewater System in good repair and working order at all times and will operate the Wastewater System in an efficient and economical manner and will pay all Maintenance and Operations Costs as they become due and payable; provided, however, that the District shall not be required to pay such Maintenance and Operations Costs if the validity thereof shall be contested in good faith (so long as such nonpayment will not materially adversely affect the District's ability to perform its obligations hereunder). The District will prepare and adopt an annual budget for the Wastewater System for each Fiscal Year. Such budget shall set forth in reasonable detail the Revenues anticipated to be derived in such Fiscal Year and the expenditures anticipated to be paid or provided for therefrom in such Fiscal Year, including, without limitation, the amounts required to pay or provide for the payment of the Obligations during such Fiscal Year, the amounts required to pay or provide for the payment of Maintenance and Operations Costs during such Fiscal Year and the amounts required to pay or provide for the payment of all other claims or obligations required to be paid from Revenues in such Fiscal Year, and shall show that Revenues and Net Revenues shall be at least sufficient to satisfy the requirements of Section 4.05 hereof. On or before September 1 of each Fiscal Year, commencing September 1, 2000, the District will file with each Obligation Trustee a copy of the adopted budget for such Fiscal Year. Any budget may be amended at any time by the District during the Fiscal Year; provided, however, that any such amended budget shall show that Revenues and Net Revenues shall be at least sufficient to satisfy the requirements of Section 4.05 hereof. On or before the date 60 days after the adoption of any such amended budget, the District will file a copy of such amended budget with each Obligation Trustee. Section 4.05. Amount of Fees and Charges. The District will, to the extent permitted by law, fix, prescribe and collect fees and charges for the services and facilities of the Wastewater System which will be at least sufficient to yield during each Fiscal Year (a) Net Revenues equal to 125% of Debt Service on Senior Obligations for such Fiscal Year, and (b) Net Operating Revenues equal to 100% of Debt Service on all Obligations for such Fiscal Year. The District may make adjustments from time to time in such fees and charges and may make such classification thereof as it deems necessary, but shall not reduce the fees and charges then in effect unless the Revenues and Net Revenues from such reduced fees and charges will at all times be sufficient to meet the requirements of this Section. DOCSLAl :350031.2 41758-7 OHi 24 Section 4.06. Payment of Claims. The District will pay and discharge any and all lawful claims for labor, materials or supplies which, if unpaid, might become a lien on Revenues or any part thereof or on any funds in the hands of the District or an Obligation Trustee which might impair the security of the Obligations; provided, however, that the District shall not be required to pay such claims if the validity thereof shall be contested in good faith (so long as such nonpayment will not materially adversely affect the District's ability to perform its obligations hereunder or under any Obligation). Section 4.07. Compliance with Contracts. The District will comply with, keep, observe and perform all material agreements, conditions, covenants and terms, express or implied, required to be performed by it contained in all contracts for the use of the Wastewater System and all other contracts affecting or involving the Wastewater System. Section 4.08. Insurance. The District will procure and maintain or cause to be procured and maintained casualty insurance on the Wastewater System with responsible insurers, or provide self insurance (which may be provided in the form of risk-sharing pools), in such amounts and against such risks (including accident to or destruction of the Wastewater System) as are usually covered in connection with facilities similar to the Wastewater System. In the event of any damage to or destruction of the Wastewater System caused by the perils covered by such insurance or self insurance, the Net Proceeds thereof shall be applied to the reconstruction, repair or replacement of the damaged or destroyed portion of the Wastewater System. The District shall begin such reconstruction, repair or replacement promptly after such damage or destruction shall occur, and shall continue and properly complete such reconstruction, repair or replacement as expeditiously as possible, and shall pay out of such Net Proceeds all costs and expenses in connection with such reconstruction, repair or replacement so that the same shall be completed and the Wastewater System shall be free and clear of all claims and liens unless the District determines that such property or facility is not necessary to the efficient or proper operation of the Wastewater System and therefore determines not to reconstruct, repair or replace such project or facility. If such Net Proceeds exceed the costs of such reconstruction, repair or replacement, then the excess Net Proceeds shall be deposited in the Operating Fund and be available for other proper uses of funds deposited in the Operating Fund. The District will procure and maintain such other insurance which it shall deem advisable or necessary to protect its interests and the interests of the Corporation, which insurance shall afford protection in such amounts and against such risks as are usually covered in connection with facilities similar to the Wastewater System; provided, however, that any such insurance may be maintained under a self-insurance program so long as such self-insurance is maintained in the amounts and manner usually maintained in connection with facilities similar to the Wastewater System and is, in the opinion of an accredited actuary, actuarially sound. Section 4.09. Accounting Records; Financial Statements and Other Reports. (a) The District will keep appropriate accounting records in which complete and correct entries shall be made of all transactions relating to the Wastewater System, which records shall be available for inspection by the Corporation and each Obligation Trustee at reasonable hours and under reasonable conditions. DOCSLAI :350031 .2 41758-7 GHI 25 (b) The District will prepare and file with the Corporation and each Obligation Trustee annually within 180 days after the close of each Fiscal Year (commencing with the Fiscal Year ending June 30, 2000): (i) financial statements of the District for the preceding Fiscal Year prepared in accordance with Generally Accepted Accounting Principles, together with an Accountant's Report thereon; and (ii) a summary report showing in reasonable detail Revenues, Maintenance and Operations Costs, Net Revenues and Debt Service for such Fiscal Year and containing a general statement of the physical condition of the Wastewater System. ( c) On or before September 1 of each Fiscal Year, commencing September 1, 2000, the District will file with the Corporation and each Obligation Trustee a copy of the adopted budget for such Fiscal Year. ( d) On or before the date 60 days after the adoption of any amended budget, the District will file a copy of such amended budget with the Corporation and each Obligation Trustee. Section 4.10. Protection of Security and Rights. The District will preserve and protect the security hereof and the rights of the Obligation Trustees and the Owners to the Obligation Payments and other payments required to be made by the District hereunder and will warrant and defend such rights against all claims and demands of all Persons. Section 4.11. Payment of Taxes and Compliance with Governmental Regulations. The District will pay and discharge all taxes, assessments and other governmental charges, if any, which may hereafter be lawfully imposed upon the Wastewater System or any part thereof or upon the Revenues, when the same shall become due; provided, however, that the District shall not be required to pay such taxes, assessments or governmental charges if the validity thereof shall be contested in good faith (so long as such nonpayment will not materially adversely affect the District's ability t~ perform its obligations hereunder). The District will duly observe and comply with all valid regulations and requirements of any governmental authority relative to the operation of the Wastewater System or any part thereof; provided, however, that the District shall not be required to comply with any such regulations or requirements so long as the validity or application thereof shall be contested in good faith. Section 4.12. Collection of Fees and Charges; No Free Service. The District will have in effect at all times rules and regulations for the payment of bills for services and facilities of the Wastewater System, which rules and regulations shall provide for a due date and a delinquency date for each bill. The District will not permit any part of the Wastewater System to be used or taken advantage of free of charge by any Person, except to the extent required by federal or State law; provided, however, that the District may, in its discretion, elect not to require the payment of Capital Facilities Capacity Charges by any Person. Section 4.13. Eminent Domain Proceeds. If all or any part of the Wastewater System shall be taken by eminent domain proceedings, the Net Proceeds thereof shall be applied to the DOCSLA1:35003 l.2 41758-7 GHI 26 replacement of the property or facilities so taken, unless the District determines that such property or facilities are not necessary to the efficient or proper operation of the Wastewater System and therefore determines not to replace such property or facilities. Any Net Proceeds of such award not applied to replacement, or remaining after such work has been completed, shall be deposited in the Operating Fund and be available for other proper uses of funds deposited in its Operating Fund. Section 4.14. Administrative Costs. The District shall pay all Administrative Costs. Administrative Costs shall be paid by the District directly to the Person or Persons to whom such amounts shall be payable. The District shall pay all such amounts when due or at such later time as such amounts may be paid without penalty or, in any other case, within 30 days after notice in writing from an Obligation Trustee to the District stating the amount of Administrative Costs then due and payable and the purpose thereof. Section 4.15. Indemnification of Corporation. To the extent permitted by law, the District hereby agrees to indemnify and hold the Corporation and its members and officers harmless against any and all liabilities which might arise out of or are related to this Master Agreement, the Obligations or the Obligation Securities, and the District further agrees to defend the Corporation and its members and officers in any action arising out of or related to this Master Agreement, the Obligations or the Obligation Securities. Section 4.16. Further Assurances. The District will adopt, deliver, execute and make any and all further assurances, instruments and resolutions as may be reasonably necessary or proper to carry out the intention or to facilitate the performance hereof and for the better assuring and confirming unto the Corporation the rights and benefits provided herein to the Corporation. DOCS LA 1:35 003 1.2 41758-7 GHJ 27 ARTICLEV EVENTS OF DEFAULT AND REMEDIES Section 5.01. Events of Default. The following shall be Events of Default under this Master Agreement, and Event of Default shall mean any one or more of the following events: (a) if default shall be made by the District in the due and punctual payment of or on account of any Senior Obligation as the same shall become due and payable; (b) if default shall be made by the District in the performance of any of the agreements or covenants required to be performed by it herein (other than as specified in (a) above), and such default shall have continued for a period of 60 days after the District shall have been given notice in writing of such default by the Corporation or any Obligation Trustee; ( c) if an event of default shall have otherwise occurred and be continuing under any Senior Obligation, under any Senior Obligation Securities or under the Issuing Instrument pursuant to which any Senior Obligation Securities are issued, incurred or executed and delivered; or ( d) if the District shall file a petition or answer seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if a court of competent jurisdiction shall approve a petition filed with or without the consent of the District seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if under the provisions of any other law for the relief or aid of debtors any court of competent jurisdiction shall assume custody or control of the District or of the whole or any substantial part of its property. If an Event of Default shall have occurred and be continuing, the Corporation, or any Senior Obligation Trustee may, by written notice to the District, declare the unpaid Senior Obligation Payments, and the accrued interest thereon, immediately due and payable, whereupon anything contained herein to the contrary notwithstanding, said amounts shall, without further action, become and be immediately due and payable with, to the extent permitted by law, interest on such accelerated amounts at a rate per annum equal to the default rate specified in the instrument pursuant to which the respective Senior Obligations were incurred; provided, however, that, notwithstanding the foregoing, no Senior Obligation Payments payable under and pursuant to Senior Obligations that are Credit Enhanced Obligations shall be accelerated without the written consent of related Credit Enhancer and, provided, further, that nothing herein shall affect the rights of the parties to a Financial Contract to terminate such Financial Contract. If at any time after the principal amount of such unpaid Senior Obligation Payments, and the accrued interest thereon, shall have so accelerated and before any judgment or decree of the payment of the moneys due shall have been obtained or entered, the District shall pay the unpaid amount of all such Senior Obligation Payments due prior to such declaration, with interest on such overdue Senior Obligation Payments at the rate or rates applicable thereto in accordance with their terms, and the reasonable expenses of the Corporation and the Senior Obligation Trustees, if any, and any and all DOCSLAl :35003 I .2 41758-7 GHI 28 other defaults (other than in the payment of the unpaid Senior Obligation Payments, and the accrued interest thereon, due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Corporation and the Senior Obligation Trustees or provision deemed by the Corporation and the Senior Obligation Trustees to be adequate.shall have been made therefor, then and in every such case the Corporation, by written notice to the District, may rescind and annul such declaration and its consequences; but no such rescission and annulment shall extend to or shall affect any subsequent default or shall impair or exhaust any right or power consequent thereon. All Net Revenues received after the date of acceleration of the Senior Obligation Payments, and the accrued interest thereon, shall be applied, first, to the payment of the costs and expenses of the Corporation and the Senior Obligation Trustees, if any, in carrying out the provisions of this Article, including reasonable compensation of its and their accountants and counsel, second, to the payment of the entire amount of unpaid Senior Obligation Payments, and the accrued interest thereon at the rate or rates of interest applicable thereto, and to the payment of unpaid Reimbursement Obligations with respect to Senior Obligations, in accordance with their respective terms; provided, however, that if such Net Revenues are not sufficient to pay such amounts in full, then said Net Revenues shall be applied, as nearly as practicable, pro rata, based on the respective principal amounts of unpaid Senior Obligations and Reimbursement Obligations with respect to Senior Obligations and, third, to such other liabilities of the District as are then payable. Section 5.02. Remedies on Default. Upon the occurrence of an Event of Default, each of the Corporation and each Obligation Trustee shall have the right: (a) by mandamus or other action or proceeding or suit at law or in equity to enforce its rights against the District or any board member, officer or employee thereof, and to compel the District or any such board member, officer or employee to perform and carry out his or her duties under applicable law and the agreements and covenants required to be performed by him or her contained herein; (b) by suit in equity to enjoin any acts or things which are unlawful or violate the rights of the Corporation or such Obligation Trustee; ( c) by suit in equity require the District and its board members, officers and employees to account as the trustee of an express trust; and (d) to have a receiver or receivers appointed for the Wastewater System and of the issues, earnings, income, products and profits thereof, pending such proceedings, with such powers as the court making such appointment shall confer. Section 5.03. Non-Waiver. Nothing in this Article or in any other provision hereof shall affect or impair the obligation of the District, which is absolute and unconditional, to pay the Obligation Payments at the respective due dates from the Net Revenues and the other funds herein committed for such payment, or shall affect or impair the right of the Corporation and each Obligation Trustee, which is also absolute and unconditional, to institute suit to enforce such payment by virtue of the contract embodied herein. DOCSLAI :350031.2 41758-7 GH! 29 A waiver of any default or breach of duty or contract by the Corporation or an Obligation Trustee shall not affect any subsequent default or breach of duty or contract or impair any rights or remedies on any such subsequent default or breach of duty or contract. No delay or omission by the Corporation or an Obligation Trustee to exercise any right or remedy accruing upon any default or breach of duty or contract shall impair any such right or remedy or shall be construed to be a waiver of any such default or breach of duty or contract or an acquiesce'nce therein, and every right or remedy conferred upon the Corporation or an Obligation Trustee by applicable law or by this Article may be enforced and exercised from time to time and as often as shall be deemed expedient by the Corporation and each Obligation Trustee. If any action, proceeding or suit to enforce any right or exercise any remedy is abandoned or determined adversely to the Corporation and the Obligation Trustees, the District, the Corporation and the Obligation Trustees shall be restored to their former positions, rights and remedies as if such action, proceeding or suit had not been brought or taken. Section 5.04. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Corporation and the Obligation Trustees is intended to be exclusive of any other remedy, and each such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing in law or in equity or by statute or otherwise and may be exercised without exhausting and without regard to any other remedy conferred by law. DOCSLAI :350031.2 41758-7 GHI 30 ARTICLE VI AMENDMENTS Section 6.01. Amendments. (a) This Master Agreement and the rights and obligations of the District, the Corporation, the Obligation Trustees and the Owners of Obligation Securities may be amended or modified from time to time and at any time by a written amendment hereto executed by the District, the Corporation and the Obligation Trustees, with the written consent of the Owners of a majority of the aggregate Principal Amount of Obligation Securities then Outstanding. No such amendment or modification shall (i) reduce the percentage of Owners of the Obligation Securities whose consent is required to effect any such amendment or modification, or (ii) permit the creation of any lien on the Net Revenues for the payment of the Obligations prior to or on a parity with the liens created by this Master Agreement or deprive the Owners of the Obligation Securities of the lien created by this Master Agreement on such Net Revenues (except as expressly provided in this Master Agreement), without the consent of the Owners of all of the Obligation Securities then Outstanding. (b) This Master Agreement and the rights and obligations of the District, the Corporation, the Senior Obligation Trustees and the Owners of Senior Obligation Securities may be amended or modified from time to time and at any time by a written amendment hereto executed by the District, the Corporation and the Senior Obligation Trustees, provided that such amendment or modification does not materially adversely affect the interests hereunder of the Subordinate Obligation Trustees or the Owners of Subordinate Obligation Securities, with the written consent of the Owners of a majority of the aggregate Principal Amount of Senior Obligation Securities then Outstanding. No such amendment or modification shall (i) reduce the percentage of Owners of the Senior Obligation Securities whose consent is required to effect any such amendment or modification, or (ii) permit the creation of any lien on the Net Revenues for the payment of the Senior Obligations prior to or on a parity with the lien created by this Master Agreement or deprive the Owners of the Senior Obligation Securities of the lien created by this Master Agreement on such Net Revenues (except as expressly provided in this Master Agreement), without the consent of the Owners of all of the Senior Obligation Securities then Outstanding. (c) This Master Agreement and the rights and obligations of the District, the Corporation, the Subordinate Obligation Trustees and the Owners of Subordinate Obligation Securities may be amended or modified from time to time and at any time by a written amendment hereto executed by the District, the Corporation and the Subordinate Obligation Trustees, provided that such amendment or modification does not materially adversely affect the interests hereunder of the Senior Obligation Trustees or the Owners of Senior Obligation Securities, with the written consent of the Owners of a majority of the aggregate Principal Amount of Subordinate Obligation Securities then Outstanding. No such amendment or modification shall (i) reduce the percentage of Owners of the Subordinate Obligation Securities whose consent is required to effect any such amendment or modification, or (ii) permit the creation of any lien on the Net Revenues for the payment of the Subordinate Obligations prior to or on a parity with the lien created by this Master Agreement or deprive the Owners of the Subordinate Obligation Securities of the lien created by this Master Agreement on such Net DOCSLAI :350031.2 41758-7 GHI 31 .. Revenues (except as expressly provided in this Master Agreement), without the consent of the Owners of all of the Subordinate Obligation Securities then Outstanding. ( d) This Master Agreement and the rights and obligations of the District, the Corporation, the Obligation Trustees and the Owners may be amended or modified from time to time and at any time by a written amendment hereto executed by the District, the Corporation and the Obligation Trustees, without the written consents of any Owners of Obligation Securities, but only to the extent permitted by law and only for any one or more of the following purposes - (i) to add to the agreements, conditions, covenants and terms required by the District, the Corporation or the Obligation Trustees, to be observed or performed herein other agreements, conditions, covenants and terms thereafter to be observed or performed by the District, the Corporation or the Obligation Trustees, or to surrender any right or power reserved herein to or conferred herein on the District, the Corporation or the Obligation Trustees and which in either case shall not materially adversely affect the interests of the Owners of the Obligation Securities; (ii) to make such provisions for the purpose of curing any ambiguity or of correcting, curing or supplementing any defective provision contained herein or in regard to questions arising hereunder which the District, the Corporation or the Obligation Trustees may deem desirable or necessary and not inconsistent herewith, and which shall not materially adversely affect the interests of the Owners of the Obligation Securities; (iii) to make such other amendments or modifications hereto as the District, the Corporation or the Obligation Trustees may deem desirable or necessary, and which shall not materially adversely affect the interests of the Owners of the Obligation Securities. DOCSLAI :350031.2 41758-7 GHI 32 ARTICLE VII MISCELLANEOUS Section 7.01. Liability of Dist·rict Limited. Notwithstanding anything contained herein, the District shall not be required to advance any moneys derived from any source of income other than Net Revenues and the other funds provided herein for the payment of the Obligation Payments and other payments required to be made by it hereunder, or for the performance of any agreements or covenants required to be performed by it contained herein. The District may, however, but in no event shall be obligated to, advance moneys for any such purpose so long as such moneys are derived from a source legally available for such purpose and may be legally used by the District for such purpose. The obligation of the District to pay the Obligation Payments and other payments required to be made by it hereunder is a special obligation of the District payable, in the manner provided herein, solely from Net Revenues and other funds provided for herein, and does not constitute a debt of the District or of the State, or of any political subdivision thereof, in contravention of any constitutional or statutory debt limitation or restriction. Neither the faith and credit nor the taxing power of the District or the State, or any political subdivision thereof, is pledged to the payment of the Obligation Payments or other payments required to be made hereunder. Section 7.02. Limitation of Rights. Nothing in this Master Agreement expressed or implied is intended or shall be construed to give to any Person other than the District, the Corporation, the Obligation Trustees and the Owners of the Obligation Securities, any legal or equitable right, remedy or claim under or in respect of this Master Agreement or any covenant, condition or provision therein or herein contained, and all such covenants, conditions and provisions are and shall be held to be for the sole and exclusive benefit of the District, the Corporation, the Obligation Trustees and the Owners of the Obligation Securities. Section 7 .03. Contract with Owners. In consideration of the acceptance of the Obligation Securities by those who shall be Owners of the same from time to time, this Master Agreement shall be deemed to be and shall constitute a contract between the District and the Owners from time to time of the Obligation Securities to secure the full and final payment of the Obligations, subject to the agreements, conditions, covenants and terms contained herein. Section 7.04. Third-Party Beneficiaries. The Obligation Trustees are third-party beneficiaries of this Master Agreement. Section 7.05. Notices. Any written notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication to be given hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely: DOCSLAI :350031.2 41758-7 GHI 33 If to the District: If to the Corporation: Orange County Sanitation District 10844 Ellis A venue Fountain Valley, California 92708 Attention: Orange County Sanitation District Financing Corporation c/o Orange County Sanitation District 10844 Ellis A venue Fountain Valley, California 92708 Attention: Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if personally served or delivered, upon delivery, (b) if given by electronic communication, whether by telex, telegram or telecopier, upon the sender's receipt of an appropriate answerback or other written acknowledgment, ( c) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, (d) if given by overnight courier, with courier charges prepaid, 24 hours after delivery to said overnight courier, or (e) if given by any other means, upon delivery at the address specified in this Section. Section 7.06. Successor Is Deemed Included in all References to Predecessor. Whenever either the District or the Corporation is named or referred to herein, such reference shall be deemed to include the successor to the powers, duties and functions that are presently vested in the District or the Corporation, and all agreements and covenants required hereby to be performed by or on behalf of the District or the Corporation shall bind and inure to the benefit of the respective successors thereof whether so expressed or not. Section 7.07. Waiver of Personal Liability. No official, officer or employee of the District shall be individually or personally liable for the payment of the Obligation Payments or other payments required to be made by the District hereunder, but nothing contained herein shall relieve any official, officer or employee of the District from the performance of any official duty provided by any applicable provisions of law or hereby. Section 7.08. Article and Section Headings, Gender and References. The headings or titles of the several Articles and Sections hereof and the table of contents appended hereto shall be solely for convenience of reference and shall not affect the meaning, construction or effect hereof, and words of any gender shall be deemed and construed to include all genders. All references herein to "Articles," "Sections" and other subsections or clauses are to the corresponding articles, sections, subsections or clauses hereof; and the words "hereby," "herein," "hereof," "hereto," "herewith" and other words of similar import refer to this Master Agreement as a whole and not to any particular Article, Section, subdivision or clause hereof. Section 7.09. Partial Invalidity. If any one or more of the agreements or covenants or portions thereof required hereby to be performed by or on the part of the District or the DOCSLAl :350031.2 41758-7 GHI 34 Corporation shall be contrary to law, then such agreement or agreements, such covenant or covenants or such portions thereof shall be null and void and shall be deemed separable from the remaining agreements and covenants or portions thereof and shall in no way affect the validity hereof. Section 7.10. Law Governing. This Master Agreement shall be construed and governed in accordance with the laws of the State. Section 7.11. Execution in Counterparts. This Master Agreement may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. DOCSLAI :350031.2 41758-7 GHI 35 .. IN WITNESS WHEREOF, the parties hereto have executed this Master Agreement by their officers thereunto duly authorized as of the day and year first written above. DOCSLAI :350031.2 41758-7 GHI 36 ORANGE COUNTY SANITATION DISTRICT ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION INSTALLMENT PURCHASE AGREEMENT DOCSLAI :332519.5 41758-7 GH! by and between the ORANGE COUNTY SANITATION DISTRICT and the ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION Dated as of 1, 2000 ---- Relating To $ _____ _ Orange County Sanitation District Refunding Certificates of Participation (2000 Refunding Project) TABLE OF CONTENTS ARTICLE I DEFINITIONS Section 1.01. Definitions ................................................................................................................ 3 Section 1.02. Definitions in Master Agreement and Trust Agreement .......................................... 4 ARTICLE II PURCHASE AND SALE OF PROJECT; PAYMENTS Section 2.01. Purchase and Sale of Project.. .................................................................................. 5 Section 2.02. Installment Payments ............................................................................................... 5 Section 2.03. Reserve Fund Payments ........................................................................................... 6 Section 2.04. Obligation Absolute ................................................................................................. 6 Section 2.05. Nature of Agreement.. .............................................................................................. 7 ARTICLE III PREPAYMENT OF INSTALLMENT PAYMENTS; DISCHARGE Section 3.01. Prepayment oflnstallment Payments ....................................................................... 8 Section 3.02. Notice ....................................................................................................................... 9 Section 3.03. Discharge of Obligations ....................................................................................... 10 ARTICLE IV COVENANTS Section 4.01. Compliance with Master Agreement ..................................................................... 11 Section 4.02. Compliance with Installment Purchase Agreement. .............................................. 11 Section 4.03. Protection of Security and Rights .......................................................................... 11 Section 4.04. Consent of Bank ..................................................................................................... 11 Section 4.05. Indemnification of Corporation ............................................................................. 11 Section 4.06. Further Assurances ................................................................................................. 11 ARTICLEV EVENTS OF DEFAULT AND REMEDIES OF THE CORPORATION Section 5.01. Events of Default ................................................................................................... 13 Section 5.02. Remedies on Default .............................................................................................. 13 Section 5.03. Non-Waiver. ............................................................................................................ 14 Section 5.04. Remedies Not Exclusive ........................................................................................ 14 ARTICLE VI AMENDMENTS Section 6. 01. Amendments .................................. -· ...................................................................... 15 ARTICLE VII MISCELLANEOUS Section 7.01. Liability of District Limited ................................................................................. ~. 17 Section 7.02. Limitation of Rights ............................................................................................... 17 Section 7 .03. Assigrunent ............................................................................................................. 17 Section 7.04. Rights of Bank ....................................................................................................... 17 Section 7.05. Third-Party Beneficiary ......................................................................................... 18 Section 7. 06. References to Bank Ineffective .............................................................................. 18 Section 7.07. Notices ................................................................................................................... 18 Section 7. 08. Successor Is Deemed Included in all References to Predecessor .......................... 19 DOCSLAI :332519.5 41758-7 GHI TABLE OF CONTENTS (continued) Page Section 7. 09. Waiver of Personal Liability .................................................................................. 19 Section 7.10. Article and Section Headings, Gender and References ......................................... 19 Section 7 .11. Partial Invalidity ..................................................................................................... 19 Section 7.12. Law Govenring ...................................................................................................... 19 Section 7 .13. Execution in Counterparts ...................................................................................... 19 EXHIBIT A DESCRIPTION OF PROJECT ............................................................................ A-1 DOCSLAI:332519.5 41758-7 GHI 2 INSTALLMENT PURCHASE AGREEMENT THIS INSTALLMENT PURCHASE AGREEMENT (this "Installment Purchase Agreement"), is made and entered into as of 1, 2000, by and between the ORANGE COUNTY SANITATION DISTRICT, a county sanitation district organized and existing under the laws of the State of California (the "District"), and the ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION, a nonprofit public benefit corporation organized and existing under the laws of the State of California (the "Corporation"). W I T N E S S E T H: WHEREAS, the District previously financed the acquisition, construction and installation of certain improvements to its wastewater system (the "Project") through the incurrence of certain obligations; WHEREAS, in order to refinance such obligations, the District desires to purchase the Project from the Corporation, and the Corporation desires to sell the Project to the District, for the installment payments (the "Installment Payments") to be made by the District pursuant to this Installment Purchase Agreement; WHEREAS, pursuant to the Master Agreement for District Obligations, dated as of _____ , 2000, by and between the District and the Corporation, the District has established and declared the conditions and terms upon which obligations such as this Installment Purchase Agreement, and the Installment Payments and the interest thereon payable hereunder, are to be incurred and secured; WHEREAS, the Corporation proposes to assign without recourse certain of its rights under and pursuant to this Installment Purchase Agreement to State Street Bank and Trust Company of California, N.A., as trustee (the "Trustee"); WHEREAS, in consideration of such assignment and the execution and entering into of the Trust Agreement, dated as of the date hereof, among the Trustee, the Corporation and the District, the Trustee has agreed to execute and deliver certificates of participation (the "Certificates (2000 Refunding Project)"), evidencing direct, undivided fractional interests in the Installment Payments, and the interest thereon, payable hereunder; WHEREAS, a portion of the proceeds of the Certificates (2000 Refunding Project) will be used to provide for the refinancing of the obligations incurred to finance the Project; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and delivery of this Installment Purchase Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Installment Purchase Agreement; DOCS LA 1 :332519.S 41758-7 GHI NOW, THEREFORE, in consideration of the covenants and provisions herein set forth and for other valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows: DOCSLA1:332519.5 41758-7 GHI 2 ARTICLE I DEFINITIONS Section 1.01. Definitions. Except as provided in Section 1.02 hereof or unless the context otherwise requires, the terms defined in this Section shall for all purposes hereof and of any amendment hereof or supplement hereto and of any report or other document mentioned herein or therein have the meanings defined herein, the following definitions to be equally applicable to both the singular and plural forms of any of the terms defined herein: "Bank" means Dexia Credit Local de France, acting through its New York Agency, as issuer of the Liquidity Facility, and any issuer of any Substitute Liquidity Facility. "Certificates (2000 Refunding Project)" means the Orange County Sanitation District Refunding Certificates of Participation (2000 Refunding Project) executed and delivered by the Trustee pursuant to the Trust Agreement. "Closing Date" means _____ _, 2000. "Corporation" means the Orange County Sanitation District Financing Corporation, a nonprofit public benefit corporation organized and existing under the laws of the State, and any successor thereto. "Default Rate" means, as of any date, the highest rate then applicable to any Installment Payment[; provided, however, that the Default Rate shall be 0% if and to the extent that the interest accruing and payable at the Default Rate would duplicate any amount payable pursuant to Section_ hereof]. "District" means the Orange County Sanitation District, a county sanitation district organized and existing under and by virtue of the laws of the State, and any successor thereto. "Event of Default" means an event described in Section 5.01 hereof. "Installment Payments" means the Installment Payments required to be made by the District pursuant to Section 2.02 hereof. "Installment Payment Date" means each August 1, commencing August 1, [2000]. "Installment Purchase Agreement" means this Installment Purchase Agreement, dated as of 1, 2000, by and between the District and the Corporation, as originally executed and as it may from time to time be amended or supplemented in accordance with the terms hereof. "Liquidity Facility" means the [liquidity facility] issued by the Bank, dated the Closing Date, naming the Trustee as beneficiary, and any Substitute Liquidity Facility. DOCSLA1:332519.5 41758-7 GHI 3 "Master Agreement" means the Master Agreement for District Obligations, dated as of ____ 1, 2000, by and between the District and the Corporation, as originally executed and as it may from time to time be amended or supplemented in accordance with the terms thereof. "Project" means the improvements to the Wastewater System described in Exhibit A hereto. "Standby Agreement" means the Standby Agreement, dated as of the date hereof, by and between the District and the Bank, as originally executed as it may from to time to time be amended or supplemented in accordance with its terms, and any agreement pursuant to which a Substitute Liquidity Facility is issued. "State" means the State of California. "Substitute Liquidity Facility" means any [liquidity facility] substituted for the initial Liquidity Facility in accordance with the provisions of the Trust Agreement. "Trust Agreement" means the Trust Agreement, dated as of the date hereof, by and among the Trustee, the Corporation and the District, as originally executed and as it may from time to time be amended or supplemented in accordance with its terms. "Trustee" means State Street Bank and Trust Company of California, N.A., a national banking association duly organized and existing under and by virtue of the laws of the United States of America, or any other bank or trust company which may at any time be substituted in its place as provided in the Trust Agreement. Section 1.02. Definitions in Master Agreement and Trust Agreement. Except as otherwise herein defined and unless the context otherwise requires, the terms defined in the Master Agreement or the Trust Agreement shall for all purposes hereof and of any amendment hereof or supplement hereto and of any report or other document mentioned herein have the meanings defined therein, such definitions to be equally applicable to both the singular and plural forms of any of the terms defined therein. With respect to any defined term which is given a different meaning under this Installment Purchase Agreement than under the Master Agreement or the Trust Agreement, as used herein it shall have the meaning given herein. DOCSLAI :332519.5 41758-7GHI 4 ARTICLED PURCHASE AND SALE OF PROJECT; PAYMENTS Section 2.01. Purchase and Sale of Project. The District hereby purchases from the Corporation, and the Corporation hereby sells to the District, the Project in accordance with the provisions of this Installment Purchase Agreement. All right, title and interest in the Project shall immediately vest in the District on the Closing Date without further action on the part of the District or the Corporation. Section 2.02. Installment Payments. (a) The District shall, subject to any rights of prepayment provided in Article III hereof, pay to the Corporation, solely from Net Revenues and from no other sources, the purchase price of the Project in Installment Payments, with interest thereon, as provided herein. The Installment Payments shall be in the aggregate principal amount of $ , and shall be payable on the Installment Payment Dates in the principal amounts set forth in the following schedule: Installment Payment Date (August 1) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Installment Payment The Installment Payments shall accrue interest from the Closing Date, and such interest shall be payable on the Interest Payment Dates in each year. The interest on Installment Payments evidenced by Certificates (2000 Refunding Project) in the Daily Mode shall accrue at the Daily Rate, calculated as provided in the Trust Agreement. The interest on Installment Payments evidenced by Certificates (2000 Refunding Project) in the Weekly Mode shall accrue at the Weekly Rate, calculated as provided in the Trust Agreement. The interest on Installment DOCSLAl :332519.5 41758-7 GHI 5 Payments evidenced by Certificates (2000 Refunding Project) in the Extended Rate Mode shall accrue at the Extended Rate, calculated as provided in the Trust Agreement. The interest on Installment Payments evidenced by Certificates (2000 Refunding Project) in the Fixed Rate Mode shall accrue at the Fixed Rate, calculated as provided in the Trust Agreement. Notwithstanding the foregoing, the interest on Installment Payments evidenced by Bank Certificates (2000 Refunding Project) shall accrue at the Bank Certificate Rate, calculated as provided in the Trust Agreement. (b) Each Installment Payment, and each payment of interest thereon, shall be deposited with the Trustee, as assignee of the Corporation, no later than the Business Day next preceding the Installment Payment Date or Interest Payment Date on which such Installment Payment or payment of interest is due, in lawful money of the United States of America, in immediately available funds. If and to the extent that, on any such date, there are amounts on deposit in the Installment Payment Fund established under the Trust Agreement, or in any of the accounts therein, which amounts are not being held for the payment of specific Certificates (2000 Refunding Project), said amounts shall be credited against the Installment Payment, or payment of interest thereon, as applicable, due on such date. In the event the District fails to make any of the payments required to be made by it under this Section, such payment shall continue as an obligation of the District until such amount shall have been fully paid and, to the extent permitted by law, the District agrees to pay the same with interest accruing thereon at the Default Rate. Section 2.03. Reserve Fund Payments. The District will maintain or cause to be maintained in the Reserve Fund established under the Trust Agreement an amount equal to the Reserve Requirement; provided, however, that any replenishment thereof shall be payable solely from Net Revenues. On or before the last Business Day of each month, commencing on or before the last Business Day of each month during which an event occurs that causes the amount on deposit in the Reserve Fund to be reduced below, or further below, the Reserve Requirement, the District shall transfer, from Net Revenues, to the Trustee for deposit in the Reserve Fund, 1/12 of the amount of such reduction, except that no such transfer to the Trustee and deposit in the Reserve Fund need be made if the amount available and contained therein is at least equal to the Reserve Requirement. Section 2.04. Obligation Absolute. The obligation of the District to make the Installment Payments, and payments of interest thereon, and other payments required to be made by it under this Article, solely from Net Revenues, is absolute and unconditional, and until such time as the Installment Payments, payments of interest thereon, and such other payments shall have been paid in full (or provision for the payment thereof shall have been made pursuant to Article III), the District shall not discontinue or suspend any Installment Payments, or payments of interest thereon, or other payments required to be made by it hereunder when due, whether or not the Project or any part thereof is operating or operable or has been completed, or its use is suspended, interfered with, reduced or curtailed or terminated in whole or in part, and such Installment Payments, payments of interest thereon, and other payments shall not be subject to reduction whether by offset or otherwise and shall not be conditional upon the performance or nonperformance by any party of any agreement for any cause whatsoever. DOCSLAl :332519 .5 41758-7 GHI 6 Section 2.05. Nature of Agreement. This Installment Purchase Agreement constitutes a Senior Obligation and, as such, shall be governed by the provisions of the Master Agreement and shall be afforded all of the advantages, benefits, interests and security afforded Senior Obligations pursuant to the Master Agreement. DOCSLAl :332519.5 41758-7 GHI 7 ARTICLE III PREPAYMENT OF INSTALLMENT PAYMENTS; DISCHARGE Section 3.01. Prepayment of Installment Payments. (a) The District may optionally prepay Installment Payments as follows: (i) The District may prepay all or a portion of the Installment Payments evidenced by Bank Certificates, from any source of available funds, on any date, by paying all or a portion, as elected by the District, of the Installment Payments evidenced by Bank Certificates, and the accrued but unpaid interest on such Installment Payments to be prepaid to the date of such prepayment, without premium. (ii) The District may prepay all or a portion of the Installment Payments evidenced by Certificates (2000 Refunding Project) in the Daily Rate Mode or the Weekly Rate Mode, from any source of available funds, on any Interest Payment Date, by paying all or a portion (in an amount equal to $100,000 or an integral multiple thereof), as elected by the District, of such Installment Payments, and the accrued but unpaid interest on such Installment Payments to be prepaid to the date of such prepayment, without premium. (iii) The District may prepay all or a portion of the Installment Payments evidenced by Certificates (2000 Refunding Project) in the Extended Rate Mode, from any source of available funds, on the day following the last day of the Extended Rate Period, by paying all or a portion (in an amount equal to $5,000 or an integral multiple thereof), as elected by the District, of such Installment Payments, and the accrued but unpaid interest on such Installment Payments to be prepaid to the date of such prepayment, without premium. (iv) The District may prepay all or a portion of the Installment Payments evidenced by Certificates (2000 Refunding Project) in the Fixed Rate Mode, from any source of available funds, on any date during the periods indicated in the following table, by paying (A) all or a portion (in an amount equal to $5,000 or an integral multiple thereof), as elected by the District, of such Installment Payments, (B) the accrued but unpaid interest on such Installment Payments to be prepaid to the date of such prepayment, and (C) a premium, applicable for the periods indicated (expressed as a percentage of the Installment Payments being prepaid), as set forth in the following table: DOCSLA1:332519.5 41758-7 GHI 8 Original Length of Fixed Rate Period More than 10 Years More than 8 years but not more than 1 0 years More than 5 years but not more than 8 years 5 years or less Commencement of Prepayment Period 8th anniversary of commencement of Fixed Rate Period 6th anniversary of commencement of Fixed Rate Period 4th anniversary of commencement of Fixed Rate Period No prepayment Prepayment Premium as a Percentage of Installment Payment 2% declining by 1 % on each succeecling anniversary of the first day of the prepayment period until reaching 0% and thereafter 0% 1 % until the first anniversary of the first day of the prepayment period and 0% from said first anniversary and thereafter 0% Installment Payments evidenced by Bank Certificates shall be prepaid prior to the prepayment of any Installment Payments pursuant to paragraphs (ii), (iii) or (iv) of this subsection (a). (b) The District may prepay, from any source of available funds, all or any portion of the Installment Payments (other than Installment Payments evidenced by Bank Certificates) by depositing with the Trustee moneys or securities as provided, and subject to the terms and conditions set forth, in Article XII of the Trust Agreement sufficient to pay such Installment Payments, and the interest thereon, when due or to pay such Installment Payments, and the interest thereon, through a specified date on which the District has a right to prepay such Installment Payments pursuant to subsection (a) of this Section, and to prepay such Installment Payments on such prepayment date, at a prepayment price determined in accordance with subsection (a) of this Section. ( c) If less than all of the Installment Payments are prepaid pursuant to this Section then, as of the date of such prepayment pursuant to subsection (a) of this Section, or the date of a deposit pursuant to subsection (b) of this Section, the schedule of Installment Payments shall be recalculated in order to take such prepayment into account. ( d) Prepayments of Installment Payments made pursuant to this Section shall be applied to the prepayment of Certificates (2000 Refunding Project) as provided in Section 4.01 of the Trust Agreement. Section 3.02. Notice. Before making any prepayment pursuant to this Article, the District shall give written notice to the Trustee and the Bank specifying the date on which the prepayment will be made, which date shall be not less than 30 nor more than 45 days from the date such notice is given to the Trustee and the Bank. DOCSLA 1:332519.5 41758-7 GHI 9 .. Section 3.03. Discharge of Obligations. If all Installment Payments, and the interest thereon, shall be paid as and when due in accordance with the terms hereof, or prepaid in accordance with Section 3.01 hereof, or if all Certificates (2000 Refunding Project) shall be fully paid, or provision therefor made in accordance with Article XII of the Trust Agreement, and the Trust Agreement shall be discharged by its terms, and all amounts payable to the Bank pursuant to the Standby Agreement shall have been paid in full, then all agreements, covenants and other obligations of the District hereunder shall thereupon cease, terminate and become void and be discharged and satisfied. DOCSLA1:332519.5 41758-7 GHI 10 ARTICLE IV COVENANTS Section 4.01. Compliance with Master Agreement. The District will faithfully observe and perform all the agreements, conditions, covenants and terms contained in the Master Agreement required to be observed and performed by it and will not suffer or permit any default to occur thereunder. Section 4.02. Compliance with Installment Purchase Agreement. The District will punctually pay the Installment Payments, and interest thereon, and other payments required to be made by it hereunder in strict conformity with the terms hereof, and will faithfully observe and perform all the agreements, conditions, covenants and terms contained herein required to be observed and performed by it, will not suffer or permit any default to occur hereunder and will not terminate this Installment Purchase Agreement for any cause including, without limiting the generality of the foregoing, any acts or circumstances that may constitute failure of consideration, destruction of or damage to the Project, commercial frustration of purpose, any change in the tax or other laws of the United States of America or of the State or any political subdivision of either or any failure of the Corporation to observe or perform any agreement, condition, covenant or term contained herein required to be observed and performed by it, whether express or implied, or any duty, liability or obligation arising out of or connected herewith or the insolvency, or deemed insolvency, or bankruptcy or liquidation of the Corporation or any force majeure, including acts of God, tempest, storm, earthquake, war, rebellion, riot, civil disorder, acts of public enemies, blockade or embargo, strikes, industrial disputes, lock outs, lack of transportation facilities, fire, explosion, or acts or regulations of governmental authorities. Section 4.03. Protection of Security and Rights. The District will preserve and protect the security hereof and the rights of the Trustee, as assignee of the Corporation, to the Installment Payments, and interest thereon, and other payments required to be made by the District hereunder and will warrant and defend such rights against all claims and demands of all persons. Section 4.04. Consent of Bank. The District will not amend the Master Agreement without the prior written consent of the Bank. Section 4.05. Indemnification of Corporation. To the extent permitted by law, the District hereby agrees to indemnify and hold the Corporation and its members and officers harmless against any and all liabilities which might arise out of or are related to the Project, this Installment Purchase Agreement or the Certificates (2000 Refunding Project), and the District further agrees to defend the Corporation and its members and officers in any action arising out of or related to the Project, this Installment Purchase Agreement or the Certificates (2000 Refunding Project). Section 4.06. Further Assurances. The District will adopt, deliver, execute and make any and all further assurances, instruments and resolutions as may be reasonably necessary or proper to carry out the intention or to facilitate the performance hereof and for the better assuring DOCSLA1:332519.5 41758-?GHI 11 and confirming unto the Corporation, or unto the Trustee, as assignee of the Corporation, the rights and benefits provided herein to the Corporation, or to the Trustee, as assignee of the Corporation. DOCSLAl:332519.5 41758-7 GHI 12 ARTICLEV EVENTS OF DEFAULT AND REMEDIES OF THE CORPORATION Section 5.01. Events of Default. The following shall be Events of Default under this Installment Purchase Agreement, and Event of Default shall mean any one or more of the following events: (a) if default shall be made by the District in the due and punctual payment of or on account of any Senior Obligation as the same shall become due and payable; (b) if default shall be made by the District in the performance of any of the agreements or covenants required herein, in the Trust Agreement or in the Master Agreement to be performed by it (other than as specified in (a) above), and such default shall have continued for a period of 60 days after the District shall have been given notice in writing of such default by the Corporation; ( c) if the District shall file a petition or answer seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if a court of competent jurisdiction shall approve a petition filed with or without the consent of the District seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if under the provisions of any other law for the relief or aid of debtors any court of competent jurisdiction shall assume custody or control of the District or of the whole or any substantial part of its property; or ( d) if an event of default as provided in the Standby Agreement shall have occurred and be continuing, as evidenced by the Trustee's receipt of a written notice from the Bank so stating. Section 5.02. Remedies on Default. Upon the occurrence of an Event of Default, the Trustee, as assignee of the Corporation, shall have the right: (a) by mandamus or other action or proceeding or suit at law or in equity to enforce its rights against the District or any board member, officer or employee thereof, and to compel the District or any such board member, officer or employee to perform and carry out his or her duties under applicable law and the agreements and covenants required to be performed by him or her contained herein; (b) by suit in equity to enjoin any acts or things which are unlawful or violate the rights of the Trustee, as assignee of the Corporation; ( c) by suit in equity require the District and its board members, officers and employees to account as the trustee of an express trust; and (d) to have a receiver or receivers appointed for the Wastewater System and of the issues, earnings, income, products and profits thereof, pending such proceedings, with such powers as the court making such appointment shall confer. DOCSLAI :332519.5 41758-7 GHI 13 ' Section 5.03. Non-Waiver. Nothing in this Article or in any other provision hereof shall affect or impair the obligation of the District, which is absolute and unconditional, to pay the Installment Payments, and the interest thereon, to the Trustee, as assignee of the Corporation, at the respective due dates from the Net Revenues and the other funds herein committed for such payment, or shall affect or impair the right of the Trustee, as assignee of the Corporation, which is also absolute and unconditional, to institute suit to enforce such payment by virtue of the contract embodied herein. A waiver of any default or breach of duty or contract by the Trustee, as assignee of the Corporation, shall not affect any subsequent default or breach of duty or contract or impair any rights or remedies on any such subsequent default or breach of duty or contract. No delay or omission by the Trustee, as assignee of the Corporation, to exercise any right or remedy accruing upon any default or breach of duty or contract shall impair any such right or remedy or shall be construed to be a waiver of any such default or breach of duty or contract or an acquiescence therein, and every right or remedy conferred upon the Trustee, as assignee of the Corporation, by applicable law or by this Article may be enforced and exercised from time to time and as often as shall be deemed expedient by the Trustee, as assignee of the Corporation. If any action, proceeding or suit to enforce any right or exercise any remedy is abandoned or determined adversely to the Trustee, as assignee of the Corporation, the District and the Trustee, as assignee of the Corporation, shall be restored to their former positions, rights and remedies as if such action, proceeding or suit had not been brought or taken. Section 5.04. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee, as assignee of the Corporation, is intended to be exclusive of any other remedy, and each such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing in law or in equity or by statute or otherwise and may be exercised without exhausting and without regard to any other remedy conferred by law. DOCSLA1:332519.5 41758-7 GHl 14 ARTICLE VI AMENDMENTS Section 6.01. Amendments. (a) This Installment Purchase Agreement and the rights and obligations of the District, the Corporation and the Trustee, as assignee of the Corporation, may be amended or modified from time to time and at any time by a written amendment hereto executed by the District, the Corporation and the Trustee, as assignee of the Corporation, with the written consent of the Owners of a majority of the aggregate principal evidenced by Certificates (2000 Refunding Project) then Outstanding. No such amendment shall (i) extend the payment date of any Installment Payment or reduce the amount of any Installment Payment, or the interest rate applicable thereto, without the prior written consent of the Owner of each affected Certificate, (ii) reduce the percentage of Owners of the Certificates (2000 Refunding Project) whose consent is required to effect any such amendment or modification, or (iii) amend or modify any of the rights or obligations of the Bank without the prior written consent of the Bank, without the prior written consent of the Owners of all Certificates (2000 Refunding Project) then Outstanding. (b) This Installment Purchase Agreement and the rights and obligations of the District, the Corporation and the Trustee, as assignee of the Corporation, may be amended or modified from time to time and at any time by a written amendment hereto executed by the District, the Corporation and the Trustee, as assignee of the Corporation, without the written consents of any Owners of the Certificates (2000 Refunding Project), but only to the extent permitted by law and only for any one or more of the following purposes - (i) to add to the agreements, conditions, covenants and terms required by the District, the Corporation or the Trustee, as assignee of the Corporation, to be observed or performed herein other agreements, conditions, covenants and terms thereafter to be observed or performed by the District, the Corporation or the Trustee, as assignee of the Corporation, or to surrender any right or power reserved herein to or conferred herein on the District, the Corporation or the Trustee, as assignee of the Corporation, and which in either case shall not materially adversely affect the interests of the Owners of the Certificates (2000 Refunding Project) or the Bank; (ii) to make such provisions for the purpose of curing any ambiguity or of correcting, curing or supplementing any defective provision contained herein or in regard to questions arising hereunder which the District, the Corporation or the Trustee, as assignee of the Corporation, may deem desirable or necessary and not inconsistent herewith, and which shall not materially adversely affect the interests of the Owners of the Certificates (2000 Refunding Project) or the Bank; (iii) to make such additions, deletions or modifications as may be necessary or appropriate to assure the exclusion from gross income for federal income tax purposes of interest on the Installment Payments; and (iv) to make such other changes herein or modifications hereto as the District, the Corporation or the Trustee, as assignee of the Corporation, may deem desirable or DOCSLAI :332519.5 41758-?GHI 15 necessary, and which shall not materially adversely affect the interests of the Owners of the Certificates (2000 Refunding Project) or the Bank. (c) This Installment Purchase Agreement and the rights and obligations of the District, the Corporation and the Trustee, as assignee of the Corporation, may be amended or modified as of any Conversion.Date by a written amendment hereto executed by the District, the Corporation and the Trustee, as assignee of the Corporation, which shall become binding on such Conversion Date, with the prior written consent of the Bank (if the Rate Period commencing on such Conversion Date is a Variable Rate Period), but without the written consents of any Owners of the Certificates (2000 Refunding Project), but only to the extent permitted by law and only if the Certificates (2000 Refunding Project) have been remarketed by the Remarketing Agent pursuant to subsection (d) of Section 5.02 or Section 5.03 of the Trust Agreement for purchase on such Conversion Date with such amended or modified rights or obligations of the District, the Corporation or the Trustee, as assignee of the Corporation. DOCSLA1:332519.5 41758-7 OH! 16 ARTICLE VII MISCELLANEOUS Section 7.01. Liability of District Limited. Notwithstanding anything contained herein, the District shall not be required to advance any moneys derived from any source of income other than Net Revenues and the other funds provided herein for the payment of the Installment Payments, and the interest thereon, and other payments required to be made by it hereunder, or for the performance of any agreements or covenants required to be performed by it contained herein. The District may, however, but in no event shall be obligated to, advance moneys for any such purpose so long as such moneys are derived from a source legally available for such purpose and may be legally used by the District for such purpose. The obligation of the District to pay the Installment Payments, and the interest thereon, and other payments required to be made by it hereunder is a special obligation of the District payable, in the manner provided herein, solely from Net Revenues and other funds provided for herein, and does not constitute a debt of the District or of the State, or of any political subdivision thereof, in contravention of any constitutional or statutory debt limitation or restriction. Neither the faith and credit nor the taxing power of the District or the State, or any political subdivision thereof, is pledged to the payment of the Installment Payments, or the interest thereon, or other payments required to be made hereunder. Section 7.02. Limitation of Rigbts. Nothing in this Installment Purchase Agreement expressed or implied is intended or shall be construed to give to any person other than the District, the Corporation, the Trustee, as assignee of the Corporation, and the Bank, any legal or equitable right, remedy or claim under or in respect of this Installment Purchase Agreement or any covenant, condition or provision therein or herein contained, and all such covenants, conditions and provisions are and shall be held to be for the sole and exclusive benefit of the District, the Corporation, the Trustee, as assignee of the Corporation, and the Banl<. Section 7.03. Assignment. The District and the Corporation hereby acknowledge the transfer, conveyance and assignment by the Corporation to the Trustee of all of the Corporation's rights, title and interest under this Installment Purchase Agreement (excepting its rights to indemnification hereunder), including the right to receive Installment Payments, and the interest thereon, from the District, pursuant to the Trust Agreement. Section 7.04. Rights of Bank. As long as the Liquidity Facility is in effect and the Bank is not in default in respect of its payment obligations thereunder, the Bank shall be deemed to be the sole and exclusive Owner of the Outstanding Certificates (2000 Refunding Project) in a Variable Rate Mode for purposes of all approvals, consents, waivers, institution of any action, and the direction of all remedies, including but not limited to approval of or consent to any amendment to this Installment Purchase Agreement which requires the consent or approval of the Owners of a majority of the principal evidenced by the Certificates (2000 Refunding Project) then Outstanding; provided, however, that the Bank shall not be deemed to be the sole and exclusive Owner of the Outstanding Certificates (2000 Refunding Project) with respect to any amendment or supplement to this Installment Purchase Agreement which seeks to amend or DOCSLA1 :332519.5 41758-7 GHI 17 supplement this Installment Purchase Agreement for the purposes set forth in clause (i) or (ii) of subsection (a) of Section 6.01 hereof. Section 7.05. Third-Party Beneficiary. The Bank is a third-party beneficiary of this Installment Purchase Agreement. Section 7.06. References to Bank Ineffective. If the Liquidity Facility is no longer in effect, and all obligations to the Bank under the Standby Agreement have been paid in full, then all references in this Installment Purchase Agreement to the Bank, the Liquidity Facility and the Standby Agreement shall be of no effect. Section 7.07. Notices. Any written notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication to be given hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely: If to the District: If to the Corporation: Ifto the Trustee: If to the Bank: Orange County Sanitation District 10844 Ellis A venue Fountain Valley, California 92708 Attention: -------- Orange County Sanitation District Financing Corporation c/o Orange County Sanitation District 10844 Ellis A venue Fountain Valley, California 92708 Attention: State Street Bank and Trust Company of California, N .A. 633 West Fifth Street, 12th Floor Los Angeles, California 90071 Attention: Operations Department Dexia Credit Local de France 445 Park A venue, 8th Floor New York, New York 10022 Attention: Operations Manager Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if personally served or delivered, upon delivery, (b) if given by electronic communication, whether by telex, telegram or telecopier, upon the sender's receipt of an appropriate answerback or other written acknowledgment, ( c) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours DOCSLAI :332519.5 41758-7GHI 18 after such notice is deposited with the United States mail, (d) if given by overnight courier, with courier charges prepaid, 24 hours after delivery to said overnight courier, or (e) if given by any other means, upon delivery at the address specified in this Section. Any notice to be given to or by the Corporation hereunder shall, upon the assignment of the Corporation's rights hereunder to the Trustee, also be given to or by the Trustee. Section 7.08. Successor Is Deemed Included in all References to Predecessor. Whenever either the District or the Corporation is named or referred to herein, such reference shall be deemed to include the successor to the powers, duties and functions that are presently vested in the District or the Corporation, and all agreements and covenants required hereby to be performed by or on behalf of the District or the Corporation shall bind and inure to the benefit of the respective successors thereof whether so expressed or not. Section 7.09. Waiver of Personal Liability. No official, officer or employee of the District shall be individually or personally liable for the payment of the Installment Payments, or the interest thereon, or other payments required to be made by the District hereunder, but nothing contained herein shall relieve any official, officer or employee of the District from the performance of any official duty provided by any applicable provisions of law or hereby. Section 7.10. Article and Section Headings, Gender and References. The headings or titles of the several Articles and Sections hereof and the table of contents appended hereto shall be solely for convenience of reference and shall not affect the meaning, construction or effect hereof, and words of any gender shall be deemed and construed to include all genders. All references herein to "Articles," "Sections" and other subsections or clauses are to the corresponding articles, sections, subsections or clauses hereof; and the words "hereby," "herein," "hereof," "hereto," "herewith" and other words of similar import refer to this Installment Purchase Agreement as a whole and not to any particular Article, Section, subdivision or clause hereof. Section 7.11. Partial lovaliqity. If any one or more of the agreements or covenants or portions thereof required hereby to be performed by or on the part of the District or the Corporation shall be contrary to law, then such agreement or agreements, such covenant or covenants or such portions thereof shall be null and void and shall be deemed separable from the remaining agreements and covenants or portions thereof and shall in no way affect the validity hereof. Section 7.12. Law Governing. This Installment Purchase Agreement shall be construed and governed in accordance with the laws of the State. Section 7.13. Execution in Counterparts. This Installment Purchase Agreement may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. DOCSLAI :332519.5 41758-7 GHI 19 .. • IN WITNESS WHEREOF, the parties hereto have executed this Installment Purchase Agreement by their officers thereunto duly authorized as of the day and year first written above. DOCSLA1:332519.5 41758-7 GHl 20 ORANGE COUNTY SANITATION DISTRICT ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION DOCS LA I :332519.5 41758-7 GHI EXHIBIT A DESCRIPTION OF PROJECT A-1 TRUST AGREEMENT by and among STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A. DOCSLAl :336504.4 41758-7 GHl and ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION and ORANGE COUNTY SANITATION DISTRICT Dated as of , 2000 ------ Relating To $ ------Orange County Sanitation District Refunding Certificates of Participation (2000 Refunding Project) TABLE OF CONTENTS ARTICLE I DEFINITIONS; EQUAL SECURITY Section 1.01. Definitions ............................................................................................................... 3 Section 1.02. Definitions in Installment Purchase Agreement ................................................... 10 Section 1.03. Equal Security ....................................................................................................... 10 ARTICLE II TERMS AND CONDITIONS OF CERTIFICATES Section 2.01. Preparation and Delivery of Certificates ............................................................... 11 Section 2.02. Denomination, Medium and Dating of Certificates .............................................. 11 Section 2.03. Payment Dates of Certificates; Interest Computation ........................................... 11 Section 2.04. Form of Certificates .............................................................................................. 12 Section 2.05. Execution of Certificates and Replacement Certificates ....................................... 12 Section 2.06. Transfer and Payment of Certificates; Exchange of Certificates .......................... 12 Section 2.07. Certificate Registration Books .............................................................................. 13 Section 2.08. Temporary Certificates .......................................................................................... 13 Section 2.09. Certificates Mutilated, Lost, Destroyed or Stolen ................................................ 13 Section 2.10. Cooperation by the District.. ................................................................................. 14 Section2.ll. Book-Entry System ................................................................................................ 14 ARTICLE III INTEREST RA TES Section 3.01. Variable Rates ....................................................................................................... 18 Section 3.02. Optional Conversion Between Variable Rate Modes ........................................... 20 Section 3.03. Conversion to the Fixed Rate Mode ..................................................................... 21 ARTICLE IV PREPAYMENT OF CERTIFICATES Section 4.01. Optional Prepayment ............................................................................................ 24 Section 4.02. Mandatory Sinking Account Prepayment. ............................................................ 25 Section 4.03. Selection of Certificates for Prepayment.. ............................................................ 26 Section 4.04. Notice of Prepayment ........................................................................................... 26 Section 4.05. Partial Prepayment of Certificates ........................................................................ 28 Section 4.06. Effect of Prepayment ............................................................................................ 28 ARTICLEV TENDER AND PURCHASE OF CERTIFICATES Section 5.01. Optional Tenders While Daily Rate Mode in Effect.. ........................................... 29 Section 5.02. Optional Tenders While Weekly Rate Mode in Effect ......................................... 30 Section 5.03. Mandatory Tenders On Conversion Dates ............................................................. 31 Section 5.04. Mandatory Tenders After Each Extended Rate Period ......................................... 32 Section 5.05 . Mandatory Tenders Upon Expiration or Substitution of Liquidity Facility or Event of Default with Respect Thereto .................................... 32 Section 5.06. Purchase of Tendered Certificates ........................................................................ 33 DOCSLAI :336504.4 41758-7 GHI TABLE OF CONTENTS (continued) Section 5.07. Bank Certificates ........................................................................................... -....... 35 Section 5.08. Insufficient Funds for Purchases ........................................................................... 35 Section 5. 09. Restriction on Remarketing of Certificates to District or Corporation ................................................................................................ 36 Section 5.10. Book-Entry Tenders .................................................................... -......................... 36 ARTICLE VI THE LIQUIDITY FACILITY Section 6.01. The Liquidity Facility ........................................................................................... 37 Section 6.02. Substitute Liquidity Facility ................................................................................. 37 Section 6.03 . Notices to the Bank ............................................................................................... 38 ARTICLE VII FUNDS AND ACCOUNTS; ASSIGNMENT AND PLEDGE Section 7.01. Deposit of Proceeds of Certificates ....................................................................... 39 Section 7.02. Costs of Issuance Fund ......................................................................................... 39 Section 7.03. Assignment and Pledge ......................................................................................... 39 Section 7.04. Installment Payment Fund .................................................................................... 39 Section 7.05. Reserve Fund ........................................................................................................ 40 Section 7.06. Rebate Fund .......................................................................................................... 42 Section 7.07. Investment of Moneys ........................................................................................... 42 ARTICLE VIII COVENANTS Section 8.01. Compliance with Trust Agreement.. ..................................................................... 44 Section 8.02. Compliance with Installment Purchase Agreement.. ............................................ 44 Section 8.03. Observance of Laws and Regulations ............................. .' ..................................... 44 Section 8.04. Other Liens ............................................................................................................ 44 Section 8.05. Prosecution and Defense of Suits ......................................................................... 44 Section 8.06. Accounting Records and Statements .................................................................... 44 Section 8.07. Tax Covenants ...................................................................................................... 45 Section 8.08. Continuing Disclosure .......................................................................................... 45 Section 8.09. Further Assurances ................................................................................................ 45 ARTICLE IX DEFAULT AND LIMITATIONS OF LIABILITY Section 9.01. Action upon Event of Default ............................................................................... 46 Section 9.02. Other Remedies of the Trustee .............................................................................. 46 Section 9.03. Non-Waiver ........................................................................................................... 46 Section 9.04. Remedies Not Exclusive ....................................................................................... 47 Section 9.05. Application of Amounts After Default ................................................................. 47 DOCSLAI :336504.4 41758-7 GHI 11 TABLE OF CONTENTS (continued) Section 9.06. Trustee May Enforce Claims Without Possession of Certificates ........................ 47 Section 9.07. Limitation on Suits ................................................................................................ 47 Section 9.08. No Liability by the Corporation to the Owners .................................................... 48 Section 9.09. No Liability by the District to the Owners ............................................................ 48 Section 9.10. No Liability of the Trustee to the Owners ............................................................ 48 ARTICLEX THE TRUSTEE AND THE REMARKETING AGENT Section 10.01. Employment of the Trustee; Duties .................................................................... 49 Section 10.02. Removal and Resignation of the Trustee ............................................................ 49 Section 10.03. Compensation and Indemnification of the Trustee ............................................. 50 Section 10.04. Protection of the Trustee ..................................................................................... 51 Section 10.05. The Remarketing Agent.. .................................................................................... 52 Section 10.06. Qualifications of Remarketing Agent.. ............................................................... 53 ARTICLEX AMENDMENT OF OR SUPPLEMENT TO TRUST AGREEMENT Section 11.01. Amendment or Supplement ................................................................................ 54 Section 11.02. Disqualified Certificates ..................................................................................... 55 Section 11. 03. Endorsement or Replacement of Certificates After Amendment or Supplement ............................................................................................. 55 Section 11.04. Amendment by Mutual Consent.. ....................................................................... 55 ARTICLE XII DEFEASANCE Section 12.01. Discharge of Certificates and Trust Agreement.. ................................................ 56 Section 12.02. Unclaimed Moneys ............................................................................................. 57 ARTICLE XIII MISCELLANEOUS Section 13.01. Benefits of Trust Agreement.. ............................................................................. 59 Section 13.02. Successor Deemed Included in all References to Predecessor ........................... 59 Section 13.03. Execution of Documents by Owners .................................................................. 59 Section 13.04. Waiver of Personal Liability ............................................................................... 59 Section 13 .05. Acquisition of Certificates by District ................................................................ 60 Section 13.06. Content of Certificates ........................................................................................ 60 Section 13.07. Funds and Accounts ............................................................................................ 60 Section 13.08 . Third-Party Beneficiary ...................................................................................... 60 Section 13.09. Article and Section Headings, Gender and References ...................................... 60 Section 13. I 0. Partial Invalidity .................................................................................................. 61 Section 13 .11. California Law .................................................................................................... 61 DOCSLAI :336504.4 41758-7 GHI ll1 TABLE OF CONTENTS (continued) Section 13.12. Notices ................................................................................................................ 61 Section 13 .13. Notice to Rating Agencies .................................................................................. 63 Section 13.14. New York Time .................................................................................................. 63 Section 13.15. References to Bank Ineffective ........................................................................... 63 Section 13.16. Effective Date ..................................................................................................... 63 Section 13 .17. Execution in Counterparts ................................................................................... 63 EXHIBIT A FORM OF CERTIFICATE .................................................................................. A-1 DOCSLAI :336504.4 41758-7 GH! lV TRUST AGREEMENT THIS TRUST AGREEMENT (this "Trust Agreement"), is made and entered into as of _____ , 2000, by and among STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A., a national banking association duly organized and existing under the laws of the United States of America, as Trustee (the "Trustee"), the ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION, a nonprofit public benefit corporation organized and existing under the laws of the State of California (the "Corporation"), and the ORANGE COUNTY SANITATION DISTRICT, a county sanitation district organized and existing under the laws of the State of California (the "District"). WI TNE S SETH: WHEREAS, the District previously financed the acquisition, construction and installation of certain improvements to its wastewater system (the "Project") through the incurrence of certain obligations; WHEREAS, in order to refinance such obligations, the District desires to purchase the Project from the Corporation, and the Corporation desires to sell the Project to the District, pursuant to an Installment Purchase Agreement, dated as of the date hereof (the "Installment Purchase Agreement"); WHEREAS, the Corporation proposes to assign without recourse certain of its rights under and pursuant to the Installment Purchase Agreement to the Trustee; WHEREAS, in consideration of such assignment and the execution and entering into of this Trust Agreement, the Trustee has agreed to execute and deliver certificates of participation (the "Certificates"), evidencing direct, undivided fractional interests in the Installment Payments, and the interest thereon, payable under the Installment Purchase Agreement; WHEREAS, a portion of the proceeds of the Certificates will be used to provide for the refinancing of the obligations incurred to finance the Project; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Trust Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Trust Agreement; NOW, THEREFORE, in consideration of the premises and of the mutual agreements and covenants contained herein and for other valuable consideration, the parties hereto do hereby agree as follows: DOCSLAI :336504.4 41758-7 GHJ 1 ARTICLE I DEFINITIONS; EQUAL SECURITY Section 1.01. Definitions. Except as provided in Section 1.02 hereof or unless the context otherwise requires, the terms defined in this Section shall for all purposes hereof and of any amendment hereof or supplement hereto and of the Certificates and of any certificate, opinion, request or other document mentioned herein or therein have the meanings defined herein, the following definitions to be equally applicable to both the singular and plural forms of any of the terms defined herein: "Authorized Corporation Representative" means the [President, the Vice President, the Treasurer and the Secretary] of the Corporation, and any other person authorized by the Board of Directors of the Corporation to act on behalf of the Corporation under or with respect to this Trust Agreement. "Authorized Denominations" means (a) while the Certificates are in the Daily Rate Mode or the Weekly Rate Mode, $100,000 and whole multiples thereof, except that one Certificate may be in the amount of $100,000 and a whole multiple of $5,000 in excess thereof, and (b) while the Certificates are in the Extended Rate Mode or the Fixed Rate Mode, $5,000 and whole multiples thereof. "Authorized District Representative" means the General Manager of the District and the of the District, and any other person authorized by the Board of Directors of the District to act on behalf of the District under or with respect to this Trust Agreement. "Available Commitment" has the meaning ascribed thereto in the Standby Agreement. "Bank" means Dexia Credit Local de France, acting through its New York Agency, as issuer of the Liquidity Facility, and any issuer of any Substitute Liquidity Facility. "Bank Certificate" has the meaning ascribed thereto in the Standby Agreement. "Bank Certificate Rate" means 0%. "Beneficial Owners" means those individuals, partnerships, corporations or other entities for whom the Participants have caused the Depository to hold Book-Entry Certificates. "Book-Entry Certificates" means the Certificates registered in the name of the nominee of DTC, or any successor securities depository for the Certificates, as the registered owner thereof pursuant to the terms and provisions of Section 2.11 hereof. "Business Day" means a day other than (a) Saturday or Sunday, (b) a day on which banking institutions in the city or cities in which the Principal Office of the Trustee is located, the principal office of the Remarketing Agent is located or the office of the Bank at which draws DOCSLAl :336504.4 41758-7 GHl 2 under the Liquidity Facility are made is located, are authorized or required by law to be closed, and (c) a day on which the New York Stock Exchange is authorized or obligated by law or executive order to be closed. If the date for making any payment or the last date for performance of any act or the exercising of any right, as provided in the Trust Agreement or the Installment Purchase Agreement, shall not be a Business Day, such payment may be made or act performed or right exercised on the next succeeding Business Day, with the same force and effect as if done on the nominal date provided in the Trust Agreement or the Installment Purchase Agreement and, unless otherwise specifically provided in the Trust Agreement, the Installment Purchase Agreement or the Standby Agreement, no interest shall accrue for the period from and after such nominal date. "Cede & Co." means Cede & Co., the nominee of DTC, and any successor nominee of DTC with respect to the Certificates. "Certificate Purchase Agreement" means the Certificate Purchase Agreement, dated ______ _, 2000, by and among the Purchaser, the District and the Corporation relating to the Certificates. "Certificates" means the Orange County Sanitation District Refunding Certificates of Participation (2000 Refunding Project) executed and delivered by the Trustee pursuant hereto. "Code" means the Internal Revenue Code of 1986. "Conversion Date" means any date on which the Mode applicable to the Certificates is converted from one Variable Rate Mode to another Variable Rate Mode or to the Fixed Rate Mode. "Corporation" means the Orange County Sanitation District Financing Corporation, a nonprofit public benefit corporation organized and existing under the laws of the State. "Costs of Issuance" means all the costs of executing and delivering the Certificates, including, but not limited to, all printing and document preparation expenses in connection with this Trust Agreement, the Installment Purchase Agreement, the Standby Agreement, the Certificates and any preliminary official statement and final official statement pertaining to the Certificates, rating agency fees, CUSIP Service Bureau charges, market study fees, legal fees and expenses of counsel with respect to the execution and delivery of the Certificates, any computer and other expenses incurred in connection with the Certificates, the initial fees and expenses of the Trustee, Liquidity Facility fees and charges, and other fees and expenses incurred in connection with the execution and delivery of the Certificates, to the extent such fees and expenses are approved by the District. "Costs of Issuance Fund" means the account by that name established in accordance with Section 7 .02 hereof. "Daily Rate" means the interest rate or rates determined for a Daily Rate Period pursuant to subsection (b) of Section 3.01 hereof. DOCSLA I :336504.4 41758-7 GH! 3 "Daily Rate Mode" means the Mode in which the Certificates evidence interest at a Daily Rate. "Defeasance Securities" means Permitted Investments described in paragraph (1) of the definition thereof, which Permitted Investments do not contain provisions permitting the redemption thereof other than at the option of the holder. "Delivery Date" means _______ , 2000. "Depository" means the securities depository acting as Depository pursuant to Section 2.11 hereof. "District" means the Orange County Sanitation District, a county sanitation district organized and existing under and by virtue of the laws of the State, and any successor thereto. "DTC" means The Depository Trust Company, New York, New York and its successors. "Extended Rate" means the interest rate or rates determined for an Extended Rate Period pursuant to subsection ( d) of Section 3. 01 hereof. "Extended Rate Mode" means the Mode in which the Certificates evidence interest at an Extended Rate. "Fixed Rate" means the interest rate determined for a Fixed Rate Period pursuant to Section 3.03 hereof. "Fixed Rate Mode" means the Mode in which the Certificates evidence interest at a Fixed Rate. "Installment Payment Fund" means the fund by that name established in accordance with Section 7 .04 hereof. "Installment Payments" means the Installment Payments required to be made by the District pursuant to Section 2.02 of the Installment Purchase Agreement. "Installment Purchase Agreement" means the Installment Purchase Agreement, dated as of the date hereof, by and between the District and the Corporation, as originally executed and as it may from time to time be amended in accordance with the provisions thereof. "Interest Account" means the account by that name within the Installment Payment Fund established in accordance with Section 7 .04 hereof. "Interest Payment Date" means: (a) while the Certificates are in the Daily Rate Mode, the first Business Day of each calendar month; DOCSLA 1 :336504.4 41758-7 GHl 4 (b) while the Certificates are in the Weekly Rate Mode, the first Business Day of each calendar month; (c) while the Certificates are in the Extended Rate Mode, each February 1 and August 1; and (d) while the Certificates are in the Fixed Rate Mode, each February 1 and August 1. "Letter of Representations" means the letter of the District delivered to and accepted by the Depository on or prior to the delivery of the Certificates as Book-Entry Certificates setting forth the basis on which the Depository serves as depository for such Book-Entry Certificates, as originally executed or as it maybe supplemented or revised or replaced by a letter to a substitute Depository. "Liquidity Facility" means the standby purchase facility established by the Bank pursuant to the Standby Agreement, and any Substitute Liquidity Facility. "Mandatory Sinking Account Payments" means the Installment Payments evidenced by Certificates required to be paid on each Mandatory Sinking Account Payment Date pursuant to Section 4.02 hereof. "Mandatory Sinking Account Payment Date" means August 1, 2000 and each August 1 thereafter continuing through and including August 1, 2018. "Maximum Rate" means, with respect to any Certificate, prior to the Fixed Rate Conversion Date therefor, 12% per annum and, thereafter, the highest rate of interest allowed by law. "Mode" means the Daily Rate Mode, the Weekly Rate Mode, the Extended Rate Mode or the Fixed Rate Mode. "Moody's" means Moody's Investors Service, a corporation organized and ex1stmg under the laws of the State of Delaware, its successors and assigns, except that if such corporation shall no longer perform the function of a securities rating agency for any reason, the term "Moody's" shall be deemed to refer to any other nationally recognized securities rating agency selected by the District. "Nominee" means the nominee of the Depository, which may be the Depository, as determined from time to time pursuant to Section 2.11 hereof. "Notice of Mandatory Tender" has the meaning ascribed thereto m the Standby Agreement. "Opinion of Counsel" means a written opm10n of counsel of recognized national standing in the field of law relating to municipal bonds, appointed and paid by the District and satisfactory to and approved by the Trustee. DOCSLAI :336504.4 41758-7 GHI 5 "Outstanding," when used as of any particular time with reference to Certificates, means (subject to the provisions of Section 11.02 hereof) all Certificates except: (a) Certificates previously canceled by the Trustee or delivered to the Trustee for cancellation; (b) Certificates paid or deemed to have been paid within the meaning of Section 12.01 hereof; and ( c) Certificates in lieu of or in substitution for which other Certificates shall have been executed and delivered by the Trustee pursuant to Section 2.09 hereof. "Owner" means any person who shall be the registered owner of any Outstanding Certificate as indicated in the registration books of the Trustee required to be maintained pursuant to Section 2.07 hereof. "Participants" means those broker-dealers, banks and other financial institutions from time to time for which the Depository holds Book-Entry Certificates as securities depository. "Period" or "Rate Period" means, when used with respect to any particular rate of interest applicable to the Certificates (whether a Daily Rate, a Weekly Rate, an Extended Rate or a Fixed Rate), the period during which such rate of interest will remain in effect pursuant to Article III hereof. "Permitted Investments" means any of the following: (a) Any bonds or other obligations which, as to principal and interest, constitute direct obligations of, or are unconditionally guaranteed by, the United States of America, including obligations of any federal agencies, to the extent such obligations are unconditionally guaranteed by the United States of America; (b) Obligations issued by banks for cooperatives, federal land banks, federal intermediate credit banks, federal home loan banks or the Federal Home Loan Bank Board, or obligations, participations or other instruments of or issued by, or fully guaranteed as to principal and interest by, the Federal National Mortgage Association, the Government National Mortgage Association or the Federal Home Loan Mortgage Corporation; or guaranteed Small Business Administration notes or portions thereof; ( c) Obligations of the State of California or of any state or any local agency of either thereof which are rated in one of the two highest long-term rating categories of Moody's; ( d) Bills of exchange or time drafts drawn on and accepted by a commercial bank, otherwise known as bakers acceptances, with a maximum term of one year, which are eligible for purchase by the Federal Reserve System, or deposit accounts of any bank DOCSLAI :336504.4 41758-7 GHI 6 which has unsecured, uninsured and unguaranteed obligation ratings of "Prime-I" or "A3" or better by Moody's and "A-1 +"by S&P; ( e) Commercial paper of "prime" quality of the highest ranking or of the highest letter and numerical rating at the time of investment therein as provided by Moody's and S&P; (f) Negotiable certificates of deposit issued by a nationally or state-chartered bank, or a state or federal savings and loan association or by a state-licensed branch of a foreign bank qualified as a depository of public funds in the State of California, including the Trustee or any affiliate thereof, which are fully insured by the Federal Deposit Insurance Corporation; (g) Any repurchase agreement or reverse repurchase agreement with members of the Association of Primary Dealers of United States Government Securities or institutions insured by the Federal Deposit Insurance Corporation, which are rated at the time of investment therein not lower than A by Moody's and A by S&P, to the extent such agreements are fully collateralized at levels acceptable to the Bank by obligations described in clauses (a) and (b) of this definition, if the Trustee holds or appoints some intermediary bank or savings association to hold the collateral securing such agreement and the Trustee or its appointed agent has a first priority security interest in such collateral, and the repurchase agreement or reverse repurchase agreement is free and clear of any third party lien or claim; (h) For amounts less than $10,000, interest-bearing demand or time deposits (including certificates of deposit) in a national or state-chartered bank, or state or federal savings and loan association in the State of California, fully insured by the Federal Deposit Insurance Corporation or any successor thereto, including the Trustee or any affiliate thereof; (i) Shares in money market funds investing in the securities and obligations as authorized by clauses (a) to (h), inclusive, of this definition and which comply with the investment restrictions of Articles 1 and 2 of Chapter 4 of Title 5 of the California Government Code (commencing with Section 53630) (including such funds managed, advised or sponsored by the Trustee or any of its affiliates). To be eligible for investment pursuant to this clause (i) these companies shall either: (1) attain the highest ranking or the highest letter and numerical rating provided by S&P, or (2) have an investment adviser registered with the Securities and Exchange Commission with not less than five years experience investing in the securities and obligations as authorized by clauses (a) to (i), inclusive, of this definition and with assets under management in excess of $500,000,000. The purchase price of shares of beneficial interest purchased pursuant to this clause (i) shall not include any commission that these companies may charge; (j) Investment agreements (including guaranteed investment contracts), debt service fund float agreements and debt service reserve fund put agreements reviewed by and acceptable to Moody's and the Bank; DOCSLAI :336504.4 41758-7 GHI 7 (k) Any other investments which the District deems to be prudent investments and in which the District invests or directs the Trustee to invest, provided that such investments are approved by Moody's and the Banlc Any references to long-term rating categories in this definition shall not take into account any plus or minus sign or numerical modifiers. "Prepayment Account" means the account by that name within the Installment Payment Fund established in accordance with Section 7.04 hereof. "Principal Account" means the account by that name within the Installment Payment Fund established in accordance with Section 7.04 hereof. "Principal Office" means the Trustee's principal corporate trust office in Los Angeles, California. "Principal Payment Date" means a date on which an Installment Payment evidenced by the Certificates becomes due and payable. "Purchase Date" means a date upon which the Trustee IS obligated to purchase a Certificate pursuant to Article V hereof. "Purchase Price" means, with respect to any Certificate required to be purchased by the Trustee pursuant to Article V hereof, an amount equal to the principal evidenced by such Certificate, plus accrued interest evidenced thereby, if any, at the rate applicable to such Certificate from the most recent Interest Payment Date and up to but excluding the Purchase Date. "Purchaser" means Paine Webber Incorporated, as underwriter and purchaser of the Certificates pursuant to the Certificate Purchase Agreement. "Rebate Fund" means the fund by that name established in accordance with Section 7 .06 hereof. "Rebate Requirement" has the meaning ascribed thereto in the Tax Certificate. "Record Date" means, with respect to the interest payable on any Interest Payment Date, (a) the Business Day immediately prior to such Interest Payment Date, in the case of Certificates in the Daily Rate Mode or the Weekly Rate Mode, and (b) the fifteenth day of the calendar month immediately preceding such Interest Payment Date, whether or not such day is a Business Day, in the case of Certificates in the Extended Rate Mode or the Fixed Rate Mode. "Remarketing Agent" means the remarketing agent for the Certificates appointed pursuant to Section 10.06 hereof. "Remarketing Agreement" means the Remarketing Agreement, dated as of the date hereof, by and between the District and the initial Remarketing Agent, as originally executed and DOCSLAI :336504.4 41758-?GHI 8 as it may from time to time be amended in accordance with the provisions thereof, or any similar agreement with a successor Remarketing Agent. "Reserve Facility" means any line of credit, letter of credit, insurance policy, surety bond or other credit source and deposited with the Trustee pursuant to Section 7.05 hereof. "Reserve Fund" means the fund by that name established in accordance with Section 7.05 hereof. "Reserve Requirement" means an amount equal to the least of (i) the maximum amount of remaining Installment Payments, and the interest thereon, coming due in any one year, (ii) "10% of the proceeds of the issue", with respect to the Certificates in the Fixed Rate Mode, within the meaning of Section 148 of the Code, and (iii) 125% of the average amount of remaining Installment Payments, and the interest thereon, coming due in each year. "S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., a corporation organized and existing under the laws of the State of New York, its successors and assigns, except that if such entity shall no longer perform the functions of a securities rating agency for any reason, the term "S&P" shall be deemed to refer to any other nationally recognized securities rating agency selected by the District. "State" means the State of California. "Standby Agreement" means the Standby Agreement, dated as of the date hereof, by and between the District and the Bank, as originally executed and as it may from time to time be amended in accordance with the provisions thereof, or any similar agreement with the provider of a Substitute Liquidity Facility. "Substitute Liquidity Facility" means any standby purchase facility substituted for the initial Liquidity Facility in accordance with the provisions hereof. "Tax Certificate" means the Tax Certificate executed by the District at the time of execution and delivery of the Certificates relating to the requirements of Section 148 of the Code, as originally executed and as it may from time to time be amended in accordance with the provisions thereof. "Trust Agreement" means this Trust Agreement, by and among the Trustee, the Corporation and the District, as originally executed and as it may from time to time be amended or supplemented in accordance with the provisions hereof. "Trustee" means State Street Bank and Trust Company of California, N.A., a national banking association duly organized and existing under and by virtue of the laws of the United States of America, or any other bank or trust company which may at any time be substituted in its place as provided in Section 10.02 hereof. DOCSLAI :336504.4 41758-7 GHI 9 "Variable Rate" means, as the context requires, the Daily Rate, the Weekly Rate or the Extended Rate. "Variable Rate Mode" means, as the context requires, the Daily Rate Mode, the Weekly Rate Mode or the Extended Rate Mode. "Weekly Rate" means the interest rate or rates determined for a Weekly Rate Period pursuant to subsection ( c) of Section 3. 01 hereof. "Weekly Rate Mode" means the Mode in which the Certificates evidence interest at a Weekly Rate. "Written Certificate" and "Written Request" mean (a) with respect to the Corporation, a written certificate or written request, respectively, signed in the name of the Corporation by an Authorized Representative of the Corporation, and (b) with respect to the District, a written certificate or written request, respectively, signed in the name of the District by an Authorized Representative of the District. Any such certificate or request may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument. Section 1.02. Definitions in Installment Purchase Agreement. Except as otherwise herein defined and unless the context otherwise requires, the terms defined in the Installment Purchase Agreement shall for all purposes hereof and of any amendment hereof or supplement hereto and of any report or other document mentioned herein have the meanings defined therein, such definitions to be equally applicable to both the singular and plural forms of any of the terms defined therein. With respect to any defined term which is given a different meaning under this Trust Agreement than under the Installment Purchase Agreement, as used herein it shall have the meaning given herein. Section 1.03. Equal Security. In consideration of the acceptance of the Certificates by the Owners, this Trust Agreement shall be deemed to be and shall constitute a contract between the Trustee and the Owners to secure the full and final payment of the Installment Payments, and the interest thereon, evidenced by the Certificates which may be executed and delivered hereunder, subject to each of the agreements, conditions, covenants and terms contained herein; and all agreements, conditions, covenants and terms contained herein required to be observed or performed by or on behalf of the Trustee shall be for the equal and proportionate benefit, protection and security of all Owners without distinction, preference or priority as to security or otherwise of any Certificates over any other Certificates by reason of the number or date thereof or the time of execution or delivery thereof or for any cause whatsoever, except as expressly provided herein or therein. DOCSLAI :336504.4 41758-7 GHI 10 ARTICLE II TERMS AND CONDITIONS OF CERTIFICATES Section 2.01. Preparation and Delivery of Certificates. The Trustee is hereby authorized and directed to prepare the Certificates and, upon the Written Request of the District, shall execute the Certificates in the aggregate principal amount of $ --------· evidencing the aggregate principal amount of the Installment Payments and each evidencing a direct, fractional undivided interest in the Installment Payments, and the interest thereon. The Installment Payments evidenced by each Certificate shall constitute the principal evidenced thereby and the interest on such Installment Payments shall constitute the interest evidenced thereby. The Certificates shall be numbered, with or without prefixes, as directed by the Trustee. The Trustee is hereby authorized to deliver the Certificates to the Purchaser pursuant to the Certificate Purchase Agreement upon receipt of a Written Request of the District and upon receipt of the proceeds of sale thereof. Section 2.02. Denomination, Medium and Dating of Certificates. The Certificates shall be designated "Orange County Sanitation District Refunding Certificates of Participation (2000 Refunding Project)" shall be prepared in the form of fully registered Certificates, without coupons, in Authorized Denominations and shall be payable in lawful money of the United States of America. The Certificates shall be dated as of the Delivery Date. Each Certificate which is not a Bank Certificate shall evidence interest from the Interest Payment Date next preceding its date of execution to which interest has been paid in full, unless such date of execution shall be after a Record Date and prior to or on the following Interest Payment Date, in which case such Certificate shall evidence interest from such Interest Payment Date, or unless such date of execution shall be on or prior to 2000, in which case such Certificate shall evidence interest from the Delivery Date. Notwithstanding, the foregoing, if, as shown by the records of the Trustee, interest evidenced by the Certificates shall be in default, each Certificate shall evidence interest from the last Interest Payment Date to which such interest has been paid in full or duly provided for. Bank Certificates shall evidence interest from the date on which they become Bank Certificates until such time as they are no longer Bank Certificates. Section 2.03. Payment Dates of Certificat~s; Interest Computation. The principal evidenced by the Certificates shall become due and payable, subject to prior prepayment, on August 1, 2018. The Certificates shall evidence interest at the rates determined as set forth herein, payable on the Interest Payment Dates. Except as otherwise provided in the Letter of Representations, payments of interest evidenced by the Certificates shall be made to the Owners thereof (as determined at the close of business on the Record Date next preceding the related Interest Payment Date) by check or draft of the Trustee mailed to the address of each such Owner as it appears on the registration books maintained by the Trustee pursuant to Section 2.07 hereof, or to such other address as may be furnished in writing to the Trustee by such Owner, except that in the case of an Owner of DOCSLAI :336504.4 41758-7 GH! 11 Certificates evidencing $1,000,000 or more in aggregate principal amount, upon the written request of such Owner to the Trustee (which request shall remain in effect until revoked or revised by such Owner by an instrument in writing delivered to the Trustee), received at least ten days prior to a Record Date, specifying the account or accounts to which such payment shall be made, payment of interest evidenced by such Certificates shall be made by wire transfer of immediately available funds on the following Interest Payment Date. Payment of principal and prepayment premium, if any, evidenced by the Certificates, on their stated Principal Payment Dates or upon prepayment in whole or in part prior thereto, shall be made only upon presentation and surrender of the Certificates at the Principal Office of the Trustee. The interest evidenced by the Certificates shall be payable on each Interest Payment Date to and including their respective Principal Payment Dates or prepayment prior thereto, and shall represent the sum of the interest on the Installment Payments coming due on the Interest Payment Dates in each year. The principal evidenced by the Certificates shall be payable on their respective Principal Payment Dates and Mandatory Sinking Account Payment Dates in each year and shall represent the sum of the Installment Payments coming due on the Principal Payment Dates and Mandatory Sinking Account Payment Dates in each year. While the Certificates evidence interest at the Daily Rate or the Weekly Rate, interest evidenced by the Certificates shall be computed on the basis of the actual days elapsed and a 365-or 366-day year, as applicable. While the Certificates evidence interest at the Extended Rate or the Fixed Rate, interest evidenced by the Certificates shall be computed on the basis of a 360-day year consisting of twelve 30-day months. Section 2.04. Form of Certificates. The Certificates and the assignment to appear thereon shall be in substantially the forms, respectively, of Exhibit A hereto, with necessary or appropriate insertions, omissions and variations as permitted or required hereby. Section 2.05. Execution of Certificates and Replacement Certificates. The Certificates shall be executed by the Trustee by the manual signature of an authorized signatory of the Trustee. The Trustee shall deliver replacement Certificates in the manner and as contemplated by this Article. Such replacement Certificates shall be executed as herein provided and shall be in Authorized Denominations. Section 2.06. Transfer and Payment of Certificates; Exchange of Certificates. Each Certificate is transferable by the Owner thereof, in person or by his attorney duly authorized in writing, at the Principal Office of the Trustee on the registration books maintained by the Trustee pursuant to Section 2.07 hereof, upon surrender of such Certificate for cancellation accompanied by delivery of a duly executed written instrument of transfer in a form approved by the Trustee. The Trustee may treat the Owner of any Certificate as the absolute owner of such Certificate for all purposes, whether or not the principal or interest evidenced by such Certificate shall be overdue, and the Trustee shall not be affected by any knowledge or notice to the contrary; and payment of the interest and principal evidenced by such Certificate shall be made only to such Owner, which payments shall be valid and effectual to satisfy and discharge the liability evidenced by such Certificate to the extent of the sum or sums so paid. DOCSLAl :336504.4 41758-7 GHl 12 Whenever any Certificate shall be surrendered for transfer, the Trustee shall execute and deliver a new Certificate or Certificates evidencing prinCipal in the same aggregate amount and having the same stated Principal Payment Date. The Trustee shall require the payment by any Owner requesting such transfer of any tax or other governmental charge required to be paid with respect to such transfer. Each Certificate may be exchanged at the Principal Office of the Trustee for Certificates evidencing principal in a like aggregate principal amount having the same stated Principal Payment Date in such Authorized Denominations as the Owner thereof may request. The Trustee shall require the payment by the Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. The Trustee shall not be required to transfer or exchange any Certificate during the period commencing on the date five days before the date of selection of Certificates for prepayment and ending on the date of mailing notice of such prepayment, nor shall the Trustee be required to transfer or exchange any Certificate or portion thereof selected for prepayment from and after the date of mailing the notice of prepayment thereof. Section 2.07. Certificate Registration Books. The Trustee shall keep at its Principal Office sufficient books for the registration and transfer of the Certificates, which books shall be available for inspection and copying by the Corporation, the Trustee, the District and the Bank (or its designated agent) at reasonable hours and under reasonable conditions; and upon presentation for such purpose the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer the Certificates on such books as hereinabove provided. The Trustee shall, upon written request, make copies of such books available to any Owner or his agent duly authorized in writing. Section 2.08. Temporary Certificates. The Certificates may be initially delivered in temporary form exchangeable for definitive Certificates when ready for delivery, which temporary Certificates shall be printed, lithographed or typewritten, shall be of such denominations as may be determined by the Trustee, shall be in fully registered form and shall contain such reference to any of the provisions hereof as may be appropriate. Every temporary Certificate shall be executed and delivered by the Trustee upon the same conditions and terms and in substantially the same manner as definitive Certificates. If the Trustee executes and delivers temporary Certificates, it will prepare and execute definitive Certificates without delay, and thereupon the temporary Certificates may be surrendered at the Principal Office of the Trustee in exchange for such definitive Certificates, and until so exchanged such temporary Certificates shall be entitled to the same benefits hereunder as definitive Certificates executed and delivered hereunder. Section 2.09. Certificates Mutilated, Lost, Destroyed or Stolen. If any Certificate shall become mutilated, the Trustee, at the expense of the Owner thereof, shall execute and deliver a new Certificate evidencing a like principal amount and having the same stated Principal Payment Date and number in exchange and substitution for the Certificate so mutilated, but only upon surrender to the Trustee of the Certificate so mutilated. Every mutilated Certificate so DOCSLAI :336504.4 41758-7 GHI 13 surrendered to the Trustee shall be canceled by it. If any Certificate shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee, and if such evidence is satisfactory to the Trustee and indemnity satisfactory to the Trustee shall be given, the Trustee, at the expense of the Owner thereof, shall execute and deliver a new Certificate evidencing a like principal amount and having the same stated Principal Payment Date, numbered as the Trustee shall determine, in lieu of and in substitution for the Certificate so lost, destroyed or stolen. The Trustee may require payment of a sum not exceeding the actual cost of preparing each new Certificate executed and delivered by it under this Section and of the expenses which may be incurred by it under this Section. Any Certificate executed and delivered under the provisions of this Section in lieu of any Certificate alleged to be lost, destroyed or stolen shall be equally and proportionately entitled to the benefits hereof with all other Certificates executed and delivered hereunder, and the Trustee shall not be required to treat both the original Certificate and any replacement Certificate as being Outstanding for the purpose of determining the amount of Certificates which may be executed and delivered hereunder or for the purpose of determining any percentage of Certificates Outstanding hereunder, but both the original and replacement Certificate shall be treated as one and the same. Notwithstanding any other provision of this Section, in lieu of executing and delivering a new Certificate for a Certificate which has been lost, destroyed or stolen and which evidences principal that is then payable, the Trustee may make payment of such Certificate to the Owner thereof if so instructed by the District. Section 2.10. Cooperation by the District. The District shall cooperate with the Trustee to cause the necessary arrangements to be made and to be thereafter continued whereby the Certificates shall be made available for exchange, registration and transfer at the Principal Office of the Trustee. Section 2.11. Book-Entry System. (a) Prior to the execution and delivery of the Certificates, the District may provide that such Certificates shall be initially executed and delivered as Book-Entry Certificates, and in such event, the Certificates for each stated Principal Payment Date shall be in the form of a separate single fully registered Certificate (which may be typewritten). Upon initial execution and delivery, the ownership of each such Certificate shall be registered in the registration books maintained by the Trustee in the name of the Nominee, as nominee of the Depository. Payment of principal or interest evidenced by any Book-Entry Certificate registered in the name of the Nominee shall be made on the applicable Interest Payment Date by wire transfer of New York clearing house or equivalent next day funds or by wire transfer of same day funds to the account of the Nominee. Such payments shall be made to the Nominee at the address which is, on the Record Date, shown for the Nominee in the registration books maintained by the Trustee. (b) With respect to Book-Entry Certificates, the District, the Corporation and the Trustee shall have no responsibility or obligation to any Participant or to any person on behalf of which such a Participant holds an interest in such Book-Entry Certificates. Without limiting the immediately preceding sentence, the District, the Corporation and the Trustee shall have no responsibility or obligation with respect to (i) the accuracy of the records of the Depository, the Nominee or any Participant with respect to any ownership interest in Book-Entry Certificates, DOCSLAI :336504.4 41758-7 GHI 14 (ii) the delivery to any Participant or any other person, other than an Owner as shown in the registration books maintained by the Trustee, of any notice with respect to Book-Entry Certificates, including any notice of prepayment, (iii) the selection by the Depository and its Participants of the beneficial interests in Book-Entry Certificates to be prepaid in the event Certificates are prepaid in part, (iv) the payment to any Participant or any other person, other than an Owner as shown in the registration books maintained by the Trustee, of any amount with respect to principal, premium, if any, or interest evidenced by Book-Entry Certificates, or (v) any consent given or other action taken by the Depository as Owner. (c) The District, the Corporation and the Trustee may treat and consider the person in whose name each Book-Entry Certificate is registered in the registration books maintained by the Trustee as the absolute Owner of such Book-Entry Certificate for the purpose of payment of principal, prepayment premium, if any, and interest evidenced by such Certificate, for the purpose of selecting any Certificates, or portions thereof, to be prepaid, for the purpose of giving notices of prepayment and other matters with respect to such Certificate, for the purpose of registering transfers with respect to such Certificate, for the purpose of obtaining any consent or other action to be taken by Owners and for all other purposes whatsoever, and the District, the Corporation and the Trustee shall not be affected by any notice to the contrary. ( d) In the event of a prepayment of all or a portion of a Certificate, the Depository, in its discretion, (i) may request the Trustee to execute and deliver a new Certificate, or (ii) if DTC is the sole Owner of such Certificate, shall make an appropriate notation on the Certificate indicating the date and amounts of the reduction in principal evidenced thereby resulting from such prepayment, except in the case of final payment, in which case such Certificate must be presented to the Tr?stee prior to payment. (e) The Trustee shall pay all principal, premium, if any, and interest evidenced by the Certificates only to or "upon the order of' (as that term is used in the Uniform Commercial Code as adopted in the State) the respective Owner, as shown in the registration books maintained by the Trustee, or his respective attorney duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the obligations with respect to payment of principal, premium, if any, and interest evidenced by the Certificates to the extent of the sum or sums so paid. No person other than an Owner, as shown in the registration books maintained by the Trustee, shall receive a Certificate evidencing principal, premium, if any, and interest evidenced by the Certificates. Upon delivery by the Depository to the Owners, the Trustee and the District of written notice to the effect that the Depository has determined to substitute a new nominee in place of the Nominee, and subject to the provisions herein with respect to Record Dates, the word Nominee in this Trust Agreement shall refer to such nominee of the Depository. (f) In order to qualify the Book-Entry Certificates for the Depository's book-entry system, the District shall execute and deliver to the Depository a Letter of Representations. The execution and delivery of a Letter of Representations shall not in any way impose upon the Corporation, the District or the Trustee any obligation whatsoever with respect to persons having interests in such Book-Entry Certificates other than the Owners, as shown on the registration books maintained by the Trustee. Such Letter of Representations may provide the time, form, DOCSLA1:336504.4 41758-7 GHI 15 content and manner of transmission, of notices to the Depository. In addition to the execution and delivery of a Letter of Representations by the District, the District, the Corporation and the Trustee shall take such other actions, not inconsistent with this Trust Agreement, as are reasonably necessary to qualify Book-Entry Certificates for the Depository's book-entry program. (g) In the event the District determines that it is in the best interests of the Beneficial Owners that they be able to obtain certificated Certificates and that such Certificates should therefore be made available and notifies the Depository and the Trustee of such determination, the Depository will notify the Participants of the availability through the Depository of certificated Certificates. In such event, the Trustee shall transfer and exchange certificated Certificates as requested by the Depository and any other Owners in appropriate amounts. In the event (i) the Depository determines not to continue to act as securities depository for Book-Entry Certificates, or (ii) the Depository shall no longer so act and gives notice to the Trustee of such determination, then the District shall discontinue the Book-Entry system with the Depository. If the District determines to replace the Depository with another qualified securities depository, the District shall prepare or direct the preparation of a new single, separate, fully registered Certificate for each stated Principal Payment Date of such Book-Entry Certificates, registered in the name of such successor or substitute qualified securities depository or its nominee. If the District fails to identify another qualified securities depository to replace the Depository, then the Certificates shall no longer be restricted to being registered in the registration books maintained by the Trustee in the name of the Nominee, but shall be registered in whatever name or names the Owners transferring or exchanging such Certificates shall designate, in accordance with the provisions of Sections 2.06 and 2.09 hereof. Whenever the Depository requests the District to do so, the District will cooperate with the Depository in taking appropriate action after reasonable notice (i) to make available one or more separate certificates evidencing the Book-Entry Certificates to any Participant having Book-Entry Certificates credited to its account with the Depository, and (ii) to arrange for another securities depository to maintain custody of certificates evidencing the Book-Entry Certificates. (h) Notwithstanding any other provision of this Trust Agreement to the contrary, if DTC is the sole Owner of the Certificates, so long as any Book-Entry Certificate is registered in the name of the Nominee, all payments of principal, premium, if any, and interest evidenced by such Certificate and all notices with respect to such Certificate shall be made and given, respectively, as provided in the Letter of Representations or as otherwise instructed by the Depository. · (i) In connection with any notice or other communication to be provided to Owners pursuant to the Trust Agreement by the District, the Corporation or the Trustee, with respect to any consent or other action to be taken by Owners, the Trustee shall establish a record date for such consent or other action and give the Depository notice of such record date not less than 15 calendar days in advance of such record date to the extent possible. Notice to the Depository shall be given only when DTC is the sole Owner of the Certificates. DOCSLAI :336504.4 41758-7 GHI 16 G) Notwithstanding the foregoing, in the event any Certificate is tendered but not remarketed, with the result that such Certificate becomes a Bank Certificate, the Trustee and the District shall, if requested by the Bank, take all such actions as shall be necessary to remove the Certificates from the book-entry system of DTC and to register such tendered but not remarketed Certificate in the name of the Bank. Bank Certificates not in the book-entry system of DTC shall be held by the Bank, or at the option of the Bank, by the Trustee on behalf, and for the benefit, of the Bank. At such time as all Bank Certificates have been remarketed such that no Bank Certificates remain outstanding and the Liquidity Facility has been reinstated in full, the Trustee and the District shall take all such actions as shall be necessary to return the Certificates to the full book-entry system ofDTC. DOCSLAI :336504.4 41758-7 GHI 17 ARTICLE III INTEREST RATES Section 3.01. Variable Rates. (a) Determination by Remarketing Agent. The Certificates shall be in the [Daily] [Weekly] Rate Mode until converted to another Mode as provided herein or until becoming Bank Certificates (at which time they shall evidence interest at the Bank Certificate Rate until such time as they are no longer Bank Certificates). Subject to the further provisions of this Article with respect to particular Variable Rates or conversions between Modes, and subject to the provisions of the Certificates, the Variable Rates to be applicable while the Certificates are in any Variable Rate Mode shall be determined by the Remarketing Agent as provided in this Section. (b) Daily Rates. Daily Rate Periods shall be for one day. The Remarketing Agent shall determine the Daily Rate for each Daily Rate Period that is a Business Day not later than 9:45 a.m. on such Business Day. The Daily Rate for any Daily Rate Period that is not a Business Day shall be the Daily Rate established for the immediately preceding Business Day. The Daily Rate so to be determined shall be the lowest rate of interest which, in the judgment of the Remarketing Agent, would cause the Certificates to produce as nearly as practicable a bid equal to the principal evidenced thereby, plus accrued interest evidenced thereby, under prevailing market conditions as of the date of determination of such Daily Rate. Notwithstanding the foregoing, in no event shall any Daily Rate exceed the Maximum Rate. Notice of Daily Rates shall be given by the Remarketing Agent to the Trustee by telephone (followed by notice in writing by an authorized officer of the Remarketing Agent) not later than [5:00 p.m. on the date of determination] [weekly?]. The Trustee shall inform the Owners of the Certificates and the Bank of each Daily Rate upon request. All determinations of Daily Rates pursuant to this subsection shall be conclusive and binding upon the District, the Trustee, the Bank and the Owners of the Certificates. The District, the Trustee, the Bank and the Remarketing Agent shall not be liable to the Owner of any Certificate for failure to give any notice required above or for failure of the Owner of any Certificate to receive any such notice. (c) Weekly Rates. Weekly Rate Periods shall be from Wednesday of each week to but excluding Wednesday of the following week, except that (i) in the case of a conversion of the Certificates to a Weekly Rate Mode from an Extended Rate Mode, the initial Weekly Rate Period upon such conversion shall be from the Conversion Date to but excluding Wednesday of the following week, (ii) in the case of a conversion of the Certificates from a Weekly Rate Mode to an Extended Rate Mode, the last Weekly Rate Period shall end on the Conversion Date, and (iii) in case the Weekly Rate Mode is in effect as of the stated Principal Payment Date for the Certificates, the last Weekly Rate Period shall end on such stated Principal Payment Date. The Remarketing Agent shall determine the Weekly Rate for each Weekly Rate Period not later than 4:00 p.m. on the last Business Day which is immediately prior to the commencement date of the Weekly Rate Period to which such Weekly Rate relates. The Weekly DOCSLAI :336504.4 41758-7 GHI 18 Rate so to be determined shall be the lowest rate of interest which, in the judgment of the Remarketing Agent, would cause the Certificates to produce as nearly as practicable a bid equal to the principal evidenced thereby, plus accrued interest evidenced thereby, under prevailing market conditions as of the date of determination of such Weekly Rate. Notwithstanding the foregoing, in no event shall any Weekly Rate exceed the Maximum Rate. Notice of Weekly Rates shall be given by the Remarketing Agent to the Trustee by telephone (followed by notice in writing by an authorized officer of the Remarketing Agent) not later than 5:00 p.m. on the date of determination. The Trustee shall inform the Owners of the Certificates and the Bank of each Weekly Rate upon request. All determinations of Weekly Rates pursuant to this subsection shall be conclusive and binding upon the District, the Trustee, the Bank and the Owners of the Certificates. The District, the Trustee, the Bank and the Remarketing Agent shall not be liable to the Owner of any Certificate for failure to give any notice required above or for failure of the Owner of any Certificate to receive any such notice. (d) Extended Rates. Extended Rate Periods shall commence initially on the applicable Conversion Date and, subsequently, on the August 1 next following the last day of the prior Extended Rate Period, shall extend for a period of at least one year, as set by the Remarketing Agent, and shall end on a day which is the last day preceding a August 1. The Remarketing Agent, in consultation with the District, shall determine the duration of each Extended Rate Period by not later than 4:00 p.m. on the last Business Day that is at least six days prior to the commencement date of such Extended Rate Period. The Remarketing Agent shall determine the Extended Rate for each Extended Rate Period by not later than 3:30 p.m. on the last Business Day that is at least five days prior to the commencement date of the Extended Rate Period to which such Extended Rate relates. The Extended Rate so to be determined shall be the lowest rate of interest which, in the judgment of the Remarketing Agent, would cause the Certificates to produce as nearly as practicable a bid equal to the principal evidenced thereby, plus accrued interest evidenced thereby, under prevailing market conditions as of the date of determination of such Extended Rate. Notwithstanding the foregoing, in no event shall any Extended Rate exceed the Maximum Rate. Not later than 4:00 p.m. on the date of determination of each Extended Rate, the Remarketing Agent shall notify the Trustee by telephone (promptly confirmed in writing) of the Extended Rate so determined and of the duration of the Extended Rate Period to which such Extended Rate relates. The Trustee shall notify the District and the Bank by telephone (promptly confirmed in writing), telegram, telecopy, telex or other similar means of communication of the Extended Rate so determined and of the duration of the Extended Rate Period to which such Extended Rate relates. The Trustee shall inform the Owners of the Certificates of each Extended Rate Period and the Extended Rate relating thereto upon request. All determinations of Extended Rate Periods and Extended Rates pursuant to this subsection shall be conclusive and binding upon the District, the Trustee, the Bank and the Owners of the Certificates. DOCSLAI :336504.4 41758-7 GHI 19 (e) Limitation on Rate Periods. No Variable Rate Period may extend beyond the expiration date of the Liquidity Facility. No Variable Rate Period may extend beyond the stated Principal Payment Date of the Certificates. Section 3.02. Optional Conversion Between Variable Rate Modes. (a) At the option of the District and upon delivery of an Opinion of Counsel to the effect that such conversion will not, in and of itself, adversely affect the exclusion from gross income of interest evidenced by the Certificates for federal income tax purposes, all of the Certificates may be converted from the then current Variable Rate Mode to another Variable Rate Mode as provided in this Section. (b) In the case of conversion from the Daily Rate Mode to another Variable Rate Mode, the Conversion Date shall be an Interest Payment Date for the Daily Rate Mode. In the case of conversion from the Weekly Rate Mode to another Variable Rate Mode, the Conversion Date shall be an Interest Payment Date for the Weekly Rate Mode. In the case of a conversion from the Extended Rate Mode to another Variable Rate Mode, the Conversion Date shall be the day following the last day of the Extended Rate Period. ( c) At the direction of the District, the Remarketing Agent shall give written notice of any conversion pursuant to this Section to the Trustee and the Bank not less than five Business Days prior to the date on which the Trustee is required to notify the Owners of the conversion pursuant to subsection ( d) of this Section. Such notice shall specify (i) the proposed Conversion Date, (ii) the Mode to which the conversion will be made, and (iii) in the case of conversion to the Extended Rate Mode, the initial Extended Rate Period. ( d) Not less than 10 days prior to any such Conversion Date, the Trustee shall mail a written notice of the conversion to all of the Owners of Certificates. A copy of such notice shall be sent to the District and the Bank. Such notice shall set forth (i) the information contained in the notice from the Remarketing Agent pursuant to subsection (c) of this Section, (ii) the Interest Payment Dates for the new Mode, (iii) in the case of conversion to the Extended Rate Mode, the initial Extended Rate Period, (iv) the-dates on which the Remarketing Agent will determine and the Trustee will notify the Owners of the Variable Rate for the Variable Rate Period commencing on the Conversion Date, (v) that the Certificates are subject to mandatory tender for purchase (without the right to retain) on the Conversion Date at a Purchase Price equal to the principal evidenced thereby plus accrued interest evidenced thereby, and (vi) that the Certificates shall be deemed purchased on the Conversion Date, and thereafter the Owner shall have no further rights hereunder except to receive.such Purchase Price. ( e) The Variable Rate for the Variable Rate Period commencing on the Conversion Date shall be determined by the Remarketing Agent in the manner and on the date provided in Section 3. 01 hereof. In addition to determining the Extended Rate, the Remarketing Agent shall determine a Weekly Rate at the time specified in subsection (c) of Section 3.01 hereof, and give notice thereof to the Trustee and the Bank, which Weekly Rate shall take effect, if required, pursuant to subsection (f) of this Section. (f) Notwithstanding the delivery of notice of the conversion pursuant to subsection ( c) of this Section, conversion to a new Variable Rate Mode shall not take effect if: DOCSLAI :336504.4 41758-?GHI 20 (i) the Remarketing Agent fails to determine a Variable Rate for the new Variable Rate Mode; (ii) any notice required by this Section is not given when required; (iii) there is not delivered to the District and the Trustee an Opinion of Counsel, dated as of the Conversion Date, to the effect that such conversion will not, in and of itself, adversely affect the exclusion from gross income of interest evidenced by the Certificates for federal income tax purposes; (iv) such notice of conversion is rescinded by the District by written notice of such rescission to the Trustee, the Bank and the Remarketing Agent, which written notice is delivered prior to the applicable Conversion Date. If the Trustee receives notice of such rescission prior to the time the Trustee has given notice to the Owners of the Certificates, then such notice of conversion shall be of no force and effect. If the Trustee receives notice of such rescission after the Trustee has given notice to the Owners of the Certificates, then the Certificates shall automatically convert to the Weekly Rate Mode. Any purchases of Certificates scheduled or required to take place on the proposed effective date of any Mode (being also the effective date of the automatic conversion to the Weekly Rate Mode as in this Section provided) shall take place on such date. No Opinion of Counsel shall be required in connection with any automatic conversion to the Weekly Rate Mode as in this Section provided; or (v) in the case of conversion to an Extended Rate Mode, the Trustee has not received a written notice from each rating agency then maintaining a rating of the Certificates that the conversion to such Extended Rate Mode will not have an adverse effect on such rating agency's rating of the Certificates. Except as specifically provided in paragraph (iv) above, in any such event, the Certificates shall automatically be converted to the Weekly Rate Mode on the date such conversion was to be made, provided that any mandatory or optional tender for purchase on the Conversion Date shall nevertheless be carried out. No cancellation of a conversion pursuant to this subsection shall constitute an event of default hereunder. Upon the occurrence of an event described in paragraph (i) above, the Weekly Rate for such Certificates shall be the per annum rate of interest determined on each Tuesday (or if such day is not a Business Day, the immediately preceding Business Day) by the Trustee which is 80% of the current bond equivalent yield for 91 day United States Treasury Bills sold at the last United States Treasury auction occurring prior to such day, which yield shall be calculated in accordance with standard practices in the banking industry on the basis of the discount rates at which such bills were sold, but such rate shall not exceed the Maximum Rate. Section 3.03. Conversion to the Fixed Rate Mode. (a) All of the Certificates may be converted from the then current Variable Rate Mode to the Fixed Rate Mode at the option of the District as provided in this Section. The Conversion Date for any conversion of Certificates to the Fixed Rate Mode shall be, if the conversion is from the Daily Rate Mode or the Weekly Rate DOCSLAI :336504.4 41758-7 GHI 21 Mode, the first Business Day of a calendar month, and, if the conversion is from the Extended Rate Mode, the day following the last day of an Extended Rate Period. Not less than 20 days (or such shorter period approved by the parties to receive the same) prior to the Conversion Date, the District shall give written notice to the Trustee, the Remarketing Agent and the Bank, setting forth (i) the election to convert the Certificates to the Fixed Rate Mode, and (ii) the proposed Conversion Date. As a condition of any such conversion, the Trustee, the Bank and the Remarketing Agent shall receive concurrently with the notice, a letter from counsel that it expects to be able to deliver on the Conversion Date an Opinion of Counsel to the effect that such conversion will not, in and of itself, adversely affect the exclusion from gross income of interest evidenced by the Certificates for federal income tax purposes. (b) The Trustee shall mail a notice of the proposed conversion to all of the Owners of the Certificates. A copy of such notice shall be sent to the District and the Bank. Such notice shall be mailed not less than 10 days prior to the proposed Conversion Date. Such notice shall set forth the proposed Conversion Date and state (i) that the Certificates are subject to mandatory tender for purchase (without the right to retain) on the Conversion Date at a Purchase Price equal to the principal evidenced thereby plus accrued interest evidenced thereby, and (ii) that the Certificates shall be deemed purchased on the Conversion Date, and thereafter the Owner shall have no further rights hereunder except to receive such Purchase Price. ( c) The Remarketing Agent shall determine the Fixed Rate for the Certificates by not later than 3 :30 p.m. on the last Business Day that is at least five days prior to the Conversion Date. The Fixed Rate for Certificates shall be the lowest rate (not in excess of the Maximum Rate) which, in the judgment of the Remarketing Agent as of the date of determination and under prevailing market conditions, would cause the Certificates to produce as nearly as practicable a bid equal to the principal evidenced thereby, plus accrued interest evidenced thereby. Not later than 4:00 p.m. on the date of determination of the Fixed Rate, the Remarketing Agent shall notify the Trustee by telephone (promptly confirmed in writing) of the Fixed Rate so determined. Such determinations shall be conclusive and binding upon the District, the Trustee, the Bank and the Owners of the Certificates. The Trustee shall notify the District and the Bank by telephone (promptly confirmed in writing), telegram, telecopy, telex or other similar means of communication of the Fixed Rate so determined. The Remarketing Agent shall offer for sale at par and use its best efforts to find purchasers for the Certificates required to be tendered pursuant to subsection ( c) of this Section. The terms of any sale by the Remarketing Agent of such Certificates shall provide for the sale thereof at par and the payment of the Purchase Price by the Remarketing Agent to the Trustee in immediately available funds against the delivery of the remarketed Certificates to the Trustee at or before 11 :30 a.m. on the Purchase Date. (d) Notwithstanding the delivery of notice of conversion pursuant to subsection (a) of this Section, conversion to the Fixed Rate Mode shall not take effect if: DOCSLAI :336504.4 41758-7 GHI 22 (i) the District withdraws such notice of conversion not later than the Business Day preceding the date on which the Fixed Rate is to be determined; (ii) the Remarketing Agent fails to determine the Fixed Rate; (iii) any notice required by this Section is not given when required; (iv) there is not delivered to the District and the Trustee an Opinion of Counsel, dated as of the Conversion Date, to the effect that such conversion will not, in and of itself, adversely affect the exclusion from gross income of interest evidenced by the Certificates for federal income tax purposes; (v) upon such conversion, any Certificates in the Fixed Rate Mode would be Bank Certificates, unless the Bank consents; or (vi) upon the conversion, the amount on deposit in the Reserve Fund, together with the amount available under all Reserve Facilities, would not be at least equal to the Reserve Requirement. In any of such events, the Certificates shall automatically be converted to a Weekly Rate Mode which shall commence on the date such conversion was to be made, provided that the mandatory tender for purchase pursuant to Section 5.04 hereof shall nevertheless be carried out if notice of the conversion to the Fixed Rate Mode has been given to the Owners of the Certificates. Withdrawal of a conversion notice shall be given by the District to the Trustee, the Remarketing Agent and the Bank, by telephone, promptly confirmed in writing. No cancellation of a conversion to the Fixed Rate Mode pursuant to this subsection shall constitute an event of default hereunder. If the Certificates are converted to a Weekly Rate Mode, and the Remarketing Agent fails to determine a Weekly Rate, the Weekly Rate shall be the per annum rate of interest determined on each Tuesday (or if such day is not a Business Day, the immediately preceding Business Day) by the Trustee which is 80% of the current bond equivalent yield for 91 day United State Treasury Bills sold at th.e last United States Treasury auction occurring prior to such day, which yield shall be calculated in accordance with standard practices in the banking industry on the basis of the discount rate at which such bills were sold, but shall not exceed the Maximum Rate. ( e) Once the District has effectively exercised its option to convert the Certificates to the Fixed Rate Mode pursuant to this Section, the District shall have no further option to convert the Certificates to any other Mode, and the Certificates shall no longer be subject to tender for purchase. DOCSLA 1 :336504.4 41758-7 GHI 23 ARTICLE IV PREPAYMENT OF CERTIFICATES Section 4.01. Optional Prepayment. (a) Bank Certificates shall be subject to prepayment prior to their stated Principal Payment Date, on any date, at the option of the District, as a whole or in part, from and to the extent of prepaid Installment Payments paid pursuant paragraph (i) of subsection (a) of Section 6.01 of the Installment Purchase Agreement, at a prepayment price equal to the principal evidenced thereby, plus accrued interest evidenced thereby, without premium. (b) While the Daily Rate Mode or the Weekly Rate Mode is in effect, the Certificates shall be subject to prepayment prior to their stated Principal Payment Date, on any Interest Payment Date, at the option of the District, as a whole or in part in Authorized Denominations, from and to the extent of prepaid Installment Payments paid pursuant to paragraph (ii) of subsection (a) of Section 6.01 of the Installment Purchase Agreement, at a prepayment price equal to the principal evidenced thereby, plus accrued interest evidenced thereby to the date fixed for prepayment, without premium. (c) While the Extended Rate Mode is in effect, the Certificates shall be subject to prepayment prior to their stated Principal Payment Date, on the day following the last day of each Extended Rate Period, at the option of the District, as a whole or in part in Authorized Denominations, from and to the extent of prepaid Installment Payments paid pursuant to paragraph (iii) of subsection (a) of Section 6.01 of the Installment Purchase Agreement, at a prepayment price equal to the principal evidenced thereby, plus accrued interest evidenced thereby to the date fixed for prepayment, without premium. ( d) While the Fixed Rate Mode is in effect, the Certificates shall be subject to prepayment prior to their stated Principal Payment Date, on any date during the periods indicated in the following table, at the option of the District, as a whole or in part in Authorized Denominations, from and to the extent of prepaid Installment Payments paid pursuant to paragraph (iv) of subsection (a) of Section 6.01 of the Installment Purchase Agreement, at the following prepayment prices applicable for the periods indicated, plus accrued interest evidenced thereby to the date fixed for prepayment: DOCSLA1:336504.4 41758-7 GHl 24 Original Length of Fixed Rate Period More than 10 Years More than 8 years but not more than 10 years More than 5 years but not more than 8 years 5 years or less Commencement of Prepayment Period 8th anniversary of commencement of Fixed Rate Period 6th anmversary of commencement of Fixed Rate Period 4th anniversary of commencement of Fixed Rate Period No prepayment Prepayment Price as a Percentage of Principal 102% declining by 1 % on each succeeding anniversary of the first day of the prepayment period until reaching 100% and thereafter 100% 101 % until the first anniversary of the first day of the prepayment period and 100% from said first anniversary and thereafter 100% Section 4.02. Mandatory Sinking Account Prepayment. The Certificates are subject to prepayment prior to their stated Principal Payment Date, in part, from Mandatory Sinking Account Payments, on each August 1 specified below, at a prepayment price equal to the principal evidenced thereby, plus accrued interest evidenced thereby to the date fixed for prepayment, without premium. The principal evidenced by such Certificates to be so prepaid and the dates therefor shall be as follows: DOCS LAI :336504.4 41758-7 GHI 25 Prepayment Date (August 1) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018* *Stated Principal Payment Date Principal Amount The amount of each such prepayment shall be reduced proportionately, to the extent possible, in Authorized Denominations, in the event and to the extent of any and all prepayments of Certificates, other than prepayments made pursuant to the preceding paragraph. Section 4.03. Selection of Certificates for Prepayment. Whenever less than all the Outstanding Certificates are to be prepaid on any one date, the Trustee shall select the Certificates to be prepaid by lot in any manner that the Trustee deems fair and appropriate, which decision shall be final and binding upon the District, the Corporation and the Owners. Notwithstanding the foregoing, all Bank Certificates shall be prepaid prior to the prepayment of any other Certificates. The Trustee shall promptly notify the District in writing of the numbers of the Certificates so selected for prepayment on such date. For purposes of such selection, any Certificate may be prepaid in part in Authorized Denominations. Section 4.04. Notice of Prepayment. When prepayment of Certificates is authorized pursuant to this Article, the Trustee shall give notice, at the expense of the District, of the prepayment of the Certificates. The notice of prepayment shall specify the Certificates or designated portions thereof (in the case of prepayment of the Certificates in part but not in whole) which are to be prepaid, the date of prepayment, the place or places where the prepayment will be made, including the name and address of any paying agent, the prepayment DOCSLAI :336504.4 41758-7 GHI 26 price, the CUSIP numbers assigned to the Certificates to be prepaid, and the numbers of the Certificates to be prepaid in whole or in part and, in the case of any Certificate to be prepaid in part only, the principal evidenced by such Certificate to be prepaid. Such notice of prepayment shall further state that on the specified date there shall become due and payable upon each Certificate or portion thereof being prepaid the prepayment price and that from and after such date interest evidenced thereby shall cease to accrue and be payable. The Trustee shall take the following actions with respect to such notice of prepayment: At least 30 but not more than 45 days prior to any prepayment date, notice of prepayment shall be given to the respective Owners of Certificates designated for prepayment by first-class mail, postage prepaid, at their addresses appearing on the registration books maintained by the Trustee as of the close of business on the day before such notice of prepayment is given. At least 30 days before each prepayment date, notice of prepayment shall also be given by (a) first-class mail, postage prepaid, (b) confirmed facsimile transmission, or ( c) overnight delivery service, to the following securities depository: The Depository Trust Company 711 Stewart A venue Garden City, New York 11530 Facsimile transmission: (516) 227-4039; (516) 227-4190 At least 30 days before each prepayment date, notice of prepayment shall also be given by (a) first-class mail, postage prepaid, or (b) overnight delivery service, to each of the following information services: DOCSLA 1 :336504.4 41758-7 GHl Bloomberg Municipal Repositories P.O. Box 840 Princeton, New Jersey 08542-0840 Phone: (609) 279-3225 Fax: (609) 279-5962 E-mail: Munis@Bloomberg.com DPC Data Inc. One Executive Drive Fort Lee, New Jersey 07024 Phone: (201) 346-0701 Fax: (201) 947-0107 E-mail: nrmsir@dpcdata.com 27 Muller Data Attn: Municipal Disclosure 395 Hudson Street, 3d Floor New York, New York 10014 Phone: (212) 807-5001 or (800) 689-8466 Fax: (212) 989-2078 E-mail: Disclosure@muller.com Standard & Poor's J.J. Kenny Repository 55 Water Street, 45th Floor New York, New York 10041 Telephone: (212) 438-4595 Facsimile: (212) 438-3975 The actual receipt by an Owner or by any of the securities depositories or information services specified above of any notice of such prepayment shall not be a condition precedent to prepayment, and neither failure to receive such notice nor any defect therein shall affect the validity of the proceedings for the prepayment of such Certificates or the cessation of interest evidenced thereby on the date fixed for prepayment. A certificate by the Trustee that notice of prepayment has been given to Owners or to any of the securities depositories or information services specified above as herein provided shall be conclusive as against all parties, and no Owner whose Certificate is called for prepayment may object thereto or object to the cessation of interest evidenced thereby on the fixed prepayment date by any claim or showing that said Owner failed to actually receive such notice of prepayment. The Trustee shall give notice of prepayment of any Certificates to be prepaid upon receipt of a Written Request of the District (which request shall be given to the Trustee at least 45 days prior to the date fixed for prepayment). Section 4.05. Partial Prepayment of Certificates. Upon surrender of any Certificate prepaid in part only, the Trustee shall execute and deliver to the Owner thereof a new Certificate or Certificates evidencing the unprepaid principal of the Certificate surrendered. Section 4.06. Effect of Prepayment. If notice of prepayment has been duly given as aforesaid and moneys for the payment of the prepayment price of the Certificates to be prepaid are held by the Trustee, then on the prepayment date designated in such notice, the Certificates so called for prepayment shall become payable at the prepayment price specified in such notice; and from and after the date so designated, interest evidenced by the Certificates so called for prepayment shall cease to accrue, such Certificates shall cease to be entitled to any benefit or security hereunder and the Owners of such Certificates shall have no rights in respect thereof except to receive payment of the prepayment price thereof, and such moneys shall be pledged to such prepayment. The Trustee shall, upon surrender for payment of any of the Certificates to be prepaid, pay such Certificates at the prepayment price thereof. DOCSLAI :336504.4 41758-7 GH! 28 All Certificates prepaid pursuant to the provisions of this Article shall be canceled by the Trustee and shall not be redelivered. DOCSLAI :336504.4 41758-7 GHI 29 ARTICLE V TENDER AND PURCHASE OF CERTIFICATES Section 5.01. Optional Tenders While Daily Rate Mode in Effect (a) Purchase Dates. While the Daily Rate Mode is in effect, Owners of Certificates (other than Bank Certificates) may elect to have their Certificates (or portions thereof in Authorized Denominations) purchased at the Purchase Price on any Business Day upon delivery of a written notice of tender meeting the requirements of subsection (b) of this Section to the Trustee and the Remarketing Agent not later than 9:45 a.m. on such Business Day. (b) Notice of Tender. Each notice of tender: (i) shall be delivered to the Trustee at its Principal Office and the Remarketing Agent at its principal office and be in form satisfactory to the Trustee; (ii) shall state (A) the principal evidenced by the Certificate or portion of the Certificate to be purchased and the CUSIP number thereof, (B) that the Owner irrevocably demands purchase of such Certificate or portion thereof, (C) that such Certificate or portion thereof is to be purchased on such Business Day, (D) payment instructions, and (E) if such tender is through a Participant, the DTC participant number for such Participant and the name, telephone number and telecopy number of a contact person at such Participant; and (iii) shall automatically constitute (A) an irrevocable offer to sell the Certificate or portion thereof to which the notice relates on the Purchase Date to any purchaser selected by the Remarketing Agent, at the Purchase Price, (B) an irrevocable authorization and instruction to the Trustee to effect transfer of such Certificate or portion thereof upon payment of such Purchase Price to the Trustee on the Purchase Date, (C) an irrevocable authorization and. instruction to the Trustee to effect the exchange of the Certificate to be purchased in whole or in part for other Certificates evidencing principal in an equal aggregate amount so as to facilitate the sale of such Certificate or portion thereof, and (D) an acknowledgment that such Owner will have no further rights with respect to such Certificate or portion thereof upon payment of the Purchase Price by the Trustee on the Purchase Date, except for the right of such Owner to receive such Purchase Price upon surrender of such Certificate to the Trustee. The determination of the Trustee as to whether a notice of tender has been properly delivered pursuant to the foregoing provisions shall be conclusive and binding upon the Owner. ( c) Certificates to be Remarketed. Not later than 10:00 a.m. on the date of receipt of any such notice of tender, the Trustee [Remarketing Agent?] shall notify the Bank of the principal evidenced by Certificates or portions thereof to be tendered and remarketed and that such Certificates or portions thereof are to be tendered and remarketed on such date. Such notice shall be given by telephone, telegram, telecopy, telex or other similar communication and shall be promptly confirmed in writing. DOCSLAl :336504.4 41758-7 GHI 30 ( d) Re marketing of Tendered Certificates. The Remarketing Agent shall offer for sale and use its best efforts to find purchasers for all Certificates or portions thereof properly tendered. The terms of any sale by the Remarketing Agent of tendered Certificates shall provide for the purchase of the remarketed Certificates at the Purchase Price and the payment of such Purchase Price to the Trustee by the Remarketing Agent in immediately available funds against delivery of the remarketed Certificates to the Trustee at or before 11 :30 a.m. on the Purchase Date. Notwithstanding the foregoing, the Remarketing Agent shall not offer for sale any Certificate if (i) notice of any optional or mandatory prepayment or any conversion from the Daily Rate Mode to another Mode has been given to the Owner of such Certificate pursuant to the provisions of this Trust Agreement, or (ii) any defeasance of such Certificate in accordance with the provisions of this Trust Agreement has occurred, unless the Remarketing Agent has advised the person in writing to whom the offer is made of such occurrence and the effect of the same on the rights of the Owner of such Certificate, including, but not limited to, the rights of such Owner to tender such Certificate, as described in the conversion notice from the Trustee to the Owner of such Certificate. Section 5.02. Optional Tenders While Weekly Rate Mode in Effect (a) Purchase Dates. While the Weekly Rate Mode is in effect, Owners of Certificates (other than Bank Certificates) may elect to have their Certificates (or portions thereof in Authorized Denominations) purchased at the Purchase Price on any Business Day upon delivery of a written notice of tender meeting the requirements of subsection (b) of this Section to the Trustee and the Remarketing Agent not later than 5:00 p.m. on a Business Day not less than seven days prior to the Purchase Date. (b) Notice of Tender. Each notice of tender: (i) shall be delivered to the Trustee at its Principal Office and the Remarketing Agent at its principal office and be in form satisfactory to the Trustee; (ii) shall state (A) the principal evidenced by the Certificate or portion of the Certificate to be purchased and the CUSIP number thereof, (B) that the Owner irrevocably demands purchase of such Certificate or portion thereof, (C) the date on which such Certificate or portion thereof is to be purchased, (D) payment instructions, and (E) if such tender is through a Participant, the DTC participant number for such Participant and the name, telephone number and telecopy number of a contact person at such Participant; and (iii) shall automatically constitute (A) an irrevocable offer to sell the Certificate or portion thereof to which the notice relates on the Purchase Date to any purchaser selected by the Remarketing Agent, at the Purchase Price, (B) an irrevocable authorization and instruction to the Trustee to effect transfer of such Certificate or portion thereof upon payment of such Purchase Price to the Trustee on the Purchase Date, (C) an irrevocable authorization and instruction to the Trustee to effect the exchange of the Certificate to be purchased in whole or in part for other Certificates evidencing principal in an equal aggregate amount so as to facilitate the sale of such Certificate or portion DOCSLAI :336504.4 41758-7 GHI 31 thereof, and (D) an acknowledgment that such Owner will have no further rights with respect to such Certificate or portion thereof upon payment of the Purchase Price by the Trustee on the Purchase Date, except for the right of such Owner to receive such Purchase Price upon surrender of such Certificate to the Trustee. The determination of the Trustee as to whether a notice of tender has been properly delivered pursuant to the foregoing provisions shall be conclusive and binding upon the Owner. (c) Certificates to be Remarketed. Not later than 4:30 p.m. on the Business Day immediately following the date of receipt of any notice of tender, the Trustee [Remarketing Agent?] shall notify the Bank of the principal evidenced by Certificates or portions thereof to be tendered and remarketed and the date on which such Certificates or portions thereof are to be tendered and remarketed. Such notice shall be given by telephone, telegram, telecopy, telex or other similar communication and shall be promptly confirmed in writing. (d) Remarketing a/Tendered Certificates. The Remarketing Agent shall offer for sale and use its best efforts to find purchasers for all Certificates or portions thereof properly tendered. The terms of any sale by the Remarketing Agent of tendered Certificates shall provide for the purchase of the remarketed Certificates at the Purchase Price and the payment of such Purchase Price to the Trustee by the Remarketing Agent in immediately available funds against delivery of the remarketed Certificates to the Trustee at or before 11 :30 a.m. on the Purchase Date. Notwithstanding the foregoing, the Remarketing Agent shall not offer for sale any Certificate if (i) notice of any optional or mandatory prepayment or any conversion from the Weekly Rate Mode to another Mode has been given to the Owner of such Certificate pursuant to the provisions of this Trust Agreement, or (ii) any defeasance of such Certificate in accordance with the provisions of this Trust Agreement has occurred, unless the Remarketing Agent has advised the person in writing to whom the offer is made of such occurrence and the effect of the same on the rights of the Owner of such Certificate, including, but not limited to, the rights of such Owner to tender such Certificate, as described in the conversion notice from the Trustee to the Owner of such Certificate. Section 5.03. Mandatory Tenders On Conversion Dates. (a) Purchase Dates. The Certificates shall be subject to mandatory tender for purchase on each Conversion Date, and the Owners shall not be entitled to retain such Certificates. Notice of conversion to a Variable Rate Mode shall be given to the Owners in the manner provided in subsection (d) of Section 3.02 hereof. Notice of conversion to the Fixed Rate Mode shall be given to the Owners in the manner provided in subsection (c) of Section 3.03 hereof. The provisions of Section 5.06 hereof shall be applicable to the purchase, payment for and registration and delivery of tendered Certificates. Any Certificate not tendered for purchase on a Conversion Date, as required hereby, shall be deemed tendered and purchased on such Conversion Date, and thereafter the Owner thereof shall have no further rights hereunder except to receive such Purchase Price. (b) Remarketing. On the day on which the notice is mailed pursuant to subsection (a) of this Section, the Trustee shall notify the Remarketing Agent and the Bank by telephone, telegram, telecopy, telex or other similar communication of the aggregate principal evidenced by DOCSLAI :336504.4 41758-7 GHI 32 Certificates to be tendered for purchase on the Conversion Date. The Remarketing Agent shall offer for sale and use its best efforts to find purchasers for the Certificates to be tendered pursuant to subsection (a) of this Section. The terms of any sale of such tendered Certificates by the Remarketing Agent shall provide for the purchase of the remarketed Certificates at the Purchase Price and the payment of such Purchase Price to the Trustee by the Remarketing Agent in immediately available funds against delivery of the remarketed Certificates to the Trustee at or before 11 :30 a.m. on the Conversion Date. Section 5.04. Mandatory Tenders After Each Extended Rate Period. (a) The Certificates shall be subject to mandatory tender for purchase on the day following the last day of each Extended Rate Period, and the Owners shall not be entitled to retain such Certificates. The Trustee shall, not less than 10 days prior to each such mandatory tender date, mail by first class mail, postage prepaid, a notice to all of the Owners of the Certificates, which notice shall set forth mandatory tender date and state (i) that the Certificates are subject to mandatory tender for purchase (without the right to retain) on such mandatory tender date at a Purchase Price equal to the principal evidenced thereby plus accrued interest evidenced thereby, (ii) that the Certificates shall be deemed purchased on such mandatory tender date, and thereafter the Owner shall have no further rights hereunder except to receive such Purchase Price, and (iii) that on and after the last Business Day that is at least four days prior to such mandatory tender date, the Trustee, upon request of an Owner, will inform such Owner of the duration of the Extended Period commencing on such mandatory tender date and the Extended Rate relating thereto. The provisions of Section 5.06 hereof shall be applicable to the purchase, payment for and registration and delivery of the Certificates. Any Certificate not tendered for purchase on such a mandatory tender date, as required hereby, shall be deemed tendered and purchased on such mandatory tender date, and thereafter the Owner thereof shall have no further rights hereunder except to receive such Purchase Price. (b) Remarketing. On the day on which the notice is mailed pursuant to subsection (a) of this Section, the Trustee shall notify the Remarketing Agent and the Bank by telephone, telegram, telecopy, telex or other similar communication of the aggregate principal evidenced by Certificates to be tendered for purchase on the mandatory tender date. The Remarketing Agent shall offer for sale and use its best efforts to find purchasers for the Certificates to be tendered pursuant to subsection (a) of this Section. The terms of any sale of such tendered Certificates by the Remarketing Agent shall provide for the purchase of the remarketed Certificates at the Purchase Price and the payment of such Purchase Price to the Trustee by the Remarketing Agent in immediately available funds against delivery of the remarketed Certificates to the Trustee at or before 11 :30 a.m. on the mandatory tender date. Section 5.05. Mandatory Tenders Upon Expiration or Substitution of Liquidity Facility or Event of Default with Respect Thereto. (a) Purchase Dates. Prior to conversion of the Certificates to the Fixed Rate Mode, the Certificates shall be subject to mandatory tender for purchase at the Purchase Price: (i) on the last Business Day which is at least five days prior to expiration of the Liquidity Facility; DOCSLAI :336504.4 41758-7 GHI 33 (ii) on the fifth Business Day following the Trustee's receipt of a Notice of Mandatory Tender from the Bank; and (iii) if the Certificates are in the Daily Rate Mode or the Weekly Rate Mode, on the last Business Day which is at least five days prior to the substitution of a Substitute Liquidity Facility for the Liquidity Facility pursuant to subsection (b) of Section 6.02 hereof. (b) No Election to Retain Certificates. The Owners may not elect to retain their Certificates in the event of mandatory tender required by the provisions of subsection (a) of this Section. (c) Notice to Owners. Notice of mandatory tender of the Certificates, stating the date on which and time at which the Certificates are required to be tendered for purchase, shall be given by first class mail, postage prepaid by the Trustee to the Owners of the Certificates not less than five Business Days prior to the date on which the Certificates are to be purchased pursuant to paragraph (i) or paragraph (iii) of subsection (a) of this Section, or as soon as practicable after the Trustee's receipt of a Notice of Mandatory Tender from the Bank, with respect to a purchase pursuant to paragraph (ii) of said subsection. A copy of such notice shall be sent to the District, the Remarketing Agent and the Bank. Notice having been so given, such mandatory tender shall occur on the date provided in such notice whether or not a Substitute Liquidity Facility is provided after such initial notice has been given. ( d) Remarketing. On the Business Day on which the notice is mailed pursuant to subsection ( c) of this Section, the Trustee shall notify the Remarketing Agent and the Bank by telephone, telegram, telecopy, telex or other similar communication of the aggregate principal evidenced by Certificates to be tendered for purchase on the mandatory tender date. The Remarketing Agent shall offer for sale and use its best efforts to find purchasers for the Certificates to be tendered pursuant to paragraph (i) or paragraph (ii) of subsection (a) of this Section and shall inform prospective purchasers whether the Liquidity Facility will be replaced. In the case of substitution of the Liquidity Facility, the Remarketing Agent shall inform prospective purchasers of the identity of the Bank issuing such Substitute Liquidity Facility and of the ratings to be in effect on the Certificates following such substitution. The terms of any sale by the Remarketing Agent of tendered Certificates shall provide for the purchase of the remarketed Certificates at the Purchase Price and the payment of such Purchase Price to the Trustee by the Remarketing Agent in immediately available funds against the delivery of the remarketed Certificates to the Trustee at or before 11 :30 a.m. on the Purchase Date. Notwithstanding the foregoing, the Certificates shall not be offered for sale unless the Liquidity Facility or a Substitute Liquidity Facility is in place at the time of the remarketing. Section 5.06. Purchase of Tendered Certificates. (a) Notices. At or before 10:30 a.m. on each Purchase Date for Certificates in the Daily Rate Mode tendered pursuant to Section 5.01 hereof, the Remarketing Agent shall notify by telephone, telegram, telecopy, telex or other similar communication to the Trustee and the Bank of the principal evidenced by tendered Certificates which have been remarketed and of the names, addresses and taxpayer identification DOCS LAI :336504.4 41758-7 GHI 34 numbers of the purchasers and the denominations of remarketed Certificates to be delivered to each purchaser. At or before 3 :30 p.m. on the Business Day immediately preceding each Purchase Date (other than a Purchase Date for Certificates in the Daily Rate Mode tendered pursuant to Section 5.01 hereof), the Remarketing Agent shall notify by telephone, telegram, telecopy, telex or other similar communication to the Trustee and the Bank of the principal evidenced by tendered Certificates which have been remarketed and of the names, addresses and taxpayer identification numbers of the purchasers and the denominations of remarketed Certificates to be delivered to each purchaser. On the Purchase Date, the Trustee shall make a request for purchase in accordance with the terms of the Liquidity Facility at the times and to the extent necessary to timely pay the Purchase Price with regard to the Certificates for which remarketing proceeds have not been paid to the Trustee; and the Trustee shall hold the moneys received pursuant to such draw under the Liquidity Facility in trust in a separate segregated account for the benefit of the Owners of such tendered Certificates. (b) Sources of Payment. The Remarketing Agent shall pay to the Trustee, on the Purchase Date, all amounts representing proceeds of the remarketing of tendered Certificates, such payments to be made in the manner and at the time specified in subsection ( d) of Section 5.01 hereof, subsection (d) of Section 5.02 hereof, Section (d) of Section 5.03 hereof, Section 5.04 hereof and subsection (d) of Section 5.05 hereof, as applicable. All such proceeds shall be held by the Trustee in trust in a separate segregated account for the benefit of the person or entity which has delivered such moneys until the Certificates purchased with such moneys have been delivered to such person or entity. The District and the Corporation shall not have any right, title, or interest in or to remarketing proceeds held by the Remarketing Agent or the Trustee or proceeds of a draw on the Liquidity Facility. The Bank has agreed under the Liquidity Facility to pay, on or before 2:00 p.m. on the Purchase Date (so long as the request for purchase thereunder is made prior to 11 :30 a.m.), the Purchase Price to the Trustee of such Certificates that have not been remarketed. (c) Payments by the Trustee. Before 4:00 p.m. on the Purchase Date and upon receipt by the Trustee of 100% of the aggregate Purchase Price of the tendered Certificates, the Trustee shall pay the Purchase Price of such Certificates to the Owners thereof at its Principal Office or by bank wire transfer. Such payments shall be made in immediately available funds. Payments of such Purchase Price are to be made from the following sources in the order of priority indicated: (i) the proceeds of the sale of the Certificates which have been remarketed by the Remarketing Agent; and (ii) moneys paid pursuant to draws on the Liquidity Facility to pay the Purchase Price of Certificates. (d) Registration and Delivery of Tendered or Purchased Certificates. On the Purchase Date, the Trustee shall register and deliver (or hold) all Certificates purchased on any Purchase Date as follows: DOCS LAI :336504.4 41758-7 GHI 35 (i) Certificates purchased or remarketed by the Remarketing Agent shall be registered in accordance with the instructions of the Remarketing Agent and made available for delivery to the Remarketing Agent against payment of the Purchase Price for such Certificates by 11 :30 a.m.; and (ii) Certificates purchased with funds received pursuant to a draw on the Liquidity Facility shall become Bank Certificates, shall be registered in the name of the Bank or its nominee and shall be delivered to or held by DTC, or such other entity as may be specified by the Bank in a written instrument delivered to the Trustee, for the benefit of the Bank. ( e) Delivery of Certificates; Effect of Failure to Surrender Certificates. All Certificates to be purchased on any date shall be required to be delivered to the Principal Office of the Trustee at or before 11 :30 a.m. on the Purchase Date. If the Owner of any Certificate or portion thereof that is subject to purchase pursuant to this Article V fails to surrender such Certificate to the Trustee for purchase on the Purchase Date, and if the Trustee is in receipt of the Purchase Price therefor, such Certificate or portion thereof shall nevertheless be deemed purchased on the Purchase Date and ownership of such Certificate or portion thereof shall be transferred to the purchaser thereof as provided in subsection ( d) of this Section. Any Owner who fails to deliver a Certificate for purchase as required above shall have no further rights with respect thereto except the right to receive the Purchase Price therefor upon presentation and surrender of said Certificate to the Trustee. (f) Investment of Funds. All money held by the Trustee for the payment of the Purchase Price of Certificates shall be held in separate segregated accounts and shall be held uninvested. Section 5.07. Bank Certificates. In the event that any Certificates become Bank Certificates pursuant to subsection (d) of Section 5.06 hereof, the Remarketing Agent shall continue to offer for sale and use its best efforts to sell such Bank Certificates (other than Bank Certificates that become such as a result of mandatory tender pursuant to paragraph (ii) of subsection (a) of Section 5.05 hereof) at the Purchase Price until such Bank Certificates are sold or until the Remarketing Agent and the District determine that such Bank Certificates cannot be sold at such price. The Trustee shall deliver such Bank Certificates to the Bank or its designee which shall hold the same pending such remarketing. Upon the remarketing of any Bank Certificate, and receipt of the proceeds of such remarketing, such Bank Certificate shall cease to be a Bank Certificate (unless and until it again becomes a Bank Certificate pursuant to subsection (d) of Section 5.06 hereof). While the Liquidity Facility is effective and prior to the release of any Bank Certificate, upon receipt of the proceeds of the remarketing of Bank Certificates, the Trustee shall deliver to the Bank the notices required pursuant to the Liquidity Facility in order to reinstate the Liquidity Facility to an amount equal to the principal and interest evidenced by the Outstanding Certificates in accordance with its terms. The Trustee shall deliver a copy of such notices to the Remarketing Agent. Notwithstanding the foregoing, the Trustee shall not release any remarketed Bank Certificates that, upon such remarketing, would be in a Variable DOCSLAI :336504.4 41758-7GHI 36 Rate Mode, unless and until the Trustee receives notice from the Bank pursuant to the Standby Agreement that the Available Commitment has been reinstated as provided therein. Section 5.08. Insufficient Funds for Purchases. (a) If the moneys available for purchase of Certificates pursuant to this Article are inadequate for the purchase of all Certificates which are tendered on any Purchase Date, each Certificate subject to such purchase shall continue in the same Mode as in effect with respect thereto on the day prior to the Purchase Date to the date on which the earliest of the following occurs: (i) the date of conversion of the Certificates to the Fixed Rate Mode; (ii) the date on which any default by the Bank under the Liquidity Facility has been cured; or (iii) the date on which a Substitute Liquidity Facility meeting the requirements of Section 6.01 hereof has been obtained. (b) If the provisions of subsection (a) of this Section become applicable (i) the Trustee shall immediately (but no later than the end of the next succeeding Business Day) return all tendered Certificates to the Owners thereof and notify all Owners of Certificates in writing of the Mode to be effective with respect thereto pursuant to subsection (a) of this Section, and (ii) the Trustee shall return all moneys received for the purchase of such Certificates to the persons who provided such moneys. Section 5.09. Restriction on Remarketing of Certificates to District or Corporation. So long as the Liquidity Facility is effective, no Certificate tendered pursuant to this Article shall be remarketed to the District or the Corporation; provided, however, that the Trustee shall not be required to monitor the actions of the Remarketing Agent to insure that it does not sell Certificates to the District or the Corporation. Section 5.10. Book-Entry Tenders. Notwithstanding any other provision of this Article to the contrary, all tenders for purchase during any period in which the Certificates are registered in the name of the Nominee (or the nominee of any successor Depository) shall be subject to the terms and conditions set forth in the Letter of Representations and any notices and regulations promulgated by DTC. Subject to such terms, conditions, notices and regulations, the Certificates may be tendered by means of a book-entry credit of such Certificates to the account of the Remarketing Agent; provided, however, that under certain circumstances notice of tender shall be given by a Participant on behalf of the beneficial owner of such Certificates, and, provided further, that, if the Remarketing Agent notifies the Trustee that such Certificates have been remarketed pursuant to the Trust Agreement, such Certificates may be treated as being tendered upon a book-entry transfer of such Certificates from the account of the tendering party to the credit of the account of the purchaser of such Certificates. DOCSLAI :336504.4 41758-7 GHI 37 ARTICLE VI THE LIQUIDITY FACILITY Section 6.01. The Liquidity Facility. (a) The original Facility and any Substitute Facility shall be an obligation of the Bank to pay to the Trustee upon request made with respect to the Certificates in accordance with the terms thereof (i) an amount, not exceeding the aggregate principal evidenced by the Certificates, sufficient to pay the principal portion of the Purchase Price of Certificates delivered or required to be delivered to the Trustee for purchase, and (ii) an amount sufficient to pay the interest portion of the Purchase Price of Certificates delivered to the Trustee for purchase, which amount (A) during the Daily Rate Mode and the Weekly Rate Mode, shall be an amount equal to the amount of interest that would accrue during a period of [35] days computed at the Maximum Rate, and (B) during the Extended Rate Mode, shall be an amount equal to the amount of interest that would accrue during a period of 180 days computed at the actual Extended Rate for such Extended Rate Period. (b) While the Fixed Rate Mode is in effect, the Certificates shall not be payable from or secured by the Liquidity Facility or subject to tender for purchase. Within five days after the date on which the Certificates have been converted to the Fixed Rate Mode, the Trustee shall surrender the Liquidity Facility to the Bank, together with any certificate of surrender required by the Liquidity Facility, but only if the Bank has honored the draw on the Liquidity Facility made in connection with such conversion. (c) No later than five days after all principal and interest evidenced by the Certificates have been paid in full, the Trustee shall surrender the Liquidity Facility to the Bank, together with any certificate of surrender required by the Liquidity Facility. (d) Notwithstanding any other provision of this Trust Agreement, (i) under no circumstances shall any amounts other than the Purchase Price of the Certificates be payable from funds paid by the Bank under· the Facility or from any proceeds of the remarketing of Certificates by the Remarketing Agent, and (ii) under no circumstances shall remarketing proceeds or proceeds received under the Facility be paid to the District or the Corporation. Section 6.02. Substitute Liquidity Facility. (a) If at any time the District shall deliver to the Trustee: (i) a Substitute Liquidity Facility; (ii) an Opinion of Counsel stating that the delivery of such Substitute Liquidity Facility to the Trustee is authorized under this Trust Agreement and complies with the provisions hereof and that the proposed substitution will not, in and of itself, adversely affect the exclusion of interest evidenced by the Certificates from gross income for federal income tax purposes; (iii) one or more opinions of counsel addressed to the Trustee, to the effect, singly or together, that the Substitute Liquidity Facility is a legal, valid and binding DOCSLAI :336504.4 41758-7 GH! 38 obligation of the obligor, enforceable against the obligor in accordance with its terms, except as limited by applicable reorganization, insolvency, liquidation, readjustment of debt, moratorium or other similar laws affecting the enforcement of the rights of creditors generally as such laws may be applied in the event of a reorganization, insolvency, liquidation, readjustment of debt or other similar proceeding of or moratorium applicable to the obligor and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); (iv) if a rating or ratings on the Certificates shall be in effect on the date of such substitution, written evidence from Moody's and S&P, as applicable, to the effect that each such rating agency has reviewed the proposed Substitute Liquidity Facility and that the substitution of the proposed Substitute Liquidity Facility for the existing Liquidity Facility will not, in and of itself, result in a reduction, suspension or withdrawal of such rating agency's rating on the Certificates; and (v) written evidence that notice of such proposed substitution has been sent to the Owners prior to such substitution, then the Trustee shall, so long as such Substitute Liquidity Facility shall contain administrative procedures which are acceptable to the Trustee in its reasonable discretion, accept such Substitute Liquidity Facility, and, not later than five days after such acceptance, surrender the existing Liquidity Facility to the issuer thereof, together with any certificate of surrender required by such Liquidity Facility. (b) While the Daily Rate Mode or the Weekly Rate Mode is in effect, if all of the requirements of subsection (a) of this Section are satisfied other than those set forth in paragraph (iv) thereof, and the District has given the Trustee and the Owners at least 45 days written notice of its intention to substitute such Liquidity Facility, the Trustee shall accept the Substitute Liquidity Facility, enforce payment of any amounts due under the existing Liquidity Facility to the extent required by this Trust Agreement and, not later than five days after such acceptance, surrender the existing Liquidity Facility to the issuer thereof, together with any certificate of surrender required by such Liquidity Facility, but only if such issuer has honored any draw on such Liquidity Facility made in connection with such substitution. (c) Any Substitute Liquidity Facility shall be an irrevocable purchase agreement, letter of credit, surety bond, insurance policy or other irrevocable credit facility, or any combination thereof, issued by one or more commercial banks or savings associations, insurance companies or other financial institutions, the terms of which shall in all respects material to the interests of the Owners be the same as the Liquidity Facility, except that the expiration date of such Substitute Liquidity Facility may be later than the expiration date for the existing Liquidity Facility and such expiration date shall be not less than one year after the date such Substitute Liquidity Facility is substituted for the existing Liquidity Facility. Section 6.03. Notices to the Bank. The Trustee shall provide to the Bank copies of all notices, consents, certificates, waivers or transcripts received by the Trustee from the District or delivered by the Trustee to the District, Moody's or S&P. The District shall provide to the Bank DOCSLAI :336504.4 41758-7GHI 39 copies of all notices, consents, certificates, waivers or transcripts delivered by the District to Moody's or S&P if any such copy will not otherwise be provided to the Bank by the Trustee pursuant to the preceding sentence. DOCSLAI :336504.4 41758-7 GH! 40 ARTICLE VII FUNDS AND ACCOUNTS; ASSIGNMENT AND PLEDGE Section 7.01. Deposit of Proceeds of Certificates. The proceeds received from the sale of the Certificates shall be deposited by the Trustee as follows, as directed by a Written Request of the District: (a) the Trustee shall deposit in the Costs oflssuance Fund established pursuant to Section 7.02 hereof the amount of$ ; and (b) the Trustee shall transfer to [prior trustees/escrow] the amount of $ _____ _ Section 7.02. Costs of Issuance Fund. The Trustee shall establish and maintain a separate special fund to be held by the Trustee known as the Costs of Issuance Fund. The Trustee shall disburse moneys from the Costs of Issuance Fund on such dates and in such amounts as are necessary to pay Costs of Issuance, in each case upon the Written Request of the District stating the person to whom payment is to be made, the amount to be paid, the purpose for which the obligation was incurred and that such payment is a proper charge against the Costs of Issuance Fund. On 1, 2000, the Trustee shall transfer any amounts then remaining in the Costs of Issuance Fund to the Installment Payment Fund. Section 7.03. Assignment and Pledge. The Corporation hereby transfers, conveys and assigns to the Trustee, for the benefit of the Owners, all of the Corporation's rights, title and interest under the Installment Purchase Agreement (excepting its rights to indemnification thereunder), including the right to receive Installment Payments, and the interest thereon, from the District and the right to exercise any remedies provided therein in the event of a default by the District thereunder. The Trustee hereby accepts said assignment, solely in its capacity as Trustee, for the benefit of the Owners, subject to the provisions of this Trust Agreement. All Installment Payments, and the interest thereon, shall be paid directly by the District to the Trustee, and if received by the Corporation at any time shall be deposited by the Corporation with the Trustee immediately upon the receipt thereof. In order to secure the respective rights of the Owners to the payments required to be made thereto as provided herein, the Corporation and the District hereby irrevocably pledge to the Trustee, for the benefit of the Owners, all of their right, title and interest, if any, in and to all amounts on deposit from time to time in the funds and accounts established hereunder (other than the Rebate Fund and the accounts described in subsections (a) and (b) of Section 5.06). This pledge shall constitute a first lien on the funds and accounts established hereunder in accordance with the terms hereof. Section 7.04. Installment Payment Fund. (a) All Installment Payments, and the interest thereon, paid by the District shall be deposited by the Trustee in the Installment Payment Fund, which the Trustee shall establish and maintain until all required Installment Payments, and the interest thereon, are paid in full pursuant to the Installment Purchase Agreement and until the DOCS LA I :336504.4 41758-7 GHI 41 first date upon which the Certificates are no longer Outstanding. The moneys in the Installment Payment fund shall be held in trust by the Trustee and shall be disbursed only for the purposes and uses herein authorized. (b) The Trustee shall transfer the amounts on deposit in the Installment Payment Fund, at the times and in the manner hereinafter provided, to the following respective accounts within the Installment Payment Fund, each of which the Trustee hereby agrees to establish and maintain until all required Installment Payments, and the interest thereon, are paid in full pursuant to the Installment Purchase Agreement and until the first date upon which the Certificates are no longer Outstanding. The moneys in each of such accounts shall be held in trust by the Trustee and shall be disbursed only for the purposes and uses herein authorized. (i) Interest Account. The Trustee, on each Interest Payment Date, shall deposit in the Interest Account that amount of moneys representing the interest on the Installment Payments coming due on such Interest Payment Date. Moneys in the Interest Account shall be used by the Trustee for the purpose of paying the interest evidenced by the Certificates when due and payable. (ii) Principal Account. The Trustee, on each Principal Payment Date and each Mandatory Sinking Account Payment Date, shall deposit in the Principal Account that amount of moneys representing the Installment Payments coming due on such Principal Payment Date or Mandatory Sinking Account Payment Date. Moneys in the Principal Account shall be used by the Trustee for the purpose of paying the principal evidenced by the Certificates when due and payable at their stated Principal Payment Date or upon earlier prepayment from Mandatory Sinking Account Payments. (iii) Prepayment Account. The Trustee, on the prepayment date specified in the Written Request of the District filed with the Trustee at the time that any prepaid Installment Payment is paid to the Trustee pursuant to the Installment Purchase Agreement, shall deposit in the Prepayment Account that amount of moneys representing such prepaid Installment Payment, the accrued interest thereon to the prepayment date and any premium payable with respect thereto. Moneys in the Prepayment Account shall be used by the Trustee for the purpose of paying the interest, premium, if any, and principal evidenced by the Certificates to be prepaid. All moneys held by the Trustee in the Prepayment Account shall either be held uninvested or invested in Defeasance Securities that mature in sufficient amounts and on the dates needed to make the prepayments of Certificates for which such moneys were deposited. Section 7.05. Reserve Fund. (a) On the Conversion Date on which the Certificates are converted to the Fixed Rate Mode, the Trustee shall establish the Reserve Fund and shall maintain the Reserve Fund until all required Installment Payments, and the interest thereon, are paid in full pursuant to the Installment Purchase Agreement and until the first date upon which the Certificates are no longer Outstanding. On such Conversion Date, there shall be deposited in the Reserve Fund (i) moneys at least equal to the Reserve Requirement, (ii) a Reserve Facility, the amount available under which is at least equal to the Reserve Requirement, or (ii) a DOCSLAI :336504.4 41758-7 GHI 42 combination thereof, such that the amount on deposit in the Reserve Fund, together with the amount available under such Reserve Facility, is at least equal to the Reserve Requirement. The District may substitute a Reserve Facility for all or a part of the moneys on deposit in the Reserve Fund by depositing such Reserve Facility with the Trustee so long as, at the time of such substitution, the amount on deposit in the Reserve Fund, together with the amount available under such Reserve Facility and any previously substituted Reserve Facilities, shall be at least equal to the Reserve Requirement; provided, however, that, prior to any such substitution, the Trustee shall have received written confirmation from each rating agency then rating the Certificates that such substitution would not cause such rating agency to lower or withdraw its rating then in effect with respect to the Certificates. Moneys for which a Reserve Facility has been substituted as provided herein shall be transferred, at the election of the District, to the Installment Payment Fund, or upon receipt of an Opinion of Counsel to the effect that such transfer, in and of itself, will not adversely affect the exclusion of interest evidenced by the Certificates from gross income for federal income tax purposes, to a special account to be held by the Trustee and applied to the payment of capital costs of the District, as directed in a Written Request of the District. Any amounts paid pursuant to any Reserve Facility shall be deposited in the Reserve Fund. The moneys in the Reserve Fund and any Reserve Facility shall be held in trust by the Trustee and shall be used and disbursed only for the purposes and uses herein authorized. (b) Amounts on deposit in the Reserve Fund which were not derived from payments under any Reserve Facility credited to the Reserve Fund to satisfy a portion of the Reserve Requirement shall be used and withdrawn by the Trustee prior to using and withdrawing any amounts derived from payments under any such Reserve Facility. In order to accomplish such use and withdrawal of such amounts not derived from payments under any such Reserve Facility, the Trustee shall, as and to the extent necessary, liquidate any investments purchased with such amounts. If and to the extent that more than one Reserve Facility is credited to the Reserve Fund to satisfy a portion of the Reserve Requirement, drawings thereunder, and repayment of expenses with respect thereto, shall be made on a pro-rata basis (calculated by reference to the policy limits available thereunder). If, on any Interest Payment Date while the Fixed Rate Mode is in effect, the amount on deposit in the Interest Account is insufficient to pay the interest evidenced by the Certificates on such Interest Payment Date, the Trustee shall transfer from the Reserve Fund and deposit in the Interest Account an amount sufficient to make up such deficiency. If a Reserve Facility is credited to the Reserve Fund to satisfy a portion of the Reserve Requirement, the Trustee shall make a claim for payment under such Reserve Policy, in accordance with the provisions thereof, in an amount which, together with other available moneys in the Reserve Fund, will be sufficient to make said deposit in the Interest Account. If, on any Principal Payment Date or Mandatory Sinking Account Payment Date, the amount on deposit in the Principal Account is insufficient to pay the principal evidenced by the Certificates on such Principal Payment Date or Mandatory Sinking Account Payment Date, the Trustee shall transfer from the Reserve Fund and deposit in the Principal Account an amount DOCSLAI :336504.4 41758-7 GHI 43 sufficient to make up such deficiency. If a Reserve Facility is credited to the Reserve Fund to satisfy a portion of the Reserve Requirement, the Trustee shall make a claim for payment under such Reserve Policy, in accordance with the provisions thereof, in an amount which, together with other available moneys in the Reserve Fund, will be sufficient to make said deposit in the Principal Account. Moneys, if any, on deposit in the Reserve Fund shall be withdrawn and applied by the Trustee for the final payment of principal and interest evidenced by the Certificates. ( c) In the event of any transfer from the Reserve Fund or the making of any claim under any Reserve Facility, the Trustee shall, within five days thereafter, provide written notice to the District of the amount and the date of such transfer or claim. (d) The Trustee shall, from amounts received from the District pursuant to Section 2.03 of the Installment Purchase Agreement, deposit in the Reserve Fund an amount of money which, together with the amount already on deposit therein and the amounts available under all Reserve Facilities, will be equal to the Reserve Requirement. No deposit need be made in the Reserve Fund so long as there shall be on deposit therein a sum equal to the amount which, together with the amounts available under all Reserve Facilities, is at least the Reserve Requirement. The Trustee shall promptly notify the District in writing if the amount on deposit is less than the Reserve Requirement. ( e) Any amount in the Reserve Fund in excess of the Reserve Requirement on January 15 and July 15 of each year shall be withdrawn from the Reserve Fund by the Trustee and shall be deposited in the Installment Payment Fund. If, as a result of the payment of principal or interest evidenced by the Certificates or otherwise, the Reserve Requirement is reduced, amounts on deposit in the Reserve Fund in excess of such reduced Reserve Requirement shall be transferred to the Installment Payment Fund. Section 7.06. Rebate Fund. (a) In addition to the other funds and accounts created pursuant hereto, the Trustee shall establish and maintain the Rebate Fund. There shall be deposited in the Rebate Fund such amounts as are required to be deposited therein pursuant to the Tax Certificate. All money at any time deposited in the Rebate Fund shall be held by the Trustee in trust, to the extent required to satisfy the Rebate Requirement, for payment to the United States of America. Notwithstanding defeasance of the Certificates pursuant to Article XII hereof or anything to the contrary contained herein, all amounts required to be deposited into or on deposit in the Rebate Fund shall be governed exclusively by this Section and by the Tax Certificate (which is incorporated herein by reference). The Trustee shall be deemed conclusively to have complied with such provisions if it follows the written directions of the District, and shall have no liability or responsibility to enforce compliance by the District with the terms of the Tax Certificate. The Trustee may conclusively rely upon the District's determinations, calculations and certifications required by the Tax Certificate. The Trustee shall have no responsibility to independently make any calculation or determination or to review the District's calculations. DOCSLA I :336504.4 41758-7 GHI 44 (b) Any funds remaining in the Rebate Fund after payment in full of all of the principal and interest evidenced by the Certificates and after payment of any amounts described in this Section, shall be withdrawn by the Trustee and remitted to the District. Section 7.07. Investment of Moneys. Except as otherwise provided herein, all moneys in any of the funds or accounts established pursuant to this Trust Agreement shall be invested by the Trustee solely in Permitted Investments, as directed by the District pursuant to a Written Request of the District at least two Business Days prior to the making of such investment. Moneys in all funds and accounts held by the Trustee shall be invested in Permitted Investments maturing not later than the date on which it is estimated that such moneys will be required for the purposes specified in this Trust Agreement; provided, however, that Permitted Investments in which moneys in the Reserve Fund are so invested shall mature no later than the earlier of five years from the date of investment or the final Principal Payment Date of the Certificates; provided, further, that if such Permitted Investments may be redeemed at par so as to be available on each Interest Payment Date, any amount in the Reserve Fund may be invested in such redeemable Permitted Investments maturing on any date on or prior to the final Principal Payment Date of the Certificates. Absent timely written direction from the District, the Trustee shall invest any funds held by it in Permitted Investments described in clause (_J of the definition thereof. Subject to the provisions of Section 7.06 hereof, all interest, profits and other income received from the investment of moneys in any fund or account established pursuant to this Trust Agreement shall be retained therein. Permitted Investments acquired as an investment of moneys in any fund or account established under this Trust Agreement shall be credited to such fund or account. For the purpose of determining the amount in any fund, all Permitted Investments credited to such fund shall be valued by the Trustee at the market value thereof, such valuation to be performed not less frequently than semiannually on or before each January 15 and July 15. The Trustee may act as principal or agent in the making or disposing of any investment. The Trustee shall sell or present for redemption any Permitted Investment whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or account to which such Permitted Investment is credited, and the Trustee shall not be liable or responsible for any loss resulting from any investment made or sold pursuant to this Section. For purposes of investment, the Trustee may commingle moneys in any of the funds and accounts established hereunder. DOCSLA1:336504.4 41758-7 GHI 45 ARTICLE VIII COVENANTS Section 8.01. Compliance with Trust Agreement. The Trustee will not execute or deliver any Certificates in any manner other than in accordance with the provisions hereof, and the Corporation and the District will not suffer or permit any default by them to occur hereunder, but will faithfully comply with, keep, observe and perform all the agreements, conditions, covenants and terms hereof required to be complied with, kept, observed and performed by them. Section 8.02. Compliance with Installment Purchase Agreement. The Corporation and the District will faithfully comply with, keep, observe and perform all the agreements, conditions, covenants and terms contained in the Installment Purchase Agreement required to be complied with, kept, observed and performed by them and, together with the Trustee, will enforce the Installment Purchase Agreement against the other party thereto in accordance with its terms. Section 8.03. Observance of Laws and Regulations. The Corporation and the District will faithfully comply with, keep, observe and perform all valid and lawful obligations or regulations now or hereafter imposed on them by contract, or prescribed by any law of the United States of America or of the State, or by any officer, board or commission having jurisdiction or control, as a condition of the continued enjoyment of each and every franchise, right or privilege now owned or hereafter acquired by them, including their right to exist and carry on their respective businesses, to the end that such franchises, rights and privileges shall be maintained and preserved and shall not become abandoned, forfeited or in any manner impaired. Section 8.04. Other Liens. So long as any Certificates are Outstanding, none of the Trustee, the Corporation or the District shall create or suffer to be created any pledge of or lien on the amounts on deposit in any of the funds or accounts created hereunder, other than the pledge and lien hereof. Section 8.05. Prosecution and Defense of Suits. The District will defend against every action, suit or other proceeding at any time brought against the Trustee, the Bank or any Owner upon any claim arising out of the receipt, deposit or disbursement of any of the Installment Payments, or the interest thereon, or involving the rights of the Trustee, the Bank or any Owner hereunder; provided, however, that the Trustee, the Bank or any Owner at its or his election may appear in and defend any such action, suit or other proceeding. Section 8.06. Accounting Records and Statements. The Trustee will keep proper accounting records in which complete and correct entries shall be made of all transactions relating to the receipt, deposit and disbursement of the Installment Payments, and the interest thereon, and such accounting records shall be available for inspection by the Corporation and the District at reasonable hours and under reasonable conditions. The Trustee will, upon written request, make copies of the foregoing available to the Bank and any Owner or such Owner's agent duly authorized in writing. DOCSLAI :336504.4 41758-7 GHI 46 Section 8.07. Tax._ Covenants. (a) The District will not take any action, or fail to take any action, if such action or failure to take such action would adversely affect the exclusion from gross income of interest evidenced by the Certificates under Section 103 of the Code. Without limiting the generality of the foregoing, the District will comply with the requirements of the Tax Certificate, which is incorporated herein as if fully set forth herein. This covenant shall survive payment in full or defeasance of the Certificates. (b) In the event that at any time the District is of the opinion that for purposes of this Section it is necessary or helpful to restrict or limit the yield on the investment of any moneys held by the Trustee in any of the funds or accounts established hereunder, the District shall so instruct the Trustee in writing, and the Trustee shall take such action as may be necessary in accordance with such instructions. (c) Notwithstanding any provisions of this Section, if the District shall provide to the Trustee an Opinion of Counsel to the effect that any specified action required under this Section is no longer required or that some further or different action is required to maintain the exclusion from federal income tax of interest evidenced by the Certificates, the Trustee may conclusively rely on such opinion in complying with the requirements of this Section and of the Tax Certificate, and the covenants hereunder shall be deemed to be modified to that extent. Section 8.08. Continuing Disclosure. [If determined to be necessary or appropriate]. Section 8.09. Further Assurances. Whenever and so often as requested to do so by the Trustee, the Bank or any Owner, the Corporation and the District will promptly execute and deliver or cause to be executed and delivered all such other and further assurances, documents or instruments and promptly do or cause to be done all such other and further things as may be necessary or reasonably required in order to further and more fully vest in the Trustee, the Bank and the Owners all advantages, benefits, interests, powers, privileges and rights conferred or intended to be conferred upon them hereby or by the Installment Purchase Agreement. DOCSLAI :336504.4 41758-7 GHI 47 ARTICLE IX DEFAULT AND LIMITATIONS OF LIABILITY Section 9.01. Action upon Event of Default. An event of default under the Installment Purchase Agreement shall constitute an event of default hereunder. The Trustee may give notice, as assignee of the Corporation, of an event of default under the Installment Purchase Agreement to the District, and shall do so if directed to do so by the Owners of not less than a majority of the aggregate principal evidenced by Certificates then Outstanding. In each and every case during the continuance of an event of default, the Trustee may, and, at the direction of the Owners of not less than a majority of the aggregate principal evidenced by Certificates then Outstanding, shall, upon notice in writing to the District and the Corporation, exercise any of the remedies granted to the Corporation under the Installment Purchase Agreement and, in addition, take whatever action at law or in equity may appear necessary or desirable to enforce the Trustee's rights as assignee pursuant hereto or to protect and enforce any of the rights vested in the Trustee or the Owners by this Trust Agreement or by the Certificates, either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement or for the enforcement of any other legal or equitable right, including any one or more of the remedies set forth in Section 9.02 hereof. Section 9.02. Other Remedies of the Trustee. Subject to the provisions of Section 9.01 hereof, the Trustee shall have the right: (a) by mandamus or other action or proceeding or suit at law or in equity to enforce its rights against the Corporation or the District or any member, director, officer or employee thereof, and to compel the Corporation or the District or any such member, director, officer or employee to perform or carry out its or his or her duties under law and the agreements and covenants required to be performed by it or him or her contained herein; (b) by suit in equity to enjoin any acts or things which are unlawful or violate the rights of the Trustee; or ( c) by suit in equity upon the happening of any Event of default hereunder to require the Corporation and the District to account as the trustee of an express trust. Section 9.03. Non-Waiver. A waiver of any default or breach of duty or contract by the Trustee shall not affect any subsequent default or breach of duty or contract or impair any rights or remedies on any such subsequent default or breach of duty or contract. No delay or omission by the Trustee to exercise any right or remedy accruing upon any default or breach of duty or contract shall impair any such right or remedy or shall be construed to be a waiver of any such default or breach of duty or contract or an acquiescence therein, and every right or remedy conferred upon the Trustee by law or by this Article may be enforced and exercised from time to time and as often the Trustee shall deem expedient. DOCSLAl:336504.4 41758-7 GHJ 48 If any action, proceeding or suit to enforce any right or to exercise any remedy is abandoned or determined adversely to the Trustee, the Bank or any Owner, then subject to any adverse determination, the Trustee, the Bank, such Owner, the Corporation and the District shall be restored to their former positions, rights and remedies as if such action, proceeding or suit had not been brought or taken. Section 9.04. Remedies Not Exclusive. Subject to the prov1s10ns of Section 9.01 hereof, no remedy herein conferred upon or reserved to the Trustee is intended to be exclusive of any other remedy, and each such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing in law or in equity or by statute or otherwise and may be exercised without exhausting and without regard to any other remedy conferred by any law. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. Section 9.05. Application of Amounts After Default. All damages or other payments received by the Trustee for the enforcement of any rights and powers of the Trustee under this Article shall be deposited into the Installment Payment Fund and as soon as practicable thereafter applied: (a) to the payment of all amounts due the Trustee under Section 10.03 hereof; (b) to the payment of all amounts then due for interest evidenced by the Certificates, in respect of which, or for the benefit of which, money has been collected (other than Certificates which have become payable prior to such event of default and money for the payment of which is held by the Trustee), ratably without preference or priority of any kind, according to the amounts of interest evidenced by such Certificates due and payable; and ( c) to the payment . of all amounts then due for principal evidenced by the Certificates, in respect of which, or for the benefit of which, money has been collected (other than Certificates which have become payable prior to such event of default and money for the payment of which is held by the Trustee), ratably without preference or priority of any kind, according to the amounts of principal evidenced by such Certificates due and payable. Section 9.06. Trustee May Enforce Claims Without Possession of Certificates. All rights of action and claims under this Trust Agreement or the Certificates may be prosecuted and enforced by the Trustee without the possession of any of the Certificates or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Owners of the Certificates in respect of which such judgment has been recovered. DOCSLAI :336504.4 41758-7 GHI 49 Section 9.07. Limitation on Suits. No Owner of any Certificate shall have any right to institute any proceeding, judicial or otherwise, with respect to this Trust Agreement, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (a) such Owner shall have previously given written notice to the Trustee of a continuing Event of default, (b) the Owners of not less than 25% of the aggregate principal evidenced by Certificates then Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of default in its own name as Trustee hereunder, (c) such Owner or Owners shall have afforded to the Trustee indemnity reasonably satisfactory to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request, ( d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall have failed to institute any such proceedings, and ( e) no direction inconsistent with such written request shall have been given to the Trustee during such 60 day period by the Owners of a majority of the aggregate principal evidenced by Certificates then Outstanding; it being understood and intended that no one or more Owners of Certificates shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Trust Agreement to affect, disturb or prejudice the rights of any other Owner of Certificates, or to obtain or seek to obtain priority or preference over any other Owner or to enforce any right under this Trust Agreement, except in the manner herein provided and for the equal and ratable benefit of all the Owners of Certificates. Section 9.08. No Liability by the Corporation to the Owners. Except as expressly provided herein, the Corporation shall not have any obligation or liability to the Owners with respect to the payment when due of the Installment Payments, and the interest thereon, by the District, or with respect to the performance by the District of the other agreements and covenants required to be performed by it contained in the Installment Purchase Agreement or herein, or with respect to the performance by the Trustee of any right or obligation required to be performed by it contained herein. Section 9.09. No Liability by the District to the Owners. Except for the payment when due of the Installment Payments, and the interest thereon, and the performance of the other agreements and covenants required to be performed by it contained in the Installment Purchase Agreement or herein, the District shall not have any obligation or liability to the Owners with respect to the Trust Agreement or the preparation, execution, delivery or transfer of the Certificates or the disbursement of the Installment Payments, and the interest thereon, by the Trustee to the Owners, or with respect to the performance by the Trustee of any right or obligation required to be performed by it contained herein. Section 9.10. No Liability of the Trustee to the Owners. Except as expressly provided herein, the Trustee shall not have any obligation or liability to the Owners with respect to the payment when due of the Installment Payments, and the interest thereon, by the District, or with respect to the performance by the Corporation or the District of the other agreements and covenants required to be performed by them, respectively contained in the Installment Purchase Agreement or herein. DOCSLAI :336504.4 41758-7 GHI 50 ARTICLEX THE TRUSTEE AND THE REMARKETING AGENT Section 10.01. Employment of the Trustee; Duties. The Corporation and the District hereby appoint and emplby the Trustee to receive, deposit and disburse the Installment Payments, and the interest thereon, to prepare, execute, deliver and transfer the Certificates and to perform the other functions contained herein, all in the manner provided herein and subject to the conditions and terms hereof. By executing and delivering this Trust Agreement, the Trustee accepts the appointment and employment hereinabove referred to and accepts the rights and obligations of the Trustee provided herein, subject to the conditions and terms hereof. Other than when an event of default has occurred and is continuing, the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Trust Agreement, and no implied covenants or obligations shall be read into this Trust Agreement against the Trustee. In case an event of default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Trust Agreement, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs. The Trustee agrees to hold all Certificates delivered to it for purchase hereunder in trust for the benefit of the respective Owners which shall have so delivered such Certificates until moneys representing the Purchase Price of such Certificates shall have been delivered to or for the account of or to the order of such Owners and to keep such books and records as shall be consistent with prudent industry practice and to make such books and records available for inspection by the District and the Remarketing Agent. Section 10.02. Removal and Resignation of the Trustee. The Corporation and the District may, by an instrument in writing, remove the Trustee initially a party hereto and any successor thereto unless an event of default shall have occurred and then be continuing, and shall remove the Trustee initially a party hereto and any successor thereto if at any time (a) requested to do so by an instrument or concurrent instruments in writing signed by the Owners of a majority of the aggregate principal component represented by the Certificates at the time Outstanding (or their attorneys duly authorized in writing), or (b) the Trustee shall cease to be eligible in accordance with the following sentence, and shall appoint a successor Trustee. The Trustee shall be a bank having trust powers or a trust company in good standing in or incorporated under the laws of the United States or any state thereof, having (or if such bank or trust company is a member of a bank holding company system, its parent bank holding company shall have) a combined capital and surplus of at least $75,000,000, and subject to supervision or examination by federal or state agency. If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. DOCSLAI :336504.4 41758-7 GHI 51 The Trustee may at any time resign by giving written notice of such resignation to the Corporation, the District and the Bank and by giving notice, by first class mail, postage prepaid, of such resignation to the Owners at their addresses appearing on the registration books maintained by the Trustee. Upon receiving such notice of resignation, the Corporation and the District shall promptly appoint a successor Trustee by an instrument in writing; provided, however, that in the event the District and the Corporation do not appoint a successor Trustee within 30 days following receipt of such notice of resignation, the resigning Trustee may, at the expense of the District, petition the appropriate court having jurisdiction to appoint a successor Trustee. Any resignation or removal of a Trustee and appointment of a successor Trustee shall become effective only upon acceptance of appointment by the successor Trustee. Any successor Trustee appointed under this Trust Agreement shall signify its acceptance of such appointment by executing and delivering to the District and the Corporation and to its predecessor Trustee a written acceptance thereof, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named Trustee herein; but, nevertheless, at the written request of the District or of the successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Trustee all the right, title and interest of such predecessor Trustee in and to any property held by it under this Trust Agreement and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth, including the Liquidity Facility (which shall be transferred in accordance with the terms thereof). Any corporation, association or agency into which the Trustee may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer its corporate trust business and assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation or transfer to which it is a party, provided that such entity meets the combined capital and surplus requirements of this Section, ipso facto, shall be and become successor trustee under this Trust Agreement and vested with all the trusts, powers, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any instrument or any further act, deed or conveyance on the part of any of the parties hereto, anything herein to the contrary notwithstanding. Section 10.03. Compensation and Indemnification of the Trustee. The District shall from time to time, subject to any written agreement then in effect with the Trustee, pay the Trustee reasonable compensation for all its services rendered hereunder and reimburse the Trustee for all its reasonable advances and expenditures (which shall not include "overhead expenses" except as such expenses are included as a component of the Trustee's stated annual fees or disclosed transaction fees) hereunder, including but not limited to advances to and reasonable fees and reasonable expenses of accountants, agents, appraisers, consultants or other experts, and counsel not directly employed by the Trustee but an attorney or firm of attorneys retained by the Trustee, employed by it in the exercise and performance of its rights and obligations hereunder; provided, however, that the Trustee shall not have any lien for such DOCSLAI :336504.4 41758-7 GHI 52 compensation or reimbursement against any moneys held by it in any of the funds or accounts established hereunder. The Trustee may take whatever legal actions are lawfully available to it directly against the Corporation or the District. Except as otherwise expressly provided herein, no provision of this Trust Agreement shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers hereunder. The District, to the extent permitted by law, agrees to indemnify and save the Trustee, its directors, officers, employees and agents harmless against any liabilities which it may incur in the exercise and performance of its powers and duties hereunder, including but not limited to costs and expenses incurred in defending against any claim or liability, which are not due to its negligence, willful misconduct or default. Section 10.04. Protection of the Trustee. The Trustee shall be protected and shall incur no liability in acting or proceeding in good faith upon any affidavit, bond, certificate, consent, notice, request, requisition, resolution, statement, telegram, voucher, waiver or other paper or document which it shall in good faith believe to be genuine and to have been adopted, executed or delivered by the proper party or pursuant to any of the provisions hereof, and the Trustee shall be under no duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument, but may accept and rely upon the same as conclusive evidence of the truth and accuracy of such statements. The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Trust Agreement at the request or direction of any of the Owners of the Certificates pursuant to this Trust Agreement, unless such Owners shall have offered to the Trustee security or indemnity, reasonably satisfactory to the Trustee, against the reasonable costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. Under no circumstances shall the Trustee request or be entitled to indemnification from the District for taking actions required by and in accordance with this Trust Agreement, including, but not limited to, requesting amounts under the Liquidity Facility, causing payments of interest and principal evidenced by the Certificates to be made to the Owners thereof and carrying out purchases or prepayments of the Certificates in accordance with the terms hereof. The Trustee may consult with counsel, who may be counsel to the Corporation or the District, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect to any action taken or suffered by it hereunder in good faith in accordance therewith. The Trustee shall not be responsible for the sufficiency of the Certificates or the Installment Purchase Agreement, or of the assignment made to it by the Trust Agreement, or for statements made in the preliminary or final official statement relating to the Certificates. The Trustee shall not be required to take notice or be deemed to have notice of any default or event of default hereunder, except failure of any of the payments to be made to the Trustee required to be made hereunder or under the Installment Purchase Agreement, unless the Trustee shall be specifically notified in writing of such default or event of default by the Bank, DOCSLAl :336504.4 41758-7 GHI 53 the District, the Corporation or by the Owners of not less than 5% of the aggregate principal evidenced by the Certificates then Outstanding. Whenever in the administration of its rights and obligations hereunder the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a Written Certificate of the District or a Written Certificate of the Corporation, and such certificate shall be full warrant to the Trustee for any action taken or suffered under the provisions hereof upon the faith thereof, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as it deems reasonable. The Trustee may buy, sell, own, hold and deal in any of the Certificates and may join in any action which any Owner may be entitled to take with like effect as if the Trustee were not a party hereto. The Trustee, either as principal or agent, may also engage in or be interested in any financial or other transaction with the Corporation or the District, and may act as agent, depository or trustee for any committee or body of Owners or of owners of obligations of the Corporation or the District as freely as if it were not the Trustee hereunder. The Trustee may, to the extent reasonably necessary, execute any of the trusts or powers hereof and perform any rights and obligations required of it hereunder by or through agents, attorneys or receivers, and shall be entitled to advice of counsel concerning all matters of trust and its rights and obligations hereunder, and the Trustee shall not be answerable for the negligence or misconduct of any such agent, attorney or receiver selected by it with reasonable care; provided, however, that in the event of any negligence or misconduct of any such attorney, agent or receiver, the Trustee shall diligently pursue all remedies of the Trustee against such agent, attorney or receiver. The Trustee shall not be liable for any error of judgment made by it in good faith unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts. The Trustee shall not be answerable for the exercise of any trusts or powers hereunder or for anything whatsoever in connection with the funds established hereunder, except only for its own willful misconduct, negligence or breach of an obligation hereunder. The Trustee may, on behalf of the Owners, intervene in any judicial proceeding to which the Corporation or the District is a party and which, in the opinion of the Trustee and its counsel, affects the Certificates or the security therefor, and shall do so if requested in writing by the Bank or the Owners of at least 5% of the aggregate principal evidenced by Certificates then Outstanding, provided the Trustee shall have no duty to take such action unless it has been indemnified to its reasonable satisfaction against all risk or liability arising from such action. Section 10.05. The Remarketing Agent. PaineWebber Incorporated is hereby appointed initial Remarketing Agent for the Certificates. The Remarketing Agent shall designate its principal office and signify its acceptance of the duties and obligations imposed upon it hereunder by a written instrument of acceptance delivered to the District and the Trustee under which the Remarketing Agent will agree, among other things, to keep such books and records as DOCSLAI :336504.4 41758-7 GHI 54 shall be consistent with prudent industry practice and to make such books and records available for inspection by the District and the Trustee at all reasonable times. The Remarketing Agent shall hold all moneys delivered to it in connection with the remarketing of Certificates in trust in non-commingled funds solely for the benefit of the person or entity which has delivered such moneys until such moneys have been delivered to the Trustee as provided herein. Section 10.06. Qualifications of Remarketing Agent. The Remarketing Agent shall be either (a) a member of the National Association of Securities Dealers, Inc., having a capitalization of at least $50,000,000, or (b) a commercial bank having combined capital and surplus of $50,000,000 and, in either event, rated Baa/Prime-3 or better by Moody's or shall otherwise be approved in writing by the rating agencies then rating the Certificates and authorized by law to perform all the duties imposed upon it by this Trust Agreement. If the Remarketing Agent resigns or is removed, the Remarketing Agent shall pay over, assign and deliver any money and Certificates held by it in such capacity to the successor Remarketing Agent. If the Remarketing Agent shall resign or be removed, or be dissolved, or if the property or affairs of the Remarketing Agent shall be taken under the control of any state or federal court or administrative body because of bankruptcy or insolvency, or for any other reason, the District shall appoint a successor Remarketing Agent, with the approval of the Bank. If the District fails to so appoint a successor Remarketing Agent, the Trustee shall serve in that capacity or shall appoint a successor Remarketing Agent. Any successor Remarketing Agent appointed under this Trust Agreement, shall signify its acceptance of such appointment by executing and delivering to the District, the Trustee, and to its predecessor Remarketing Agent, a written acceptance thereof, and thereupon such successor Remarketing Agent, without further act, deed or conveyance, shall become vested with all the monies, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Remarketing Agent, with like effect as if originally named Remarketing Agent herein; but nevertheless at the request of the District or the request of the successor Remarketing Agent, such predecessor Remarketing Agent shall execute and deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Remarketing Agent all the right, title and interest of such predecessor Remarketing Agent in and to any property held by it under this Trust Agreement and shall pay over, transfer, assign and deliver to the successor Remarketing Agent any money or other property subject to the trust and conditions herein set forth. Upon request of the successor Remarketing Agent, the District shall execute and deliver any and all instruments as may be reasonably required for more fully certainly vesting in and confirming to successor Remarketing Agent all money, estates, properties, rights, powers, trusts, duties and obligations. Upon acceptance by a successor Remarketing Agent as provided in this subsection, the Trustee shall give notice of the succession of such Remarketing Agent hereunder to the Bank and to the Owners at the addresses shown in the registration books maintained by the Trustee. DOCSLAI :336504.4 41758-7 GHI 55 ARTICLE XI AMENDMENT OF OR SUPPLEMENT TO TRUST AGREEMENT Section 11.01. Amendment or Supplement. (a) This Trust Agreement and the rights and obligations of the Corporation, the District, the Owners and the Trustee hereunder may be amended or supplemented at any time by an amendment hereof or supplement hereto which shall become binding when the prior written consents of the Owners of a majority of the aggregate principal evidenced by the Certificates then Outstanding, exclusive of Certificates disqualified as provided in Section 11.02 hereof, are filed with the Trustee. No such amendment or supplement shall (i) extend the stated Principal Payment Date of any Certificate or reduce the rate of interest evidenced thereby or extend the time of payment of such interest or reduce the amount of principal evidenced thereby or reduce the amount of any Mandatory Sinking Account Payment or change the prepayment terms and provisions or the provisions regarding delivery of notice of prepayment or diminish the security afforded by the Liquidity Facility without the prior written consent of the Owner of each Certificate so affected and the Bank (so long as the Bank is not in default under the Liquidity Facility), (ii) reduce the percentage of Owners whose consent is required for the execution of any amendment hereof or supplement hereto without the prior written consent of the Owners of all Certificates then Outstanding and the Bank (so long as the Bank is not in default under the Liquidity Facility), (iii) modify any of the rights or obligations of the Trustee without the prior written consent of the Trustee, (iv) modify any of the rights or obligations of the Bank without the prior written consent of the Bank, or (v) amend this Section without the prior written consent of the Owners of all Certificates then Outstanding and the Bank (so long as the Bank is not in default under the Liquidity Facility). (b) This Trust Agreement and the rights and obligations of the Corporation, the District, the Owners and the Trustee hereunder may also be amended or supplemented at any time by an amendment hereof or supplement hereto which shall become binding upon execution, without the written consents of any Owners, but only to the extent permitted by law and only for any one or more of the following purposes: (i) to add to the agreements, conditions, covenants and terms required by the Corporation or the District to be observed or performed herein other agreements, conditions, covenants and terms thereafter to be observed or performed by the Corporation or the District, or to surrender any right or power reserved herein to or conferred herein on the Corporation or the District, and which in either case shall not adversely affect the rights or interests of the Owners; (ii) to make such provisions for the purpose of curing any ambiguity or of correcting, curing or supplementing any defective provision contained herein or in regard to questions arising hereunder which the Corporation or the District may deem desirable or necessary and not inconsistent herewith, and which shall not adversely affect the rights or interests of the Owners; DOCS LA I :336504.4 41758-7 GHI 56 (iii) to make such additions, deletions or modifications as may be necessary or appropriate to assure the exclusion from gross income for federal income tax purposes of interest evidenced by the Certificates; or (iv) for any other reason, provided such amendment or supplement does not adversely affect the rights or interests of the Owners. No such amendment or supplement shall modify any of the rights or obligations of the Bank without the prior written consent of the Bank. (c) This Trust Agreement and the rights and obligations of the Corporation, the District, the Owners and the Trustee hereunder may also be amended or supplemented as of any Conversion Date by an amendment hereof or supplement hereto which shall become binding on such Conversion Date, with the prior written consent of the Bank (if the Rate Period commencing on such Conversion Date is a Variable Rate Period), but without the written consents of any Owners, but only to the extent permitted by law and only if the Certificates have been remarketed by the Remarketing Agent pursuant to subsection (d) of Section 5.03 hereof or Section 5.04 hereof for purchase on such Conversion Date with such amended or supplemented rights or obligations. Section 11.02. Disqualified Certificates. Certificates owned or held by or for the account of the District (but excluding Certificates held in any pension or retirement fund of the District) shall not be deemed Outstanding for the purpose of any consent or other action or any calculation of Outstanding Certificates provided in this Article, and shall not be entitled to consent to or take any other action provided in this Article, and the Trustee may adopt appropriate regulations to require each Owner, before his consent provided for herein shall be deemed effective, to reveal if the Certificates as to which such consent is given are disqualified as provided in this Section. Section 11.03. Endorsement. or Replacement of Certificates After Amendment or S_upplement. After the effective date of any action taken as hereinabove provided in this Article, the Trustee may determine that the Certificates may bear a notation by endorsement in form approved by the Trustee as to such action, and in that case upon demand of the Owner of any Outstanding Certificate and presentation of such Certificate for such purpose at the Principal Office of the Trustee a suitable notation as to such action shall be made on such Certificate. If the Trustee shall receive an Opinion of Counsel advising that new Certificates modified to conform to such action are necessary, modified Certificates shall be prepared, and in that case upon demand of the Owner of any Outstanding Certificates such new Certificates shall be exchanged at the Principal Office of the Trustee witp.out cost to each Owner for Certificates then Outstanding upon surrender of such Outstanding Certificates. Section 11.04. Amendment by Mutual Consent. The provisions of this Article shall not prevent any Owner from accepting any amendment as to the particular Certificates owned by such Owner, provided that due notation thereof is made on such Certificates. DOCSLAI :336504.4 41758-7 GHI 57 ARTICLE XII DEFEASANCE Section 12.01. Discharge of Certificates and Trust Agreement. (a) If the Trustee shall pay or cause to be paid or there shall otherwise be paid (i) to the Owners of all Outstanding Certificates the interest and principal evidenced thereby at the times and in the manner stipulated herein and therein, and (ii) all other amounts due hereunder and under the Installment Purchase Agreement and the Standby Agreement, then such Owners shall cease to be entitled to the pledge of and lien on the amounts on deposit in the funds and accounts established hereunder, as provided herein, and all agreements and covenants of the Corporation, the District, and the Trustee to such Owners hereunder shall thereupon cease, terminate and become void and shall be discharged and satisfied. (b) Any Outstanding Certificate shall be deemed to have been paid within the meaning and with the effect expressed in this Section when the whole amount of the principal, premium, if any, and interest evidenced by such Certificate shall have been paid or when (i) in case said Certificate or portion thereof has been selected for prepayment in accordance with Section 4.03 hereof prior to its stated Principal Payment Date, the District shall have given to the Trustee irrevocable instructions to give, in accordance with the provisions of Section 4.04 hereof, notice of prepayment of such Certificate, or portion thereof, (ii) there shall be on deposit with the Trustee, moneys, or Defeasance Securities, or any combinations thereof, the principal of and the interest on which when due, and without any reinvestment thereof, will provide moneys which shall be sufficient to pay when due the principal, premium, if any, and interest evidenced by such Certificate and due and to become due on or prior to the prepayment date or its stated Principal Payment Date, as the case may be, and (iii) in the event the stated Principal Payment Date of such Certificate will not occur, and said Certificate is not to be prepaid, within the next succeeding 60 days, the District shall have given the Trustee irrevocable instructions to give notice, as soon as practicable in the same manner as a notice of prepayment given pursuant to Section 4.04 hereof, to the Owner of said Certificate, or portion thereof, stating that the deposit of moneys or Defeasance Securities required by clause (ii) of this subsection has been made with the Trustee and that said Certificate, or portion thereof, is deemed to have been paid in accordance with this Section and stating such Principal Payment Date or prepayment date upon which moneys are to be available for the payment of the principal, premium, if any, and interest evidenced by said Certificate, or portion thereof. Neither the moneys nor the Defeasance Securities deposited with the Trustee pursuant to this Section nor principal or interest payments on any such Defeasance Securities shall be withdrawn or used for any purpose other than, and shall be held in trust for and pledged to, the payment of the principal, premium, if any, and interest evidenced by said Certificate, or portions thereof. If payment of less than all of the Certificates is to be provided for in the manner and with the effect expressed in this Section, the Trustee or the District, as applicable, shall select such Certificates, or portions thereof, in the manner specified in Section 4.03 hereof for selection for prepayment of less than all of the Certificates, in the principal amounts designated to the Trustee by the District. DOCSLAJ :336504.4 41758-7 GHI 58 ( c) The Trustee may seek and is entitled to rely upon (i) an Opinion of Counsel reasonably satisfactory to the Trustee to the effect that the conditions precedent to a defeasance pursuant to this Section have been satisfied, and (ii) such other opinions, certifications and computations, as the Trustee may reasonably request, or accountants or other financial consultants concerning the matters described in subsection (b) of this Section. (d) After the payment of all the interest, prepayment premium, if any, and principal evidenced by all Outstanding Certificates and all other amounts due hereunder and under the Standby Agreement as provided in this Section, the Trustee shall execute and deliver to the Corporation and the District all such instruments as may be necessary or desirable to evidence the discharge and satisfaction of the Trust Agreement, the Trustee shall pay over or deliver to the District all moneys or securities held by it pursuant hereto which are not required for the payment of the interest, prepayment premium, if any, and principal evidenced by such Certificates and all other amounts due hereunder and under the Installment Purchase Agreement. ( e) Prior to any defeasance becoming effective under this Article, (i) all amounts currently due to the Bank hereunder and under the Standby Agreement shall have been paid in full, and (ii) the District shall cause to be delivered (A) an executed copy of a report, addressed to the Trustee, the District and the Bank, in form and in substance acceptable to the Trustee, the District and the Bank, of a nationally recognized certified public accountant, or firm of such accountants, verifying that the Defeasance Securities and cash, if any, satisfy the requirements of clause (ii) of subsection (b) of this Section (a "Verification"), (B) a copy of the escrow deposit agreement entered into in connection with such defeasance, which escrow deposit agreement shall provide that no substitution of Defeasance Securities shall be permitted except with other Defeasance Securities and upon delivery of a new Verification and no reinvestment of Defeasance Securities shall be permitted except as contemplated by the original Verification or upon delivery of a new Verification, and (C) a copy of an Opinion of Counsel, dated the date of such defeasance and addressed to the Trustee, the District and the Bank, in form and in substance acceptable to the Trustee, the District and the Bank, to the effect that such Certificates have been paid within the meaning and with the effect expressed in the Trust Agreement, all agreements and covenants of the Corporation, the District and the Trustee to the Owners of such Certificates under the Trust Agreement have ceased, terminated and become void and have been discharged and satisfied. Prior to the defeasance of any Certificates in the Variable Rate Mode becoming effective under this Article, the Trustee shall have received written confirmation from each rating agency then rating such Certificates that such defeasance would not, in and of itself, cause such rating agency to lower, withdraw or suspend its rating of such Certificates. Section 12.02. Unclaimed Moneys. Any moneys held by the Trustee in trust for the payment and discharge of the interest or principal evidenced by any of the Certificates which remain unclaimed for two years after the date when such interest or principal evidenced by such Certificates have become payable, if such moneys were held by the Trustee at such date, or for two years after the date of deposit of such moneys if deposited with the Trustee after the date when the interest and principal evidenced by such Certificates have become payable, shall, DOCSLAI :336504.4 41758-7 GHI 59 subject to subsection (d) of Section 6.01 hereof, at the Written Request of the District be repaid by the Trustee to the District as its absolute property free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Owners shall look only to the District for the payment of the interest and principal evidenced by such Certificates. DOCSLAI :336504.4 41758-7 GHI 60 ARTICLE XIII MISCELLANEOUS Section 13.01. Benefits of Trust Agreement. Nothing contained herein, expressed or implied, is intended to give to any person other than the Corporation, the District, the Trustee, the Bank, the Remarketing Agent and the Owners any claim, remedy or right under or pursuant hereto, and any agreement, condition, covenant or term required herein to be observed or performed by or on behalf of the Corporation or the District shall be for the sole and exclusive benefit of the Trustee, the Bank, the Remarketing Agent and the Owners. Section 13.02. Successor Deemed Included in all References to Predecessor. Whenever the Corporation, the District or the Trustee, or any officer thereof, is named or referred to herein, such reference shall be deemed to include the successor to the powers, duties and functions that are presently vested in the Corporation, the District or the Trustee, or such officer, and all agreements, conditions, covenants and terms required hereby to be observed or performed by or on behalf of the Corporation, the District or the Trustee, or any officer thereof, shall bind and inure to the benefit of the respective successors thereof whether so expressed or not. Section 13.03. Execution of Documents by Owners. Any declaration, request or other instrument which is permitted or required herein to be executed by Owners may be in one or more instruments of similar tenor and may be executed by Owners in person or by their attorneys appointed in writing. The fact and date of the execution by any Owner or his attorney of any declaration, request or other instrument or of any writing appointing such attorney may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state or territory in which he purports to act that the person signing such declaration, request or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution duly sworn to before such notary public or other officer, or by such other proof as the Trustee may accept which it may deem sufficient. The ownership of any Certificates and the amount, payment date, number and date of owning the same may be proved by the registration books maintained by the Trustee pursuant to the provisions of Section 2.07 hereof. Any declaration, request or other instrument in writing of the Owner of any Certificate shall bind all future Owners of such Certificate with respect to anything done or suffered to be done by the Corporation, the District or the Trustee in good faith and in accordance therewith. Section 13.04. Waiver of Personal Liability. Notwithstanding anything contained herein to the contrary, no member, officer or employee of the District or the Corporation shall be individually or personally liable for the payment of any moneys, including without limitation, the interest or principal represented by the Certificates, but nothing contained herein shall relieve any member, officer or employee of the District or the Corporation from the performance of any official duty provided by any applicable provisions of law, by the Installment Purchase Agreement or hereby. DOCSLAI :336504.4 41758-7 GHI 61 Section 13.05. Acquisition of Certificates by District. All Certificates acquired by the District, whether by purchase or gift or otherwise, shall be surrendered to the Trustee for cancellation. Section 13.06. Content of Certificates. Every Written Certificate of the District and every Written Certificate of the Corporation with respect to compliance with any agreement, condition, covenant or term contained herein shall include (a) a statement that the person making or giving such certificate has read such agreement, condition, covenant or term and the definitions herein relating thereto, (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements contained in such certificate are based, ( c) a statement that, in the opinion of the signer, the signer has made or caused to be made such examination or investigation as is necessary to enable the signer to express an informed opinion as to whether or not such agreement, condition, covenant or term has been complied with, and (d) a statement as to whether, in the opinion of the signer, such agreement, condition, covenant or term has been complied with. Any Written Certificate of the District and any Written Certificate of the Corporation may be based, insofar as it relates to legal matters, upon an Opinion of Counsel, unless the person making or giving such certificate knows that the Opinion of Counsel with respect to the matters upon which each person's certificate may be based, as aforesaid, is erroneous, or in the exercise of reasonable care should have known that the same was erroneous. Any Opinion of Counsel may be based, insofar as it relates to factual matters, upon information which is in the possession of the District or the Corporation upon a representation by an officer or officers of the District or the Corporation, as the case may be, unless the counsel executing such Opinion of Counsel knows that the representation with respect to the matters upon which such counsel's opinion may be based, as aforesaid, is erroneous, or in the exercise of reasonable care should have known that the same was erroneous. Section 13.07. Funds and Accounts. Any fund or account required to be established and maintained herein by the Trustee may be established and maintained in the accounting records of the Trustee either as an account or a fund, and may, for the purposes of such accounting records, any audits thereof and any reports or statements with respect thereto, be treated either as an account or a fund, but all such records with respect to all such funds and accounts shall at all times be maintained in accordance with sound accounting practice and with due regard for the protection of the security of the Certificates and the rights of the Owners. Subject to Section 5.06 hereof, Trustee may commingle any of the moneys held by it hereunder for investment purposes only; provided, however, that the Trustee shall account separately for the moneys in each fund or account established pursuant to this Trust Agreement. Section 13.08. Third-Party Beneficiary. The Bank is a third-party beneficiary of this Trust Agreement. Section 13.09. Article and Section Headings, Gender and References. The singular form of any word used herein, including the terms defined in Section 1.01 hereof, shall include the plural, and vice versa, unless the context otherwise requires. The use herein of a pronoun of DOCSLAI :336504.4 41758-?GHI 62 any gender shall include correlative words of the other genders. The headings or titles of the several Articles and Sections hereof and the table of contents appended hereto shall be solely for convenience of reference and shall not affect the meaning, construction or effect hereof. All references herein to "Articles," "Sections," subsections or clauses are to the corresponding Articles, Sections, subsections or clauses hereof, and the words "hereby," "herein," "hereof," "hereto," "herewith," "hereunder" and other words of similar import refer to this Trust Agreement as a whole and not to any particular Article, Section, subsection or clause thereof. Section 13.10. PartiaJ Invalidity. If any one or more of the agreements, conditions, covenants or terms required herein to be observed or performed by or on the part of the Corporation, the District or the Trustee shall be contrary to law, then such agreement or agreements, such condition or conditions, such covenant or covenants or such term or terms shall be null and void to the extent contrary to law and shall be deemed separable from the remaining agreements, conditions, covenants and terms hereof and shall in no way affect the validity hereof or of the Certificates, and the Owners and the Bank shall retain all the benefit, protection and security afforded to them under any applicable provisions of law. The Corporation, the District and the Trustee hereby declare that they would have executed this Trust Agreement, and each and every Article, Section, paragraph, subsection, sentence, clause and phrase hereof and would have authorized the execution and delivery of the Certificates pursuant hereto irrespective of the fact that any one or more Articles, Sections, paragraphs, subsections, sentences, clauses or phrases hereof or the application thereof to any person or circumstance may be held to be unconstitutional, unenforceable or invalid. Section 13.11. California Law. This Trust Agreement shall be construed and governed in accordance with the laws of the State. Section 13.12. Notices. Any written notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication to be given hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely: DOCSLAl :336504.4 41758-7 GHI 63 If to the District: If to the Corporation: If to the Trustee: If to Moody's: lfto S&P: Ifto the Bank: Orange County Sanitation District 10844 Ellis A venue Fountain Valley, California 92708 Attention: Orange County Sanitation District Financing Corporation c/o Orange County Sanitation District 1 0844 Ellis A venue Fountain Valley, California 92708 Attention: State Street Bank and Trust Company of California, N.A. 633 West Fifth Street, 12th Floor Los Angeles, California 90071 Attention: ------- Moody's Investors Service 99 Church Street New York, New York 10007 Attention: Public Finance Dept. Structured Finance Group Standard & Poor' s Ratings Services 25 Broadway New York, New York 10004 OP.erations Department Dexia Credit Local de France 445 Park Avenue, 8th Floor New York, New York 10022 Attention: Operations Manager Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if personally served or delivered, upon delivery, (b) if given by electronic communication, whether by telex, telegram or telecopier, upon the sender's receipt of an appropriate answerback or other written acknowledgment, ( c) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, (d) if given by overnight courier, with courier charges prepaid, 24 hours after delivery to said overnight courier, or (e) if given by any other means, upon delivery at the address specified in this Section. DOCSLA1:336504.4 41758-7 GHI 64 Section 13.13. Notice to Rating Agencies. The Trustee shall provide Moody's, if the Certificates are then rated by Moody's, and S&P, if the Certificates are then rated by S&P, with prompt written notice of (a) the appointment of any successor Trustee or Remarketing Agent, (b) any material amendments to the Trust Agreement, the Installment Purchase Agreement, the Standby Agreement or the Liquidity Facility (which notice shall be sent no later than 10 days prior to the effective date of any such amendment), (c) any expiration, substitution, termination or extension of the Liquidity Facility (d) a conversion from one Mode to another Mode, (e) a mandatory tender, prepayment, defeasance or acceleration of the Certificates, or (f) the prepayment in whole of the Certificates. Section 13.14. New York Time. Unless otherwise expressly stated, all times referred to in this Trust Agreement shall be New York City time. Section 13.15. References to Bank Ineffective. If the Liquidity Facility is no longer in effect, and all obligations to the Bank hereunder and under the Standby Agreement have been paid in full, then all references in this Trust Agreement to the Bank, the Liquidity Facility and the Standby Agreement shall be of no effect. Section 13.16. Effective Date. This Trust Agreement shall become effective upon its execution and delivery. Section 13.17. Execution in Counterparts. This Trust Agreement may be simultaneously executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. DOCS LAI :336504.4 41758-7 GHI 65 IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to be executed by their respective officers thereunto duly authorized, all as of the day and year first written above. DOCSLAI :336504.4 41758-7 GHI 66 [TRUSTEE] By: _____________ _ Authorized Officer ORANGE COUNTY SANITATION DISTRICT By: _____________ _ ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION By: _____________ _ EXHIBIT A FORM OF CERTIFICATE No.R- ORANGE COUNTY SANITATION DISTRICT REFUNDING CERTIFICATE OF PARTICIPATION (2000 REFUNDING PROJECT) PRINCIPAL PAYMENT DATE ______ 1 INTEREST RATE Variable REGISTERED OWNER: Cede & Co. PRINCIPAL AMOUNT: DOLLARS DATEDDATE ____ , 2000 ***$*** CU SIP THIS IS TO CERTIFY that the Registered Owner of this Certificate of Participation (the "Certificate"), as identified above, is the owner of a direct, fractional undivided interest in certain installment payments ("Installment Payments"), and the interest thereon, payable under and pursuant to the Installment Purchase Agreement, dated as of 2000 (the "Installment Purchase Agreement"), by and between the Orange County Sanitation District (the "District"), a county sanitation distriot organized and existing under and by virtue of the laws of the State of California, as lessee, and the Orange County Sanitation District Financing Corporation (the "Corporation"), a nonprofit public benefit corporation organized and existing under and by virtue of the laws of the State of California, as lessor. Substantially all of the rights of the Corporation under the Installment Purchase Agreement, including the right to receive the Installment Payments, and the interest thereon, have been assigned without recourse by the Corporation to State Street Bank and Trust Company of California, N.A., a national banking association duly organized and existing under the laws of the United States of America, as trustee (the "Trustee") under the Trust Agreement, dated as of 2000 (the 'Trust Agreement"), by and among the Trustee, the District and the Corporation. This Certificate is one of the duly authorized Orange County Sanitation District Refunding Certificates of Participation (2000 Refunding Project) (the "Certificates") evidencing principal in the aggregate amount of $ executed pursuant to the terms of the Trust Agreement. The Certificates evidence direct, fractional undivided interests in the Installment Payments, and the interest thereon, payable under the Installment Purchase DOCSLAI :336504.4 41758-7 GHI A-1 Agreement. The Certificates are executed and delivered to refinance certain obligations of the District, to [fund . a reserve fund for the Certificates, to] pay the costs of issuance incurred in connection therewith and to pay certain other related costs. The Installment Payments, and the interest thereon, are to be paid by the District pursuant to the Installment Purchase Agreement in consideration for the purchase of certain improvements to the wastewater collection, treatment and disposal facilities of the District (the "Wastewater System") and for the other agreements and obligations undertaken by the Corporation under the Installment Purchase Agreement and the Trust Agreement. The income and receipts derived by the District from the operation of the Wastewater System remaining after the payment of maintenance and operation costs of the Wastewater System (as more fully described in the Installment Purchase Agreement, the "Net Revenues") are, pursuant to the Installment Purchase Agreement, pledged to the payment of the Installment Payments, and interest thereon, and any Additional Obligations (as such term is defined in the Installment Purchase Agreement). The District is not required to advance any moneys derived from any source of income other than the Net Revenues and the other funds provided in the Installment Purchase Agreement for the payment of the Installment Payments, or the interest thereon. The obligation of the District to pay the Installment Payments, and the interest thereon, is a special obligation of the District payable solely from such Net Revenues and other funds provided for in the Installment Purchase Agreement, and does not constitute a debt of the District or of the State of California or of any political subdivision thereof in contravention of any constitutional or statutory debt limitation or restriction. Additional Obligations payable from Net Revenues on a parity with the Installment Payments, and the interest thereon, may be incurred by the District, but only subject to the conditions and upon compliance with the procedures set forth in the Installment Purchase Agreement. Reference is hereby made to the Installment Purchase Agreement and to the Trust Agreement and any and all amendments thereof and supplements thereto for a description of the terms under which the Certificates are executed and delivered, the provisions with regard to the nature and extent of the Net Revenues, and the rights of the Owners of the Certificates. All of the terms of the Installment Purchase Agreement and the Trust Agreement are hereby incorporated herein. The Trust Agreement constitutes a contract among the District, the Corporation and the Trustee for the benefit of the Owners of the Certificates, to all the provisions of which the Owner of this Certificate, by acceptance hereof, agrees and consents. Capitalized undefined terms used herein shall have the meanings ascribed thereto in the Trust Agreement. As used herein, the following terms shall have the meanings indicated below: "Applicable Rate" means, with respect to a Certificate, as of any date of calculation, the per annum rate of interest then in effect with respect to such Certificate, as established pursuant to the Trust Agreement. "Authorized Denominations" means (a) while the Certificates are in the Daily Rate Mode or the Weekly Rate Mode, $100,000 and whole multiples thereof, except that one Certificate may DOCSLAI :336504.4 41758-7 GHI A-2 be in the amount of $100,000 and a whole multiple of $5,000 in excess thereof, and (b) while the Certificates are in the Extended Rate Mode or the Fixed Rate Mode, $5,000 and whole multiples thereof. "Bank" means Dexia Credit Local de France, acting through its New York Agency, as issuer of the Liquidity Facility, and any issuer of any Substitute Liquidity Facility. "Bank Certificate" has the meaning ascribed thereto in the Standby Agreement. "Business Day" means a day other than (a) Saturday or Sunday, (b) a day on which banking institutions in the city or cities in which the Principal Office of the Trustee is located, the principal office of the Remarketing Agent is located or the office of the Bank at which draws under the Liquidity Facility are made is located, are authorized or required by law to be closed, and (c) a day on which the New York Stock Exchange is authorized or obligated by law or executive order to be closed. If the date for making any payment or the last date for performance of any act or the exercising of any right, as provided in the Trust Agreement or the Installment Purchase Agreement, shall not be a Business Day, such payment may be made or act performed or right exercised on the next succeeding Business Day, with the same force and effect as if done on the nominal date provided in the Trust Agreement or the Installment Purchase Agreement and, unless otherwise specifically provided in the Trust Agreement, the Installment Purchase Agreement or the Standby Agreement, no interest shall accrue for the period from and after such nominal date. "Conversion Date" means any date on which the Mode applicable to the Certificates is converted from one Variable Rate Mode to another Variable Rate Mode or to the Fixed Rate Mode. "Daily Rate Mode" means the Mode in which Certificates evidence interest at a Daily Rate. "Extended Rate Mode" means the Mode in which Certificates evidence interest at an Extended Rate. "Fixed Rate Mode" means the Mode in which the Certificates evidence interest at a Fixed Rate. "Installment Payments" means the Installment Payments required to be made by the District pursuant to the Installment Purchase Agreement. "Interest Payment Date" means: (a) while the Certificates are in the Daily Rate Mode, the first Business Day of each calendar month; DOCSLA I :336504.4 41758-7GH1 A-3 (b) while the Certificates are in the Weekly Rate Mode, the first Business Day of each calendar month (c) while the Certificates are in the Extended Rate Mode, each February 1 and August 1; an ( d) while the Certificates are in the Fixed Rate Mode, each February 1 and August 1. "Liquidity Facility" means the standby purchase facility established by the Bank pursuant to the Standby Agreement, and any Substitute Liquidity Facility. "Maximum Rate" means, with respect to any Certificate, prior to the Fixed Rate Conversion Date therefor, 12% per annum and, thereafter, the highest rate of interest allowed by law. "Mode" means the Daily Rate Mode, the Weekly Rate Mode, the Extended Rate Mode or the Fixed Rate Mode. "Period" or "Rate Period" means, when used with respect to any particular rate of interest applicable to the Certificates (whether a Daily Rate, a Weekly Rate, an Extended Rate or a Fixed Rate), the period during which such rate of interest will remain in effect pursuant to the Trust Agreement. "Principal Office" means the Trustee's principal corporate trust office in Los Angeles, California. "Principal Payment Date" means a date on which an Installment Payment evidenced by the Certificates becomes due and payable. "Purchase Date" means a date upon which the Trustee is obligated to purchase a Certificate pursuant to the Trust Agreement. "Purchase Price" means, with respect to any Certificate required to be purchased by the Trustee pursuant to the Trust Agreement, an amount equal to the principal evidenced by such Certificate, plus accrued interest evidenced thereby, if any, at the rate applicable to such Certificate from the most recent Interest Payment Date and up to but excluding the Purchase Date. "Record Date" means, with respect to the interest payable on any Interest Payment Date, (a) the Business Day immediately prior to such Interest Payment Date, in the case of Certificates in the Daily Rate Mode or the Weekly Rate Mode, and (b) the fifteenth day of the calendar month immediately preceding such Interest Payment Date, whether or not such day is a Business Day, in the case of Certificates in the Extended Rate Mode or the Fixed Rate Mode. DOCS LAI :336504.4 41758-7 GHI A-4 "Remarketing Agent" means the remarketing agent for the Certificates appointed pursuant to the Trust Agreement. "Standby Agreement" means the Standby Agreement, dated as of ------~ 2000, by and between the District and the Bank, as originally executed and as it may from time to time be amended in accordance with the provisions thereof, or any similar agreement with the provider of a Substitute Liquidity Facility. "Substitute Liquidity Facility" means a standby purchase facility substituted for the initial Liquidity Facility in accordance with the provisions of the Trust Agreement. "Variable Rate" means, as the context requires, the Daily Rate, the Weekly Rate or the Extended Rate. "Variable Rate Mode" means, as the context requires, the Daily Rate Mode, the Weekly Rate Mode or the Extended Rate Mode. "Weekly Rate Mode" means the Mode in which the Certificates evidence interest at a Weekly Rate. The Purchase Price of Certificates subject to mandatory or optional tender is payable from the proceeds of the remarketing of such Certificates or, if such proceeds are not sufficient therefor, from amounts available under the Liquidity Facility. The Liquidity Facility expires by its terms on and may be terminated prior thereto upon the occurrence of certain events. A Substitute Liquidity Facility may be substituted for the Liquidity Facility, as provided in the Trust Agreement. Amounts are not available under the Liquidity Facility to pay the principal and interest evidenced by the Certificates. The Owner of this Certificate is entitled to receive, subject to the terms of the Trust Agreement and any right of prepayment as provided herein or therein, on the Principal Payment Date set forth above, upon surrender of this Certificate at the Principal Office of the Trustee, the Principal Amount specified above, evidencing the Owner's interest in the Installment Payments coming due on the Payment Date, and to receive on each Interest Payment Date, interest accrued thereon at the Applicable Rate, until said Principal Amount is paid in full, evidencing the Owner's interest in the interest on such Installment Payments coming due on each of said dates. Unless this Certificate is a Bank Certificate, this Certificate shall evidence interest from the Interest Payment Date next preceding its date of execution to which interest has been paid in full, unless such date of execution shall be after a Record Date, and on or prior to the following Interest Payment Date, in which case this Certificate shall evidence interest from such Interest Payment Date, or unless such date of execution shall be on or prior to 2000, in which case this Certificate shall evidence interest from the Delivery Date. Notwithstanding, the foregoing, if, as shown by the records of the Trustee, interest evidenced by the Certificates shall be in default, this Certificate shall evidence interest from the last Interest Payment Date to which interest has been paid in full or duly provided for. Bank Certificates shall evidence interest from DOCS LAI :336504.4 41758-7 GHI A-5 the date on which they became Bank Certificates until such time as they are no longer Bank Certificates. Except as otherwise provided in the Letter of Representations, payments of interest evidenced by the Certificates shall be made to the Owners thereof (as determined at the close of business on the Record Date next preceding the related Interest Payment Date) by check or draft of the Trustee mailed to the address of each such Owner as it appears on the registration books maintained by the Trustee pursuant to the Trust Agreement, or to such other address as may be furnished in writing to the Trustee by such Owner, except that in the case of an Owner of Certificates evidencing $1,000,000 or more in aggregate principal amount upon the written request of such Owner to the Trustee (which request shall remain in effect until revoked or revised by such Owner by an instrument in writing delivered to the Trustee), received at least ten days prior to a Record Date, specifying the account or accounts to which such payment shall be made, payment of interest evidenced by such Certificates shall be made by wire transfer of immediately available funds on the following Interest Payment Date. Payment of principal and prepayment premium, if any, evidenced by the Certificates, on their stated Principal Payment Dates or upon prepayment in whole or in part prior thereto, shall be made only upon presentation and surrender of the Certificates at the Principal Office of the Trustee. The Certificates are authorized to be executed and delivered m the form of fully registered certificates in Authorized Denominations. This Certificate may be transferred or exchanged by the Owner hereof, in person or by his attorney duly authorized in writing, at the Principal Office of the Trustee, but only in the manner, subject to the limitations and upon payment of the charges provided in the Trust Agreement. The Trustee shall not be required to transfer or exchange any Certificate during the period commencing on the date five days before the date of selection of Certificates for prepayment and ending on the date of mailing of notiee of such prepayment, nor shall the Trustee be required to transfer or exchange any Certificate or portion thereof selected for prepayment from and after the date of mailing the notice of prepayment thereof. The Trustee may treat the Owner hereof as the absolute owner hereof for all purposes, whether or not the principal or interest evidenced by this Certificate shall be overdue, and the Trustee shall not be affected by any knowledge or notice to the contrary; and payment of the principal and interest evidenced by this Certificate shall be made only to such Owner, which payments shall be valid and effectual to satisfy and discharge the liability evidenced by this Certificate to the extent of the sum or sums so paid. The Certificates shall evidence interest during each Rate Period at the Applicable Rate, provided that such rate shall never exceed the Maximum Rate. All Certificates shall be in the [Daily] [Weekly] Rate Mode until converted to another Mode as provided in the Trust Agreement or until becoming Bank Certificates (at which time they shall evidence interest at the Bank Certificate Rate until such time as they are no longer Bank Certificates). The Remarketing Agent shall determine the Applicable Rate from time to time, and such determination by the DOCSLAI :336504.4 41758-7 GHI A-6 Remarketing Agent shall be conclusive and binding. The Trust Agreement provides that if the Remarketing Agent fails to determine the Applicable Rate, the Applicable Rate will be determined as set forth therein. While the Certificates evidence interest at the Daily Rate or the Weekly Rate, interest evidenced by the Certificates shall be computed on the basis of the actual days elapsed and a 365-or 366-day year, as applicable. While the Certificates evidence interest at the Extended Rate or the Fixed Rate, interest evidenced by the Certificates shall be computed on the basis of a 360-day year consisting of twelve 30-day months. While the Certificates are in the Daily Rate Mode, the Certificates may be converted to another Variable Rate Mode at the option of the District on any Interest Payment Date for the Daily Rate Mode. While the Certificates are in the Weekly Rate Mode, the Certificates may be converted to another Variable Rate Mode at the option of the District on any Interest Payment Date for the Weekly Rate Mode. While the Certificates are in the Extended Rate Mode, the Certificates may be converted to another Variable Rate Mode at the option of the District on the day following the last day of the Extended Rate Period. While the Certificates are in the Variable Rate Mode, the Certificates may be converted to the Fixed Rate Mode at the option of the District on the first Business Day of a calendar month, when the Certificates are in the Daily Rate Mode or the Weekly Rate Mode, or the day following the last day of an Extended Rate Period, when the Certificate are in the Extended Rate Mode. Once the District has effectively exercised its option to convert the Certificates to the Fixed Rate Mode pursuant to the Trust Agreement, the District shall have no further option to convert the Certificates to any other Mode, and such Certificate shall no longer be subject to tender for purchase. The conditions for conversion of the Certificates from one Mode to another Mode include, but are not limited to, the delivery of an Opinion of Counsel to the effect that such conversion will not, in and of itself, adversely affect the exclusion from gross income of interest evidenced by the Certificates for federal income tax purposes. Each Certificate in the Variable Rate Mode (or any portion thereof in an amount equal to an Authorized Denomination) shall be subject to mandatory and optional tenders for purchase at the Purchase Price in accordance with the Trust Agreement. [Owners of Certificates in the Daily Rate Mode (other than Bank Certificates) may elect to have their Certificates (or portions thereof in Authorized Denominations) purchased at the Purchase Price on any Business Day upon delivery of a written notice of tender to the Remarketing Agent and the Trustee, meeting the requirements of the Trust Agreement, not later than [9:45 a.m.] (New York City time) on such Business Day.] [Owners of Certificates in the Weekly Rate Mode (other than Bank Certificates) may elect to have their Certificates (or portions thereof in Authorized Denominations) purchased at the Purchase Price on any Business Day upon delivery of a written notice of tender to the [Remarketing Agent and the] Trustee, meeting the requirements of the Trust Agreement, not later DOCS LA I :336504.4 41758-7 GHI A-7 than 5:00 p.m. (New York City time) on a Business Day not less than seven days prior to the Purchase Date.] In the case of any conversion from one Variable Rate Mode to another Variable Rate Mode, the Certificates being so converted shall be subject to mandatory tender for purchase on the Conversion Date, at the Purchase Price, and the Owners thereof shall not be entitled to retain such Certificates. Prior to conversion of the Certificates to the Fixed Rate Mode, the Certificates shall be subject to mandatory tender for purchase at the Purchase Price (a) on the last Business Day which is at least five days prior to expiration of the Liquidity Facility, (b) on the fifth Business Day following the Trustee's receipt of a Notice of Mandatory Tender from the Bank, and (c) if the Certificates are in the Daily Rate Mode or the Weekly Rate Mode, on the last Business Day which is at least five days prior to the substitution of a Substitute Liquidity Facility meeting the requirements of the Trust Agreement for the Liquidity Facility pursuant to the Trust Agreement. Certificates being converted to the Fixed Rate Mode are subject to mandatory tender for purchase on the Conversion Date, and the Owners thereof shall not be entitled to retain such Certificates. All Certificates to be purchased on any date shall be required to be delivered to the Principal Office of the Trustee at or before 11 :30 a.m. on the Purchase Date, except that Certificates in the Extended Rate Mode being tendered for purchase at the election of the Owner shall be delivered to the Principal Office of the Trustee with the notice of tender. If the Owner of any Certificate or portion thereof that is subject to purchase fails to surrender such Certificate to the Trustee for purchase on the Purchase Date, and if Trustee is in receipt of the Purchase Price therefor, such Certificate or portion thereof shall nevertheless be deemed purchased on the Purchase Date and ownership of such Certificate or portion thereof shall be transferred to the purchaser thereof. Any Owner who fails to deliver a Certificate for purchase as required in the Trust Agreement shall have no further rights with respect thereto except the right to receive the Purchase Price therefor upon presentation and surrender of said Certificate to the Trustee. The Purchase Price for this Certificate or any portion hereof shall be payable by the Trustee, in immediately available funds, at its Principal Office or by wire transfer on the Purchase Date; provided that no such payment shall be made unless sufficient funds are on deposit with the Trustee for the payment of the Purchase Price of all Certificates to be purchased on such date. BY ACCEPTANCE OF THIS CERTIFICATE, EACH OWNER IRREVOCABLY AGREES THAT, IF THIS CERTIFICATE OR ANY PORTION HEREOF IS TO BE PURCHASED ON ANY DATE AND SUFFICIENT FUNDS ARE ON DEPOSIT WITH THE TRUSTEE FOR ALL PURCHASES TO BE MADE ON SUCH DATE, AS AFORESAID, THIS CERTIFICATE OR THE PORTION TO BE PURCHASED SHALL BE DEEMED TO HA VE BEEN PURCHASED FOR ALL PURPOSES HEREUNDER AND UNDER THE TRUST AGREEMENT AND, THEREAFTER, THE OWNER SHALL HA VE NO FURTHER RIGHTS HEREUNDER OR UNDER THE TRUST AGREEMENT WITH DOCSLAI :336504.4 41758-7 GHI A-8 RESPECT TO THIS CERTIFICATE OR SUCH PORTION, EXCEPT TO RECEIVE THE PURCHASE PRICE FOR THIS CERTIFICATE OR SUCH PORTION FROM THE FUNDS SO DEPOSITED UPON SURRENDER HEREOF AS AFORESAID. Any delivery of a notice required to be made to the Trustee shall be delivered to State Street Bank and Trust Company of California, N.A., 633 West Fifth Street, 12th Floor, Los Angeles, California 90071, Attention: or to the office designated for such purpose by any successor Trustee. Any delivery of a notice required to be made to the Remarketing Agent shall be delivered to Paine Webber Incorporated, 1285 Avenue of the Americas, 10th Floor, New York, New York 10019, Attention: Short-term Desk, or to the office designated for such purpose by any successor Remarketing Agent. Bank Certificates shall be subject to prepayment on any date prior to their stated Principal Payment Date, at the option of the District, as a whole or in part, from and to the extent of prepaid Installment Payments paid by the District from any source of available funds pursuant to the Installment Purchase Agreement, at a prepayment price equal to the principal evidenced thereby, plus accrued interest evidenced thereby, without premium. Certificates in the Daily Rate Mode or the Weekly Rate Mode shall be subject to prepayment on any Interest Payment Date prior to their stated Principal Payment Date, at the option of the District, as a whole or in part in Authorized Denominations, from and to the extent of prepaid Installment Payments paid by the District from any source of available funds pursuant to the Installment Purchase Agreement, at a prepayment price equal to the principal evidenced thereby, plus accrued interest evidenced thereby to the date fixed for prepayment, without premium. Certificates in the Extended. Rate Mode shall be subject to prepayment on the day following the last day of the Extended Rate Period prior to their stated Principal Payment Date, at the option of the District, as a whole or in part in Authorized Denominations, from and to the extent of prepaid Installment Payments paid by the District from any source of available funds pursuant to the Installment Purchase Agreement, at a prepayment price equal to the principal evidenced thereby, plus accrued interest evidenced thereby to the date fixed for prepayment, without premium. Certificates in the Fixed Rate Mode shall be subject to prepayment on any date during the periods indicated in the following table prior to their stated Principal Payment Date, at the option of the District, as a whole or in part in Authorized Denominations, from and to the extent of prepaid Installment Payments paid by the District from any source of available funds pursuant to the Installment Purchase Agreement, at the following prepayment prices applicable for the periods indicated, plus accrued interest evidenced thereby to the date fixed for prepayment: DOCSLAI :336504.4 41758-7 GH! A-9 Original Length of Fixed Rate Period More than 10 Years More than 8 years but not more than 10 years More than 5 years but not more than 8 years 5 years or less Commencement of Prepayment Period 8th anniversary of commencement of Fixed Rate Period 6th anniversary of commencement of Fixed Rate Period 4th anniversary of commencement of Fixed Rate Period No prepayment Prepayment Price as a Percentage of Principal 102% declining by 1 % on each succeeding anniversary of the first day of the prepayment period until reaching 1 00% and thereafter 100% 101 % until the first anniversary of the first day of the prepayment period and 100% from said first anniversary and thereafter 100% The Certificates are subject to prepayment prior to their stated Principal Payment Date, in part, from Mandatory Sinking Account Payments, on August 1 of each year, commencing August 1, 2000, at a prepayment price equal to the principal evidenced thereby, plus accrued interest evidenced thereby to the date fixed for prepayment, without premium, in the amounts and on the dates set forth in the Trust Agreement. As provided in the Trust Agreement, at least 30 but not more than 45 days prior to any prepayment date, notice of prepayment shall be given to the respective Owners of Certificates designated for prepayment by first class mail, postage prepaid, at their addresses appearing on the registration books maintained the Trustee as of the close of business on the day before such notice of prepayment is given. The actual receipt by the Owner of any notice of such prepayment shall not be a condition precedent to prepayment, and neither failure to receive such notice nor any defect therein shall affect the validity of the proceedings for the prepayment of such Certificates or the cessation of interest evidenced thereby on the date fixed for prepayment. If this Certificate is selected for prepayment, notice of prepayment has been duly given as provided in the Trust Agreement and moneys for the prepayment price are held by the Trustee, then on the prepayment date designated in such notice, this Certificate shall become payable at the prepayment price specified in such notice; and from and after the date so designated, the interest evidenced hereby shall cease to accrue, this Certificate shall cease to be entitled to any benefit or security under the Trust Agreement and the Owner hereof shall have no rights in respect hereof except to receive payment of such prepayment price. DOCSLAI :336504.4 41758-7 GHI A-10 To the extent and in the manner permitted by the terms of the Trust Agreement, the provisions of the Trust Agreement may be amended or supplemented, such amendment or supplement becoming binding when the prior written consents of the Owners of a majority of the aggregate principal evidenced by the Certificates then Outstanding, exclusive of Certificates disqualified under the Trust Agreement, are filed with the Trustee. No such supplement or amendment shall (a) extend the stated Principal Payment Date of any Certificate or reduce the rate of interest evidenced thereby or extend the time of payment of such interest or reduce the amount of principal evidenced thereby or reduce the amount of any Mandatory Sinking Account Payment or change the prepayment terms and provisions or the provisions regarding delivery of notice of prepayment or diminish the security afforded by the Liquidity Facility without the prior written consent of the Owner of each Certificate so affected and the Bank (so long as the Bank is not in default under the Liquidity Facility), (b) reduce the percentage of Owners whose consent is required for the execution of any amendment of or supplement to the Trust Agreement without the prior written consent of the Owners of all Certificates then outstanding and the Bank (so long as the Bank is not in default under the Liquidity Facility), (c) modify any of the rights or obligations of the Trustee without the prior written consent of the Trustee, ( d) modify any of the rights or obligations of the Bank without prior written consent of the Bank, or (e) amend the amendment provisions of the Trust Agreement without the prior written consent of the Owners of all Certificates then outstanding and the Bank (so long as the Bank is not in default under the Liquidity Facility). To the extent and in the manner permitted by the terms of the Trust Agreement, the provisions of the Trust Agreement may be amended or supplemented by the parties thereto without the written consents of any Owners, but only to the extent permitted by law and after receipt of an unqualified approves Opinion of Counsel and only (a) to add to the agreements, conditions, covenants and terms required by the Corporation or the District to be observed or performed under the Trust Agreement other agreements, conditions, covenants and terms thereafter to be observed or performed by the Corporation or the District, or to surrender any right or power reserved therein to or conferred therein on the Corporation or the District, and which in either case shall not adversely affect the rights or interests of the Owners; (b) to make such provisions for the purpose of curing any ambiguity or of correcting, curing or supplementing any defective provision contained in the Trust Agreement or in regard to questions arising thereunder which the Corporation or the District may deem desirable or necessary and not inconsistent therewith, and which shall not adversely affect the rights or interests of the Owners; ( c) to make such additions, deletions or modifications as may be necessary or appropriate to assure the exclusion from gross income for federal income tax purposes of interest evidenced by the Certificates; or ( d) for any other reason, provided such amendment or supplement does not adversely affect the rights or interests of the Owners; provided, however, that the Corporation, the District; provided, however, that no such amendment or supplement shall modify any of the rights or obligations of the Bank without the prior written consent of the Bank. Unless this Certificate is presented by an authorized representative of The Depository Trust Company to the Trustee for registration of transfer, exchange or payment, and any DOCS LA I :336504.4 41758-7GHI A-11 Certificate issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the Registered Owner hereof, Cede & Co., has an interest herein. THE DISTRICT HAS CERTIFIED that all acts, conditions and things required by the statutes of the State of California and by the Trust Agreement to exist, to have happened and to have been performed precedent to and in connection with the execution and delivery of this Certificate do exist, have happened and have been performed in regular and due time, form and manner as required by law, and that the Trustee is duly authorized to execute and deliver this Certificate. DOCSLAl :336504.4 41758-7 GHI A-12 IN WITNESS WHEREOF, this Certificate has been executed by the manual signature of an authorized signatory of the Trustee as of the date set forth below. Date: ------- DOCSLAI :336504.4 41758-7 GHI A-13 STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A., as Trustee By: ~------------~ Authorized Signatory ASSIGNMENT For value received, the undersigned do(es) hereby sell, assign and transfer unto the within-mentioned Certificate and hereby irrevocably constitute(s) and appoint( s) attorney, to transfer the same on the books of the Trustee with full power of substitution in the premises. Dated: ------- Note: The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within registered Certificate in every particular, without alteration or enlargement or any change whatsoever. Tax I.D. #: -------- Signature Guaranteed: DOCSLAI :336504.4 41758-7 GHI -------- A-14 -'~ l s M 5 6 12 13 19 20 26 27 s M 4 5 11 12 18 19 25 26 Date Jan 14 Jan20 Feb3 Feb. 9 Feb JO Feb 14 Feb 17 Feb 21 Mar8 ORANGE COUNTY SANITATION DISTRICT Series 2000 Refunding COPs Financing Schedule MARCH APRIL T w T F s s M T w T F s s 1 2 3 4 1 7 8 9 10 11 2 3 4 5 6 7 8 7 14 15 16 17 18 9 10 11 12 13 14 15 14 21 22 23 _24 25 16 17 18 19 20 21 22 21 28 29 30 31 23 24 25 26 27 28 29 28 30 .JUNE .JULY T w T F s s M T w T F s s 1 2 3 I 6 7 8 9 10 2 3 4 5 6 7 8 6 13 14 15 16 17 9 10 11 12 13 14 15 13 20 21 22 23 24 16 17 18 19 20 21 22 20 27 28 29 30 23 24 25 26 27 28 29 27 30 31 Activity • x 1st draft of Installment Purchase Agreement distributed x Kick-off meeting to discuss legal structure x Review 1st draft of ratings presentation and revised cashflows (9:00 a.m. at District) x FAHR Committee meeting (5:00 p.m.) x Financing progress report x 1st draft of P.O.S. distributed x 1st draft of Trust Agreement distributed x Meeting to review legal documents and P.O.S. (10:00 a.m. at OH&S) x Market Holiday (President's Day) x FAHR Committee meeting (5:00 p.m.) x Financing progress report Paine Webber June 30, 2000 MAY M T w T F s 1 2 3 4 5 6 8 9 10 11 12 13 15 16 17 18 19 20 22 23 24 25 26 27 29 30 31 AUGUST I M T w T F s 1 2 3 4 5 7 8 9 10 11 12 14 15 16 17 18 19 21 22 23 24 25 26 28 29 30 31 Responsibility BC All-Hands OCSD,PW OCSD OCSD,PW UC BC All-Hands OCSD OCSD, PW June 30, 2000 Mar9 x 2nd draft of legal documents distributed BC x 2nd draft of P.O.S distributed UC Mar 14 x Meeting to review legal documents and P.O.S. All-Hands (10:00 a.m. at OH&S) Mar20 x Begin preparing package for liquidity banks PW Mar22 x District Board meeting OCSD,PW Mar24 x 3rd draft of P.O.S distributed UC Week of x Review proposed legal structure with rating analysts PW Mar27 x Distribute draft legal documents to rating agencies BC,UC x Commence discussions with Ambac and swap providers PW,BC x Continue revising rating agency presentation OCSD, PW Mar28 x Meeting to review legal documents and P.O.S. All-Hands (I 0:30 a.m. at OH&S) Mar30 x Meeting to review cashflows and ratings presentation OCSD, PW Apr5 x Agendize non-profit corporation formation materials OCSD,BC Apr6 x Conference call on rating agency presentation (9:00 a.m.) OCSD,PW Apr 11 x Meeting to review rating agency presentation (9:00 a.m.) OCSD,PW Aprl2 x FAHR Committee meeting (5:00 p.m.) OCSD x Approval of non-profit Financing Corporation OCSD,BC x Financing progress report OCSD, PW x Call with Ambac to discuss amendment process PW Apr 13 x Rehearsal for rating agency presentations (1 l :00 a.m. P.D.T.) OCSD, PW Apr 18119 x Rating agency presentations (at District) OCSD,PW Apr 21 x Market Holiday (Good Friday) Apr25 x Call with Ambac to review District credit PW Apr26 x District Board meeting OCSD x Approval of non-profit Financing Corporation OCSD MaylO x Receipt of long-term "indicator" credit ratings OCSD,PW x FAHR Committee meeting (5:00 p.m.) OCSD x Financing progress report OCSD,PW May 15 x Conference call on documents (10:00 a.m.) All-Hands May17 x Receive liquidity facility provider bids PW May19 x Draft amendments to '92 and '93 legal documents circulated BC Paine Webber 't June 30, 2000 ' .-i May24 x District Board meeting OCSD May25 x Select liquidity facility bank for Series 2000 COPs OCSD,PW May31 x Conference call with Ambac, AIG, and SocGen to review OCSD, PW, BC, AP, APC proposed amendments Week of x Begin development of amended swap documents for APC June 5 outstanding 1992 and 1993 COPs Jun 14 x FAHR Committee meeting (5:00 p.m.) OCSD x Approve Series 2000 liquidity facility provider OCSD x Approve Series 2000 Trustee selection process OCSD x 1st draft of daily mode mechanics for 1992 COPs circulated BC x 1st draft of swap document amendments circulated APC Jun 15 x Trustee bank RFP circulated OCSD, PW, BC, AP, APC Jun 19 x Trustee bids due (5:00 p.m. PDT) OCSD,PW Jun20 x Select Trustee OCSD,PW x Liquidity bank receives "home office" credit approval LP x 151 draft of '92 and '93 COP amendments circulated BC Jun23 x Conference call on amendment and swap documents OCSD,PW,BC Jun28 x District Board meeting OCSD x Board approves Trustee selection OCSD x 1st draft of Standby Purchase Agreement circulated LPC x 1st draft of swap documents circulated PW Jul 4 • Market Holiday (Independence Day) Jul 5 • Draft Phase I & II COP legals, bank liquidity, swap and OCSD,BC disclosure documents agendized for F AHR Committee Draft documents distributed to rating agencies BC, LPC, APC, UC Jul JO • Conference call to finalize COP legal, bank liquidity, All Hands amendment, swap, and disclosure documents Jul 12 • FAHR Committee meeting (5:00 p.m) OCSD • Approval of all Phase I & II documents OCSD Jul 13 • "Substantially final" Phase I & II legal, bank liquidity, swap, OCSD,BC and disclosure documents agendized for Board approval Jul 14 • Distribute RFP for financial printer and verification agent OCSD,PW Jul 16 • Select financial printer and verification agent OCSD, PW Jul 19 • District Board I Financing Corporation meetings OCSD • Approval of all Phase I & II documents OCSD Ju/24 • Receipt of formal long-term and short-term ratings OCSD,PW Paine Webber June 30, 2000 Jul 27 • Print Official Statement(s) UC,PW,P • Begin pre-marketing 2000 COPs PW Jul 28 • Mail Official Statement(s) UC,P Aug I • Price advance refunding component of2000 COPs OCSD, PW (Execute Series B swap to f1X yield through 811101) • Convert 1992 COPs to daily mode (if necessary) OCSD, BC, T Aug 15 • Price current refunding component of2000 COPs OCSD, PW (Sold at least 15 days after "Series B "pricing) Aug 16 • Close all refunding components All-Hands • Convert 1992 COPs to weekly mode (if necessary) OCSD,BC, T 811101 Series B COPs called and prepaid from refunding escrow EA X -Denotes completed activity. Key Role Participants OCSD Issuer Orange County Sanitation District BC Bond Counsel Orrick, Herrington & Sutcliffe PW Underwriter/Remarketing Agent Paine Webber Incorporated UC Underwriter's Counsel Hawkins, Delafield & Wood LP Liquidity Provider Dexia Credit Local de France LPC Liquidy Provider's Counsel King & Spalding T Series 2000 Trustee To be determined EA Escrow Agent(s) To be determined AP Amendment Parties Ambac, AIG, SocGen APC Amendment Parties' Counsel Various p Financial Printer To be determined Paine Webber ,. FAHR COMMITTEE AGENDA REPORT Orange County Sanitation District FROM : Lisa Tomko, Director of Human Resources & Employee Development Originator: John Weingarden, Human Resources Analyst SUBJECT: EMPLOYMENT STATUS REPORT AS OF JUNE 19, 2000. GENERAL MANAGER'S RECOMMENDATION Receive and file the Employment Status Report. SUMMARY Total FTE headcount at the District as of June 19, 2000 is 497.75. 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. ~ Not applicable (information item) ADDITIONAL INFORMATION The District had a full-time equivalent (FTE) headcount of 497.75 as of June 19, 2000. The actual number of employees was 508. There was one promotion during the month of June: • Dave Usher Sr. Mechanic to Lead Mechanic (Mechanical Maintenance) There was one new employee hired during the month of June. • Programmer Analyst (Programming and Database Systems) H:lwp.dta\hr\510\Weingarden\Misc\AR -Recruiting -As of June 19.dot Revised: 8/20198 Page 1 ALTERNATIVES Not applicable. CEQA FINDINGS Not applicable. ATTACHMENTS June 19, 2000 Employment Status Report. Performance compared to 3-Year Staffing Plan. H:\wp.dtalhr\51 O\Weingarden\Misc\AR -Reauiting -As of June 19,dot Revised: 8120198 Page2 I • 11 o -General Management Admin Total General Management 210 -Finance Administration 220 -Accounting 230 -Purchasing & Warehousing Total Finance 310 -Communications Total Communications 510 -HR & Employee Development Total Human Resources 610 -Technical Services Admin 620 -Environmental Compliance & Monitoring 630 -Environmental Laboratory 640 -Source Control 650 -Safety & Emergency Response Total Technical Services 71 O -Engineering Administration 720 -Planning & Design Engineering 730 -Construction Management Total Engineering 420 -Collection Facilities Mice 430 -Plant Maintenance 810 -0 & M Administration 820 -0 & M Process Support 830 -Plant 1 Operations 840 -Plant 2 Operations 850 -Mechanical Mtce 860 -Electrical & Instrumentation Mice 870 -Cogeneration 880 -Air Quality & Special Projects Total Operations & Maintenance 910 -IT Admin 930 -Customer & Network Support 940 -Programming & Database Sys 950 -Process Controls Integration Total Information Technology Total staffing Offers Outstanding: Recruitments pending, but not offered: Actual FTE's with currant recruitments filled: g:\excel.dta\hr\51 O\welngarden\3-Year Staffing Plan Regular Regular Part-time Fu/I-time 20 hours 3.00 0.00 3.00 0.00 4.00 0.00 14.00 0.00 14.00 1.50 32.00 1.50 7.00 0.00 7.00 0.00 9.00 0.00 9.00 0.00 2.00 0.00 18.00 0.00 29.00 2.00 33.00 0.00 8.00 0.00 90.00 2.00 3.00 0.00 30.00 0.00 36.00 0.00 69.00 0.00 18.50 0.00 29.50 0.00 2.00 0.00 8.00 0.00 32.00 0.50 39.00 0.00 44.00 o.oo 55.00 0.00 9.00 0.00 9.00 0.00 246.00 0.50 2.00 0.00 12.00 0.00 7.00 0.00 8.00 0.00 29.00 0.00 485.ool 4.001 Employment Status Report Regular Part-time 30 hours Contract Intern LOA o.oo 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.00 0.00 0.00 0.00 1.00 0.75 0.00 o.oo o.oo 0.75 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.00 o.oo 0.00 0.00 0.50 0.50 0.75 0.00 0.00 0.00 o.oo 0,00 0.50 0.00 0.75 0.00 2.00 0.50 0.00 0.00 0.00 0.00 0.75 0.00 0.50 0.00 0.00 0.00 0.00 1.00 0.75 0.00 0.50 1.00 0.00 0.00 o.oo 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.50 0.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 o.oo 0.00 0,00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0,00 0.50 o.oo 0.00 0.50 1.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.251 0.501 3.601 2.50 06119/2000-----10:21 AM Actual Vacant Budget Plan Plan Positions FTE Positions FTE FTE FTE wlin Final plan Count FY99-00 99-00 00-01 01-02 (FY01-02} 3.00 1.00 4.00 4.00 4.00 1.00 3.00 1.00 4.00 4.00 4.00 1.00 4.00 0.00 4.00 4,00 4.00 0.00 14.00 2.00 16.00 16.00 16.00 2.00 15.50 2.00 17.50 17.50 17.50 2.00 33.60 4.00 37.50 37.50 37.50 4.00 8.00 1.00 9.00 9.00 9.00 1.00 8.00 1.00 9.00 9.00 9.00 1.00 9.75 0.50 10.25 10.25 10.25 0.50 9.75 0.50 10.25 10.25 10.25 0.50 2.00 0.00 2.00 2.00 2.00 o.oo 19.0Q 1.50 20.50 20.50 20.50 1.50 32.00 0.00 32.00 32.00 32.00 0.00 33.75 0.00 33.75 33.75 33.75 0.00 8.5Q -1.00 7.50 7.50 7.50 -1.00 0.00 95.25 0.50 95.75 95.75 95.75 0.50 3.00 0.00 3.00 3.00 3.00 0.00 31.25 4.00 35.25 35,25 35.25 4.00 37.00 -0.25 36.75 36,75 36.75 -0.25 71.25 3.75 75.00 75.00 75.00 3.75 18.50 -1.00 17.50 19.50 19.50 1.00 29.50 0.00 29.50 29.50 28.50 -1.00 2.00 1.00 3,00 2.00 2.00 0.00 9.00 1.00 10.00 9,25 9.25 0.25 32.50 0.83 33.33 34.33 34.33 1.83 39.00 0.33 39.33 37.33 37.33 -1.67 44.00 1.50 45.50 45.50 45.50 1,50 55.00 0.50 55.50 55.50 55.50 0.50 9.00 1.34 10.34 10.34 10.34 1.34 9.50 0.50 10.00 9.50 9.50 0.00 248.00 5.00 254.00 252.75 251.75 3.75 2.00 0.00 2,00 2.00 2.00 0.00 12.00 3.00 15.00 15.00 15,00 3.00 7.00 0.00 7.00 7.00 7,00 0.00 8.00 1.00 9.00 9.00 9.00 1.00 29.00 4.00 33.00 33.00 33.00 4.00 497.75 20.75 518.50 517.25 516.25 18.60 6.00 6.00 509.76 Pe rformance to 3-Year Staffing Plan I 1 550~~~~~~~~~~~~~~~~~~~~~~~~- I ]540-r-·-·-.-~~~~~~~~~~~~~~~~~~~~~~ ...... -. -----·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-· I 4 8 0 -1------1 I • FTE Headcount -· • · -3 Year Staffing Plan [470-+--r-.--~,.---.-------,---r--.---r-~~--.--1-o-----.-------,--~-.---,--.-------.-----.--,--,--, I I J A S 0 N D J F M A M J J A S 0 N D J F M A M J I FY 98-99 I FY 99-00 I I FA HR CO MM ITTEE Meeting Date To Bd. of Dir. 07/12/00 07/19/00 AGE NDA REPO RT Item Number Item Number Orange County Sanitation District FROM: Gary Streed, Director of Finance Originator: Steve Kozak, Financial Manager SUBJECT: TREASURER'S REPORT FOR THE MONTH OF JUNE 2000 GENERAL MANAGER'S RECOMMENDATION Receive and file Treasurer's Report for the month of June 2000. SUMMARY 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" portfolios. 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 current market values are shown as estimated by both PIMCO and Mellon Trust. The District's portfolios are priced to market ("mark-to-market") as of the last day of each reporting period. The slight differences in value are related to minor variations in pricing assumptions by the valuation sources 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) llradon\dala1\wp.dtalfin\210\cranelFAHRIFahr2000\July\Treasure~s Report.doc Revised: 8/20/98 Page 1 ADDITIONAL INFORMATION Schedules are attached summarizing the detail for both the short-term and long-term investment portfolios for the reporting period. In addition, a consolidated report of posted investment portfolio transactions for the month 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. These reports accurately reflect all District investments and are in compliance with California Government Code Section 53646 and the District's Investment Policy. Sufficient liquidity and anticipated revenues are available to meet budgeted expenditures for the next six months. 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 Report llradonldala 1 lwp.dta\fin\21 O\crane\FAHR\Fahr2000\.July\Treasure~s Report.doc Revised: 8/20/98 Book Balances Estimated June 30, 2000 Yield(%) $ 12,521,844 6.3 414,763 - 2,640,000 5.9 33,083,005 6.1 353,713,095 5.2 2,059 5.9 32,158,846 6.7 8,000 -- $434,541,612 Page2 Prepared by Finance, 07/11/2000, 2:52 PM Monthl y Treas urer's Report District Fu nd Balances $450,000,000 -.---------------------------------- $400,000,000 -i-------~~M----~~~-------t~~j-------J:j ~~ $350,000,000 -t----rrrrrrnm-------1rll'U4!----f5J.~~---f+,:~~----1fAA~--~~m-----1 $1 00' 000' 000 -t-----1)(' )( )()( )( ~---IAA/'A A ·---:~"" .... ~Id----.-----rXX)()04--------r~>(X)<:X)4...---IV\At'V'>ll---l $50, 000, 000 -t---iX x >~ xxi--------1"v'VV"'.,AJ-------r Jan, 00 Feb, 00 Mar, 00 la PIMCO -Long-term ~Debt Service Reserves £3 Bank Accts El Dist 11 GO Bond Fund G:\excel.dta\fin\2220\geggi\Finance\monthly treasurers report Apr, 00 Ill PIMCO -Short-term CDLAIF ml Petty Cash May, 00 June, 00 MONTHLY REPORT ORANGE COUNTY SANITATION DISTRICT INVESTMENT MANAGEMENT PROGRAM PIMCO'S PERFORMANCE MONITORING & REPORTING (for the month ending 30 June 2000) Liquid Operating Monies (603) 15.1.1 PORTFOLIO COST AND MARKET VALUE Current Market Value Estimate: • PIM CO • Mellon Historical Cost: • PIM CO • Mellon 15.1.2 MODIFIED DURATION Of Portfolio: Of Index: 15.1.3 1 % INTEREST RA TE 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: l Month: 3 Months: 12 Months: Year-to-Date: Commentary $33,075,609 $33,083,005 $33,086,501 $33,088,796 0.30 0.20 $99,915 0% 55% "AA+" See Note See Note Portfolio 0.57 1.60 5.98 3.16 • Interest rates at the short-end of the yield curve rose in June (three-month I-Bills up 5 basis points to 5.86%), while the long-end posted decreases (30-yearTroas1,1ries down 21 basis points to 5.89%). • The Liquid portfolio outperfonned its benchmark by I 0 basis points in May, and outperformed by 36 basis points year-to-date. • PIMCO's emphasis on commercial paper added to returns. Index 0.47 1.44 5.32 2.80 • NOTE: On June 15, S&P downgraded !CI Wilmington (a petrochemical finn) from A-to BBB+ due to a slower that expected pace of business improvement following their $8 billion debt-financed acquisition of Unilever in 1998. An IC! Wilmington debenture, $1,000,000 par amount, 9.5% coupon, maturing on November 15, 2000, is held in the Liquid Operating Monies portfolio. The note comprises about 3% of the $33 million portfolio. PIMCO's credit team has analyzed the ICI Wilmington credit and reported on July 7: "!CI has dramatically reduced its debt burden via asset sales and strategic partnerships (over $2 billion since 1998). We view IC! as a solid credit with an improving business profile. Therefore, we recommend that that the portfolio conlinues to hold this security until maturity." H:\. \FINANCE\_, \REVISED L!Q0600JU'T MONTHLY REPORT ORANGE COUNTY SANITATION DISTRICT INVESTMENT MANAGEMENT PROGRAM PIMCO'S PERFORMANCE MONITORING & REPORTING (for the month ending 30 June 2000) Long-Term Operating Monies (203) 15.1.1 PORTFOLIO COST AND MARKET VALUE Current Market Value Estimate: • PIM CO • Mellon Historical Cost: • PIM CO • Mellon 15.1.2 MODIFIED DURATION Of Portfolio: Of Index: 15.1.3 1 % INTEREST RA TE CHANGE Dollar Impact (gain/loss) of I% 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" $354,203,602 $353,713,095 $354,343,291 $355,624,940 2.18 2.27 $7,809,543 0% 44% "AA+" 0% Yes 15.1.9 PORTFOLIO PERFORMANCE Total Rate of Return(%) by Portfolio Index Period: 1 Month: 3 Months: 12 Months: Year-to-Date: Commentary • • V.'hile three-month yields rose during June (90-day T-Bills up 5 basis points to 5.86%) yields on longer maturities declined (5-year Treasury Notes down 34 basis points to 6.18%) . The Long-Tenn portfolio underperfonned its benchmatk by I basis points in June, but has outperfonned by 58 basis points year-to-date . • PIMCO's decision to underweight corporate notes detracted slightly from portfolio returns, as corporates outperfonned other sectors . • PJMCO's emphasis on mortgage backed and asset backed securities added to relative returns . H:\ \FINANCE\210\. \REVISED L-T0600.RP7' 1.31 1.32 1.90 1.69 5.43 4.57 3.56 2.98 OCSF0751l102 LIQUID OPER-PJMCO PORTFOLIO DISTRIBUTION CASH & CASH EQUIVALENTS UNITED STATES COMMERCIAL PAPER -DISCOUNT FEDERAL HOME LOAN MORTGAGE -LESS FNMA ISSUES -LESS THAN 1 YR FED HM LOAN BNK -LESS THAN 1 YR MUTUAL FUNDS TOTAL UNITED STATES TOTAL CASH & CASH EQUIVALENTS FIXED INCOME SECURITIES UNITED STA TES U.S. GOVERNMENTS ABS: CAR LOAN BANKING & FINANCE INDUSTRIAL UTILITY -GAS UTILITY -TELEPHONE TOT AL UNITED STA TES TOTAL FIXED INCOME SECURITIES OTHER PORTFOLIO ASSETS PAYABLES/RECEIVABLES TOTAL TOTAL OTHER PORTFOLIO ASSETS NET PORTFOLIO ASSETS Jl-Jul-2000 12:54:55 ORANGE COUNTY SANITATION DISTRICT NET ASSET SECTOR SUMMARY 30-JUN-2000 COST MARKET VALUE 4,842,551.09 4,842,551.09 4,927,055.28 4,927,055.28 1,886,232.01 1,890,348.04 5,635,726.57 5,635,726.57 226,809.63 226,809.63 17,518,374.58 17,522,490.61 17,518,374.58 17 ,522,490.61 6,526, 781.25 6,551,556.00 905,913.00 900,027.00 6,206,942.05 6,198,708.60 922,860.00 908,838.00 495,845.00 496,710.00 512,080.00 504,675.00 15,570,421.30 15,560,514.60 15,570,421.30 15,560,514.60 229,929.06 229,929.06 229,929.06 229,929.06 229,929.06 229,929.06 33,318,724.94 33,312,934.27 %OF TOTAL 14.54% 14.79% 5.67% 16.92% 0.68% 52.60% 52.60% 19.67% 2.70% 18.61% 2.73% 1.49% 1.51% 46.71% 46.71% 0.69% 0.69% 0.69% 100.00% PAGE'.· BASE: j USD FINAL UNREALIZED GAIN/LOSS 0.00 0.00 4,116.03 0.00 0.00 4,116.03 4,116.03 24,774.75 -5,886.00 -8,233.45 -14,022.00 865.00 -7,405.00 -9,906.70 -9,906.70 0.00 0.00 0.00 -5,790.67 Executive Workbench @ ORANGE COUNTY SANITATION DISTRICT PAGE: 1 BASE: USD NET ASSET SECTOR SUMMARY OCSF07522202 30-JUN-2000 FINAL LONG TERM OPER-P!MCO %OF UNREALIZED PORTFOLIO DISTRIBUTION COST MARKET VALUE TOTAL GAIN/LOSS CASH & CASH EQUIVALENTS RECEIVABLES 57,350.47 57,350.47 0.02% 0.00 PAYABLES -28, 109,531.25 -28, 109,531 .25 -7.86% 0.00 TOTAL -28,052, 180. 78 -28,052, 180. 78 -7.84% 0.00 UNITED STATES COMMERCIAL PAPER-DISCOUNT 53,516,109.28 53,516,109.28 14.96% 0.00 FEDERAL HOME LOAN MORTGAGE -LESS 17,052,648.50 17,052,648.50 4.77% 0.00 FED HM LOAN BNK -LESS THAN 1 YR 13,014,672.00 13,014,672.00 3.64% 0.00 MUTUAL FUNDS 409,926.13 409,926.13 0.11 % 0.00 TOT AL UNITED ST A TES 83,993,355.91 83,993,355.91 23.48% 0.00 TOTAL CASH & CASH EQUIVALENTS 55,941,175.13 55,941,175.13 15.64% 0.00 FIXED INCOME SECURITIES UNITED ST ATES U.S. GOVERNMENTS 33, 752, 174.35 33,572,347.24 9.38% -179,827.11 U.S. AGENCIES 93,296, 764.69 92,976,113.94 25.99% -320,650. 75 GNMA SINGLE FAMILY POOLS 28, 109,531 .25 28,181,925.00 7.88% 72,393.75 GNMA MULTI FAMILY POOLS 14,415,905.32 14,369,303.14 4.02% -46,602.18 FHLMCPOOLS 8,722,659.48 8,522,255.49 2.38% -200,403.99 FHLMC MULTICLASS 7,600,976.96 7,432,035. I 6 2.08% -168,941.80 ASSET BACKED SECURITIES 25,749.86 25,685.50 0.01% -64.36 ABS: HOME EQUITY 304,301.41 302,874.24 0.08% -1,427.17 OTHER GOVERNMENT OBLIGATIONS 2,667,485.38 2,658,392.23 0.74% -9,093.15 MUTUAL FUNDS 1,000,000.00 990,780.00 0.28% -9,220.00 BANKING & FINANCE 76,414,938.01 75,998,669.44 21.24% -416,268.57 INDUSTRIAL 7,126,189.00 6,832,187.15 1.91% -294,001.85 UTILITY -ELECTRIC 8,096,080.00 7,921,840.00 2.21% -174,240.00 UTILITY -GAS 7,300,000.00 7,298,832.00 2.04% -1,168.00 UTILITY -TELEPHONE 7,497,255.00 7,334,925.00 2.05% -162,330.00 G. 0. CITY/MUNI 1,723,280.00 1,723,280.00 0.48% 0.00 HOSPITAL 1,630,474.05 1,630,474.05 0.46% 0.00 1 J-Ju/-2000 12:53:35 Executive Workbench @ ORANGE COUNTY SANITATION DISTRICT PAGE: 2 BASE: USD NET ASSET SECTOR SUMMARY OCSF07522202 30-JUN-2000 FINAL LONG TERM OPER-PIMCO %OF UNREALIZED PORTFOLIO DISTRIBUTION COST MARKET VALUE TOTAL GAIN/LOSS TOTAL UNITED STATES 299,683, 764. 76 297,771,919.58 83.24% -1,911,845.18 TOTAL FIXED INCOME SECURITIES 299,683,764.76 297,771,919.58 83.24% -1,911,845.18 OTHER PORTFOLIO ASSETS PAYABLES/RECEIVABLES 4,023,163.79 4,023,163.79 1.12% 0.00 TOTAL 4,023,163.79 4,023,163.79 1.12% 0.00 TOTAL OTHER PORTFOLIO ASSETS 4,023,163.79 4,023,163.79 1.12% 0.00 NET PORTFOLIO ASSETS 359,648,103.68 357, 736,258.50 100.00% -1,911,845.18 JJ-Jul-2000 12:53:35 Executive Workbench YLDANAL YIELD ANALYSIS PAGE 1 OCSF07511102 2000/06/30 RUN DATE 07/07/00 DISTRICT: LIQUID OPERATING RUN TIME 13.38.55 =====~======================================================================================================================= PAR VALUE YTM AT CURRENT MOODY MARKET TOTAL COST/ % TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARKET VALUE % TOTAL ------------------------------------------------------------------------------------ CASH & CASH EQUIVALENTS 226,809.63 DREYFUS TREASURY CASH MGMT .ooo 6.220 AAA 100.000 226,809.63 1. 29 996085247 AAA 226,809.63 .69 9µ0,000.00 NATIONAL RURALDISC 6.293 .000 P-1 98.519 886,670.00 5.06 63743CG56 07/05/2000 886,670.00 2.68 1,400,000.00 FEDERAL NATL MTG ASSN DISC NT 6.494 .ooo P-1 99.018 1,386,246.94 7.91 313588846 MAT 08/09/2000 A-1+ 1,386,246.94 4.19 1,600,000.00 FEDERAL HOME LN BK CONS DISC 6.549 .ODO P-1 98.495 1,575,920.00 8.99 313384F20 MAT 09/08/2000 A-1+ 1,575,920.00 4.76 2,500,000.00 FEDERAL HOME LN MTG CORP DISC 6.561 .ooo P-1 98.457 2,461,419.44 14.04 313396F81 MAT 09/14/2000 A-1+ 2,461,419.44 7.44 505,000.00 FEDERAL NATL MTG ASSN DISC NT 6.565 .000 AAA 99.822 499,985.07 2.87 313588ZH1 MAT 07/13/2000 AAA 504, 101.10 1. 52 1,000,000.00 FEDERAL HOME LN MTG CORP DISC 6.590 .ooo P-1 98.486 984,856.67 5.62 313396G72 MAT 09/21/2000 A-1+ 984,856.67 2.98 500,000.00 HEINZ H J CO DISC 6.599 .ooo P-1 99 .110 495,549.17 2.82 42307JGA2 07/10/2000 495,549.17 1. 50 600,000.00 EASTMAN KODAK CO DISC 6 .628 .ooo P-1 98.817 592,904.17 3.38 27746AHP7 08/23/2000 592,904.17 1. 79 1,100,000.00 BECTON DICKINSON DISC 6.629 .ooo P-1 99.106 1,090,163.25 6.22 07588RGA7 07/10/2000 1,090,163.25 3.30 900,000.00 GOLDMAN SACHS LP DISC 6.656 .ooo P-1 99.012 891,103.50 5.08 38142TGH2 0717 /2000 891,103.50 2.69 1,500,000.00 FEDERAL HOME LN MTG CRP DISC N 6.676 .ooo P-1 98. 719 1,480,779.17 8.45 313396A45 MAT 08/01/2000 A-1+ 1,480,779.17 4.48 900,000.00 MOTOROLA INC DISC 6.693 .ooo P-1 98.462 886,161.00 5.05 62008AJL4 09/20/2000 886,161.00 2.68 4,109,000.00 FEDERAL NATL MTG ASSN DISC NTS 8.389 .ooo P-1 98.803 4,059,806.57 23.16 313588A62 MAT 08/03/2000 A-1+ 4,059,806.57 12.27 YLDANAL OCSF07511102 DISTRICT: LIQUID OPERATING YIELD ANALYSIS 2000/06/30 PAGE RUN DATE RUN TIME 2 07/07/00 13.38.55 ============================================================================================================================= PAR VALUE SECURITY ID SECURITY DESCRIPTION TOTAL CASH & CASH EQUIVALENTS FIXED INCOME SECURITIES 6 1 600,000.00 U S TREASURY NOTES 9128274T6 04.000% 10/31/2000 DD 10/31/98 9001 000.00 FORD MTR CR MTN t TR 00538 345402YK1 7.020% 10/10/2000 DD 10/10/95 400,000.00 LEHMAN BROS HLDGS MTN TR 00252 52517PLH1 6.400% 08/30/2000 DD 09/26/97 9001 000.00 GENERAL HTRS CORP NTS 370442AH8 9.625% 12/01/2000 DD 12/01/90 150,000.00 HORGAN JP & CO MTN SR 00043 61697YBUO 6.125% 10/02/2000 DD 10/02/97 500,000.00 GTE CORP DEB 362320AQ6 9.375% 12/01/2000 475,000.00 FINOVA CAP CORP 319074AF9 6.375% 10/15/2000 DD 10/11/95 175,000.00 CIT GROUP HLDGS MTN t SR 00010 12560QAK5 5.625% 02/02/2001 DD 02/02/96 500,000.00 UGI UTILS INC MTN ITR 00006 90269QAF6 6.170% 03/06/2001 DD 03/06/99 l,000,000.00 ICI WILMINGTON INC GTD NT 449909AA9 9.500% 11/15/2000 1,000,000.00 ARISTAR INC SR NT 040420AT9 7.750% 06/15/2001 DD 07/07/94 1,000,000.00 FLEET/NORSTAR FINL GROUP INC 339019AD5 9.900% 06/15/2001 DD 06/24/91 575,000.00 FCC NATL BK DE MTN t TR 00284 30241NMV4 6.375% 03/15/2001 DD 03/14/96 YTH AT CURRENT MOODY MARKET BOOK YIELD S-P PRICE 6.420 .176 5.205 4.030 6.312 1.020 6.353 6.408 6.425 9.531 6.430 6.139 6.669 9.288 6.820 6.476 6.962 5.687 6.999 6.211 7.344 9.439 7.346 7.752 7.365 9.673 7.426 6.411 AAA AAA A2 A A3 A A2 A Al AA A2 A+ BAA2 BBB+ Al A+ A3 A- BAAl BBB+ A3 A- A3 A- AA2 AA- 99.266 100.003 99.970 100.992 99.765 100.935 98.433 98.916 99.342 100.641 99.975 102.346 99.441 TOTAL COST/ MARKET VALUE 17,519,374.58 17,522,490.61 6,526, 781.25 6,551,556.00 905,913.00 900,027.00 400,216.00 399,480.00 922,860.00 908,839.00 149,625.00 149,647.50 512,090.00 504,675.00 473,031.25 467,556.75 173,383.00 173,103.00 495,845.00 496,710.00 1,008,480.00 1,006,410.00 1 1 0031930.00 999,750.00 1,024,020.00 1,023,460.00 570,262.00 571,795.75 % TYPE % TOTAL 100.00 52.97 42.10 19.80 5.79 2.72 2.56 1.21 5.84 2.75 .96 .45 3.24 1.53 3.00 1. 41 1.11 .52 3.19 1. 50 6.46 3.04 6.42 3.02 6.57 3.09 3.67 1. 73 YLDANAL OCSF07511102 DISTRICT: LIQUID OPERATING YIELD ANALYSIS 2000/06/30 PAGE RUN DATE RUN TIME 3 07/07/00 13.38.55 ============================================================================================================================= PAR VALUE YTM AT CURRENT MOODY MARKET TOTAL COST/ ' TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARKET VALUE ' TOTAL ~----------------------·--------------------------------------------------------------------- 420,000.00 BANKAMERICA CORP SR NT 7.441 6.686 AA2 99.468 417,034.80 2.68 066050CJ2 6.650% 05/01/2001 DD 05/01/96 A+ 417,765.60 1.26 1,000,000.00 DONALDSON LUFKIN & JEN TROOOll 7.530 6.173 A3 98.975 987,060.00 6.36 25766CAL8 6 .110% 05/15/2001 DD 05/27/98 A-989,750.00 2 .99 ------------------------------------------TOTAL FIXED INCOME SECURITIES 5.812 5,535 15 r 570 I 421. 30 100.00 15,560,514.60 47.02 -----------------------------------------TOTAL 6.061 3.340 33,088,795.88 100.00 33,083,005.21 100.00 ========= YLDANAL OCSF07522202 DISTRICT: LONG-TERM OPERATING YIELD ANALYSIS 2000/06/30 PAGE RUN DATE RUN TIME 4 07/07/00 13.38.55 ============================================================================================================================= PAR VALUE SECURITY ID SECURITY DESCRIPTION CASH & CASH EQUIVALENTS 409,926.13 DREYFUS TREASURY CASH MGMT 996085247 11,400,000.00 FLORIDA PWR CORP DISC 34110AGA5 07/10/2000 31700 1 000.00 PHARMACIA CORP DISC 71714JGS9 07/26/2000 13,2001 000.00 FEDERAL HOME LN BK CONS DISC 313384F79 MAT 09/13/2000 6,200 1 000.00 HEINZ H J CO DISC 42307JGKO 07/19/2000 7,800,000.00 GENERAL ELEC CAP DISC 36959HG50 07/05/2000 17 1 300,000.00 FEDERAL HOME LN MTG CORP DISC 313396F81 MAT 09/14/2000 51 600,000,00 WISCONSIN EL PWR DISC 97665RHF2 08/15/2000 5,6001000.00 ALUMINUM CO AMER DISC 02225AJ60 09/06/2000 1,000,000.00 ALUMINUM CO AMER DISC 02225AJL7 09/20/2000 12,8001 000,00 USAA CAP CORP DISC 90328AJJ3 09/18/2000 TOTAL CASH & CASH EQUIVALENTS FIXED INCOME SECURITIES 317,133.80 FHLMC GROUP 178-6064 31348SWZ3 6.384% 01/01/2028 DD 12/01/97 YTM AT BOOK .000 6.550 6. 570 6.572 6.606 6.606 6 .610 6.626 6.665 6.680 6.686 6.527 .000 CURRENT MOODY MARKET YIELD S-P PRICE 6.220 .000 .ooo .ooo .ooo .ooo .ooo .ooo .ooo .ooo .ooo .058 6.482 AAA AAA P-1 P-1 A-1+ P-1 P-1 P-1 A-1+ WR P-1 P-1 P-1 AAA AAA 100.000 99.385 99.239 98.596 99.001 99.145 98.570 99.161 98.721 98.358 98.266 98.484 TOTAL COST/ MARKET VALUE 409,926.13 409,926.13 11,329,909.00 11,329,909.00 3,671,855.33 3,671,855.33 13,014,672.00 13,014,672.00 6,138,051.67 6,138,051.67 7,733,299.17 7,733,299.17 17,052,648.50 17,052,648.50 5,552,988.00 5,552,988.00 5,528,351.11 5,528,351.11 983,575.00 983,575.00 12,578,080.00 12,578,080.00 83,993,355.91 83,993,355.91 309,403.67 312,326,05 % TYPE % TOTAL .48 .11 13.48 2.97 4.37 .96 15.49 3.41 7.30 1.61 9.20 2.03 20.30 4.47 6.61 1.45 6.58 1.45 1.17 .26 14.97 3.29 100.00 22.01 .10 ,08 YLDANAL YIELD ANALYSIS PAGE 5 OCSF07522202 2000/06/30 RUN DATE 07/07/00 DISTRICT: LONG-TERM OPERATING RUN TIME 13.38.55 ========·==-=::::::=====~ PAR VALUE YTM AT CURRENT MOODY MARJ<ET TOTAL COST/ ' TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARJ<ET VALUE ' TOTAL ----------------------------~------------------·---------------------------------------------------- 1,248,638.04 GNMA iI POOL f0080395 . 000 6.559 AAA 99.094 1,237,322.25 .41 36225CNM4 6.500% 04/20/2030 DD 04/01/00 AAA 1,237,325.38 .32 9,990,175.32 GNMA II POOL f080408X .ooo 6.559 AAA 99.094 9,888,712.60 3.32 36225CN28 6.500% 05/20/2030 DD 05/01/00 AAA 9,899,664.33 2.59 .oo U S TREASURY NOTES .000 .ooo AAA .ooo .oo .oo 9l28272L5 06.250% 02/28/2002 DD 02/28/97 AAA .oo .oo 8,765,308.00 US TREASURY INFLATION INDEX NT 3. 716 3.650 AAA 99.312 0,735,888.19 2.92 9128273A8 3.625% 07/15/2002 DD 07/15/97 AAA 8,705,002.68 2.28 24,852,650.00 US TREASURY INFLATION INDEX NT 3.824 3.519 AAA 95.906 24,005,826.16 0.00 9128272M3 3.375% 01/15/2007 DD 01/15/97 AAA 23,835,182.51 6.24 1,017,540.00 US TREASURY INFLATION INDEX NT 4.336 4.190 AAA 101.437 1,010,460.00 .34 9128275W8 4.250%001/15/2010 DD 01/15/00 AAA 1,032,162.05 .27 1,867,396.60 SALOMON SMITH BARNEY HLDGS INF 4.720 3.720 AA3 98.128 1,833,495.81 .61 79549BBG1 3.650% 02/14/2002 DD 02/14/97 A 1,832,438.94 .48 4,000,000.00 MORGAN STANLEY MTN fTR 00299 5.480 5.460 AA3 100 .000 3,997,788.00 1. 34 61745ENL1 FLTG RT 04/15/2002 DD 04/15/99 A+ 4,000,000.00 1.05 1,500,000.00 ASSOCIATES CORP N A SR NTS 5.650 6.649 AA3 97.759 1,543,215.00 .49 046003BY8 6.500% 07/15/2002 DD 07/11/97 A+ 1,466,385.00 .38 3,950,000.00 GMAC NTS 5.752 6.832 A2 100.425 3,918,768.50 1.33 370425QV5 FLTG RT 08/18/2003 DD 08/17/98 A 3,966,787.50 1.04 1,000,000.00 BELLER FINANCIAL INC NTS 5.760 5.893 A3 97.573 999,730.00 .32 42333HKJO 5.750% 09/25/2001 DD 09/25/98 A-975,730.00 .26 1,000,000.00 HOUSEHOLD FIN MTN SR 100570 5. 775 5.709 A2 100.617 999,188.90 .33 44181KZT4 FLTG RT 08/01/2001 DD 09/04/98 A 1,006,170.00 .26 2,005,000.00 SEARS ROEBUCK ACCEP CORP MTN 5.804 6. 719 A3 97.343 2,060,739.00 .65 81240QGW6 6 .540% 02/20/2003 DD 02/20/97 A-1,951,727.15 .51 3,000,000.00 SEARS ROEBUCK ACCEP CORP MTN 5.849 6.750 A3 98.218 3,073,170.00 .98 81240QJA1 6.630% 07/09/2002 DD 07/09/97 A-2,946,540.00 .11 2,000,000.00 BANKERS TR NY CORP GLOBAL NT 5.881 5.762 Al 100.572 1,992,800.00 .67 066365DW4 FLTG RT 05/11/2003 DD OS/11/98 I A-2,011,440.00 .53 YLDANAL YIELD ANALYSIS PAGE 6 OCSF07522202 2000/06/30 RUN DATE 07/07/00 DISTRICT: LONG-TERM OPERATING RUN TIME 13.38.55 ..... --- PAR VALUE YTM AT CURRENT MOODY MARKET TOTAL COST/ % TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARKET VALUE % TOTAL -----~-----------------------------------------------------------------------·------------------- 329,610.00 FHLHC HULTICL MTG P/C 1574 E 5.912 5.930 99.500 329,146.48 .11 3133T02D5 5.900% 06/15/2017 327,961.95 .09 1,945,000.00 NEW JERSEY HLTH CARE SER B 5.942 5 .666 AAA 83.829 1,630,474.05 .54 64579ERMO 4.750% 07/01/2028 DD 12/01/98 AAA 1,630,474.05 .43 15,000,000.00 FEDERAL NATL MTG ASSN MTN 5.981 5.892 AAA 98.781 14,955,300.00 4.97 31364G2VO 5.820% 07/19/2001 DD 07/19/99 AAA 14,817,150.00 3.88 2,500,000.00 MERRILL LYNCH NOTES 5.995 6 .453 AA3 98.797 2,526,725.00 .82 59018SXP4 6.375% 10/01/2001 DD 10/03/97 AA-2,469,925.00 .65 2,000,000.00 MONTGOMERY ALA BMC SER B 6.001 5.803 AAA 86.164 1,723,280.00 .57 613041GH9 5,000% 11/15/2029 DD 12/01/98 AAA 1,723,280.00 .45 1,500,000.00 BELLSOUTH TELECOMMUNICATIONS 6.010 6.135 AA2 97.799 7,497,255.00 2.46 079867AX5 6,000% 06/15/2002 DD 06/15/98 AAA 7,334,925.00 1.92 2,673,228.65 STUDENT LN HKTG ASSN 98-2 Al 6.026 6,520 AAA 99.445 2,667,485.38 .89 78442GBA3 FLTG RT 04/25/2007 DD 06/18/98 AAA 2,658,392.23 .70 12,500,000.00 FEDERAL HOME LN MTG CORP DEBS 6.062 6.056 AAA 99.075 12,485,625.00 4.15 3134A3ZM1 6,000% 07/20/2001 DD 07/20/99 AAA 12,384,375.00 3.24 2,000,000.00 BANKBOSTON CORP SR NTS 6.133 6.275 A2 97.603 1,999,600.00 .65 06605TAL6 6.125% 03/15/2002 DD 03/12/99 A 1,952,060.00 .51 3,500,000.00 CHRYSLER FINL LLC MTN fTR00615 6 .154 6.141 Al 100.046 3,498,635.00 1.17 17120QE80 FLTG RT 08/08/2002 DD 04/08/98 A+ 3,501,610.00 .92 1,700,000.00 MORGAN STANLEY MTN fTR 00311 6.180 6.501 AA3 99.984 1,699,517.20 .57 61745ENY3 FLTG RT 01/28/2002 DD 01/27/00 AA-1,699,728.00 .45 25,749.87 FIFTH THIRD BK AUTO TR 96A CLA 6.200 6.216 AAA 99.750 25,749.86 .oo 31677EAA4 6.200% 09/01/2001 DD 03/15/96 25,685.50 .01 1,000,000.00 POPULAR INC MTN fTR 00004 6.201 6.258 A3 99.078 1,000,000.00 .33 73317PAD1 6.200% 04/30/2001 DD 04/21/99 BBB+ 990,780.00 .26 2,372,526.00 FHLMC MULTICLASS CTF 2146 QT 6. 207 6.164 AAA 97.343 2,330,636.10 • 77 3133TKKU3 6.000% 11/15/2011 AAA 2,309,487.98 .60 2,000,000.00 FORD MTR CR CO TERM ENHANCED 6.221 6.214 A2 99.937 1,998,613.60 .67 345397SC8 FLTG RT 08/27/2006 DD 08/27/98 A 1,998,740.00 .52 YLDANAL YIELD ANALYSIS PAGE 7 OCSF07522202 2000/06/30 RUN DATE : 07/07/00 DISTRICT: LONG-TERM OPERATING RUN TIME I 13.38.55 =====:--====== PAR VALUE YTM AT CURRENT MOODY MARI<ET TOTAL COST/ % TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARI<ET VALUE % TOTAL ----------~----------------------------------------------------·--------------·---·---------------- 3,000,000.00 CONSOLIDATED EDISON N Y DEBS 6 .271 6.177 Al 100.066 2,994,300.00 1.00 209111CU5 FLTG RT 06/15/2002 DD 06/20/97 A+ 3,001,980.00 .79 304 I 301. 41 GREEN TREE CORP 99-D CL A-1 6.290 6.320 AAA 99.531 304, 301.41 .10 3935052Y7 6.290% 10/15/2013 DD 08/26/99 AAA 302,874.24 .oe 4,500,000.00 FEDERAL NATL MTG ASSN MTN 6.291 6.306 AAA 98.797 4,488,705.00 1. 49 31364CXV5 6.230% 03/01/2002 DD 03/03/97 AAA 4,445,865.00 1.16 3,000,000.00 HELLER FINL MTN ITR 00246 6.300 6.339 A3 99.390 3,000,000.00 1.00 42333BLF7 FLTG RT 04/28/2003 DD 04/27/99 A-2,981,700.00 .78 3,000,000.00 GENERAL MTRS ACCEP ITR 00562 6.303 6 ,279 A2 99.687 2,996,430.00 1.00 37042WZKO FLTG RT 02/14/2003 DD 02/14/00 A 2,990,610.00 .78 2,937,094.18 FHLMC MULTICLASS CTF E3 A 6.316 6,330 AAA 98.202 2,940,306.38 .96 3133TCE95 VAR RT 08/15/2032 AAA 2,884,285.23 .76 2,617,909.90 GNMA GTD REMIC TR 2000-9 FD 6.320 6.317 AAA 100.051 2,617,909.90 .87 3837B4NX9 VAR RT 02/16/2030 AAA 2,619,245.03 .69 2,000,000.00 BEAR STEARNS COS INC 6.330 6.933 A2 97.362 2,031,960.00 .65 073902AH1 6.750% 04/15/2003 A 1,947,240.00 .51 3,000,000.00 FORD MTR CR CO GLOBAL LANDMARI< 6.350 6.976 A2 99.875 3,000,000.00 1.00 345397SRS FLTG RT 03/17/2003 DD 03/16/00 A 2,996,250.00 .78 2,000,000.00 FORD MTR CR CO GLOBAL NTS 6.351 6.866 A2 99.687 1,992,580.00 .66 345397RV7 FLTG RT 02/13/2003 DD 02/13/98 A 1,993,740.00 .52 3,000,000.00 GMAC MTN FLTG RT 6.389 7.129 A2 100.328 3,010,830.00 1.01 37042WVR9 12/17/2001 DD 12/15/98 A 3,009,840.00 .79 4,000,000.00 HOUSEHOLD FIN CO MTN 6 .440 6.425 A2 100,239 4,000,000.00 1. 34 44181KZA5 FLTG RT 06/24/2003 DD 06/24/98 A 4,009,560.00 1.05 2,000,000.00 FHLMC MULTICLASS CTF Tll A6 6. 496 6.805 AAA 95.515 2,ooo,8B8.00 .64 3133TDPV2 6.500% 09/25/2018 AAA 1,910,300.00 .50 2,000,000.00 BELLER FINANCIAL INC NTS 6.507 6.472 A3 100.546 2,000,000.00 .67 423328BK8 FLTG RT 06/25/2001 DD 06/25/99 A-2,010,920.00 .53 2,446,824.45 FHLMC MULTICLASS CTF SER 1620Z 6.517 7.348 AAA 81.651 2,290,684.51 .67 3133Tl7A4 6.000% 11/15/2023 DD 11/01/93 AAA 1,997,856.63 .52 YLDANAL YIELD ANALYSIS PAGE 8 OCSF07522202 2000/06/30 RUN DATE 07/07/00 DISTRICT: LONG-TERM OPERATING RUN TIME 13.38.55 ============================================================================================================================= PAR VALUE YTM AT CURRENT MOODY MARXET TOTAL COST/ ' TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARKET VALUE ' TOTAL ----------------------------------------~---·~ --------------------------------------------------- 5,000,000.00 SALOMON SB HLDGS MTN 6.625 6,635 AA3 99.843 5,000,000.00 1. 67 79548EEE8 FLTG RT 04/28/2003 DD 04/28/00 A 4,992,150.00 1. 31 8,283,821.12 FHLMC GROUP tG5-0476 6.628 7.063 AAA 99.108 8,413,255.81 2.75 3128DDQ55 7.000\ 02/01/2003 DD 02/01/98 AAA 8,209,929.44 2.15 2,300,000.00 LEHMAN BROS HLDGS MTN TR 00333 6.672 7.593 A3 101.134 2,322,379.00 .78 52517PPW5 FLTG RT 04/01/2002 DD 03/29/99 A 2,326,082.00 .61 5,000,000.00 LEHMAN BROS HLDGS MTN 6.674 6.665 A3 100.125 5,000,000.00 1.68 52517PQQ7 FLTG RT 12/12/2002 DD 12/07/99 A 5,006,250.00 1. 31 1,861,933.53 GNMA II POOL f080088M 6.705 6.372 AAA 100.047 1,902,663.33 .62 36225CC20 VAR RT 06/20/2027 DD 06/01/97 AAA 1,862,808.64 .49 10,500,000.00 FEDERAL HOME LN MTG CORP DEBS 6. 711 6.515 AAA 96.703 10,323,075.00 3.40 3134A3TCO 6.300% 06/01/2004 DD 06/01/99 AAA 10,153,815.00 2.66 2,000,000.00 MARSH & MCLENNAN COS INC SR NT 6. 717 6.851 A2 96.696 1,992,280.00 .64 571748AB8 6.625% 06/15/2004 DD 06/14/99 AA-1,933,920.00 .51 6,250,000.00 COMMIT TO PUR GNMA SF MTG 6.724 6.515 AAA 92.094 5,742,187.50 1.93 01N060676 6.000% 07/15/2030 AAA 5,755,875.00 1. 51 3,000,000.00 FORD MTR CR CO GLOBAL LANDMARK 6.739 6.915 A2 96.886 2,995,080.00 .97 345397SJ3 6.700% 07/16/2004 DD 07/16/99 A+ 2,906,580.00 .76 900,000,00 FEDERAL HOME LN BK CONS BDS 6. 777 6. 771 AAA 99.687 899,550.00 ,30 3133MAQJ1 6.750\ 02/01/2002 DD 02/01/00 AAA 897,183,00 .24 2,500,000.00 COUNTRYWIDE HOME LNS INC NT 6.866 7 .119 A3 96.225 2,498,400.00 .so 22237UAB8 6.850% 06/15/2004 DD 06/24/99 A 2,405,625.00 .63 7,300,000.00 ONEOK INC NEW NT 6.960 6.961 A2 99.984 7,300,000.00 2.45 682680AJ2 FLTG RT 04/24/2002 DD 04/24/00 A 7,298,832.00 1.91 1,364,605.85 GNMA II POOL 10080023 6.992 1.100 AAA 100.359 1,387,207.14 ,45 36225CAZ9 7 .125% 12/20/2026 DD 12/01/96 AAA 1,369,504.79 .36 2,000,000.00 GNMA GTD REMIC TR 2000-2 PA 7.014 7.047 AAA 99.329 1,996,875.00 .66 3837H3C70 7.000% 12/20/2022 AAA 1,986,580.00 .52 21,500,000.00 COMMIT TO PUR GNMA SF MTG 7.025 6.849 AAA 94.906 20,351,093.75 6.85 01N062672 6.500\ 07/15/2030 AAA 20,404,790.00 5.34 YLDANAL YIELD ANALYSIS PAGE 9 OCSF07522202 • 2000/06/30 RUN DATE 07/07/00 DISTRICT: LONG-TERM OPERATING RUN TIME 13.38.55 ~~----------~---~-~-------- PAR VALUE YTM AT CURRENT MOODY MARKET TOTAL COST/ % TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARKET VALUE % TOTAL ------------------------------------------------------------------------------------------------------ 1,000,000.00 OLD KENT BK MTN SB 00001 7.084 7.108 A2 99.656 1,000,000.00 2.34 67982XAA6 VAR RT 11/01/2005 DD 04/28/00 A-6,975,920.00 1.83 2,100,000.00 FEDERAL NATL MTG ASSN DEBS 7.113 6.858 AAA 96.609 2,030,133.00 .68 31359MEY5 6.625% 09/15/2009 DD 09/01/99 AAA 2,028,789.00 .53 2,000,000.00 LONG ISLAND LTG CO DEB 7.512 8.627 BAA3 95.045 2,151,250.00 .63 542671CT7 8.200% 03/15/2023 DO 03/28/93 A-1,900,900.00 .so 1,314,066.19 GREYSTONE SVCNG CORP FHA 195-7 7.564 7.540 AAA 98.539 1,294,868.50 .43 39810fAE4 7.430% 06/01/2003 DD 02/29/00 AAA 1,294,868.50 .34 1,000,000.00 FORD MOTOR CR CO NT 7.582 6.997 A2 96.466 965,170.00 .32 345397GV9 6.750% 05/15/2005 A 964,660.00 .25 974,043.79 WNP/HUNTOON PAIGE f000-11150 7.684 7.667 AAA 97.828 952,888.78 .32 302998GE3 7.500% 12/01/2030 00 10/21/99 AAA 952,888.78 .25 3,000,000.00 PACIFICORP SECO MTN tTR 00115 7.709 7.254 A2 100.632 2,950,530.00 1.01 69512EEU5 7.300% 10/22/2004 00 10/22/92 A 3,018,960.00 .79 42,200,000.00 FEDERAL NATL MTG ASSN MTN 7.724 6.962 AAA 93.359 38,961,150.00 13.23 31364GYJ2 6.500% 03/12/2009 OD 03/12/99 AAA 39,397,498.00 10.32 2,000,000.00 COMMIT TO PUR GNMA SF MTG 7.869 7.916 AAA 101. 063 2,016,250.00 .67 01N080674 8.000% 07/15/2030 AAA 2,021,260.00 .53 1,600,000.00 ALLSTATE CORP SR NT 7.967 7.872 Al 100.033 1,594,032.00 .53 020002AL5 7.875% 05/01/2005 OD 05/01/00 A+ 1,600,528.00 .42 ------------------------------------------- TOTAL FIXED INCOME SECURITIES 5.181 5.732 299,683,764.76 100.00 297,771,919.58 78.00 ------------------------------------------TOTAL 5.244 5.467 383,677,120.67 100.00 381,765,275.49 100.00 ================= ==~--= OCSGOOO 10000 OCSD-CONSOLIDATED SHARES/PAR SECURITY ID TRANSCODE ORANGE COUNTY SANITATION DISTRICT PORTFOLIO DETAIL Ol-JUN-2000 -30-JUN-2000 TRANSACTION DESCRIPTION/ BROKER TRADE DATE/ SETTLDATE/ COMPLDATE RECEIPTS AND DISBURSEMENT TRANSACTIONS OTHER ADMINISTRATIVE EXPENSES LIQUID OPER-PIMCO 0.00 FED WIRE FEES FOR MAY 06-Jun-2000 NA9123459 cw 06-Jun-2000 LONG TERM OPER-PIMCO 0.00 FED WIRE FEES FOR MAY 06-Jun-2000 NA9123459 cw 06-Jun-2000 PURCHASES CASH & CASH EQUIVALENTS LIQUID OPER-PIMCO 66,750.01 DREYFUS TREASURY CASH MGMT 01-Jun-2000 996085247 01-Jun-2000 B LIQUID OPER-PIMCO 66,750.01 DREYFUS TREASURY CASH MGMT Ol-Jun-2000 996085247 01-Jun-2000 FC 0 l-Jun-2000 LONG TERM OPER-PIMCO 362,491.32 DREYFUS TREASURY CASH MGMT Ol-Jun-2000 996085247 01-Jun-2000 B JJ-Jul-2000 12:37:41 . PAGE: 1 AMOUNT/ COST/ GAIN/LOSS -16.15 0.00 0.00 -7.65 0.00 0.00 -66,750.01 66,750.01 0.00 -66,750.01 0.00 0.00 -362,491.32 362,491.32 0.00 Executive Workbench @ ORANGE COUNTY SANITATION DISTRICT PAGE: 2 PORTFOLIO DETAIL OCSGOOO 10000 01-JUN-2000 -30-JUN-2000 OCSD-CONSOLIDATED SHARES/PAR TRADE DATE/ AMOUNT/ SECURITY ID TRANSACTION DESCRIPTION/ SETTLDATE/ COST/ TRANSCODE BROKER COMPLDATE GAIN/LOSS LONG TERM OPER-PIMCO 362,491.32 DREYFUS TREASURY CASH MGMT 01-Jun-2000 -362,491.32 996085247 01-Jun-2000 0.00 FC Ol-Jun-2000 0.00 LIQUID OPER-PIMCO 609.02 DREYFUS TREASURY CASH MGMT 02-Jun-2000 -609.02 996085247 02-Jun-2000 609.02 B 0.00 LIQUID OPER-PIMCO 609.02 DREYFUS TREASURY CASH MGMT 02-Jun-2000 -609.02 996085247 02-Jun-2000 0.00 FC 02-Jun-2000 0.00 LONG TERM OPER-PIMCO 2,300.07 DREYFUS TREASURY CASH MGMT 02-Jun-2000 -2,300.07 996085247 02-Jun-2000 2,300.07 B 0.00 LONG TERM OPER-PIMCO 2,300.07 DREYFUS TREASURY CASH MGMT 02-Jun-2000 -2,300.07 996085247 02-Jun-2000 0.00 FC 02-Jun-2000 0.00 LONG TERM OPER-PIMCO 11,400,000.00 FLORIDA PWR CORP DISC 06-Jun-2000 -11,329,909.00 341 IOAGA5 07/10/2000 06-Jun-2000 11,329,909.00 B BANC ONE CAP MKTS INC, COLUM 0.00 LONG TERM OPER-PIMCO 11,400,000.00 FLORIDA PWR CORP DISC 06-Jun-2000 -11,329,909.00 34110AGA5 07/10/2000 06-Jun-2000 0.00 FC BANC ONE CAP MKTS INC, COLUM 06-Jun-2000 0.00 JJ-Jul-2000 12:37:41 Executive Workbench @ ORANGE COUNTY SANITATION DISTRICT PAGE: 3 PORTFOLIO DETAIL OCSGOOO 10000 01-JUN-2000 -30-JUN-2000 OCSD-CONSOL/DATED SHARES/PAR TRADE DATE/ AMOUNT/ SECURITY ID TRANSACTION DESCRIPTION/ SETTLDATE/ COST/ TRANSCODE BROKER COMPLDATE GAIN/LOSS LONG TERM OPER-PIMCO 84,554.17 DREYFUS TREASURY CASH MGMT l 2-Jun-2000 -84,554.17 996085247 I 2-Jun-2000 84,554.17 B 0.00 LONG TERM OPER-PIMCO 84,554.17 DREYFUS TREASURY CASH MGMT 12-Jun-2000 -84,554.17 996085247 12-Jun-2000 0.00 FC 12-Jun-2000 0.00 LIQUID OPER-PIMCO 1,300,000.00 FEDERAL NATL MTG ASSN DISC N 12-Jun-2000 -1,287,944.67 313588A62 MAT 08/03/2000 l 2-Jun-2000 1,287,944.67 B MERRILL LYNCH PIERCE FENNER 0.00 LIQUID OPER-PIMCO 1,300,000.00 FEDERAL NATL MTG ASSN DISC N 12-Jun-2000 -1,287,944.67 313588A62 MAT 08/03/2000 12-Jun-2000 0.00 FC MERRILL LYNCH PIERCE FENNER I 2-Jun-2000 0.00 LONG TERM OPER-PIMCO 1,200,000.00 DU PONT DE DE MOUR DISC 13-Jun-2000 -1,198,062.00 26354AFN9 06/22/2000 13-Jun-2000 1,198,062.00 B CREDIT SUISSE FIRST BOSTON C 0.00 LONG TERM OPER-PIMCO 1,200,000.00 DU PONT DE DE MOUR DISC 13-Jun-2000 -1, 198,062.00 26354AFN9 06/22/2000 l 3-Jun-2000 0.00 FC CREDIT SUISSE FIRST BOSTON C l 3-Jun-2000 0.00 LONG TERM OPER-PIMCO 28,144.67 DREYFUS TREASURY CASH MGMT 14-Jun-2000 -28, 144.67 996085247 14-Jun-2000 28,144.67 B 0.00 1 l-Jul-2000 12:37:41 Executive Workbench OCSGOOO 10000 OCSD-CONSOLIDATED SHARES/PAR SECURITY ID TRANSCODE 28,144.67 996085247 FC 3, 700,000.00 71714JGS9 B 3, 700,000.00 71714JGS9 FC 12,800,000.00 90328AJJ3 B 12,800,000.00 90328AJJ3 FC 2,318.89 996085247 B 2,318.89 996085247 FC J J-Jul-2000 12:37:41 ORANGE COUNTY SANITATION DISTRICT PORTFOLIO DETAIL 01-JUN-2000 -30-JUN-2000 TRANSACTION DESCRIPTION/ BROKER LONG TERM OPER-PIMCO DREYFUS TREASURY CASH MGMT LONG TERM OPER-PIMCO PHARMACIA CORP DISC 07/26/2000 GOLDMAN SACHS & CO, NY LONG TERM OPER-PIMCO PHARMACIA CORP DISC 0712612000 GOLDMAN SACHS & CO, NY LONG TERM OPER-PIMCO USAA CAP CORP DISC 09/18/2000 MERRILL LYNCH PIERCE FENNER LONG TERM OPER-PIMCO USAA CAP CORP DISC 09/18/2000 MERRILL LYNCH PIERCE FENNER LIQUID OPER-PIMCO DREYFUS TREASURY CASH MGMT LIQUID OPER-PIMCO DREYFUS TREASURY CASH MGMT TRADE DATE/ SETTLDATE/ COMPLDATE 14-Jun-2000 14-Jun-2000 14-Jun-2000 I 4-Jun-2000 I 4-Jun-2000 14-Jun-2000 14-Jun-2000 14-Jun-2000 I 4-Jun-2000 15-Jun-2000 14-Jun-2000 15-Jun-2000 15-Jun-2000 15-Jun-2000 15-Jun-2000 I 5-Jun-2000 15-Jun-2000 15-Jun-2000 ii PAGE: 4 AMOUNT/ COST/ GAIN/LOSS -28,144.67 0.00 0.00 -3,671,855.33 3,671,855.33 0.00 -3,671,855.33 0.00 0.00 -12,578,080.00 12,578,080.00 0.00 -12,578,080.00 0.00 0.00 -2,318.89 2,318.89 0.00 -2,318.89 0.00 0.00 Executive Workbench OCSGOOOJ 0000 OCSD-CONSOLIDATED SHARES/PAR SECURITY ID TRANSCODE 627,607.04 996085247 B 627,607.04 996085247 FC 6.50 996087094 B 1,400,000.00 313588B46 B 1,400,000.00 313588B46 FC 6.50 996085247 B 6.50 996085247 .FC JJ-Jul-2000 12:37:41 ORANGE COUNTY SANITATION DISTRICT PORTFOLIO DETAIL 01-JUN-2000 -30-JUN-2000 TRANSACTION DESCRIPTION/ BROKER LONG TERM OPER-PIMCO DREYFUS TREASURY CASH MGMT LONG TERM OPER-PIMCO DREYFUS TREASURY CASH MGMT LONG TERM OPER-PIMCO BSDT-LATE MONEY DEPOSIT ACCT LIQUID OPER-PIMCO FEDERAL NATL MTG ASSN DISC N MAT 08/09/2000 LEHMAN GOVT SECS INC, NY LIQUID OPER-PIMCO FEDERAL NATL MTG ASSN DISC N MAT 08/09/2000 LEHMAN GOVT SECS INC, NY LONG TERM OPER-PIMCO DREYFUS TREASURY CASH MGMT LONG TERM OPER-PIMCO DREYFUS TREASURY CASH MGMT TRADE DATE/ SETTLDATE/ COMPLDATE 15-Jun-2000 I 5-Jun-2000 I 5-Jun-2000 I 5-Jun-2000 l 5-Jun-2000 I 5-Jun-2000 I 5-Jun-2000 I 5-Jun-2000 15-Jun-2000 15-Jun-2000 15-Jun-2000 I 5-Jun-2000 16-Jun-2000 16-Jun-2000 16-Jun-2000 16-Jun-2000 16-Jun-2000 PAGE: 5 AMOUNT/ COST/ GAIN/LOSS -627,607.04 627,607.04 0.00 -627,607.04 0.00 0.00 -6.50 6.50 0.00 -1,386,246.94 1,386,246.94 0.00 -1,386,246.94 0.00 0.00 -6.50 6.50 0.00 -6.50 0.00 0.00 Executive Workbench OCSGOOO 10000 OCSD-CONSOLIDATED SHARES/PAR SECURITY ID TRANSCODE 24,080.00 996085247 B 24,080.00 996085247 FC 1,600,000.00 313384F20 B 1,600,000.00 313384F20 FC 7,095.83 996085247 B 7,095.83 996085247 FC 162,063.08 996085247 B 11-Jul-2000 12:37:41 ORANGE COUNTY SANITATION DISTRICT PORTFOLIO DETAIL 01-JUN-2000 -30-JUN-2000 TRANSACTION DESCRIPTION/ BROKER LIQUID OPER-PIMCO DREYFUS TREASURY CASH MGMT LIQUID OPER-PIMCO DREYFUS TREASURY CASH MGMT LIQUID OPER-PIMCO FEDERAL HOME LN BK CONS DISC MAT 09/08/2000 CREDIT SUISSE FIRST BOSTON C LIQUID OPER-PIMCO FEDERAL HOME LN BK CONS DISC MAT 09/08/2000 CREDIT SUISSE FIRST BOSTON C LIQUID OPER-PIMCO DREYFUS TREASURY CASH MGMT LIQUID OPER-PIMCO DREYFUS TREASURY CASH MGMT LONG TERM OPER-PIMCO DREYFUS TREASURY CASH MGMT TRADE DATE/ SETTLDATE/ COMPLDATE 16-Jun-2000 16-Jun-2000 16-Jun-2000 16-Jun-2000 16-Jun-2000 16-Jun-2000 l 6-Jun-2000 16-Jun-2000 16-Jun-2000 16-Jun-2000 19-Jun-2000 19-Jun-2000 l 9-Jun-2000 19-Jun-2000 19-Jun-2000 19-Jun-2000 l 9-Jun-2000 PAGE: 6 AMOUNT/ COST/ GAIN/LOSS -24,080.00 24,080.00 0.00 -24,080.00 0.00 0.00 -1,575,920.00 1,575,920.00 0.00 -1,575,920.00 0.00 0.00 -7,095.83 7,095.83 0.00 -7,095.83 0.00 0.00 -162,063.08 162,063.08 0.00 Executive Workbench @ ORANGE COUNTY SANITATION DISTRICT PAGE: 7 PORTFOLIO DETAIL OCSGOOOJOOOO 01-JUN-2000 -30-JUN-2000 OCSD-CONSOL/DATED SHARES/PAR TRADE DATE/ AMOUNT/ SECURITY ID TRANSACTION DESCRIPTION/ SETTLDATE/ COST/ TRANSCODE BROKER COMPLDATE GAIN/LOSS LONG TERM OPER-PIMCO 162,063.08 DREYFUS TREASURY CASH MGMT I 9-Jun-2000 -162,063.08 996085247 I 9-Jun-2000 0.00 FC 19-Jun-2000 0.00 LIQUID OPER-PIMCO 600,000.00 EASTMAN KODAK CO DISC 19-Jun-2000 -592,904.17 27746AHP7 08/23/2000 I 9-Jun-2000 592,904.17 B CREDIT SUISSE FIRST BOSTON C 0.00 LIQUID OPER-PIMCO 600,000.00 EASTMAN KODAK CO DISC 19-Jun-2000 -592,904.17 27746AHP7 08/23/2000 I 9-Jun-2000 0.00 FC CREDIT SUISSE FIRST BOSTON C 19-Jun-2000 0.00 LIQUID OPER-PIMCO 38,580.56 DREYFUS TREASURY CASH MGMT 20-Jun-2000 -38,580.56 996085247 20-Jun-2000 38,580.56 B 0.00 LIQUID OPER-PIMCO 38,580.56 DREYFUS TREASURY CASH MGMT 20-Jun-2000 -38,580.56 996085247 20-Jun-2000 0.00 FC 20-Jun-2000 0.00 LIQUID OPER-PIMCO 2,500,000.00 FEDERAL HOME LN MTG CORP DIS 20-Jun-2000 -2,461,419.44 313396F81 MAT 09/14/2000 20-Jun-2000 2,461,419.44 B LEHMAN GOVT SECS INC, NY 0.00 LIQUID OPER-PIMCO 2,500,000.00 FEDERAL HOME LN MTG CORP DIS 20-Jun-2000 -2,461,419.44 313396F81 MAT 09/1412000 20-Jun-2000 0.00 FC LEHMAN GOVT SECS INC, NY 20-Jun-2000 0.00 Jl-Jul-2000 12:37:41 Executive Workbench OCSGOOO 10000 OCSD-CONSQLIDATED SHARES/PAR SECURITY ID TRANSCODE 22,832.64 996085247 B 22,832.64 996085247 FC 1,100,000.00 313396F81 B I, 100,000.00 313396F81 FC 1,000,000.00 02225AJL7 B 1,000,000.00 02225AJL7 FC 26,672,276.09 996085247 B ll-Jul-2000 12:37:41 ORANGE COUNTY SANITATION DISTRICT PORTFOLIO DETAIL 01-JUN-2000 -30-JUN-2000 TRANSACTION DESCRIPTION/ BROKER LONG TERM OPER-PIMCO DREYFUS TREASURY CASH MGMT LONG TERM OPER-PIMCO DREYFUS TREASURY CASH MGMT LONG TERM OPER-PIMCO FEDERAL HOME LN MTG CORP DIS MAT 09/14/2000 MORGAN JP SECS -FIXED INCO LONG TERM OPER-PIMCO FEDERAL HOME LN MTG CORP DIS MAT 09/14/2000 MORGAN J P SECS -FIXED INCO LONG TERM OPER-PIMCO ALUMINUM CO AMER DISC 09/20/2000 GOLDMAN SACHS & CO, NY LONG TERM OPER-PIMCO ALUMINUM CO AMER DISC 09/20/2000 GOLDMAN SACHS & CO, NY LONG TERM OPER-PIMCO DREYFUS TREASURY CASH MGMT TRADE DATE/ SETTLDATE/ COMPLDATE 2 l-Jun-2000 2 l-Jun-2000 21-Jun-2000 2 l-Jun-2000 21-Jun-2000 22-Jun-2000 22-Jun-2000 22-Jun-2000 22-Jun-2000 22-Jun-2000 22-Jun-2000 22-Jun-2000 22-Jun-2000 22-Jun-2000 22-Jun-2000 26-Jun-2000 26-Jun-2000 PAGE: 8 AMOUNT/ COST/ GAIN/LOSS -22,832.64 22,832.64 0.00 -22,832.64 0.00 0.00 -1,083,368.00 1,083,368.00 0.00 -1,083,368.00 0.00 0.00 -983,575.00 983,575.00 0.00 -983,575.00 0.00 0.00 -26,672,276.09 26,672,276.09 0.00 Executive Workbench @ ORANGE COUNTY SANITATION DISTRICT PAGE~· 9 PORTFOLIO DETAIL OCSGOOO 10000 01-JUN-2000 -30-JUN-2000 OCSD-CONSOLJDATED SHARES/PAR TRADE DATE/ AMOUNT/ SECURITY ID TRANSACTION DESCRIPTION/ SETTLDATE/ COST/ TRANSCODE BROKER COMPLDATE GAIN/LOSS LONG TERM OPER-PIMCO 26,672,276.09 DREYFUS TREASURY CASH MGMT 26-Jun-2000 -26,672,276.09 996085247 26-Jun-2000 0.00 FC 26-Jun-2000 0.00 LONG TERM OPER-PIMCO 13,200,000.00 FEDERAL HOME LN BK CONS DISC 27-Jun-2000 -13,014,672.00 313384F79 MAT 0911312000 27-Jun-2000 13,014,672.00 B LEHMAN GOVT SECS INC, NY 0.00 LONG TERM OPER-PIMCO 13,200,000.00 FEDERAL HOME LN BK CONS DISC 27-Jun-2000 -13,014,672.00 313384F79 MAT 09/13/2000 27-Jun-2000 0.00 FC LEHMAN GOVT SECS INC, NY 27-Jun-2000 0.00 LONG TERM OPER-PIMCO 16,200,000.00 FEDERAL HOME LN MTG CORP DIS 27-Jun-2000 -15,969,280.50 3 l3396F81 MAT 09/14/2000 27-Jun-2000 15,969,280.50 B MORGAN JP SECS -FIXED INCO 0.00 LONG TERM OPER-PIMCO 16,200,000.00 FEDERAL HOME LN MTG CORP DIS 27-Jun-2000 -15,969,280.50 313396F81 MAT 09/14/2000 27-Jun-2000 0.00 FC MORGAN J P SECS -FIXED INCO 27-Jun-2000 0.00 LONG TERM OPER-PIMCO 5,600,000.00 ALUMINUM CO AMER DISC 27-Jun-2000 -5,528,351.11 02225AJ60 0910612000 28-Jun-2000 5,528,351.11 B CREDIT SUISSE FIRST BOSTON C 0.00 LONG TERM OPER-PIMCO 5,600,000.00 ALUMINUM CO AMER DISC 27-Jun-2000 -5,528,351.11 02225AJ60 09/06/2000 28-Jun-2000 0.00 FC CREDIT SUISSE FIRST BOSTON C 28-Jun-2000 0.00 ll-Jul-2000 12:37:41 Executive Workbench @ ORANGE COUNTY SANITATION DISTRICT PAGE: JO PORTFOLIO DETAIL OCSGOOO 10000 01-JUN-2000 -30-JUN-2000 OCSD-CONSOLIDATED SHARES/PAR TRADE DATE/ AMOUNT/ SECURITY ID TRANSACTION DESCRIPTION/ SETTLDATE/ COST/ TRANSCODE BROKER COMPLDATE GAIN/LOSS LIQUID OPER-PIMCO 13,839.00 DREYFUS TREASURY CASH MGMT 28-Jun-2000 -13,839.00 996085247 28-Jun-2000 13,839.00 B 0.00 LIQUID OPER-PIMCO 13,839.00 DREYFUS TREASURY CASH MGMT 28-Jun-2000 -13,839.00 996085247 28-Jun-2000 0.00 FC 28-Jun-2000 0.00 LIQUID OPER-PIMCO 900,000.00 MOTOROLA INC DISC 28-Jun-2000 -886, 161. 00 62008AJL4 0912012000 28-Jun-2000 886,161.00 B MORGAN STANLEY & CO INC, NY 0.00 LIQUID OPER-PIMCO 900,000.00 MOTOROLA INC DISC 28-Jun-2000 -886, 161.00 62008AJL4 0912012000 28-Jun-2000 0.00 FC MORGAN STANLEY & CO INC, NY 28-Jun-2000 0.00 LIQUID OPER-PIMCO 15,143.33 DREYFUS TREASURY CASH MGMT 29-Jun-2000 -15,143.33 996085247 29-Jun-2000 15,143.33 B 0.00 LIQUID OPER-PIMCO 15, 143.33 DREYFUS TREASURY CASH MGMT 29-Jun-2000 -15, 143.33 996085247 29-Jun-2000 0.00 FC 29-Jun-2000 0.00 LIQUID OPER-PIMCO 1,000,000.00 FEDERAL HOME LN MTG CORP DIS 29-Jun-2000 -984,856.67 313396G72 MAT 09/21/2000 29-Jun-2000 984,856.67 B MORGAN STANLEY & CO INC, NY 0.00 11-Jul-2000 12:37:41 Executive Wol'khench OCSGOOO I 0000 OCSD-CONSOLIDATED SHARES/PAR SECURITY ID TRANSCODE 1,000,000.00 313396G72 FC 5,600,000.00 97665RHF2 B 5,600,000.00 97665RHF2 FC 47,041.23 996085247 B 47,041.23 996085247 FC FIXED INCOME SECURITIES 2,000,000.00 01N080666 FC I 1,000,000.00 01N062664 FC ll-Jul-2000 12:37:41 ORANGE COUNTY SANITATION DISTRICT PORTFOLIO DETAIL 01-JUN-2000 -30-JUN-2000 TRANSACTION DESCRIPTION/ BROKER LIQUID OPER-PIMCO FEDERAL HOME LN MTG CORP DIS MAT 09/21/2000 MORGAN STANLEY & CO INC, NY LONG TERM OPER-PIMCO WISCONSIN EL PWR DISC 08/15/2000 GOLDMAN SACHS & CO, NY LONG TERM OPER-PIMCO WISCONSIN EL PWR DISC 08/15/2000 GOLDMAN SACHS & CO, NY LONG TERM OPER-PIMCO DREYFUS TREASURY CASH MGMT LONG TERM OPER-PIMCO DREYFUS TREASURY CASH MGMT LONG TERM OPER-PIMCO COMMIT TO PUR GHMA SF MTG 8.000% 0611512030 BEAR STEARNS & CO INC, NY LONG TERM OPER-PIMCO COMMIT TO PUR GNMA SF MTG 6.500% 06/15/2029 BEAR STEARNS & CO INC, NY TRADE DATE/ SETTLDATE/ COMPLDATE 29-Jun-2000 29-Jun-2000 29-Jun-2000 29-Jun-2000 30-Jun-2000 29-Jun-2000 30-Jun-2000 30-Jun-2000 30-Jun-2000 30-Jun-2000 30-Jun-2000 30-Jun-2000 30-Jun-2000 03-May-2000 22-Jun-2000 22-Jun-2000 08-May-2000 22-Jun-2000 22-Jun-2000 PAGff 11 AMOUNT/ COST/ GAIN/LOSS -984,856.67 0.00 0.00 -5,552,988.00 5,552,988.00 0.00 -5,552,988.00 0.00 0.00 -47,041.23 47,041.23 0.00 -47,041.23 0.00 0.00 -1,997,500.00 0.00 0.00 -10,144,062.50 0.00 0.00 Executive Workbench @ ORANGE COUNTY SANITATION DISTRICT PAGE: 12 PORTFOLIO DETAIL OCSGOOO 10000 01-JUN-2000 -30-JUN-2000 OCSD-CONSOLIDATED SHARES/PAR TRADE DATE/ AMOUNT/ SECURITY ID TRANSACTION DESCRIPTION/ SETTLDATE/ COST/ TRANSCODE BROKER COMPLDATE GAIN/LOSS LONG TERM OPER-PIMCO I 0,500,000.00 COMMIT TO PUR GNMA SF MTG 15-May-2000 -9,673, 125.00 01N062664 6.500% 06/15/2029 22-Jun-2000 0.00 FC MERRILL LYNCH PIERCE FENNER 22-Jun-2000 0.00 LONG TERM OPER-PIMCO 6,250,000.00 COMMIT TO PUR GNMA SF MTG I 6-May-2000 -5,605,468. 75 OIN060668 6.000% 06/15/2029 22-Jun-2000 0.00 FC GOLDMAN SACHS & CO, NY 23-Jun-2000 0.00 LIQUID OPER-PIMCO 1,000,000.00 ICI WILMINGTON INC GTD NT 12-Jun-2000 -1,008,480.00 449909AA8 9.500% 11/15/2000 I 5-Jun-2000 1,008,480.00 B GOLDMAN SACHS & CO, NY 0.00 LIQUID OPER-PIMCO l,000,000.00 ICI WILMINGTON INC GTD NT l 2-Jun-2000 -7,916.67 449909AA8 9.500% 11/15/2000 15-Jun-2000 0.00 IB 0.00 LIQUID OPER-PIMCO 1,000,000.00 ICI WILMINGTON INC GTD NT 12-Jun-2000 -1,016,396.67 449909AA8 9.500% 11115/2000 15-Jun-2000 0.00 FC GOLDMAN SACHS & CO, NY l 5-Jun-2000 0.00 LIQUID OPER-PIMCO l,000,000.00 ARISTAR INC SR NT 12-Jun-2000 -1,003,830.00 040420AT8 7.750% 06/15/2001 DD 0710719 I 5-Jun-2000 1,003,830.00 B BANC ONE CAP MKTS INC, COLUM 0.00 LIQUID OPER-PIMCO 1,000,000.00 ARISTAR INC SR NT 12-Jun-2000 -1,003,830.00 040420AT8 7.750% 06/15/2001 DD 0710719 l 5-Jun-2000 0.00 FC BANC ONE CAP MKTS INC, COLUM 15-Jun-2000 0.00 JJ-Jul-2000 12:37:41 Executive Workbench OCSGOOO 10000 OCSD-CONSOLIDATED SHARES/PAR SECURITY ID TRANSCODE 1,000,000.00 339018AD5 B 1,000,000.00 339018AD5 FC I 0,500,000.00 01N062672 B 6,250,000.00 OIN060676 B 11,000,000.0'0 01N062672 B 2,000,000.00 01N080674 B 2,000,000.00 613041GH9 B /f-Jul-2000 12:37:41 ORANGE COUNTY SANITATION DISTRICT PORTFOLIO DETAIL 01-JUN-2000 -30-JUN-2000 TRANSACTION DESCRIPTION/ BROKER LIQUID OPER-PIMCO FLEET/NORSTAR FINL GROUP INC 9.900% 06/15/2001 DD 06/24/9 FIRST CHICAGO CAPITAL MARKET LIQUID OPER-PIMCO FLEET/NORST AR FINL GROUP INC 9.900% 06/15/2001 DD 06/24/9 FIRST CHICAGO CAPITAL MARKET LONG TERM OPER-PIMCO COMMIT TO PUR GNMA SF MTG 6.500% 07/15/2030 MERRILL LYNCH PIERCE FENNER LONG TERM OPER-PIMCO COMMIT TO PUR GNMA SF MTG 6.000% 07/15/2030 GOLDMAN SACHS & CO, NY LONG TERM OPER-PIMCO COMMIT TO PUR GNMA SF MTG 6.500% 07/15/2030 BEAR STEARNS & CO INC, NY LONG TERM OPER-PIMCO COMMIT TO PUR GNMA SF MTG 8.000% 07115/2030 BEAR STEARNS & CO INC, NY LONG TERM OPER-PIMCO MONTGOMERY ALA BMC SERB 5.000% 11/15/2029 DD 12/01/9 U.S. CLEARING CORP I TRADE DATE/ SETTLDATE/ COMPLDATE l 2-Jun-2000 l 5-Jun-2000 l 2-Jun-2000 l 5-Jun-2000 I 5-Jun-2000 I 2-Jun-2000 24-Jul-2000 12-Jun-2000 24-Jul-2000 12-Jun-2000 24-Jul-2000 12-Jun-2000 24-Jul-2000 I 5-Jun-2000 20-Jun-2000 PAGE: 13 AMOUNT/ COST/ GAIN/LOSS -1,024,020.00 1,024,020.00 0.00 -1,024,020.00 0.00 0.00 -9,938,906.25 9,938,906.25 0.00 -5,742,187.50 5,742,187.50 0.00 -10,412,187.50 10,412,187.50 0.00 -2,016,250.00 2,016,250.00 0.00 -1,723,280.00 1,723,280.00 0.00 Executive Workbench @ ORANGE COUNTY SANITATION DISTRICT PAGE: 14 PORTFOLIO DETAIL OCSGOOO 10000 01-JUN-2000 -30-JUN-2000 OCSD-CONSOLJDATED SHARES/PAR TRADE DATE/ AMOUNT/ SECURITY ID TRANSACTION DESCRIPTION/ SETTLDATE/ COST/ TRANSCODE BROKER COMPLDATE GAIN/LOSS LONG TERM OPER-PIMCO 2,000,000.00 MONTGOMERY ALA BMC SERB I 5-Jun-2000 -9,722.22 613041GH9 5.000% I 1/15/2029 DD 12/0l/9 20-Jun-2000 0.00 IB 0.00 LONG TERM OPER-PIMCO 2,000,000.00 MONTGOMERY ALA BMC SERB I 5-Jun-2000 -1,733,002.22 613041GH9 5.000% ll/15/2029 DD 12/01/9 20-Jun-2000 0.00 FC U.S. CLEARING CORP 20-Jun-2000 0.00 LONG TERM OPER-PIMCO- 1,945,000.00 NEW JERSEY HLTH CARE SERB 15-Jun-2000 -1,630,474.05 64579ERMO 4.750%07/01/2028 DD 12/01/9 20-Jun-2000 1,630,474.05 B U.S. CLEARING CORP 0.00 LONG TERM OPER-PIMCO 1,945,000.00 NEW JERSEY HLTH CARE SERB 15-Jun-2000 -43,370.80 64579ERMO 4.750% 07/01/2028 DD 12/01/9 20-Jun-2000 0.00 IB 0.00 LONG TERM OPER-PIMCO 1,945,000.00 NEW JERSEY HLTH CARE SER B I 5-Jun-2000 -1,673,844.85 64579ERMO 4.750% 07/01/2028 DD 12/01/9 20-Jun-2000 0.00 FC U.S. CLEARING CORP 20-Jun-2000 0.00 LONG TERM OPER-PIMCO 42,200,000.00 FEDERAL NATL MTG ASSN MTN 23-Jun-2000 -38,961,150.00 31364GYJ2 6.500% 03/12/2009 DD 03/12/9 26-Jun-2000 38,961,150.00 B FIRST TENNESSEE BANK NA MEM 0.00 LONG TERM OPER-PIMCO 42,200,000.00 FEDERAL NATL MTG ASSN MTN 23-Jun-2000 -792,422.22 31364GYJ2 6.500% 03/12/2009 DD 03/12/9 26-Jun-2000 0.00 IB 0.00 11-Ju/-2000 12:37:41 Executive Workbench OCSGOOO 10000 OCSD-CONSOLIDATED PAY UPS SHARES/PAR SECURITY ID TRANSCODE · 42,200,000.00 31364GYJ2 FC FIXED INCOME SECURITIES 20,700.00 9128272M3 PU 20,700.00 9128272M3 FC 840.00 9128275W8 PU 840.00 9128275W8 FC 7,216.00 9128273A8 PU JJ-Jul-2000 12:37:41 ORANGE COUNTY SANITATION DISTRICT PORTFOLIO DETAIL 01-JUN-2000 -30-JUN-2000 TRANSACTION DESCRIPTION/ BROKER LONG TERM OPER-PIMCO FEDERAL NATL MTG ASSN MTN 6.500% 03/12/2009 DD 03/l 2/9 FIRST TENNESSEE BANK NA MEM LONG TERM OPER-PIMCO US TREASURY INFLATION INDEX 3.375% 01/15/2007 DD 01/15/ LONG TERM OPER-PIMCO US TREASURY INFLATION INDEX 3.375% 01/15/2007 DD 01115/ LONG TERM OPER-PIMCO US TREASURY INFLATION INDEX 4.250%001/15/2010 DD 011151 LONG TERM OPER-PIMCO US TREASURY INFLATION INDEX 4.250%001/15/2010 DD 01/15/ LONG TERM OPER-PIMCO US TREASURY INFLATION INDEX 3.625% 07/15/2002 DD 07/15/ TRADE DATE/ SETTLDATE/ COMPLDATE 23-Jun-2000 26-Jun-2000 26-Jun-2000 l 5-Jan-2000 I 5-Jan-2000 I 5-Jan-2000 I 5-Jan-2000 30-Jun-2000 I 5-Jan-2000 I 5-Jan-2000 l 5-Jan-2000 I 5-Jan-2000 30-Jun-2000 15-Jan-2000 I 5-Jan-2000 PAGE: J5 AMOUNT/ COST/ GAIN/LOSS -39, 753,572.22 0.00 0.00 -20,700.00 20,700.00 0.00 -20,700.00 0.00 0.00 -840.00 840.00 0.00 -840.00 0.00 0.00 -7,216.00 7,216.00 0.00 Executive Workbench @ ORANGE COUNTY SANITATION DISTRICT PAGE: 16 PORTFOLIO DETAIL OCSGOOO I 0000 01-JUN-2000 -30-JUN-2000 OCSD-CONSOLIDATED SHARES/PAR TRADE DATE/ AMOUNT/ SECURITY ID TRANSACTION DESCRIPTION/ SETTLDATE/ COST/ TRANSCODE BROKER COMPLDATE GAIN/LOSS LONG TERM OPER-PIMCO 7,216.00 US TREASURY INFLATION INDEX I 5-Jan-2000 -7,216.00 9128273A8 3.625% 07/15/2002 DD 07/15/ I 5-Jan-2000 0.00 FC 30-Jun-2000 0.00 LONG TERM OPER-PIMCO 1,539.70 SALOMON SMITH BARNEY HLDGS I 14-Feb-2000 -1,539.70 79549BBG1 3.650% 02/14/2002 DD 02/14/ 14-Feb-2000 1,539.70 PU 0.00 LONG TERM OPER-PIMCO 1,539.70 SALOMON SMITH BARNEY HLDGS I 14-Feb-2000 -1,539.70 79549BBG1 3.650% 02/14/2002 DD 02/14/ 14-Feb-2000 0.00 FC 30-Jun-2000 0.00 LONG TERM OPER-PIMCO 6.50 FHLMC MULTICLASS CTF E3 A 01-Jun-2000 -6.50 3133TCE95 VAR RT 08/15/2032 01-Jun-2000 6.50 PU 0.00 LONG TERM OPER-PIMCO 6.50 FHLMC MULTICLASS CTF E3 A 01-Jun-2000 -6.50 3133TCE95 VAR RT 08/15/2032 01-Jun-2000 0.00 FC 15-Jun-2000 0.00 LONG TERM OPER-PIMCO 12,173.21 FHLMC MULTICLASS CTF SER 162 01-Jun-2000 -12,173.21 3133Tl7A4 6.000% 11/15/2023 DD 11/0119 01-Jun-2000 12,173.21 PU 0.00 LONG TERM OPER-PIMCO 12,173.21 FHLMC MULTICLASS CTF SER 162 01-Jun-2000 -12,173.21 3133Tl7A4 6.000% 11/15/2023 DD 11/01/9 01-Jun-2000 0.00 FC l 9-Jun-2000 0.00 SALES J J-J11l-2000 12:37:41 Executive Workbench ® ORANGE COUNTY SANITATION DISTRICT PAGE: 17 PORTFOLIO DETAIL OCSGOOO 10000 01-JUN-2000 -30-JUN-2000 OCSD-CONSOLlDATED SHARES/PAR TRADE DATE/ AMOUNT/ SECURITY ID TRANSACTION DESCRIPTION/ SETTLDATE/ COST/ TRANSCODE BROKER COMPLDATE GAIN/LOSS CASH & CASH EQUIVALENTS LONG TERM OPER-PIMCO -31,740.00 BSDT-LATE MONEY DEPOSIT ACCT 01-Jun-2000 31,740.00 996087094 01-Jun-2000 -31,740.00 s 0.00 LIQUID OPER-PIMCO -16.15 DREYFUS TREASURY CASH MGMT 06-Jun-2000 16.15 996085247 06-Jun-2000 -16.15 s 0.00 LIQUID OPER-PIMCO -16.15 DREYFUS TREASURY CASH MGMT 06-Jun-2000 16.15 996085247 06-Jun-2000 0.00 FC 06-Jun-2000 0.00 LONG TERM OPER-PIMCO -323,251.13 DREYFUS TREASURY CASH MGMT 06-Jun-2000 323,251.13 996085247 06-Jun-2000 -323,251.13 s 0.00 LONG TERM OPER-PIMCO -323,251.13 DREYFUS TREASURY CASH MGMT 06-Jun-2000 323,251.13 996085247 06-Jun-2000 0.00 FC 06-Jun-2000 0.00 LIQUID OPER-PIMCO -87,944.67 DREYFUS TREASURY CASH MGMT 12-Jun-200.0 87,944.67 996085247 12-Jun-2000 -87,944.67 s 0.00 LIQUID OPER-PIMCO -87,944.67 DREYFUS TREASURY CASH MGMT 12-Jun-2000 87,944.67 996085247 12-Jun-2000 0.00 FC 12-Jun-2000 0.00 JJ-Jul-2000 12:37:41 Executive Workbench @ ORANGE COUNTY SANITATION DISTRICT PAGE: 18 PORTFOLIO DETAIL OCSGOOO 10000 01-JUN-2000 -30-JUN-2000 OCSD-CONSOLIDATED SHARES/PAR TRADE DATE/ AMOUNT/ SECURITY ID TRANSACTION DESCRIPTION/ SETTLDATE/ COST/ TRANSCODE BROKER COMPLDATE GAIN/LOSS LONG TERM OPER-PIMCO -198,062.00 DREYFUS TREASURY CASH MGMT 13-Jun-2000 198,062.00 996085247 13-Jun-2000 -198,062.00 s 0.00 LONG TERM OPER-PIMCO -198,062.00 DREYFUS TREASURY CASH MGMT l 3-Jun-2000 198,062.00 996085247 13-Jun-2000 0.00 FC 13-Jun-2000 0.00 LONG TERM OPER-PIMCO -6.50 BSDT-LATE MONEY DEPOSIT ACCT l 6-Jun-2000 6.50 996087094 16-Jun-2000 -6.50 s 0.00 LONG TERM OPER-PIMCO -735,206.02 DREYFUS TREASURY CASH MGMT 20-Jun-2000 735,206.02 996085247 20-Jun-2000 -735,206.02 s 0.00 LONG TERM OPER-PIMCO -735,206.02 DREYFUS TREASURY CASH MGMT 20-Jun-2000 735,206.02 996085247 20-Jun-2000 0.00 FC 20-Jun-2000 0.00 LONG TERM OPER-PIMCO -2,500,000.00 FEDERAL NATL MTG ASSN DISCOU 20-Jun-2000 2,468,438.00 313588YL3 MAT 06/22/2000 20-Jun-2000 -2,468,438.89 s MERRILL LYNCH PIERCE FENNER -0.89 LONG TERM OPER-PIMCO -2,500,000.00 FEDERAL NATL MTG ASSN DISCOU 20-Jun-2000 30,680.06 313588YL3 MAT 06/22/2000 20-Jun-2000 0.00 IS 0.00 ll-Jul-2000 12:37:41 Executive Workbench OCSGOOO 10000 OCSD-CONSOLJDATED SHARES/PAR SECURITY ID TRANSCODE -2,500,000.00 313588YL3 FC -161,317.99 996085247 s -161,317.99 996085247 FC -26,286,518.54 996085247 s -26,286,518.54 996085247 FC -328,351.11 996085247 s -328,351.11 996085247 FC FIXED INCOME SECURITIES //-Jul-2000 12:37:41 ORANGE COUNTY SANITATION DISTRICT PORTFOLIO DETAIL 01-JUN-2000 -30-JUN-2000 TRANSACTION DESCRIPTION/ BROKER LONG TERM OPER-PIMCO FEDERAL NATL MTG ASSN DISCOU MAT 06/22/2000 MERRILL LYNCH PIERCE FENNER LONG TERM OPER-PIMCO DREYFUS TREASURY CASH MGMT LONG TERM OPER-PIMCO DREYFUS TREASURY CASH MGMT LONG TERM OPER-PIMCO DREYFUS TREASURY CASH MGMT LONG TERM OPER-PIMCO DREYFUS TREASURY CASH MGMT LONG TERM OPER-PIMCO DREYFUS TREASURY CASH MGMT LONG TERM OPER-PIMCO DREYFUS TREASURY CASH MGMT TRADE DATE/ SETTLDATE/ COMPLDATE 20-Jun-2000 20-Jun-2000 20-Jun-2000 22-Jun-2000 22-Jun-2000 22-Jun-2000 22-Jun-2000 22-Jun-2000 27-Jun-2000 27-Jun-2000 27-Jun-2000 27-Jun-2000 27-Jun-2000 28-Jun-2000 28-Jun-2000 28-Jun-2000 28-Jun-2000 28-Jun-2000 PAGE: l~ AMOUNT/ COST/ GAIN/LOSS 2,499,118.06 0.00 0.00 161,317.99 -161,317.99 0.00 161,317.99 0.00 0.00 26,286,518.54 -26,286,518.54 0.00 26,286,518.54 0.00 0.00 328,351.11 -328,351.11 0.00 328,351.11 0.00 0.00 Executive Workbench @ ORANGE COUNTY SANITATION DISTRICT PAGE: 20 PORTFOLIO DETAIL OCSGOOO 10000 01-JUN-2000 -30-JUN-2000 OCSD-CONSOLIDATED SHARES/PAR TRADE DATE/ AMOUNT/ SECURITY ID TRANSACTION DESCRIPTION/ SETTLDATE/ COST/ TRANSCODE BROKER COMPLDATE GAIN/LOSS LONG TERM OPER-PIMCO -I 0,500,000.00 COMMIT TO PUR GNMA SF MTG 12-Jun-2000 9,944,648.44 OIN062664 6.500% 06/I 5/2030 22-Jun-2000 -9,678,161.34 s MERRILL LYNCH PIERCE FENNER 266,487.10 LONG TERM OPER-PIMCO -I 0,500,000.00 COMMIT TO PUR GNMA SF MTG I 2-Jun-2000 9,944,648.44 01N062664 6.500% 06/15/2030 22-Jun-2000 0.00 FC MERRILL LYNCH PIERCE FENNER 22-Jun-2000 0.00 LONG TERM OPER-PIMCO -2,000,000.00 COMMIT TO PUR GNMA SF MTG I 2-Jun-2000 2,019,218.75 OIN080666 8.000% 06/15/2030 22-Jun-2000 -I ,997,500.00 s BEAR STEARNS & CO INC, NY 21,718.75 LONG TERM OPER-PIMCO -2,000,000.00 COMMIT TO PUR GNMA SF MTG 12-Jun-2000 2,019,218.75 01N080666 8.000% 06/15/2030 22-Jun-2000 0.00 FC BEAR STEARNS & CO INC, NY 22-Jun-2000 0.00 LONG TERM OPER-PIMCO -11,000,000.00 COMMIT TO PUR GNMA SF MTG 12-Jun-2000 10,417,773.44 01N062664 6.500% 06/15/2030 22-Jun-2000 -10,139,026.16 s BEAR STEARNS & CO INC, NY 278,747.28 LONG TERM OPER-PIMCO -I 1,000,000.00 COMMIT TO PUR GNMA SF MTG 12-Jun-2000 10,417,773.44 01N062664 6.500% 06/15/2030 22-Jun-2000 0.00 FC BEAR STEARNS & CO INC, NY 22-Jun-2000 0.00 LONG TERM OPER-PIMCO -6,250,000.00 COMMIT TO PUR GNMA SF MTG 12-Jun-2000 5, 744, 140.63 01N060668 6.000% 06/15/2029 22-Jun-2000 -5,605,468. 75 s GOLDMAN SACHS & CO, NY 138,671.88 I l-Jul-2000 12:37:41 Executive Workbench @ ORANGE COUNTY SANITATION DISTRICT . PAGE: 21 PORTFOLIO DETAIL OCSGOOO 10000 01-JUN-2000 -30-JUN-2000 OCSD-CONSOLIDATED SHARES/PAR TRADE DATE/ AMOUNT/ SECURITY ID TRANSACTION DESCRIPTION/ SETTLDATE/ COST/ TRANSCODE BROKER COMPLDATE GAIN/LOSS LONG TERM OPER-PIMCO -6,250,000.00 COMMIT TO PUR GNMA SF MTG l 2-Jun-2000 5,744,140.63 01N060668 6.000% 06/15/2029 22-Jun-2000 0.00 FC GOLDMAN SACHS & CO, NY 23-Jun-2000 0.00 LONG TERM OPER-PIMCO -21,400,000.00 US TREASURY NOTES 23-Jun-2000 21,460,187.50 912827Z62 06.500% 10/15/2006 DD 10/15/ 26-Jun-2000 -21,276,109.37 s MERRILL LYNCH PIERCE FENNER 184,078.13 LONG TERM OPER-PIMCO. -21 ,400,000.00 US TREASURY NOTES 23-Jun-2000 273,639.34 912827Z62 06.500% 10/15/2006 DD 10/15/ 26-Jun-2000 0.00 IS 0.00 LONG TERM OPER-PIMCO -21,400,000.00 US TREASURY NOTES 23-Jun-2000 21,733,826.84 912827Z62 06.500% 10/15/2006 DD 10/15/ 26-Jun-2000 0.00 FC MERRILL LYNCH PIERCE FENNER 26-Jun-2000 0.00 LONG TERM OPER-PIMCO -23,430,000.00 US TREASURY NOTES 23-Jun-2000 23, 149,023.05 9128275Ql 05.625% 09/30/2001 DD 091301 26-Jun-2000 -23,351,289.85 s GREENWICH CAP MKTS INC, GREE -202,266.80 LONG TERM OPER-PIMCO -23,430,000.00 US TREASURY NOTES 23-Jun-2000 313,280.23 9128275Ql 05.625% 0913012001 DD 09/30/ 26-Jun-2000 0.00 IS 0.00 LONG TERM OPER-PIMCO -23,430,000.00 US TREASURY NOTES 23-Jun-2000 23,462,303.28 9128275Ql 05.625% 09/30/2001 DD 09/30/ 26-Jun-2000 0.00 FC GREENWICH CAP MKTS INC, GREE 26-Jun-2000 0.00 JJ-Jul-2000 12:37:41 Executive Workbench OCSGOOO 10000 OCSD-CONSOLJDATED SHARES/PAR SECURITY ID TRANSCODE -2, I 00,000.00 912827Z54 s -2, I 00,000.00 912827Z54 IS -2, I 00,000.00 912827Z54 FC -9,600,000.00 912810DL9 s -9,600,000.00 912810DL9 IS -9,600,000.00 912810DL9 FC -5,000,000.00 9128272L5 s JJ-Ju/-2000 12:37:41 ORANGE COUNTY SANITATION DISTRICT PORTFOLIO DETAIL 01-JUN-2000 -30-JUN-2000 TRANSACTION DESCRIPTION/ BROKER LONG TERM OPER-PIMCO US TREASURY NOTES 06.375% 0913012001 DD 091301 GREENWICH CAP MKTS INC. GREE LONG TERM OPER-PIMCO U S TREASURY NOTES 06.375% 09/30/2001 DD 09/30/ LONG TERM OPER-PIMCO US TREASURY NOTES 06.375% 09/30/2001 DD 09/30/ GREENWICH CAP MKTS INC, GREE LONG TERM OPER-PIMCO US TREASURY BONDS 12.500% 08/15/2014 DD 08/15/ GREENWICH CAP MKTS INC, GREE LONG TERM OPER-PIMCO U S TREASURY BONDS 12.500% 08/15/2014 DD 08/15/ LONG TERM OPER-PIMCO US TREASURY BONDS 12.500% 08/15/2014 DD 08/15/ GREENWICH CAP MKTS INC, GREE LONG TERM OPER-PIMCO U S TREASURY NOTES 06.250% 02/28/2002 DD 02/28/ GREENWICH CAP MKTS INC, GREE TRADE DATE/ SETTLDATE/ COMPLDATE 23-.Tun-2000 26-Jun-2000 23-Jun-2000 26-Jun-2000 23-Jun-2000 26-Jun-2000 26-Jun-2000 23-Jun-2000 26-Jun-2000 23-Jun-2000 26-Jun-2000 23-Jun-2000 26-Jun-2000 26-Jun-2000 23-Jun-2000 26-Jun-2000 PAGE: 22 AMOUNT/ COST/ GAIN/LOSS 2,093,683.59 -2,167,321.15 -73,637.56 31,822.75 0.00 0.00 2, 125,506.34 0.00 0.00 13,474,875.00 -13,314,211.20 160,663.80 435,164.84 0.00 0.00 13,910,039.84 0.00 0.00 4,972,265.63 -5,086,402.25 -114,136.62 Executive Workbench OCSGOOO 10000 OCSD-CONSOLIDATED SHARES/PAR SECURITY ID TRANSCODE -5,000,000.00 9128272L5 IS -5,000,000.00 9128272L5 FC PRINCIPAL PAYMENTS FIXED INCOME SECURITIES 2,139.75 31348SWZ3 PDC 48,896.50 3133TCE95 PDC -570.59 302998GE3 PD -570.59 302998GE3 FC JJ-Jul-2000 12:37:41 ORANGE COUNTY SANITATION DISTRICT PORTFOLIO DETAIL 01-JUN-2000 -30-JUN-2000 TRANSACTION DESCRIPTION/ BROKER LONG TERM OPER-PIMCO US TREASURY NOTES 06.250% 02/28/2002 DD 02/28/ LONG TERM OPER-PIMCO U S TREASURY NOTES 06.250% 02/28/2002 DD 02/28/ GREENWICH CAP MKTS INC, GREE LONG TERM OPER-PIMCO FHLMC GROUP #78-6064 6.384% 01/01/2028 DD 12/01/ LONG TERM OPER-PIMCO FHLMC MULTICLASS CTF E3 A VAR RT 08/15/2032 LONG TERM OPER-PIMCO WMP/HUNTOON PAIGE #000-11150 7.500% 12/01/2030 DD 10/21/9 LONG TERM OPER-PIMCO WMP/HUNTOON PAIGE #000-11150 7.500% 12/01/2030 DD 1012119 TRADE DATE/ SETTLDATE/ COMPLDATE 23-Jun-2000 26-Jun-2000 23-Jun-2000 26-Jun-2000 26-Jun-2000 Ol-May-2000 0 l-May-2000 01-May-2000 01-May-2000 01-May-2000 01-May-2000 01-May-2000 01-May-2000 06-Jun-2000 PAGE: 23 AMOUNT/ COST/ GAIN/LOSS 100,203.80 0.00 0.00 5,072,469.43 0.00 0.00 -2,139.75 2,087.59 -52.16 -48,896.50 48,949.98 53.48 570.59 -558.20 12.39 570.59 0.00 0.00 £'Cecutive Workhench OCSGOOO 10000 OCSD-CONSOLIDATED SHARES/PAR SECURITY ID TRANSCODE -2, 139. 75 31348SWZ3 PD -2,139.75 31348SWZ3 FC -48,903.00 3133TCE95 PD -48,903.00 3133TCE95 FC -43,930.95 3133T02D5 PD -43,930.95 3133T02D5 FC -139,237.68 3128DDQ55 PD 11-Jul-2000 12:37:41 ORANGE COUNTY SANITATION DISTRICT PORTFOLIO DETAIL 01-JUN-2000 -30-JUN-2000 TRANSACTION DESCRIPTION/ BROKER LONG TERM OPER-PIMCO FHLMC GROUP #78-6064 6.384% Ol/01/2028 DD 121011 LONG TERM OPER-PIMCO FHLMC GROUP #78-6064 6.384% Ol/01/2028 DD 12/01/ LONG TERM OPER-PIMCO FHLMC MULTICLASS CTF E3 A VAR RT 08/15/2032 LONG TERM OPER-PIMCO FHLMC MULTI CLASS CTF E3 A VAR RT 08/15/2032 LONG TERM OPER-PIMCO FHLMC MULTICL MTG P/C 1574 E 5.900% 06/15/2017 LONG TERM OPER-PIMCO FHLMC MULTICL MTG P/C 1574 E 5.900% 06/15/2017 LONG TERM OPER-PIMCO FHLMC GROUP #G5-0476 7.000% 02/01/2003 DD 02/01/ TRADE DATE/ SETTLDATE/ COMPLDATE 01-May-2000 01-May-2000 01-May-2000 01-May-2000 15-Jun-2000 01-May-2000 0 l -May-2000 01-May-2000 Ol-May-2000 15-Jun-2000 01-.Tun-2000 01-Jun-2000 01-Jun-2000 01-Jun-2000 15-Jun-2000 01-Jun-2000 01-Jun-2000 PAGE: 24 AMOUNT/ COST/ GAIN/LOSS 2,139.75 -2,087.59 52.16 2,139.75 0.00 0.00 48,903.00 -48,956.48 -53.48 48,903.00 0.00 0.00 43,930.95 -43,869.17 61.78 43,930.95 0.00 0.00 139,237.68 -141,413.27 -2,175.59 Executive Workbench OCSGOOO 10000 OCSD-CONSOLIDATED SHARES/PAR SECURITY ID TRANSCODE -139,237.68 3128DDQ55 FC -29,594.05 36225CC20 PD -29,594.05 36225CC20 FC -39,622.30 36225CAZ9 PD -39,622.30 36225CAZ9 FC -1,485.37 36225CNM4 PD -1,485.37 36225CNM4 FC ll-Jul-2000 12:37:41 ORANGE COUNTY SANITATION DISTRICT PORTFOLIO DETAIL 01-JUN-2000 -30-JUN-2000 TRANSACTION DESCRIPTION/ BROKER LONG TERM OPER-PIMCO FHLMC GROUP #G5-0476 7.000% 02/0112003 DD 02/01/ LONG TERM OPER-PIMCO GNMA II POOL #080088M VAR RT 06/20/2027 DD 0610119 LONG TERM OPER-PIMCO GNMA II POOL #080088M VAR RT 06/20/2027 DD 0610119 LONG TERM OPER-PIMCO GNMA II POOL #0080023 7.125% 12/20/2026 DD 12/01/ LONG TERM OPER-PIMCO GNMA II POOL #0080023 7.125% 12/20/2026 DD 12/01/ LONG TERM OPER-PIMCO GNMA II POOL #0080395 6.500% 04/20/2030 DD 04/01/ LONG TERM OPER-PIMCO GNMA II POOL #0080395 6.500% 04/20/2030 DD 04/01/ TRADE DATE/ SETTLDATE/ COMPLDATE 01-Jun-2000 01-Jun-2000 15-Jun-2000 01-Jun-2000 01-Jun-2000 01-Jun-2000 01-Jun-2000 20-Jun-2000 01-Jun-2000 01-Jun-2000 01-Jun-2000 01-Jun-2000 20-Jun-2000 01-Jun-2000 01-Jun-2000 01-Jun-2000 01-Jun-2000 20-Jun-2000 PAGE: 25 AMOUNT/ COST/ GAIN/LOSS 139,237.68 0.00 0.00 29,594.05 -30,241.42 -647.37 29,594.05 0.00 0.00 39,622.30 -40,278.54 -656.24 39,622.30 0.00 0.00 1,485.37 -1,471.91 13.46 1,485.37 0.00 0.00 Executive Workbench OCSGOOO 10000 OCSD-CONSOLIDATED SHARES/PAR SECURITY ID TRANSCODE -35,825.00 3133TKKU3 PD -35,825.00 3133TKKU3 FC -11,300.40 31348SWZ3 PD -10,824.68 36225CN28 PD -10,824.68 36225CN28 FC -45,475.50 3133TCE95 PD -1,868.23 39810#AE4 PD 11-Jul-2000 12:37:41 ORANGE COUNTY SANITATION DISTRICT PORTFOLIO DETAIL 01-JUN-2000 -30-JUN-2000 TRANSACTION DESCRIPTION/ BROKER LONG TERM OPER-PIMCO FHLMC MULTICLASS CTF 2146 QT 6.000% 11115/2011 LONG TERM OPER-PIMCO FHLMC MULTICLASS CTF 2146 QT 6.000% 11115/2011 LONG TERM OPER-PIMCO FHLMC GROUP #78-6064 6.384% 0110112028 DD 12/01/ LONG TERM OPER-PIMCO GNMA II POOL #080408X 6.500% 05/20/2030 DD 05/01/ LONG TERM OPER-PIMCO GNMA II POOL #080408X 6.500% 05/20/2030 DD 051011 LONG TERM OPER-PIMCO FHLMC MULTICLASS CTF E3 A VAR RT 08/15/2032 LONG TERM OPER-PIMCO GREYSTONE SVCNG CORP FHA #95 7.430% Oq/0112003 DD 0212910 TRADE DATE/ SETTLDATE/ COMPLDATE 0 l-Jun-2000 01-Jun-2000 0 l-Jun-2000 0 l-Jun-2000 15-J un-2000 Ol-Jun-2000 0 l-Jun-2000 01-Jun-2000 01-Jun-2000 0 l-Jun-2000 0 l-Jun-2000 20-Jun-2000 Ol-Jun-2000 Ol-.Tun-2000 0 l-Jun-2000 0 l-Jun-2000 PAGE: 26 AMOUNT/ COST/ GAIN/LOSS 35,825.00 -35, 192.46 632.54 35,825.00 0.00 0.00 11,300.40 -11,024.95 275.45 10,824.68 -10,714.74 109.94 10,824.68 0.00 0.00 45,475.50 -45,525.24 -49.74 1,868.23 -1,840.94 27.29 Executive Workbench OCSGOOO 10000 OCSD-CONSOLIDATED SHARES/PAR SECURITY ID TRANSCODE -1,868.23 39810#AE4 FC -574.57 302998GE3 PD -5,693.70 31677EAA4 PD -5,693.70 31677EAA4 FC -23, 142.37 3935052Y7 PD -23,142.37 3935052Y7 FC -42,323.76 3837H4NX9 PD JJ-Jul-2000 12.37:41 ORANGE COUNTY SANITATION DISTRICT PORTFOLIO DETAIL 01-JUN-2000 -30-JUN-2000 TRANSACTION DESCRIPTION/ BROKER LONG TERM OPER-PIMCO GREYSTONE SVCNG CORP FHA #95 7.430% 06/01/2003 DD 02/29/0 LONG TERM OPER-PIMCO WMP/HUNTOON PAIGE #000-11150 7.500% 12/01/2030 DD 10/21/9 LONG TERM OPER-PIMCO FIFTH THIRD BK AUTO TR 96A C 6.200% 09/01/2001DD03/15/9 LONG TERM OPER-PIMCO FIFTH THIRD BK AUTO TR 96A C 6.200% 09101/200 l DD 03/15/9 LONG TERM OPER-PIMCO GREEN TREE CORP 99-D CL A-1 6.290% 10/15/2013 DD 0812619 • LONG TERM OPER-PIMCO GREEN TREE CORP 99-D CL A-I 6.290% 10/15/2013 DD 08/26/9 LONG TERM OPER-PIMCO GNMA GTD REMIC TR 2000-9 FH VAR RT 02/16/2030 TRADE DATE/ SETTLDATE/ COMPLDATE Ol-Jun-2000 0 l-Jun-2000 26-Jun-2000 Ol-Jun-2000 01-Jun-2000 15-Jun-2000 15-Jun-2000 15-Jun-2000 I 5-Jun-2000 15-Jun-2000 15-Jun-2000 J 5-Jun-2000 l 5-Jun-2000 l 5-Jun-2000 l 5-Jun-2000 l 6-Jun-2000 16-Jun-2000 PAG£: 2~ AMOUNT/ COST/ GAIN/LOSS 1,868.23 0.00 0.00 574.57 -562.09 12.48 5,693.70 -5,693.70 0.00 5,693.70 0.00 0.00 23,142.37 -23, 142.37 0.00 23,142.37 0.00 0.00 42,323.76 -42,323.76 0.00 Executive Workbench OCSGOOO 10000 OCSD-CONSOLIDATED SHARES/PAR SECURITY ID TRANSCODE MATURITIES -42,323.76 3837H4NX9 FC CASH & CASH EQUIVALENTS -I 0,400,000.00 42307JF62 MT -600,000.00 90328AF65 MT -1,200,000.00 313588YA7 MT -1,000,000.00 62007AFD7 MT -400,000.00 61166AFE4 MT ll-Ju/-2000 12:37:41 ORANGE COUNTY SANITATION DISTRICT PORTFOLIO DETAIL 01-JUN-2000 -30-JUN-2000 TRANSACTION DESCRIPTION/ BROKER LONG TERM OPER-PIMCO GNMA GTD REMIC TR 2000-9 FH VAR RT 02/16/2030 LONG TERM OPER-PIMCO HEINZ H J CO DISC 0610612000 LONG TERM OPER-PIMCO USAA CAP CORP DISC 0610612000 LIQUID OPER-PIMCO FEDERAL NATL MTG ASSN DISC MAT 06/12/2000 LONG TERM OPER-PIMCO MOTOROLA CR CO DISC 06113/2000 LONG TERM OPER-PIMCO MONSANTO CO DISC 06/14/2000 TRADE DATE/ SETTLDATE/ COMPLDATE 16-Jun-2000 I 6-Jun-2000 I 6-Jun-2000 06-Jun-2000 06-Jun-2000 06-Jun-2000 06-Jun-2000 06-Jun-2000 06-Jun-2000 12-Jun-2000 12-Jun-2000 l 2-Jun-2000 13-Jun-2000 13-Jun-2000 l 3-Jun-2000 14-Jun-2000 14-Jun-2000 I 4-Jun-2000 PAGE: 28 AMOUNT/ COST/ GAIN/LOSS 42,323.76 0.00 0.00 10,312,611.11 -10,312,611.11 0.00 591,642.00 -591,642.00 0.00 1,200,000.00 -1,194,912.00 5,088.00 992,534.72 -992,534. 72 0.00 394,334.67 -394,334.67 0.00 Executive Tf orkbench OCSGOOO 10000 OCSD-CONSOLIDATED SHARES/PAR SECURITY ID TRANSCODE -3,300,000.00 74271RFE2 MT -4,400,000.00 313588YDI MT -8,000,000.00 90262CFF9 MT -2,200,000.00 313384YD5 MT -600,000.00 313588YDI MT -1,600,000.00 313384YE3 MT -600,000.00 90262CFK8 MT /J-Jul-2000 12:37:41 ORANGE COUNTY SANITATION DISTRICT PORTFOLIO DETAIL Ol-JUN-2000 -30-JUN-2000 TRANSACTION DESCRIPTION/ BROKER LONG TERM OPER-PIMCO PROCTER & GAMBLE DISC 0611412000 LONG TERM OPER-PIMCO FEDERAL NATL MTG ASSN DISC N MAT 06/ 15/99 LONG TERM OPER-PIMCO UBS FIN DEL INC DISC 0611512000 LIQUID OPER-PIMCO FEDERAL HOME LN BK CONS DISC MAT 0611512000 LIQUID OPER-PIMCO FEDERAL NATL MTG ASSN DISC N MAT 06115199 LIQUID OPER-PIMCO FEDERAL HOME LN BK CONS DISC MAT 06/16/2000 LIQUID OPER-PIMCO UBS FIN DEL INC DISC 06/19/2000 TRADE DATE/ SETTLDATE/ COMPLDATE 14-Jun-2000 I 4-Jun-2000 14-Jun-2000 I 5-Jun-2000 I 5-Jun-2000 I 5-Jun-2000 I 5-Jun-2000 I 5-Jun-2000 15-Jun-2000 I 5-Jun-2000 l 5-Jun-2000 I 5-Jun-2000 l 5-Jun-2000 15-Jun-2000 I 5-Jun-2000 I 6-Jun-2000 16-Jun-2000 16-Jun-2000 19-Jun-2000 l 9-Jun-2000 l 9-Jun-2000 PAGE: 29 AMOUNT/ COST/ GAIN/LOSS 3,264, 130.83 -3,264, 130.83 0.00 4,349, 737.33 -4,349,737.33 0.00 7,954,516.66 -7,954,516.66 0.00 2, 191, 102.84 -2,191,102.84 0.00 594,151.67 -594, 151.67 0.00 l,593,539.56 -1,593,539.56 0.00 596,943.33 -596,943.33 0.00 E.xecutive Workbench OCSGOOO 10000 OCSD-CONSOLIDATED SHARES/PAR SECURITY ID TRANSCODE -2,500,000.00 313396YJ6 MT -1,200,000.00 26354AFN9 MT -2, 700,000.00 313396YR8 MT -5,200,000.00 37042DFU2 MT -900,000.00 36959HFU6 MT -1,000,000.00 313396YT4 MT -5,600,000.00 00282AFW1 MT FIXED INCOME SECURITIES 11-Jul-2000 12:37:41 ORANGE COUNTY SANITATION DISTRICT PORTFOLIO DETAIL 01-JUN-2000 -30-JUN-2000 TRANSACTION DESCRIPTION/ BROKER LIQUID OPER-PIMCO FEDERAL HOME LN MTG CORP DIS MAT 0612012000 LONG TERM OPER-PIMCO DU PONT DE DE MOUR DISC 0612212000 LONG TERM OPER-PIMCO FEDERAL HOME LN MTG CORP DIS MAT 0612712000 LONG TERM OPER-PIMCO GMAC DISC 06/28/2000 LIQUID OPER-PIMCO GENERAL ELEC CAP DISC 06/28/2000 LIQUID OPER-PIMCO FEDERAL HOME LN MTG CORP DIS MAT 0612912000 LONG TERM OPER-PIMCO ABBOTT LABS DISC 0613012000 TRADE DATE/ SETTLDATE/ COMPLDATE 20-Jun-2000 20-Jun-2000 20-Jun-2000 22-Jun-2000 22-Jun-2000 22-Jun-2000 27-Jun-2000 27-Jun-2000 27-Jun-2000 28-Jun-2000 28-Jun-2000 28-Jun-2000 28-Jun-2000 28-Jun-2000 28-Jun-2000 29-Jun-2000 29-Jun-2000 29-Jun-2000 30-Jun-2000 30-Jun-2000 30-Jun-2000 PAGE: 30 AMOUNT/ COST/ GAIN/LOSS 2,476,569.44 -2,476,569.44 0.00 1,198,062.00 -1,198,062.00 0.00 2,673,409.50 -2,673,409.50 0.00 5, 137,451.83 -5, 137,451.83 0.00 888,392.25 -888,392.25 0.00 992,568.33 -992,568.33 0.00 5,564,774.44 -5,564,774.44 0.00 Executive Workbench OCSGOOO 10000 OCSD-CONSOLIDATED INTEREST SHARES/PAR SECURITY ID TRANSCODE -4 75,000.00 046003EL9 MT -500,000.00 122014AB9 MT -600,000.00 812404AE1 MT 0.00 996087094 IT 900,000.00 370442AH8 IT 0.00 996087094 IT JJ-Jul-2000 12:37:41 ORANGE COUNTY SANITATION DISTRICT PORTFOLIO DETAIL 01-JUN-2000 -30-JUN-2000 TRANSACTION DESCRIPTION/ BROKER LIQUID OPER-PIMCO ASSOCIATES CORP NORTH AMER 6.000% 06/15/2000 LIQUID OPER-PIMCO BURLINGTON RES INC NT 9.625% 0611512000 DD 06/28/9 LIQUID OPER-PIMCO SEARS ROEBUCK ACCEP CORP NT 6.500% 06/15/2000 DD 0611319 LIQUID OPER-PIMCO BSDT-LATE MONEY DEPOSIT ACCT LIQUID OPER-PIMCO GENERAL MTRS CORP NTS 9.625% 12/01/2000 DD 1210119 LONG TERM OPER-PIMCO BSDT-LATE MONEY DEPOSIT ACCT TRADE DATE/ SETTLDATE/ COMPLDATE l 5-Jun-2000 l 5-Jun-2000 l 5-Jun-2000 l 5-Jun-2000 l 5-Jun-2000 15-Jun-2000 l 5-Jun-2000 l 5-Jun-2000 l 5-Jun-2000 Ol-Jun-2000 Ol-Jun-2000 Ol-Jun-2000 01-Jun-2000 Ol-Jun-2000 Ol-Jun-2000 Ol-Jun-2000 Ol-Jun-2000 Ol-Jun-2000 PAGf: AMOUNT/ COST/ GAIN/LOSS 475,000.00 -4 74,273.25 726.75 500,000.00 -505,900.00 -5,900.00 600,000.00 -599, 760.00 240.00 0.01 0.00 0.00 43,312.50 0.00 0.00 1.32 0.00 0.00 Executive Workbench OCSGOOOJ 0000 OCSD-CONSOLJDATED SHARES/PAR SECURITY ID TRANSCODE 10,500,000.00 3134A3TCO IT 500,000.00 362320AQ6 IT 0.00 996085247 IT 0.00 996085247 IT 10,400,000.00 42307JF62 IT 600,000.00 90328AF65 IT 570.59 302998GE3 IT ll-Jul-2000 12:37:41 ORANGE COUNTY SANITATION DISTRICT PORTFOLIO DETAIL 01-JUN-2000 -30-JUN-2000 TRANSACTION DESCRIPTION/ BROKER LONG TERM OPER-PIMCO FEDERAL HOME LN MTG CORP DEB 6.300% 0610112004 DD 0610119 LIQUID OPER-PIMCO GTE CORP DEB 9.375% 12/01/2000 LIQUID OPER-PIMCO DREYFUS TREASURY CASH MGMT LONG TERM OPER-PIMCO DREYFUS TREASURY CASH MGMT LONG TERM OPER-PIMCO HEINZ H J CO DISC 06/06/2000 LONG TERM OPER-PIMCO USAA CAP CORP DISC 06/06/2000 LONG TERM OPER-PIMCO WMP/HUNTOON PAIGE #000-11150 7.500% 12/01/2030 DD 10/21/9 TRADE DATE/ SETTLDATE/ COMPLDATE 01-Jun-2000 01-Jun-2000 0 l-Jun-2000 01-Jun-2000 01-Jun-2000 01-Jun-2000 02-Jun-2000 01-Jun-2000 02-Jun-2000 02-Jun-2000 01-Jun-2000 02-Jun-2000 06-Jun-2000 06-Jun-2000 06-Jun-2000 06-Jun-2000 06-Jun-2000 06-Jun-2000 06-Jun-2000 01-May-2000 06-Jun-2000 PAGE: 32 AMOUNT/ COST/ GAIN/LOSS 330,750.00 0.00 0.00 23,437.50 0.00 0.00 609.02 0.00 0.00 2,300.07 0.00 0.00 87,388.89 0.00 0.00 8,358.00 0.00 0.00 6,094.93 0.00 0.00 Executive Workbench @ ORANGE COUNTY SANITATION DISTRICT PAGf· 3J PORTFOLIO DETAIL OCSGOOO 10000 01-JUN-2000 -30-JUN-2000 OCSD-CONSOLJDATED SHARES/PAR TRADE DATE/ AMOUNT/ SECURITY ID TRANSACTION DESCRIPTION/ SETTLDATE/ COST/ TRANSCODE BROKER COMPLDATE GAIN/LOSS LONG TERM OPER-PIMCO 1,000,000.00 MOTOROLA CR CO DISC I 3-Jun-2000 7,465.28 62007AFD7 0611312000 13-Jun-2000 0.00 IT 13-Jun-2000 0.00 LONG TERM OPER-PIMCO 5,000,000.00 LEHMAN BROS HLDGS MTN I 3-Jun-2000 84,554.17 52517PQQ7 FLTG RT 12/12/2002 DD 12/07/ 13-Jun-2000 0.00 IT 13-Jun-2000 0.00 LONG TERM OPER-PIMCO 400,000.00 MONSANTO CO DISC 14-Jun-2000 5,665.33 61166AFE4 06/14/2000 14-Jun-2000 0.00 IT 14-Jun-2000 0.00 LONG TERM OPER-PIMCO 3,300,000.00 PROCTER & GAMBLE DISC 14-Jun-2000 35,869.17 74271RFE2 06/14/2000 14-Jun-2000 0.00 IT l 4-Jun-2000 0.00 LONG TERM OPER-PIMCO 7,500,000.00 BELLSOUTH TELECOMMUNICATIONS l 5-Jun-2000 225,000.00 079867AX5 6.000% 06/15/2002 DD 0611519 l 5-Jun-2000 0.00 IT 15-Jun-2000 0.00 LONG TERM OPER-PIMCO 2,000,000.00 MARSH & MCLENNAN COS INC SR 15-Jun-2000 66,250.00 571748AB8 6.625% 0611512004 DD 0611419 15-Jun-2000 0.00 IT 15-Jun-2000 0.00 LIQUID OPER-PIMCO 600,000.00 SEARS ROEBUCK ACCEP CORP NT 15-Jun-2000 19,500.00 812404AE1 6.500% 06/15/2000 DD 0611319 l 5-Jun-2000 0.00 IT l 5-Jun-2000 0.00 ll-Jul-2000 12:37:41 Executive Workbench OCSGOOOJ 0000 OCSD-CONSOLIDATED SHARES/PAR SECURITY ID TRANSCODE 500,000.00 122014AB9 IT 3,000,000.00 209111CU5 IT 2,500,000.00 22237UAB8 IT 475,000.00 046003EL9 IT 139,237.68 3128DDQ55 IT 4,400,000.00 313588YD1 IT 8,000,000.00 90262CFF9 IT JJ-Jul-2000 12:37:41 ORANGE COUNTY SANITATION DISTRICT PORTFOLIO DETAIL 01-JUN-2000 -30-JUN-2000 TRANSACTION DESCRIPTION/ BROKER LIQUID OPER-PIMCO BURLINGTON RES INC NT 9.625% 06115/2000 DD 06/28/9 LONG TERM OPER-PIMCO CONSOLIDATED EDISON NY DEBS FL TG RT 06/15/2002 DD 06/20/ LONG TERM OPER-PIMCO COUNTRYWIDE HOME LNS INC NT 6.850% 06115/2004 DD 06/24/9 LIQUID OPER-PIMCO ASSOCIATES CORP NORTH AMER 6.000% 06/15/2000 LONG TERM OPER-PIMCO FHLMC GROUP #G5-0476 7.000% 02/01/2003 DD 02/01/ LONG TERM OPER-PIMCO FEDERAL NATL MTG ASSN DISC N MAT 06/15/99 LONG TERM OPER-PIMCO UBS FIN DEL INC DISC 06/15/2000 TRADE DATE/ SETTLDATE/ COMPLDATE l 5-Jun-2000 l 5-Jun-2000 l 5-Jun-2000 l 5-Jun-2000 15-Jun-2000 l 5-Jun-2000 15-Jun-2000 15-Jun-2000 I 5-Jun-2000 l 5-Jun-2000 l 5-Jun-2000 I 5-Jun-2000 15-Jun-2000 Ol-Jun-2000 15-Jun-2000 15-Jun-2000 15-Jun-2000 l 5-Jun-2000 l 5-Jun-2000 l 5-Jun-2000 15-Jun-2000 PAGE: 34 AMOUNT/ COST/ GAIN/LOSS 24,062.50 0.00 0.00 47,610.00 0.00 0.00 85,625.00 0.00 0.00 14,250.00 0.00 0.00 49,134.51 0.00 0.00 50,262.67 0.00 0.00 45,483.34 0.00 0.00 Executive Workbench , OCSGOOO 10000 OCSD-CONSOL/DATED SHARES/PAR SECURITY ID TRANSCODE 2,200,000.00 313384YD5 IT 600,000.00 313588YDI IT 35,825.00 3133TKKU3 IT 43,930.95 3133T02D5 IT 5,693.70 31677EAA4 IT 2,139.75 31348SWZ3 IT 23,142.37 3935052Y7 IT 1 J-Jul-2000 12:37:41 ORANGE COUNTY SANITATION DISTRICT PORTFOLIO DETAIL 01-JUN-2000 -30-JUN-2000 TRANSACTION DESCRIPTION/ BROKER LIQUID OPER-PIMCO FEDERAL HOME LN BK CONS DISC MAT 06/15/2000 LIQUID OPER-PIMCO FEDERAL NATL MTG ASSN DISC N MAT 06115199 LONG TERM OPER-PIMCO FHLMC MULTICLASS CTF 2146 QT 6.000% 11/15/2011 LONG TERM OPER-PIMCO FHLMC MULTICL MTG P/C 1574 E 5.900% 06/15/2017 LONG TERM OPER-PIMCO FIFTH THIRD BK AUTO TR 96A C 6.200% 09/01/2001 DD 0311519 LONG TERM OPER-PIMCO FHLMC GROUP #78-6064 6.384% 01/01/2028 DD 12/01/ LONG TERM OPER-PIMCO GREEN TREE CORP 99-D CL A-1 6.290% 10/15/2013 DD 08/26/9 TRADE DATE/ SETTLDATE/ COMPLDATE 15-Jun-2000 15-Jun-2000 I 5-Jun-2000 15-Jun-2000 I 5-Jun-2000 I 5-Jun-2000 15-Jun-2000 Ol-Jun-2000 15-Jun-2000 I 5-Jun-2000 01-Jun-2000 15-Jun-2000 15-Jun-2000 l 5-Jun-2000 15-Jun-2000 15-Jun-2000 01-May-2000 15-Jun-2000 I 5-Jun-2000 I 5-Jun-2000 l 5-Jun-2000 . PAGE: 35 AMOUNT/ COST/ GAIN/LOSS 8,897.16 0.00 0.00 5,848.33 0.00 0.00 12,041.75 0.00 0.00 1,836.58 0.00 0.00 162.46 0.00 0.00 1,747.90 0.00 0.00 1,716.35 0.00 0.00 Executive Workbench OCSGOOO 10000 OCSD-CONSOL/DATED SHARES/PAR SECURITY ID TRANSCODE 48,903.00 3133TCE95 IT 6.50 3 l33TCE95 IT 1,600,000.00 313384YE3 IT 42,323.76 3837H4NX9 IT 3,000,000.00 37042WVR9 IT 600,000.00 90262CFK8 IT 12,173.21 3133T17A4 IT Jl-Jul-2000 12:37:41 ORANGE COUNTY SANITATION DISTRICT PORTFOLIO DETAIL Ol-JUN-2000 -30-JUN-2000 TRANSACTION DESCRIPTION/ BROKER LONG TERM OPER-PIMCO FHLMC MULTICLASS CTF E3 A VAR RT 08/15/2032 LONG TERM OPER-PIMCO FHLMC MULTI CLASS CTF E3 A VAR RT 08/15/2032 LIQUID OPER-PIMCO FEDERAL HOME LN BK CONS DISC MAT 06/16/2000 LONG TERM OPER-PIMCO GNMA GTD REMIC TR 2000-9 FH VAR RT 02/16/2030 LONG TERM OPER-PIMCO GMAC MTN FLTG RT 12/17/2001DD12/15/98 LIQUID OPER-PIMCO UBS FIN DEL INC DISC 06/19/2000 LONG TERM OPER-PIMCO FHLMC MULTICLASS CTF SER 162 6.000% 11/15/2023 DD 11/01/9 TRADE DATE/ SETTLDATE/ COMPLDATE I 5-Jun-2000 01-May-2000 I 5-Jun-2000 15-Jun-2000 01-May-2000 I 5-Jun-2000 I 6-Jun-2000 16-Jun-2000 16-Jun-2000 I 6-Jun-2000 16-Jun-2000 I 6-Jun-2000 l 9-Jun-2000 I 7-Jun-2000 I 9-Jun-2000 I 9-Jun-2000 I 9-Jun-2000 19-Jun-2000 19-Jun-2000 Ol-Jun-2000 l 9-Jun-2000 PAGE: 36 AMOUNT/ COST/ GAIN/LOSS 15,696.49 0.00 0.00 6.50 0.00 0.00 6,460.44 0.00 0.00 15,606.70 0.00 0.00 51,295.80 0.00 0.00 3,056.67 0.00 0.00 12,173.21 0.00 0.00 Executive Workbench OCSGOOO 10000 OCSD-CONSOLJDATED SHARES/PAR SECURITY ID TRANSCODE 2,000,000.00 3837H3C70 IT 2,500,000.00 313396YJ6 IT 39,622.30 36225CAZ9 IT 29,594.05 36225CC20 IT 1,485.37 36225CNM4 IT 10,824.68 36225CN28 IT 3,500,000.00 l 7120QE80 IT ll-Jul-2000 12:37:41 ORANGE COUNTY SANITATION DISTRICT PORTFOLIO DETAIL 01-JUN-2000 -30-JUN-2000 TRANSACTION DESCRIPTION/ BROKER LONG TERM OPER-PIMCO GNMA GTD REMIC TR 2000-2 PA 7.000% 12/20/2022 LIQUID OPER-PIMCO FEDERAL HOME LN MTG CORP DIS MAT 0612012000 LONG TERM OPER-PIMCO GNMA II POOL #0080023 7.125% 12/20/2026 DD 121011 LONG TERM OPER-PIMCO GNMA II POOL #080088M VAR RT 06/20/2027 DD 0610119 LONG TERM OPER-PIMCO GNMA II POOL #0080395 6.500% 04/20/2030 DD 04/011 LONG TERM OPER-PIMCO GNMA II POOL #080408X 6.500% 05/20/2030 DD 051011 LONG TERM OPER-PIMCO CHRYSLER FINL LLC MTN #TR006 FL TG RT 08/08/2002 DD 04/08/ TRADE DATE/ SETTLDATE/ COMPLDATE 20-Jun-2000 0 l-Jun-2000 20-Jun-2000 20-Jun-2000 20-Jun-2000 20-Jun-2000 20-Jun-2000 Ol-Jun-2000 20-Jun-2000 20-Jun-2000 Ol-Jun-2000 20-Jun-2000 20-Jun-2000 Ol-Jun-2000 20-Jun-2000 20-Jun-2000 Ol-Jun-2000 20-Jun-2000 21-Jun-2000 20-Jun-2000 21-Jun-2000 PAGE~ 3l AMOUNT/ COST/ GAIN/LOSS 11,666.67 0.00 0.00 23,430.56 0.00 0.00 8,337.60 0.00 0.00 10,048.74 0.00 0.00 6,771.50 0.00 0.00 54, 172.08 0.00 0.00 22,832.64 0.00 0.00 Executive WQrkbench. @ ORANGE COUNTY SANITATION DISTRICT PAGE: 38 PORTFOLIO DETAIL OCSGOOOJOOOO 01-JUN-2000 -30-JUN-2000 OCSD-CONSOLIDATED SHARES/PAR TRADE DATE/ AMOUNT/ SECURITY ID TRANSACTION DESCRIPTION/ SETTLDATE/ COST/ TRANSCODE BROKER COMPLDATE GAIN/LOSS LONG TERM OPER-PIMCO 1,200,000.00 DU PONT DE DE MOUR DISC 22-Jun-2000 1,938.00 26354AFN9 06/22/2000 22-Jun-2000 0.00 IT 22-Jun-2000 0.00 LONG TERM OPER-PIMCO 2,000,000.00 FHLMC MULTICLASS CTF Tl 1 A6 26-Jun-2000 10,833.33 3133TDPV2 6.500% 09/25/2018 25-May-2000 0.00 IT 26-Jun-2000 0.00 LONG TERM OPER-PIMCO 2,000,000.00 HELLER FINANCIAL INC NTS 26-Jun-2000 32,899.03 423328BK8 FL TG RT 06/25/2001 DD 06/25/ 25-Jun-2000 0.00 IT 26-Jun-2000 0.00 LONG TERM OPER-PIMCO 4,000,000.00 HOUSEHOLD FIN CO MTN 26-Jun-2000 67,954.16 44181KZA5 FLTG RT 06/24/2003 DD 06/24/ 24-Jun-2000 0.00 IT 26-Jun-2000 0.00 LONG TERM OPER-PIMCO 1,868.23 GREYSTONE SVCNG CORP FHA #95 26-Jun-2000 8,147.83 39810#AE4 7.430% 06/01/2003 DD 02/29/0 0 l-Jun-2000 0.00 IT 26-Jun-2000 0.00 LONG TERM OPER-PIMCO 3,000,000.00 FORD MTR CR CO GLOBAL LANDMA 27-Jun-2000 50,270.83 345397SR5 FLTG RT 03/17/2003 DD 031161 17-Jun-2000 0.00 IT 27-Jun-2000 0.00 LONG TERM OPER-PIMCO 2,700,000.00 FEDERAL HOME LN MTG CORP DIS 27-Jun-2000 26,590.50 313396YR8 MAT 06/27/2000 27-Jun-2000 0.00 IT 27-Jun-2000 0.00 JJ-Jul-2000 12:37:41 Executive Workbench OCSGOOO 10000 OCSD-CONSOLJDATED SHARES/PAR SECURITY ID TRANSCODE 5,200,000.00 37042DFU2 IT 900,000.00 36959HFU6 IT 1,000,000.00 313396YT4 IT 0.00 990000PJ4 CD 5,600,000.00 00282AFW1 IT 0.00 9128272M3 CD 0.00 9128273A8 CD 11-Jul-2000 12:37:41 ORANGE COUNTY SANITATION DISTRICT PORTFOLIO DETAIL 01-JUN-2000 -30-JUN-2000 TRANSACTION DESCRIPTION/ BROKER LONG TERM OPER-PIMCO GMAC DISC 06/28/2000 LIQUID OPER-PIMCO GENERAL ELEC CAP DISC 06/28/2000 LIQUID OPER-PIMCO FEDERAL HOME LN MTG CORP DIS MAT 06/29/2000 LONG TERM OPER-PIMCO SHORT TERM FDS INT ADJ NET OF OVERNIGHT INTEREST LONG TERM OPER-PIMCO ABBOTT LABS DISC 0613012000 LONG TERM OPER-PIMCO US TREASURY INFLATION INDEX 3.375% 01/15/2007 DD 01/15/ LONG TERM OPER-PIMCO US TREASURY INFLATION INDEX 3.625% 07115/2002 DD 07/15/ TRADE DATE/ SETTLDATE/ COMPLDATE 28-Jun-2000 28-Jun-2000 28-Jun-2000 28-Jun-2000 28-Jun-2000 28-Jun-2000 29-Jun-2000 29-Jun-2000 29-Jun-2000 30-Jun-2000 30-Jun-2000 30-Jun-2000 30-Jun-2000 30-Jun-2000 30-Jun-2000 30-Jun-2000 30-Jun-2000 30-Jun-2000 30-Jun-2000 PAG£. • 39 AMOUNT/ COST/ GAIN/LOSS 62,548.17 0.00 0.00 11 ,607.75 0.00 0.00 7,431.67 0.00 0.00 29.23 0.00 0.00 35,225.56 0.00 0.00 20,700.00 0.00 0.00 7,216.00 0.00 0.00 Executive Workbench OCSGOOO 10000 OCSD-CONSOLIDATED SHARES/PAR SECURITY ID TRANSCODE 0.00 79549BBGI CD 0.00 9128275W8 CD •tT/"lnflfl /1·~7·tf{ ORANGE COUNTY SANITATION DISTRJCT PORTFOLIO DETAIL 01-JUN-2000 -30-JUN-2000 TRANSACTION DESCRIPTION/ BROKER LONG TERM OPER-PIMCO ALOMON SMITH BARNEY HLDGS I 3.650% 02114/2002 DD 02114/ LONG TERM OPER-PIMCO US TREASURY fNFLATION INDEX 4250%00 1/15/20 10 DD 01/15/ TRADE DATE/ SETTLDATE/ COMPLDATE 30-Jun-2000 30-Jun-2000 30-Jun-2000 30-Jun-2000 PAGE: 40 AMOUNT/ COST/ GAIN/LOSS 1,539.70 0.00 0.00 840.00 0.00 0.00 Executive Workbenoli ----·