MINUTES OF MEFTING BOARD OF DIRECTORS, ORANGE COUNTY WATER DISTRICT

June l9, 2013, S:30 p.m.

President Dewane called to order the June 19, 201 J, meeting of the Orange County Water District Board of Directors at 5:30pm in the Boardroom at the District office. Following the Pledge of Allegiance to the Flag, the Assistant District Secretary called the roll and reported a quorum as follows.

Philip Anthony Kathryn Barr Denis Bilodeau Shawn Dewane Cathy Green Vincent Sarmiento

(not present)

(arrived 5:45p.m.)

Stephen Sheldon (arrived 6:30p.m.) Harry SiJhu Bruce Whitaker Roger Yoh (arrived 5:45p.m.)

Others in attendance:

Don Calkins -· City of Anaheim Jose Diaz- City of Orange

Michael R. Markus, General Manager Jeremy Jungreis, Acting General Counsel Judy-Rae Karlsen, Assistant District Secretary Paula Bouyounes, Bruce Dosier, Stephanie Dosier, Randy Fick, Roy Herndon, Bonnie Howard, Bill Hunt, Don Jackson, John Kennedy, Rae Krause, Gina Pineda, Sandy Scott-Roberts, Mike Welmer, Greg Woodside, Nira Yamachika, Dick Zembal

Keith Lyon- Municipal Water District of Orange County Merle Mosishri, Dave Hamilton-- R4RD Nabil Saba- City of Santa Ana Andre Jolmson- Brady Anthony Manzano - Yorba Linda Water District Robert Hanford- Golden State Water Company Brian Ragland - City of Huntington Beach Jim Atkinson-- Mesa Water District

VISITOR PARTICIPATION

Residents for Responsible Desalination President Merle Mosishri speaking on behalf of the Orange County Coastkeepers expressed opposition to the proposed desalination project with Poseidon Resources and recommended the District continue with the successful Groundwater Replenishment project.

1. Public Hearing to Consider FY2013-14 Coasta}_Pumping Transfer Program_

President Dewane opened the public hearing to consider the FY20 13-14 Coastal Pumping Transfer Program and the adjustment ofparticipating Producers Basin Equity Assessment (BEA) rates. Senior Engineer Sandy Scott-Roberts advised that the Coastal Pumping Transfer Program (CPTP) and is designed to reduce groundwater pumping along the coast and increase pumping by inland Producers. She reviewed the incentive-based strategy for modifying the BEA for participating

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Producers and reported that the Cities Buena Park and La Palma and Golden State Water Company would receive an incentive of $50/af for the burden of running production wells longer with additional operational costs, and the City of Anaheim would receive an incentive of $25/af for running production wells longer, and a reduced "Readiness to Serve" charge from the Municipal Water District of Orange County. She advised that the BEA adjustments would be as follows:

Buena Park from $614 to $564; Golden State Water Company from $622 to $572; La Palma from $594 to $544; Anaheim from $599 to $574

Ms. Scott-Roberts advised that staff will file a Notice of Exemption in order to meet the requirements of State Code No. 1573 ofthe California Environmental Quality Act, required when a public agency modifies Basin Equity Assessment rates. There being no other persons wishing to present testimony, President Dewane declared the hearing closed and the following actions were taken.

Upon motion by Director Green, duly seconded, the following resolution was unanimously adopted [6-0].

RESOLUTION 13-6-60 IMPLEMENTING COASTAL PUMPING TRANSFER PROGRAM

TO ENCOURAGE THE TRANSFER OF GROUNDWATER PRODUCTION INLAND AWAY FROM THE COAST AND MODIFYING BASIN EQUITY ASSESSMENTS FOR CITY OF BUENA PARK, GOLDEN STATE WATER COMPANY, CITY OF LA PALMA AND CITY OF ANAHEIM

WHEREAS, groundwater production along the coastal portion of the groundwater basin may create ongoing problems related to seawater intrusion, increased potential for colored water upwelling into the main production aquifer, and lower groundwater levels; and

WHEREAS, to encourage pumping inland from the coastal portion of the groundwater basin, the OCWD Board, pursuant to Resolution No. 2000-7-84 adopted July 5, 2000, and as extended by Resolution Nos. 01-4-71, 02-4-66, and 03-6-82 adopted April25, 2001, April23, 2002, and June 18, 2003 respectively, established a Coastal Pumping Transfer Program; and

WHEREAS, this Board has reviewed such Program and has presented and recommended implementation of a one-year Coastal Pumping Transfer Program (that may be extended for 3-5 years) and an annual assessment of the programs efficiency; and

WHEREAS, the City of Buena Park, Golden State Water Company and City of La Palma will receive an incentive of $50/af for the burden of running production wells longer with additional operational costs. The City of Anaheim will receive an incentive of $25/af for running production wells longer; however the City of Anaheim will receive a reduced "Readiness to Serve" charge from the Municipal Water District of Orange County. The incentive amount is deducted from the Producers Basin Equity Assessment (BEA) and the recommended BEA adjustments are presented as follows:

City of Buena Park from $614 to $564 Golden State Water Company from $622 to $572

City of La Palma from $594 to $544 City of Anaheim from $599 to $574

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WHERAS, the Board recommends filing a Statutory Exemption to meet the requirement of the California Environmental Quality Act under State Code No. 1573 which applies to rate adjustments by public agencies.

NOW, THEREFORE, the Board of Directors ofthe Orange County Water District does hereby authorize implementation of the herein-described Coastal Pumping Transfer Program for the 2013-2014 fiscal year, and approves modifying BEAs for participating Groundwater Producers for the over pumping and under pumping of approximately 5,000 to 10,000 af of water.

Directors Bilodeau and Yoh arrived at 5:45p.m. at this point in today's meeting.

CONSENT CALENDAR

The Consent Calendar was approved upon motion by Director Barr, seconded by Director Green and carried [8-0] as follows.

2. Approval of Cash Disbursements

MOTION NO. 13-81 APPROVING CASH DISBURSEMENTS

Payment of bills for the period May 30, 2013 through June 13, 2013 in the total amount of $7,173,232.19 is ratified and approved.

3. Approval of Minutes of Board of Directors Meetings

MOTION NO. 13-82 APPROVING MINUTES OF BOARD MEETING

The minutes of the Board of Directors meeting held May 1 0, 2013 are hereby approved as presented.

4. Resolution Commending U.S. Army Corps of Engineers Commander and District Engineer Colonel R. Mark Toy

RESOLUTION NO. 13-6-61 COMMENDING U.S. ARMY CORPS OF ENGINEERS COMMANDER AND DISTRICT ENGINEER COLONEL R. MARK TOY FOR HIS VALUABLE LEADERSHIP IN THE

LOS ANGELES DISTRICT

WHEREAS, since June 2010, Colonel R. Mark Toy has served as the 591h Commander and District Engineer in the Los Angeles District, U.S. Army Corps of Engineers. The Los Angeles District is one of four districts in the Corps' South Pacific Division and encompasses an area of 225,000 square miles in four states, including California, Arizona, Nevada and Utah.; and

WHEREAS, While serving as the Los Angeles District Commander, U.S. Army Corps of Engineers from June 2010 to July 2013, Colonel Toy inspired and led over 800 military and civilian professionals, serving throughout a 225,000 square mile area of California, Arizona, Nevada and Utah. His team executed a nearly billion dollar program each year; and

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WHEREAS, Colonel Toy's leadership ~.;ignificantly contributed to the progress of the Santa Ana River Mainstem Project, one of the largest public works projects in the history of Orange County; and

WHEREAS, the Santa Ana River Mainstem Project allows tor the establishment of an enhanced water conservation program at Prado Dam as the increased flood control capacity permits use of the dam for increased conservation, which 1s an enormous boon to the Orange County Water District and its ratepayers; and

WHEREAS, The Prado Basin Feasibility Study was initiated under Colonel Toy's leadership; the Feasibility Cost Share Agreement was executed and the first milestone under the new Smart Planning system was achieved; and

WHEREAS, The Prado Basin Feasibility Study will provide valuable improvements to regionally significant aquatic and riparian habitat and will improve the water conservation capability to contribute to the solution of Southern California's water issues; and

WHEREAS, Colonel Toy's efforts on the Prado Basin Sediment Management Demonstration Project have contributed greatly to the project's support and advancement; and

WHEREAS, Colonel Toy's outreach to the public, local government leaders, small businesses, universities, service academies and high schools was instrumental to the success ofhis district and will strengthen U.S. Army Corps of Engineers and the engineering profession well into the future; and

WHEREAS, Colonel Toy's leadership, vision, positive attitude, and dedication to fairness and collaboration, has greatly served our region;

NOW, THEREFORE, the Board of Directors of the Orange County Water District does hereby officially commend and congratulate Colonel R. Mark Toy on his leadership as the 591h Commander and District Engineer at the U.S. Army Corps of Engineers Los Angeles District, and wish him continued success in his future endeavors.

5. Ratification ofMOU with Orange County Water District Employee Association

RESOLUTION NO. 13-6-62 RATIFYING MEMORANDUM OF UNDERSTANDING BETWEEN THE ORANGE COUNTY WATER DISTRICT AND THE ORANGE COUNTY

WATER DISTRlCT EMPLOYEE ASSOCIATION

RESOLVED, that the Memorandum ofUnderstanding between the Orange County Water District and the Orange County Water District Employee Association for the contract period of July 1, 2013 through June 30, 2015 is hereby ratified as presented.

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6. Cost-of-Living & Medical Insurance Premium Cap Increase (Non-Represented Employees)

MOTION NO. 13-83 APPROVING COST OF LIVING AND MEDICAL INSURANCE PREMIUM CAP INCREASE

FOR NON-REPRESENTED EMPLOYEES

The following cost ofliving salary increases are hereby approved for OCWD non-represented employees: 2.0% effective July 1, 2013; and 2.0% effective July 1, 2014; and the following medical insurance premium cap increases are hereby approved for non-represented employees:

a) Effective January 1, 2014, increase the District's contributions by up to $120 per month per benefit level or 100% of the premium rate increase, whichever is less.

b) Effective January 1, 2015, increase the District's contributions by up to $140 per month per benefit level or 1 00% of the premium rate increase, whichever is less.

7. Proposed Amendments to Independent Special Districts of Orange County Bylaws

MOTION NO. 13-84 APPROVING PROPOSED AMENDMENT TO INDEPENDENT SPECIAL DISTRICTS

OF ORANGE (ISDOC) BYLAWS

The proposed amendments to the Independent Special Districts of Orange (IS DOC) Bylaws are hereby approved authorizing participation by OCWD Directors and employees in ISDOC sanctioned meetings and activities.

8. License Agreement to Southern California Gas Company for Gas Pipeline at Lincoln A venue and Santa Ana River

RESOLUTION NO. 13-6-63 AUTHORIZING LICENSE AGREEMENT TO SOUTHERN CALIFORNIA GAS COMPANY FOR GAS PIPELINE ACROSS DISTRICT PROPERTY

AT LINCOLN A VENUE BRIDGE

RESOLVED, that the General Manager is hereby authorized to negotiate and execute a License Agreement with Southern California Gas Company for the installation of a 24" Gas Pipeline across District property at the Lincoln Ave. Bridge and Santa Ana River, a Temporary Construction Area, a Lay-Down area and an area for parking vehicles and equipment; and, upon approval as to form by District General Counsel, execution of such License Agreement by the District's officers is authorized.

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CONSENT CALENDAR ITEM RECOM.lv1ENDED FOR APPROVAL AT COMMUNICATIONS/ LEGISLATIVE LIAISON COMMITTEE MEETING HELD JUNE 6, 2013

9. Federal Legislative Update

MOTION NO. 13-85 DIRECTING STAFF TO TRANSMIT LETTER OPPOSING PROPOSED

CAP ON THE TAX EXEMPT STATUS OF MUNICIPAL BONDS AND THE PROHIBITION ON USING TAX EXEMPT BONDS TO FINANCE WIFIA PROJECTS

Staff is directed to transmit a letter opposing the proposed cap on the Tax-Exempt Status of Municipal Bonds; and opposing the prohibition on the use of tax-exempt bonds to finance Water Infrastructure Finance and Innovation Authority (WIFlA) projects.

10. State Legislative Update

MOTION NO. 13-86 ADOPTING POSITION OF SUPPORT FOR BILL AB 792

A position of support is hereby adopted on AB 792 Local Government Open Meetings (Mullin).

CONSENT CALENDAR ITEMS RECOMMENDED FOR APPROVAL AT WATER ISSUES COMMITTEE MEETING HELD JUNE 12,2013

11. Contract No. SAR-2013-2: Upper and Lower Five Coves Rehabilitation Project

RESOLUTION NO. 13-6-64 REJECTING ALL BIDS FOR CONTRACT NO. SAR-2013-2, UPPER AND LOWER FIVE

COVES REHABILITATION PROJECT AND RE-AUTHORIZING PUBLICATION FOR NOTICE INVITING BIDS

WHEREAS, a Notice Inviting Bids for Contract No. SAR-2013-2, Upper and Lower Five Coves Rehabilitation Project, was published in The Orange County Register on May 17, 2013; and

WHEREAS, staffhas advised that the following bids were received on June 4, 2013;

SCW Contracting Corporation Pacific Hydrotech Corporation Mike Bubalo Construction Co., Inc.

Request to withdraw $1,884,300 $2,279,200

WHEREAS, staff has advised that the apparent low bidder, SCW Contracting Corporation, requested withdrawal of its bid proposal due to a clerical error; and

WHEREAS, the District staff has recommended rejection of all bids and re-publication of a Notice Inviting Bids for this contract in January 2014 when weather conditions for construction are favorable for this project;

NOW, THEREFORE, the Board of Directors of the Orange County Water District does hereby resolve as follows:

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Section 1: All bids submitted for Contract No. SAR-2013-2, Upper and Lower Five Coves Rehabilitation Project are hereby rejected and the District staff is instructed to return the Bid Bonds to the bidders.

Section 2: Re-publication of a Notice Inviting bids in January 2014 for such contract is authorized.

12. Agreement to Beavens Systems for On-Call Supervisory Control & Data Acquisition Design and Integration Services

RESOLUTION NO. 13-6-65 AUTHORIZING AGREEMENT TO BEA YENS SYSEMS FOR ON CALL

SUPERVISORY CONTROL AND DATA ACQUSITION DESIGN AND INTEGRATION SERVICES

RESOLVED, that an Agreement to Beavens Systems, Inc. is authorized for an amount not to exceed $90,000 for on-call Supervisory Control and Data Acquisition design and integration services; and, upon approval as to form by District General Counsel, execution of such agreement by the District's officers is authorized.

13. Amendment to Agreement with Butier Construction Management Services

RESOLUTION NO. 13-6-66 AUTHORIZING AMENDMENT TO AGREEMENT WITH BUTlER

CONSTRUCTION MANAGERS, CONSULTING ENGINEERS

WHEREAS, pursuant to Resolution No. 11-12-175 adopted December 21,2011, 9CWD issued Agreement No. 0370 to Butier Construction Managers, Consulting Engineers for construction management services for a three year period; and

WHEREAS, the Water Issues Committee of this Board has recommended issuance of a no cost Amendment No.2 to such Agreement, to extend the contract expiration date to December 31, 2014 for additional construction management services required on Mid Basin Injection Well Equipping, Fletcher Basin, and Upper and Lower Five Coves Rehabilitation Project;

NOW, THEREFORE, the Board ofDirectors of the Orange County Water District does hereby approve Amendment No.2 to such Agreement as outlined herein; and, upon approval as to form by District General Counsel, execution of such Agreement by the District's officers is authorized.

14. Amendment to Agreement No. 0867 to Carollo Engineers, Inc. for Design oflmperial Headgates Rehabilitation Project

RESOLUTION NO. 13-6-67 AUTHORIZING AMENDMENT TO AGREEMENT WITH CAROLLO ENGINEERS FOR

DESIGN OF IMPERIAL HEADGA TES REHABILITATION PROJECT

WHEREAS, pursuant to Resolution No. 12-9-110 adopted September 19,2012, OCWD issued Agreement No. 0867 to Carollo Engineers, Inc. for the design, bid and construction phase services of Imperial Headgates Rehabilitation Project; and

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WHEREAS, the Water Issues Committee of this Board has recommended issuance of Amendment No. 1 to such Agreement for an amount not to exceed $64,062 for additional design work;

NOW, THEREFORE, the Board of Directors ofthe Orange County Water District does hereby approve Amendment No. 1 to such Agreement as outlined herein; and, upon approval as to form by District General Counsel, execution of such License Agreement by the District's officers is authorized.

15. Reject All Bids for Contract No. FV-2013-1 and Authorize Notice Inviting Bids for Contract No. FV-2013-2: Replacement of Administration Building Windows Project

RESOLUTION NO. 13-6-68 REJECTING BIDS FOR CONTRACT NO. FV-2013-1: REPLACEMENT OF

ADMINISTRATION BUILDING WINDOWS PROJECT AND AUTHORIZING RE-PUBLICATION OF NOTICE INVITING BIDS

WHEREAS, a Notice Inviting Bids for Contract No. FV-2013-1, Replacement of Administration Building Windows Project was published in The Orange County Register on May 2, 2013; and

WHEREAS, staff has advised that the following bids were received on May 23, 2013;

IBN Construction, Inc. Norse Corporation Newman Midland Corporation

Request to withdraw $120,477 $155,000

WHEREAS, District staff has advised that the apparent low bidder, IBN Construction, Incorporated requested withdrawal of its bid proposal due to a clerical error.

WHEREAS, District staff was advised the project required a Class C Contractor's License and this information was missing from the original bid proposal and contract documents. Therefore staff recommends rejection of all bids.

WHEREAS, the District staff recommends publishing the Notice Inviting Bids for Contract No. FV-2013-2: Replacement of Adminsitration Building Windows Project.

NOW, THEREFORE, the Board of Directors of the Orange County Water District does hereby resolve as follows:

Section 1: All bids submitted for Contract No. FV -2013-1, Replacement of Administration Building Windows Project, are hereby rejected and the District staff is instructed to return the Bid Bonds to the bidders.

Section 2: Publication of a Notice Inviting bids for Contract FV-2013-2, Replacement of Administration Building Windows Project is authorized.

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16. Agreement with Santa Ana Watershed Association

RESOLUTION NO. 13-6-69 APPROVING AND AUTHORIZING EXECUTION OF SANTA ANA

WATERSHED PROGRAM AGREEMENT

WHEREAS, the Water Issues Committee has presented and recommended approval of the Santa Ana Watershed Program Agreement to set forth the terms and conditions guiding the expenditure of, and accounting for OCWD' s past and future contributions to the Santa Ana Watershed Associations Trust Fund, as well as related issues addressed in the agreement;

NOW, THEREFORE, the Board of Directors of the Orange County Water District does hereby approve the aforementioned Agreement with the Santa Ana Watershed Association as described herein; and, upon approval as to form by District General Counsel, execution of such Agreement by the District's officers is authorized.

17. Contract No. B-2013-1: Burris Pump Station Replacement Project- Phase One Design and Final Initial Study/Mitigated Negative Declaration

RESOLUTION NO. 13-6-70 APPROVING FINAL DESIGN OF BURRIS PUMP STATION PHASE 1 DESIGN

AND ADOPTING FINAL INITIAL STUDY/MITIGATED NEGATIVE DECLARATION

WHEREAS, staff has completed the Phase One Design for the Burris Basin Pump Station Replacement Project; and

WHEREAS, the Burris Basin Pump Station Replacement Project would involve the construction of a new pump station at Burris Basin and the demolishing of the existing pump station, and

WHEREAS, the staff of the District has undertaken preparation of an Initial Study/Mitigated Negative Declaration in accordance with Guidelines established under Article VI of the California Environmental Quality Act (CEQA) California Administrative Code Section 15000, et. seq., on the potential environmental impacts associated with the construction and operation of such project; and

WHEREAS, such Initial Study/Mitigated Negative Declaration has determined that with the incorporation of mitigation measures, potentially significant impacts to the environment would be reduced to a level that would be less than significant;

NOW, THEREFORE, the Board of Directors of the Orange County Water District does hereby resolve as follows:

Section 1: The Board of Directors does hereby find that:

i) The Initial Study identifies potentially significant effects to the environment, but A) Revisions to the project plans made by the District have been incorporated into the

project before the proposed negative declaration and initial study are released for public review, which would avoid the effect or mitigate the effects to a point where clearly no significant effect on the environment would occur, and

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B) There is no substantial evidence, in light of the whole record before the lead agency, that the project, as revised, may have a significant effect on the environment;

ii) The Initial Study/Mitigated Ncg~rtive Declaration ref1ects the independent judgment and analysis ofthe Board of Directors of the District, as the lead agency for the project; and

iii) Prior to approving the Phase One Design for the Burris Basin Pump Station Replacement Project, the Board of Directors of the District has considered the Initial Study/Mitigated Negative Declaration together with any comments received during the public review process, and any responses to such comments;

Section 2: The Final Initial Study/Mitigated Negative Declaration and associated Mitigated Monitoring and Reporting Program for the BuiTis Basin Pump Station Replacement Project are hereby adopted.

Section 3: The Phase One Design for the Burris Basin Pump Station Replacement Project is hereby approved.

Section 4: Staff is authorized and directed to file a l\iotice of Determination for Burris Basin Pump Station Replacement Project Final Initial Study/Mitigated Negative Declaration.

Section 5: Staff is authorized to complete the regulatory permitting process for the Burris Pump Station Replacement Project.

CONSENT CALENDAR ITEMS RECOMMENDED FOR APPROVAL AT ADMINISTRATION/ FINANCE ISSUES COMMITTEE MEETING HELD JUNE 13, 2013

18. Monthly Cash Control Report

MOTION NO. 13-87 RECEIVING AND FILING SUMMARY CASH AND CASH EQUIVALENTS

CONTROL REPORT DATED MAY 31,2013

The Summary Cash and Cash Equivalents Control Report dated May 31, 2013 is hereby received and filed.

19. Monthly Cash Disbursements Detail Report

MOTION NO. 13-88 RECEIVING AND FILING CASH DISPURSEMENNTS DETAIL REPORT

FOR PERIOD OF APRIL 25 THROUGH MAY 29, 2013

The Cash Disbursements Detail Report for the period of April25 through May 29, 2013 is hereby received and filed.

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20. Agreement with Jabez Building Services for Janitorial Services

RESOLUTION NO. 13-6-71 AUTHORIZING ISSUANCE OF AGREEMENT TO JABEZ BUILDING

SERVICES FOR JANITORIAL SERVICES

WHEREAS, the Administration and Finance Issues Committee has presented and recommended approval of the Agreement to Jabez Building Services for continued janitorial services for the Fountain Valley, Anaheim and Prado facility sites for a period of one year in an amount not to exceed $96,000 with an option to renew for one additional year;

NOW, THEREFORE, the Board of Directors of the Orange County Water District does hereby approve the aforementioned Agreement with Jabez Building Services as described herein; and, upon approval as to form by District General Counsel, execution of such Agreement by the District's officers is authorized.

21. Nomination of Cathy Green to ACWA Region 10 Board

RESOLUTION NO. 13-6-72 NOMINATING DIRECTOR CATHY GREEN FOR ACW A REGION 10 BOARD

RESOLVED, that Director Cathy Green is hereby nominated for a position on the Association of California Water Agencies Region 1 0 Board of Directors.

22. State Revolving Fund Loan - Reimbursement Resolution for Fletcher Basin Improvement Pro·ect

RESOLUTION NO. 13-6-73 STATING OCWD INTENTION TO REIMBURSE ITSELF FOR EXPENDITURES PAID

PRIOR TO ISSUANCE OF OBLIGATIONS OR APPROVAL BY STATE WATER BOARD OF THE PROJECT FUNDS

FOR THE FLETCHER BASIN IMPROVEMENT PROJECT

WHEREAS, the Orange County Water District (the "Agency") desires to finance the costs of constructing and/or reconstructing certain public facilities and improvements relating to its water and wastewater system, including certain treatment facilities, pipelines and other infrastructure (the "Project"); and

WHEREAS, the Agency intends to finance the construction and/or reconstruction of the Project or portions of the Project with moneys ("Project Funds") provided by the State of California, acting by and through the State Water Resources Control Board (State Water Board); and

WHEREAS, the State Water Board may fund the Project Funds with proceeds from the sale of obligations the interest upon which is excluded from gross income for federal income tax purposes (the "Obligations"), and

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WHEREAS, prior to either the issuanct' 0fthe Obligations or the approval by the State Water Board of the Project Funds the Agency desires to incur certain capital expenditures (the "Expenditures") with respect to the Project fi-om availahle moneys of the Agency; and

WHEREAS, the Agency has determined that those moneys to be advanced on and after the date hereof to pay the Expenditures are available only for a temporary period and it is necessary to reimburse the Agency for the Expenditures from the proceeds of the Obligations.

NOW, THEREFORE, THF AGENCY DOES HEREBY RESOLVE, ORDER AND DETERMINE AS FOLLOWS:

Section 1: The Agency hereby states its intention and reasonably expects to reimburse Expenditures paid prior to the issuance of the Obligations or the approval by the State Water Board of the Project Funds.

Section 2: The reasonably expected maximum principal amount of the Project Funds is $3,633,400.

Section 3: This resolution is being adopted no later than 60 days after the date on which the Agency will expend moneys for the portion of the Project costs to be reimbursed with Project Funds.

Section 4: Each Agency expenditure will be of a type properly chargeable to a capital account under general federal income tax principles.

Section 5: To the best of our knowledge, this Agency is not aware of the previous adoption of official intents by the Agency that have been made as a matter of course for the purpose of reimbursing expenditures and for which tax-exempt obligations have not been issued.

Section 6: This resolution is adopted as official intent of the Agency in order to comply with Treasury Regulation §1.150-2 and any other regulations of the Internal Revenue Service relating to the qualification for reimbursement of Project costs.

Section 7: All the recitals in this Resolution are true and correct and this Agency so finds, determines and represents.

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23. Renewal of Federal Legislative Advocacy Contracts

RESOLUTION NO. 13-6-74 AUTHORIZING RENEWAL OF FEDERAL LEGISLATIVE ADVOCACY AGREEMENT

WITH ENS RESOURCES (ERIC SAPERSTEIN)

WHEREAS, the Administration and Finance Issues Committee has recommended renewal of the existing Agreement with ENS Resources for federal legislative advocacy services for an amount not to exceed $53,760 plus reasonable travel and business expenses for a one-year period commencing July 1, 2013;

NOW, THEREFORE, the Board ofDirectors of the Orange County Water District does hereby authorize renewal of the aforementioned Agreement with ENS Resources as outlined herein; and, upon approval as to form by District General Counsel, execution of such Agreement by the District's officers is authorized.

RESOLUTION NO. 13-6-75 AUTHORIZING RENEWAL OF FEDERAL LEGISLATIVE ADVOCACY AGREEMENT

WITH JAMES MCCONNELL

WHEREAS, the Administration and Finance Issues Committee has recommended renewal of the existing Agreement with James McConnell for federal legislative advocacy services for an amount not to exceed $60,000 plus reasonable travel and business expenses for a one-year period commencing July 1, 2013;

NOW, THEREFORE, the Board of Directors of the Orange County Water District does hereby authorize renewal of the aforementioned Agreement with James McConnell as outlined herein; and, upon approval as to form by District General Counsel, execution of such Agreement by the District's officers is authorized.

24. Renewal of State Legislative Advocacy Contract with Townsend Public Affairs

RESOLUTION NO. 13-6-76 AUTHORIZING RENEWAL OF STATE LEGISLATIVE ADVOCACY AGREEMENT

WITH TOWNSEND PUBLIC AFFAIRS

WHEREAS, the Administration and Finance Issues Committee has recommended renewal of the existing Agreement with Townsend Public Affairs for state legislative advocacy services for an amount not to exceed $120,000 for a one-year period commencing July 1, 2013;

NOW, THEREFORE, the Board of Directors ofthe Orange County Water District does hereby authorize renewal of the aforementioned Agreement with Townsend Public Affairs as outlined herein; and, upon approval as to form by District General Counsel, execution of such Agreement by the District's officers is authorized.

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25. Replacement of Fencing at West Side ofWar_r_1_t;~r Basin

RESOLUTION NO. 13-6-77 AUTHORIZINCJ PURCHASE ORDER TO QUALITY FENCE FOR

REPLACEMENT FENCING IN WARNER BASIN

RESOLVED, that issuance of a Purchase Order is authonzed to Quality Fence in the amount of $53,888 for the replacement of the west Warner fence.

26. Investment PortfoliQ]{ol9.i!.!g§_Report

MOTION NO. 13-89 RECEIVING AND FILING INVESTMENT PORTFOLIO HOLDINGS REPORT

DATED MAY 31,2013

The Investment Portfolio Holdings Report dated May 31, 2013 is hereby received and filed.

27. State Revolving Fund Loan Applications- Resolutions for Future Capital Improvement Projects

RESOLUTION NO. 13-6-78 ESTABLISHING A DESIGNEE TO AUTHORIZE EXECUTION OF FINANCING

AGREEMENTS WITH STATE WATER RESOURCES CONTROL BOARD

RESOLVED, that the General Manager is hereby authorized and directed to sign and file for and on behalf of the Orange County Water District, a Financial Assistance Application for the financing agreement from the State Water Resources Control Board for the planning, design, and construction of capital improvement projects listed in the fiscal year 2013-14 Capital Improvement Program adopted by the District April 17, 2013.

RESOLVED FURTHER, that the Orange County Water District hereby agrees and further does authorize the aforementioned representative of his/her designee, to provide the assurances, certifications and commitments required for any such financial assistance agreements from the State Water Resources Control Board and any amendments or changes thereto.

RESOLVED FURTHER, that the General Manager, or his/her designee, is designated to represent the Orange County Water District in carrying out the Orange County Water District's responsibilities under the financing agreement, including certifying disbursement requests on behalf of the Orange County Water District and compliance with applicable state and federal laws.

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RESOLUTION NO. 13-6-79 ESTABLISHING DEDICATED SOURCE OF REVENUE FOR REPAYMENT OF STATE

REVOLVING FUND FINANCING FOR THE FISCAL YEAR 2013-14 CAPITAL IMPROVEMENT PROGRAM

WHEREAS, the Orange County Water District (the "District") plans to enter into one or more financing agreements with the State Water Resources Control Board pursuant to the Clean Water State Revolving Fund (CWSRF), Seawater Intrusion Control Loan Program (SWIC), and or Water Recycling Funding Program (WRFP) programs for the projects listed in the three year Capital Improvement Program Summary located in Section 8 ofthe approved fiscal year 2013-14 budget (the "Project/s"), as approved by the District on April 17, 2013.

WHEREAS, the District plans to dedicate Net Revenues (as such terms are defined in the Installment Purchase Agreement, dated as ofJuly 1, 2009, by and between the District and the OCWD Public Facilities Corporation) to the repayment of any and all CWSRF, SWIC, and WRFP financing for the Projectls on a parity with the District's obligation to make payments under all Bonds and Contracts (as such terms are defined in the Installment Purchase Agreement, dated July 1, 2009, by and between the District and the OCWD Public Facilities Corporation);

NOW THEREFORE, the Board ofDirectors of the Orange County Water District does hereby resolve as follows:

The District hereby dedicates and pledges Net Revenues to payment of any and all Clean Water State Revolving Fund, Seawater Intrusion Control Loan Program, and/or Water Recycling Funding program financing for the "Project/s" listed in the fiscal year 2013-14 Capital Improvement Program adopted by the District on April17, 2013. So long as the financing agreement(s) is/are outstanding, the District's pledge hereunder shall constitute a lien in favor of the State Water Resources Control Board on the Net Revenues without any further action necessary. The District commits to collecting such Net Revenues throughout the terms of such financing and until the District has satisfied its repayment obligation thereunder unless a modification or change is approved in writing by the State Water Resources Control Board. So long as the financing agreement(s) is/are outstanding, the District commits to maintaining New Revenues all levels sufficient to meet its obligations under the financing agreement(s).

28. Renewal of2013-14 Tax and Revenue Anticipation Note

RESOLUTION NO. 13-6-80 AUTHORIZING EXECUTION AND DELIVERY OF AT AX AND REVENUE ANTICIPATION

NOTE IN THE AMOUNT OF $45 MILLION TO SUPPORT THE EXISTING OCWD COMMERCIAL PAPER PROGRAM

WHEREAS, the Board of Directors of the Orange County Water District (the "District"), a political subdivision duly organized and existing under and pursuant to the Constitution and laws of the State of California (the "State"), has entered into a commercial paper program through the OCWD Public Facilities Corporation (the "Corporation"); and

WHEREAS, to implement the commercial paper program, the Board of Directors of the Corporation has adopted a resolution (the "Corporation Resolution") providing for the execution and delivery of Orange County Water District Commercial Paper Notes (the "Commercial Paper Notes"); and

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WHEREAS, in order to secure the Commercial Paper Notes, the District has issued a tax and revenue anticipation note in the aggregate principal amount of $45,000,000 (the "Prior Note"), pursuant to Article 7.6 (commencing with Section 53850) of Chapter 4, Part 1, Division 2, Title 5 of the California Government Code for the fiscal year ending June 30, 2013; and

WHEREAS, in order to continue the commercial paper program relating to the fiscal year ending June 30, 2014, it is desirable to issue a tax and revenue anticipation note to replace the Prior Note.

NOW, THEREFORE, the Board of Directors of the Orange County Water District does hereby resolve as follows:

Section 1. Definitions. Unless the context otherwise requires, the terms defined in this Section shall have the meanings herein specified.

"Authorizing Law" means Article 7 .6, Chapter 4, Part 1, Division 2, Title 5 of the California Government Code.

"Code" means the Internal Revenue Code of 1986, as amended, and the Regulations promulgated thereunder.

"Commercial Paper Notes" means Certificates issued pursuant to Resolution No. C-94-4-12 ofthe Corporation, adopted on April20, 1994.

"Corporation" means the OCWD Public Facilities Corporation.

"District" means the Orange County Water District.

"Installment Purchase Agreement" means the Installment Purchase Agreement, dated as of July 1, 2009 by and between the Corporation and the District as amended and supplemented from time to time.

"Net Revenues" means Net Revenues as defined in the Installment Purchase Agreement.

"Note" means the Tax and Revenue Anticipation Notes to be issued hereunder.

"Parity Obligations" means Bonds and Contracts, as defined in the Installment Purchase Agreement.

"Regulations" means the income tax regulations promulgated or proposed by the Department of the Treasury pursuant to the Code from time to time, including temporary regulations, to the extent applicable.

"Trustee" means U.S. Bank National Association and any successor thereto.

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Section 2. Issuance ofthe Notes; Amount: Terms: Interest Rate: Place ofPayment.

Pursuant to the Authorizing Law, the Note shall be issued in an aggregate principal amount which, when added to the interest payable thereon, will not exceed 85 percent of the estimated amount of the then uncollected taxes, income, revenue, cash receipts, and other moneys of the District which will be available for the payment of the Commercial Paper Notes and the interest thereon. A certificate of the Chief Financial Officer certifying to such effect, in the form on file at the District office and described as "Exhibit B", shall be completed by the Chief Financial Officer on or prior and as a condition to, the delivery of the Note. The Note shall be designated "Orange County Water District 2013-14 Tax and Revenue Anticipation Note" and shall be dated the date of issuance thereof. The Note shall be payable at the office of the District at such times and in such amounts as set forth in the Note. The Note shall mature and be payable no later than 15 months after its date of issuance. The Note shall bear a rate of interest which shall be determined on a daily basis and shall be a rate which when multiplied by the principal amount of such Note outstanding on such day will be equal to interest accruing with respect to the Commercial Paper Note outstanding on such day and shall be payable in accordance with the form of the Note.

The Note shall be prepayable in whole or in part on any day on which the Corporation notifies the District that principal with respect to the Note is due and payable and that the District declines to cause additional Notes to be sold to repay such maturing Note.

Section 3. Execution of the Notes. The President, First Vice President or Second Vice President is hereby authorized and directed to sign the Note, by such officer's manual, printed, lithographed or facsimile signatures.

Section 4. Form of the Notes. The Note shall be issued in substantially the form set forth in "Exhibit A," attached hereto and incorporated herein and may be issued in typewritten form.

Section 5. Note Non-Callable. The Note is not subject to call and redemption prior to the maturity date thereof, except as set forth in Section 2 hereof.

Section 6. Security for the Note; Pledge of Net Revenues. As security for the payment of the principal of and interest on the Note, the District hereby pledges the Net Revenues of the District on a parity with payment of Parity Obligations of the District. The District hereby acknowledges that the Note shall constitute a "Bond" for purposes of the Installment Purchase Agreement.

Section 7. Certified Copies. The District Secretary shall provide a certified copy of this document to the Chief Financial Officer who shall take such action as shall be necessary to assure compliance by the District with the terms and conditions hereof. The District Secretary shall further provide a certified copy of this document to the Trustee.

Section 8. Cancellation of Prior Note. The Note shall be executed and delivered simultaneously with the cancellation of the existing Prior Note.

Section 9. Effective Date. This resolution shall take effect immediately.

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29. Audits for OCWQ Money_E:yrchase Ret!r_emem_Plan and 457B Retirement Plan

MOTION NO. 13-90 RECEIVING AND FILING AUDIT REPORTS PREPARED BY

LANCE, SOl,L & LUNGHARD CPA's, LLP FOR OCWD MONEY PURCHASE RETIREMENT PLAN AND 457B RETIREMENT PLAN

The Audit Repm1 for the Money Purchase Retirement Plan and the Audit Report for Section 457(b) Retirement Plan prepared by Lance, So 11 & Lunghard CPA's, LLP, for the period ending December 31, 2012, are hereby received and filed.

30. Informational Items

There was no discussion of the lnfom1ation Items on tonight's Agenda.

~ Reports on Conferences/Meetings Attended at District Expense (at which a quorum of the Board was present)

The Board reported on attendance at the following Committee meetings and noted the Minutes/Action Agendas were included in tonight's Board packet.

June 06 Communications and Legislative Liaison Committee June 12 Water Issues Committee June 13 Administration/Finance Issues Committee

31. VERBAL REPORTS

There were no verbal reports.

32. ADJOURNMENT TO CLOSED SESSION

The Board adjourned to Closed Session at 6:25 p.m. as follows:

CONFERENCE WITH LEGAL COUNSEL- EXISTING LITlGA TlON [Paragraph (1) of subdivision (d) of Section 54956.9]: Three (3) Cases 1) OCWD v. Northrop Corporation, et al (VOC Litigation) Superior Court

Case No. 04CC00715 2) OCWD v. Sabic Innovative Plastics, LLC et al (South Basin Litigation) Superior Court

Case No. 03CC 00078246 3) OCWD v. Unocal Corporation, et al (MTBE Litigation) Superior Court Case

No. 03CC00176

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RECONVENE IN OPEN SESSION

The Board reconvened in Open Session at 7:40p.m. whereupon Acting General Counsel Jeremy Jungreis announced that the Board took the following actions in Closed Session with regard to Section 54957.183 regarding OCWD v. Sabic Innovative Plastics, LLC eta! (South Basin Litigation).

RESOLUTION NO. CS-13-6-2 AUTHORIZING EXECUTION OF FINAL SETTLEMENT AGREEMENT RE SOUTH BASIN

LITIGATION WITHCOLONIAL ENGINEERING FOR $80,000

RESOLUTION NO. CS-13-6-3 AUTHORIZING EXECUTION OF FINAL SETTLEMENT RE SOUTH BASIN LITIGATION

AGREEMENT WITH BURNS INTERNATIONAL FOR A WAIVER OF COSTS

ADJOURNMENT

There being no further business to come before the Board, the meeting was adjourned at 7:42p.m.

Judy-Rae Karls n, Assistant District Secretary

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