REVISED ADMINISTRATIVE AND FINANCE COMMITTEE AGENDA FOR JUNE 23, :35 a.m. 10:45 a.m.

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1 REVISED ADMINISTRATIVE AND FINANCE COMMITTEE AGENDA FOR JUNE 23, :35 a.m. 10:45 a.m. Jesse Dixon, Chair Marilyn Dailey, Vice Chair Yen Tu, Vice Chair Jim Bowersox Tom Brammell John Johnson Bill Knutson Mark Muir Joseph Parker Hershell Price Pam Slater-Price Fern Steiner Mark Watton Howard Williams 1. Roll Call Determination of Quorum. 2. Additions to Agenda (Government Code Section (b)). 3. Public Comment Opportunities for members of the public to address the Committee on matters within the Committee s jurisdiction. 4. Chair s Report. 4-A Director s Comments. I. CONSENT CALENDAR 1. Treasurer s report. Warren Staff recommendation: Note and file monthly Treasurer s report. (Action) 2. Approval of the transfer of funds within the Operating Budget for Fiscal Years 2004 & Staff recommendation: Approve the transfer of the funds within the Fiscal Years 2004 & 2005 Operating Budget from Water Resources to Right of Way in the amount of $125,000. (Action) Warren

2 3. Adopt resolution approving the extension of the existing Liquidity Facility with Bayerische Landesbank ( BLB ) for the Water Authority s commercial paper program. Staff recommendation: A. Adopt resolution approving the extension of the Liquidity Facility commitment with BLB at the new terms and fees as negotiated between staff and BLB. B. Approve certain financing documents relative to this commitment extension. (Action) Brust II. ACTION/DISCUSSION 1. Discussion of options regarding when the Board should consider whether to include a project labor agreement specification on public works projects. Alternatives: A. Adopt Ordinance No , an ordinance of the Board of Directors of the San Diego County Water Authority amending Section of the Administrative Code to require board consideration whether to include a project labor agreement specification on public works projects, including design-build projects, having a contract amount of $100 million or greater. B. Do not adopt a policy setting a threshold of $100 million for requiring a Board determination for including a project labor agreement specification. C. Set some other threshold for requiring a Board determination. D. Clarify the PLA determination by the Board shall not include design-build projects. (Discussion/Possible Action) 2. Adopt General Manager s Recommended Multi-Year Budget Fiscal Years and (Volume I: Operating and Volume II: Capital Improvement Program) and make appropriations in the amount of $1.338 billion consistent with the budget. Administrative and Finance Committee recommendation: Adopt Resolution No , a Resolution of the Board of Directors of the San Diego County Water Authority approving the General Manager Recommended Multi-Year Budget Fiscal Years and (Volume I: Operating and Volume II: Capital Improvement Program) and making appropriations in the amount of $1,338 billion consistent with the approved budget; and establish new and revised project budgets within the Capital Improvement Program increasing the program to $3,315 billion. (Action) Economides Stapleton Dixon

3 3. Public Hearing to adopt increased Water Rates and Charges consistent with Budget for Fiscal Year and Fiscal Year and continue the Water Standby Availability Charge as currently imposed. Staff recommendation: Adopt Ordinance No , an ordinance of the Board of Directors of the San Diego County Water Authority setting rates and charges for the delivery and supply of water, use of facilities and provision of services. Adopt Ordinance No , an ordinance of the Board of Directors of the San Diego County Water Authority fixing a Water Standby Availability Charge on land within the boundaries of the Water Authority for Fiscal Year at the current amount of $10 per acre or parcel less than an acre. (Action) 4. Adopt Resolution No approving Fiscal Years 2006 and 2007 Classification and Salary Schedules, and Salary Tables for determining compensation of Water Authority employees. Staff recommendation: Adopt Resolution No approving the Fiscal Years 2006 and 2007 Classification and Salary Schedules, and Salary Tables for determining compensation of Water Authority employees. (Action) Brust Glover III. INFORMATION 1. Monthly Financial report. Wade 2. Board Calendar of events. IV. ADJOURNMENT Doria F. Lore Clerk of the Board NOTE: This meeting is called as an Administrative and Finance Committee meeting. Because a quorum of the Board may be present, the meeting is also noticed as a Board meeting. Members of the Board who are not members of the Committee may participate in the meeting pursuant to Section (i) of the Authority Administrative Code (Recodified). All items on the agenda, including information items, may be deliberated and become subject to action.

4 June 15, 2005 Attention: Administrative and Finance Committee Treasurer s Report Attached for review by the Administrative and Finance Committee and the Board of Directors is the Treasurer s Report as of May 31, 2005, which includes: Portfolio Master Summary Investment Activity, Agency Securities, and Portfolio Yield Graphs Investment Portfolio Details Investment Activity Summary Cash Flow Summary Glossary of Terms The reports are formatted to provide information, as required by the California Government Code, and the San Diego County Water Authority s Statement of Investment Policy. A brief description of each report follows: Portfolio Master Summary: This one page report summarizes all cash and investments held by the Water Authority. Investment Activity, Agency Securities and Portfolio Yield Graphs: The Investment Activity Graph shows the Water Authority s portfolio activity by type, percentage and amount. The Agency Securities Graph shows the Water Authority s total portfolio holdings of agencies by type. The Portfolio Yield Graph shows the Water Authority s portfolio yield, with and without bond funds, for the past twelve months, compared to a rolling average yield of the Board adopted Merrill Lynch 1-3 Year Treasury Index benchmark. Investment Portfolio Details: This report takes the summary information listed in the Portfolio Master Summary and provides details of active investments. Investment Activity Summary: This report produces a twelve-month rolling summary of portfolio investment activity. Cash Flow Summary: This report shows Operating, Rate Stabilization Fund and Capital Improvement Program cash flows for the next 12 months. Glossary of Terms: This report defines investment and cash flow terms. Page 37 / 346

5 Mortgage rates are lower than last year and the 10-year Treasury yield is falling, despite the Fed's steady increases in short-term interest rates. Mortgage giant Freddie Mac reported its weekly survey that showed rates on 30-year, fixed-rate mortgages averaged 5.56 percent the first week of June, down from 5.62 percent last week. It marked the ninth decline in the past 10 weeks and pushed rates down to the lowest level since they averaged 5.52 percent the week of April 1, The steady decline in mortgage rates has helped spur sales of both new and existing homes to record levels in April and analysts predicted further strong sales in May. The most recent drop in rates was attributed to the weaker-than-expected jobs report on June 3, which showed businesses added just 78,000 workers to their payrolls, the poorest showing in nearly two years. Maurice R. "Hank" Greenberg resigned Wednesday evening, June 8, from the board of American International Group Inc., (AIG) according to a report in the Wall Street Journal. Standard & Poor s Rating Service lowered its long-term counterparty credit and senior debt ratings on American International Group, Inc., from AA+ to AA on June 3, Standard & Poor s stated that although AIG s overall earnings are considered strong, its property/casualty earnings, as restated in its recently released 10-K filing, indicated greater volatility as well as less robust profitability than was previously reported. As you may recall, during the first week of May 2005, Fitch Ratings downgraded AIG's senior debt obligations from AA+ to AA, and Moody's Investors Service downgraded the company's long-term senior debt rating from Aa1 to Aa2. Reuters News Service reported on Thursday, June 9, that Federal Reserve Chairman Alan Greenspan told Congress s Joint Economic Committee that the budget deficit is more of a worry than the current U.S. trade gap. Mr. Greenspan said, markets will adjust to help correct U.S. current trade gap imbalances but they cannot alter the budget deficit and that is more of a worry. The trade gap will get resolved because of the markets -- prices will change, terms of trade will change, interest rates will change, and at the end of the day exchange rates will change one way or the other. But the thing that should concern us more is that which the markets cannot adjust -- which is the Federal budget deficit." The Wall Street Journal reported in May that a refining shortage threatens to keep prices of gasoline, diesel and jet fuel elevated for years, even if oil prices ease. The global capacity crunch is aggravated by growing demands from China, India and other rising powers. The U.S. has not seen a new refining plant built since All investments have been made in accordance with the San Diego County Water Authority Statement of Investment Policy. This report provides documentation that the Water Authority has sufficient funds to meet the financial obligations for the next six months. The market value information is provided by Bloomberg L.P. and is as of the report date. Please see the attachments for more information. Karen P. Brust, Treasurer Page 38 / 346

6 Page 39 / 346 Investment Type PORTFOLIO MASTER SUMMARY as of May 31, 2005 PORTFOLIO PERCENTAGES Permitted By Board Policy Actual Percentage Actual Amount Local Agency Investment Fund (LAIF) $40 Million 1.94% $ 5,045,613 Banker's Acceptances 20% 0.00% - Treasury Securities 15% - Minimum 37.09% 96,276,728 Agency Securities 70% 40.11% 104,133,711 Reverse Repurchase Agreements 20% 0.00% - Certificates of Deposit (CD's) 15% 0.00% - Negotiable CD's 15% 0.00% - Commercial Paper 25% 17.60% 45,698,412 Medium Term Notes/Corporates 30% 1.36% 3,528,452 Money Market Funds 15% 1.90% 4,939, % $ 259,622,190 Accrued Interest (unavailable for investing) - Checking/Petty Cash/Available Funds (unavailable for investing) **** (171,006) Subtotal: $ 259,451,184 Bond Proceeds Excluded from Portfolio Percentages: Money Market Funds and Cash 322,003 Treasury Securities 16,586,942 Commercial Paper 11,090,089 Local Agency Investment Fund (LAIF) - AIG - Acquisition Fund (GIC) 269,995,965 Subtotal for Bond Proceeds (available for CIP expenditures): $ 297,994,999 Debt Service Reserve (DSR) Funds Excluded from Portfolio Percentages: Trinity Plus - Reserve (GIC) 12,240,775 FSA - Reserve (GIC) 18,385,750 MBIA - Reserve (GIC) 38,568,617 Subtotal for Debt Service Reserve Funds (unavailable for CIP expenditures): $ 69,195,142 Total Cash and Investments $ 626,641,325 PORTFOLIO INFORMATION Equipment Bond Debt Service Operating RSF Pay Go Replacement CIAC * Proceeds * Reserve Total ** Portfolio Yield to Maturity Days 3.04% 3.51% 2.71% 2.71% 3.18% 2.42% 5.31% 2.96% Average Term 62 1,309 1, Average Days to Maturity (730 Days Maximum) Avg. Days to Maturity excluding Bond Proceeds & DSR (730 Days Max.) 468 Accrued Interest Earnings (Cash and Investments): Month Ended May 2005 $ 117,090 $ 164,613 $ 333,697 $ 16,864 $ 16,457 $ 624,059 $ 315,578 $ 1,588,358 Fiscal Year to Date *** $ 1,264,332 $ 1,883,411 $ 4,172,829 $ 150,413 $ (41,855) $ 5,414,442 $ 3,609,910 $ 16,453,482 Fund Balance $ 36,202,003 $ 57,536,095 $ 151,629,218 $ 7,986,645 $ 6,097,223 $ 297,994,999 $ 69,195,142 $ 626,641,325 * Bond Proceeds and CIAC are available for CIP expenditures (Total of $304,092,222 at 5/31/2005). ** "The weighted average days to maturity of the total portfolio shall not exceed 730 days (two years) to maturity" per SDCWA Investment Policy. *** CIAC interest earnings for the Fiscal Year to Date have been reduced by the premium that was paid at the time of purchase for investments that matured in August 2004 and November **** Negative cash balance due to outstanding checks of $714,311 mailed on 5/31/05.

7 Commercial Paper 18% INVESTMENT ACTIVITY Month Ended May 31, 2005 Medium Term Notes/Corporates 1% $45.7M Money Market Funds 2% $3.5M $4.9M $5.1M Local Agency Investment Fund (LAIF) 2% Treasury Securities 37% $96.3M $104.1M Agency Securities 40% Page 40 / 346

8 AGENCY SECURITIES $104,133,711 May 31, 2005 Federal Home Loan Mortgage Corporation 15% Federal National Mortgage Association 3% Student Loan Marketing Association 6% $3.0M $6.6M $15.5M $31.8M $47.2M Federal Farm Credit Bank 45% Federal Home Loan Bank 31% Page 41 / 346

9 AGGREGATE CWA PORTFOLIO YIELD June 2004 through May % 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% June July August September October November December January February March April May CWA Yield CWA Yield (excluding Bond Proceeds & DSR Funds) Merrill Lynch 1-3 Year Treasury Index (Rolling 12-month Average) Page 42 / 346

10 CUSIP Investment # Managed Pool Accounts Issuer Average Balance SDCWA - Fiscal Year 2005 Portfolio Management Portfolio Details - Investments May 31, 2005 Purchas e Par Value Market Value Book Value Stated Rate S&P YTM Days to 365 Maturity CASH AIG MATCHED FUNDING CORP. 09/01/ ,995, ,995, ,995, AA CASH FIDELITY TREASURY FUND /01/ AAA CASH FSA CAPITAL MGMT. SVC A 18,385, ,385, ,385, AAA CASH GOLDMAN - RATE STABILIZATION 07/01/ , , , AAA CASH GOLDMAN A COPs 07/01/ AAA CASH GOLDMAN A COPS 09/01/ , , , AAA CASH GOLDMAN - EQUIPMENT 07/01/ , , , AAA CASH GOLDMAN - OPERATING 07/01/2004 4,206, ,206, ,206, AAA CASH GOLDMAN - PAY AS YOU GO 07/01/ , , , AAA CASH13 72 LAIF - OPERATING 5,045, ,045, ,045, CASH LAIF A COPs CASH LAIF A COPS 09/01/ CASH MBIA INC A 09/01/ ,568, ,568, ,568, AAA CASH SOCIETE GENERALE A/B AA CASH SOCIETE GENERALE A/B AA CASH TRINITY PLUS A 12,240, ,240, ,240, AAA CASH US BANK MONEY MARKET FUND /08/ , , , Page 2 Maturity Date Subtotal and Average 347,456, ,497, ,497, ,497, Medium Term Notes 36962GA GENERAL ELECTRIC CAPITAL CORP. 02/25/2003 3,500, ,496, ,528, AAA /30/2006 Subtotal and Average 3,528, ,500, ,496, ,528, Commercial Paper - Discount 36959HTM GENERAL ELECTRIC CAPITAL CORP. 04/21/2005 4,020, ,999, ,999, AAA /21/ HUU GENERAL ELECTRIC CAPITAL CORP. 04/29/2005 6,145, ,097, ,097, AAA /28/ HTW GENERAL ELECTRIC CAPITAL CORP. 04/29/2005 2,010, ,000, ,999, AAA /30/ HTW GENERAL ELECTRIC CAPITAL CORP. 05/04/2005 2,612, ,599, ,599, AAA /30/ HUV GENERAL ELECTRIC CAPITAL CORP. 05/04/2005 1,010, ,003, ,002, AAA /29/ HV GENERAL ELECTRIC CAPITAL CORP. 05/05/2005 6,047, ,999, ,999, AAA /03/ HUV GENERAL ELECTRIC CAPITAL CORP. 05/05/2005 1,511, ,501, ,500, AAA /29/ HUV GENERAL ELECTRIC CAPITAL CORP. 05/13/2005 6,039, ,999, ,999, AAA /29/ HUL GENERAL ELECTRIC CAPITAL CORP. 04/21/2005 1,210, ,200, ,200, AAA /20/ HUU GENERAL ELECTRIC CAPITAL CORP. 04/29/2005 2,106, ,089, ,089, AAA /28/ HV GENERAL ELECTRIC CAPITAL CORP. 05/05/2005 4,535, ,499, ,499, AAA /03/ HU GENERAL ELECTRIC CAPITAL CORP. 05/25/2005 3,312, ,301, ,300, AAA /07/ HU GENERAL ELECTRIC CAPITAL CORP. 04/21/2005 2,920, ,910, ,901, AAA /07/ HT GENERAL ELECTRIC CAPITAL CORP. 04/29/2005 2,507, ,502, ,499, AAA /03/2005 Portfolio CWA2 CC Run Date: 06/02/ :15 PM (PRF_PM2) SymRept V6.32 Page 43 / 346 Report Ver. 5.00

11 SDCWA - Fiscal Year 2005 Portfolio Management Portfolio Details - Investments May 31, 2005 Page 3 CUSIP Investment # Commercial Paper - Discount Issuer Average Balance Purchas e Par Value Market Value Book Value Stated Rate S&P YTM Days to 365 Maturity 36959HT GENERAL ELECTRIC CAPITAL CORP. 05/13/2005 4,107, ,099, ,099, AAA /03/ HU GENERAL ELECTRIC CAPITAL CORP. 05/31/2005 2,006, ,999, ,999, AAA /07/ HUM GENERAL ELECTRIC CAPITAL CORP. 05/31/2005 2,510, ,499, ,499, AAA /21/ HV GENERAL ELECTRIC CAPITAL CORP. 05/31/2005 2,515, ,500, ,500, AAA /04/2005 Federal Agency - Coupon Subtotal and Average 59,413, ,122, ,805, ,788, QFH FEDERAL FARM CREDIT BANK 10/11/2002 1,500, ,495, ,500, AAA /11/ QFH FEDERAL FARM CREDIT BANK 10/11/2002 1,500, ,495, ,500, AAA /11/ QRY FEDERAL FARM CREDIT BANK 01/23/2003 4,950, ,908, ,964, AAA /15/ QRY FEDERAL FARM CREDIT BANK 06/24/2003 3,000, ,974, ,075, AAA /15/ QRY FEDERAL FARM CREDIT BANK 06/26/2003 2,500, ,478, ,549, AAA /15/ TDE FEDERAL FARM CREDIT BANK 09/05/2003 4,000, ,960, ,998, AAA /05/ Q3M FEDERAL FARM CREDIT BANK 09/30/2003 2,315, ,246, ,274, AAA /16/ Q3M FEDERAL FARM CREDIT BANK 11/18/ , , , AAA /16/ Q3M FEDERAL FARM CREDIT BANK 11/19/2003 1,650, ,601, ,611, AAA /16/ QRY FEDERAL FARM CREDIT BANK 11/19/2003 1,800, ,784, ,813, AAA /15/ TLQ FEDERAL FARM CREDIT BANK 12/03/2003 1,000, , , AAA /01/ QKC FEDERAL FARM CREDIT BANK 11/22/2002 3,800, ,784, ,770, AAA /15/ QMJ FEDERAL FARM CREDIT BANK 11/06/2003 3,115, ,100, ,144, AAA /15/ LWJ FEDERAL FARM CREDIT BANK 11/12/2003 1,000, ,016, ,057, AAA /19/ TGN FEDERAL FARM CREDIT BANK 11/12/2003 2,000, ,965, ,976, AAA /02/ Q3M FEDERAL FARM CREDIT BANK 11/18/2003 2,205, ,139, ,153, AAA /16/ STU FEDERAL FARM CREDIT BANK 04/11/2005 2,858, ,874, ,864, AAA /11/ MTL FEDERAL HOME LOAN BANK 11/22/2002 3,000, ,987, ,975, AAA /15/ MUMU FEDERAL HOME LOAN BANK 12/19/2002 2,500, ,486, ,494, AAA /15/ MVHK FEDERAL HOME LOAN BANK 01/31/2003 2,100, ,082, ,101, AAA /15/ MYRT FEDERAL HOME LOAN BANK 08/28/2003 2,000, ,972, ,968, AAA /15/ MQSS FEDERAL HOME LOAN BANK 08/28/2003 1,500, ,496, ,523, AAA /15/ MJUR FEDERAL HOME LOAN BANK 09/03/2003 2,505, ,517, ,586, AAA /15/ X2W FEDERAL HOME LOAN BANK 09/22/2003 2,000, ,970, ,995, AAA /09/ MU4F FEDERAL HOME LOAN BANK 09/30/2003 1,000, , ,021, AAA /04/ MYRR FEDERAL HOME LOAN BANK 09/30/2003 1,000, , ,001, AAA /15/ MW2K FEDERAL HOME LOAN BANK 10/03/2003 1,790, ,763, ,809, AAA /15/ MJUR FEDERAL HOME LOAN BANK 11/15/2001 4,000, ,020, ,995, AAA /15/ MDJP FEDERAL HOME LOAN BANK 03/12/2002 3,000, ,033, ,032, AAA /06/ MGVU FEDERAL HOME LOAN BANK 04/25/2002 1,100, ,103, ,118, AAA /15/ X2B FEDERAL HOME LOAN BANK 11/12/2003 2,255, ,223, ,241, AAA /15/2006 Maturity Date Portfolio CWA2 CC Run Date: 06/02/ :15 PM (PRF_PM2) SymRept V6.32 Page 44 / 346

12 SDCWA - Fiscal Year 2005 Portfolio Management Portfolio Details - Investments May 31, 2005 Page 4 CUSIP Investment # Federal Agency - Coupon Issuer Average Balance Purchas e Par Value Market Value Book Value Stated Rate S&P YTM Days to 365 Maturity 3134A4PQ FEDERAL HOME LOAN MORTGAGE COR 06/07/2002 4,075, ,076, ,113, AAA /15/ A4RA FEDERAL HOME LOAN MORTGAGE COR 10/03/2002 2,000, ,997, ,023, AAA /15/ A4RA FEDERAL HOME LOAN MORTGAGE COR 10/17/2002 3,000, ,995, ,017, AAA /15/ A4SX FEDERAL HOME LOAN MORTGAGE COR 02/12/2003 1,000, , , AAA /15/ A4SX FEDERAL HOME LOAN MORTGAGE COR 02/21/2003 3,100, ,065, ,109, AAA /15/ A4CX FEDERAL HOME LOAN MORTGAGE COR 04/30/2002 2,239, ,261, ,290, AAA /15/ MLH FEDERAL NATION MORTAGE ASSOC. 11/14/2001 2,985, ,012, ,025, AAA /15/ UAV STUDENT LOAN MARKETING ASSOC. 06/24/2003 3,000, ,038, ,295, AAA /15/ UAV STUDENT LOAN MARKETING ASSOC. 06/26/2003 3,000, ,038, ,277, AAA /15/2006 Federal Agency - Coupon - Callable Subtotal and Average 96,151, ,637, ,199, ,560, TMB FEDERAL FARM CREDIT BANK 11/28/2003 3,150, ,103, ,144, AAA /24/ TQP FEDERAL FARM CREDIT BANK 02/09/2004 4,500, ,414, ,500, AAA /09/ YYZ FEDERAL HOME LOAN BANK 07/31/2003 1,940, ,909, ,929, AAA /28/2006 Treasury Securities - Discount Subtotal and Average 9,573, ,590, ,426, ,573, VS UNITED STATES TREASURY 05/12/2005 4,044, ,006, ,999, AAA /22/ SR UNITED STATES TREASURY 12/29/2004 8,600, ,599, ,509, AAA /02/ SV UNITED STATES TREASURY 12/30/2004 1,280, ,277, ,263, AAA /30/ ST UNITED STATES TREASURY 02/28/2005 2,016, ,013, ,999, AAA /16/ SV UNITED STATES TREASURY 02/28/2005 1,009, ,006, , AAA /30/ VG UNITED STATES TREASURY 02/28/2005 3,855, ,842, ,814, AAA /14/ ST UNITED STATES TREASURY 12/16/2004 2,025, ,022, ,000, AAA /16/2005 Treasury Securities - Coupon Subtotal and Average 26,053, ,829, ,768, ,587, AY UNITED STATES TREASURY 07/31/2003 2,900, ,862, ,895, AAA /15/ BF UNITED STATES TREASURY 08/15/2003 3,100, ,059, ,097, AAA /15/ F UNITED STATES TREASURY 08/28/2003 4,284, ,282, ,387, AAA /15/ BP UNITED STATES TREASURY 11/28/2003 3,000, ,962, ,019, AAA /15/ AN UNITED STATES TREASURY 12/03/2003 5,800, ,719, ,793, AAA /15/ AT UNITED STATES TREASURY 01/29/2004 2,195, ,160, ,225, AAA /15/ BJ UNITED STATES TREASURY 05/28/2004 3,000, ,992, ,002, AAA /31/ AZ UNITED STATES TREASURY 05/28/2004 3,100, ,013, ,012, AAA ,079 05/15/ AH UNITED STATES TREASURY 06/02/2004 3,100, ,078, ,104, AAA /15/ BK UNITED STATES TREASURY 08/18/2004 2,000, ,966, ,998, AAA ,202 09/15/2008 Maturity Date Portfolio CWA2 CC Run Date: 06/02/ :15 PM (PRF_PM2) SymRept V6.32 Page 45 / 346

13 SDCWA - Fiscal Year 2005 Portfolio Management Portfolio Details - Investments May 31, 2005 Page 5 CUSIP Investment # Treasury Securities - Coupon Issuer Average Balance Purchas e Par Value Market Value Book Value Stated Rate S&P YTM Days to 365 Maturity BK UNITED STATES TREASURY 08/20/2004 1,575, ,548, ,574, AAA ,202 09/15/ BG UNITED STATES TREASURY 08/20/2004 3,575, ,531, ,593, AAA ,171 08/15/ BM UNITED STATES TREASURY 08/27/2004 3,500, ,439, ,493, AAA ,232 10/15/ BQ UNITED STATES TREASURY 08/27/2004 3,500, ,465, ,525, AAA ,263 11/15/ AT UNITED STATES TREASURY 08/31/2004 5,000, ,921, ,024, AAA /15/ BT UNITED STATES TREASURY 08/31/2004 2,300, ,276, ,324, AAA ,293 12/15/ AT UNITED STATES TREASURY 10/01/2004 3,100, ,051, ,099, AAA /15/ BY UNITED STATES TREASURY 10/21/2004 2,825, ,764, ,802, AAA /15/ BU UNITED STATES TREASURY 12/15/2004 2,025, ,008, ,008, AAA /31/ CM UNITED STATES TREASURY 12/15/2004 3,955, ,925, ,949, AAA /30/ F UNITED STATES TREASURY 11/20/2001 3,900, ,898, ,795, AAA /15/ AY UNITED STATES TREASURY 08/01/2003 1,095, ,080, ,089, AAA /15/ AH UNITED STATES TREASURY 07/01/2004 2,000, ,985, ,003, AAA /15/ BT UNITED STATES TREASURY 08/31/2004 4,000, ,959, ,042, AAA ,293 12/15/ BQ UNITED STATES TREASURY 10/28/2004 3,675, ,638, ,709, AAA ,263 11/15/ CE UNITED STATES TREASURY 11/01/2004 1,775, ,739, ,767, AAA ,414 04/15/ AZ UNITED STATES TREASURY 02/15/2005 3,595, ,494, ,499, AAA ,079 05/15/ BK UNITED STATES TREASURY 03/15/2005 1,865, ,833, ,810, AAA ,202 09/15/ AN UNITED STATES TREASURY 03/21/2005 2,020, ,991, ,977, AAA /15/ BM UNITED STATES TREASURY 03/21/2005 2,730, ,683, ,650, AAA ,232 10/15/2008 Subtotal and Average 90,296, ,489, ,337, ,276, Maturity Date Total and Average 632,677, ,664, ,532, ,812, Portfolio CWA2 CC Run Date: 06/02/ :15 PM (PRF_PM2) SymRept V6.32 Page 46 / 346

14 SDCWA - Fiscal Year 2005 Portfolio Management Portfolio Details - Cash May 31, 2005 Page 6 CUSIP Investment # Passbook/Checking Accounts Issuer Average Balance Purchas e Par Value Market Value Book Value Stated Rate S&P YTM Days to 365 Maturity CASH01 48 PETTY CASH 07/01/2004 2, , , CASH WELLS FARGO - OPERATING 07/01/ , , , CASH WELLS FARGO - PAYROLL ZBA 07/01/ , , , CASH WELLS FARGO - PAY AS YOU GO 07/01/ CASH WELLS FARGO - RSF 07/01/ CASH WELLS FARGO A COPs 07/01/ CASH WELLS FARGO A COPS 09/01/ CASH WELLS FARGO - EQUIPMENT 07/01/ Average Balance Total Cash and Investmentss ,677, ,493, ,361, ,641, Portfolio CWA2 CC Run Date: 06/02/ :15 PM (PRF_PM2) SymRept V6.32 Page 47 / 346

15 SDCWA - Fiscal Year 2005 Portfolio Management Activity Summary May 2004 through May 2005 Page 7 Month End Year Number of Securities Total Invested 360 Equivalent Yield to Maturity 365 Equivalent Managed Pool Rate Number of Investments Purchased Number of Investments Redeemed Average Term Average Days to Maturity May ,014, June ,198, July ,561, August ,302, September ,190, October ,961, November ,175, December ,462, January ,036, February ,076, March ,267, April ,436, May ,812, Average ,730, % 2.891% Portfolio CWA2 CC Run Date: 06/02/ :15 PM (PRF_PM4) SymRept V6.32 Page 48 / 346 Report Ver. 5.00

16 FPC I-1c - Rolling Cash Flows.xls San Diego County Water Authority Rolling Cash Flow Projections 6/14/ :32 AM June, FY05 July, FY06 August, FY06 September, FY06 October, FY06 November, FY06 December, FY06 January, FY06 February, FY06 March, FY06 April, FY06 May, FY06 Water Sales 19,274,686 23,374,202 26,545,065 28,449,615 27,310,070 25,269,357 25,523,648 21,525,115 18,824,964 17,140,019 14,333,961 18,434,785 RTS/CRC 4,089, , , , , ,873 4,104, , , , , ,911 Taxes 193, , , , ,009 2,611, , , ,017 1,898, ,067 Standby Charges 599,057 (60,637) 22,091 24, , ,012 2,039,388 3,234, , ,964 1,669,060 2,371,305 In-Lieu Taxes Capacity Charges 914,894 3,305,837 1,201,202 1,490,158 4,169,667 1,585,578 1,510,059 3,495,650 1,172,582 1,214,028 2,854,235 1,586,110 Infrastructure Access Charges 1,002, , , , , , ,398 1,002,268 1,002,268 1,002,268 1,002,268 1,002,268 Interest 364, , , , , , , , , , , ,252 Other Revenues 271,475 99, ,092 64, ,362 71,937 66,622 87, ,389 48,772 78,850 80,578 RSF Transfers Maturing Investments 1,800,000 1,600,000 1,500,000 4,400,000 6,600, ,000 5,800,000 7,900,000 9,900,000 11,300,000 0 Use of Liquid Funds ,708, ,493,522 0 TOTAL RECEIPTS 28,509,806 30,523,575 31,759,344 36,760,606 56,508,266 29,767,269 37,770,465 36,965,491 30,780,959 30,860,773 51,829,576 25,198,277 Water Purchases (14,681,744) (18,278,108) (21,021,899) (22,640,994) (21,643,481) (19,874,653) (19,956,568) (16,515,786) (14,238,460) (12,772,576) (10,387,565) (13,991,421) RTS/CRC (4,089,619) (848,911) (848,911) (848,873) (848,873) (848,873) (4,104,763) (848,873) (848,873) (833,954) (848,911) (848,911) Payroll (1,605,045) (1,605,045) (1,605,045) (2,407,568) (1,605,045) (1,605,045) (1,605,045) (2,407,568) (1,605,045) (1,605,045) (1,605,045) (1,605,045) Operating Expenditures (4,076,016) (4,415,684) (2,002,293) (2,130,088) (2,219,114) (4,128,769) (2,099,134) (1,868,908) (2,074,026) (2,032,207) (2,652,811) (2,041,950) G.O. Debt Service C.O.P. Debt Service (218,968) (218,968) (218,968) (218,968) (24,809,276) (218,968) (218,968) (218,968) (218,968) (437,936) (31,434,305) (169,501) S.T. Debt Service (549,643) (549,643) (549,643) (549,643) (549,643) (549,643) (549,643) (549,643) (549,643) (549,643) (549,643) (549,643) RSF Transfers (728,000) Investment Purchases (1,600,000) (1,500,000) (4,400,000) (6,600,000) 0 (600,000) (5,800,000) (7,900,000) (9,900,000) (11,300,000) 0 (2,200,000) Transfers to PAYGO (1,513,951) (3,245,200) (1,223,293) (1,514,968) (4,276,835) (2,021,590) (3,549,446) (6,730,264) (1,449,750) (1,432,991) (4,523,295) (3,957,415) Replenish Liquid Funds (2,820) (34,016) (61,291) (21,504) (0) (91,727) (58,897) (97,480) (68,193) (68,420) 0 (6,391) TOTAL DISBURSEMENTS (28,337,806) (30,695,575) (31,931,344) (36,932,606) (56,680,266) (29,939,269) (37,942,465) (37,137,491) (30,952,959) (31,032,773) (52,001,576) (25,370,277) NET CHANGE IN INVESTMENTS (197,180) (65,984) 2,961,291 2,221,504 (22,308,772) 691,727 5,258,897 2,197,480 2,068,193 1,468,420 (28,793,522) 2,206,391 PAYGO FUND Maturing Investments - PAYGO Fund 10,689,000 7,436,000 5,515,000 5,000,000 3,000,000 3,000,000 2,500,000 3,500, ,350,000 4,100,000 4,900,000 Interest Income - PAYGO 469, , , , , , , , , , , ,093 Transfers from Operating Fund 1,513,951 3,245,200 1,223,293 1,514,968 4,276,835 2,021,590 3,549,446 6,730,264 1,449,750 1,432,991 4,523,295 3,957,415 Use of Liquid Funds , ,249,580 0 TOTAL RECEIPTS 12,672,033 11,152,663 7,209,614 6,987,788 7,756,683 5,502,127 6,533,449 10,760,131 2,301,483 22,311,906 26,410,484 9,341,508 Cash Funded CIP Expenditures (2,609,700) (2,661,289) (1,757,727) (1,323,485) (1,640,861) (2,196,888) (2,496,708) (2,300,778) (2,301,483) (2,033,356) (1,459,047) (1,661,539) Debt Service (24,951,437) 0 Investment Purchases (10,000,000) (8,400,000) (5,400,000) (5,600,000) (6,100,000) (3,300,000) (4,000,000) (8,400,000) 0 (20,200,000) 0 (7,600,000) Replenish Liquid Funds (62,333) (91,374) (51,887) (64,303) (15,822) (5,239) (36,741) (59,353) 0 (78,550) 0 (79,969) TOTAL DISBURSEMENTS (12,672,033) (11,152,663) (7,209,614) (6,987,788) (7,756,683) (5,502,127) (6,533,449) (10,760,131) (2,301,483) (22,311,906) (26,410,484) (9,341,508) NET CHANGE IN INVESTMENTS (626,667) 1,055,374 (63,113) 664,303 3,115, ,239 1,536,741 4,959,353 (322,645) (71,450) (21,349,580) 2,779,969 BOND FUND Maturing Investments - Bond Fund 12,905,000 10,483,000 4,535, ,500,000 8,100,000 8,200,000 8,400,000 10,200,000 10,700,000 10,300,000 12,800,000 Contributions in Aid of Construction 2,080, , , , , , Interest Income - CIP 599, , , , , , , , , , , ,286 Use of Liquid Funds 0 3,729,622 1,361,942 4,644, , ,747 1,157, ,451 1,037,101 4,579, ,455 0 TOTAL RECEIPTS 15,584,911 14,779,363 6,695,555 5,278,091 8,822,118 10,257,238 10,132,499 9,713,219 11,663,910 15,995,759 11,148,125 13,147,286 CIP Fund Draws (3,942,115) (14,212,622) (5,896,942) (4,644,173) (8,306,871) (8,910,747) (9,357,741) (9,260,451) (11,237,101) (15,279,399) (10,777,455) (10,498,040) Investment Purchases (11,600,000) (500,000) (2,600,000) Replenish Liquid Funds (42,796) (566,741) (798,613) (633,918) (515,247) (846,491) (774,758) (452,768) (426,809) (716,360) (370,670) (49,246) TOTAL DISBURSEMENTS (15,584,911) (14,779,363) (6,695,555) (5,278,091) (8,822,118) (10,257,238) (10,132,499) (9,713,219) (11,663,910) (15,995,759) (11,148,125) (13,147,286) NET CHANGE IN INVESTMENTS (1,262,204) (13,645,881) (5,098,329) (4,010,255) (7,791,624) (7,564,256) (8,582,983) (8,807,683) (10,810,292) (14,563,039) (10,406,785) (10,150,754) RATE STABILIZATION FUND Maturing Investments 0 0 1,100, ,800,000 3,115,000 2,239, ,000, ,095,000 Interest Earnings 195, , , , , , , , , , , ,785 Deposits , TOTAL RECEIPTS 195, ,504 1,302, , ,513 4,006,130 3,321,749 2,452, ,798 3,214, ,120 1,310,785 Withdrawals Investment Purchases (195,885) (201,504) (1,302,109) (202,716) (933,513) (4,006,130) (3,321,749) (2,452,140) (213,798) (3,214,458) (215,120) (1,310,785) TOTAL DISBURSEMENTS (195,885) (201,504) (1,302,109) (202,716) (933,513) (4,006,130) (3,321,749) (2,452,140) (213,798) (3,214,458) (215,120) (1,310,785) NET CHANGE IN INVESTMENTS 195, , , , , , , , , , , ,785 OVERALL CHANGE IN INVESTMENTS (1,890,166) (12,454,988) (1,998,042) (921,732) (26,051,062) (6,361,160) (1,580,596) (1,437,711) (8,850,947) (12,951,610) (60,334,766) (4,948,610) Page 49 / 346

17 INVESTMENT PORTFOLIO DETAIL REPORT and CASH FLOW GLOSSARY OF TERMS INVESTMENT PORTFOLIO DETAIL REPORT CUSIP: Committee of Uniform Securities Identification Procedures; unique number assigned to a security. Investment Number: The unique number assigned by the investment software in order to keep track of an investment. Issuer: The Bank, Federal Agency/Government, Corporation or Company that manages a fund or issues the security/securities. Average Balance: The average daily balance of the type of security or cash account during the month reported. Purchase Date: The day in which the security was delivered to the Authority s safekeeping account. Book Value: The amount paid for the security inclusive of any accrued interest or premium/discount. A security that has a book value in excess of face value was purchased with accrued interest or at a premium, thus the yield-to-maturity on the security will be the same as or less than the stated rate. A security that has a book value less than face value was purchased at a discount, thus the yield to maturity will always be in excess of the stated rate. The book value may differ significantly from the security s current value in the market. Face (Par) Value: The amount of cash to be received on the maturity date. Market Value: The current market value of the security. This is based on the price a security can be traded in the market at the close of the month. Stated Rate: The rate of interest paid on a security as dictated by the coupon, if applicable, and by discount rate (original purchase price) if it is a discount security (t-bill, bankers acceptance, commercial paper, etc.). Yield to Maturity: The yield of a security on a 365 day basis (converting 360 day interest payment investments to 365 day) with a theoretical assumption that securities with coupon payments are reinvested at the rate of the coupon. Quality Rating: The credit rating of the security. Maturity Date: The date in which the security matures. With managed pool accounts and passbook/checking accounts, there are no maturity dates because these accounts are ongoing. Days to Maturity: The number of days remaining from the reporting date until the maturity of the security. CASH FLOW TERMS Other Revenues: Revenues received from hydro-electric power sales and other sources. RSF Transfers: Transfers to or from the Rate Stabilization Fund. Use/Replenishment of Liquid Funds: Incoming or outgoing transfer of funds from either the State of California LAIF pooled investment account or the Goldman Sachs money market accounts. Investment Purchases: Investments with specific maturities to cover the cash flow needs of the fund (Operating, RSF, PAYGO, Bond/CIP). Net Change in Investments: The increase or decrease (dollars) held in investments for a fund. Page 50 / 346

18 INVESTMENT TYPES GLOSSARY OF TERMS Agencies: Debt instrument(s) that are issued by U.S. Government agencies, departments and governmentsponsored corporations. Some agencies have a direct government guarantee and others have an implied government guarantee. All agency securities are of the highest credit quality. Banker's Acceptances: An investment instrument issued by a bank, guaranteeing the payment of a customer s drafts for a stated amount for a specified period. It substitutes the bank s credit for the buyer and eliminates the seller s risk. This security is created out of a trade transaction. Callable: A security redeemable by the issuer before the scheduled maturity. The issuer usually pays the holder par or in some cases a premium price if such a security is retired early. Certificates of Deposit: A security instrument representing specific cash deposits in commercial banks, having varying maturities and yields based on size and maturity. This security has pooled collateral pledged against the deposit. Commercial Paper: Commercial paper is a short-term, unsecured promissory discount note that usually pays interest at maturity and is primarily used by large corporations to finance receivables. Managed Pool Accounts: Funds are managed by outside managers. Goldman Sachs is an AAA rated U.S. Treasury fund with a very short average life. The Local Agency Investment Fund (LAIF) is run by the State Treasurer s Office and is invested in most securities permitted under the California Government Code. LAIF has an average life that varies between 6 to 12 months. Both types of funds are used for liquidity purposes. Trinity Plus, FSA and MBIA are guaranteed investment contracts (GICs) that provide competitive rates of return while giving additional security to the holders of Authority 1998A, 2002A and 2004A debt. The final maturity of the Trinity Plus, FSA and MBIA reserve funds are 2028, 2032 and 2034, but due to the ability to access funds immediately, the investments are considered to have daily liquidity. Medium Term Notes: Corporate and agency, usually senior, unsecured debt instruments sold by an agent on a continuously offered basis. Negotiable Certificates of Deposit: Securities that are issued by major international and domestic banks and are similar to certificates of deposits purchased at a local bank; however, unlike collateralized certificates of deposit, they are liquid with an active secondary market for strong issuers. Passbook/Checking Account: These accounts are savings, checking and money market accounts at Wells Fargo Bank. Repurchase Agreements (RP, Repo): An agreement with a commitment by the seller (dealer) to buy a security back from the purchaser (customer) at a specified price at a designated future date. Also called a repo, it represents a collateralized short-term loan for which, where the collateral may be a Treasury security, money market instrument, federal agency security, or a mortgage-backed security. From the purchaser s (customer s) perspective, the deal is reported as a reverse repurchase agreement. Treasury Bill: An obligation issued by the U.S. Treasury with a maturity of under one year and having virtually no risk. Treasury Note: An obligation issued by the U.S. Treasury with a maturity ranging from one to ten years, paying interest semiannually, and having virtually no risk. Page 51 / 346

19 June 15, 2005 Attention: Administrative and Finance Committee Approval of the transfer of funds within the Operating Budget for Fiscal Years 2004 & 2005 (Action) Purpose To obtain Board approval of the transfer of $125,000 from the Water Resources department to the Right of Way department to cover the increases in Plan Check Review services in Fiscal Year Staff recommendation Approve the transfer of funds within the Fiscal Years 2004 & 2005 Operating Budget from Water Resources to Right of Way in the amount of $125,000. Alternatives Do not approve the transfer of funds within the Fiscal Years 2004 & 2005 Operating Budget. Fiscal impact The Right of Way Department s total budget will increase from $3,316,133 to $3,441,133, however, there will be no increase in the overall Fiscal Years 2004 & 2005 Operating Budget. It is estimated that approximately 40 percent of the $125,000 increase to the Right of Way budget is reimbursable from developer s fees. Background In June 2003, the Board of Directors adopted the Fiscal Years 2004 & 2005 Operating Budget in the amount of $62.3 million. In June 2004, the Board amended the two-year Operating Budget to include the Mid-Term Update modifications and increased it by $2.0 million to $64.3 million. The Operating Budget encompasses individual department budgets. A department budget is the department s spending plan for the upcoming two-year cycle. During the cycle, these spending plans can change in response to changes in scope and responsibilities. Budget Resolution No b states that, The General Manager may exercise discretion in administration of the Operating Budget to respond to changed circumstances, provided that any modification in excess of $50,000 shall require approval by the Board. For Fiscal Years 2004 & 2005, a transfer in the amount of $125,000 is required for the Right of Way department to continue to conduct plan check review services. Discussion During the last two years, development in the County and along the Authority s rights-of way has continued at a rapid pace. The Right of Way department responds to requests to review proposed projects within the Authority s rights-of-way as they are submitted, but the department is obligated to respond within an appropriate amount of time, regardless of how many requests are received in a Page 52 / 346

20 Administrative and Finance Committee June 15, 2005 Page 2 of 2 given time. The pace of new development and, therefore, the number of project reviews exceeded the estimates made when preparing the current Operating Budget. Accordingly, a transfer of $125,000 is required to enable the Right of Way department to conduct additional plan check review services. Funds are available in the Water Resources budget due to less than anticipated use of outside services. This is the only last quarter department transfer required for Fiscal Year Approval of this last quarter transfer will amend the final departmental budgets by increasing Right of Way by $125,000 and decreasing Water Resources by $125,000 for the Fiscal Years 2004 & 2005 Operating Budget. Prepared by: Tandy Ramsey, Budget Officer Reviewed by: Karen P. Brust, Director of Finance/Treasurer Approved by: Paul A. Lanspery, Deputy General Manager Page 53 / 346

21 June 15, 2005 Attention: Administrative and Finance Committee Adopt resolution approving the extension of the existing Liquidity Facility with Bayerische Landesbank for the Water Authority s Commercial Paper Program (Action) Purpose To adopt a resolution approving the extension of the Liquidity Facility commitment with Bayerische Landesbank ( BLB ) for the Water Authority s Commercial Paper Program for a new term and at new fees, including certain financing documents relative to this commitment extension. Staff recommendation 1. Adopt resolution approving the extension of the Liquidity Facility commitment with BLB at the new terms and fees as negotiated between staff and BLB. 2. Approve certain financing documents relative to this commitment extension. Alternative 1. The Board may choose not to approve the extension with BLB, and instead direct staff to pursue obtaining a new Liquidity Facility commitment from another bank. Fiscal impact Anticipated savings include a one time cost-of-issuance savings of approximately $40,000, and annual savings of $22,000 or more for each of the four years of the agreement when compared to current costs. Background In 1995 the Water Authority entered into a Revolving Credit and Term Loan Agreement (commonly referred to as a Liquidity Facility ) with BLB to provide liquidity for the Water Authority s outstanding Commercial Paper Program, which is currently in an amount of $110,000,000. The Liquidity Facility with BLB was extended in A liquidity facility is necessary in allowing the Water Authority to have a successfully marketed Commercial Paper Program. The higher the credit ratings of the bank providing the liquidity facility, the lower the interest rates the Water Authority obtains for its Commercial Paper. BLB currently has both the highest and best short-term credit ratings of A1/SP-1/P1+ and long-term credit ratings of Aaa/AAA/AAA by Moody s, Standard & Poor s, and Fitch, respectively. BLB, which is a German land bank, has the highest credit ratings due to a guarantee from the German national government to secure payment of its debt obligations. Page 54 / 346