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1 Notice and Agenda REGULAR MEETING BOARD OF DIRECTORS COUNTY SANITATION DISTRICT NO. 2 To be held at the OFFICE OF THE DISTRICT 1955 Workman Mill Road, Whittier, California WEDNESDAY June 13, 2018 At 1:30 P.M. Governing Body Director Alternate ALHAMBRA MALONEY AYALA ARTESIA FLOWERS LIMA BELL GALLARDO SALEH BELL GARDENS MARIA PULIDO ACEITUNO BELLFLOWER DUNTON SANTA INES CERRITOS MARK PULIDO HU COMMERCE REBOLLO ALTAMIRANO COMPTON BROWN ZURITA DOWNEY ASHTON R. RODRIGUEZ LONG BEACH GARCIA ANDREWS LOS ANGELES CITY WESSON BUSCAINO MONTEBELLO DELGADO HADJINIAN MONTEREY PARK LAM CHAN NORWALK PEREZ VERNOLA PARAMOUNT MARTINEZ HOFMEYER PICO RIVERA CAMACHO ARMENTA (Chairperson) SAN GABRIEL HARRINGTON COSTANZO SOUTH GATE BERNAL DAVILA VERNON WOODRUFF-PEREZ YBARRA WHITTIER VINATIERI WARNER LOS ANGELES COUNTY KUEHL BARGER 1. Receive and Order Filed as Follows: C O N S E N T A G E N D A (a) Certificate of Mr. Jeffrey Maloney, Presiding Officer of the City of Alhambra (b) Action Appointing Mr. Luis Ayala as Alternate Director of the City of Alhambra (c) Action Appointing Ms. Grace Hu as Temporary Alternate Director of the City of Cerritos (d) Action Appointing Mr. Daryl Hofmeyer as Alternate Director of the City of Paramount (e) Certificate of Mr. John Harrington, Presiding Officer of the City of San Gabriel (f) Action Appointing Ms. Juli Costanzo as Alternate Director of the City of San Gabriel (g) Certificate of Ms. Yvette Woodruff-Perez, Presiding Officer of the City of Vernon (h) Action Appointing Ms. Melissa Ybarra as Alternate Director of the City of Vernon 2. Approve Minutes of Regular Meeting Held May 23, Authorize Payment to Lewis, Brisbois, Bisgaard & Smith LLP in Amount of $140, for Legal Services Rendered and Reimbursement of Expenses Advanced in Various Districts Matters for Month of April Approve March 2018 Expenses in Amount of $19,273, Summary: Local District expenses represent costs incurred for operations, maintenance, and capital projects that are the sole responsibility of the individual District. The District s share of allocated expenses represent their proportionate share of expenses made by District No. 2, the administrative District, on behalf of the individual districts that participate in either the Joint Administration Agreement or the Joint Outfall Agreement. These Agreements provide for the management of the operations, maintenance, and capital costs associated with all of the shared facilities along with the methodology for determining the proportionate costs for each participating district. District No. 2 also acts as the administrative District for the Solid Waste System expenses which are managed pursuant to the Solid Waste Management System Agreement, the Los Angeles County Refuse Disposal Trust Fund Agreement, and a series of Joint Powers Agreements. This is consistent with the Districts Guiding Principle of fiscal responsibility and prudent financial stewardship. DIST JUNE 13, 2018 DOCUMENT NUMBER

2 REGULAR MEETING COUNTY SANITATION DISTRICT NO. 2 OF LOS ANGELES COUNTY Local District Expenses: Operations & Maintenance (O & M) $ 108, Capital 530, District No. 2 s Share of Allocated Wastewater Expenses for O & M and Capital: Joint Administration 352, Technical Support 512, Joint Outfall 1,640, Solid Waste System Expenses: Operations & Maintenance (O&M) 10,973, Allocated Expenses 794, Capital 4,353, Stormwater Expenses: Operations & Maintenance (O & M) 7, Total Expenses $19,273, Authorize Advertising and Receipt of Bids for Pavement Repairs and Improvements at Joint Water Pollution Control Plant (JWPCP) Summary: The existing asphalt concrete (AC) pavement in selected areas of the JWPCP has deteriorated. Proposed repairs include removing and replacing 33,000 square feet of AC pavement, grinding and applying a two-inch asphalt overlay to 29,000 square feet of pavement, and seal-coating 62,000 square feet of pavement. This item is consistent with the Districts Guiding Principle of protecting facility assets through prudent maintenance practices. 6. Accept Contract No and Order Final Payment to Houalla Enterprises Ltd. dba Metro Builders & Engineers Group, Ltd. for Construction of Indiana Street Pumping Plant Generator Installation Resulting in Total Contract Amount of $1,798, Summary: The project involved installation of a standby generator to provide full operational capability of the pumping plant during utility power outages. The project also involved construction of a masonry building to house the generator and associated site improvements. There were eight change orders totaling $122, approved on this project. The project was located within the City of Los Angeles. This item is consistent with the Districts Guiding Principle of protecting facility assets through prudent investments. R E G U L A R A G E N D A 1. Re: Contract with Spiniello Companies, in Amount of Approximately $2,274,270, for Construction of Belvedere Trunk Sewer Rehabilitation Phase 1 (Project) (a) Report on Bids and Award Contract (b) Order Secretary to Review Surety Bonds for Performance and Payment and, if Sufficient, Execute Contract with Spiniello Companies for Construction of Project Summary: The proposed project will consist of lining approximately 10,270 feet of 15-inch, 21-inch and 24-inch diameter cracked vitrified clay pipe sewer constructed in The work is located within the City of Commerce, City of Monterey Park, and unincorporated Los Angeles County as shown on the attached map. The bid summary/recommendation is attached. This item is consistent with the Districts Guiding Principles of commitment to operational excellence and to protect facility assets through prudent maintenance programs. 2. Authorize Issuance of Purchase Order to Brea Canon Oil Co., Inc., in Amount of Approximately $160,000 for Relocation of Oil and Electrical Lines for Construction of Joint Water Pollution Control Plant Effluent Outfall Tunnel Summary: Relocation of oil and electrical lines is necessary to allow the tunnel construction and is the most cost-effective alternative. This item is consistent with the Districts Guiding Principles of commitment to fiscal responsibility and operational excellence. 3. Authorize Chief Engineer & General Manager (Chief Engineer) to Execute All Documents Necessary to Obtain Extended Validation Certificates for Any Districts Website, Including Any Subscriber Agreement, Practice Statement or Related Documents Required by Starfield Technologies, LLC, (Affiliate of Internet Domain Registrar and Web Hosting Company GoDaddy) or Any Other Provider of Secure Socket Layer Certificate Protections DIST JUNE 13, 2018

3 REGULAR MEETING COUNTY SANITATION DISTRICT NO. 2 OF LOS ANGELES COUNTY 3. Contd. Summary: The Sanitation Districts maintain a number of internet websites to provide good communication, accessibility and transparency for our ratepayers. Evolving internet security standards are increasingly mandating data encryption for website traffic. This encryption is enabled through the use of Secure Socket Layer (SSL) digital certificates. Enhanced SSL certificates are also available in an Extended Validation (EV) form that provides website visitors additional confidence they are accessing a genuine website. In order to obtain the necessary certification and secure Districts websites, it is recommended that EV SSL certificates be obtained for all Districts websites from Starfield Technologies, LLC, the certificate-issuing authority, at an estimated cost of $1,500. In addition, verification procedures require that the Districts execute legal documents to be prepared by Districts counsel attesting to Districts ownership and control of the websites. It is recommended that the Board delegate authority to the Chief Engineer to execute all necessary documents. 4. Approve and Order Executed Lease Agreement with Ecology Auto Parts, Inc. (Ecology) for Interim Use of Mesquite Regional Landfill Intermodal Railyard (Railyard) Summary: Market and economic conditions have delayed the utilization of the Districts existing waste-by-rail system infrastructure at the Mesquite Regional Landfill located in Imperial County. In order to derive productive use of Districts assets and generate additional revenue in the interim, staff has investigated options for various alternative uses. One of the alternative uses would be receiving, storing, and delivering commodities, other than municipal solid waste, from the Railyard to various markets. Proposed destinations may include the Port of Long Beach, Port of Los Angeles and manufacturing sites in Mexico. Use of the Railyard for commodities other than waste was approved through modification of the Conditional Use Permit (CUP) by the Imperial County Board of Supervisors on February 6, The Board subsequently approved and accepted the modified CUP on March 14, In January 2017, a Request for Expressions of Interest (RFEI) was issued to identify potential users, tenants, or operators for the Railyard. The RFEI was provided to 20 companies and two submitted expressions of interest to lease the Railyard. Ecology was the only company whose submittal was responsive. Under the terms of the Lease Agreement (Lease), Ecology will pay the District $30 per intermodal container or $120 per bulk railcar that are loaded or unloaded at the Railyard and the lease is required to generate at least $480,000 per year in rent with a penalty for noncompliance. The Lease will have a five-year term with three additional five-year extensions. Ecology s interim use will be for non-refuse materials and will not exceed the Districts permitted use, and Ecology will comply with all applicable permit conditions and mitigation requirements. This item is consistent with the Districts Guiding Principles of commitment to fiscal responsibility, prudent financial stewardship, and maximizing use of assets and resources. 5. Re: Settlement with BP Energy Company and Related Companies (BP) for Overcharges on Natural Gas Purchases: (a) Approve False Claims Action Settlement and Release with BP Related to California False Claims Act Case: State of California ex. rel. Christopher J. Schroen, et al. v. BP America Production Co., et al., San Francisco Superior Court Case No. CGC (b) Approve and Order Executed Release and Covenant Not to Sue and Authorize Chief Engineer and General Manager to Execute Any Additional Documents Necessary to Finalize Settlement Summary: On January 14, 2015, the Board authorized District Counsel to intervene in a California False Claims Act case the State Attorney General s office was prosecuting against BP alleging that between 2004 and 2012, BP defrauded the State and other California governmental entities out of millions of dollars by unlawfully inflating the price of natural gas it sold to these entities through California s Department of General Services Natural Gas Services Program (Program). During this time period, the District purchased approximately $11 million of natural gas from the Program. The District intervened in the case in order to obtain its share of any damages recovered from BP. The Attorney General settled the case, which allocates the District approximately $475,568, which is its proportionate share of the damages BP has agreed to pay. The Chief Engineer and General Manager and District Counsel recommend the settlement. 6. Approve and Order Executed Settlement Agreement and Mutual Release with Long Beach Unified School District (LBUSD), Los Angeles Unified School District (LAUSD), Los Angeles Community College District (LACCD), and Montebello Unified School District (MUSD) Summary: When the state dissolved redevelopment agencies, their portion of ad valorem taxes was reallocated among the other taxing entities serving the redevelopment area. A number of school districts filed lawsuits contending that the allocation was incorrectly applied by the County of Los DIST JUNE 13, 2018

4 REGULAR MEETING COUNTY SANITATION DISTRICT NO. 2 OF LOS ANGELES COUNTY 6. Contd. Angeles. After prolonged litigation, the Court found that the County had allocated insufficient amounts to the school districts and improperly distributed larger-than-owed amounts to the County and many other taxing entities, including the District. The County and the school districts agreed to a complex formula by which the school district could recover some of the moneys owed. The District, along with the other taxing entities, participated in negotiations with LBUSD, LAUSD, LACCD, and MUSD in order to resolve the claims by the school districts. A settlement was reached which provides for a payment to each of the school districts to compensate for ad valorem taxes that were improperly distributed to the District. The District owes the following amounts (plus interest) as follows: (a) $5, to LBUSD, (b) $33, to LAUSD, (c) $24, to LACCD, and (d) $128, to MUSD. This item is consistent with the Districts Guiding Principles of commitment to ethical, respectful, and honest behavior in all interactions. 7. Re: Wastewater Budget Matters for Fiscal Year (a) Establish by Resolution Appropriations Limit of $33,550,061 as Required by California Government Code Section 7910 Utilizing the Population Change within the County (b) Adopt Operating Fund Budget (c) Adopt Resolution Requesting Tax Levy of $6,349,000 (d) Authorize Appropriations per Budget Summary: A letter discussing fiscal year budgetary matters accompanies the agenda. This item is consistent with the Districts Guiding Principles of commitment to fiscal responsibility and prudent financial stewardship, and to plan for both short-term and long-term needs to minimize the need for significant rate increases. 8. Authorize Settlement of Eminent Domain Proceedings with Target Corporation (Target) to Acquire Easements Necessary for Construction of Joint Water Pollution Control Plant (JWPCP) Effluent Outfall Tunnel Project in Amount of $400,000, and Authorize Chief Engineer and General Manager and District Counsel to Stipulate to Judgment and Sign all Documents Necessary to Effectuate Settlement and Judgment Adjourn Status Report: Summary: The Clearwater Program Master Facilities Plan, which was previously approved by the Board, includes construction of a new tunnel to convey treated wastewater effluent from the JWPCP to the District s existing ocean outfalls at Royal Palms Beach on the Palos Verdes Peninsula. The tunnel alignment crosses under a portion of a parking lot owned by Target. On April 12, 2017, the Board adopted a resolution authorizing use of eminent domain to acquire the permanent subsurface easement and temporary construction easement (TCE) necessary to construct the Project. On March 14, 2018, the Board adopted a resolution amending the TCE in order to limit the potential impacts to Target. On April 12, 2018, the District and Target reached a settlement in principle following mediation. Target agreed to grant the easements subject to minor revisions in the easement agreement documents and payment of $400,000 in compensation. The terms of the settlement are contained in the Final Judgment in Condemnation. If the Board does not authorize settlement, this eminent domain case is scheduled to go to trial in September The Board may meet in closed session to discuss this matter with the Chief Engineer and General Manager and District Counsel pursuant to provisions of the California Government Code Section , Conference with Legal Counsel Pending Litigation. Public Comment: Document Requests: Prior to or during the regular meeting session, the Chief Engineer and General Manager may update the Directors on various matters concerning the Districts that may be of current interest to the Directors. Members of the public may address the Board of Directors on any item shown on the agenda or matter under the Board s authority. A Request to Address Board of Directors form is available in the foyer. In compliance with the Americans with Disabilities Act, if you require special assistance to participate in this meeting, please contact the Secretary to the Boards Office (562) , extension Notification 48 hours prior to the meeting will enable staff to make reasonable arrangements to ensure accessibility to this meeting. (28CFR et seq. ADA Title II). Links to supporting documents are available online at the time of posting. Agendas and supporting documents or other writings that will be distributed to Board members in connection with matters subject to discussion or consideration at this meeting that are not exempt from disclosure under the Public Records Act are available for inspection following the posting of this agenda at the office of the Secretary to the Boards of Directors located at the Districts' Joint Administration Building, 1955 Workman Mill Road, Whittier, California, or at the time of the meeting at the address posted on this agenda. DIST JUNE 13, 2018

5 BELVEDERE TRUNK SEWER REHABILITATION, PHASE PROJECT ROUTE Doc # Agenda Item No. R-1 (a) ~ -~1

6 TO: BOARD OF DIRECTORS OF COUNTY SANITATION DISTRICT NO. 2 OF LOS ANGELES COUNTY RE: AGENDA ITEM NO. R-1(a) FOR BOARD MEETING June 13, 2018 BIDS were received at the District Office on May 15, 2018 FOR Belvedere Trunk Sewer Rehabilitation, Phase 1 No. of Bids Received: 4 BIDDER Spiniello Companies Mike Prlich and Sons, Inc. Insituform Technologies, LLC Michels Corporation dba Michels Pipeline Construction TOTAL BID $2,274, $3,218, $3,340, $3,467, RECOMMENDATION: Award contract to Spiniello Companies, low bidder, in the amount of $2,274,270. Engineer's Estimate: $2,500, Grace Robinson Hyde Chief Engineer and General Manager Doc #

7 COUNTY SANITATION DISTRICTS OF LOS ANGELES COUNTY 1955 Workman Mill Rood, Whittier, CA Moiling Address: P.O. Box 4998, Whittier, CA T e I e phone : (56 2) , FAX: (56 2) GRACE ROBINSON HYDE Chief Engineer and General Manager June 6, 2018 Board of Directors County Sanitation District No. 2 of Los Angeles County Dear Directors: Wastewater Budget Matters for Fiscal Year The agenda for the Board meeting on June 13, 2018, contains an item relating to wastewater budget matters for fiscal year (FY) These matters include establishing an appropriations limit on the proceeds of taxes, adopting the sewerage system final budget, requesting the tax levy, and authorizing appropriations per the sewerage system budget. APPROPRIATIONS LIMIT The Constitution of the State of California places a limit on the authorization to expend the proceeds of taxes levied by state and local governments in California. In addition, the Government Code requires the governing body for each local jurisdiction to establish, by resolution, an appropriations limit for each fiscal year. The appropriations limit for FY has been determined by adjusting the previous limit for FY based upon population change factors for Los Angeles County and the change in the California Personal Per Capita Income. The appropriations limit has also been adjusted to include the increased operation and maintenance costs of secondary treatment needed to comply with federal requirements. All of this is in accordance with the procedures outlined in Article XIIIB of the Constitution and Section 7910 of the Government Code. The proposed appropriations limit and anticipated tax revenue are shown in Exhibit No. 1. This information has been available to the public at the Districts' Joint Administration Office in conformance with the requirement that the documentation used in the determination of the appropriations limit be available fifteen days prior to its establishment by the Board of Directors. FINAL BUDGET FOR FISCAL YEAR Enclosed for your review is the proposed final budget for FY , a list of proposed capital projects, and information on the monies set aside in various funds/reserves. These funds and reserves were established in accordance with the District's Wastewater Financial Reserve Policy adopted in October DOC ft Recycled Paper '-~

8 Board of Directors 2 June 6, 2018 The final budget provides a comparison with the current budget and a breakdown of the items included in the budget. It is divided into three sections: anticipated expenses, projected revenues, and transfers to or from reserves. In preparing the budget, it is projected that the general revenue sources available to the District for meeting expenses during the coming fiscal year include a pro rata share of the ad valorem (property) taxes, service charges, industrial wastewater surcharges, grants, state low-interest loans, interest income, and contract revenue. In addition, monies will be transferred from the Capital Improvement Fund (a restricted fund for the accumulation of connection fees paid by new users) to cover the costs of expansion-related capital projects. Lastly, previously accumulated monies will be transferred from the designated reserves to help fund the construction of capital improvements. In addition to the expenses directly incurred by each District for the facilities it owns, the final budget also includes each District's proportionate share of the costs associated with facilities and services jointly shared with other Districts. In accordance with the Joint Administration and Joint Outfall Agreements, Joint Administration and Joint Outfall costs are allocated to each signatory District according to the ratio of the number of sewage units in a District to the total number of sewage units in all the Districts signatory to each agreement. A sewage unit represents the average daily sewage flow and strength (measured in terms of chemical oxygen demand and suspended solids) from a single-family home. In the Joint Outfall System (JOS), there are approximately 1.9 million sewage units. This method of allocating costs considers flow as well as the strength of sewage from all types of users and is the most equitable way to distribute Joint Administration and Joint Outfall costs. In past years, certain non-operational expenses were categorized as either O&M-Joint Administration or O&M-Technical Services depending upon which Districts' Department incurred the expense. As part of the process of implementing a new accounting software system, staff has been evaluating those expenses and re-categorizing them according to whether they still provide broad administrative services to all Districts (i.e. accounting, purchasing) or more technical support (i.e. reuse and compliance, information technology). As a result, the Joint Administration budget has dropped significantly and the Technical Services budget has risen by a similar amount. However, in combination, the budget for these two items has remained nearly identical to last year's combined budget. As part of the new accounting system, changes have been made to the way interest income is recorded. In prior years, interest on funds in the designated reserves were credited to the reserve account and then transferred to the District's operating account for use as a revenue source. To simplify this process, all of the interest earned is now credited directly as a revenue source. SIGNIFICANT CAPITAL EXPENDITURES The issues outlined below relate to the Joint Outfall System (JOS). This is the system of trunk sewers and treatment plants jointly owned by the seventeen Districts signatory to the Joint Outfall Agreement. The costs discussed below are the combined total for the JOS, of which each District in the JOS is required to pay its proportionate share of the costs. In addition, a District may have costs related to sewers and pumping plants specifically owned by that District. Those costs are solely borne by that specific District. Sewer System Repair and Rehabilitation - One of the naturally occurring processes in sewer systems is the formation of hydrogen sulfide gas. Through a series of complex biological and chemical reactions this gas is transformed into sulfuric acid, which can lead to extensive corrosion of the sewers. In an effort to slow down the corrosion rate and to control odors, iron salts and sodium hydroxide are routinely added to the sewer system and the crowns of the sewer pipes are sprayed with acid-neutralizing DOC

9 Board of Directors 3 June 6, 2018 magnesium. hydroxide. Although the chemical addition has reduced the rate of corrosion, it has not eliminated the problem. Where feasible, the Districts' sewer rehabilitation program utilizes technological advancements for the in-place repair of sewer lines by inserting corrosion-resistant liners into the sewers. These liners restore the structural integrity of damaged lines and represent a permanent solution as they prevent further corrosion from occurring. In some instances, corroded sewers are being replaced with pipelines containing corrosion-resistant material. For fiscal year , capital expenses related to the repair and rehabilitation of the sewers is estimated to be $33.8 million. This total, which is higher than what was shown in the preliminary budget, includes projects that were scheduled to be completed during fiscal year but have carried over to fiscal year Concrete Protection - The concrete at the various treatment plants is subject to corrosion in the same way that the sewers are. Liners were installed a number of years ago to protect concrete structures at the plants that were subject to significant corrosion. These liners have reached the end of their useful life. In order to preserve the structural integrity of the plants, it is necessary to remove the old liners, repair any existing damage, and then add new protective liners to prevent future corrosion. The proposed budget for fiscal year includes $10.1 million related to this work. Clearwater - Effluent from the Joint Water Pollution Control Plant (JWPCP) in Carson is conveyed to the ocean through two tunnels, one completed in 1937 and the other in Both tunnels have had continual flow in them and cannot be taken out of service under any condition. As has been discussed extensively with the Boards, construction of a third tunnel (the Clearwater Project) has been proposed. District No. 2, acting in its capacity as the administrative agent for the Joint Outfall System, previously approved prequalification of potential contractors for the Clearwater Project and entered into a Project Labor Agreement with the Los Angeles/Orange Counties Building and Construction Trades Council. The Clearwater Project will be funded with a combination of monies accumulated in the Capital Improvement Fund (fees paid by new users of the system and dedicated to capital projects) and debt financing. The Districts previously sold bonds in 1993 (which have subsequently been refinanced), with debt service that expires between 2021 and It is proposed to use the Capital Improvement Fund monies first and wait until the existing debt is retired before issuing the new debt. Because the two debts are fairly similar in size, the impact on the rates will be minimized. The total estimated construction cost of the Clearwater Project, scheduled to be completed in fiscal year , is $700 million, with $80 million to be spent in this next fiscal year. Flow Equalization at the San Jose Creek Water Reclamation Plant (WRP)- Influent flows at the treatment plants are not static; they vary over the course of the day with peaks and valleys occurring at different times. Unfortunately, flows are highest during the day when the demand for recycled water is lowest, meaning that water may be discharged to the San Gabriel River and go unused. Conversely, flows are lowest at night when the demand for recycled water is highest, meaning that some of the need may go unmet. An 8 million gallon storage tank is being constructed at the San Jose Creek WRP that will store the peak flows during the day and then feed them back into the plant during the low-flow periods. This will make more recycled water available and also improve the operational efficiency of the WRP. This project, which is already under construction, is scheduled to be complete in fiscal year , with estimated expenses in fiscal year of $20 million. Power Distribution System - This project involves the modernization of the power distribution systems at the various treatment plants to include redundant power feeds to improve the maintainability and reliability of those systems. $8.4 million budgeted for this work next fiscal year. DOC

10 Board of Directors 4 June 6, 2018 Process Air Compressors - All of the upstream treatment plants bubble ambient air through the secondary treatment system to enhance the biological treatment process. This air is first compressed and then injected into the aeration tanks through a series of diffusers. As the equipment ages or as technology improves, the process air compressors (P ACs) must be replaced to ensure maximum efficiency in the transfer of oxygen, which leads to lower overall operating costs. Scheduled replacement of the P ACs will occur through fiscal year , with $4.9 million anticipated to be spent on this work next fiscal year. Summary of Required Actions At the June 13, 2018 Board meeting, it will be recommended that the Board of Directors adopt a resolution establishing the appropriations limit on the proceeds of taxes, adopt the budget for FY , adopt a resolution requesting the tax levy, and authorize appropriations in the sewerage system budget, all as shown on the agenda. Very truly yours, GRH:gc Grace Robinson Hyde Enclosures DOC

11 Exhibit 1 I SUMMARY OF APPROPRIATIONS LIMIT FOR EACH SANITATION DISTRICT I APPRO. LMT. POPULATION APPRO. LMT. * APPRO. LMT APPRO. LMT. DISTRICT EXCLUDING CHANGE CHANGE EXCLUDING MANDATED INCLUDING NUMBER MANDATED COSTS FACTOR FACTOR MANDATED COSTS COSTS MANDATED COSTS 1 $ 17,129, $ 17,849,200 $ 1,900,978 $ 19,750, ,452, ,688,840 2,861,221 33,550, ,731, ,601,976 2,200,106 23,802, ,664, ,830, ,830, ,341, ,161,570 3,299,075 48,460, ,115, ,456,590 1,131,483 9,588, ,042, ,086, ,086, ,163, ,185,441 12,387,463 62,572, ,115, ,834,111 2,377,848 20,211, ,955, ,457,776 1,315,728 13,773, ,671, ,741, ,072 1,910, ,904, ,446,497 1,556,331 15,002, ,051, ,263, ,686 5,699, ,973, ,609,464 12,755,111 53,364, ,207, ,273,735 1,920,486 53,194, ,437, ,917,439 1,601,850 13,519, ,765, ,007, ,754 6,210, , , , , ,022,076 54,190 1,076, , ,808 69, ,171 SBC 22,703, ,656, ,747 24,235,363 scv 20,129, ,974,884 2,430,000 23,404, N/A** NR N/A** ESTIMATED AD VALOREM TAX REVENUES DISTRICT NUMBER 3,058, ,349, ,755, , ,531, ,877, , , ,424, ,960, , ,564, ,252, , ,372, ,639, , , , , ,542,000 SBC 7,298,000 scv 34 NR *This column represents the net change resulting from the percent change in population and the percent change in Per Capita Income of3.67%. ** This District is not subject to an appropriations limit as it does not receive any proceeds of taxes. DOC

12 COUNTY SANITATION DISTRICT NO.2 OF LOS ANGELES COUNTY SEWERAGE SYSTEM FINAL BUDGET FOR FY APPROPRIATIONS: O&M -Joint Administration O&M- Technical Services O&M - Local Facilities O&M -Joint Facilities Capital -Joint Administration Capital - Local Facilities Capital -Joint Facilities Bond Repayment Loan Repayment TOTAL BUDGET: $ 4,471,000 6,453,000 1,381,000 24,453, ,000 7,190,000 20,511,000 3,356,000 3,209, $ 71,514,000 $ 3,371,000 8,211,000 1,798,000 25,071, ,000 6,730,000 25,212,000 3,349,000 3,323, $ 77,834,000 ESTIMATED REVENUES: Taxes Service Charge Grants Loans Industrial Waste Interest and Contracts TOTAL REVENUES: $ 5,866,000 36,336, ,000 2,038,000 8,596,000 2,092,000 $ 55,617,000 $ 6,349,000 38,423,000 1,095,000 3,241,000 9,188,000 2,912,000 $ 61,208,000 TRANSFERS TO (FROM) RESERVES: Transfer from Designated Reserves Transfer from Capital Improvement Fund NET TRANSFER FROM RESERVES $ (9,698,000) (6,199,000) $ (15,897,000) $ (6,066,000) (1 0,560,000) $ (16,626,000)

13 COUNTY SANITATION DISTRICT NO.2 OF LOS ANGELES COUNTY PROPOSED CAPITAL PROJECTS JULY 1, 2018 THROUGH JUNE 30, 2019 JOINT ADMINISTRATION: $ 769,000 LOCAL FACILITIES: 1. District 2 Interceptor Trunk Sewer Rehabilitation $ 1,000, Old River School Road Relief Trunk Sewer Rehabilitation 2,550, Belvedere Trunk Sewer Rehabilitation Phase 1 1,780, Downey Trunk Sewer Rehabilitation Phase 2 1,400,000 JOINT FACILITIES: 1. Clearwater Tunnel Project $ 10,560, Treatment Plant Related Capital Projects 4,467, Sewer System Repair and Rehabilitation 4,463, Flow Equalization at the San Jose Creek WRP 2,640, Power Distribution System Improvements 1 I 109, Treatment Plant Concrete Protection 1,331, Process Air Compressor Replacements 642,000 $ $ 6,730,000 25,212,000 TOTAL PROPOSED CAPITAL PROJECTS: $ 32,711,000

14 COUNTY SANITATION DISTRICT NO.2 OF LOS ANGELES COUNTY RESERVE SUMMARY JULY 1, 2018 THROUGH JUNE 30, 2019 UNRESTRICTED RESERVES: General Operating Fund $ 3,314,000 DESIGNATED RESERVES: Beginning Balance Transfer from Designated Reserves Ending Balance $ 63,693,000 (6,066,000) $ 57,627,000 RESTRICTED RESERVES: Beginning Balance Projected Connection Fees Received Transfer from Capital Improvement Fund Ending Balance $ 62,609, ,000 (1 0,560,000) $ 52,477,000 TOTAL RESERVES $ 113,418,000