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11-13-2024 Administration Committee Meeting Complete Agenda Packet
SPECIAL NOTICE PUBLIC ATTENDANCE & PARTICIPATION AT PUBLIC MEETINGS Administration Committee Meeting Wednesday, November 13, 2024 5:00 p.m. Your participation is always welcome. OC San offers several ways in which to interact during meetings. You will find information as to these opportunities below. IN-PERSON MEETING ATTENDANCE You may attend the meeting in-person at the following location: Orange County Sanitation District Headquarters 18480 Bandilier Circle Fountain Valley, CA 92708 ONLINE MEETING PARTICIPATION You may join the meeting live via Teams on your computer or similar device or web browser by using the link below: Click here to join the meeting We suggest testing joining a Teams meeting on your device prior to the commencement of the meeting. For recommendations, general guidance on using Teams, and instructions on joining a Teams meeting, please click here. Please mute yourself upon entry to the meeting. Please raise your hand if you wish to speak during the public comment section of the meeting. The Clerk of the Board will call upon you by using the name you joined with. Meeting attendees are not provided the ability to make a presentation during the meeting. Please contact the Clerk of the Board at least 48 hours prior to the meeting if you wish to present any items. Additionally, camera feeds may be controlled by the meeting moderator to avoid inappropriate content. HOW TO PARTICIPATE IN THE MEETING BY TELEPHONE To join the meeting from your phone: Dial (213) 279-1455 When prompted, enter the Phone Conference ID: 783 888 6# All meeting participants may be muted during the meeting to alleviate background noise. If you are muted, please use *6 to unmute. You may also mute yourself on your device. Please raise your hand to speak by use *5, during the public comment section of the meeting. The Clerk of the Board will call upon you by using the last 4 digits of your phone number as identification. NOTE: All attendees will be disconnected from the meeting at the beginning of Closed Session. If you would like to return to the Open Session portion of the meeting, please login or dial-in to the Teams meeting again and wait in the Lobby for admittance. WATCH THE MEETING ONLINE The meeting will be available for online viewing at: https://ocsd.legistar.com/Calendar.aspx SUBMIT A COMMENT You may submit your comments and questions in writing for consideration in advance of the meeting by using the eComment feature available online at: https://ocsd.legistar.com/Calendar.aspx or sending them to OCSanClerk@ocsan.gov with the subject line “PUBLIC COMMENT ITEM # (insert the item number relevant to your comment)” or “PUBLIC COMMENT NON-AGENDA ITEM”. You may also submit comments and questions for consideration during the meeting by using the eComment feature available online at: https://ocsd.legistar.com/Calendar.aspx. The eComment feature will be available for the duration of the meeting. All written public comments will be provided to the legislative body and may be read into the record or compiled as part of the record. For any questions and/or concerns, please contact the Clerk of the Board’s office at 714-593-7433. Thank you for your interest in OC San! November 6, 2024 NOTICE OF REGULAR MEETING ADMINISTRATION COMMITTEE ORANGE COUNTY SANITATION DISTRICT Wednesday, November 13, 2024 – 5:00 P.M. Headquarters 18480 Bandilier Circle Fountain Valley, CA 92708 ACCESSIBILITY FOR THE GENERAL PUBLIC Your participation is always welcome. Specific information as to how to participate in this meeting is detailed on the Special Notice attached to this agenda. In general, OC San offers several ways in which to interact during this meeting: you may participate in person, join the meeting live via Teams on your computer or similar device or web browser, join the meeting live via telephone, view the meeting online, and/or submit comments for consideration before or during the meeting. The Regular Meeting of the Administration Committee of the Orange County Sanitation District will be held at the above location and in the manner indicated on Wednesday, November 13, 2024 at 5:00 p.m. ADMINISTRATION COMMITTEE MEETING DATE BOARD MEETING DATE 11/13/24 11/20/24 * 12/11/24 12/18/24 * JANUARY DARK 01/22/25 02/12/25 02/26/25 03/12/25 03/26/25 04/09/25 04/23/25 05/14/25 05/28/25 06/11/25 06/25/25 07/09/25 07/23/25 AUGUST DARK 08/27/25 09/10/25 09/24/25 10/08/25 10/22/25 * Meeting will be held on the third Wednesday of the month ROLL CALL ADMINISTRATION COMMITTEE Finance, Information Technology, Environmental Services and Human Resources Meeting Date: November 13, 2024 Time: 5:00 p.m. COMMITTEE MEMBERS (13) Christine Marick, Chair Glenn Grandis, Vice-Chair Brad Avery Rose Espinoza Farrah Khan Jordan Nefulda Andrew Nguyen Robbie Pitts David Shawver Chad Wanke John Withers Ryan Gallagher (Board Chair) Jon Dumitru (Board Vice-Chair) OTHERS Scott Smith, General Counsel STAFF Rob Thompson, General Manager Lorenzo Tyner, Assistant General Manager Jennifer Cabral, Director of Communications Mike Dorman, Director of Engineering Laura Maravilla, Director of Human Resources Riaz Moinuddin, Director of Operations & Maintenance Wally Ritchie, Director of Finance Lan Wiborg, Director of Environmental Services Kelly Lore, Clerk of the Board ORANGE COUNTY SANITATION DISTRICT Effective 01/23/2024 BOARD OF DIRECTORS Complete Roster AGENCY/CITIES ACTIVE DIRECTOR ALTERNATE DIRECTOR Anaheim Stephen Faessel Carlos A. Leon Brea Christine Marick Cecilia Hupp Buena Park Joyce Ahn Art Brown Cypress Scott Minikus Bonnie Peat Fountain Valley Glenn Grandis Ted Bui Fullerton Bruce Whitaker Nick Dunlap Garden Grove Stephanie Klopfenstein John O’Neill Huntington Beach Pat Burns Gracey Van Der Mark Irvine Farrah N. Khan Kathleen Treseder La Habra Rose Espinoza Jose Medrano La Palma Debbie Baker Mark I. Waldman Los Alamitos Jordan Nefulda Shelley Hasselbrink Newport Beach Brad Avery Erik Weigand Orange Jon Dumitru John Gyllenhammer Placentia Chad Wanke Ward Smith Santa Ana Johnathan Ryan Hernandez Benjamin Vazquez Seal Beach Schelly Sustarsic Lisa Landau Stanton David Shawver Carol Warren Tustin Ryan Gallagher Austin Lumbard Villa Park Robbie Pitts Jordan Wu Sanitary/Water Districts Costa Mesa Sanitary District Bob Ooten Art Perry Midway City Sanitary District Andrew Nguyen Tyler Diep Irvine Ranch Water District John Withers Douglas Reinhart Yorba Linda Water District Phil Hawkins Tom Lindsey County Areas Board of Supervisors Doug Chaffee Donald P. Wagner ADMINISTRATION COMMITTEE Regular Meeting Agenda Wednesday, November 13, 2024 - 5:00 PM Board Room Headquarters 18480 Bandilier Circle Fountain Valley, CA 92708 (714) 593-7433 ACCOMMODATIONS FOR THE DISABLED: If you require any special disability related accommodations, please contact the Orange County Sanitation District (OC San) Clerk of the Board’s office at (714) 593-7433 at least 72 hours prior to the scheduled meeting. Requests must specify the nature of the disability and the type of accommodation requested. AGENDA POSTING: In accordance with the requirements of California Government Code Section 54954.2, this agenda has been posted outside OC San's Headquarters located at 18480 Bandilier Circle, Fountain Valley, California, and on the OC San’s website at www.ocsan.gov not less than 72 hours prior to the meeting date and time above. All public records relating to each agenda item, including those distributed less than 72 hours prior to the meeting to a majority of the Board of Directors, are available for public inspection with the Clerk of the Board. AGENDA DESCRIPTION: The agenda provides a brief general description of each item of business to be considered or discussed. The recommended action does not indicate what action will be taken. The Board of Directors may take any action which is deemed appropriate. MEETING RECORDING: A recording of this meeting is available within 24 hours after adjournment of the meeting at https://ocsd.legistar.com/Calendar.aspx or by contacting the Clerk of the Board. NOTICE TO DIRECTORS: To place items on the agenda for a Committee or Board Meeting, the item must be submitted to the Clerk of the Board: Kelly A. Lore, MMC, (714) 593-7433 / klore@ocsan.gov at least 14 days before the meeting. For any questions on the agenda, Board members may contact staff at: General Manager: Rob Thompson, rthompson@ocsan.gov / (714) 593-7110 Asst. General Manager: Lorenzo Tyner, ltyner@ocsan.gov / (714) 593-7550 Director of Communications: Jennifer Cabral, jcabral@ocsan.gov / (714) 593-7581 Director of Engineering: Mike Dorman, mdorman@ocsan.gov / (714) 593-7014 Director of Environmental Services: Lan Wiborg, lwiborg@ocsan.gov / (714) 593-7450 Director of Finance: Wally Ritchie, writchie@ocsan.gov / (714) 593-7570 Director of Human Resources: Laura Maravilla, lmaravilla@ocsan.gov / (714) 593-7007 Director of Operations & Maintenance: Riaz Moinuddin, rmoinuddin@ocsan.gov / (714) 593-7269 ADMINISTRATION COMMITTEE Regular Meeting Agenda Wednesday, November 13, 2024 CALL TO ORDER PLEDGE OF ALLEGIANCE ROLL CALL AND DECLARATION OF QUORUM: Clerk of the Board PUBLIC COMMENTS: Your participation is always welcome. Specific information as to how to participate in a meeting is detailed in the Special Notice attached to this agenda. In general, OC San offers several ways in which to interact during meetings: you may participate in person, join the meeting live via Teams on your computer or similar device or web browser, join the meeting live via telephone, view the meeting online, and/or submit comments for consideration before or during the meeting. REPORTS: The Committee Chairperson and the General Manager may present verbal reports on miscellaneous matters of general interest to the Directors. These reports are for information only and require no action by the Directors. CONSENT CALENDAR: Consent Calendar Items are considered to be routine and will be enacted, by the Committee, after one motion, without discussion. Any items withdrawn from the Consent Calendar for separate discussion will be considered in the regular order of business. 1.2024-3919APPROVAL OF MINUTES RECOMMENDATION: Approve minutes of the Regular meeting of the Administration Committee held October 9, 2024. Originator:Kelly Lore Agenda Report 10-09-2024 Administration Committee Meeting Minutes Attachments: 2.2024-3799CONSOLIDATED FINANCIAL REPORT FOR THE FIRST QUARTER ENDED SEPTEMBER 30, 2024 RECOMMENDATION: Recommend to the Board of Directors to: Receive and file the Orange County Sanitation District First Quarter Financial Report for the period ended September 30, 2024. Originator:Wally Ritchie Page 1 of 6 ADMINISTRATION COMMITTEE Regular Meeting Agenda Wednesday, November 13, 2024 Agenda Report First Quarter Financial Report for the period ended September 30, 2024 Attachments: 3.2024-3803PUBLIC AFFAIRS UPDATE FOR THE MONTH OF OCTOBER 2024 RECOMMENDATION: Recommend to the Board of Directors to: Receive and file the Public Affairs Update for the month of October 2024. Originator:Jennifer Cabral Agenda Report Outreach and Media Report - October 2024 Attachments: 4.2024-3889RENEWAL OF ESRI GIS ENTERPRISE LICENSE AGREEMENT SUBSCRIPTION AND SUPPORT RECOMMENDATION: Recommend to the Board of Directors to: A. Approve Amendment No. 3 of Agreement 334620 with Environmental Systems Research Institute, Inc. for the renewal of the Sole Source GIS Enterprise License Agreement, for a three-year period commencing December 31, 2024, through December 30, 2027, for a total amount not to exceed $494,000; and B. Approve a not to exceed contingency of $24,700 (5%). Originator:Wally Ritchie Agenda Report ESRI GIS Enterprise License Agreement (Amendment No. 3) Attachments: 5.2024-3899CONTINGENCY INCREASE FOR ANNUAL TRUE-UP OF MICROSOFT ENTERPRISE LICENSE AGREEMENT (ELA) FOR MICROSOFT ENTERPRISE SOFTWARE LICENSES RECOMMENDATION: Recommend to the Board of Directors to: Approve a contingency increase of $525,748 (36%) to the existing Contract for annual true-up of the Microsoft ELA for a new total contingency amount of $746,322 (51%). Originator:Wally Ritchie Agenda ReportAttachments: Page 2 of 6 ADMINISTRATION COMMITTEE Regular Meeting Agenda Wednesday, November 13, 2024 6.2024-3915MICROSOFT ENTERPRISE LICENSE AGREEMENT (ELA) FOR MICROSOFT ENTERPRISE SOFTWARE LICENSES RECOMMENDATION: Recommend to the Board of Directors to: A. Approve a Purchase Order for a three-year contract to purchase Microsoft Enterprise licenses under the Microsoft ELA in accordance with Microsoft Volume Enterprise Enrollment - for State and Local government, Riverside County Master Licensing Agreement 01E73970, payable annually and with a contract expiration date of December 31, 2027, for a total amount not to exceed $2,255,657; and B. Approve a contingency of $451,131 (20%). Originator:Wally Ritchie Agenda ReportAttachments: 7.2024-3923GENERAL MANAGER APPROVED PURCHASES AND ADDITIONS TO THE PRE-APPROVED OEM SOLE SOURCE LIST RECOMMENDATION: Recommend to the Board of Directors to: A. Receive and file Orange County Sanitation District purchases made under the General Manager’s authority for the period of July 1, 2024 to September 30, 2024; and B. Approve the following additions to the pre-approved Original Equipment Manufacturers (OEM) Sole Source List: ·ROCKWELL ENGINEERING & EQUIPMENT CO - Horizontal Pump (Replaces OEM Manufacturer VAUGHAN COMPANY, INC. - Designated Representative) ·VEOLIA WTS SERVICES USA, INC. - Bar Screen Repair Parts (Replaces OEM Manufacturer SUEZ WTS/ VEOLIA WTS - Name Change). Originator:Wally Ritchie Agenda ReportAttachments: 8.2024-3925TRIPLE QUADRUPOLE GAS CHROMATOGRAPH MASS SPECTROMETER (TQ-GC/MS) SYSTEM RECOMMENDATION: Recommend to the Board of Directors to: Approve a Purchase Order to VWR International, LLC for the purchase of a Triple Quadrupole Gas Chromatograph Mass Spectrometer (TQ-GC/MS) System using NASPO Master Agreement No. MA2024005 for a total amount not to exceed $325,947. Page 3 of 6 ADMINISTRATION COMMITTEE Regular Meeting Agenda Wednesday, November 13, 2024 Originator:Lan Wiborg Agenda ReportAttachments: 9.2024-38972025 LEGISLATIVE AND REGULATORY PLAN RECOMMENDATION: Recommend to the Board of Directors to: Adopt the Orange County Sanitation District 2025 Legislative and Regulatory Plan. Originator:Jennifer Cabral Agenda Report OC San 2025 Legislative & Regulatory Plan Attachments: NON-CONSENT: 10.2024-3791LEGISLATIVE AFFAIRS UPDATE FOR THE MONTH OF OCTOBER 2024 RECOMMENDATION: Recommend to the Board of Directors to: Receive and file the Legislative Affairs Update for the month October 2024. Originator:Jennifer Cabral Agenda Report Federal Legislative Update Federal Matrix State Legislative Update State Matrix Local Legislative Update Attachments: 11.2024-3807ORANGE COUNTY SANITATION DISTRICT ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2024 RECOMMENDATION: Recommend to the Board of Directors to: Receive and file the Orange County Sanitation District’s (OC San) Annual Comprehensive Financial Report for the year ended June 30, 2024, prepared by staff and audited by Davis Farr, Certified Public Accountants, along with the following reports prepared by Davis Farr: 1. Report to the Board of Directors; 2. Independent Accountants’ Report on Agreed-Upon Procedures Applied to Appropriations Limit Worksheets; and Page 4 of 6 ADMINISTRATION COMMITTEE Regular Meeting Agenda Wednesday, November 13, 2024 3. Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards. Originator:Wally Ritchie Agenda Report Report to the Board of Directors Independent Accountant's Report on Applying Agreed-Upon Procedures Related to Appropriations Limit Calculation Report on Internal Control Over Financial Reporting Annual Comprehensive Financial Report for the Year Ended June 30, 2024 Presentation - 2024 ACFR & Davis Farr Audit Results Attachments: 12.2024-3895ORANGE COUNTY SANITATION DISTRICT POPULAR ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2024 RECOMMENDATION: Recommend to the Board of Directors to: Receive and file the Orange County Sanitation District Popular Annual Financial Report for the year ended June 30, 2024. Originator:Wally Ritchie Agenda Report Popular Annual Financial Report 6-30-2024 Attachments: INFORMATION ITEMS: 13.2024-3924EMPLOYEE ENGAGEMENT SURVEY RESULTS RECOMMENDATION: Information item. Originator:Jennifer Cabral Agenda Report Presentation - Employee Engagement Survey Results Attachments: DEPARTMENT HEAD REPORTS: CLOSED SESSION: None. Page 5 of 6 ADMINISTRATION COMMITTEE Regular Meeting Agenda Wednesday, November 13, 2024 OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: BOARD OF DIRECTORS INITIATED ITEMS FOR A FUTURE MEETING: At this time Directors may request staff to place an item on a future agenda. ADJOURNMENT: Adjourn the meeting until the Regular Meeting of the Administration Committee on December 11, 2024 at 5:00 p.m. Page 6 of 6 ADMINISTRATION COMMITTEE Agenda Report Headquarters 18480 Bandilier Circle Fountain Valley, CA 92708 (714) 593-7433 File #:2024-3919 Agenda Date:11/13/2024 Agenda Item No:1. FROM:Robert Thompson, General Manager Originator: Kelly A. Lore, Clerk of the Board SUBJECT: APPROVAL OF MINUTES GENERAL MANAGER'S RECOMMENDATION RECOMMENDATION: Approve minutes of the Regular meeting of the Administration Committee held October 9, 2024. BACKGROUND In accordance with the Board of Directors Rules of Procedure,an accurate record of each meeting will be provided to the Directors for subsequent approval at the following meeting. RELEVANT STANDARDS ·Resolution No. OC SAN 24-09 ATTACHMENT The following attachment(s)may be viewed on-line at the OC San website (www.ocsan.gov)with the complete agenda package: ·October 9, 2024 Administration Committee meeting minutes Orange County Sanitation District Printed on 11/1/2024Page 1 of 1 powered by Legistar™ Orange County Sanitation District Minutes for the ADMINISTRATION COMMITTEE Wednesday, October 9, 2024 5:00 PM Board Room Headquarters Building 18480 Bandilier Circle Fountain Valley, CA 92708 (714) 593-7433 CALL TO ORDER A regular meeting of the Administration Committee of the Orange County Sanitation District was called to order by Committee Chairwoman Christine Marick on Wednesday, October 9, 2024 at 5:02 p.m. in the Headquarters Building of the Orange County Sanitation District. Board Vice-Chairman Jon Dumitru led the pledge of allegiance. ROLL CALL AND DECLARATION OF QUORUM: Assistant Clerk of the Board Jackie Castro declared a quorum present as follows: PRESENT:Brad Avery, Jon Dumitru, Rose Espinoza, Ryan Gallagher, Glenn Grandis, Farrah Khan, Christine Marick, Jordan Nefulda, Andrew Nguyen, David Shawver, Chad Wanke, John Withers and Jordan Wu (Alternate) ABSENT:None STAFF PRESENT: Rob Thompson, General Manager; Lorenzo Tyner, Assistant General Manager; Jennifer Cabral, Director of Communications; Mike Dorman, Director of Engineering; Laura Maravilla, Director of Human Resources; Riaz Moinuddin, Director of Operations and Maintenance; Wally Ritchie, Director of Finance; Lan Wiborg, Director of Environmental Services; Jackie Castro, Assistant Clerk of the Board; Belen Carrillo; Sam Choi; Daisy Covarrubias; Thys DeVries; Al Garcia; Sergio Gonzalez; Mark Kawamoto; Tina Knapp; Rebecca Long; Joe Manzella; Rob Michaels; Aldwin Ramirez; Perla Rodriguez; Thomas Vu; Kevin Work; and Ruth Zintzun were present in the Board Room. OTHERS PRESENT: Scott Smith, General Counsel; Eric O'Donnell and Cori Takkinen, Townsend Public Affairs, were present in the Board Room. Eric Sapirstein, ENS Resources, was present telephonically. PUBLIC COMMENTS: None. REPORTS: Chair Marick announced that a Special meeting of the Board of Directors will take place on Friday, October 25, 2024 at 11:00 a.m. for the State of OC San at Mile Square Park Golf Course. General Manager Rob Thompson did not provide a report. Page 1 of 5 ADMINISTRATION COMMITTEE Minutes October 9, 2024 CONSENT CALENDAR: Vice-Chair Dumitru asked questions regarding Item No. 2. The questions were addressed and the vote on the Consent Calendar was taken. 1.APPROVAL OF MINUTES 2024-3859 Originator: Kelly Lore MOVED, SECONDED, AND DULY CARRIED TO: Approve minutes of the Regular meeting of the Administration Committee held September 11, 2024. AYES:Brad Avery, Jon Dumitru, Rose Espinoza, Ryan Gallagher, Glenn Grandis, Farrah Khan, Christine Marick, Jordan Nefulda, Andrew Nguyen, David Shawver, Chad Wanke and John Withers NOES:None ABSENT:Jordan Wu (Alternate) ABSTENTIONS:None 2.PLANT RADIO AND BASE STATION UPGRADE 2024-3861 Originator: Wally Ritchie MOVED, SECONDED, AND DULY CARRIED TO: A. Approve a Purchase Order Contract to BEARCOM for the purchase and programming/ installation of 122 Motorola R7 radios and two XPR 5550e base stations for Plant Nos. 1 and 2 using the Sourcewell Cooperative Agreement, for a total amount not to exceed $218,822; and B. Approve a contingency in the amount of $21,882 (10%). AYES:Brad Avery, Jon Dumitru, Rose Espinoza, Ryan Gallagher, Glenn Grandis, Farrah Khan, Christine Marick, Jordan Nefulda, Andrew Nguyen, David Shawver, Chad Wanke and John Withers NOES:None ABSENT:Jordan Wu (Alternate) ABSTENTIONS:None 3.MAXIMO TO MAXIMO APPLICATION SUITE 2024-3869 Originator: Wally Ritchie MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: Page 2 of 5 ADMINISTRATION COMMITTEE Minutes October 9, 2024 A. Approve a Professional Services Agreement to Total Resource Management, Inc. to upgrade Maximo to Maximo Application Suite, Specification No. CS-2024-623BD, for a total amount not to exceed $296,441; and B. Approve a contingency of $44,467 (15%). AYES:Brad Avery, Jon Dumitru, Rose Espinoza, Ryan Gallagher, Glenn Grandis, Farrah Khan, Christine Marick, Jordan Nefulda, Andrew Nguyen, David Shawver, Chad Wanke and John Withers NOES:None ABSENT:Jordan Wu (Alternate) ABSTENTIONS:None NON-CONSENT: Alternate Director Jordan Wu arrived at the meeting at 5:08 p.m. 4.PUBLIC AFFAIRS UPDATE FOR THE MONTHS OF AUGUST AND SEPTEMBER 2024 2024-3802 Originator: Jennifer Cabral Director of Communications Jennifer Cabral gave a PowerPoint presentation to introduce the Public Affairs Division, who they are and what they do. Ms. Cabral introduced Public Affairs Supervisor Daisy Covarrubias who continued the presentation and provided an overview of the public affairs team, the FY 2024-2026 Public Affairs Strategic Plan, Division updates, OC San's updated website, and the recent employee engagement survey. MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: Receive and file the Public Affairs Update for the months of August and September 2024. AYES:Brad Avery, Jon Dumitru, Rose Espinoza, Ryan Gallagher, Glenn Grandis, Farrah Khan, Christine Marick, Jordan Nefulda, Andrew Nguyen, David Shawver, Chad Wanke, John Withers and Jordan Wu (Alternate) NOES:None ABSENT:None ABSTENTIONS:None 5.LEGISLATIVE AFFAIRS UPDATE FOR THE MONTHS OF AUGUST AND SEPTEMBER 2024 2024-3790 Originator: Jennifer Cabral Page 3 of 5 ADMINISTRATION COMMITTEE Minutes October 9, 2024 Senior Public Affairs Specialist Rebecca Long provided a PowerPoint presentation regarding the 2025 draft legislative and regulatory plan. The presentation included an overview of guiding priorities, the legislative regulatory team, the procedure for taking a position, plan development, the 2025 plan highlights, potential legislative concepts, and the final plan. Townsend Public Affairs Director Eric O'Donnell provided a PowerPoint presentation regarding the 2024 state legislative end of session summary. The presentation included an overview of SB 903 (Skinner), SB 937 (Wiener), SB 1210 (Skinner), potential legislative concepts, bid advertising reform, contract work dollar threshold, video retention reform, and future legislation. MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: Receive and file the Legislative Affairs Update for the months of August and September 2024. AYES:Brad Avery, Jon Dumitru, Rose Espinoza, Ryan Gallagher, Glenn Grandis, Farrah Khan, Christine Marick, Jordan Nefulda, Andrew Nguyen, David Shawver, Chad Wanke, John Withers and Jordan Wu (Alternate) NOES:None ABSENT:None ABSTENTIONS:None 6.POSITION CHANGE REQUEST FOR FISCAL YEAR 2024-25 2024-3863 Originator: Laura Maravilla Director of Human Resources Laura Maravilla provided a verbal report of the item. MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: Approve the upgrade of one vacant Lead Facilities Worker (Salary Grade LOC66) position to Building Maintenance Technician (Salary Grade LOC67) position for FY 2024-25. AYES:Brad Avery, Jon Dumitru, Rose Espinoza, Ryan Gallagher, Glenn Grandis, Farrah Khan, Christine Marick, Jordan Nefulda, Andrew Nguyen, David Shawver, Chad Wanke, John Withers and Jordan Wu (Alternate) NOES:None ABSENT:None ABSTENTIONS:None Page 4 of 5 ADMINISTRATION COMMITTEE Minutes October 9, 2024 INFORMATION ITEMS: 7.SUPERCRITICAL WATER OXIDATION UPDATE 2024-3875 Originator: Rob Thompson Mr. Thompson provided a report and presentation on the recent trip he took with Board Chair Ryan Gallagher and Board Vice-Chair Jon Dumitru to Orlando, Florida where they saw the unit in operation and learned more about the status of the project . ITEM RECEIVED AS AN: Information Item. DEPARTMENT HEAD REPORTS: None. CLOSED SESSION: None. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: None. BOARD OF DIRECTORS INITIATED ITEMS FOR A FUTURE MEETING: None. ADJOURNMENT: Chair Marick declared the meeting adjourned at 6:10 p.m. to the next Regular Administration Committee meeting to be held on Wednesday, November 13, 2024 at 5:00 p.m. Submitted by: _____________________ Jackie Castro, CMC Assistant Clerk of the Board Page 5 of 5 ADMINISTRATION COMMITTEE Agenda Report Headquarters 18480 Bandilier Circle Fountain Valley, CA 92708 (714) 593-7433 File #:2024-3799 Agenda Date:11/13/2024 Agenda Item No:2. FROM:Robert Thompson, General Manager Originator: Wally Ritchie, Director of Finance SUBJECT: CONSOLIDATED FINANCIAL REPORT FOR THE FIRST QUARTER ENDED SEPTEMBER 30, 2024 GENERAL MANAGER'S RECOMMENDATION RECOMMENDATION: Recommend to the Board of Directors to: Receive and file the Orange County Sanitation District First Quarter Financial Report for the period ended September 30, 2024. BACKGROUND Included in this consolidated report are the following quarterly financial reports for the period ended September 30, 2024: ·First Quarter Budget Review The Budget Review Summary provides the Directors,staff,and general public with a comprehensive overview of the financial results of the Orange County Sanitation District (OC San) through the first quarter ended September 30, 2024. ·First Quarter Treasurer’s Report This section reports on financial portfolio performance with respect to OC San’s funds.The report also contains information on the U.S.and global economic outlook from OC San’s investment manager,Insight Investment.Additionally,the Section 115 Trust quarterly performance report is included.The Section 115 trust is administered by Public Agency Retirement Services,managed by PFM Asset Management,and was established to prefund pension obligations. ·First Quarter Certificates of Participation Report The report includes a summary of each outstanding debt issuance. RELEVANT STANDARDS ·Quarterly financial reporting Orange County Sanitation District Printed on 11/5/2024Page 1 of 2 powered by Legistar™ File #:2024-3799 Agenda Date:11/13/2024 Agenda Item No:2. ADDITIONAL INFORMATION The first quarter treasurer’s report contained within the Consolidated Financial Report for the first quarter ended September 30,2024 is being submitted in accordance with OC San’s Investment Policy that requires the report be submitted to the governing body following the end of each quarter. None of the portfolios are currently invested in reverse repurchase agreements.All investments are in compliance with the Investment Policy and the California Government Code.Sufficient funds are available for OC San to meet its operating expenditure requirements for the next six months. ATTACHMENT The following attachment(s)may be viewed on-line at the OC San website (www.ocsan.gov)with the complete agenda package: ·First Quarter Financial Report for period ended September 30, 2024 Orange County Sanitation District Printed on 11/5/2024Page 2 of 2 powered by Legistar™ Orange County, California for the period ended September 30, 2024 First Quarter Financial Report Orange County Sanitation District Table of Contents Executive Summary .................................................................................................................... 1 Budget Review Section 1 – Consolidated Financial Reports ......................................................................... 1 Section 2 – Operating Budget Review Chart of Cost per Million Gallons by Department .................................................... 1 Chart of Collection, Treatment, & Disposal Expenses by Major Category ............... 1 Divisional Contributions to Cost Per Million Gallons ................................................ 2 Comparison of Expenses by Department ................................................................ 3 Summary of Collection, Treatment, & Disposal Expenses by Major Category ......... 4 Summary of Revenues ........................................................................................... 5 Summary of Collection, Treatment, & Disposal Expenses by Line Item .................. 6 Summary of Collection, Treatment, & Disposal Expenses by Process .................... 8 Chart of Staffing Trends .......................................................................................... 9 Section 3 – Capital Improvement Program Budget Review Chart of Capital Improvement Program By Process Area and Project Driver .......... 1 Summary of Capital Improvement Construction Requirements – Current Year ....... 2 Summary of Capital Improvement Construction Requirements – Project Life ......... 6 Section 4 – Capital Assets Schedule & Debt Service Budget Review Capital Assets Schedule ......................................................................................... 1 Debt Service Budget Review .................................................................................. 1 Section 5 – Self Insurance Budget Review General Liability and Property Fund Budget Review ............................................... 1 Workers’ Compensation Fund Budget Review ........................................................ 2 Treasurer’s Report ...................................................................................................................... 1 Certificates of Participation (COP) Report ................................................................................... 1 FY 2024-25 First Quarter Financial Report This Page Intentionally Left Blank Executive Summary Page 1 Consolidated Financial Reports For the First Quarter Ended September 30, 2024 Included in this consolidated report are the following quarterly financial reports for the period ended September 30, 2024: Budget Review: The Consolidated Financial Reports Section 1 provides the Directors, staff, and the general public with a comprehensive overview of the financial results of the Orange County Sanitation District (OC San) through the first quarter ended September 30, 2024. Contained within the Budget Review Sections 2 through 5 is the budget-to-actual status of the Collection, Treatment and Disposal Operations, Capital Improvement Program, Debt Service, and Self-Insurance Program. Also included is a Capital Assets Schedule as of September 30, 2024. The chart below provides for a summary of these activities. Various detail information can be found in this report. Below is a descriptive summary of these activities through September 30, 2024: a) Most major expense categories are anticipated to approximate budget. b) Total revenues are at 6.8 percent of the $524.3 million budget, mainly due to the timing of property tax and sewer fee distribution from the County that occurs mostly after the first quarter. These two revenue sources make up 86.2 percent of OC San’s total budgeted revenue. Other, less material FY 2024-25 First Quarter Financial Report Page 2 revenue sources in comparison that are tracking significantly lower than the proportionate budget through September 30 include Intra District Sewer Use-IRWD, Capital Assessments-IRWD, Capital Facilities Capacity Charges, and Other Revenues. Overall, total revenues are projected to approximate budget at year-end. More detailed information on revenues is provided within Section 1 – Pages 3 through 5. c) Collection, Treatment and Disposal Costs: As indicated within the Consolidated Financial Reports Section of this report, the net operating requirements through the first quarter of $55.5 million is currently tracking at 23.8 percent of the $232.7 million budget. In addition, net operating expenses have increased $3.5 million or 6.8 percent in comparison with the same period last year. Overall, staff expects the total operating costs to remain at or slightly below budget throughout the remainder of the year. More detailed information on operating expenses is provided within Section 1 – Pages 1 through 3. The total cost per million gallons is $3,195 based on flows of 189 million gallons per day. This is $251 per million gallons, or 7.3 percent less than the budgeted cost per million gallons per day. A further description of these costs and benchmarking with other agencies is contained within Section 1 – Pages 6 through 8. d) The total projected capital outlay cash flow of the Capital Improvement Program (CIP) for FY 2024-25 has been revised to $233.4 million, or 104.6 percent of the board approved cash outlay of $223.1 million. The actual cash outlay spending through the first quarter is $25.0 million, or 11.2 percent of the total budgeted outlay. More detailed information on the CIP budget review can be found in Section 1 – Page 9 and Section 3. Treasurer’s Report This section reports on financial portfolio performance with respect to OC San’s funds. Both Long-Term and Liquid Operating Portfolios are summarized. The report also contains information on the national economic outlook from OC San’s money manager, Insight Investment (Insight). Insight notes the Long-Term Portfolio quarterly return of 331 basis points underperformed the ICE BofA 1-5 Year AAA-A US Corp & Govt Index return of 344 basis points, while the Liquid Operating Portfolio quarterly return of 139 basis outperformed the ICE BofA 3-Month US Treasury Bill Index return of 137 basis points. Economic Review and Outlook Insight further notes that the main central banks were active in the third quarter, as the Federal Reserve, European Central Bank and Bank of England all cut rates, with economies softening and inflation pressure continuing to ease. The Bank of Japan meanwhile, tightened policy again, as it sought to stem the rise in inflation. In general, the global economic backdrop appeared less robust, but few envisage the beginnings of recession. Chinese authorities introduced a range of Executive Summary Page 3 stimulus measures designed to support the ailing property sector. And notably, political developments saw President Biden drop out of the race for the White House and endorse Vice President Kamala Harris for the Democratic nomination. The outlook for the US economy moderated in Q3, as the labor market appeared to soften and headline inflation continued to decline. The Federal Reserve reduced interest rates for the first time, cutting the Federal Funds rate 50bp to 4.75%-5.0%. The Institute of Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) fell further below 50 in July and remained there, while the number of jobs created in the non-farm payrolls report declined from earlier in the year. While the growth in average hourly earnings remained near 4%, inflation at the headline level as measured by the CPI fell to 2.4% in September. The Fed's preferred measure of inflation, the Personal Consumption Expenditure measure (PCE), fell to 2.2% in August, which may help explain the reason for the relatively large Fed rate cut. Insight sees a gradual decline in US leading indicators as presaging a general slowdown in the economy, falling below trend to around 2.5 % in 2024 and just 1.6% in 2025. This is expected to arise as both consumer spending and business investment normalize. While the labor market has remained robust for some time, the pace of job growth has slowed slightly, so a more meaningful cooling in the pace of job creation could represent an increased risk to the downside. With respect to inflation, Insight believes that although the headline rate may continue to oscillate, it should gradually moderate toward the 2% target, though it may take some time to reach that level. The Federal Reserve is expected to cut rates further, with a terminal rate currently projected to be around 3% ultimately, although potentially not until 2026. Treasury yields at shorter maturities are expected to reflect the reduction in official rates but yields at the long end may not do so and could rise slightly from prevailing levels. Insight sees 10-year US Treasuries at around 3.90% in 12 months’ time as the curve continues to steepen. Market Review and Outlook Governments – Government bond yields were lower for the third quarter as the economic outlook broadly slowed, inflation concerns continued to ease and the main central banks, apart from the Bank of Japan, eased policy. The yield on 10- year US Treasuries declined by 62 basis points (bp) to 3.78%, helped lower by the first Federal Reserve rate cut of 50bp rather than 25bp. Credit – Credit markets were relatively static in terms of spread levels, with market indices tightening slightly. The positive total returns were therefore driven primarily by the strength in underlying government bonds. The option-adjusted spread (OAS) over governments for the investment grade Bloomberg US Aggregate (Agg) Corporate Index tightened by 5bp, ending at 89bp. The OAS over governments for the ICE BofA 1-5 Year AAA-A US Corporate Index equally tightened by 5bp, ending at 54bp. Within the broader corporate benchmark, the utilities sectors did best along with life insurers, aerospace and defense, railroads, and tobacco. The energy sectors, particularly integrated energy FY 2024-25 First Quarter Financial Report Page 4 companies were notably weak, as were automotives, media entertainment and airlines. Structured credit / Secured finance – 2024 has been characterized by solid, income-driven returns and, although the easing cycle has started, we see little reason for that to change in the near term, with central banks expected to ease relatively gradually over the year ahead. With AAA-rated ABS spreads still attractive relative to corporate credits Insight expects demand to remain high. Insight continues to favor issues with seniority in the capital structure and robust transaction structures that divert cashflow in the event of underperformance, and strong underwriting and servicing policies, all of which should act to insulate investors were the economy to weaken. Municipal bonds – With the Fed starting the easing cycle, investors are returning to Muni markets, and Insight is observing demand returning to the asset class. Oversubscriptions on new issues are ranging from between five to ten times proposed issuance, depending on issuer and yield. Those issuers offering incremental yield have been receiving especially strong demand. Issuance in the first half of 2024 was higher than normal as many issuers pulled deals forward given the Presidential election in November, and this continued into Q3. Insight expects issuance to dip significantly in Q4. Certificates of Participation (COP) Report The report includes a summary of each outstanding debt issuance. Consolidated Financial Reports Section 1 - Page 1 First Quarter Financial Report September 30, 2024 The Financial Management Division is pleased to present the FY 2024-25 first quarter financial report. This report provides a comprehensive overview of the financial activities of the Orange County Sanitation District (OC San) and reports on the status of all capital projects in progress. A summary of the sections contained within this report is provided below. Operating Budget Review: This section reports on collection, treatment, and disposal net operating requirements. At September 30, 2024, 23.8 percent, or $55.5 million of the FY 2024-25 net operating budget of $232.7 million has been expended. Net operating expenses increased from the same period last year by $3.5 million, or 6.8 percent, mainly due to an increase of $2.6 million in Salaries and Benefits, $939,000 in Operating Materials and Supplies, $598,000 in Professional Services, $238,000 in Training & Meetings, $159,000 in Contractual Services, $113,000 in Utilities, $109,000 in Administrative Expenses, and $53,000 in Research and Monitoring, partially offset by an increase of $1.3 million in indirect costs allocated out to capital projects. These and other variances that factor into this net increase in expenses are discussed in more detail below. Overall, staff expects the total operating costs to remain at or slightly below budget through the remainder of the year. At September 30, 2024, 6.8 percent, or $35.8 million of the FY 2024-25 budgeted total revenues of $524.3 million has been recognized. Revenues increased from the same period last year by $16.8 million, or 88.6 percent, mainly due to an increase of $19.7 million in Interest Earnings, $517,000 in Property Taxes, and $107,000 in Inter District Sewer Use-SAWPA & SBSD, partially offset by a decrease of $1.6 million in Capital Facilities Capacity Charges, $1.5 million in Permit Fees, $170,000 in Capital Assessments-IRWD, $106,000 in Other Revenues, $38,000 in Power Sales, $25,000 in Service Fees, $24,000 in CIP Reimbursements, $23,000 in Wastehauler Fees, and $22,000 in Rents & Leases. These and other variances that factor into this net increase in revenues are discussed in more detail below. Overall, staff expects the total revenues to approximate budget at the end of the fiscal year. Significant operating results as of September 30, 2024, include the following: Salaries, Wages and Benefits – Personnel costs of $28.9 million are on target at 23.3 percent of the budget through the first quarter of FY 2024-25. The budget is based on a five percent vacancy factor, and staffing is 33 full-time equivalents (FTEs), or 5.0 percent below the total 664 FTEs approved in the FY 2024-25 budget. Salary and benefit costs are $2.6 million, or 10.0 percent higher than the $26.3 million incurred in the same period last year, mainly due to an increase of $2.0 million in Salaries and Wages, $404,000 in Group Insurances, $156,000 in Retirement, $52,000 in Employee Supplemental Benefits, and $44,000 in Uniform Rental, partially offset by a decrease of $48,000 in Workers’ Compensation. Net FY 2024-25 First Quarter Financial Report Section 1 - Page 2 operating personnel costs are expected to approximate budget throughout the remainder of the year. Administrative Expenses – Administrative Expenses totaled $653,000, or 24.3 percent of the $2.7 million budget through September 30. These costs are $109,000, or 20.1 percent higher at September 30 in comparison with the prior year, mainly due to an increase of $58,000 in Small Computer Items, $31,000 in Minor Furniture & Fixtures, and $13,000 in Memberships. It is anticipated that administrative costs will approximate or be below budget at year-end. Printing and Publication Expenses – Printing and Publication Expenses totaled $50,000 or 12.7 percent of the $398,000 budget through September 30. These costs are $20,000, or 28.3 percent lower at September 30 in comparison with the prior year, primarily due to a decrease of $23,000 in Notices & Ads. Printing and publication costs are expected to approximate or be below budget at year-end. Training and Meetings – Training and meetings of $357,000 is below target at 17.9 percent of the $2.0 million budget through September 30. This account is lower than the proportionate budget due to the timing and need for training throughout the year. Compared to the same period last year, costs have risen by $238,000, or 200.8%, largely because the training budget increased by $757,493, or 70.7%, and management has strongly encouraged the pursuit of training opportunities. Total training and meeting costs are anticipated to approximate budget at year-end. Operating Materials and Supplies – Operating materials and supplies of $7.4 million is on target at 23.8 percent of the $31.2 million budget through September 30. Operating Materials and Supplies is higher than the prior year by $939,000, or 14.5 percent, mostly due to an increase of $547,000 in Chemical Coagulants, $491,000 in Odor & Corrosion Control, and $87,000 in Lab Chemicals & Supplies, partially offset by a decrease of $178,000 in Tools. Based on current processes, operating materials and supplies are anticipated to approximate budget at year-end. Contractual Services – Contractual services is on target at $5.4 million, or 22.8 percent of the $23.5 million budget through September 30. Solids Removal costs, budgeted at $14.4 million, comprise the majority of this expense category at $3.4 million, or 23.6 percent of its budget at September 30. Contractual Services is higher by $159,000, or 3.1 percent over the same period last year, mainly due to an increase of $137,000 in Security Services, $98,000 in Other Contractual Services, $90,000 in Janitorial, and $79,000 in Outside Lab Services, partially offset by a decrease of $271,000 in Solids Removal. County Service Fees totaled only $8,000, or 2.1 percent of the $410,000 budget through the first quarter, as the preponderance of these fees are billed by the County in the fourth quarter. Total contractual services costs are anticipated to approximate budget at year-end. Professional Services – Professional services costs totaled $1.6 million, or 19.7 percent of the $7.9 million budget through September 30. Professional services costs, such as Environmental Scientific Consulting, Industrial Hygiene Services, Consolidated Financial Reports Section 1 - Page 3 Labor Negotiation Services, and Other Professional Services are proportionately low through September 30 due to a variety of factors such as timing of services and re- evaluation of need for services. These costs are $598,000, or 62.2 percent higher at September 30 in comparison with the prior year, mainly due to an increase of $324,000 in Legal, $126,000 in Engineering, and $100,000 in Software Program Consulting. It is anticipated that the costs for this category will approximate budget at year-end. Research and Monitoring – Research and monitoring costs totaled $714,000, or 33.4 percent of the $2.1 million budget through September 30. These costs are $53,000, or 8.1 percent higher at September 30 in comparison with the prior year, due to an increase of $34,000 in Air Quality Monitoring, $10,000 in Research, and $9,000 in Environmental Monitoring. Total research and monitoring costs are anticipated to approximate or be slightly above budget at year-end. Repairs and Maintenance – Repairs and maintenance costs totaled $11.2 million, or 31.0 percent of the $36.3 million budget through September 30. These costs through the first quarter mirror those of the same period last year, with an increase of only $4,000, or 0.0%. It is anticipated that the costs for this category will approximate or be slightly above budget at year-end. Utilities – Utilities costs totaled $3.9 million, or 24.5 percent of the $16.1 million budget through September 30. These costs are $113,000, or 3.0 percent higher at September 30 in comparison with the prior year, primarily due to an increase of $82,000 in Natural Gas and $40,000 in Water. It is anticipated that the costs will approximate budget at year-end. Other Operating Supplies – Other operating supplies costs totaled $1.2 million, or 18.5 percent of the $6.2 million budget through September 30. Property and General Liability Insurance, budgeted at $3.6 million, comprise the majority of this expense category at $730,000. Overall, Other Operating Supplies is $22,000, or 1.9 percent lower at September 30 in comparison with the prior year, primarily due to a decrease of $80,000 in Property and General Liability Insurance, partially offset by an increase of $26,000 in Miscellaneous Operating Expense and $22,000 in Regulatory Operating Fees. It is anticipated that other operating supplies costs will approximate budget at year-end. Revenues – Service Fees and Property Taxes – Through September 30, revenues from Service Fees are at $25,000, or 0.0 percent of the $334.3 million budget and Property Taxes are at $1.9 million, or 1.7 percent of the $117.6 million budget. These items comprise the majority of OC San’s revenues and are mostly collected by the County through the property tax roll and distributed to OC San throughout the year based on a set distribution schedule that begins in November of each year. The decrease of $25,000, or 50.4 percent in service fee revenue over the prior year is primarily due to the timing of receipts and user fee refunds. The property tax revenue increase of $517,000, or 36.3 percent over the prior year is mainly a result of the timing of unsecured tax receipts. These revenues are expected to approximate budget at year-end. FY 2024-25 First Quarter Financial Report Section 1 - Page 4 Revenues – Permit Fees – Permit Fees are at $4.1 million, or 26.1 percent of the $15.5 million budget. The revenues through the first quarter are lower than the same period last year by $1.5 million, or 26.7 percent, due to the fluctuation in the number of permittees from year to year as businesses establish or cease their operations and a decrease in operation and maintenance charges based on flows received from these customers. Permit Fees revenues are expected to approximate budget at year-end. Revenues – Inter District Sewer Use – SAWPA and SBSD – Inter District Sewer Use-SAWPA and SBSD are at $850,000 or 28.2 percent of the $3.0 million budget. This revenue is derived from charges to the Santa Ana Watershed Protection Agency (SAWPA) and Sunset Beach Sanitary District (SBSD) for treatment of flows. The revenues through the first quarter are higher than the same period last year by $107,000, or 14.5 percent, due to an increase in operation and maintenance charges based on flows received from these agencies. These revenues are expected to approximate or be above budget at year-end. Revenues – Intra District Sewer Use – IRWD – Intra District Sewer Use-IRWD are at $982,000, or 12.2 percent of the $8.1 million budget. This revenue is derived from charges to the Irvine Ranch Water District (IRWD) for treatment of flows. The revenues through the first quarter are lower than the same period last year by $5,000, or 0.5 percent, due to an increase of $315,000 in interest income and $22,000 in property tax revenues allocated to IRWD, partially offset by an increase of $331,000 in operating and maintenance charges to IRWD. These revenues are expected to be below budget at year-end. Revenues – Capital Assessments – IRWD – Capital Assessments-IRWD are at $822,000, or 11.4 percent of the $7.2 million budget. The revenues through the first quarter are lower than the same period last year by $170,000, or 17.1 percent, due a decrease in joint capital costs. It is estimated that IRWD capital assessments revenues will be below budget at year-end. Revenues – Capital Facilities Capacity Charges (CFCC) – CFCC are at $1.6 million, or 10.6 percent of the $15.5 million budget. The revenues through the first quarter are lower than the same period last year by $1.6 million, or 49.3 percent, due to a decrease in capacity charges collected from local agencies. These revenues are expected to approximate or be below budget at year-end. Revenues – Interest Earnings – Interest Earnings are at $25.1 million, or 146.3 percent of the $17.1 million budget. The revenues through the first quarter are higher than the same period last year by $19.7 million, or 364.8 percent, due to the higher rate of return experienced in the current year. It is estimated that interest earnings will exceed budget at year-end. Revenues – Wastehauler – Wastehauler revenues are at $158,000 and does not have a budget. This revenue is derived from fees charged to wastehaulers, allowing them to dump waste into OC San’s system. The revenues through the first quarter are lower than the same period last year by $23,000, or 12.9 percent, due to a decrease in waste dumping. Consolidated Financial Reports Section 1 - Page 5 Revenues – CNG Sales – CNG Sales revenues are at $44,000 and does not have a budget. This revenue is derived from public sales at OC San’s Compressed Natural Gas (CNG) fueling station. The revenues through the first quarter are higher than the same period last year by $2,000, or 5.7 percent, due to an increase in compressed natural gas sales. Revenues – Rents & Leases – Rents & Leases revenues are at $99,000 and does not have a budget. The revenues through the first quarter are lower than the same period last year by $22,000, or 18.3 percent. Revenues – Other – Other revenues are at $79,000, or 1.3 percent of the $6.0 million budget. These revenues are $106,000, or 57.2 percent lower than the same period last year, primarily due to prior year insurance proceeds for a machinery breakdown claim on Central Generation Engine #1. These revenues are expected to be below budget at year-end. Revenues – Power Sales – Power Sales revenues are at $21,000 and does not have a budget. The revenues through the first quarter are lower than the same period last year by $38,000, or 63.9 percent, due to a decrease in the buyback of surplus generated energy exported to Southern California Edison. FY 2024-25 First Quarter Financial Report Section 1 - Page 6 Comparison of First Quater Cost per Million Gallon Results with Budget Last Five Years As demonstrated in the preceding graph for the current and each of the last four fiscal years, the cost per million gallons at the end of the first quarter has been between 7.3 percent lower and 2.4 percent lower than the annual budget. The FY 2024-25 first quarter cost per million gallons of $3,195 is 7.3 percent lower when compared with this year’s budget. The increase in cost per million gallons of $153 from the previous year is primarily due to an increase in operating expenses, which are 6.8 percent higher than the same period last year, partially offset by an increase in flows, which are 1.7 percent higher than the same period last year. Staff believes that overall operating costs will be at or slightly below budget at year-end. The total cost per million gallons at September 30 is $3,195 based on flows of 189 million gallons per day. This is $251 per million gallons, or 7.3 percent less than the budgeted cost per million gallons of $3,446. The lower cost per million gallons is due to net expenses being 4.6% lower than the proportionate budget through September 30 and flows of 189 million gallons per day being 2.0 percent higher than the budgeted flow of 185 million gallons per day, which has an inverse relationship to the cost per unit of collection, treatment, and disposal. More detailed information on operating revenues, costs, and related information is provided within Section 2. Consolidated Financial Reports Section 1 - Page 7 Following are data tables showing the last five years of Single Family Residential User Fees (SFR) and the cost per million gallons (MG) to collect, treat, and dispose of wastewater for the Orange County Sanitation District and similar agencies. The agencies used in the tables were determined to be those that most closely resembled OC San in terms of services provided and treatment levels. The summaries demonstrate that OC San’s SFR and cost per MG are each one of the lowest in their respective groups. 2020 2021 2022 2023 2024 Agency SFR SFR SFR SFR SFR Notes San Francisco 1,169$ 1,270 1,270 1,337 1,409 Vallejo Sanitation/Flood Control District 715$ 747 769 885 1,018 City of San Diego 573$ 573 687 714 742 (1) City of Los Angeles 636$ 636 636 636 736 (2) Central Contra Costa Sanitary District 598$ 660 690 697 725 Union Sanitary District 421$ 524 530 570 612 (3) East Bay MUD 439$ 457 475 515 559 City of Hayward 430$ 446 463 495 530 Dublin San Ramon Services District 469$ 486 496 495 516 Sacramento County 444$ 444 444 444 486 Irvine Ranch Water District 313$ 313 357 399 441 (4) Oro Loma Sanitary District 296$ 318 342 368 423 Orange County Sanitation District 339$ 343 347 358 371 City of Fresno 309$ 309 309 309 309 (5) Los Angeles County 213$ 226 226 217 234 (6) Notes: (1) - Data represents the base sewer fee plus the average usage of 9 hundred cubic feet per month. (2) - Data is for the typical SFR customer rate using approximately 9 hundred cubic feet per month. (3) - Deferred rate increase for July 2020 incorporated into July 2021 rate. (4) - Data represents the usage of 10 hundred cubic feet per unit. (5) - Data represents the minimum SFR rate not including flow. (6) - Data represents the average service charge rates for the prior fiscal year. Benchmark Study Five-Year Single Family Residential Rate Rates as of July FY 2024-25 First Quarter Financial Report Section 1 - Page 8 FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 Agency Svc.Trt.Cost/MG Cost/MG Cost/MG Cost/MG Cost/MG Notes Central Contra Costa Sanitary District B 3 3,980$ 5,284 6,513 6,353 7,043 (1) Union Sanitary District B 2 4,838$ 5,655 5,569 5,623 6,822 Vallejo Sanitation/Flood Control District B 2 6,137$ 8,682 9,108 9,595 6,280 (2) San Francisco B 2 5,995$ 7,573 9,456 7,152 5,895 (3) City of San Diego B 3 4,180$ 3,977 4,219 4,263 4,450 East Bay MUD T 2 2,710$ 3,122 4,052 3,674 3,959 (4) Dublin San Ramon Services District B 3 3,692$ 3,441 3,570 3,406 3,889 City of Los Angeles B 3 3,046$ 3,021 2,763 3,120 3,625 Los Angeles County B 3 2,264$ 2,343 2,338 2,786 3,081 Orange County Sanitation District B 2 2,275$ 2,422 2,428 2,255 2,961 Sacramento County T 3 2,812$ 3,407 3,470 2,819 2,953 (5) City of Fresno B 3 1,945$ 1,993 2,100 2,235 2,454 Legend for Service Provided and Treatment Level: B - Agency operates both collection and treatment facilities T - Agency provides treatment services but not collection 2 - Secondary treatment 3 - Advanced secondary or secondary with some tertiary treatment Notes: (4) - FY21-22 operating expense decreased $6.7 million. (5) - FY21-22 operating expense decreased $20.8 million. Benchmark Study Five-Year Cost per MG (1) - FY18-19 operating expense decreased $36.4 million; $30.4 million due to an adjustment to the Agency's Other Post Employment Benefit Plan (OPEB) - Transition to CalPers Health Insurance. (3) - FY20-21 operating expense increased $29.9 million and average daily flow decreased 8.3MG per day. Combined stormwater/sewer system. (2) - In FY19-20, Agency updated FY18-19 Annual Comprehensive Financial Report (ACFR) treatment cost. In FY22-23, a decrease in treatment cost is reported in Agency's ACFR. Consolidated Financial Reports Section 1 - Page 9 Capital Outlay Review: As depicted by the preceding chart, Capital Outlays totaled $25.0 million, or 11.2 percent of the capital outlay cash flow budget for FY 2024-25 as of September 30, 2024. Costs are lower than the proportionate budget through the first quarter as some projects are still in the design phase or have experienced various delays or deferrals. Examples as of September 30 are Gisler Red-Hill Interceptor & Baker Force Main Rehabilitation, which has a budget of $26.8 million but actual costs of $1.5 million, Primary Treatment Rehabilitation at Plant No. 2, which has a budget of $19.5 million but actual costs of $655,000, and Central Generation Engine Overhauls at Plants No. 1 and No. 2, which has a budget of $9.4 million but actual costs of $108,000. Overall, the capital outlay costs of the capital improvement program are expected to approximate $233.4 million, or 104.6 percent of the capital outlay cash flow budget at year-end. More detailed information on the capital improvement program is provided within Section 3. Capital Assets Schedule and Debt Service Budget Review: Section 4 is the Capital Assets Schedule and Debt Service Section. This section shows the cost value of OC San’s capital facilities at September 30, 2024, as well as the debt service costs resulting from the need to provide funding for the construction of capital facilities. Principal payments on debt issues are due in February, during the third quarter of each fiscal year. As of September 30, 2024, no principal payments have been made. Interest costs are expensed ratably throughout the fiscal year and are expected to approximate budget at year-end. $0 $50,000,000 $100,000,000 $150,000,000 $200,000,000 $250,000,000 09/30/24 Actual Capital Outlay $24,993,372 Projected 2024-25 Capital Outlay $233,425,000 2024-25 Capital Outlay Cashflow Budget $223,075,453 FY 2024-25 First Quarter Financial Report Section 1 - Page 10 Self-Insurance Budget Review: Section 5 is the Self-Insurance Section. Through September 30, the Self-Insurance Fund revenues totaled $912,000, or 17.7 percent of the budget, while expenses are at $1.6 million, or 31.7 percent of the budget. Separate fund accounting is used for recording the revenue and expenses incurred in managing these liability claims. The revenues to these funds represent charges to operating divisions. Expenses to these funds include actual claims paid, claims administration, and excess loss policies. Operating Budget Review $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 $2,200 Ge n e r a l M a n a g e r ' s Ad m i n i s t r a t i v e S e r v i c e s Co m m u n i c a t i o n s Hu m a n R e s o u r c e s En v i o r n m e n t a l S e r v i c e s En g i n e e r i n g Op e r a t i o n s & M a i n t e n a n c e Cost per Million Gallons by Department Budget and Actual September 30, 2024 Budget Actual $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 Sa l a r y & W a g e s Em p l o y e e B e n e f i t s Ad m i n i s t r a t i v e E x p e n s e s Pr i n t i n g & P u b l i c a t i o n Tr a i n i n g & M e e t i n g s Op e r a t i n g M a t e r i a l s & S u p p l i e s Co n t r a c t u a l S e r v i c e s Pr o f e s s i o n a l S e r v i c e s Re s e a r c h & M o n i t o r i n g Re p a i r s & M a i n t e n a n c e Ut i l i t i e s Ot h e r M a t e r i a l s , S u p p l i e s , & S v c s Collection, Treatment, & Disposal Expenses by Major Category Budget and Actual (in thousands) September 30, 2024 Budget Actual Section 2 - Page 1 Divisional Contributions to Cost Per Million Gallons For the Three Months Ended September 30, 2024 2024-25 09/30/22 09/30/23 Annual 09/30/24 Actual Actual Budget Actual Flow in Million Gallons 16,593.98 17,078.51 67,525.00 17,363.47 Flow in Million Gallons per Day 180.37 185.64 185.00 188.73 General Manager's Department General Management Administration 30.23$ 43.06$ 35.41$ 41.09$ Subtotal 30.23 43.06 35.41 41.09 Administrative Services Department Administrative Services 8.77 6.80 14.18 4.89 Consolidated Services 115.63 129.11 211.44 167.49 Financial Management 65.52 66.94 69.77 77.81 Contracts, Purchasing, & Materials Mgmt.80.58 66.09 79.36 73.43 Information Technology 298.14 297.67 236.83 324.86 Facilities Maintenance - - - 0.13 Subtotal 568.64 566.61 611.58 648.61 Communications Department Communications Administration - - 4.74 4.81 Board Services 13.93 14.82 19.59 16.52 Public Affairs 19.04 19.25 29.13 21.99 Subtotal 32.97 34.07 53.46 43.32 Human Resources Department Human Resources Administration - - 5.13 5.36 Human Resources 60.39 50.30 66.66 44.82 Risk Management 63.60 54.65 48.84 44.16 Subtotal 123.99 104.95 120.63 94.34 Environmental Services Department Environmental Services Administration 80.66 83.72 19.86 51.43 Resource Protection 83.32 90.15 112.69 94.36 Environmental Laboratory & Ocean Monitoring 141.96 134.20 172.90 152.44 Environmental Compliance - - 74.48 41.09 Subtotal 305.94 308.07 379.93 339.32 Engineering Department Engineering Administration 13.07 9.85 9.50 8.51 Planning 60.05 51.42 69.19 59.93 Project Management Office 63.17 63.47 72.04 66.03 Design 88.29 84.04 119.73 109.27 Construction Management 108.64 114.58 140.23 128.04 Subtotal 333.22 323.36 410.69 371.78 Operations & Maintenance Department Operations & Maintenance Administration 6.92 5.05 9.28 5.44 Collections Facilities O & M 253.21 248.27 304.86 211.72 Fleet Services 38.44 33.78 39.93 31.44 Plant No. 1 Operations 599.79 583.77 649.12 560.77 Plant No. 2 Operations 279.08 290.19 324.37 353.05 Plant No. 1 Maintenance 380.49 393.76 482.94 576.92 Plant No. 2 Maintenance 216.73 378.54 339.90 258.39 Subtotal 1,774.66 1,933.36 2,150.40 1,997.73 Total Operating Expenses 3,169.65 3,313.48 3,762.10 3,536.19 Cost Allocation (278.59) (272.04) (316.10) (341.50) Net Operating Requirements 2,891.06$ 3,041.44$ 3,446.00$ 3,194.69$ FY 2024-25 First Quarter Financial Report Section 2 - Page 2 Comparison of Expenses by Department For the Three Months Ended September 30, 2024 2024-25 09/30/22 09/30/23 Year to Date Budget % Department and Division Actual Actual Budget 09/30/24 Realized General Manager's Department General Management Administration 501,556$ 735,343$ 2,391,106$ 713,520$ 29.84% Subtotal 501,556 735,343 2,391,106 713,520 29.84% Administrative Services Department Administrative Services 145,607 116,066 957,325 84,826 8.86% Consolidated Services 1,918,778 2,204,941 14,277,812 2,908,226 20.37% Financial Management 1,087,246 1,143,260 4,710,887 1,351,035 28.68% Contracts, Purchasing, & Materials Mgmt. 1,337,121 1,128,740 5,359,090 1,275,036 23.79% Information Technology 4,947,265 5,083,827 15,991,713 5,640,761 35.27% Facilities Maintenance - - - 2,219 N/A Subtotal 9,436,017 9,676,834 41,296,827 11,262,103 27.27% Communications Department Communications Administration - - 320,274 83,542 26.08% Board Services 231,087 253,135 1,322,596 286,761 21.68% Public Affairs 315,870 328,831 1,966,701 381,870 19.42% Subtotal 546,957 581,966 3,609,571 752,173 20.84% Human Resources Department Human Resources Administration - - 346,220 92,994 26.86% Human Resources 1,002,179 859,089 4,501,045 778,285 17.29% Risk Management 1,055,358 933,408 3,298,191 766,799 23.25% Subtotal 2,057,537 1,792,497 8,145,456 1,638,078 20.11% Environmental Services Department Environmental Services Administration 1,338,538 1,429,823 1,340,930 892,932 66.59% Resource Protection 1,382,612 1,539,549 7,609,491 1,638,461 21.53% Environmental Laboratory & Ocean Monitoring 2,355,693 2,291,934 11,675,367 2,646,836 22.67% Environmental Compliance - - 5,029,311 713,415 14.19% Subtotal 5,076,843 5,261,306 25,655,099 5,891,644 22.96% Engineering Department Engineering Administration 216,940 168,194 641,184 147,762 23.05% Planning 996,510 878,142 4,671,881 1,040,532 22.27% Project Management Office 1,048,306 1,083,931 4,864,814 1,146,559 23.57% Design 1,465,148 1,435,321 8,084,688 1,897,232 23.47% Construction Management 1,802,848 1,956,899 9,469,248 2,223,261 23.48% Subtotal 5,529,752 5,522,487 27,731,815 6,455,346 23.28% Operations & Maintenance Department Operations & Maintenance Administration 114,772 86,197 626,574 94,465 15.08% Collections Facilities O & M 4,201,833 4,240,162 20,585,540 3,676,276 17.86% Fleet Services 637,916 576,991 2,696,485 545,849 20.24% Plant No. 1 Operations 9,952,926 9,969,923 43,831,774 9,736,981 22.21% Plant No. 2 Operations 4,631,041 4,955,982 21,902,873 6,130,252 27.99% Plant No. 1 Maintenance 6,313,806 6,724,916 32,610,821 10,017,358 30.72% Plant No. 2 Maintenance 3,596,423 6,464,889 22,951,578 4,486,590 19.55% Subtotal 29,448,717 33,019,060 145,205,645 34,687,771 23.89% Total Operating Expenses 52,597,379 56,589,493 254,035,519 61,400,635 24.17% Cost Allocation (4,623,173) (4,646,267) (21,361,020) (5,929,698) 27.76% Net Operating Requirements 47,974,206$ 51,943,226$ 232,674,499$ 55,470,937$ 23.84% Operating Budget Review Section 2 - Page 3 Summary of Collection, Treatment, & Disposal Expenses by Major Category For the Three Months Ended September 30, 2024 Expense Expense Increase Increase Percent Budget Through Through (Decrease)(Decrease)Budget Remaining 2024-25 09/30/24 09/30/23 $%Realized Budget Salary & Wages 96,380,855$ 22,338,079 20,336,384 2,001,695$ 9.84%23.18%74,042,776$ Employee Benefits 27,714,692 6,577,115 5,959,894 617,221 10.36%23.73%21,137,577 Administrative Expenses 2,694,297 653,447 544,145 109,302 20.09%24.25%2,040,850 Printing & Publication 398,196 50,418 70,357 (19,939) -28.34%12.66%347,778 Training & Meetings 1,989,398 356,855 118,637 238,218 200.80%17.94%1,632,543 Operating Materials & Supplies 31,214,002 7,436,449 6,497,701 938,748 14.45%23.82%23,777,553 Contractual Services 23,491,390 5,353,625 5,195,114 158,511 3.05%22.79%18,137,765 Professional Services 7,917,396 1,557,603 960,089 597,514 62.24%19.67%6,359,793 Research & Monitoring 2,135,754 714,278 660,900 53,378 8.08%33.44%1,421,476 Repairs & Maintenance 36,305,899 11,236,485 11,232,873 3,612 0.03%30.95%25,069,414 Utilities 16,132,374 3,944,184 3,830,902 113,282 2.96%24.45%12,188,190 Other Materials, Supplies, and Services 7,661,266 1,182,097 1,182,497 (400) -0.03%15.43%6,479,169 Net Cost Allocation (21,361,020) (5,929,698) (4,646,267) (1,283,431) 27.62%27.76%(15,431,322) Net Operating Requirements 232,674,499 55,470,937 51,943,226 3,527,711 6.79%23.84%177,203,562 Gallonage Flow (MG)67,525.00 17,363.47 17,078.51 284.96 1.67% Gallonage Flow (MGD)185.00 188.73 185.64 3.09 1.66% Gallonage Flow ($'s /MG)$3,446.00 $3,194.69 $3,041.44 $153.25 5.04% Description FY 2024-25 First Quarter Financial Report Section 2 - Page 4 Revenue Percent Revenue Increase Increase Budget Through Budget Remaining Through (Decrease)(Decrease) Description 2024-25 09/30/24 Realized Budget 09/30/23 $% Service Fees 334,282,867$ 24,802$ 0.01% 334,258,065$ 49,984$ (25,182)$ -50.38% Permit Fees 15,506,269 4,051,625 26.13% 11,454,644 5,524,638 (1,473,013) -26.66% Inter District Sewer Use-SAWPA & SBSD 3,018,000 849,558 28.15% 2,168,442 742,328 107,230 14.45% Intra District Sewer Use-IRWD 8,067,337 982,433 12.18% 7,084,904 987,353 (4,920) -0.50% Capital Assessments-IRWD 7,211,000 822,056 11.40% 6,388,944 991,568 (169,512) -17.10% Capital Facilities Capacity Charges 15,485,595 1,646,118 10.63% 13,839,477 3,248,814 (1,602,696) -49.33% Property Taxes 117,624,920 1,943,297 1.65% 115,681,623 1,426,040 517,257 36.27% Interest Earnings 17,133,000 25,072,596 146.34% (7,939,596) 5,393,980 19,678,616 364.83% CIP Reimbursements - - N/A - 24,289 (24,289) -100.00% Wastehauler - 157,517 N/A (157,517) 180,815 (23,298) -12.88% CNG Sales - 44,335 N/A (44,335) 41,963 2,372 5.65% Rents & Leases - 99,095 N/A (99,095) 121,344 (22,249) -18.34% Other Revenues 6,014,651 79,221 1.32% 5,935,430 185,178 (105,957) -57.22% Power Sales - 21,343 N/A (21,343) 59,138 (37,795) -63.91% Other Sales - 12,573 N/A (12,573) 3,601 8,972 249.15% Total Revenues 524,343,639$ 35,806,569$ 6.83% 488,537,070$ 18,981,033$ 16,825,536$ 88.64% Summary of Revenues For the Three Months Ended September 30, 2024 Operating Budget Review Section 2 - Page 5 FY 2024-25 First Quarter Financial Report Summary of Collection, Treatment, & Disposal Expenses by Line Item For the Three Months Ended September 30, 2024 Expense Percent Expense Increase Budget Through Budget Remaining Through (Decrease) Description 2024-25 09/30/24 Expensed Budget 09/30/23 $ Salaries, Wages & Benefits Salaries & Wages 96,380,855$ 22,338,079$ 23.18% 74,042,776$ 20,336,384$ 2,001,695$ 9.84% Employee Benefits Retirement 12,846,492 2,833,746 22.06% 10,012,746 2,677,609 156,137 5.83% Group Insurances 12,009,427 3,023,160 25.17% 8,986,267 2,618,994 404,166 15.43% Tuition & Certification Reimb 84,192 19,589 23.27% 64,603 19,793 (204) -1.03% Edu. degrees, Cert. & Lic. 632,324 155,774 24.64% 476,550 146,299 9,475 6.48% Uniform Rental 281,237 112,497 40.00% 168,740 68,711 43,786 63.72% Workers' Compensation 905,678 164,889 18.21% 740,789 212,625 (47,736) -22.45% Unemployment Insurance 17,122 390 2.28% 16,732 702 (312) -44.44% Employee Supplemental Benefits 938,220 267,070 28.47% 671,150 215,161 51,909 24.13% Total Benefits 27,714,692 6,577,115 23.73% 21,137,577 5,959,894 617,221 10.36% Salaries, Wages & Benefits 124,095,547 28,915,194 23.30% 95,180,353 26,296,278 2,618,916 9.96% Matl, Supplies, & Services Administrative Expenses Memberships 706,626 332,238 47.02% 374,388 319,543 12,695 3.97% Office Exp - Supplies 73,981 11,252 15.21% 62,729 9,218 2,034 22.07% Postage 48,700 13,228 27.16% 35,472 11,570 1,658 14.33% Books & Publications 33,240 6,268 18.86% 26,972 2,247 4,021 178.95% Forms 2,000 102 5.10% 1,898 - 102 N/A Small Computer Items 1,300,750 236,898 18.21% 1,063,852 178,885 58,013 32.43% Minor Furniture & Fixtures 529,000 53,461 10.11% 475,539 22,682 30,779 135.70% Subtotal 2,694,297 653,447 24.25%2,040,850 544,145 109,302 20.09% Printing & Publication Repro-In-House 202,993 38,218 18.83% 164,775 34,537 3,681 10.66% Printing-Outside 42,203 1,928 4.57% 40,275 2,238 (310) -13.85% Notices & Ads 153,000 10,272 6.71% 142,728 33,582 (23,310) -69.41% Subtotal 398,196 50,418 12.66%347,778 70,357 (19,939) -28.34% Training & Meetings Meetings 160,985 19,394 12.05% 141,591 9,927 9,467 95.37% Training 1,828,413 337,461 18.46% 1,490,952 108,710 228,751 210.42% Subtotal 1,989,398 356,855 17.94%1,632,543 118,637 238,218 200.80% Operating Mat'ls & Supplies Chemical Coagulants 15,855,536 4,150,308 26.18% 11,705,228 3,603,400 546,908 15.18% Odor & Corrosion Control 10,476,895 2,190,361 20.91% 8,286,534 1,699,617 490,744 28.87% Disinfection 611,300 138,141 22.60% 473,159 137,135 1,006 0.73% Chemicals - Misc & Cogen 490,200 102,027 20.81% 388,173 69,591 32,436 46.61% Gasoline, Diesel & Oil 894,340 189,426 21.18% 704,914 183,957 5,469 2.97% Tools 698,642 164,492 23.54% 534,150 342,657 (178,165) -52.00% Safety equipment/tools 1,007,568 178,652 17.73% 828,916 224,086 (45,434) -20.28% Solv, Paints & Jan. Supplies 134,106 34,164 25.48% 99,942 34,951 (787) -2.25% Lab Chemicals & Supplies 754,325 239,287 31.72% 515,038 152,091 87,196 57.33% Misc. Operating Supplies 274,590 49,591 18.06% 224,999 50,216 (625) -1.24% Property Tax Fees 16,500 - 0.00% 16,500 - - N/A Subtotal 31,214,002 7,436,449 23.82%23,777,553 6,497,701 938,748 14.45% Contractual Services Solids Removal 14,356,000 3,382,614 23.56% 10,973,386 3,653,660 (271,046) -7.42% Other Waste Disposal 1,219,990 299,490 24.55% 920,500 242,890 56,600 23.30% Groundskeeping 215,200 39,185 18.21% 176,015 30,041 9,144 30.44% Janitorial 1,929,800 439,656 22.78% 1,490,144 349,870 89,786 25.66% Outside Lab Services 444,000 105,594 23.78% 338,406 26,675 78,919 295.85% Oxygen 1,332,000 195,614 14.69% 1,136,386 187,287 8,327 4.45% County Service Fee 410,300 8,462 2.06% 401,838 9,839 (1,377) -14.00% Temporary Services 355,000 50,320 14.17% 304,680 97,081 (46,761) -48.17% Security Services 2,487,100 572,056 23.00% 1,915,044 435,012 137,044 31.50% Other 742,000 260,634 35.13% 481,366 162,759 97,875 60.13% Subtotal 23,491,390 5,353,625 22.79%18,137,765 5,195,114 158,511 3.05% Increase (Decrease) % Section 2 - Page 6 (Continued) Operating Budget Review Summary of Collection, Treatment, & Disposal Expenses by Line Item For the Three Months Ended September 30, 2024 Expense Expense Increase Increase Budget Through Remaining Through (Decrease)(Decrease) Description 2024-25 09/30/24 Expensed Budget 09/30/23 $% Continued: Professional Services Legal 1,487,000 506,291 34.05% 980,709 182,206 324,085 177.87% Audit & Accounting 180,000 101,000 56.11% 79,000 67,412 33,588 49.82% Engineering 1,698,150 395,059 23.26% 1,303,091 269,060 125,999 46.83% Enviro Scientific Consulting 1,091,500 70,844 6.49% 1,020,656 68,915 1,929 2.80% Software Prgm Consulting 976,100 261,463 26.79% 714,637 161,263 100,200 62.13% Energy Consulting 22,000 3,500 15.91% 18,500 9,000 (5,500) -61.11% Advocacy Efforts 278,600 53,500 19.20% 225,100 67,800 (14,300) -21.09% Industrial Hygiene Services 100,000 4,391 4.39% 95,609 3,445 946 27.46% Labor Negotiation Services 60,000 - 0.00% 60,000 - - N/A Other 2,024,046 161,555 7.98% 1,862,491 130,988 30,567 23.34% Subtotal 7,917,396 1,557,603 19.67% 6,359,793 960,089 597,514 62.24% Research & Monitoring Environmental Monitoring 1,248,000 104,826 8.40% 1,143,174 95,651 9,175 9.59% Air Quality Monitoring 300,000 46,698 15.57% 253,302 12,886 33,812 262.39% Research 587,754 562,754 95.75% 25,000 552,363 10,391 1.88% Subtotal 2,135,754 714,278 33.44% 1,421,476 660,900 53,378 8.08% Repairs & Maintenance Materials & Services 27,998,162 7,633,545 27.26% 20,364,617 7,826,353 (192,808) -2.46% Svc. Mtc. Agreements 8,307,737 3,602,940 43.37% 4,704,797 3,406,520 196,420 5.77% Subtotal 36,305,899 11,236,485 30.95% 25,069,414 11,232,873 3,612 0.03% Utilities Telephone 513,400 122,091 23.78% 391,309 124,325 (2,234) -1.80% Diesel For Generators 62,000 4,191 6.76% 57,809 5,790 (1,599) -27.62% Natural Gas 3,035,000 758,314 24.99% 2,276,686 676,721 81,593 12.06% Power 11,266,947 2,699,085 23.96% 8,567,862 2,703,730 (4,645) -0.17% Water 1,255,027 360,503 28.72% 894,524 320,336 40,167 12.54% Subtotal 16,132,374 3,944,184 24.45% 12,188,190 3,830,902 113,282 2.96% Other Operating Supplies Outside Equip Rental 95,000 14,734 15.51% 80,266 6,738 7,996 118.67% Insurance Premiums 53,000 51,415 97.01% 1,585 49,251 2,164 4.39% Prop & Gen Liab Insurance 3,567,300 730,323 20.47% 2,836,977 810,750 (80,427) -9.92% Freight 207,000 44,040 21.28% 162,960 44,636 (596) -1.34% Misc. Operating Expense 479,398 100,263 20.91% 379,135 73,874 26,389 35.72% Regulatory Operating Fees 1,823,610 212,117 11.63% 1,611,493 189,885 22,232 11.71% Subtotal 6,225,308 1,152,892 18.52% 5,072,416 1,175,134 (22,242) -1.89% General Mgr Contingency & Reappropriations 1,294,788 - 0.00% 1,294,788 - - N/A Other Non-Oper Expense 141,170 29,205 20.69% 111,965 7,363 21,842 296.65% Total Materials, Supplies & Services 129,939,972 32,485,441 25.00% 97,454,531 30,293,215 2,192,226 7.24% Total Expenditures 254,035,519 61,400,635 24.17% 192,634,884 56,589,493 4,811,142 8.50% Cost Allocation (21,361,020) (5,929,698) 27.76% (15,431,322) (4,646,267) (1,283,431) 27.62% Net Operating Requirements 232,674,499$ 55,470,937$ 23.84%177,203,562$ 51,943,226$ 3,527,711$ 6.79% Percent Budget Section 2 - Page 7 FY 2024-25 First Quarter Financial Report Summary of Collection, Treatment, & Disposal Expenses by Process For the Three Months Ended September 30, 2024 Increase Increase Actual Actual (Decrease) (Decrease) 09/30/24 09/30/23 $ % Process: Preliminary Treatment 3,645,104$ 2,997,438$ 647,666$ 21.61% Primary Treatment 6,952,202 6,607,305 344,897 5.22% Secondary Treatment 3,406,001 4,170,956 (764,955) -18.34% Oxygen Generation Facility (Plant 2)393,371 379,525 13,846 3.65% Effluent Disposal 276,030 602,686 (326,656) -54.20% Solids Handling 16,747,983 15,565,899 1,182,084 7.59% Cogeneration 7,193,190 6,778,085 415,105 6.12% Utilities 1,248,742 1,189,052 59,690 5.02% Electrical Distribution 682,348 571,462 110,886 19.40% Miscellaneous Buildings 3,389,669 3,180,102 209,567 6.59% External Location 3,962 10,179 (6,217) -61.08% Nerissa Vessel 87,236 120,768 (33,532) -27.77% Laboratory 4,305,114 3,720,194 584,920 15.72% Collections 7,139,985 6,049,575 1,090,410 18.02% Net Operating Requirements 55,470,937$ 51,943,226$ 3,527,711$ 6.79% Section 2 - Page 8 Staffing Trends Full Time Equivalents (FTE) September 30, 2024 At September 30, 2024, the total head count was 648 employees, or a full time equivalency of 631. Operating Budget Review 450 500 550 600 650 700 750 6/30/21 6/30/22 6/30/23 6/30/24 9/30/24 619 595 583 623 631 20 44 64 32 33 Actual Vacant Budgeted FTE 639 639 647 655 664 Section 2 - Page 9 FY 2024-25 First Quarter Financial Report This Page Intentionally Left Blank Section 2 - Page 10 Capital Improvement Program By Process Area and Project Driver For the Three Months Ended September 30, 2024 Capital Improvement Program Budget Review Total Capital Improvement Outlays by Project Driver - $24,993,372 Rehabilitation and Replacement: 80.2% Strategic Initiatives: 10.7% Additional Capacity: 4.5% Regulatory: 4.6% Total Capital Improvement Outlays by Process Area - $24,993,372 Collections Facilities: 18.5% Liquid Treatment: 47.1% Solids Handling & Digestion: 2.1% Utility Systems: 2.0% Support Facilities: 16.0% Other: 14.3% Section 3 - Page 1 FY 2024-25 First Quarter Financial Report Summary of Capital Improvement Construction Requirements - Current Year For the Three Months Ended September 30, 2024 2024-25 2024-25 2024-25 Cashflow Actual at Projected Budget 9/30/2024 Outlay Collection System Improvement Projects Collections Facilities Santa Ana Trunk Sewer Rehabilitation 1,098,804$ 373,094$ 1,261,500$ Greenville-Sullivan Trunk Improvements 132,179 10,823 207,600 Taft Branch Capacity Improvements 6,327,358 50,491 5,465,800 Yorba Linda Dosing Station Installation 248,738 - 113,600 Knott - Miller Holder - Artesia Branch Rehabilitation 648,678 66,277 811,300 Westminster Blvd Force Main Replacement 169,215 (27,445) 386,200 Rehabilitation of Western Regional Sewers 4,063,118 86,675 5,194,500 Interstate 405 Widening Project Impacts on OC San Sewers 34,158 - 8,100 Seal Beach Pump Station Replacement 14,196,085 1,302,264 11,994,200 Bay Bridge Pump Station Replacement 3,323,255 218,850 2,046,300 Newport Beach Pump Station Pressurization Improvements 436,401 (412) 298,200 Fairview Trunk Sewer Rehabilitation 599,292 93,198 586,800 MacArthur Pump Station Rehabilitation 187,422 - 129,800 Gisler Red-Hill Interceptor & Baker Force Main Rehabilitation 26,796,764 1,506,635 21,063,300 MacArthur Force Main Improvement 2,728,325 56,179 3,236,600 North Trunk Improvements 637,625 66,112 171,100 Edinger Pumping Station Replacement 1,143,575 42,999 924,300 Small Construction Projects Program - Collections 4,932,646 666,240 6,208,400 Operations & Maintenance Capital Program - Collections 3,695 100,933 101,000 Planning Studies Program - Collections 347,627 - 321,800 Sunflower and Red Hill Interceptor Repairs 3,391 4,790 79,900 Subtotal - Collections Facilities 68,058,351 4,617,703 60,610,300 Revenue Area 14 Bay Bridge Pumping Station Rehabilitation (3.62%) 124,820 8,220 76,900 Newport Beach Pump Station Pressurization Improve (0.27%) 1,181 (1) 900 Subtotal - Revenue Area 14 126,001 8,219 77,800 Total Collection System Improvement Projects 68,184,352 4,625,922 60,688,100 Section 3 - Page 2 (Continued) Summary of Capital Improvement Construction Requirements - Current Year For the Three Months Ended September 30, 2024 2024-25 2024-25 2024-25 Cashflow Actual at Projected Budget 9/30/2024 Outlay Treatment & Disposal Projects Headworks Headworks Rehabilitation at Plant 1 40,947,431 7,302,619 35,541,000 Headworks Modifications at P2 for GWRS Final Expansion 180,259 29,080 1,622,800 Subtotal - Headworks 41,127,690 7,331,699 37,163,800 Primary Treatment Primary Sedimentation Basins 3-5 Replacement at Plant 1 4,652,825 824,152 6,152,400 Primary Sedimentation Basins 6-31 Reliability Improv at P1 2,296,476 185,405 1,531,000 Primary Treatment Rehabilitation at Plant 2 19,483,658 655,165 14,551,500 Subtotal - Primary Treatment 26,432,959 1,664,722 22,234,900 Secondary Treatment Activated Sludge-1 Aeration Basin & Blower Rehab at P1 5,682,462 416,157 5,702,000 Trickling Filter Rehab at P1 483,777 72,135 475,800 Activated Sludge Aeration Basin Rehabilitation at Plant 2 3,163,385 278,918 2,085,600 Subtotal - Secondary Treatment 9,329,624 767,210 8,263,400 Solids Handling & Digestion Interim Food Waste Receiving Facility 223,531 133 49,700 TPAD Digester Facility at Plant 2 7,161,399 392,773 6,510,800 Digesters Rehabilitation at Plant No. 2 3,836,078 75,891 2,211,400 Truck Loading Bay Odor Control Improvements at Plant 2 108,872 56,317 116,100 Subtotal - Solids Handling & Digestion 11,329,880 525,114 8,888,000 Ocean Outfall Systems Ocean Outfall System Rehabilitation 10,269,146 1,833,973 10,013,300 120-inch Ocean Outfall Rehabilitation 326,842 42,281 611,700 Sodium Bisulfite Station Rehabilitation at Plant 2 672,673 123,523 475,400 Emergency Overflow Pipes & Windwall Rehabilitation at P2 173,297 3,531 49,000 Subtotal - Ocean Outfall Systems 11,441,958 2,003,308 11,149,400 Capital Improvement Program Budget Review Section 3 - Page 3 (Continued) FY 2024-25 First Quarter Financial Report Summary of Capital Improvement Construction Requirements - Current Year For the Three Months Ended September 30, 2024 2024-25 2024-25 2024-25 Cashflow Actual at Projected Budget 9/30/2024 Outlay Treatment & Disposal Projects (Continued) Utility Systems Electrical Power Distribution System Improvements 1,697,999 (84,149) 907,000 Digester Gas Facilities Rehabilitation 2,909,099 340,438 3,058,500 Central Generation Engine Overhauls at Plants 1 and 2 9,361,016 108,360 7,642,700 Central Generation Facilities & OOBS Seismic Upgrades 177,372 - 132,000 Uninterruptable Power Supply Improvements at Plant 1 2,855,350 112,603 2,777,700 12.47 kV Switchgear Replacement at CenGen at Plant 1 118,833 - 118,900 Industrial Control System & IT Data Center Relocation at P1 238,625 19,898 192,500 Headworks Electrical Distribution Improvements at P2 64,508 - - Subtotal - Utility Systems 17,422,802 497,150 14,829,300 Information Management Systems Process Control Systems Upgrades 7,365,033 680,971 4,824,200 Project Management Information System 61,318 18,500 43,000 Process Control System Alarm Optimization 115,523 - 59,200 Information Technology Capital Program 1,371,024 47,700 779,300 EAM Software and Process Implementation 246,436 - 261,800 Subtotal - Information Management Systems 9,159,334 747,171 5,967,500 Strategic & Master Planning Planning Studies Program 3,443,719 140,711 4,095,700 Subtotal - Strategic & Master Planning 3,443,719 140,711 4,095,700 Water Management Projects GWRS Final Expansion Coordination - - 600 Subtotal - Water Management Projects - - 600 Research Research Program 1,849,805 74,096 3,338,900 Subtotal - Research 1,849,805 74,096 3,338,900 Section 3 - Page 4 (Continued) Summary of Capital Improvement Construction Requirements - Current Year For the Three Months Ended September 30, 2024 2024-25 2024-25 2024-25 Cashflow Actual at Projected Budget 9/30/2024 Outlay Treatment & Disposal Projects (Continued) Support Facilities Small Construction Projects Program 21,132,557 2,435,711 23,457,900 Operations & Maintenance Capital Program 4,622,089 192,650 3,961,800 Headquarters Complex 2,340,333 360,963 3,967,300 South Perimeter Security & Utility Improvements at Plant 1 258,560 (125,177) 236,900 Support Buildings Seismic Improvements at Plant 1 1,119,403 (33,179) 578,300 Administrative Facilities & Power Building 3A Demolition 62,006 26,609 73,000 Collections Yard Relocation 4,705,701 1,218,799 4,364,100 Operations and Maintenance Complex at Plant 2 3,412,770 (88,639) 4,047,800 Subtotal - Support Facilities 37,653,419 3,987,737 40,687,100 Others Capital Improvement Program Management Services 723,265 29,183 753,100 Subtotal - Others 723,265 29,183 753,100 Total Treatment and Disposal Projects 169,914,455 17,768,101 157,371,700 Capital Equipment Purchases 15,396,026 2,599,349 15,365,600 Total Collection, Treatment and Disposal Projects and Capital Equipment Purchases 253,494,833 24,993,372 233,425,400 Less: Savings and Deferrals (30,419,380) - - Net Collection, Treatment and Disposal Projects and Capital Equipment Purchases 223,075,453$ 24,993,372$ 233,425,400$ Capital Improvement Program Budget Review Section 3 - Page 5 FY 2024-25 First Quarter Financial Report Summary of Capital Improvement Construction Requirements - Project Life For the Three Months Ended September 30, 2024 Current Total Approved June 30, 2024 Year Projected Remaining Project Accumulated Projected Cost at Future Budget Cost Cost June 30, 2025 Budget Collection System Improvement Projects Collections Facilities Santa Ana Trunk Sewer Rehabilitation 54,620,000$ 2,979,726$ 1,261,500$ 4,241,226$ 50,378,774$ Greenville-Sullivan Trunk Improvements 48,600,000 2,123,554 207,600 2,331,154 46,268,846 Taft Branch Capacity Improvements 31,200,000 3,073,594 5,465,800 8,539,394 22,660,606 Yorba Linda Dosing Station Installation 21,700,000 - 113,600 113,600 21,586,400 Santa Ana Canyon South River Trunk Rehabilitation 19,300,000 - - - 19,300,000 Knott - Miller Holder - Artesia Branch Rehabilitation 16,500,000 433,586 811,300 1,244,886 15,255,114 Westminster Blvd Force Main Replacement 43,900,000 43,488,084 386,200 43,874,284 25,716 Rehabilitation of Western Regional Sewers 94,000,000 41,150,153 5,194,500 46,344,653 47,655,347 Interstate 405 Widening Project Impacts on OC San Sewers 500,000 301,861 8,100 309,961 190,039 Seal Beach Pump Station Replacement 134,000,000 12,346,728 11,994,200 24,340,928 109,659,072 Los Alamitos Sub-Trunk Extension 119,600,000 - - - 119,600,000 Crystal Cove Pump Station Rehabilitation 14,500,000 - - - 14,500,000 Bay Bridge Pump Station Replacement 140,714,800 23,289,439 2,046,300 25,335,739 115,379,061 Newport Beach Pump Station Pressurization Improvements 2,692,710 2,152,305 298,200 2,450,505 242,205 East Coast Highway Sewer Rehabilitation 8,600,000 - - - 8,600,000 Fairview Trunk Sewer Rehabilitation 25,000,000 1,003,638 586,800 1,590,438 23,409,562 MacArthur Pump Station Rehabilitation 16,200,000 - 129,800 129,800 16,070,200 Main Street Pump Station Rehabilitation 37,700,000 - - - 37,700,000 Gisler Red-Hill Interceptor & Baker Force Main Rehabilitation 55,500,000 16,747,696 21,063,300 37,810,996 17,689,004 MacArthur Force Main Improvement 8,150,000 3,237,154 3,236,600 6,473,754 1,676,246 North Trunk Improvements 59,100,000 5,801 171,100 176,901 58,923,099 Edinger Pumping Station Replacement 36,500,000 1,835,268 924,300 2,759,568 33,740,432 Slater Pump Station Rehabilitation 45,600,000 16,480 - 16,480 45,583,520 Bolsa Chica/Edinger/Springdale Trunk Sewer Rehab 11,520,000 - - - 11,520,000 Small Construction Projects Program - Collections 7,385,000 5,655,481 6,208,400 11,863,881 (4,478,881) Operations & Maintenance Capital Program - Collections 660,000 224,687 101,000 325,687 334,313 Planning Studies Program - Collections 1,075,000 416,120 321,800 737,920 337,080 Sunflower and Red Hill Interceptor Repairs 6,750,000 6,691,812 79,900 6,771,712 (21,712) Subtotal - Collections Facilities 1,061,567,510 167,173,167 60,610,300 227,783,467 833,784,043 Revenue Area 14: Bay Bridge Pumping Station Rehabilitation (3.62%) 5,285,200 874,743 76,900 951,643 4,333,557 Newport Beach Pump Station Pressurization Improve (0.27%) 7,290 5,827 900 6,727 563 Subtotal - Revenue Area 14 5,292,490 880,570 77,800 958,370 4,334,120 Total Collection System Improvement Projects 1,066,860,000 168,053,737 60,688,100 228,741,837 838,118,163 Section 3 - Page 6 (Continued) Summary of Capital Improvement Construction Requirements - Project Life For the Three Months Ended September 30, 2024 Current Total Approved June 30, 2024 Year Projected Remaining Project Accumulated Projected Cost at Future Budget Cost Cost June 30, 2025 Budget Treatment & Disposal Projects Headworks Headworks Rehabilitation at Plant 1 340,000,000 176,468,994 35,541,000 212,009,994 127,990,006 Headworks Modifications at P2 for GWRS Final Expansion 30,400,000 28,779,424 1,622,800 30,402,224 (2,224) Subtotal - Headworks 370,400,000 205,248,418 37,163,800 242,412,218 127,987,782 Primary Treatment Primary Sedimentation Basins 3-5 Replacement at Plant 1 183,000,000 5,987,189 6,152,400 12,139,589 170,860,411 Primary Sedimentation Basins 6-31 Reliability Improv at P1 12,100,000 10,081,017 1,531,000 11,612,017 487,983 Primary Treatment Rehabilitation at Plant 2 188,000,000 85,197,364 14,551,500 99,748,864 88,251,136 B/C-Side Primary Clarifiers Rehabilitation at Plant 2 306,093,000 - - - 306,093,000 Subtotal - Primary Treatment 689,193,000 101,265,570 22,234,900 123,500,470 565,692,530 Secondary Treatment Activated Sludge-1 Aeration Basin & Blower Rehab at P1 470,000,000 6,012,999 5,702,000 11,714,999 458,285,001 Trickling Filter Rehab at P1 47,000,000 111,452 475,800 587,252 46,412,748 Return Activated Sludge Piping Replacement at Plant 2 10,000,000 9,424,585 - 9,424,585 575,415 Activated Sludge Aeration Basin Rehabilitation at Plant 2 65,600,000 1,118,217 2,085,600 3,203,817 62,396,183 Subtotal - Secondary Treatment 592,600,000 16,667,253 8,263,400 24,930,653 567,669,347 Solids Handling & Digestion Interim Food Waste Receiving Facility 6,300,000 1,352,312 49,700 1,402,012 4,897,988 TPAD Digester Facility at Plant 2 588,000,000 34,694,206 6,510,800 41,205,006 546,794,994 Digesters Rehabilitation at Plant No. 2 45,000,000 3,873,832 2,211,400 6,085,232 38,914,768 Truck Loading Bay Odor Control Improvements at Plant 2 8,356,000 31,489 116,100 147,589 8,208,411 Subtotal - Solids Handling & Digestion 647,656,000 39,951,839 8,888,000 48,839,839 598,816,161 Ocean Outfall Systems Ocean Outfall System Rehabilitation 170,300,000 131,016,178 10,013,300 141,029,478 29,270,522 120-inch Ocean Outfall Rehabilitation 82,000,000 206,462 611,700 818,162 81,181,838 Sodium Bisulfite Station Rehabilitation at Plant 2 9,200,000 1,086,687 475,400 1,562,087 7,637,913 Emergency Overflow Pipes & Windwall Rehabilitation at P2 7,500,000 103,875 49,000 152,875 7,347,125 Subtotal - Ocean Outfall Systems 269,000,000 132,413,202 11,149,400 143,562,602 125,437,398 Capital Improvement Program Budget Review Section 3 - Page 7 (Continued) FY 2024-25 First Quarter Financial Report Summary of Capital Improvement Construction Requirements - Project Life For the Three Months Ended September 30, 2024 Current Total Approved June 30, 2024 Year Projected Remaining Project Accumulated Projected Cost at Future Budget Cost Cost June 30, 2025 Budget Treatment & Disposal Projects (Continued) Utility Systems Electrical Power Distribution System Improvements 29,000,000 4,250,356 907,000 5,157,356 23,842,644 Digester Gas Facilities Rehabilitation 190,000,000 17,383,954 3,058,500 20,442,454 169,557,546 Natural Gas Pipelines Replacement at Plants 1 and 2 2,173,718 2,173,717 - 2,173,717 1 Central Generation Engine Overhauls at Plants 1 and 2 72,200,000 21,578,599 7,642,700 29,221,299 42,978,701 Central Generation Facilities & OOBS Seismic Upgrades 17,500,000 - 132,000 132,000 17,368,000 Uninterruptable Power Supply Improvements at Plant 1 9,600,000 5,402,415 2,777,700 8,180,115 1,419,885 12.47 kV Switchgear Replacement at CenGen at Plant 1 16,000,000 - 118,900 118,900 15,881,100 Industrial Control System & IT Data Center Relocation at P1 16,500,000 52,741 192,500 245,241 16,254,759 Headworks Electrical Distribution Improvements at P2 34,652,000 - - - 34,652,000 Subtotal - Utility Systems 387,625,718 50,841,782 14,829,300 65,671,082 321,954,636 Information Management Systems Process Control Systems Upgrades 35,500,000 11,757,880 4,824,200 16,582,080 18,917,920 Project Management Information System 2,280,000 1,666,899 43,000 1,709,899 570,101 Process Control System Alarm Optimization 4,121,000 - 59,200 59,200 4,061,800 Information Technology Capital Program 10,000,000 669,755 779,300 1,449,055 8,550,945 EAM Software and Process Implementation 9,200,000 7,087,993 261,800 7,349,793 1,850,207 Subtotal - Information Management Systems 61,101,000 21,182,527 5,967,500 27,150,027 33,950,973 Strategic & Master Planning Planning Studies Program 23,925,000 8,895,681 4,095,700 12,991,381 10,933,619 Subtotal - Strategic & Master Planning 23,925,000 8,895,681 4,095,700 12,991,381 10,933,619 Water Management Projects GWRS Final Expansion Coordination 1,400,000 1,399,404 600 1,400,004 (4) Subtotal - Water Management Projects 1,400,000 1,399,404 600 1,400,004 (4) Research Research Program 10,000,000 4,227,762 3,338,900 7,566,662 2,433,338 Subtotal - Research 10,000,000 4,227,762 3,338,900 7,566,662 2,433,338 Section 3 - Page 8 (Continued) Summary of Capital Improvement Construction Requirements - Project Life For the Three Months Ended September 30, 2024 Current Total Approved June 30, 2024 Year Projected Remaining Project Accumulated Projected Cost at Future Budget Cost Cost June 30, 2025 Budget Treatment & Disposal Projects (Continued) Support Facilities Small Construction Projects Program 101,993,000 23,234,482 23,457,900 46,692,382 55,300,618 Operations & Maintenance Capital Program 14,962,000 3,853,186 3,961,800 7,814,986 7,147,014 Laboratory Rehabilitation at Plant 1 103,800,000 - - - 103,800,000 Headquarters Complex 169,500,000 166,065,260 3,967,300 170,032,560 (532,560) South Perimeter Security & Utility Improvements at Plant 1 8,150,000 7,915,360 236,900 8,152,260 (2,260) Support Buildings Seismic Improvements at Plant 1 27,600,000 1,910,233 578,300 2,488,533 25,111,467 Administrative Facilities & Power Building 3A Demolition 4,286,000 34,759 73,000 107,759 4,178,241 Collections Yard Relocation 8,800,000 4,368,666 4,364,100 8,732,766 67,234 Operations and Maintenance Complex at Plant 2 126,500,000 2,709,338 4,047,800 6,757,138 119,742,862 Subtotal - Support Facilities 565,591,000 210,091,284 40,687,100 250,778,384 314,812,616 Others Capital Improvement Program Management Services 1,500,000 911,345 753,100 1,664,445 (164,445) Subtotal - Others 1,500,000 911,345 753,100 1,664,445 (164,445) Total Treatment and Disposal Projects 3,619,991,718 793,096,067 157,371,700 950,467,767 2,669,523,951 Capital Equipment Purchases 29,593,863 - 15,365,600 15,365,600 14,228,263 Total Collection, Treatment and Disposal Projects and Capital Equipment Purchases 4,716,445,581$ $961,149,804 $233,425,400 $1,194,575,204 $3,521,870,377 Capital Improvement Program Budget Review Section 3 - Page 9 FY 2024-25 First Quarter Financial Report This Page Intentionally Left Blank Section 3 - Page 10 Capital Assets Schedule & Debt Service Budget Review For the Three Months Ended September 30, 2024 Balance Year-to-Date Balance 07/01/24 Activity 09/30/24 CONSTRUCTION IN PROGRESS (CIP): Collection System 118,859,678$ 4,625,922$ 123,485,600$ Treatment Plant 558,222,491 20,367,450 578,589,941 Subtotal 677,082,169 24,993,372 702,075,541 PROPERTY, PLANT & EQUIPMENT (at cost): Land and Property Rights 58,153,170 - 58,153,170 Collection Lines and Pump Stations 1,013,172,599 - 1,013,172,599 Treatment Facilities 2,850,633,361 - 2,850,633,361 Effluent disposal facilities 96,161,634 - 96,161,634 Solids disposal facilities 3,329,893 - 3,329,893 General and administrative facilities 401,983,964 - 401,983,964 Lease right-to-use asset 109,897 - 109,897 Subscription right-to-use assets 3,474,003 - 3,474,003 Excess purchase price over book value on acquired assets 19,979,000 - 19,979,000 Subtotal 4,446,997,521 - 4,446,997,521 Total Property, Plant & Equipment & CIP 5,124,079,690$ 24,993,372$ 5,149,073,062$ 2024-25 Year-to-Date Remaining Budget Payments % of Budget Budget Principal Payments by Debt Issue: 2010A BABs -$ -$ --$ 2010C BABs - - -- 2016A COP 5,635,000 - 0.00%5,635,000 2017A COP - - -- 2021A COP 17,940,000 - 0.00%17,940,000 2022A COP - - -- 2024A COP 10,510,000 - 0.00%10,510,000 Subtotal Principal Payments 34,085,000 - 0.00% 23,575,000 Interest Expense by Debt Issue: 2010A BABs 2,986,574 976,239 32.69%2,010,335 2010C BABs 971,230 (22,351) -2.30%993,581 2016A COP 5,757,550 1,439,375 25.00%4,318,175 2017A COP 3,290,750 822,775 25.00%2,467,975 2021A COP 4,732,250 1,183,025 25.00%3,549,225 2022A COP 4,081,000 1,020,300 25.00%3,060,700 2024A COP 5,123,067 1,713,217 33.44%3,409,850 Subtotal Interest Expense 26,942,421 7,132,580 26.47% 19,809,841 Total Debt Service 61,027,421$ 7,132,580$ 11.69% 43,384,841$ Capital Assets Schedule & Debt Service Budget Review Capital Assets Schedule Debt Service Budget Review Section 4 - Page 1 FY 2024-25 First Quarter Financial Report This Page Intentionally Left Blank Section 4 - Page 2 General Liability and Property Fund Budget Review For the Three Months Ended September 30, 2024 Actual Actual 2024-25 Through Through Budget 09/30/24 09/30/23 Revenues: In-Lieu Premiums 4,381,983$ 730,323$ 16.67%3,651,660$ 810,750$ (80,427)$ Service Department Allocations 25,000 810 3.24%24,190 2,220 (1,410) Total Revenues 4,406,983 731,133 16.59%3,675,850 812,970 (81,837) Expenses: Benefits/Claims 400,000 1,116 0.28%398,884 995,730 (994,614) Professional Services 20,000 - 0.00%20,000 5,528 (5,528) Subtotal 420,000 1,116 0.27%418,884 1,001,258 (1,000,142) Policy Premium Expense 3,622,500 1,159,329 32.00%2,463,171 1,006,250 153,079 Total Expenses 4,042,500 1,160,445 28.71%2,882,055 2,007,508 (847,063) Excess Revenue (Expense)364,483 (429,312) 793,795$ (1,194,538) 765,226 Beginning Reserves 97,635,517 97,635,517 98,000,000 (364,483) Ending Reserves 98,000,000$ 97,206,205$ 96,805,462$ 400,743$ 09/30/24 Budget (Decrease) Self Insurance Budget Review Percent of Budget Remaining Through 2024-25 Increase Section 5 - Page 1 FY 2024-25 First Quarter Financial Report Workers' Compensation Fund Budget Review For the Three Months Ended September 30, 2024 Actual Actual 2024-25 Through Through Budget 09/30/24 09/30/24 09/30/23 Revenues: In-Lieu Premiums 659,546$ 164,886$ 25.00% 494,660$ 212,625$ (47,739)$ Service Department Allocations 100,000 15,876 15.88% 84,124 24,699 (8,823) Total Revenues 759,546 180,762 23.80%578,784 237,324 (56,562) Expenses: Benefits/Claims 600,000 218,180 36.36% 381,820 67,492 150,688 Legal Services 150,000 153,058 102.04% (3,058) 25,707 127,351 Professional Services 80,000 14,457 18.07% 65,543 - 14,457 Subtotal 830,000 385,695 46.47%444,305 93,199 292,496 Policy Premium Expense 294,029 91,995 31.29%202,034 81,675 10,320 Total Expenses 1,124,029 477,690 42.50%646,339 174,874 302,816 Excess Revenue (Expense)(364,483) (296,928) (67,555)$ 62,450 (359,378) Beginning Reserves 2,364,483 2,364,483 2,000,000 364,483 Ending Reserves 2,000,000$ 2,067,555$ 2,062,450$ 5,105$ Budget (Decrease) Percent of Budget Remaining Through 2024-25 Increase Section 5 - Page 2 October 31, 2024 STAFF REPORT Treasurer’s Report For the Period Ended September 30, 2024 SUMMARY Section 18.0 of the Orange County Sanitation District's (OC San) Investment Policy includes quarterly reporting requirements for OC San's two investment portfolios. These two funds, the "Liquid Operating Monies," and the "Long-Term Operating Monies" are managed by Insight Investment (Insight), OC San’s external money manager. The ongoing monitoring of OC San's investment program by staff and Callan LLC (Callan), OC San's independent investment advisor, indicates that OC San’s investments are in compliance with OC San's adopted Investment Policy and the California Government Code, and that overall performance has tracked with benchmark indices. In addition, sufficient liquidity and anticipated revenues are available for OC San to meet budgeted expenditures for the next six months. OC San’s portfolios do not include any reverse repurchase agreements or derivative securities. ADDITIONAL INFORMATION Performance Reports The Quarterly Investment Report, prepared by Insight, and the Investment Measurement Service Quarterly Review, prepared by Callan, as of September 30, 2024, are attached for reference. The Liquid Operating portfolio, with an average maturity of 115 days, consists entirely of high quality fixed income investments consistent with OC San’s investment policy. Also included within the attachments are: • Performance results in comparison with the ICE BAML 3-month treasury bill index for the liquid operating portfolio; and the ICE BAML Corp./Govt. 1-5 Year Bond index for the long-term portfolio as identified in the investment policy. • A listing of individual securities held at the end of each reporting period. Treasurer’s Report For the Period Ended September 30, 2024 Page 2 of 4 • Cost and market values of the portfolios: Liquid Operating Long-Term Cost $40.3 M $689.4 M Market Value $40.3 M $685.7 M • Modified duration of the portfolio compared to the Benchmark. Liquid Operating Long-Term OC San Policy < 0.50 < 5.00 Benchmark 0.16 2.51 Portfolio 0.07 2.38 • The percent of the Liquid Operating Monies portfolio maturing within 90 days: 92.7% • Average portfolio credit quality: Liquid Operating – AA Long-Term – AA • Percent of portfolio with credit ratings below “A” by any rating agency and a description of such securities: Liquid Operating – Percent of portfolio – 0.0% Long-Term – Percent of portfolio – 0.89%: Virginia Electric Power Corp Callable Note 5/15/2027 Cost: $5,736,523.40 Maturity Date: 5/15/2027 Moody: A2 S&P: BBB+ Fitch: A • All investments are in compliance with the investment policy and the California Government Code, except for the following Lehman Brother holdings that OC San is pursuing collection through the bankruptcy court: Lehman Brothers Note-Defaulted $600,000 par value purchased 9/19/2008 Lehman Brothers Note-Defaulted $2,000,000 par value purchased 9/18/2008 Treasurer’s Report For the Period Ended September 30, 2024 Page 3 of 4 Portfolio Market Values 12/31/2023 3/31/2024 6/30/2024 9/30/2024 Long-Term ($) 728,414,369.87 730,072,327.88 689,065,781.68 685,660,419.69 Liquid Operating ($M) 208,505,775.29 140,513,156.80 96,236,867.45 40,346,159.38 Total $936,920,145.16 $870,585,484.68 $785,302,649.13 $726,006,579.07 Orange County Sanitation District Account Balances as of September 30, 2024 Investment Accounts Balances September 30, 2024 Insight/U.S. Bank – Long-Term Portfolio Insight/U.S. Bank – Liquid Operating Portfolio State of California LAIF PARS Section 115 Trust - Moderate PARS Section 115 Trust - Balanced Banc of California – General Banc of California – Workers’ Compensation Banc of California – Property, Liability Claim, Exp U.S. Bank – Mount Langley BNY Mellon OCIP Reserve Petty Cash TOTAL Debt Service Reserves w/Trustees $685,660,420 40,346,159 26,904,148 10,996,712 5,602,541 2,608,091 100,000 50,000 322,377 250,000 1,500 $772,841,948 $88,903 Treasurer’s Report For the Period Ended September 30, 2024 Page 4 of 4 ATTACHMENTS 1. Insight Quarterly Review 2. Insight Quarterly Investment Report 3. Insight - U.S. Bank Month End Investment Detail with Accruals 4. Insight - U.S. Bank Transaction History 5. Callan Investment Measurement Service Quarterly Review 6. Investment Transactions and Balances in LAIF 7. BNY Mellon Owner Controlled Insurance Program Escrow Account 8. PARS Section 115 Trust Account Report 9. PARS - U.S. Bank Month End Investment Detail with Accruals Insight Quarterly Review 1 4.62 3.64 3.56 3.78 3.00 4.00 5.00 6.00 3 m 6 m 1 yr 2 yr 3 yr 4 yr 5 yr 6 yr 7 yr 8 yr 9 yr 10 yr 09/30/24 06/30/24 09/30/23 Insight Quarterly Investment Report 1MPR02141MPRM0214 FOR PROFESSIONAL CLIENTS ONLY,NOT TO BE DISTRIBUTED TO RETAIL CLIENTS THIS DOCUMENT SHOULD NOT BE REPRODUCED IN ANY FORM WITHOUT PRIOR WRITTEN APPROVAL PLEASE REFER TO THE RISK DISCLOSURES AT THE BACK OF THIS DOCUMENT Orange County Sanitation Client investment report: Q3 2024 This document has been prepared by Insight North America LLC (INA), a registered investment adviser under the Investment Advisers Act of 1940 and regulated by the US Securities and Exchange Commission. INA is part of ‘Insight’ or ‘Insight Investment’, the corporate brand for certain asset management companies operated by Insight Investment Management Limited including, among others, Insight Investment Management (Global) Limited and Insight Investment International Limited. The performance of Insight is being presented to show the historical performance of the portfolio management team responsible for managing the strategy. The track records presented include all accounts managed by Insight with substantially similar investment objectives, policies and strategies for which the strategy management teams were responsible. Advisory services referenced herein are available in the US only through INA. INA and its Insight affiliates are part of the GIPS® firm Insight Investment, which claims compliance with GIPS. Please refer to the important disclosures at the back of this document. 3MPR0214 •Economic review and outlook •Portfolio update •Compliance summary •Important disclosures Agenda Economic review and outlook 5MPR0214 Source: Insight, as of September 30, 2024. Any projections or forecasts contained herein are based upon certain assumptions considered reasonable. Projections are speculative in nature and some or all of the assumptions underlying the projections may not materialize or vary significantly from the actual results. Accordingly, the projections are only an estimate. Opinions expressed herein are as of the date stated and are subject to change without notice. Insight assumes no responsibility to update such information or to notify a client of any changes. •The US economy continues to perform well, with still-robust growth and inflation quickly approaching the Fed's 2% target •However, while the economy continues to add jobs, the broad labor market conditions are moderating as the demand for labor has largely re-balanced with the supply •We expect the Fed to continue to normalize interest rates in quarter-percentage points increments, but we do not rule out a more aggressive rate-cutting pace if the labor market conditions start to deteriorate rapidly Key takeaways 2023 2024 2025 2.5 1.6 2.4 3.1 4.4 2.5 4.1 5.4 2525 3.0 Real GDP Consumer Price Index Policy rate (year-end) 6MPR0214 Source: Federal Reserve, Insight Investment, as of September 4, 2024. Activity assessment in Beige Book The US economy is treading water Anecdotal evidence points to flat or declining economic activity across most regions in the US 7MPR0214 Source: Institute for Supply Management, Federal Reserve, as of October 1, 2024. ISM index and industrial production The manufacturing sector remains sluggish A combination of still-high interest rates and elevated uncertainty continue to weigh on the industrial sector 30 35 40 45 50 55 60 65 70 -25 -20 -15 -10 -5 0 5 10 15 20 25 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 In d e x v a l u e % Manufacturing industrial production, % year-over-year (LHS) 8MPR0214 Available jobs include total employment plus job openings; available workers include total civilian labor force plus marginally attached. Source: Bureau of Labor Statistics, Insight Investment, as of October 4, 2024. Available jobs and workers The demand for labor has largely re-balanced with the supply The incoming data indicates that the labor market is still strong but showing signs of cooling 135 140 145 150 155 160 165 170 175 2016 2017 2018 2019 2020 2021 2022 2023 2024 Mi l l i o n s Available jobs 9MPR0214 Source: Bureau of Labor Statistics, Insight Investment, as of October 4, 2024. Aggregate labor churn and unemployment rate We are in the low-hiring, low-firing stage of the cycle The labor market churn is tightening up in the face of a moderating economy 3.0 5.0 7.0 9.0 11.0 13.0 15.03.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 %% Total hires and separations as a % of labor force (LHS) Unemployment rate, inverted (RHS) Pandemicdisruption 10MPR0214 Source: Mortgage Bankers Association, Freddie Mac, Insight Investment as of October 2, 2024. Existing home sales and 30-year fixed mortgage rate Easing mortgage rates may jolt the lethargic housing market The housing sector plays a critical role in transmitting monetary policy 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 Mi l l i o n s % 30-year fixed mortgage rate (LHS) 11MPR0214 Source: Bureau of Economic Analysis as of September 27, 2024. Core PCE (% annualized growth rate) The disinflationary momentum continues With the 2% inflation target in sight, the Fed shifted its focus to the labor market 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 Jan-21 Apr-21 Jul-21 Oct-21 Jan-22 Apr-22 Jul-22 Oct-22 Jan-23 Apr-23 Jul-23 Oct-23 Jan-24 Apr-24 Jul-24 % 1-month 3-month 6-month 12MPR0214 Source: Chicago Board of Trade, as of October 4, 2024. Any projections or forecasts contained herein are based upon certain assumptions considered reasonable. Projections are speculative in nature and some or all of the assumptions underlying the projections may not materialize or vary significantly from the actual results. Accordingly, the projections are only an estimate. Fed funds futures The return of volatility 2.5 3.0 3.5 4.0 4.5 5.0 5.5 Jan-23 Apr-23 Jul-23 Oct-23 Jan-24 Apr-24 Jul-24 Oct-24 Jan-25 Apr-25 Jul-25 Oct-25 % Jan-24 Mar-24 May-24 Aug-24 Oct-24 Expectations for future rate cuts have swung wildly throughout the year with the ebb and flow of macro data Portfolio update Orange County Liquid Operating 15MPR0214 Orange County Liquid Operating Portfolio summary as of September 30, 2024 Source: Insight/Northern Trust/Rimes. Inception date for performance purposes: February 29, 2024. Returns are gross of fees. Benchmark history provided at the end of this section Portfolio summary ● Value: $40,569,457 ● Benchmark: ICE BofA US 3-Month Treasury Bill Performance blank 1 month 3 months Since inception % % % Portfolio 0.43 1.39 3.26 Benchmark 0.43 1.37 3.17 Relative 0.00 0.02 0.09 16MPR0214 Orange County Liquid Operating Portfolio characteristics as of September 30, 2024 Approach used for credit rating: Average. All durations are effective duration. *Excludes Treasury. Summary Portfolio Benchmark Relative Yield to worst (%)4.8 4.8 0.0 Effective duration (years)0.1 0.2 -0.1 Average coupon 3.7 0.0 3.7 Average life / Maturity 0.3 0.2 0.1 Average rating AA AA+ Top issuers* (%)Holding Federal Farm Credit Banks Funding Corp 13.64 Morgan Stanley 4.99 New York Life Global Funding 4.95 Chevron Corp 4.91 Novartis Finance Corp 4.91 John Deere Capital Corp 4.80 Caterpillar Financial Services Corp 4.28 International Bank for Reconstruct & Development 2.82 PepsiCo Inc 2.48 Intercontinental Exchange Inc 2.28 Issuer overweight*Contribution to duration (years) Portfolio Benchmark Relative John Deere Capital Corp 0.02 -0.02 Intercontinental Exchange 0.01 -0.01 New York Life Global Funding 0.01 -0.01 FFCB Funding Corporation 0.00 -0.00 Novartis Finance Corp 0.00 -0.00 Caterpillar Fin Serv Corp 0.00 -0.00 Chevron Corp 0.00 -0.00 Intrn Bank for Reconstr&Dev 0.00 -0.00 Morgan Stanley 0.00 -0.00 PepsiCo Inc 0.00 -0.00 Total 0.06 -0.06 Rating (%) Interna C o e D o NY 7.8 73.4 18.8 100.0 0 50 100 150 AAA AA A BBB BIG Cash NR Portfolio Benchmark Duration (%) r p r B a C 3.3 48.9 20.4 19.1 6.0 2.3 100.0 0 40 80 120 1 day 2-7 days 8-30 days 31-90 91-180 181+Portfolio Benchmark 17MPR0214 Orange County Liquid Operating Portfolio allocation as of September 30, 2024 Sector (%) Market Value Portfolio Benchmark Relative Industrial 16.5 - 16.5 Agency 15.0 - 15.0 Financial Institutions 14.3 - 14.3 Cash and other 5.0 - 5.0 Supranational 2.8 - 2.8 Treasury 46.4 100.0 -53.6 Total 100.0 100.0 18MPR0214 Orange County Liquid Operating Contribution to duration as of September 30, 2024 All durations are effective duration. Sector Contribution to duration (years) Portfolio Benchmark Relative (CTD) Financial Institutions 0.0 - 0.0 Industrial 0.0 - 0.0 Agency 0.0 - 0.0 Supranational 0.0 - 0.0 Treasury 0.0 0.2 -0.1 Total 0.1 0.2 19MPR0214 Orange County Liquid Operating Contribution to duration as of September 30, 2024 Approach used for credit rating: Average. All durations are effective duration. Ratings Contribution to duration (years) Rating Portfolio Benchmark Relative AAA 0.01 -0.01 AA 0.03 0.16 -0.13 A 0.03 -0.03 BBB --- BIG --- NR --- Total 0.07 0.16 -0.09 0.0 0.0 0.0 0.2 0 1 AAA AA A BBB BIG NR Portfolio Benchmark Duration Contribution to duration (years) Portfolio Benchmark Relative 1 day --- 2-7 days 0.00 -0.00 8-30 days 0.01 -0.01 31-90 0.02 0.16 -0.14 91-180 0.02 -0.02 181+0.01 -0.01 Total 0.07 0.16 -0.09 0.0 0.0 0.0 0.0 0.0 0.2 0 1 1 day 2-7 days 8-30 days 31-90 91-180 181+ Portfolio Benchmark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range County Long Term 24MPR0214 Orange County Long Term Portfolio summary as of September 30, 2024 Source: Insight/Northern Trust/Rimes. Inception date for performance purposes: February 29, 2024. Returns are gross of fees. Benchmark history provided at the end of this section Portfolio summary ●Value: $641,176,152 ●Benchmark: ICE BofA 1-5 Year AAA-A US Corporate & Government Index Performance blank 1 month 3 months Since inception % % % Portfolio 0.85 3.31 4.65 Benchmark 0.90 3.44 4.75 Relative -0.06 -0.13 -0.09 25MPR0214 Orange County Long Term Portfolio characteristics as of September 30, 2024 Approach used for credit rating: Average. All durations are effective duration. *Excludes Treasury. Summary Portfolio Benchmark Relative Yield to worst (%)3.9 3.8 0.1 Effective duration (years)2.4 2.5 -0.1 Average coupon 2.7 3.0 -0.3 Average life / Maturity 2.6 2.7 -0.1 Average rating AA AA Top issuers* (%)Holding Fannie Mae 6.29 Inter American Development Bank 5.15 Freddie Mac 4.96 International Bank for Reconstruct & Development 4.81 Federal Home Loan Banks 2.42 Bank of America Corp 2.40 JPMorgan Chase & Co 1.65 Morgan Stanley 1.61 UnitedHealth Group Inc 1.42 Toyota Motor Credit Corp 1.39 Issuer overweight*Contribution to duration (years) Portfolio Benchmark Relative Inter American Dev Bank 0.13 0.01 0.12 Intrn Bank for Reconstr&Dev 0.10 0.01 0.09 Freddie Mac 0.09 0.00 0.09 Resolution Fund Corp Strip 0.06 -0.06 Federal Home Loan Banks 0.06 0.01 0.05 Fannie Mae 0.05 0.00 0.05 ERAC USA Finance LLC 0.05 0.00 0.04 John Deere Capital Corp 0.04 0.00 0.04 Merck & Co Inc 0.04 0.00 0.03 Tennessee Valley Authority 0.03 0.00 0.03 Total 0.64 0.04 0.60 Rating (%) Morga d a e A B Fdd 15.0 65.6 19.4 0.13.9 80.6 15.4 0 50 100 AAA AA A BBB BIG Cash NR Portfolio Benchmark Duration (%) u a e C D k e 17.7 17.5 26.0 35.0 3.74.6 33.6 26.9 24.0 10.9 0 10 20 30 40 0-1 1-2 2-3 3-4 4-5 5+Portfolio Benchmark 26MPR0214 Orange County Long Term Portfolio allocation as of September 30, 2024 Sector (%) Market Value Portfolio Benchmark Relative Agency 12.8 4.4 8.4 Supranational 10.6 2.6 8.1 ABS 4.3 - 4.3 Industrial 10.2 6.0 4.1 CMBS 3.0 - 3.0 Financial Institutions 12.9 10.4 2.5 Utility 0.9 0.6 0.3 CMO 0.2 - 0.2 Cash and other 0.1 - 0.1 Local Authority - 0.7 -0.7 Sovereign - 0.9 -0.9 Treasury 44.9 74.4 -29.5 Total 100.0 100.0 27MPR0214 Orange County Long Term Contribution to duration as of September 30, 2024 All durations are effective duration. Sector Contribution to duration (years) Portfolio Benchmark Relative (CTD) Supranational 0.3 0.1 0.2 Agency 0.2 0.1 0.1 Industrial 0.2 0.2 0.1 CMBS 0.1 - 0.1 ABS 0.0 - 0.0 Financial Institutions 0.3 0.3 0.0 Utility 0.0 0.0 0.0 CMO 0.0 - 0.0 Local Authority - 0.0 0.0 Sovereign - 0.0 0.0 Treasury 1.2 1.9 -0.6 Total 2.4 2.5 28MPR0214 Orange County Long Term Contribution to duration as of September 30, 2024 Approach used for credit rating: Average. All durations are effective duration. Ratings Contribution to duration (years) Rating Portfolio Benchmark Relative AAA 0.30 0.10 0.20 AA 1.64 2.02 -0.38 A 0.44 0.39 0.04 BBB --- BIG --- NR --- Total 2.38 2.51 -0.14 0.3 1.6 0.4 0.1 2.0 0.4 0 1 2 3 AAA AA A BBB BIG NR Portfolio Benchmark Duration Contribution to duration (years) Portfolio Benchmark Relative 0-1 0.12 0.04 0.07 1-2 0.25 0.50 -0.25 2-3 0.64 0.67 -0.03 3-4 1.22 0.85 0.37 4-5 0.15 0.46 -0.30 5+--- Total 2.38 2.51 -0.14 0.1 0.3 0.6 1.2 0.20.0 0.5 0.7 0.8 0.5 0 1 2 0-1 1-2 2-3 3-4 4-5 5+ Portfolio Benchmark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)+/0&08/7,)$0,/<6758&785('3)+06.$ 7RWDO*RY WLVVXHG&RPPHUFLDO0RUWJDJH%DFNHG 0LVFHOODQHRXV (6&,% (6&01/(+0$1%57+56+/'*55 '0*/(6&52: MPR0214 6(&85,7,(6+(/' $VRI6HSWHPEHU 25$1*(&2817</21*7(503257)2/,2 $PRUWL]HGFRVW )DLUYDOXH 8QUHDOL]HG JDLQ ORVV &RXSRQ 0DWXULW\ &DOOGDWH +LVWRULFDOFRVW&XVLS 7RWDO DFFUXHG LQWHUHVW 3RUW FRVW 3DUYDOXHRU VKDUHV 'HVFULSWLRQ 0LVFHOODQHRXV (6&< (6&01/(+0$1%57+56+/'*559$5 '0*/(6&52: 7RWDO0LVFHOODQHRXV *UDQGWRWDO MPR0214 Compliance summary MPR0214 Portfolio compliance report As of September 30, 2024 Reference:Orange County Sanitation District - Administrative Policy Directives and Procedures Manual - Investment Objectives and Parameters Effective Date of Policy:January 8, 2024 Description Policy Guidelines Compliant U.S. Treasuries •10% minimum; 1-year max maturity Yes Federal Agencies •20% max per agency of the U.S. Government, which does not provide the full faith and credit of the U.S. government; 1-year max maturity; Securities, obligations, participations, or other instruments of, or issued by, or fully guaranteed as to principal and interest by the US Government , a federal agency, or a US Government-sponsored enterprise Yes Supranational Obligations •"AA" rated or better by a NRSRO; 30% max; 5-year max maturity; U.S. dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development ("IBRD"), the International Finance Corporation ("IFC") or the Inter-American Development Bank ("IADB") Yes Municipal Securities •"A" rated or higher by a NRSRO; or as otherwise approved by the Board of Directors; Taxable or tax-exempt municipal bonds issuedby any of the 50 states; 10% max; 5% max issuer; 1-year max maturity Yes Corporate Medium-Term Notes •"A" rating category or better by a NRSRO; 30% max; 5% max per issuer; 5-year max maturity; Issued by corporations organized and operating within the U.S. or issued by depository institutions licensed by the U.S. or any state and operating within the U.S.1 with AUM >$500 million Yes, except noted 1 Non- Agency Asset-Backed Securities, Mortgage-Backed Securities, CMOs •"AA" rating category or better by a NRSRO; 20% max (combined MBS/CMO/ABS); 5% max issuer (except U.S. government or its agencies) ; 5-year max maturity; Mortgage pass-through security, collateralized mortgage obligation, mortgage-backed or other pay- through bond, equipment lease-backed certificate, consumer receivable pass-through certificate, or consumer receivable-backed bond yes Negotiable Certificates of Deposit (NCD)•"A" rating or better long-term debt by a NRSRO; or highest short-term rating for deposits by a NRSRO; or as otherwise approved by the Board of Directors; 30% max; 5% max issuer; 1-year max maturity; Negotiable certificates of deposit issued by a nationally or state- chartered bank or state of federal savings and loan association, as defined by Section 5102 of the California Financial Code Yes Certificates of Deposit •5% max issuer; 1-year max maturity; Secured (collateralized) time deposits issued by a nationally or state-chartered bank or state or federal savings and loan association, as defined by Section 5102 of the California Financial Code and having a net operating profit in the two most recently completed fiscal years; Collateral must comply with California Government Code Yes Banker’s Acceptances •A-1 rated or highest short-term rating by a NRSRO; 40% max; 5% max issuer; 180 days max maturity; Acceptance is eligible for purchase by the Federal Reserve System Yes 1 & 2 –Please see Appendix 1 MPR0214 Reference:Orange County Sanitation District - Administrative Policy Directives and Procedures Manual - Investment Objectives and Parameters Effective Date of Policy:January 8, 2024 Description Policy Guidelines Compliant Commercial Paper •A-1 rated or better by a NRSRO; "A" long term debt rating or better by a NRSRO; Issued by a domestic corporation organized and operating in the U.S. with assets > $500 million; 40% max; 5% max issuer; 10% max of the outstanding commercial paper of any single issuer; 270 days max maturity Yes Mutual Fund & Money Market Mutual Fund •Highest rating or "AAA" rated by two NRSROs; or SEC registered adviser with AUM >$500 million and experience > than 5 years; 20% max in Mutual Funds; 10% max per one Mutual Fund; 20% max per issuer on Money Market Mutual Funds and are not subject to the 10% stipulation Yes Local Agency Investment Fund (LAIF)•No more than the statutory maximum may be invested in LAIF; Not used by investment adviser; Investment of OCSD funds in LAIF shall be subject to investigation and due diligence prior to investing, and on a continual basis to a level of review pursuant to the policy Yes Orange County Treasurer's Money Market Commingled Investment Pool (OCCIP) •15% max; Not used by investment adviser; Orange County Treasurer's Money Market Commingled Investment Pool; Investment of OCSD funds in OCCIP would be subject to investigation and due diligence prior to investing and on continual basis to a level of review pursuant to the policy Yes Repurchase Agreements •20% max; 102% collateralization Yes Reverse Repurchase Agreements •5% max, 90 days max maturity Yes Prohibited •Mortgage Derivatives, which include interest-only payments (IOs) and principal-only payments (POs); Inverse floaters, and RE-REMICS (Real Estate Mortgage Investment Conduits) Yes Securities Downgrade •If securities owned by the OCSD are downgraded below the quality required by the Investment Policy, it shall be OCSD’s policy to review the credit situation and make a determination as to whether to sell or retain such securities in the portfolio. If a decision is made to retain the downgraded securities in the portfolio, their presence in the portfolio will be monitored and reported quarterly to the OCSD General Manager, the Administration Committee and Board of Directors Yes Avg Duration •Not to exceed 180 days in Liquid Operating account Yes Max Per Holding •5% max of the total debt outstanding of any issuer per individual holding Yes Portfolio compliance report (continued) As of September 30, 2024 MPR0214 Portfolio compliance report (continued) As of September 30, 2024 Reference:Orange County Sanitation District - Administrative Policy Directives and Procedures Manual - Investment Objectives and Parameters Effective Date of Policy:January 8, 2024 Description Policy Guidelines Compliant Max Per Issuer •5% max per issuer (except Supranationals, U.S. Government, Agencies, Mutual Funds); 20% max per issuer on Money Market Mutual Funds) Yes Maximum Maturity •1-year max maturity per security in Liquid Operating account Yes Maximum Maturity •5-year max maturity per security in Long Term account Yes Maximum Duration •5-year max portfolio effective duration in Long Term account Yes Maximum Duration •Duration of portfolio should be between 80% to 120% in Long Term account Yes 2 –Please see Appendix 1 MPR0214 Portfolio compliance report As of September 30, 2024 Reference:Orange County Sanitation District - Administrative Policy Directives and Procedures Manual - Investment Objectives and Parameters Effective Date of Policy:January 8, 2024 Description Policy Guidelines Appendix 1 •1 –Medium term notes issued by depository institution not licensed in US. Insight assumed investments from prior OC San advisor. Insight will monitor these investments from a credit perspective and recommends holding these securities until market value sufficiently recover versus purchase costs. Insight will seek to sell these investments as market opportunities present. Important disclosures 46MPR0214 Orange County Liquid Operating Benchmark history as of September 30, 2024 Benchmark history ICE BofA US 3-Month Treasury Bill 03/01/2024 - Present 47 Orange County Long Term Benchmark history as of September 30, 2024 Benchmark history ICE BofA 1-5 Year AAA-A US Corporate & Government Index 03/01/2024 - Present MPR0214 48 Past performance is not indicative of future results. Investment in any strategy involves a risk of loss which may partly be due to exchange rate fluctuations. The performance results shown, whether net or gross of investment management fees, reflect the reinvestment of dividends and/or income and other earnings. Any gross of fees performance does not include fees and charges and these can have a material detrimental effect on the performance of an investment. The performance shown is for the stated time period(s) only. Any target performance aims are not a guarantee, may not be achieved and a capital loss may occur. Funds which have a higher performance aim generally take more risk to achieve this and so have a greater potential for the returns to be significantly different than expected. Investments are subject to risks, including loss of principal. There can be no guarantee that any investment strategy will meet the liability funding needs of a particular client. Performance information for certain accounts may reflect performance achieved while the account was managed at a prior firm. In addition, the performance and customized benchmark information for these periods are based on Information from 3rd parties that Insight believes to be accurate, but Insight has not independently verified such information and no representation is made regarding its accuracy or completeness. The quoted benchmarks do not reflect deductions for fees, expenses or taxes. These benchmarks are unmanaged and cannot be purchased directly by investors. Benchmark performance is shown for illustrative purposes only and does not predict or depict the performance of any investment. There may be material factors relevant to any such comparison such as differences in volatility, and regulatory and legal restrictions between the indices shown and the strategy. Any currency conversions performed for this presentation, use FX rates as per WM Reuters 4pm spot rates, unless noted otherwise. Funds and portfolios with an ESG objective follow a sustainable or ESG related investment approach, which may cause them to perform differently than funds that are not required to integrate sustainable investment criteria when selecting securities. Funds and portfolios with no ESG objective are not required to integrate sustainable investment criteria when selecting securities so any ESG approach shown is only indicative and there is no guarantee that the specific approach will be applied across the whole portfolio. This is a client report intended for professional clients only. This material is for professional clients only and is not intended for distribution to retail clients. This document must not be used for the purpose of an offer or solicitation in any jurisdiction or in any circumstances in which such offer or solicitation is unlawful or otherwise not permitted. This document is intended only for the parties to whom it was delivered or its authorised agents and should not be copied or passed to any other person. Please contact the Client Services Team if there has been any change in your financial circumstances or risk tolerance since the previous valuation that could affect the investment objective of your portfolio. Insight obtains market data and prices from an independent pricing source for all of our currency positions on a daily basis. For trading activity the Clearing broker will be reflected. In certain cases the Clearing broker will differ from the Executing broker. Some information contained in this client report comes from external sources which Insight believes to be reliable. A list of sources is available on request. All statistics represent month end figures unless otherwise noted. It should not be assumed that any of the security transactions or holdings referenced herein have been or will prove to be profitable or that future investment decisions will be profitable or will equal or exceed the past investment performance of the securities listed. Tax treatment depends on the individual circumstances of each investor and may be subject to change in the future. Insight does not provide tax or legal advice to its clients and all investors are strongly urged to seek professional advice regarding any potential strategy or investment. Material in this publication is for general information only and is not advice, investment advice, or the recommendation of any purchase or sale of any security. Insight Investment is the corporate brand for certain companies operated by Insight Investment Management Limited (IIML). Insight includes, among others, Insight Investment Management (Global) Limited (IIMG), Insight Investment International Limited (IIIL) and Insight North America LLC (INA), each of which provides asset management services. This group of companies may be referred to as 'Insight' or 'Insight Investment’. Please compare the information provided in this statement to the information provided in the statement received from your Custodian. This report is not intended to replace your custodial statement which is your official record for all pertinent account information. Please notify us promptly if you do not receive from your custodian on at least a quarterly basis account statements that contain the amount of funds and each security in the account at the end of the period and all transactions in the account during that period. Disclosures MPR0214 49 For clients of Insight Investment Management (Global) Limited: Issued by Insight Investment Management (Global) Limited. Registered in England and Wales. Registered office 160 Queen Victoria Street, London EC4V 4LA; registered number 00827982. For clients of Insight Investment Funds Management Limited: Issued by Insight Investment Funds Management Limited. Registered in England and Wales. Registered office 160 Queen Victoria Street, London EC4V 4LA; registered number 01835691. For clients of Insight Investment International Limited: Issued by Insight Investment International Limited (IIIL). Registered in England and Wales. Registered office 160 Queen Victoria Street, London EC4V 4LA; registered number 03169281. IIIL is registered with the Securities and Exchange Commission (SEC) in the United States as an investment adviser and the Commodity Futures Trading Commission (CFTC) as a Commodity Trading Advisor and is a member of the National Futures Authority (NFA); the Ontario Securities Commission (OSC), Alberta Securities Commission (ASC), British Columbia Securities Commission (BCSC), Manitoba Securities Commission (MSC), Nova Scotia Securities Commission (NSSC), Authorities des Marches Financiers and Saskatchewan Financial Services Commission (SFSC) in Canada, and the Financial Services Agency in Japan. Insight Investment Management (Global) Limited, Insight Investment Funds Management Limited and Insight Investment International Limited are authorised and regulated by the Financial Conduct Authority in the UK. Insight Investment Management (Global) Limited and Insight Investment International Limited are authorised to operate across Europe in accordance with the provisions of the European passport under Directive 2004/39 on markets in financial instruments. For clients based in Singapore: This material is for Institutional Investors only. This documentation has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, it and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of Shares may not be circulated or distributed, nor may Shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor pursuant to Section 304 of the Securities and Futures Act, Chapter 289 of Singapore (the 'SFA') or (ii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA. For clients based in Australia and New Zealand: This material is for wholesale investors only (as defined under the corporations Act in Australia or under the Financial Markets Conduct Act in New Zealand) and is not intended for distribution to, nor should it be relied upon by retail investors. Both Insight Investment Management (Global) Limited and Insight Investment International Limited are exempt from the requirement to hold an Australian financial services licence under the Corporations Act 2001 in respect of the financial services; and both are authorised and regulated by the Financial Conduct Authority (FCA) under UK laws, which differ from Australian laws. If this document is used or distributed in Australia, it is issued by Insight Investment Australia Pty Ltd (ABN 69 076 812 381, AFS license number 230541) located at Level 2, 1-7 Bligh Street, Sydney, NSW 2000. For clients based in North America: This material is for professional clients only and is not intended for distribution to retail clients. Investment advisory services in North America are provided through two different investment advisers registered with the Securities and Exchange Commission (SEC), using the brand Insight Investment: Insight North America LLC (INA) and Insight Investment International Limited (IIIL). The North American investment advisers are associated with other global investment managers that also (individually and collectively) use the corporate brand Insight Investment and may be referred to as 'Insight' or 'Insight Investment'. INA is registered with the CFTC as a Commodity Trading Advisor and a Commodity Pool Operator and are members of the NFA. © 2024 Insight Investment. All rights reserved. Disclosures (continued) MPR0214 Insight - U.S. Bank Month End Investment Detail with Accruals Insight - U.S. Bank Transaction History Callan Investment Measurement Service Quarterly Review September 30, 2024 Orange County Sanitation District Investment Measurement Service Quarterly Review Important Disclosures regarding the use of this document are included at the end of this document. These disclosures are an integral part of this document and should be considered by the user. Orange County Sanitation District Executive Summary for Period Ending September 30, 2024 Asset Allocation Performance * Current Quarter Target = 80.0% ML 1-5 Govt/Corp and 20.0% FTSE 3mo T-Bills. Recent Developments ⎯ Effective March 1, 2024 Insight Investment Management became the investment manager for the District’s Long-Term Operating Fund and the Liquid Operating Monies, replacing Chandler Asset Management. Organizational Issues ⎯ N/A September 30, 2024 June 30, 2024 Market Value Weight Net New Inv.Inv. Return Market Value Weight Domestic Fixed IncomeInsight Long Term 688,979,966 94.44%(28,000,000)22,631,284 694,348,682 87.79% Insight Liquid 40,552,172 5.56%(57,000,000)956,502 96,595,670 12.21% Total Fund $729,532,138 100.00%$(85,000,000)$23,587,787 $790,944,351 100.00% Last Last Last Last Last 3 5 7 Quarter Year Years Years Years Domestic Fixed Income Long Term Operating Fund^3.32%7.84%1.26%1.70%2.00% Blmbg Govt/Cred 1-5 Year Idx 3.50%8.10%0.94%1.54%1.89% ML 1-5 Govt/Corp 3.48%8.10%0.97%1.57%1.92% Liquid Operating Monies^1.40%5.58%3.51%2.39%2.29% Citigroup 3-Month Treasury Bill 1.37%5.63%3.63%2.38%2.26% Total Fund 3.14%7.56%1.71%1.85%2.08% Target*3.06%7.61%1.50%1.74%1.99% 2 Orange County Sanitation District Fixed Income Market Snapshot — It was a strong quarter for core fixed income. The Bloomberg U.S. Aggregate Bond Index soared 5.2% after producing flat returns in the previous quarter. Year-to-date, the Aggregate Index is up 4.9%. The 10-year Treasury yield sank 55 bps during the quarter, closing at 3.8% as markets priced in a higher probability of a deeper economic slowdown and more aggressive cuts. In early September, the 2-year and 10-year Treasury yields steepened and un-inverted for the first time since July 2022. All the Aggregate sectors outperformed Treasuries on a like-duration basis, led by agency mortgage-backed securities. TIPS underperformed nominal U.S. Treasuries (Bloomberg U.S. TIPS: 4.1%; Bloomberg U.S. Treasury: 4.7%). Investment grade corporates (+5.8%) outperformed High Yield (+5.3%) for the quarter. Spreads broadly remained flat over the quarter despite intra-quarter volatility and remained tight relative to historical averages. Both investment grade and high yield issuance was robust in 3Q. Leveraged loans were positive (CS Leveraged Loan: +1.4%). — Municipal bonds posted gains in 3Q (Bloomberg Municipal Bond Index: +2.7%) with lower quality outperforming (Bloomberg Muni High Yield: +3.2%). The municipal bond yield curve steepened with the front end of the curve declining more than the long end. Ample supply for the quarter was met with strong demand. The Bloomberg Muni 1–10 Year Index gained 2.7% for the quarter. The Bloomberg Muni Managed Money Short/Intermediate Index rose 3.1%. Investment Manager Performance — The Long-Term Operating Fund returned 3.3% in the third quarter, underperforming the ICE Corporate/Government 1-5 Year Index by 16 bps and the Bloomberg Government/Credit 1-5 Year Index by 18 bps. The Fund ranked 15th percentile in the Callan Short Term Fixed Income peer group. Over the last year, the portfolio returned 7.8%, underperforming the ICE benchmark and the Bloomberg benchmark by 26 bps. The Fund ranked 57th percentile. — The Liquid Operating Money rose 1.4% (net) over the quarter, underperforming the Citigroup 3-Month Treasury Bill Index by 1 bp, and ranking 39th percentile in the Callan Money Market Funds peer group. Over the last year, the portfolio returned 5.4% (net), underperforming the benchmark by 21 bps, and ranking 43rd percentile. Please reach out to me should you have any questions or need any additional information. Cordially, Alexander Ford Senior Vice President, Investment Consulting Callan LLC Table of Contents September 30, 2024 Capital Market Review 1 Active Management Overview Market Overview 7 Domestic Fixed Income 8 Asset Allocation Investment Manager Asset Allocation 10 Investment Manager Returns 11 Asset Class Risk and Return 15 Manager Analysis Long Term Operating Fund 17 Liquid Operating Money 21 Definitions 23 Disclosures 2828 Capital Market Review Russell 3000 Russell 1000 Russell 1000 Growth Russell 1000 Value S&P 500 Russell Midcap Russell 2500 Russell 2000 U.S. Equity: Quarterly Returns 6.2% 6.1% 3.2% 9.4% 5.9% 9.2% 8.7% 9.3% Russell 3000 Russell 1000 Russell 1000 Growth Russell 1000 Value S&P 500 Russell Midcap Russell 2500 Russell 2000 U.S. Equity: One-Year Returns 35.2% 35.7% 42.2% 27.8% 36.4% 29.3% 26.2% 26.8% Source: S&P Dow Jones Indices S&P Sector Returns, Quarter Ended 9/30/24 Last Quarter 1.7% 7.8%9.0% -2.3% 10.7% 6.1% 11.5% 1.6% 9.7% 17.2% 19.4% Services Communication Discretionary Consumer Staples Consumer Energy Financials Health Care Industrials Technology Information Materials Real Estate Utilities U.S. EQUITIES U.S. market reaches record high after spike in volatility –The U.S. equity market had a disappointing start to 3Q24 as the S&P 500 Index dropped in July. –But the market rallied in the last months of 3Q to end the quarter at a record high. –All sectors within the S&P 500 posted positive returns over the quarter except for the Energy sector. As a result of the Fed’s rate cut decision, the bond proxy sectors (Real Estate and Utilities) performed the best. –During 3Q, value outperformed growth across the market cap spectrum. Small cap stocks outperformed large cap stocks. –Narrow leadership continues to be an issue for U.S. stocks. YTD, the “Magnificent Seven” stock returns accounted for 45% of the returns of the S&P 500 Index. Top performers have broadened out –The “Magnificent Seven” stocks experienced increased volatility and mixed results in 3Q. Four of these stocks underperformed the S&P 500 Index. –Better earnings growth expectations for the market relative to the “Magnificent Seven” could result in broader market leadership. –Although the long-term trend may have reversed in the last quarter, a large percentage of S&P 500 Index returns since 2021 are attributable to the “Magnificent Seven.” Small cap valuations –Small cap relative valuations are historically low across numerous forward and trailing valuation multiples. –Small cap continues to trade at large discounts relative to large cap. –This may be indicative of an attractive entry point for increased allocation. Capital Markets Overview 3Q24 Sources: FTSE Russell, S&P Dow Jones Indices Capital Markets Overview (continued) 3Q24 MSCI EAFE MSCI ACWI MSCI World MSCI ACWI ex USA MSCI World ex USA MSCI ACWI ex USA SC MSCI World ex USA SC MSCI Europe ex UK MSCI United Kingdom MSCI Pacific ex Japan MSCI Japan MSCI Emerging Markets MSCI China MSCI Frontier Markets Global Equity: Quarterly Returns 7.3% 6.6% 6.4% 8.1% 7.8% 8.9% 10.4% 6.2% 7.9% 14.3% 5.7% 8.7% 23.5% 4.5% MSCI EAFE MSCI ACWI MSCI World MSCI ACWI ex USA MSCI World ex USA MSCI ACWI ex USA SC MSCI World ex USA SC MSCI Europe ex UK MSCI United Kingdom MSCI Pacific ex Japan MSCI Japan MSCI Emerging Markets MSCI China MSCI Frontier Markets Global Equity: One-Year Returns 24.8% 31.8% 32.4% 25.4% 25.0% 23.3% 23.4% 25.8% 23.3% 28.2% 21.6% 26.1% 23.9% 15.1% Source: MSCI GLOBAL EQUITIES Global ex-U.S. markets outpace U.S. as technology lags –Global equity markets rose while central banks began easing monetary policy and cutting interest rates. –Market gains broadened to include more value stocks and previously underperforming sectors. –Global ex-U.S. markets outpaced U.S. markets as the technology sector, a large portion of the U.S. market, faced pressure from AI spending scrutiny. –Emerging markets outperformed developed markets with Asia being the strongest region within emerging markets. Emerging markets –China led a sharp rally higher in emerging markets after the Chinese government announced extensive stimulus measures aimed at tackling weakening economic activity, deflation, and its deteriorating property market. Growth vs. value –Generally, value-oriented sectors led markets higher as the technology sector hindered growth concerns. One exception was China, as stimulus announcements boosted beaten- down Chinese tech companies. U.S. dollar strength –The U.S. Dollar Index (DXY), declined over 3Q amid a much- anticipated rate cut by the U.S. Federal Reserve. Quality growth managers struggle –While outperforming in 2022, global quality growth managers have struggled since 2023, as high-growth names, often viewed as low-quality, have driven much of the market. High growth rewarded last 18 months –While high-growth managers were punished in 2022, they performed exceptionally well in 2023 and 2024. –Still, on a three-year basis, quality growth managers have tended to outperform high-growth managers but still struggle against the ACWI index. China’s stimulus: what and why –On Sept. 24, 2024, China announced a broad economic stimulus package. This is likely due to declining consumer sentiment and investor pressure. Results –Stock markets initially rallied between 10%-30%, moving into YTD gain territory. Valuations are still at 10-year lows. –China has the worst pass-through from GDP growth to earnings and investor returns since 2010. While the stimulus may assist with GDP growth, it may not correlate to better stock performance. Bloomberg Gov/Cr 1-3 Yr Bloomberg Interm Gov/Cr Bloomberg Aggregate Bloomberg Long Gov/Cr Bloomberg Universal CS Leveraged Loans Bloomberg High Yield Bloomberg TIPS U.S. Fixed Income: Quarterly Returns 3.0% 4.2% 5.2% 8.0% 5.2% 2.1% 5.3% 4.1% Bloomberg Gov/Cr 1-3 Yr Bloomberg Interm Gov/Cr Bloomberg Aggregate Bloomberg Long Gov/Cr Bloomberg Universal CS Leveraged Loans Bloomberg High Yield Bloomberg TIPS U.S. Fixed Income: One-Year Returns 7.2% 9.4% 11.6% 17.2% 12.1% 9.7% 15.7% 9.8% 0% 1% 2% 3% 4% 5% 6% 0 5 10 15 20 25 30 U.S. Treasury Yield Curves U.S. FIXED INCOME Rate cut spurs market rally –The Fed lowered rates for the first time since 2020, reducing its overnight target by 50 bps; Fed “dot plot” indicates two more cuts by year-end. –U.S. Treasuries fell across the curve; 10-year Treasury yield declined to 3.81% from 4.36% at the beginning of the quarter. –The yield curve took a step toward normalization with the 2s/10s ending positive, though rates at the front-end remain elevated vs. intermediate- and long-term. Performance and drivers –The Bloomberg US Aggregate Index gained 5.2%, the second-best quarter in nearly 30 years, led by the rally in rates. –Investment grade corporates and all securitized sectors outperformed U.S. Treasuries on a duration-adjusted basis. –High yield corporate excess returns (+1.7%) outpaced investment grade corporates excess returns (+0.8%). Valuations –Despite significant widening in late July, both IG and HY spreads ended tighter over the quarter. –HY defaults declined to 1.8%, while bank loans rose to 3.1%, widening the gap between them to the highest since 2014. –New issuance continued to be strong, adding $424 billion in IG and $78 billion in HY debt. Munis posted gains but underperformed U.S. Treasuries –Bloomberg Municipal Bond Index (+2.7%) vs Bloomberg US Treasury Index (+4.7%) AAA-rated muni yield curve normalized –2-year and 10-year AAA rates fell by 77 bps and 23 bps, respectively; spread now +24 bps –Maximum inversion of -50 bps was April 2024 –Followed path of U.S. Treasury yield curve, which also normalized during the quarter (2-year vs 10-year) Quality was not a major differentiator in 3Q –AAA: 2.8% –AA: 2.7% –A: 2.7% –BBB: 2.9% Muni valuations vs. U.S. Treasuries remain rich –10-year AAA Muni/10-year U.S. Treasury yield ratio rich relative to 10-year median (69% now vs. 85% historical) –Need for increased infrastructure spending could benefit municipal bond issuance in years to come Capital Markets Overview (continued) 3Q24 Sources: Bloomberg, Credit Suisse 9/30/2024 6/30/2024 12/31/2023 12/31/2022 12/31/2021 Bloomberg Global Aggregate Bloomberg Global Agg (hdg) Bloomberg Global High Yield Bloomberg Global Agg ex US JPM EMBI Global Diversified JPM GBI-EM Global Diversified JPM EMBI Gl Div/JPM GBI-EM Gl Div JPM CEMBI Global Fixed Income: Quarterly Returns 7.0% 4.2% 6.2% 8.5% 6.2% 9.0% 7.6% 4.5% Bloomberg Global Aggregate Bloomberg Global Agg (hdg) Bloomberg Global High Yield Bloomberg Global Agg ex US JPM EMBI Global Diversified JPM GBI-EM Global Diversified JPM EMBI Gl Div/JPM GBI-EM Gl Div JPM CEMBI Global Fixed Income: One-Year Returns 12.0% 10.6% 19.0% 12.3% 18.6% 13.4% 16.0% 14.0% Change in 10-Year Global Government Bond Yields U.S. FIXED INCOME (continued) Fed makes first cut, and markets anticipate more –The Fed cut rates in September with a 50 bps decrease, citing a slowdown in job gains, higher unemployment, and inflation nearing its target of 2%. The move marked the first reduction since March 2020. –Fed Funds futures now imply three additional rate cuts by year end and seven more over the coming year. –Yields fell across the curve by no less than 37 bps, and the spread between 2-year and 10-year rates became positive for the first time since July 5, 2022, ending the quarter at +15 bps. However, the front end remains well above intermediate- and long-term rates. Corporate new debt issuance remains robust –Investment-grade corporate issuers continued the surge of new debt, issuing $424 billion in 3Q, bringing the total YTD to more than $1.3 trillion, already more than 7 of the last 10 years. At the current pace, new issuance will surpass $1.7 trillion by year-end, the second-highest total on record. –High yield new issuance was also robust, with approximately $78 billion issued over the quarter. This brings the total issuance YTD to nearly $250 billion, more than each of the last two calendar years. –Concerning labor reports in late July initially led to a pullback in the market. –But spreads narrowed once again with both IG and HY ending the quarter tighter than they began. GLOBAL FIXED INCOME Macro environment –Developed market rates declined as growth and inflation expectations moved lower. –Several central banks cut rates over the quarter while the Bank of Japan unexpectedly raised its target to 0.25%, its highest rate since 2008. U.S. dollar weakens –The U.S. dollar weakened relative to major currencies, reversing the trend from the first half of the year and enhancing returns for unhedged investors. –Within the U.S. Dollar Index (DXY), Japanese yen saw the largest relative gain, rising 12% vs. the U.S dollar. Emerging market debt posts strong quarter –EM central banks broadly continued their easing policies, though Brazil raised its rate and signaled future hikes. –The rally in EM currencies enhanced returns for EM debt, with the JPM GBI-EM Global Diversified Index gaining 9.0%. Capital Markets Overview (continued) 3Q24 Sources: Bloomberg, JP Morgan -62 bps -38 bps -17 bps -55 bps -20 bps -63-62-61-60-59-58-57-56-55-54-53-52-51-50-49-48-47-46-45-44-43-42-41-40-39-38-37-36-35-34-33-32-31-30-29-28-27-26-25-24-23-22-21-20-19-18-17-16-15-14-13-12-11-10-9-8-7-6-5-4-3-2-10 U.S. Treasury Germany U.K. Canada Japan 2Q24 to 3Q24 Active Management Overview Market Overview Active Management vs Index Returns Market Overview The charts below illustrate the range of returns across managers in Callan’s Separate Account database over the most recent one quarter and one year time periods. The database is broken down by asset class to illustrate the difference in returns across those asset classes. An appropriate index is also shown for each asset class for comparison purposes. As an example, the first bar in the upper chart illustrates the range of returns for domestic equity managers over the last quarter. The triangle represents the S&P 500 return. The number next to the triangle represents the ranking of the S&P 500 in the Large Cap Equity manager database. Range of Separate Account Manager Returns by Asset Class One Quarter Ended September 30, 2024 Re t u r n s (4%) (2%) 0% 2% 4% 6% 8% 10% 12% 14% Large Cap Small Cap Non-US Domestic Non-US Real Equity Equity Equity Fixed Income Fixed Income Estate vs vs vs vs vs vs S&P 500 Russell 2000 MSCI EAFE Blmbg Aggr Bd Citi Non-US Govt NCREIF Index (43) (28) (51) (75) (29) (24) 10th Percentile 8.90 10.84 10.25 5.48 9.41 1.9125th Percentile 7.41 9.57 8.94 5.36 8.78 0.76 Median 5.17 8.20 7.32 5.29 8.26 0.30 75th Percentile 2.96 6.74 6.29 5.20 7.94 (0.20)90th Percentile 1.79 5.54 5.50 5.06 4.58 (1.24) Index 5.89 9.27 7.26 5.20 8.61 0.78 Range of Separate Account Manager Returns by Asset Class One Year Ended September 30, 2024 Re t u r n s (20%) (10%) 0% 10% 20% 30% 40% 50% 60% Large Cap Small Cap Non-US Domestic Non-US Real Equity Equity Equity Fixed Income Fixed Income Estatevs vs vs vs vs vsS&P 500 Russell 2000 MSCI EAFE Blmbg Aggr Bd Citi Non-US Govt NCREIF Index (43) (43)(62) (93)(58) (42) 10th Percentile 44.47 33.16 29.15 13.20 15.35 3.20 25th Percentile 40.63 29.02 27.21 12.72 14.40 (0.29)Median 34.31 25.92 25.64 12.34 13.44 (4.45)75th Percentile 28.45 22.60 23.79 12.06 9.50 (8.04)90th Percentile 24.54 18.71 21.42 11.74 8.31 (11.58) Index 36.35 26.76 24.77 11.57 12.02 (3.47) 7Orange County Sanitation District Domestic Fixed Income Active Management Overview The Bloomberg US Aggregate Bond Index soared 5.2% in 3Q, bringing its year-to-date return to 4.9%. The 10-year Treasury yield sank 55 bps, closing at 3.8%. The yield curve "normalized" with the spread between the 2-year and 10-year Treasury becoming positive for the first time since July 2022. All the Aggregate sectors outperformed Treasuries on a like-duration basis, led by agency mortgage-backed securities. Investment grade corporates (+5.8%) outperformed High Yield (+5.3%) for the quarter. Spreads broadly remained flat over the quarter despite intra-quarter volatility and remained tight relative to historical averages. Both investment grade and high yield issuance was robust in 3Q and met with strong demand. Separate Account Style Group Median Returns for Quarter Ended September 30, 2024 0% 2% 4% 6% 8% 10% 12% 3.02 Defensive 4.27 Intermed 5.29 CoreBond 5.38 Core Plus 8.00 ExtendedMaturity 2.13 BankLoans 4.66 High Yield Re t u r n s Blmbg Aggregate: 5.20% Blmbg High Yield: 5.28% Blmbg Long Gov/Cred: 7.96% Separate Account Style Group Median Returns for One Year Ended September 30, 2024 0% 5% 10% 15% 20% 25% 7.97 Defensive 10.24 Intermed 12.34 Core Bond 13.17 Core Plus 18.09 Extended Maturity 9.82 Bank Loans 15.20 High Yield Re t u r n s Blmbg Aggregate: 11.57% Blmbg High Yield: 15.74% Blmbg Long Gov/Cred: 17.24% 8Orange County Sanitation District Asset Allocation Investment Manager Asset Allocation The table below contrasts the distribution of assets across the Fund’s investment managers as of September 30, 2024, with the distribution as of June 30, 2024. The change in asset distribution is broken down into the dollar change due to Net New Investment and the dollar change due to Investment Return. Asset Distribution Across Investment Managers September 30, 2024 June 30, 2024 Market Value Weight Net New Inv. Inv. Return Market Value Weight Domestic Fixed Income Insight Long Term 688,979,966 94.44%(28,000,000)22,631,284 694,348,682 87.79% Insight Liquid 40,552,172 5.56%(57,000,000)956,502 96,595,670 12.21% Total Fund $729,532,138 100.00%$(85,000,000)$23,587,787 $790,944,351 100.00% *Insight replaced Chandler during the 1st quarter of 2024. Assets were transferred in-kind as of 03/01/2024. 10Orange County Sanitation District Investment Manager Returns The table below details the rates of return for the Fund’s investment managers over various time periods ended September 30, 2024. Negative returns are shown in red, positive returns in black. Returns for one year or greater are annualized. The first set of returns for each asset class represents the composite returns for all the fund’s accounts for that asset class. Returns for Periods Ended September 30, 2024 Last Last Last Last Last 3 5 7 Quarter Year Years Years Years Domestic Fixed Income Long Term Operating Fund^ 3.32% 7.84% 1.26% 1.70% 2.00% Blmbg Govt/Cred 1-5 Year Idx 3.50% 8.10% 0.94% 1.54% 1.89% ML 1-5 Govt/Corp 3.48% 8.10% 0.97% 1.57% 1.92% Liquid Operating Monies^ 1.40% 5.58% 3.51% 2.39% 2.29% Citigroup 3-Month Treasury Bill 1.37% 5.63% 3.63% 2.38% 2.26% Total Fund 3.14% 7.56% 1.71% 1.85% 2.08% Target* 3.06% 7.61% 1.50% 1.74% 1.99% * Current Quarter Target = 80.0% ICE Corp/Gov 1-5 Yr and 20.0% FTSE 3 Mo T-Bill. ^Assets were transferred in kind to Insight on 3/1/2024. Performance from 12/1/2014 to 3/1/2024 represents Chandler. Previous performance reflects PIMCO. 11Orange County Sanitation District Investment Manager Returns The table below details the rates of return for the Fund’s investment managers over various time periods ended September 30, 2024. Negative returns are shown in red, positive returns in black. Returns for one year or greater are annualized. The first set of returns for each asset class represents the composite returns for all the fund’s accounts for that asset class. Returns for Periods Ended September 30, 2024 Last Last Last 10 15 29 Years Years Years Domestic Fixed Income Long Term Operating Fund^ 1.84% 2.03% 3.80% Blmbg Govt/Cred 1-5 Year Idx 1.77% 1.93% 3.64% ML 1-5 Govt/Corp 1.81% 1.97% 3.67% Liquid Operating Monies^ 1.73% 1.21% 2.55% Citigroup 3-Month Treasury Bill 1.67% 1.13% 2.30% Total Fund 1.81% 1.88% 3.61% Target*1.78% 1.81% 3.40% * Current Quarter Target = 80.0% ICE Corp/Gov 1-5 Yr and 20.0% FTSE 3 Mo T-Bill. ^Assets were transferred in kind to Insight on 3/1/2024. Performance from 12/1/2014 to 3/1/2024 represents Chandler. Previous performance reflects PIMCO. 12Orange County Sanitation District Investment Manager Returns The table below details the rates of return for the Fund’s investment managers over various time periods. Negative returns are shown in red, positive returns in black. Returns for one year or greater are annualized. The first set of returns for each asset class represents the composite returns for all the fund’s accounts for that asset class. 12/2023- 9/2024 2023 2022 2021 2020 Domestic Fixed Income Long Term Operating Fund^ 4.50% 4.96%(4.75%) (0.79%)4.42% Blmbg Govt/Cred 1-5 Year Idx 4.50% 4.89%(5.50%) (0.97%)4.71% ML 1-5 Govt/Corp 4.60% 4.89%(5.54%) (0.87%)4.65% Liquid Operating Monies^ 4.10% 5.17% 1.30% 0.15% 0.84% Citigroup 3-Month Treasury Bill 4.17% 5.26% 1.50% 0.05% 0.58% Total Fund 4.58% 5.01%(3.70%) (0.61%)3.73% Target* 4.52% 4.97%(4.16%) (0.68%)3.82% * Current Quarter Target = 80.0% ICE Corp/Gov 1-5 Yr and 20.0% FTSE 3 Mo T-Bill. ^Assets were transferred in kind to Insight on 3/1/2024. Performance from 12/1/2014 to 3/1/2024 represents Chandler. Previous performance reflects PIMCO. 13Orange County Sanitation District Investment Manager Returns The table below details the rates of return for the Fund’s investment managers over various time periods. Negative returns are shown in red, positive returns in black. Returns for one year or greater are annualized. The first set of returns for each asset class represents the composite returns for all the fund’s accounts for that asset class. 2019 2018 2017 2016 2015 Domestic Fixed Income Long Term Operating Fund^ 4.70% 1.60% 1.18% 1.58% 0.85% Blmbg Govt/Cred 1-5 Year Idx 5.01% 1.38% 1.27% 1.56% 0.97% ML 1-5 Govt/Corp 5.08% 1.40% 1.28% 1.62% 1.05% Liquid Operating Monies^ 2.39% 1.90% 0.91% 0.47% 0.22% Citigroup 3-Month Treasury Bill 2.25% 1.86% 0.84% 0.27% 0.03% Total Fund 4.26% 1.72% 1.02% 1.15% 0.80% Target* 4.51% 1.49% 1.19% 1.35% 0.85% * Current Quarter Target = 80.0% ICE Corp/Gov 1-5 Yr and 20.0% FTSE 3 Mo T-Bill. ^Assets were transferred in kind to Insight on 3/1/2024. Performance from 12/1/2014 to 3/1/2024 represents Chandler. Previous performance reflects PIMCO. 14Orange County Sanitation District Asset Class Risk and Return The charts below show the seven year annualized risk and return for each asset class component of the Total Fund. The first graph contrasts these values with those of the appropriate index for each asset class. The second chart contrasts them with the risk and return of the median portfolio in each of the appropriate CAI comparative databases. In each case, the crosshairs on the chart represent the return and risk of the Total Fund. Seven Year Annualized Risk vs Return Asset Classes vs Benchmark Indices 0.8%1.0%1.2%1.4%1.6%1.8%2.0%2.2%2.4%2.6%2.8%3.0%3.2% 1.85% 1.90% 1.95% 2.00% 2.05% 2.10% 2.15% 2.20% 2.25% 2.30% Total Fund Blmbg Gov/Cred 1-5 Yr ICE Corp/Gov 1-5 Yr FTSE 3 Mo T-Bill Total Fund Target Standard Deviation Re t u r n s Seven Year Annualized Risk vs Return Asset Classes vs Asset Class Median 0.8%1.0%1.2%1.4%1.6%1.8%2.0%2.2%2.4%2.6%2.8% 2.00% 2.05% 2.10% 2.15% 2.20% 2.25% 2.30% 2.35% 2.40% 2.45% Total Fund Callan Money Market Funds Callan Short Fixed Inc Standard Deviation Re t u r n s 15Orange County Sanitation District Manager Analysis Long Term Operating Fund Period Ended September 30, 2024 Investment Philosophy Insight 1-5 Year strategy seeks to capitalize on market inefficiencies, use multiple sources of alpha and make diverse bets in an effort to achieve superior total return versus the Barclays Capital Aggregate Index over a full market cycle on an absolute and risk-adjusted basis. We employ a disciplined team structure that relies on fundamental proprietary analysis and research to identify individual securities with the greatest capital appreciation potential. We customize every portfolio to meet each client’s return objectives, liquidity needs, and risk tolerance. We emphasize diversification across sectors, industries, issuers and credit quality. Under most circumstances, we limit our duration exposure to within a range of +/- 15% versus the benchmark. We add value for our clients’ portfolios by using a disciplined team structure that relies on fundamental, proprietary research analysis to identify individual securities with the greatest capital appreciation potential. Assets were transferred in kind to Insight on 3/1/2024. Performance from 12/1/2014 to 3/1/2024 represents Chandler. Previous performance reflects PIMCO. Quarterly Summary and Highlights Long Term Operating Fund’s portfolio posted a 3.32% return for the quarter placing it in the 15 percentile of the Callan Short Term Fixed Income group for the quarter and in the 57 percentile for the last year. Long Term Operating Fund’s portfolio underperformed the ICE Corp/Gov 1-5 Yr by 0.16% for the quarter and underperformed the ICE Corp/Gov 1-5 Yr for the year by 0.26%. Quarterly Asset Growth Beginning Market Value $694,348,682 Net New Investment $-28,000,000 Investment Gains/(Losses) $22,631,284 Ending Market Value $688,979,966 Performance vs Callan Short Term Fixed Income (Gross) 0%1%2%3%4%5%6%7%8%9%10% Last Quarter Last Last 3 Years Last 5 Years Last 7 Years Last 9-3/4 Last 10 Years Last 29 Years Year Years B(8)A(15)(9) B(46)A(57)(46) A(91)B(98)(98)A(92)B(99)(99)A(91)B(96)(95)A(86)B(90)(87)A(85)B(89)(86) A(30)B(53)(48) 10th Percentile 3.45 9.02 2.77 2.81 2.92 2.67 2.64 4.0125th Percentile 3.18 8.48 2.37 2.52 2.55 2.38 2.32 3.83Median 3.02 7.97 2.05 2.22 2.38 2.12 2.11 3.65 75th Percentile 2.93 7.59 1.74 1.98 2.17 1.98 1.97 3.47 90th Percentile 2.31 6.96 1.34 1.85 2.03 1.77 1.76 3.23 Long TermOperating Fund A 3.32 7.84 1.26 1.70 2.00 1.83 1.84 3.80 Blmbg Govt/Cred 1-5 Year Idx B 3.50 8.10 0.94 1.54 1.89 1.78 1.77 3.64 ICE Corp/Gov 1-5 Yr 3.48 8.10 0.97 1.57 1.92 1.81 1.81 3.67 Relative Return vs ICE Corp/Gov 1-5 Yr Re l a t i v e R e t u r n s (0.8%) (0.6%) (0.4%) (0.2%) 0.0% 0.2% 0.4% 0.6% 0.8% 17 2018 2019 2020 2021 2022 2023 2024 Long Term Operating Fund Callan Short Term Fixed Income (Gross) Annualized Seven Year Risk vs Return 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 1.6% 1.8% 2.0% 2.2% 2.4% 2.6% 2.8% 3.0% 3.2% 3.4% 3.6% Long Term Operating Fund ICE Corp/Gov 1-5 Yr Blmbg Govt/Cred 1-5 Year Idx Standard Deviation Re t u r n s 17Orange County Sanitation District Long Term Operating Fund Return Analysis Summary Return Analysis The graphs below analyze the manager’s return on both a risk-adjusted and unadjusted basis. The first chart illustrates the manager’s ranking over different periods versus the appropriate style group. The second chart shows the historical quarterly and cumulative manager returns versus the appropriate market benchmark. The last chart illustrates the manager’s ranking relative to their style using various risk-adjusted return measures. Assets were transferred in kind to Insight on 3/1/2024. Performance from 12/1/2014 to 3/1/2024 represents Chandler. Previous performance reflects PIMCO. Performance vs Callan Short Term Fixed Income (Gross) (8%) (6%) (4%) (2%)0%2% 4% 6% 8% 12/23- 9/24 2023 2022 2021 2020 2019 2018 2017 2016 2015 A(86)B(86)79 A(81)B(86)86 A(81)B(95)95 A(89)B(99)94 B(23)A(33)24 B(22)A(35)20 A(66)B(87)86 B(59)A(65)58 A(48)B(49)47 B(34)A(61)26 10th Percentile 5.60 6.38 (1.90)0.75 5.12 5.48 2.02 2.30 2.81 1.18 25th Percentile 5.18 5.74 (2.90)0.14 4.55 4.96 1.83 1.76 2.19 1.05Median 4.86 5.39 (3.34) (0.22)3.98 4.53 1.69 1.34 1.55 0.9075th Percentile 4.65 5.05 (4.49) (0.45)3.56 4.06 1.53 0.97 1.16 0.7690th Percentile 4.39 4.82 (4.93) (0.82)2.41 3.56 1.33 0.66 1.04 0.62 Long TermOperating Fund A 4.50 4.96 (4.75) (0.79)4.42 4.70 1.60 1.18 1.58 0.85Blmbg Govt/Cred1-5 Year Idx B 4.50 4.89 (5.50) (0.97)4.71 5.01 1.38 1.27 1.56 0.97 ICE Corp/Gov1-5 Yr 4.60 4.89 (5.54) (0.87)4.65 5.08 1.40 1.28 1.62 1.05 Cumulative and Quarterly Relative Returns vs ICE Corp/Gov 1-5 Yr Qu a r t e r l y R e l a t i v e R e t u r n s Cu m u l a t i v e R e l a t i v e R e t u r n s (0.6%) (0.4%) (0.2%) 0.0% 0.2% 0.4% 0.6% 0.8% (6%) (4%) (2%) 0% 2% 4% 6% 8% 14 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Long Term Operating Fund Blmbg Govt/Cred 1-5 Year Idx Callan Short Fixed Inc Risk Adjusted Return Measures vs ICE Corp/Gov 1-5 Yr Rankings Against Callan Short Term Fixed Income (Gross) Seven Years Ended September 30, 2024 (0.6)(0.4)(0.2)0.00.20.40.60.81.01.2 Alpha Sharpe Excess Return Ratio Ratio A(87)B(90)A(88)B(90) A(84) B(100) 10th Percentile 0.92 0.23 0.6025th Percentile 0.54 0.13 0.49 Median 0.36 0.06 0.36 75th Percentile 0.17 (0.02)0.26 90th Percentile (0.04) (0.11)0.08 Long Term Operating Fund A 0.05 (0.08)0.20 Blmbg Govt/Cred 1-5 Year Idx B (0.03) (0.11) (0.26) 18Orange County Sanitation District Long Term Operating Fund Bond Characteristics Analysis Summary Portfolio Characteristics This graph compares the manager’s portfolio characteristics with the range of characteristics for the portfolios which make up the manager’s style group. This analysis illustrates whether the manager’s current holdings are consistent with other managers employing the same style. Fixed Income Portfolio Characteristics Rankings Against Callan Short Term Fixed Income as of September 30, 2024 (1) 0 1 2 3 4 5 6 7 Average Effective Coupon OA Duration Life Yield Rate Convexity (17)(8)(27)(21) (90) (94)(90) (5)(4) 10th Percentile 2.57 3.10 5.40 4.96 0.0625th Percentile 2.08 2.69 4.76 4.48 0.05Median 1.87 2.18 4.36 4.16 0.03 75th Percentile 1.78 1.94 4.13 3.77 (0.00) 90th Percentile 0.97 1.16 3.87 3.23 (0.10) Long Term Operating Fund 2.38 2.56 - 2.72 0.08 ICE Corp/Gov 1-5 Yr 2.60 2.81 3.87 3.17 0.09 Sector Allocation and Quality Ratings The first graph compares the manager’s sector allocation with the average allocation across all the members of the manager’s style. The second graph compares the manager’s weighted average quality rating with the range of quality ratings for the style. Sector Allocation September 30, 2024 0%10%20%30%40%50%60%70%80% US Trsy 44.934.2 65.4 Corp (incl 144A)23.0 50 % Mg r M V 50 % Mg r M V 42.527.1 Gov Related 12.80.4 7.5 Other 11.7 ABS 4.3 17.7 CMBS 3.04.2 CMOs 0.2 Cash 0.10.8 RMBS 0.2 Long Term Operating Fund Callan Short Term Fixed Income ICE Corp/Gov 1-5 Yr Quality Ratings vs Callan Short Term Fixed Income A- A A+ AA- AA AA+ AAA Trsy Weighted Average Quality Rating (67)(67) 10th Percentile AA+25th Percentile AAMedian AA 75th Percentile A 90th Percentile A Long TermOperating Fund AA ICE Corp/Gov 1-5 Yr AA 19Orange County Sanitation District Long Term Operating Fund Portfolio Characteristics Summary As of September 30, 2024 Portfolio Structure Comparison The charts below compare the structure of the portfolio to that of the index from the three perspectives that have the greatest influence on return. The first chart compares the two portfolios across sectors. The second chart compares the duration distribution. The last chart compares the distribution across quality ratings. Sector Allocation Long Term Operating Fund US Trsy 45% Cash0% Corp (incl 144A) 23% CMOs 0% Gov Related13% CMBS3% Other12% ABS 4% ML:Corp/Gov 1-5 Yr US Trsy 65% Gov Related7% Corp (incl 144A)27% Duration Distribution 0% 10% 20% 30% 40% 50% 60% 70% 80% <1 17.7 2.3 1-3 43.5 60.9 3-5 38.8 36.7 5-7 0.0 0.0 7-10 0.0 0.0 >10 0.0 0.0 Years Duration Pe r c e n t o f P o r t f o l i o Weighted Average: Duration Long Term Operating Fund: ML:Corp/Gov 1-5 Yr: 2.38 2.60 Quality Distribution 0% 20% 40% 60% 80% 100% AAA 15.0 3.4 AA 65.6 70.7 A 19.4 13.2 BBB 0.0 12.6 BB 0.0 0.1 B 0.0 0.0 CCC 0.0 0.0 CC 0.0 0.0 C 0.0 0.0 N/R 0.1 0.0 Quality Rating Pe r c e n t o f P o r t f o l i o Weighted Average: Quality Long Term Operating Fund: ML:Corp/Gov 1-5 Yr: AA AA 20Orange County Sanitation District Liquid Operating Money Period Ended September 30, 2024 Investment Philosophy Assets were transferred in kind to Insight on 3/1/2024. Performance from 12/1/2014 to 3/1/2024 represents Chandler. Previous performance reflects PIMCO. Quarterly Summary and Highlights Liquid Operating Money Net’s portfolio posted a 1.36% return for the quarter placing it in the 39 percentile of the Callan Money Market Funds group for the quarter and in the 43 percentile for the last year. Liquid Operating Money Net’s portfolio underperformed the Citigroup 3-Month Treasury Bill by 0.01% for the quarter and underperformed the Citigroup 3-Month Treasury Bill for the year by 0.21%. Quarterly Asset Growth Beginning Market Value $96,595,670 Net New Investment $-57,000,000 Investment Gains/(Losses) $956,502 Ending Market Value $40,552,172 Performance vs Callan Money Market Funds (Net) 0% 1% 2% 3% 4% 5% 6% 7% 8% Last Quarter Last Last 3 Years Last 5 Years Last 7 Years Last 9-3/4 Last 10 Years Last 29 Years Year Years (39)(38) (43)(36) (44)(10) (37)(23)(32)(25) (28)(23)(28)(23) (10)(16) 10th Percentile 1.93 7.08 3.66 2.66 2.50 2.13 2.07 2.4225th Percentile 1.66 6.24 3.51 2.37 2.26 1.65 1.61 2.22 Median 1.30 5.34 3.32 2.16 2.00 1.47 1.43 2.11 75th Percentile 1.24 5.09 3.16 2.05 1.89 1.39 1.35 2.02 90th Percentile 1.19 4.88 2.90 1.86 1.72 1.25 1.22 1.88 Liquid Operating Money Net 1.36 5.42 3.35 2.24 2.14 1.62 1.58 2.39 Citigroup 3-MonthTreasury Bill 1.37 5.63 3.63 2.38 2.26 1.71 1.67 2.30 Relative Returns vs Citigroup 3-Month Treasury Bill Re l a t i v e R e t u r n s (0.30%) (0.20%) (0.10%) 0.00% 0.10% 0.20% 0.30% 0.40% 17 2018 2019 2020 2021 2022 2023 2024 Liquid Operating Money Net Callan Money Market Funds (Net) Annualized Seven Year Risk vs Return 0 1 2 3 4 5 6 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% Citigroup 3-Month Treasury Bill Liquid Operating Money Net Standard Deviation Re t u r n s 21Orange County Sanitation District Liquid Operating Money Net Return Analysis Summary Return Analysis The graphs below analyze the manager’s return on both a risk-adjusted and unadjusted basis. The first chart illustrates the manager’s ranking over different periods versus the appropriate style group. The second chart shows the historical quarterly and cumulative manager returns versus the appropriate market benchmark. The last chart illustrates the manager’s ranking relative to their style using various risk-adjusted return measures. Assets were transferred in kind to Insight on 3/1/2024. Performance from 12/1/2014 to 3/1/2024 represents Chandler. Previous performance reflects PIMCO. Performance vs Callan Money Market Funds (Net) (2%)(1%)0% 1% 2% 3%4%5% 6% 7% 8% 12/23- 9/24 2023 2022 2021 2020 2019 2018 2017 2016 2015 4735 4530 6117 8822 2426 2827 2312 3530 2932 2236 10th Percentile 4.95 6.22 1.57 0.19 1.70 3.20 1.89 1.42 1.32 0.2825th Percentile 4.46 5.49 1.43 0.03 0.62 2.32 1.72 0.91 0.39 0.06Median 3.96 4.98 1.27 0.01 0.34 1.96 1.53 0.61 0.14 0.01 75th Percentile 3.77 4.75 0.38 0.01 0.27 1.76 1.31 0.42 0.05 0.01 90th Percentile 3.61 4.56 (0.95) (0.03)0.19 1.50 1.07 0.23 0.01 0.00 Liquid Operating Money Net 3.98 5.02 1.14 (0.00)0.69 2.24 1.75 0.76 0.32 0.07 Citigroup 3-MonthTreasury Bill 4.17 5.26 1.50 0.05 0.58 2.25 1.86 0.84 0.27 0.03 Cumulative and Quarterly Relative Returns vs Citigroup 3-Month Treasury Bill Qu a r t e r l y R e l a t i v e R e t u r n s Cu m u l a t i v e R e l a t i v e R e t u r n s (0.15%) (0.10%) (0.05%) 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% 0.35% (3.0%) (2.5%) (2.0%) (1.5%) (1.0%) (0.5%) 0.0% 0.5% 1.0% 1.5% 2.0% 14 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Liquid Operating Money Net Callan Money Market Funds Risk Adjusted Return Measures vs Citigroup 3-Month Treasury Bill Rankings Against Callan Money Market Funds (Net) Seven Years Ended September 30, 2024 (5) (4) (3) (2) (1) 0 1 Alpha Sharpe Excess Return Ratio Ratio (14)(32) (33) 10th Percentile (0.01)0.16 0.20 25th Percentile (0.16)0.03 (0.00) Median (0.29) (0.23) (2.68) 75th Percentile (0.40) (0.36) (3.36)90th Percentile (0.56) (0.54) (3.66) Liquid Operating Money Net (0.07) (0.08) (0.79) 22Orange County Sanitation District Definitions Risk/Reward Statistics The risk statistics used in this report examine performance characteristics of a manager or a portfolio relative to a benchmark (market indicator) which assumes to represent overall movements in the asset class being considered. The main unit of analysis is the excess return, which is the portfolio return minus the return on a risk free asset (3 month T-Bill). Alpha measures a portfolio’s return in excess of the market return adjusted for risk. It is a measure of the manager’s contribution to performance with reference to security selection. A positive alpha indicates that a portfolio was positively rewarded for the residual risk which was taken for that level of market exposure. Beta measures the sensitivity of rates of portfolio returns to movements in the market index. A portfolio’s beta measures the expected change in return per 1% change in the return on the market. If a beta of a portfolio is 1.5, a 1 percent increase in the return on the market will result, on average, in a 1.5 percent increase in the return on the portfolio. The converse would also be true. Downside Risk stems from the desire to differentiate between "good risk" (upside volatility) and "bad risk" (downside volatility). Whereas standard deviation punishes both upside and downside volatility, downside risk measures only the standard deviation of returns below the target. Returns above the target are assigned a deviation of zero. Both the frequency and magnitude of underperformance affect the amount of downside risk. Excess Return Ratio is a measure of risk adjusted relative return. This ratio captures the amount of active management performance (value added relative to an index) per unit of active management risk (tracking error against the index.) It is calculated by dividing the manager’s annualized cumulative excess return relative to the index by the standard deviation of the individual quarterly excess returns. The Excess Return Ratio can be interpreted as the manager’s active risk/reward tradeoff for diverging from the index when the index is mandated to be the "riskless" market position. Information Ratio measures the manager’s market risk-adjusted excess return per unit of residual risk relative to a benchmark. It is computed by dividing alpha by the residual risk over a given time period. Assuming all other factors being equal, managers with lower residual risk achieve higher values in the information ratio. Managers with higher information ratios will add value relative to the benchmark more reliably and consistently. R-Squared indicates the extent to which the variability of the portfolio returns are explained by market action. It can also be thought of as measuring the diversification relative to the appropriate benchmark. An r-squared value of .75 indicates that 75% of the fluctuation in a portfolio return is explained by market action. An r-squared of 1.0 indicates that a portfolio’s returns are entirely related to the market and it is not influenced by other factors. An r-squared of zero indicates that no relationship exists between the portfolio’s return and the market. Relative Standard Deviation is a simple measure of a manager’s risk (volatility) relative to a benchmark. It is calculated by dividing the manager’s standard deviation of returns by the benchmark’s standard deviation of returns. A relative standard deviation of 1.20, for example, means the manager has exhibited 20% more risk than the benchmark over that time period. A ratio of .80 would imply 20% less risk. This ratio is especially useful when analyzing the risk of investment grade fixed-income products where actual historical durations are not available. By using this relative risk measure over rolling time periods one can illustrate the "implied" historical duration patterns of the portfolio versus the benchmark. Residual Portfolio Risk is the unsystematic risk of a fund, the portion of the total risk unique to the fund (manager) itself and not related to the overall market. This reflects the "bets" which the manager places in that particular asset market. These bets may reflect emphasis in particular sectors, maturities (for bonds), or other issue specific factors which the manager considers a good investment opportunity. Diversification of the portfolio will reduce or eliminate the residual risk of that portfolio. 24 Risk/Reward Statistics Rising Declining Periods refer to the sub-asset class cycles vis-a-vis the broader asset class. This is determined by evaluating the cumulative relative sub-asset class index performance to that of the broader asset class index. For example, to determine the Growth Style cycle, the S&P 500 Growth Index (sub-asset class) performance is compared to that of the S&P 500 Index (broader asset class). Sharpe Ratio is a commonly used measure of risk-adjusted return. It is calculated by subtracting the "risk-free" return (usually 3 Month Treasury Bill) from the portfolio return and dividing the resulting "excess return" by the portfolio’s risk level (standard deviation). The result is a measure of return gained per unit of risk taken. Sortino Ratio is a downside risk-adjusted measure of value-added. It measures excess return over a benchmark divided by downside risk. The natural appeal is that it identifies value-added per unit of truly bad risk. The danger of interpretation, however, lies in these two areas: (1) the statistical significance of the denominator, and (2) its reliance on the persistence of skewness in return distributions. Standard Deviation is a statistical measure of portfolio risk. It reflects the average deviation of the observations from their sample mean. Standard deviation is used as an estimate of risk since it measures how wide the range of returns typically is. The wider the typical range of returns, the higher the standard deviation of returns, and the higher the portfolio risk. If returns are normally distributed (ie. has a bell shaped curve distribution) then approximately 2/3 of the returns would occur within plus or minus one standard deviation from the sample mean. Total Portfolio Risk is a measure of the volatility of the quarterly excess returns of an asset. Total risk is composed of two measures of risk: market (non-diversifiable or systematic) risk and residual (diversifiable or unsystematic) risk. The purpose of portfolio diversification is to reduce the residual risk of the portfolio. Tracking Error is a statistical measure of a portfolio’s risk relative to an index. It reflects the standard deviation of a portfolio’s individual quarterly or monthly returns from the index’s returns. Typically, the lower the Tracking Error, the more "index-like" the portfolio. Treynor Ratio represents the portfolio’s average excess return over a specified period divided by the beta relative to its benchmark over that same period. This measure reflects the reward over the risk-free rate relative to the systematic risk assumed. Note: Alpha, Total Risk, and Residual Risk are annualized. 25 Fixed Income Portfolio Characteristics All Portfolio Characteristics are derived by first calculating the characteristics for each security, and then calculating the market value weighted average of these values for the portfolio. Allocation by Sector - Sector allocation is one of the tools which managers often use to add value without impacting the duration of the portfolio. The sector weights exhibit can be used to contrast a portfolio’s weights with those of the index to identify any significant sector bets. Average Coupon - The average coupon is the market value weighted average coupon of all securities in the portfolio. The total portfolio coupon payments per year are divided by the total portfolio par value. Average Moody’s Rating for Total Portfolio - A measure of the credit quality as determined by the individual security ratings. The ratings for each security, from Moody’s Investor Service, are compiled into a composite rating for the whole portfolio. Quality symbols range from Aaa+ (highest investment quality - lowest credit risk) to C (lowest investment quality - highest credit risk). Average Option Adjusted (Effective) Convexity - Convexity is a measure of the portfolio’s exposure to interest rate risk. It is a measure of how much the duration of the portfolio will change given a change in interest rates. Generally, securities with negative convexities are considered to be risky in that changes in interest rates will result in disadvantageous changes in duration. When a security’s duration changes it indicates that the stream of expected future cash-flows has changed, generally having a significant impact on the value of the security. The option adjusted convexity for each security in the portfolio is calculated using models developed by Lehman Brothers and Salomon Brothers which determine the expected stream of cash-flows for the security based on various interest rate scenarios. Expected cash-flows take into account any put or call options embedded in the security, any expected sinking-fund paydowns or any expected mortgage principal prepayments. Average Option Adjusted (Effective) Duration - Duration is one measure of the portfolio’s exposure to interest rate risk. Generally, the higher a portfolio’s duration, the more that its value will change in response to interest rate changes. The option adjusted duration for each security in the portfolio is calculated using models developed by Lehman Brothers and Salomon Brothers which determine the expected stream of cash-flows for the security based on various interest rate scenarios. Expected cash-flows take into account any put or call options embedded in the security, any expected sinking-fund paydowns or any expected mortgage principal prepayments. Average Price - The average price is equal to the portfolio market value divided by the number of securities in the portfolio. Portfolios with an average price above par will tend to generate more current income than those with an average price below par. Average Years to Expected Maturity - This is a measure of the market-value-weighted average of the years to expected maturity across all of the securities in the portfolio. Expected years to maturity takes into account any put or call options embedded in the security, any expected sinking-fund paydowns or any expected mortgage principal prepayments. Average Years to Stated Maturity - The average years to stated maturity is the market value weighted average time to stated maturity for all securities in the portfolio. This measure does not take into account imbedded options, sinking fund paydowns, or prepayments. Current Yield - The current yield is the current annual income generated by the total portfolio market value. It is equal to the total portfolio coupon payments per year divided by the current total portfolio market value. 26 Fixed Income Portfolio Characteristics Duration Dispersion - Duration dispersion is the market-value weighted standard deviation of the portfolio’s individual security durations around the total portfolio duration. The higher the dispersion, the more variable the security durations relative to the total portfolio duration ("barbellness"), and the smaller the dispersion, the more concentrated the holdings’ durations around the overall portfolio’s ("bulletness"). The purpose of this statistic is to gauge the "bulletness" or "barbellness" of a portfolio relative to its total duration and to that of its benchmark index. Effective Yield - The effective yield is the actual total annualized return that would be realized if all securities in the portfolio were held to their expected maturities. Effective yield is calculated as the internal rate of return, using the current market value and all expected future interest and principal cash flows. This measure incorporates sinking fund paydowns, expected mortgage principal prepayments, and the exercise of any "in-the-money" imbedded put or call options. Weighted Average Life - The weighted average life of a security is the weighted average time to payment of all remaining principal. It is calculated by multiplying each expected future principal payment amount by the time left to the payment. This amount is then divided by the total amount of principal remaining. Weighted average life is commonly used as a measure of the investment life for pass-through security types for comparison to non-pass-through securities. 27 Disclosures List of Callan’s Investment Manager Clients Confidential – For Callan Client Use Only Callan takes its fiduciary and disclosure responsibilities to clients very seriously. We recognize that there are numerous potential conflicts of interest encountered in the investment consulting industry, and that it is our responsibility to manage those conflicts effectively and in the best interest of our clients. At Callan, we employ a robust process to identify, manage, monitor, and disclose potential conflicts on an ongoing basis. The list below is an important component of our conflicts management and disclosure process. It identifies those investment managers that pay Callan fees for educational, consulting, software, database, or reporting products and services. We update the list quarterly because we believe that our fund sponsor clients should know the investment managers that do business with Callan, particularly those investment manager clients that the fund sponsor clients may be using or considering using. Please note that if an investment manager receives a product or service on a complimentary basis (e.g., attending an educational event), they are not included in the list below. Callan is committed to ensuring that we do not consider an investment manager’s business relationship with Callan, or lack thereof, in performing evaluations for or making suggestions or recommendations to its other clients. Please refer to Callan’s ADV Part 2A for a more detailed description of the services and products that Callan makes available to investment manager clients through our Institutional Consulting Group, Independent Adviser Group, and Fund Sponsor Consulting Group. Due to the complex corporate and organizational ownership structures of many investment management firms, parent and affiliate firm relationships are not indicated on our list. Fund sponsor clients may request a copy of the most currently available list at any time. Fund sponsor clients may also request specific information regarding the fees paid to Callan by particular fund manager clients. Per company policy, information requests regarding fees are handled exclusively by Callan’s Compliance department. Quarterly List as of September 30, 2024 September 30, 2024 Manager Name abrdn Investments Acadian Asset Management LLC Adams Street Partners, LLC Aegon Asset Management AllianceBernstein Allspring Global Investments, LLC Altrinsic Global Advisors, LLC American Century Investments Amundi US, Inc. Antares Capital LP Apollo Global Management, Inc. AQR Capital Management Ares Management LLC ARGA Investment Management, LP Ariel Investments, LLC Aristotle Capital Management, LLC Atlanta Capital Management Co., LLC Audax Private Debt Manager Name AXA Investment Managers Baillie Gifford International, LLC Baird Advisors Barings LLC Baron Capital Management, Inc. Barrow, Hanley, Mewhinney & Strauss, LLC BentallGreenOak Beutel, Goodman & Company Ltd. BlackRock Blackstone Group (The) Blue Owl Capital, Inc. BNY Mellon Asset Management Boston Partners Brandes Investment Partners, L.P. Brandywine Global Investment Management, LLC Brookfield Asset Management Inc. Brown Brothers Harriman & Company Brown Investment Advisory & Trust Company September 30, 2024 Manager Name Capital Group CastleArk Management, LLC Cercano Management LLC CIBC Asset Management CIM Group, LP ClearBridge Investments, LLC Cohen & Steers Capital Management, Inc. Columbia Threadneedle Investments Comvest Partners Crescent Capital Group LP Dana Investment Advisors, Inc. DePrince, Race & Zollo, Inc. Dimensional Fund Advisors L.P. DoubleLine DWS EARNEST Partners, LLC Fayez Sarofim & Company Federated Hermes, Inc. Fidelity Institutional Asset Management Fiera Capital Corporation First Eagle Investment Management, LLC First Hawaiian Bank Wealth Management Division Fisher Investments Franklin Templeton Fred Alger Management, LLC GAMCO Investors, Inc. GlobeFlex Capital, L.P. Goldman Sachs Golub Capital GW&K Investment Management Harbor Capital Group Trust Hardman Johnston Global Advisors LLC Heitman LLC Hotchkis & Wiley Capital Management, LLC HPS Investment Partners, LLC IFM Investors Impax Asset Management LLC Income Research + Management Insight Investment Intercontinental Real Estate Corporation Manager Name Invesco J.P. Morgan Janus Jennison Associates LLC Jobs Peak Advisors Kayne Anderson Rudnick Investment Management, LLC King Street Capital Management, L.P. Kohlberg Kravis Roberts & Co. L.P. (KKR) Lazard Asset Management LGIM America Lincoln National Corporation Longview Partners Loomis, Sayles & Company, L.P. Lord, Abbett & Company LSV Asset Management MacKay Shields LLC Macquarie Asset Management Manulife Investment Management Manulife | CQS Investment Management Marathon Asset Management, L.P. Mawer Investment Management Ltd. MetLife Investment Management MFS Investment Management Mondrian Investment Partners Limited Montag & Caldwell, LLC Morgan Stanley Investment Management MUFG Bank, Ltd. Natixis Investment Managers Neuberger Berman Newton Investment Management Northern Trust Asset Management Nuveen Oaktree Capital Management, L.P. Orbis Investment Management Limited P/E Investments Pacific Investment Management Company Parametric Portfolio Associates LLC Partners Group (USA) Inc. Pathway Capital Management, LP Peavine Capital September 30, 2024 Manager Name Peregrine Capital Management, LLC PGIM DC Solutions PGIM Fixed Income PGIM Quantitative Solutions LLC Pictet Asset Management PineBridge Investments Polen Capital Management, LLC PPM America, Inc. Pretium Partners, LLC Principal Asset Management Raymond James Investment Management RBC Global Asset Management Regions Financial Corporation S&P Dow Jones Indices Sands Capital Management Schroder Investment Management North America Inc. Segall Bryant & Hamill SLC Management Star Mountain Capital, LLC State Street Global Advisors Strategic Global Advisors, LLC Manager Name T. Rowe Price Associates, Inc. TD Global Investment Solutions – TD Epoch The D.E. Shaw Group The TCW Group, Inc. Thompson, Siegel & Walmsley LLC TPG Angelo Gordon UBS Asset Management VanEck Versus Capital Group Victory Capital Management Inc. Virtus Investment Partners, Inc. Vontobel Asset Management Voya Walter Scott & Partners Limited WCM Investment Management Wellington Management Company LLP Western Asset Management Company LLC Westfield Capital Management Company, LP William Blair & Company LLC Xponance, Inc. Important Disclosures Information contained in this document may include confidential, trade secret and/or proprietary information of Callan and the client. It is incumbent upon the user to maintain such information in strict confidence. Neither this document nor any specific information contained herein is to be used other than by the intended recipient for its intended purpose. The content of this document is particular to the client and should not be relied upon by any other individual or entity. There can be no assurance that the performance of any account or investment will be comparable to the performance information presented in this document. Certain information herein has been compiled by Callan from a variety of sources believed to be reliable but for which Callan has not necessarily verified for accuracy or completeness. Information contained herein may not be current. Callan has no obligation to bring current the information contained herein. Callan’s performance, market value, and, if applicable, liability calculations are inherently estimates based on data available at the time each calculation is performed and may later be determined to be incorrect or require subsequent material adjustment due to many variables including, but not limited to, reliance on third party data, differences in calculation methodology, presence of illiquid assets, the timing and magnitude of unrecognized cash flows, and other data/assumptions needed to prepare such estimated calculations. In no event should the performance measurement and reporting services provided by Callan be used in the calculation, deliberation, policy determination, or any other action of the client as it pertains to determining amounts, timing or activity of contribution levels or funding amounts, rebalancing activity, benefit payments, distribution amounts, and/or performance-based fee amounts, unless the client understands and accepts the inherent limitations of Callan’s estimated performance, market value, and liability calculations. Callan’s performance measurement service reports estimated returns for a portfolio and compares them against relevant benchmarks and peer groups, as appropriate; such service may also report on historical portfolio holdings, comparing them to holdings of relevant benchmarks and peer groups, as appropriate ("portfolio holdings analysis"). To the extent that Callan’s reports include a portfolio holdings analysis, Callan relies entirely on holdings, pricing, characteristics, and risk data provided by third parties including custodian banks, record keepers, pricing services, index providers, and investment managers. Callan reports the performance and holdings data as received and does not attempt to audit or verify the holdings data. Callan is not responsible for the accuracy or completeness of the performance or holdings data received from third parties and such data may not have been verified for accuracy or completeness. Callan’s performance measurement service may report on illiquid asset classes, including, but not limited to, private real estate, private equity, private credit, hedge funds and infrastructure. The final valuation reports, which Callan receives from third parties, for of these types of asset classes may not be available at the time a Callan performance report is issued. As a result, the estimated returns and market values reported for these illiquid asset classes, as well as for any composites including these illiquid asset classes, including any total fund composite prepared, may not reflect final data, and therefore may be subject to revision in future quarters. The content of this document may consist of statements of opinion, which are made as of the date they are expressed and are not statements of fact. The opinions expressed herein may change based upon changes in economic, market, financial and political conditions and other factors. Callan has no obligation to bring current the opinions expressed herein. The information contained herein may include forward-looking statements regarding future results. The forward-looking statements herein: (i) are best estimations consistent with the information available as of the date hereof and (ii) involve known and unknown risks and uncertainties. Actual results may vary, perhaps materially, from the future results projected in this document. Undue reliance should not be placed on forward-looking statements. Callan is not responsible for reviewing the risks of individual securities or the compliance/non-compliance of individual security holdings with a client’s investment policy guidelines. This document should not be construed as legal or tax advice on any matter. You should consult with legal and tax advisers before applying any of this information to your particular situation. Reference to, or inclusion in this document of, any product, service or entity should not necessarily be construed as recommendation, approval, or endorsement or such product, service or entity by Callan. This document is provided in connection with Callan’s consulting services and should not be viewed as an advertisement of Callan, or of the strategies or products discussed or referenced herein. The issues considered and risks highlighted herein are not comprehensive and other risks may exist that the user of this document may deem material regarding the enclosed information. Please see any applicable full performance report or annual communication for other important disclosures. Unless Callan has been specifically engaged to do so, Callan does not conduct background checks or in-depth due diligence of the operations of any investment manager search candidate or investment vehicle, as may be typically performed in an operational due diligence evaluation assignment and in no event does Callan conduct due diligence beyond what is described in its report to the client. Any decision made on the basis of this document is sole responsibility of the client, as the intended recipient, and it is incumbent upon the client to make an independent determination of the suitability and consequences of such a decision. Callan undertakes no obligation to update the information contained herein except as specifically requested by the client. Past performance is no guarantee of future results. Disclosures Investment Transactions and Balances in LAIF Par Value Book Value Market Value Rate Yield Balance 9/1/2024 $15,104,148 $15,104,148 $15,104,148 4.58 4.58 Deposits: 9/3/2024 28,200,000 28,200,000 28,200,000 4.58 4.58 Total Deposits 28,200,000 28,200,000 28,200,000 4.58 4.58 Quarterly Interest Distribution - - - 4.58 4.58 Withdrawals: 9/10/2024 (4,800,000) (4,800,000) (4,800,000) 4.58 4.58 9/17/2024 (6,200,000) (6,200,000) (6,200,000) 4.58 4.58 9/24/2024 (5,400,000) (5,400,000) (5,400,000) 4.58 4.58 Total Withdrawals (16,400,000) (16,400,000) (16,400,000) 4.58 4.58 Balance 9/30/2024 $26,904,148 $26,904,148 $26,904,148 4.58 4.58 Orange County Sanitation District Investment Transactions and Balances in the State of California Local Agency Investment Fund September 30, 2024 H:\dept\asd\220\Groups\GL\Common\fixed\Investment-Mellon & LAIF\FY 24-25\E LAIF Transactions FY 24-25 BNY Mellon Owner Controlled Insurance Program Escrow Account Current Period Year-to-Date Go Paperless. Securely access your accounts online to view your statements. Ask your BNY Mellon contact how we can help you accessyour account balances and activity in real time, receive your reports, enter your own transactions or submit an audit confirmation online. Also be sure to ask how NEXEN(SM) Gateway, our new cloud-based ecosystem, can help you. Visit us at www.bnymellon.com CLIENT SERVICE MANAGER: ROSS KEGLER Percent of all Investments Asset Classification Market Value 100% TOTAL OF ALL INVESTMENTS 250,000.00 Estimated MarketAsset Classification Market Value Cost Accrued Income Annual Income Yield ACCOUNT TOTALS 250,000.00 250,000.00 0.00 0.00 0.00 % Realized Transaction Category Income Principal Gains/Losses Income Principal OPENING BALANCE 2,403.62- 252,403.62 2,403.62- 252,403.62 CLOSING BALANCE 2,403.62- 252,403.62 0.00 2,403.62- 252,403.62 Account Statement Account Overview Summary of Assets Held by Asset Classification Summary of Cash Transactions by Transaction Category Statement Period 09/01/2024 Through 09/30/2024 Account 00300282 Base Currency = USD OCSD LIBERTY MUTUAL 240 GREENWICH ST NEW YORK, NY 10286+12128152716 ROSS.B.KEGLER@BNYMELLON.COM 100% CASH AND SHORT TERM 250,000.00 CASH AND SHORT TERM 250,000.00 250,000.00 0.00 0.00 0.00 % The above cash transactions summary is provided for information purposes only and may not reflect actual taxable income or deductible expenses as reportable under the Internal Revenue Code. Page 1 of 2 e 1 0 1 3 2 3 n 0 8 7 4 8 7 a 0 1 t D O M i W I s 3 5 3 , 0 8 9 The Bank of New York Mellon may utilize subsidiaries and affiliates to provide services and certain products to the Account. Subsidiaries and affiliates may be compensated for their services and products. The value of securities set forth on this Account Statement are determined by The Bank of New York Mellon for Corporate Trust on the basis of market prices and information obtained by The Bank of New York Mellon from unaffiliated third parties (including independent pricing vendors) ("third party pricing services"). The Bank of New York Mellon has not verified such market values or information and makes no assurances as to the accuracy or correctness of such market values or information or that the market values set forth on this Account Statement reflect the value of the securities that can be realized upon the sale of such securities. In addition, the market values for securities set forth in this Account Statement may differ from the market prices and information for the same securities used by other business units of The Bank of New York Mellon or its subsidiaries or affiliates based upon market prices and information received from other third party pricing services utilized by such other business units. Corporate Trust does not compare its market values with those used by, or reconcile different market values used by, other business units of The Bank of New York Mellon or its subsidiaries or its affiliates. The Bank of New York Mellon shall not be liable for any loss, damage or expense incurred as a result of or arising from or related to the market values or information provided by third party pricing services or the differences in market prices or information provided by other third party pricing services. No Transactions This Period Accrued Estimated Market Shares/Par Value Asset Description Market Price Market Value Cost Average Cost Income Income Yield Realized Transaction Date Transaction Description Income Principal Cost Gains/Losses Statement Period 09/01/2024 Through 09/30/2024 Statement of Assets Held by Asset Classification Statement of Transactions by Transaction Date Account 00300282 Base Currency = USD OCSD LIBERTY MUTUAL CASH BALANCE 250,000.00 250,000.00 0.00000 0.00 0.00 0.00% Total Market Value Plus Total Accrued Income 250,000.00 Cumulative realized capital gain and loss position from 12/31/2023 for securities held in principal of account: Short Term: 0.00 * Long Term: 0.00 * * The above gain and loss position does not include transactions where tax cost information is incomplete or unavailable. CASH AND SHORT TERM Total CASH AND SHORT TERM 250,000.00 250,000.00 0.00 0.00 0.00% ACCOUNT TOTALS 250,000.00 250,000.00 0.00 0.00 0.00% Page 2 of 2 e 1 0 1 3 2 3 n 0 8 7 4 8 7 a 0 1 t D O M i W I s 3 5 3 , 0 9 0 PARS Section 115 Trust Account Report ORANGE COUNTY SANITATION DISTRICT PARS Post-Employment Benefits Trust 9/1/2024 to 9/30/2024 Robert Thompson General Manager Orange County Sanitation District 10844 Ellis Ave. Fountain Valley, CA 92708 Account Summary Source 9/1/2024 Contributions Earnings Expenses Distributions Transfers 9/30/2024 OC SAN A1 1128 $10,847,289.08 $0.00 $153,404.50 $3,981.18 $0.00 $0.00 $10,996,712.40 OC SAN B1 1129 $5,526,183.24 $0.00 $79,147.74 $2,030.69 $0.00 $0.00 $5,603,300.29 Totals $16,373,472.32 $0.00 $232,552.24 $6,011.87 $0.00 $0.00 $16,600,012.69 Investment Selection Source OC SAN A1 OC SAN B1 Investment Objective Source OC SAN A1 OC SAN B1 Investment Return Source 1-Month 3-Months 1-Year 3-Years 5-Years 10-Years OC SAN A1 1.41% 5.51% 21.66% - - - 1/14/2022 OC SAN B1 1.43% 5.59% 23.53% - - - 1/14/2022 Information as provided by US Bank, Trustee for PARS; Not FDIC Insured; No Bank Guarantee; May Lose Value Headquarters - 4350 Von Karman Ave., Suite 100, Newport Beach, CA 92660 800.540.6369 Fax 949.250.1250 www.pars.org Account balances are inclusive of Trust Administration, Trustee and Investment Management fees Annualized Return Investment Return: Annualized rate of return is the return on an investment over a period other than one year multiplied or divided to give a comparable one-year return. Past performance does not guarantee future results. Performance returns may not reflect the deduction of applicable fees, which could reduce returns. Information is deemed reliable but may be subject to change. Individual account based on Balanced - Strategic Blend. The dual goals of the Balanced Strategy are growth of principal and income. While dividend and interest income are an important component of the objective's total return, it is expected that capital appreciation will comprise a larger portion of the total return. The portfolio will be allocated between equity and fixed income investments. Account Report for the Period Balance as of Orange County SD - PEN A1 Balance as of Individual account based on Moderate - Strategic Blend. The dual goals of the Moderate Strategy are growth of principal and income. It is expected that dividend and interest income will comprise a significant portion of total return, although growth through capital appreciation is equally important. The portfolio will be allocated between equity and fixed income investments. Orange County SD - PEN B1 Plan's Inception Date PARS - U.S. Bank Month End Investment Detail with Accruals FY 2024-25 First Quarter Financial Report This Page Intentionally Left Blank October 31, 2024 STAFF REPORT Certificates of Participation (COP) Report For the Period Ended September 30, 2024 Summary The Orange County Sanitation District (OC San) began issuing Certificates of Participation (COPs) in 1990. These COPs were a part of our long-term financing plan that included both variable interest rate and traditional fixed rate borrowing. There remains no variable interest rate COPs at OC San. Following are the current outstanding debt issues of OC San: In May 2010, OC San issued $80 million of fixed rate Build America Bonds (BABs), Series 2010A at a true interest cost of 3.68 percent for the issue. In December 2010, OC San issued $157 million of fixed rate BABs, Series 2010C at a true interest cost of 4.11 percent for the issue. In March 2016, OC San issued $145.88 million of fixed rate COPs, Series 2016A, refunding $162.78 million of the Series 2009A fixed rate debt. The true interest cost for the issue is 3.02 percent. In February 2017, OC San issued $66.37 million of fixed rate COPs, Series 2017A, refunding $91.885 million of the Series 2007A debt. The true interest cost for the issue is 2.55 percent. In July 2021, OC San issued $133.51 million of fixed rate COPs, Series 2021A, refunding $61.575 million of the Series 2011A fixed rate debt and $102.2 million of the Series 2018A fixed rate debt. The true interest cost for the issue is 1.06 percent. In February 2022, OC San issued $81.62 million of fixed rate COPs, Series 2022A, refunding $100.645 million of the Series 2012A fixed rate debt and $6.67 million of the Series 2012B fixed rate debt. The true interest cost for the issue is 1.59 percent. In May 2024, OC San issued $139.72 million of fixed rate COPs, Series 2024A, refunding $30.095 million of the Series 2014A fixed rate debt and $127.51 million of the Series 2015A fixed rate debt. The true interest cost for the issue is 2.72 percent. COP Report For the Period Ended September 30, 2024 Page 2 of 2 Issue Description Outstanding COP Balance Annual Interest Rate Approx Annual Interest Original Principal Issue Date Final Maturity 2010A Fixed 80,000,000.00 3.68% 2,944,000.00 80,000,000.00 5/18/2010 2/1/2040 2010C Fixed 22,830,000.00 4.11% 938,313.00 157,000,000.00 12/8/2010 2/1/2032 2016A Fixed 121,485,000.00 3.02% 3,668,847.00 145,880,000.00 3/30/2016 2/1/2039 2017A Fixed 65,815,000.00 2.55% 1,681,437.01 66,370,000.00 2/1/2017 2/1/2030 2021A Fixed 94,645,000.00 1.06% 1,003,237.00 133,510,000.00 7/29/2021 2/1/2036 2022A Fixed 81,620,000.00 1.59% 1,297,758.00 81,620,000.00 2/1/2022 2/1/2033 2024A Fixed 139,720,000.00 2.72% 3,800,384.00 139,720,000.00 5/7/2024 2/1/2037 606,115,000.00 15,333,976.01 804,100,000.00 2.53%Weighted Avg Cost of Funds ORANGE COUNTY SANITATION DISTRICT FINANCIAL MANAGEMENT DIVISION18480 Bandilier CircleFountain Valley, California 92708-7018714.962.2411 | www.ocsan.gov 09/30/24 ADMINISTRATION COMMITTEE Agenda Report Headquarters 18480 Bandilier Circle Fountain Valley, CA 92708 (714) 593-7433 File #:2024-3803 Agenda Date:11/13/2024 Agenda Item No:3. FROM:Robert Thompson, General Manager Originator: Jennifer Cabral, Director of Communications SUBJECT: PUBLIC AFFAIRS UPDATE FOR THE MONTH OF OCTOBER 2024 GENERAL MANAGER'S RECOMMENDATION RECOMMENDATION: Recommend to the Board of Directors to: Receive and file the Public Affairs Update for the month of October 2024. BACKGROUND Included in this report are recent activities of interest,managed by the Public Affairs Office for the month of October 2024. RELEVANT STANDARDS ·Maintain influential legislative advocacy and a public outreach program ·Maintain collaborative and cooperative relationships with regulators,stakeholders,and neighboring communities ·Listen to and seriously consider community input on environmental concerns PROBLEM The Orange County Sanitation District (OC San)is a distinguished entity in the water/wastewater industry.Despite our industry recognition,there may be limited awareness among our customers regarding the pivotal role we play in protecting public health and the environment.The absence of direct communication through a billing method may contribute to this gap in knowledge. It is our responsibility to ensure that our ratepayers comprehend the vital services we provide.Many customers may not realize that improper waste disposal into the sanitation system can adversely impact our sewer lines,reclamation plants,and the quality of water supplied through GWRS.By enhancing communication channels and fostering understanding,we aim to bridge the gap and empower our ratepayers with the knowledge needed to support and appreciate the essential work we undertake for the well-being of our community and the environment. Orange County Sanitation District Printed on 11/1/2024Page 1 of 4 powered by Legistar™ File #:2024-3803 Agenda Date:11/13/2024 Agenda Item No:3. PROPOSED SOLUTION By providing tours,community outreach,education,and general communication via OC San’s website,social media,and direct mailings,we can share information with the community,local agencies,and businesses on our messaging such as the What2Flush program,energy production, water recycling,biosolids,and our source control program.This,in turn,helps improve the quality of wastewater that is recycled or released to the ocean and the knowledge and understanding of wastewater treatment. RAMIFICATIONS OF NOT TAKING ACTION Neglecting to inform the community,local agencies,and area businesses about OC San could lead to insufficient support for our mission, hindering our ability to fulfill our responsibilities effectively. PRIOR COMMITTEE/BOARD ACTIONS June 2024 - Received and filed the Public Affairs Strategic Plan for Fiscal Year 2024-2026. ADDITIONAL INFORMATION Activities in October: Outreach Report An outreach report that includes tours,website updates,social media posts,construction notifications, speaking engagements, and more is attached to this Agenda Report. Social Media OC San messaging,announcements,and program updates were posted across OC San’s social media platforms. Our social media handle is @OCSanDistrict. ·Facebook: 22 posts reaching 2.2k people ·X: 17 posts reaching 727 people ·Instagram: 28 posts reaching 6.4k people ·LinkedIn: 9 posts reaching 4.3k people ·Nextdoor: 2 posts reaching 50,000 Presentations and Outreach Events In October,staff presented to various groups including:Colorado State University,the California Association of Public Information Officers,Tustin City Council,Orange City Council,University of California Irvine, the 15th Annual Energy Event with Sustain SoCal, and the State of OC San. OC San staff conducted 12 tours,engaging guests from Cypress College,Chapman University, Cabrillo Academy,Huntington Beach Chamber of Commerce,University of California Irvine,and Jurupa Community Services.Staff also attended and participated in the Cypress Community Festival and the Placentia Heritage Festival.In total we reached approximately 800 people.Details can be found in the Outreach and Media Report. As part of our General Manager’s outreach efforts,Mr.Thompson is actively engaging with our Orange County Sanitation District Printed on 11/1/2024Page 2 of 4 powered by Legistar™ File #:2024-3803 Agenda Date:11/13/2024 Agenda Item No:3. As part of our General Manager’s outreach efforts,Mr.Thompson is actively engaging with our member agencies through a series of meetings.These meetings aim to strengthen partnerships, discuss key initiatives impacting each agency,and explore collaborative opportunities.By fostering open communication,we seek to ensure alignment on regional goals and enhance the collective impact of our work across Orange County.So far,meetings have taken place with the cities of Fullerton,Huntington Beach,Los Alamitos,Newport Beach,Santa Ana,Seal Beach,Tustin,Villa Park,Costa Mesa Sanitary District,and the County Supervisor Vice-Chairman’s office.Upcoming meetings are scheduled with the cities of Orange,Buena Park,and the Yorba Linda Water District in November. Internal Communication Over the course of the month,there were 47 posts on the employee intranet page,The San Box,and four emails were distributed on relevant weekly topics through our Three Things to Know staff email distribution.Additionally,the employee newsletter,The Pipeline,was published at the end of October. Construction Outreach Update Outreach efforts continue for OC San construction activities throughout the service area.Projects are ongoing in Fountain Valley,Costa Mesa,Seal Beach,Newport Beach,and within both of our reclamation plants.New construction is set to begin in October in the city of Orange for the Taft Sewer Improvement Project.As part of our communication efforts,OC San distributed over 4,000 mailers to residents.Website updates,email text alerts,and direct notifications continue to be distributed as the projects progress.Details on each project can be found at www.ocsan.gov/construction. State of OC San The State of OC San was held on Friday,October 25.The event provided an update on OC San,our accomplishments,and the future direction of the agency.The event was attended by over 175 local, state, and federal dignitaries, and community members. Annual Report OC San’s Annual Report is available and highlights the 2023-2024 fiscal year accomplishments including the recent completion of Headquarters,the Pretreatment Honor Roll Program,and our financial stability. The report can be found at www.ocsan.gov and on our social media channels. OC San Connection Newsletter The fall issue of the community newsletter was published and distributed in October.The issue includes information on upcoming construction projects,an update on various programs,and community events. The issue can be found at www.ocsan.gov/newsletter. New OC San Website OC San has officially launched its new website.After nearly 10 months of development,staff has created a site that not only looks great but also features improved navigation,mobile responsiveness, enhanced educational resources,and easier access to public information.Explore the new website at www.ocsan.gov. Orange County Sanitation District Printed on 11/1/2024Page 3 of 4 powered by Legistar™ File #:2024-3803 Agenda Date:11/13/2024 Agenda Item No:3. Awards ·OC San won Silver for the Fiscal Year 2023-24 Capital Improvement Program Annual Report under the Design and Print Category of the Davey Awards.The Davey Awards is an international awards program honoring outstanding creative and marketing work exclusively from small shops, boutique agencies, internal creative teams, and independent creators. ·OC San was awarded the Excellence in Information Technology Practices Award from the Municipal Information Systems Association of California.This award recognizes agencies for implementing information technology practices that excel in creative and efficient uses of local and government resources. ·The Government Finance Officers Association of the United States and Canda has awarded OC San with the Distinguished Budget Presentation Award for the current budget.This award is the highest form of recognition in governmental budgeting and its attainment represents a significant achievement by our organization. ·The Institute of Asset Management has awarded OC San with the Corporate/Organization Transformation Award for the Asset Management Plan.This award honors the corporate journey and the excellence displayed by organizations to progress their asset management competence. Activities in November: OC San Celebrates Our Veterans In November,OC San will recognize and celebrate staff who have proudly served in the Armed Forces.Streetlight banners honoring each of our veterans will be displayed throughout the Headquarters parking lot and at both plants.Additionally,we will share posts on our website and social media, and poster boards will be set up at Headquarters and Plant Nos. 1 and 2. Social Media OC San continues to share messaging across the various social media platforms. CEQA N/A FINANCIAL CONSIDERATIONS All items mentioned are included in OC San’s FY 2024-26 Budget. ATTACHMENT The following attachment(s)may be viewed on-line at the OC San website (www.ocsan.gov)with the complete agenda package: ·Outreach and Media Report - October 2024 Orange County Sanitation District Printed on 11/1/2024Page 4 of 4 powered by Legistar™ Outreach Report October 2024 Date Tours Attendees Tour Guide 10/1/24 Cypress College 26 Charles Falzone 10/1/24 Cypress College 30 Sharon Yin 10/7/24 City of Fountain Valley 1 Rob Thompson 10/9/24 City of Los Alamitos 2 Rob Thompson 10/9/24 City of Tustin 1 Rob Thompson 10/10//24 City of Fullerton 20 Dickie Fernandez 10/11/24 Chapman University 9 Jonathan Powell 10/14/24 City of Newport Beach 4 Rob Thompson 10/15/24 Cabrillo Academy 15 Eric Halverson/ Matt Smith 10/16/24 Huntington Beach Chamber of Commerce 19 Cortney Light 10/18/24 University of California Irvine 13 Pegah Behravan 10/21/24 Jurupa Community Services District 22 Jenna Torres Date Speaking Engagements/Events Attendees Presenter 10/3- 10/4/24 California Association of Public Information Officers presentation on Leadership 40 Jennifer Cabral 10/11/24 Colorado State University presentation on Wastewater treatment and Resource Recovery 20 Dickie Fernandez 10/12/24 Cypress Community Festival 130 Enisha Matthews/ Vianey Sorto-Garcia/ Warren Liu/ Carrie Robles/ Al Garcia/ Mo Abiodun/ Belen Carrillo/ Daisy Covarrubias/ Becky Polcyn 10/15/24 Tustin City Council meeting 20 Rob Thompson 10/19/24 Placentia Heritage Festival 150 Enisha Matthews/ Victoria Pilko/ Jeanette Tang/ Vianey Sorto-Garcia/ Becky Polcyn/ Victor Dang/ Kelly Newell 10/22/24 Orange City Council meeting 20 Mike Dorman 10/23/24 University of California, Irvine presentation on Biosolids 113 Matt Smith 10/24/24 15th Annual Energy Event – Sustain SoCal 100 Rob Thompson 10/25/24 State of OC San 175 Ryan Gallagher Project Area Outreach Notifications-Needs Update # of People Reached Website Posts and Text Alerts Costa Mesa Costa Mesa Sewer Along I-405 602 2 website posts 1 text alerts Orange Taft Sewer Replacement Project Update 4,385 1 website post/ 1 email alert 1 text alerts Service Area Community Newsletter 2000 External Communications Distribution # of People Reached 5 Minutes Per Month State of OC San- 70 Years of Excellence 216 Email Board Member Talking Points One 50 Email Website Posts 8 posts 350 views Website Facebook 22 posts 2.2k reached Social Media X (Twitter) 17 tweets 727 reached Social Media Instagram 28 posts 6.4 k reached Social Media LinkedIn 9 posts 4.3 k reached Social Media Nextdoor 2 posts 50,000 impressions Social Media ADMINISTRATION COMMITTEE Agenda Report Headquarters 18480 Bandilier Circle Fountain Valley, CA 92708 (714) 593-7433 File #:2024-3889 Agenda Date:11/13/2024 Agenda Item No:4. FROM:Robert Thompson, General Manager Originator: Wally Ritchie, Director of Finance SUBJECT: RENEWAL OF ESRI GIS ENTERPRISE LICENSE AGREEMENT SUBSCRIPTION AND SUPPORT GENERAL MANAGER'S RECOMMENDATION RECOMMENDATION: Recommend to the Board of Directors to: A. Approve Amendment No. 3 of Agreement 334620 with Environmental Systems Research Institute, Inc. for the renewal of the Sole Source GIS Enterprise License Agreement, for a three-year period commencing December 31, 2024, through December 30, 2027, for a total amount not to exceed $494,000; and B. Approve a not to exceed contingency of $24,700 (5%). BACKGROUND Geographic Information System (GIS)solutions for desktop,web,database,and mobile GIS currently being used at the Orange County Sanitation District (OC San)are provided by Environmental Systems Research Institute,Inc.(ESRI).The GIS provides a framework for gathering,managing, and analyzing data through a map interface.The Information Technology (IT)Division maintains the different GIS applications to support the business needs of OC San. To properly maintain OC San’s enterprise GIS program,the IT Division requires the purchase of software licensing and maintenance for the ESRI GIS suite of products through the Enterprise License Agreement (ELA).The ELA will help maintain our existing programs including hydraulic modeling,pipeline condition assessment,underground service alerts,and integration with OC San’s asset management software IBM Maximo.The Amendment is for a three-year renewal agreement, with payments for software support and maintenance made on an annual basis. RELEVANT STANDARDS ·Protect OC San assets ·Maintain a proactive asset management program ·Maintain a culture of improving efficiency to reduce the cost to provide the current service level or standard Orange County Sanitation District Printed on 11/6/2024Page 1 of 2 powered by Legistar™ File #:2024-3889 Agenda Date:11/13/2024 Agenda Item No:4. PROBLEM The annual software maintenance for ESRI GIS software expires on December 30, 2024. PROPOSED SOLUTION Renew the annual software maintenance for ESRI GIS software before December 31,2024,to maintain continued support and software enhancements from ESRI. TIMING CONCERNS The renewal must be completed prior to December 31, 2024. RAMIFICATIONS OF NOT TAKING ACTION Not renewing the annual software maintenance will cause OC San to lose support and software enhancements from ESRI and consequently negatively impact the stated relevant standards. PRIOR COMMITTEE/BOARD ACTIONS October 2021 -Approved Amendment No.2 of Agreement 334620 with Environmental Systems Research Institute,Inc.for the renewal of the Sole Source GIS Enterprise License Agreement,for a three-year period commencing December 31,2021 through December 30,2024,for a total amount not to exceed $382,000; and approved a not to exceed contingency of $19,100 (5%). ADDITIONAL INFORMATION N/A CEQA N/A FINANCIAL CONSIDERATIONS This request complies with the authority levels of OC San’s Purchasing Ordinance.This item has been budgeted (Budget FY 2024-25 and 2025-26,Section 8,Page 4,Information Management Systems) and the budget is sufficient for the recommended action. ATTACHMENT The following attachment(s)may be viewed on-line at the OC San website (www.ocsan.gov)with the complete agenda package: ·ESRI GIS Enterprise License Agreement (Amendment No. 3) Orange County Sanitation District Printed on 11/6/2024Page 2 of 2 powered by Legistar™ Amendment 3 To Agreement 334620 Page 1 of 5 00181632.4 Orange County Sanitation District (“OCSD”) and Environmental Systems Research Institute, Inc. (“Esri”) have entered into Enterprise Agreement for Term Licenses No 334620 (the “EA”) on December 31, 2019. The parties now amend the EA to extend the period of performance and to update product list and pricing for the extended term, as follows: 1. Article 7.1 Term. The following sentence is added to Article 7.1 term: The term of the EA is extended for another three years beginning on December 31, 2024 and expiring on December 30, 2027 unless this EA is terminated earlier as provided herein. 2. Appendices. For the extend period beginning December 31, 2024 through December 30, 2027, the following appendices are updated with new appendices, both attached hereto and incorporated herein by reference: Appendix A—Products and Deployment Schedule - Term Licenses Appendix B—EA Fee Schedule All other terms and conditions of the EA, including any previous amendments, shall remain in full force and effect, except as amended herein. The EA and this Amendment are the sole and final agreement of the parties and supersede any previous agreements, understandings, and arrangements relating to such subject matter. ORANGE COUNTY SANITATION DISTRICT ENVIRONMENTAL SYSTEMS RESEARCH INSTITUTE, INC. Signature: Signature: Printed Name: Printed Name: Title: Title: Date: Date: Page 2 of 5 00181632.4 APPENDIX A PRODUCTS AND DEPLOYMENT SCHEDULE TERM LICENSES For the extend period beginning December 31, 2024 through December 30, 2027, OCSD may Deploy the EA Products up to the total quantity of licenses indicated below. Table A-1 EA Products (Term Licenses)—Uncapped Quantities Product Total ArcGIS Enterprise: ArcGIS Enterprise (Advanced and Standard) Uncapped ArcGIS Enterprise Extensions: ArcGIS 3D Analyst, ArcGIS Data Reviewer, ArcGIS Geostatistical Analyst, ArcGIS Network Analyst, ArcGIS Schematics, and ArcGIS Spatial Analyst Uncapped ArcGIS GIS Server: Advanced, Standard, Basic Uncapped ArcGIS Enterprise Additional Capability Servers: ArcGIS Image Server, ArcGIS GeoEvent Server Uncapped ArcGIS Monitor Uncapped ArcGIS Runtime Advanced Uncapped ArcGIS Runtime Analysis Extension Uncapped Table A-2 EA Products (Term Licenses)—Capped Quantities ArcGIS Desktop Perpetual Products SU/CU Rolled-In Qty. (if applicable) Qty. to Be Deployed Total ArcGIS Desktop: Advanced CU 9 0 9 ArcGIS Desktop: Standard CU 13 0 13 ArcGIS Desktop: Basic CU 33 0 33 ArcGIS Desktop Extensions: ArcGIS 3D Analyst CU 6 0 6 ArcGIS Desktop Extensions: ArcGIS Data Reviewer CU 6 0 6 ArcGIS Desktop Extensions: ArcGIS Geostatistical CU 3 0 3 ArcGIS Desktop Extensions: ArcGIS Network Analyst CU 6 0 6 ArcGIS Desktop Extensions: ArcGIS Publisher CU 3 0 3 ArcGIS Desktop Extensions: ArcGIS Schematics CU 3 0 3 ArcGIS Desktop Extensions: ArcGIS Spatial Analyst CU 6 0 6 ArcGIS Desktop Extensions: ArcGIS Data Interoperability CU 2 0 2 Page 3 of 5 00181632.4 ArcGIS Desktop Extensions: ArcGIS Workflow Manager CU 3 0 3 ArcGIS Desktop Extensions: ArcGIS Maritime CU 1 0 1 ArcGIS Desktop Extensions: ArcGIS Bathymetry CU 1 0 1 Annual Subscription Products Term 1 Term 2 Term 3 Drone2Map Advanced for ArcGIS Enterprise Annual Subscription 1 1 1 ArcGIS 3D Analyst for ArcGIS Pro (Add-on App) for ArcGIS Enterprise Creator or GIS Professional User Type Annual Subscription 4 4 4 ArcGIS Data Reviewer for ArcGIS Pro (Add-on App) for ArcGIS Enterprise Creator or GIS Professional User Type Annual Subscription 4 4 4 ArcGIS Geostatistical Analyst for ArcGIS Pro (Add-on App) for ArcGIS Enterprise Creator or GIS Professional User Type Annual Subscription 3 3 3 ArcGIS Network Analyst for ArcGIS Pro (Add-on App) for ArcGIS Enterprise Creator or GIS Professional User Type Annual Subscription 3 3 3 ArcGIS Publisher for ArcGIS Pro (Add-on App) for ArcGIS Enterprise Creator or GIS Professional User Type Annual Subscription 3 3 3 ArcGIS Spatial Analyst for ArcGIS Pro (Add-on App) for ArcGIS Enterprise Creator or GIS Professional User Type Annual Subscription 3 3 3 ArcGIS Workflow Manager for ArcGIS Pro (Add-on App) for ArcGIS Enterprise Creator or GIS Professional User Type Annual Subscription 3 3 3 ArcGIS Data Interoperability for ArcGIS Pro (Add-on App) for ArcGIS Enterprise Creator or GIS Professional User Type Annual Subscription 2 2 2 ArcGIS Maritime for ArcGIS Pro (Add-on App) for ArcGIS Enterprise Creator or GIS Professional User Type Annual Subscription 1 1 1 ArcGIS Bathymetry for ArcGIS Pro (Add-on App) for ArcGIS Enterprise Creator or GIS Professional User Type Annual Subscription 1 1 1 User Type Products Term 1 Term 2 Term 3 ArcGIS Enterprise (number of Users per Term) ArcGIS Enterprise Contributor (formerly Editor) User Type Annual Subscription 20 20 20 ArcGIS Enterprise Mobile Worker User Type Annual Subscription 10 10 10 Page 4 of 5 00181632.4 ArcGIS Enterprise Creator User Type Annual Subscription 45 45 45 ArcGIS Enterprise Professional (formerly Standard) User Type Annual Subscription 12 12 12 ArcGIS Enterprise Professional (formerly Standard) User Type Annual Subscription 8 8 8 ArcGIS Advanced Editing User Type Extension for ArcGIS Enterprise Annual Subscription 5 10 10 ArcGIS Insights in ArcGIS Enterprise Annual Subscription 3 3 3 ArcGIS Online (1 Organizational Subscription) (number of Users per Term) ArcGIS Online Viewer User Type Annual Subscription 100 100 100 ArcGIS Online Creator User Type Annual Subscription (500 credits per user) 13 13 13 ArcGIS Insights in ArcGIS Online Annual Subscription 2 2 2 Additional Service Credits – Block of 1,000 75 75 75 Page 5 of 5 00181632.4 APPENDIX B EA FEE SCHEDULE The EA Fee is $494,000.00 for the extend period beginning December 31, 2024 through December 30, 2027. The EA Fee is in consideration of the EA Products, EA Maintenance, and Esri User Conference registrations. Year 4 (December 31, 2024 through December 30, 2025) Year 5 (December 31, 2025 through December 30, 2026) Year 6 (December 31, 2026 through December 30, 2027) EA Fee Payments $154,000 $164,500 $176,500 $494,000 Number of Esri User Conference Registrations per Year 15 Number of Tier 1 Help Desk Callers That May Contact Esri for Tier 2 Support 6 Number of Sets of Backup Media, if Requested 1 Extended Term of EA Three years from December 31, 2024 through December 30, 2027. ADMINISTRATION COMMITTEE Agenda Report Headquarters 18480 Bandilier Circle Fountain Valley, CA 92708 (714) 593-7433 File #:2024-3899 Agenda Date:11/13/2024 Agenda Item No:5. FROM:Robert Thompson, General Manager Originator: Wally Ritchie, Director of Finance SUBJECT: CONTINGENCY INCREASE FOR ANNUAL TRUE-UP OF MICROSOFT ENTERPRISE LICENSE AGREEMENT (ELA) FOR MICROSOFT ENTERPRISE SOFTWARE LICENSES GENERAL MANAGER'S RECOMMENDATION RECOMMENDATION: Recommend to the Board of Directors to: Approve a Contingency increase of $525,748 (36%)to the existing Contract for annual true-up of the Microsoft ELA for a new total contingency amount of $746,322 (51%). BACKGROUND The Orange County Sanitation District (OC San)relies on various Microsoft product licenses for essential components of its software architecture,including Windows desktop and server operating systems,email and chat communications,Office suite,databases,cyber defense software,and conference room integrations.While we strive to accurately project Microsoft licensing needs to support our business needs over the three-year agreement,new technologies and unforeseen circumstances may arise,necessitating unplanned technologies and licenses.Therefore,we request contingency as part of the original approval. RELEVANT STANDARDS ·Protect OC San assets ·24/7/365 treatment plant reliability ·Maintain a culture of improving efficiency to reduce the cost to provide the current service level or standard PROBLEM During the three-year period of this ELA,three projects have increased our Microsoft Enterprise Licensing beyond our contingency.The projects listed below have raised the number of servers on the Industrial Control System and Office networks, necessitating additional Microsoft licenses: ·J-117 - Ocean Outfall System Rehabilitation ·J-120 - Process Control System Upgrade (SCADA Upgrade) Orange County Sanitation District Printed on 11/6/2024Page 1 of 3 powered by Legistar™ File #:2024-3899 Agenda Date:11/13/2024 Agenda Item No:5. ·IT Hardware for Enterprise Server Refresh and Upgrade The computing systems implemented by each of these projects were not in place at the time this Microsoft ELA was initiated;however,the cost of the licensing is included in the project budgets noted above. At the end of each calendar year,we must true-up the additional licenses that were added during the year above-and-beyond the Microsoft ELA.This causes an immediate cost for the true-up and an increase in the ongoing,annual Microsoft ELA payment cost.For year one,2022,and year two, 2023,true-ups for a release of contingency funds in the amount of $182,811 for payment was approved.There is currently $37,763 remaining of the originally approved contingency amount.An increase of contingency in the amount of $525,748 for year three,2024,true-up is required to maintain license compliance with Microsoft. PROPOSED SOLUTION Approve an increase for the contingency in the amount of $525,748 for a total contingency amount not to exceed $746,322. TIMING CONCERNS The annual true-up of Microsoft licensing must be completed by the end of the contract term, December 31, 2024. RAMIFICATIONS OF NOT TAKING ACTION This amount is due to Microsoft as a true-up of licensing utilization over the course of our agreement, payable at the end of the contract term.Failure to true-up with amount may cause OC San to become non-compliant with contractual terms.Delay in approval and payment may result in loss of Microsoft services, impacting OC San’s critical infrastructure. PRIOR COMMITTEE/BOARD ACTIONS November 2021 -Approved a Purchase Order for a three-year contract to purchase Microsoft Enterprise licenses under the Microsoft ELA in accordance with Microsoft Volume Enterprise Enrollment -for State and Local government,Riverside County Master Licensing Agreement 01E73970,payable annually and with a contract expiration date of December 31,2024,for a total amount not to exceed $1,470,495; and approved a contingency of $220,574 (15%). ADDITIONAL INFORMATION The total true-up cost for the third and final year of the contract is $563,511.The cost attributed by each project is noted below. ·J-117 Ocean Outfall System Rehabilitation - $108,240 ·J-120 Process Control System Upgrade (SCADA Upgrade) - $306,681 ·IT Hardware for Enterprise Server Refresh and Upgrade - $148,590 Orange County Sanitation District Printed on 11/6/2024Page 2 of 3 powered by Legistar™ File #:2024-3899 Agenda Date:11/13/2024 Agenda Item No:5. CEQA N/A FINANCIAL CONSIDERATIONS This request complies with the authority levels of OC San’s Purchasing Ordinance.This item has been budgeted (Budget FY 2024-25 and 2025-26,Section 8,Pages 4,37,and 38)and the budget is sufficient for the recommended action. ATTACHMENT The following attachment(s)may be viewed on-line at the OC San website (www.ocsan.gov)with the complete agenda package: N/A Orange County Sanitation District Printed on 11/6/2024Page 3 of 3 powered by Legistar™ ADMINISTRATION COMMITTEE Agenda Report Headquarters 18480 Bandilier Circle Fountain Valley, CA 92708 (714) 593-7433 File #:2024-3915 Agenda Date:11/13/2024 Agenda Item No:6. FROM:Robert Thompson, General Manager Originator: Wally Ritchie, Director of Finance SUBJECT: MICROSOFT ENTERPRISE LICENSE AGREEMENT (ELA)FOR MICROSOFT ENTERPRISE SOFTWARE LICENSES GENERAL MANAGER'S RECOMMENDATION RECOMMENDATION: Recommend to the Board of Directors to: A.Approve a Purchase Order for a three-year contract to purchase Microsoft Enterprise licenses under the Microsoft ELA in accordance with Microsoft Volume Enterprise Enrollment - for State and Local government, Riverside County Master Licensing Agreement 01E73970, payable annually and with a contract expiration date of December 31, 2027, for a total amount not to exceed $2,255,657; and B. Approve a contingency of $451,131 (20%). BACKGROUND The Orange County Sanitation District (OC San)relies on various Microsoft product licensing for key components of its software architecture,including Windows desktop and server operating systems, email and chat communications,Office suite,databases,cyber defense software,and conference room integrations. Approval of the Microsoft ELA ensures that OC San receives the best pricing on software purchases and subscriptions while staying compliant with software license agreements and copyright law.Other benefits include access to the latest security patches and feature updates as well as centralized license management, records management, and tools to fulfill public records act requests. Staff is requesting a contingency of 20%to cover any additional Microsoft licensing required during this three-year contract.Additional licenses may be required to comply with contractor staffing changes,growth of existing systems,new system implementations and upgrades,including Microsoft Copilot a generative artificial intelligence. RELEVANT STANDARDS •Protect OC San assets •Ensure the public’s money is wisely spent Orange County Sanitation District Printed on 11/5/2024Page 1 of 3 powered by Legistar™ File #:2024-3915 Agenda Date:11/13/2024 Agenda Item No:6. •Participate in local, state, and national cooperative purchasing programs •Commitment to safety & reducing risk in all operations PROBLEM The existing Microsoft ELA expires December 31,2024.OC San must have a renewed ELA in place by January 1,2025,to ensure seamless transition of licensing for access to Microsoft products and services. PROPOSED SOLUTION Approve a Purchase Order for a three-year contract to purchase Microsoft Enterprise licenses under the Microsoft ELA. TIMING CONCERNS Renewal of the Microsoft ELA should occur prior to December 31,2024,to ensure no gaps in licensing coverage come January 1, 2025. RAMIFICATIONS OF NOT TAKING ACTION Access to the Microsoft 365 Platform,including Office 365 and e-mail would become unavailable to OC San Staff.Certain Microsoft software would fall out of compliance with licensing requirements. Any delay in approval will delay the procurement of the Microsoft ELA renewal and will result in loss of function for OC San’s Microsoft products and services. PRIOR COMMITTEE/BOARD ACTIONS November 2021 -Approved a Purchase Order for a three-year contract to purchase Microsoft Enterprise licenses under the Microsoft ELA in accordance with Microsoft Volume Enterprise Enrollment -for State and Local government,Riverside County Master Licensing Agreement 01E73970,payable annually and with a contract expiration date of December 31,2024,for a total amount not to exceed $1,470,495; and approved a contingency of $220,574 (15%). ADDITIONAL INFORMATION The County of Riverside negotiated a contract for an ELA with Microsoft to be used by any government agency in the State of California.There are many public agencies in California currently using this contract. This contract aggregates the quantities of all participating agencies to secure the highest bulk discount provided by Microsoft.This results in the lowest possible rates across all Microsoft licensing. CEQA N/A Orange County Sanitation District Printed on 11/5/2024Page 2 of 3 powered by Legistar™ File #:2024-3915 Agenda Date:11/13/2024 Agenda Item No:6. FINANCIAL CONSIDERATIONS This request complies with authority levels of the OC San’s Purchasing Ordinance.This item has been budgeted (Budget FY 2024-25 and 2025-26,Section 8,Page 4,Information Management Systems) and the budget is sufficient for the recommended action. ATTACHMENT The following attachment(s)may be viewed on-line at the OC San website (www.ocsan.gov)with the complete agenda package: N/A Orange County Sanitation District Printed on 11/5/2024Page 3 of 3 powered by Legistar™ ADMINISTRATION COMMITTEE Agenda Report Headquarters 18480 Bandilier Circle Fountain Valley, CA 92708 (714) 593-7433 File #:2024-3923 Agenda Date:11/13/2024 Agenda Item No:7. FROM:Robert Thompson, General Manager Originator: Wally Ritchie, Director of Finance SUBJECT: GENERAL MANAGER APPROVED PURCHASES AND ADDITIONS TO THE PRE-APPROVED OEM SOLE SOURCE LIST GENERAL MANAGER'S RECOMMENDATION RECOMMENDATION: Recommend to the Board of Directors to: A. Receive and file Orange County Sanitation District purchases made under the General Manager’s authority for the period of July 1, 2024 to September 30, 2024; and B. Approve the following additions to the pre-approved Original Equipment Manufacturers (OEM) Sole Source List: ·ROCKWELL ENGINEERING &EQUIPMENT CO -Horizontal Pump (Replaces OEM Manufacturer VAUGHAN COMPANY, INC. - Designated Representative) ·VEOLIA WTS SERVICES USA,INC.-Bar Screen Repair Parts (Replaces OEM Manufacturer SUEZ WTS/ VEOLIA WTS - Name Change) BACKGROUND Staff provides the Administration Committee and the Board of Directors quarterly reports of General Manager approved and executed purchases between $50,000 and $150,000;maintenance and repair Services Task Orders between $50,000 and $500,000;and additions to the pre-approved OEM Sole Source List. This list of additions to the pre-approved OEM Sole Source List displays the OEM added this quarter that require sole source procurement to maintain,service,or replace equipment currently in operation at Orange County Sanitation District (OC San)facilities because the parts and/or service can only be provided by the OEM or their designated representative. RELEVANT STANDARDS ·Quarterly financial reporting ·Ensure the public’s money is wisely spent Orange County Sanitation District Printed on 11/6/2024Page 1 of 7 powered by Legistar™ File #:2024-3923 Agenda Date:11/13/2024 Agenda Item No:7. PRIOR COMMITTEE/BOARD ACTIONS December 2016 -Minute Order 12(b)authorized the General Manager to ratify additions or deletions to the OEM Sole Source list on the General Manager’s quarterly approved purchases agenda report. ADDITIONAL INFORMATION In accordance with Board purchasing policies,Ordinance No.OC SAN-61,the General Manager has authority to approve and execute purchases between $50,000 and $150,000.Below is a summary of General Manager approved purchases,in amounts exceeding $50,000,for the first quarter of fiscal year 2024-25: Vendor Name Amount Department Description/Discussion ADVANCED BATTERY SYSTEMS, INC. $58,710.06 Operations & Maintenance Purchase of Batteries and Parts for Headworks Power Building B at Plant 2 County of Los Angeles Contract MA-IS- 2240017-11, in Accordance with Ordinance OC SAN-61 Section 2.03 (B) Cooperative Purchases AIRGAS USA, LLC $77,432.41 Environmental Services Annual Renewal for Laboratory Gases 7/1/24 - 6/30/25 GM Article 2, Section 2.2 (b) (1) ARI PHOENIX, INC. $93,874.75 Operations & Maintenance Purchase of Six (6) Complete Mobile Column Lift Systems Sourcewell Contract 013020-ARP, in Accordance with Ordinance OC SAN-61 Section 2.03 (B) Cooperative Purchases BEC BUILDING ELECTRONIC CONTROLS INC $140,000.00 Operations & Maintenance Blanket PO for Fire Alarm System Response at Plant 1 and Plant 2 and Maintenance and Testing on Aspirating Smoke Detector Systems 7/30/24 - 8/25/25 GM Article 2, Section 2.2 (b) (1) BENTLY NEVADA LLC $64,000.00 Operations & Maintenance Blanket PO for Multiple Training Courses Board Approved OEM Sole Source List M.O. 12/14/16, Item 12(B) CARAHSOFT TECHNOLOGY CORPORATION $148,877.16 Administrative Services Annual Renewal for ServiceNow License 8/30/24-6/30/26 NASPO Master Contract No. AR2472, in Accordance with Ordinance OC SAN-61 Section 2.03 (B) Cooperative Purchases CARAHSOFT TECHNOLOGY CORPORATION $148,451.38 Administrative Services Strategic Portfolio Management Implementation NASPO C Master Contract No. AR2472, in Accordance with Ordinance OC SAN-61 Section 2.03 (B) Cooperative Purchases CENTRE FOR ORGANIZATION EFFECTIVENESS $108,801.00 Human Resources Blanket PO for Three (3) Supervisory Academy Cohorts Sole Source Justification 2809 Reason: Unique Product/Service CORITY SOFTWARE, INC. $82,844.07 Administrative Services Annual Renewal for Cority Software Subscription 9/24/24 - 9/23/25 GSA Contract# GS-35F-0032U, in Accordance with Ordinance OC SAN-61 Section 2.03 (B) Cooperative Purchases DETECTION INSTRUMENTS CORPORATION $78,770.62 Operations & Maintenance Blanket PO to Manage Odor Emissions and Comply with AQMD Regulations 8/19/24 - 8/1825 Sole Source Justification 2803 Reason: Unique Product/Service ELECTRABOND $65,000.00 Operations & Maintenance Blanket PO for Epoxy Coating of Material and Equipment at Plant 1, Plant 2, and Pump Stations 8/6/24 - 6/30/2025 GM Article 2, Section 2.2 (b) (1) EPLUS TECHNOLOGY, INC. $149,055.52 Administrative Services Annual Nutanix Renewal for Two (2) ICS Clusters at Plant 2 8/18/24 - 8/17/25 NASPO 7-17-70-40-05 CA-CARAHSOFT -NVP AR2472, in Accordance with Ordinance OC SAN-61 Section 2.03 (B) Cooperative Purchases FILANC $110,400.00 Operations & Maintenance Thickening and Dewatering Facility Handrail Installation at Plant 1 Project No. FE21-04 FISHER SCIENTIFIC COMPANY LLC $95,000.00 Environmental Services Convenience Blanket PO for Miscellaneous Laboratory Supplies 7/1/24 - 6/30/25 GM Article 2, Section 2.2 (b) (1) *This PO replaces the entry from last quarter, which was canceled due to incorrect coding; Ref. File ID 2024-3754. FLUKE ELECTRONICS CORPORATION $82,974.28 Operations & Maintenance Purchase of Two (2) Full Rotalign Touch Board Approved OEM Sole Source List M.O. 5/26/21, Item 20(B) GALLAGHER BENEFIT SERVICES, INC. $99,540.00 Human Resources Service Purchase Order for Class and Total Compensation Study and Market Data Refresh Sole Source Justification 2815 Reason: Unique Product/Service GEA MECHANICAL EQUIPMENT US, INC. $100,000.00 Operations & Maintenance On-Call Maintenance Service Contract for P1-101 GEA Westfalia Thickening and Dewatering Centrifuges 10/21/24 - 10/20/25 Board Approved OEM Sole Source List M.O. 9/23/20, Item 12(B) GEA MECHANICAL EQUIPMENT US, INC. $63,795.26 Operations & Maintenance Stock Item Purchase of GEA Westfalia Centrifuge Parts 7/1/24 - 6/30/25 Board Approved OEM Sole Source List M.O. 9/23/20, Item 12(B) GEA MECHANICAL EQUIPMENT US, INC. $60,026.72 Operations & Maintenance Purchase of One (1) GEA Mechanical Hex Head Screw Board Approved OEM Sole Source List M.O. 9/23/20, Item 12 (B) HACH COMPANY $81,967.20 Operations & Maintenance Two-Year Blanket PO to Provide Preventive Maintenance and Calibrations for Sensors and Meters at Plants 1and 2 8/08/24 - 6/30/26 Board Approved OEM Sole Source List M.O. 12/14/16, Item 12 (B) HARTZELL AIR MOVEMENT $58,369.00 Operations & Maintenance Purchase of Fiberglass Backward Curved Centrifugal Fan Board Approved OEM Sole Source List M.O. 5/24/17, Item 17 (B) HOME DEPOT $75,000.00 Administrative Services Convenience Blanket PO for Miscellaneous Parts, Supplies, and Tools 7/1/24 - 6/30/25 GM Article 2, Section 2.2 (b) (1) HOWARD RIDLEY CO $149,000.00 Operations & Maintenance Annual Blanket PO to Repair Cracks in Structures Within Plant 1 & Plant 2 7/5/24 - 6/30/25 GM Article 2, Section 2.2 (b) (1) INSIGHT PUBLIC SECTOR, INC. $73,700.00 Administrative Services ICS Network Refresh at Plant 1 Omnia Partners (Cobb County) IT Products and Services (# 23-6692-03), in Accordance with Ordinance OC SAN-61 Section 2.03 (B) Cooperative Purchases INTERTECH INCORPORATED $76,166.00 Operations & Maintenance Technical Education for Unity Combined On-Site Training for Instrumentation Staff Board Approved OEM Sole Source List M.O. 2/23/22, Item 16 (B) ISA $91,980.00 Operations & Maintenance On-Site Instrumentation Technician Training Board Approved OEM Sole Source List M.O.11/28/18, Item 15 (B) KARBONOUS, INC $115,265.58 Operations & Maintenance Turnkey Filter Media Services at Three (3) Tanks at Plant 1 Sole Source Justification 2817 Reason: Urgent Need MAXIM SECURITY SYSTEMS $100,000.00 Administrative Services Convenience Blanket PO for Miscellaneous Services, Supplies, Materials, Licenses, and Equipment 10/23/24 - 10/22/25 GM Article 2, Section 2.2 (b) MAXIM SECURITY SYSTEMS $91,447.00 Administrative Services Evacuation Mustering & Visitor Management System Specification CS- 2024-1444BD MH3 CORPORATION $90,000.00 Operations & Maintenance Blanket PO to Perform Odor Assessment Services as Part of The Odor Control Master Plan 8/22/24 - 8/21/25 Board Approved OEM Sole Source List M.O. 10/25/23, Item 9(B) NATIONAL AUTO FLEET GROUP $52,927.23 Operations & Maintenance Purchase of One (1) New Royal Truck Body #0484815 - 11' Service Body for V0742 Weld Truck Sourcewell Contract 091521-NAF, in Accordance with Ordinance OC SAN-61 Section 2.03 (B) Cooperative Purchases PARKHOUSE TIRE INC $60,000.00 Administrative Services Convenience Blanket PO for Purchase of New Vehicle Tires, Repairs, and Rotation Services 7/1/24 - 6/30/25 GM Article 2, Section 2.2 (b) PdMA CORPORATION $57,565.80 Operations & Maintenance Purchase of MCEmax AC Offline/Online Motor Tester Sole Source Justification 2804 Reason: Unique Product/Service PETRO- LUBRICANT TESTING LABORATORIES $55,000.00 Operations & Maintenance Blanket PO for Testing of Various Lubricants, Testing and Miscellaneous. Services for Plants 1, 2 and Pump Stations. 9/1/24 - 8/31/25 GM Article 2, Section 2.2 (b) QUINCY COMPRESSOR $51,000.00 Operations & Maintenance Blanket PO for Preventive Guardian Service Agreement 8/23/24 - 8/22/25 Board Approved OEM Sole Source List M.O. 2/28/18 Item 13(B) ROCKWELL ENGINEERING & EQUIPMENT CO $68,860.00 Operations & Maintenance Purchase of One (1) Vaughan Horizontal Pump (HE16W20CS) Board Approved OEM Sole Source List M.O. 12/14/16 Item 12(B) SAFETY SHOE SERVICES $80,000.00 Human Resources Convenience Blanket PO for On-Site Safety Shoe Services 7/1/24 - 6/30/25 GM Article 2, Section 2.2 (b) (1) SCHWING BIOSET $100,000.00 Operations & Maintenance Blanket PO for Parts and Services for Truck Loading and Dewatering Hydraulic Units 10/10/24 - 10/9/25 Board Approved OEM Sole Source List M.O. 12/14/16, Item 12(B) SOUTH COAST WATER $90,000.00 Operations & Maintenance Annual Renewal for Maintenance of Reverse Osmosis Water Purification System and Four (4) Point-of-Use ELGA PureLab Flex Dispenser Units 7/1/24 - 6/30/25 GM Article 2, Section 2.2 (b) SOUTHERN TIRE MART, LLC $60,000.00 Operations & Maintenance Convenience Blanket PO for Purchase of New Vehicle Tires, Repairs, and Rotation Services 9/1/24 - 6/30/25 GM Article 2, Section 2.2 (b) AMETEK SPECTRO SCIENTIFIC, INC. $108,419.00 Operations & Maintenance Purchase of SpectrOil 120C Optical Emission Spectrometer Board Approved OEM Sole Source List M.O. 2/22/23 Item No.18 (B) TIANO CONSTRUCTION $99,000.00 Operations & Maintenance Convenience Blanket PO for Cleaning and Removing Debris from OC San Collection System Property and Easements 10/18/24 - 10/17/25 GM Article 2, Section 2.2 (b) (1) TOSHIBA BUSINESS SOLUTIONS (USA) INC $70,000.00 Administrative Services Annual Blanket PO for Toshiba Parts, Labor, and Toner 8/1/24 - 7/31/25 NASPO Master Contract 188037, in Accordance with Ordinance OC SAN-61 Section 2.03 (B) Cooperative Purchases VEOLIA WTS SERVICES USA, INC. $105,590.70 Operations & Maintenance Stock Item Purchase of One (1) VEOLIA TYPE IIIAS Drive Shaft Assembly Board Approved OEM Sole Source List M.O. 8/23/17, Item 9(B) WATERLINE TECHNOLOGIES INC $90,000.00 Operations & Maintenance Blanket PO for Sodium Hypochlorite Solution-Bleach (NaOCI) (Tote Deliveries) for Plants 1 and 2 10/1/24 - 9/30/25 Informal Bid 134164-OR WESTAIR GASES & EQUIPMENT INC - LOX $85,000.00 Operations & Maintenance Convenience Blanket PO for the Emergency Purchase of Bulk Liquid Oxygen (LOX) 8/21/24 - 8/20/25 GM Article 2, Section 2.2 Orange County Sanitation District Printed on 11/6/2024Page 2 of 7 powered by Legistar™ File #:2024-3923 Agenda Date:11/13/2024 Agenda Item No:7. Vendor Name Amount Department Description/DiscussionADVANCEDBATTERYSYSTEMS, INC.$58,710.06 Operations &Maintenance Purchase of Batteries and Parts forHeadworks Power Building B at Plant 2County of Los Angeles Contract MA-IS-2240017-11, in Accordance withOrdinance OC SAN-61 Section 2.03 (B)Cooperative PurchasesAIRGAS USA,LLC $77,432.41 EnvironmentalServices Annual Renewal for Laboratory Gases7/1/24 - 6/30/25 GM Article 2, Section2.2 (b) (1)ARI PHOENIX,INC.$93,874.75 Operations &Maintenance Purchase of Six (6) Complete MobileColumn Lift Systems SourcewellContract 013020-ARP, in Accordancewith Ordinance OC SAN-61 Section 2.03(B) Cooperative PurchasesBEC BUILDINGELECTRONICCONTROLS INC $140,000.00 Operations &Maintenance Blanket PO for Fire Alarm SystemResponse at Plant 1 and Plant 2 andMaintenance and Testing on AspiratingSmoke Detector Systems 7/30/24 -8/25/25 GM Article 2, Section 2.2 (b) (1)BENTLY NEVADALLC $64,000.00 Operations &Maintenance Blanket PO for Multiple Training CoursesBoard Approved OEM Sole Source ListM.O. 12/14/16, Item 12(B)CARAHSOFTTECHNOLOGYCORPORATION $148,877.16 AdministrativeServices Annual Renewal for ServiceNow License8/30/24-6/30/26 NASPO Master ContractNo. AR2472, in Accordance withOrdinance OC SAN-61 Section 2.03 (B)Cooperative PurchasesCARAHSOFTTECHNOLOGYCORPORATION$148,451.38 AdministrativeServices Strategic Portfolio ManagementImplementationNASPO C MasterContract No. AR2472, in Accordance withOrdinance OC SAN-61 Section 2.03 (B)Cooperative Purchases CENTRE FOR ORGANIZATION EFFECTIVENESS $108,801.00 Human Resources Blanket PO for Three (3) Supervisory Academy Cohorts Sole Source Justification 2809 Reason: Unique Product/Service CORITY SOFTWARE, INC. $82,844.07 Administrative Services Annual Renewal for Cority Software Subscription 9/24/24 - 9/23/25 GSA Contract# GS-35F-0032U, in Accordance with Ordinance OC SAN-61 Section 2.03 (B) Cooperative Purchases DETECTION INSTRUMENTS CORPORATION $78,770.62 Operations & Maintenance Blanket PO to Manage Odor Emissions and Comply with AQMD Regulations 8/19/24 - 8/1825 Sole Source Justification 2803 Reason: Unique Product/Service ELECTRABOND $65,000.00 Operations & Maintenance Blanket PO for Epoxy Coating of Material and Equipment at Plant 1, Plant 2, and Pump Stations 8/6/24 - 6/30/2025 GM Article 2, Section 2.2 (b) (1) EPLUS TECHNOLOGY, INC. $149,055.52 Administrative Services Annual Nutanix Renewal for Two (2) ICS Clusters at Plant 2 8/18/24 - 8/17/25 NASPO 7-17-70-40-05 CA-CARAHSOFT -NVP AR2472, in Accordance with Ordinance OC SAN-61 Section 2.03 (B) Cooperative Purchases FILANC $110,400.00 Operations & Maintenance Thickening and Dewatering Facility Handrail Installation at Plant 1 Project No. FE21-04 FISHER SCIENTIFIC COMPANY LLC $95,000.00 Environmental Services Convenience Blanket PO for Miscellaneous Laboratory Supplies 7/1/24 - 6/30/25 GM Article 2, Section 2.2 (b) (1) *This PO replaces the entry from last quarter, which was canceled due to incorrect coding; Ref. File ID 2024-3754. FLUKE ELECTRONICS CORPORATION $82,974.28 Operations & Maintenance Purchase of Two (2) Full Rotalign Touch Board Approved OEM Sole Source List M.O. 5/26/21, Item 20(B) GALLAGHER BENEFIT SERVICES, INC. $99,540.00 Human Resources Service Purchase Order for Class and Total Compensation Study and Market Data Refresh Sole Source Justification 2815 Reason: Unique Product/Service GEA MECHANICAL EQUIPMENT US, INC. $100,000.00 Operations & Maintenance On-Call Maintenance Service Contract for P1-101 GEA Westfalia Thickening and Dewatering Centrifuges 10/21/24 - 10/20/25 Board Approved OEM Sole Source List M.O. 9/23/20, Item 12(B) GEA MECHANICAL EQUIPMENT US, INC. $63,795.26 Operations & Maintenance Stock Item Purchase of GEA Westfalia Centrifuge Parts 7/1/24 - 6/30/25 Board Approved OEM Sole Source List M.O. 9/23/20, Item 12(B) GEA MECHANICAL EQUIPMENT US, INC. $60,026.72 Operations & Maintenance Purchase of One (1) GEA Mechanical Hex Head Screw Board Approved OEM Sole Source List M.O. 9/23/20, Item 12 (B) HACH COMPANY $81,967.20 Operations & Maintenance Two-Year Blanket PO to Provide Preventive Maintenance and Calibrations for Sensors and Meters at Plants 1and 2 8/08/24 - 6/30/26 Board Approved OEM Sole Source List M.O. 12/14/16, Item 12 (B) HARTZELL AIR MOVEMENT $58,369.00 Operations & Maintenance Purchase of Fiberglass Backward Curved Centrifugal Fan Board Approved OEM Sole Source List M.O. 5/24/17, Item 17 (B) HOME DEPOT $75,000.00 Administrative Services Convenience Blanket PO for Miscellaneous Parts, Supplies, and Tools 7/1/24 - 6/30/25 GM Article 2, Section 2.2 (b) (1) HOWARD RIDLEY CO $149,000.00 Operations & Maintenance Annual Blanket PO to Repair Cracks in Structures Within Plant 1 & Plant 2 7/5/24 - 6/30/25 GM Article 2, Section 2.2 (b) (1) INSIGHT PUBLIC SECTOR, INC. $73,700.00 Administrative Services ICS Network Refresh at Plant 1 Omnia Partners (Cobb County) IT Products and Services (# 23-6692-03), in Accordance with Ordinance OC SAN-61 Section 2.03 (B) Cooperative Purchases INTERTECH INCORPORATED $76,166.00 Operations & Maintenance Technical Education for Unity Combined On-Site Training for Instrumentation Staff Board Approved OEM Sole Source List M.O. 2/23/22, Item 16 (B) ISA $91,980.00 Operations & Maintenance On-Site Instrumentation Technician Training Board Approved OEM Sole Source List M.O.11/28/18, Item 15 (B) KARBONOUS, INC $115,265.58 Operations & Maintenance Turnkey Filter Media Services at Three (3) Tanks at Plant 1 Sole Source Justification 2817 Reason: Urgent Need MAXIM SECURITY SYSTEMS $100,000.00 Administrative Services Convenience Blanket PO for Miscellaneous Services, Supplies, Materials, Licenses, and Equipment 10/23/24 - 10/22/25 GM Article 2, Section 2.2 (b) MAXIM SECURITY SYSTEMS $91,447.00 Administrative Services Evacuation Mustering & Visitor Management System Specification CS- 2024-1444BD MH3 CORPORATION $90,000.00 Operations & Maintenance Blanket PO to Perform Odor Assessment Services as Part of The Odor Control Master Plan 8/22/24 - 8/21/25 Board Approved OEM Sole Source List M.O. 10/25/23, Item 9(B) NATIONAL AUTO FLEET GROUP $52,927.23 Operations & Maintenance Purchase of One (1) New Royal Truck Body #0484815 - 11' Service Body for V0742 Weld Truck Sourcewell Contract 091521-NAF, in Accordance with Ordinance OC SAN-61 Section 2.03 (B) Cooperative Purchases PARKHOUSE TIRE INC $60,000.00 Administrative Services Convenience Blanket PO for Purchase of New Vehicle Tires, Repairs, and Rotation Services 7/1/24 - 6/30/25 GM Article 2, Section 2.2 (b) PdMA CORPORATION $57,565.80 Operations & Maintenance Purchase of MCEmax AC Offline/Online Motor Tester Sole Source Justification 2804 Reason: Unique Product/Service PETRO- LUBRICANT TESTING LABORATORIES $55,000.00 Operations & Maintenance Blanket PO for Testing of Various Lubricants, Testing and Miscellaneous. Services for Plants 1, 2 and Pump Stations. 9/1/24 - 8/31/25 GM Article 2, Section 2.2 (b) QUINCY COMPRESSOR $51,000.00 Operations & Maintenance Blanket PO for Preventive Guardian Service Agreement 8/23/24 - 8/22/25 Board Approved OEM Sole Source List M.O. 2/28/18 Item 13(B) ROCKWELL ENGINEERING & EQUIPMENT CO $68,860.00 Operations & Maintenance Purchase of One (1) Vaughan Horizontal Pump (HE16W20CS) Board Approved OEM Sole Source List M.O. 12/14/16 Item 12(B) SAFETY SHOE SERVICES $80,000.00 Human Resources Convenience Blanket PO for On-Site Safety Shoe Services 7/1/24 - 6/30/25 GM Article 2, Section 2.2 (b) (1) SCHWING BIOSET $100,000.00 Operations & Maintenance Blanket PO for Parts and Services for Truck Loading and Dewatering Hydraulic Units 10/10/24 - 10/9/25 Board Approved OEM Sole Source List M.O. 12/14/16, Item 12(B) SOUTH COAST WATER $90,000.00 Operations & Maintenance Annual Renewal for Maintenance of Reverse Osmosis Water Purification System and Four (4) Point-of-Use ELGA PureLab Flex Dispenser Units 7/1/24 - 6/30/25 GM Article 2, Section 2.2 (b) SOUTHERN TIRE MART, LLC $60,000.00 Operations & Maintenance Convenience Blanket PO for Purchase of New Vehicle Tires, Repairs, and Rotation Services 9/1/24 - 6/30/25 GM Article 2, Section 2.2 (b) AMETEK SPECTRO SCIENTIFIC, INC. $108,419.00 Operations & Maintenance Purchase of SpectrOil 120C Optical Emission Spectrometer Board Approved OEM Sole Source List M.O. 2/22/23 Item No.18 (B) TIANO CONSTRUCTION $99,000.00 Operations & Maintenance Convenience Blanket PO for Cleaning and Removing Debris from OC San Collection System Property and Easements 10/18/24 - 10/17/25 GM Article 2, Section 2.2 (b) (1) TOSHIBA BUSINESS SOLUTIONS (USA) INC $70,000.00 Administrative Services Annual Blanket PO for Toshiba Parts, Labor, and Toner 8/1/24 - 7/31/25 NASPO Master Contract 188037, in Accordance with Ordinance OC SAN-61 Section 2.03 (B) Cooperative Purchases VEOLIA WTS SERVICES USA, INC. $105,590.70 Operations & Maintenance Stock Item Purchase of One (1) VEOLIA TYPE IIIAS Drive Shaft Assembly Board Approved OEM Sole Source List M.O. 8/23/17, Item 9(B) WATERLINE TECHNOLOGIES INC $90,000.00 Operations & Maintenance Blanket PO for Sodium Hypochlorite Solution-Bleach (NaOCI) (Tote Deliveries) for Plants 1 and 2 10/1/24 - 9/30/25 Informal Bid 134164-OR WESTAIR GASES & EQUIPMENT INC - LOX $85,000.00 Operations & Maintenance Convenience Blanket PO for the Emergency Purchase of Bulk Liquid Oxygen (LOX) 8/21/24 - 8/20/25 GM Article 2, Section 2.2 Orange County Sanitation District Printed on 11/6/2024Page 3 of 7 powered by Legistar™ File #:2024-3923 Agenda Date:11/13/2024 Agenda Item No:7. Vendor Name Amount Department Description/DiscussionADVANCEDBATTERYSYSTEMS, INC.$58,710.06 Operations &Maintenance Purchase of Batteries and Parts forHeadworks Power Building B at Plant 2County of Los Angeles Contract MA-IS-2240017-11, in Accordance withOrdinance OC SAN-61 Section 2.03 (B)Cooperative PurchasesAIRGAS USA,LLC $77,432.41 EnvironmentalServices Annual Renewal for Laboratory Gases7/1/24 - 6/30/25 GM Article 2, Section2.2 (b) (1)ARI PHOENIX,INC.$93,874.75 Operations &Maintenance Purchase of Six (6) Complete MobileColumn Lift Systems SourcewellContract 013020-ARP, in Accordancewith Ordinance OC SAN-61 Section 2.03(B) Cooperative PurchasesBEC BUILDINGELECTRONICCONTROLS INC $140,000.00 Operations &Maintenance Blanket PO for Fire Alarm SystemResponse at Plant 1 and Plant 2 andMaintenance and Testing on AspiratingSmoke Detector Systems 7/30/24 -8/25/25 GM Article 2, Section 2.2 (b) (1)BENTLY NEVADALLC $64,000.00 Operations &Maintenance Blanket PO for Multiple Training CoursesBoard Approved OEM Sole Source ListM.O. 12/14/16, Item 12(B)CARAHSOFTTECHNOLOGYCORPORATION $148,877.16 AdministrativeServices Annual Renewal for ServiceNow License8/30/24-6/30/26 NASPO Master ContractNo. AR2472, in Accordance withOrdinance OC SAN-61 Section 2.03 (B)Cooperative PurchasesCARAHSOFTTECHNOLOGYCORPORATION$148,451.38 AdministrativeServices Strategic Portfolio ManagementImplementationNASPO C MasterContract No. AR2472, in Accordance withOrdinance OC SAN-61 Section 2.03 (B)Cooperative PurchasesCENTRE FORORGANIZATIONEFFECTIVENESS $108,801.00 HumanResources Blanket PO for Three (3) SupervisoryAcademy Cohorts Sole SourceJustification 2809 Reason: UniqueProduct/ServiceCORITYSOFTWARE,INC.$82,844.07 AdministrativeServices Annual Renewal for Cority SoftwareSubscription 9/24/24 - 9/23/25 GSAContract# GS-35F-0032U, in Accordancewith Ordinance OC SAN-61 Section 2.03(B) Cooperative PurchasesDETECTIONINSTRUMENTSCORPORATION$78,770.62 Operations &Maintenance Blanket PO to Manage Odor Emissionsand Comply with AQMD Regulations8/19/24 - 8/1825 Sole Source Justification2803 Reason: Unique Product/ServiceELECTRABOND$65,000.00 Operations &Maintenance Blanket PO for Epoxy Coating of Materialand Equipment at Plant 1, Plant 2, andPump Stations 8/6/24 - 6/30/2025 GMArticle 2, Section 2.2 (b) (1)EPLUSTECHNOLOGY,INC.$149,055.52 AdministrativeServices Annual Nutanix Renewal for Two (2) ICSClusters at Plant 2 8/18/24 - 8/17/25NASPO 7-17-70-40-05 CA-CARAHSOFT-NVP AR2472, in Accordance withOrdinance OC SAN-61 Section 2.03 (B)Cooperative PurchasesFILANC$110,400.00 Operations &Maintenance Thickening and Dewatering FacilityHandrail Installation at Plant 1 ProjectNo. FE21-04FISHERSCIENTIFICCOMPANY LLC $95,000.00 EnvironmentalServices Convenience Blanket PO forMiscellaneous Laboratory Supplies7/1/24 - 6/30/25 GM Article 2, Section 2.2(b) (1) *This PO replaces the entry fromlast quarter, which was canceled due toincorrect coding; Ref. File ID 2024-3754.FLUKEELECTRONICSCORPORATION $82,974.28 Operations &Maintenance Purchase of Two (2) Full Rotalign TouchBoard Approved OEM Sole Source ListM.O. 5/26/21, Item 20(B)GALLAGHERBENEFITSERVICES, INC.$99,540.00 HumanResources Service Purchase Order for Class andTotal Compensation Study and MarketData Refresh Sole Source Justification2815 Reason: Unique Product/ServiceGEAMECHANICALEQUIPMENT US,INC.$100,000.00 Operations &Maintenance On-Call Maintenance Service Contract forP1-101 GEA Westfalia Thickening andDewatering Centrifuges 10/21/24 -10/20/25 Board Approved OEM SoleSource List M.O. 9/23/20, Item 12(B)GEAMECHANICALEQUIPMENT US,INC.$63,795.26 Operations &Maintenance Stock Item Purchase of GEA WestfaliaCentrifuge Parts 7/1/24 - 6/30/25 BoardApproved OEM Sole Source List M.O.9/23/20, Item 12(B) GEA MECHANICAL EQUIPMENT US, INC. $60,026.72 Operations & Maintenance Purchase of One (1) GEA Mechanical Hex Head Screw Board Approved OEM Sole Source List M.O. 9/23/20, Item 12 (B) HACH COMPANY $81,967.20 Operations & Maintenance Two-Year Blanket PO to Provide Preventive Maintenance and Calibrations for Sensors and Meters at Plants 1and 2 8/08/24 - 6/30/26 Board Approved OEM Sole Source List M.O. 12/14/16, Item 12 (B) HARTZELL AIR MOVEMENT $58,369.00 Operations & Maintenance Purchase of Fiberglass Backward Curved Centrifugal Fan Board Approved OEM Sole Source List M.O. 5/24/17, Item 17 (B) HOME DEPOT $75,000.00 Administrative Services Convenience Blanket PO for Miscellaneous Parts, Supplies, and Tools 7/1/24 - 6/30/25 GM Article 2, Section 2.2 (b) (1) HOWARD RIDLEY CO $149,000.00 Operations & Maintenance Annual Blanket PO to Repair Cracks in Structures Within Plant 1 & Plant 2 7/5/24 - 6/30/25 GM Article 2, Section 2.2 (b) (1) INSIGHT PUBLIC SECTOR, INC. $73,700.00 Administrative Services ICS Network Refresh at Plant 1 Omnia Partners (Cobb County) IT Products and Services (# 23-6692-03), in Accordance with Ordinance OC SAN-61 Section 2.03 (B) Cooperative Purchases INTERTECH INCORPORATED $76,166.00 Operations & Maintenance Technical Education for Unity Combined On-Site Training for Instrumentation Staff Board Approved OEM Sole Source List M.O. 2/23/22, Item 16 (B) ISA $91,980.00 Operations & Maintenance On-Site Instrumentation Technician Training Board Approved OEM Sole Source List M.O.11/28/18, Item 15 (B) KARBONOUS, INC $115,265.58 Operations & Maintenance Turnkey Filter Media Services at Three (3) Tanks at Plant 1 Sole Source Justification 2817 Reason: Urgent Need MAXIM SECURITY SYSTEMS $100,000.00 Administrative Services Convenience Blanket PO for Miscellaneous Services, Supplies, Materials, Licenses, and Equipment 10/23/24 - 10/22/25 GM Article 2, Section 2.2 (b) MAXIM SECURITY SYSTEMS $91,447.00 Administrative Services Evacuation Mustering & Visitor Management System Specification CS- 2024-1444BD MH3 CORPORATION $90,000.00 Operations & Maintenance Blanket PO to Perform Odor Assessment Services as Part of The Odor Control Master Plan 8/22/24 - 8/21/25 Board Approved OEM Sole Source List M.O. 10/25/23, Item 9(B) NATIONAL AUTO FLEET GROUP $52,927.23 Operations & Maintenance Purchase of One (1) New Royal Truck Body #0484815 - 11' Service Body for V0742 Weld Truck Sourcewell Contract 091521-NAF, in Accordance with Ordinance OC SAN-61 Section 2.03 (B) Cooperative Purchases PARKHOUSE TIRE INC $60,000.00 Administrative Services Convenience Blanket PO for Purchase of New Vehicle Tires, Repairs, and Rotation Services 7/1/24 - 6/30/25 GM Article 2, Section 2.2 (b) PdMA CORPORATION $57,565.80 Operations & Maintenance Purchase of MCEmax AC Offline/Online Motor Tester Sole Source Justification 2804 Reason: Unique Product/Service PETRO- LUBRICANT TESTING LABORATORIES $55,000.00 Operations & Maintenance Blanket PO for Testing of Various Lubricants, Testing and Miscellaneous. Services for Plants 1, 2 and Pump Stations. 9/1/24 - 8/31/25 GM Article 2, Section 2.2 (b) QUINCY COMPRESSOR $51,000.00 Operations & Maintenance Blanket PO for Preventive Guardian Service Agreement 8/23/24 - 8/22/25 Board Approved OEM Sole Source List M.O. 2/28/18 Item 13(B) ROCKWELL ENGINEERING & EQUIPMENT CO $68,860.00 Operations & Maintenance Purchase of One (1) Vaughan Horizontal Pump (HE16W20CS) Board Approved OEM Sole Source List M.O. 12/14/16 Item 12(B) SAFETY SHOE SERVICES $80,000.00 Human Resources Convenience Blanket PO for On-Site Safety Shoe Services 7/1/24 - 6/30/25 GM Article 2, Section 2.2 (b) (1) SCHWING BIOSET $100,000.00 Operations & Maintenance Blanket PO for Parts and Services for Truck Loading and Dewatering Hydraulic Units 10/10/24 - 10/9/25 Board Approved OEM Sole Source List M.O. 12/14/16, Item 12(B) SOUTH COAST WATER $90,000.00 Operations & Maintenance Annual Renewal for Maintenance of Reverse Osmosis Water Purification System and Four (4) Point-of-Use ELGA PureLab Flex Dispenser Units 7/1/24 - 6/30/25 GM Article 2, Section 2.2 (b) SOUTHERN TIRE MART, LLC $60,000.00 Operations & Maintenance Convenience Blanket PO for Purchase of New Vehicle Tires, Repairs, and Rotation Services 9/1/24 - 6/30/25 GM Article 2, Section 2.2 (b) AMETEK SPECTRO SCIENTIFIC, INC. $108,419.00 Operations & Maintenance Purchase of SpectrOil 120C Optical Emission Spectrometer Board Approved OEM Sole Source List M.O. 2/22/23 Item No.18 (B) TIANO CONSTRUCTION $99,000.00 Operations & Maintenance Convenience Blanket PO for Cleaning and Removing Debris from OC San Collection System Property and Easements 10/18/24 - 10/17/25 GM Article 2, Section 2.2 (b) (1) TOSHIBA BUSINESS SOLUTIONS (USA) INC $70,000.00 Administrative Services Annual Blanket PO for Toshiba Parts, Labor, and Toner 8/1/24 - 7/31/25 NASPO Master Contract 188037, in Accordance with Ordinance OC SAN-61 Section 2.03 (B) Cooperative Purchases VEOLIA WTS SERVICES USA, INC. $105,590.70 Operations & Maintenance Stock Item Purchase of One (1) VEOLIA TYPE IIIAS Drive Shaft Assembly Board Approved OEM Sole Source List M.O. 8/23/17, Item 9(B) WATERLINE TECHNOLOGIES INC $90,000.00 Operations & Maintenance Blanket PO for Sodium Hypochlorite Solution-Bleach (NaOCI) (Tote Deliveries) for Plants 1 and 2 10/1/24 - 9/30/25 Informal Bid 134164-OR WESTAIR GASES & EQUIPMENT INC - LOX $85,000.00 Operations & Maintenance Convenience Blanket PO for the Emergency Purchase of Bulk Liquid Oxygen (LOX) 8/21/24 - 8/20/25 GM Article 2, Section 2.2 Orange County Sanitation District Printed on 11/6/2024Page 4 of 7 powered by Legistar™ File #:2024-3923 Agenda Date:11/13/2024 Agenda Item No:7. Vendor Name Amount Department Description/DiscussionADVANCEDBATTERYSYSTEMS, INC.$58,710.06 Operations &Maintenance Purchase of Batteries and Parts forHeadworks Power Building B at Plant 2County of Los Angeles Contract MA-IS-2240017-11, in Accordance withOrdinance OC SAN-61 Section 2.03 (B)Cooperative PurchasesAIRGAS USA,LLC $77,432.41 EnvironmentalServices Annual Renewal for Laboratory Gases7/1/24 - 6/30/25 GM Article 2, Section2.2 (b) (1)ARI PHOENIX,INC.$93,874.75 Operations &Maintenance Purchase of Six (6) Complete MobileColumn Lift Systems SourcewellContract 013020-ARP, in Accordancewith Ordinance OC SAN-61 Section 2.03(B) Cooperative PurchasesBEC BUILDINGELECTRONICCONTROLS INC $140,000.00 Operations &Maintenance Blanket PO for Fire Alarm SystemResponse at Plant 1 and Plant 2 andMaintenance and Testing on AspiratingSmoke Detector Systems 7/30/24 -8/25/25 GM Article 2, Section 2.2 (b) (1)BENTLY NEVADALLC $64,000.00 Operations &Maintenance Blanket PO for Multiple Training CoursesBoard Approved OEM Sole Source ListM.O. 12/14/16, Item 12(B)CARAHSOFTTECHNOLOGYCORPORATION $148,877.16 AdministrativeServices Annual Renewal for ServiceNow License8/30/24-6/30/26 NASPO Master ContractNo. AR2472, in Accordance withOrdinance OC SAN-61 Section 2.03 (B)Cooperative PurchasesCARAHSOFTTECHNOLOGYCORPORATION$148,451.38 AdministrativeServices Strategic Portfolio ManagementImplementationNASPO C MasterContract No. AR2472, in Accordance withOrdinance OC SAN-61 Section 2.03 (B)Cooperative PurchasesCENTRE FORORGANIZATIONEFFECTIVENESS $108,801.00 HumanResources Blanket PO for Three (3) SupervisoryAcademy Cohorts Sole SourceJustification 2809 Reason: UniqueProduct/ServiceCORITYSOFTWARE,INC.$82,844.07 AdministrativeServices Annual Renewal for Cority SoftwareSubscription 9/24/24 - 9/23/25 GSAContract# GS-35F-0032U, in Accordancewith Ordinance OC SAN-61 Section 2.03(B) Cooperative PurchasesDETECTIONINSTRUMENTSCORPORATION$78,770.62 Operations &Maintenance Blanket PO to Manage Odor Emissionsand Comply with AQMD Regulations8/19/24 - 8/1825 Sole Source Justification2803 Reason: Unique Product/ServiceELECTRABOND$65,000.00 Operations &Maintenance Blanket PO for Epoxy Coating of Materialand Equipment at Plant 1, Plant 2, andPump Stations 8/6/24 - 6/30/2025 GMArticle 2, Section 2.2 (b) (1)EPLUSTECHNOLOGY,INC.$149,055.52 AdministrativeServices Annual Nutanix Renewal for Two (2) ICSClusters at Plant 2 8/18/24 - 8/17/25NASPO 7-17-70-40-05 CA-CARAHSOFT-NVP AR2472, in Accordance withOrdinance OC SAN-61 Section 2.03 (B)Cooperative PurchasesFILANC$110,400.00 Operations &Maintenance Thickening and Dewatering FacilityHandrail Installation at Plant 1 ProjectNo. FE21-04FISHERSCIENTIFICCOMPANY LLC $95,000.00 EnvironmentalServices Convenience Blanket PO forMiscellaneous Laboratory Supplies7/1/24 - 6/30/25 GM Article 2, Section 2.2(b) (1) *This PO replaces the entry fromlast quarter, which was canceled due toincorrect coding; Ref. File ID 2024-3754.FLUKEELECTRONICSCORPORATION $82,974.28 Operations &Maintenance Purchase of Two (2) Full Rotalign TouchBoard Approved OEM Sole Source ListM.O. 5/26/21, Item 20(B)GALLAGHERBENEFITSERVICES, INC.$99,540.00 HumanResources Service Purchase Order for Class andTotal Compensation Study and MarketData Refresh Sole Source Justification2815 Reason: Unique Product/ServiceGEAMECHANICALEQUIPMENT US,INC.$100,000.00 Operations &Maintenance On-Call Maintenance Service Contract forP1-101 GEA Westfalia Thickening andDewatering Centrifuges 10/21/24 -10/20/25 Board Approved OEM SoleSource List M.O. 9/23/20, Item 12(B)GEAMECHANICALEQUIPMENT US,INC.$63,795.26 Operations &Maintenance Stock Item Purchase of GEA WestfaliaCentrifuge Parts 7/1/24 - 6/30/25 BoardApproved OEM Sole Source List M.O.9/23/20, Item 12(B)GEAMECHANICALEQUIPMENT US,INC.$60,026.72 Operations &Maintenance Purchase of One (1) GEA MechanicalHex Head Screw Board Approved OEMSole Source List M.O. 9/23/20, Item 12(B)HACH COMPANY $81,967.20 Operations &Maintenance Two-Year Blanket PO to ProvidePreventive Maintenance and Calibrationsfor Sensors and Meters at Plants 1and 28/08/24 - 6/30/26 Board Approved OEMSole Source List M.O. 12/14/16, Item 12(B)HARTZELL AIRMOVEMENT $58,369.00 Operations &Maintenance Purchase of Fiberglass Backward CurvedCentrifugal Fan Board Approved OEMSole Source List M.O. 5/24/17, Item 17(B)HOME DEPOT $75,000.00 AdministrativeServices Convenience Blanket PO forMiscellaneous Parts, Supplies, and Tools7/1/24 - 6/30/25 GM Article 2, Section 2.2(b) (1)HOWARDRIDLEY CO $149,000.00 Operations &Maintenance Annual Blanket PO to Repair Cracks inStructures Within Plant 1 & Plant 27/5/24 - 6/30/25 GM Article 2, Section 2.2(b) (1)INSIGHT PUBLICSECTOR, INC.$73,700.00 AdministrativeServices ICS Network Refresh at Plant 1 OmniaPartners (Cobb County) IT Products andServices (# 23-6692-03), in Accordancewith Ordinance OC SAN-61 Section 2.03(B) Cooperative PurchasesINTERTECHINCORPORATED$76,166.00 Operations &Maintenance Technical Education for Unity CombinedOn-Site Training for Instrumentation StaffBoard Approved OEM Sole Source ListM.O. 2/23/22, Item 16 (B)ISA $91,980.00 Operations &Maintenance On-Site Instrumentation TechnicianTraining Board Approved OEM SoleSource List M.O.11/28/18, Item 15 (B)KARBONOUS,INC $115,265.58 Operations &Maintenance Turnkey Filter Media Services at Three(3) Tanks at Plant 1 Sole SourceJustification 2817 Reason: Urgent NeedMAXIMSECURITYSYSTEMS$100,000.00 AdministrativeServices Convenience Blanket PO forMiscellaneous Services, Supplies,Materials, Licenses, and Equipment10/23/24 - 10/22/25 GM Article 2, Section2.2 (b)MAXIMSECURITYSYSTEMS $91,447.00 AdministrativeServices Evacuation Mustering & VisitorManagement System Specification CS-2024-1444BDMH3 CORPORATION $90,000.00 Operations & Maintenance Blanket PO to Perform Odor Assessment Services as Part of The Odor Control Master Plan 8/22/24 - 8/21/25 Board Approved OEM Sole Source List M.O. 10/25/23, Item 9(B) NATIONAL AUTO FLEET GROUP $52,927.23 Operations & Maintenance Purchase of One (1) New Royal Truck Body #0484815 - 11' Service Body for V0742 Weld Truck Sourcewell Contract 091521-NAF, in Accordance with Ordinance OC SAN-61 Section 2.03 (B) Cooperative Purchases PARKHOUSE TIRE INC $60,000.00 Administrative Services Convenience Blanket PO for Purchase of New Vehicle Tires, Repairs, and Rotation Services 7/1/24 - 6/30/25 GM Article 2, Section 2.2 (b) PdMA CORPORATION $57,565.80 Operations & Maintenance Purchase of MCEmax AC Offline/Online Motor Tester Sole Source Justification 2804 Reason: Unique Product/Service PETRO- LUBRICANT TESTING LABORATORIES $55,000.00 Operations & Maintenance Blanket PO for Testing of Various Lubricants, Testing and Miscellaneous. Services for Plants 1, 2 and Pump Stations. 9/1/24 - 8/31/25 GM Article 2, Section 2.2 (b) QUINCY COMPRESSOR $51,000.00 Operations & Maintenance Blanket PO for Preventive Guardian Service Agreement 8/23/24 - 8/22/25 Board Approved OEM Sole Source List M.O. 2/28/18 Item 13(B) ROCKWELL ENGINEERING & EQUIPMENT CO $68,860.00 Operations & Maintenance Purchase of One (1) Vaughan Horizontal Pump (HE16W20CS) Board Approved OEM Sole Source List M.O. 12/14/16 Item 12(B) SAFETY SHOE SERVICES $80,000.00 Human Resources Convenience Blanket PO for On-Site Safety Shoe Services 7/1/24 - 6/30/25 GM Article 2, Section 2.2 (b) (1) SCHWING BIOSET $100,000.00 Operations & Maintenance Blanket PO for Parts and Services for Truck Loading and Dewatering Hydraulic Units 10/10/24 - 10/9/25 Board Approved OEM Sole Source List M.O. 12/14/16, Item 12(B) SOUTH COAST WATER $90,000.00 Operations & Maintenance Annual Renewal for Maintenance of Reverse Osmosis Water Purification System and Four (4) Point-of-Use ELGA PureLab Flex Dispenser Units 7/1/24 - 6/30/25 GM Article 2, Section 2.2 (b) SOUTHERN TIRE MART, LLC $60,000.00 Operations & Maintenance Convenience Blanket PO for Purchase of New Vehicle Tires, Repairs, and Rotation Services 9/1/24 - 6/30/25 GM Article 2, Section 2.2 (b) AMETEK SPECTRO SCIENTIFIC, INC. $108,419.00 Operations & Maintenance Purchase of SpectrOil 120C Optical Emission Spectrometer Board Approved OEM Sole Source List M.O. 2/22/23 Item No.18 (B) TIANO CONSTRUCTION $99,000.00 Operations & Maintenance Convenience Blanket PO for Cleaning and Removing Debris from OC San Collection System Property and Easements 10/18/24 - 10/17/25 GM Article 2, Section 2.2 (b) (1) TOSHIBA BUSINESS SOLUTIONS (USA) INC $70,000.00 Administrative Services Annual Blanket PO for Toshiba Parts, Labor, and Toner 8/1/24 - 7/31/25 NASPO Master Contract 188037, in Accordance with Ordinance OC SAN-61 Section 2.03 (B) Cooperative Purchases VEOLIA WTS SERVICES USA, INC. $105,590.70 Operations & Maintenance Stock Item Purchase of One (1) VEOLIA TYPE IIIAS Drive Shaft Assembly Board Approved OEM Sole Source List M.O. 8/23/17, Item 9(B) WATERLINE TECHNOLOGIES INC $90,000.00 Operations & Maintenance Blanket PO for Sodium Hypochlorite Solution-Bleach (NaOCI) (Tote Deliveries) for Plants 1 and 2 10/1/24 - 9/30/25 Informal Bid 134164-OR WESTAIR GASES & EQUIPMENT INC - LOX $85,000.00 Operations & Maintenance Convenience Blanket PO for the Emergency Purchase of Bulk Liquid Oxygen (LOX) 8/21/24 - 8/20/25 GM Article 2, Section 2.2 Orange County Sanitation District Printed on 11/6/2024Page 5 of 7 powered by Legistar™ File #:2024-3923 Agenda Date:11/13/2024 Agenda Item No:7. Vendor Name Amount Department Description/DiscussionADVANCEDBATTERYSYSTEMS, INC.$58,710.06 Operations &Maintenance Purchase of Batteries and Parts forHeadworks Power Building B at Plant 2County of Los Angeles Contract MA-IS-2240017-11, in Accordance withOrdinance OC SAN-61 Section 2.03 (B)Cooperative PurchasesAIRGAS USA,LLC $77,432.41 EnvironmentalServices Annual Renewal for Laboratory Gases7/1/24 - 6/30/25 GM Article 2, Section2.2 (b) (1)ARI PHOENIX,INC.$93,874.75 Operations &Maintenance Purchase of Six (6) Complete MobileColumn Lift Systems SourcewellContract 013020-ARP, in Accordancewith Ordinance OC SAN-61 Section 2.03(B) Cooperative PurchasesBEC BUILDINGELECTRONICCONTROLS INC $140,000.00 Operations &Maintenance Blanket PO for Fire Alarm SystemResponse at Plant 1 and Plant 2 andMaintenance and Testing on AspiratingSmoke Detector Systems 7/30/24 -8/25/25 GM Article 2, Section 2.2 (b) (1)BENTLY NEVADALLC $64,000.00 Operations &Maintenance Blanket PO for Multiple Training CoursesBoard Approved OEM Sole Source ListM.O. 12/14/16, Item 12(B)CARAHSOFTTECHNOLOGYCORPORATION $148,877.16 AdministrativeServices Annual Renewal for ServiceNow License8/30/24-6/30/26 NASPO Master ContractNo. AR2472, in Accordance withOrdinance OC SAN-61 Section 2.03 (B)Cooperative PurchasesCARAHSOFTTECHNOLOGYCORPORATION$148,451.38 AdministrativeServices Strategic Portfolio ManagementImplementationNASPO C MasterContract No. AR2472, in Accordance withOrdinance OC SAN-61 Section 2.03 (B)Cooperative PurchasesCENTRE FORORGANIZATIONEFFECTIVENESS $108,801.00 HumanResources Blanket PO for Three (3) SupervisoryAcademy Cohorts Sole SourceJustification 2809 Reason: UniqueProduct/ServiceCORITYSOFTWARE,INC.$82,844.07 AdministrativeServices Annual Renewal for Cority SoftwareSubscription 9/24/24 - 9/23/25 GSAContract# GS-35F-0032U, in Accordancewith Ordinance OC SAN-61 Section 2.03(B) Cooperative PurchasesDETECTIONINSTRUMENTSCORPORATION$78,770.62 Operations &Maintenance Blanket PO to Manage Odor Emissionsand Comply with AQMD Regulations8/19/24 - 8/1825 Sole Source Justification2803 Reason: Unique Product/ServiceELECTRABOND$65,000.00 Operations &Maintenance Blanket PO for Epoxy Coating of Materialand Equipment at Plant 1, Plant 2, andPump Stations 8/6/24 - 6/30/2025 GMArticle 2, Section 2.2 (b) (1)EPLUSTECHNOLOGY,INC.$149,055.52 AdministrativeServices Annual Nutanix Renewal for Two (2) ICSClusters at Plant 2 8/18/24 - 8/17/25NASPO 7-17-70-40-05 CA-CARAHSOFT-NVP AR2472, in Accordance withOrdinance OC SAN-61 Section 2.03 (B)Cooperative PurchasesFILANC$110,400.00 Operations &Maintenance Thickening and Dewatering FacilityHandrail Installation at Plant 1 ProjectNo. FE21-04FISHERSCIENTIFICCOMPANY LLC $95,000.00 EnvironmentalServices Convenience Blanket PO forMiscellaneous Laboratory Supplies7/1/24 - 6/30/25 GM Article 2, Section 2.2(b) (1) *This PO replaces the entry fromlast quarter, which was canceled due toincorrect coding; Ref. File ID 2024-3754.FLUKEELECTRONICSCORPORATION $82,974.28 Operations &Maintenance Purchase of Two (2) Full Rotalign TouchBoard Approved OEM Sole Source ListM.O. 5/26/21, Item 20(B)GALLAGHERBENEFITSERVICES, INC.$99,540.00 HumanResources Service Purchase Order for Class andTotal Compensation Study and MarketData Refresh Sole Source Justification2815 Reason: Unique Product/ServiceGEAMECHANICALEQUIPMENT US,INC.$100,000.00 Operations &Maintenance On-Call Maintenance Service Contract forP1-101 GEA Westfalia Thickening andDewatering Centrifuges 10/21/24 -10/20/25 Board Approved OEM SoleSource List M.O. 9/23/20, Item 12(B)GEAMECHANICALEQUIPMENT US,INC.$63,795.26 Operations &Maintenance Stock Item Purchase of GEA WestfaliaCentrifuge Parts 7/1/24 - 6/30/25 BoardApproved OEM Sole Source List M.O.9/23/20, Item 12(B)GEAMECHANICALEQUIPMENT US,INC.$60,026.72 Operations &Maintenance Purchase of One (1) GEA MechanicalHex Head Screw Board Approved OEMSole Source List M.O. 9/23/20, Item 12(B)HACH COMPANY $81,967.20 Operations &Maintenance Two-Year Blanket PO to ProvidePreventive Maintenance and Calibrationsfor Sensors and Meters at Plants 1and 28/08/24 - 6/30/26 Board Approved OEMSole Source List M.O. 12/14/16, Item 12(B)HARTZELL AIRMOVEMENT $58,369.00 Operations &Maintenance Purchase of Fiberglass Backward CurvedCentrifugal Fan Board Approved OEMSole Source List M.O. 5/24/17, Item 17(B)HOME DEPOT $75,000.00 AdministrativeServices Convenience Blanket PO forMiscellaneous Parts, Supplies, and Tools7/1/24 - 6/30/25 GM Article 2, Section 2.2(b) (1)HOWARDRIDLEY CO $149,000.00 Operations &Maintenance Annual Blanket PO to Repair Cracks inStructures Within Plant 1 & Plant 27/5/24 - 6/30/25 GM Article 2, Section 2.2(b) (1)INSIGHT PUBLICSECTOR, INC.$73,700.00 AdministrativeServices ICS Network Refresh at Plant 1 OmniaPartners (Cobb County) IT Products andServices (# 23-6692-03), in Accordancewith Ordinance OC SAN-61 Section 2.03(B) Cooperative PurchasesINTERTECHINCORPORATED$76,166.00 Operations &Maintenance Technical Education for Unity CombinedOn-Site Training for Instrumentation StaffBoard Approved OEM Sole Source ListM.O. 2/23/22, Item 16 (B)ISA $91,980.00 Operations &Maintenance On-Site Instrumentation TechnicianTraining Board Approved OEM SoleSource List M.O.11/28/18, Item 15 (B)KARBONOUS,INC $115,265.58 Operations &Maintenance Turnkey Filter Media Services at Three(3) Tanks at Plant 1 Sole SourceJustification 2817 Reason: Urgent NeedMAXIMSECURITYSYSTEMS$100,000.00 AdministrativeServices Convenience Blanket PO forMiscellaneous Services, Supplies,Materials, Licenses, and Equipment10/23/24 - 10/22/25 GM Article 2, Section2.2 (b)MAXIMSECURITYSYSTEMS $91,447.00 AdministrativeServices Evacuation Mustering & VisitorManagement System Specification CS-2024-1444BDMH3CORPORATION$90,000.00 Operations &Maintenance Blanket PO to Perform Odor AssessmentServices as Part of The Odor ControlMaster Plan 8/22/24 - 8/21/25 BoardApproved OEM Sole Source List M.O.10/25/23, Item 9(B)NATIONAL AUTOFLEET GROUP $52,927.23 Operations &Maintenance Purchase of One (1) New Royal TruckBody #0484815 - 11' Service Body forV0742 Weld Truck Sourcewell Contract091521-NAF, in Accordance withOrdinance OC SAN-61 Section 2.03 (B)Cooperative PurchasesPARKHOUSETIRE INC $60,000.00 AdministrativeServices Convenience Blanket PO for Purchase ofNew Vehicle Tires, Repairs, and RotationServices7/1/24 - 6/30/25 GM Article 2,Section 2.2 (b)PdMACORPORATION $57,565.80 Operations &Maintenance Purchase of MCEmax AC Offline/OnlineMotor Tester Sole Source Justification2804 Reason: Unique Product/ServicePETRO-LUBRICANTTESTINGLABORATORIES $55,000.00 Operations &Maintenance Blanket PO for Testing of VariousLubricants, Testing and Miscellaneous.Services for Plants 1, 2 and PumpStations. 9/1/24 - 8/31/25 GM Article 2,Section 2.2 (b)QUINCYCOMPRESSOR $51,000.00 Operations &Maintenance Blanket PO for Preventive GuardianService Agreement 8/23/24 - 8/22/25Board Approved OEM Sole Source ListM.O. 2/28/18 Item 13(B)ROCKWELLENGINEERING &EQUIPMENT CO $68,860.00 Operations &Maintenance Purchase of One (1) Vaughan HorizontalPump (HE16W20CS) Board ApprovedOEM Sole Source List M.O. 12/14/16Item 12(B)SAFETY SHOESERVICES $80,000.00 HumanResources Convenience Blanket PO for On-SiteSafety Shoe Services 7/1/24 - 6/30/25GM Article 2, Section 2.2 (b) (1)SCHWINGBIOSET $100,000.00 Operations &Maintenance Blanket PO for Parts and Services forTruck Loading and Dewatering HydraulicUnits10/10/24 - 10/9/25 Board ApprovedOEM Sole Source List M.O. 12/14/16,Item 12(B)SOUTH COASTWATER $90,000.00 Operations &Maintenance Annual Renewal for Maintenance ofReverse Osmosis Water PurificationSystem and Four (4) Point-of-Use ELGAPureLab Flex Dispenser Units 7/1/24 -6/30/25 GM Article 2, Section 2.2 (b)SOUTHERN TIREMART, LLC $60,000.00 Operations &Maintenance Convenience Blanket PO for Purchase ofNew Vehicle Tires, Repairs, and RotationServices9/1/24 - 6/30/25 GM Article 2,Section 2.2 (b) AMETEK SPECTRO SCIENTIFIC, INC. $108,419.00 Operations & Maintenance Purchase of SpectrOil 120C Optical Emission Spectrometer Board Approved OEM Sole Source List M.O. 2/22/23 Item No.18 (B) TIANO CONSTRUCTION $99,000.00 Operations & Maintenance Convenience Blanket PO for Cleaning and Removing Debris from OC San Collection System Property and Easements 10/18/24 - 10/17/25 GM Article 2, Section 2.2 (b) (1) TOSHIBA BUSINESS SOLUTIONS (USA) INC $70,000.00 Administrative Services Annual Blanket PO for Toshiba Parts, Labor, and Toner 8/1/24 - 7/31/25 NASPO Master Contract 188037, in Accordance with Ordinance OC SAN-61 Section 2.03 (B) Cooperative Purchases VEOLIA WTS SERVICES USA, INC. $105,590.70 Operations & Maintenance Stock Item Purchase of One (1) VEOLIA TYPE IIIAS Drive Shaft Assembly Board Approved OEM Sole Source List M.O. 8/23/17, Item 9(B) WATERLINE TECHNOLOGIES INC $90,000.00 Operations & Maintenance Blanket PO for Sodium Hypochlorite Solution-Bleach (NaOCI) (Tote Deliveries) for Plants 1 and 2 10/1/24 - 9/30/25 Informal Bid 134164-OR WESTAIR GASES & EQUIPMENT INC - LOX $85,000.00 Operations & Maintenance Convenience Blanket PO for the Emergency Purchase of Bulk Liquid Oxygen (LOX) 8/21/24 - 8/20/25 GM Article 2, Section 2.2 Additionally,in accordance with Board purchasing policies,Ordinance No.OC SAN-61,the General Manager has authority to approve and execute maintenance and repair Services Task Orders between $50,000 and $500,000.Below is a summary of General Manager approved maintenance and repair Services Task Orders,in amounts exceeding $50,000,for the first quarter of fiscal year 2024-25: Vendor Name Amount Department Description/Discussion CHARLES KING CO INC $390,758.42 Operations & Maintenance Partial Bypass of Sunflower Trunkline Upstream of M&D Building Specification No. TOB-2024-643 of Master Service Contract S-2021-1234BD-1 CHARLES KING CO INC $82,700.00 Operations & Maintenance Decommissioning of the Yorba Linda Pump Station Specification No. TOB-2024-620 of Master Service Contract S-2021-1234BD-1 FILANC $204,500.00 Operations & Maintenance Water Pump Station 12 KV Transformer Secondary Replacement (TFR-PWA and TFR-PWB) at Plant 2 Specification No. TOB -2024-621 of Master Service Contract S- 2021-1234BD-2 JAMISON ENGINEERING CONTRACTOR S, INC. $149,500.00 Operations & Maintenance Temporary Repair Damages to Sunflower Pump Station Effluent Channel Specification No. TOB-2024-637 of Master Service Contract S-2021-1234BD-3 Orange County Sanitation District Printed on 11/6/2024Page 6 of 7 powered by Legistar™ File #:2024-3923 Agenda Date:11/13/2024 Agenda Item No:7. ATTACHMENT The following attachment(s)may be viewed on-line at the OC San website (www.ocsan.gov)with the complete agenda package: N/A Orange County Sanitation District Printed on 11/6/2024Page 7 of 7 powered by Legistar™ ADMINISTRATION COMMITTEE Agenda Report Headquarters 18480 Bandilier Circle Fountain Valley, CA 92708 (714) 593-7433 File #:2024-3925 Agenda Date:11/13/2024 Agenda Item No:8. FROM:Robert Thompson, General Manager Originator: Lan C. Wiborg, Director of Environmental Services SUBJECT: TRIPLE QUADRUPOLE GAS CHROMATOGRAPH MASS SPECTROMETER (TQ-GC/MS) SYSTEM GENERAL MANAGER'S RECOMMENDATION RECOMMENDATION: Recommend to the Board of Directors to: Approve a Purchase Order to VWR International,LLC for the purchase of a Triple Quadrupole Gas Chromatograph Mass Spectrometer (TQ-GC/MS)System using NASPO Master Agreement No. MA2024005 for a total amount not to exceed $325,947. BACKGROUND The TQ-GC/MS system will be utilized to analyze wastewater samples as required by Orange County Sanitation District’s (OC San)NPDES Permit and for various special projects.This is the third of the three budgeted TQ-GC/MS systems for the OC San laboratory;the other two have been successfully deployed for use in ocean sediment and fish tissue analyses. RELEVANT STANDARDS ·Ensure the public’s money is wisely spent ·Comply with environmental permit requirements ·Maintain a culture of improving efficiency to reduce the cost to provide the current service level or standard ·Maintain a proactive asset management program ·Participate in local, state, and national cooperative purchasing programs PROBLEM This request is to augment the laboratory’s analytical capacity and capability as it relates to semi- volatile organic compounds in wastewater.Currently the laboratory analyzes routine compliance samples for this class of compounds using a traditional single-quadrupole GC/MS.The current instrument is eight years old and is approaching the manufacturer-recommended serviceable life of 10-12 years.The current instrument struggles to meet analytical sensitivity requirements outlined in the 2019 California Ocean Plan for constituents such as benzidine,hexachlorocyclopentadiene, hexachlorobenzene,and 2,4-dinitrophenol.The current instrument does not have a backup system in place.In instances of instrument malfunction,staff needs to devote resources to get theOrange County Sanitation District Printed on 11/6/2024Page 1 of 3 powered by Legistar™ File #:2024-3925 Agenda Date:11/13/2024 Agenda Item No:8. in place.In instances of instrument malfunction,staff needs to devote resources to get the instrument back up and running to meet compliance deadlines,or in extreme cases,must send samples out to a contract laboratory for analysis.When sending this type of sample out in the past, OC San has experienced issues with the contract laboratory meeting our sensitivity and data quality objectives.OC San’s NPDES permit also requires annual analysis for Industrial Endocrine Disrupting Compounds (IEDCs)in the final effluent.OC San has historically performed this analysis in-house using a GC/MS Time-of-Flight instrument.The instrument was initially purchased in 2004 and was taken out of service in 2023 due to age and inability to meet method suitability criteria.The analysis of IEDCs has been outsourced to a contract lab.Several IEDCs in OC San’s permit are uncommon,and only one lab nationwide offers analytical capability for the entire list.On two separate occasions,the contract lab has communicated to OC San their intent to discontinue the analysis of those particular compounds. PROPOSED SOLUTION Approve a purchase order to VWR International,LLC (VWR)for the TQ-GC/MS system in the amount of $325,947 to augment the current GC/MS system.Purchasing the TQ-GC/MS system will equip OC San with a more sensitive system that uses the most current technology,is less susceptible to matrix interference,and provides enhanced instrument capabilities to better support regulatory compliance.The existing GC/MS will be kept in service as a backup to the new system, providing valuable redundancy in case of instrument malfunctions or other contingencies.The TQ- GC/MS system will also be used to develop an in-house method for the analysis of IEDCs,providing long-term assurance that OC San will be able to meet monitoring requirements for those compounds should contract lab services become unavailable. TIMING CONCERNS Regulatory actions (such as the expected update to the California Ocean Plan,or OC San’s renewed NPDES permit)may impact required sensitivity levels for analysis of semi-volatiles in wastewater. Method development and validation for a new instrument can take a significant amount of time, therefore having the instrument onboard ahead of any anticipated regulatory impacts is important to ensure timely compliance with updated requirements. RAMIFICATIONS OF NOT TAKING ACTION Without the TQ-GC/MS system,OC San will continue to use the existing system,which currently has difficulty in meeting minimum sensitivity requirements for some compounds.As the instrument approaches the end of its manufacturer’s expected service life,the instrument is likely to lose sensitivity due to age and normal wear and tear.This decreased sensitivity is likely to result in a failure to achieve the sensitivity requirements outlined in the NPDES permit and referenced in the California Ocean Plan.If NPDES permit compliance is not met,OC San could be subject to enforcement action and daily penalties of up to $25,000 for each violation in addition to other actions deemed appropriate by the EPA and Santa Ana Regional Water Quality Control Board. PRIOR COMMITTEE/BOARD ACTIONS N/A Orange County Sanitation District Printed on 11/6/2024Page 2 of 3 powered by Legistar™ File #:2024-3925 Agenda Date:11/13/2024 Agenda Item No:8. ADDITIONAL INFORMATION The National Association of State Procurement Officers (NASPO,formerly WSCA-NASPO) agreements are available to all State of California governmental entities (e.g.,state agencies,cities, counties,special districts,school districts,universities)that expend public funds for the acquisition of both goods and services. The State of California purchases a wide variety of goods and services ranging from pencils to temporary labor under these agreements.Annual purchases total nearly $10 billion.The Procurement Division is the central purchasing authority for all State departments and local government agencies.With a massive marketplace and billions of dollars in purchasing power they can offer a lower procurement cost to California's state,county,city,special districts,education,and other government entities through their Leveraged Procurement Agreements.Leveraged Procurement Agreements allow entities/agencies to buy directly from suppliers through existing contracts and agreements.One of these that the state offers to California governmental agencies is the National Association of State Procurement Officers for Commodities,IT Goods &Services,and Telecommunication Goods and Services. OC San is utilizing NASPO Agreement No.MA2024005 with VWR,under Ordinance No.OC SAN- 61, Section 2.03(B), Cooperative Purchases. The total cost of $325,947 includes the TQ-GC/MS system,installation and training,a 2-year extended warranty, sales tax, and freight. CEQA N/A FINANCIAL CONSIDERATIONS This request complies with authority levels of OC San’s Purchasing Ordinance No.OC SAN-61.This item has been budgeted (Budget FY 2024-25 and 2025-26,Section 8,Page 90,Capital Equipment) and the budget is sufficient for the recommended action. ATTACHMENT The following attachment(s)may be viewed on-line at the OC San website (www.ocsan.gov)with the complete agenda package: N/A Orange County Sanitation District Printed on 11/6/2024Page 3 of 3 powered by Legistar™ ADMINISTRATION COMMITTEE Agenda Report Headquarters 18480 Bandilier Circle Fountain Valley, CA 92708 (714) 593-7433 File #:2024-3897 Agenda Date:11/13/2024 Agenda Item No:9. FROM:Robert Thompson, General Manager Originator: Jennifer Cabral, Director of Communications SUBJECT: 2025 LEGISLATIVE AND REGULATORY PLAN GENERAL MANAGER'S RECOMMENDATION RECOMMENDATION: Recommend to the Board of Directors to: Adopt the Orange County Sanitation District 2025 Legislative and Regulatory Plan. BACKGROUND Each year,the Board of Directors adopts a legislative and regulatory plan,which is a summary of the Orange County Sanitation District’s (OC San)goals,key issues,and policy positions.The legislative and regulatory policies in this document were developed taking into consideration agency priorities, the wastewater industry,OC San’s member agencies,and policy needs.These Board-adopted policies serve as OC San’s official positions of support or opposition on issues of importance to the agency.The Legislative and Regulatory Plan is a dynamic document,adopted annually,and is modified to meet the needs of OC San as Local, State, and Federal policymaking agendas change. RELEVANT STANDARDS ·Maintain influential legislative advocacy and a public outreach program ·Build brand, trust, and support with policy makers and community leaders ·Maintain collaborative and cooperative relationships with regulators,stakeholders,and neighboring communities PROBLEM Without a strong advocacy program,elected officials may not be aware of OC San’s mission, programs, and projects and how they could be impacted by proposed legislation. PROPOSED SOLUTION Adopt the 2025 Legislative and Regulatory Plan directing staff to work with Local,State,and Federal officials to advocate OC San’s legislative interests and work to create/monitor legislation and grants that would benefit OC San,the wastewater industry,and the community.To assist in OC San’s Orange County Sanitation District Printed on 11/5/2024Page 1 of 2 powered by Legistar™ File #:2024-3897 Agenda Date:11/13/2024 Agenda Item No:9. that would benefit OC San,the wastewater industry,and the community.To assist in OC San’s relationship building efforts,we will continue to reach out to our elected officials providing facility tours, one-on-one meetings, and meetings/lobby trips with D.C. and Sacramento representatives. ADDITIONAL INFORMATION N/A ATTACHMENT The following attachment(s)may be viewed on-line at the OC San website (www.ocsan.gov)with the complete agenda package: ·OC San 2025 Legislative and Regulatory Plan Orange County Sanitation District Printed on 11/5/2024Page 2 of 2 powered by Legistar™ F 2025 Legislative and Regulatory Plan 2 Table of Contents Legislative & Regulatory Affairs Team ................................................................................................................................... 3 Introduction ........................................................................................................................................................................... 4 Procedures for Establishing an OC San Position .................................................................................................................... 4 Guiding Priorities .................................................................................................................................................................... 5 Federal Priorities .................................................................................................................................................................... 5 State Priorities ........................................................................................................................................................................ 7 Appendix ................................................................................................................................................................................ 9 Federal Tactics.................................................................................................................................................................. 10 State Tactics ..................................................................................................................................................................... 12 Legislative and Regulatory Policies .................................................................................................................................. 15 Legislative and Regulatory Process Flow Chart ................................................................................................................ 25 3 Legislative & Regulatory Affairs Team OC San Legislative Advocacy Team Rebecca Long Senior Public Affairs Specialist (714) 593-7444 rlong@ocsan.gov Kelly Newell Public Affairs Specialist (714) 593-7102 knewell@ocsan.gov Jennifer Cabral Director of Communications (714) 593-7581 jcabral@ocsan.gov Daisy Covarrubias Public Affairs Supervisor (714) 593-7119 dcovarrubias@ocsan.gov Rob Thompson General Manager (714) 593-7110 rthompson@ocsan.gov Federal Advocacy Team Eric Sapirstein ENS Resources (202) 466-3755 esap@ensresources.com Sarah Sapirstein ENS Resources (202) 466-3755 ssap@ensresources.com David French ENS Resources (202) 466-3755 dfrench@ensresources.com State Advocacy Team Cori Takkinen Townsend Public Affairs (949) 399-9050 ctakkinen@TownsendPA.com Eric O’Donnell Townsend Public Affairs (949) 399-9050 eodonnell@TownsendPA.com Local Advocacy Team Peter Whittingham (949) 280-9181 peter@whittinghampaa.com OC San Regulatory Advocacy Team Lan Wiborg, Director of Environmental Services (714) 593-7450 lwiborg@ocsan.gov Mark Kawamoto, Environmental Protection Manager (714) 593-7424 kawamoto@ocsan.gov Tom Meregillano, Environmental Protection Manager (714) 593-7457 tmeregillano@ocsan.gov Sam Choi, Environmental Protection Manager (714) 596-7497 schoi@ocsan.gov 4 Administration Committee Ryan Gallagher Board Chairman City of Tustin Jon Dumitru Board Vice-Chairman City of Orange Christine Marick Chairwoman City of Brea Glenn Grandis Vice-Chairman City of Fountain Valley Chad Wanke Member-At-Large City of Placentia Brad Avery Member-At-Large City of Newport Beach John Withers Member-At-Large Irvine Ranch Water District Rose Espinoza Member-At-Large City of La Habra Farrah Khan Member-At-Large City of Irvine Jordan Nefulda Member-At-Large City of Los Alamitos Andrew Nguyen Member-At-Large Midway City Sanitary District Robbie Pitts Member-At-Large City of Villa Park David Shawver Member-At-Large City of Stanton Introduction The Orange County Sanitation District (OC San) recognizes the need for an active local, state, and federal legislative and regulatory advocacy program at the local, state, and federal levels. This program ensures that the interests of the ratepayers and the Board of Directors (Board) are effectively represented and supported. The legislative and regulatory team actively engages, pursues, and monitors activities in California and Washington, D.C. and takes appropriate action to align these with OC San’s goals. Annually, the Board adopts a Legislative and Regulatory Plan that is a summary of OC San’s goals, key issues, and policy positions. The legislative and regulatory policies in this document were developed to take into consideration OC San’s priorities, specifically for the wastewater industry and policy needs. These Board-approved policies serve as OC San’s official positions of support or opposition on issues of importance to the agency. The Legislative and Regulatory Plan is a dynamic document, adopted and modified annually to ensure it meets the everchanging local, state and federal policy changes. Consistent with the Legislative and Regulatory Plan, the legislative and regulatory team may draft position letters, advocate on behalf of OC San, and/or comment on proposed legislation and regulations. Procedures for Establishing an OC San Position 1. The Legislative and Regulatory team will track bills and proposed regulations of greatest interest to OC San, particularly those that align with the goals and objectives identified by the Board and referenced in this plan. Staff will monitor bills and proposed regulations being watched by similar agencies within our region (Los Angeles County Sanitation Districts, South Orange County Water Authority, Orange County Water District, Irvine Ranch Water District, Municipal Water District of Orange County, etc.) as well as state, federal, and national associations such as California Association of Sanitation Agencies (CASA), Clean Water SoCal (CWSC), California Special Districts Association (CSDA), Association of California Water Agencies (ACWA), Association of California Cities Orange County (ACC-OC), League of California Cities (LOCC), and National Association of Clean Water Agencies (NACWA). 2. For those bills and proposed regulations that are being tracked and where there is clear policy direction stated in the current Legislative and Regulatory Plan, the Public Affairs and Regulatory team may send 5 comment letters to legislators and regulators and give direction to the lobbyists to advocate that position. 3. As a first step, when the Regulatory Affairs team is considering issuing a comment letter on proposed regulations, the team will first review the Board-approved criteria established in the current Legislative and Regulatory Plan. If the proposed position meets the established criteria, the team will work with the member associations to ensure a unified voice. When appropriate, the member association(s) will take the lead and advocate on our behalf. Otherwise, a comment letter will be submitted from OC San directly. This will be decided by both the Regulatory Affairs team with input from the Public Affairs Office. Additionally, the Regulatory Affairs team will work directly with OC San’s Director of Communications and other managers as appropriate when crafting an official comment letter. 4. When a legislative issue is not time-sensitive, the legislative letter will be hand-signed by the Board Chairman or Vice-Chairman. If a legislative or regulatory matter is urgent, Legislative and Regulatory team may use the electronic signature, so long as a clear policy direction exists, and approval is secured from the General Manager, or Designee. 5. When a bill does not fall within the scope of the Legislative and Regulatory Plan or is a controversial issue, staff will seek direction from the Administration Committee. 6. If a bill does not fall within the scope of the Legislative and Regulatory Plan, but the ACC-OC, CASA, CWSC, CSDA, and/ or NACWA has adopted a unified position, staff may follow this position and inform the Administration Committee of such action at the next regularly scheduled meeting. Guiding Priorities • Oppose redundant regulatory and legislative requirements that cause undue constraints on efficient operations; • Support legislative and regulatory streamlining that promotes affordability, public health, and environmental protection; • Maintain local control over governance of special districts and other local entities; • Obtain financial assistance for OC San projects through grants, loans, and legislative-directed funding. Federal Priorities • Funding/Finance o Advocate for national infrastructure program that includes wastewater infrastructure needs. o Advocate for fully authorized federal water infrastructure funding of existing programs in addition to national infrastructure initiatives including, but not limited to, Clean Water Act State Revolving Fund (SRF), Water Infrastructure Finance and Innovation Act (WIFIA), Smart Water Infrastructure Grants, and Water Recycling. Additionally, advocate for federal support assistance for workforce training. o Secure competitive and direct federal grant assistance in support of resilient infrastructure, renewable energy, biosolids management, and water and organic management recycling projects assistance. o Monitor and obtain federal grants for funding of traditional wastewater treatment needs, alternative renewable energy, bioenergy, water recycling, biosolids beneficial use, and environmental protection. o Support development of infrastructure policies and legislation that will close funding gaps and 6 encourage direct grant assistance in support of projects and programs addressing resiliency needs that protect OC San infrastructure investments from natural disasters. o Work in support of CERCLA PFAS liability exemption for water sector. Support legislation, policies, and regulations that offer to provide below-market bonding rate assistance to construct treatment facilities including credit assistance including Municipal Facility Assistance, and infrastructure banks. Focus should include modernizing wastewater treatment facilities. This should include energy and water use efficiency as well as sustainable energy recovery technologies. o Secure federal support of OC San’s capital project needs to aid in the budget decision making process for the coming fiscal year. o Promote restoration of federal deductibility of state and local tax payments and oppose elimination or restriction on the use or availability of tax-exempt financing for public infrastructure. o Support legislation to revise the SRF allocation formula to allow for appropriate and fair share of funding to California that is consistent with the EPA’s Review of the Allotment of the Clean Water State Revolving Fund (CWSRF) study (20 percent increase in share). o Support removal of private activity Bond State Volume Cap as part of the national infrastructure initiative on water and wastewater facilities to allow for innovative financing approaches. • Innovative Technology o Work with Congress and the EPA to enhance the WaterSense Program to increase the use of energy and water use efficiency technologies at OC San while protecting against potential increasing treatment costs related to the program’s rulemaking. o Work with Congress to authorize and fund direct assistance to support innovative technology adoption. • Contaminants of Emerging Concern o Support the reduction/elimination of Contaminants of Emerging Concern (CEC) such as Per- and polyfluoroalkyl substances (PFAS), microplastics, pharmaceuticals and personal care products (PPCPs), pesticides and endocrine disrupting chemicals (EDCs)) within consumer and commercial products. o Recognition of a PFAS/CEC baseload that originates from non-industrial sources that are immune from local, state, and federal source control/ pretreatment regulations. o Work with Congress to advance federal assistance to support the treatment of forever chemicals and to protect public agencies from liability for per- and polyfluoroalkyl substances (PFAS) presence in biosolids, wastewater, and air. o Manufacturers of PFAS chemicals to provide a funding stream for federal grants and low-interest loans to agencies that are impacted. o Support regulations or legislation that limit or ban the creation, formulation, and general use of PFAS constituents. o Oppose regulations or legislation that would place responsibility for addressing PFAS as a class of constituents on water sector. o Secure liability exemption for wastewater agencies from liability under CERCLA as a result of hazardous substance designation. o Preserve land application of biosolids based upon science justified standards under Section 503. CECs. o Work with the EPA on emerging regulatory issues of concern including integrated planning, method development, monitoring effluent limitations and guidelines, and Contaminants of Emerging Concern including, but not limited to, PFAS, microplastics, and methylene chloride. o Support legislation that will eliminate non-essential PFAS uses to reduce and mitigate PFAS in everyday consumer goods. 7 • NPDES/Permitting o Advocate to authorize EPA to provide NPDES permits terms for a period of up to 10 years and to retain a five-year administrative extension authority. o Support streamlining of the Clean Water Act permitting processes. • Environment/Climate Resiliency o Work with OC San’s congressional delegation and administration officials to advance funding of resiliency needs, including impacts associated with sea level rise, climate change, and natural disasters, such as wildfires, which could affect our utility grid and cause power outages. o Also, seismic events, drought, and general resiliency planning that would support OC San’s water recycling, conservation, and other resiliency projects. • Source Control o Support implementation of policies to label wipes as non-flushable/non-dispersible. o Advocate for federal policies that minimize regulatory burdens imposed upon communities and public agencies that seek to adopt programs for the giveback of pharmaceuticals that will result in the reduction of disposal of pharmaceuticals through wastewater treatment facilities. Additionally, OC San will advocate for federal funding of programs currently authorized that support the development of pharmaceutical management programs including education. o Monitor legislation and regulations that limit PFAS in industrial wastewater. State Priorities • Funding/Finance o Secure funding through grants and legislation for infrastructure, collection improvements, and alternative renewable energy at the Headquarters, Fountain Valley, Plant No. 1 and Huntington Beach, Plant No. 2. o Promote a regional distribution/statewide equity approach to the disbursement of SRF monies. o Oppose legislation or any regulations that would mandate volumetric pricing of wastewater. o Actively protect the allocation of local property taxes to special districts in the state budget process. o Monitor legislation that affects capacity and connection fees for accessory dwelling units or single- family residences. o Support legislation that would encourage or develop bulk energy storage facilities as well as legislation that would provide funding for long-term energy storage. o Obtain funding for projects that meet the State’s goals of expanded water supply, energy reduction, and renewable energy implementation. o Where appropriate, obtain State funding for critical aging infrastructure, through funding sources made available through any agency including, but not limited to, the State Water Resources Control Board (SWRCB), California Air Resources Board (CARB), and the Department of Water Resources (DWR). o Support funding through grants and legislation for a Food Waste/Organic Co-Digestion facility. o Monitor pension reform legislation for clean-up bills and relevant proposed regulations. o Support legislation that would supersede the Kaanana decision by limiting prevailing wage requirements for utilities to construction contracts. o Support targeted funding through grants and legislation for zero and near zero emission vehicles and the supporting infrastructure required for zero emission vehicles. o Monitor and support funding for PFAS prevention, cleanup, collection, and disposal programs. • Contaminants of Emerging Concern 8 o Support regulations and legislations that abide by the ‘producer pays’ principle when allocating clean up responsibility and enable cost recovery. o Oppose regulations or legislation that puts responsibility of addressing PFAS as a class of constituents on public treatment plants. o Monitor state legislation as well as the SWRCB and CARB on regulatory activity related to PFAS. o Work with legislators to address concerns stemming from Mobile Persistent Bioaccumulative Toxic substances (MPBTs) such as PFAS. o Support legislation that will eliminate non-essential PFAS uses to reduce and mitigate PFAS in everyday consumer goods. • Environment/Climate Resiliency o Support and participate in Integrated Regional Water Management planning efforts in the Santa Ana River watershed. o Oppose restrictive and redundant regulatory requirements for biosolids. o Support the creation of a Statewide Organics Management Plan that includes the beneficial reuse of biosolids, education, market expansion activities, and mandates to buy-back compost and other organics diverted from landfills. o Support efforts to reform the California Environmental Quality Act (CEQA) to streamline current procedures and regulations for projects to refurbish or replace existing infrastructure facilities. o Actively monitor the Little Hoover Commission hearings and reports related to climate change adaptation, special districts, and other topics as it relates to OC San. • Water Reuse o Oppose legislation that would directly or indirectly impair GWRS’s ability to effectively recycle all reclaimable flows. o Support the inclusion of recycled water credits during the continued development and implementation of long-term water conservation legislation and regulations. o Monitor legislation and regulations on direct potable water reuse such as GWRS and/or other potential DPR-related issues (e.g., Direct Potable Reuse Regulations (SBDDW-23-001)). • Source Control o Support legislation and/or regulations that restrict the non-essential use of microplastics and contaminants of emerging concern in any product that is disposed or has the potential to be introduced into the sanitary sewer system. o Support the reduction/elimination of Contaminants of Emerging Concern (CEC) such as Per- and polyfluoroalkyl substances (PFAS), microplastics, pharmaceuticals and personal care products (PPCPs), pesticides and endocrine disrupting chemicals (EDCs)) within consumer and commercial products. o Support legislation or regulations that discourage the flushing of wipes through the sewer system, unless they meet certain performance standards. o Monitor legislation and regulations that limit PFAS in industrial wastewater. • Local Government o Support the State’s efforts to increase the effectiveness and efficiencies of Local Agency Formation Commissions. o Oppose state mandates, regulations, or legislation that set, alter, or otherwise modify the governance structure of special districts, joint powers authorities, or other local government entities. 9 Appendix A. Federal Tactics B. State Tactics C. Legislative and Regulatory Policies D. State, Federal and Regulatory Processes Appendices 10 Federal Tactics Initiative Action 1. Identify and advise on federal funding opportunities for OC San infrastructure projects • Schedule meetings with federal agency stakeholders and senior officials in Washington, D.C. and district offices to build support for OC San priority projects. • Work with congressional delegation to update priority needs. • Develop white papers to justify requested assistance through direct grants. 2. Seek funding assistance to advance recovery of energy and other resources from biosolids and other organics such as food waste • Meet with federal agency officials to review OC San’s needs and to discuss funding opportunities and options related to the energy water nexus. • Work with EPA and other agencies to advance energy and water efficient technologies related to smart water technologies and WaterSense grant program. 3. Seek Infrastructure assistance A. Robust funding of SRF and revise SRF Allocation Formula B. Innovative Financing C. Regulatory Streamlining • Meet with congressional delegation and key congressional committees. • Develop priorities and disseminate to OC San’s congressional delegation. • Advocate before congressional infrastructure committees and applicable Executive Branch officials to secure adoption of alternative water infrastructure financing including credit, loans, public-private partnerships and grants in addition to direct grants assistance. • Work to ensure expedited National Environmental Policy Act and related reviews and approvals. • Work with Congress and U.S. Bureau of Reclamation on proposals to provide enhanced alternative water infrastructure financing tools and seek opportunities to testify before Congress. 4. Support tax reform that protects public agencies • Work with NACWA and CASA in support of unrestricted use of tax-exempt financing and feasible innovative financing approaches such as infrastructure banks to supplement traditional funding approaches. • Work with state and local government stakeholders to restore state and local tax deductibility and advocate before congressional delegation. • Present or submit testimony. • Transmit communications on tax-exempt financing. Appendix A 11 5. Support resiliency legislation, regulations, and policies that support protection of OC San’s investments and promote water and biosolids recycling assistance • Work with delegation and regulators to ensure incorporation of new programs for water and biosolids recycling assistance. • Work with NACWA, CASA, and ACWA to support resiliency water and biosolids recycling legislation and regulations. • Work with congressional infrastructure committees to secure assistance for resiliency projects. 6. Work with federal agencies on permitting issues • Work with U.S. Fish and Wildlife Service on environmental site assessment issues such as incidental take permits under Endangered Species Act (ESA) • Advocate current Administration and Congress to advance commonsense permitting processes and programmatic permits issued by the EPA and the U.S. Army Corps of Engineers to reduce ratepayer costs. • Advocate to authorize EPA to provide NPDES permits terms for a period of up to 10 years and to retain a five-year administrative extension authority. • Continue to work with EPA advocating opposition of restrictive air quality requirements in Title V permits such as Affirmative Defense Provisions. 12 State Tactics Initiative Action 1. Develop a proactive legislative and regulatory advocacy agenda • Identify legislation that has the potential to benefit or impact OC San, as legislation is introduced and amended. • Identify proposed state and local regulations that are introduced that have the potential to benefit or impact OC San. • Recommend positions on identified legislation and proposed regulation to align with OC San’s Legislative and Regulatory Plan. • Create and continually update a legislative and regulatory matrix to track identified pieces of priority legislation and proposed regulations. • Schedule advocacy days in Sacramento as needed with legislators and committee staff and regulators. • Continue an active comment letter writing campaign to support or oppose priority legislation and proposed regulations. • Schedule meetings with legislators, regulators, stakeholders, and senior officials in Sacramento and district offices as needed to build support for OC San priority projects. • Participate in CASA’s legislative committees and Regulatory Workgroup and CWSC’s air quality, water issues, collection systems, biosolids, and wastewater pretreatment committees. 2. Compile a comprehensive list of Capital Improvement Projects to reference for soliciting future funding opportunities • Meet with management to discuss future capital projects and priorities. • Match capital improvements with funding opportunities based on project eligibility. 3. Monitor and advise on possible funding opportunities, including, but not limited to, funding through Statewide bonds • Proactively engage in the drafting of grant funding guidelines and provide input to drafting agency or committee to ensure eligibility and competitiveness of OC San’s projects and priorities. • Proactively engage on proposed legislation and regulations that would have an impact on the implementation of funding programs. • Identify funding opportunities and provide recommendations for eligible projects. Create an advocacy and outreach schedule on the planning and execution of efforts to seek funds. Appendix B 13 4. Monitor and advise on funding available through Cap and Trade • Monitor the rollout of the Cap-and-Trade Expenditure Plan for waste diversion projects. Continue to advocate for additional funding in future Cap-and-Trade Expenditure Plans that OC San is eligible for. • Identify eligible and competitive projects and programs. • Create a schedule on planning and execution of efforts to seek funds, including outreach and advocacy strategy. 5. Monitor and advise on energy or other resource recovery related funding opportunities • Track energy related grant opportunities. • Identify potential projects for funding, including, but not limited to, alternative renewable energy, biogas, biosolids to energy conversion, organic waste (high strength food waste and fats, oils, and grease) to energy conversion, and greenhouse gas reduction projects. • Ensure wastewater interests are protected as significant decisions are made related to renewable energy production financing, mandates, climate change goals, programs, and continued efforts to extend the state’s emissions reduction target. • Schedule meetings with local delegation as well as key members to discuss project benefits and funding opportunity. • Support initiatives that help OC San strive for energy independence by minimizing energy utilization and maximizing useful energy recovery from the sewage it receives. • Support fair and reasonable regulations for the pipeline injection of biomethane produced from anaerobic digestion • Support renewable energy initiatives that are reasonable and fair. 6. Schedule and attend advocacy and outreach meetings to provide OC San project updates • Educate current administration, key staff, and agencies as needed on priority projects and advocate for funding allocations that align with OC San’s priorities. • Schedule stakeholder meetings to build support for projects • Hold advocacy meetings in coordination with funding opportunities and project timelines. • Work with relevant budget committees, budget sub-committees, policy committees and their staff to advocate for funding allocations that align with OC San’s priorities. • Provide full briefings and updates to Orange County’s legislative delegation and relevant members as needed on OC San’s priority projects. 7. Ensure that there is regulatory support in place to allow for non-reclaimable discharge such as brine • Outreach with the California Environmental Protection Agency, Department of Toxic Substances, State Water Resources Control Board, Regional Water Quality Control Board, the governor's office, legislative leadership, and other appropriate stakeholders. 14 8. Ensure development and implementation of a statewide biosolids land application management policy • Work in conjunction with CASA, CWSC, etc. to reach to and educate legislators and regulators to develop an advocacy strategy for regulatory framework that will support statewide objectives to manage biosolids land application. 9. Ensure development and implementation of a strategy to relieve OC San of cumbersome and outdated bid advertising costs • Work with relevant legislators and committees to draft legislation that will lessen the cost burden on OC San rate payers of complying with outdated bid advertising requirements. • Conduct outreach with various other sanitation districts/publicly owned treatment works (POTW’s) across the State to form a coalition to support any efforts. 10. Ensure development and advocacy for legislation to raise the contracting and bid threshold for OC San • Meet with local labor groups to initially present the issue. • Brainstorm proposed solutions that will give OC San and other sanitation district’s/POTW’s more flexibility to complete small scale public works projects in house. • Work in conjunction with CASA to outreach, educate, and develop an advocacy strategy that will target all sanitation districts/ POTW’s affected by the current threshold limitations. • Develop and advocate for legislation that will raise the threshold for work that can be performed in-house as well as work that is required to be bid. 15 Legislative and Regulatory Policies A. Air Quality: OC San is committed to complying with federal, state, and local air quality laws, rules, regulations, and policies. a. Support air quality legislations, regulations, rules, and policies that minimize permitting barriers and encourage the use of advanced air pollution control technologies through greater permitting flexibility and financial incentives. b. Support measures that maintain and enhance local decision-making authority, where appropriate, in the development and implementation of air quality attainment strategies. c. Support legislation and regulations to ensure greater consistency between the California and Federal Clean Air Acts. d. Support strategies that clearly demonstrate and provide for the most cost-effective means for meeting air quality goals. e. Support regulatory and legislative changes that allow exemptions from CARB's medium and heavy-duty clean air requirements for critical wastewater response vehicles, such as Assembly Bill 1594. f. With respect to CARB’s Advanced Clean Fleets Regulation and the restrictions imposed on the vehicles subject to these purchase requirements, support legislation that will include emergency response vehicles owned/operated by essential public services in the definition of “Emergency Vehicles” in CVC section 165. g. Oppose regulations that mandate specific fuel types or neglect the significant benefits of renewable fuels. h. Oppose air quality policies, rules, and regulations at Title V facilities that disregard the role wastewater treatment as an essential public service. i. Oppose redundant and unreasonable requirements, such as double reporting requirements, with respect to emissions reporting associated with AB 617 (2017), the Community Air Protection Program. j. Oppose SCAQMD policies, rules, and/or regulations on Cumulative Impacts from Air Toxics for CEQA Projects. Monitor SCAQMD for proposed changes to risk mitigation procedures, public notification threshold requirements, R1401 limits, analysis to criteria pollutants, and GHG impacts. Appendix C 16 k. Oppose federal, CARB, and SCAQMD policies, rules, and/or regulations that promote the use of technologies that are unvetted, have scalability issues, or can’t be manufacturer guaranteed such as certified, backup emergency power equipment with automatic shutoff inducement. l. Adhere to OC San’s odor policy and level of service to assure OC San is a good neighbor to the surrounding communities. m. Monitor, participate, and engage in the development of any updates to the federal National Emission Standards for Hazardous Air Pollutants (NESHAP) and New Source Performance Standards (NSPS) applicable to POTW’s, process Boilers, and Reciprocating Internal Combustion Engines (RICE) located at an area source. n. Monitor SCAQMD’s Priority Reserve Bank for impacts transcending from the sunsetting of the Regional Clean Air Incentives Market (RECLAIM) program. Oppose any rules proposing to cease or limit future emission reduction credit deposits into the Priority Reserve bank. o. Monitor and oppose any legislation or SCAQMD regulations requiring fence-line monitoring for pollutants of concern, including hydrogen sulfide, at POTW’s having a design capacity ≤ 425 MGD. p. Monitor legislative and regulatory developments in response to State’s goal of achieving Carbon Neutrality including the Advanced Clean Fleets and the Zero- Emission Forklift Fleets regulations pertaining to the electrification of engine-driven equipment and fleets. Oppose measures that require special districts and local governments to be early adopters of this unproven technology. q. Monitor SCAQMD’s development of regulations and guidelines associated with AB 617 in the following areas: (1) implementation of best available retrofit control technology (BARCT) requirements for existing stationary sources; (2) deployment of air monitoring systems in selected communities; (3) implementation of emissions reduction plans in selected communities. r. Monitor SCAQMD’s development of rules and policies, such as Rule 317.1, that will require major stationary sources such as OC San and other publicly owned wastewater facilities to pay for the region’s inability to achieve attainment with the federal 8-hour ozone standards pursuant to Section 185 of the CAA. s. Monitor SCAQMD’s development of rules and policies associated with the electrification of combustion-fired equipment such as for furnaces under Rule 1111 and smaller boilers/water heaters under Rule 1146.2. t. Monitor SCAQMD’s development of rules and policies associated with the potential elimination or imposed limitation on emergency standby internal combustion engines under proposed Rule 1110.4. 17 u. Obtain grant funding through programs such as the Carl Moyer Memorial Air Quality Standards Attainment Program (Carl Moyer Program) and the VW Mitigation Trust, as deemed eligible, for zero-emitting vehicles and equipment and any necessary infrastructure to support those emerging technologies. v. Participate and engage in associations efforts to work with CARB and the local air districts in the implementation of the updated AB 617 (2017), the Community Air Protection Program, the Regulation for the Reporting of Criteria Air Pollutants & Toxic Air Contaminants (CTR), AB 2588 Air Toxics “Hot Spots” Programs, and the SCAQMD’s 2022 AQMP. w. Participate and engage in SCAQMD’s implementation of the provisions adopted in the 2022 AQMP. Oppose potential measures in future AQMP’s that place additional burdens to resource recovery operations generating renewable energy. x. Monitor and support any legislative development which would provide a relief on the use of diesel emergency power generators during State of Emergency events and Public Safety Power Shutoff (PSPS) events impacting the local electrical utility. B. Biosolids, Organics and Biogas: OC San strives for the beneficial reuse of biosolids through multiple management options performed at reasonable costs that are protective of public health and the environment. a. Support legislation, regulations, and policies that support the beneficial reuse of biosolids on agricultural lands, landscape, horticulture, California Healthy Soils Initiatives, mine reclamation, fire ravaged lands, superfund sites, brownfields, overgrazed lands, carbon sequestration, and wetland restoration. b. Support the promotion and funding of local pilot programs, studies, and research for the beneficial use of biosolids. c. Oppose legislation, regulations, and policies that impose unreasonable new rules, guidance or bans that restrict the use of biosolids for land application in any region, county, or state without scientific basis. d. Support alternative renewable energy legislation, regulation, and policies that encourage use of biosolids as a renewable energy resource. e. Support responsible local reuse of community-generated organics, not limited to biosolids compost and biogas. f. Support streamlined legislation, regulations, and policies that encourage the procurement of biogas, biosolids, and compost. 18 g. Support CalRecycle, CARB, California Public Utilities Commission, (CPUC), California Energy Commission (CEC), California Department of Food and Agriculture (CDFA), and SWRCB accepting quality standards that allow wastewater treatment plants to inject biogas production into existing pipelines for renewable use. h. Support compost associations and local cities and agencies in education, market expansion activities, and meeting mandates to buy-back compost and other organics diverted from landfills. i. Limit redundant reporting requirements on organics, recyclable material, and solid waste. j. Support development and funding for organic co-digestion and recycling projects in accordance with SB 1383 or other associated rules and regulations. k. Support efforts to provide alternative management and/or funding options for biosolids, such as supercritical water oxidation, pyrolysis, and/or future biosolids/biogas projects. C. Source Control: OC San supports legislation that reduces pollutants and harmful materials that could enter the sewer system. a. Support statewide or targeted public education programs and initiatives that teach appropriate “What To Flush” practices and fats, oils, and grease management. b. Support federal policies and legislation that regulates the disposal of flushable wipes to ensure clarity on the definition of “flushable.” c. Support legislation, regulations, and funding assistance that would lead to decreased introduction of microplastics, and other contaminants of concern discharged into the sewer system. d. Support legislation and funding mechanisms that reduce the amount of trash, waste, chemicals, and harmful organic material that enter the sewer system. e. Support legislation that would create forever homes for forever chemicals. f. Oppose regulations or legislation that would place the responsibility of addressing PFAS as a class of constituents on the public treatment plants. g. Support funding opportunities for clean-up costs from the manufacturers of PFAS and through state grants and low-interest loans. h. Support the reduction/elimination of Contaminants of Emerging Concern (e.g., PFAS) within consumer and commercial products. i. Monitor the development of PFAS-containing firefighting foam collection and disposal programs across the country. 19 D. Grant Funding: OC San is committed to advancing the state of knowledge in the treatment and management of wastewater through the application of innovative and alternative technologies. To this end, OC San supports grants assistance to offset its research, special projects, and capital improvement projects. a. Support legislation, bonds, programs, and projects that provide funding for: infrastructure construction and rehabilitation, special studies and research or projects relating to security, environmental education, water quality, wastewater processing, urban runoff, wastewater recycling, biosolids and organics management, water quality improvement, resource recovery, or alternative energy. b. Support projects that provide for public benefit over projects that are primarily intended for private benefit or gain. c. Oppose proposals placing further requirements on grant recipients that return low value for high administrative costs. d. Support regional collaboration and funding for public agencies for food waste co-digestion and recycling projects. E. Innovative Funding: OC San is committed to supporting programs that provide the highest quality services to its ratepayers. a. Support programs to leverage federal assistance such as credit assistance and highly subsidized loan assistance. b. Support Public-Private Partnerships, Public-to-Public, and other financing approaches that can reduce costs only if such projects do not impose costs on OC San ratepayers. c. Support the full funding of the Clean Water Act- SRF Program at $4 billion annually. d. Seek federal assistance to support water conservation projects such as water recycling, green infrastructure through the Water Infrastructure Finance and Innovation Act (WIFIA), and direct grants to reduce project costs. e. Seek state and/or regional incentive funding opportunities, such as CARB’s Heavy Duty Voucher Incentives Program (HVIP) and the Carl Moyer Program, available to offset the regulatory mandates to transition combustion-fired vehicles and equipment to zero emission technologies (e.g. battery electric, heat pumps, and hydrogen fuel cells). F. Labor Relations/Human Resources: OC San is committed to employer-employee relations including, but not limited to, meeting and conferring in good faith with recognized employee organizations regarding the wages, hours of work, and other terms and conditions of employment. As Congress considers reforming the federal tax code, many of the provisions subject to reform may impact labor relations. a. Support measures to reform current workers compensation formulas that rely on a proportionate exposure formula. 20 b. Support health insurance reform that does not create additional financial burdens on special districts. c. Support measures to ease applicability of the Fair Labor Standards Act on public agencies. d. Oppose any measure imposing compulsory and binding arbitration with respect to public employees. e. Oppose any measure that imposes upon local government mandated employee benefits that are more properly decided at the local bargaining table. f. Oppose efforts reducing local control over public employee disputes and imposing regulations on an outside agency. g. Oppose any measure granting essential public employees the right to strike. h. Oppose a new mandatory Social Security tax for public employers and public employees. i. Oppose overreaching and costly mandates that require non-necessary disclosures to employees. j. Oppose legislation and regulations that force OC San to adjust paid and unpaid leave time parameters. G. Security: OC San is committed to the safety of all personnel, facilities, and the entire sewer system. a. Support legislation that would create efficiencies around the retention policy of surveillance video recordings. b. Support policies that address cybersecurity needs of wastewater agencies, including Supervisory Control and Data Acquisition. c. Support funding assistance to ensure employees remain safe and secure during global pandemics. d. Support funding for the hardening of essential regional facilities such as water recycling and sewer collection and recycling sites. e. Support legislation and funding for regional emergency management collaboration to protect critical infrastructure. H. Planning: OC San ensures the long-range planning of capital improvement programs in order to deliver the highest quality facilities. a. Support reform of existing state, regional, and local planning processes only if directly linked to reforms in the current revenue and tax structure of state and local governments. b. Support measures that provide new revenues for growth management and the public facilities necessary to support expected growth. 21 c. Support proposals encouraging regional, sub-regional, or countywide cooperation in planning urban development strategies, especially those that provide funding for effective implementation of agreed upon goals. d. Oppose legislation consolidating special districts that fail to address the concerns of cities affected by the proposed consolidation. e. Oppose measures that prevent or restrict the ability of cities or special districts to participate in the Southern California Association of Governments’ sub-regional process. I. Public Health: Protection of public health is OC San’s core mission. OC San will work cooperatively with county and state health officers to assure local health protection. a. Support hazard mitigation, emergency response, planning, and recovery through direct legislation, policy directives, and funding toward floodplain security within the Santa Ana River watershed. b. Support funding assistance to ensure employees remain safe and secure during global pandemics. c. Support (generally) measures that provide for improved public health through regulation. d. Support the protection of public health and environment through the construction and implementation of advanced wastewater treatment technology. e. Support sharing critical information and data from state and county agencies in the interest of protecting the public health and saving taxpayer dollars. f. Monitor legislation that provides additional occupational safety and health standard requirements for employees, contractors, or subcontractors. J. Public Works: OC San is committed to the successful completion of effective and efficient projects that provide wastewater treatment services that benefit its ratepayers. a. Support measures that provide funding and support to POTWs and sewage collection systems. b. Support legislation and regulation that allow public agencies to procure goods and services in manners similar to private industry, thereby reducing overall costs of delivery. c. Support legislation and regulation that improve the Utility Underground Service Alert Program to improve coordination, identification, minimize damage, minimize environmental risks, and minimize cost exposure to publicly owned facilities when contractors are performing sub- surface work. d. Support a comprehensive response to the state’s electricity and natural gas shortages that provide a stable energy supply, respects the ability of municipalities to provide power, recognizes that infrastructure (i.e. emergency and standby generators) exists that could be employed temporarily during periods with minimal air quality impact and protects ratepayers against dramatic rate increases and statewide power outages. 22 e. Support legislation and regulation that allows OC San to utilize the Best Value Design Build, Progressive Design Build and Construction Manager at Risk Design Build option for the construction of public works projects. f. Oppose Buy American mandates legislation that would increase project costs or prevent the use of the most innovative technologies. g. Monitor legislation that would require the inspection and possible repair of sewer laterals at the time of sale in residential, commercial, and industrial areas. h. Monitor legislation connected with government claims against special districts regarding risk and wrap-up insurance. i. Support legislation that increases the thresholds for bid work and force account work. K. Tax Reform/Revenue and Taxation: Track pending legislation to ensure OC San remains in compliance with the government code as it pertains to wastewater system user fees and property tax revenues and the investment of public funds. a. Support measures leading to a greater financial independence from the state that would result in greater stability and predictability in local government budgeting. b. Oppose measures that impose mandated costs for which there is no guarantee of local reimbursement or offsetting benefits. c. Oppose legislation that shifts tax revenues away from local governments without the adequate provision of a constitutionally guaranteed backfill to offset the lost revenues of those local governments. d. Oppose measures that shift existing local revenue sources back to the state, including the special district share of property tax, sales tax, vehicle license fees, and ratepayer fees. e. Oppose the use of revenues traditionally used to fund the delivery of municipal services to fund programs for which the state is responsible, particularly the courts, health, and welfare programs. f. Oppose elimination or restriction of state and local tax deduction from federal tax liability of local taxpayers. g. Oppose elimination or restriction on the availability of municipal tax-exempt financing for public infrastructure projects. h. Monitor legislation regarding changes in law that influence the fees and charges that OC San facilitates. i. Support legislation that would exempt vital treatment chemicals for water and wastewater agencies for the sole purpose of water recycling from sales and use tax. L. Special Districts: OC San supports the maintenance of special districts to provide specific services, in response to citizen’s demands, in a cost-effective manner. 23 a. Support efforts to provide equitable treatment of special districts in emergency funding assistance. b. Support outreach to local, regional, and state elected officials to foster a greater understanding regarding the critical relationship between adequate reserves and the successful short-and-long- term operation of water and wastewater agencies. c. Support the work of the ACWA, CASA, and CSDA etc. in any future discussions or negotiations pertaining to the legislative and budget issues relative to preserving control of members’ reserves. d. Oppose further state regulations that adversely impact special district financing, operations, and administration. e. Oppose measures that create or grant powers to sub-regional or regional bodies that would result in an infringement on clearly local concerns. f. Oppose any administrative or legislative efforts to access or transfer any reserve funds held by water and wastewater districts. g. Oppose the imposition of unfunded, mandated programs on local governments. h. Oppose efforts that diminish OC San’s ability to govern efficiently and effectively, including expanding the size of the Board. i. Support alternate methods of public meetings notices that maintain transparency but are more cost efficient and technologically advanced. j. Support maximum flexibility for special districts to conduct Board business virtually while providing for public transparency. k. Support legislation that gives local control on video retention guidelines to special districts to maintain maximum flexibility and cost control. M. Water Quality and Supply: OC San is committed to participating collaboratively in the protection of regional water resources for the benefit of the people we serve. a. Support (generally) measures to increase water supply and improve water quality in the region, including drought relief legislations and regulations. b. Support measures that would increase funding for water reuse technologies, including support for the Groundwater Replenishment System project by the Orange County Water District and the OC San to create new water supplies through wastewater recycling. c. Support measures that promote and provide for the use of reclaimed water. 24 d. Support policy development, funding, and research for addressing urban runoff, stormwater, and beach closures, including funding for studies that identify the sources of nutrients (e.g., ammonia, nitrates, etc.) and bacterial, viral, and other microbial contaminants and human pathogens. e. Support measures to evaluate water quality standards, as needed, to ensure the objectives are appropriately protecting the designated use. f. Support legislation and regulation that would direct EPA levied fines to remain in the region. g. Support measures addressing non-point source pollution in order to protect our ocean water quality and provide funding to mitigate its effects, including integrated permitting approaches that can reduce costs and achieve water quality improvements while allowing permits to be tailored to the needs of Orange County and its watershed. h. Support national infrastructure policies that contain aspirational goals which promote improved water use efficiency in construction of water efficient buildings and communities. i. Support legislation and regulation that promote improved water use efficiency through state assistance in evaluating and implementing new programs and technologies and increasing public awareness of water use efficiency. j. Support legislation and regulation that provide for the development of the watershed approach, including watershed management plans and watershed-based permitting. k. Support legislation and regulation that necessitate the responsible use of water in residential, commercial, and industrial areas. l. Support streamlined environmental guidelines and regulations which would safeguard the region, providing increased protections and lesser costs to ratepayers. m. Oppose the imposition of statewide fees for environmental cleanup that is caused through private sector actions or are regional in nature (e.g., when the nexus between those responsible for environmental abuse and those required to pay for cleanup or mitigation is absent). n. Support approaches to reduce compliance costs associated with stormwater controls including the use of integrated plans. o. Monitor state and federal legislation and regulations related to Contaminants of Emerging Concern (e.g., PFAS, etc.). 25 Legislative and Regulatory Process Flow Chart Appendix D State 26 Federal 27 Regulatory ADMINISTRATION COMMITTEE Agenda Report Headquarters 18480 Bandilier Circle Fountain Valley, CA 92708 (714) 593-7433 File #:2024-3791 Agenda Date:11/13/2024 Agenda Item No:10. FROM:Robert Thompson, General Manager Originator: Jennifer Cabral, Director of Communications SUBJECT: LEGISLATIVE AFFAIRS UPDATE FOR THE MONTH OF OCTOBER 2024 GENERAL MANAGER'S RECOMMENDATION RECOMMENDATION: Recommend to the Board of Directors to: Receive and file the Legislative Affairs Update for the month October 2024. BACKGROUND The Orange County Sanitation District’s (OC San)legislative affairs program includes advocating for OC San’s legislative interests;sponsoring legislation (where appropriate);and seeking local,state, and federal funding for projects and programs. RELEVANT STANDARDS ·Maintain influential legislative advocacy and a public outreach program ·Build brand, trust, and support with policy makers and community leaders ·Maintain collaborative and cooperative relationships with regulators,stakeholders,and neighboring communities PROBLEM Without a strong advocacy program,elected officials may not be aware of OC San’s mission, programs, and projects and how they could be impacted by proposed legislation. PROPOSED SOLUTION Continue to work with local,state,and federal officials to advocate for OC San’s legislative interests. Help to create and monitor legislation and grants that would benefit OC San,the wastewater industry, and the community.To assist in relationship building efforts,OC San will continue to reach out to elected officials through facility tours,one-on-one meetings,and trips to Washington D.C.and Sacramento. Orange County Sanitation District Printed on 11/1/2024Page 1 of 2 powered by Legistar™ File #:2024-3791 Agenda Date:11/13/2024 Agenda Item No:10. RAMIFICATIONS OF NOT TAKING ACTION If OC San does not work with local,state,and federal elected officials,legislation could be passed that negatively affects OC San and the wastewater industry.Additionally,a lack of engagement may result in missed funding opportunities. ADDITIONAL INFORMATION Activities in October: ·The State of OC San took place on Friday,October 25 from 11 a.m.to 1 p.m.at the Mile Square Golf Course Clubhouse in Fountain Valley.The event hosted more than 175 local, state,and federal dignitaries and provided an update on OC San,our accomplishments,and the future direction of the agency. Activities in November: ·The General Election took place on Tuesday,November 5,where the presidency,vice- presidency,Federal Legislative representatives,State Legislative representatives,and many local representatives were elected. ATTACHMENT The following attachment(s)may be viewed on-line at the OC San website (www.ocsan.gov)with the complete agenda package: ·Federal Legislative Update ·Federal Matrix ·State Legislative Update ·State Matrix ·Local Legislative Update Orange County Sanitation District Printed on 11/1/2024Page 2 of 2 powered by Legistar™ 1 | P a g e TO: Rebecca Long FROM: Eric Sapirstein DATE: October 22, 2024 SUBJECT: Washington Update Over the past month, Congress remained on recess in the run-up to the General Election. Congress will return for the Lame Duck Session November 12 in what promises to be a session dominated by legislation addressing: disaster assistance, finalizing Fiscal Year 2025 spending bills, Farm Bill, water resources, wildfire suppression, and perfluoroalkyl and polyfluoroalkyl (PFAS) liability protections. Whether any or all these policy matters are addressed in final remains an open question since the productivity of the session will hinge upon the election returns. The following summarizes the status of federal policy matters of interest to OC San • PFAS Rulemakings and Liability Protection Legislation The U.S. Environmental Protection Agency’s (USEPA’s) Office of Science and Technology continues its self-imposed deadline of the end of the year to publish a draft Risk Assessment Model (RA) for PFAS in biosolids. Office staff indicate that the overall model is essentially complete with the only outstanding matters centering quality control reviews. As matters stand presently, the model will rely on several numbers of PFAS concentration tied to identified pathway of exposure. For example, the model is expected to specify risk levels for cattle grazing on lands treated with biosolids. This would be mirrored for other pathways like impacts to soils and groundwater. The USEPA staff insist that the RA is not intended to eliminate land application of biosolids, noting that land application is a vital element of a comprehensive biosolids management program. 2 | P a g e The USEPA is expected to publish the RA in draft by the end of 2024 and we anticipate that the agency will accept public comments for a period as long as sixty days. Following the close of public comment period, the agency would review the input, make revisions as deemed necessary and then publish the model as final. Timing of any final rule is unlikely for at least a year following the draft publication. The Office of Water continues to develop the wastewater influent, effluent and biosolids survey to define the nature and extent of PFAS presence. As of this writing, it appears the agency has decided to pursue a targeted approach by first conducting an influent survey rather than survey all three elements of the wastewater treatment process. Originally the survey was to review 400 utilities across the nation. This number may be more limited as the agency seeks to focus on larger utilities. As stated on the agency’s website, “The wastewater sampling data will primarily be used to identify and prioritize industrial point source categories where additional study or regulations may be warranted to control PFAS discharges. The sewage sludge sampling will fulfill the EPA’s data needs for the upcoming National Sewage Sludge Survey (NSSS) by establishing a current national data set of sewage sludge characteristics which the EPA will subsequently use to inform upcoming risk assessments and the need for future regulations and guidance pertaining to the management of sewage sludge.” Within the context of PFAS liability, both the House and Senate continue to consider approaches to develop a policy to protect the water sector against potential clean-up liability. At this writing, consensus on a legislative fix remains elusive. However, a growing recognition, on a bipartisan basis, exists that the potential liability for the water sector is credible. The key stumbling block appears to center on how to define eligibility of a passive receiver for liability protection to fashion a narrow liability exemption that could become part of compromise agreement. Importance of PFAS Rulemaking and Liability Initiative to OC San The USEPA’s ongoing development of a PFAS RA model for biosolids is of importance to OC San because of two important matters. First, the draft RA will likely set the stage for subsequent compliance standards for biosolids management into the future as part of the “503” program. The U.S. EPA’s 503 program, also known as the Standards for the Use or Disposal of Sewage Sludge, regulates how sewage sludge is managed. Of more immediate concern is the draft RA and its impact on current management practices. The numbers identified in the draft RA will carry no immediate mandate for compliance, but states could still adopt these standards, potentially leading to costly changes in management practices for biosolids like land application. The second impact surrounding RA is the increased demand for monitoring and the costs that it may impose. 3 | P a g e A final consequence of the RA involves future management practices. There are increasingly vocal calls from the environmental non-governmental organizations for state and local ordinances limiting or banning biosolids land application. This effort is expected to increase demand for biosolids management alternatives such as the OC San demonstration project. Federal assistance to advance the commercialization of such technologies could be an outgrowth of the calls for a transition away from land application. • Fiscal Year 2025 Appropriations Upon Congress’ return to work in November, a priority is to complete action on the current year’s spending bills. For OC San, spending on water infrastructure and water quality programs is expected to be stable at current year level funding for the State Revolving Loan Fund (SRF), Water Infrastructure Finance and Innovation Act, and general aquatic health programs. FY 25 also marks the second to last year of the Bipartisan Infrastructure Law’s funding. This means that a supplemental funding of $9 billion to support water infrastructure will supplement the SRF program. One of the outstanding matters in any final spending compromise involves policy statements. The USEPA and U.S. Department of Agriculture spending bills contain a handful of these “riders” related to PFAS. Among the riders of note: o Directives to USEPA to maintain its research into the health impacts of PFAS on soils and biosolids, including treatment standards; o Directives that USEPA provide Congress a report on progress in the implementation of its policy to not enforce against water sector interests like OC San for clean-up liability created by the PFAS hazardous substance Comprehensive Emergency Response Compensation and Liability Act (CERCLA) designation; and o Assist dairy farmers adversely impacted by PFAS contaminated soils. Importance of Spending Decisions to OC San Aside from the general interest in maintaining a strong federal partnership with local wastewater agencies through a commitment of federal assistance for water quality programs, the ongoing spending debate is important to OC San because of the continued interest in using the appropriations process to address PFAS policy. While the current focus is on research and administrative matters like compliance with PFAS drinking water standards, the potential remains for efforts to legislate, using spending bills, to ban certain biosolids management practices. 1 of 8 Federal Legislative Report - October 2024 Steering Committee Bills 17 Bills US HR 8467 Title: Farm, Food, and National Security Act of 2024 Current Status: Introduced Introduction Date: May 21, 2024 Last Action Date: Referred to the House Committee on Agriculture.. May 21, 2024 Summary: H.R 8467 would establish grant funding to support research into the agriculture impacts of PFAS and microplastics, with the purpose to better understand the role and influence land-applied biosolids and wastewater treatment processes play. Eligible activities include analyzing crop uptake of PFAS and techniques, such as wastewater treatment and composting, to filter out or biodegrade such substances from biosolids intended to be used for agriculture purposes. H.R. 8467 does not establish mandates for these activities. Location: United States US HR 8032 High Priority Monitor Title: Low-Income Household Water Assistance Program Establishment Act Current Status: Introduced Introduction Date: April 16, 2024 Last Action Date: Referred to the Subcommittee on Environment, Manufacturing, and Critical Materials.. April 19, 2024 Summary: H.R. 8032 is the companion bill to S. 3830 that would create a permanent low income ratepayer assistance for water and wastewater services. Location: United States US HR 7944 Monitor Title: Water Systems PFAS Liability Protection Act Current Status: Introduced Introduction Date: April 11, 2024 2 of 8 Last Action Date: Referred to the Subcommittee on Environment, Manufacturing, and Critical Materials.. April 12, 2024 Summary: H.R. 7944 is a companion bill to S. 1430 sponsored by Senator Cynthia Lummis (R-WY). H.R. 7944 would protect water and wastewater agencies and related contractors from liability under CERCLA unless the threat stemmed from gross negligence. Location: United States US HR 2964 High Priority Monitor Title: WIPPES Act Current Status: Introduced Introduction Date: April 27, 2023 Last Action Date: Placed on the Union Calendar, Calendar No. 371.. April 05, 2024 Summary: Directs the Federal Trade Commission, in consultation with the Environmental Protection Agency, Commissioner of Food and Drugs, and the Consumer Product Safety Commission (as appropriate depending on the type of covered product involved) to issue “Do Not Flush” labeling requirements for nonflushable wipes, including baby wipes, household wipes, disinfecting wipes and personal care wipes. The requirements mirror California's labeling law and has the support from the wipes industry, national clean water sector, civil engineers, and environment advocates. Companion Senate bill: S. 1350. Location: United States US HR 7023 Title: Creating Confidence in Clean Water Permitting Act Current Status: Considering Introduction Date: January 17, 2024 Last Action Date: Received in the Senate and Read twice and referred to the Committee on Environment and Public Works.. March 22, 2024 Summary: H.R. 7023 was amended on the House floor to provide for ten year NPDES permit terms for public agencies. The amendment offered by Rep. John Garamendi (D-CA) was adopted without debate unanimously. Description: Creating Confidence in Clean Water Permitting Act This bill modifies requirements under the Clean Water Act, including requirements concerning water quality criteria, the National Pollutant Discharge Elimination System (NPDES) program, the permit program for discharging dredged or fill material into waters of the United States, and the meaning of waters of the United States. It also limits the issuance of permits under the act. First, the bill directs the Environmental Protection Agency (EPA) to develop any new or revised water quality criteria for states through a rule. Next, the bill modifies the NPDES program, including by providing statutory authority for provisions that shield NPDES permit holders from liability under certain circumstances. It also provides statutory authority for 3 of 8 the EPA to issue general permits under the program. The EPA must also provide written notification two years before the expiration of a general permit. If notice is not provided by that deadline, then di.... Location: United States US S 3830 Title: Low-Income Household Water Assistance Program Establishment Act Current Status: Introduced Introduction Date: February 28, 2024 Last Action Date: Read twice and referred to the Committee on Health, Education, Labor, and Pensions. (Sponsor introductory remarks on measure: CR S1045-1046). February 28, 2024 Location: United States US HR 7194 High Priority Monitor Title: PFAS Accountability Act of 2024 Current Status: Introduced Introduction Date: February 01, 2024 Last Action Date: Referred to the Subcommittee on Environment, Manufacturing, and Critical Materials.. February 02, 2024 Summary: H.R. 7194 would create a cause of action under the Toxics Substances Control Act to allow a citizen or class of citizens to litigate against a manufacturer of PFAS that improperly discharged PFAS into the environment and created a public health impact. Companion legislation in the Senate: S. 3725. Sponsor: Rep. Madeline Dean (D-NH) Location: United States US HR 6805 High Priority Monitor Title: PFAS Action Act of 2023 Current Status: Introduced Introduction Date: December 14, 2023 Last Action Date: Referred to the Subcommittee on Water Resources and Environment.. January 02, 2024 Summary: PFAS Action Act of 2023 is a reintroduction of the 2021 legislation. It would impose a statutory designation of PFAS as a hazardous substance under CERCLA. It would also impose other mandates including time specific drinking water standards for PFOA and PFOS and other members of the PFAS chemical family. It currently enjoys 21 sponsors, all Democratic. Sponsor: Rep. Debbie Dingell D-MI 4 of 8 Location: United States US S 2162 High Priority Monitor Title: STREAM Act Current Status: Introduced Introduction Date: June 22, 2023 Last Action Date: Committee on Energy and Natural Resources Subcommittee on Water and Power. Hearings held.. July 19, 2023 Summary: S. 2162 renews expiring provisions of the WIIN Act. It would increase funding authorizations for surface and groundwater storage projects, water recycling, desalination, and ecosystem restoration projects. Among the changes that would be authorized would be priorities for water supply projects that include enhanced public benefits (fisheries, wildlife and disadvantage communities drinking water reliability). It would also provide for enhanced water transfers to support temporary fallowing of agriculture lands to support wildlife habitats. (BILL PROVISIONS LIKELY TO INCORPORATED INTO LARGER WESTERN WATER LEGISLATION) No Sponsor at the writing Location: United States US S 1430 High Priority Title: Water Systems PFAS Liability Protection Act Current Status: Introduced Introduction Date: May 03, 2023 Last Action Date: Read twice and referred to the Committee on Environment and Public Works.. May 03, 2023 Summary: S. 1430 would provide a limited CERCLA liability (section 107) exemption for PFAS family of chemicals for water and wastewater agencies. S. 1430 would not exempt an agency from liability in cases of gross negligence. Description: Water Systems PFAS Liability Protection Act This bill exempts specified water management entities from liability under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) for releases of certain perfluoroalkyl or polyfluoroalkyl substances, commonly referred to as PFAS. Specifically, the entities covered under the bill are public water systems, publicly or privately owned or operated treatment works, municipalities with a stormwater discharge permit, political subdivisions or special districts of a state that act as a wholesale water agency, and contractors performing the management or disposal activities for such entities. Under the bill, the exemption only applies if a specified entity transports, treats, disposes of, or arranges for the transport, treatment or disposal of PFAS consistent with applicable laws and during and following the conveyance or treatment of water under federal or state law, such as through the management or disposal of bi.... 5 of 8 Location: United States US S 1350 High Priority Monitor Title: WIPPES Act Current Status: Introduced Introduction Date: April 27, 2023 Last Action Date: Read twice and referred to the Committee on Commerce, Science, and Transportation.. April 27, 2023 Summary: Directs the Federal Trade Commission, in consultation with the Environmental Protection Agency, Commissioner of Food and Drugs, and the Consumer Product Safety Commission (as appropriate depending on the type of covered product involved) to issue “Do Not Flush” labeling requirements for nonflushable wipes, including baby wipes, household wipes, disinfecting wipes and personal care wipes. The requirements mirror California's labeling law and has the support from the wipes industry, national clean water sector, civil engineers, and environment advocates. Companion House bill: H.R. 2964. Location: United States US HR 1729 Low Priority Monitor Title: Water Affordability, Transparency, Equity, and Reliability Act of 2023 Current Status: Introduced Introduction Date: March 22, 2023 Last Action Date: Referred to the Subcommittee on Commodity Markets, Digital Assets, and Rural Development.. April 25, 2023 Summary: Sponsor: Rep. Bonnie Coleman D-NJ Co-Sponsor: Rep. Katie Porter D-CA Description: Water Affordability, Transparency, Equity, and Reliability Act of 2023 This bill increases funding for water infrastructure, including funding for several programs related to controlling water pollution or protecting drinking water. Specifically, it establishes a Water Affordability, Transparency, Equity, and Reliability Trust Fund. The fund may be used for specified grant programs. The bill increases the corporate income tax rate to 24.5% to provide revenues for the fund. In addition, the bill revises requirements concerning the clean water state revolving fund (SRF) and the drinking water SRF, including by prohibiting states from providing financial assistance using amounts from the clean water SRF for projects that will provide substantial direct benefits to new communities other than projects for constructing an advanced decentralized wastewater system. It also creates or reauthorizes several grant programs related to water infrastructure, such as grants for removing lead from dr.... Location: United States 6 of 8 US HR 2162 Title: To provide for a limitation on availability of funds for U.S. Department of Interior, US Fish and Wildlife Service, Neurotropic Migratory Bird Conservation for fiscal year 2024. Current Status: Introduced Introduction Date: March 29, 2023 Last Action Date: Referred to the House Committee on Natural Resources.. March 29, 2023 Description: This bill limits FY2024 funding for the U.S. Fish and Wildlife Service's Neotropical Migratory Bird Conservation grant program. Location: United States US HR 1837 Title: Investing in Our Communities Act Current Status: Introduced Introduction Date: March 28, 2023 Last Action Date: Referred to the House Committee on Ways and Means.. March 28, 2023 Summary: Legislation restores tax-exempt advance refunding for municipal bonds to allow states and local governments to more efficiently invest in projects. Description: Investing in Our Communities Act This bill reinstates the exclusion from gross income for interest on certain bonds issued to advance the refunding of a prior bond issue. The exclusion was repealed for bonds issued after 2017. Location: United States US S 938 Low Priority Monitor Title: Water Affordability, Transparency, Equity, and Reliability Act of 2023 Current Status: Introduced Introduction Date: March 22, 2023 Last Action Date: Read twice and referred to the Committee on Finance.. March 22, 2023 Summary: S. 938 would establish a $35 billion trust fund to support the construction of water and wastewater treatment systems. Funding would be derived from an increase in the corporate tax rate. The bill also imposes requirements for Department of Justice and USEPA to carryout activities to determine whether water and wastewater operators discriminate in the provision of services. USEPA must also investigate the impact of rates on service cut- offs. Additional provisions would address use of assistance to promote regionalization of systems and limitations on the use of federal assistance to support projects that address growth. The bill enjoys 500 NGO organizational support. It has five cosponsors. Sponsor: Sen. Bernie Sanders I-VT Description: Water Affordability, Transparency, Equity, and Reliability Act of 2023 This bill increases funding for water infrastructure to control water pollution or protect drinking 7 of 8 water. Specifically, it establishes a Water Affordability, Transparency, Equity, and Reliability Trust Fund. The fund may be used for specified grant programs. The bill increases the corporate income tax rate to 24.5% to provide revenues for the fund. In addition, the bill revises requirements concerning the clean water state revolving fund (SRF) and the drinking water SRF, including by prohibiting states from providing financial assistance using amounts from the clean water SRF for projects that will provide substantial direct benefits to new communities other than projects for constructing an advanced decentralized wastewater system. It also creates or reauthorizes several grant programs related to water infrastructure, such as grants for removing lead from drinking water. Location: United States US HR 250 Medium Priority Monitor Title: Clean Water SRF Parity Act Current Status: Introduced Introduction Date: January 10, 2023 Last Action Date: Referred to the Subcommittee on Water Resources and Environment.. February 01, 2023 Summary: Amends eligibility provisions for the Federal Water Pollution Control Act’s Clean Water State Revolving Fund so that all wastewater customers have the ability to benefit from the program’s low-interest loans. Supported by NAWCA Also introduce in 117th Congress - No Action Description: Clean Water SRF Parity Act This bill expands the state revolving fund established under the Clean Water Act, including by allowing low-interest loans to be given to privately owned treatment works to address wastewater. Currently, loans are given to wastewater systems that are publicly owned. Location: United States US S 115 Monitor Title: Clean Water Allotment Modernization Act of 2023 Current Status: Introduced Introduction Date: January 26, 2023 Last Action Date: Read twice and referred to the Committee on Environment and Public Works.. January 26, 2023 Summary: Provides for a set aside from Clean Water SRF appropriations to conduct Buy America oversight compliance, establishes that each state's allotment must be at the same level as FY 23 during FY 24-28 and additional allotments based on percent of state population to the nation. FY 29 and beyond allotments to be determined by new formula based upon Clean Water Needs Survey. 8 of 8 Description: Clean Water Allotment Modernization Act of 2023 This bill revises the formula the Environmental Protection Agency (EPA) uses to determine how to distribute funds from the Clean Water State Revolving Fund (SRF) program. Under the program, the EPA allocates funding to states for water quality infrastructure projects, such as wastewater systems and stormwater management projects. In FY2024-FY2028, the EPA must provide an initial allotment to each state that is equal to the amount the state received in FY2023. The EPA must also provide an additional allotment to each state that is based on its share of the U.S. population. In FY2029 and each subsequent fiscal year, the EPA must use an updated allotment formula, which is based on the needs of states as identified in the most recently available clean watersheds needs survey. Beginning in FY2024, the formula must also provide allotments for Indian tribes and territories. In addition, the formula must provide an allotment for EPA's oversight .... Location: United States Page 1 M E M O R A N D U M To: Orange County Sanitation District From: Townsend Public Affairs Date: October 17, 2024 Subject: October 2024 Monthly Report STATE LEGISLATIVE UPDATES The month of September saw the conclusion of legislative activity with the Governor taking action on the last of the 1,206 bills that were sent to his desk. In total, the Governor signed 1,017 bills and vetoed 189, marking a slightly higher than average veto rate over his tenure. The most common reason cited for vetoes was the state’s budget deficit and the concern that measures would exacerbate the state’s delicate fiscal footing. Other veto messages included warnings of controversial policy, legality, local control, or implementation. The vast majority of bills will go into effect January 1, 2025, while some have a delayed effective date to allow state or local agencies to prepare. Additionally, on December 2, lawmakers will return to Sacramento to swear in newly elected members and kick off the 2025-26 Legislative Session. This "Organizational Session" also marks the first day members are permitted to introduce new bill vehicles for the upcoming session. Bill introductions that occur during the preliminary session are typically reserved for "big concept" measures that are priorities for members. Following the November 2024 election, the Legislature is expected to have over 25 percent new members, in addition to the nearly 30 percent new members from the last election cycle. This drastic turnover of legislators will bring forward several new priorities, leaders, political facets, and bill ideas. Sites Reservoir Allowed to Move Forward After Win in Court The long-awaited Sites Reservoir Project in Northern California came under legal scrutiny from conservation groups challenging the project under the California Environmental Quality Act (CEQA) last year. In a victory for the project, the Third District Court of Appeal struck down the lawsuit allowing preparation for the reservoir to continue. At issue was the environmental impact report (EIR) required under CEQA and the impact the project would have on the surrounding environment. Normally, EIRs and CEQA lawsuits can take years to litigate, however, the court was able to act quickly because of SB 149 (Caballero) that allows for judicial streamlining reducing the time in court to 270 days. Page 2 Aside from litigation, funding has been the primary issue for the project. Funding from Proposition 1 of 2014 will now be contributed to the new reservoir which is finally set to break ground in 2026. Up to 1.5 million acre-feet of water will be stored from rain capture and snow runoff, saving enough water for up to 3 million households per year which will be critical in times of future drought. This water supply project could have major impacts in the availably of potable water via the State Water Project for Orange County water suppliers and could contribute to minimum wastewater flow standards needed to operate GWRS at full capacity. OC San State Bills of Interest BILL AUTHOR SUMMARY LATEST ACTION OC SAN POSITION LEGISLATIVE PLAN OTHER POSITIONS AB 347 Ting [D]Current law prohibits juvenile products, textile articles, and food packaging that contain specified levels of perfluoroalkyl and polyfluoroalkyl substances (PFAS) from being distributed, sold, or offered for sale in the state, as provided. This bill would require the Department of Toxic Substances Control, on or before January 1, 2026, to adopt regulations for the enforcement of those prohibitions on the use of PFAS. The bill would require manufacturers of these products, on or before July 1, 2026, to register with the department, to pay a registration fee to the department, and to provide a statement of compliance certifying compliance with the applicable prohibitions on the use of PFAS to the department, as specified. The bill would authorize the department to test products and to rely on third- party testing to determine compliance with prohibitions on the use of PFAS, as specified. The bill would authorize or require, as specified, the department to issue a notice of violation for a product in violation of the prohibitions on the use of PFAS, as provided. Signed into law Watch State Priorities: Monitor state legislation as well as State Water Resources Control Board (SWRCB) regulatory activity related to PFAS. ACC-OC - NYC LOCC - NYC CASA - NYC CSDA - NYC ACWA - NYC AB 805 Arambula [D]Authorizes the State Water Resources Control Board (State Water Board) to require a sewer service provider—for a sewer system that has the reasonable potential to cause a violation of water quality objectives; impair present or future beneficial uses of water; or cause pollution, nuisance, or contamination of waters of the state—to contract with an administrator designated or approved by the State Water Board. Signed into law Watch Legislative and Regulatory Policies: Special Districts - Oppose further state regulations that adversely impact special district financing, operations, and administration. ACC-OC - NYC LOCC - Watch CASA - Work With Author CSDA - Oppose Unless Amended ACWA - Not Favor AB 1567 E. Garcia [D]Would enact the Safe Drinking Water, Wildfire Prevention, Drought Preparation, Flood Protection, Extreme Heat Mitigation, Clean Energy, and Workforce Development Bond Act of 2024, which, if approved by the voters, would authorize the issuance of bonds in the amount of $15,995,000,000 pursuant to the State General Obligation Bond Law to finance projects for safe drinking water, wildfire prevention, drought preparation, flood protection, extreme heat mitigation, clean energy, and workforce development programs. Dead Not going to be the vehicle for the climate bond Watch Guiding Priorities: Obtain financial assistance for OC San projects through grants, loans, and legislative directed funding. ACC-OC - NYC LOCC - Support if Amended CASA - Support if Amended CSDA -Support if Amended ACWA - Support if Amended Proposed Legislation 2024 High Priority OC San State Bills of Interest BILL AUTHOR SUMMARY LATEST ACTION OC SAN POSITION LEGISLATIVE PLAN OTHER POSITIONS AB 1820 Schiavo [D]Current law requires a city or county to deem an applicant for a housing development project to have submitted a preliminary application upon providing specified information about the proposed project to the city or county from which approval for the project is being sought. Current law requires a housing development project be subject only to the ordinances, policies, and standards adopted and in effect when the preliminary application was submitted. This bill would authorize a development proponent that submits a preliminary application for a housing development project to request a preliminary fee and exaction estimate, as defined, and would require the local agency to provide the estimate within 30 business days of the submission of the preliminary application. For development fees imposed by an agency other than a city or county, the bill would require the development proponent to request the fee schedule from the agency that imposes the fee. Signed into law Watch Legislative and Regulatory Policies: Special Districts - Oppose further state regulations that adversely impact special district financing, operations, and administration. ACC-OC - NYC LOCC - Oppose Unless Amended CASA - Neutral as Amended CSDA - Oppose ACWA - Watch AB 2257 Wilson [D]The California Constitution specifies various requirements with respect to the levying of assessments and property-related fees and charges by a local agency, including notice, hearing, and protest procedures, depending on the character of the assessment, fee, or charge. Current law, known as the Proposition 218 Omnibus Implementation Act, prescribes specific procedures and parameters for local jurisdictions to comply with these requirements. This bill would prohibit, if a local agency complies with specified procedures, a person or entity from bringing a judicial action or proceeding alleging noncompliance with the constitutional provisions for any new, increased, or extended fee or assessment, as defined, unless that person or entity has timely submitted to the local agency a written objection to that fee or assessment that specifies the grounds for alleging noncompliance, as specified. This bill would provide that local agency responses to the timely submitted written objections shall go to the weight of the evidence supporting the agency’s compliance with the substantive limitations on fees and assessments imposed by the constitutional provisions. Signed into law Watch Legislative and Regulatory Policies: Special Districts - Oppose further state regulations that adversely impact special district financing, operations, and administration. ACC-OC - NYC LOCC - Neutral CASA - Support CSDA - Support ACWA - Sponsor OC San State Bills of Interest BILL AUTHOR SUMMARY LATEST ACTION OC SAN POSITION LEGISLATIVE PLAN OTHER POSITIONS AB 2515 Papan [D]This bill would similarly prohibit any person from manufacturing, distributing, selling, or offering for sale in the state any menstrual products that contain regulated PFAS, as defined. The bill would authorize the Department of Toxic Substances Control to adopt guidance or regulations, as specified, for the purposes of implementing and enforcing these provisions. The bill would require the department to issue guidance related to testing for regulated PFAS in menstrual products and would exempt that guidance from the Administrative Procedure Act. The bill would authorize the department to issue a cease and desist order to a manufacturer of a menstrual product under specified circumstances. The bill would make a violation of these provisions punishable by civil penalties, as specified, and would authorize the Attorney General by request of the department, a city attorney, a county counsel, or a city prosecutor to bring an action to enforce these provisions. The bill would create, and would require all moneys collected from penalties to be deposited in, the T.A.M.P.O.N. Act Fund. Signed into law Support State Priorities: Monitor state legislation as well as State Water Resources Control Board (SWRCB) regulatory activity related to PFAS. ACC-OC - NYC LOCC - Watch CASA - Support CSDA - Watch ACWA - NYC AB 2533 Carrillo [D]This bill would prohibit a local agency from denying a permit for an unpermitted accessory dwelling unit or junior accessory dwelling unit that was constructed before January 1, 2020, for certain violations, unless the local agency makes a finding that correcting the violation is necessary to comply with conditions that would otherwise deem a building substandard. The bill would require a local agency to inform the public about the provisions prohibiting denial of a permit for an unpermitted accessory dwelling unit or junior accessory dwelling unit. The bill would require this information to include a checklist of the conditions that deem a building substandard and to inform homeowners that, before submitting a permit application, the homeowner may obtain a confidential third-party code inspection from a licensed contractor. The bill would prohibit a local agency from requiring a homeowner to pay impact fees or connection or capacity charges except under specified circumstances. Signed into law Watch Legislative and Regulatory Policies: Special Districts - Oppose further state regulations that adversely impact special district financing, operations, and administration. ACC-OC - NYC LOCC - Watch CASA - Watch CSDA - Oppose Unless Amended ACWA - NYC OC San State Bills of Interest BILL AUTHOR SUMMARY LATEST ACTION OC SAN POSITION LEGISLATIVE PLAN OTHER POSITIONS AB 2557 Ortega [D]Existing law relating to the government of counties authorizes a county board of supervisors to contract for certain types of special services on behalf of the county, any county officer or department, or any district or court in the county. Existing law requires those special services contracts to be with persons who are specially trained, experienced, expert, and competent to perform those services. This bill would require each person who enters into a specified contract for special services with the board of supervisors to submit semiannual performance reports, as prescribed, every 180 days, to the board of supervisors and the exclusive representative of the employee organization. The bill would require the board or its representative to monitor semiannual performance reports to evaluate the quality of services. The bill would require contract terms exceeding 2 years to undergo a performance audit, as prescribed, by an independent auditor approved by the board to determine whether the performance standards are being met. Dead Watch Legislative and Regulatory Policies: Labor Relations/Human Resources: Oppose efforts reducing local control over public employee disputes and imposing regulations on an outside agency. ACC-OC - NYC LOCC - Oppose CASA - Oppose CSDA - Oppose ACWA - Not Favor AB 2561 McKinnor [D]The Meyers-Milias-Brown Act (act) authorizes local public employees, as defined, to form, join, and participate in the activities of employee organizations of their own choosing for the purpose of representation on matters of labor relations. The act requires the governing body of a public agency to meet and confer in good faith regarding wages, hours, and other terms and conditions of employment with representatives of recognized employee organizations and to consider fully presentations that are made by the employee organization on behalf of its members before arriving at a determination of policy or course of action. This bill would, as specified, require a public agency to present the status of vacancies and recruitment and retention efforts at a public hearing at least once per fiscal year, and would entitle the recognized employee organization to present at the hearing. If the number of job vacancies within a single bargaining unit meets or exceeds 20% of the total number of authorized full-time positions, the bill would require the public agency, upon request of the recognized employee organization, to include specified information during the public hearing. Signed into law Watch Legislative and Regulatory Policies: Labor Relations/Human Resources: Oppose efforts reducing local control over public employee disputes and imposing regulations on an outside agency. ACC-OC - NYC LOCC - Oppose CASA - Oppose CSDA - Oppose ACWA - Not Favor AB 2626 Dixon [R]This bill would extend the compliance dates for local government set forth in the Advanced Clean Fleets Regulation by 10 years. The bill would prohibit the state board from taking enforcement action against a local government for violating the Advanced Clean Fleets Regulation if the alleged violation occurs before January 1, 2025. Dead Watch Legislative and Regulatory Policies: Special Districts - Oppose further state regulations that adversely impact special district financing, operations, and administration. ACC-OC - NYC LOCC - NYC CASA - NYC CSDA - Support ACWA - NYC OC San State Bills of Interest BILL AUTHOR SUMMARY LATEST ACTION OC SAN POSITION LEGISLATIVE PLAN OTHER POSITIONS AB 2761 Hart [D]This bill would enact the Reducing Toxics in Packaging Act, which would prohibit, beginning January 1, 2026, a person from manufacturing, selling, offering for sale, or distributing in the state plastic packaging that contains certain chemicals, as specified. The bill would exclude from that prohibition packaging used for certain medical, drug, and federally regulated products. The bill would authorize the imposition of a civil penalty for a violation of that prohibition, as specified. Dead Watch State Priorities: Support legislation or regulations that restrict the use of microplastics and chemicals of emerging concern in any product that is disposed of through the sewer system. ACC-OC - NYC LOCC - Watch CASA - Watch CSDA - Watch ACWA - NYC AB 2894 Gallagher [D]Spot Bill related to Indoor Residential Water Use Dead Watch Legislative and Regulatory Policies: Special Districts - Oppose further state regulations that adversely impact special district financing, operations, and administration. ACC-OC - NYC LOCC - NYC CASA - NYC CSDA - Watch ACWA - NYC AB 3073 Haney [D]Would require the State Department of Public Health, in consultation with participating wastewater treatment facilities, local public health agencies, and other subject matter experts, to create a pilot program to test for high- risk substances and related treatment medications in wastewater. Under the bill, the goal of the program would be to determine how wastewater data can be used by state and local public health programs to address substance abuse in California. The bill would require the department to develop a list of target substances to be analyzed during the program that may include cocaine, fentanyl, methamphetamine, xylazine, methadone, buprenorphine, and naloxone. The bill would require the department, on or before July 1, 2025, to solicit voluntary participation from local public health agencies and wastewater treatment facilities, as specified. The bill would require the department to work with the participating agencies and facilities to collect samples and to arrange for those samples to be tested by qualified laboratories. The bill would require the department, in consultation with public health agencies and subject matter experts, to analyze test results to determine possible public health interventions. Dead Watch Legislative and Regulatory Policies: Special Districts - Oppose further state regulations that adversely impact special district financing, operations, and administration. ACC-OC - NYC LOCC - NYC CASA - Support, if amended CSDA - Oppose Unless Amended ACWA - Watch ACA 2 Alanis [R]Would establish the Water and Wildfire Resiliency Fund within the State Treasury, and would require the Treasurer to annually transfer an amount equal to 3% of all state revenues that may be appropriated as described from the General Fund to the Water and Wildfire Resiliency Fund. The measure would require the moneys in the fund to be appropriated by the Legislature and would require that 50% of the moneys in the fund be used for water projects, as specified, and that the other 50% of the moneys in the fund be used for forest maintenance and health projects, as specified. Dead Watch Guiding Priorities: Obtain financial assistance for OC San projects through grants, loans, and legislative directed funding. ACC-OC - NYC LOCC - NYC CASA - NYC CSDA - Watch ACWA - NYC OC San State Bills of Interest BILL AUTHOR SUMMARY LATEST ACTION OC SAN POSITION LEGISLATIVE PLAN OTHER POSITIONS SB 399 Wahab [D]The Alatorre-Zenovich-Dunlap-Berman Agricultural Labor Relations Act of 1975 provides that it is the policy of the state to encourage and protect the right of agricultural employees to full freedom of association, self- organization, and designation of representatives of their own choosing to negotiate the terms and conditions of their employment, and to be free from the interference, restraint, or coercion of employers of labor, or their agents, in the designation of such representatives, self-organization, or other concerted activities for the purpose of collective bargaining or other mutual aid or protection. Other existing law relating to employment prohibits employers from making, adopting, or enforcing rules, regulations, or policies that forbid or prevent employees from engaging or participating in politics or from becoming candidates for public office, and from controlling or directing, or tending to control or direct, the political activities or affiliations of employees. This bill, except as specified, would prohibit an employer from subjecting, or threatening to subject, an employee to discharge, discrimination, retaliation, or any other adverse action because the employee declines to attend an employer-sponsored meeting or affirmatively declines to participate in, receive, or listen to any communications with the employer or its agents or representatives, the purpose of which is to communicate the employer’s opinion about religious or political matters and would require an employee who refuses to attend a meeting as described to continue to be paid, as specified. The bill would impose a civil penalty of $500 on an employer who violates these provisions. Signed into law Watch Legislative and Regulatory Policies: Labor Relations/Human Resources: Oppose efforts reducing local control over public employee disputes and imposing regulations on an outside agency. ACC-OC - NYC LOCC - Oppose CASA - Oppose CSDA - Oppose ACWA - Not Favor SB 867 Allen [D]Would enact the Drought, Flood, and Water Resilience, Wildfire and Forest Resilience, Coastal Resilience, Extreme Heat Mitigation, Biodiversity and Nature-Based Climate Solutions, Climate Smart Agriculture, Park Creation and Outdoor Access, and Clean Energy Bond Act of 2024, which, if approved by the voters, would authorize the issuance of bonds in the amount of $15,500,000,000 pursuant to the State General Obligation Bond Law to finance projects for drought, flood, and water resilience, wildfire and forest resilience, coastal resilience, extreme heat mitigation, biodiversity and nature-based climate solutions, climate smart agriculture, park creation and outdoor access, and clean energy programs. Passed. On the November 2024 Ballot Watch Guiding Priorities: Obtain financial assistance for OC San projects through grants, loans, and legislative directed funding. ACC-OC - NYC LOCC - Support if Amended CASA - Support if Amended CSDA - Support if Amended ACWA - Support if Amended OC San State Bills of Interest BILL AUTHOR SUMMARY LATEST ACTION OC SAN POSITION LEGISLATIVE PLAN OTHER POSITIONS SB 903 Skinner [D]This bill would, beginning January 1, 2030, prohibit a person from distributing, selling, or offering for sale a product that contains intentionally added PFAS, as defined, unless the Department of Toxic Substances Control has made a determination that the use of PFAS in the product is a currently unavoidable use, the prohibition is preempted by federal law, or the product is used. The bill would specify the criteria and procedures for determining whether the use of PFAS in a product is a currently unavoidable use, for renewing that determination, and for revoking that determination. The bill would require the department to maintain on its internet website a list of each determination of currently unavoidable use, when each determination expires, and the products and uses that are exempt from the prohibition. The bill would impose a civil penalty for a violation of the prohibition, as specified. Dead Support State Priorities: Monitor state legislation as well as State Water Resources Control Board (SWRCB) regulatory activity related to PFAS. ACC-OC - NYC LOCC - Support CASA - Sponsor CSDA - Watch ACWA - Favor SB 937 Wiener [D]The Mitigation Fee Act regulates fees for development projects, fees for specific purposes, including water and sewer connection fees, and fees for solar energy systems, among others. The act, among other things, requires local agencies to comply with various conditions when imposing fees, extractions, or charges as a condition of approval of a proposed development or development project. The act prohibits a local agency that imposes fees or charges on a residential development for the construction of public improvements or facilities from requiring the payment of those fees or charges until the date of the final inspection or the date the certificate of occupancy is issued, whichever occurs first, except for utility service fees, which the local agency is authorized to collect at the time an application for utility service is received. The act exempts specified units in a residential development proposed by a nonprofit housing developer if the housing development meets certain conditions. This bill would limit the utility service fees exception described above to utility service fees related to connections, and cap those fees at the costs incurred by the utility provider resulting from the connection activities. Signed into law Watch Legislative and Regulatory Policies: Special Districts - Oppose further state regulations that adversely impact special district financing, operations, and administration. ACC-OC - NYC LOCC - Oppose Unless Amended CASA - Oppose Unless Amended CSDA - Oppose Unless Amended ACWA - Watch OC San State Bills of Interest BILL AUTHOR SUMMARY LATEST ACTION OC SAN POSITION LEGISLATIVE PLAN OTHER POSITIONS SB 972 Min [D]Current law requires the State Air Resources Board to approve and begin implementing a comprehensive strategy to reduce emissions of short-lived climate pollutants in the state and to achieve a reduction in specified emissions, including methane, as provided. Current law requires the methane reduction goals to include a 75% reduction target from the 2014 level by 2025. Existing law requires the Department of Resources Recycling and Recovery, in consultation with the state board, to adopt regulations, as provided, that achieve the targets for reducing organic waste in landfills. This bill would require the department to provide procedures for local jurisdictions to request technical assistance regarding organic waste and methane reduction requirements from the department, to post those procedures on its internet website, and to provide that technical assistance, as specified. Dead Watch Legislative and Regulatory Policies: Special Districts - Oppose further state regulations that adversely impact special district financing, operations, and administration. ACC-OC - NYC LOCC - Sponsor CASA - Support CSDA - Watch ACWA - NYC SB 1034 Seyarto [R]This bill would revise the unusual circumstances under which the time limit may be extended to include the need to search for, collect, appropriately examine, and copy records during a state of emergency proclaimed by the Governor when the state of emergency has affected the agency’s ability to timely respond to requests due to decreased staffing or closure of the agency’s facilities. Signed into law Support Legislative and Regulatory Policies: Special Districts - Oppose further state regulations that adversely impact special district financing, operations, and administration. ACC-OC - NYC LOCC - Support CASA - Watch CSDA - Support ACWA - Favor SB 1072 Padilla [D]The California Constitution sets forth various requirements for the imposition of local taxes. The California Constitution excludes from classification as a tax assessments and property-related fees imposed in accordance with provisions of the California Constitution that establish requirements for those assessments and property-related fees. Under these requirements, an assessment is prohibited from being imposed on any parcel if it exceeds the reasonable cost of the proportional special benefit conferred on that parcel, and a fee or charge imposed on any parcel or person as an incident of property ownership is prohibited from exceeding the proportional cost of the service attributable to the parcel. Current law, known as the Proposition 218 Omnibus Implementation Act, prescribes specific procedures and parameters for local compliance with the requirements of the California Constitution for assessments and property-related fees. This bill would require a local agency, if a court determines that a fee or charge for a property-related service, as specified, violates the above-described provisions of the California Constitution relating to fees and charges, to credit the amount of the fee or charge attributable to the violation against the amount of the revenues required to provide the property-related service, unless a refund is explicitly provided for by statute. Signed into law Support Legislative and Regulatory Policies: Special Districts - Oppose further state regulations that adversely impact special district financing, operations, and administration. ACC-OC - NYC LOCC - Watch CASA - Support CSDA - Support ACWA - Favor OC San State Bills of Interest BILL AUTHOR SUMMARY LATEST ACTION OC SAN POSITION LEGISLATIVE PLAN OTHER POSITIONS SB 1147 Portantino [D]The Sherman Food, Drug, and Cosmetic Law regulates, among other things, the manufacture, production, processing, and packing of any food, drug, device, or cosmetic, and is administered by the State Department of Public Health. The law prescribes various quality and labeling standards for bottled water and vended water, and limits the levels of certain contaminants that may be contained in those water products. Current law makes a violation of the law or regulation adopted pursuant to the law a crime. Current law requires, as a condition of licensure, a water-bottling plant, as defined, to annually prepare a water-bottling plant report, as specified, and to make the report available to each customer, upon request. This bill would require, upon adoption by the State Water Resources Control Board of a primary drinking water standard for microplastics, any water-bottling plant that produces bottled water that is sold in this state to provide the State Department of Public Health’s Food and Drug Branch an annual report on the levels of microplastics found in the source water used for bottling and in the final bottled water product that is offered for sale, as provided. The bill would require this report to be included with the annual water-bottling plant report and, upon request, be made available to each consumer. Signed into law Watch Legislative and Regulatory Policies: Source Control - Support legislation and/or regulations that restrict the use of microplastics and chemicals of emerging concern in any product that is disposed of through the sanitary sewer system. ACC-OC - NYC LOCC - NYC CASA - Oppose Unless Amended CSDA - Oppose Unless Amended ACWA - Watch SB 1210 Skinner [D]Current law vests the Public Utilities Commission with regulatory authority over public utilities, including electrical corporations, gas corporations, sewer system corporations, and water corporations, while local publicly owned utilities, including municipal utility districts, public utility districts, and irrigation districts, are under the direction of their governing boards. This bill would, for new housing construction, require the above-described utilities, on or before January 1, 2026, to publicly post on their internet websites (1) the schedule of estimated fees for typical service connections for each housing development type, including, but not limited to, accessory dwelling unit, mixed-use, multifamily, and single-family developments, except as specified, and (2) the estimated timeframes for completing typical service connections needed for each housing development type, as specified. The bill would exempt from its provisions a utility with fewer than 4,000 service connections that does not establish or maintain an internet website due to a hardship and would authorize the utility to establish that a hardship exists by annually adopting a resolution that includes detailed findings, as provided. Signed into law Oppose Legislative and Regulatory Policies: Special Districts - Oppose further state regulations that adversely impact special district financing, operations, and administration. ACC-OC - NYC LOCC - Watch CASA - Neutral, as Amended CSDA - Watch ACWA - Watch OC San State Bills of Interest BILL AUTHOR SUMMARY LATEST ACTION OC SAN POSITION LEGISLATIVE PLAN OTHER POSITIONS SB 1266 Limon [D]Current law prohibits the manufacture, sale, or distribution in commerce of any bottle or cup that contains bisphenol A, as specified, if the bottle or cup is designed or intended to be filled with any liquid, food, or beverage intended primarily for consumption by children 3 years of age or younger. The prohibition above does not apply to a product subject to a regulatory response by the Department of Toxic Substances Control as of the date that the department posts a prescribed notice regarding the department’s adoption of the regulatory response. Current law additionally requires manufacturers to use the least toxic alternative when replacing bisphenol A in containers and prohibits manufacturers from replacing bisphenol A with chemicals known to cause cancer or reproductive harm, as specified. This bill would, on and after January 1, 2026, instead apply the above prohibitions and requirements to any juvenile’s feeding product or juvenile’s sucking or teething product, as defined, that contains any form of bisphenol, as defined, at a detectable level above the practical quantitation limit, as determined by the department. The bill would authorize the department to establish standards for the juvenile’s products above that are more protective of public health, sensitive populations, or the environment than the standards established by the bill, and would authorize the department or the Attorney General to enforce the prohibitions and requirements, as specified. The bill would additionally prohibit manufacturers from replacing any form of bisphenol with any chemical identified by the department as a Candidate Chemical, as specified. Signed into law Watch State Priorities: Monitor state legislation as well as State Water Resources Control Board (SWRCB) regulatory activity related to PFAS. ACC-OC - NYC LOCC - Watch CASA - Watch CSDA - NYC ACWA - NYC SB 1393 Niello [R]This bill would require the state board to establish the Advanced Clean Fleets Regulation Appeals Advisory Committee by an unspecified date for purposes of reviewing appeals of denied requests for exemptions from the requirements of the Advanced Clean Fleets Regulation. The bill would require the committee to include representatives of specified state agencies, other state and local government representatives, and representatives of private fleet owners, the electric vehicle manufacturing industry, and electrical corporations, as provided. The bill would require the committee to meet monthly and would require recordings of its meetings to be made publicly available on the state board’s internet website. The bill would require the committee to consider, and make a recommendation on, an appeal of an exemption request denial no later than 60 days after the appeal is made. Dead Watch Legislative and Regulatory Policies: Special Districts - Oppose further state regulations that adversely impact special district financing, operations, and administration. ACC-OC - NYC LOCC - Support CASA - Watch CSDA - Support ACWA - Favor OC San State Bills of Interest BILL AUTHOR SUMMARY LATEST ACTION OC SAN POSITION LEGISLATIVE PLAN OTHER POSITIONS SB 1420 Caballero [D]The California Environmental Quality Act (CEQA) requires preparation of specified documentation before a public agency approves or carries out certain projects. Current law authorizes the Governor to certify energy infrastructure projects meeting specified requirements for streamlining benefits related to CEQA. Current law defines “energy infrastructure project” for these purposes to include eligible renewable energy resources under the California Renewables Portfolio Standard Program, excluding resources that use biomass fuels. Current law expressly excludes from that definition of “energy infrastructure project” any project using hydrogen as a fuel. This bill would instead exclude from the definition of “energy infrastructure project” for purposes of the CEQA streamlining benefits eligible renewable energy resources under the California Renewables Portfolio Standard Program that combust, rather than use, biomass fuels. The bill would include hydrogen production facilities and associated onsite storage and processing facilities that do not derive hydrogen from a fossil fuel feedstock and that receive funding from specified state and federal programs within the definition of “energy infrastructure project. Signed into law Watch Legislative and Regulatory Policies: Public Works: Support a comprehensive response to the state’s electricity and natural gas shortages that provide a stable energy supply, respects the ability of municipalities to provide power, recognizes that infrastructure exists that could be employed temporarily during periods with minimal air quality impact and protects ratepayers against dramatic rate increases and statewide power outages. ACC-OC - NYC LOCC - Oppose Unless Amended CASA - Support CSDA - NYC ACWA - NYC Legend: ACC-OC - Association of California Cities, Orange County LOCC - League of California Cities NYC - Not Yet Considered CASA - California Association of Sanitation Agencies ACWA - Association of California Water Agencies CSDA - California Special Districts Association Whittingham PAA, LLC 31441 Santa Margarita Parkway, Suite A181 ▪ Rancho Santa Margarita, CA 92688 (949) 280-9181 ▪ peter@whittinghampaa.com TO: Orange County Sanitation District FROM: Whittingham Public Affairs Advisors DATE: October 21, 2024 SUBJECT: Local Legislative Report The month of October was marked by a week-long heat wave and wildfires that burned tens of thousands of acres and stretched resources at dozens of agencies. Following is a few of the more notable developments and issues of the month: • The City of Fullerton provided an updated on its efforts to comply with SB 1383, which included the creation of two new staff positions, a solid waste recycling specialist and environmental services coordinator. Fullerton has implemented a three-bin collection system at various City facilities and is looking at establishing a partnership with Abound Food Care, a food waste nonprofit organization, to aid the process of implementing an edible food recovery program for the city. • Costa Mesa Sanitary District (CMSD) began rollout of its three-cart collection system for its ratepayers. With this new system, one of the existing Mixed Waste Carts will be exchanged for a new Recycling Cart (blue lid) to dispose of recyclables such as clean paper, cardboard, glass and plastic. The second Mixed Waste Cart will become a Landfill Cart (black lid) for landfill waste and customers will continue to use their Organics Cart (green lid) for food scraps and yard trimmings. CMSD is one of a number of jurisdictions in Orange County required to a three-cart system since their waste is not processed at a high- diversion facility. • The City of San Clemente has finished a sand replenishment project at North Beach, a months-long effort to help widen a stretch of eroded coastline. The project, which kicked off in late July, delivered 37,000 cubic yards of sand from the Santa Ana River. The project cost an estimated $2 million and because the work went faster than expected and was under budget, the amount of material to be hauled in was expanded a month ago to add 7,000 more cubic yards. • The Placentia City Council approved a new three-year contract for the management of the City’s Fats, Oils & Grease (FOG) control program. Placentia’s 110 permitted food service establishments (FSEs) are required to obtain an annual FOG permit, and all new or existing FSEs undergoing a change 2 of operations are required to install and maintain a grease interceptor and implement Kitchen Best Management Practices (BMPs), which include employee training, education, and cleaning methods to keep FOG from entering the sewer. • The County of Orange Health Care Agency (HCA) assumed management of the Be Well Orange Campus in Orange, overseeing the delivery of vital mental health and substance use disorder (SUD) services at the campus. As part of our scope of work, Whittingham Public Affairs Advisors (WPAA) has continued to monitor the various City Council agendas of each of the District’s members and highlighted issues and items of relevance to OC San. We also monitored activities at the South Coast Air Quality Management District, including the ongoing consideration of Proposed Amended Rule (PAR) 410, dealing with Odors from Transfer Stations and Materials Recovery Facilities; Proposed Rule 1110.4, related to Emissions from Emergency Generators; and PAR 1133.3, which will seek to reduce VOC and ammonia emissions from green waste and organics composting. It is a pleasure to work with you and to represent the Orange County Sanitation District. Sincerely, Peter Whittingham ADMINISTRATION COMMITTEE Agenda Report Headquarters 18480 Bandilier Circle Fountain Valley, CA 92708 (714) 593-7433 File #:2024-3807 Agenda Date:11/13/2024 Agenda Item No:11. FROM:Robert Thompson, General Manager Originator: Wally Ritchie, Director of Finance SUBJECT: ORANGE COUNTY SANITATION DISTRICT ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2024 GENERAL MANAGER'S RECOMMENDATION RECOMMENDATION: Recommend to the Board of Directors to: Receive and file the Orange County Sanitation District’s (OC San)Annual Comprehensive Financial Report for the year ended June 30,2024,prepared by staff and audited by Davis Farr,Certified Public Accountants, along with the following reports prepared by Davis Farr: 1. Report to the Board of Directors; 2. Independent Accountants’ Report on Agreed-Upon Procedures Applied to Appropriations Limit Worksheets; and 3. Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards. BACKGROUND The Annual Comprehensive Financial Report for the year ended June 30,2024 is attached for the Administration Committee’s consideration.Included within the report are OC San’s financial statements for the year ended June 30,2024,along with the Independent Auditor’s Report that includes the unmodified opinion. RELEVANT STANDARDS ·Produce appropriate financial reporting - annual financial report & audit letter Orange County Sanitation District Printed on 11/5/2024Page 1 of 2 powered by Legistar™ File #:2024-3807 Agenda Date:11/13/2024 Agenda Item No:11. ATTACHMENT The following attachment(s)may be viewed on-line at the OC San website (www.ocsan.gov)with the complete agenda package: ·Report to the Board of Directors ·Independent Accountant's Report on Applying Agreed-Upon Procedures Related to Appropriations Limit Calculation ·Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ·Annual Comprehensive Financial Report for the Year Ended June 30, 2024 ·Presentation Orange County Sanitation District Printed on 11/5/2024Page 2 of 2 powered by Legistar™ To the Board of Directors Orange County Sanitation District Fountain Valley,California We have audited the financial statements of Orange County Sanitation District (OC San) as of and for the year ended June 30, 2024,and have issued our report thereon dated October 31, 2024. Professional standards require that we advise you of the following matters relating to our audit. Our Responsibility in Relation to the Financial Statement Audit As communicated in our engagement letter dated April 24, 2024, our responsibility, as described by professional standards, is to form and express an opinion about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of your respective responsibilities. Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, as part of our audit, we considered the internal control of OC San solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures for the purpose of identifying other matters to communicate to you. Planned Scope and Timing of the Audit We conducted our audit consistent with the planned scope and timing we previously communicated to you in our letter dated April 5, 2024. Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firm, as appropriate, and our firm have complied with all relevant ethical requirements regarding independence under the American Institute of Certified Public Accountants (“AICPA”) independence standards, contained in the Code of Professional Conduct. Significant Risks Identified For purposes of designing our audit procedures, we identified the following significant risks: The recording of capital assets. As a result, we selected a sample of at least 65% of outstanding construction projects and met with OC San’s personnel who determine the status of the project. We also selected a sample of project expenses and reviewed the transactions to ensure they meet the criteria for capitalization. The defeasance and refunding of debt. We reviewed the District’s journal entry to record the new bonds and defease the existing debt. We verified the transaction was recorded correctly and the financial statement footnotes were complete and accurate. Qualitative Aspects of the Entity’s Significant Accounting Practices Significant Accounting Policies Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by OC San is included in Note 1 to the financial statements. There have been no initial selection of accounting policies and no changes in significant accounting policies or their application during 2024.No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus. Significant Accounting Estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s current judgments. Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ markedly from management’s current judgments. The most sensitive accounting estimates affecting the financial statements include: Judgments concerning which capital project expenditures should be capitalized and depreciated versus expensed in the financial statements and judgments concerning which projects should be placed in service Estimates involving the calculation of the net pension liability and related transactions Estimates involving the calculation of the other post-employment benefit (OPEB) liability and related transactions Financial Statement Disclosures Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting OC San’s financial statements relate to: The disclosure of pensions in note 6 to the financial statements The disclosure of OPEB in note 7 to the financial statements Significant Difficulties Encountered during the Audit We encountered no significant difficulties in dealing with management relating to the performance of the audit. Uncorrected and Corrected Misstatements For purposes of this communication, professional standards also require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole and each applicable opinion unit.There were no uncorrected misstatements identified by us as a result of our procedures, either individually or in the aggregate, to the financial statements taken as a whole or applicable opinion unit. In addition, professional standards require us to communicate to you all material, corrected misstatements that were brought to the attention of management as a result of our audit procedures. There were no material misstatements identified as a result of our audit procedures. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to OC San’s financial statements or the auditor’s report. No such disagreements arose during the course of the audit. Representations Requested from Management We have requested certain written representations from management, which are included in the attached letter dated October 31,2024. Management’s Consultations with Other Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters. Other Significant Matters, Findings, or Issues In the normal course of our professional association with OC San, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, significant events or transactions that occurred during the year,operating and regulatory conditions affecting the entity, and operational plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as OC San’s auditors. Other Information Included in the Annual Comprehensive Financial Report Pursuant to professional standards, our responsibility as auditors for other information, whether financial or nonfinancial, included in OC San’s annual reports,does not extend beyond the information identified in the audit report, and we are not required to perform any procedures to corroborate such other information. However, in accordance with such standards, we have read the information and considered whether such information, or the manner of its presentation, was materially inconsistent with its presentation in the financial statements. Our responsibility also includes communicating to you any information which we believe is a material misstatement of fact. Nothing came to our attention that caused us to believe that such information, or its manner of presentation, is materially inconsistent with the information, or manner of its presentation, appearing in the financial statements. This report is intended solely for the information and use of the Board of Directors, and management of OC San and is not intended to be and should not be used by anyone other than these specified parties. Irvine, California October 31, 2024 INDEPENDENT ACCOUNTANT’S REPORT The Board of Directors Orange County Sanitation District Fountain Valley,California We have performed the procedures enumerated below on Orange County Sanitation District (OC San)appropriations limit worksheets for compliance with the requirements of Section 1.5 of Article XIIIB of the California Constitution for the year ended June 30, 2024. OC San is responsible for compliance with Section 1.5 of Article XIIIB of the California Constitution. OC San has agreed to and acknowledged that these procedures are appropriate to meet the intended purpose of evaluating compliance with the requirements of Section 1.5 of Article XIIIB of the California Constitution and the League of California Cities publication entitled Article XIIIB Appropriations Limitation Uniform Guidelines for the year ended June 30, 2024. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes. The procedures and the associated findings are as follows: 1.We obtained the worksheets referred to above and compared the limit and annual adjustment factors included in those worksheets to the limit and annual adjustment factors that were adopted by resolution of the Board of Directors. We also compared the population and inflation options included in the aforementioned worksheets to those that were selected by a recorded vote. Results: No exceptions were noted as a result of our procedures. 2. We recalculated the mathematical computations reflected in OC San’s worksheets. Results: No exceptions were noted as a result of our procedures. 3. We compared the current year information used to determine the current year limit and agreed it to worksheets prepared by OC San and information provided by the State Department of Finance. Results: No exceptions were noted as a result of our procedures. 4. We compared the amount of the prior year appropriations limit presented in the worksheets to the amount adopted by the Board of Directors for the prior year. Results: No exceptions were noted as a result of our procedures. The Board of Directors Orange County Sanitation District Fountain Valley,California We were engaged by OC San to perform this agreed-upon procedures engagement and conducted our engagement in accordance with standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review, the objective of which would be the expression of an opinion or conclusion, respectively on the worksheets referred to above. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures,other matters might have come to our attention that would have been reported to you.No procedures have been performed with respect to the determination of the appropriation limit for the base year, as defined by the League publication entitled Article XIIIB Appropriations Limitation Uniform Guidelines. We are required to be independent of OC San and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement. This report is intended solely for the information and use of the Board of Directors and Management of OC San and is not intended to be, and should not be, used by anyone other than the specified party. Irvine, California October 31, 2024 Board of Directors Orange County Sanitation District Fountain Valley, California Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards Independent Auditor’s Report We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the Orange County Sanitation District’s (OC San) basic financial statements, and have issued our report thereon dated October 31, 2024. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the OC San’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the OC San’s internal control. Accordingly, we do not express an opinion on the effectiveness of the OC San’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Orange County Sanitation District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts,and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Irvine, California October 31, 2024 Orange County Sanitation District for the year ended June 30, 2024 AnnualComprehensiveFinancial Report Orange County, California ORANGE COUNTY SANITATION DISTRICT ORANGE COUNTY, CALIFORNIA ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2024 Prepared By: Administrative Services Department Financial Management Division Ruth Zintzun Finance Manager (THIS PAGE LEFT INTENTIONALLY BLANK) ORANGE COUNTY SANITATION DISTRICT Annual Comprehensive Financial Report Table of Contents For the Year Ended June 30, 2024 Page INTRODUCTORY SECTION (Unaudited): Letter of Transmittal ..................................................................................................................... i-viii GFOA Certificate of Achievement ............................................................................................... ix Board of Directors ........................................................................................................................ x Organizational Chart .................................................................................................................... xi Map of Service Area .................................................................................................................... xii FINANCIAL SECTION: Independent Auditor’s Report ...................................................................................................... 1-3 Management Discussion and Analysis – Required Supplementary Information (Unaudited) .... 4-10 Basic Financial Statements: Statement of Net Position ................................................................................................... 12 Statement of Revenues, Expenses, and Change in Net Position ...................................... 13 Statement of Cash Flows .................................................................................................... 14 Notes to Basic Financial Statements .................................................................................. 15-48 Required Supplementary Information (Unaudited): Proportionate Share of the Net Pension Liability (Asset) – OCERS Pension Plan ............ 50 Schedule of District Contributions – OCERS Pension Plan ............................................... 51 Total Pension Liability – Additional Retiree Benefit Account .............................................. 52 Changes in Total Pension Liability – Additional Retiree Benefit Account ........................... 53 Total OPEB Liability – Post-Employment Medical Benefits Plan........................................ 54 Changes in Total OPEB Liability – Post-Employment Medical Benefits Plan .................... 55 Supplementary Information: Combining Area Schedule of Net Position .......................................................................... 58 Combining Area Schedule of Revenues, Expenses, and Change in Net Position ............ 59 Combining Area Schedule of Cash Flows .......................................................................... 60 STATISTICAL SECTION (Unaudited): Net Position by Component – Last Ten Fiscal Years .................................................................. 62 Revenues and Gross Capital Contributions by Source – Last Ten Fiscal Years ........................ 63 Expenses by Type – Last Ten Fiscal Years ................................................................................ 64 Change in Net Position – Last Ten Fiscal Years ......................................................................... 65 Cash and Investment Reserve Balances – Last Ten Fiscal Years ............................................. 66 Sewer Service Fees – Last Nine Fiscal Years and Next Fiscal Year .......................................... 67 Number of Accounts and Revenues by Customer Class – Last Ten Fiscal Years ..................... 68 Principal Sewer Service Customers – Current Fiscal Year and Nine Years Ago ....................... 69 Ratio of Annual Debt Service to Total Expenses – Last Ten Fiscal Years ................................. 70 Debt Coverage Ratios – Last Ten Fiscal Years .......................................................................... 71 Ratios of Outstanding Debt – Last Ten Fiscal Years .................................................................. 72 Comparison of the Volume of Wastewater Treated – Last Ten Fiscal Years ............................. 73 Authorized Full-time Equivalents by Function – Last Ten Fiscal Years ...................................... 74 Biosolids Produced – Last Ten Fiscal Years ............................................................................... 75 Capital Asset Statistics – Last Ten Fiscal Years ......................................................................... 76 Demographic Statistics – Last Ten Fiscal Years ......................................................................... 77 Estimated Population Served by the Orange County Sanitation District .................................... 78 Principal Orange County Employers – Current Fiscal Year and Nine Years Ago ....................... 79 Operating Indicators .................................................................................................................... 80 OTHER DATA & TRENDS (Unaudited): Cash and Investment Portfolio ................................................................................................... 82 Property Tax Rates – Direct and Overlapping Governments – Last Ten Fiscal Years ............... 83 Assessed and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years ................ 84 Property Tax and User Fee Levies and Collections – Last Ten Fiscal Years ............................. 85 Property Value and Construction – Last Ten Fiscal Years ......................................................... 86 Insurance in Force ....................................................................................................................... 87 (THIS PAGE LEFT INTENTIONALLY BLANK) i October 31, 2024 The Board of Directors of the Orange County Sanitation District, Orange County, California Subject: Letter of Transmittal Submitted herewith is the Annual Comprehensive Financial Report of the Orange County Sanitation District (OC San), Orange County, California for the fiscal year ended June 30, 2024. This report includes the financial position and activity of individual revenue areas, as described within the Governmental Structure below, as of June 30, 2024, and was prepared by the Financial Management Division of OC San’s Administrative Services Department. Responsibility for both the accuracy of the data, and the completeness and fairness of the presentation, including all disclosures, rests with OC San. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to present fairly the financial position and changes in the financial position of OC San. All disclosures necessary to enable the reader to gain an understanding of the agency’s financial activities have been included. Included within the accompanying financial statements are all of the organizations, activities, and functions controlled by OC San’s Board of Directors in accordance with the Governmental Accounting Standards Board (GASB) Codification of Governmental Accounting and Financial Reporting. For the purpose of this evaluation, control was determined by the Board’s responsibility for: (1) adoption of the budget and user charges, (2) taxing authority, and (3) establishment of policies. The reporting entity and its services are described in further detail in Note 1 of the financial statements. An audit of the books, financial records, and transactions of OC San is conducted annually by independent certified public accountants. OC San selected the accounting firm of Davis Farr LLP to perform the audit for the year ended June 30, 2024. The auditor’s report on OC San’s basic financial statements and supplementary information is located on page 1 within the financial section of this report. This report renders an unmodified opinion on OC San’s basic financial statements for the year ended June 30, 2024. Management’s discussion and analysis (MD&A) immediately follows the independent auditor’s report and provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A complements this letter of transmittal and should be read in conjunction with it. GOVERNMENTAL STRUCTURE The Orange County Sanitation District encompasses the central and northwest section of Orange County. OC San provides wastewater treatment for an area of the County covering 479 square miles and serving a population of approximately 2.6 million, or 80 percent of the County’s population. OC San was originally incorporated in 1954 as seven separate public corporations, or districts, with two additional districts added in 1985 and 1986. In April of 1998, at OC San’s request, the Board of Supervisors of the County of Orange passed Resolution No. 98-140 ordering the consolidation of these nine County Sanitation Districts into a new, single sanitation district, to be known as the Orange County Sanitation District, effective July 1, 1998. This action was recommended to the Board by the Local Agency Formation Commission in ii order to simplify governance structures, reduce the size of the Board, ease administrative processes, streamline decision-making and consolidate accounting and auditing processes. The boundaries of the nine previous districts had remained intact for the purpose of collecting sewer user fees at the previously established rate schedules and were referred to as nine individual revenue areas through June 30, 2000. Effective July 1, 2003, eight of the revenue areas consolidated user fee rates and all enterprise fund accounting and budgeting activities and are now known as the Consolidated Revenue Area. The boundaries of one of the previous districts, now known as Revenue Area No. 14, have been maintained separately because their use of OC San’s collection, treatment, and disposal system is funded by the Irvine Ranch Water District (IRWD). OC San is managed by an administrative organization composed of directors appointed by the agencies or cities which are serviced by OC San. Each of the two remaining revenue areas, the Consolidated Revenue Area and Revenue Area 14, has its own budget and is responsible for the construction and maintenance of its own collection system. All revenue areas, except Revenue Area 14 and the portion of the Consolidated Revenue Area previously known as Revenue Area 13, receive their own share of the one-percent ad valorem property tax levy. In addition, all revenue areas, except Revenue Area 14, receive user fees from property owners. Revenue Area 14 receives all of its revenues from service charges to IRWD. The purpose of OC San’s wastewater collection, treatment, and recycling program is to protect the public’s health and the environment, preserving the beneficial uses of coastal waters and maintaining air quality. The objectives of operating the reclamation plants are to process and pass on for purification or dispose of the treated wastewater and the separated solids in accordance with federal, state, and local laws including the Environmental Protection Agency. OC San’s sewerage system includes more than 380 miles of sewers that convey wastewater generated within OC San’s boundaries to OC San’s two reclamation plants; Plant No. 1 located in the City of Fountain Valley, and Plant No. 2 located in the City of Huntington Beach. Plants No. 1 and No. 2 have secondary treatment capacities of 182 million gallons per day (mgd) and 150 mgd, respectively. In fiscal year 2024-25, both plants are projected to receive a combined average daily wastewater flow of 185 million gallons per day from residential, commercial, and industrial sources. After wastewater receives secondary treatment, it flows to the Groundwater Water Replenishment System (GWRS) at the Orange County Water District, located adjacent to OC San, where it undergoes a state-of- the-art purification process consisting of microfiltration, reverse osmosis, and ultraviolet light with hydrogen peroxide. The product water is near-distilled quality. Approximately 30 million gallons (113,500 cubic meters) per day of GWRS water are pumped into injection wells to create a seawater intrusion barrier. Another 100 million gallons (378,500 cubic meters) are pumped daily to Orange County Water District's percolation basins in Anaheim where the GWRS water naturally filters through sand and gravel to the deep aquifers of the groundwater basin. Remaining outflows of treated wastewater from Plants No. 1 and No. 2 are combined and discharged to the ocean off the Huntington Beach coast through an outfall pipe that is 120 inches in diameter and approximately five miles long. The last mile of the outfall pipe is a diffuser with over 500 ports through which treated wastewater is slowly released at a depth of 200 feet. ECONOMIC CONDITIONS AND OUTLOOK Job growth in Orange County has mirrored California's trends over the past five years. In December 2023, Chapman University projected a modest growth of 0.6 percent for 2024. Since 2019, the county has added nearly 50,000 jobs, averaging a 0.5 percent annual increase. The professional and business sectors, along with education and health, were the only areas to gain jobs during this period. The California Employment Development Department (EDD) reports that Orange County saw an increase of approximately 1.2 percent in payroll jobs from August 2023 to August 2024. During this same time period, unemployment in Orange County increased from 4.0 percent to 4.5 percent while the unemployment in California as a whole iii increased from 5.2 percent to 5.9 percent. Orange County's status as the national leader in the medical equipment and supplies manufacturing job sector provides it with significant agglomeration economies, positioning it as a key driver of future economic growth in the region. Chapman University indicates several factors that the slowdown in the construction industry in Orange County is likely to persist in the long term. One significant factor is the decline in the county's population growth, primarily due to negative net domestic migration. From 2018 to 2022, Orange County experienced a loss of 50,000 residents, with 43,000 of those moving out rather than moving in. This trend means that vacant homes are increasing the housing supply. With a current ratio of 2.83 persons per occupied housing unit, this net outflow effectively adds around 15,000 housing units to the existing supply, which is more than two years' worth of new single and multi-family units combined. Additionally, new housing permits for apartment units are likely to be limited by the low financial returns on apartment investments. The current cap rate for apartments offers less than a one percent premium over a 10-year T-Bond, which barely compensates for the risks associated with investing in apartment construction, especially in a declining population environment like Orange County. MAJOR INITIATIVES Following are the Orange County Sanitation District’s current major initiatives as outlined in the General Manager’s work plan for fiscal year (FY) 2024-25: 1. Business Principles Asset Management Plan – Implement a siphon cleaning program by June 30, 2025. Progressive Design-Build – Select an Owner Advisor for Progressive Design-Build by March 31, 2025. Develop Progressive Design-Build contract templates by June 30, 2025. Earned Value – Review Engineering’s earned value processes for project reporting and compare with industry best practices by June 30, 2025. NPDES Permitting Legal Support – Secure legal and technical resources for 2026 NPDES permit renewal by March 31, 2025. Permit Fees – Complete analysis of the current Capital Facilities Capacity Charge program to identify deficiencies for the member agencies and provide program improvement recommendation by December 31, 2024. Create a customer portal for online submission and payment of fees by June 30, 2025. Headquarters Educational Display – (Carried over from FY 23/24) Develop a Board approved design for the hands-on educational display for the outdoor patio by June 30, 2025. Regional Sewer Spill Training – Conduct regional sanitary sewer spill training for the collections system by June 30, 2025. 2. Environmental Stewardship Plant No. 2 Process Facilities Seismic Resilience – Select a consultant for the Plant No. 2 Process Facilities Seismic Resiliency Study by December 31, 2024. Urban Runoff Optimization Study – Receive draft Urban Runoff Study identifying opportunities within Orange County Water District, County of Orange, and OC San’s service area for additional dry weather urban runoff by June 30, 2025. Enforcement Response Plan – Update pretreatment/source control enforcement response plan in alignment with State of California’s 2024 water quality enforcement guidance document for legal review by June 30, 2025. Pretreatment Management – Expand OC San’s Pretreatment Honor Roll program to include iv wastehaulers by June 30, 2025. Food Waste – Finalize Memo of Understanding with Orange County Waste and Recycling by December 31, 2024. Agree on deal points for a cooperative agreement and make go/no-go decision to move forward by June 30, 2025. 3. Wastewater Management Plant No. 1 Distributed Control System Human Machine Interface (HMI) – Complete the conversion of the Plant No. 1 HMI system from CRISP to ABB by June 30, 2025. Deep Well Injection – Evaluate the initial feasibility of deep well injection of biosolids. Issue and evaluate Request for Information for potential deep well injection design-build-operate vendors and review permitting requirement by June 30, 2025. Supercritical Water Oxidization – (Carried over from FY 23/24) Complete the commissioning and begin demonstration of the pilot project by March 31, 2025, subject to regulatory permitting. Publicize project status. Property Management – Complete a physical assessment of all current OC San easements and rights-of-way. Document the assessment in written and visual forms as part of the OC San easement management program. Complete the assessment and report by June 30, 2025. 4. Workplace Environment Staff Training – Create development plans for each employee with associated training plans by June 30, 2025. Scanning and Paper Reduction – Complete Scope of Work for Phase III, issue a Purchase Order Agreement Request for Proposal and award the contract for implementation of the trusted system, Phase III for Environmental Services. Complete Phase III by June 30, 2025. Labor Agreements – Complete all labor agreements for all labor groups by June 30, 2025. OSHA Voluntary Protection Program (VPP) certification for Plant No. 2 – Apply for VPP certification for Plant No. 2 by June 30, 2025. Employee Engagement Survey – Conduct an employee engagement survey by June 30, 2025 to gather feedback on workplace environment satisfaction, communication effectiveness, recognition programs, and professional development opportunities. Utilize survey results to identify areas for improvement and develop action plans aimed at enhancing employee engagement and satisfaction levels. Strategic Planning In November 2023, the Board of Directors adopted a new comprehensive strategic plan to steer OC San’s efforts. The Strategic Plan developed by the Board of Directors and staff defines the strategic initiatives to be pursued by OC San and provides a basis for long-term financial, capital, and operational planning. In addition, it provides for long-term continuity of vision as Board and staff members change over the many years it takes to deliver public works infrastructure. The Strategic Plan is updated every two years to align policy and execution expectations with OC San’s two-year budget cycle. Driven by our Mission, Vision and Core Values, this Strategic Plan continues OC San’s efforts to protect the public health of the 2.6 million people we serve while protecting the environment where we live. v The Strategic Plan is broken down into four broad categories with fifteen policy areas that define our responsibilities and the services we provide. These areas are: Business Principles Budget Control and Fiscal Discipline Asset Management Cybersecurity Property Management Organizational Advocacy and Outreach Environmental Stewardship Energy Independence Climate and Catastrophic Event Resiliency Food Waste Treatment Water Reuse Environmental Water Quality, Stormwater Management and Urban Runoff Wastewater Management Chemical Sustainability Biosolids Management Constituents of Emerging Concern Workplace Environment Resilient Staffing Safety and Physical Security The Strategic Plan is not a radical departure from the current direction, but rather the well-defined iterative update to the direction of OC San. With the adoption of the Strategic Plan, staff also update the Asset Management Plan, Capital Improvement Plan, and Financial Plan that are the basis of the two-year budget adopted by the Board of Directors. The budget goals and the General Manager’s work plan are the accountability steps that measure achievable progress toward the strategic initiatives listed in the Strategic Plan. SERVICE EFFORTS AND ACCOMPLISHMENTS The following service efforts and accomplishments were achieved by OC San during the year ended June 30, 2024: American Inhouse Design Award - 2024 Graphic Design USA Certificate of Achievement for Excellence in Financial Reporting - 2023 Government Finance Officers Association Platinum Peak Performance Award - 2024 National Association of Clean Water Agencies (NACWA) Special Occasion/ One Time Event Award for Groundwater Replenishment System Dedication Ceremony - 2024-California Association of Public Information Officers Best in Show for Groundwater Replenishment System Dedication Ceremony - 2024- California Association of Public Information Officers vi Award For Excellence - Community Water Champion for Final Expansion of Groundwater Replenishment System - 2023 WateReuse Community Leadership Award for Final Expansion for Groundwater Replenishment System - 2023 National Association of Clean Water Agencies- National Environmental Association Agencies Excellence in Information Technology Practices Award - 2023 Municipal Information Systems Association of California Award for Excellence- Recycling Water Agency of the Year- Large for Final Expansion of Groundwater Replenishment System - 2023 WateReuse Honorable Mention - 2023 Beacon Program US Water Prize for Final Expansion of Groundwater Replenishment System - 2023 US Water Alliance ACCOUNTING AND BUDGETARY CONTROLS OC San’s accounting records are maintained on the accrual basis. In developing and evaluating OC San’s accounting system, consideration is given to the adequacy of internal accounting controls. Internal accounting controls are designed to provide reasonable, but not absolute, assurance regarding: (1) the safeguarding of assets against loss from unauthorized use or disposition; and (2) the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the evaluation of costs and benefits requires estimates and judgments by management. We believe that OC San’s internal accounting controls adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions. Each year, OC San’s Board of Directors adopts an annual operating plan. A joint works budget is first prepared that identifies the specific capital projects and operating activities to be undertaken by OC San during the year. The budgetary level of control, the level at which expenses cannot exceed budget, is exercised at the individual department level. OC San has adopted a Purchasing Ordinance that establishes requirements and procedures for the purchase of goods, services, and public work projects. ACCUMULATED FUNDS AND RESERVES POLICY The Board of Directors of the Orange County Sanitation District has established the following Accumulated Funds and Reserves Policy: Cash Flow Reserve: A cash flow criterion has been established at a level to fund operations, maintenance, and certificates of participation expenses for the first half of the fiscal year, prior to the receipt of the first installment of the property tax allocation and the sewer service user fees which are collected as a separate line item on the property tax bill. The level of this criterion will be established as the sum of an amount equal to six months operations and maintenance expenses and the total of the annual debt certificate of participation (COP) service payments due in August each year. Operating Contingency Reserve: An operating contingency criterion has been established to provide for non-recurring operating expenditures that were not anticipated when the annual budget was considered and adopted. The level of this criterion has been established at an amount equal to ten percent of the current fiscal year’s annual operating budget. vii Capital Improvement Reserve: A capital improvement criterion has been maintained to fund annual increments of the capital improvement program (CIP). The target level of this criterion has been established at one half of the average annual cash outlay of the capital improvement program over the next ten years. Levels higher and lower than the target can be expected while the long-term financing and capital improvement programs are being finalized. Catastrophic Loss or Self-Insurance Reserves: A catastrophic loss or self-insurance criterion has been maintained for property damage including fire, flood, and earthquake, for general liability and for workers' compensation. This reserve criterion is intended to work with purchased insurance policies, FEMA, and state disaster reimbursements. Based on the plant infrastructure replacement value, the level of this criterion has been set to fund OC San’s non-reimbursed costs, estimated to be $100 million. Capital Replacement/Renewal Reserve Policy: A capital replacement/renewal criterion policy has been established to provide funding to replace or refurbish the current collection, treatment, and recycling facilities at the end of their useful economic lives. The current replacement value of these facilities is estimated to be $14 billion. The reserve criterion level had been established at $75 million. Debt Service Reserves: A debt service criterion policy has been established at ten percent of the outstanding COP and revenue obligations. Other debt service reserves are required to be under the control of a trustee by the provisions of the COP or revenue obligations. These funds are not available for the general needs of OC San and must be maintained at specified levels. Accumulated Funds exceeding the targets specified by OC San policy will be maintained for Capital Improvements and Rate Stabilization. These funds will be applied to future years' CIP needs due to the timing of the actual CIP outlays, in order to maintain rates or to moderate annual fluctuations. As of June 30, 2024, OC San was in compliance with the Accumulated Funds and Reserves Policy with designated cash and investments totaling $849 million, and have been earmarked for the following specific purposes in accordance with OC San’s reserve policy: Designated Cash and Investments Cash Flow Contingency $ 148 million Self-Insurance 100 million Capital Improvements 525 million Debt Service Requirements 76 million Total Designated Cash and Investments $ 849 million CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the Orange County Sanitation District for OC San’s Annual Comprehensive Financial Report for the year ended June 30, 2023. This was the thirtieth consecutive year that OC San has received this award. In order to be awarded a Certificate of Achievement, a governmental unit must publish an easily readable and efficiently organized Annual Comprehensive Financial Report, whose contents conform to program standards. Such reports must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current Annual Comprehensive Financial Report continues to meet the Certificate of Achievement Program requirements, and we are submitting it to GFOA to determine its eligibility for another certificate. viii ACKNOWLEDGMENTS This report could not have been accomplished without the dedicated services of the Financial Management Division staff, and I would like to especially express my appreciation to the staff who assisted in its preparation. I would also like to thank OC San’s Board of Directors and the General Manager for their interest and support in conducting the financial operations of OC San in a responsible and progressive manner. Respectfully submitted, Ruth Zintzun Finance Manager ix x ORANGE COUNTY SANITATION DISTRICT Board of Directors As of June 30, 2024 Agency _ Active Director _ Alternate Director _ Cities: Anaheim Stephen Faessel Carlos A. Leon Brea Christine Marick Cecilia Hupp Buena Park Joyce Ahn Art Brown Cypress Scott Minikus Bonnie Peat Fountain Valley Glenn Grandis Ted Bui Fullerton Bruce Whitaker Nick Dunlap Garden Grove Stephanie Klopfenstein John O'Neill Huntington Beach Pat Burns Gracey Van Der Mark Irvine Farrah N. Khan Kathleen Treseder La Habra Rose Espinoza Jose Medrano La Palma Debbie Baker Mark Waldman Los Alamitos Jordan Nefulda Shelley Hasselbrink Newport Beach Brad Avery Erik Weigand Orange Jon Dumitru John Gyllenhammer Placentia Chad Wanke Ward Smith Santa Ana Johnathan Ryan Hernandez Benjamin Vazquez Seal Beach Schelly Sustarsic Lisa Landau Stanton David Shawver Carol Warren Tustin Ryan Gallagher Austin Lumbard Villa Park Robbie Pitts Jordan Wu Sanitary Water Districts: Costa Mesa Sanitary District Robert Ooten Art Perry Midway City Sanitary District Andrew Nguyen Tyler Diep Irvine Ranch Water District John Withers Douglas Reinhart Yorba Linda Water District Phil Hawkins Tom Lindsey County Areas: Member of the Board of Supervisors Doug Chaffee Donald P. Wagner xi ORANGE COUNTY SANITATION DISTRICT Organizational Chart As of June 30, 2024 xii ORANGE COUNTY SANITATION DISTRICT Map of Service Area As of June 30, 2024 Independent Auditor’s Report Board of Directors Orange County Sanitation District Fountain Valley, California Report on the Audit of the Financial Statements Opinion We have audited the financial statements of the Orange County Sanitation District (OC San), as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise OC San’s basic financial statements as listed in the table of contents. In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the Orange County Sanitation District, as of June 30, 2024, and the respective changes in financial position and cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of OC San and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Responsibilities of Management for the Financial Statements OC San’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about OC San’s ability to continue as a going concern for one year after the date that the financial statements are issued. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial 1 likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS, we: Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of OC San’s internal control. Accordingly, no such opinion is expressed. Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about OC San’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis,Proportionate Share of the Net Pension Liability (Asset) –OCERS Pension Plan, Schedule of District Contributions –OCERS Pension Plan, Total Pension Liability –Additional Retiree Benefit Account, Changes in Total Pension Liability –Additional Retiree Benefit Account, Total OPEB Liability –Post-Employment Medical Benefits Plan, and Changes in Total OPEB Liability –Post-Employment Medical Benefits Plan be presented to supplement the basic financial statements.Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise OC San’s basic financial statements. The Combining Area Schedule of Net Position, Combining Area Schedule of Revenues, Expenses, and Change in Net Position, and Combining Area Schedule of Cash Flows are presented for purposes of additional analysis and are not a required part of the basic financial statements. 2 The Combining Area Schedule of Net Position, Combining Area Schedule of Revenues, Expenses, and Change in Net Position, and Combining Area Schedule of Cash Flows are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Combining Area Schedule of Net Position, Combining Area Schedule of Revenues, Expenses, and Change in Net Position, and Combining Area Schedule of Cash Flows are fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Information Management is responsible for the other information included in the Annual Comprehensive Financial Report. The other information comprises the Introductory Section, Statistical Section, and Other Data and Trends but does not include the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 31, 2024,on our consideration of OC San’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance.That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering OC San’s internal control over financial reporting and compliance. Irvine, California October 31, 2024 3 ORANGE COUNTY SANITATION DISTRICT Management Discussion and Analysis (Unaudited) June 30, 2024 4 This section of the financial statements of the Orange County Sanitation District (OC San) is management’s narrative overview and analysis of the financial activities of OC San for the fiscal year ended June 30, 2024. The information presented here is to be considered in conjunction with additional information provided within the letter of transmittal located in the Introductory Section of this report. Financial Highlights As of June 30, 2024, OC San’s assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources by $3.2 billion (net position). Of this amount, $872.2 million represents unrestricted net position, which may be used to meet OC San’s ongoing obligations to citizens and creditors. Total net position increased $197.8 million, or 6.6 percent over the prior year. Net capital assets, consisting of non-depreciable capital assets and depreciable capital assets net of accumulated depreciation, increased $137.5 million, or 4.8 percent over the prior year. Net investment in capital assets increased $316.0 million, or 16.2 percent over the prior year. Restricted net position increased $9.6 million, or 38.9 percent over the prior year. Unrestricted net position decreased $127.9 million, or 12.8 percent under the prior year. Total outstanding bonded debt decreased by $183.6 million, or 23.3 percent from the prior year, to $606.1 million. Overview of the Basic Financial Statements OC San operates as a utility enterprise and presents its financial statements using the economic resources measurement focus and the full accrual basis of accounting. As an enterprise fund, OC San’s basic financial statements are comprised of two components: financial statements and notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. In accordance with the Governmental Accounting Standards Board (GASB) Codification of Governmental Accounting and Financial Reporting Standards, OC San’s financial statements include a Statement of Net Position; Statement of Revenues, Expenses, and Change in Net Position; and a Statement of Cash Flows. The Statement of Net Position includes OC San’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources; and provides information about the nature and amounts of investments in resources (assets) and the obligations to OC San’s creditors (liabilities). It also provides the basis for computing the rate of return, evaluating the capital structure of OC San, and assessing the liquidity and financial flexibility of OC San. The Statement of Revenues, Expenses, and Change in Net Position accounts for the current year’s revenues and expenses. This statement measures the success of OC San’s operations over the past year and can be used to determine OC San’s creditworthiness. It also highlights OC San’s dependency on property tax revenues in supplementing user fees and other charges for recovering total cost. The final required financial statement, the Statement of Cash Flows, reports cash receipts, cash payments, and net changes in cash resulting from operations, investments, and financial activities of the reporting period. ORANGE COUNTY SANITATION DISTRICT Management Discussion and Analysis (Unaudited) June 30, 2024 5 Net Position As previously noted, net position increased $197.8 million, or 6.6 percent over the net position at June 30, 2023, to $3.2 billion at June 30, 2024. (Dollars in thousands) Assets Current and other assets 919,344$ 1,052,833$ (133,489)$ -12.7% Net capital assets 2,993,396 2,855,895 137,501 4.8% Total assets 3,912,740 3,908,728 4,012 0.1% Deferred outflows of resources 97,104 110,106 (13,002) -11.8% Total assets and deferred outflows of resources 4,009,844 4,018,834 (8,990)-0.2% Liabilities Current liabilities 146,735 165,975 (19,240) -11.6% Noncurrent liabilities 664,213 852,918 (188,705) -22.1% Total liabilities 810,948 1,018,893 (207,945) -20.4% Deferred inflows of resources 21,449 20,249 1,200 5.9% Total liabilities and deferred inflows of resources 832,397 1,039,142 (206,745) -19.9% Net position Net investment in capital assets 2,270,960 1,954,939 316,021 16.2% Restricted for OCERS pension benefits 34,278 24,678 9,600 38.9% Unrestricted 872,209 1,000,075 (127,866) -12.8% Total net position 3,177,447$ 2,979,692$ 197,755$ 6.6% Increase (Decrease) Percentage Increase (Decrease) June 30, 2023 June 30, 2024 ORANGE COUNTY SANITATION DISTRICT Management Discussion and Analysis (Unaudited) June 30, 2024 6 Current and other assets decreased $133.5 million, or 12.7 percent, due primarily to capital outlays of $264.7 million, bonded debt retirements of $165.8 million, and interest paid of $50.5 million, offset by net cash provided by operations of $105.0 million, proceeds from property taxes of $131.8 million, interest received of $25.0 million, unrealized investment gains of $19.3 million, receipt of capital facilities capacity charges of $18.0 million, contributions from other governments of $24.5 million, an increase in due from other governmental agency of $12.3 million, and an increase in net pension asset of $7.9 million. Net capital assets increased $137.5 million, or 4.8 percent, due mostly to the ongoing capital improvement program construction in progress additions of $252.9 million, capital equipment of $3.2 million, and subscription right-to-use assets of $2.0 million, offset by depreciation of $116.2 million, loss on asset disposals of $3.5 million, and $0.9 million of prior capital project expenses that were written off as expense. Included in total capital outlay additions is the Headworks Rehabilitation at Plant 1 with incurred project costs of $69.0 million in FY 2023-24 and a total project budget of $340.0 million. The Headquarters Complex incurred project costs of $39.0 million in FY 2023-24 with a total project budget of $171.0 million. This project constructed the new Headquarters Building on the north side of Ellis Avenue to house administrative, engineering, resource protection, and environmental compliance staff. See page 9 for the Schedule of Capital Assets and listing of other major capital additions for FY 2023-24. Deferred outflows of resources decreased $13.0 million, or 11.8 percent from the prior year, primarily due to a $7.2 million or 7.5 percent decrease in pension deferred outflows attributable to the change in projected and actual earnings on pension plan investments and changes of actuarial assumptions and other inputs, and a $5.8 million or 39.9 percent decrease in the difference between carrying amount of the retired debt and the acquisition price of COP Series. Current liabilities decreased $19.2 million, or 11.6 percent, due to a decline in the amount due to other governmental agency Irvine Ranch Water District (IRWD) of $19.3 million and a decrease in interest payable of $6.3 million, offset by an increase in accounts payable and other current liabilities of $6.4 million. Noncurrent liabilities decreased $188.7 million, or 22.1 percent, primarily due to bonded debt repayments of $165.8 million, the refunding of $30.1 million of Series 2014A Revenue Refunding Obligations and $127.5 million of 2015A Revenue Refunding Obligations with Series 2024A Refunding Revenue Obligations issued in the amount of $139.7 million in May 2024, and a decrease in other noncurrent liabilities of $5.0 million. Deferred inflows of resources increased $1.2 million, or 5.9 percent over the prior year, primarily due to a $5.7 million or 551.6 percent increase in the difference between carrying amount of the retired debt and the acquisition price of COP Series due to 2024A new debt issuance, offset by $4.2 million or 23.1 percent decrease in pension deferred inflows attributable to the change in projected and actual earnings on pension plan investments and differences between expected and actual experiences, and a $0.3 million decrease in deferred inflows related to leases. Net investment in capital assets increased $316.0 million, or 16.2 percent over the prior year, primarily as a result of the net increase in capital assets of $137.5 million coupled with a $178.5 million decrease in related debt. Restricted net position increased $9.6 million, or 38.9 percent, due to the increase in amounts restricted for Orange County Employees Retirement System (OCERS) pension benefits. Unrestricted net position decreased $127.9 million, or 12.8 percent, due to the overall increase in net position of $197.7 million, offset by the increase in net investment in capital assets of $316.0 million and restricted net position of $9.6 million. ORANGE COUNTY SANITATION DISTRICT Management Discussion and Analysis (Unaudited) June 30, 2024 7 Change in Net Position The change in net position increased $33.3 million in FY 2023-24, or 20.2 percent over the prior year’s increase in net position. (Dollars in thousands) Revenues: Operating revenues Service charges 338,713$ 331,382$ 7,331$ 2.2% Permit and inspection fees 941 1,399 (458) -32.7% Total operating revenues 339,654 332,781 6,873 2.1% Non-operating revenues Property taxes 131,608 125,467 6,141 4.9% Investment and interest income (loss) 46,640 12,027 34,613 287.8% Contrib. from other governments 29,395 16,066 13,329 83.0% Other non-operating revenues 6,548 4,605 1,943 42.2% Total non-operating revenues 214,191 158,165 56,026 35.4% Total revenues 553,845 490,946 62,899 12.8% Expenses: Operating expenses other than depreciation and amortization 222,673 207,212 15,461 7.5% Depreciation and amortization 116,205 123,611 (7,406) -6.0% Non-operating expenses 35,454 27,882 7,572 27.2% Total expenses 374,332 358,705 15,627 4.4% Income before capital contributions 179,513 132,241 47,272 35.7% Capital contributions 18,242 32,264 (14,022) -43.5% Increase in net position 197,755 164,505 33,250 20.2% Beginning net position 2,979,692 2,815,187 164,505 5.8% Ending net position 3,177,447$ 2,979,692$ 197,755$ 6.6% June 30, 2024 June 30, 2023 Increase (Decrease) Percentage Increase (Decrease) As previously stated, an enterprise fund is used to account for the operations of OC San, which is financed and operated in a manner similar to private business enterprises. This allows OC San to determine that the costs (expenses, including depreciation and amortization) of providing wastewater management services on a continuing basis are financed or recovered primarily through user charges. Sewer service user fees are evaluated annually based primarily on budget requirements for total operation and maintenance expenses and capital outlays for providing wastewater management services. Property tax revenues are dedicated for the payment of debt service. ORANGE COUNTY SANITATION DISTRICT Management Discussion and Analysis (Unaudited) June 30, 2024 8 Operating revenues increased $6.9 million, or 2.1 percent in FY 2023-24 from the prior year, primarily due to a 3.2 percent increase in the average sewer user fee rate, offset by a slight decrease in other operating revenues as compared to the prior year. Non-operating revenues increased $56.0 million, or 35.4 percent, primarily due to a $34.6 million or 287.8 percent growth in investment and interest income as a result of higher yields on balances held in the investment portfolios, a $6.1 million or 4.9 percent increase in property taxes revenue attributable to increased home sales and a rise in total assessed valuation of 6.6 percent over the prior year, a $13.3 million or 83.0 percent increase in contributions from other governments due to the integration adjustment of Revenue Area 14’s equity share in OC San’s Joint Works Treatment Facilities based on the flows discharged to OC San and higher IRWD capital outlay revolving fund requirements, and a $2.0 million or 42.2 percent increase in other revenues mainly as a result of insurance recoveries. Operating expenses other than depreciation and amortization increased $15.5 million, or 7.5 percent, primarily due to increases of $12.2 million or 23.1 percent in supplies, repairs and maintenance due to digester cleaning, repairs, and a rise in chemical costs, $2.6 million or 9.3 percent in contractual services, and $2.6 million in other operating services, offset by decreases of $1.0 million or 6.5 percent in utilities and $0.9 million or 0.9 percent in salaries and benefits over the prior year. Non-operating expenses increased $7.6 million, or 27.2 percent, primarily from an increase of $5.2 million or 20.0 percent in interest expense due to an early call premium on 2010C debt repayments, offset by repayments and refundings from previous years, and an increase of $2.4 million in loss from disposal of assets. Capital contributions decreased $14.0 million, or 43.5 percent from the prior year, due to a $7.2 million or 30.6 percent decrease in capital facility capacity charges for connection fees collected from cities and supplemental capital facilities capacity charges assessed to industrial dischargers, and a decrease of $6.8 million or 77.5 percent in capital contributions from other governments, reflective of reimbursements from Orange County Water District (OCWD) for Groundwater Replenishment System costs. 61%24% 8% 7% Sources of Revenue June 30, 2024 User Fees Taxes Levied Interest Income Other 10% 49% 31% 8%2% Functional Expenses June 30, 2024 Collection System Treatment & Disposal Depreciation & Amortization Interest Expense Other ORANGE COUNTY SANITATION DISTRICT Management Discussion and Analysis (Unaudited) June 30, 2024 9 Capital Assets At June 30, 2024, OC San had a net investment of $3.0 billion in capital assets. This represents a net increase (including additions and deletions) of $137.5 million, or 4.8 percent over the prior year. (Dollars in thousands) Land 58,153$ 58,153$ -$ 0.0% Construction in progress 677,082 637,405 39,677 6.2% Sewage collection facilities 531,090 509,389 21,701 4.3% Sewage treatment facilities 1,500,387 1,567,802 (67,415) -4.3% Effluent disposal facilities 24,611 25,984 (1,373) -5.3% Solids disposal facilities 229 239 (10) -4.2% General and administrative facilities 199,883 55,953 143,930 257.2% Lease right-to-use asset 104 26 78 300.0% Subscription right-to-use assets 1,857 944 913 96.7% Capital assets, net 2,993,396$ 2,855,895$ 137,501$ 4.8% Schedule of Capital Assets (Net of Depreciation and Amortization) June 30, 2024 June 30, 2023 Increase (Decrease) Percentage Increase (Decrease) Major capital asset additions for the current fiscal year included the following: $69.0 million Headworks Rehabilitation at Plant No. 1 (P1-105) $39.0 million Headquarters Complex (P1-128) $18.7 million Primary Treatment Rehabilitation at Plant No. 2 (P2-98) $14.4 million Ocean Outfall System Rehabilitation (J-117) $14.2 million Gisler Red-Hill Interceptor & Baker Force Main Rehabilitation (7-65) $ 8.0 million Central Generation Engine Overhauls at Plants 1 and 2 (J-135) $ 7.9 million TPAD Digester Facility at Plant 2 (P2-128) $ 7.7 million Process Control System Upgrades (J-120) More detailed information about OC San’s capital assets is provided in Notes 1 and 3 of the Notes to Basic Financial Statements. ORANGE COUNTY SANITATION DISTRICT Management Discussion and Analysis (Unaudited) June 30, 2024 10 Debt Administration At June 30, 2024, OC San had $606.1 million outstanding in bonded debt, a net decrease of $183.6 million, or 23.3 percent from the prior year. This reduction consisted of the accumulation of principal payments made in accordance with the schedule of debt service payments, the refunding of $30.1 million of Series 2014A Revenue Refunding Obligations and $127.5 million of 2015A Revenue Refunding Obligations with Series 2024A Refunding Revenue Obligations issued in the amount of $139.7 million in May 2024, and the early repayment of $134.2 million of Series 2010C Revenue Obligations (Taxable Build America Bonds) in June 2024. During OC San’s most recent debt refundings, Moody’s, Standard and Poor’s, and Fitch Ratings all reaffirmed their AAA rating of the Orange County Sanitation District. OC San’s long-range financing plan is designed to maintain this high rating. Over the next ten years, OC San is projecting over $3.2 billion in capital improvements. In accordance with OC San’s long-term debt fiscal policy, OC San will restrict long- term borrowing to capital improvements that cannot be financed from current revenue. No new debt issuances are being proposed to assist with the funding of the system improvements scheduled over this time period. For more information on long-term debt activities, see Note 5 of the Notes to Basic Financial Statements. Economic Factors and Next Year’s Budgets and Rates The unemployment rate within the County of Orange is at 4.0 percent in June 2024, an increase from the rate of 3.7 percent in June 2023. Inflation for the Los Angeles-Long Beach-Anaheim area increased 3.2 percent in June 2024 over the prior year June 2023 based on the actual percentage change in the consumer price index according to the U.S. Department of Labor, Bureau of Labor Statistics. The yield on investments for FY 2023-24 stayed steady at 4.8 percent, matching the 4.8 percent earnings rate from FY 2022-23. All of these factors are considered in preparing OC San’s biennium budget. OC San’s user fee schedule was increased by 3.2 percent for FY 2023-24 over the prior year. The Single Family Residential (SFR) fee, which is the underlying rate for all other user rates, is applicable to OC San’s largest customer base: the SFR fee increased by $11.00, from $347.00 to $358.00. The revenue from sewer fees is necessary to support OC San’s cash flow needs for operating costs, debt service, and capital improvement outlays. Capital improvement costs are projected to total $3.2 billion over the next ten years in order to rehabilitate and upgrade existing facilities and maintain full secondary treatment standards. Requests for Information The financial report is designed to provide a general overview of OC San’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Financial Management Division, Orange County Sanitation District, 18480 Bandilier Circle, Fountain Valley, CA 92708. ORANGE COUNTY SANITATION DISTRICT BASIC FINANCIAL STATEMENTS 11 ORANGE COUNTY SANITATION DISTRICT Statement of Net Position June 30, 2024 Current assets: Cash and cash equivalents 123,087,456$ Investments 709,770,149 Accounts receivable, net of allowance for uncollectibles 10,148,213 Accrued interest receivable 6,210,455 Connection fees receivable 1,999,479 Property tax receivable 2,118,918 Lease receivable, current portion 341,723 Inventories 11,596,000 Prepaid expenses 2,420,320 Total current assets 867,692,713 Noncurrent assets: Restricted: Cash and cash equivalents 897,605 Investments 15,192,853 Accrued interest receivable 2,234 Net pension asset - OCERS 18,531,537 Unrestricted: Non-depreciable capital assets 735,235,339 Depreciable capital assets, net of accumulated depreciation 2,258,160,210 Due from other governmental agency 16,594,914 Lease receivable, noncurrent portion 422,260 Other noncurrent assets, net 10,344 Total noncurrent assets 3,045,047,296 Total assets 3,912,740,009 Deferred outflows of resources: Deferred outflows related to refundings 8,802,449 Deferred outflows related to pensions 84,098,923 Deferred outflows related to OPEB 4,202,234 Total deferred outflows of resources 97,103,606 Total assets and deferred outflows of resources 4,009,843,615 Current liabilities: Accounts payable and accrued expenses 45,467,767 Retentions payable 15,103,997 Interest payable 9,083,820 Due to other governmental agency 18,229,514 Long-term obligations, current portion 56,732,046 Total pension liability - ARBA, current portion 1,232,603 Total OPEB liability, current portion 885,432 Total current liabilities 146,735,179 Noncurrent liabilities: Long-term obligations, noncurrent portion 640,134,439 Total pension liability - ARBA, noncurrent portion 19,781,076 Total OPEB liability, noncurrent portion 4,297,056 Total noncurrent liabilities 664,212,571 Total liabilities 810,947,750 Deferred inflows of resources: Deferred inflows related to leases 708,862 Deferred inflows related to refundings 6,777,704 Deferred inflows related to pensions 13,962,233 Total deferred inflows of resources 21,448,799 Total liabilities and deferred inflows of resources 832,396,549 Net position: Net investment in capital assets 2,270,960,561 Restricted for OCERS pension benefits 34,277,644 Unrestricted 872,208,861 Total net position 3,177,447,066$ See Accompanying Notes to Basic Financial Statements. 12 ORANGE COUNTY SANITATION DISTRICT Statement of Revenues, Expenses, and Change in Net Position For the Year Ended June 30, 2024 Operating revenues: Service charges 338,713,310$ Permit and inspection fees 940,909 Total operating revenues 339,654,219 Operating expenses other than depreciation and amortization: Salaries and benefits 95,983,431 Utilities 14,892,620 Supplies, repairs and maintenance 64,995,443 Contractual services 30,335,241 Feasibility studies 4,479,443 Other operating expenses 11,987,202 Total operating expenses other than depreciation and amortization 222,673,380 Operating income before depreciation and amortization 116,980,839 Depreciation and amortization 116,204,812 Operating income 776,027 Non-operating revenues: Property taxes 131,607,529 Investment and interest income 46,640,438 Contributions from other governments 29,395,065 Other non-operating revenues 6,547,472 Total non-operating revenues 214,190,504 Non-operating expenses: Interest 31,066,678 Loss on disposal of assets 4,319,214 Other non-operating expenses 68,185 Total non-operating expenses 35,454,077 Income before capital contributions 179,512,454 Capital contributions: Capital facilities capacity charges 16,253,760 Capital contributions from other governments 1,988,372 Total capital contributions 18,242,132 Change in net position 197,754,586 Total net position - beginning 2,979,692,480 Total net position - ending 3,177,447,066$ See Accompanying Notes to Basic Financial Statements. 13 ORANGE COUNTY SANITATION DISTRICT Statement of Cash Flows For the Year Ended June 30, 2024 Cash flows from operating activities: Receipts from customers and users 319,981,533$ Payments to employees (94,759,626) Payments to suppliers (126,392,390) Receipts for other activities 6,187,286 Net cash provided by operating activities 105,016,803 Cash flows from noncapital financing activities: Proceeds from property taxes 131,847,028 Net cash provided by noncapital financing activities 131,847,028 Cash flows from capital and related financing activities: Capital facilities capacity charges 18,026,378 Contributions from other governments 24,453,389 Receipts from lease agreements 391,540 Additions to capital assets (264,736,825) Principal payments on debt obligations (163,874,926) Payments to bond escrow agent (159,480,074) Interest paid (50,477,432) Proceeds from debt issuance 139,636,168 Proceeds from premiums on debt issuance 20,309,469 Debt issuance costs (524,372) Net cash used in capital and related financing activities (436,276,685) Cash flows from investing activities: Proceeds from sale of investments 824,476,440 Purchases of investments (669,749,566) Interest received 24,970,345 Net cash provided by investing activities 179,697,219 Net decrease in cash and cash equivalents (19,715,635) Cash and cash equivalents, beginning of year 143,700,696 Cash and cash equivalents, end of year 123,985,061$ Reconciliation of operating income to net cash provided by operating activities: Operating income (loss) 776,027$ Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation and amortization 116,204,812 Bad debt expense (net recoveries) (109,438) Other non-operating revenues 6,119,101 (Increase)/decrease in operating assets and deferred outflows: Accounts receivable (13,023,280) Inventories (1,253,703) Prepaid expenses 306,149 Net pension asset - OCERS (7,926,736) Deferred outflows related to pensions 11,358,273 Deferred outflows related to OPEB (4,202,234) Increase/(decrease) in operating liabilities and deferred inflows: Accounts payable and accrued expenses 2,109,828 Due to other governmental agency (6,539,968) Compensated absences 742,650 Claims and judgments (402,899) Total pension liability - ARBA 914,896 Total OPEB liability 4,147,606 Deferred inflows related to pensions (4,204,281) Net cash provided by operating activities 105,016,803$ Noncash activities: Unrealized gain (loss) on the fair value of investments 19,289,038$ Capital assets acquired through accounts payable (13,532,651) Capital facilities capacity charges acquired (1,772,618) See Accompanying Notes to Basic Financial Statements. 14 ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements For the Year Ended June 30, 2024 15 (1) Summary of Significant Accounting Policies Reporting Entity The Orange County Sanitation District (OC San) is a public agency which owns and operates certain wastewater facilities in order to provide regional wastewater collection, treatment, and disposal services to approximately 2.6 million people in the central and northwest portion of the County of Orange, California. OC San is overseen by a Board comprised of directors appointed by the agencies and cities which are serviced by OC San. OC San’s service area was originally formed in 1954 pursuant to the County Sanitation District Act and consisted of seven independent special districts. Two additional districts were formed and additional service areas were added in 1985 and 1986. These special districts were jointly responsible for the treatment and disposal facilities which they each used. In April of 1998, the Board of Supervisors of Orange County passed Resolution 98-140 approving the consolidation of the existing nine special districts into a new, single sanitation district. This action was taken in order to simplify the governance structures, reduce the size of OC San’s Board of Directors, ease administrative processes, streamline decision-making and consolidate accounting and auditing processes. Pursuant to the Resolution and Government Code Section 57500, the predecessor special districts transferred and assigned all of their powers, rights, duties, obligations, functions, and properties to OC San, including all assets, liabilities, and equity. Effective July 1, 1998, the organization became known as the Orange County Sanitation District. The boundaries of one of the previous districts, now known as Revenue Area No. 14, have been maintained separately because their use of OC San’s collection, treatment, and disposal system is funded by the Irvine Ranch Water District (IRWD). The boundaries of the other eight districts have been consolidated and are collectively referred to as the Consolidated Revenue Area. OC San utilizes joint operating and capital outlay accounts to pay joint treatment, disposal, and construction costs. These joint costs are allocated to each revenue area based on gallons of sewage flow. The supplemental schedules and statements show internal segregations and are not intended to represent separate funds for presentation as major or non-major funds in the basic financial statements. The accompanying financial statements present OC San and its blended component unit, the Orange County Sanitation District Financing Corporation (Corporation). The Corporation is a legally separate entity although in substance it is considered to be part of OC San’s operations. OC San is considered to be financially accountable for the Corporation which is governed by a board comprised entirely of OC San’s board members. There is no requirement for separate financial statements of the Corporation; consequently, separate financial statements for the Corporation are not prepared. The Corporation had no financial activity during the fiscal year ended June 30, 2024, other than principal and interest payments on outstanding certificates of participation and revenue obligations (see Note 5). OC San is independent of and overlaps other formal political jurisdictions. There are many governmental entities, including the County of Orange, that operate within OC San’s jurisdiction; however, financial information for these entities is not included in the accompanying financial statements in accordance with the Governmental Accounting Standards Board (GASB). ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 16 Measurement Focus and Basis of Accounting OC San operates as an enterprise activity. Enterprise funds account for operations that are financed and operated in a manner similar to private business enterprises, where the intent of the Board of Directors is that the costs (expenses, including depreciation and amortization) of providing services to the general public on a continuing basis be financed or recovered primarily through user charges. Basis of accounting refers to when revenues and expenses are recognized in the accounts and reported in the financial statements. Enterprise funds are accounted for on the flow of economic resources measurement focus and use the accrual basis of accounting, whereby revenues are recognized when earned and expenses are recognized when incurred, regardless of the timing of related cash flows. The accounting policies of OC San conform to the Generally Accepted Accounting Principles (GAAP) in the United States of America as applicable to governments. The GASB is the accepted standard- setting body for establishing governmental accounting and financial reporting principles in the United States. Operating Plans Each year, OC San staff prepares an annual operating plan which is adopted by the Board of Directors. The annual operating plan is used to serve as a basis for monitoring financial progress, estimating the levy and collection of taxes, and determining future service charge rates. During the year, these plans may be amended as circumstances or levels of operation dictate. Cash and Cash Equivalents Investments with original maturities of three months or less when purchased, money market mutual funds, and external investment pools that can be withdrawn on demand are considered to be cash equivalents. Investments Investments are stated at fair value (the price that would be received to sell an asset in an orderly transaction between market participants acting in their economic best interest at the measurement date). Changes in fair value that occur during the fiscal year are reported as part of investment and interest income. Investment and interest income include interest earnings and realized and unrealized gains or losses in fair value. Investment and interest income are recorded as revenues and receivables when declared and realized gains or losses are recorded when the investment is sold. Accounts Receivable Accounts receivable is reported net of the allowance for uncollectible receivables. There were no uncollectible receivables at June 30, 2024. Unbilled sewer services through June 30, 2024, are recorded as revenue and receivables. Management determines the allowance for uncollectible receivables by evaluating individual accounts receivable at least one year past due and considering a customer’s financial condition, credit history and current economic conditions. Accounts receivables are written off when deemed uncollectible. Recoveries of accounts receivables previously written off are recorded when received. ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 17 Inventories Inventories, which are held for consumption and not resale, are stated at cost on a weighted-average basis and are expensed when used. Prepaid Expenses Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid expenses. Prepaid expenses are recorded as expenses when consumed rather than when purchased. Capital Assets Outlays for property, plant, equipment, and construction in progress are recorded in the revenue area which will use the asset. Such outlays may be for individual revenue area assets or for a revenue area’s share of joint assets. Capital assets of property, plant, and equipment are defined as assets with an initial, individual cost of $10,000 or more and an estimated useful life of at least three years. Such assets are recorded at cost, except for donated capital assets, donated works of art and similar items, and capital assets received in a service concession arrangement, which are recorded at acquisition value at the time received. Cost includes labor; materials; outside services; vehicle and equipment usage; other ancillary costs consisting of direct charges such as engineering, purchasing, supervision, or fringe benefits. Depreciation of plant and equipment is provided for over the estimated useful lives of the assets using the straight-line method in accordance with generally accepted accounting principles. OC San also considers the guidelines of estimated useful lives as recommended in the State of California Controller’s Uniform System of Accounts for Waste Disposal Districts, which range from 3 to 75 years. The following are estimated useful lives for major classes of depreciable assets: Sewage collection facilities – 50 years, Sewage treatment facilities – 40 years, Sewage disposal facilities – 40 years, General plant and administrative structures – 40 years, and other General plant and administrative facilities and equipment – 4 to 25 years. Lease and subscription right-to-use assets are defined as assets with an initial, individual cost of more than $50,000 and an estimated useful life of at least one year. Such assets are recorded at the present value of the lease or subscription liability and are amortized using the straight-line method over the term, which range from 1 to 5 years. Restricted Assets Certain assets are classified as restricted because their use is limited by applicable debt covenants or other legal agreements. Restricted cash and investments are maintained in separate trustee bank accounts. When both restricted and unrestricted resources are available for use, it is OC San’s policy to use restricted resources first, then unrestricted resources as they are needed, except in the case of restricted amounts in the Section 115 pension trust, for which OC San will specifically identify amounts to be utilized to fund OCERS pension benefits. Amortization Premiums on wastewater refunding revenue obligations are amortized to interest expense over the respective terms of the installment obligations based on the effective interest method (Note 5). ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 18 Deferred Outflows/Inflows of Resources In addition to assets, the statement of net position includes a separate section for deferred outflows of resources. Deferred outflows of resources represent a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense) until then. In addition to liabilities, the statement of net position includes a separate section for deferred inflows of resources. Deferred inflows of resources represent an acquisition of net assets that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. OC San has four items that qualify for reporting in these categories; related to refundings, pensions, Other Post-Employment Benefits (OPEB), and leases. For refundings resulting in defeasance of debt, the difference between the reacquisition price and the net carrying amount of the old debt is reported as a deferred outflow of resources or a deferred inflow of resources and amortized to interest expense based on the effective interest method over the remaining life of the old debt or the life of the new debt, whichever is shorter. Deferred outflows and inflows related to pensions and OPEB represent differences between estimated and actual investment earnings, changes in actuarial assumptions, and other related changes. Deferred inflows related to leases is associated with the lease receivable from building lease agreements, which is recognized as revenue over the life of the lease terms. Net Position Net position represents the total of assets and deferred outflows of resources less liabilities and deferred inflows of resources, and is classified into three categories: Net Investment in Capital Assets – This amount consists of capital assets, net of accumulated depreciation/amortization and reduced by the outstanding balances of borrowings or other debt that are attributable to the acquisition, construction, or improvement of those assets. Deferred outflows of resources and deferred inflows of resources that are attributable to the acquisition, construction, or improvement of those assets or related debt are included in this component of net position. Restricted – This amount consists of restricted assets for which constraints are placed on asset use either by external parties or by laws or regulations of other governments. OC San’s restricted net position reflects restricted cash and investments and accrued interest in the pension trust and the OCERS net pension asset. Unrestricted – This amount represents the residual of amounts not classified in the other category and represents the net position available for OC San. Compensated Absences OC San’s employees, other than operations and maintenance personnel, are granted vacation and sick leave in varying amounts with maximum accumulations of 200 hours and 560 hours for vacation and sick days earned but unused, respectively. Operations and maintenance personnel accrue between 80 and 250 personal leave hours per year depending on years of service, which can be accumulated up to a maximum of 440 hours. All accrued and unused vacation or personal leave is paid to the employee upon termination or retirement of the employee. Accrued and unused sick leave is paid to the employee at a percentage rate based on years of service, as stated in the Memorandum of Understanding for each bargaining group. Vacation and sick leave benefits and personal days are recorded as an expense and liability when earned by eligible employees. The distribution between current and long-term portions of the liability is based on historical trends. ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 19 Claims and Judgments OC San records estimated losses when it is probable that a claim liability has been incurred and when the amount of the loss can be reasonably estimated. Claims payable includes an estimate for incurred but unreported claims. The distribution between current and long-term portions of the liability is based on historical trends. Pensions OC San has two defined benefit pension plans for retirees: the plan maintained through and by the Orange County Employees Retirement System (OCERS) and the Additional Retiree Benefit Account (ARBA) administered directly by OC San. For purposes of measuring the net pension asset/liability, deferred outflows of resources related to pensions, deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of OC San’s cost sharing multiple-employer plan with the OCERS plan (Plan) and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis as they are reported by OCERS. Benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Deferred outflow and inflow of resources related to pensions result from changes in the components of the net pension asset/liability and are applicable to a future reporting period (Note 6). Property Taxes The County is permitted by State law (Proposition 13) to levy taxes at one percent of full market value (at time of purchase) and can increase the assessed value no more than two percent per year. OC San receives a share of this basic levy, proportionate to what was received in the 1976 to 1978 period. Property taxes are determined annually and attached as enforceable liens on real property as of January 1 and are payable in two installments which become delinquent after December 10 and April 10. The County bills and collects the property taxes and remits them to OC San in installments during the year. Property tax revenues are recognized when levied. The Board of Directors has designated property tax revenue to be used for the annual debt service requirements prior to being used as funding for current operations. Capital Facilities Capacity Charges Capital facilities capacity charges represent fees imposed at the time a structure is newly connected to OC San’s system, directly or indirectly, or an existing structure or category of use is increased. This charge is to pay for OC San facilities in existence at the time the charge is imposed or to pay for new facilities to be constructed that are of benefit to the property being charged. Operating and Non-operating Revenues and Expenses Operating revenues and expenses result from collecting, treating, and disposing of wastewater and inspection and permitting services. OC San’s operating revenues consist of charges to customers for the services provided. Operating expenses include the cost of providing these services, administrative expenses, and depreciation and amortization expenses. All revenues and expenses not meeting these definitions, and which are not capital in nature, are reported as non-operating revenues and expenses. Self-Insurance Plans For the year ended June 30, 2024, OC San was self-insured for portions of workers’ compensation, property damage, and general liability. The self-insurance portion of the workers’ compensation ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 20 exposure is the $1 million deductible per occurrence under the outside excess insurance coverage to statutory levels. The self-insurance portion of the property damage exposure covering fire and other perils is the $500,000 per occurrence deductible (for most perils) under the outside excess property insurance coverage to $1 billion. The self-insurance portion of the property damage exposure covering flood is the $1 million per occurrence deductible with outside excess property insurance coverage to $25 million. The self-insurance portion of the property damage exposure covering earthquake is the 5% per structure, minimum $5 million deductible with outside excess insurance coverage to $25 million on covered structures. OC San has insured several key structures against the peril of earthquake; all other structures are completely self-insured. The self-insurance portion of the boiler & machinery exposure is the deductible ranging from $25,000 to $350,000 under the outside excess boiler & machinery insurance coverage to $100 million per occurrence combined limit. The self-insurance portion of the general liability exposure is the $750,000 per occurrence deductible under the outside excess liability coverage to $40 million per occurrence and aggregate. The self-insurance portion of the pollution liability exposure is the $250,000 per loss deductible under the outside pollution liability insurance coverage to $10 million. There were no substantive changes to insurance coverage during the fiscal year ended June 30, 2024. During the past three fiscal years there have been no settlements in excess of covered amounts. Claims against OC San are processed by General Counsel or an outside claim administrator. These claims are charged to claims expense based on estimated or known amounts which will ultimately be paid. Claims incurred but not yet reported have been considered in determining the accrual for loss contingencies. Workers’ compensation reserves and general liability estimated loss accruals are actuarially determined. The estimate of the claims liability also includes any amounts for allocated and non-allocated claim adjustment expenses. OC San management believes that there are no unrecorded claims as of June 30, 2024, that would materially affect the financial position of OC San. Deferred Compensation Plan OC San offers its employees a deferred compensation plan established in accordance with Internal Revenue Code Section 457. The plan permits all employees of OC San to defer a portion of their salary until future years. The amount deferred is not available to employees until termination, retirement, death or for unforeseeable emergency. The assets of the plan are held in trust for the exclusive benefit of the participants and their beneficiaries. The plan assets are administered by an outside party and are not subject to the claims of OC San’s general creditors. In accordance with GASB Statement No. 97, the plan’s assets and liabilities are not included within OC San’s financial statements. New Accounting Pronouncements OC San implemented the following GASB Statement for the year ended June 30, 2024: GASB Statement No. 100, Accounting Changes and Error Corrections — an amendment of GASB Statement No. 62. The following GASB Statements have been issued but are not yet effective for the year ended June 30, 2024. OC San is assessing what financial statement impact, if any, these Statements will have: GASB Statement No. 101, Compensated Absences, effective for the fiscal year ending June 30, 2025. GASB Statement No. 102, Certain Risk Disclosures, effective for the fiscal year ending June 30, 2025. ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 21 GASB Statement No. 103, Financial Reporting Model Improvements, effective for the fiscal year ending June 30, 2026. (2) Cash and Investments Cash and investments as of June 30, 2024, are classified within the accompanying Statement of Net Position as follows: Cash and investments consist of the following as of June 30, 2024: Statement of Net Position: Current assets, unrestricted: Cash and cash equivalents 123,087,456$ Investments 709,770,149 Subtotal - current, unrestricted 832,857,605 Noncurrent assets, restricted: Cash and cash equivalents 897,605 Investments 15,192,853 Subtotal - restricted 16,090,458 Total cash and investments 848,948,063$ Cash on hand 1,500$ Deposits with financial institutions 4,178,443 Managed portfolio - cash and investments 828,677,662 Subtotal - unrestricted cash and investments 832,857,605 Monies held by trustees: Fiscal agent - cash and cash equivalents 346,586 Pension trust - cash and investments 15,743,872 Subtotal - restricted cash and investments 16,090,458 Total cash and investments 848,948,063$ ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 22 Investments Authorized by the California Government Code and OC San’s Investment Policy The following table identifies the investment types that are authorized by the California Government Code and OC San’s investment policy. This table and the subsequent tables identify certain provisions of either the California Government Code or OC San’s investment policy (whichever is more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. Maximum Maximum Investment Investment Type - Authorized by Maximum Percentage in a Single the California Government Code Maturity (1 ) (3)of Portfolio (1 )Issuer (1 ) Local Agency Bonds 5 years 10% (2)5% (2) U.S. Treasury Obligations 5 years No limit No limit California State Treasury Obligations 5 years No limit No limit U.S. Agency Securities 5 years No limit 20% (2) Banker's Acceptances 180 days 40% 5% (2) Commercial Paper 270 days 40% 5% (2) Negotiable Certificates of Deposit 5 years 30% 5% (2) Certificates of Deposit 5 years No limit 5% (2) Repurchase Agreements 1 year 20% (2)5% (2) Reverse Repurchase Agreements 90 days (2)5% (2)5% (2) Corporate Medium-Term Notes 5 years 30% 5% (2) Mutual Funds N/A 20% 10% Money Market Mutual Funds N/A 20% 20% Mortgage Pass-Through Securities/ CMO/Asset-Backed Securities 5 years 20% 5% (2) County Investment Pools N/A 15% (2)15% (2) Local Agency Investment Fund (LAIF) N/A No limit No limit Supranational Obligations 5 years 30% 30% Public Bank Obligations 5 years No limit 5% (2) Notes (1 ) Restrictions are in accordance with the California Government Code unless indicated otherwise. (2) The restriction is in accordance with OC San's Investment Policy which is more restrictive than the California Government Code. (3) As allowed by California Government Code Section 53601, the Board of Directors has adopted a policy of a maximum maturity of 5 years for investments purchased by OC San's external money manager for the long-term investment portfolio. The duration of the long-term investment portfolio can never exceed 60 months. Investments purchased for the short-term portfolio are subject to the maturity restrictions noted in this table. ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 23 Investments Authorized by Debt Agreements The investment of debt proceeds held by trustees is governed by provisions of the debt covenant agreements, rather than the general provisions of the California Government Code or OC San’s investment policy. The following table identifies the investment types that are authorized for investments held by OC San’s debt trustees. This table and the subsequent tables identify certain provisions of the debt covenant agreements that address interest rate risk, credit risk, and concentration of credit risk. Maximum Maximum Investment Type - Authorized by Maximum Percentage Investment in a the Debt Covenant Agreement Maturity of Portfolio Single Issuer U.S. Treasury Obligations No Limit No limit No limit U.S. Agency Securities No Limit No limit No limit State and Local Agency Bonds No Limit No limit No limit Certificates of Deposit No Limit No limit No limit Banker's Acceptances 180 days No limit No limit Repurchase Agreements 1 year No limit No limit Investment Agreements No Limit No limit No limit Forward Purchase Agreements No Limit No limit No limit Reserve Fund Put Agreements No Limit No limit No limit Guaranteed Investment Contracts No Limit No limit No limit Commercial Paper 270 days No limit No limit Money Market Mutual Funds N/A No limit No limit Local Agency Investment Fund (LAIF) N/A No limit No limit Investments in Pension Trust OC San has established an Internal Revenue Service (IRS) Section 115 trust to fund OCERS pension benefits. The tax-exempt irrevocable trust assets are to be used exclusively for payment of OCERS pension liabilities. OC San has restricted cash and investments held in the trust administered by Public Agency Retirement Services (PARS), with US Bank as the trustee, and managed by PFM Asset Management under guidelines approved by OC San. OC San has two pension trust portfolios: Moderate and Balanced. Both portfolios are constructed to control risk through four layers of diversification – asset classes (cash, fixed income, equity), investment styles (large cap, small cap, international, value, growth), managers, and securities. Disciplined mutual fund selection and monitoring process helps to drive return potential while reducing portfolio risk. The primary goal of the Moderate objective is to provide current income and moderate capital appreciation. It is expected that dividend and interest income will comprise a significant portion of total return, although growth through capital appreciation is equally important. The strategic ranges are as follows: Equity (40% - 60%), Fixed Income (40% – 60 %), and Cash (0% – 20%) The primary goal of the Balanced objective is to provide growth of principal and income. While dividend and interest income are important components of the objective’s total return, it is expected that capital appreciation will comprise a larger portion of the total return. The strategic ranges are as follows: Equity (50% - 70%), Fixed Income (30% – 50 %), and Cash (0% – 20%) ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 24 Disclosures Relating to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer an investment has before maturity, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that OC San manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time, as necessary to provide the cash flow and liquidity needed for operations. OC San monitors the interest rate risk inherent in its managed portfolio by measuring the duration of its portfolio. The duration of monies held for shorter term purposes is recommended by OC San’s Treasurer and is based on OC San’s cash flow requirements in meeting current operating and capital needs. The average duration of monies invested for shorter term purposes may never exceed 180 days. The duration of monies held for longer term purposes is recommended annually by OC San’s Treasurer and is based on OC San’s five-year cash flow forecast. The average duration may not exceed 120 percent nor be less than 80 percent of the recommended duration. The average duration of monies invested for longer term purposes may never exceed 60 months. There is no stated maximum maturity for the money market mutual funds. The money market mutual funds for BlackRock Institutional Fund and First American Government Obligations Fund are daily liquid funds available on demand. Following is a table which summarizes OC San’s managed portfolio investments by purpose and type with the duration as of June 30, 2024: Duration Duration Investment Type Fair Value (in years)(in months) Short-Term Portfolio: Local Agency Investment Fund 43,375,013$ 0.595 7.13 U.S. Agency Securities* 29,792,550 0.129 1.55 U.S. Treasury Notes 19,998,000 0.010 0.12 Corporate Medium-Term Notes 16,312,456 0.097 1.16 Commercial Paper 15,164,816 0.087 1.05 U.S. Treasury Bills 14,879,716 0.151 1.81 Money Market Mutual Funds 89,329 - - Short-term portfolio subtotal 139,611,880 0.251 3.01 Long-Term Portfolio: U.S. Treasury Notes 281,480,951 2.980 35.76 Corporate Medium-Term Notes 183,346,154 2.324 27.89 U.S. Agency Securities* 90,725,276 1.692 20.30 Supranationals 66,019,940 2.556 30.67 Asset Backed Securities/CMO/Mortgage Pass-Through* 60,298,229 1.564 18.77 U.S. Treasury Inflation-Protected Securities (TIPS) 4,750,146 0.050 0.60 Commercial Paper 2,195,681 0.044 0.53 Money Market Mutual Funds 249,405 - - Long-term portfolio subtotal 689,065,782 2.441 29.29 Total managed investment portfolio 828,677,662$ * Includes highly sensitive securities. ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 25 OC San monitors the interest rate risk inherent in its other investments using maturity of the investments. Following is a table of these investments, all held by trustees, as of June 30, 2024: Investments with Fair Values Highly Sensitive to Interest Rate Fluctuations OC San’s investments (including investments held by trustees) include the following investments that are highly sensitive to interest rate fluctuations (to a greater degree than already indicated in the information provided above): Mortgage-backed securities: These securities are subject to early payment in a period of declining interest rates. The resulting reduction in expected total cash flows affects the fair value of these securities, making them highly sensitive to change in interest rates. At fiscal year end, the fair value of investments in mortgage-backed securities totaled $23,347,886 including $23,109,270 of mortgage pass-through securities, $197,571 of U.S. agency securities, and $41,045 of U.S. government backed mortgage pools. Fair Value of Investments OC San measures and records its investments using fair value measurement guidelines established by generally accepted accounting principles. These guidelines recognize a three-tiered fair value hierarchy, as follows: Level 1: Quoted prices for identical investments in active markets; Level 2: Observable inputs other than quoted market prices; and Level 3: Unobservable inputs. 12 Months or Less Cash equivalents held by fiscal agents: Money Market Mutual Funds 346,586$ Cash equivalents held by fiscal agents subtotal 346,586 Cash equivalents and investments held by pension trust: Money Market Mutual Funds 551,019 Mutual Funds - Equity 8,476,920 Mutual Funds - Fixed Income 6,715,933 Cash equivalents and investments held by pension trust subtotal 15,743,872 Total held by trustees 16,090,458$ ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 26 At June 30, 2024, OC San had the following fair value measurements: US Bank is the custodial bank for all of OC San’s investments shown above in the managed portfolio, except for LAIF. Investments classified as Level 2 are valued using US Bank’s fair value hierarchy matrix based on the asset type classification. The fair value hierarchy level matrix is based on discussions with (1) pricing vendors, (2) broker/dealers, (3) investment managers, (4) industry groups, and (5) independent accounting firms. Disclosures Relating to Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The following table presents the minimum rating as required by the California Government Code, OC San’s investment policy, or debt agreements, and the actual rating as of year-end for each investment type: Quoted Prices Significant in Active Other Markets for Observable Unobservable Identical Assets Inputs Inputs Investment Type Fair Value Level 1 Level 2 Level 3 Investments in Short-Term Portfolio: U.S. Agency Securities 29,792,550$ -$ 29,792,550$ -$ U.S. Treasury Notes 19,998,000 - 19,998,000 - Corporate Medium-term Notes 16,312,456 - 16,312,456 - Commercial Paper 15,164,816 - 15,164,816 - U.S. Treasury Bills 14,879,716 - 14,879,716 - Investments in Long-Term Portfolio: U.S. Treasury Notes 281,480,951 - 281,480,951 - Corporate Medium-term Notes 183,346,154 - 183,346,154 - U.S. Agency Securities 90,725,276 - 90,725,276 - Supranationals 66,019,940 - 66,019,940 - Asset Backed Securities/CMO/Mortgage Pass-Through 60,298,229 - 60,298,229 - U.S. Treasury Inflation Protected Securities (TIPS) 4,750,146 - 4,750,146 - Commercial Paper 2,195,681 - 2,195,681 - Investments Held By Pension Trust: Mutual Funds - Equity 8,476,920 - 8,476,920 - Mutual Funds - Fixed Income 6,715,933 - 6,715,933 - Fair Value Hierarchy Totals -$ 800,156,768$ -$ Investments Not Subject To Fair Value Hierarchy: Local Agency Investment Fund (LAIF) 43,375,013 Money Market Mutual Funds (Short-Term Portfolio) 89,329 Money Market Mutual Funds (Long-Term Portfolio) 249,405 Money Market Mutual Funds (Held by Fiscal Agent) 346,586 Money Market Mutual Funds (Held by Pension Trust) 551,019 Total Investment Portfolio 844,768,120$ ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 27 Investment Type and the Lowest Rating Reported at Year End Investments with no legal minimum rating & no required disclosure: U.S. Treasury Obligations 321,108,813$ U.S. Agency Securities - GNMA 41,045 Subtotal 321,149,858$ Investments with no legal minimum rating: U.S. Agency Securities (other than GNMA): Rating of AA+ (Standard & Poor's)120,517,826 Local Agency Investment Fund (LAIF): Not rated 43,375,013 Invested with pension trust: Money Market Mutual Funds: Rating of Aaa-mf (Moody's)551,019 Mutual Funds - Equity: Not rated 8,476,920 Mutual Funds - Fixed Income: Not rated 6,715,933 Subtotal 179,636,711 Investments with a legal minimum rating (or its equivalent) of A: Corporate Medium-Term Notes: Rating of Aa1 (Moody's)3,017,203 Rating of AA+ (Standard & Poor's)1,966,040 Rating of Aa2 (Moody's)10,204,685 Rating of Aa3 (Moody's)8,895,946 Rating of AA- (Standard & Poor's)10,265,420 Rating of A1 (Moody's)19,401,583 Rating of A+ (Fitch)6,444,419 Rating of A2 (Moody's)36,716,921 Rating of A (Standard & Poor's)29,255,085 Rating of A3 (Moody's)*30,817,255 Rating of A- (Standard & Poor's)*36,153,809 Rating of Baa1 (Moody's)*996,800 Rating of BBB+ (Standard & Poor's)*5,523,264 Not rated 180 Subtotal 199,658,610 Investments with a legal minimum rating (or its equivalent) of AA: Asset Backed Securities/CMO/Mortgage Pass-Through: Rating of Aaa (Moody's)16,914,273 Rating of AAA (Standard & Poor's)20,036,070 Rating of AA+ (Standard & Poor's)23,306,841 Supranational Obligations: Rating of Aaa (Moody's)66,019,940 Subtotal 126,277,124 Investments with a legal minimum rating (or its equivalent) of AAA: Money Market Mutual Funds: Rating of Aaa (Moody's)338,734 Invested with fiscal agents: Money Market Mutual Funds: Rating of Aaa-mf (Moody's) 346,586 Subtotal 685,320 Investments with a legal minimum rating (or its equivalent) of "Prime": Commercial Paper: Rating of Aa2 (Moody's)4,744,347 Rating of Aa3 (Moody's)3,655,816 Rating of AA- (Standard & Poor's)1,523,185 Rating of A1 (Moody's)4,461,029 Rating of A2 (Moody's)2,976,120 Subtotal 17,360,497 Total 844,768,120$ * Investment was in compliance with legal requirements at the time it was purchased. Fair Value ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 28 Concentration of Credit Risk Limitations on the amount that OC San is allowed to invest in any one issuer have been identified previously in the section “Investments Authorized by the California Government Code and OC San’s Investment Policy” and in the section “Investments Authorized by Debt Agreements”. OC San follows whichever guideline is the most restrictive. As of June 30, 2024, OC San had no investments representing five percent or more of total investments. Custodial Credit Risk Custodial credit risk for deposits is the risk that in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The California Government Code and OC San’s investment policy contain legal requirements that limit the exposure to custodial credit risk for deposits as follows: a financial institution must secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The fair value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. Custodial credit risk for investments is the risk that in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and OC San’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for investments. As of June 30, 2024, in accordance with OC San’s investment policy, none of OC San’s investments were held with a counterparty. All of OC San’s investments were held with an independent third-party custodian bank registered in the name of OC San. OC San uses US Bank as a third-party custody and safekeeping service for its investment securities. Investment in State Investment Pool OC San is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of OC San’s investment in this pool is reported in the accompanying financial statements at amounts based upon OC San’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. Included in LAIF’s investment portfolio are mortgage-backed securities, other asset-backed securities, loans to certain state funds, securities with interest rates that vary according to changes in rates greater than a one-for-one basis, and structured notes. The amounts invested in LAIF are recorded as cash and cash equivalents at June 30, 2024. ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 29 (3) Capital Assets Capital asset activity for the year ended June 30, 2024, is as follows: Beginning Ending Balance at Additions / Deletions / Balance at July 1, 2023 Transfers Transfers June 30, 2024 Capital assets not depreciated: Cost: Land 58,153,170$ -$ -$ 58,153,170$ Construction in progress 637,404,895 252,863,353 (213,186,079) 677,082,169 Total nondepreciable assets 695,558,065 252,863,353 (213,186,079) 735,235,339 Depreciable capital assets: Cost: Sewage collection facilities 981,437,263 45,015,150 (13,279,814) 1,013,172,599 Sewage treatment facilities 2,871,421,987 14,190,706 (34,979,332) 2,850,633,361 Effluent disposal facilities 96,972,016 - (810,382) 96,161,634 Solids disposal facilities 3,463,236 - (133,343) 3,329,893 General and administrative facilities 265,647,129 156,266,797 (19,929,962) 401,983,964 Lease right-to-use asset 86,747 109,897 (86,747) 109,897 Subscription right-to-use assets 1,708,027 1,972,158 (206,182) 3,474,003 Excess purchase price over book value on acquired assets 19,979,000 - - 19,979,000 Subtotal 4,240,715,405 217,554,708 (69,425,762) 4,388,844,351 Accumulated depreciation and amortization: Sewage collection facilities (472,048,047) (23,275,971) 13,240,962 (482,083,056) Sewage treatment facilities (1,303,619,503) (78,466,125) 31,839,301 (1,350,246,327) Effluent disposal facilities (70,988,409) (1,372,516) 810,382 (71,550,543) Solids disposal facilities (3,224,282) (9,719) 133,343 (3,100,658) General and administrative facilities (209,694,049) (11,989,174) 19,582,015 (202,101,208) Lease right-to-use asset (61,234) (31,619) 86,747 (6,106) Subscription right-to-use assets (763,737) (1,059,688) 206,182 (1,617,243) Excess purchase price over book value on acquired assets (19,979,000) - - (19,979,000) Subtotal (2,080,378,261) (116,204,812) 65,898,932 (2,130,684,141) Net depreciable assets 2,160,337,144 101,349,896 (3,526,830) 2,258,160,210 Net capital assets 2,855,895,209$ 354,213,249$ (216,712,909)$ 2,993,395,549$ ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 30 (4) Lease Receivable As of June 30, 2024, OC San was engaged as a lessor in two noncancellable leases for building office space. The lessees are required to make fixed monthly payments ranging from $12,983 to $17,888 per month. OC San recognized $353,520 in lease revenue and $46,823 in interest revenue during the current fiscal year related to these agreements. As of June 30, 2024, the lease receivable is $763,983 and deferred inflows of resources is $708,862. The future principal and interest lease payments to be received as of June 30, 2024, are as follows: (5) Long-Term Liabilities The following is a summary of the changes in long-term liabilities for the year ended June 30, 2024: Compensated Absences OC San’s policies related to compensated absences are described in Note 1. OC San’s liability at June 30, 2024, is $10,392,752 with an estimated $9,188,437 to be paid or used within the next fiscal year. Year Ending June 30,Principal Interest Total 2025 341,723$ 30,480$ 372,203$ 2026 352,206 12,738 364,944 2027 70,054 878 70,932 Total 763,983$ 44,096$ 808,079$ Beginning Ending Balance, Due within Long-term Balance, July 1 Additions Deletions June 30 one year amount Compensated absences 9,650,103$ 9,159,770$ (8,417,121)$ 10,392,752$ 9,188,437$ 1,204,315$ Claims and judgments 5,555,003 2,326,045 (2,728,943) 5,152,105 1,121,620 4,030,485 Lease liability 27,369 109,897 (32,864) 104,402 34,143 70,259 Subscription liability 613,454 1,972,158 (1,776,073) 809,539 252,214 557,325 Certificates of participation / revenue obligations 789,750,000 139,720,000 (323,355,000) 606,115,000 34,085,000 572,030,000 Unamortized premium 79,812,663 20,309,469 (25,829,445) 74,292,687 12,050,632 62,242,055 Totals 885,408,592$ 173,597,339$ (362,139,446)$ 696,866,485$ 56,732,046$ 640,134,439$ ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 31 Claims and Judgments Payable OC San is self-insured in a number of areas as described in Note 1. The following is a summary of the change in claims and judgments payable for the years ended June 30, 2024, and 2023: Lease Liability As of June 30, 2024, OC San was engaged in one three-year lease agreement as lessee for property access used to operate a chemical dosing site as part of OC San’s sewer collection facilities. Required monthly payments range from $3,200 to $3,395 per month. OC San’s lease liability at June 30, 2024, is $104,402. The future principal and interest lease payments as of June 30, 2024, are as follows: Subscription Liability As of June 30, 2024, OC San was engaged in five subscription-based information technology arrangements for the right to use various vendor-provided software including geographic information systems, Microsoft Enterprise licenses, server virtualization licenses, workflow automation, and financial budget software applications. The future principal and interest subscription payments as of June 30, 2024, are as follows: 2023-24 2022-23 Claims and judgments payable at July 1 5,555,003$ 5,273,297$ Claims incurred during the fiscal year 2,326,045 3,751,128 Payments on claims during the fiscal year (2,728,943) (3,469,422) Claims and judgments payable at June 30 5,152,105 5,555,003 Less: current portion (1,121,620) (540,020) Total long-term claims and judgments payable 4,030,485$ 5,014,983$ Year Ending June 30,Principal Interest Total 2025 34,143$ 4,449$ 38,592$ 2026 37,075 2,675 39,750 2027 33,184 765 33,949 Total 104,402$ 7,889$ 112,291$ Year Ending June 30,Principal Interest Total 2025 252,214$ 28,290$ 280,504$ 2026 262,285 15,513 277,798 2027 140,527 8,137 148,664 2028 154,513 644 155,157 Total 809,539$ 52,584$ 862,123$ ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 32 Certificates of Participation / Revenue Obligations OC San issued certificates of participation and revenue obligations in order to finance construction of the treatment facilities. Each issuance represents a direct and proportionate interest in the semi- annual interest payments. Installment payments for the issues are payable from any source of lawfully available funds of OC San. Certificates of participation and revenue obligations at June 30, 2024, are summarized as follows: Outstanding Certificates of Participation and Revenue Obligations All of the outstanding debt of OC San is senior lien debt with rate covenants that require a minimum coverage ratio of 1.25. The minimum coverage ratio is the ratio of net annual revenues available for debt service requirements to total annual debt service requirements. As of June 30, 2024, the coverage ratio for senior lien debt was 1.73. May 2010 Wastewater Revenue Obligations, Series 2010A On May 18, 2010, OC San completed the sale of $80,000,000 of wastewater revenue obligations under the federally taxable Build America Bonds program. The obligations were issued to finance and reimburse OC San for the acquisition, construction, and installation of additional improvements made to the wastewater system. The stated interest rate on the obligations is fixed and will range from 5.56 percent to 5.58 percent, however, in accordance with their designation as Build America Bonds, OC San expected to receive a cash subsidy from the United States Treasury equal to 35 percent of the interest payable with respect to these revenue obligations, resulting in lower net costs. On March 1, 2013, the federal government implemented certain automatic spending cuts known as the sequester. As a result of the sequester, federal subsidy payments on Build America Bonds have been reduced annually from a high of 8.7 percent for the federal fiscal year end September 30, 2013, to a low of 5.7 percent for the federal fiscal year end September 30, 2021 through 2030. Annual principal payments are due on February 1, beginning February 1, 2034, through February 1, 2040. The trust agreement for the revenue obligations does not require the establishment of a reserve. December 2010 Wastewater Revenue Obligations, Series 2010C On December 8, 2010, OC San completed the sale of $157,000,000 of wastewater revenue obligations under the federally taxable Build America Bonds program. The obligations were issued to finance and reimburse OC San for the acquisition, construction, and installation of additional improvements made to the wastewater system. The stated interest rate on the Amount 2010A wastewater revenue obligations 80,000,000$ 2010C wastewater revenue obligations 22,830,000 2016A wastewater refunding revenue obligations 121,485,000 2017A wastewater refunding revenue obligations 65,815,000 2021A wastewater refunding revenue obligations 94,645,000 2022A wastewater refunding revenue obligations 81,620,000 2024A wastewater refunding revenue obligations 139,720,000 Total certificates of participation / revenue obligations 606,115,000$ ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 33 obligations is fixed and will range from 6.35 percent to 6.40 percent, however, in accordance with their designation as Build America Bonds, OC San expected to receive a cash subsidy from the United States Treasury equal to 35 percent of the interest payable with respect to these revenue obligations, resulting in lower net costs. Similar to the 2010 Series A certificates of participation, the sequester also reduced the federal subsidy on these Build America Bonds from a high of 8.7 percent for the federal fiscal year end September 30, 2013, to a low of 5.7 percent for the federal fiscal year end September 30, 2021 through 2030. Annual principal payments are due on February 1, beginning February 1, 2031, through February 1, 2044. On June 20, 2024, OC San prepaid $134,170,000 of 2010 Series C wastewater revenue obligations using existing resources, leaving a remaining balance outstanding of $22,830,000. Annual principal payments are due on February 1, beginning February 1, 2031, through February 1, 2032. The trust agreement for the revenue obligations does not require the establishment of a reserve. March 2016 Wastewater Refunding Revenue Obligations, Series 2016A On March 30, 2016, OC San completed the sale of $145,880,000 of wastewater refunding revenue obligations. The obligations were issued to partially refund $162,780,000 of the outstanding principal balance of the 2009 Series A certificates of participation. The stated interest rate on the obligations is fixed and will range from 4 to 5 percent. Annual principal payments are due on February 1, beginning February 1, 2020, through February 1, 2039. The trust agreement for the revenue obligations does not require the establishment of a reserve. February 2017 Wastewater Refunding Revenue Obligations, Series 2017A On February 1, 2017, OC San completed the sale of $66,370,000 of wastewater refunding revenue obligations. The obligations were issued to refund the $91,620,000 outstanding principal balance of the 2007 Series A certificates of participation. The stated interest rate on the obligations is fixed at 5 percent. Annual principal payments are due on February 1, beginning February 1, 2021, through February 1, 2030. The trust agreement for the revenue obligations does not require the establishment of a reserve. 2021 Wastewater Refunding Revenue Obligations, Series 2021A On July 29, 2021, OC San completed the sale of $133,510,000 of wastewater refunding revenue obligations. The obligations were issued to refund the $61,575,000 outstanding principal balance of the 2011 Series A certificates of participation and to refund the $102,200,000 outstanding principal balance of the 2018 Series A revenue refunding certificate anticipation notes. The stated interest rate on the obligations is fixed at 5 percent. Annual principal payments are due on February 1, beginning February 1, 2022, through February 1, 2036. The trust agreement for the revenue obligations does not require the establishment of a reserve. 2022 Wastewater Refunding Revenue Obligations, Series 2022A On February 1, 2022, OC San completed the sale of $81,620,000 of wastewater refunding revenue obligations. The obligations were issued to refund the $100,645,000 outstanding principal balance of the 2012 Series A certificates of participation and to refund the $6,670,000 outstanding principal balance of the 2012 Series B certificates of participation. The stated interest rate on the obligations is fixed at 5 percent. Annual principal payments are due on February 1, beginning February 1, 2031, through February 1, 2033. ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 34 The trust agreement for the revenue obligations does not require the establishment of a reserve. 2024 Wastewater Refunding Revenue Obligations, Series 2024A On May 7, 2024, OC San completed the sale of $139,720,000 of wastewater refunding revenue obligations. The obligations were issued to refund the $30,095,000 outstanding principal balance of the 2014 Series A wastewater refunding revenue obligations and to refund the $127,510,000 outstanding principal balance of the 2015 Series A wastewater refunding revenue obligations. The ending balances of the defeased debt, $30,095,000 and $127,510,000, respectively, are held in Escrow accounts until the call date. The stated interest rate on the obligations is fixed at 5 percent. Annual principal payments are due on February 1, beginning February 1, 2025, through February 1, 2037. The aggregate difference in debt service between the refunding debt and the refunded debt is $22,760,706. The total future payments for the new debt provide a net present value gain of approximately $23,087,328 to refund the old debt. The trust agreement for the revenue obligations does not require the establishment of a reserve. Annual Amortization Requirements The annual requirements to amortize all debt related to certificates of participation and revenue obligations as of June 30, 2024, are as follows: Year Ending June 30,Principal Estimated Interest Total 2025 34,085,000$ 26,824,564$ 60,909,564$ 2026 33,330,000 26,983,247 60,313,247 2027 34,870,000 25,316,747 60,186,747 2028 40,770,000 23,573,247 64,343,247 2029 42,805,000 21,534,747 64,339,747 2030 - 2034 235,175,000 73,665,657 308,840,657 2035 - 2039 171,630,000 21,547,506 193,177,506 2040 13,450,000 487,832 13,937,832 Total 606,115,000$ 219,933,547$ 826,048,547$ ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 35 (6) Pension Benefits OC San has two defined benefit pension plans for retirees: the plan maintained through and by the Orange County Employees Retirement System (OCERS) and the Additional Retiree Benefit Account (ARBA) administered directly by OC San. A summary of pension amounts for OC San’s plans at June 30, 2024, is presented below: A. Orange County Employees Retirement System (OCERS) Plan Description: All qualified permanent and probationary employees are eligible to participate in OC San’s Employee Pension Plan (Plan), which is a cost-sharing multiple employer defined benefit pension plan administered by the Orange County Employees Retirement System (OCERS). OCERS was established in 1945 under the provisions of the County Employees Retirement Law of 1937 (CERL). The Plan operates under the provisions of the CERL, the California Public Employees’ Pension Reform Act of 2013 (PEPRA), and the regulations, procedures and policies adopted by OCERS’ Board of Retirement. The Plan’s authority to establish and amend the benefit terms are set by the CERL and PEPRA and may be amended by the California State Legislature. The Plan is a tax qualified plan under Section 401(a) of the Internal Revenue Code. Benefits Provided: OCERS provides service retirement, disability, death, and survivor benefits to plan members who may be public employees or beneficiaries. The CERL and PEPRA establish benefit terms. Benefits are based on years of credited service equal to one year of full-time employment. Members of plans B and H with ten years of service credit are entitled to receive a retirement allowance beginning at age 50; members of plan U with 5 years of service are eligible to receive a retirement allowance at age 52. Members attaining age 70 are eligible to retire regardless of credited service. OCERS ARBA Total Net pension asset - OCERS 18,531,537$ -$ 18,531,537$ Deferred outflows - pensions 80,677,139 3,421,784 84,098,923 Total pension liability - ARBA - 21,013,679 21,013,679 Deferred inflows - pensions 9,903,026 4,059,207 13,962,233 Pension expense 9,503,059 1,347,936 10,850,995 ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 36 Benefits are determined by plan formula, age, years of service and final average salary (FAS) as follows: Plan H Plan B Plan U Hire Date After 9/21/79 Prof/Sup*: Before 10/1/10 OCEA*: Before 8/1/11 501*: Before 7/1/11 Prof/Sup: After 10/1/10 OCEA: After 8/1/11 501: After 7/1/11 All: Before 1/1/2013 On or after 1/1/2013 Final Average Compensation (FAS)Highest 36 months Highest 36 months Highest 36 months Normal Retirement Age Age 55 Age 57.5 Age 67 Age 70, any years Age 70, any years Age 70, any years Age 50, 10 years Age 50, 10 years Age 52, 5 years Benefit percent per year of service for normal retirement age 2.5% per year of FAS for every year of service credit 1.667% per year of FAS for every year of service credit 2.5% per year of FAS for every year of service credit Benefit Adjustments Reduced before age 55 Reduced before age 57.5 Reduced before age 67 FAS Limitation Internal Revenue Code Section 401(a)(17) Internal Revenue Code Section 401(a)(17) Public Employees Pension Reform Act (PEPRA): 120% of Social Security wage base per year * Prof/Sup: Professional and Supervisor employee groups, bargaining unit SPMG. * OCEA: Administrative, Clerical, Engineering, and Technical Services employee groups, bargaining unit OCEA. * 501: Operations and Maintenance employee groups, bargaining unit International Union of Operating Engineers Local 501. Service Requirement Eligibility A cost-of-living adjustment is provided to benefit recipients based on changes in the Consumer Price Index (CPI) up to a maximum of 3% per year. Any increase greater than 3% is banked and may be used in years when the CPI is less than 3%. The increase is established and approved annually by the Board of Retirement. The Plan also provides disability and death benefits to eligible members and their beneficiaries, respectively. For retirees, the death benefit is determined by the retirement benefit option chosen. For all other members, the beneficiary is entitled to benefits based on the member’s years of service and whether or not the cause of death is service related. At the December 31, 2023, measurement date, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits 634 Inactive employees entitled to but not yet receiving benefits 161 Active employees 608 Total 1,403 ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 37 Contributions: Participating employers and active members are required by statute to contribute a percentage of covered salary to the Plan. CERL requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and be effective on the July 1 following notice of a change in rate. Funding contributions are determined annually on an actuarial basis as of December 31 by OCERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Contributions to the Plan from OC San were $9,172,411 for the year ended June 30, 2024. Contribution rates in effect for the fiscal year ended June 30, 2024, are as follows: For the year ended June 30, 2024, the contributions and average employer’s contribution rate as a percentage of covered payroll were as follows: Pension Assets/Liabilities: As of June 30, 2024, OC San reported a net pension asset of $18,531,537 for its proportionate share of OCERS’ net pension liability. The net pension asset was measured as of December 31, 2023, and the total pension asset used to calculate the net pension asset was determined by an actuarial valuation as of that date. OC San’s proportion of the net pension asset was based on a projection of OC San’s long-term share of contributions to the pension plan relative to the projected contribution of all participating employers, actuarially determined. At December 31, 2023, OC San’s proportion of the net pension liability was negative (0.382%), which was a decrease of 0.185% from its proportion measured as of December 31, 2022. The change in OC San’s proportion of the net pension liability during the fiscal year ended June 30, 2024, was caused by contributions and projections noted above. Plan H Plan B Plan U Employer Contribution Rate, 7/1/23 - 6/30/24 13.47% 13.09% 9.82% Employee Contribution Rate, 7/1/23 - 6/30/24 (2)6.59-13.37% (1)7.55-13.79% 6.95-14.77% Paid by Employer for Employee 3.50% 0.00% 0.00% (1) Net of employer paid portion of 3.5%. (2) Employee rates are determined by the age of entry into the retirement system. Plans Employer Contributions Employee (Paid by Employer) Contributions Average Employer Contribution Rate (%) Plan H 3,762,087 973,474 5.88% Plan B 982,848 - 1.22% Plan U 4,427,476 - 5.50% Total 9,172,411$ 973,474$ ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 38 Pension Expense and Deferred Outflows/Inflows of Resources Related to Pensions: For the year ended June 30, 2024, OC San recognized pension expense of $9,503,059 for its proportionate share of the pension expense. At June 30, 2024, OC San reported its share of deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: The $13,393,606 reported as deferred outflows of resources related to pensions resulting from OC San’s contributions to OCERS subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2025. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OCERS pensions will be recognized in pension expense as follows: Deferred Outflows of Resources Deferred Inflows of Resources Difference between expected and actual experience 33,942,756$ 9,903,026$ Net difference between projected and actual investment earnings on pension plan investments 22,365,002 - Changes of assumptions (1) 10,975,775 - Employer contributions paid to OCERS subsequent to the measurement date 13,393,606 - Total 80,677,139$ 9,903,026$ • adjustments to the mortality tables, • % in the rate of marriage for male and female members at retirement or pre-retirement death, • an increase in the Consumer Price Index of 2.75% per year, maximum increase is 3%, • and a slight increase of .50% in salaries per year. • retirement assumptions for deferred vested members (age at retirement 58, increase of 3.90% in reciprocity, and an increase in compensation increases), Detail for these changes is available in the Segal Actuarial Valuation for December 31, 2023, Section 3. This report is available on the OCERS website at www.ocers.org. (1) The monetary effects of changes in actuarial assumptions and method totals $10,975,775 for deferred outflows and $0 for deferred inflows of resources. These changes include: Year Ending June 30, Amount 2025 9,079,208$ 2026 15,940,192 2027 31,416,059 2028 (1,190,048) 2029 2,135,096 Total 57,380,507$ ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 39 Actuarial Assumptions and Methods: The total pension liability in the December 31, 2023, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: OCERS Economic and Demographic Assumptions: On August 17, 2020, the OCERS Board adopted the following significant changes to the economic and demographic actuarial assumptions, used to establish retirement contribution rates effective July 1, 2021: Reduced the assumed rate of price inflation from 2.75% to 2.50%. Adopted the use of Public Retirement Plans Mortality tables (PUB-2010) published by the Society of Actuaries. Additionally, the OCERS Board adopted a three-year phase-in of the impact to the contribution rates associated with the Unfunded Actuarially Accrued Liability. The cumulative effect of these changes will have the impact of increasing contribution rates for members and plan sponsors. The mortality assumptions used in the total pension liability at December 31, 2023, were based on the Amount-Weighted Above-Median Mortality Tables (adjusted for OCERS experience), projected generationally with the two-dimensional mortality improvement scale MP-2021, and adjusted separately for healthy and disabled members. The basis for determining the mortality assumptions used were based on the results of the actuarial experience study for the period January 1, 2020, through December 31, 2022. Further details of the experience study can be found in the OCERS Annual Comprehensive Financial Report, available on their website at www.ocers.org. Long-Term Expected Real Rate of Return: The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of inflation) are developed for each major asset class. These returns are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation and deducting expected investment expenses. Investment rate of return 7.00% of net pension plan investment expenses, including inflation Discount rate 7.00% Inflation rate 2.50% Projected salary increases 3.90% to 8.00% Cost of living adjustment 2.75% of retirement income ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 40 The target allocation and projected arithmetic real rates of return for each major asset class, after deducting inflation, but before investment expenses, used in the derivation of the long-term expected investment rate of return assumption are summarized in the following table for the calendar year ended December 31, 2023: Discount Rate: The discount rate used to measure the total pension liability was 7.00% for the year ended December 31, 2023. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the actuarially determined contribution rates. For this purpose, only employer contributions that are intended to fund benefits for current plan members and their beneficiaries are included. Projected employer contributions that are intended to fund the service costs for future plan members and their beneficiaries, as well as projected contributions from future plan members, are not included. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments for current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability as of December 31, 2023. Sensitivity of the Proportionate Share of Net Pension Liability to Changes in the Discount Rate: The following table represents OC San’s proportionate share of the net pension liability calculated using the discount rate of 7.00%, as well as what OC San’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower (6.00%) or 1 percentage point higher (8.00%) than the current rate: Asset Class Target Allocation Long-Term Expected Real Rate of Return (Arithmetic) Global Equity 45.00% 7.05% Investment Grade Bonds 9.00% 1.97% High Yield Bond 0.50% 4.63% TIPS 2.00% 1.77% Emerging Market Debt 0.50% 4.72% Long-Term Government Bonds 3.30% 2.82% Real Estate 3.00% 3.86% Private Equity 15.00% 9.84% Private Credit 3.50% 6.47% Value Added Real Estate 3.00% 7.38% Opportunistic Real Estate 1.00% 9.74% Energy 2.00% 10.89% Infrastructure (Core Private) 1.00% 5.98% Infrastructure (Non-Core Private) 3.00% 8.88% Global Macro 1.70% 3.17% CTA (Trend Following) 3.30% 3.15% Alternative Risk Premia 1.70% 3.24% Special Situations Lending 1.50% 8.96% Total 100.00% Net Pension Asset (Liability) December 31, 2023 $ (109,406,478) $ 18,531,537 $ 123,117,445 (6.00%) (7.00%) (8.00%) 1% Decrease Current Discount Rate 1% Increase ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 41 Pension Plan Fiduciary Net Position: Detailed information about OCERS’ fiduciary net position is available in a separately issued OCERS Annual Comprehensive Financial Report. That report may be obtained from OCERS at 2223 Wellington Avenue, Santa Ana, California 92708 or at their web site (www.ocers.org). B. Additional Retiree Benefit Account (ARBA) Plan Description: The OC San ARBA plan is a single-employer defined benefit plan which was administered by OCERS until February 29, 2008, when OC San began direct administration. This benefit was established by the OC San Board of Directors on October 25, 1992. It provides a monthly payment to retirees towards the premium costs of health insurance for the retiree and eligible dependents. The retiree is not required to use this amount for health insurance premium or to remain on the OC San medical plan. The plan is a funded on a pay-as-you-go plan from general funds and is administered by OC San. Stand-alone financial statements are not issued for the plan. Benefits Provided: Employees who retire receive $10 per month for every year of service up to a maximum of 25 years, or $250 per month. This amount is independent of salary and is fixed at retirement. Because OC San cannot ensure the use of the benefit for payment of eligible health insurance expenses, the benefit is taxable to the retiree. Survivor benefits are provided in the event that a retiree pre-deceases his/her spouse. For retirees hired prior to July 1, 1988, OC San provides health insurance coverage for 2½ months per year of service (see Note 7 – Other Post-Employment Benefits). ARBA benefits begin immediately after this benefit ends. For those hired on or after July 1, 1988, ARBA benefits begin immediately upon retirement and continue for life. Employees hired into the OCEA bargaining group after August 1, 2011, are ineligible for this benefit. Benefits are determined by hire date, bargaining unit and years of service as follows: Hire date All: Prior to 7/1/88 All: After 7/1/88 OCEA*: Before 8/1/11 Benefit amount per year of service for normal retirement age $10 per month x years of service up to a maximum of 25 years $10 per month x years of service up to a maximum of 25 years Service requirement eligibility Age 50 or over with 10 or more years Any age with 30 or more years Age 70 or over, any years Age 50 or over with 10 or more years Any age with 30 or more years Age 70 or over, any years Benefit payments Monthly for life Monthly for life Benefit schedule Immediately after retiree health insurance coverage ends Immediately upon retirement * OCEA: Administrative, Clerical, Engineering, and Technical Services employee groups, bargaining unit OCEA. No cost-of-living adjustment is provided to benefit recipients. ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 42 At the July 1, 2023, actuarial valuation date, the following employees were covered by the benefit terms: Contributions: There are no employee contributions for this plan; OC San covers 100% of the cost. OC San utilizes a pay-as-you-go method for funding the plan. Contributions to the plan from OC San were $1,231,320 for the year ended June 30, 2024. Pension Liabilities: As of June 30, 2024, OC San reported a total pension liability of $21,013,679 for its ARBA plan with an estimated $1,232,603 to be paid within the next fiscal year. The total pension liability was determined by an actuarial valuation as of July 1, 2023. OC San funds benefits on a pay-as-you-go basis and elected not to pre-fund its pension obligation. As a result, there are no plan assets and the total pension liability is equal to the net pension liability. Standard actuarial update procedures were used to project/discount from July 1, 2023, to the measurement date of June 30, 2024. The actuarial valuation performed as of July 1, 2023, used the entry age, level percent of pay cost method. This method represents the present value of all benefits accrued through the valuation date assuming that each employee’s liability is expensed from hire date until retirement date as a level percentage of pay. The following table shows the changes in the total pension liability: Inactive employees or beneficiaries currently receiving benefits 494 Active employees 518 Total 1,012 Total Pension Liability Increase (Decrease) Beginning balance at July 1, 2023 20,098,783$ Changes in the year: Service cost 438,173 Interest on total pension liability 813,972 Difference between expected and actual experience 1,902,002 Changes of assumptions (1,007,931) Benefit payments (1,231,320) Net changes 914,896 Ending balance at June 30, 2024 21,013,679$ ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 43 Pension Expense and Deferred Outflows/Inflows of Resources Related to Pension: For the year ended June 30, 2024, OC San recognized pension expense of $1,347,936 for its ARBA plan. At June 30, 2024, OC San reported its share of deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Amounts reported as deferred outflows of resources and deferred inflows of resources related to ARBA pensions will be recognized in pension expense as follows: Actuarial Assumptions and Methods: The total pension liability in the July 1, 2023, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: The mortality assumptions used in the total pension liability at July 1, 2023, were based on the Pub-2010 General Employee and Healthy Retiree Amount-Weighted Above-Median Mortality Tables for males or females, projected generationally with the two-dimensional mortality improvement scale MP-2021. Deferred Outflows of Resources Deferred Inflows of Resources Difference between expected and actual experience 2,124,024$ 646,797$ Changes of assumptions (1) 1,297,760 3,412,410 Total 3,421,784$ 4,059,207$ (1) The monetary effects of changes in actuarial assumptions and method totals $1,297,760 for deferred outflows and $3,412,410 for deferred inflows of resources. These changes include passage of time, a change in the discount rate from 3.86% to 3.97%, change in actuarial system, census and other losses. Year Ending June 30, Amount 2025 (112,461)$ 2026 (251,132) 2027 (286,415) 2028 (237,845) 2029 111,915 Thereafter 138,515 Total (637,423)$ Investment rate of return 3.75% per annum Discount rate 3.86% per annum as of July 1, 2023 (valuation date) 3.97% per annum as of June 30, 2024 (measurement date) Inflation rate 2.50% per annum Projected salary increases 3.00% per annum (for service cost only; benefits not pay-related) ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 44 Discount Rate: The discount rate used to measure the total pension liability was 3.86% as of the valuation date, July 1, 2023, and 3.97% as of the measurement date, June 30, 2024. Because there are no assets held in a trust, the discount rate is based on the 20-year, tax exempt general obligation municipal bonds with an average rating of AA/Aa or higher. Sensitivity of the Total Pension Liability to Changes in the Discount Rate: The following table represents the total pension liability calculated using the discount rate of 3.97% as of the measurement date, as well as what total pension liability would be if it were calculated using a discount rate that is 1 percentage point lower (2.97%) or 1 percentage point higher (4.97%) than the current rate: (7) Other Post-Employment Benefits (OPEB) Plan Description: The post-employment medical benefits plan is a single-employer defined benefit plan administered by OC San. This plan was established and may be modified only by action of the OC San Board of Directors. Stand-alone financial statements are not issued. Benefits Provided: OC San offers medical insurance to active and retired employees, as well as their qualified dependents. All retirees may choose coverage in an OC San medical plan, with retirees paying the full premium. However, for employees hired prior to July 1, 1988, medical benefits begin immediately at retirement with OC San paying 2.5 months of premium for each year of continuous service toward the cost of coverage under OC San medical plans. At the termination of this period the retiree may elect to continue coverage at his/her own expense. For the fiscal year ended June 30, 2024, premiums ranged between $189 and $4,468 per month, depending on the plan and number of dependents covered. At the July 1, 2023, actuarial valuation date, the following employees were covered by the benefit terms: Contributions: There are no employee contributions to this plan; OC San covers 100% of the cost for qualifying employees as stated above. Retirees opting to remain with the plan after employment pay 100% of the premium cost, except for those for whom OC San pays for a period (see above). OC San utilizes a pay-as-you-go method for funding the plan. Contributions to the plan from OC San were $228,929 and the estimated implicit subsidy was $722,064, resulting in total payments of $950,993, and retirees contributed $1,725,775 for the year ended June 30, 2024. Total Pension Liability June 30, 2024 $ 23,645,615 $ 21,013,679 $ 18,821,637 (2.97%) (3.97%) (4.97%) 1% Decrease Current Discount Rate 1% Increase Inactive employees or beneficiaries currently receiving benefits (includes 16 with premiums paid by OC San and 89 under age 65 paying premiums) 105 Active employees 579 Total 684 ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 45 OPEB Liabilities: As of June 30, 2024, OC San reported total OPEB liability of $5,182,488 for its post-employment retiree medical benefits plan with an estimated $885,432 to be paid within the next fiscal year. The total OPEB liability was determined by an actuarial valuation as of July 1, 2023. OC San funds benefits on a pay-as-you-go basis and elected not to pre-fund its OPEB obligation. As a result, there are no plan assets and the total OPEB liability is equal to the net OPEB liability. Standard actuarial update procedures were used to project/discount from July 1, 2023, to the measurement date of June 30, 2024. The actuarial valuation performed as of July 1, 2023, used the entry age, level percent of pay cost method. This method represents the present value of benefits accrued through the valuation date, assuming that each employee’s liability is expensed from hire date until retirement date as a level percentage of pay. The following table shows the changes in the total OPEB liability: OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB: For the year ended June 30, 2024, OC San recognized OPEB expense of $896,365 for its post-employment retiree medical benefits plan. At June 30, 2024, OC San reported its share of deferred outflows and deferred inflows of resources related to OPEB from the following sources: Total OPEB Liability Increase (Decrease) 1,034,882$ Changes in the year: Service cost 153,009 Interest on total OPEB liability 211,428 Difference between expected and actual experience 3,457,311 Changes of assumptions 1,276,851 Benefit payments (1)(950,993) Net changes 4,147,606 5,182,488$ (1) As part of the July 1, 2023 actuarial valuation report, Foster & Foster prepared a projection of the expected annual cost to the District to pay OPEB benefits. Ending balance at June 30, 2024 Beginning balance at July 1, 2023 Deferred Outflows of Resources Deferred Inflows of Resources Difference between expected and actual experience 3,068,849$ -$ Changes of assumptions (1) 1,133,385 - Total 4,202,234$ -$ (1) The monetary effects of changes in actuarial assumptions and method totals $1,133,385 for deferred outflows. These changes include passage of time, a change in the discount rate from 3.86% to 3.97%, change in actuarial system, census and other losses. ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 46 Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in pension expense as follows: Actuarial Assumptions and Methods: The total OPEB liability in the July 1, 2023, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: The mortality assumptions used in the total OPEB liability at July 1, 2023, were based on the Pub- 2010 General Employee and Healthy Retiree Amount-Weighted Above-Median Mortality Tables for males or females, projected generationally with the two-dimensional mortality improvement scale MP-2021. Actuarial assumptions used in the July 1, 2023, valuation were based on a review of plan experience during the period July 1, 2021, through June 30, 2023. Discount Rate: The discount rate used to measure the total OPEB liability was 3.86% as of the valuation date, July 1, 2023, and 3.97% as of the measurement date, June 30, 2024. Because there are no assets held in a trust, for GASB 75 reporting purposes, the discount rate is based on a yield or index rate for 20-year, tax exempt general obligation municipal bonds with an average rating of AA/Aa or higher. Year Ending June 30, Amount 2025 531,928$ 2026 531,928 2027 531,928 2028 531,928 2029 531,928 Thereafter 1,542,594 Total 4,202,234$ Investment rate of return 3.75% per annum Discount rate 3.86% per annum as of July 1, 2023 (valuation date) 3.97% per annum as of June 30, 2004 (measurement date) Inflation rate 2.50% per annum Healthcare cost trend rate 5.50% for 2024, 5.25% for 2025-2029, 5.00% for 2030-2039, 4.75% for 2040-2049, 4.50% for 2050-2069, and 4.00% for 2070 and later; Medicare ages: 4.50% for 2024-2029 and 4.00% for 2030 and later years Projected salary increases 3.00% per annum ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 47 Sensitivity of the Total OPEB Liability to Changes in the Discount Rate: The following table represents the total OPEB liability calculated using the discount rate of 3.97% as of the measurement date, as well as what total OPEB liability would be if it were calculated using a discount rate that is 1 percentage point lower (2.97%) or 1 percentage point higher (4.97%) than the current rate: Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rates: The following table represents the total OPEB liability, as well as what total OPEB liability would be if it were calculated using a healthcare cost trend rate that is 1 percentage point lower or 1 percentage point higher than the current healthcare cost trend rate: (8) Transactions with Irvine Ranch Water District – Revenue Area No. 14 Formation of Revenue Area No. 14 & Excess Purchase Price Over Book Value of Acquired Assets On July 1, 1985, Revenue Area No. 14 was formed as an independent special district as a result of a negotiated agreement between OC San and IRWD. At the time of Revenue Area 14’s creation, OC San consisted of eight independent special districts (see Note 1 – Reporting Entity). The eight existing districts sold a portion of the joint treatment facilities and land to the newly created district and recorded capacity rights revenue at the time of the sale. In accordance with the negotiated agreement between OC San and IRWD, IRWD paid OC San $34,532,000 for an initial 15 million gallons per day capacity in OC San’s joint treatment facilities (with an ultimate collection capacity of 32 million gallons per day) and for a pro-rata interest in real property (based on flow of 32 million gallons per day). The book value of the assets acquired was determined to be $14,553,000 as of June 30, 1986; these assets were recorded at book value in Revenue Area 14. The excess of the purchase price over the assets' book value was $19,979,000 and was recorded as an intangible asset in Revenue Area 14. The excess of the purchase price over the assets’ book value was amortized over useful lives of the original assets acquired. The excess of purchase price over the assets' book value was fully amortized as of June 30, 2017. Annual Transactions IRWD entered into a separate agreement with Revenue Area 14 on January 1, 1986, whereby IRWD agreed to fund quarterly payments of Revenue Area 14's proportionate share of OC San's joint capital outlay revolving fund budget requirements and certain capital improvements during the term of the agreement, for which contributions of $6,931,334 were recorded as contributions from other governments during the fiscal year ended June 30, 2024. IRWD also agreed to fund the annual integration adjustment of Revenue Area 14’s equity share in OC San’s Joint Works Treatment Facilities based on the flows discharged to OC San. Integration contributions charged to IRWD of $22,427,731 from Revenue Area 14 were recognized and reported as contributions from other Total OPEB Liability June 30, 2024 $ 5,428,112 $ 5,182,488 $ 4,950,895 (2.97%) (3.97%) (4.97%) 1% Decrease Current Discount Rate 1% Increase Total OPEB Liability June 30, 2024 $ 4,841,487 $ 5,182,488 $ 5,571,090 (1) 4.50% for 2024; Medicare ages: 3.50% for 2024-2029 (2) 5.50% for 2024; Medicare ages: 4.50% for 2024-2029 (3) 6.50% for 2024; Medicare ages: 5.50% for 2024-2029 1% Decrease (1) Current Trend Rate (2) 1% Increase (3) ORANGE COUNTY SANITATION DISTRICT Notes to Basic Financial Statements (Continued) For the Year Ended June 30, 2024 48 governments during the fiscal year ended June 30, 2024. These contributions received from or credited to IRWD for their agreed-upon share of capital assets and equity share in OC San’s Joint Works Treatment Facilities are calculated as prescribed in the agreements. Any amounts credited to IRWD are not refunded in cash but are held as a credit to satisfy future contributions required of IRWD. Amounts owed from IRWD are invoiced on a quarterly or annual basis. As a result, a balance of $18,229,514 was reported in due to other governmental agency as of June 30, 2024. Annual Cash Reserve Requirement The cash reserve contribution requirement from IRWD is $13.4 million at June 30, 2024, in accordance with Amendment No. 2 to the Agreement between IRWD and OC San Acquiring Ownership Interests, Assigning Rights, and Establishing Obligations. This cash reserve requirement is recognized as a liability to IRWD. (9) Due From Other Governmental Agency On July 5, 2023, an amendment to the Groundwater Replenishment System agreement between OC San and the Orange County Water District (OCWD) revised the repayment plan for reimbursements from OCWD to OC San. The amended terms included returning the amount previously reimbursed by OCWD for the Plant 2 Plant Water Pump Station Relocation Project (J-117B) and payment of all J-117B reimbursements, with an accrual of 2% interest, no later than six months after notice of completion for the project, currently anticipated to be in 2027. The previously reimbursed amount of $10,273,177 was returned to OCWD on August 1, 2023, and revised payment terms were applied to subsequent quarterly invoice amounts. The amount owed from OCWD of $16,594,914 was reported in due from other governmental agency at June 30, 2024, consisting of $16,319,445 in outstanding invoices and $275,469 in accrued interest. (10) Commitments and Contingencies Construction Commitments OC San has active construction projects to add additional capacity, improve treatment, or replace/rehabilitate existing assets. At June 30, 2024, the outstanding commitments with contractors totaled $402,108,791. Litigation Certain claims involving disputed construction costs have arisen in the ordinary course of business. Additionally, OC San is a defendant in lawsuits. Although the outcome of these matters is not presently determinable, management does not expect that the resolution of these matters will have a material adverse impact on the financial condition of OC San. ORANGE COUNTY SANITATION DISTRICT REQUIRED SUPPLEMENTARY INFORMATION 49 ORANGE COUNTY SANITATION DISTRICT Proportionate Share of the Net Pension Liability (Asset) Orange County Employees Retirement System (OCERS) Pension Plan Last 10 Fiscal Years 2015 2016 2017 2018 2019 1.13% 0.74% (0.20%) (0.80%) 0.47% 57,418,760$ 42,439,759$ (10,384,508)$ (39,571,100)$ 29,029,147$ 58,641,163$ 59,789,927$ 60,000,017$ 62,341,796$ 66,475,479$ 97.92% 70.98% (17.31%) (63.47%) 43.67% 89.61% 92.74% 101.70% 105.96% 95.86% 2020 2021 2022 2023 2024 (0.97%) (1.63%) (8.72%) (0.20%) (0.38%) (49,446,615)$ (68,643,378)$ (178,731,245)$ (10,604,801)$ (18,531,537)$ 71,395,906$ 73,290,519$ 73,539,248$ 74,669,376$ 77,104,645$ (69.26%) (93.66%) (243.04%) (14.20%) (24.03%) 106.64% 108.50% 121.74% 101.22% 101.98% (1)Covered payroll represents compensation earnable and pensionable compensation for the measurement period ended December 31. Only compensation earnable and pensionable compensation that would possibly go into the determination of retirement benefits are included. Covered payroll (1) Proportionate share of the net pension liability (asset) as a percentage of covered payroll OCERS' fiduciary net position as a percentage of the total pension liability Proportion of the net pension liability (asset) Proportionate share of the net pension liability (asset) Fiscal Year Ended June 30, Covered payroll (1) Proportionate share of the net pension liability (asset) as a percentage of covered payroll OCERS' fiduciary net position as a percentage of the total pension liability Proportionate share of the net pension liability (asset) Proportion of the net pension liability (asset) Fiscal Year Ended June 30, 50 ORANGE COUNTY SANITATION DISTRICT Schedule of District Contributions Orange County Employees Retirement System (OCERS) Pension Plan Last 10 Fiscal Years 2015 2016 2017 2018 2019 17,201,569$ 12,222,849$ 7,709,734$ 7,525,655$ 7,769,431$ (17,201,569) (12,222,849) (7,709,734) (7,525,655) (7,769,431) -$ -$ -$ -$ -$ 60,025,942$ 60,595,474$ 62,266,907$ 65,390,144$ 69,101,109$ 28.66% 20.17% 12.38% 11.51% 11.24% 2020 2021 2022 2023 2024 8,739,661$ 8,479,429$ 8,537,920$ 8,816,866$ 9,172,411$ (8,739,661) (8,479,429) (8,537,920) (8,816,866) (9,172,411) -$ -$ -$ -$ -$ 69,688,759$ 72,191,190$ 74,053,285$ 75,739,101$ 80,489,089$ 12.54% 11.75% 11.53% 11.64% 11.40% (1) Contribution deficiency (excess) Covered payroll (1) Contributions as a percentage of covered payroll Covered payroll represents compensation earnable and pensionable compensation for the fiscal year ended June 30. Only compensation earnable and pensionable compensation that would possibly go into the determination of retirement benefits are included. Fiscal Year Ended June 30, Contractually required contribution Contributions in relation to the contractually required contribution Contribution deficiency (excess) Covered payroll (1) Contributions as a percentage of covered payroll Contributions in relation to the contractually required contribution Contractually required contribution Fiscal Year Ended June 30, 51 ORANGE COUNTY SANITATION DISTRICT Total Pension Liability Additional Retiree Benefit Account (ARBA) Last 10 Fiscal Years 2015 2016 2017 2018 2019 16,680,614$ 18,313,122$ 18,467,361$ 20,831,172$ 21,577,464$ 62,139,375$ 62,977,577$ 65,120,945$ 68,126,103$ 71,948,599$ 26.84% 29.08% 28.36% 30.58% 29.99% 2020 2021 2022 2023 2024 21,434,655$ 23,320,422$ 20,382,770$ 20,098,783$ 21,013,679$ 74,602,862$ 78,413,423$ 79,472,505$ 82,806,556$ 86,671,018$ 28.73% 29.74% 25.65% 24.27% 24.25% (1) Total pension liability Fiscal Year Ended June 30, Covered-employee payroll (1) Total pension liability as a percentage of covered-employee payroll This plan is not administered through a trust or equivalent arrangement, thus covered-employee payroll is used. Covered- employee payroll represents total payroll of employees that are provided benefits through the pension plan for the fiscal year ended June 30. Fiscal Year Ended June 30, Total pension liability Covered-employee payroll (1) Total pension liability as a percentage of covered-employee payroll 52 ORANGE COUNTY SANITATION DISTRICT Changes in Total Pension Liability (2) Additional Retiree Benefit Account (ARBA) Last 10 Fiscal Years (1) 2016 2017 2018 2019 2020 16,680,614$ 18,313,122$ 18,467,361$ 20,831,172$ 21,577,464$ Changes in the year: Service cost 270,223 278,330 553,795 570,409 576,661 Interest on total pension liability 626,386 593,711 649,192 663,852 608,775 - - - - (2,263,797) Changes of assumptions 1,230,327 (70,952) 1,889,274 328,481 1,823,672 Benefit payments (494,428) (646,850) (728,450) (816,450) (888,120) Net changes 1,632,508 154,239 2,363,811 746,292 (142,809) Ending balance at June 30 18,313,122$ 18,467,361$ 20,831,172$ 21,577,464$ 21,434,655$ 2021 2022 2023 2024 21,434,655$ 23,320,422$ 20,382,770$ 20,098,783$ Changes in the year: Service cost 703,496 835,711 545,116 438,173 Interest on total pension liability 530,599 496,575 751,286 813,972 - 898,171 - 1,902,002 Changes of assumptions 1,619,642 (4,129,069) (434,329) (1,007,931) Benefit payments (967,970) (1,039,040) (1,146,060) (1,231,320) Net changes 1,885,767 (2,937,652) (283,987) 914,896 Ending balance at June 30 23,320,422$ 20,382,770$ 20,098,783$ 21,013,679$ (1) (2) The amounts presented for each fiscal year were determined as of June 30. Data for fiscal year ended June 30, 2015 is not available in a comparable format. OC San funds benefits on a pay-as-you-go basis and elected not to pre-fund its pension obligation. As a result, there are no plan assets and the total pension liability is equal to the net pension liability. Beginning balance at July 1 Fiscal Year Ended June 30, Fiscal Year Ended June 30, Beginning balance at July 1 Difference between expected and actual experience Difference between expected and actual experience 53 ORANGE COUNTY SANITATION DISTRICT Total OPEB Liability (3) Post-Employment Medical Benefits Plan Last 10 Fiscal Years (1) 2017 2018 2019 2020 2021 6,398,694$ 5,025,395$ 4,013,291$ 2,483,644$ 1,332,528$ 65,120,945$ 68,126,103$ 71,948,599$ 74,602,862$ 78,413,423$ 9.83% 7.38% 5.58% 3.33% 1.70% 2022 2023 2024 2,077,772$ 1,034,882$ 5,182,488$ 79,472,505$ 82,806,556$ 86,671,018$ 2.61% 1.25% 5.98% (1) (2) (3) Total OPEB liability Fiscal Year Ended June 30, The amounts presented for each fiscal year were determined as of June 30. Data for fiscal years ended June 30, 2015 through 2016 is not available in a comparable format. This plan is not administered through a trust or equivalent arrangement, thus covered-employee payroll is used. Covered- employee payroll represents total payroll of employees that are provided benefits through the OPEB plan for the fiscal year ended June 30. There are no assets in a trust compliant with GASB codification P52.101. OC San funds benefits on a pay-as-you-go basis and elected not to pre-fund its OPEB obligation. As a result, there are no plan assets and the total OPEB liability is equal to the net OPEB liability. Covered-employee payroll (2) Total OPEB liability as a percentage of covered-employee payroll Fiscal Year Ended June 30, Total OPEB liability Covered-employee payroll (2) Total OPEB liability as a percentage of covered-employee payroll 54 ORANGE COUNTY SANITATION DISTRICT Changes in Total OPEB Liability (3) Post-Employment Medical Benefits Plan Last 10 Fiscal Years (1) 2018 2019 2020 2021 2022 Beginning balance at July 1 6,398,694$ 5,025,395$ 4,013,291$ 2,483,644$ 1,332,528$ Changes in the year: Service cost 18,182 16,489 4,334 5,238 8,426 Interest on total OPEB liability 177,395 159,195 98,047 45,840 57,237 - - (115,924) - 2,477,916 Changes of assumptions (95,279) 78,935 88,289 41,063 (285,984) Benefit payments (2) (1,473,597) (1,266,723) (1,604,393) (1,243,257) (1,512,351) Net changes (1,373,299) (1,012,104) (1,529,647) (1,151,116) 745,244 Ending balance at June 30 5,025,395$ 4,013,291$ 2,483,644$ 1,332,528$ 2,077,772$ 2023 2024 Beginning balance at July 1 2,077,772$ 1,034,882$ Changes in the year: Service cost 3,803 153,009 Interest on total OPEB liability 55,501 211,428 (77,497) 3,457,311 Changes of assumptions (15,594) 1,276,851 Benefit payments (2) (1,009,103) (950,993) Net changes (1,042,890) 4,147,606 Ending balance at June 30 1,034,882$ 5,182,488$ (1) (2) (3) The amounts presented for each fiscal year were determined as of June 30. Data for fiscal years ended June 30, 2015 through 2017 is not available in a comparable format. Benefit payments include implicit subsidy associated with benefits paid. OC San funds benefits on a pay-as-you-go basis and elected not to pre-fund its OPEB obligation. As a result, there are no plan assets and the total OPEB liability is equal to the net OPEB liability. Fiscal Year Ended June 30, Fiscal Year Ended June 30, Difference between expected and actual experience Difference between expected and actual experience 55 (THIS PAGE INTENTIONALLY LEFT BLANK) 56 ORANGE COUNTY SANITATION DISTRICT SUPPLEMENTARY INFORMATION 57 ORANGE COUNTY SANITATION DISTRICT Combining Area Schedule of Net Position June 30, 2024 Revenue Consolidated Area No. 14 Revenue Area Totals Current assets: Cash and cash equivalents 2,694,128$ 120,393,328$ 123,087,456$ Investments 15,535,386 694,234,763 709,770,149 Accounts receivable, net of allowance for uncollectibles - 10,148,213 10,148,213 Accrued interest receivable - 6,210,455 6,210,455 Connection fees receivable - 1,999,479 1,999,479 Property tax receivable - 2,118,918 2,118,918 Lease receivable, current portion - 341,723 341,723 Inventories - 11,596,000 11,596,000 Prepaid expenses - 2,420,320 2,420,320 Total current assets 18,229,514 849,463,199 867,692,713 Noncurrent assets: Restricted: Cash and cash equivalents - 897,605 897,605 Investments - 15,192,853 15,192,853 Accrued interest receivable - 2,234 2,234 Net pension asset - OCERS - 18,531,537 18,531,537 Unrestricted: Non-depreciable capital assets 25,890,616 709,344,723 735,235,339 Depreciable capital assets, net of accumulated depreciation 83,301,226 2,174,858,984 2,258,160,210 Due from other governmental agency - 16,594,914 16,594,914 Lease receivable, noncurrent portion - 422,260 422,260 Other noncurrent assets, net - 10,344 10,344 Total noncurrent assets 109,191,842 2,935,855,454 3,045,047,296 Total assets 127,421,356 3,785,318,653 3,912,740,009 Deferred outflows of resources: Deferred outflows related to refundings - 8,802,449 8,802,449 Deferred outflows related to pensions - 84,098,923 84,098,923 Deferred outflows related to OPEB - 4,202,234 4,202,234 Total deferred outflows of resources - 97,103,606 97,103,606 Total assets and deferred outflows of resources 127,421,356 3,882,422,259 4,009,843,615 Current liabilities: Accounts payable and accrued expenses - 45,467,767 45,467,767 Retentions payable - 15,103,997 15,103,997 Interest payable - 9,083,820 9,083,820 Due to other governmental agency 18,229,514 - 18,229,514 Long-term obligations, current portion - 56,732,046 56,732,046 Total pension liability - ARBA, current portion - 1,232,603 1,232,603 Total OPEB liability, current portion - 885,432 885,432 Total current liabilities 18,229,514 128,505,665 146,735,179 Noncurrent liabilities: Long-term obligations, noncurrent portion - 640,134,439 640,134,439 Total pension liability - ARBA, noncurrent portion - 19,781,076 19,781,076 Total OPEB liability, noncurrent portion - 4,297,056 4,297,056 Total noncurrent liabilities - 664,212,571 664,212,571 Total liabilities 18,229,514 792,718,236 810,947,750 Deferred inflows of resources: Deferred inflows related to leases - 708,862 708,862 Deferred inflows related to refundings - 6,777,704 6,777,704 Deferred inflows related to pensions - 13,962,233 13,962,233 Total deferred inflows of resources - 21,448,799 21,448,799 Total liabilities and deferred inflows of resources 18,229,514 814,167,035 832,396,549 Net position: Net investment in capital assets: Collection system 12,154,880 590,836,122 602,991,002 Treatment and disposal land 2,402,034 51,337,633 53,739,667 Treatment and disposal system 94,634,928 2,242,029,952 2,336,664,880 Capital-related liabilities - (722,434,988) (722,434,988) Subtotal 109,191,842 2,161,768,719 2,270,960,561 Restricted for OCERS pension benefits - 34,277,644 34,277,644 Unrestricted - 872,208,861 872,208,861 Total net position 109,191,842$ 3,068,255,224$ 3,177,447,066$ 58 ORANGE COUNTY SANITATION DISTRICT Combining Area Schedule of Revenues, Expenses, and Change in Net Position For the Year Ended June 30, 2024 Revenue Consolidated Area No. 14 Revenue Area Totals Operating revenues: Service charges 2,280,199$ 336,433,111$ 338,713,310$ Permit and inspection fees 6,311 934,598 940,909 Total operating revenues 2,286,510 337,367,709 339,654,219 Operating expenses other than depreciation and amortization: Salaries and benefits 3,801,225 92,182,206 95,983,431 Utilities 557,064 14,335,556 14,892,620 Supplies, repairs and maintenance 2,268,728 62,726,715 64,995,443 Contractual services 1,159,969 29,175,272 30,335,241 Feasibility studies 134,787 4,344,656 4,479,443 Other operating expenses 371,470 11,615,732 11,987,202 Total operating expenses other than depreciation and amortization 8,293,243 214,380,137 222,673,380 Operating income (loss) before depreciation and amortization (6,006,733) 122,987,572 116,980,839 Depreciation and amortization 3,627,380 112,577,432 116,204,812 Operating income (loss) (9,634,113) 10,410,140 776,027 Non-operating revenues: Property taxes 4,251,264 127,356,265 131,607,529 Investment and interest income 1,493,118 45,147,320 46,640,438 Contributions from other governments 29,360,104 34,961 29,395,065 Other non-operating revenues 199,311 6,348,161 6,547,472 Total non-operating revenues 35,303,797 178,886,707 214,190,504 Non-operating expenses: Interest 1,285 31,065,393 31,066,678 Loss on disposal of assets 133,119 4,186,095 4,319,214 Other non-operating expenses 2,107 66,078 68,185 Total non-operating expenses 136,511 35,317,566 35,454,077 Income (loss) before capital contributions 25,533,173 153,979,281 179,512,454 Capital contributions: Capital facilities capacity charges - 16,253,760 16,253,760 Capital contributions from other governments 60,690 1,927,682 1,988,372 Total capital contributions 60,690 18,181,442 18,242,132 Change in net position 25,593,863 172,160,723 197,754,586 Total net position - beginning 83,597,979 2,896,094,501 2,979,692,480 Total net position - ending 109,191,842$ 3,068,255,224$ 3,177,447,066$ 59 ORANGE COUNTY SANITATION DISTRICT Combining Area Schedule of Cash Flows For the Year Ended June 30, 2024 Revenue Consolidated Area No. 14 Revenue Area Eliminations Totals Cash flows from operating activities: Receipts from customers and users (16,984,306)$ 336,965,839$ -$ 319,981,533$ Payments to employees (3,801,225) (90,958,401) - (94,759,626) Payments to suppliers (4,494,125) (121,898,265) - (126,392,390) Receipts for other activities 191,493 5,995,793 - 6,187,286 Net cash provided by (used in) operating activities (25,088,163) 130,104,966 - 105,016,803 Cash flows from noncapital financing activities: Proceeds from property taxes 4,251,264 127,595,764 - 131,847,028 Net cash provided by (used in) noncapital financing activities 4,251,264 127,595,764 - 131,847,028 Cash flows from capital and related financing activities: Capital facilities capacity charges - 18,026,378 - 18,026,378 Contributions from other governments 29,420,794 1,962,643 (6,930,048) 24,453,389 Receipts from lease agreements 12,682 378,858 - 391,540 Additions to capital assets (29,357,779) (264,736,825) 29,357,779 (264,736,825) Disposal of capital assets - 22,427,731 (22,427,731) - Principal payments on debt obligations - (163,874,926) - (163,874,926) Payments to bond escrow agent - (159,480,074) - (159,480,074) Interest paid (1,285) (50,476,147) - (50,477,432) Proceeds from debt issuance - 139,636,168 - 139,636,168 Proceeds from premiums on debt issuance - 20,309,469 - 20,309,469 Debt issuance costs - (524,372) - (524,372) Net cash provided by (used in) capital and related financing activities 74,412 (436,351,097) - (436,276,685) Cash flows from investing activities: Proceeds from sale of investments 37,066,913 787,409,527 - 824,476,440 Purchases of investments (19,910,134) (649,839,432) - (669,749,566) Interest received 883,302 24,087,043 - 24,970,345 Net cash provided by (used in) investing activities 18,040,081 161,657,138 - 179,697,219 Net increase (decrease) in cash and cash equivalents (2,722,406) (16,993,229) - (19,715,635) Cash and cash equivalents, beginning of year 5,416,534 138,284,162 - 143,700,696 Cash and cash equivalents, end of year 2,694,128$ 121,290,933$ -$ 123,985,061$ Reconciliation of operating income (loss) to net cash provided by (used in) operating activities: Operating income (loss)(9,634,113)$ 10,410,140$ -$ 776,027$ Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 3,627,380 112,577,432 - 116,204,812 Bad debt expense (net recoveries)- (109,438) - (109,438) Other non-operating revenues 189,386 5,929,715 - 6,119,101 (Increase)/decrease in operating assets and deferred outflows: Accounts receivable (12,730,848) (292,432) - (13,023,280) Inventories - (1,253,703) - (1,253,703) Prepaid expenses - 306,149 - 306,149 Net pension asset - OCERS - (7,926,736) - (7,926,736) Deferred outflows related to pensions - 11,358,273 - 11,358,273 Deferred outflows related to OPEB - (4,202,234) - (4,202,234) Increase/(decrease) in operating liabilities and deferred inflows: Accounts payable and accrued expenses - 2,109,828 - 2,109,828 Due to other governmental agency (6,539,968) - - (6,539,968) Compensated absences - 742,650 - 742,650 Claims and judgments - (402,899) - (402,899) Total pension liability - ARBA - 914,896 - 914,896 Total OPEB liability - 4,147,606 - 4,147,606 Deferred inflows related to pensions - (4,204,281) - (4,204,281) Net cash provided by (used in) operating activities (25,088,163)$ 130,104,966$ -$ 105,016,803$ Noncash activities: Unrealized gain (loss) on the fair value of investments 608,369$ 18,680,669$ 19,289,038$ Capital assets acquired through accounts payable - (13,532,651)(13,532,651) Capital facilities capacity charges acquired - (1,772,618)(1,772,618) 60 ORANGE COUNTY SANITATION DISTRICT STATISTICAL SECTION Contents Pages Financial Position and Trends 62 - 66 Revenue Capacity 67 - 69 Debt Capacity 70 - 72 Operating Information 73 - 76 Demographic and Economic Factors 77 - 80 This part of the Annual Comprehensive Financial Report of the Orange County Sanitation District (OC San) presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about OC San's overall financial health. These schedules contain information to help the reader assess OC San's most significant revenue source of sewer service fees. These schedules offer demographic information to help the reader understand the environment within which OC San's financial activities take place. These schedules contain current and trend information to help the reader understand OC San's financial position and how OC San's financial performance and well-being have changed over time. These schedules contain data to help the reader understand how the information in OC San's financial report relates to the services it provides and the activities it performs. These schedules present information to help the reader assess the affordability of OC San's current levels of outstanding debt and OC San's ability to issue additional debt in the future. All of OC San's debt is recorded in a proprietary fund; consequently, many of the schedules which are applicable to governmental funds are not presented. 61 ORANGE COUNTY SANITATION DISTRICT Net Position by Component (Dollars in Thousands) Last Ten Fiscal Years Fiscal Year 2014-15 1,327,384$ -$ 434,460$ 1,761,844$ (1) 2015-16 1,429,269 - 489,303 1,918,572 (2) 2016-17 1,504,898 10,385 525,942 2,041,225 2017-18 1,568,118 39,571 587,100 2,194,789 (3) 2018-19 1,647,723 - 712,779 2,360,502 2019-20 1,678,041 49,447 811,522 2,539,010 2020-21 1,740,102 68,643 901,637 2,710,382 2021-22 1,825,490 191,802 797,895 2,815,187 2022-23 1,954,939 24,678 1,000,075 2,979,692 2023-24 2,270,960 34,278 872,209 3,177,447 Notes (1) Beginning net position restated due to implementation of GASB 68. (2) Beginning net position restated due to implementation of GASB 73. (3) Beginning net position restated due to implementation of GASB 75. (4) FY 2016-17 to 2022-23 net position restated to reflect amounts restricted for OCERS pension benefits. Source: Orange County Sanitation District's Financial Management Division. Total Net Position Net Investment in Capital Assets Unrestricted (4) Restricted for Pension Benefits (4) $0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Net Investment in Capital Assets Restricted for Pension Benefits Unrestricted 62 ORANGE COUNTY SANITATION DISTRICT Revenues and Gross Capital Contributions by Source (Dollars in Thousands) Last Ten Fiscal Years Permit & Investment Fiscal Service Total Property & Interest Total Non- Capital Year Charges Fees Operating Taxes Income (Loss)Other (1)Operating Contributions (1) 2014-15 301,548$ 902$ 302,450$ 79,835$ 4,806$ 9,996$ 94,637$ 17,656$ 2015-16 314,477 951 315,428 84,407 9,183 14,658 108,248 17,974 2016-17 312,237 1,045 313,282 88,284 3,081 27,146 118,511 16,351 2017-18 316,329 1,170 317,499 94,188 3,230 4,055 101,473 21,633 2018-19 317,291 1,199 318,490 99,534 29,102 27,197 155,833 23,797 2019-20 339,895 1,169 341,064 104,492 33,669 6,731 144,892 29,034 2020-21 335,569 1,131 336,700 110,245 1,694 11,176 123,115 33,936 2021-22 327,824 1,271 329,095 119,186 (35,335) 7,840 91,691 26,083 2022-23 331,382 1,399 332,781 125,467 12,027 20,671 158,165 32,264 2023-24 338,713 941 339,654 131,608 46,640 35,943 214,191 18,242 Notes Source: Orange County Sanitation District's Financial Management Division. Non-Operating RevenueOperating Revenue Inspection (1) FY 2017-18 to 2020-21 restated to reflect capital contributions from other governments. Fluctuations in other non-operating revenue are primarily due to integration contributions charged or credited to the Irvine Ranch Water District, refer to Basic Financial Statements Note 8 for details. $0 $25,000 $50,000 $75,000 $100,000 $125,000 $150,000 $175,000 $200,000 $225,000 $250,000 $275,000 $300,000 $325,000 $350,000 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Operating Revenue Non-Operating Revenue Capital Contributions 63 ORANGE COUNTY SANITATION DISTRICT Expenses by Type (Dollars in Thousands) Last Ten Fiscal Years Operating Expense Non-Operating Expense Fiscal Year Salaries & Benefits Utilities Maint & Other Depr & Amort Total Operating Interest Expense Other (1) Total Non- Operating 2014-15 79,657$ 7,246$ 62,323$ 94,186$ 243,412$ 34,112$ 3,168$ 37,280$ 2015-16 75,576 7,246 70,679 90,502 244,003 27,597 6,482 34,079 2016-17 74,291 6,119 69,843 96,320 246,573 25,648 53,270 78,918 2017-18 67,418 7,298 70,840 97,399 242,955 35,011 1,483 36,494 2018-19 85,506 7,733 73,347 102,239 268,825 34,466 29,116 63,582 2019-20 82,917 8,622 76,794 113,888 282,221 33,833 20,428 54,261 2020-21 74,772 9,789 83,457 116,452 284,470 34,837 3,072 37,909 2021-22 57,004 11,046 88,065 130,465 286,580 30,027 25,457 55,484 2022-23 96,883 15,924 94,405 123,611 330,823 25,893 1,989 27,882 2023-24 95,983 14,893 111,797 116,205 338,878 31,067 4,387 35,454 Notes Source: Orange County Sanitation District's Financial Management Division. (1) Fluctuations in other non-operating expense are primarily due to integration contributions charged or credited to the Irvine Ranch Water District, refer to Note 8 of the Notes to Basic Financial Statements for details. $0 $25,000 $50,000 $75,000 $100,000 $125,000 $150,000 $175,000 $200,000 $225,000 $250,000 $275,000 $300,000 $325,000 $350,000 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Operating Expense Non-Operating Expense 64 ORANGE COUNTY SANITATION DISTRICT Change in Net Position (Dollars in Thousands) Last Ten Fiscal Years Fiscal Total Total Year 2014-15 414,743$ 280,692$ 134,051$ 1,627,793$ (1)1,761,844$ 2015-16 441,650 278,082 163,568 1,755,004 (2)1,918,572 2016-17 448,144 325,491 122,653 1,918,572 2,041,225 2017-18 440,605 279,449 161,156 2,033,633 (3)2,194,789 2018-19 498,120 332,407 165,713 2,194,789 2,360,502 2019-20 514,990 336,482 178,508 2,360,502 2,539,010 2020-21 493,751 322,379 171,372 2,539,010 2,710,382 2021-22 446,869 342,064 104,805 2,710,382 2,815,187 2022-23 523,210 358,705 164,505 2,815,187 2,979,692 2023-24 572,087 374,332 197,755 2,979,692 3,177,447 Notes (1) Beginning net position restated due to implementation of GASB 68. (2) Beginning net position restated due to implementation of GASB 73. (3) Beginning net position restated due to implementation of GASB 75. Source: Orange County Sanitation District's Financial Management Division. Change in Beginning Ending Net PositionRevenues Expenses Net Position Net Position $0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Ending Net Position by Fiscal Year 65 ORANGE COUNTY SANITATION DISTRICT Cash and Investment Reserve Balances (Dollars in Millions) Last Ten Fiscal Years Fiscal Year Total 2014-15 177$ 57$ 194$ 129$ 557$ 2015-16 181 57 190 117 545 2016-17 174 57 173 107 511 2017-18 173 57 350 100 680 2018-19 177 57 429 97 760 2019-20 178 57 552 94 881 2020-21 128 100 639 94 961 2021-22 134 100 659 91 984 2022-23 140 100 685 79 1,004 2023-24 148 100 525 76 849 Notes Source: Orange County Sanitation District's Financial Management Division. The Debt Service Requirements Reserve is held pursuant to the provisions of certificates of participation issues, and the monies are not available for the general needs of the Orange County Sanitation District. Debt Service Requirements Self- Insurance Capital Improvement Program Cash Flow Contingency The Cash Flow Contingency Reserve is to fund operations, maintenance, and certificates of participation debt service expenses for the first half of the fiscal year, prior to the receipt of the first installment of the property tax allocation and sewer service user fees. The Self-Insurance Reserve is to provide requirements for property damage including fire, flood and earthquake, general liability and workers' compensation. The Capital Improvement Program Reserve is to fund annual increments of the capital improvement program with a target level at one half of the average annual capital improvement program over the next 10 years. The Board of Directors of the Orange County Sanitation District has established the criteria below to determine the total funds required as listed in the Accumulated Funds and Reserves Policy: 66 ORANGE COUNTY SANITATION DISTRICT Sewer Service Fees Single Family Residence Rate Last Nine Fiscal Years and Next Fiscal Year 2015-16 322.00$ 2016-17 327.00 2017-18 331.00 2018-19 335.00 2019-20 339.00 2020-21 339.00 2021-22 343.00 2022-23 347.00 2023-24 358.00 2024-25 371.00 Source: Orange County Sanitation District's Financial Management Division. Sewer service fees are comprised of three categories: residential customers, commercial customers, and industrial customers. Although the majority of sewer service fee revenues are from residential and commercial customers (see the schedule of Number of Accounts and Revenues by Customer Class), the fee paid by each residential and commercial customer is less than the individual fees paid by industrial customers. The rates for commercial and industrial customers are derived from the base sewer service fee charged for a single-family residence and are based on the type of business and the strength and volume of waste that is discharged into the sewer system. Due to the complexity of the rate structure for commercial and industrial customers and since the rates are derivatives of the single-family residence rate, only the single-family residence rate is presented within the statistical section. Fiscal Year Sewer Service Charge 150 200 250 300 350 400 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 SF R A n n u a l F e e Fiscal Year Annual Sewer Service Fees Single Family Residence 67 ORANGE COUNTY SANITATION DISTRICT Number of Accounts and Revenues by Customer Class (Dollars in Millions) Last Ten Fiscal Years Number of Total Percentage Total Percentage Equivalent Sewer Svc.of Sewer Number of Sewer Svc.of Sewer Fiscal Single-Family Charge Service Charge Customer Charge Service Charge Year Dwellings (1)Revenue Revenues Accounts Revenue Revenues 2014-15 824,465 260.5$ 95% 467 14.2$ 5% 2015-16 863,317 278.0 96% 450 12.6 4% 2016-17 859,869 281.2 95% 466 13.8 5% 2017-18 871,338 288.4 94% 473 17.9 6% 2018-19 871,312 291.9 97% 476 9.4 3% 2019-20 904,886 306.8 96% 473 12.8 4% 2020-21 908,219 307.9 96% 467 12.6 4% 2021-22 900,327 308.8 96% 462 12.6 4% 2022-23 893,270 310.0 95% 446 14.8 5% 2023-24 886,879 317.5 96% 447 14.6 4% Notes Source: Orange County Sanitation District's Financial Management Division. Residential/Commercial Industrial (1) - Number of equivalent single-family dwellings is an estimate, calculated by dividing residential/commercial revenue by the sewer service fee for each fiscal year. $0 $50,000,000 $100,000,000 $150,000,000 $200,000,000 $250,000,000 $300,000,000 $350,000,000 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Residential/Commercial Users Industrial Users 68 ORANGE COUNTY SANITATION DISTRICT Principal Sewer Service Customers For the Current Fiscal Year and Nine Years Ago Fiscal Year Ended 6/30/24 Fiscal Year Ended 6/30/15 Industrial % to Total Industrial % to Total Permittee Service Permittee Service Service Charge Service Charge Customer Charges Rank Revenue Charges Rank Revenue House Foods America Corp. (East) 1,529,975$ 1 0.45% House Foods America Corp. (West) 1,159,372 2 0.34% 1,055,843$ 1 0.35% Stremicks Heritage Foods, LLC 1,151,243 3 0.34% 811,061 3 0.27% Newport Fab, LLC (TowerJazz Semiconductor) 755,941 4 0.22% 521,890 6 0.17% MBV-CA, LLC 741,941 5 0.22% Van Law Food Products, Inc 720,728 6 0.21% Koia Anaheim Facility, LLC 545,632 7 0.16% Nor-Cal Beverage Company (Main) 447,973 8 0.13% 387,579 10 0.13% California State University, Fullerton 381,942 9 0.11% Brea Power II, LLC 368,080 10 0.11% Kimberly-Clark Worldwide, Inc. 1,047,510 2 0.35% MCP Foods, Inc. 738,346 4 0.24% Pulmuone Foods USA (Wildwood), Inc. (East) 571,057 5 0.19% Ameripec, Inc. 517,583 7 0.17% Nor-Cal Beverage Company (NCB) 461,589 8 0.15% Alta Dena Certified Dairy, LLC 457,496 9 0.15% 7,802,827$ 2.29% 6,569,954$ 2.17% Source: Orange County Sanitation District's Financial Management Division. Although the majority of sewer service fee revenues are from residential and commercial customers (see the schedule of Number of Accounts and Revenues by Customer Class), the fee paid by each residential and commercial customer is customarily less than the individual fees paid by industrial customers. Consequently, this schedule shows the largest industrial sewer service fee customers. 69 ORANGE COUNTY SANITATION DISTRICT Ratio of Annual Debt Service to Total Expenses (Dollars in Thousands) Last Ten Fiscal Years Total Fiscal Total Debt Operating Year Principal (1) Interest (2) Service (3) Expenses (4) 2014-15 27,875$ 53,586$ 81,461$ 149,226$ 54.59% 2015-16 29,405 50,301 79,706 153,501 51.93 2016-17 35,575 47,143 82,718 150,253 55.05 2017-18 32,140 43,466 75,606 145,556 51.94 2018-19 31,655 44,481 76,136 166,586 45.70 2019-20 32,730 43,664 76,394 168,333 45.38 2020-21 30,430 42,061 72,491 168,018 43.14 2021-22 33,875 40,564 74,439 156,115 47.68 2022-23 30,035 37,880 67,915 207,212 32.78 2023-24 156,665 34,483 191,148 222,673 85.84 Notes Source: Orange County Sanitation District's Financial Management Division. (2) - Excludes amortization of premium/discount and deferred amount. (3) - Debt consists of certificates of participation / revenue obligations. (4) - Excludes depreciation and amortization expense. Ratio of Debt Service to Total Operating Expenses (1) - Excludes principal reductions due to debt refundings. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 70 ORANGE COUNTY SANITATION DISTRICT Debt Coverage Ratios (Dollars in Millions) Last Ten Fiscal Years 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Operating & Non-Operating Revenues: Service Charges, Net of Refunds-Regional 260.5$ 278.0$ 281.2$ 288.4$ 291.9$ 306.8$ 307.9$ 308.8$ 310.0$ 317.5$ Service Charges, Net of Refunds-Local (1) 5.5 5.7 1.3 (0.1) - - - - - - Industrial Sewer Service Charges 14.2 12.6 13.8 17.9 9.4 12.8 12.6 12.6 14.8 14.6 SAWPA Assessment 2.7 3.2 3.3 2.7 2.9 2.6 2.8 2.8 2.9 3.4 IRWD Assessment 26.4 26.6 36.0 9.9 36.3 20.8 16.0 8.6 18.6 31.8 Ad Valorem Taxes 79.8 84.4 88.3 94.2 99.5 104.5 110.2 119.2 125.5 131.6 Interest Earnings (2) 4.8 9.2 3.1 3.2 29.1 33.7 1.7 (35.3) 12.0 46.6 Other Revenues (3) 3.2 4.0 4.8 2.8 5.2 4.8 8.6 4.1 7.1 8.3 Total Revenues 397.1 423.7 431.8 419.0 474.3 486.0 459.8 420.8 490.9 553.8 Operating Expenses (4) 149.2 153.5 150.3 145.6 166.6 168.3 168.0 156.1 207.2 222.7 Net Revenues 247.9$ 270.2$ 281.5$ 273.4$ 307.7$ 317.7$ 291.8$ 264.7$ 283.7$ 331.1$ Debt Service Requirements Principal Payments 27.9$ 29.4$ 35.6$ 32.1$ 31.7$ 32.7$ 30.4$ 33.9$ 30.0$ 156.7$ Interest Payments 53.6 50.3 47.1 43.5 44.4 43.7 42.1 40.5 37.9 34.4 Total Debt Service Requirements 81.5$ 79.7$ 82.7$ 75.6$ 76.1$ 76.4$ 72.5$ 74.4$ 67.9$ 191.1$ Coverage Ratios 3.04 3.39 3.40 3.62 4.04 4.16 4.02 3.56 4.18 1.73 Ending Reserves (5) 428.0$ 428.0$ 404.0$ 580.0$ 663.0$ 787.0$ 867.0$ 893.0$ 925.0$ 773.0$ Notes (1) - Local Sewer transferred to East Orange County Water District in FY2016-17. (2) - Interest earnings include unrealized gains and losses from investments adjusted to market value. (3) - FY 2017-18 to 2020-21 other revenues restated to remove capital contributions from other governments. (4) - Operating expenses exclude depreciation and amortization expenses. (5) - Excludes debt service reserves in accordance with the Orange County Sanitation District's reserve policy. Source: Orange County Sanitation District's Financial Management Division. Fiscal Year Ending June 30, The Orange County Sanitation District has no legal debt limits as imposed by state legislation. OC San does have contractual covenants within the existing certificates of participation indenture agreements which require minimum coverage ratios of 1.25. The coverage ratio is calculated as the ratio of net annual revenues available for debt service payments to total annual debt service requirements. - 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 2011-12 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 71 ORANGE COUNTY SANITATION DISTRICT Ratios of Outstanding Debt Last Ten Fiscal Years Debt as a (1)(4)Percentage COP /Total Median of Median (6)Debt Fiscal Revenue (2)(3)Outstanding Family Family Population per Year Obligations Leases SBITAs Debt Income (5)Income Estimate (7)Capita 2014-15 1,241,140,357$ -$ -$ 1,241,140,357$ 85,900$ 0.007% 2,521,803 492.16 2015-16 1,206,722,347 - - 1,206,722,347 85,000 0.007% 2,548,745 473.46 2016-17 1,140,679,773 - - 1,140,679,773 88,000 0.008% 2,578,681 442.35 2017-18 1,095,737,610 - - 1,095,737,610 92,700 0.008% 2,609,419 419.92 2018-19 1,050,502,373 - - 1,050,502,373 97,900 0.009% 2,607,092 402.94 2019-20 1,004,215,901 - - 1,004,215,901 103,000 0.010% 2,589,011 387.88 2020-21 963,115,533 - - 963,115,533 106,700 0.011% 2,550,763 377.58 2021-22 913,102,847 58,158 913,161,005 119,100 0.013% 2,557,216 357.09 2022-23 869,562,663 27,369 613,454 870,203,486 127,800 0.015% 2,532,334 343.64 2023-24 680,407,687 104,402 809,539 681,321,628 129,000 0.019% 2,550,105 267.17 Notes & Data Sources (4) - Data Source: U.S. Department of Housing and Urban Development. (5) - Data is for the entire county of Orange. (6) - Data Source: Demographic Research Unit, California Department of Finance. (7) - Data is for the estimated population served by the Orange County Sanitation District. (1) - Data Source: Orange County Sanitation District. Debt includes certificates of participation / revenue obligations and is presented net of original issuance premiums. (2) - FY 2021-22 and 2022-23 restated to reflect implementation of GASB Statement No. 87, Leases. Beginning fiscal year ended June 30, 2022, lease contracts previously considered operating are treated as financings of the right to use an asset and, thus, included on this schedule. (3) - FY 2022-23 restated to reflect implementation of GASB Statement No. 96, Subscription-Based Information Technology Arrangements (SBITAs). Beginning fiscal year ended June 30, 2023, contracts for SBITAs are treated as financings of the right to use an asset and, thus, included on this schedule. 72 ORANGE COUNTY SANITATION DISTRICT Comparison of the Volume of Wastewater Treated With Revenues and Expenses Last Ten Fiscal Years Millions of Gallons of Wastewater Fiscal Treated Year Per Day 2014-15 187 2,070.97$ 243,412$ 37,280$ 302,450$ 94,637$ 2015-16 183 2,110.43 244,003 34,079 315,428 108,248 2016-17 188 2,054.56 246,573 78,918 313,282 118,511 2017-18 185 2,069.30 242,955 36,494 317,499 101,473 2018-19 191 2,274.73 268,825 63,582 318,490 155,833 2019-20 188 2,421.83 282,221 54,261 341,064 144,892 2020-21 182 2,428.28 284,470 37,909 336,700 123,115 2021-22 179 2,254.66 286,580 55,484 329,095 91,691 2022-23 186 2,961.49 330,823 27,882 332,781 158,165 2023-24 193 3,054.47 338,878 35,454 339,654 214,191 Notes (1) FY 2017-18 to 2020-21 restated to remove capital contributions from other governments. Source: Orange County Sanitation District's Financial Management Division. Gallons Collection, Treatment & Disposal Cost per Million Non-Operating (In Thousands) Operating (In Thousands) TotalTotal CostsCosts Total Non-Operating Revenues (1) (In Thousands) Total Operating (In Thousands) Revenues 73 ORANGE COUNTY SANITATION DISTRICT Authorized Full-time Equivalents (FTE) by Function Last Ten Fiscal Years Fiscal Year Ending June 30, 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 General Management (1)14 15 15 15 14 15 18 15 16 19 Human Resources (2)16 27 27 27 27 27 26 26 26 28 Administrative Services (2)111 98 99 99 100 101 101 102 103 106 Environmental Services (3)- - 91 91 91 92 93 93 93 94 Facilities Support Services (3)76 63 - - - - - - - - Engineering 123 127 116 116 116 121 117 116 123 123 Operations and Maintenance 284 294 279 287 288 284 284 287 286 285 Total FTEs 624 624 627 635 636 640 639 639 647 655 Notes (1) - Management Discretion positions used on a temporary basis have been excluded from FTE count. (2) - In 2016, Risk Management moved from Administrative Services to Human Resources Department. (3) - In 2017, Divisional reorganization created Environmental Services and eliminated Facilities Support Services. Source: Orange County Sanitation District's Financial Management Division. 0 100 200 300 400 500 600 700 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 General Management (1)Human Resources (2)Administrative Services (2) Environmental Services (3)Facilities Support Services (3)Engineering Operations and Maintenance 74 ORANGE COUNTY SANITATION DISTRICT Biosolids Produced Last Ten Fiscal Years Fiscal Year Wet Tonnage 2014-15 275,943 2015-16 283,052 2016-17 288,771 2017-18 284,039 2018-19 254,616 (1) 2019-20 209,000 2020-21 198,306 2021-22 186,128 2022-23 191,098 2023-24 187,156 Notes Source: Orange County Sanitation District's Environmental Compliance Division. (1) Beginning in Fiscal Year 2018-19, biosolids produced were reduced due to the commissioning of dewatering centrifuges at both reclamation plants. 100,000 150,000 200,000 250,000 300,000 350,000 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Wet Tonnage by Fiscal Year 75 ORANGE COUNTY SANITATION DISTRICT Capital Asset Statistics Last Ten Fiscal Years Number Primary Secondary Fiscal of Pump Treatment Treatment Year Stations Capacity (1) Capacity (1) 2014-15 580 17 376 332 2015-16 570 17 376 332 2016-17 396 (2) 17 376 332 2017-18 396 17 376 332 2018-19 389 17 376 332 2019-20 388 17 376 332 2020-21 388 17 376 332 2021-22 388 17 376 332 2022-23 388 17 376 332 2023-24 388 17 376 332 Notes (1) - Capacity is presented as million gallons treated per day. (2) - In FY 2016-17, local sewers were transferred to East Orange County Water District. Source: Orange County Sanitation District Miles of Trunk & Subtrunk Sewers 76 ORANGE COUNTY SANITATION DISTRICT Demographic Statistics Covering The Entire County of Orange (1) Last Ten Fiscal Years Total (5) (2)Personal Per Capita Public (6) Fiscal Population Income Personal School Unemployment Year Estimates (In Thousands) Income Enrollment Rate 2014-15 3,148,000 193,081,000$ (3)61,334$ 85,900$ 497,116 4.3% 2015-16 3,183,000 200,783,000 (3)63,080 85,000 493,030 4.4% 2016-17 3,194,000 205,052,000 (3)64,199 88,000 490,430 3.8% 2017-18 3,221,000 212,807,000 (3)66,098 92,700 485,835 3.3% 2018-19 3,222,000 221,692,000 (3)68,840 97,900 478,823 3.0% 2019-20 3,194,000 240,734,000 (3)73,983 103,000 473,612 13.6% 2020-21 3,153,764 257,834,000 (3)81,117 106,700 456,572 6.5% 2021-22 3,162,245 263,290,000 (3)84,479 119,100 448,729 2.9% 2022-23 3,137,164 276,306,000 (3),(7)84,804 127,800 441,249 3.7% 2023-24 3,150,835 286,490,000 (3),(8)90,925 129,000 437,276 4.0% Notes and Data Sources (2) - Data Source: Demographic Research Unit, California Department of Finance. (3) - Data Source: A. Gary Anderson Center for Economic Research, Chapman University. (4) - Data Source: U.S. Department of Housing and Urban Development. (5) - Data Source: California Department of Education, Educational Demographics Unit. (6) - Data Source: State of California, Employment Development Department as of June 30 of each fiscal year. (7) - Estimate (8) - Forecast Median (4) (1) -The Orange County Sanitation District services 479 square miles or 60% of the total 799.8 square miles that make up the boundaries of Orange County. Income Family 77 ORANGE COUNTY SANITATION DISTRICT Estimated Population Served by the Orange County Sanitation District June 30, 2024 Anaheim 340,160 Brea 47,725 Buena Park 82,689 Costa Mesa 109,423 Cypress 49,345 Fountain Valley 56,333 Fullerton 140,311 Garden Grove 171,024 Huntington Beach 192,503 Irvine 314,550 La Habra 60,901 La Palma 15,071 Los Alamitos 11,947 Newport Beach 82,419 Orange 138,621 Placentia 52,226 Santa Ana 310,797 Seal Beach 24,350 Stanton 40,297 Tustin 78,844 Villa Park 5,705 Westminster 89,490 Yorba Linda 66,087 Subtotal Cities (1)2,480,818 Estimated Population Served in Unincorporated Areas (2)69,287 2,550,105 Data Sources (1) Demographic Research Unit, State of California Department of Finance (2) Center for Demographic Research, California State University, Fullerton. Population as of January 1, 2024 78 ORANGE COUNTY SANITATION DISTRICT Principal Orange County Employers (1) For the Current Fiscal Year and Nine Years Ago Fiscal Year Ended 6/30/24 Fiscal Year Ended 6/30/15 Percentage of Percentage of Number of Total County Number of Total County Employers Employees (2) Rank Employment (3) Employees (4) Rank Employment (5) Disneyland Resort 34,000 1 2.25% 27,000 1 1.76% University of California, Irvine 26,072 2 1.72% 22,385 2 1.46% Providence South Division 23,632 3 1.56% 12,227 4 0.80% County of Orange 18,000 4 1.19% 18,135 3 1.18% Kaiser Permanente 10,293 5 0.68% 7,000 5 0.46% Hoag Memorial Hospital 8,081 6 0.53% Albertsons Southern California 7,222 7 0.48% Allied Universal 6,145 8 0.41% MemorialCare 5,800 9 0.38% 5,650 8 0.37% CHOC Hospital 5,462 10 0.36% The Boeing Company 6,890 6 0.45% Walmart 6,000 7 0.39% Bank of America Corp. 5,500 9 0.36% Target Corp. 5,400 10 0.35% Total 144,707 9.56% 116,187 7.58% Notes & Data Sources (1) - Data is for the entire county of Orange. (2) - Data Source: Orange County Business Journal Book of Lists published November 2023 (3) - Data Source: State of California, Employment Development Department - Percentage is calculated by dividing employees by total employment of 1,512,500 as of June 2024. (4) - Data Sources: Orange County Business Journal Book of Lists published November 2014; County of Orange (5) - Data Source: State of California, Employment Development Department - Percentage is calculated by dividing employees by total employment of 1,530,800 as of June 2015. 79 ORANGE COUNTY SANITATION DISTRICT Operating Indicators June 30, 2024 Consolidated Revenue Area Orange County (unincorporated areas) Cities: Anaheim Huntington Beach Santa Ana Brea Irvine Seal Beach Buena Park La Habra Stanton Costa Mesa La Palma Tustin Cypress Los Alamitos Villa Park Fountain Valley Newport Beach Westminster Fullerton Orange Yorba Linda Garden Grove Placentia Special Districts: Costa Mesa Sanitary District Midway City Sanitary District Yorba Linda Water District Revenue Area No. 14 Orange County (unincorporated areas) Cities: Irvine Orange Tustin Special District: Irvine Ranch Water District Governing Body:25-member Board of Directors Authorized Full-Time Equivalent Employees:655 Operational Date:July 1, 1954 Authority:California Health & Safety Code Section 4700 et. seq. Services:Wastewater collection, treatment, and disposal Service Area:479 square miles Population Served:2.6 million Total Miles of Sewers (including force mains):388 miles Reclamation Plants:2 Outlying Pump Stations:15 Wastewater System Treatment Capacities (Million Gallons per Day) Actual Flows Existing Secondary FY23-24 Treatment Capacity Plant 1 118 182 Plant 2 75 150 Total 193 332 Source: Orange County Sanitation District's Financial Management Division. District Organization:The Orange County Sanitation District is one consolidated district made up of two revenue areas which service unincorporated county areas and twenty-three cities and related special districts, as follows: Existing Primary 376 168 208 Treatment Capacity 80 ORANGE COUNTY SANITATION DISTRICT OTHER DATA & TRENDS Information within this section consists of other data and trends including additional annual disclosures as required by the Orange County Sanitation District's debt covenants beyond what is allowed to be reported in the Statistical Section. 81 ORANGE COUNTY SANITATION DISTRICT Cash and Investment Portfolio As of June 30, 2024 Net Unrealized Cost Market Value Gain/(Loss) Shares Par Base Base % of Total Base INVESTMENT PORTFOLIO: CASH & CASH EQUIVALENTS (U.S. DOLLAR): COMMERCIAL PAPER 15,200,000 $ 15,121,132 $ 15,139,455 $ 1.93% 18,323 $ ENERGY 3,751,000 3,730,670 3,734,196 0.48% 3,526 FINANCE 4,609,000 4,587,663 4,590,380 0.58% 2,717 FIRST AMERICAN SHORT TERM FDS 338,734 338,734 338,734 0.04% - U.S. AGENCY 30,000,000 29,775,331 29,792,550 3.79% 17,219 U.S. GOVERNMENT 22,050,000 21,924,384 21,937,185 2.79% 12,801 SUBTOTAL - CASH & CASH EQUIVALENTS 75,948,734 75,477,914 75,532,500 9.62% 54,586 FIXED INCOME SECURITIES (U.S. DOLLAR): COMMERCIAL PAPER 2,250,000 2,217,900 2,221,042 0.28% 3,142 CONSUMER DISCRETIONARY 17,000,000 17,069,873 16,497,710 2.10% (572,163) CONSUMER STAPLES 6,720,000 6,711,547 6,470,489 0.82% (241,058) CONVERTIBLE BONDS 1,500,000 1,480,320 1,530,360 0.19% 50,040 FINANCE 111,130,000 110,115,154 106,957,567 13.62% (3,157,587) HEALTH CARE 21,000,000 20,972,142 20,626,270 2.63% (345,872) INFORMATION TECHNOLOGY 10,000,000 10,598,452 9,834,760 1.25% (763,692) MTG RELATED SECURITY 61,640,205 61,758,304 60,296,215 7.68% (1,462,089) PRIVATE PLACEMENTS 20,165,000 20,051,426 19,143,864 2.44% (907,562) SUPRANATIONAL 69,045,000 67,887,347 66,019,940 8.41% (1,867,407) TELECOMMUNICATION SERVICES 5,000,000 4,785,920 4,749,750 0.60% (36,170) U.S. AGENCY 95,575,000 94,165,903 90,725,276 11.55% (3,440,627) U.S. GOVERNMENT 306,352,029 302,733,700 294,423,496 37.50% (8,310,204) U.S. GOVERNMENT TIPS 4,753,188 4,684,689 4,750,146 0.61% 65,457 UTILITY 5,735,000 5,736,523 5,523,264 0.70% (213,259) SUBTOTAL - FIXED INCOME SECURITIES 737,865,422 730,969,200 709,770,149 90.38% (21,199,051) TOTAL INVESTMENT PORTFOLIO 813,814,156$ 806,447,114 785,302,649 100.00% (21,144,465)$ DEMAND DEPOSITS AND CASH ON HAND 4,179,943 4,179,943 MONIES HELD WITH FISCAL AGENTS 346,586 346,586 MONIES WITH THE LOCAL AGENCY INVESTMENT FUND 43,535,396 43,375,013 MONIES WITH THE SECTION 115 TRUST 15,134,972 15,743,872 TOTAL CASH AND INVESTMENTS 869,644,011$ 848,948,063$ 82 ORANGE COUNTY SANITATION DISTRICT Property Tax Rates - Direct and Overlapping Governments Last Ten Fiscal Years Tax Rate OC San 1958 OC San's General Average Fiscal Basic Obligation Total Share of Year Levy Bonds Tax Rate Basic Levy 2014-15 1.00% 0.00% 1.00% 1.63% 2015-16 1.00% 0.00% 1.00% 1.62% 2016-17 1.00% 0.00% 1.00% 1.61% 2017-18 1.00% 0.00% 1.00% 1.59% 2018-19 1.00% 0.00% 1.00% 1.59% 2019-20 1.00% 0.00% 1.00% 1.58% 2020-21 1.00% 0.00% 1.00% 1.59% 2021-22 1.00% 0.00% 1.00% 1.61% 2022-23 1.00% 0.00% 1.00% 1.59% 2023-24 1.00% 0.00% 1.00% 1.59% Notes Source: Orange County Auditor-Controller's Office. In 1978, California voters passed Proposition 13 which set the property tax rate at a 1.00% fixed amount of assessed value. This 1.00% is shared by all taxing agencies within which the subject property resides. In addition to the 1.00% fixed amount, property owners were charged taxes as a percentage of assessed property values for the payment of OC San general obligation bonds (which were paid in full in fiscal year 1998-99). 83 ORANGE COUNTY SANITATION DISTRICT Assessed and Estimated Actual Value of Taxable Property (Dollars In Thousands) Last Ten Fiscal Years Percent Change in Fiscal Assessed Year Secured Unsecured Total Value 2014-15 343,102,030 $ 7,378,643 $ 350,480,673 $ 6.44% 2015-16 365,267,850 6,936,768 372,204,618 6.20% 2016-17 385,137,024 6,642,312 391,779,336 5.26% 2017-18 409,310,248 6,990,609 416,300,857 6.26% 2018-19 435,911,818 7,213,037 443,124,855 6.44% 2019-20 461,217,033 7,489,937 468,706,970 5.77% 2020-21 486,958,908 7,289,732 494,248,640 5.45% 2021-22 506,709,716 9,445,337 516,155,053 4.43% 2022-23 539,539,856 8,340,728 547,880,584 6.15% 2023-24 574,442,193 9,531,540 583,973,733 6.59% Source: Orange County Auditor-Controller's Office. In 1978, the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of 1% based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an inflation factor which is limited to a maximum increase of 2%. With a few exceptions, property is only reassessed at the time that it is sold to a new owner. At that point, the new assessed value is reassessed at the purchase price of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above. Consequently, the assessed and estimated values are the same. $0 $100,000,000 $200,000,000 $300,000,000 $400,000,000 $500,000,000 $600,000,000 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Secured Unsecured 84 ORANGE COUNTY SANITATION DISTRICT Property Tax and User Fee Levies and Collections (Dollars in Thousands) Last Ten Fiscal Years (1) Total Tax Current Tax Percent Total Tax % of Total % of Pass- Fiscal and User and User Fee of Levy Delinquent and User Fee Collection Outstanding Delinquencies Through Year Fee Levy Collection Collected Collection Collection to Levy Delinquencies to Levy Payments 2014-15 362,978$ 362,927$ 99.99 108$ 363,035$ 100.02 51$ 0.01 8,447$ (2) 2015-16 371,502 370,170 99.64 637 370,807 99.81 1,332 0.36 9,199 (2) 2016-17 381,226 380,078 99.70 608 380,686 99.86 1,148 0.30 9,751 2017-18 386,538 385,673 99.78 741 386,414 99.97 865 0.22 11,353 2018-19 394,641 393,809 99.79 786 394,595 99.99 832 0.21 12,524 2019-20 401,604 400,865 99.82 931 401,796 100.05 739 0.18 13,469 2020-21 405,878 405,053 99.80 1,035 406,088 100.05 825 0.20 15,034 2021-22 418,400 416,869 99.63 1,177 418,046 99.92 1,531 0.37 18,433 2022-23 430,603 428,681 99.55 143 428,824 99.59 1,922 0.45 18,903 2023-24 445,733 444,560 99.74 242 444,802 99.79 1,173 0.26 20,460 Notes Source: Orange County Auditor-Controller's Office. (1)Upon dissolution of California redevelopment agencies during fiscal year 2011-12, property tax increment formerly remitted to OC San by its member city redevelopment agencies was instead deposited into the newly formed Redevelopment Property Tax Trust Fund (RPTTF) from which the Auditor-Controller makes disbursements on behalf of the successor agencies. There is no tax levy associated with these collections; thus, they have been excluded from the "% of Total Collection to Levy" calculation. (2)In fiscal year 2014-15 and 2015-16, the County did not bill user fees for wholly exempt agencies not subject to property taxes. In fiscal year 2014-15 and 2015-16, OC San internally billed user fees of $5 million and $4.5 million, respectively, to wholly exempt agencies. These amounts have been excluded from the levy and collection amounts above, as only tax and user fees included on County property tax billings are shown in this schedule. $300,000 $325,000 $350,000 $375,000 $400,000 $425,000 $450,000 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Total Tax and User Fee Levy Total Tax and User Fee Collection 85 ORANGE COUNTY SANITATION DISTRICT Property Value and Construction Covering The Entire County of Orange (1) (Dollars In Thousands) Last Ten Fiscal Years Non- Residential Construction (3)Total Fiscal Calendar No. of Construction Year Value Year Value Units Value Value (3) 2014-15 476,303,290$ 2015 2,196,000 $ 10,897 2,834,000 $ 5,030,000 $ 2015-16 504,650,360 2016 2,487,000 12,134 3,160,000 5,647,000 2016-17 531,052,158 2017 2,062,000 10,294 3,217,000 5,279,000 2017-18 563,662,044 2018 3,507,000 8,105 2,776,000 6,283,000 2018-19 598,901,016 2019 3,144,000 10,294 2,650,000 5,794,000 2019-20 632,758,256 2020 1,929,000 5,907 1,884,000 3,813,000 2020-21 663,241,179 2021 1,802,000 7,471 2,368,000 4,170,000 2021-22 689,088,931 2022 1,868,000 6,483 2,195,000 4,063,000 2022-23 733,634,516 2023 2,126,000 7,670 2,379,000 4,505,000 (4) 2023-24 778,720,416 2024 1,910,000 7,142 2,243,000 4,153,000 (5) Notes and Data Sources (2) - Data Source: Orange County Auditor-Controller's Office. (3) - Data Source: A. Gary Anderson Center for Economic Research, Chapman University. (4) - Estimate (5) - Forecast (1) -The Orange County Sanitation District services 479 square miles or 60% of the total 799.8 square miles that make up the boundaries of Orange County. Residential Construction (3) Assessed Property Value (2) 86 ORANGE COUNTY SANITATION DISTRICT Insurance in Force As of June 30, 2024 Type Insurer Deductible All-Risk Property Fire and Other Perils Public Entity Property $500,000 per $1 billion / occurrence Insurance Program occurrence (multiple insurers) Flood Public Entity Property $1 million per $25 million / occurrence Insurance Program occurrence Boiler & Machinery Public Entity Property $25,000 to $100 million / occurrence Insurance Program $350,000 (multiple insurers) Earthquake Multiple insurers 5% per structure,$25 million (certain structures only)min. $5 million Crime Insurance Alliant Crime Insurance Program $25,000 $5 million Excess Great American Insurance Co.$750,000 $40 million / occurrence General Liability (first $10 million layer); and annual aggregate Gemini Insurance Co. ($15 million layer, excess $10 million) Arch Insurance Company ($5 million layer, excess $25 million) Great American Insurance Co. ($10 million layer, excess $30 million) Travel & Accident Federal Insurance Co.None Accidental Death & Dismemberment: Class 1: Elected Officials $500,000 per occurrence Class 2: Employees 10X annual 10X annual salary, up to $500,000 per occurrence Excess Workers'Public Risk Innovation, Solutions,$1 million Unlimited statutory coverage Compensation and Management (PRISM)each accident each accident, each employee $4 million employer's liability Pollution Liability Ironshore Specialty Insurance Co.$250,000 $10 million per loss Watercraft Liability Atlantic Specialty Insurance Co.$2,500 bodily injury $10 million $10,000 all other Hull & Machinery Atlantic Specialty Insurance Co.$10,000 Pollution Liability Great American Insurance Co.$25,000 $5 million Source: Orange County Sanitation District's Financial Management Division. Limit $600,000 87 (THIS PAGE INTENTIONALLY LEFT BLANK) 88 ORANGE COUNTY SANITATION DISTRICT FINANCIAL MANAGEMENT DIVISION 18480 Bandilier Circle Fountain Valley, California 92708-7018 714.926.2411 | www.ocsan.gov 06/30/24 11/5/2024 1 Annual Comprehensive Financial Report (ACFR) For the Year Ended June 30, 2024 Administration Committee Presented by Ruth Zintzun, Finance Manager and Bryce Hockensmith, Accounting Supervisor November 13, 2024 v Orange CountySanitation District70thAnniversary 2 July Fiscal Year Budget effective November Board consideration of ACFR and PAFR April Auditor interim field work September Auditor final field workOngoing Monthly operating budget review June End of Fiscal Year Quarterly Financial reporting 1 2 11/5/2024 2 v Orange CountySanitation District70thAnniversary 3 $534M $554M Ad o p t e d Bu d g e t Ac t u a l s $564M $503M Ad o p t e d Bu d g e t Ac t u a l s Revenues Expenses $637M v Orange CountySanitation District70thAnniversary Non-Engineering $4.6 2% Collection System $44.9 million 17% Plant No. 1 $124.2 million 47% Plant No. 2 $36.7 million 14% Joint Facilities $51.9 million 20% 4 $262.3 Million 3 4 11/5/2024 3 v Orange CountySanitation District70thAnniversary $1,004.1 $848.9 FY 22/23 FY 23/24 Mi l l i o n s 5 $155.2 million decrease Cash on hand $1,500 0% Deposits with financial institutions$4,178,443 0% Managed portfolio$828,677,66298% Monies held by trustees $16,090,4582% v Orange CountySanitation District70thAnniversary 6 $0 $100 $200 $300 $400 $500 $600 $700 2 0 2 4 - 2 5 2 0 2 5 - 2 6 2 0 2 6 - 2 7 2 0 2 7 - 2 8 2 0 2 8 - 2 9 2 0 2 9 - 3 0 2 0 3 0 - 3 1 2 0 3 1 - 3 2 2 0 3 2 - 3 3 2 0 3 3 - 3 4 2 0 3 4 - 3 5 2 0 3 5 - 3 6 2 0 3 6 - 3 7 2 0 3 7 - 3 8 2 0 3 8 - 3 9 2 0 3 9 - 4 0 Mil l i o n s •Generated $23 million in savings by refunding bonds •Paid down $134 million of taxable debt 5 6 11/5/2024 4 ORANGE COUNTY SANITATION DISTRICT Presentation of Audit Results Fiscal Year Ended June 30, 2024 8 Substantive testing of all material assets and liabilities using 3rd party confirmations and other procedures Evaluation of internal controls for key accounting cycles and information systems Analytical testing of revenues and expenditures with substantive testing when the change from the prior year was material Compliance testing of investments, debt, and disbursements 7 8 11/5/2024 5 9 Annual Comprehensive Financial Report Unmodified audit opinion The financial statements and footnotes are presented fairly, in all material respects, in accordance with generally accepted accounting principles Agreed Upon Procedures Appropriations (GANN) Limit Indemnity Agreement Bond Comfort Letter 10 Government Auditing Standards Letter No material instances of noncompliance No significant deficiencies or material weaknesses in internal controls Communication to Those in Governance No material audit adjustments detected Disclosure of significant accounting estimates: Judgments concerning which capital project expenditures to capitalize Actuarial calculations of pension and OPEB 9 10 11/5/2024 6 11 Auditor Risk Assessment and Results Accounting for capital projects Accounting for issuance of new debt and related defeasance of debt Unpredictability Test Selected 10 significant vendor transactions/contracts Tested for compliance with bidding and purchasing policies No instances of noncompliance noted 12 GASB 101: Compensated Absences – FY 24/25 GASB 102: Certain Risk Disclosures – FY 24/25 GASB 103: Financial Reporting Model Improvements – FY 25/26 Changes to Management’s Discussion & Analysis Changes to Proprietary Fund reporting of operating & nonoperating activities 11 12 11/5/2024 7 v Orange CountySanitation District70thAnniversary •Board consideration of ACFR and PAFR 14 •Apply for industry awards 13 14 ADMINISTRATION COMMITTEE Agenda Report Headquarters 18480 Bandilier Circle Fountain Valley, CA 92708 (714) 593-7433 File #:2024-3895 Agenda Date:11/13/2024 Agenda Item No:12. FROM:Robert Thompson, General Manager Originator: Wally Ritchie, Director of Finance SUBJECT: ORANGE COUNTY SANITATION DISTRICT POPULAR ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2024 GENERAL MANAGER'S RECOMMENDATION RECOMMENDATION: Recommend to the Board of Directors to: Receive and file the Orange County Sanitation District Popular Annual Financial Report for the year ended June 30, 2024. BACKGROUND A Popular Annual Financial Report (PAFR)is a way to communicate selected financial data to a broad audience.Information is extracted from the Annual Comprehensive Financial Report and compiled into a separate report specifically designed to be readily accessible and easily understandable to the general public and other interested parties without a background in public finance. RELEVANT STANDARDS ·Produce appropriate financial reporting - annual financial report & audit letter ADDITIONAL INFORMATION N/A CEQA N/A FINANCIAL CONSIDERATIONS N/A Orange County Sanitation District Printed on 11/5/2024Page 1 of 2 powered by Legistar™ File #:2024-3895 Agenda Date:11/13/2024 Agenda Item No:12. ATTACHMENT The following attachment(s)may be viewed on-line at the OC San website (www.ocsan.gov)with the complete agenda package: ·Popular Annual Financial Report for the Year Ended June 30, 2024 Orange County Sanitation District Printed on 11/5/2024Page 2 of 2 powered by Legistar™ POPULAR ANNUALFINANCIAL REPORT JUNE 30,2024 For The Year Ended “To protect public health and the environment by providing effective wastewater collection, treatment, and recycling.” OUR MISSION 2 Orange County Sanitation District Orange County Sanitation District Will Be A Leader In: Providing reliable, responsive, and affordable services in line with customer needs and expectations. Protecting public health and the environment utilizing all practical and effective means for wastewater, energy, and solids resource recovery. Continually seeking efficiencies to ensure that the public’s money is wisely spent. Communicating our mission and strategies with those we serve and all other stakeholders. Partnering with others to benefit our customers, this region, and our industry. Creating the best possible workforce in terms of safety, productivity, customer service, and training. OUR VISION 3Popular Annual Financial Report - For the year ended June 30, 2024 INTRODUCTION LETTER Ruth Zintzun Finance Manager We are proud to present Orange County Sanitation District’s (OC San) Popular Annual Financial Report (PAFR) for the fiscal year ended June 30, 2024. The PAFR provides an easily accessible overview of the financial details contained in our 100-page Annual Comprehensive Financial Report (ACFR). The PAFR draws directly from the ACFR, which provides a more detailed breakdown of our financial data and undergoes a rigorous audit process conducted by Davis Farr. The ACFR is prepared in conformity with generally accepted accounting principles. You can find the complete 2024 ACFR available for review on OC San’s official website at www.ocsan.gov. This report, along with the ACFR, could not have been accomplished without the dedicated services of the Financial Management Division staff who assisted in its preparation. I would also like to thank OC San’s Board of Directors and the General Manager for their interest and support in conducting the financial operations of OC San in a responsible and progressive manner. I hope this new report will continue to demonstrate OC San’s commitment to transparency and fiduciary responsibility as we continue to provide wastewater collection, treatment, and recycling for approximately 2.6 million people in central and northwest Orange County. Please do not hesitate to contact OC San if you have any questions, comments and or feedback at 714.962.2411 or via e-mail: ForInformation@ocsan.gov. 4 Orange County Sanitation District CITIES AGENCIESACTIVE DIRECTOR ACTIVE DIRECTOR Anaheim Stephen Faessel Brea Christine Marick Buena Park Joyce Ahn Cypress Scott Minikus Fountain Valley Glenn Grandis Fullerton Bruce Whitaker Garden Grove Stephanie Klopfenstein Huntington Beach Pat Burns Irvine Farrah N. Khan La Habra Rose Espinoza La Palma Debbie Baker Los Alamitos Jordan Nefulda Newport Beach Brad Avery Orange Jon Dumitru (Vice-Chairman) Placentia Chad Wanke Santa Ana Johnathan Ryan Hernandez Seal Beach Schelly Sustarsic Stanton David Shawver Tustin Ryan Gallagher (Chairman) Villa Park Robbie Pitts Costa Mesa Sanitary District Robert Ooten Midway City Sanitary District Andrew Nguyen Irvine Ranch Water District John Withers Yorba Linda Water District Phil Hawkins Member of the Board of Supervisors Doug Chaffee BOARD OFDIRECTORS 5Popular Annual Financial Report - For the year ended June 30, 2024 ORGANIZATIONALCHART Communications Department Human Resources Department Human Resources Operation & Maintenance Administration Environmental ServicesAdministration Risk Management Human ResourcesAdministration Collection Facilities Operations & Maintenance Laboratory & Ocean Monitoring Contracts, Purchasing & Materials Management Plant No. 1 Operations Plant No. 2 Operations Plant No. 1 Maintenance Plant No. 2 Maintenance Administrative Service Department AssistantGeneral Manager General Manager Board of Directors General Counsel Office Environmental Services Department Engineering Department Operations & Maintenance Department Public Affairs Board Services Communication Administration Information Technology Financial Management Facilities Maintenance Administrative Services Resources Protection Environmental Compliance Construction Management Design Project Management Office Planning Engineering Administration 6 Orange County Sanitation District Irvine Anaheim Orange SantaAna Fullerton Brea Tustin Yorba Linda HuntingtonBeach CostaMesa GardenGrove SealBeach BuenaPark NewportBeach La Habra Westminster Cypress Placentia FountainValley StantonLosAlamitos VillaPark LaPalma Sant a A n a R i v e r A StreetPump Station Irvine Anaheim Orange SantaAna Fullerton Brea Tustin Yorba Linda HuntingtonBeach CostaMesa GardenGrove SealBeach BuenaPark NewportBeach La Habra Westminster Cypress Placentia FountainValley StantonLosAlamitos VillaPark LaPalma HQ OC SAN BY THE NUMBERS 479 Total Service Area In Square Miles 2.6 Million People Served 100% Of Reclaimable Flow Recycled Over 380 Miles Of Regional Sewers 2 Reclamation Plants 193 Million Gallons Per Day Processed + + + + + + Pump Stations Regional Pipelines OC San Headquarters Reclamation Plants Nos. 1 and 2 (P1 & P2) LEGEND HQ 7Popular Annual Financial Report - For the year ended June 30, 2024 STRATEGICPLAN Preparing and planning for the future of OC San and the community we serve is the essence of who we are. As part of the planning process, OC San has created a guiding document – the OC San Strategic Plan. Strategic planning is the first step in defining OC San’s ability to have people and assets in the right place at the right time to meet its agreed upon mission and levels of service. Key policies are focused on four broad categories: Read the OC San Strategic Plan. BUSINESS PRINCIPLES ENVIRONMENTAL STEWARDSHIP WORKPLACE ENVIRONMENT WASTEWATER MANAGEMENT 8 Orange County Sanitation District COREVALUES We aspire to the highest degree of integrity, inclusion, honesty, and respect in our interaction with each other, our suppliers, our customers, and our community. We strive to demonstrate these values in our actions, commitments, and service. The Core Values support our Mission and Vision statements by expressing the values, beliefs, and philosophy that guides our daily actions. They help form the framework of our organization and reinforce our professional work ethic. INTEGRITY, INCLUSION, HONESTY, AND RESPECT We lead by example, acknowledging the value of our resources and using them wisely to achieve our mission. We strive to reach OC San goals through cooperative efforts and collaboration with each other and our constituencies. We work to solve problems in a creative, cost-effective, and safe manner, and we acknowledge team and individual efforts. LEADERSHIP, TEAMWORK,AND PROBLEM SOLVING We are committed to acting in a timely, accurate, accessible, and transparent manner through excellent customer service. We are committed to act in the best interest of our internal and external stakeholders. CUSTOMER SERVICE, TRANSPARENCY, AND ACCOUNTABILITY We continuously develop ourselves, enhancing our talents, skills, and abilities. We recognize that only through personal growth and development will we progress as an agency and as individuals. RESILIENCY, INNOVATION,AND LEARNING We are committed to providing a safe work environment. We will demonstrate leadership, promote individual accountability, and participate actively in the advancement of our health and safety practices. SAFETY 9Popular Annual Financial Report - For the year ended June 30, 2024 CONSTRUCTION PROGRAM OC San’s Asset Management Plan drives our 20-year Capital Improvement Program (CIP) and determines the proper timing of our projects to maximize the life of our assets. The Asset Management Group works continuously with our Operations and Maintenance Department to properly define the timing of large CIP projects and the execution of many small projects essential to the day-to-day operations of the collections and plants to maintain reliable and resilient facilities. Some project highlights from the fiscal year ended June 30, 2024 include: Construction 2023-2026 Construction Budget $43.5 million The Gisler-Red Hill Interceptor was constructed in the early 1960’s and consists of approximately 3 ½ miles of vitrified clay pipe. It crosses several high-volume roads including Interstate 405, Highway 55, and Highway 73. The Baker Force Mains were constructed in 1991 and consists of one mile of dual force mains. The force mains are used to transport wastewater flows from the Main Street Pump Station. The project also includes replacing valves and piping at the Main Street Pump Station located in the City of Irvine. Gisler-Red Hill Interceptor and Baker Force Main Rehabilitation (Project No. 7-65) 10 Orange County Sanitation District Construction 2021-2028 Construction Budget $225.0 million This is a comprehensive rehabilitation effort to the headworks facilities, the first point of entry of wastewater into Plant No. 1. The headworks facilities were built in 1989. The work needs to occur all while still treating the average 124 million gallons per day of wastewater received at Plant No. 1. The project includes rehabilitation of the metering and diversion structure, bar screen building, main sewage pumps, and grit handling facility and new grit pump station, power building, electrical building, standby generation facility, and odor control. This complex project requires extensive coordination with plant operations for shutdowns, confined space entries, and working with live flows. Headworks Rehabilitation at Plant No. 1 (Project No. P1-105) 11Popular Annual Financial Report - For the year ended June 30, 2024 CONSTRUCTION PROGRAM - Continued Construction 2021-2024 Construction Budget $106.0 million OC San has a new Headquarters in Fountain Valley. As we celebrate 70 years of history, we have also expanded our footprint in the city with the new Headquarters across the street from Plant No. 1. This will allow us to preserve Plant No. 1 for future process treatment facilities while still having administrative staff closely connected with a pedestrian skybridge spanning over a heavy traffic road. City residents have adopted the motto “A Nice Place to Live.” Following the city motto, the addition of the Headquarters is “A Nice Place to Work” for the workforce of over 300 professionals who relocated to the new building in June 2024. The remaining workforce are located at the two reclamation facilities. A noticeable design feature is the use of mass timber combined with steel-braced frames. The wood elements provide a natural warmth to the interior of the building while reducing the overall carbon footprint of its construction. Other sustainable design features that target LEED (Leadership in Energy and Environmental Design) Gold certification and net-zero energy certification include photovoltaic panels on the roof and parking lot, sun-shading and building orientation to maximize daylighting while reducing glare and solar heat gain, and as a resource recovery agency, 100 percent of the Headquarters heat is provided from the plant operations. Headquarters Complex at Plant No. 1 (Project No. P1-128A) 12 Orange County Sanitation District CONSTRUCTION PROGRAM - Continued Construction 2019-2025 Construction 2021-2027 Construction Budget $95.4 million Construction Budget $112.3 million Currently the longest duration project under construction at Plant No. 2. This project rehabilitates the mechanical, electrical, and instrumentation systems of the ocean outfall pump station that discharges non-reclaimable flows to the ocean outfall system. Because we are now able to recycle 100 percent of reclaimable flows, the flow through the ocean outfall is lower and requires a smaller pump station to handle the lower daily flows. This project also replaces the plant water pump station to allow it to use reclaimable water that can be recycled, replaces the electrical equipment in the CenGen facility, provides a plant-wide electrical power monitoring and control system, provides a new plant-wide fiber optic network, and provides new server rooms for process and IT equipment.Four primary clarifiers dating back to the 1960’s are being replaced along with the existing odor control facility. Once construction is completed, the existing primary clarifiers will be demolished. Outfall Low Flow Pump Station (Project No. J-117B) A-Side Primary Clarifiers Replacement at Plant 2 (Project No. P2-98A) 13Popular Annual Financial Report - For the year ended June 30, 2024 CONSTRUCTION PROGRAM - Continued CIP EXPENDITURES Fiscal Year 2023/24 2% $4.6 millionNon-Engineering 20% $51.9 millionJoint Facilities 17% $44.9 millionCollection System 47% $124.2 millionPlant No. 1 $262.3 MILLION 14% $36.7 millionPlant No. 2 Total 14 Orange County Sanitation District 10-YEAR NET CIP OUTLAY Fiscal Year 2024/25 Through 2033/34 1.4% $46.1 millionNon-Engineering 16.1% $522.1 millionJoint Facilities 12.5% $406.9 millionFuture Rehabilitation and Replacement 23.2% $753.3 millionCollection System 24.3% $789.4 millionPlant No. 1 22.5% $729.7 millionPlant No. 2 $3.2 BILLION Total 15Popular Annual Financial Report - For the year ended June 30, 2024 The CIP is validated as part of the budget process each year. The CIP projected net outlay, or spending forecast, is refined as project budgets are reevaluated, looking at active and future CIP projects and ensuring the project scope, schedule, and cost estimates are up to date. The Annual Net CIP Outlay chart shows the historical expenditures over the past five years and the projected CIP spending for the next ten years. The rise in spending is contributed to the increase of projects that will be transitioning in construction. PROGRAM CASH FLOW ANNUAL NET CIP OUTLAY ■ Actuals■ Projected FISCAL YEARS $50 M $0 $100 M $150 M $200 M $250 M $300 M $350 M $400 M $450 M $1 2 0 $1 6 1 $1 9 5 $2 2 6 $2 6 2 $2 3 2 $2 6 1 $2 8 4 $3 5 9 $3 3 4 $3 3 1 $3 2 7 $3 4 5 19 20 20 21 21 22 22 23 23 24 24 25 25 26 26 27 27 28 28 29 29 30 30 31 31 32 32 33 33 34 $3 9 7 $3 6 5 16 Orange County Sanitation District Project Development Preliminary Design Design Bid and Award Construction Commissioning Closed Close Out The project life cycle consists of various phases that make up the path a project takes from start to finish. The active studies and projects during the FY 2023-24 reporting period are from various phases of the project. The project budget includes costs for construction services, design costs, and administrative costs throughout the life cycle of the project. 102 ACTIVE CIP PROJECTS 33 PROJECTS IN CONSTRUCTION $555MLARGEST PROJECT BUDGET 17Popular Annual Financial Report - For the year ended June 30, 2024 FINANCIAL REPORTING OC San operates as a utility enterprise and the financial information is presented accordingly. All financial information and data are based on OC San’s Annual Comprehensive Financial Report for the year ended June 30, 2024. 18 Orange County Sanitation District Report can be found at www.ocsan.gov. 19Popular Annual Financial Report - For the year ended June 30, 2024 SOURCESOF REVENUE $339,654,219 $131,607,529 $35,942,537 $46,640,438 User Fees Taxes Levied Interest Income Other $553,844,723 TOTAL 20 Orange County Sanitation District EXPENSES $31,066,678 Interest Expense $4,387,399 Other $185,195,122 Treatment and Disposal $116,204,812 Depreciation and Amortization $37,478,258 Collection System TOTAL $374,332,269 21Popular Annual Financial Report - For the year ended June 30, 2024 LONG TERM DEBT RATING OC San strives to maintain financial stability while keeping our sewer rates affordable. OC San consistently has its AAA rating affirmed on all obligations by Fitch Ratings, Standard & Poor’s, and Moody’s Investors Service Incorporated. These ratings are based on our management practices and financial strength. The AAA rating is the highest possible credit rating an agency can receive, which means that we have access to low interest rates on financing our infrastructure improvements, resulting in cost savings for our customers. OC San is the only California utility with a AAA rating from all three major rating agencies. 2010A 2016A 2010C 2017A 2021A 2022A 2024A WASTEWATER REVENUE OBLIGATIONS WASTEWATER REFUNDING REVENUE OBLIGATIONS TOTAL CERTIFICATES OF PARTICIPATION / REVENUE OBLIGATIONS $80,000,000 $121,485,000 $22,830,000 $65,815,000 $94,645,000 $81,620,000 $139,720,000 $606,115,000 22 Orange County Sanitation District NET POSITION Assets: a resource with economic value that OC San owns or controls with the expectation that it will provide a future benefit. Liabilities: debts or obligations that arise during business operations. Deferred Outflow/Inflow of Resources: consumption or acquisition of assets that are applicable to a future reporting period. $3,912,740,009 $810,947,750 $75,654,807 Net Position: $3,177,447,066 23Popular Annual Financial Report - For the year ended June 30, 2024 Orange County Sanitation District Financial Management Division 18480 Bandilier Circle Fountain Valley, CA 92708-7018 714.962.2411 ForInformation@ocsan.gov www.ocsan.gov ADMINISTRATION COMMITTEE Agenda Report Headquarters 18480 Bandilier Circle Fountain Valley, CA 92708 (714) 593-7433 File #:2024-3924 Agenda Date:11/13/2024 Agenda Item No:13. FROM:Robert Thompson, General Manager Originator: Jennifer Cabral, Director of Communications SUBJECT: EMPLOYEE ENGAGEMENT SURVEY RESULTS GENERAL MANAGER'S RECOMMENDATION RECOMMENDATION: Information item. BACKGROUND The General Manager’s Work Plan for Fiscal Year 2024-2025 includes a goal to conduct an employee engagement survey to gather feedback from staff on a variety of topics. RELEVANT STANDARDS ·Cultivate a highly qualified, well-trained, and diverse workforce ·Promote employee job satisfaction ·Provide a safe and collegial workplace ·Provide professional growth and development PROBLEM The Orange County Sanitation District (OC San)staff has experienced a lot of change over the past couple of years.It is imperative to stay connected to the workforce to better provide the information, training,development,and communication that is needed to improve performance and engage employees.OC San has always been a sought-after employer and to maintain that status,it is imperative to understand the areas that concern employees as well as the areas that are exceeding their expectations. PROPOSED SOLUTION Conduct an employee engagement survey to gather thoughts and feedback from staff on topics such as job satisfaction, communication methods and content, employee recognition, etc. Orange County Sanitation District Printed on 11/5/2024Page 1 of 2 powered by Legistar™ File #:2024-3924 Agenda Date:11/13/2024 Agenda Item No:13. RAMIFICATIONS OF NOT TAKING ACTION Failing to conduct an employee engagement survey may result in several negative ramifications. Without this critical feedback mechanism,OC San risks losing valuable insights into employee morale,satisfaction,and potential areas of improvement.This could lead to decreased employee engagement,reduced productivity,and higher turnover rates.Additionally,the lack of data may hinder OC San’s ability to address concerns proactively,negatively impacting overall organizational performance,retention,and employee well-being.Moreover,it could also result in missed opportunities for fostering a positive workplace culture and aligning staff with strategic goals. PRIOR COMMITTEE/BOARD ACTIONS June 2024 - Received and Filed the General Manager’s Fiscal Year 2024-2025 Work Plan. ADDITIONAL INFORMATION Previous employee engagement surveys have been conducted.The most recent were conducted in 2017 and 2022,with response rates of 23 percent and 32 percent,respectively.This year,we saw a substantial improvement,achieving a 55 percent response rate,which has provided a broader and more representative view of employee sentiment.This increase in participation reflects greater engagement and strengthens our ability to make data-driven improvements aligned with staff feedback. CEQA N/A FINANCIAL CONSIDERATIONS All items mentioned are included in OC San’s FY 2024-26 Budget. ATTACHMENT The following attachment(s)may be viewed on-line at the OC San website (www.ocsan.gov)with the complete agenda package: ·Presentation Orange County Sanitation District Printed on 11/5/2024Page 2 of 2 powered by Legistar™ 11/5/2024 1 Jennifer Cabral, Director of Communications Administration CommitteeNovember 13, 2024 v Orange CountySanitation District70thAnniversary 2 •Part of General Manager’s Work Plan •Available for two weeks / consisted of 33 questions •353 responses - 55 percent response rate •2022 survey had 192 responses (32% ) •2017 survey had 131 responses (23%) 1 2 11/5/2024 2 Orange CountySanitation District70thAnniversary •Employee development opportunities •Recognition programs •Communication tools •Communication content •Engagement •Satisfaction 3 v Orange CountySanitation District70thAnniversary 4 •87% of respondents feel that job allows them to be a part of something meaningful •76% feel they can express ideas & concerns with management •85% feel they have opportunities to grow & develop •76% feel development is a priority in their workgroup •67% feel recognized for outstanding work 3 4 11/5/2024 3 v Orange CountySanitation District70thAnniversary •82% somewhat or strongly agreed they are satisfied with the current organization information received •93% feel The San Box keeps them up to date with OC San news always or most of the time •There is an interest in participating in OC San events outside work hours •There is an interest in reinstating the Employee Activity Committee 5 v Orange CountySanitation District70thAnniversary •Clear direction and transparency from management •Increase employee recognition •Two-way communication with management •More opportunity for employee feedback and engagement •Internal promotions before external •After hours employee events (with family invited) 6 5 6 11/5/2024 4 v Orange CountySanitation District70thAnniversary •Promote Recognition Programs •Printed copies of Pipeline in breakrooms •Consider opportunity for management feedback •Talking Points •Employee Activity Committee exploration •The San Box •Three Things Email •More intentional and timely posts •VIP Revamp •Social Media education 7 1954 - 2024 Orange County Sanitation District70thAnniversary 8 7 8 ORANGE COUNTY SANITATION DISTRICT COMMON ACRONYMS ACWA Association of California Water Agencies LOS Level Of Service RFP Request For Proposal APWA American Public Works Association MGD Million Gallons Per Day RWQCB Regional Water Quality Control Board AQMD Air Quality Management District MOU Memorandum of Understanding SARFPA Santa Ana River Flood Protection Agency ASCE American Society of Civil Engineers NACWA National Association of Clean Water Agencies SARI Santa Ana River Interceptor BOD Biochemical Oxygen Demand NEPA National Environmental Policy Act SARWQCB Santa Ana Regional Water Quality Control Board CARB California Air Resources Board NGOs Non-Governmental Organizations SAWPA Santa Ana Watershed Project Authority CASA California Association of Sanitation Agencies NPDES National Pollutant Discharge Elimination System SCADA Supervisory Control And Data Acquisition CCTV Closed Circuit Television NWRI National Water Research Institute SCAP Southern California Alliance of Publicly Owned Treatment Works CEQA California Environmental Quality Act O & M Operations & Maintenance SCAQMD South Coast Air Quality Management District CIP Capital Improvement Program OCCOG Orange County Council of Governments SOCWA South Orange County Wastewater Authority CRWQCB California Regional Water Quality Control Board OCHCA Orange County Health Care Agency SRF Clean Water State Revolving Fund CWA Clean Water Act OCSD Orange County Sanitation District SSMP Sewer System Management Plan CWEA California Water Environment Association OCWD Orange County Water District SSO Sanitary Sewer Overflow EIR Environmental Impact Report OOBS Ocean Outfall Booster Station SWRCB State Water Resources Control Board EMT Executive Management Team OSHA Occupational Safety and Health Administration TDS Total Dissolved Solids EPA US Environmental Protection Agency PCSA Professional Consultant/Construction Services Agreement TMDL Total Maximum Daily Load FOG Fats, Oils, and Grease PDSA Professional Design Services Agreement TSS Total Suspended Solids gpd gallons per day PFAS Per- and Polyfluoroalkyl Substances WDR Waste Discharge Requirements GWRS Groundwater Replenishment System PFOA Perfluorooctanoic Acid WEF Water Environment Federation ICS Incident Command System PFOS Perfluorooctanesulfonic Acid WERF Water Environment & Reuse Foundation IERP Integrated Emergency Response Plan POTW Publicly Owned Treatment Works WIFIA Water Infrastructure Finance and Innovation Act JPA Joint Powers Authority ppm parts per million WIIN Water Infrastructure Improvements for the Nation Act LAFCO Local Agency Formation Commission PSA Professional Services Agreement WRDA Water Resources Development Act ORANGE COUNTY SANITATION DISTRICT GLOSSARY OF TERMS ACTIVATED SLUDGE PROCESS – A secondary biological wastewater treatment process where bacteria reproduce at a high rate with the introduction of excess air or oxygen and consume dissolved nutrients in the wastewater. BENTHOS – The community of organisms, such as sea stars, worms, and shrimp, which live on, in, or near the seabed, also known as the benthic zone. BIOCHEMICAL OXYGEN DEMAND (BOD) – The amount of oxygen used when organic matter undergoes decomposition by microorganisms. Testing for BOD is done to assess the amount of organic matter in water. BIOGAS – A gas that is produced by the action of anaerobic bacteria on organic waste matter in a digester tank that can be used as a fuel. BIOSOLIDS – Biosolids are nutrient rich organic and highly treated solid materials produced by the wastewater treatment process. This high-quality product can be recycled as a soil amendment on farmland or further processed as an earth-like product for commercial and home gardens to improve and maintain fertile soil and stimulate plant growth. CAPITAL IMPROVEMENT PROGRAM (CIP) – Projects for repair, rehabilitation, and replacement of assets. Also includes treatment improvements, additional capacity, and projects for the support facilities. COLIFORM BACTERIA – A group of bacteria found in the intestines of humans and other animals, but also occasionally found elsewhere, used as indicators of sewage pollution. E. coli are the most common bacteria in wastewater. COLLECTIONS SYSTEM – In wastewater, it is the system of typically underground pipes that receive and convey sanitary wastewater or storm water. CERTIFICATE OF PARTICIPATION (COP) – A type of financing where an investor purchases a share of the lease revenues of a program rather than the bond being secured by those revenues. CONTAMINANTS OF POTENTIAL CONCERN (CPC) – Pharmaceuticals, hormones, and other organic wastewater contaminants. DILUTION TO THRESHOLD (D/T) – The dilution at which the majority of people detect the odor becomes the D/T for that air sample. GREENHOUSE GASES (GHG) – In the order of relative abundance water vapor, carbon dioxide, methane, nitrous oxide, and ozone gases that are considered the cause of global warming (“greenhouse effect”). GROUNDWATER REPLENISHMENT SYSTEM (GWRS) – A joint water reclamation project that proactively responds to Southern California’s current and future water needs. This joint project between the Orange County Water District and OCSD provides 70 million gallons per day of drinking quality water to replenish the local groundwater supply. LEVEL OF SERVICE (LOS) – Goals to support environmental and public expectations for performance. N-NITROSODIMETHYLAMINE (NDMA) – A N-nitrosamine suspected cancer-causing agent. It has been found in the GWRS process and is eliminated using hydrogen peroxide with extra ultra-violet treatment. NATIONAL BIOSOLIDS PARTNERSHIP (NBP) – An alliance of the NACWA and WEF, with advisory support from the EPA. NBP is committed to developing and advancing environmentally sound and sustainable biosolids management practices that go beyond regulatory compliance and promote public participation to enhance the credibility of local agency biosolids programs and improved communications that lead to public acceptance. PER- AND POLYFLUOROALKYL SUBSTANCES (PFAS) – A large group (over 6,000) of human-made compounds that are resistant to heat, water, and oil and used for a variety of applications including firefighting foam, stain and water-resistant clothing, cosmetics, and food packaging. Two PFAS compounds, perfluorooctanesulfonic acid (PFOS) and perfluorooctanoic acid (PFOA) have been the focus of increasing regulatory scrutiny in drinking water and may result in adverse health effects including developmental effects to fetuses during pregnancy, cancer, liver damage, immunosuppression, thyroid effects, and other effects. PERFLUOROOCTANOIC ACID (PFOA) – An ingredient for several industrial applications including carpeting, upholstery, apparel, floor wax, textiles, sealants, food packaging, and cookware (Teflon). PERFLUOROOCTANESULFONIC ACID (PFOS) – A key ingredient in Scotchgard, a fabric protector made by 3M, and used in numerous stain repellents. PLUME – A visible or measurable concentration of discharge from a stationary source or fixed facility. PUBLICLY OWNED TREATMENT WORKS (POTW) – A municipal wastewater treatment plant. SANTA ANA RIVER INTERCEPTOR (SARI) LINE – A regional brine line designed to convey 30 million gallons per day of non-reclaimable wastewater from the upper Santa Ana River basin to the ocean for disposal, after treatment. SANITARY SEWER – Separate sewer systems specifically for the carrying of domestic and industrial wastewater. SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT (SCAQMD) – Regional regulatory agency that develops plans and regulations designed to achieve public health standards by reducing emissions from business and industry. SECONDARY TREATMENT – Biological wastewater treatment, particularly the activated sludge process, where bacteria and other microorganisms consume dissolved nutrients in wastewater. SLUDGE – Untreated solid material created by the treatment of wastewater. TOTAL SUSPENDED SOLIDS (TSS) – The amount of solids floating and in suspension in wastewater. ORANGE COUNTY SANITATION DISTRICT GLOSSARY OF TERMS TRICKLING FILTER – A biological secondary treatment process in which bacteria and other microorganisms, growing as slime on the surface of rocks or plastic media, consume nutrients in wastewater as it trickles over them. URBAN RUNOFF – Water from city streets and domestic properties that carry pollutants into the storm drains, rivers, lakes, and oceans. WASTEWATER – Any water that enters the sanitary sewer. WATERSHED – A land area from which water drains to a particular water body. OCSD’s service area is in the Santa Ana River Watershed.