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MSDMarch 26, 2010

METROPOLITAN SEWER DISTRICT RE: Project Groundwork Levell ReportOF GREATER CINCINNATI

Dear Valued Stakeholder:

1600 Gest Street

Cincinnati, Ohio 45204513·244·1300

www.msdgc.org

James A. Parrott

Executive Director

Customer Service

513'352'4900

Emergency Service513'352·4900

In an effort to provide transparency and oversight to the communities that we serve, we are

forwarding you an electronic copy of the Project Groundwork Levell report. This report is a

high level overview of the entire program's (WWIP) activities for the previous quarter.

I encourage you to read the report. As you will see, this level 1 report is organized into three

major categories: summary overview, program schedule and program cost.

• The program summary overview provides background information about MSD, theissues we are facing in addressing sewer overflows, the solutions to the problems, the

risk associated with the solutions and the benefits to the community.

• The program schedule provides a summary of the milestones associated withimplementing a program of this magnitude as well as gives a status update of our

progress.

• The program cost provides anticipated financial yearly expenditures for wet weather

projects, allowances, and asset management projects versus the actual expenditures

for each component.

MSD is a steward of the environment and therefore, are a green-friendly organization. Unlessotherwise notified in writing, we will not transmit hard copies of this document to you. In

keeping with the environmental focus, we ask that you please do not print this document. If

you would like an electronic copy of the report emailed to you, please contact CassandraHillary at Cassandra.Hillary@cincinnati-oh.gov.

If you have any questions or comments, please contact Cassandra Hillary of theCommunications Team at 244-5133.

Sincerely,

~qA\/?~JQ; ParrottExecutive Director

Metropolitan Sewer DistrictOf Greater Cincinnati

Equal Opportunity Employer

Summary Overview

Introduction

This report is to detail the quarterly progress of the efforts undertaken via Project Groundwork to improve the sewer system in Hamilton County, Ohio. The intent of this report is to provide a baseline level of informa-tion to a variety of audiences, describing the actions of the Metropolitan Sewer District of Greater Cincinnati in the advancement and completion of Project Groundwork’s program to address and remedy the effects of wet weather on the Hamilton County, Ohio sewer system. This report is not intended to fulfill or supplant the reporting requirements as outlined under federal consent decrees.1

Background

The Metropolitan Sewer District of Greater Cincinnati (MSD) is the publicly-operated wastewater utility serving 43 out of 49 Hamilton County, Ohio political subdivisions, as well as parts of the three adjacent counties of Butler, Clermont, and Warren. It has a ratepayer base of approximately 230,000 residential and commercial users. MSD provides sewerage collection and treatment services to an area covering approximately more than 290+ square miles, containing over 200,000 separate sewer connections which tie into approximately 3,000 miles of sanitary and combined sewers.

The Board of County Commissioners of Hamilton County, Ohio created the sewer district in 1968. They fund and set policy for the district’s operations. On April 10, 1968, they established a 50-year contractual arrange-ment with the City of Cincinnati, for the management of MSD’s daily operations and sustainability.

During Fiscal Year (FY) 2009, MSD operated seven major wastewater treatment plants, more than 120 pump stations, and three package treatment plants that resulted in treatment of approximately 184 million gallons daily of collected wastewater. It monitors about 200 industrial users who discharge pre-treated waste into the sewer system. MSD utilizes a five-year capital planning cycle for the repair, replacement, or improvement of its physical infrastructure assets, with estimated project legislations of $165M for 2010 and $908M for the five year cycle of 2010 - 2014.

1 SSO Decree, Section IX, “Reporting Requirements;” Global Decree, Section XV, “Reporting Requirements.”

(for the year ending December 31, 2009)

2

Summary Overview

Consent Decrees

In February 2002, Hamilton County, the City of Cincinnati, and the U.S. and Ohio EPAs agreed to the Interim Partial Consent Decree on Sanitary Sewer Overflows (SSOs) (aka, SSO Decree). This decree focused on the overflows from the separated (or sanitary) sewer system and required the remediation of 17 highly active SSOs in MSD’s separated system, the development of a comprehensive, system-wide sewer model, the development of interim and permanent solutions to the most active overflow (SSO 700), and the development of a sanitary system capacity study and capacity assurance plan, among other items. The Ohio River Valley Sanitation Com-mission (ORSANCO) joined this action in August 2002.

In June 2004, the City and County, federal and state EPAs, and ORSANCO agreed to the Consent Decree on Combined Sewer Overflows (CSOs), Wastewater Treatment Plants, and Implementation of the Capacity Assur-ance Plan for SSOs (aka Global Decree). This decree focused on MSD’s combined sewer system and treatment plants and outlined the requirements to address wet weather overflows in the combined system (CSOs) and make capacity-based improvements to the 180 year-old sewer system.

The plan developed in 2006 to address the Global Decree’s requirements and to implement capacity-based sanitary sewer and CSO issues of the Interim and Global decrees was known as MSD’s Wet Weather Improve-ment Plan. In 2008, MSD branded this improvement effort as “Project Groundwork.”

In June 2009, state and federal EPAs and ORSANCO conditionally approved the Project Groundwork improve-ment effort. As of January 2010, Project Groundwork is awaiting final acceptance by the U.S. District Court for Southern Ohio Western Division.

The Problem - Wet Weather Overflows

The heart of MSD’s efforts to be undertaken with Project Groundwork will address the impacts of wet weather on our two types of sewers – combined and separated. Weather creates unique challenges for the sewer sys-tem as a whole.

Combined sewers were developed as the core of the MSD system when it was young, between 1870 - 1930. These sewers transport raw sewage and storm water in a single pipe. They comprise approximately 40% of the sewers in Hamilton County and are located chiefly within the City of Cincinnati and some of its “first-ring” and “bedroom” jurisdictions. Combined sewers are generally 12 - 15” or more in diameter.

Separate or sanitary sewers were developed as a predominant sewage transportation type outside the City of Cincinnati, in the unincorporated portions of Hamilton County, as well as its villages and smaller cities. They are designed to carry only raw sewage and not storm water flows in one pipe. Hence, they are typically smaller than combined sewers, being only 8” in diameter for local service. Since the 1970s, new development con-struction exclusively uses sanitary sewers.

Wet weather severely impacts both combined and sanitary-only sewers in Hamilton County. Combined sewers were designed to reach pipe capacity and then overflow into local watercourses. At times, they can also back-

3

Summary Overview

up into the basements of residential and commercial buildings, depending on the elevation of the sewer pipe to the elevation of basements. In Hamilton County, approximately 14 billion gallons of sewage overflows from combined sewers during rain events. This is due, in part, to the combined system’s capacity, to the volume of storm water reaching these sewers from impervious surfaces or direct connections, and to the encasement of local creeks and streams in the combined sewer network, a standard engineering practice for nearly 100 years.

The impact of wet weather and clean water connections on sanitary sewers is more significant. Sanitary sewer overflows are health and environmental hazards. Sometimes, buildings served by sanitary-only sewers were constructed with their storm water control structures – downspouts, driveway, stairwell, and window-well drains, area, and yard drains – improperly connected to them, creating the SSO during wet weather.

Wet weather overflows degrade water quality of local watercourses and can threaten public health. Wet weather also creates operational issues that impact MSD permit requirements under the Clean Water Act and the National Pollutant Discharge Elimination System (NPDES).

Solutions

Project Groundwork, the effort being made to address CSOs, SSOs, and sewer system capacity, is a multi-year initiative and is comprised of hundreds of sewer improvements and storm water control projects. It is one of the largest public works projects in the history of our community. This program is divided into two phases for purposes of implementation: Phase 1 (2010-2018) and Phase 2 (beyond 2018). Included in Phase 1 is the Lower Mill Creek Partial Remedy (LMCPR), a short, deep tunnel, and, an Enhanced High Rate Treatment Facil-ity. This tunnel (including the EHRT, pumping station and near-surface facilities at specific CSO locations) is expected to cost approximately $244 million (in 2006 dollars) and will reduce CSO discharges by 2 billion gallons per year.

Project Groundwork is designed around affordability based on a percentage of household income. Project Groundwork solutions are divided into the following major categories of construction:

New Sewers•Enhanced High-Rate Treatment•Storage Facilities•Pump Station Improvements•Regulator Improvements•Upgraded Treatment Plants•

4

Summary Overview

Work components of Project Groundwork are organized as illustrated in the following table (based upon the June 2009 conditional approval from the U.S. an Ohio EPAs and ORSANCO):

Some of the Project Groundwork construction effort is better managed by executing projects in “bundles.” Bundles are several projects grouped together based upon a number of factors, such as hydraulic dependency, geographic location, common sewer capacity, and/or water quality issues. Also, the bundle concept allows activities expected from “allowances” to be incorporated.

Allowances. Allowance projects arise due to newly discovered circumstances, opportunities, or information/analysis needs. They are typically not planned or designed years in advance; therefore, their budgets will vary from year to year. There are eight subject matter allowance programs to address, reduce, and/or eliminate overflows and improve water quality.

Water-in-Basement Program (WIB). Remedies and solves sewage backups into basements due to sewer 1. capacity issues. The WIB program operates clean-ups, claims, and prevention activities, customer education and communication, property acquisition, and other activities related to the administration and management of this program.

5

Project Groundwork

Wet Weather Improvements Asset Management

in the Wet Weather Improvement Plan)Valued at $620M• Does not include projects already • completed valued at $218M

Projects funded by annual investment of capital funds for repair, replacement and

-tain current levels of service.

Valued at $51M per year• Totaling $510M for years 2009 • through 2018.

County-wide “allowances”Green Infrastructure•

• •

RepairSewer Assessments• Trenchless Technology• Urgent Capacity• Water-in-Basement (WIB)• Valued at $255M Does not include projects already • completed valued at $53M

Note 1: Completed project costs through 2009.Note 2: All costs shown are in 2006 dollars.

Summary Overview

Sewer Lining (Trenchless Technology) Program. This program conducts internal lining of sewers and 2. external lining of aerial sewers as a cost effective method of rehabilitating structurally deteriorated sewers. The program will include, but not limit itself to, spiral-wound pipe, pipe bursting, directional drilling, carbon filament wrapping, and jack and boring. These projects are identified through investiga-tions of the sewer lines and are prioritized based on a standardized condition assessment.

Manhole Rehabilitation (Trenchless Technology) Program. This program provides a cost effective 3. method of rehabilitating structurally deteriorated manholes. Manhole rehab projects are also identified through investigations and are prioritized based on a standardized condition assessment.

Rainfall Derived Infiltration and Inflow (RDI/I) Program. This program assists in the elimination of SSOs. 4. RDI/I projects are identified through investigations which may use intrusive methods. Remedial projects are funded through this program or either or both of the Sewer Relining and Manhole Rehabilitation Allowance Programs, depending on the choice of construction methods.

Home Sewage Treatment System (HSTS) Elimination Program. This program conducts the design, 5. property acquisition, and construction of new sanitary sewers to connect properties in built up areas of the MSD service area to eliminate home sewage treatment systems. These projects improve the water quality of some MSD watersheds by replacing failing or inadequate home systems. These systems are identified and prioritized based on the public health risk.

Urgent Capacity Response Program. This program funds measures that restore sewer capacity in exist-6. ing CSO communities by identifying Project Groundwork construction needed to address urgent CSO community capacity needs, WIB issues, or unpermitted flows. These projects are either accelerated from existing Wet Weather Improvement Plan schedules or were not identified as wet weather projects.

WWIP Progress Studies and Recreation Management. This allowance funds ongoing evaluation of Proj-7. ect Groundwork wet weather improvements and the various measures to address wet weather issues in CSO areas. Evaluations involve systematic review of the wet weather effect within watersheds, the sensitivity of various remedial projects on the system hydraulic grade lines, etc. Findings of these stud-ies will provide clear and strategic direction to the watershed planning group. This allowance also funds recreation management notice, reporting and information needs.

MSD Sustainable Infrastructure (Green) Program. This program will use Low Impact Development Best 8. Management Practices (LID BMP), storm water offloading through stream separation and promotion of sustainable best practices to remove storm water from sewers in both CSO and SSO areas. Program activities will initially include LID Demonstration Projects (to evaluate technologies and reduce storm water impacts to CSOs), Pilot Projects (to evaluate multiple methods in a set of multiple projects), Re-gional BMP Projects (larger sewershed projects expected to capture over 10 million gallons) and Large Scale Projects (long-term projects in major CSO sewersheds). These projects will be evaluated and, in some cases, prioritized on volumetric reduction of storm water from the system, and unit cost per gallon of water removed from the system. The larger, more expensive green projects will focus on

6

Summary Overview

projects capable of removing a minimum of 10 million gallons of storm water from the combined sewer system, at equal or lower cost than comparable “grey” infrastructure projects

Asset Management. The term “asset management” generally refers to a comprehensive and structured approach to the long-term management of assets as tools for the efficient and effective delivery of services. Asset Management (AM) for MSD involves capital expenditures that are not formally considered WWIP projects or Allowance expenditures.

A Note on Dollar Values. Project Groundwork’s wet weather plan was guided by an EPA requirement to reflect costs “in current dollars, excluding inflation.” The guidance requires MSD to convert actual expenditures to a 2006 dollar base to compare to the initial plan budget. The following table lists the conversion factors for dollars expended in the Phase 1 years to make the required calculation.

The factors listed for the years 1998 through 2009 were derived from a cost index developed by MSD. Research found that published indices seldom offer a perfect relationship with local conditions. In consultation with the University of Cincinnati, Department of Economics, MSD created an index that is consistent with MSD’s business model goal of remaining a leader in its industry. The benefits of this customized approach include the following:

Functional in providing a context for estimating data.•Capable of guiding special studies aimed at future cost reduction.•Transparent when documenting capital costs.•Illustrates reasons for construction price fluctuations over time.•Provides accurate escalation factors for project commodity price projections.•Provides known capital expenditure factors for use in de-escalating dollars expended to compare with •original and/or current approved baselines budgets.Flexible in the frequency of the publication and update, especially during rapid economic change.•

Actual Cost Conversions to 2006 Dollars

1998 1.046541 2008 0.911841

1999 1.043471 2009 0.898416

2000 1.039663 2010 0.868035

2001 1.036100 2011* 0.838681

2002 1.033901 2012* 0.810320

2003 1.031550 2013* 0.782917

2004 1.015723 2014* 0.756442

2005 1.008155 2015* 0.730861

2006 1.000000 2016* 0.706145

2007 0.942310 2017* 0.682264

2018* 0.659191

* Based on MSD Forecast

7

Summary Overview

The factors listed for the years 2010 through 2018 assume the historic 3.5% inflationary increase. As data becomes available from the index, these future year factors will be replaced by the calculated values.

Through 2009, MSD has invested approximately $270M (in 2006 dollars) in Project Groundwork solutions.

Risks

Project Groundwork, like any massive, multi-year, and high-investment public works project has some significant risk issues. The most significant risks identified by MSD are:

Affordability for the community•Portfolio of Investments•Quality of Life•

Affordability for the Community. MSD acknowledges that federal mandates to implement Project Ground-work will be costly; hence, maintaining affordability for the communities we serve is the most important risk of this massive program. Although expectations are that sewer rates will continue to rise over the life of Project Groundwork, MSD will work to limit increases as much as possible.

To keep the program affordable to ratepayers, MSD is committed to finding sustainable, integrated solutions that are cost-effective and meet the environmental, social, and economic needs of affected communities.

Sustainable solutions in the wet weather plan include a thorough consideration of innovative and alterna-tive approaches and technologies to achieve the objectives of the Consent Decrees, CSO Policy and the Clean Water Act. These solutions also incorporate alternative funding sources, a phased schedule of implementation directly tied to local ratepayer financial capability, and a thorough review of the community’s financial capability.

Other impacts and issues relating to affordability include:

Declining usage per account•Competing infrastructure needs•Local and regional contractor issues•Economic variabilities (e.g., current downturn)•

But the implementation of Project Groundwork also presents opportunities for progressive enhancements:

Expanding capacity within the system according to future city, county and neighborhood plans•Enabling others to expand customer base through policy guidelines•Enhanced economic possibilities through SBE utilization•Infrastructure investments can spur economic growth•Establishing an integrated approach to infrastructure needs•

8

Summary Overview

Portfolio of Investments. The choices for Project Groundwork solutions need to be both cost-effective and impactful to the communities they serve. Project Groundwork’s solutions are investments for both the utility and the public. To assist in prioritizing these investments and being environmentally focused, each project is thoroughly reviewed through a business case evaluation process based upon “triple-bottom-line” methodology (social, environmental, and economic filters).

Quality of Life. Project Groundwork will make quality of life improvements. The construction is designed to be all-encompassing for communities. But, MSD efforts are only as good as the dialogues and engagements between government and citizen. MSD is committed to listen to the communities of Hamilton County and work with residents to minimize any Project Groundwork issues that detract from quality of life enhancements.

Benefits

MSD envisions the benefits of Project Groundwork outweighing its risks. As noted, the majority of these ben-efits are enhancements to our quality of life. Some of the benefits accrued to Greater Cincinnati communities from Project Groundwork are:

Environmental and Public Health:

Reduces combined sewer overflows (CSOs) into local rivers and streams; •Eliminates sanitary sewer overflows (SSOs) in a typical year; •Eliminates sewage backups into basements caused by MSD’s public sewer system; •Reduces sewage debris and sewage odors in local waterways; and •Decreases human exposure to pathogens and pollutants, such as • E. Coli bacteria.

9

Summary Overview

Economic:

Creates jobs and business revenues for local contractors and tradesmen working on sewer improvement •projects; Promotes the use of small, woman-owned, and minority businesses on sewer improvement projects; •Increases property values in homes that previously experienced chronic sewage backups requiring •disclosure to prospective buyers; Increases property values in areas that previously experienced chronic overflows resulting in poor water •quality after rains, odors, and sewer debris; and Promotes business growth - new business development or existing business expansions - in the MSD •service area through the creation of sewer connection credits.

Social:

Encourages more recreational use of waterways; •Enhances natural habitats for people, plants, and wildlife; •Improves aesthetic appeal of creeks and streams; •Creates more green space or effective use of green space through development of green infrastructure •(e.g., pervious paving, rain gardens, green roofs, bioswales, daylighting creeks, controlling hillside runoff) to control storm water; and Helps facilitate urban renewal and community development through the integration of sewer improve-•ment projects with environmental, social, and economic benefits such as creek restorations, creation of urban waterways, parks or gardens, and the renovation or reuse of buildings, etc.

10

Summary Overview

Introduction

Phase 1 of Project Groundwork includes 95 individual projects, eight bundles to be designed (comprised of 62 individual projects), and seven bundles to be constructed (comprised of 21 projects). In total there are 178 projects in Phase 1. Nearly half are being delivered using the bundle approach.

Phase 1 projects were conditionally approved by the U.S. EPA and Ohio EPAs in June 2009. The information contained within this report will focus on the Phase 1 projects. The status of Phase 1 is summarized in Table 1 below.

Table 1: Summary of Project Groundwork Phase 1

Quarterly Progress Outlook(for the year ending December 31, 2009)

December 31, 2018

Number of Project/Bundle Milestones 69 17 completed

Number of Non-Project/Bundle Milestones 68 4 completed

Single Projects Required 95 78 constructed

Bundles to be Constructed 7, incl. 21 projects

Progress thru December 2009

None completed

Bundles to be Designed Only 8, incl. 61 projects None completed

$1,146.317M (2006$)

Project Costs Expended before 2009 $217,940,966 (2006$)

Allowance Costs Expended before 2009 $52,869,655 (2006$)

$111.929M (current$) $81,993,957 (current$)

$27.176M (current$) $12,351,998 (current$)

$56.767M (current$) $33,897,161 (current$)

Phase 1 Expecta�ons

Phase 1 Comple�on Date

Phase 1 Es�mated Cost

Es�mated 2009 Project Cost

Es�mated 2009 Allowance Cost

Es�mated 2009 Asset Management Cost

7/115 months u�lized

17 ac�ve

4 ac�ve, incl. 10 projects

1 ac�ve, incl. 9 projects

11

Summary Overview

This quarterly progress outlook consists of two components:

Program Schedule•Program Costs•

Program Schedule

MSD is committed to completing the specified projects on time. Project Groundwork’s plan includes milestone for completing the work. The Consent Decree includes stipulated penalties for each day we fail to meet any of the milestones or requirements indicated in the plan. As shown in Table 1, there are 69 project/bundle mile-stones to be met between 2009 and 2018. There are 68 non-project specific milestones to be met during the same timeframe. The non-project specific milestones consist primarily of quarterly and annual reports to the regulators but also include some studies and specific reports required by the final plan. For the purposes of this report, only the near-term milestones (defined as those in 2009 and 2010) are included in Table 2.

Quarterly Progress Outlook

12

Summary Overview

Table 2: Status of Consent Decree Milestones for Years 2009 and 2010

MSD is required to meet a total of 25 milestones between June 2009 and December 2010. All •milestones have been met on time and four have been completed ahead of schedule. None are currently projected to miss the required milestone date (i.e. anticipated to be “late”).

The milestone count does not include those milestones required by the Interim Consent Decrees – • all of which were successfully achieved by the MSD. The count also does not include the milestones required by the Global Consent Decree which were also all successfully achieved by MSD.

The project achievements of Project Groundwork are documented in the 78 “project completed” •statistic.

All individual projects required by Project Groundwork have been started by MSD. Four Phase 1 •bundles remain inactive.

Quarterly Progress Outlook

Immediate Final Agreement Consent Decree Milestones

Status as of December 2009Between

RequiredComplete Pending

Late(Milestone in Bold) On Time On Time

Plan Approval and June 30, 2009 7 7 0

July 1, 2009 and Nov. 1, 2009 2 2 0

Nov. 2, 2009 and Dec. 31, 2009 3 3 0

Jan. 1, 2010 and May 31, 2010 1 1 0

June 1, 2010 and June 30, 2010 3 3 0

July 1, 2010 and Dec. 31, 2010 9 1 8 0

Totals 25 16 9 0

13

Summary Overview

Program Cost

The estimated cost for the Phase 1 projects is $1.146 billion (in 2006 dollars). The cost of Phase 1 of the Project Groundwork has been divided into two distinct areas of work:

Wet Weather Improvement Plan: defined projects (including bundles) plus allowances 1. Asset Management2.

Wet Weather Improvement Plan Costs. A summary of the defined projects and allowance costs in current dollars through December 2009 against target (expected cash flow) is shown in Exhibit 1.

Exhibit 1: Total Project Expenditures

Quarterly Progress Outlook

$-

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

$140,000,000

$160,000,000

2009 Cumula�ve Project Expenditures

Target

Projects

14

(2006 dollars)

Summary Overview

Allowances. The Project Groundwork plan includes approximately $308M (in 2006 dollars) for allowances in Phase 1. MSD has an obligation to provide an accounting and listing of the work for which allowance monies have been spent during each year. The following provides the 2009 information through December 2009. The two Project Groundwork allowances for Trenchless Technology (sewer relining and manhole rehabilitation) have been combined for this discussion.

Table 3: Allowance Categories Sunk and 2009 Costs

Note 1: Encumbered refers to funds formally committed (and presently unspent) through active MSD contracts. These figures are provided to readers to reflect MSD’s commitment to complete needed work in these specific areas.

Note 2: Encumbered figures for RDI/I and Urgent Capacity are explained further in bullets below.

For the year, posted costs against the 2009 HSTS budget are at 70%. Specific only to this allowance •category, all HSTS costs are initially posted to an Asset Management account. Annually, the Project Manager calculates the credit portion of this work that is attributable to Project Groundwork.

Quarterly Progress Outlook

All figures expressed in current dollars

Rev. 2009 2009 Costs Thru Sunk Costs

Item CIP Budget December Thru 2009 Encumbered

HSTS $ 1,969,695 $ 1,380,601 $ 1,459,631 N/A

Green $ 8,000,000 $ 1,838,954 $ 1,838,954 $ 7,069,988

RDI/I $ 2,750,000 $ 439,946 $ 637,687 $ 3,646,696

Trenchless Tech. $ 8,159,300 $ 6,276,336 $ 31,061,849 $ 1,602,964

Urgent Capacity $ 2,331,100 $ 234,573 $ 517,484 $ 3,016,645

WIB $ 2,800,000 $ 1,605,417 $ 19,100,808 $ 2,089,300

Studies/Reports $ 1,165,700 $ 576,171 $ 11,209,115 $ 833,155

Total Allowance $ 27,175,795 $ 12,351,998 $ 65,825,528 $ 18,248,748

15

Summary Overview

For the year, posted costs against the 2009 Green budget are at 23%. •

For the year, posted costs against the 2009 RDI/I budget remain at 16%. The encumbrance includes •$3M for the purchase of six vehicles. This expenditure was transacted under the operating budget.

For the year, posted costs against the 2009 Trenchless Technology budget are at 77%.•

For the year, posted costs against the 2009 Urgent Capacity budget are at 10%. The encumbrance •includes $2.3M for cleaning the Mill Creek Interceptor. •

For the year, posted costs against the 2009 WIB budget are at 57%.•

For the year, posted costs against the 2009 Studies/Recreation Management budget are at 49%.•

Quarterly Progress Outlook

16

Summary Overview

Asset Management. Exhibit 2 depicts actual 2009 AM expenditures (through December 2009) plotted against a straight line presentation of the escalated value of the $57M per year goal (in current dollars).

Exhibit 2: Asset Management Expenditures for 2009

Quarterly Progress Outlook

2009 Asset Management$60,000,000

$50,000,000

$40,000,000

$30,000,000

$20,000,000

$10,000,000

$-

Cum

ula�

ve A

nnua

l Cos

ts

Jan-09

Feb-09

Mar-09

Apr-09

May-09

Jun-09

Jul-09

Aug-09

Sep-09

Oct-09

Nov-09

Dec-09

Months

Target

Cost

17