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Home My WebLink About1973-03-15COUNTY SANITATION DISTRICTS OF ORANGE COUNTY, CALIFORNIA P. 0. BOX 8127, FOUNTAIN VALLEY, CALIFORNIA 92?08 10844 ELLIS AVENUE (EUCLID OFF-RAMP, SAN DIEGO FREEWAY) Gentlernen: March 13, 1973 NOTICE OF ADJOURNED REGULAR MEETING DIST P .. rJ· WQ -___ h_L""-~ _in __ .____.'-. THUBSDAY J M.L\RCH 15J 1973., Z; 30 P, M, 10844 ELLIS AVENUE FOUfffAIN VALLEY) CALIFORNIA TELEPHONES: AREA CODE 714 540-2910 962-2411 P1,,;.11 s·0_0.i-:."'c -~o "'c:· .. c.::.;. c-"c.1v.::.01·l c.,;i-.L ~~0'u:i. ·u.,:i..i.c.y· 1-'; ~ 1973, t~-'..:: :CvaJ. \.~ u.L Directors of County Sanitation District No. 3 has declared their 1nt0nt to ad,j ourn their March 11~ meeting to the time 2.r~d place shown above. JWS:rb • \ MEE TI NG DAT E Ma r c h 1 5, 1 973 T IME 7 :30 p .m. DI STR I CTS 3 DISTRIC T 1 A CTIVE DIRECTORS (HERR I N)····· (CASP ERS ) ...• (WE LSH) ••.••• GR I SET · · • · · ------BATT IN ..•.• _____ _ MILLE R •.••• _____ _ PORTE R • . • . • _____ _ DISTRICT 2 (P EREZ) • • · • · · (• ·-DAA) • • · · · · ( SPERS) .... 1 LA NGE R) • · • · · KOV/ALS l< I) · · · GR I SET) ,. ••· (HOL LI ND{:N ) · · (RO BERT S)···· (R E I N HA~DT). · (DUTTON )····· (D UNNE)· • · · · · S M I TH· · · • • • CAST RO· · • • • CL ARK .. •••· CUL VER····· FINNELL···· FO X· • • · • • • • HERRIN····· J UST······· NEVI L ...... ROOT······· STEPH E NS ON· WINN .... ··• DI STRICT 3 q -~ CULVER..... V -#--__ (CA SPERS) •••• BATTIN •••• J-l~ _L_ __ ( HINES) ...... DAVIS ...... ~ _ _j__ __ 1<0 \t·/Al-SKI) •.• FOX. . • • . • • • V----_d__ __ COEN) ••••••• GREEN...... V-_j__ __ (G R I SET) ..••• H ERRI N ·····.~ --@f--- (F RANK! EWICH ). L A CAYO····~ ~ --' -- (NU I JE NS) •••. LEWIS ······ ~ _:L_ -- (M I LLER) ..... LONG ....... V'" 1._ -- MC WH IN NE Y ~~ _j__ __ (R E I NHA RDT) . ·. ROOT . . • • • • • ~ _:j__ __ (BLAC KM AN) •..• S ALES •.•••• ~ + __ _ ( t f T t.l l"'r-•~) ,...,...""'_..,,.. V" \'-'f'l-1. ! I ~~ C:.1 \1 , , , 0 \..1./ l I , , , , , • (vu T TO NJ •••••• STEPHEN SON. ~ y == (RO BERT S) ••••• STEVE NS •••• _L --A/_ __ (BYR NE) ••••••• VANDE R\.'/AA L. __L i_ __ DISTRICT 5 ( CR 0 U L ). • • . . . • MC I N N I S • • • (BAKER) ••.•.•• CASPERS .... KYMLA •••••• DISTR ICT 6 PORTER • • • • • (CA S PERS; •••• BATTIN •• • • (MC INNIS) ••• STORE ••.•.• DISTRICT 7 (\•/EL SH ) •••.•. MILLER····· (CAS PERS) · · · · CLAR K · · · · · · (HERRIN) • • • • • GRISET • • • • • PORTER • •• • • (FISC HB ACH) .•• QU I GLEY ••.• (MC IN NIS) .••• ROGERS ..... (PERE Z ) •••••• SMITH •.•••• r:._,r RICT 11 (CO EN) ...... ·GI BBS .... ·· (CA SP ~RS ) . · • • BAKER • • · · • • (COE N) • • • • • • • DUKE • • • • • • • DISTRI CT 8 (J OYNSO N). • • • • BOYD • · • · --• (CL ARK ) •• • •.•• CASPE RS • • • • MITCHEL L • • • 2/l ~/7 3 ----- ------ JOINT BOPiRDS ACTIVE DIRECTORS (LAN GER)······ FI NNELL····· ·----· (CASPERS)· • • · ·BAKER· • • • • • • ----· - (CASPERS)···· ·BATTIN······ ---- . CASPERS··· • • ----- (W.EDAA) ·······CASTRO······ ---- (CASPERS)····· CLAR K······· ----- CULVER· • • • • • ---- (HINES)······ ·DAVIS······· ---- (COEN)······· ·DUKE ········ ----(KOWA~SKI) ····FOX········· ---- !COEN • • • • • • • ·GI BBS··· • • • • ----- COEN • · • • • • • ·GREEN· • • • • • • ---- HERRIN)····· ·GRISET· • • • • • ---- GR I SET)····· ·HERRIN······ __ -- (HOLLINDEN) ···JUST········ __ -- !MC INNIS)····KYMLA······· ___ _ FRANK I ElntH) ·LACAYO······ ___ _ NU .I JENS)····· LEYH S • • • • • • • ___ _ (MILLER)· ·····LONG········ (CROUL) •••••• ·MC INNIS···· ==== === · MC WHINNEY· • ___ _ (WELSH)·······MILLER· ····· (ROBERTS):::::NEVIL······· ==== \ PORTER· • • • • • !FI SHBACH) • • • ·QUIGLEY· · · · · MC INNIS)··· ·ROGERS······ RE I NH AR DT) • • ·ROOT· • • · • • • • BLAC KM AN)····SALES······· (HOLLI NDEN) ···SCOTT······· (PEREZ)······ ·SMITH······· !DUTTON) •••• ··STEPHENSON·· ROBERTs) ..... sTEVENS···;· l~I" Tft,IJ.IT_, r-,..-- (BYRNE)~~~::::VANB~RWAAL:: (DUNNE)······ ·W IN N········ * * * * * --......--- (JOHNSO N) BOYD· .. ······-· --- · OTHERS MITCHELL···· ---- RARPER . SYLVESTER LEWIS DUNN CLARKE SIGLER NISSON TAYLOR BROWN BOETTNER CARLSON FINSTE R GALLO WAY HOH EN ER HOWARD HUNT KEITH LYNCH MADDOX MARTINSON MU RONEY PIE RS ALL STEVENS KEN NEY MEET I N G DA T E March 15 , 1973 TI ME 7: 30 p .m. DISTRICTS ___ 3..;.._ _____ _ DI STRIC T 1 (HE RR I N)····· (CASP ERS ) •••• A C'J.'IVE DIR ECTORS GRISE T ····· -------BA TT I N •••.• _____ _ (WELSH) ..... . MILLER .••.• ______ _ POR TER • • • • • _____ _ DI STRICT 2 (PE REz) •••••• C' ·-:o AA) • • • • • • \; SPERS) •••• iLANGER) • • • • • KO WA LS l< I ) · · • GRISE T ) ••••• (HOLLI N D ~N) •• (R OB ER TS ) •••• (RE I NHARD T) •• (DUT TON) ••••• (DUNNE ) •••••• DIS TRIC T 3 SM I TH· • • • • • CASTR O· • • • • CLARK · • • • • • CUL VER· • · • • FINN ELL ···· FOX ········ HERR I N····· JUST· • • • • • · NE VIL··· .. · ROOT ·· • ·; · • STEP HENSON · WINN ······· f -· ---__.__ CULVE R ••••• 1 ~ _!j_ __ (C AS PERS ) •••• BA TT IN •• 5 .'0 l~ _L _j__ __ !HINES ) •••••• DAV I S ...... _:!__ _j__ __ KOWAL S KI ) ••• FOX •••••••• _v _ -1L_ __ CO Ef~) ••••••• GREE N •••.•• _:!_ _j_ __ (G R I SE T ) ••••• HERR IN···;.:~ -~-__ (F RANK I E ~/IC H). LACAY O ••• f .f; _L _:j_ __ (NU I J ENS ) •••• L E ~HS •••••• _I _ _j_ __ (MILL ER) ..... LONG •• ••• .. _.; _ __t!_ __ MC WHI NN EY ~·,if ~ _:J_ __ (RE I NHARD T ) •• ROO T ••••••• _v _ ~ __ (BLAC KMA N) •••• SA LES •.•.•• _/ _ _L __ ( ' I T • I!")~ .. I '\ " r> ,. ... ..,.._ ./ N ~'1'11r To NX~I:/:: : STEPH ENS ON: + -*-_-_-_ ROBER T S ~ •••• STEV ENS •••. BYRNE~ •••••• VAND ER WAA L. ~ ~ ==== DI STRICT 5 (CROU L) ••••••• MC I NNI S ••• (BAKER ) ••••••• CASP ERS •••• KYM LA •••••. DIST RICT 6 POR TER • • • • • (CASP ERS.:' •••• BAT TI N • • • • (MC I NN I S ) ••• STOR E •••••• DISTRICT 7 (WELSH) •••••• MILLE R • • • • • (CASPERS) • • • • CL ARK • • • • • • (HERR I N) • • • • • GR I SE T····· POR T ER ••••. !FI SCHBAC~) ••• QUI GLEY .••• MC I NNIS ) •••• ROGERS ••••• PEREZ ) •••••• SM I TH ...... L....lfRI CT 11 (COEN) ..... ··GIBBS ··· .. • (CA SP[::RS ) • • • • BAKER • • • • • • (COEN) • • • • • • • DU KE • • • • • • • DI STR ICT 8 (JO~N S QN ). • • • • BO YD • •• • .• • (CLA RK ). • • ••. • CASPERS • • • • MI TCHE LL • • • 2/14/73 JO I NT BOAR DS A CTIVE DIRECTORS (LANGE R)······ FI NN EL L··.·· ---- (CASPE RS)····· BAKER ······· ---- (C AS P ERS )···· ·BAT TI N······ ---- . CAS PERS .. · .. ------ (WED AA) ·······CAS TRO ······ ---- (CA S P ERS)····· CLARK ······· ----- CULVER ······ ---- (H I NES) ••••••• DAVIS ·······---- (COE N)········ DUKE ········ ---- 1 KOWA ~S KI)·· • ·FOX ·· • • • • • • •. ---- COE N ········GIBBS ······· ----- COE N ········GRE EN······· ---- HERRI N)····· ·GRIS ET· · • • • • ---- GR I S ET)····· ·HERRIN ······ ---- (HO LL I NDEN ) • • ·J UST· • • • • • • • ---- (M C I NNIS)····KY MLA······· ___ _ (F R A N~IE W I C H)·LACAYO ······ ___ _ (N UIJc NS) •••• ·LEWIS······· (MILLE ~). ·····LONG ········ ====-==== (C ROUL)·······MC I NN I S ···· ___ _ MC WHINNEY· • ___ _ (WE LS H)······ ·M I LLER ······ (RO BE RTS)·····NEVIL······· ==== ==== PORTER · • • • • • (FISH BACH)····QUI GLEY ····· (MC IN NI S)· ···ROGERS ······ !REINH ARD T)·· ·ROO T········ BLAC KMAN) .•• ·SA LES ······· HO LL I NDEN) • • ·SCO TT · • • • • • • PER EZ)·······SMITH ······· (D UTT ON) .• ····STEPHENSON ·· (ROB ERTS)··· ··STE VE NS····· f&.~(' T '-1 .. IT""\ ,..._,..,.._ __ ~r ·rw 1I.~~~1 v I ' ' • •;:)I Vr\C • • • • • ' • BYR NEJ··· ·• ··VANDERW AAL ·· DUNNE)······ ·W I NN ········ (J OHNSON) OTHER S * * * * * BOYD • • • • • • • • -· --· -· MI TC HEL L···· ---- RARPE R SYL VES TER LEWIS DUNN CL ARKE SIG LER NI SSON TAYLOR BROWN BOE TTN ER CAR LSON FI NST ER GALLOWA Y HOH EN ER Hm\IARD HU NT KEITH LYNCH MADDOX MARTINSON ,\1URONEY PIERSALL STEV ENS KENNEY II BOt}.,;{ OS OF Oi ~ECTOklt§ County Sa r.itstion Districts Post Off ice Box 8127 10844 El I is Avenue Fo untain Volley, Calif., 92708 Telephones: o f Orange Co un ty, c~!ifo rnia (1 ) (2 ) @ filE ·················• I.ETIER···········- A/C ... JKl R ··- ... ,. ............ ------··- ' ........................ - DISTRICT No. Ro ll Call ADJ OURNE D 'REGULAR .MEETI NG MAR CH 15, 1973 -7:30 P.M. Appo i ntment of Chairman pro tern , if necessary Area Code 714 540-29 10 962-241 1 A G ENDA MJOURNMENTS •• ~ .. ---- COMP & MILE AG E ... ~ FI LES SET UP ................... ~ RESOLUTIONS CERTIFI ED •••• LETTERS WR ITT EN .......... .... MIN UTES WRITT~- IHNUUS f l lfD·--- (a ) Repor t of Stone & Youngberg , Municipal Financing Cons~l t ants , re Financing Major Sewerage I mprovements -County Sanitation District No . 3 (Copy in Directors' meeting folders) E ··-···-······-· (b ) Cons i deration of motion to receive and file repnrt submitted by Stone & Youngberg, Municipal F inancing Consultants , Inc ., dated March 9, 1973 , re Financing Major S e werage Improvements -County Sani .tRtj.on DiRt~ict ~n , 3 .._, LETI ER ···········- A/C •••. Tl<lR .t 4 ) Verbal report of staff and engineer re evaluation of current District needs and Master Plan sewer construction schedul ing ____ ................ - _ ......................... .... (5 ) Discussion re implementation of Mun~cipal Financing Consu l tant 1 s reconur.endations to fi nance Master Plan construct i on with general obligation bonds and establishing conn ection charges to fund the p r ogram Fll.E ---"f{,6)\ LETTER···-~ A/C __ .11(1.R - -~\S r la) ,__ (b) CE!• - -l&TTEll ~ AJC v •• TKlR -· --- Verbal staff report re Knott Interceptor, Reach 4 , Contract No . 3-18 , crossing of the Westminster Flood Control Channel Consideration of Resolu t ion No . 73 -27 -3 , authorizing execution of an agreement with Orange County Flood Control District in connection with construction of a portion of the Knott Interceptor , Reach 4, Contract No . 3-1 8 , iri conjunction with their construction of the Westminster Flood Control Channel , for a total amount not 'to ,exceed $40 ,000 .00 . See page "A'' I (7 ) Other business and communications , if any ( 8 ) Consideration of motion to adjourn 9 :1~- RESOLUTION NO. 73-27-3 AUTHORIZING EXECUTION OF AGREEMENT WITH ORANGE COUNTY FLOOD CONTROL D~STRICT RE KN011T INTER CE P1'0R, REACH 4, CONTRACT NO. 3-18 A RESOLUTION OF THE BOARD OF DIRECTORS OF COUNTY SANITATION DISTRICT NO. 3, OF ORANGE COUNTY, CALIFORNIA, AUTHORIZING EXECUTION OF AGREEMENT WITH ORANGE COUNTY FLOOD CONTROL DISTRICT RE CONSTRUCTION OF PORTION OF KNOTT INTERCEPTOR, REACH 4, CONTRACT NO. 3-18 * * * * * * * * * * The Board of Directors of County Sanitation District No. 3, of Orange County, California, DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1. That the certain agreement dated between County Sanitation District No. 3 and Orange County Flood Control District, in connection with construction of a portion of the District's Knott Interceptor, Reach 4, Contract No. 3-18, in ccm511nr.ti rm wi t.lr thei.-r ~onstrur.tj on of t}lP We~tnd n8ter Pl nnn r.nntr>0l Channel, is hereby approved and accepted; and, Section 2. That payment for said construction·ror a total amount not to exceed $40, 000. 00, is hereby. authorized; and, Section 3. That the Chairman and Secretary of District No. 3 are hereby authorized and directed to execute said agreement. PASSED AND ADOPTED at a regular meeting held March 15, 1973. Agenda Item #6(b) -A-D~strict 3 COUNTY SANITATION DISTRICTS OF ORANGE COUNTY, CALIFORNIA P. 0. BOX 8127, FOUNTAIN VALLEY, CALIFORNIA 92708 10844 ELLIS AVENUE (EUCLID OFF-RAMP, SAN DIEGO FREEWAY) February 23, 1973 Subject: Change of meeting date re consideration of Ordinance No. 303) amending Uniform Connection and Use Ordinance No. 302 TELEPHDN ES: AREA CODE 714 540-2910 962-2411 At their adjourned meeting on January 3, 1973, the Board of Directors of County Sanitation District Nn. 3 rlefArred c0np1~P~? ticn ':)f Ordinance No. 303 to an ad~cui-1 n2-d mC;et:i..r!g 011 Wecln8::::>da;y, March 7, 1973, at 7:30 p.m. in the District's administrative office. Please be advised that the meeting date has been changed to Thursday, March 15 1 1273J at 7:~0 p.m~ JWS:rb COUNTY SANITATION DISTRICTS OF ORANGE COUNTY, CALIFORNIA P. 0. BOX 8127, FOUNTAIN VALLEY, CALIFORNIA 92708 10844 ELLIS AVENUE (EUCLID OFF-RAMP, SAN DIEGO FREEWAY) February 23, 1973 Subject: Further consideration of Ordinance No. 203 TELEPHONES: AREA CODE 714 540-2910 962-2411 At thelr regular meeting on February 11!, 1973, the Board cf Dj_rectors of County Sanitation D:ist:r-ict No. 2 continued t r~e !~~~ -f:-'2!1 'Jf 9. ~0~~ect7_c:l f~8 0~':1_i~2.~:?s -t-:-tl~c:.~ :-::c:ti::t; on !,wja:c ch J.. 4 > 19 ~{ 3 .• at 7 : 3 0 p • m • , at ·w hi ch r, j. me a d at e w i 11 be established for further consideration of said ordinance . JWS:rb . ·-~N_i£.J: {/_.. Wcjyne, S;t/lvEs·cer Sec~tary 16f the Board of Directors COUNTY SANITATION DISTRICTS OF ORANGE COUNTY, CALIFORNIA P. 0. BOX 8127, FOUNTAIN VALLEY, CALIFORNIA 92708 10844 ELLIS AVENUE (EUCLID OFF-RAMP, SAN DIEGO FREEWAY) January 12, 1973 RE: JANUARY 3RD PUBLIC HEARING -PROPOSED SEWER CONNECTION CHARGE ORDINANCE NO. 303 TELEPHONES: AREA CODE 714 540-2910 962-2411 This is to advise that the District No. 3 Board of Directors continued the subject hearing to March 7, 1973, at 7:30 p.m., in response to several requests due to the holidays. The firm of Stone and Youngberg, Municipal Financing Consultants, has been engaged to study the District's funding requirements. Their report and recommendation will be considered at the ~arch 7th hearing. On or about March 1st the recommendations of the consultant will be forw~rded to those interested persons and entities receiving this notice. The co~plete report will be available for study and review at the District's office. The Board has directed the District's staff to proceed with discussions with the local sewering entities concerning an agreement for collection of sewer connection charges which will be necessary in the event a connection charge ordinance is adopted by the District. ~ ,#/ ~~~ ~d~~~-0«' / Norman E. Culver Chairman cc: Directors, District No. 3 .. ~ ....... ·.....-... The City of Garcl(~!l Grove is ;?rote sting the proposed sewe;- connection fee ordinance both because of the fees themselves and because of the ~cthod of collection. All of the undcvclop~a or underdeveloped property in Garden Grove has been in the Orange County Sanitattoh.'..Districts since the beginning and has been paying taxes presumably to buy C?paci t.y. "!:'Jm.; to be tole that the capacity will not be available because it was used by property o~ner~ who developed higher density than for which the facilities were designed, and that the non~usinq tax payer ~~st now pay connection fe·es in order to pay for provision of capnci ty for him , is like punishing P. for crir.~es cor.:rnittcc1 by A. .. It seens to 1110 that, since the facilities were constructed for nevelopment envisioned by the Master Plan, that properties should at least he creci tee] for the densi. ty authorized by the flan. For example, if a parcel was planned for a duplex, the owner shoulc1 be al lowed to }mi 1 c a· duplex without adcH tional penalty. 'l'he practice of }1aving one government 0nti·ty collect money·for another government entity for a co~mission could lead to abuse. ~-lost cities have all they can handle just collecting fees they need for their own use; it could be ~ very difficult: to explain to th·~ taxpayers w~y the·~cit.ies are· collecting fees for others and shipping 95% of the proceeds ., .'-.. ·~·· ,• ... ,,,.,,..-..,. r-·· ; ·. out of town to be used sor::(~\ .. Thcre else. To ?,orPe of their taxpayer§,the cities could appear to be patsies. . :~ - If both the State and Fecteral q6vernments hav~ money ~~ distribute back to t:1e loca 1 qovernment s for a v~riety of'·.·. _:,.·.·' purposes, there should certainly DC enouqh available for environmental protection because of the e~phasis placed on _ · .·. this area. We would like to see ~ore effort to obtain State and Federal qrnnts bcforP i~posing new fees or charges on local property u.-mers. Hir:Jf:er 12vels of government are striving to allevi.ci.t.-~ the heavy bun~cn on the· property ovmers; the proposed ordinance is in direct contradiction tc those efforts. The proposed connection fees of $250.00 per residential unit will certainly ·deter development. If the' objective. is to discourage development because we don't want any more growth, then why are we building these big new trunk lines? A far more equitable method of collecting revenues required for expansion is by levying service usefees. This method is highly favored by both State and Federal Governments and is en- tirely feasible her~ by coordinating with the County of Orange! It should be not much more difficult to collect sewer use fees thru the County than it is to collect Sanitation District taxes. DISTRICT 3 -March 15, 1973 Vanderwaal: Moved that all connection fees be established as recommended by Stone and Youngberg and that the bond issue amount be left open to be determined by a Committee appointed by the Chairman. McWhinney seconded motion. Nissan: Scott: Motion is to accept recommendation of the $250 for the connection charge and to accept the recommendation of a general obligation bond issue, the amount to be determined at the time it is presented to the Board for formal action. If you adopt this motion, then we have to put it into an ordinance with connection fees at $250 and $500 for industrial. If, at the time you consider the ordinance, you wish to revise the amounts, you can. When ordinance is presented, requires 2/3 approval. Asked if that motion included another special committee and was answered yes. He then said he would like to charge the committee to come up with recommendations on a publicity campaign also. Culver appointed committee: Robert Root, Chairman Charles Stevens Donald Fox Jack Green George Scott Culver then entertained a motion that the services of Stone & Youngberg, Municipal Financing Consultants, be retained for a maximum amount to be set by the Directors in order that they may assist the special committee with any questions or problems they might have regarding establishing the bond issue amount. It was moved that Stone & Young- berg be employed for up to a maximum of $2,000. Motion was seconded and carried. 8 r1-i () ""7'1'"'1 l~ Q.r y·..-o u..,. 1' .. T G ]:--> E ·1~ (1· ...__ 'I . -~ {_~, . \_ l "'I •. _) . ..:..A .• •J •• M U N I C I PAL FI N /\ N C I N G C o·N S U LT A hi TS, I N C. Ma re h 9 , 19 7 3 The Honorable Board of Directors Orange County Sanitation District #3 P. 0. Box '8127 Fountain Valley, California 92708 Gentlemen: Agenda Item No. 3 In accordance with your authorization and direction, we have prepared a recommended financing plan for your consideration to implement major sewerage improvement programs which are to be carried out over the next s evera 1 years . We have concluded that the estimated maximum cash flow needs to implemen(the programs can be met from the sale of $13, 000, 000 General Obligation Bonds. This is the amount that would be required should federal and state standards provide for secondary treatment at an equivalent to activated sludge for total district flows. Consµlting engineers are of the opinion that federal and state standards will eventual! y require this level of treatment. Should federal and state standards be set at lower levels, the full amount of authorized bonds need not be sold to implement the program. The recommended financing plan suggests that the Board of Directors initiate a connection charge as an additional source of revenue to meet district funding needs and recover the costs of providing excess capacity in facilities to meet future users. The level suggested for your consideration is $ 250 per dwelling unit. Suggestions are also made regarding commercial and industrial user connection fees. I would like to take this opportunity to express our appreciation to Mr. Fred A. Harper, General Manager, J. Wayne Sylvester, Director of Finance, Mr. Graham Hazlett of the District Staff, Mr. Conrad Hohner, Boyle Engineering, and Mr. Walter Howard, Carollo Engineers, for their assistance in the completion of this study. 9S!) -23:10 SUITE 2750 ·ONE CALIFORNIA STREE·r •SAN FRANCISCO. CALIFORNIA 94111 • (415):(?~;.?,.C~;d . I "--'. The Honorable Board of Directors Orange County Sanitation District :h1:3 .. ·. March 9, 1973 Page Tvvo We are available to provide any further information you need to assist the District in implementing its sewerage program. Yours very truly, STONE & YOUNGBERG Municipal Financing Consultants, Ince d Y:i// //) ,, ) ~?, :..:-;/A ./ .•• ./ :yl/t·'LC~f ·// ,_,-?"~,:,,; .... .::.,.,,,.., /. c-,. - / Ernest B. Bodnar Assistant Vice President EBB:ac enclosure SUMMARY OF FINDINGS l\ND RECOMMENDATIONS 1. To meet its existing and anticipated future needs, District No. 3 initiated a seven-year trunk sev1er improvement program v1hich is estimated to _cost more than $29 million over the period 1971/72 through 1977/78. In conjunction Vlith six other Orange County sanitation districts, the Dis- trict in the process of upgrading jointly owned sew09e treatment works to meet State wuter quality control standards. The estimated co st of up- grading jojntly ov:ncd primi:1ry treatment focilitics is approximately $ 21. 2 million. The consulting engineers estimate the cost of activated sludge sec·::mdary treatment which eventually will be required by Federal and State standards at approximately $100. 8 million. 2. On the basis of the consulting engineers 1 cost estimates and construction schedules / the Director of Finance has projected funding needs of Dis- trict No. 3 to implement the mC1 stcr plan trunk sev.rer program; meet its share of estimated cupital costs of the proposed joint treatment works im- provement program; provide for the District's share of projected operations and maintenance costs; and debt sen1~ce costs on District bonds. Projec- ted cash flow Deficits range from approximately $4. 85 million to $12. 5 million dependent upon the level of secondary treatment required of the District to meet Federal and State standurds. 3. General obligation bond financing is the most practical and feasible finan- cing alternative available to District No. 3 to implement the master plan trunk sewer and joint treatment works improvement program as scheduled. It is recommended that District No. 3 seek authorization of $13 million of general obligation bonds s>1ce the consulting engineers are of the opinion that Federal and StaL· standards will eventually require secondary treatment equivalent to activaced sludge. 4. Authorization of $13,000,000 of general obligation bonds does not mean that the full amount will be issued. Should Federal and State standards provide for secondary treatment at an equivalent less than activated sludge for total District flow, facilities could be financed with the issu- ance of that portion of the authorization needed to complete the program. 5. Recent development trends within the area served by the District have indicated the following: A trend toward increased higher density residential types of development in the District. The potential prope!"ty tax base provided by single family unit land uses tends to be significuntly greater than the potential property tax base provided by a multiple family unit. Engineering. data indicate average daily flows per dwelling unit in single family residential land uses <:1vcr0ge about 38 5 gallons per unit. In high density residential hmd uses, flows uvernged about 25 6 gallons per day per unit, or approxirnr.:rtely 2/3 that of lower density sir:gle family land uses. Vvithin cities seryed by District No. 3, there are significant differ~nces in present users of tho District's sewerage facilities. median value of owner occupied housing units ranges from $ 22, 800 to $34, 700. Population per own9r occupied housing units ranges from 2.1 to 4.0. Land values within the District have increased significantly ln recent ye2rs. Land suitable for low density residEmtial develop- ment hus increased from approximately $10,000 -$12,000 per acre in 1960 to current levels of $28, 000 -$30, 000. Land suitable for high density resJdcntial development is now valued at approxi- mately $50 I 000 per acre. Land suitable for commercial develop- ment is now valued at approximately $100, COO per acre. The District's property tax base of $1. 259 billion consists of land having an assessed vuluation of $480 million (38 percent of total tax base) and improvements on land ·which is owned und occupied by present property owners having an assessed valuation of $778 million ( 6 2 percent of tota 1 tax base) . 6. Demands for sewerage service~ are created by tw@ broad classifications: (1) present users, and (Z) po~· ·ntial users (owners of improved or unim- proved land not connected to :he system but adjar:ent to it). A system of assessing and recovering the costs of these benefits .must consider the following: 1. Equity among present users 2. Equity among potential users. 3. Equity between present and potential users. The distribution of costs in relation to complete equity in all cases is highly unlikely. What must be attempted is the achievement of optimum equity in relation to the degree of benefits received by broad categories of present users and potential users within the constraints posed by statutory provisions and practical administrutive procedures. 7. On the basis of our unalyses, ·evaluations, and considcrutions to optimize equity e:rnong users und. potential users of the Djstrict's sewer- age system, it ·is . our recommendation that the ~10verning board of Dis- trict No. 3 consider the use oi a sev.1cr connection fee us a new source of revenue. The purpose of the connection fee would be to recover costs of providing facilities in the near future which will have sufficient built-· in capacity to serve future usors. Vve nlso recommend that the connection fee be made u.ppU.cable to connections made to a District owned facility or to any local collccto sevrer v1hich discharges into the District 1 s sewer- age system. 8. As the basis for formulating connection charges, we suggest unit costs of providing trunk se\ver and sewage treatment-disposal capacity. Vie esti- mate the unit costs of providing such facilities at approximately $ 645, 000 per million gallons. 9. As the basis for computing connection charge fees, we recommend that the governing board of District No. 3 consider using average anticipated sew- age flows from residential land uses v1hich have served as the basis to design master plan trunk sewer facilities in District No. 3. 10. Based on the estimated capHa 1 cost of providing sewerage facilities, pro- jected flows from residential land uses, and current land use develop- ments wiihin the District, it is recommended thut consideration be given to the establishment of a residential unit connection charge of $ 250. 11. Commercial and industrial uses were considered in the same manner as residential uses. It is anticipated these uses will provide an average flow of 3 5 5 5 gallons per day per acre. At a unit. capital cost of $ 6 5 for providing 100 gallons of sr werage capacity, the charge would be approximately ~ 2, 300 per acr ~ On a square footage basis, the capital cost for sewerage facilities would be approximately $500 per 10, 000 square feet of the facility. This rate is suggested as a general guide in recog- nition of the wide variation in types of industrial and commercial uses. It is suggested the charge for major types of industrial and commercial facilities be administered on the basis of a close study of the capacity requirements., type of discharge, number of employees, and other related· factors. 12. Revenue from connection charges under rates suggested in this study could provide as much as $2.4 million on the basis of the December 1972 study of near-term development patterns in the District. 13. Based on the estimated bond service co st s for the $13, 0 0 0 , 0 0 0 of pro- posed general obligation bonds, estimated connection charge revenues would be more than sufficient to service the bonds. Connection fee revenues in execs s of actual bond service requJn.:m~nts could be held in reserve to meet future capital D('.cds·, thereby making it possible for the District to reduce the property tax rate levied for the accumulation of capital reserves. ~: •. DISTRICT 3 -3/15/73 #6 -Knott Interceptor, Reach 4, Contract 3-18 REL reported that delay in receiving bids 8.nd starting constructio~ h3.B caused certain problems with Flood Control District and Sanitation District scheduling. FCD has let a contract and their contractor will be ready by April 16 to start work . Will be sometime in July before we can get b i ds and .start work . If we do not contract with the FCD to do this portion of the job now , wi ll have to go to tunneling under FCD l ate~ and would be an expensive procedure. It was then moved and· seconded to authorize agreement with Flood Control District to construct this .portion of 3-1 8 . Mot ion carried. #3 -Report of Stone & Youngberg Ernie Bodnar reviewed highlights of his report. Noted direct relationship between cash flow and sewage treatment plant expansion . Also noted : Districts have been doing a very commendable job with pay-as -you-go policy ! Reviewed costs of trunk sewers to be built, etc. Figured two cash flow projections to get least -dark and most -dark picture . Anticipated that eventually secondary treatment would be required for total District flows and used that for upper l imit for ulti mate cash flow deficit . Reviewed alternative methods of financing . Most economical and desirable alterna- tive was general obligation bond financing, but 2/3 vote requirement can be ~big hurdle . Indicated it had been their experience that in most instances if people think they will benefit and cost is reasonable , most people will support it. McWhinney asked if their experience was in any particular area and ~· aodnar answered that it was on a state -wide basis . Did not break it down regionally . Vanderwaal asked if we had any bond issues in the pas t that failed and Mr ~ Nisson answered that about two or three years ago, they had three bond issues in District 7 before one passed . Mr . Bodnar said that their recorn-nendation was to seek author ization to cover maximum deficit of $12 .5 million . May be possible to finance needs with less than the full authorization , but would be no expense for any authoriz ed un-used bonds . He then reviewed revenue methods to cover bond service costs . Almost complete reversal in type of building units being built. Very definite trend toward multiple family units .· Greater densities of people. Felt trend will continue. Estimated value for single family dwelling units were more than double those for multiple family units . As the District continues developing if this trend continues, the District 's tax space decreases a proportionate amount . More people served with less valuation per unit to finance District 's facilities. Also considered development of land , and took that into account in arriving at financial plan . Reviewed summary of fin~ings in rep ort (p .23) r egarding engineering studies which point out disparaties for different types of land use . Tried to minimize these disparaties . Stated that connec tion charge s were a means to overcome some of the problems in trying to achieve equity for future users . Recommended that a connection fee be maintained for any type of sewer that eventually drains into the District's main trunk system . .. p. 2 Mr. Bodnar also reviewed their method of arriving at figures for in~ustrial and commercial development . Said he felt that the $250 per dwelling unit charge and the rate for industrial and commercial repre - sents their best attempt to try to achieve equity among present anc'I. future users of the District. · Green stated that the peop l e wi th undeveloped property will be the ones buying in. ·Asked i~ Mr . Bodnar checked tax .rates or tax evaluations. Mr. Bodnar answered that figures were based on 1960 rates. Said to try to get repres~ntative types of parcels would be impossible. Recognized that land owners have been paying taxes for land for 10-1 2 years for servi ce they have not been connected into. Mr . Bodnar said that he felt that the benefits of availablility of service far outweigh property taxes paid . · Scott asked if cities surveyed gradually worked up to the present fee or ~at was the original fee set . Mr. Bodnar said that information wasn't reported in the study done in 1960 . There w~s no information as to why those people arrived at those l evels. . . Vande r waal stated that his concern was the commercial . Compared to what City of LA is charging , felt we may be low in commercial and industrial charges . Mr . Bodnar answered that they only suggested $2300/acre for industrial or commercial as a guide . Suggested caut~on in administering these charges . Scott expressed his concern that warehouses were the type of buildings they we r e getting i n Fountain Va l ley and that would be detrimental to what they needed here; large space with few occupants. Mr. Bodn ~r restated that the figures suggested on this were just a guide. Root asked JWS if other Districts were going to be faced with something like this in the future , and was answered that our projections indicate that other Districts are in pretty good shape . Districts 5 & 7 already h ave connection fees . Root then asked how they came up with their connection charges and JWS answered that District 7 had ~ study and then went to a bond issue and connection charges . Later Dist r ict 5 went to connection charges also. (Smith mentioned that in the City of Orange they had never had any 1 reprocussions with connections fees in District 2 & 7 even though split \down center of City . Doesn 't seem to be a problem with City administration. Va n de r waal asked if District 7 connection charges for commercial and industrial were on flat fee basis or what , and Mr . Lewis answered that indu strial was $450 per acre and was a l so based on whether or not they have front footage on District trunk. Briefly reviewed their connection and use ordinance . Smith mentioned that the City of Orange did have some problems with persons who have to pay the $1 0 extra charge because of front footage. McWh inney stated that he agreed with findings of recommendation with the e"fception of the numbers. From the four alternatives main discussion seems to be whether there is an equity or inequity in the charge. He then moved that we approve concept or idea of connection charge but that we hold and refer to the staff for report back· and possible additional public hearing as to what the charges and rates should be. Chairman Culver restated the motion to accept recommendation in principle but individual uni t ·ch arges be considered at additional public hearing . McWhinney a l so ~estated that he agees that further public hearing be held to determine what connection charges shoul d be. p. 3 R~t questions what part of recommendation McWhinney did not agree with , and McWhinney said that since everybody involved was in different areas with different values , don't know who is right and think that this should be given further consideration . Culver asked Mc\'/hi~1ney if his ·motion incor·porated approving a bond issue , and McWhinney answered , no , just connection charge .. Stephenson stated that we have been discussing this for months and months ind has -E~en referred to staff and that was why Stone & Youngberg was employed to arrive at recommended figures . Don't think it could be human l y ·possib l e to be equitable for everybody . S~ brought u p a p oin t of order regardi ng which item on agenda they were to be discussing -were on 3(a)&(b) not 5 , McWhinney withdrew his previous motion and moved that the report of Stone & Youngberg be received and filed . Motion was seconded and carried . #4 -Report of engineer re Districts needs & Master Plan const. scheduling Conrad Hohener explained present situation and what we need to do about it . Reviewed map of existing facilities and proposed trunk facilities and facilities currently under construction . District has recently completed a metering program of all the trunks. Miller-Holder and Magnolia Trunks have been flowing at capacity . Reviewed other trunks and at what capacity they were flowing . Said that if we did nothing , ultimately, sewage would be flowing out of manholes into streets . Imperative that the District con~i nues on with construction schedule and there shouldn't be any delays. Cu lver agreed t h at appar ently it is crit i ca l as far as capacities are concerned. Root asked if c u r r ent wet spell had shown up considerab l y and Mr . Hohener saia , yes , there had been considerable surcharging . Also said that sewers being bui l t met Districts ' standards which were much more stringent than federal standards. · Vanderwaal asked i f staff could discuss connection and use ordinance and other ordinances that are arplicable . Bob Webber reviewed main provisions of current connectior• and use ordinance . JlQ.Q..t asked how this ordinance HJ.·fected a company like Kimberly-Clark and Bob Webber answered that they were allowed to go by what they were dis - charging at the time the ordinance went into effect , unless their flow increased considerab l y . Said we have about three places looking at excess capacity charges of about $300 if flow increases , so are· using t h e money to improve their systems instead . #5 -I mp l ementat i on of Financing Consu l tant 's recommendations re general obl i gation bonds and connection charge Sa l es asked if he was right in assuming that $5 million would be ut ilized :fOr""""completing the system as outlined here , as opposed to the $1 3 mi l lion that would complete the system plus the secondary treatment. Cu l ver answered that he understood that our present Master Plan would take $5millior to comp l ete and if we go to secondary treatment , it would take another $8 million. Mr. Bodnar stated that authorization for $13 million in bonds is for eventually when secondary treatment is imposed for all District flows . ~a l es then said that he thought if we do authorize $13 mill i on , government wil l say "why not impose secondary treatment on them ." p. 4 McWhj._nney added that if we need additional money later, we cou l d increase the connection charge or at that time consider a bond issue. Mr. Bodnar then remarked that conditions change and, in fact, just today , had gotten emergency regul ations from State that because of shortage of Federal and State funds, a District is going to have to be able to meet its cash flow needs during the course of its construction . Many Districts felt they wouldn~t have a cash flow problem to worry about because they thought the Federal government was going to appropriate money and disperse it on a monthly basis . Don 't believe this is going to be the case now. Cash flow problems might be significant later if D~strict doesn 't p r oceed right away . Culver_ then stated that we have to have a bond issue. McWhinney sai d we can raise enough with connection charges for now and later determine if bond issue is needed . Mr . Bodnar stated that he estimated $2 .5 mi l lion can be raised per year with · connection charges. McWhinne~ then suggested that possibly the connection charge could be greater than what we had anticipated. Vanderwaal then reviewed for McWhinney that if we go to bond issue and ' connections charges , there will be no cost to people for bond issue . He felt· that· motion shoul d be made that we approve going out for $13 million general obligation bonds and approve the c_oncept of connection charge exp l ained here. In other words , approving their recommendation . McWhinney seconded the motion . Stevens then asked what a l ternatives we had if bond issue fails. Mr . Bodnar answered that one possibility was Joint Powers financing which would involve all the other Districts , and another possiblity of revenue bonds based on service charges but implementing a service charge is not practical. McWhinney asked if District could go to large bank for a loan if bond issue fails . Mr. Bodnar answered that they would have s:tort term bo_rrowing capacity . Must be re,paid after two years . Lewis commented that if we continually up the cost of hoiising for single Fami l y dwellings , we are going to have everybody down our necks. Stevens questioned if cost for servic i ng is only $1.5 million , why are we charging more. Mr . Bodnar then stated that study attempted to provide so u rce for equity among users so that future users would pay in relation- ship to the actual cost to provide service . 1 McWhinnei then called for the question. Mr . Harper then commented on question asked previously regarding if we go to $13 million bond issue, will government .feel we should be required to go to secondary treatment. Said this is a national problem and goverµment would not look at it that way. Motion is to approve actual charges recommended , but Mr . Harper was concered with industrial charges because they already have a charge imposed on them. Said he thought we would have to tell the people what the alternative is if we go to a bond issue and it doesn't pass, so we will have to come up with an alternative in case bond issue doesn't pass . [__ r.!cWhinne¥ called for th e question again. Scott brought up a point of order that you have to vote on calling for the question before voting on the motion itself . l l p. 5 McWhinney then withdrew ca lling for the question because it had to be unanimously agreed to , as reported by Mr . Ni ssen . Sales then asked if we pass this motion , would we not t ry for this bond i ss ue until we find out what the federal government is going to do? Vanderwaal answered no, would·sell th e $5 million and save the $8 million. Sales comm ented that he can 't see how we are going to se ll this bond issue. ~r. Harper said only option i s to go to people wi th $5 million bond issue a nd conn=@'ttion charge,but may have to go back to same people next year. ~ stated that he th ought this was a good point in letting the people Know what they are being cparged for--because of federal government requirements . Stevens asked what general expenses were involved in promoting a bond issue. Vanderwaal estimated $1 /4 million, and then would be another $1/4 million if we had to go back for anothe r b ond issue next year . Mr. Bodnar said the costs for a bond issue varied and he did not know what to . estimate . ,,µ.,r-Vanderwaal then stated that he would amend his motion to r educe the Jp bond issue to $5 million if majority desires thi s but will maintain l connection charges as recommended. Nissen advised that if motion is passed as it was stated , i t is merely an expression of intent. Cha irman would appo int a commit tee to start implementing this. Would have to adopt an ordinance o n the connection fee and a resolution on bond issue and , a t that time, will determine how much to go for. McWhinney called f o r the question and a point o f order was questioned again . ~ asked if it would be reasonab l e to delete the amount of the bond is sue and Nissen said to l eave it open. Culver then asked if the connection fee wo uld be deleted ~lso, and Nissen said i t was up to the Directors. • Vanderwaal moved to approve th8 concept of the bond issue and connection char ge and refer it to a cornrnit~ee . McWhinney seconded the motion. Sal es asked Mr . Harper if he had any timetab l e regarding EPA's standards. Mr . Harper answered that they have told us they are going to set requirements within the next co u p l e mont h s but also told us they were going to put ocean dischargers o n the "back burner"--not going to push us to go ahead right now . Problem is that their program is about a three or four year fin ancing program l.¥,ling Federal and State monies . By the end of that time we are supposef to be se lf-s u fficient and on our own with a high degreee of treatment. Th ey might dish out the money to everybody e ls e and a ll of a sudden the envir onmenta l people could decide we knew the laws so better get busy . McWhinne x call ed for the question again. Culver advised that he had been ordered not to vote for motion. Green then asked since we have hired experts in this fiel d , so why stticfY f ees some more . Is a stall so more development can get in before they will have to pay fee. Nissen stated that the only reason for delay now is to coordinate with industrial ordinance . p. 6 Stevens stated one correction to statement of Mr. Green. Staff didn't ~ . employ financial consultant to determine connection fee but because of their bond market expertise. 'l..anderwaal then restated his motion: That all connection fees be ,....,J established as recommended by Stone and Youngberg and that the bond ~issue amount be left open to be determined by a Committee appointed by the Chairman. . . \ McWhinney seconded the motion. LOJlg stated he felt committee could be made ·up of our staff people and Board members. Questioned whether this was the proper approach. Asked if what they were voting on was recommended by the staff? Mr . Harper said that he felt action Board will be taking is toward direction of a committee. Will leave bond amount open. May take a little more study from staff's viewpoint .. Whatever Board does , do think they should engage the services of the consultant for a limited amount so the committee could ask additional questions regarding the bond issue . Part of the answer is to try to accumulate funds so we won't have to go back again and say we need more money. ijl£>son advised that if the Board adopts this motion, still has to adopt the ordinance. Will not automatically start the charges. The question was called for on adopting the motion. Nisson restated motion: Is to accept recommendation of $250 connection charge and to accept recommendation of a general obligation bond issue , ~~.+-~ the amount to be determined at the time it is presented to the Board for ~~·final action. (Reminded Directors that if they adopt .this motion, then ~ ~they have to put it into an ordinance with connection fees at $250 and '-S' ~ ~$500 for industrial; and if at the time they consider the ordinance, ~they wish to revise the amounts, they can do so. When ordinance is ~ ~ presented to Board , requires 2/3 approval .) \S' • ~~ ~McWhinney seconded the motion again! "' , . Roll c a ll vote on motion . Carried 9 -6 . -~~Scott asked if motion--i.~luded another spec i a l committee and was ~ answered, yes . He then said he would like to charge the committee to come up with recommendations on a publicity campaign also. ~ ...L-McWhinne~ moved that at next regul arly scheduled meeting of the District , f k.t/{nl Ch airman Culver should make a recommendation as to comniittee and course of act i on. Directors requested that committee be appointed now. Chairman Cu l ver appointed committee as follows: Robert Root , Chairman Charl es Stevens, Jr . Donal d Fox Jack Green Geo r ge Scott CuJve r then entertained a motion that the services of Stone & Youngberg, Municipal Financing Consultants , be retained for a maximum amount to be determined by the Directors, in order that they may assist the special committee with any questions or problems they might have regarding establishing the bond issue amount . It was then moved that Stone & Youngberg be employed for up to a maximum amount of $2 ,000 . for services i n connection with the bond iss~e. Mr. Bodnar advised that the rate h e was currently employed at was $250/day . ·Motion was seconded and carried. COUNTY SANITATION DISTRICT NO. 3 MINUTES OF THE ADJOURNED REGULAR MEETING March 15, 1973 -7:30 p.m. 10844 Ellis Avenue Fountain Valley, California Pursuant to adjournment of the regular meeting held March 14, 1973, the Board of Directors of County Sanitation District No. 3,- of Orange County, California, met in an adjourned regular meeting at the above hour and date, in the District offices. The Chairman called the meeting to order at 7:30 p.m. The roll was called, and the Secretary reported a quorum present. DIRECTORS PRESENT: D~RECTORS ABSENT: STAFF MEMBERS PRESENT: OTHERS PRESENT: Norman E. Culver (Chairman), Robert Battin, Jesse Davis, Donald Fox, Jack Green, Otto Lacayo, Alicita Lewis, Charles Long, Derek McWhinney, Robert Root, Frank Sales, George Scott, Mark Stephenson, Charle~ Stevens, Jr. and Cor Vanderwaal Wade Herrin Fred A. Harper, General Manager, . J. Wayne Sylvester, Secretary, Ray E. Lewis, W. N. Clarke, Robert Webber, and Rita Brown C. Arthur Nissan, Don E. Smith, Ernest Bodnar, and Will Lindsay * * * * * * * * * * Authorizing execution of agreement with Flood Control District re Contract 3-18 Westminster Channe:l cPossing Ray Lewis, District' Chief Engineer, reported that because of delays experienced in obtaining approval of the alignment for the Knott Interceptor, Reach 4, Contract No. 3-18, scheduling of the inter- ceptor's crossing of the Westminster Flood Control Channel would not now be possible by the successful bidder until after the Flood Control District finishes planned improvements to the channel. District No. 3 could effect substantial cost savings if the Flood Control District is authorized to incor- poPate into their improvement contract, installation of that portion of the interceptor which crosses the channel. This would avoid the necessity of tunneling under the channel at a later date. It was then moved, seconded and duly carried: That the Board of Directors adopt Resolution No. 73-27-3, authorizing execution of an agreement with Orange County Flood Control District to install a portion of the Knott Interceptor, Reach 4, Contract No. 3-18, in conjunction with their construction of the Westminster Flood Control Channel, for a total amount not to exceed $40,000.00. Certified copy of this resolution is attached hereto and made a part of these minutes. #3 3/15/73 Continuation of public hearing re Proposed Sewer Connection Open Public Hearing -Continuation Ordinance No. 303 of the public hearing on Proposed Sewer Connection Ordinance No. 303, an ordinance amending Uniform Connection and Use Ordinance No. 302, was declared open. "-""' Report of Financing Consultant -Mr. Ernest Bodnar of Stone & Youngberg, Municipal Financing Consultants, Inc. reviewed the report prepared by his firm on Financing Major Sewerage Improvements for County Sanitation District No. 3, and summarized the findings and recommendations as follows: 1. To meet its existing and anticipated future needs, District No. 3 initiated a seven-year trunk sewer improvement program which is estimated to cost more than $29 million over the period 1971/72 through 1977/78. In conjunction with six other Orange County sanitation districts, the District is in the process of upgrading jointly owned sewage treatment works to meet State water quality contr&l standards. The estimated cost of upgrading jointly owned primary treatment facilities is approximately $21.2 million. The consulting engineers estimate the cost of activated sludge secondary treatment which eventually will be required by Federal and State standards at approximately $100.8 million. 2. On the basis of the consulting engineers' cost estimates and construction schedules, the Director of Finance has projected funding needs of District No. 3 to implement the master plan trunk sewer program; meet its share of estimated capital costs of the proposed joint treatment works improvement program; provide for the District's share of projected operations and maintenance costs; and debt s.ervice · costs on District bonds. Projected cash flow deficits range from approximately $4.85 million to $12.5 million dependent upon the level of secondary treatment required of the District to meet Federal and State standards. 3. General obligation bond financing is the most practical and feasible financing alternative available to District No. 3 to implement the master plan trunk sewer and joint treatment works improvement program as scheduled. It is recommended that the District seek authorization of $13 million of general obligation bonds since the con&ulting engineers are of the opinion that Federal and State standards will eventually require secondary treatment equivalent to activated sludge. 4. Authorization of $13,000,000 of general obligation bonds does not mean that the full amount will be issued. Should Federal and State standards provide for secopdary treatment at an equivalent less than activated sludge for total District flow, facilities could be financed with the issuance of that portion of the authorization needed to complete the program. -2- #3 3/15/73 5. Recent development trends within the area served by the District have indicated the following: a. A trend toward increased higher density residential types of development in the District. b. The potential property tax base provided by single family unit land uses t·ends to to be significantly greater than the potential property tax base provided by a multiple family unit. c. Engineering data indicate average daily flows per dwelling unit in single family residential land uses average about 385 gallons per unit. In high density residential land uses, flows averaged abou~ 256 gallongs per day per unit, or approximately 2/3 that of lower density single family land uses. d. Within cities served by District No. 3, there are significant differences in present users of the District's sewerage facilities. Median ¥alue of owner occupied housing units ranges from $22,800 to $34,700. Population per owner occupied housing units ranges from 2.1 to 4.o. e. Land values within the District have increased significantly in recent years. Land suitable for low density residential development has increased from approximately $10,000 -$12,000 per acre in 1960 to current levels of $28,000 -$30,000. Land suitable for high density residential development is now valued at approximately $50,000 per acre. Land suitable for commercial development is now valued at approximately $100,000 per acre. f. The District's property tax base of $1.259 billion consists of land having an assessed valuation of $480 million (38 percent of total tax base) and improvements on land which is owned and occupied by present property owners having an assessed valuation of $778 million (62 percent of total tax base). 6. Demands for sewerage services are created by two broad classifications: (1) present users, and (2) potential users (owners of improved or unimproved land not connected to the system but adjacent to it). A system of assessing and recovering the costs of these benefits must consider the following: a. Equity among present users. b. Equity among potential users. c. Equity between present and potential users. -3- #3 3/15/73 The distribution of costs in relation to complete equity in all cases is highly unlikely. Wh~t must be attempted is the achievement of optimum equity in relation to the degree of benefits received by broad categories of present users and potential users within the constraints posed by statutory provisions and practical administrative procedures. 7; On the basis of the analyses, evaluations, and considerations to optimize equity among users and potential users of the District's sewerage system, it is recommended that the Board consider the use ' . of a sewer connection fee as a new source of revenue. The purpose of the connection fee would be to . recover costs of providing facilities in the near future which will have sufficient built-in capacity to serve future users. It is also recommended that . the connection fee be made applicable to connections made to a-District owned facility or to any local collector sewer which discharges into the District's sewerage system. 8. As the basis for formulating connection charges, unit costs of providing trunk sewer and sewage treatment-disposal cap~city are suggested. The ·unit costs of providing such facilities is estimated at approximately $645,000 per million gallons. 9. As the basis for computing connection charge fees, it is recommended that the Board consider using average anticipated sewage flows from .. residential land uses which have served as the basis to design master plan trunk sewer facilities in District No. 3. 10. Based on the estimated capital cost of provfding sewerage facilities, projected flows from residential land uses, and current land use developments within the District, it is recommended that consideration be given to the establishment of a residential unit connection charge of $250. 11. Commercial and industrial uses were considered in the same manner as residential uses. It is anticipated these users will provide an average flow of 3555 gallons per day per acre. At a unit capital cost of $65 for providing 100 gallons of sewerage capacity, the charge would be approximately $2,300 per acre. On a square footage basis, the capital cost for sewerage facilities would be approximately $500 per 10,000 square feet of the facility. This rate is suggested as a general guide in recognition of the wide variation in types of industrial and commercial uses. It is suggested the charge for major types of industrial and commercial facilities be administered on the basis of a close study of the capacity requirements, type of discharge, number of employees, and other related factors. -4- 12. 13. #3 3/15/73 Revenue from connection charges under rates suggested in the study could provide as much as $2.4 million on the basis of the December 1972 study of near-term development patterns in the District. Based on the estimated bond service costs for the $13,000,000 of proposed general obligation ·bonds, estimated connection charge revenues would be more than sufficient to service the bonds. Connection fee revenues in excess of actual bond service requirements could be held in reserve to meet future capital needs, thereby making it possible for the District to reduce the property tax rate levied for the accumulation of cap~tal reserves. Mr. Bodnar then answered several questions posed by the Directors concerning the conclusionsand recommendations contained in his report. During the discussion which followed, several Directors stated that although they agreed with the connection fee concept, they felt additional study· should be given to the determination of the actual fee, particularly with regard to the recommended guidelines for industrial and commercial connection charges. It was then moved, seconded and ~uly darried: · That the report on.Financing Major Sewerage Improvements for Orange County Sanitation District No. 3, dated March 9, 1973, submitted by Stone & Youngberg, Municipal Financing Consultants, Inc., be received and ordered filed. Evaluation of current District needs and Master Plan sewer construction scheduling -Mr. Conrad Hohener of Boyle Engineering, District's consulting engineers, reviewed·the District's Master Plan Program for needed trunk sewers. During recent rain storms several of the existing trunks were flowing in a sur- charged condition, and a recently completed flow survey of the current demands placed on the District's trunk facilities has confirmed that the present system is approaching capacity. He stated the recommended Master Plan construction schedule must be maintained to avoid potential overflows in the District. Declaring intent to implement Financing Consultant's recommenda- tions for connection charges and general obligation bond issue - The Board then entered into a lengthy discussion concerning the impact of the recently adopted 1972 Federal Water Pollution Co~trol Act Amendments on the District's financial requirements. If the Districts' plan approved by the State Water Resources Control Board, to construct a 46 mgd activated sludge facility at Treatment Plant No. 1 is acceptable under the intent of the new Federal legislation, the District's maximum cash flow deficit will be approximately $5 million. If, however, the District is required to construct advanced treatment facilities to meet standards as presently proposed by the Environmental Protection Agency, the maximum cash flow deficit would be approximately $13 million. Mr. Bodnar of Stone & Youngberg stated that his firm's recommendation for authorization of a $13 million general obligation bond issue was based· upon the assumption that Federal standards for advanced treatment would require activated sludge facilities to treat the total Districts' flow. Should standards be established at a level allowing alternative plans to total secondary treatment, the full amount of authorized bonds would need not be sold. -5- #3 3/15/73 The Directors then deliberated the propriety of establishing a general obligation bond issue amount until such time as the requirements to be imposed by the Environmental Protection Agency are determined. Following a discussion concerning alternative methods of financing in the event a general obligation bond election failed to pass, it was moved and seconded: That the Board of Directors hereby deciares its intent to implement the financial consultant's recommendations to establish connection charges and issuance of general obligation bonds to finance the District's major sewerage improvements; and, FURTHER MOVED: That the amount of connection charges for cb~ercial and industrial establishments .and the matter of determining the amount of the proposed general obligation bond issue be referred to a special committee for further study and recommendation back to the Board. The General Counsel then advised the Board that actual implementation of connection charges will require adoption of an ordinance by a two-thirds affirmative vote of the Board. Following a restatement of the motion, the question was called for and the motion carried by the following roll call vote: AYES: NOES: ABSENT: Directors Robert Battin, Jesse Davis, Jack Green, Otto Lacayo, Alicita Lewis, Derek McWhinney, Robert Root, Mark Stephenson, and Cor Vanderwaal Directors Norman E. Culver (Chairman), Donald Fox, Charles Long, Frank Sales, George Scott, and Charles Stevens, Jr. Director Wade Herrih Chairman Culver then appointed Directors Root (Chairman), Fox, Green, Scott and Stevens to a Special Conunittee to Recommend Financing to Implement District No. 3 Construction Program. Continuation of public hearing to April 11, 1973 -It was then moved, seconded and duly carried: That the hearing on Proposed Sewer Connection Ordinance No. 303, an ordinance amending Uniform Connection and Use Ordinance No. 302, be continued to the regular meeting of the Boards of Directors on April 11, 1973, at 7:30 p.m. Authorizing additional services of financial consultant Stone & Following a brief discussion, it was moved, seconded and duly carried: Youngberg That the firm of Stone & Youngberg, Municipal Financing Consultants, Inc. be employed to provide consulting services to the Special Committee to Recommend Financing to Implement District No. 3 Construction Program, on a per diem fee basis of $250 per day for a maximum amount not to exceBd $2,000.00. -6- ! I . ! ' Adjournment #3 3/15/73 Moved, seconded and duly carried: That this meeting of the Board of Directors of County Sanitation District No. 3 be adjourned. The Chairman then deplared the meeting so adjourned at 9:43 p.m., March 15, 1973. ATTEST: Secretary, Board of Directors County Sanitation District No. 3 • • Chairman Board of Directdrs County Sanitation District No. 3 -7-