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Home My WebLink About1978-07-19 TELEPHONES: COUNTY SANITATION DISTRICTS AREA CODE 714 540-2910 OF ORANGE COUNTY, CALIFORNIA �, ,�► 9 6 2-2 41 1 '. P. O. BOX 8127• FOUNTAIN VALLEY• CALIFORNIA 92708 10B44 ELLIS AVENUE (EUCLID OFF-RAMP. SAN DIEGO FREEWAY) July 13, 1978 NOTICE OF ADJOURNED REGULAR MEETING DISTRICTS NOS. 1, 2, 3, 5, . 6, 7 -& 11 WEDNESDAY, JULY 191 1978 - 6:00 P,M. 10844 ELLIS AVENUE FOUNTAIN VALLEY, CALIFORNIA Pursuant to adjournment of the regular meeting of July 12, 1978, the Boards of Directors of County Sanitation Districts Nos. 1, 2, 3, 5, 6, 7 and 11 of Orange County, California, will meet in an adjourned regular meeting at the above hour and date. Se etary JWS:rb y BOARDS OF DIRECTORS County Sanitation Districts Pmt Office Box 8127 of Orange County, California 10844 Ellis Avenue Fountain Valley, Calif., 92708 Telephones: �JOINT BOARDS 9540-2910 62.24o11 II FINAL AGENDA ADJOURNMENTS POSTED ADJOURNED REGULAR MEETING Con:P a I:IILEAOE,J/....... JULY 19, 1978 — 6:00 P.M. FILES SET UP.......✓:...._. RESCLUTI'C'NS CERTIFIED' LEERS ".'JRITTEN.._' (1) Pledge of Allegiance and Invocation IMNU--ES Ci RITTEN...........� (2) Roll. Call MINUTES F ILED••............� (3) Appointment ofChairmen pro tem, if necessary (4) Consideration of motion to receive and file minute excerpts, if any, .1c ,,//L n (5) Public Hearing on proposed flat rate special assessment for sewer service and immediate availability for funding 1978-79 operating and capital budgetary requirements: Open hearing Qby Report on proposed funding method(s) (c) Consideration of motion directing Secretary to enter written comments received into record of hearing (d) Public comment Persons in attendance wishing to be heard should complete Request to Present Oral Comment at Public Hearing form (blue form) and submit to the clerk at the table marked "SUBMIT ORAL COMMENT REQUEST FORM HERE". Oral comments will be heard in order of submittal of the form to the clerk OR Persons in attendance wishing to submit a written statement in protest or support of the proposed assessment may do so by completing the Written Statement Regarding Proposed Assessment form (salmon-colored form) and submit to the clerk at the table marked "SUBMIT WRITTEN STATEMENT FORM HERE". Your statement will become a part of the official record of the hearing. (a) Close public hearing (6) QPnsideration of etio •o introduce revised o ce of each res ive ' trict establishing sewer service and i ediate av ' ability cha and to rea aid ordi a of a respective District by title only and waiving rea 'ng of ach ordinance in it DISTRICT TITLE 1 Ordinance No. 104 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability 2 Ordinance No. 205 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability 3 Ordinance No. 306 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability 5 Ordinance No. 510 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability 6 Ordinance No. 604 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability 7 Ordinance No. 717 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability 11 Ordinance No. 1105 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability ' t7) j Consideration of action on report re flat rate special assessment for sewer service and immediate availability charges (81 Ot 'ness an mmunications, if any (9) Consideration of motion to adjourn tLW: ' pJ .p7/19/78 ORDINANCE NO. (.REVISED) AN ORDINANCE ESTABLISHING FLAT RATE SPECIAL ASSESS- MENTS FOR SEWER SERVICE AND IMEDIATE AVAILABILITY The Board of Directors of County Sanitation District No. of Orange County, California, does hereby ORDAIN as follows: -Section 1: Purpose. The purpose of this Ordinance is to establish a system of sanitary sewer service assessments, together with immediate availability assessments required to be paid by property owners for the services and facilities furnished by the District in connection with its sanitation treatment works and sewage collection system. Pursuant to the provisions of Public Law 92-500, and Public Law 95-217, commonly referred to respectively as the .Federal Water Pollution Control Act Amend-' ments of 1972, and the Clean Water Act of 1977, the District is mandated thereby to provide a system of user charges. Revenues derived under the provisions of this Ordinance shall be used for the acquisition, construction, reconstruction, maintenance and operation of the sewage collection facilities and wastewater treatment and disposal facilities of the District, together with costs of administration, debt retirement and provisions for necessary reserves. . Section 2: Annual Sewer Service Assessments. Each parcel of real property located within the District which is improved with structures designed for residential, commercial or industrial use, shall pay a flat rate special assessment for sewer service in the sum of $ provided, however, that upon the Orange County Auditor allocating to this District, pursuant to `..� Government Code Section- 26912, a portion of the ad valorem real property tax levied pursuant to California Revenue and Taxation Code Section 2237, the flat rate special assessment for sewer service shall be in the sum of $ Section 3: Application of Ordinance. The provisions of this Ordinance shall be in addition to Ordinance No. of the District establishing regulations for use of District' s sewage facilities, including provisions for payment of- charges or fees related thereto. Section 4 : Exceptions. The provisions of this Ordinance shall apply to all properties in the District, and no exception shall be provided for properties otherwise deemed exempt by provisions of the State Constitution or statute, such as properties owned by other public agencies or charitable founda- tions, except as expressly provided- in Section 5 hereof. Section 5: Exemptions - Rebates. In recognition that certain legal parcels of real property exist within the District which are undeveloped, unsewered or unsewerable, it is the intent of the District that said parcels be totally or partially exempt from the payment of charges as prescribed herein, all in ac- cordance with the following: A. Unsewerable parcels shall be entitled to a 100% rebate of the charges assessed, and levied; B. Unsewered parcels developed with a structure shall be entitled to a 66-2/3% rebate of the charges assessed and levied; -2- i C. Unsewered parcels undeveloped with a structure shall ,*MOW be entitled to a 66-2/3% rebate of the charges assessed and levied; and D. Improved parcels owned by public agencies but which are not developed with a structure thereon, such as parks, and NOT containing any sewer connection shall be entitled to a 100% rebate of the charges assessed and levied. Any property owner may submit a claim for rebate to the District on the forms prescribed and provided by the District within one .hundred twenty (120) days after the annual property tax bills are mailed by the Orange County Tax Collector. All applications for• rebate will be determined by the General Manager of the District and his decision shall be final. For purposes of this Section, "unsewerable" parcels shall be defined to include, but not limited to, those that are used exclusively for private roadways or walkways; a single structure on two or more lots; a carport or garage lot separate from an adjacent residential structure on a separate lot; remnant parcels from public right-of-way which are less than the local code re minimum building lot size. Section 6: Credits Against Other Charges Due. The annual flat rate special assessment for sewer service established by the provisions of this Ordinance, shall be applied as a credit against use charges imposed upon a parcel of property pursuant to Ordinance No. Establishing Regulations for Use of District Sewerage Facilities (Industrial Wastewater Ordinance) , as amended. -3- Section 7: Assessment Based on Fiscal Year. The flat rate special assessments for sewer service and immediate sewer �J Availability established by this Ordinance, shall be for the fiscal year commencing July 1 and terminating June 30, and there shall be no proration of such assessments. Section 8 : Pursuant to the authority granted by California. Health and Safety Code Section 5473, all assessments established herein shall be collected on the County Tax Roll in the same manner, by the same persons and at the same time as, together with and not separately from, its general taxes. The County Tax Collector is authorized and hereby ordered to make said collections in accordance with the terms and conditions of agreements between the County of Orange and this District. Section 9 : Severability. If any provisions of this Ordinance or the application to any y person or circumstance is held invalid by order of court, the remainder .of the Ordinance or the application of such .provision to other persons or in other circumstances shall not be affected. Section 10: Effective Date. This Ordinance shall become effective immediately upon its adoption by vote of two-thirds of the members of the Board. Section 11: The Secretary shall certify to the adoption of this Ordinance and shall cause the same to be published in a newspaper of general circulation in the District as required by law. -4- COUNTY SANITATION DISTRICTS . of ORANGE COUNTY.CALIFORNIA P 0.8OX 8127 10844 ELLIS AVENUE July 19, 1978 FOUNTAIN VALLEY,CALIFORNIA 92708 ., (714)540.2910 (714)962.2411 PUBLIC HEARING JULY 19, 1978 - 6:00 P.M. RE PROPOSAL TO ESTABLISH AND COLLECT FLAT RATE SPECIAL ASSESSMENTS FOR SEWER SERVICE AND IMMEDIATE AVAILABILITY ON TAX ROLL In the past, the Sanitation Districts have received the bulk of their revenues from a special assessment for sewer service against all real property and improvements in the Districts based on the ad valorem property rolls of the County. The cost to the homeowner whose property is assessed at $13,000 - $15,000, has been $3 to $5 per month, depending on the District, for sewer service exclusive of maintenance of local sewers. This has been collected via the County tax bill. With the passage of the Jarvis/Gann Initiative (proposition 13) , the question arises: Does this provision prohibit the Districts from levying the special assessments that have been levied in all prior years? While the Jarvis/Gann Initiative did not bar this procedure, the actions of the State Legislature in subsequent legislation (Senate Bill 2212 enacted on June 30) barred the use of instituting any charge based on property valuation other than the allowable 1% ad valorem levy. Under consideration are several proposals to institute a flat rate special assessment. These are attached. The Sanitation Districts operate the third largest wastewater (sewage) treatment system on the West Cost. The capital costs of present day facilities are $229 million; additional construction required during the next 8 years will double this figure. The Districts collect, treat, and dispose of wastewater from 408,000 residential, commercial and industrial connections serving 1.5 million citizens in the 23 cities in the Orange County metropolitan area. i1 - Ad valorem assess- In spite of the increased demands 40 ment rate for sewer service and additional 39 facilities required by higher State and Federal environmental 38 standards, the combined average N 37 annual variable ad valorem special assessment rate has steadily de- 36 clined from 421Y/$100 assessed 35 valuation in 72-73 to 311r/$100 assessed valuation in 77-78. The 34 Districts' Boards of Directors 33 have reduced the budget require- ments to lighten the property- owners' burden by $2.2 million 31 I ! f for this fiscal year (78-79) . 73 74 75 76 77 W r>F ! S PA L �Y E A 7 Annual revenues come from variable rate ad valorem special assessments, connection fees, induatrial use fees, annexation charges and State and Federal construction grants. The annual expenditures break down approximately 10% for operations and maintenance, 87% for current and planned treatment plant and trunk sewer construction, 3% for bonded debt retirement. COUNTY SANITATION Dlr-'tICT NO. (ALL) 7/18/78 PRELIMINARY STATEMENT-0 3OJECTED CASH FLOW OPERATING & CAPITAL ONLY (EXCLUSIVE OF DEBT SERVICE) FISCAL YEARS 78-79 THROUGH 82-83 MILLIONS OF DOLLARS DESCRIPTION 78-79 79-80 80-81 81-82 82-83 CARRY-OVER CONSTRUCTION RESERVES $38 $77 $70 $61 $39 REVENUE Assessments R $42.85/parcel 17 17 17 17 17 Construction Grants 14 19 31 36 29 Loan in Aid of Construction 1 Industrial User Fees & Connection Fees 4 3 3 3 3 Interest E Other Income 5 3 3 3 2 TOTAL FUNDS AVAILABLE $129 $119 $124 $120 $90 EXPENDITURES Trunk Sewer & Pump Station Construction $11 $ 6 $ 4 $ 6 $ 3 Treatment Plant Construction 30 30 43 51 38 Treatment Plant Mtce & Operation 8 11 13 21 26 Trunk Sewer Mtce & Operation & Other 3 2 3 3 4 TOTAL EXPENDITURES $52 $49 $63 $81 $71 Carry-Over Construction Reserves I $77 $70 $61 $39 $19 Funds Required 25 32 40 36 36 Fund Balance or (Deficit) $52 $38 $21 $ 3 ($17) ALL DISTRICTS PRELIMINARY ESTIMATE OF ANNUAL FLAT RATE SPECIAL ASSESSMENT FOR SEWER SERVICE & IMMEDIATE AVAILABILITY 1978-79 Increase 77-78 78-79 (Decrease) Estimated Operating & Capital Requirements District (Collection System) Construction & Reserves 41 ,662,824 25,933,200 (15,729,624) Joint Works (Treatment Plant) Construction and Equity Purchase & Reserves 61 ,058,000 85,075,000 24,017,000 Joint Operating (Treatment Plant) Expense 6,817,884 8, 153,000 1 ,335, 116 District Operating & Other Expenditures 7,009,700 8,548,800 1 ,539, 100 Distribute Upper Basin Joint Works Equity to other CSD's 1 , 141 ,000 1 , 141 ,0" TOTAL REQUIREMENTS 116,548,408 128,851 ,000 12,302,592 Estimated Revenue Federal-State Grants 14,152,000 13,759,000 ( 393,000) Sale of Capacity Rights 660,000 1 ,213,000 ' 553,000 Connection Fees & Industrial User Charges 3,858,000 4,236,000 378,000 Interest & Misc. Income 3,629,637 3,517,000 ( 112,637) Other 3,003,000 1 ,500,000 (1 ,503,000) Carry-over 71 ,836,318 87,461 ,000 15,624,682 TOTAL OTHER REVENUE 97, 138,955 111 ,636,000 14,547,045 Amount to be raised by Assessment 19,409,453 17,165,000 ( 2,244,453) Estimated Number of Parcels in the District 400,56o Estimated Annual Flat Rate Special Assessment for Sewer Service & immediate availability $42.85 per parcel (Average) `-'Ch. 292 —14— fund reserves" shall not include: (1) Noncash assets such as stores, inventory, property and buildings, or other investments. (2) Any amounts for self-insurance, for contractual obligations,or for reserves established by a governing board policy adopted prior to July 1, 1978. (3) Any amounts restricted by law or court order. THIS SECTION .IS EXCERPTED (4) Any amounts committed to a capital outlay project approved FROM SB-154 WHICH WAS prior to June 6, 1978, by the board of supervisors. ADOPTED BY THE STATE (f) For the purpose'of this subdivision,the amount of property tax LEGISLATURE AND SIGNED INTO collections pursuant to paragraphs (1) and (2) of Section 2270 of the LAW BY THE GOVERNOR ON Revenue and Taxation Code for the purpose of making annual JUNE 1978 , SUBSEQUENT payments for the interest and principal on outstanding general TO PASSAGE OF PRPO OSITION 13 . obligation bonds or other indebtedness approved by the voters prior to July 1, 1978. (g) Funds distributed for this section shall be given first for police It is my opinion that this and fire programs in order not to jeopardize the health and safety of section, when combined the community. The legislative body shall ensure that the level of with Government Code police and fire protection programs actually provided in the 1977-78 Section 26912 , will provide fiscal year shall be continued in 1978-79. for the Districts to Nothing in this section shall prevent the legislative body from reviewing and establishing its police and fire protection program in receive an apportionment the IS78-79 fiscal year in a manner which will make such program of the tax levy for 1978/79 more efficient and effective. only. In subsequent years , (h) The Controller shall estimate the amounts required to be the Districts will not determined pursuant to subdivision (b) (3). receive any portion of the The Controller shall determine the actual amounts and make a 1% ad valorem property tax reconciliation with the April 10, 1979, distribution. levy. (x) The amount allocated in subdivision (a) shall be reduced by i n amount equal to the a Aid. o Families of any Dependent increase in aid payments under the Aid to Families with Dependent Children program, as provided in Section 35 of this bill. ��ss CHAPTEn 3. SPECIAL DisTnicTs Thomas L. Woodruff General Counsel Article 1. General Provisions and Definitions 16270. The Legislature finds and declares that many special districts have the ability to raise revenue through user charges and fees and that their ability to raise revenue directly from the property tax for district operations has been eliminated by Article X1II A of the Cnhfornia Constitution. It is the intent of the Legislature that such districts rely on user fees and charges for rasing revenue due to the lack of the availability of property tax revenues after the 1978-79 fiscal year. Such districts are encouraged to begin the transition to user fees and charges during the 1978-79 fiscal year. 16271. As used in this chapter: (a) "Governing body"means the board of supervisors except that 96 480 JUNE 14, 1978 AVAILABLE ALTERNATIVES FOR FUNDING AGENDA ITEM #5 1978-79 OPERATING/CAPITAL FUNDING REQU REMENTS JARVIS-GANN WILL REDUCE THE DISTRICTS' CURRENT (1977-78) $19.4 MILLION TAX LEVY BY A MINIMUM OF 58% IF THE DISTRICTS RECEIVE A PRO-RATA SHARE OF THE TAXES ALLOWED TO BE COLLECTED BY THE TAX LIMITATION INITIATIVE, TO A MAXIMUM OF 100% IF THE DISTRICTS RECEIVE NO TAXES UNDER THE ALLOCATION METHOD YET TO BE DECIDED BY THE STATE LEGISLATURE. ALTERNATIVE METHODS OF FUNDING THE DISTRICTS SEWAGE COLLECTION, TREATMENT AND DISPOSAL ACTIVITIES FOR 1978-79 ARE AS FOLLOWS: I - FUND 1978-79 REQUIREMENTS FROM CONSTRUCTION RESERVE FUNDS (ASSUMES NO PRO-RATA SHARE OF TAX ALLOCATION) - MAJOR ADVANTAGE - NO ADDITIONAL ADMINISTRATIVE OVERHEAD COSTS FOR 1978-79 - MAJOR DISADVANTAGES - FUNDS RESERVED FOR CONSTRUCTION TO COMPLY WITH FEDERAL AND STATE LAWS WOULD BE DIVERTED FROM CAPITAL TO OPERATING - NEEDED AND/OR REQUIRED CONSTRUCTION PROJECTS MAY BE DELAYED - FUNDS WOULD HAVE TO BE REPAID TO CONSTRUCTION RESERVES IN FUTURE YEARS REQUIRING DISPROPOR- TIONATELY HIGHER CHARGE IN THOSE YEARS - LOSS OF INTEREST EARNINGS 11 - FUND 1978-79 REQUIREMENTS BY ESTABLISHING A FLAT RATE USER/AVAILABILITY CHARGE AGAINST EACH PARCEL OF PROPERTY TO BE COLLECTED BY THE TAX BILL MAJOR ADVANTAGES - PROVIDES FINANCING FOR 1978-79 OPERATING AND CAPITAL REQUIREMENTS WITHOUT SUBSTANTIAL USE OF CONSTRUCTION RESERVES - STABILIZES PROPERTY OWNER CHARGES AND DISTRICTS CASH FLOW - ACCOMMODATES PHASING OF USER CHARGE/REVENUE PROGRAM REQUIRED TO BE IMPLEMENTED IN 1979-80 BY EPA AND SWRCB - MAJOR DISADVANTAGES - REQUIRES PUBLIC NOTICE AND HEARINGS IN A RELATIVELY SHORT TIME FRAME TO IMPLEMENT - DISTRICTS WILL INCUR ADDED ADMINISTRATIVE OVERHEAD COST TO IMPLEMENT (ESTIMATED AT BETWEEN $75,000 TO $105,000) PLUS ADDED CHARGE TO COLLECT ON TAX BILL - POSSIBLE PUBLIC BACKLASH IN VIEW OF JARVIS-GANN MANDATE - FLAT USE CHARGE IS NOT EQUITABLE III - CONTINUE TO LEVY FULL TAX RATE NECESSARY TO FUND 1978-79 REQUIREMENTS ON THE BASIS OF PREVIOUS COUNTY COUNSEL OPINION THAT SANITATION DISTRICT LEVY IS A ''SPECIAL ASSESSMENT''. SAID OPINION MAY THUS EXCLUDE THE DISTRICTS FROM APPLICATION OF JARVIS-GANN. - MAJOR ADVANTAGE - NO ADDITIONAL ADMINISTRATIVE OVERHEAD COSTS FOR 1978-79 - MAJOR DISADVANTAGES - COUNTY COUNSEL HAS NOT YET RULED ON THIS OPINION RELATIVE TO JARViS-GANN - MAY RESULT IN LITIGATION AND THE COURTS MAY FIND AGAINST THIS INTERPRETATION COUNTY SANITATION DISTRICTS Of ORANGE COUNTY.CALIFORNIA P.O.BOX 8127 July 19 , 1978 10844 ELLIS AVENUE FOUNTAIN VALLEY.CAI IrORNIA9270B (7141540-2110 (714)962-241 1 SUPPLEMENTAL ALTERNATIVES FOR FUNDING 1978-79 OPERATING/CAPITAL FUNDING REQUIREMENTS ON JUNE 24, THE GOVERNOR SIGNED SENATE BILL 154, ALSO KNOWN AS CHAPTER 292, IMPLEMENTING THE JARVIS/GANN INITIATIVE. ONE OF THE PROVISIONS OF SENATE BILL 154 INDICATES THAT THE DISTRICT WILL RECEIVE A PRO RATA SHARE (APPROXIMATELY $7 MILLION) OF THE 1`/ TAX ALLOCATION IN 1978-79 ONLY. IT ALSO INDICATES THAT ENTERPRISE SPECIAL DISTRICTS , SUCH AS THE SANITATION DISTRICTS, ARE EXPECTED TO RAISE THEIR REVENUES THROUGH USER CHARGES AND FEES IN FUTURE YEARS AND WILL NOT RECEIVE ANY TAX ALLOCATION AFTER THIS FISCAL YEAR. The following two supplemental funding alternatives consider receipt of tax funds for the 1978-79 fiscal year. IA - This proposal assumes that the District will receive its pro rata share of the 1% tax allocation provided under the Jarvis/Gann Amendment for the 1978-79 fiscal year and defers the implementation of a flat rate user fee to the 1979-80 fiscal year. Approximately $10 . 2 million in District funds reserved for construction would be diverted from capital accounts to operating accounts as required during 1978-79 to fund operations . Based on the requirements of the Districts , this pro- posal would anticipate a flat rate user charge next year as follows : Alternative IA Proposed 7 -79 Estimated 79-80 DISTRICT NO. Flat Rate Flat Rate* 1 NONE $ 46.04 2 NONE 45. 18 3 NONE 49.62 5 NONE 67. 14 6 NONE 46. 11 7 NONE 41 .60 11 NONE 64.24 (continued) BOARD ACTIONS REQUIRED: �✓ (1) Adopt proposal IA which eliminates the need for a flat rate user fee for the 78-79 fiscal year (2) Declare intent of the Boards of Directors to institute a user fee revenue program effective July 1, 1979 IIA - This proposal assumes the anticipated share of the 1% property tax allocation for 78-79 as indicated in Proposal IA, but implements a user charge per parcel this year as listed below. This proposal , which incorporates a flat fee and ad valorem taxes , provides a substantial degree of equity. Proposed User Charge 78-79 79-80 Fixed Estimated Dist. #1 24. 98 39 . 79 Dist. #2 22. 70 39 . 50 `,, Dist. #3 26 . 79 42. 92 Dist. #5 29 . 75 59 . 70 Dist. #6 24.77 39 . 92 Dist . #7 13. 93 38. 12 Dist.#ll 36 . 82 55 . 03 We do not anticipate receiving any of the 1% property tax allocation as provided by the Jarvis/Gann Amendment after this current fiscal year. Under this proposal, the staff recommends that rebates and/or exceptions be provided for properties that are considered unsewerable and properties not receiving sewer service. REBATES AND EXCLUSIONS : FULL REBATE OR EXCLUSION - Properties that are improved but do not receive sewer service, such as parcels that contain only carports , green- belts , drainage channels and incidental or adjoinint undevelopable parcels should be exempt from a flat rate charge. �.s -2- (continued) TWO-THIRDS REBATE OR EXCLUSION - Improved and unimproved properties that are not currently receiving sanitary sewer service should have a 2/3 exemption from the District charges . Capital improvements have been and are con- tinuing to be made for their benefit at the treatment plants . While it is desirable that the above-mentioned properties be excluded from any adopted flat rate charge now, the Sanitation Districts do not have sufficient information to exclude all of these properties in the implementation of a user charge flat fee. Therefore, since these properties cannot be identified readily, it is recommended that the implementing ordinance include a simple rebate (refund) provision. BOARD ACTION REQUIRED: Adoption of an ordinance setting forth fixed flat rate fees per parcel for the 78-79 fiscal year allowing, for anticipated taxes but providing for exceptions for rebates and/or exclusions . 7/19/78 FLAT RATE CHARGE ESTIMATES BASED ON VARIOUS ALTERNATIVES Alternative IA Alternative II Alternative IIA Proposed 7 -79 Estimated 79-80 Proposed 78-79 Estimated 79- 0 Proposed 7 -79 Estimated 79-80 DISTRICT NO. Flat Rate Flat Rate* Flat Rate** Flat Rate* Flat Rate Flat Rate* NONE $ 46.04 $ 39.79 $ 39.79 $ 24.98 $ 39.79 2 NONE 45.18 39.50 39.50 22.70 39.50 3 NONE 49.62 42.92 42.92 26.79 42.92 5 NONE 67.14 59.70 59.70 29.75 59.70 6 NONE 46.11 39.92 39.92 24.77 39.92 7 NONE 41.6o 38.12 38.12 13.93 38.12 11 NONE 64.24 55.03 55.03 36.82 55.03 Average All Districts $ 49.19 $ 42.85 $ 42.85 $ 25.34 $ 42.85 Pursuant to SB-154 adopted by the State Legislature and signed by the Governor on June 24, 1978 which implements the Jarvis-Gann initiative, the Districts would not receive any pro-rata share of the 1% property tax levy after 1978-79. ** This rate assumed that the Districts' would not receive any tax funds based on property value in 1978-79 or subsequent years. The public notice was based on this alternative. ^* No proposed flat rate in 1978-79. Districts would receive pro-rata share of 1% property tax allocation only. BOARDS OF DIRECTORS County Sanitation Districts post office Box 8127 of Orange County,California 10844 Ellis Avenue Fountain Valley, Calif., 92708 Telephones: Area Code 714 540-291 1 JOINT BOARDS .962-241 DRAFT AGENDA ADJOURNED REGULAR MEETING JULY 19, 1978 - 6:00 P.M. (1) • Pledge of Allegiance and Invocation (2) Roll Call (3) Appointment of Chairmen pro tem, if necessary .(4) Public Hearing on proposed flat rate special assessment for sewer service and immediate availability for funding 1978-79 operating and capital budgetary requirements: (a) Open hearing (b) Report on proposed funding method(s) (c) Consideration of motion directing Secretary to enter written comments received into record of hearing (d) Public comment (NOTE: Members of the public wishing to be heard should complete Request to Present Comments at Public Hearing Form (blue form) and submit to the clerk. Members of the public will be called in order of submittal of the form.) (e) Close public hearing (S) Consideration of motion to introduce revised ordinance of each respective District establishing sewer -service and availability charges, and to read said ordinance of each respective District by title only and waiving reading of each ordinance in its entirety: DISTRICT TITLE 1 Ordinance No. 104 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability 2 Ordinance No. 205 (Revised), An Ordinance Establishing Flat Rate Special' Assessment for Sewer Service and Immediate Availability 3 Ordinance No. 306 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability 5 Ordinance No. 510 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability 6 Ordinance No. 604 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability 7 Ordinance No. 717 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Serviee and Immediate Availabiltiy 11 Ordinance No. 1105 (Revised), An Ordinance Establishing 1 Flat Rate Special Assessment for Sewer Service and Immediate Availability (6). Consideration of action on report re flat rate special assessment for sewer service and immediate availability charges (7) Other business and communications, if any (8) Consideration of motion to adjourn 1 _Y BOARDS OF DIRECTORS County Sanitation Districts Post office Box 8127 of Orange County,California 10844 Ellis Avenue Fountain Valley, Calif., 92708 Telephones: JOINT BOARDS "96 Code;" IFINAL AGENDA ADJOURNED REGULAR MEETING JULY 19, 1978 - 6:00 P.M. (1) Pledge of Allegiance and Invocation (2) Roll Call (3) Appointment of Chairmen pro tem, if necessary (4) Consideration of motion to receive and file minute excerpts, if any (5) Public Hearing on proposed flat rate special assessment for sewer service and immediate availability for funding 1978-79 operating and capital budgetary requirements: (a) Open hearing (b) Report on proposed funding method(s) (c) Consideration of motion directing Secretary to enter written comments received into record of hearing (d) Public comment Persons in attendance wishing to be heard should complete Request to Present Oral Comment at Public Hearing form (blue form) and submit to the clerk at the table marked "SUBMIT ORAL COMMENT REQUEST FORM HERE". Oral comments will be heard in order of submittal of the -form to the clerk. OR Persons in attendance wishing to submit a written statement in protest or support of the proposed assessment may do so by completing the Written Statement Regarding Proposed Assessment form (salmon-colored form) and submit to the clerk at the table marked "SUBMIT WRITTEN STATEMENT FORM HERE". Your statement will become a part of the official record of the hearing.. (e) Close public hearing (6) Consideration of motion to introduce revised ordinance of each respective District establishing sewer service and immediate availability charges, and to read said ordinance of each respective District by title only and waiving reading of each ordinance in its entirety: DISTRICT TITLE 1 Ordinance No. 104 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability 2 Ordinance No. 205 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability 3. Ordinance No. 306 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability 5 Ordinance No. 510 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability 6 Ordinance No. 604 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability 7 Ordinance No. 717 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability 11 Ordinance No. 1105 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability (7) Consideration of action on report re flat rate special assessment for sewer service and immediate availability charges (8) Other business and communications, if any (9) Consideration of motion to adjourn ?� T :�,pj 07/19/78 ORDINANCE NO. (REVISED) AN ORDINANCE ESTABLISHING FLAT RATE SPECIAL ASSESS- MENTS FOR SEWER SERVICE AND IMMEDIATE AVAILABILITY The Board of Directors of County Sanitation District No. of Orange County, California, does hereby ORDAIN as follows: Section 1: Purpose. The purpose of this Ordinance is to establish a system of sanitary sewer service assessments, together with immediate availability assessments required to be paid by property owners for the services and facilities furnished by the District in connection with its sanitation treatment works and sewage collection system. Pursuant to the provisions of " Public Law 92-500, and Public Law 95-217, commonly referred to respectively as the Federal Water Pollution Control Act Amend ments of 1972, and the -Clean Water Act of 1977, the District is mandated thereby to provide a . system of user charges. Revenues derived under the provisions of this Ordinance shall be used for the acquisition, construction, reconstruction, maintenance and operation of the sewage collection facilities and wastewater treatment and disposal facilities of the District, together with costs of administration, debt retirement and provisions for necessary reserves. Section 2: Annual Sewer Service Assessments. Each parcel of real property located within the District which is "improved with structures designed for residential, commercial or industrial use, shall pay a flat rate special assessment for sewer service • .P a in the sum of $ provided, however, that upon the Orange County Auditor allocating to this District, pursuant to Government Code Section 26912, a portion of the ad valorem real property tax levied pursuant to California-Revenue and Taxation Code Section 2237', the flat rate special assessment for sewer service shall be in the sum of $ . Section 3: Application of Ordinance. The provisions of this Ordinance shall be in addition to Ordinance No. of the District establishing regulations for use of District' s sewage facilities, including provisions for payment of charges or fees related thereto. Section 4 : Exceptions. The provisions of this Ordinance shall .apply to all properties in the District, and no exception shall be provided for properties otherwise deemed exempt by provisions of the State Constitution or statute, such as properties owned by other public agencies or charitable "founda- tions, except as expressly provided in Section 5 hereof. Section 5 : Exemptions - Rebates. In recognition that certain legal parcels of real property exist within the District which are undeveloped, unsewered or unsewerable, it is the intent of the District that said parcels be totally or partially exempt from the payment of charges as prescribed herein, all in ac- cordance with the following: A. Unsewerable parcels shall be entitled to a 100% rebate of the charges assessed and levied; B. Unsewered parcels developed with a structure shall be entitled to a 66-2/3% rebate of the charges assessed and levied; -2- a C. Unsewered parcels undeveloped with a structure shall be entitled to a 66-2/3% rebate of the charges assessed and levied; and D. Improved parcels owned by public agencies but which are not developed with a structure thereon, such as parks, and NOT containing any sewer connection shall be entitled to a 100% rebate of the charges assessed and levied. Any property owner may submit a claim for rebate to the District on the forms prescribed and provided by the District within one hundred twenty (120) days after the annual property tax bills are mailed by the Orange County Tax Collector. All applications for rebate will be determined by the General Manager of the District and his decision shall be final. For purposes of this Section, "unsewerable" parcels shall be defined to include, but not limited to, those that are used exclusively for private roadways or walkways; a single structure on two or more lots; a carport or garage lot separate from an adjacent residential structure on a separate lot; remnant parcels from public right-of-way which are less than the local code re minimum building lot size. Section 6: Credits Against Other Charges Due. The annual flat rate special assessment for sewer service established by the provisions of this Ordinance, shall be applied as a credit against use charges imposed upon a parcel of property pursuant to Ordinance No. , Establishing Regulations for Use of District Sewerage Facilities (Industrial Wastewater Ordinance) , as amended. -3- M � Section 7: . Assessment Based on Fiscal Year. 'The flat rate special assessments for sewer service and immediate sewer availability established by this Ordinance, shall be for the fiscal year commencing July 1 and terminating June 30, and there shall be no proration of such assessments. Section 8 : Pursuant to the authority granted by California Health and Safety Code Section 5473, all assessments established herein shall be collected on the County Tax Roll in the same manner, by the same persons and at the same time as, together with and not separately from, 'its general taxes. The County Tax Collector is authorized and hereby ordered to make said collections in accordance with the terms and conditions of agreements between the County of Orange and this District. Section 9: Severability. If any provisions of this Ordinance or the application to any person or circumstance is held invalid by order of court, the remainder of the Ordinance or the application of such provision to other persons or in other circumstances shall not be affected. Section *10 : Effective Date. This Ordinance shall become effective immediately upon its adoption by vote of two-thirds of the members of the Board. Section 11: The Secretary shall certify to the adoption of this Ordinance and shall cause the same to be published in a newspaper of general circulation in the District as required by law. -4- i COUNTY SANITATION DISTRICTS of ORANGE COUNTY.CALIFORNIA P O.BOX 8127 10844 ELLIS AVENUE July 19, 1978 FOUNTAIN VALLEY.CALIFORNIA 92708 .., (714)540.2910 (714)9U-2411 PUBLIC HEARING JULY 19, 1978 - 6:00 P.M. RE PROPOSAL TO ESTABLISH AND COLLECT FLAT RATE SPECIAL ASSESSMENTS FOR SEWER SERVICE AND IMMEDIATE AVAILABILITY ON TAX ROLL In the past, the Sanitation Districts have received the bulk of their revenues from a special assessment for sewer service against all real property and improvements in the Districts based on the ad valorem property rolls of the County. The cost to the homeowner whose property is assessed at $13,000 - $15,000, has been $3 to $5 per month, depending on the District, for sewer service exclusive of maintenance of local sewers. This has been collected via the County tax bill. With the passage of the Jarvis/Gann Initiative (proposition 13) , the question arises : Does this provision prohibit the Districts from levying the special assessments that have been levied in all prior years? While the Jarvis/Gann Initiative did not bar this procedure, the actions of the State Legislature in subsequent legislation (Senate Bill 2212 enacted on June 30) barred the use of instituting any charge based on property valuation other than the allowable 1% ad valorem levy. Under consideration are several proposals to institute a flat rate special assessment. These are attached. The Sanitation Districts operate the third largest wastewater 14 . (sewage) treatment system on the West Cost. The capital costs of present day facilities are $229 million; additional construction required during the next 8 years will double this figure. The Districts collect, treat, and dispose of wastewater from 408,000 residential, commercial and industrial connections serving 1.5 million citizens in the 23 cities in the Orange County metropolitan area. 41 ' Ad valorem assess- In spite of the increased demands 40 ment rate for sewer service and additional 39 facilities required by higher State and Federal environmental 36 standards, the combined average N 37 annual variable ad valorem special y 36 assessment rate has steadily de- clined from 42C/$100 assessed la 35 valuation in 72-73 to 31c/$100 assessed valuation in 77-78. The 34 Districts' Boards of Directors 33 have reduced the budget require- meets to lighten the property- owners' burden by $2.2 million 31 I ! 1 for this fiscal year (78-79) . 73 74 775 76 77 IF I SAL 7� EA7R C' Annual revenues come from variable rate ad valorem special assessments, connection fees, induatrial use fees, annexation charges and State and Federal construction grants. The annual expenditures break down approximately 10% for operations and maintenance, 87% for current and planned treatment plant and trunk sewer construction, 3% for bonded debt retirement. I ' COUNTY SANITATION DIc-RICT NO. (ALL) 7/18/78 PRELIMINARY STATEMENT- 04 ZOJECTED CASH FLOW OPERATING & CAPITAL ONLY (EXCLUSIVE OF DEBT SERVICE) FISCAL YEARS 78-79 THROUGH 82-83 MILLIONS OF DOLLARS DESCRIPTION 78-79 79-80 8o-81 81 -82 82-83 CARRY-OVER CONSTRUCTION RESERVES $88 $77 $70 $61 $39 REVENUE Assessments @ $42.85/parcel 17 17 17 17 17 Construction Grants 14 19 31 36 29 Loan in Aid of Construction 1 Industrial User Fees & Connection Fees 4 3 3 3 3 Interest & Other Income 5 3 3 3 2 TOTAL FUNDS AVAILABLE $129 $119 $124 $120 $50 EXPENDITURES Trunk Sewer & Pump Station Construction $11 $ 6 $ 4 $ 6 $ 3 Treatment Plant Construction 30 30 43 51 38 Treatment Plant Mtce & Operation 8 ; 1 13 21 26 Trunk Sewer Mtce S Operation & Other 3 2 3 3 4 TOTAL EXPENDITURES $52 $49 $63 $81 $71 Carry-Over Construction Reserves $77 $70 $61 $39 $19 Funds Required 25 32 40 36 36 Fund Balance or (Deficit) $52 $38 $21 $ 3 ($17) ALL DISTRICTS PRELIMINARY ESTIMATE OF ANNUAL FLAT RATE SPECIAL ASSESSMENT FOR SEriER SERVICE & IMMEDIATE AVAILABILITY 1978-79 Increase 77-78 78-79 (Decrease) Estimated Operating & Capital Requirements District (Collection System) Construction & Reserves 41 ,662,824 25,933,200 (15,729,624) Joint Works (Treatment Plant) Construction and Equity Purchase & Reserves 61 ,058,000 85,075,000 24,017,000 Joint Operating (Treatment Plant) Expense 6,817,884 8, 153,000 1 ,335, 116 District Operating & Other Expenditures 7,009,700 8,548,800 1 ,539, 100 Distribute Upper Basin Joint Works Equity to other CSD's 1 ,141 ,000 1 , 141 ,0-- TOTAL REQUIREMENTS 116,548,408 128,851 ,000 12,302,592 -Estimated Revenue Federal-State Grants 14,152,000 13,759,000 ( 393,000) Sale of Capacity Rights 660,000 1 ,213,000 553,000 Connection Fees & Industrial User Charges 3,858,000 4,236,000 378,000 Interest & Misc. Income 3,629,637 3,517,000 ( 112,637) Other 3,003,000 1 ,500,000 (1 ,503,000) Carry-over 71 ,836,318 87,461 ,000 15,624,682 TOTAL OTHER REVENUE 97, 138,955 111 ,636,000 14,547,A5 Amount to be raised by Assessment 19,409,453 17,165,000 ( 2,244,453) Estimated Number of Parcels in the District 400,560 Estimated Annual Flat Rate Special Assessment for Sewer Service & immediate availability $42.85 per parcel (Average) " Ch. 292 —14— fund reserves" shall not include: (1) Noncash assets such as stores, inventory, property and buildings, or other investments. (2) Any amounts for self-insurance,for contractual obligations,or for reserves established by a governing board policy adopted prior to July 1, 1978. SECTION IS EXCERPTED (3) Any amounts restricted by law or court order. THIS SFROM SECEC WHICH WAS (4) Any amounts committed to a capital outlay project approved prior to June 6, 1978, by the board of supervisors. ADOPTED BY THE STATE (f) For the purpose of this subdivision,the amount of property tax LEGISLATURE AND SIGNED INTO collections pursuant to paragraphs (1) and (2) of Section 2270 of the LAW BY THE GOVERNOR ON Revenue and Taxation Code for the purpose of making annual JUNE 24, 197 SUBSEQUENT payments for the interest and principal on outstanding general TO PASSAGE OF PROPOSITION 13 . obligation bonds or other indebtedness approved by the voters prior to July 1, 1978. (g) Funds distributed for this section shall be given first for police It is my opinion that this and fire programs in order not to jeopardize the health and safety of section, when combined the community. The legislative body shall ensure that the level of with Government Code police and fire protection programs actually provided in the 1977-78 Section 26912 , will provide fiscal year shall be continued in 1978-79. for the Districts to Nothing in this section shall prevent the legislative body from receive an apportionment reviewing and establishing its police and fire protection program in the 1978-79 fiscal year in a manner which will make such prograun of the tax levy for 1978/79 more efficient and effective. only. In subsequent years , (h) The Controller shall estimate the amounts required to be the Districts will not determined pursuant to subdivision (b) (3). receive any portion of the The Controller shall determine the actual amounts and make a 1% ad valorem property tax reconciliation with the April 10, 1979, distribution. levy. (x) The amount allocated in subdivision (a) shall be reduced by i n id pay equal to the a Aid, o Families es any cost-of-living increase in aid payments under the Aid to F::milies with Dependent Children program, as provided in Section 35 of this bill. CHAPTER 3. SPECIAL DISTRICTS Thomas L. Woodruff General Counsel Article 1. General Provisions and Definitions 16270. The Legislature finds and declares that many special districts have the ability to raise revenue through user charges and fees and that their ability to raise revenue directly from the property tax for district operations has been eliminated by Article XIII A of the California Constitution. It is the intent of the Legislature that such districts rely on user fees and charges for raising revenue due to the lack of the availability of property tax revenues after the 1978-79 fiscal year. Such districts are encouraged to begin the transition to user fees and char-es during the 197849 fiscal year. 16271. As used in this chapter: (a) "Governing body"moans the board of supervisors except that 96 480 JUNE 14, 1978 AVAILABLE ALTERNATIVES FOR FUNDING AGENDA ITEM #5 1978-79 OPERATING/CAPITAL FUNDING REQUIREMENTS JARVIS-GANN WILL REDUCE THE DISTRICTS' CURRENT (1977-78) $19.4 MILLION TAX LEVY BY A MINIMUM OF 58% IF THE DISTRICTS RECEIVE A PRO-RATA SHARE OF THE TAXES ALLOWED TO BE COLLECTED BY THE TAX LIMITATION INITIATIVE, TO A MAXIMUM OF 100% IF THE DISTRICTS RECEIVE NO TAXES UNDER THE ALLOCATION METHOD YET TO BE DECIDED BY THE STATE LEGISLATURE. ALTERNATIVE METHODS OF FUNDING THE DISTRICTS SEWAGE COLLECTION, TREATMENT AND DISPOSAL ACTIVITIES FOR 1978-79 ARE AS FOLLOWS: I - FUND 1978-79 REQUIREMENTS FROM CONSTRUCTION RESERVE FUNDS (ASSUMES NO PRO-RATA SHARE OF 1% TAX ALLOCATION - MAJOR ADVANTAGE - NO ADDITIONAL ADMINISTRATIVE OVERHEAD COSTS FOR 1978-79 - MAJOR DISADVANTAGES - FUNDS RESERVED FOR CONSTRUCTION TO COMPLY WITH FEDERAL AND STATE LAWS WOULD BE DIVERTED FROM CAPITAL TO OPERATING - NEEDED AND/OR REQUIRED CONSTRUCTION PROJECTS MAY BE DELAYED - FUNDS WOULD HAVE TO BE REPAID TO CONSTRUCTION RESERVES IN FUTURE YEARS REQUIRING DISPROPOR- TIONATELY HIGHER CHARGE IN THOSE YEARS - LOSS OF INTEREST EARNINGS II - FUND 1978-79 REQUIREMENTS BY ESTABLISHING A FLAT RATE USER/AVAILABILITY CHARGE AGAINST EACH PARCEL OF PROPERTY TO BE COLLECTED BY THE TAX BILL MAJOR ADVANTAGES - PROVIDES FINANCING FOR 1978-79 OPERATING AND CAPITAL REQUIREMENTS WITHOUT SUBSTANTIAL USE OF CONSTRUCTION RESERVES - STABILIZES PROPERTY OWNER CHARGES AND DISTRICTS CASH FLOW - ACCOMMODATES PHASING OF USER CHARGE/REVENUE PROGRAM REQUIRED TO BE IMPLEMENTED IN 1979-80 BY EPA AND SWRCB - MAJOR DISADVANTAGES - REQUIRES PUBLIC NOTICE AND HEARINGS IN A RELATIVELY SHORT TIME FRAME TO IMPLEMENT - DISTRICTS WILL INCUR ADDED ADMINISTRATIVE OVERHEAD COST TO IMPLEMENT (ESTIMATED AT BETWEEN $75,000 TO $105,000) PLUS ADDED CHARGE TO COLLECT ON TAX BILL - POSSIBLE PUBLIC BACKLASH IN VIEW OF JARVIS-GANN MANDATE - FLAT USE CHARGE IS NOT EQUITABLE III - CONTINUE TO LEVY FULL TAX RATE NECESSARY TO FUND 1978-79 REQUIREMENTS ON THE BASIS OF PREVIOUS COUNTY COU14SEL OPINION THAT SANITATION DISTRICT LEVY IS A "SPECIAL ASSESSMENT". SAID OPINION MAY THUS EXCLUDE THE DISTRICTS FROM APPLICATION OF JARVIS-GANN. - MAJOR ADVANTAGE - NO ADDITIONAL ADMINISTRATIVE OVERHEAD COSTS FOR 1978-79 - MAJOR DISADVANTAGES - COUNTY COUNSEL HAS NOT YET RULED ON THIS OPINION RELATIVE TO JARVIS-GANN - MAY RESULT IN LITIGATION AND THE COURTS MAY FIND AGA114ST THIS INTERPRETATION COUNTY SANITATION DISTRICTS of ORANGE COUNTY.CALIFORNIA P.O,BOX 8127 July 19 , 1978 10844 ELLIS AVENUE -� FOUNTAIN VALLEY,CALIFORNIA 92708 (714)540 2910 (714)962-2411 SUPPLEMENTAL ALTERNATIVES FOR FUNDING 1978-79 OPERATING/CAPITAL FUNDING REQUIREMENTS . ON JUNE 24, THE GOVERNOR SIGNED SENATE BILL 154, ALSO KNOWN AS CHAPTER 292, IMPLEMENTING THE JARVIS/GANN INITIATIVE. ONE OF THE PROVISIONS OF SENATE BILL 154 INDICATES THAT THE DISTRICT WILL RECEIVE A PRO RATA SHARE (APPROXIMATELY $7 MILLION) OF THE 1% TAX ALLOCATION IN 1978-79 ONLY. IT ALSO INDICATES THAT ENTERPRISE SPECIAL DISTRICTS , SUCH AS THE SANITATION DISTRICTS , ARE EXPECTED TO RAISE THEIR REVENUES THROUGH USER CHARGES AND FEES IN FUTURE YEARS AND WILL NOT RECEIVE ANY TAX ALLOCATION AFTER THIS FISCAL YEAR. The following two supplemental funding alternatives consider receipt of tax funds for the 1978-79 fiscal year . IA - This proposal assumes that the District will receive its pro rata share of the 1% tax allocation provided under the Jarvis/Gann Amendment for the 1978-79 fiscal year and defers the implementation of a flat rate user fee to the 1979-80 fiscal year. Approximately $10 . 2 million in District funds reserved for construction would be diverted from capital accounts to operating accounts as required during 1978-79 to fund operations . Based on the requirements of the Districts , this pro- posal would anticipate a flat rate user charge next year as follows : Alternative IA Proposed 7 -79 Estimated 79-80 DISTRICT NO. Flat Rate Flat Rate- 1 NONE $ 46.04 2 NONE 45. 18 3 NONE 49.62 5 NONE 67. 14 6 NONE 46. 11 7 NONE 41 .60 11 NONE 64.24 (continued) BOARD ACTIONS REQUIRED: (1) Adopt proposal IA which eliminates the need for a flat rate user fee for the 78-79 fiscal year (2) Declare intent of the Boards of Directors to institute a user fee revenue program effective July 1 , 1979 IIA - This proposal assumes the anticipated share of the 1% property tax allocation for 78-79 as indicated in Proposal IA, but implements a user charge per parcel this year as listed below. This proposal , which incorporates a flat fee and ad valorem taxes , provides a substantial degree of equity. Proposed User Charge 78-79 79-80 FixeU Estimated Dist. #1 24. 98 39 . 79 Dist. #2 22. 70 39 . 50 � Dist. #3 26 . 79 42 . 92 Dist. #5 29 . 75 59 . 70 Dist. #6 24. 77 39 . 92 Dist. #7 13 . 93 38. 12 Dist.#ll 36 . 82 55 . 03 We do not anticipate receiving any of the 1% property tax allocation as provided by the Jarvis/Gann Amendment after this current fiscal year. Under this proposal, the staff recommends that rebates and/or exceptions be provided for properties that are considered unsewerable and properties not receiving sewer service. REBATES AND EXCLUSIONS : FULL REBATE OR EXCLUSION - Properties that are improved but do not receive sewer service , such as parcels that contain only carports , green- belts , drainage channels and incidental or adjoinint undevelopable parcels should be exempt from a flat rate charge. -2- (continued) ... TWO-THIRDS REBATE OR EXCLUSION - Improved and unimproved properties that are not currently receiving sanitary sewer service should have a 2/3 exemption from the District charges . Capital improvements have been and are con- tinuing to be made for their benefit at the treatment plants . While it is desirable that the above-mentioned properties be excluded from any adopted flat rate charge now, the Sanitation Districts do not have sufficient information to exclude all of these properties in the implementation of a user charge flat fee. Therefore, since these properties cannot be identified readily, it is recommended that the implementing ordinance include a simple rebate (refund) provision. BOARD ACTION REQUIRED: Adoption of an ordinance setting forth fixed flat rate fees per parcel for the 78-79 fiscal year allowing for anticipated taxes but providing for exceptions for rebates and/or exclusions . n 7/19/78 FLAT RATE CHARGE ESTIMATES BASED ON VARIOUS ALTERNATIVES Alternative IA Alternative II Alternative IIA Proposed 7 -79 Estimated 79- 0 Proposed 7 -79 Estimated 79-80 Proposed 7 -79 Estimated 79-80 DISTRICT NO. Flat Rate Flat Rate* Flat Rate** Flat Rate* Flat Rate Flat Rate* 1 NONE $ 46.04 $ 39.79 $ 39.79 $ 24.98 $ 39:79 2 NONE 45.18 39.50 39.50 22.70 39.50 3 NONE 49.62 42.92 42.92 26.79 42.92 5 NONE 67. 14 59.70 59.70 29.75 59.70 6 NONE 46.11 39.92 39.92 24.77 39.92 7 NONE 41 .60 38. 12 38.12 13.93 38.12 11 NONE 64.24 55.03 55.03 36.82 55.03 Average All Districts $ 49.19 $ 42.85 $ 42.85 $ 25.34 $ 42.85 Pursuant to SB-154 adopted by the State Legislature and signed by the Governor on June 24, 1978 which implements the Jarvis-Gann initiative, the Districts would not receive any pro-rata share of the 1% property tax levy after 1978-79. ** This rate assumed that the Districts' would not receive any tax funds based on property value in 1978-79 or subsequent years. The public notice was based on this alternative. ** No proposed flat rate in 1978-79. Districts would receive pro-rata share of 1% property tax allocation only. _r BOARDS OF DIRECTORS County Sanitation Districts ro r attire ea. enu of Orange County,California 10844 Ellis Avenua Fountain Valley, Calif., 92708 Teleph..: A 714 JOINT BOARDS 62 411 IIFINAL AGENDA ADJOURNED REGULAR MEETING JULY 19, 1978 — 6:00 P,M. (1) Pledge of Allegiance and Invocation "� o 1 (2) Roll Call (3) Appointment of Chairmen pro tem, if necessary t (4) Coub"',ath'bn o ion to receive and f' a minute xcerp s, if any (S) Public eari�opos laft ial assessment oror se�vice and immediate availability for funding 1978-79 operating and capital budgetary requirements: (�n8 (b) Report on prpposed funding method(s) (c) Consideration of motion directing Secretary to enter written comments received into record of hearing (d) Public comment Persons in attendance wishing to be heard should complete Request to Present Oral Comment at Public Hearing form (blue form) and submit to Fhe clerk at the table marked "SUBMIT ORAL COnMENT REQUEST FORM HERE". Oral comments will be heard in order of submittal of the Form to the clerk OR Persons in attendance wishing to submit a written statement in protest or support of the proposed assessment may do so by completing the Written Statement Regarding Proposed Assessment form (salmon-colored form) and submit to the clerk at the table marked "SUBMIT WRITTEN STATEMENT FORM HERE". Your statement will become a part of the official record of the hearing. (e) Close public hearing (6) Consideration of motion to introduce revised ordinance of each respective District establishing sewer service and immediate availability charges, and to read said ordinance of each respective District by title only and waiving reading of each ordinance in its entirety: DISTRICT TITLE 1 Ordinance No. 104 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability 2 Ordinance No. 205 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability 3 Ordinance No. 306 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability S Ordinance No. 510 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability 6 Ordinance No. 604 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability 7 Ordinance No. 717 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability 11 Ordinance No. 1105 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability (7) Consideration of action on report re flat rate special assessment for sewer service and immediate availability charges (8) Other business and communications, if any (9) Consideration of motion to adjourn T.J1:p j 07/19/78 ORDINANCE NO. (REVISED) AN ORDINANCE ESTABLISHING FLAT RATE -SPECIAL ASSESS- MENTS FOR SEWER SERVICE AND I1,24EDIATE AVAILABILITY The Board of Directors of County Sanitation District No. of Orange County, California, does hereby ORDAIN as follows: Section l: Purpose. The purpose of this Ordinance is to establish a system of sanitary sewer service assessments, together with immediate availability assessments required to be paid by property owners for the services and. facilities furnished by the District in connection- with its sanitation treatment works and sewage collection system. Pursuant to the provisions of Public Law 92-500, and Public Law 95-217, commonly referred to respectively- as the Federal Water Pollution Control Act Amend .ments of 1.972, and the Clean Water Act of 1977, the District is mandated thereby to provide a system of user charges. Revenues derived under the provisions. of this Ordinance shall be used for the acquisition, construction, reconstruction, maintenance and operation of the sewage collection facilities and wastewater treatment and disposal facilities of the District, .together with costs of administration, debt retirement and provisions for necessary reserves. -Section 2: Annual Sewer Service Assessments. Each parcel of real property located within the District which is improved with structures designed. for residential, commercial or industrial . use, shall -pay a flat rate special assessment for sewer service in the sum of $ provided, however, that upon the Orange County Auditor allocating to this District, pursuant to Government Code Section 26912, a portion of the ad valorem real property tax levied pursuant to California Revenue and Taxation Code Section 2237, the flat rate special assessment for sewer service shall be .in the sum of $ ; Section 3: Application of- Ordinance. The provisions of this Ordinance shall be in addition -to Ordinance No.. of the District establishing regulations for use of District' s sewage facilities, including provisions for payment of charges or fees related thereto. Section 4 : Exceptions. The provisions of this Ordinance shall apply to all properties in the District, and no exception shall be provided for properties otherwise deemed exempt by provisions of the State Constitution or statute, such as properties owned by other public agencies or charitable founda- tions, except as expressly provided in Section 5 hereof. Section 5: Exemptions - Rebates. In recognition that certain legal parcels of real .property exist within the District which are undeveloped, unsewer-ed or unsewe-rable, -it is the intent of the District that said parcels be totally or partially. exempt from the payment of charges as prescribed herein, all in ac- cordance with the following: A. Unsewerable parcels shall be entitled to a 100% rebate of the charges assessed and levied; B. Unsewered parcels developed with a structure shall be entitled to a 66-2/3% rebate of the charges assessed and levied; --2 - a a C. Unsewered parcels undeveloped with a structure shall be entitled to a 66-2/3% rebate of the charges assessed and levied; and D. Improved parcels owned by publicagencies .but which are not developed with a -structure thereon, such as parks, and NOT containing any sewer connection shall be entitled to a 100% rebate of the charges assessed and levied. Any property owner may submit a claim for rebate to the District on the forms prescribed and provided by. the District within one hundred twenty (120) days after the annual property tax bills are mailed by the Orange County Tax Collector. All applications for rebate will be determined by the General Manager of the District and his decision shall be final. For purposes of this Section, . "unsewerable" parcels shall be defined to include, but not limited to, those - that are used exclusively for private roadways or walkways; a single structure on two or more lots; a carport or garage lot separate from an adjacent residential structure on a separate lot; remnant parcels from public right-of-way which are less than the local code re minimum building lot size. Section 6: Credits Against Other Charges Due. The annual flat rate special assessment -for sewer service established by the provisions of this Ordinance, shall be applied as a credit against use charges imposed upon a parcel of property pursuant to Ordinance No. , Establishing Regulations for Use of District Sewerage 'Facilities (Industrial Wastewater Ordinance) , as amended. -3- Section 7: Assessment Based on Fiscal Year. The flat rate special assessments for sewer service and immediate sewer availability established "by this Ordinance, shall be for the fiscal year commencing July- 1 and terminating June 30, and• there shall be no proration of such assessments. Section 8 : Pursuant to the authority granted by California Health and Safety Code Section 5473, all assessments established herein shall be collected on the County Tax Roll in the same manner, by the same persons and at the same time as, together with and not separately from, its general taxes. The County Tax Collector is authorized and hereby ordered to make said collections in accordance with the terms and conditions of agreements between the County of Orange and this District. Section 9 : Severability. If any provisions of this Ordinance or the application to -any person or circumstance is held invalid by order of court, the remainder of the Ordinance or the application of such provision to other persons or in other circumstances shall not be affected. Section 10: Effective Date. This Ordinance shall become effective immediately upon its adoption by vote of two-thirds of the members of the Board. Section 11: The Secretary shall certify to the adoption of this Ordinance and shall cause the same to be published in a newspaper of general circulation in the District as required by law. COUNTY SANITATION DISTRICTS of ORANGE COUNTY,CALIFORNIA P O-BOX 8127 10844 ELLIS AVENUE July 19, 1978 FOUNTAIN VALLEY.CALIFORNIA 92708 (714)540-2910 'Wasp, (714)962-2411 PUBLIC HEARING JULY 19, 1978 - 6:00 P.M. RE PROPOSAL TO ESTABLISH AND COLLECT FLAT RATE SPECIAL ASSESSMENTS FOR SE14ER SERVICE AND IMMEDIATE AVAILABILITY ON TAX ROLL In the past, the Sanitation Districts have received the bulk of their revenues from a special assessment for sewer service against all real property and improvements in the Districts based on the ad valorem property rolls of the County. The cost to the homeowner whose property is assessed at $13,000 - $15,000, has been $3 to $5 per month, depending on the District, for sewer service exclusive of maintenance of local sewers. This has been collected via the County tax bill. With the passage of the Jarvis/Gann Initiative (proposition 13) , the question arises: Does this provision prohibit the Districts from levying the special assessments that have been levied in all prior years? While the Jarvis/Gann Initiative did not bar this procedure, the actions of the State Legislature in subsequent legislation (Senate Bill 2212 enacted on June 30) barred the use of instituting any charge based on property valuation other than the allowable 1% ad valorem levy. Under consideration are several proposals to institute a flat rate special assessment. These are attached. The Sanitation Districts operate the third largest wastewater (sewage) treatment system on the West Cost. The capital costs of present day facilities are $229 million; additional construction required during the next 8 years will double this figure. The Districts collect, treat, and dispose of wastewater from 408,000 residential, commercial and industrial connections serving 1.5 million citizens in the 23 cities in the Orange County metropolitan area. �t Ad valorem assess- In spite of the increased demands 40 ment rate for sewer service and additional 39 facilities required by higher State and Federal environmental 38 standards, the combined average ti 37 annual variable ad valorem special assessment rate has steadily de- 36 clined from 42c,-/$100 assessed 35 valuation in 72-73 to 31�/$100 assessed valuation in 77-78. The 34 Districts' Boards of Directors 33 have reduced the budget require- ments to lighten the property- owners' burden by $2.2 million 31 1 1 1 for this fiscal year (78-79) . 73 74 75 76 77 _ K TIF 13 FA 7YEA3f� ` Annual revenues come from variable rate ad valorem special assessments, connection fees, induatrial use fees, annexation charges and State and Federal construction grants. The annual expenditures break down approximately 10% for operations and maintenance, 87% for current and planned treatment plant and trunk sewer construction, 3% for bonded debt retirement. COUNTY SANITATION DI 'z 'RICT NO. (ALL) 7/18/78 PRELIMINARY STATEMENT- A ,OJECTED CASH FLOW { OPERATING & CAPITAL ONLY (EXCLUSIVE OF DEBT SERVICE) FISCAL YEARS 78-79 THROUGH 82-83 MILLIONS OF DOLLARS DESCRIPTION 78-79 79-80 80-81 81 -82 82-83 CARRY-OVER CONSTRUCTION RESERVES $38 $77 $70 $61 $39 REVENUE Assessments @ $42.85/parcel 17 17 17 17 17 Construction Grants 14 19 31 36 29 Loan in Aid of Construction 1 Industrial User Fees & Connection Fees 4 3 3 3 3 Interest & Other Income 5 3 3 3 2 TOTAL FUNDS AVAILABLE $129 $119 $124 $120 $90 EXPENDITURES Trunk Sewer & Pump Station Construction $11 $ 6 $ 4 $ 6 $ 3 Treatment Plant Construction 30 30 43 51 38 Treatment Plant Mtce & Operation 8 11 13 21 26 Trunk Sewer Mtce & Operation & Other 3 2 3 3 4 TOTAL EXPENDITURES �0n/b $52 $49 $63 $81 $71 r�� Carry-Over Construction Reserves $77 $70 $61 $39 $19 Funds Required 25 32 40 36 36 Fund Balance or (Deficit) $52 $38 $21 $ 3 ($17) ALL DISTRICTS PRELIMINARY ESTIMATE OF ANNUAL FLAT RATE SPECIAL ASSESSMENT FOR SEWER SERVICE & IMHEDIATE AVAILABILITY 1978-79 Increase 77-78 78-79 (Decrease) Estimated Operating & Capital Requirements District (Collection System) Construction & Reserves 41 ,662,824 25,933,200 (15,729,624) Joint Works (Treatment Plant) Construction and Equity Purchase & Reserves 61 ,058,000 85,075,000 24,017,000 Joint Operating (Treatment Plant) Expense 6,817,884 8, 153,000 1 ,335, 116 District Operating & Other Expenditures 7,009,700 8,548,800 1 ,539, 100 Distribute Upper Basin Joint Works Equity to other CSD's 1 , 141 ,000 1 , 141 ,c` TOTAL REQUIREMENTS 116,548,408 128,851 ,000 12,302,592 -Estimated Revenue Federal-State Grants 14, 152,000 13,759,000 ( 393,000) Sale of Capacity Rights 660,000 1 ,2.13,000 553,000 Connection Fees & Industrial User Charges 3,858,000 4,236,000 378,000 Interest & Misc. Income 3,629,637 3,517,000 ( 112,637) Other 3,003,000 1 ,500,000 (1 ,503,000) Carry-over 71 ,836,318 87,461 ,000 15,624,682 TOTAL OTHER REVENUE 97, 138,955 111 ,686,000 14,547,045 Amount to be raised by Assessment 19,409,453 17,165,000 ( 2,244,453) Estimated Number of Parcels in the District 400,560 ''40d Estimated Annual Flat Rate Special Assessment for Sewer Service & immediate availability $42.85 per parcel (Average) �.Ch. 292 — 14— fund reserves" shall not include: (1) Noncash assets such as stores, inventory, property and buildings, or other investments. (2) Any amounts for self-insurance,for contractual obligations,or for reserves established by a governing board policy adopted prior to July 1, 1978. ON IS EXCERPTED (3) Any amounts restricted by law or court order. THIS SECTION SECTIECTIB-15 WHICH WAS (4) Any amounts committed to a capital outlay project approved prior to June 6, 1978, by the board of supervisors. ADOPTED BY THE STATE (f) For the purpose of this subdivision,the amount of property tax LEGISLATURE AND SIGNED INTO collections pursuant to paragraphs (1) and (2) of Section 2270 of the LAW BY THE GOVERNOR ON Revenue and Taxation Code for the purpose of making annual JUNE 24, 1978 , SUBSEQUENT payments for the interest and principal on outstanding general TO PASSAGE OF PROPOSITION 13 . obligation bonds or other indebtedness approved by the voters prior to July 1, 1978. (g) Funds distributed for this section shall be given first for police It is my opinion that this and fire programs in order not to jeopardize the health and safety of section, when combined the community. The legislative bony shall ensure that the level of with Government Code police and fire protection programs actually provided in the 1977-78 Section 26912 , will provide fiscal year shall be continued in 1978-79. for the Districts to Nothing in this section shall prevent the legislative body from reviewing and establishing its police and fire protection program in receive an apportionment the 1978-79 fiscal year in a manner which will make such program of the tax levy for 1978/79 more efficient and effective. only. In subsequent years , (h) The Controller shall estimate the amounts required to be the Districts will not determined pursuant to subdivision (b) (3). receive any portion of the The Controller shall determine the actual amounts and make a 1% ad valorem property tax reconciliation with the April 10, 1979, distribution. levy. (x) The amount allocated in subdivision. (a) shall be reduced by i n amount equal to the a Aid. o Families es any cost-of-living increase I/ in aid payments under the Aid to Families with Dependent Children program, as provided in Section 35 of this bill. CHAPTER 3. SPECIAL DISTRICTS Thomas L. Woodruff General Counsel Article 1. General Provisions and Definitions 16270. The Legislature finds and declares that many special UL i districts have the ability to raise revenue through user charges and "4-> fees and that their ability to raise revenue directly from the property & lax for district operations has been eliminated by Article XIII A of the ® f, yt t3, n. California Constitution. It is the intent of the Legislature that such l°'� 1J1"" districts rely on user fees and charges for raising revenue due to the t lack of the availability of property tax revenueslafter the 1978-79 3 (/ fiscal year. Such districts are encouraged to begin the transition to user fees and charges during the 1978-79 fiscal year. . 16271. As used in this chapter: (a) "Governing body"nic"ns the board of supervisors except that l% v% Ua 96 490 JUNE 14, 1978 AVAILABLE ALTERNATIVES FOR FUNDING AGENDA ITEM N5 1978-79 OPERATING/CAPITAL FUNDING REQU REMENTS JARVIS-GANN WILL REDUCE THE DISTRICTS' CURRENT (1977-78) $19.4 MILLION TAX LEVY BY A MINIMUM OF 58% IF THE DISTRICTS RECEIVE A PRO-RATA SHARE OF THE TAXES ALLOWED TO .. BE COLLECTED BY THE TAX LIMITATION INITIATIVE, TO A MAXIMUM OF 100% IF THE DISTRICTS RECEIVE NO TAXES UNDER THE ALLOCATION METHOD YET TO BE DECIDED BY THE STATE LEGISLATURE. ALTERNATIVE METHODS OF FUNDING THE DISTRICTS SEWAGE COLLECTION, TREATMENT AND DISPOSAL ACTIVITIES FOR 1978-79 ARE AS FOLLOWS: I - FUND 1978-7g REQUIREMENTS FROM CONSTRUCTION RESERVE FUNDS (ASSUMES NO PRO-RATA SHARE OF 1$ TAX ALLOCATION - MAJOR ADVANTAGE - NO ADDITIONAL ADMINISTRATIVE OVERHEAD COSTS FOR 1978-79 - MAJOR DISADVANTAGES - FUNDS RESERVED FOR CONSTRUCTION TO COMPLY WITH FEDERAL AND STATE LAWS WOULD BE DIVERTED FROM CAPITAL TO OPERATING - NEEDED AND/OR REQUIRED CONSTRUCTION PROJECTS MAY BE DELAYED - FUNDS WOULD HAVE TO BE REPAID TO CONSTRUCTION RESERVES IN FUTURE YEARS REQUIRING DISPROPOR- TIONATELY HIGHER CHARGE IN THOSE YEARS - LOSS OF INTEREST EARNINGS II - FUND 1978-79 REQUIREMENTS BY ESTABLISHING A FLAT RATE USER/AVAILABILITY CHARGE AGAINST EACH PARCEL OF PROPERTY TO BE COLLECTED BY THE TAX BILL - MAJOR ADVANTAGES - PROVIDES FINANCING FOR 1978-79 OPERATING AND CAPITAL REQUIREMENTS WITHOUT SUBSTANTIAL USE OF CONSTRUCTION RESERVES - STABILIZES PROPERTY OWNER CHARGES AND DISTRICTS CASH FLOW - ACCOMMODATES PHASING OF USER CHARGE/REVENUE PROGRAM REQUIRED TO BE IMPLEMENTED IN 1979-80 BY EPA AND SWRCB - MAJOR DISADVANTAGES - REQUIRES PUBLIC NOTICE AND HEARINGS IN A RELATIVELY SHORT TIME FRAME TO IMPLEMENT - DISTRICTS WILL INCUR ADDED ADMINISTRATIVE OVERHEAD COST TO IMPLEMENT (ESTIMATED AT BETWEEN $75,000 TO $105,000) PLUS ADDED CHARGE TO COLLECT ON TAX BILL - POSSIBLE PUBLIC BACKLASH IN VIEW OF JARVIS-GANN MANDATE - FLAT USE CHARGE IS NOT EQUITABLE III - CONTINUE TO LEVY FULL TAX RATE NECESSARY TO FUND 1978-79 REQUIREMENTS ON THE BASIS OF PREVIOUS COUNTY COUNSEL OPINION THAT SANITATION DISTRICT LEVY IS A "SPECIAL ASSESSMENT". SAID OPINION MAY THUS EXCLUDE THE DISTRICTS FROM APPLICATION OF JARVIS-GANN. - MAJOR ADVANTAGE - NO ADDITIONAL ADMINISTRATIVE OVERHEAD COSTS FOR 1978-79 - MAJOR DISADVANTAGES - COUNTY COUNSEL HAS NOT YET RULED ON THIS OPINION RELATIVE TO JARVIS-GANN - MAY RESULT IN LITIGATION AND THE COURTS MAY FIND AGAINST THIS INTERPRETATION COUNTY SANITATION DISTRICTS of O RANGE COUNTY,CALIFORNIA 0 BOX 8127 July 19, 1978 10844ELLLIS AVENUE FOUNTAIN VALLEY,CALIFORNIA 92708 (714)540-2910 (714)962-2411 SUPPLEMENTAL ALTERNATIVES FOR FUNDING 1978-79 OPERATING/CAPITAL FUNDING REQUIREMENTS ON JUNE 24, THE GOVERNOR SIGNED SENATE BILL 154 , ALSO KNOWN AS CHAPTER 292, IMPLEMENTING THE JARVIS/GANN INITIATIVE . ONE OF THE PROVISIONS OF SENATE BILL 154 INDICATES THAT THE DISTRICT WILL RECEIVE A PRO RATA SHARE (APPROXIMATELY $7 MILLION) OF THE 1% TAX ALLOCATION IN 1978-79 ONLY. IT ALSO INDICATES THAT ENTERPRISE SPECIAL DISTRICTS , SUCH AS THE SANITATION DISTRICTS, ARE EXPECTED TO RAISE THEIR REVENUES THROUGH USER CHARGES AND FEES IN FUTURE YEARS AND WILL NOT RECEIVE ANY TAX ALLOCATION AFTER THIS FISCAL YEAR. The following two supplemental funding alternatives consider receipt of tax funds for the 1978-79 fiscal year. IA - This proposal assumes that the District will receive its pro rata share of the 1% tax allocation provided under the Jarvis/Gann Amendment for the 1978-79 fiscal year and defers the implementation of a flat rate user �.s fee to the 1979-80 fiscal year. Approximately $10 . 2 million in District funds reserved for construction would be diverted from capital accounts to operating accounts as required during 1978-79 to fund operations . Based on the requirements of the Districts , this pro- posal would anticipate a flat rate user charge next year as follows : Alternative IA Proposed 7 -79 Estimated 79-80 DISTRICT NO. Flat Rate Flat Rate* .L J..4 1 NONE $ 46.04 2 NONE 45. 18 3 NONE 49.62 5 NONE 67. 14 6 NONE 46. 11 7 NONE 41 .60 11 NONE 64.24 (continued) BOARD ACTIONS REQUIRED: (1) Adopt proposal IA which eliminates the need for a flat rate user fee for the 78-79 fiscal year (2) Declare intent of the Boards of Directors to institute a user fee revenue program effective July 1, 1979 IIA - This proposal assumes the anticipated share of the 1% property tax allocation for 78-79 as indicated in Proposal IA, but implements a user charge per parcel this year as listed below. This proposal , which incorporates a flat fee and ad valorem taxes , provides a substantial degree of equity. Proposed User Charge 78-79 79-80 Fixed Estimated Dist. #1 24. 98 39 . 79 Dist. #2 22. 70 39 . 50 � Dist. #3 26 . 79 42. 92 Dist. #5 29 . 75 59 . 70 Dist. #6 24. 77 39 . 92 Dist. #7 13. 93 38. 12 Dist.#ll 36 . 82 55 . 03 We do not anticipate receiving any of the 1% property tax allocation as provided by the Jarvis/Gann Amendment after this current fiscal year. Under this proposal, the staff recommends that rebates and/or exceptions be provided for properties that are considered unsewerable and properties not receiving sewer service. REBATES AND EXCLUSIONS : FULL REBATE OR EXCLUSION - Properties that are improved but do not receive sewer service, such as parcels that contain only carports , green- belts , drainage channels and incidental or adjoinint undevelopable parcels should be exempt from a flat rate charge. -2- (continued) `-' TWO-THIRDS REBATE OR EXCLUSION - Improved and unimproved properties that are not currently receiving sanitary sewer service should have a 2/3 exemption from the District charges . Capital improvements have been and are con- tinuing to be made for their benefit at the treatment plants . While it is desirable that the above-mentioned properties be excluded from any adopted flat rate charge now, the Sanitation Districts do not have sufficient information to exclude all of these properties in the implementation of a user charge flat fee. Therefore, since these properties cannot be identified readily, it is recommended that the implementing ordinance include a simple rebate (refund) provision. BOARD ACTION REQUIRED: Adoption of an ordinance setting forth fixed flat rate fees per parcel for the 78-79 fiscal year allowing for anticipated taxes but providing for exceptions for rebates and/or exclusions . *4MW s� N Z -4 O X -0 O w 3- -h 3' C d 70 / i-• %.n W N -� OD a rt A In m n O rt rt O In O m aye v rt v °' In mi � a O u W CI a s m rt i -v rtm (D rt LA v� rt -'O14 D LA 0) m rt =r z z z z z Z z 01 o rr 3 = rt m n, o 0 0 0 0 o O In (p rr N Q! CL z z Z z Z Z Z :S• m rt X o m m m rn rn m m sF ;a O_ D 3 m rt rt rt V -� -• � m < •a m 00 1 m V v 1 0- OD - CI G7 K Or 1 W -h ID � V -� rt rt 3 rt rn _. I m-3 3' w < • m - -1 m -n rt m v rt 3 N yr cn 0) v C W \D -•rr rt V rt CU 4- CT .P- 4- cy% 4 V- -P- r* OD-•rt w r O% V lD vl a% o�, m rt A O V rt m N O rt %D < %D V O 4- N OD N A O a m IO 1 rt rt - - OD In -• In o A O rt O m rt m m rt -� Cl m v '1 a In A -• m m ul rt N m o, < -1 3 A w m -• a �• CL tU rt In D -n -v cn r � m rn -Di �p rt O m 4.* -i rt Cu c 0. m o O O ? X .1• VI w w V7 .-- w w rt (A z D i m rr N VI co w lD N lD %D m -! CL c Oo o — lD v lD vl -*4a D D m rt N 3 O rt V1 W N N O N O %D rt m �T :;aC')pl o.. rt ? rt to m :b I m Co D In m -1 ;o 3' -1 CT m G) lD 3 N 0 m 3 Iv A o m -1 nl W m < rt D m rt m -•m 0. < -1 IA < -I Cn Oh mO m 0 to -n rt m m -1 -• _ ... 3 : 4- V7 w W V1 _r_- W W rt N — D D NO 'n o N V1 OD lD w rt -I --I -p O m ' OD O I lD V to n V d C L G cmn -1 'O -1 C- In W N N O N O lD r -4Cmn 0 •'m'1 OI 3 :z•lD ml �G a) m 00 rt rt N o -� < cl .r- N rt N 01 C ? -• . x m nl �D "S V of - m OD O A W rt O -n O 4A to a O C11 O 3 N w N N N N N rt In V7 O� W .C!- lD ON m W OD lD V V V V %D Ili D V7 w O OO r -4 —rt 1 m ' • V '1 lD 3 til rt um+ < V -t rt m cn 4A a N %n co w w N %D %D rt rt D V • ;O m OD In W N N O N O lD rt m V - :t-lD 1 O BOARDS OF DIRECTORS County Sanitation Districts Post office Box 8127 of Orange County,California 10844 Ellis Avenue Fountain Valley, Calif., 92708 Telephones: Area Code 14 JOINT BOARDS 9540-2910 62-2411 FINAL AGENDA ADJOURNED REGULAR MEETING JULY 19, 1978 - 6:00 P.M. (1) Pledge of Allegiance and Invocation (2) Roll Call f (3) Appointment of Chairmen pro tem, if necessary (4) Consideration of motion to receive and file minute excerpts, if any 5 a-- (5) Public Hearing on proposed flat rate special assessment for sewer service and immediate availability for funding 1978-79 operating and capital budgetary requirements: (a) Open hearing (b) Report on proposed funding method(s) (c) Consideration of motion directing Secretary to enter written comments received into record of hearing (d) Public comment Persons in attendance wishing to be heard should complete Request to Present Oral Comment at Public Hearing form (blue form) and submit to the clerk at the table marked "SUBMIT ORAL CO&NIMENT REQUEST FORM HERE". Oral comments will be heard in order of submittal of the form to the clerk. OR Persons in attendance wishing to submit a written statement in protest or support of the proposed assessment may do so by completing the Written Statement Regarding Proposed Assessment form (salmon-colored form) and submit to the clerk at the table marked "SUBMIT WRITTEN STATEMENT FORM HERE". Your statement will become a part of the official record of the hearing. (e) Close public hearing (6) Consideration of motion to introduce revised ordinance of each respective District establishing sewer service and immediate availability charges, and to read said ordinance of each respective District by title only and waiving reading of each ordinance in its entirety: DISTRICT TITLE 1 Ordinance No. 104 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability 2 Ordinance No. 205 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability 3 Ordinance No. 306 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability 5 Ordinance No. 510 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability 6 Ordinance No. 604 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability 7 Ordinance No. 717 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability 11 Ordinance No. 1105 (Revised), An Ordinance Establishing Flat Rate Special Assessment for Sewer Service and Immediate Availability (7) Consideration of action on report re flat rate special assessment for sewer service and immediate availability charges (8) Other business and communications, if any .10 o,a v (9) Consideration of motion to adjourn TLW:pJ, 07/19/18 ORDINANCE NO. (REVISED) AN ORDINANCE ESTABLISHING FLAT RATE SPECIAL ASSESS- DIENTS FOR SEWER SERVICE AND IMEDIATE AVAILABILITY The Board of Directors of County Sanitation District No. of Orange County, California, does hereby ORDAIN as follows: Section 1: Purpose. The purpose of this Ordinance is to establish a system of sanitary sewer service assessments, together with immediate availability assessments required to be paid by property owners for the services and facilities furnished by the District in connection with its sanitation treatment works and sewage collection system. Pursuant to the provisions of Public Law 92-500, and Public Law 95-217, commonly referred to respectively as the Federal Water Pollution Control Act Amend ments of 1972, and the Clean Water Act of 1977, the District is mandated thereby to provide a system of user charges. Revenues derived under the provisions of this Ordinance shall be used for the acquisition, construction, reconstruction, maintenance and operation of the sewage collection facilities and wastewater treatment and disposal facilities of the District, together with costs of 'administration, debt retirement and provisions for necessary reserves. Section 2: Annual Sewer Service Assessments. Each parcel of real property located within the District which is -improved with structures designed for residential, commercial or industrial use, shall pay a flat rate special assessment for sewer service a in the sum of $ provided, however, that upon the Orange County Auditor allocating to this District, pursuant to Government Code Section 26912, a portion of the ad valorem real property tax levied pursuant to California Revenue and Taxation Code Section 2237, the flat rate special assessment for sewer service shall be in the sum of $ Section 3: Application of Ordinance. The provisions of this Ordinance shall be in addition to Ordinance No. of the District establishing regulations for use of District' s sewage facilities, including provisions for payment of charges or fees related thereto. Section 4 : Exceptions. The provisions of this Ordinance shall apply to all properties in the District, and no exception shall be provided for properties otherwise deemed exempt by provisions of the State Constitution or statute, such as properties owned by other public agencies or charitable founda- tions,- except as expressly provided in Section 5 hereof. Section 5 : Exemptions - Rebates. In recognition that certain legal parcels of real property exist within the District which are undeveloped, unsewered or unsewerable, it is the intent of the District that said parcels be totally or partially exempt from the payment of. charges as prescribed herein, all in ac- cordance with the following: A. Unsewerable parcels shall be entitled to a 100% rebate of the charges assessed and levied; B. Unsewered parcels developed with a structure shall be. entitled to a .66-2/3% rebate of the charges assessed and levied - 2- i f C. Unsewered parcels undeveloped with a structure shall r..f be entitled to a 66-2/3% rebate of the charges assessed and levied; and D. Improved parcels owned by public agencies but which are not developed with a structure thereon, such as parks, and NOT containing any sewer connection shall be entitled to a 100% rebate of the charges assessed and levied. Any property owner may submit a claim for rebate to the . District on the forms prescribed and provided by the District within one hundred twenty (120) days after the annual property tax bills are mailed by the Orange County Tax Collector. All applications for rebate will be determined by the General Manager of the District and his decision shall be final. For purposes of this Section, "unsewerable" parcels shall be defined to include, but not limited to, those that are used exclusively for private roadways or walkways; a single structure on two or more lots; a carport or garage lot separate from an adjacent residential structure on a separate lot; remnant parcels from public right-of-way which are less than the local code re minimum building lot size. Section 6: Credits Against Other Charges Due. The annual flat rate special assessment for sewer service established by the provisions of this Ordinance, shall be applied as a credit against use charges imposed upon a parcel of property pursuant to Ordinance No. , Establishing Regulations for Use of District Sewerage Facilities (Industrial Wastewater Ordinance) , as amended. -3- i Section 7: Assessment Based on Fiscal Year. The flat rate special assessments for sewer service and immediate sewer availability established by this Ordinance, shall be for the fiscal year commencing July 1 and -terminating June 30, and there shall be no proration of such assessments. Section 8 : Pursuant to- the authority granted by California Health and Safety Code Section 5473, all assessments established herein shall be collected on the County Tax Roll in the same manner, by the same persons and at the same time as, together with and not separately from, its general taxes. The County Tax Collector is authorized and hereby ordered to make said collections in accordance with the terms and conditions of agreements between the County of Orange and this District. Section 9: Severability. If any provisions of this Ordinance or the application to any person or circumstance is held invalid by order of court, the remainder of the Ordinance or the application of such provision to other persons or in other circumstances shall not be affected. Section 10: Effective Date. This Ordinance shall become effective immediately upon its adoption by vote of two-thirds of the members of the Board. Section 11: The Secretary shall certify to the adoption of this Ordinance and shall cause the same to be published in a newspaper of general circulation in the District as required by law. -4- i COUNTY SANITATION DISTRICTS of ORANGE COUNTY,CALIFORNIA P O.BOX 8127 10844 ELLIS AVENUE July 19, 1978 FOUNTAIN VALLEY.CALIFORNIA 92708 (714)540.2910 (714)962-2411 PUBLIC HEARING JULY 19, 1978 - 6:00 P.M. RE PROPOSAL TO ESTABLISH AND COLLECT FLAT RATE SPECIAL ASSESSMENTS FOR SE14ER SERVICE AND IMMEDIATE AVAILABILITY ON TAX ROLL In the past, the Sanitation Districts have received the bulk of their .revenues from a special assessment for sewer service against all real property and improvements in the Districts based on the ad valorem property rolls of the County. The cost to the homeowner whose property is assessed at $13,000 - $15,000, has been $3 to $5 per month, depending on the District, for sewer service exclusive of maintenance of local sewers. This has been collected via the County tax bill. With the passage of the Jarvis/Gann Initiative (proposition 13) , the question arises: Does this provision prohibit the Districts from levying the special assessments that have been levied in all prior years? While the Jarvis/Gann Initiative did not bar this procedure, the actions of the State Legislature in subsequent legislation (Senate Bill 2212 enacted on June 30) barred the use of instituting any charge based on property valuation other than the allowable 1% ad valorem levy. Under consideration are several proposals to institute a flat rate special assessment. These are attached. The Sanitation Districts operate the third largest wastewater (sewage) treatment system on the West Cost. The capital costs of present day facilities are $229 million; additional construction required during the next 8 years will double this figure. The Districts collect, treat, and dispose of wastewater from 408,000 residential, commercial and industrial connections serving 1.5 million citizens in the 23 cities in the Orange County metropolitan area. iB Ad valorem assess- In spite of the increased demands 4o meet rate for sewer service and additional 39 facilities required by higher State and Federal environmental 38 standards, the combined average y 37 annual variable ad valorem special assessment rate has steadily de- ;6 clined from 42(,%/$100 assessed 3s valuation in 72-73 to 31c/$100 assessed valuation in 77-78. The 34 Districts' Boards of Directors 33 have reduced the budget require- ments to lighten the property- owners' burden by $2.2 million 31 I ! I I I for this fiscal year (78-79) . 73 74 775 76 77 7_5F I SPAL 7YEA' Annual revenues come from variable rate ad valorem special assessments, connection fees, induatrial use fees, annexation charges and State and Federal construction grants. The annual expenditures break down approximately 10% for operations and maintenance, 87% for current and planned treatment plant and trunk sewer construction, 3% for bonded debt retirement. • I COUNTY SANITATION DIii—RICT NO. (ALL) 7/18/78 PRELIMINARY STATEMENT 0 iOJECTED CASH FLOW OPERATING & CAPITAL ONLY (EXCLUSIVE OF DEBT SERVICE) FISCAL YEARS 78-79 THROUGH 82-83 MILLIONS OF DOLLARS DESCRIPTION 78-79 79-80 80-81 81-82 82-83 CARRY-OVER CONSTRUCTION RESERVES $88 $77 $70 $61 $39 REVENUE Assessments @ $42.85/pa-rcel 17 17 17 17 17 Construction Grants 14 19 31 36 29 Loan in Aid of Construction 1 Industrial User Fees & Connection fees 4 3 3 3 3 Interest s Other Income 5 3 3 3 2 TOTAL FUNDS AVAILABLE $129 $119 $124 $120 $90 EXPENDITURES Trunk Sewer & Pump Station Construction $11 $ 6 $ 4 $ 6 $ 3 Treatment Plant Construction 30 30 43 51 38 Treatment Plant Mtce & Operation 8 11 13 21 26 Trunk Sewer Mtce & Operation S Other 3 2 3 3 4 TOTAL EXPENDITURES $52 $49 $63 $81 $71 Carry-Over Construction Reserves $77 $70 $61 $39 $19 Funds Required 25 32 40 36 36 Fund Balance or (Deficit) $52 $38 $21 $ 3 ($17) ALL DISTRICTS PRELIMINARY ESTIMATE OF ANNUAL FLAT RATE SPECIAL ASSESSMENT FOR SEWER SERVICE & IMMEDIATE AVAILABILITY u 1978-79 Increase 77-78 78-79 (Decrease) Estimated Operating & Capital Requirements District (Collection System) Construction & Reserves 41 ,662,824 25,933,200 (15,729,624) Joint Works (Treatment Plant) Construction and Equity Purchase & Reserves 61 ,058,000 85,075,000 24,017,000 Joint Operating (Treatment Plant) Expense 6,817,884 8,153,000 1 ,335, 116 District Operating & Other Expenditures 7,009,700 8,548,800 1 ,539, 100 Distribute Upper Basin Joint Works Equity to other CSD's 1 , 141 ,000 1 , 141 ,o TOTAL REQUIREMENTS 116,548,408 128,851 ,000 12,302592 Estimated Revenue Federal-State Grants 14, 152,000 13,759,000 ( 393,000) Sale of Capacity Rights 660,000 1 ,213,000 553,000 Connection Fees & Industrial User Charges 3,858,000 4,236,000 378,000 Interest & Misc. Income 3,629,637 3,517,000 ( 112,637) Other 3,003,000 1 ,500,000 (1 ,503,000) Carry-over 71 ,836,318 87,461 ,000 15,624,682 TOTAL OTHER REVENUE 97, 138,955 111 ,636,000 14,547,045 Amount to be raised by Assessment 19,409,453 17,165,000 ( 2,244,453) Estimated Number of Parcels in the District 400,560 Estimated Annual Flat Rate Special Assessment for Sewer Service & immediate availability $42.85 per parcel (Average) Ch. 292 — 19— fund reserves" shall not include: (1) Noncash assets such as stores, inventory, property and buildings, or other investments. (2) Any amounts for self-insurance,for contractual obligations,or for reserves established by a governing board policy adopted prior to July 1, 1978. (3) Any amounts restricted by law or court order. THIS SECTION IS EXCERPTED (4) Any amounts committed to a capital outlay project approved FROM SB-T54 WHICH WAS prior to June 6, 1978, by the board of supervisors. ADOPTED BY THE STATE (f) For the purpose'of this subdivision,the amount of property tax LEGISLATURE AND SIGNED INTO collections pursuant to paragraphs (1) and (2) of Section 2270 of the LAW BY THE GOVERNOR ON Revenue and Taxation Code for the purpose of making annual JUNE 24, 197 , SUBSEQUENT payments for the interest and principal on outstanding general TO PASSAGE OF PROPOSITION 13 . obligation bonds or other indebtedness approved by the voters prior to Jul), 1, 1978. (g) Funds distributed for this section shall be given first for police It is my opinion that this and fire programs in order not to jeopardize the health and safety of section, when combined the community. The legislative body shall ensure that the level of with Government Code police and fire protection programs actually provided in the 1977-78 Section 26912 , will provide fiscal year shall be continued in 1978-79. for the Districts to Nothing in this section shall prevent the legislative body from reviewing and establishing its police and fire protection program in receive an apportionment the 1978-79 fiscal year in a manner which will make such program of the tax levy for 1978/79 more efficient and effective. only. In subsequent years , (h) The Controller shall estimate the amounts required to be the Districts will not determined pursuant to subdivision (b) (3). receive any portion of the The Controller shall determine the actual amounts and make a 1% ad valorem property tax reconciliation with the April 10, 1979, distribution. levy. (x) The amount allocated in subdivision. (a) shall be reduced by n amount equal to the dollar,amount of any cost-of-living increase i // � n aid payments under the Aid to Families with Depenndedentt Children �e�,. program, as provided in Section 35 of this bill. ,`I, CHAPTER 3. SPECIAL DISTRICTS Thomas L. Woodruff General Counsel Article 1. General Provisions and Definitions 16270. The Legislature finds and declares that many special districts have the ability to raise revenue through user charges and fees and that their ability to raise revenue directly from the property tax for district operations has been eliminated by Article XIII A of the California Constitution. It is the intent of the Legislature that such districts rely on user fees and charges for raising revenue due to the lack of the availability of property tax revenues after the 1978-79 fiscal year. Such districts are encouraged to begin the transition to user fees and charges during the 1978-79 fiscal year. 16271. As used in this chapter: (a) "Governing body"means the board of supervisors except that 96 480 JUNE 14, 1978 ' AVAILABLE ALTERNATIVES FOR FUNDING AGENDA ITEM #5 1978-79 OPERATING/CAPITAL FUNDING REQUIREMENTS JARVIS-GANN WILL REDUCE THE DISTRICTS' CURRENT (1977-78) $19.4 MILLION TAX LEVY BY A MINIMUM OF 58% IF THE DISTRICTS RECEIVE A PRO-RATA SHARE OF THE TAXES ALLOWED TO BE COLLECTED BY THE TAX LIMITATION INITIATIVE, TO A MAXIMUM OF 100% IF THE DISTRICTS RECEIVE NO TAXES UNDER THE ALLOCATION METHOD YET TO BE DECIDED BY THE STATE LEGISLATURE. ALTERNATIVE METHODS OF FUNDING THE DISTRICTS SEWAGE COLLECTION, TREATMENT AND DISPOSAL ACTIVITIES FOR 1978-79 ARE AS FOLLOWS: I - FUND 1978-79 REQUIREMENTS FROM CONSTRUCTION RESERVE FUNDS (ASSUMES NO PRO-RATA SHARE OF 1% TAX ALLOCATION - MAJOR ADVANTAGE - NO ADDITIONAL ADMINISTRATIVE OVERHEAD COSTS FOR 1978-79 - MAJOR DISADVANTAGES - FUNDS RESERVED FOR CONSTRUCTION TO COMPLY WITH FEDERAL AND STATE LAWS WOULD BE DIVERTED FROM CAPITAL TO OPERATING - NEEDED AND/OR REQUIRED CONSTRUCTION PROJECTS MAY BE DELAYED - FUNDS WOULD HAVE TO BE REPAID TO CONSTRUCTION RESERVES IN FUTURE YEARS REQUIRING DISPROPOR- TIONATELY HIGHER CHARGE IN THOSE YEARS - LOSS OF INTEREST EARNINGS II - FUND 1978-79 REQUIREMENTS BY ESTABLISHING A FLAT RATE USER/AVAILABILITY CHARGE AGAINST EACH PARCEL OF PROPERTY TO BE COLLECTED BY THE TAX BILL MAJOR ADVANTAGES - PROVIDES FINANCING FOR 1978-79 OPERATING AND CAPITAL REQUIREMENTS WITHOUT SUBSTANTIAL USE OF CONSTRUCTION RESERVES - STABILIZES PROPERTY OWNER CHARGES AND DISTRICTS CASH FLOW - ACCOMMODATES PHASING OF USER CHARGE/REVENUE PROGRAM REQUIRED TO BE IMPLEMENTED IN 1979-80 BY EPA AND SWRCB MAJOR DISADVANTAGES - REQUIRES PUBLIC NOTICE AND HEARINGS IN A RELATIVELY SHORT TIME FRAME TO IMPLEMENT - DISTRICTS WILL INCUR ADDED ADMINISTRATIVE OVERHEAD COST TO IMPLEMENT (ESTIMATED AT BETWEEN $75,000 TO $105,000) PLUS ADDED CHARGE TO COLLECT ON TAX BILL - POSSIBLE PUBLIC BACKLASH IN VIEW OF JARVIS-GANN MANDATE - FLAT USE CHARGE IS NOT EQUITABLE III - CONTINUE TO LEVY FULL TAX RATE NECESSARY TO FUND 1978-79 REQUIREMENTS ON THE BASIS OF PREVIOUS COUNTY COUNSEL OPINION THAT SANITATION DISTRICT LEVY IS A "SPECIAL ASSESSMENT". SAID OPINION MAY THUS EXCLUDE THE DISTRICTS FROM APPLICATION OF JARVIS-GANN. - MAJOR ADVANTAGE - NO ADDITIONAL ADMINISTRATIVE OVERHEAD COSTS FOR 1978-79 - MAJOR DISADVANTAGES - COUNTY COUNSEL HAS NOT YET RULED ON THIS OPINION RELATIVE TO JARVIS-GANN - MAY RESULT IN LITIGATION AND THE COURTS MAY FIND AGAINST THIS INTERPRETATION COUNTY SANITATION DISTRICTS of ORANGE COUNTY.CALIFORNIA P.O.BOX 8127 July 19 , 1978 10844 ELLIS AVENUE FOUNTAIN VALLEY.CALIFORNIA 92708 (714)540-2910 (714)962-2411 SUPPLEMENTAL ALTERNATIVES FOR FUNDING 1978-79 OPERATING/CAPITAL FUNDING REQUIREMENTS ON JUNE 24, THE GOVERNOR SIGNED SENATE BILL 154 , ALSO KNOWN AS CHAPTER 292, IMPLEMENTING THE JARVIS/GANN INITIATIVE. ONE OF THE PROVISIONS OF SENATE BILL 154 INDICATES THAT THE DISTRICT WILL RECEIVE A PRO RATA SHARE (APPROXIMATELY $7 MILLION) OF THE 1% TAX ALLOCATION IN 1978-79 ONLY. IT ALSO INDICATES THAT ENTERPRISE SPECIAL DISTRICTS , SUCH AS THE SANITATION DISTRICTS, ARE EXPECTED TO RAISE THEIR REVENUES THROUGH USER CHARGES AND FEES IN FUTURE YEARS AND WILL NOT RECEIVE ANY TAX ALLOCATION AFTER THIS FISCAL YEAR. The following two supplemental funding alternatives consider receipt of tax funds for the 1978-79 fiscal year . IA - This proposal assumes that the District will receive its pro rata share of the 1% tax allocation provided under the Jarvis/Gann Amendment for the 1978-79 fiscal year and defers the implementation of a flat rate user fee to the 1979-80 fiscal year. Approximately $10 . 2 million in District funds reserved for construction would be diverted from capital accounts to operating accounts as required during 1978-79 to fund operations . Based on the requirements of the Districts , this pro- posal would anticipate a flat rate user charge next year as follows : Alternative IA Proposed 7 -79 Estimated 79-80 DISTRICT NO. Flat Rate Flat Rate' J.AA 1 NONE $ 46.04 2 NONE 45. 18 3 NONE 49.62 5 NONE 67. 14 6 NONE 46. 11 7 NONE 41 .60 11 NONE 64.24 (continued) BOARD ACTIONS REQUIRED: '.W, (1) Adopt proposal IA which eliminates the need for a flat rate user fee for the 78-79 fiscal year (2) Declare intent of the Boards of Directors to institute a user fee revenue program effective July 1 , 1979 IIA - This proposal assumes the anticipated share of the 1% property tax allocation for 78-79 as indicated in Proposal IA, but implements a user charge per parcel this year as listed below. This proposal , which incorporates a flat fee and ad valorem taxes , provides a substantial degree of equity. Proposed User Charge 78-79 79-80 Fixed Estimated Dist. #1 24. 98 39 . 79 Dist. #2 22 . 70 39 . 50 '*M0, Dist. #3 26. 79 42 . 92 Dist. #5 29 . 75 59 . 70 Dist. #6 24. 77 39 . 92 Dist. #7 13. 93 38. 12 Dist.#ll 36. 82 55 . 03 We do not anticipate receiving any of the 1% property tax allocation as provided by the Jarvis/Gann Amendment after this current fiscal year. Under this proposal, the staff recommends that rebates and/or exceptions be provided for properties that are considered unsewerable and properties not receiving sewer service. REBATES AND EXCLUSIONS : FULL REBATE OR EXCLUSION - Properties that are improved but do not receive sewer service, such as parcels that contain only carports , green- belts , drainage channels and incidental or adjoinint undevelopable parcels should be exempt from a flat rate charge. -2- (continued) TWO-THIRDS REBATE OR EXCLUSION - Improved and unimproved properties that are not currently receiving sanitary sewer service should have a 2/3 exemption from the District charges . Capital improvements have been and are con- tinuing to be made for their benefit at the treatment plants . While it is desirable that the above-mentioned properties be excluded from any adopted flat rate charge now, the Sanitation Districts do not have sufficient information to exclude all of these properties in the implementation of a user charge flat fee . Therefore, since these properties cannot be identified readily, it is recommended that the implementing ordinance include a simple rebate (refund) provision. BOARD ACTION REQUIRED: Adoption of an ordinance setting forth fixed flat rate fees per parcel for the 78-79 fiscal year allowing for anticipated taxes but providing for exceptions for rebates and/or exclusions . 7/19/78 FLAT RATE CHARGE ESTIMATES BASED ON VARIOUS ALTERNATIVES Alternative IA Alternative II Alternative IIA Proposed 7 -79 Estimated 79-80 Proposed 7 -79 Estimated 79- 0 Proposed 7 -79 Estimated 79-80 DISTRICT NO. Flat Rate Flat Rate` Flat Rate** Flat Rate* Flat Rate Flat Rate* 1 NONE $ 46.04 $ 39.79 $ 39.79 $ 24.98 $ 39.79 2 NONE 45.18 39.50 39.50 22.70 39.50 3 NONE 49.62 42.92 42.92 26.79 42.92 5 NONE 67.14 59.70 59.70 29.75 59.70 6 NONE 46.11 39.92 39.92 24.77 39.92 7 NONE 41 .60 38.12 38.12 13.93 38.12 11 NONE 64.24 55.03 55.03 36.82 55.03 Average All Districts $ 49.19 $ 42.85 $ 42.85 $ 25.34 $ 42.85 Pursuant to SB-154 adopted by the State Legislature and signed by the Governor on June 24, 1978 which implements the Jarvis-Gann initiative, the Districts would not receive any pro-rata share of the 1% property tax levy after 1978-79• ** This rate assumed that the Districts' would not receive any tax funds based on property value in 1978-79 or subsequent years. The public notice was based on this alternative, t*' No proposed flat rate in 1978-79. Districts would receive pro-rata share of 1% property tax allocation only. LAW OFFICES OF Rourke & Woodruff JAMES G.ROURKE SUITE 1020 AREA CODE 714 THOMAS L.W000RUFF CALIFORNIA FIRST BANK BUILDING 835-6212 ALAN R.WATTS IOSS NORTH MAIN STREET TELECOPIER KENNARD R.SMART.JR. SANTA ANA,CALIFORNIA 92701 (714) 835-7787 ALAN R.BURNS MEMORANDUM To: ALL DIRECTORS From: GENERAL COUNSEL This legal memorandum is obviously very lengthy and detailed. Much of it was included in my prior .memoranda dated June 20' and June 22, respectively. I will orally summarize this at the hearing, but I felt it would be beneficial for you to have a com- prehensive analysis. Likewise, the press and public, if interested, can use it as a detailed basis to evaluate our legal position. Thomas L. Woodruff General Counsel TLW:pj t . -LAW OFFICES OF Rourke & Woodrurf JAMES G.ROURKE SUITE 1020 AREA CODE 714 THOMAS L.WOODRUFF 1--ALIFORNIA FIRST BANK BUILDING 835-6212 ALAN R.WATTS 1055 NORTH MAIN STREET TELECOPIER -KENNARO R.SMART,JR. SANTA ANAL CALIFORNIA 92701 (714) 835-7787 ALAN R.BURNS MMORANDUM To: Boards of Directors County Sanitation Districts From: General Counsel Date: July 19, 1978 Re: Constitutional and Statutory Provisions Pertaining to Proposed District Ordinances Establishing Flat Rate Assessment Charge for Sewer Services By previous memoranda dated June 20 and June 22, 1978 respectively, I have provided legal opinions to the Directors pertaining to the proposal recommended by the Staff that the Boards proceed in the identical manner in which they have for the past several years of levying an "assessment" upon all parcels of real property within the District boundaries on the basis of the ad valorem assessment for those parcels. The legal analysis was based upon both existing statutory law and decisions of the California Supreme Court and Court of Appeal which drew a clear legal distinction between an "assessment" and a "tax" . The purpose of de- fining and otherwise establishing the nature of. the District's proceedings was to make an ultimate determination of whether the proposed assessment which would impose a variable charge upon each property owner based upon the ad valorem assessment was subject to the provisions of the Jarvis/Gann Initiative (Proposition 13) . At the time of the Boards' action at the June meetings, directing the Staff to proceed forward in the same manner as in the past, it was pointed out that the possibility existed that the County. Auditor (relying upon opinion of the Orange County Counsel) might refuse to accept this procedure as being in conflict with the provisions of Proposition 13. Your Staff and this office recommended, therefore, that an alternative. procedure be considered concurrently -in the eve'nt that decision was made by the Auditor. The alternative procedure was to adopt a user charge as specifically authorized pursuant Boards of Directors Page Two July 19, 1978 to California Health and Safety Code Section 5471 et sego . , and upon doing so, to further provide by ordinance for the collection of this amount through the utilization of the Orange County Tax Collector' s offices and facilities on the individual parcel property tax bills. This procedure is expressly provided for in Section 5473.1 of the California Health and Safety Code, provided that the Districts give public notice, both by publication and written notification, to every property owner of the proposed hearing to consider the adoption of an ordinance establishing the charge as well as requesting the Tax Collector to make the collections. This alternative procedure is in lieu of utilizing a direct billing/invoice system for the collection of the user charges, and it should be emphasized that simply utilizing the facilities and functions of the Tax Collector does not convert the service charge into a "tax" . There is no legal authority known to me that would justify or support an argument that said proceeding would constitute a tax. Subsequent to the opinions dated June 20 and June 22 from my office, the California Legislature has enacted, on June 24, 1978, S.B. 154 , which has as its fundamental purpose, the implementation necessary with the enactment of Proposition 13. Additionally, S.B. 2212 was enacted into law on June �.•� 30, 1978, as Chapter 332, 1978 Stats. The primary purpose of this measure was to "clean-up" certain provisions of S.B. 154 by removing ambiguities, contradictions and uncertainties. SU14MARY Based upon my review of the provisions of Proposition 13 together with recent enabling legislation as well as prior statutory enactments, it. is my opinion that: 1. The charges levied by the Districts directly for sewer service regardless of the formula or method of es- tablishing these charges constitute "an assessment" and not a "tax" for all legal purposes with the exception of tax limitation measures found in the Constitution and Statutes. 2. The provisions of California Constitution Article XIII A (Proposition 13 - June 6 , 1978) does not of itself prohibit the District from levying_ an assessment or user charge for the services rendered to property owners within the District boundaries. 4' Board of Directors Page Three July 19, 1978 3. The enactment of S.B. 154 as amended by S.B. 2212 containing certain additions and amendments to provisions of the California Government Code and California Revenue and Taxation Code, apply to the Districts and specifically Section 2237a bars the District from levying an ad valorem property tax, except as- is necessary to repay- principal and- interest on bonded indebtedness. This Section is contained in Division 1, Part 4, Chapter 3 of the California Revenue and Taxation Code, and as discussed below, provides the basis for the opinion that the previously-adopted method of the Districts levying an assessment are contained within the limitations of S.B. 154 implementing Proposition 13. 4. The District will be entitled to receive its pro rata share of the 1% levy of an ad valorem tax on the full - cash value of real property ($4.00 per $100. 00 assessed value) . This will be pursuant to Government Code Sections 26912 and 26912.1. 5. Notwithstanding the constraints of ad valorem property tax limitations imposed upon the District pursuant to Proposition 13 and the supplemental legislation, the District is separately empowered as a matter of law to impose a user charge upon all parcels of real property which are provided or have the ability to receive sewer service from the Districts. ANALYSIS AND DISCUSSION As the Directors are aware, Proposition 13, as approved, enacted Article XIII A which provides in part: "Section 1 (a) . The maximum amount of any ad valorem tax on real property shall not exceed one percent (1%) of the full cash value of such property. The one percent (1%) tax to be collected by the Counties and apportioned according to law to the Districts within the Counties . Section 4. Cities, Counties and Special Districts, by a two-thirds vote of the qualified electors of such District may impose special taxes on such District, except ad valorem taxes on real property . " Boards of Directors Page Four July 19, 1978 I believe most of the Directors have been presented with arguments by numerous people that the provisions cited immediately above would bar the District from levying either an assessment or an actual user service charge. By memorandum opinion I discussed at considerable length the holdings and reasoning of the California Supreme Court . making the clear legal distinction between an assessment and a tax and holding that they are considerably different, and on that basis I rendered the opinion that the pro- visions of Proposition 13 would not apply to the assessment of the Districts and I re-affirm that opinion with the notation that such an opinion however must yield ultimately to the statutory enactment found in S.B. 154 and S.B. 2212 discussed below. This matter has been discussed at considerable length with legal counsel from various State Offices as well as the Orange County Counsel who has in- formally concurred in that analysis. S.B. 154 and S.B. 2212 As the Directors are aware, these two legislative measures are rather comprehensive and they will not be discussed at length herein. Essentially, they address themselves to two major topics--namely, the distribution and allocation of the approximately 5 billion dollar State surplus monies to the Cities, Counties and Special Districts -throughout the State; and secondly, to the method of apportioning the approved 1% levy of ad valorem property taxes commencing with fiscal year 1978-79. In summary, it can be noted that the Districts have from nearly the .outset, indicated they would not seek to obtain any of the surplus monies from the State due in large part because of our determination that we would likely not qualify under the formula established by statute, and secondly that the conditions imposed by the State could not be readily complied with by the Districts. However, of particular relevance is the provision set forth in Government Code Section 16270 which provides: "16270. The Legislature finds and declares that • many special districts have the ability to raise revenue through user charges and fees and that their ability to raise revenue .directly from the property tax for district operations has been eliminated by Article XIII A of the California Constitution. It is the intent of the Legislature that such districts rely on user fees and charges for raising revenue due to the lack of the availability of property. tax r _ f Boards of Directors Page Five July 19, 1978 revenues after the 1978-79 fiscal year. Such districts are encouraged to begin the transition to user fees -and charges during the 1978-79 fiscal year. " These Legislative measures further provide for the ad- dition of Revenue and Taxation Code Section 2237 which provides that no local agency shall levy an ad valorem property tax except for its bonded indebtedness and further grants to the County the singular authority to levy an ad valorem property tax at a rate equal to $4. 00 per $100. 00 of assessed valuation. That Section further provides expressly: -"The revenue from such tax shall be distributed in accordance with the provisions of Section 26912 of the Government Code. " Government Code Section 26912 provides that for the 1978- 79 fiscal year only, the amount of revenue derived from levying a tax pursuant to Section' 2237 (b-) of the Revenue - - -- and Taxation Code, shall be allocated by the County Auditor in accordance with the formula prescribed in this Section. It is the opinion of this office and that of the County Counsel that that formula vests no discretion with either the County Auditor or the County Board of Supervisors to the distribution of those funds, and that the formula must be rigidly adhered to. Assuming compliance with that Section and its interpretation, the Districts would stand to receive its proportionate share of the- l% tax levy by the County Board of Supervisors, which in accordance with estimates prepared by your Finance Department Staff amount to approximately 7 million dollars or 40% of prior year revenues. FEDERAL WATER POLLUTION CONTROL ACT A4ENDMENTS OF 1972 -- PL 92-5Y0 As the District Directors are aware, our agency is very rigidly regulated by the Federal Government through the pro- visions of this Act. While it is an extensive legislative enactment, I do bring to your attention a reminder of the Declaration of the United States Congress in enacting this matter that a system of user charges is expressly required in order to qualify for grants. In view of the fact that we have accepted numerous grants for the construction of trunk lines and the treatment works to date and will of necessity have to obtain said grants to complete the development of our District, the provisions of this Act are particularly important to the Districts and the Directors. With respect to the issue Boards of Directors Page Six July 19, 1978 ti before the Directors at this time, I cite as a reference Section 2 04 (b) (1) which provides in part: "Notwithstanding any other provision of this Title, the Administrator shall not approve any grant for any treatment works . . . unless he shall first-. . - - have determined that the applicant has adopted or will adopt a system of charges to assure that each recipient of waste treatment services within the applicant' s jurisdiction . . . will pay its pro- portionate share of the costs of operation and maintenance (including replacement) of any waste treatment services provided by the applicant [and provides further that the applicant] has legal, institutional, managerial and financial capability to insure adequate construction, operation and maintenance of treatment works throughout the applicant' s jurisdiction . . . . " STATUTORY AUTHORIZATION FOR SEWER CHARGES AND COLLECTION ON TAX ROLL As indicated above, the hearing set forth tonight is being held in accordance with the provisions of California Health and Safety Code Section 5471, Section 5473 and Section 5473.1. Those Sections, in part, provide as follows: "Section 5471. Any entity shall have power, by an ordinance approved by two-thirds vote of the members of the legislative body thereof, to prescribe, revise and collect these tolls, rates, rentals or other charges, including sewer standby or immediate availability charges for services and facilities furnished by it either within or without its terri- torial limits in connection with its sanitation or sewage system . " "Section 5473. Any entity which has adopted an ordi- nance pursuant to this Article . . . may, by such ordinance, or by separate ordinances approved by two- thirds vote of the members of the legislative body thereof, elect to have such charges for the forth- coming fiscal year collected on the tax roll in the same manner, by the same persons, and at the same time as, together with and not separately from its general taxes . " Boards of Directors Page Seven July 19, 1978 "Section 5473.1. before any entity may have such charges collected on the tax rolls for the first time following the effective date of this section, the Clerk shall cause a notice in writing of the filing of said report proposing to have such charges for the forthcoming fiscal year collected on the tax roll and of the time and place of hearing thereon to be mailed to each person to whom any parcel or parcels of real property des- cribed in said report is assessed in the last equalized assessment roll available on the date said report is prepared. " This procedure is found in the Health and Safety Code and is designed in order to insure that the District in ob- taining the necessary funding for its operations and mainte- nance, can do so by the process of having the charges collected by the County Tax Collector and in the event of nonpayment they become a lien on the property, thereby insuring that all bills for public services are in fact paid. The procedure further provides that in the event of the majority protest, that the report shall not be adopted, but in the event of no majority protest, that the final determination of the legislative body at the conclusion of the hearing will be to adopt said report and impose the charges as a lien by transmitting those charges to the Tax Collector. The ordinance which has been prepared for consideration of the Boards pursuant to its notice of public hearing, .is designed to both establish charges for sewer -services rendered, as well as to provide for the collection of those charges through the utilization o the County Tax Collector' s facilities and system. 47 Thomas L. Woodruff TLW:pj General Counsel cc: Mr. F.A. Harper Mr. J.W. Sylvester SUMMARY OF WRITTEN PROTESTS REGARDING PROPOSED FLAT RATE ASSESSMENT Written Protests Received as of 4 : 00 p.m. 246 Staff Comments Properties not using sewer Staff comments : Approximately 370 of the written protests FULL REBATE OR EXCLUSION - Properties that are from property owners that are not connected are improved but do not receive sewer service, or whose property is unsewerable or mineral such as parcels that contain only carports , rights only. greenbelts , drainage channels and incidental or adjoining undevelopable parcels should be exempt from a flat rate charge. TWO--THIRDS REBATE OR EXCLUSION - Improved and unimproved properties that are not currently receiving sanitary sewer service should have a 2/3 exemption from the District charges . Capital improvements have been and are continuing to be made for their benefit at the treatment plants . Circumventation of Jarvis-Gann See General Counsel ' s opinions and SB-154 adopted by legislature mandating special Many feel that because of Jarvis-Gann, the use Districts to convert to user charge. charge is illegal and/or That the Districts must operate within their share of the 1% total property tax allocation. and/or The Districts and Fare and Police should receive full budgetary requirements from the 1% property tax allocation, and other taxing agencies should share what is left over. Continuation of Written Protests Staff Comments Other User Charge Bases All systems have been considered previously and have inherent inequities and would cost Suggestions have been made that rather than a substantially more to administer (see comments flat rate use charge, the Districts should base below) and require expensive billing systems . the charge on the following and bill separately The tax bill is the most cost effective each month like utilities : collection system. Number of occupants . . . . . . . Would require annual census for each property. Water Use . . . . . . . . . . . . . . . . . . . Would require obtaining water use information ,for each parcel from over 80 separate water companies . Metered Sewage Discharge. . . . . . . . . . . . Would require installation of meters on each property which is impracticable. Many have suggested the Districts remain on This was the alternative adopted by the Boards , current ad valorem (variable) system however, the County Counsel has ruled against it. Misunderstandings Additional Charge The proposed flat rate would replace the existing ad valorem (variable) system except Many homeowners feel the flat rate is an for bond debt. additional District charge over and above the current ad valorem (variable rate) Inequitable Industries - Many think that industries will Industrial dischargers pay an additional use pay the flat rate only. charge of approximately $2 , 000 , 000 per year Multiple dwelling and commercial parcels The 1978-79 proposed flat rate (Alt. II) is inequitable for multiple dwelling proper- ties , however, this would be corrected in 1979-80 upon completion of revenue program presently under design. Alt. IIA would minimize the inequity because the parcels would still pay a portion of their District charge based on property value. -2- Continuation of Written Protests Staff Comments 3 (Continuation of Misunderstandings) New Developments Except for Dists . 1 and 6 all new connections to the system pay a connection fee (approx . Many suggest new developments pay the $250 per unit) . Areas that annex to the added costs . Districts pay annexation fees (approx . $1300/acre) plus the connection fee. Further, the added cost for secondary treat- ment is for existing properties (present capacity) Cut Expenditures Because of the nature of our operation (sewage treatment/public health and safety) our budgets do not contain "frill" items . Further (1) We have a freeze on hiring (2) Management staff has been reduced 50o in recent years . The charge to the property owners for 1978-79 is being reduced $2 . 2 million from 1977-78 . Federal and State Regulations Our Directors have worked vigorously for a a change in the Federal law that would save Many suggest we ignore or sue the Federal the Districts $100 million in capital costs and State Governments over the requirements and $7--$8 million in annual operating costs . that are being imposed . The law was finally changed in 1977 (December) to allow a waiver provided certain criteria are met. The Districts are applying for this waiver and , if successful , the above savings will be realized . Environmentalists Many suggest we follow the same approach with environmentalists as with Federal and State Government. -3- 1\t., ALTERNATIVE II Establishing Flat Rate Special Assessment for Sewer Service and Inmediate Availability to be Collected on the Tax Roll. LEGAL OPINION LAW OFFICES OF Rourke & Woodruff JAMES G. ROURKE SUITE 1020 AREA CODE 714 THOMAS L.WOODRUFF CALIFORNIA FIRST BANK 13UILOING 835-6212 ALAN R.WATTS TOSS NORYH'MAIN STREET TELECOPIER KENNARD R.SMART.JR. SANTA ANAL CALIFORNIA 92701 (714) 83S-7787 ALAN R.BURNS MEMORANDUM To: Mr. F.A. Harper County Sanitation Districts From: General Counsel Date: June 22, 1978 Re: Supplement Opinion re Assessments This memorandum will serve. as a supplement to that opinion which was forwarded from this office dated June 20, 1978, pertaining to the levy of a special assessment charge on behalf of the Districts for purposes of funding the budgetary requirements for the forthcoming fiscal year. I am advised that in addition to the preparation of a budget and the action of the Board of Directors to proceed in the- exact same manner that has been undertaken in previous years relative to establishing a rate that when applied to the ad valorem property rolls in the County will produce sufficient revenue to meet the budgetary -requirements, an. alternate form of a flat rate charge to be applied universally to all parcels in, the property, is al-so being considered. As I indicated to you previously, to establish such a charge and have it collected with the annual tax bill, would require compliance with the provisions of California Health and Safety Code Sections. 5471 et seq. , which I under- stand is presently being studied to determine the costs and necessary procedures to give the required statutory notices. In. reviewing the proposal to establish a uniform flat rate charge. for the services rendered by. the District, I have concluded that to do so. is essentially the same as outlined in the variable charge procedure which you have utilized in the past .and which you contemplate using during fiscal year 1978-79. Specifically, and for the reasons set forth in my opinion letter of June 20, I am of the further opinion that such a charge would also be deemed "a special assessment charge" and not a "tax" as that term has . been judicially defined and those cases cited in the June 20th memorandum. For that reason, the conclusion relative to Mr. F.A. Harper Page Two June 22, 1978 the variable charge is identical with respect to the flat rate charge--namely, that the restrictions imposed by the .enactment of Proposition 13 would not be applicable to the District, and therefore, the amount to be levied as a flat rate can be established by the Board of Directors as that which is necessary to fund the budget without concern to receiving a proportionate allocation out of the one percent tax levy that will be made by the County Board of Supervisors. As indicated previously, if either a flat rate or a rate based upon the ad valorem of real property is con- sidered to be "a tax" , it could not be levied in an amount beyond that which is authorized per allocation by action of the Board of Supervisors from the total tax rate levy permitted by Proposition 13. It is my further opinion that in point of fact, the establishment of a flat rate- special service charge, constitutes a "user charge" , which beyond the legal distinction asset forth in the June 20 opinion, appears to be clearly beyond the scope of Proposition 13 limitations, and would be permissible for levy in any amount necessary to provide the service to the individual users. Thomas L. Woodruff General Counsel TLW:pj `yet Report Required By Section 5473 of the Health and Safety Code COUNTY SANITATION DISTRICTS Of ORANGE COUNTY.CALIFORNIA P 0 BOX 8127 10844 ELLIS AVE NUE FOUNTAIN VALLEY.CALIF OfINIA92708 ti (7 14)540.2910 REPORT RE SEWER SERVICE FEES-- (714)962-2411 COUNTY SANITATION DISTRICTS OF ORANGE COUNTY, CALIFOMNIA PREFACE This report is prepared pursuant to the requirements of California Health and Safety Code Section 5473. The purpose of said report is to give public notice of the intent of the County Sanitation Districts to consider the adoption of an Ordinance that will prescribe fees and charges for sanitary sewer services provided by the Districts and to be charged to respective parcels of property within the territorial juris- diction of the Districts. This report contains a description of each parcel of real property that will receive the services of the Districts and have access to utilization of the facilities, said parcels of real property being described by reference to maps prepared in accordance with Section 327 of the California Revenue and Taxation Code and on file in the office of the County Assessor, with copies on file in the office of the Clerk of these Districts . Additionally, this report sets forth the amount of the charge for each parcel for fiscal year 1978-79 . The Ordinance under consideration by the governing Board of Directors of these Districts will provide revenues which shall be used only for the acquisition, construction, reconstruction, maintenance and operation of sanitary sewer facilities, and shall not be used for the acquisition or construction or mainte- nance of new local street sewers or laterals as distinguished from main trunk, interceptor and outfall sewers provided by these Districts. If the proposed Ordinance is adopted, the legislative authority may elect to have such charges for the forthcoming fiscal year collected on the tax roll in the same manner, by the same persons, and at the same time as, together with and not separately from, the general taxes of these Districts and the County of Orange. At the time stated in the notice setting the public hearing on this report, the governing Board of Directors shall hear and consider all objections or protests, if any, to said report referred to in said notice, and may continue the hearing from time to time. i DATED: June 22, 1978 Thomas L. Woodruff, General Counsel Supporting Material for Flat Rate Special Assessment for Sewer Service and Immediate Availability Charge ALL DISTRICTS PRELIMINARY ESTIMATE OF ANNUAL FLAT RATE SPECIAL ASSESSMENT FOR SEWER SERVICE & INNEDIATE AVAILABILITY 1978-79 Increase 77-78 78-79 (Decrease) Estimated Operating & Capital Requirements District (Collection System) Construction & Reserves 41 ,662,824 25,933,200 (15,729,624) Joint Works (Treatment Plant) Construction and Equity Purchase & Reserves 61 ,058,000 85,075,000 24,017,000 Joint Operating (Treatment Plant) Expense 6,817,884 8, 153,000 1 ,335, 116 District Operating & Other Expenditures 7,009,700 8,548,800 1 ,539, 100 "-stribute Upper Basin Joint Works ,quity to other CSD' s 1 ,141 ,000 1 , 141 ,000 TOTAL REQUIREMENTS 116,543,408 128,851 ,000 12,302,592 Extended Revenue Federal-State Grants 14,152,000 13,759,000 ( 393,000) Sale of Capacity Rights 660,000 1 ,213,000 553,000 Connection Fees & Industrial User Charges 3,858,000 4,236,000 378,000 Interest & Misc. Income 3,629,637 3,517,000 ( 112,637) Other 3,003,000 1 ,500,000 (1 ,503,000) Carry-over 71 ,836,318 87,461 ,000 15,624,682 TOTAL OTHER REVENUE 97,138,955 111 ,636,000 14,547,0115 Amount to be raised by Assessment 19,409,453 17, 165,000 ( 2,244,453) Es—,.iated Number of Parcels in the District 400,560 Estimated Annual Flat Rate Special Assessment for Sewer Service & Immediate availability $42.85 per parcel (Avrrane) f ' 6/22/78 COUNTY SANITATION DISTRICT NO. (ALL) PRELIMINARY STATEMENT OF PROJECTED CASH FLOW OPERATING E CAPITAL ONLY (EXCLUSIVE OF DEBT SERVICE) FISCAL YEARS 78-79 THROUGH 82-83 DESCRIPTION 78-79 79-80 8o-81 81-82 82-83 CARRY-OVER FROM PREVIOUS FISCAL YEARS $ 87,461 ,000 $ 76,830,000 $70,277,000 $60,969,000 $39,335,000 REVENUE Assessment at $ /parcel 17,165,000 17,165,000 17,165,000 17,165,000 17,165,000 Other Revenue Federal 6 State Participation 13,759,000 18,749,000 30,583,000 36,063,000 29,563,000 Loan in Aid of Construction 7 ,150,000 Sale of Capacity Rights 1 ,213,000 73,000 73,000 73,000 73,000 Fees 4,236,000 3,697,000 3,49i ,000 3,232,000 2,857,000 Miscellaneous 3,867,000 3,066,000 2,798,000 2,435.000 1 ,557,000 TOTAL FUNDS AVAILABLE $128,851 ,000 $119,580,000 $124,387,000 $119,937,000 $90,550,000 EXPENDITURES District Construction $ 10,868,000 $ 5,577,000 $ 4,054,000 $ 6,163,000 $ 2,999,000 Share of Joint Works Construction 29,639,000 30,434,Oo0 43,0118,000 50,618,000 38,213,000 Repay Loan in Aid of Construction 200,000 2UU,UU0 200,000 200,000 200,000 Refunds of Capital Cost Recovery to Federal Treasury 1,141 ,000 100,000 100,000 100,000 335,000 Share of Joint Operating 8,151 ,000 10,667,000 13,343,000 20,448,000 26,118,000 District Operating E Other Expenditures 2,022,000 2,325,000 2,673,000 3,073,000 _ 3,533,000 TOTAL EXPENDITURES $ 52,021 000 $ 49 303 000 $63,418,000 $80,602,000 „$71 ,398,000 Carry-Over Balance to Following Fiscal Year $ 76,830,000 $ 70,277,000 $ 60,969,000 $39,335,000 $19,152,000 Funds Necessary to Meet Com,ni tnents Prior to Receipt of Tax Apportionments 24,653,000 32,210,000 40,303,000 35,700,000 35,700,000 Fund Balance or (Deficit) $ 52, 177 000 $ 38,o67,000 $ 20,666 000 __ $ 3,635.000 ($ 16,548,000) iM IKILI NU, j PRELIIIINARY ESTIMATE OF ANNUAL FLAT RATE SPECIAL ASSESSMENT FOR SEWER SERVICE & INHEDIATE AVAILABILITY 1978-79 Increase - 77-78 78-79 (Decrease) Estimated Operating & Capital Requirements District (Collection System) Construction & Reserves 900,000 638,000 (202,000) Joint Works (Treatment Plant) Construction and Equity Purchase C Reserves 6,566,564 7,075,000 . 508,436 Joint Operating (Treatment Plant) Expense 789,511 924,000 134,489 District Operating & Other Expenditures a; Reserves 607,45o 747,000 139,550 Now TOTAL REQUIREMENTS 8,863>525 9,384,000 520,475 Extended Revenue Federal-State Grants 1 ,234,000 1 ,249,000 15,000 Sale of Capacity Rights 32,000 154,000 122,000 Connection Fees & Industrial User Charges 234,000 244,000 10,000 Interest & Misc. Income 410,300 352,000 ( 58,300) Carry-over 5,656,452 6,026,000 369,548 TOTAL OTHER REVENUE 7,566,752 8,025,000 458,246 -Amount to be raised by Assessment 1 ,296,773 1 ,359,000 62,227 F-•imated Number of Parcels in the strict 34055 Estimated Annual Flat Rate Special Assessment for Sewer Service & immediate availability 39.79 6/22/78 COUNTY SANITATION DISTRICT NO, l PRELIMINARY STATEMENT Or PROJECTED CASH FLOW OPERATING & CAPITAL ONLY (EXCLUSIVE OF DEBT SERVICE) FISCAL YEARS 78-79 THROUGH 82-•83 DESCRIPTION 78-79 79-80 80-81 81-82 82-83 CARRY-OVER FROM PREVIOUS FISCAL YEARS $6,026,000 $5,599,000 $5,086,000 $4,:50,000 $2,168,000 REVEI.UE AssessTent at $39.79/parcel 1 ,359,000 1 ,359,000 1 ,359,000 1 ,359,000 1 ,359,000 Other Revenue Federal & State Participation 1 ,249,000 1 ,704,0o0 2,780,000 3,278,000 2,687,000 Sale of Capacity Rights 154,000 7,000 7,000 7,000 7,000 Fees 244,000 260,000 279,000 302,000 302,000 Miscellaneous 352,000 323,000 295,000 239,000 127,000 TOTAL FUNDS AVAILABLE $9,384,00o $9,252,000 $9,806,000 $9,335,000 $6,650,000 EXPENDITURES District Construction $ 75,000 $ 75,000 $ 100,000 $ 100,000 $ 100,000 Share of Joint Works Construction 2,692.,00C 2,767,000 3,91�,000 4,601 ,000 3.474,000 Fefunds of Capital Cost Recovery to Federal Treasury -0- 9,000 9,000 9,000 30,000 Share of Joint Operating 924,Oo0 1 ,209,000 1 ,512,000 2,317,000 2,959,000 District Operating & Other Expenditures 92,000 106,000 122,000 140,O0o 161 ,000 TOTAL EXPENDITURES $ 3,785,000 $ 4,166,000 $5,656,Ooo $7,167,000 $6,724,000 Carry-Over Balance to Following Fiscal Year $ 5,599,000 $5,086,000 $4,150,000 $2,168,OOD $ (74,000) Funds Necessary to Meet Commitments Prior to Receipt of Tax Apportionments 2,083,000 2,828,000 3,584,000 3,362,000 3,362,000 Fund Balance or (Deficit) $ 3,516,OCO $ 2,258,000 $ 566,0oo (S1 ,194,000) (S3,436,000) DISTRICT NO, 2 PRELIMINARY ESTIMATE OF ANNUAL FLAT RATE SPECIAL ASSESSNENT FOR SEWER SERVICE _ & IMMEDIATE AVAILABILITY 1978-79 Increase 77-78 78-79 (Decrease) Estimated Operating & Capital Requirements District (Collection System) Construction & Reserves 10,710,993 5,799,000 (4,911 ,993) Joint Works (Treatment Plant) Construction and Equity Purchase & Reserves 22,474,534 28,005,000 5,530,466 Joint operating (Treatment Plant) Expense 2, 123,089 2,625,000 501 ,911 District Operating & Other Expenditures & Reserves 1 ,781 ,000 2,261 ,000 480,000 'istribute Upper Basin Joint Works 1 ,141 ,000 1 , 141 ,000 Equity to other CSD's TOTAL REQUIREMENTS 37,039,616 39,831 ,000 2,7111 ,384 Extended Revenue Federal-State Grants 4,356,000 4, 114,000 ( 242,000) Sale of Capacity Rights 455,000 22,000 ( 433,000) Connection Fees & Industrial User Charges 1 ,580,000 1 ,530,000 ( 50,000) Interest & Misc. Income 1 ,024,000 1 ,089,000 65,000 Carry-over 24,425,236 28,588,000 4, 162,764 TOTAL OTHER REVENUE 31 ,8 0,236 35,343,000 3,502,761, Amount to be raised by Assessment 5,249,380 4,488,000 ( 761 ,380) L imated Number of Parcels in the district 113,610 Estimated Annual Flat Rate Special Assessment for Scwer Service & immediate availability 39.50 6/22/78 COUNTY SANITATION DISTRICT NO. 2 PRELIMINARY STATEMENT OF PROJECTED CASH FLOW OPERATING & CAPITAL ONLY (EXCLUSIVE OF DEBT SERVICE) FISCAL YEARS 78-79 THROUGH 82-83 DESCRIPTION 78-79 79-80 80-81 81-82 82-83 CARRY-OVER FROM PREVIOUS FISCAL YEARS $28,588,000 $24,751 ,000 $24,125,000 $21 ,820,000 $16,144,000 REVENUE Assessment at $39.50/parcel 4,488,000 4,488,000 4,488,000 4,488,000 4,488,000 Other Revenue Federal S State Participation 4,114,000 5,551 ,000 9,120,000 10,754,000 8,816,000 Sale of Capacity Rights 22,000 22,000 22,000 22,000 22,000 Fees 1 ,530,000 1 ,400,000 1 ,300,000 1 ,200,000 1 ,000,000 Miscellaneous 1 ,089,000 936,000 914,C00 827,000 609,000 TOTAL FUNDS AVAILABLE $39,831 ,000 $37, 188,000 __$39,969,000 $39,111 ,000 $31 .079.000 EXPENDITURES District Construction $ 2,108,000 $ 100,000 $ 500,000 $ 700,000 $ 200,000 Share of Joint Works Construction 8,833,000 9,075,000 72,837,000 15,094,000 11 ,395,000 Refunds of Capital Cost Recovery to Federal Treasury 1 ,141 ,000 30,000 30,000 30,000 100,000 Share of Joint Operating 2,625,000 3,435,000 4,296,000 6,584,000 8,410,000 District Operating E Other Expenditures 368,000 423,000 486,000 559,000 643,000 TOTAL EXPENDITURES $ 15,080,000 $ 13,063,000 $ 18,149,000 $22,967,000 $20,748,000 Carry-Over Balance to Following Fiscal Year $ 24,751 ,000 $24,125,000 $21 ,820,000 $16,144,000 $10,331 ,000 Funds Necessary to Meet , Commitments Prior to Receipt of Tax Apportionments 6,532,000 9,074,o0o 11 ,484,0oo 10,374,000 10,374,o00 Fund Balance or (Deficit) $ 18,219,000 $ 15,051 ,000 $ 10,336,000 $ 5,770,000 ($ 43,000) DISTRICT NO, 3 PRELIMINARY ESTIMATE OF ANNUAL FLAT RATE SPECIAL ASSESSMENT FOR SEWER SERVICE & IMMEDIATE AVAILABILITY _ 1978-79 Increase 77-78 78-79 (Decrease) Estimated Operating & Capital Requirements District (Collection System) Construction & Reserves 15,720,559 9,389,400 (6,331 , 159) Joint Works (Treatment Plant) Construction and Equity Purchase & Reserves 14,935,524 25,939,000 11 ,003,476 Joint Operating (Treatment Plant) Expense 2,192,631 2,587,000 394,369 District Operating & Other Expenditures & Reserves 2,077,600 2,483,6o0 406,000 TOTAL REQUIREMENTS 34,926,314 40,399,000 5,472,686 Extended Revenue Federal-State Grants 4,775,000 4,546,000 ( 229,000) Sale of Capacity Rights 75,000 561 ,000 486,000 Connection Fees & Industrial User Charges 1 ,243,000 1 ,370,000 127,000 Interest & Misc. Income 1 , 119,225 1 ,076,000 ( 43,225) . Carry-over 20,422, 189 26, 127,000 5,704,811 TOTAL OTHER REVENUE 27,634,414 33,680,000 6,045,586 Amount to be raised by Assessment 7,291 ,900 6,719,000 ( 572,900) E. mated Number of Parcels in the DTStrict 156,555 Estimated Annual Flat Rate Special Assessment for Sewer Service & immediate availability 42.92 • 6/22/78 COUNTY SANITATION DISTRICT NO. 3 PRELIMINARY STATEMENT OF PROJECTED CASH FLOW OPERATING S CAPITAL ONLY (EXCLUSIVE OF DEBT SERVICE) FISCAL YEARS 78-79 THROUGH 82-83 DESCRIPTION 78-79 79-80 80-81 81-82 82-83 CARRY-OVER FROM PREVIOUS FISCAL YEARS $26,127,000 $21 ,247,000 $20,460,000 $18,382,000 $12,816,000 REVENUE Assessment at $42.92/parcel 6,719,000 6,719,000 6,719,000 6,719,000 6,719,000 Other Revenue Federal S State Participation 4,546,000 6,201 ,000 10,114,000 11 ,927,000 9.777,000 Sale of Capacity Rights 561 ,000 24,000 24,000 24,000 24,000 Fees 1 ,370,000 1 ,200,000 1 ,100,000 1 ,000,000 900,000 Miscellaneous 1 ,076,000 871 ,000 839,000 753,000 527,000 TOTAL FUNDS AVAILABLE $40,399,000 $36,262,000 539,256,000 $38,805,000 $30,763,000 EXPENDITURES District Construction $ 6,258,000 $ 1 ,740,000 $ 1 ,703,000 $ 1 ,960,000 $ 100,000 Share of Joint Works Construction 9,802,000 10,064,000 14,236,000 16,740,000 12,637,000 Refunds of Capital Cost Recovery to Federal Treasury -O- 33,000 33,000 33,000 111 ,000 Share of Joint Operating 2,587,000 3,384,000 4,234,000 6,488,000 8,287,000 District Operating E Other Expenditures 505,000 581 ,000 668,0oo 768,000 883.000 TOTAL EXPENDITURES $ 19,152,000 $ 15,802,000 $20,874,0o0 $25,989,000 $22,018,000 Carry-Over Balance to Following Fiscal Year $ 21 ,247,000 $20,460,000 $18,382,000 $12,816,000 $ 8,745,000 Funds Necessary to Meet Co,-nitnents Prior to Receipt of Tax Apportionments 7,901 ,000 10,437,000 12,995,000 11 ,009,000 11 ,009,000 Fund Balance or (Deficit) $ 3461000 $ 10 i023,000 _ $_ 5,387,000 $ 1 ,807,000 (S 2,264,o00) L DISTRICT NO, 5 PRELIMINARY ESTIMATE OF ANNUAL FLAT RATE SPECIAL ASSESSMENT FOR SEWER SERVICE & IMMEDIATE AVAILABILITY 1978-79 Increase - 77-78 78-79 (Decrease) Estimated Operating & Capital Requirements District (Collection System) Construction & Reserves 3,605,945 21170,000 (1 ,435,945) Joint Works (Treatment Plant) Construction and Equity Purchase & Reserves 4,732,950 6,560,000 1 ,827,050 Joint Operating (Treatment Plant) Expense 396,801 462,000 65, 199 District Operating '& Other Expenditures - & Reserves 719,000 828,000 109,000 TOTAL REQUIREMENTS 9,454,696 10,020,000 565,304 Extended Revenue Federal-State Grants 914,000 940,000 26,000 Sale of Capacity Rights 24,000 116,000 92,000 Connection Fees & Industrial User Charges 142,000 50,000 ( 92,000) Interest & Misc. Income 233,000 237,000 4,000 Loan in aid of Construction 1 ,150,000 1 ,150,000 Carry-over 5,520,764 6,371 ,000 850,236 TOTAL OTHER REVENUE 7,983,764 8,864,000 830,236 Amount to be raised by Assessment 1 ,470,932 1 , 156,000 ( 314,932) Estimated Number of Parcels in the District 19,365 Estimated Annual Flat Rate Special Assessment for Sewer Service & immediate availability 59.70 6/22/70 COUNTY SANITATION DISTRICT NO. 5 PRELIMINARY STATEMENT OF PROJECTED CASH FLOW OPERATING E CAPITAL ONLY (EXCLUSIVE OF DEBT SERVICE) FISCAL YEARS 78-79 THROUGH 82-83 DESCRIPTION 78-79 79-80 80-81 81-82 82-83 CARRY-OVER FROM PREVIOUS FISCAL YEARS $ 6,371 ,000 $6,562,000 $5,166,006 $3,797,000 $1 ,917,00- REVENUE Assessment at $59.70/parcel 1 ,156,000 1 ,156,000 1 ,156,000 1 ,156,000 1 ,156,000 Other Revenue Federal S State Participation 940,000 1 ,282,000 2,092,000 2,467,000 2,022,000 Loans In Aid of Construction 1 ,150,000 Sale of Capacity Rights 116,000 5,000 5,000 5,000 5,000 Fees 50,000 50,000 50,000 40,000 40,000 Miscellaneous _ 237,000 241 ,000 150,000 1401000 71 ,000_ TOTAL FUNDS AVAILABLE $10,020,000 $9,296,000 $8,653,000 $7,605,000 $5,211 ,000 EXPENDITURES District Construction $ 450,000 $ 875,000 $ 525,000 $ 375,000 $ 75,000 Share of Joint Works Construction E Equity 2,027,000 2,032,000 2,945,000 3,462,000 2,614,000 Repay Loan in Aid of Construction 200,000 200,000 200,000 200,000 200,000 Refunds of Capital Cost Recovery to Federal Treasury 7,000 7,000 7,000 23,000 Share of Joint Operating 462,000 605,000 757,000 1,159,000 1 ,481 ,000 District Operating & Other Expenditures 319,000 367,000 422,000 485,000 557,000 TOTAL EXPENDITURES $`3,458,000 $4,136,000 $4,856,000 $5,688,000 $4,950,000 Carry-Over Balance to Following Fiscal Year $ 6,562,000 $5,160,000 $3,797,000 $1 ,917,000 $ 261 ,000 Funds Necessary to Meet Commitments Prior to Receipt of Tax Apportionments 2,068,000 2,428,000 2,844,000 2,475,000 2,475.000 Fund Balance or (Deficit) $ 4,494,000 $2,732,000 $ 953,000 ($ 558,000) ($2,214,000) DISTRICT NO, --L PRELIMINARY ESTIMATE OF ANNUAL FLAT RATE SPECIAL ASSESSIMENT FOR SEWER SERVICE •• & INHEDIATE AVAILABILITY 1978-79 Increase 77-78 78-79 (Decrease) Estimated Operating & Capital Requirements District (Collection System) Construction 967,000 305,000 (662,OG & Reserves i!)Joint Works (Treatment Plant) Construction •3,168,114 4,111 ,000 942,886 and Equity Purchase & Reserves Joint Operating (Treatment Plant) Expense 419,300 492,000 72,700 District Operating & Other Expenditures & Reserves 394,800 477,000 82,200 *ft/ TOTAL REQUIREMENTS 4,949,214 5,385,000 435,786 Extended Revenue Federal-State Grants 792,000 802,000 10,000 Sale of Capacity Rights 20,000 99,000 79,000 Connection Fees & Industrial User Charges 35,000 4o,0oo 5,000 Interest & Misc. Income 147,700 150,000 2,300 Carry-over 3, 1o6,445 3,424,000 317,555 TOTAL OTHER REVENUE 4,101 , 145 4,515,000 413,855 Amount to be raised by Assessment 848,069 870,000 21 ,931 bweimated Number of Parcels in the District 21 ,795 Estimated Annual Flat Rate Special Assessment for Sewer Service & immediate availability 39.92 6122/76 COUNTY SANITATION' DISTRICT "13. 6 PRELIMINARY STATEhc_NT OF PROJECTED CASH FLOW OPERATING s CAPITAL ONLY (EXCLUSIVE OF DEBT SERVICE) FISCAL YEARS 78-79 THROUGH 82-83 C=SCRIPTION 78-79 79-80 80-81 81-82 82-83 CARRY-OVER FROM PREVIOUS FISCAL YEARS $3,424,000 $3,012,000 $2,614,000 $1 ,979,000 ($ 21 ,000) a EVEN UE Assessment at $39.92/parcel 870,000 870,000 870,000 870,000 870,000 Other Revenue Federal & State Participation 802,000 1 ,095,000 1 ,786,000 2,106,000 1 ,726,000 Sale of Capacity Rights 99,000 4,000 4,C00 4,000 4,000 Fees 40,000 40,000 40,000 40,000 40,00C Miscellaneous 150,000 131 ,000 114,000 85,COo _ -O- TOTAL FUNDS AVAILABLE �S5,385,000 S5,152,000 $5,428,000 $5,034,000 S2 619,000 EXPENDITURES District Construction $ 75,000 $ 25,000 $ 25,000 $ 795,000 $ 525,000 Share of Joint Works Construction 1 ,731 ,000 1 ,777,000 2,514,000 2,956,000 2.231 ,000 Refunds of Capital Cost Recovery .o Federal Treasury 6,000 6,000 6,000 20,000 Share of Joint Operating 491 ,004 643,000 804,000 1 ,233,000 1 ,575,000 District Operating & Other Expenditures 76,000 87,000 100,000 115,00-D 132.000 TOTAL EXPENDITURES $2,373,000 $2,538,000 $3,449,000 $5 105,000 54 43 000 Carry-Over Balance to Following Fiscal Year $3,012,000 $2,614 mo $1 ,979,000 ($ 21 ,000) ($1 ,864,000) Funds Necessary to Meet Commitments Prior to Receipt of Tax Apportionments 1 ,269,000 2,225,00P 2,242.000 2,242.00 Fund Balance or (Deficit) $ 1 ,743.000 _ __$ 389,000 ($ S24 QQQ) (S2.263.000)_ ($4,106`oo0) DISTRICT N0, 7 PRELIMINARY ESTIMATE OF ANNUAL FLAT RATE SPECIAL ASSESSNE11T FOR SEWER SERVICE _ - & INflEDIATE AVAILABILITY 1978-79 Increase 77-78 78-79 (Decrease) Estimated Operating & Capital Requirements District (Collection System) Construction & Reserves 4,492,327 3, 170,300 (1 ,321 ,527) Joint Works (Treatment Plant) Construction and Equity Purchase & Reserves 5,937,058 8,022,000 2,OS4,942 Joint Operating (Treatment Plant) Expense 444,526 526,000 81 ,474 District Operating & Other Expenditures & Reserves 806,050 985,200 179, 150 TOTAL REQUIREMENTS 11 ,679,961 12,704,o00 1 ,024,039 Extended Revenue Federal-State Grants 1 ,147,000 1 , 16i ,000 14,o00 Sale of Capacity Rights 30,000 144,000 114,000 Connection Fees & Industrial User Charges 384,000 405,000 21 ,000 Interest & Misc. Income 312,612 332,000 19,388 Due from Cities 1 ,853,000 350,000 (1 ,503,000) Carry-over 6,345,668 9,280,000 2,934,332 TOTAL OTHER REVENUE 10,072,280 11 ,672,000 1 ,599,720 Amount to be raised by Assessment 1 ,607,681 1 ,032,000 ( 575,681) E.r mated Number of Parcels in the District 27,075 Estimated Annual Flat Rate Special Assessment for Sewer Service & immediate availability 38. 12 6/22/78 COUNTY SANITATION DISTRICT N0. 7 PRELIMINARY STATEMENT OF PROJECTED CASH FLOW OPERATING & CAPITAL ONLY (EXCLUSIVE OF DEBT SERVICE) FISCAL YEARS 78-79 THROUGH 82-83 DESCRIPTION 78-79 79-80 80-81 81-82 82-83 CARRY-OVER FROM PREVIOUS FISCAL YEARS $9,280,040 $8,777,000 $7,842,000 $6,406,000 $4,596,000 REVE NUE Assessment at $38.12/parcel 1 ,032,000 1 ,032,000 1 ,032,000 1 ,032,000 1 ,032,000 Other Revenue Federal E State Participation 1 ,161 ,000 1 ,584,000 2,584,000 3,047,000 2,498,000 Sale of Capacity Rights 144,000 6,0D0 6,000 6,000 6,000 Fees 405,000 350,000 325,000 300,000 275,000 Miscellaneous 682,o00 312,000 278,000 229,000 162,000 TOTAL FUNDS AVAILABLE $12,704,000 $12,061 ,000 $12,067,000 $11 ,020,000 $8,569,000 EXPENDITURES District Construction $ 496,000 $ 490,DDD $ 625,000 $ 210,000 $ 185,OD0 Share of Joint Works Construction 2,505,000 2,572,000 3,637,000 4,277,000 3.229,000 Refunds of Capital Cost Recovery to Federal Treasury 8,000 8,000 8,000 28,000 Share of Joint Operating 525,000 b88,DD0 861 ,000 1 ,319,000 1 ,685.000 District Operating & Other Expenditures 401 ,000 461 ,000 530,000 610,000 702,000 TOTAL EXPENDITURES $3,927,000 $4,219,000 $5,661 ,000 S6,424,000 $5,829,000 Carry-Over Balance to Following Fiscal Year $8,777,000 $7,842,000 $6,406,000 $4,596,D00 $2,740,000 Funds Necessary to Meet , Cor7itrents Prior to Receipt of Tax Apportionments 2,110,000 2 8 1 DOD 3 ,212,0002 1 Fund Balance or (Deficit) $6,667,000 $5,0.11,000_ _ $3.194,00D„__ __, S1 ,6B1 ,000 _(S 125,000) DISTRICT NO 11 PRELII1INARY ESTIMATE OF ANNUAL FLAT RATE SPECIAL ASSESSMENT FOR SEWER SERVICE & IMMEDIATE AVAILABILITY 1978-79 Increase 77-78 78-79 (Decrease) Estimated Operating & Capital Requirements District (Collection System) Construction & Reserves 5,266,000 4,461 ,000 ( 805,000) Joint Works (Treatment Plant) Construction and Equity Purchase &, Reserves 3,243>256 5>363,000 2, 119,744 Joint Operating (Treatment Plant) Expense 452,026 537,000 84,974 District Operating & Other Expenditures & Reserves 623,800 767,000 143,200 TOTAL REQUIREMENTS 9,585,082 11 , 128,000 1 ,542,918 Extended Revenue Federal-State Grants 934,000 947,000 13,000 Sale of Capacity Rights 24,000 117,000 93,000 Connection Fees & Industrial User Charges 240,000 597,000 357,000* Interest & Misc. Income 382,800** 281 ,000 (101 ,800) Carry-Over 6,359,564 7,645,000 1 ,285,436 TOTAL OTHER REVENUE 7,940,364 9,587,000 1 ,646,636 Amount to be raised by Assessment 1 ,644,718 1 ,541 ,000 ( 103,718) *Includes 1977-78 fees not remitted by City *;Includes $141M Equity Sale in 77-78; -0- in 78-79 ""estimated Number of Parcels in the District 28,005 Estimated Annual Flat Rate Special Assessment for Sewer Service & immediate availability 55.03 f 6/22/78 COUNTY SANITATION DISTRICT NO. 11 PRELIMINARY STATEMENT OF PROJECTED CASH FLOW OPERATING & CAPITAL ONLY (EXCLUSIVE OF DEBT SERVICE) FISCAL YEARS 78-79 THROUGH 82-83 DESCRIPTION 78-79 79-80 80-81 81-82 82-83 CARRY-OVER FROM PREVIOUS FISCAL YEARS $7,645,000 S6,8E2,000 $4,990,000 $4,435,000 $ 1 ,715,000 REVENUE Assessment at $55.03/parcel 1 ,541 ,000 1 ,541 ,000 1 ,541 ,000 1 ,541 ,000 1 ,541 ,000 Other Revenue Federal & State Participation 947,000 1 ,292,000 2,107,000 2,484,000 2,037,000 Sale of Capacity Rights 117,000 5,000 . 5,000 5.000 5,000 Fees 597,000 397,000 397,000 350,000 300,030 Miscellaneous 281 ,000 252,000 168,000 162,000 61 ,000 TOTAL FUNDS AVAILABLE $11 ,123,000 $10,369,000 59,208,000 $8,977.000 $ 5,659,000 EXPENDITURES District Construction $ 1 ,406,000 $2,272,000 $ 576,000 $2,023,000 $ 1 ,814,000 Share of Joint Works Construction 2,042,000 2,097,000 2,966,000 3,488,000 2.633,000 Refunds of Capital Cost Recovery to Federal Treasury 7,000 7,000 7,000 23,000 Share of Joint Operating 537,000 703.000 879,000 1 ,348,000 1,721 ,000 District Operating & Other Expenditures 261 ,000 300;000 345,000 3°6,000 455,000 TOTAL EXPENDITURES $4,246,000 $5,379,000 $4,773,000 $7,262,000 $ 6.646,000 Carry-Over Balance to Following Fiscal Year $6,882,coo $4,990,000 $4,213F.000 $1 ,715,000 ($ 987,000) Funds Necessary to Meet Commitments Prior to Receipt of Tax Apportionments 2,690,000 2,387,000 3,631 ,000 3,323,000 3.323,COO Fund Balance or (Deficit) $4,192,000 $2,603,000 $ 804,000 ($12608,000) (S 4,310,CO0) 7/19/78 CSDOC �rd FLAT RATE CHARGE PER PARCEL Following Flat Rate Per Parcel Will Raise District No. of Parcels $1 $5 $10 1 34,155 $ 34,155 $ 170,775 $ 341,550 2 113,610 113,610 568,050 1,136,100 3 . 156,555 156,555 782,775 1,565,550 5 191,365 19,365 96,825 193,650 6 21,795 21,795 108,975 217,950 7 27,075 27,075 135, 375 270,750 11 28, 005 . 28, 005 140,025 28.0,.050 . 400,560 $ 400,560 $21002,800 $4.,.005,600. e L.r' REQUEST TO PRESENT ORAL COMMENTS AT PUBLIC HEARING JULY 19 , 1978 I wish to present oral comments at the public hearing regarding proposed flat rate special assessment for sewer service and immediate availability. Name PLEASE PRINT Street Address City District No. gal comments will be heard in the order that this form is submitted to the clerk at the table marked "SUBMIT ORAL COMMENT REQUEST FORM HERE" . WRITTEN STATEMENT REGARDING PROPOSED FLAT RATE SPECIAL ASSESSMENT FOR SEWER SERVICE AND IMMEDIATE AVAILABILITY JULY 19, 1978 - "Sf you wish to protest or support the proposed assessment you may do so by completing this form and submitting to the clerk at the table marked "SUBMIT WRITTEN STATEMENT FORM HERE" . Your statement will become a part of the official record of this hearing. Name (Printed) Signature Address : City: District Comments : (USE REVERSE SIDE FOR FURTHER COMMENTS) s REQUEST TO PRESENT ORAL COMMENTS AT PUBLIC HEARING JULY 19, 1978 I wish to present oral comments at the public hearing regarding proposed flat rate special assessment for sewer service and immediate availability. Name PLEASE PRINT Street Address City District No. Oral comments will be heard in the order that this form is submitted to the clerk at the table marked "SUBMIT ORAL COMMENT REQUEST FORM HERE" . c �� v� -� � -� � �, �� -` r � ,� i �� ,, � � J- � � z � � �. EXHIBIT 1°A" to Minutes of Adjourned Meeting on July 19, 1978 Persons -Presenting Oral Comments at* Public Hearing on Pro- - posed Fiat Rate- Special Assessments for Sewer Service and llq� Immediate Availability to be Collected. on the Tax Roll NAME CITY NAME CITY 1) Ward Millhouse Santa Ana 32) Stephen Bedrossian Anaheim 2) Lura B. Labourdette Los Alamitos 33) Clarence Cornell Garden Grove 3) Lorraine Gray Santa Ana 34) Leo Lesnick Santa Ana 4) Dave McHaffie Anaheim 35) Glen B. Jackson Orange 5) Harry J. Appling Fountain Valley 36) Duane Laible Yorba Linda 6) Harriett Wieder Huntington Beach 37) Lu Manning County of Orange 7) W. L. Chambers Orange 38) Walter Nollac Placentia 8) T. B. Barron Garden Grove 39) Lauren Duvall Santa Ana 9) Virgil Elkins Santa Ana 40) L. J. Post Costa Mesa 10) Marvin A. Wendt Anaheim 41) Walter Wise Fullerton 11) Stan H. Sabin Huntington Beach 42) Elizabeth Sharon District 2 12) Charleen Wiersma Cypress 43) Bill Weatherill La Palma 13) Paul Holder Fullerton 44) George Maverne Fountaini'Valley 14) A. M. Gilmore Anaheim 45) Ed Wise Yorba Linda l�,o) Dr. Andrew Erdely Cypress 46) Kenneth G. Hahn Fullerton 16) James G. Harp Buena Park. 47) Miles Leach Santa Ana 17) Al Morgan Santa Ana 48) Dave Smith Costa Mesa 18) Clarence Herbert Newport Beach 49) Dick Longshore Santa Ana 19) Bob Dinsen Garden Grove 50) Maurice DeMong Tustin 20) Wilbur L. Cassidy Garden Grove 51) William Romo District 11 21) Don Moonier Cypress 52) Adin Dancer Westminster 22) Frank Beskiss Fountain Valley 53) Jay Scannell Westminster 23) Joe Hardcastle Cypress 54) Did Not Give Name 24) Dave Atkinson Huntington Beach 55) Vance Vote District 1 25) Bill Snelling Anaheim 56) Richard Barrett Santa Ana 26) David Baker Garden Grove 57) Donald Freedland Fullerton 27) Bob Romans Garden Grove 58) Ken Shank . Did Not State City 28) John Allen Placentia 59) Vivian Kirkpatrick Westminster 29) Kay McCloud Huntington Beach 60) Glen Hanson Costa Mesa 30) Fred Woodworth Newport Beach 61) Betty Scott Huntington Beach 31) Arthur Womer Fountain Valley 62) Jack Tubbs Santa Ana -9- r WRITTEN STATEMENT REGARDING PROPOSED FLAT RATE SPECIAL ASSESSMENT l FOR SEWER SERVICE AND IMMEDIATE AVAILABILITY JULY 19, 1978 "ff you wish to protest or support the proposed assessment you may do so by completing this form and submitting to the clerk at the table marked "SUBMIT WRITTEN STATEMENT FORM HERE" . Your statement will become a part of the official record of this hearing. Name (Printed) Signature Address: City: District Comments : (USE REVERSE SIDE FOR FURTHER COMMENTS) JUNE 14, 1978 AVAILABLE ALTERNATIVES FOR FUNDING AGENDA ITEM B5 1978-79 OPERATING/CAPITAL FUNDING REQUIREMENTS JARVIS-GANN WILL REDUCE THE DISTRICTS' CURRENT (1977-78) $21 .4 MILLION TAX LEVY BY A MINIMUM OF 58% IF THE DISTRICTS RECEIVE A PRO-RATA SHARE OF THE TAXES ALLOWED TO BE COLLECTED BY THE TAX LIMITATION INITIATIVE, TO A MAXIMUM OF 100% IF THE DISTRICTS RECEIVE NO TAXES UNDER THE ALLOCATIO14 METHOD YET TO BE DECIDED BY THE STATE LEGISLATURE. ALTERNATIVE METHODS OF FUNDING THE DISTRICTS SEWAGE COLLECTION, TREATMENT AND DISPOSAL ACTIVITIES FOR 1978-79 ARE AS FOLLOWS: I - FUND 1978-79 REQUIREMENTS FROM CONSTRUCTION RESERVE FUNDS MAJOR ADVANTAGE - NO ADDITIONAL ADMINISTRATIVE OVERHEAD COSTS FOR 1978-79 MAJOR DISADVANTAGES - FUNDS RESERVED FOR CONSTRUCTION TO COMPLY WITH FEDERAL AND STATE LAWS WOULD BE DIVERTED FROM CAPITAL TO OPERATING - NEEDED AND/OR REQUIRED CONSTRUCTION PROJECTS WOULD BE DELAYED - FUNDS WOULD HAVE TO BE REPAID TO CONSTRUCTION RESERVES IN FUTURE YEARS REQUIRING DISPROPOR- TIONATELY HIGHER CHARGE IN THOSE YEARS - LOSS OF INTEREST EARNINGS II - FUND 1978-79 REQUIREMENTS BY ESTABLISHING A FLAT RATE USER/AVAILABILITY CHARGE AGAINST EACH PARCEL OF PROPERTY TO BE COLLECTED BY THE TAX BILL - MAJOR ADVANTAGES - PROVIDES FINANCING FOR 1978-79 OPERATING AND CAPITAL REQUIREMENTS WITHOUT SUBSTANTIAL USE OF CONSTRUCTION RESERVES - STABILIZES PROPERTY OWNER CHARGES AND DISTRICTS CASH FLOW - ACCOMMODATES PHASING OF USER CHARGE/REVENUE PROGRAM REQUIRED TO BE IMPLEMENTED IN 1979-80 BY EPA AND SWRCB - MAJOR DISADVANTAGES - REQUIRES PUBLIC NOTICE AND HEARINGS IN A RELATIVELY SHORT TIME FRAME TO IMPLEMENT - DISTRICTS WILL INCUR ADDED ADMINISTRATIVE OVERHEAD COST TO IMPLEMENT (ESTIMATED AT BETWEEN $75,000 TO $105,000) PLUS ADDED CHARGE TO COLLECT ON TAX, BILL - POSSIBLE PUBLIC BACKLASH IN VIEW OF JARVIS-GANN MANDATE - FLAT USE CHARGE IS NOT EQUITABLE III - CONTINUE TO LEVY FULL TAX RATE NECESSARY TO FUND 1978-79 REQUIREMENTS ON THE BASIS OF PREVIOUS COUNTY COUNSEL OPINION THAT SANITATION DISTRICT LEVY IS A "SPECIAL ASSESSMENT". SAID OPINION MAY THUS EXCLUDE THE DISTRICTS FROM APPLICATION OF JARVIS-GANN. - MAJOR ADVANTAGE - NO ADDITIONAL ADMINISTRATIVE OVERHEAD COSTS FOR 1978-79 - MAJOR DISADVANTAGES - COUNTY COUNSEL HAS NOT YET RULED ON THIS OPINION RELATIVE TO JARVIS-GANN - MAY RESULT IN LITIGATION AND THE COURTS MAY FIND AGAINST THIS INTERPRETATION COUNTY SANITATION DISTRICTS of ORANGE COUNTY,CALIFORNIA P O.BOX 8127 10844 ELLIS AVENUE _ July 19, 1978 FOUNTAIN VALLEY.CALIFORNIA 92708 (714)540.2910 `✓ (714)982.2411 PUBLIC HEARING JULY 19, 1978 - 6:00 P.M. RE PROPOSAL TO ESTABLISH AND COLLECT FLAT RATE SPECIAL ASSESSMENTS FOR SEWER SERVICE AND IMMEDIATE AVAILABILITY ON TAX ROLL In the past, the Sanitation Districts have received the bulk of their revenues from a special assessment for sewer service against all real property and improvements in the Districts based on the ad valorem property rolls of the County. The cost to the homeowner whose property is assessed at $13,000 - $15,000, has been $3 to $5 per month, depending on the District, for sewer service exclusive of maintenance of local sewers. This has been collected via the County tax bill. With the passage of the Jarvis/Gann Initiative (proposition 13) , the question arises: Does this provision prohibit the Districts from levying the special assessments that have been levied in all prior years? While the Jarvis/Gann Initiative did not bar this procedure, the actions of the State Legislature in subsequent legislation (Senate Bill 2212 enacted on June 30) barred the use of instituting any charge based on property valuation other than the allowable 1% ad valorem levy. Under consideration are several proposals to institute a flat rate special assessment. These are attached. The Sanitation Districts operate the third largest wastewater (sewage) treatment system on the West Cost. The capital costs of present day facilities are $229 million; additional construction required during the next 8 years will double this figure. The Districts collect, treat, and dispose of wastewater from 408,000 residential, commercial and industrial connections serving 1.5 million citizens in the 23 cities in the Orange County metropolitan area. Ad valorem assess- In spite of the increased demands 40 ment rate for sewer service and additional 39 facilities required by higher State and Federal environmental 38 standards, the combined average h 37 annual variable ad valorem special assessment rate has steadily de- x 36 clined from 42(,%/$100 assessed 35 valuation in 72-73 to 31C/$100 assessed valuation in 77-78. The 34 Districts' Boards of Directors 33 have reduced the budget require- ments to lighten the property- burden by $2.2 million 31 I ! for this fiscal year (78-79) . 73 74 75 7t5 77 l� 7'F l S �'AL 7YEA3R Annual revenues come from variable rate ad valorem special assessments, connection fees, induatrial use fees, annexation charges and State and Federal construction grants. The annual expenditures break down approximately 10% for operations and maintenance, 87% for current and planned treatment plant and trunk sewer construction, 3% for bonded debt retirement. Chairman Don Saltar.elli July 19th Public Hearing LADIES AND GENTLEMEN : MY NAME IS DON SALTARELLI, JOINT CHAIRMAN OF THE SANITATION DISTRICTS THE PURPOSE OF THIS MEETING TONIGHT IS TO GET PUBLIC TESTIMONY ON PROPOSALS OF THE DISTRICTS TO ESTABLISH FLAT RATE SPECIAL ASSESSMENTS FOR THE 7 SANITATION DISTRICTS, TO BE COLLECTED ON THIS YEAR S COUNTY TAX ROLL, BEFORE WE START THE PUBLIC HEARING, I WISH TO INTRODUCE THE MEMBERS SITTING -AT THE TABLE WITH ME - ON MY RIGHT IS THOMAS WOODRUFF, • THE DISTRICTS' GENERAL COUNSEL; ON MY LEFT IS VICE JOINT CHAIRMAN DON FOX, COUNCILMAN FROM .THE CITY OF BREA , NEXT TO MR, FOX IS FRED HARPER, GENERAL MANAGER OF THE DISTRICTS . SITTING AT THE TABLES IMMEDIATELY IN FRONT- ARE THE MEMBERS OF THE BOARDS OF DIRECTORS, FIRST, I WOULD LIKE TO SET A TONE, IF YOU WILL, FOR THIS MEETING AS I REALIZE THAT THE PUBLIC NOTICE OF THIS HEARING HAS CREATED CONCERN BY SOME THAT THE SANITATION DISTRICTS INTEND TO IGNORE THE MANDATE OF THE JARVISIGANN INITIATIVE (PROPOSITION 13) . TONIGHT IS GOING TO BE A LEARNING PROCESS FOR US, THE DIRECTORS OF THE SANITATION DISTRICTS, AND I BELIEVE IT IS GOING TO BE A LEARNING PROCESS FOR THOSE OF YOU WHO ARE HERE, I CAN ASSURE YOU, FOR THE DIRECTORS OF THE SANITATION DISTRICTS, THAT IT IS NOT OUR PURPOSE TO CIRCUMVENT THE INTENT OF PROPOSITION 13 AS WE UNDERSTAND THAT PEOPLE WANT THE FAT CUT OUT OF GOVERNMENT, WE UNDERSTAND THAT THE PROPERTY TAXPAYER IS SICK AND TIRED OF RISING COSTS FOR NO APPARENT BENEFITS , f WHILE WE ARE VERY MUCH AWARE OF THE IMPORTANCE OF THE JARVIS/ GANN AMENDMENT, WE ALSO RECOGNIZE THAT PEOPLE WANT CLEAN WATER BECAUSE THEY APPROVED, ON THE SAME BALLOT AS PROPOSITION 13, THE E STATE .CLEAN WATER BOND ACT. OF. 1n7o, . THE SANITATION DISTRICTS ARE REGULATED BY MANY AGENCIES: THE COUNTY AND STATE HEALTH DEPART-MENTS, STATE WATER RESOURCES- CONTROL BOARD, AND THE .UNITED STATES ENVIRONMENTAL.. PROTECTION AGENCY, THE SANITATION -DISTRICTS OPERATE THE THIRD LARGEST WASTEWATER TREATMENT SYSTEM ON THE WEST COAST, CAPITAL COSTS FOR PRESENT DAY FACILITIES ARE $229 MILLION; ADDI- w TIONAL CONSTRUCTION REQUIRED DURING THE NEXT $ YEARS WILL DOUBLE u THIS FIGURE, ' THE DISTRICTS COLLECT, TREAT AND DISPOSE OF WASTEWATER FROM 408, OOO RESIDENTIAL, COMMERCIAL, AND INDUSTRIAL CONNECTIONS WHICH SERVE 1,5 MI-LLION PEOPLE IN THE .23 CITIES IN THE ORANGE COUNTY METROPOLITAN AREA THE DISTRICTS REVENUES COME FROM -CONNECTION FEES, ANNEXATION FEES, INDUSTRIAL USER FEES, FEDERAL AND STATE CONSTRUCTION GRANTS AND, -IN THE PAST, FROM AD VALOREM SPECIAL ASSESSMENTS ON THE COUNTY TAX- BILLS , NOW IT .HAS BEEN -DETERMINED -THAT WE NO LONGER 'CAN HAVE AD VALOREM SPECIAL ASSESSMENTS, HOWEVER, THE SANITATION DISTRICTS HAVE STATUTORY AUTHORITY UNDER THE STATE HEALTH AND SAFETY CODE TO ESTABLISH USER FEES , WE ALSO HAVE AUTHORITY UNDER THE SAME CODE TO COLLECT THOSE FEES ON THE COUNTY TAX BILLS SUBJECT TO THE PROCEDURES WE ARE - FOLLOW- ING TONIGHT, I WOULD LIKE TO COMMENT BRIEFLY ON THE ACTIVITIES OF THE SANI- TATION DISTRICTS BECAUSE WE ARE BEING REQUIRED TO EXPAND OUR OPERATIONS, RATHER THAN CURTAIL- THEM, IN 1972, -AN $"1 8 BILLION MUNICIPAL CONSTRUCTION GRANT PROGRAM WAS INITIATED UNDER PUBLIC -2- LAW 92-500, THIS ACT PROVIDED FOR FEDERAL ASSISTANCE OF 7517: OF THE COSTS FOR ALL MUNICIPALITIES THROUGHOUT THE COUNTRY TO ATTAIN A LEVEL OF WASTEWATER TREATMENT KNOWN AS SECONDARY TREATMENT , SINCE THEN, THE SANITATION DISTRICTS HAVE BEEN ENGAGED IN MEETING THE SECONDARY TREATMENT REQUIREMENT, WE HAVE JUST COMPLETED A �32 MILLION PROJECT IN FOUNTAIN VALLEY TO BRING THIS 50 MILLION GALLON PER DAY PLANT UP TO FEDERAL REQUIREMENTS . IN ADDITION, THE DISTRICTS HAVE LET CONTRACTS TOTALING $50 MILLION AT PLANT 2 IN HUNTINGTON BEACH TO CONSTRUCT SECONDARY TREATMENT FACILITIES FOR 75 MGD OF SECONDARY TREATMENT, CURRENTLY, THIS 135 MGD FACILITY HAS ONLY PRIMARY TREATMENT , IN ADDITION TO THE $50 MILLION PROJECT, WE EXPECT TO LET A CONTRACT OF �12, 4 MILLION LATER THIS YEAR FOR THE REQUIRED SLUDGE HANDLING FACILITIES , DURING THE PAST SIX YEARS, THE DISTRICTS HAVE NOT BEEN PERMITTED TO ADD ANY ADDITIONAL CAPACITY AT THE TREATMENT FACILITIES BY THE STATE AND FEDERAL AGENCIES, EVEN THOUGH THERE IS CONTINUING GROWTH r IN THE AREA . AS THE NEW FACILITIES COM, ON LINE, WE ARE REQUIRED TO OPERATE THEM AND IF WE FAIL TO OPERATE THESE FACILITIES AND DO NOT COMPLY WITH THE STATE AND FEDERAL PERMIT REQUIREMENTS, STRINGENT FINES CAN BE IMPOSED UPON THE DISTRICTS , o5/�Ce .z�6 c Gc Oee, .t�<C .rue rQ B e�cz�9�.L�du�r ae�f� A 226 7V�S' d�/<.c<. �.�,ce_�he��/kJ' .z'4`rc®�/Q�'�>��-''• 1f�< .er.�t, .tG�Gtsr-.,s.e�r-sag �rcy /� •w-�..ZZ-`�. �r.C��t��-j=J��, .oGz. auc.ir-�aet��.ce®'`m �r.G�� cro-�c��.le�v� �w Gil 4 p�E{ AJ .40zil ,6�G � -G GIB �MGuo ,O�vlac�cvw �xr.Ger .itu.g�: a�9.Go.ac... �,�-c�.C. ��=,a`.s•..�r-e��'�T�"`�' Via' c%s�c�.� Cn.�-�.Q� -�Lct<-cc� .!/-m C.tc.er. CC.C¢d� y�.e/�a� ..;�f-�-� •c--a-�'-at�jQ!,c-a�� Zp P Y� RIGHTLY REQUIRED FOR DISCHARGE TO FRESH WATER IS NOT REQUIRED FOR DEEP OCEAN DISCHARGE . IN DECEMBER '77, THE CONGRESS PASSED A BILL WHICH PROVIDES FOR A WAIVER OF SECONDARY TREATMENT AT THE DISCRETION OF THE ENVIRONMENTAL PROTECTION AGENCY ADMINISTRATOR IF THE DISCHARGER CAN PROVE THAT A DEGREE OF TREATMENT LESS THAN SECONDARY TREATMENT WILL NOT BE DETRIMENTAL TO THE MARINE ENVIRONMENT. THE CALIFORNIA STATE WATER RESOURCES CONTROL BOARD SUPPORTED THIS AMENDMENT TO THE FEDERAL ACT AND WE ARE NOW IN THE PROCESS OF APPLYING FOR A WAIVER . HOWEVER, THE REQUIREMENTS ESTABLISHED BY THE EPA IMPLEMENTING THIS WAIVER PROVISION APPEAR TO BE EX- TREMELY STRINGENT AND WE HAVE NO WAY OF KNOWING WHETHER OR NOT THE DISTRICTS WILL RECEIVE THIS WAIVER, BUT IF WE DO, WE WILL SAVE $100 MILLION IN CONSTRUCTION COSTS AND THE ACCOMPANYING $7 MILLION PER YEAR IN OPERATING COSTS . OUR APPLICATION MUST BE IN WASHINGTON BY SEPTEMBER 24 OF THIS YEAR , EPA COULD TAKE AS LONG AS 18 MONTHS TO DECIDE OUR FATE . THE DISTRICTS HAVE HAD A LONG-RANGE PLANNING AND BUDGET PROGRAM AND WE HAVE ATTEMPTED TO MAINTAIN A STABLE SITUATION FOR THE TAXPAYER WITHOUT SURPRISES . WE HAVE CONTINUALLY REDUCED THE TAX RATE AND THIS YEAR THE DIRECTORS, IN LIGHT OF THE JARVIS/GANN HAVE REDUCED YOU, THE PROPERTYOWNERSI BURDEN BY $2,2 MILLION . BEFORE WE TAKE PUBLIC TESTIMONY, THERE ARE A COUPLE OF POINTS THAT MUST BE MADE , ONE, THE LEGAL ASPECTS OF OUR PROPOSED ACTION OF ESTABLISHING FLAT RATE SPECIAL ASSESSMENTS AND (2), THE CONCERN OF THE AMOUNT OF FUNDS PRESENTLY HELD BY THE SANITATION DISTRICTS , I V46'hD ASK OUR GENERAL COUNSEL, MR , WOODRUFF, TO REVIEW THE STATUTORY AUTHORITY BY WHICH THE DISTRICTS CAN IMPOSE USER CHARGES -4- AND THE RELATIONSHIP TO THE RECENTLY-PASSED PROPOSITION 131 FOLLOWING THIS PRESENTATION, OUR DIRECTOR OF FINANCE, WAYNE SYLVESTER, WILL COMMENT ON THE FUNDS THAT ARE PRESENTLY HELD BY THE DISTRICTS AND THEIR RELATIONSHIP TO OUR REQUIREMENTS , AGAIN, I SUGGEST THAT WE ARE NOT HERE AS ADVERSARIES, BUT HERE TO GET THE FACTS$ _5_ Chairman Don Saltarelli July 19th Public Hearing LADIES AND GENTLEMEN: MY NAME . IS DON SALTARELLI, JOINT CHAIRMAN OF THE SANITATION DISTRICTS THE PURPOSE OF THIS MEETING TONIGHT IS TO GET PUBLIC TESTIMONY ON PROPOSALS OF THE DISTRICTS TO ESTABLISH FLAT RATE SPECIAL ASSESSMENTS FOR THE 7 SANITATION DISTRICTS, TO BE COLLECTED ON THIS YEAR'S COUNTY TAX ROLL. BEFORE WE START THE PUBLIC HEARING, I WISH TO INTRODUCE THE MEMBERS SITTING -AT THE TABLE WITH ME. ON MY RIGHT IS THOMAS WOODRUFF, THE DISTRICTS GENERAL COUNSEL; ON MY LEFT IS VICE JOINT CHAIRMAN DON FOX, COUNCILMAN FROM THE CITY OF BREAe NEXT TO MR, FOX IS FRED HARPER, GENERAL MANAGER OF THE DISTRICTS . SITTING AT THE TABLES IMMEDIATELY IN FRONT- ARE THE MEMBERS OF THE BOARDS OF D I R ECTORS, FIRST, I WOULD LIKE TO SET A TONE, IF YOU WILL, FOR THIS MEETING AS I REALIZE THAT THE PUBLIC NOTICE OF THIS HEARING HAS CREATED CONCERN BY SOME THAT THE SANITATION DISTRICTS INTEND TO IGNORE THE MANDATE OF THE JARVISIGANN INITIATIVE (PROPOSITION 13) . TONIGHT IS GOING TO BE A LEARNING PROCESS FOR US, THE DIRECTORS OF THE SANITATION DISTRICTS, AND I BELIEVE IT IS GOING TO .BE A LEARNING PROCESS FOR THOSE OF YOU WHO ARE HERE, I CAN ASSURE YOU, FOR THE DIRECTORS OF THE SANITATION DISTRICTS, THAT IT IS NOT OUR PURPOSE TO CIRCUMVENT THE INTENT OF PROPOSITION 13 AS WE UNDERSTAND THAT PEOPLE WANT THE FAT CUT OUT OF GOVERNMENT, WE UNDERSTAND THAT THE PROPERTY TAXPAYER IS SICK AND TIRED OF RISING COSTS FOR NO APPARENT BENEFITS. ,+ WHILE WE ARE VERY MUCH AWARE OF THE IMPORTANCE OF THE JARVIS/ i - - GANN AMENDMENT, WE ALSO RECOGNIZE THAT PEOPLE WANT CLEAN WATER 1 BECAUSE THEY APPROVED, ON THE SAME -BALLOT AS PROPOSITION 13, THE H STATE .CLEAN WATER BOND ACT. OF• 1(?70.- THE SANITATION DISTRICTS ARE REGULATED BY MANY AGENCIES: THE COUNTY AND STATE HEALTH DEPART-MENTS, STATE WATER RESOURCES- CONTROL BOARD, AND THE .UNITED STATES ENVIRONMENTAL.. PROTECTION AGENCY..- THE SA_NITATION .DISTRICTS OPERATE 41 THE THIRD LARGEST WASTEWATER TREATMENT SYSTEM ON THE WEST COAST, =t CAPITAL COSTS FOR PRESENT DAY FACILITIES ARE $229 MILLION; ADDI- TIONAL CONSTRUCTION REQUIRED DURING THE NEXT •8 YEARS WILL DOUBLE THIS FIGURE THE DISTRICTS COLLECT, TREAT AND DISPOSE OF WASTEWATER FROM 405,000 RESIDENTIAL, COMMERCIAL, AND INDUSTRIAL CONNECTIONS WHICH SERVE 1.5 MI•LLION PEOPLE IN THE -23 CITIES IN THE ORANGE COUNTY METROPOLITAN AREA THE DISTRICTS REVENUES COME FROM -CONNECTION FEES, ANNEXATION FEES, INDUSTRIAL USER FEES, FEDERAL AND STATE CONSTRUCTION GRANTS AND, IN THE PAST, FROM AD VALOREM SPECIAL ASSESSMENTS ON THE COUNTY TAX BILLS . NOW IT HAS BEEN -DETERMINED -THAT WE NO LONGER *CAN HAVE AD VALOREM SPECIAL ASSESSMENTS, HOWEVER, THE SANITATION DISTRICTS HAVE STATUTORY AUTHORITY UNDER THE STATE HEALTH AND SAFETY CODE TO ESTABLISH USER FEES , WE ALSO HAVE AUTHORITY UNDER THE SAME CODE TO COLLECT THOSE FEES ON THE COUNTY TAX BILLS SUBJECT TO THE PROCEDURES WE ARE - FOLLOW- ING TONIGHT I WOULD LIKE TO COMMENT BRIEFLY ON THE ACTIVITIES OF THE SANI- TATION DISTRICTS BECAUSE WE ARE BEING REQUIRED TO EXPAND OUR OPERATIONS, RATHER THAN CURTAIL- THEM. IN 1972, *AN $18 BILLION MUNICIPAL CONSTRUCTION GRANT PROGRAM WAS INITIATED UNDER PUBLIC -2- LAW 92 500. THIS ACT PROVIDED FOR FEDERAL ASSISTANCE OF 75% OF !.� THE COSTS FOR ALL MUNICIPALITIES THROUGHOUT THE COUNTRY TO ATTAIN is A LEVEL OF WASTEWATER TREATMENT KNOWN AS SECONDARY TREATMENT. SINCE THEN, THE SANITATION DISTRICTS HAVE BEEN ENGAGED IN MEETING i ; THE SECONDARY TREATMENT REQUIREMENT. WE HAVE JUST COMPLETED A 32 MILLI -ON PROJECT IN FOUNTAIN VALLEY TO BRING THIS 50 MILLION GALLON PER DAY PLANT UP TO FEDERAL REQUIREMENTS. IN ADDITION, THE {{ = D I STR I CTS- HAVE LET CONTRACTS TOTALING $50 MILLION AT PLANT 2 IN HUNTINGTON BEACH TO CONSTRUCT' SECONDARY TREATMENT FACILITIES FOR `l 75 MGD OF SECONDARY TREATMENT. - -CURRENTLY, - THIS 135 •MGD FACILITY HAS ONLY PRIMARY TREATMENT, IN ADDITION TO THE $50 MILLION PROJECT, WE EXPECT TO LET A CONTRACT OF .12.4 MILLION LATER THIS YEAR FOR THE REQUIRED SLUDGE HANDLING FACILITIES. DURING THE PAST SIX YEARS, THE DISTRICTS HAVE NOT BEEN PERMITTED TO ADD ANY ADDITIONAL CAPACITY AT THE TREATMENT FACILITIES BY THE STATE AND FEDERAL AGENCIES, EVEN THOUGH THERE IS CONTINUING GROWTH IN THE AREA , AS THE NEW FACILITIES COM ON LINE, WE ARE REQUIRED TO OPERATE THEM AND IF WE FAIL TOOPERATE THESE FACILITIES AND DO _ NOT COMPLY WITH THE STATE AND FEDERAL PERMIT REQUIREMENTS, STRINGENT FINES CAN -BE IMPOSED UPON THE DI STR I CTS, AS I STATED EARLIER, WE EXPECT TO CONSTRUCT ANOTHER, $2O0 MILLION IN TREATMENT PLANT FACILITIES DURING THE NEXT 8 YEARS. WE ARE ,i HOPEFUL THAT WE CAN AVOID HALF OF THIS CONSTRUCTION BY NOT COM— PLETING ALL OF THE SECONDARY TREATMENT, THIS AGENCY, ALONG -WITH MANY OTHER -AGENCIES IN THE UNITED STATES, HAVE BEEN PRESSING CONGRESS TO AVOID NEEDLESS EXPENDITURES OF MONIES AND ENERGY - SUPPLIES -BY CONSTRUCTING FACILITIES FOR TREATMENT S SAKE ALONE, WE DEMONSTRATED TO THE CONGRESS THAT SECONDARY TREATMENT, WHICH IS -3- �,.�HTLY REQUIRED FOR DISCHARGE TO FRESH WATER IS NOT REQUIRED FOR DEEP OCEAN DISCHARGE. IN DECEMBER "771 THE CONGRESS PASSED A BILL WHICH PROVIDES FOR A WAIVER OF SECONDARY TREATMENT AT THE DISCRETION OF THE ENVIRONMENTAL PROTECTION AGENCY ADMINISTRATOR' .IF THE DISCHARGER CAN PROVE THAT A DEGREE OF TREATMENT LESS THAN SECONDARY TREATMENT WIt.L NOT BE DETRIMENTAL TO THE MARINE ENVIRONMENT. THE CALIFORNIA STATE WATER RESOURCES CONTROL BOARD SUPPORTED THIS AMENDMENT TO THE FEDERAL ACT AND WE ARE NOW IN THE PROCESS OF APPLYING FOR A WAIVER. HOWEVER, THE REQUIREMENTS ESTABLISHED BY THE EPA IMPLEMENTING THIS WAIVER PROVISION APPEAR TO BE EX- TREMELY STRINGENT AND WE HAVE NO WAY OF KNOWING WHETHER OR NOT THE DISTRICTS WILL RECEIVE THIS WAIVER, BUT IF WE DO, WE WILL SAVE $100 MILLION IN CONSTRUCTION COSTS AND THE ACCOMPANYING $7 MILLION PER YEAR IN OPERATING COSTS OUR APPLICATION MUST BE IN WASHINGTON BY SEPTEMBER 24 OF THIS YEAR . EPA COULD TAKE AS LONG AS 18 MONTHS TO DECIDE OUR FATE. THE DISTRICTS HAVE HAD A LONG-RANGE PLANNING AND BUDGET PROGRAM AND WE HAVE ATTEMPTED TO MAINTAIN A STABLE SITUATION FOR THE TAXPAYER WITHOUT SURPRISES. WE HAVE CONTINUALLY REDUCED THE TAX RATE AND. THIS YEAR THE DIRECTORS, IN LIGHT OF THE JARVISIGANN HAVE REDUCED YOU, -THE PROPERTYOWNERSI BURDEN BY $2.2 MILLION. BEFORE WE TAKE PUBLIC TESTIMONY, THERE ARE A- COUPLE OF POINTS THAT MUST BE MADE . ONE, THE LEGAL ASPECTS OF OUR PROPOSED ACTION OF ESTABLISHING - FLAT RATE SPECIAL •ASSESSMENTS AND (2), THE CONCERN L,r OF THE AMOUNT OF FUNDS PRESENTLY HELD BY THE SANITATION DISTRICTS. I WOULD ASK OUR GENERAL COUNSEL, MR. -WOODRUFF, :TO REVIEW THE STATUTORY AUTHORITY BY WHICH THE DISTRICTS CAN IMPOSE USER CHARGES -4- AND THE RELATIONSHIP TO THE RECENTLY-PASSED PROPOSITION 13. FOLLOWING THIS PRESENTATION, OUR DIRECTOR OF FINANCE, WAYNE SYLVESTER, WILL COMMENT ON THE FUNDS THAT ARE PRESENTLY HELD BY THE DISTRICTS AND THEIR RELATIONSHIP TO OUR REQUIREMENTS. I: AGAIN, I SUGGEST THAT. WE ARE NOT HERE AS ADVERSARIES, BUT HERE TO GET THE FACTS. I . G d�v�j w ttw M IVA �o lls CW4 - MEETING DATE JulY 19, 1978 ' TIME 6 : 00 P.m. DISTRICTS 1,2 , 3 , 5 , 6 , 7&11 D ISTF ICT_ 1 '"A cy- t�t JOINT BOARDS IRA K .RIMA. . . . . . . . _ ) RILEY •ANTHONY• • .El H . . . . . . .SHARP- • RILEY . . . . . . • • •CLARK ULVER. • .— — RILEY . . . . . . .ANTHONY. PERRY • • • • • • • •CULVER• • • • • ORTIZ . . . . . . ..EVANS))* ORTIZ . . . . . . •EVANS• • •• • .— — `� DISTRICT 2 J COOPN . .. • . . . .FOX- • • • • • : — — COOPER . •GAMBINA• • •— — FRI Ell) • • • • • • • •WEDAA- • • • • • •_ate —p�_ _L HUTCHISON) • • • • •GLOCKNER• - •— — RASHFORD). . . . .HOLT. . .. . . . .✓ _p� _ IROGET) - -: . . . . . .GRAHAM. . . .•— — RILEY) 4tA-RIt . . . . . .�� NN CMEYER)• • • • • • • •GRIFFIN• • - -- — COOPER;. . . . . . .�. . . . . .. . .J/ �L �_ RASHFORD)• - - • • •HOLT. . . . . . .— — ROGET). . . . . . . .GRAHAM. . . . . .�G _Ll _�_ WELLS)• • • • • - • • •HOUSTON- • - •— — WELLS). . . . ... .HOUSTON. . . . .�G _ LACAYO)• • • - • • • •HUDSON. . . . .— — EVANS) • • • • • • • •ORTIZ• • • • - • • x_ SEITZ) . . . . . . . . .LASZLO. . . . .— — CULVFR) . . • • • • •PERRY• • . . • . .— — LL RYCKOFF) . . . . . . .MC INNIS- • •— — ROTH))))• - . . . . . GEYH R . . . .lam �1_ _ WEISHAUPT . . . . .MILLER• • • • •— — HOYT • • • • • • • •SMITH- • - • • • •_/L FINLAYSON . . . . .OLSON- • • • • •— — ADLER) . . . .. . . .STANTON• • • • . Z/ EVANS) . . . . . . . . .ORTIZ• • • • • .— WINTERS) . . . . ..VELASQUEZ. . .JG 4— SHENKMAN) • • • . •MacALLISTER — — CULVER? - • . • • - • •PERRY•- • . • •— — DISTRICT 3' INY-BORG) - . . . . .PRIEST. . . • ._ . ANTHONY) . . . . . . .RILEY. . .. . . — — ADDLLER�• SVALSTAD• . . . ✓ CRANK)• - • • • • • - •RIMA. . . .. . . — — MEY� ER). . • • • • • •GRIFFIN• • • • :_� `` JY0 NG)• • • • • - • • •ROGET. . . . . . — — PERRY) . . . . . . . .CULVER. . . . . .� WELM£�)• . . . . . . .RYCKOFF- - • •—COOPER) • • -• • • .GAMBINA- • • . . WELSH • • • • • - - •SALTARELLI� LACAYO) . . . . . . .HUDSON. . . . . ._�� _pL_ Z RILEY). . .. . . . . .SCHMIT• • - • - _ SEITZ) . . . • • • • •LASZLO• -- - - - lL_ �_ ROTH ) . . . . . . . . .SEYMOUR• • • - WEISHAUPT . . . .MILLER• . • • • • ✓ �(_ _�_ JWELSH�j • • • • • • • •SHARP• • • • • •FINLAYSON) . . . .OLSON• • . • • • •_� �_ BAILEY . . . . . . . .SHENKMAN• • • — EVANS) . . . ORTIZ• • • • • • • _ SHENKMAN) . . . . . .SIEBERT• • • • — NYBORG) . . . . . . .PRIEST• • • • • • CL HOYT : : : : : * * *SMITH. . . . . . — YOUNG . . . . . . .ROGET. ' i / Q Q ADLER) • • • • • • • • •STANTON. .- -STANTON. .-- - RILEY) / _� RYCKO50 .. . • • • •STRAUSS• - • •— _ \I' ROTH).. . . . . . . .TSc=r';;ovP�. . . . . SHENKMAO); . . . . SIEBERT. . . . . — — ADLER • • • - • . • •SVALSTAD• - •_ — )) �� _ L �_ ZOMMICK) • • • • • • -SYLVIA. • • • • — ZOMMICK . . . . . .SYLVIA. . . . . ._� _M y _ GAIDO) . . . . . . • • •VARDOULIS• • IVELASQUEZ) . . . .WINTERS . . . . _� y_ W INTERS) . . . . . . .VELASQUEZ- -_ _— FRIED) • • • - • - - • •WEDAA. . .. . . DISTRICT S VELASQUEz) • • • • •wINTERS-- - -. ANTHONY . . . .RILEY. . . . . . . • • • • • •STRAUSS. . . . . a, _(L c OTHERS DISTRICT 6 HARPER. . . . .— �RYC . . . .MC INNIS. . . . L SYLVESTER. .— CRANK . . . . . . . .RIMA. . . . . . .. ... LEWIS. . . . . . RILEY) .. . . . . . . .ANTHONY. . . . , . CLARKE. . . . .— BROWN. . . . . .— DISTRICT 7 GAIDO . . . . . . . .VARDOULIS• • _ / —N y WOODRUFF. . ._ HOYT) - • • • • • • •-SMITH. . . .. . ._,G Y HOHENER. . . .— RILEY . . . . . .CH•Ai�K.. . . . . . ,/ �_ HOWARD.. . . .— RCKOFF) TIZI ON - . . .GLOCKNER q•� �_ HUNT.. . . . . . . _ TCHISON) • • - •GLOCKNER- -44_�/ � V KEITH. . . . . . LSH) • • . . . • • •SALTARELLI . JG A_ KENNEY. . . . . • • • • - •WILLIAMS- • • •_ LYNCH. . . . . .— MADDOX. . . . . DISTR]CT 11 — F1ART1 NSON. .— EAILEY)— . . tea. . . . ✓ nI PIERSALL. . .— SHENKMAN) . . . . . MAC ALL ISTER_� _�_ STEVENS. . . .— �..' RILEY) • • . • . • • • SCHMIT _ ' _0/— TRAVERS. . . .— 7/19/78 MEETING DATE July 19, 1978 Ti r2E 6 . 00 p.m. DISTRICTS 1 , 2,3 ,5 , 6 , 7&11 DISTRICT_.1 5 Sib `dire, _JOIHT BOARDS CRANK . . . . . . . .R1MA. . . . . . . . + RILEY . . . . . . . . .ANTHONY. . . . WELSH� . . . . . . . .SHARP. . RILEY . . . . . . • •CLARK• • • - • -- — RILEY . . . . . . .ANTHONY. . . . .._ PERRY(()` . . . . . . . . .CULVER. . . . .— — (ORTIZ�. t'i*K. • �� iROGET) - -: ORTIZJ • • .EVANS• • - - DISTRICT 2 o`RCOOPER. . . . . . . .FOX• • • • •• • —COOPER . . . . . . •GAMBINA• • • •— — FRIED) - • • • • • ••WEDAA. . . .. . •= 4 _ — HUTCHISON) • • • • •GLOCKNER-- •— — RASHFORD). . . ..HOLT. . . .. . . ._ f_ — • • • • • •GRAHAM• •-• — — RILEY) . . . . . .GWJW. . . . . . . 4,— — SMEYER)• • . . • • • •GRIFFIN• - • -- — Coop ER) .. . . . . .P&*. . . . . .. . ._ (RASHFORD)• • • • • .HOLT. . . .. . .— — ROGET). . . . . . . .GRAHAM. . • . WELLS)• • • • • • - • •HOUSTON• • • •— — .WELLS). . . . . . . .HOUSTON. . . . ._ LACAYO)• • • • • • • •HUDSON. . . . .— — EVANS) • • • - • • • •ORTIZ. . . . . . ._ �_ — SEITZ . . . . . . . . .LASZLO• • . . .— — CULV�R) . . . . . . .PERRY. . . . . . . CL, �— — RYCKOFF) . . . . . . .MC INNIS-- •— — ROTH - - - • • • • • . . . !• f_ — WE.SHAUPT� . . . . .MILLER. . . . .— HOYT - • - - • • • • •SMITH- • • • • • • _+ — FINLAYSON • • • • •OLSON. . . . . . ADLER) . . . . . . . .STANTON. . . . ..F _+ _ — EVANS) . . . . . . .. .ORTIZ. . . . . .— WINTERS) . . . . . .VELASQUEZ• • -= 4. SHENKMAN) • • • • - •MacALLISTER __ — CULVER} - • -PERRY. . . . . .. — DISTRICT 3 NYBORG) • • - • • • • •PRIEST. . . . .— — ANTHONY) • - • • • • •RILEY• • • - • •— ADLER . . . . . . . .SVALSTAD- • • .� 4_ — ICRANK)• - • • - - - --RIMA- • • • • • •— MEYER) - - • • • • • •GRIFFIN• • • - • YOUNG)• • • • . . . . .ROGET• • • • • •— — PERRY) . . . . . . . .CULVER • • • • • • W HUP'N7E )-- • • • • • •RYCKOFF• • • •— — COOPER) . . . . . . .GAMBINA- • • • .— WELSH). . . . . . . . . SALTARELLI •— LACAYO) - • • • - • •HUDSON• • • • • •! RILEY ). . . . . . . . .SCHMIT. . . . .— — SEITZ) . . .. . . . .LASZLO• • • • • • ROTH). . . . . . . . . .SEYMOUR• - - • WEISHAUPT) • • - •MILLER . . . . . ._ �_ — WELSH) . . . . . . . . .SHARP. . . . . . — FINLAYSON . . . .OLSON. . . . . . . _ BAILEY) • • • - - • • •SHENKMAN. . . — EVANS) . . . . . . . .ORTIZ• • • • • • •_ _� — SHENIMAN) • • • • • •SIEBERT• • • •— NYBORG) . . . . . . .PRIEST• • - - • •�C_ HOYT)) - • -- • • • • • •SMITH. . . . . .— JYOUNG� . . . . . . . .ROGET. . . . . . . CL � — ADLER) - - - • • • • • •STANTON. - . -- RILEY . . . . . . .SCHMIT. . . . . _ (RYCKOFF) . . . . . . .STRAUSS• - • - — �./ ROTH).. . . . . . . . .SEY?19YR . . . . . _ — SADLER) - • • - - • • • -SVALSTAD• - • — SHENKMA( ),• . . . . SIEBERT. . . . ._ 17OMMICK)- • - • • • •SYLVIA• • • - •— ZOMMICK)) . . . . . .SYLVIA. . . . . . - GAIDO) . . . . . . . . .VARDOULI.S- • _ VELASQUEZ) . . . .WINTERS . . . . . 4. — WINTERS)- - • • • • •VELASQUEZ- FRIED) • • • • • - • • •WEDAA• • • • • •— DISTRICT 5 RYCKOFF) . . . . . . .WILLIAMS• • — H_UMMEL • • • • • • •R*CKBFF . . . ." + iVELASQUEZ) . . . . ...;INTERS- - - ANTHONY • • - • • •RILEY• • • • • • — + - • • •STRAUSS• • • • a- OTHERS DISTRICT 6 HARPER. . . . .— (RYC�. . . . .MC INNIS. . . . - + _ — SYLVESTER. .— (CRANK .. . . . . . . .RIMA. . . . . . ...F LEWIS. . . . . .— (RILEY) . . . . . . . .ANTHONY. . . . CLARKE. . . . .— BROWN. . . . . .— DISTRICT 7 a 11AIDO • - - • • • • •VARDOULIS• • - — — �` � WOODRUFF. . .— HOYT) • • - • • • • • •SMITH• • • • • • •_' _ �� r HOHENER. . . .— RILEY? . . . . . . . .C-{.�I44. . . . . . — — — OL HOWARD. . . . .— ORT I Z . . . .. . . .6h'A 15. . . . . . . HUTCHISON) • • • •GLOCKNER. . . • HUNT.. . . . . . .— WELSH) - • • • • • • •SALTARELLI - — + KE KEITH. . . . . .— �RYCKOFF) . . . . . .WILLIAMS. . . •_ + — LYNNEY. . . . .— LYNCH. . . . . . — DISTRICT 11 MADDOX. . . . .— MARTINSON. .— EA1 LEVY=. . . . . e9HENKMAN. . . .; �_ — PIERSALL. . . — SHENKMAN). . . . . MAC ALLISTER= - + STEVENS. . . .— RILEY) . . . . . . . . SCHMIT • - • • • -� TRAVERS. . . . — 7/19/78 - ADJOURNED JOINT MTG. - JULY 19, 1978 "-b) Joint Chairman Saltarelli gave report re legal aspects of Districts charges *40' and some of the concerns re amount of funds holding by the Districts. (See attached) TLW referred to statutory report in package handed out to public. JWS referred to yellow pages of report and reviewed some of the figures. FAH referred to pink and goldenrod-colored pages and reported on them. (5-c) Saltarelli stated he would entertain a motion from the Board to enter into record all written comments. It was so moved and seconded. Motion carried. (5-c) PUBLIC COMMENT opened Schmit stated he was ready to vote on Alternative IA - no user charge this year or next year or any year. Motion out of order as public comment to be heard first. After some public comment, Vardoulis said he thought they had heard the people. Wanted to make a three part motion. Saltarelli advised have to have motion to close thepublic hearing first. Vardoulis stated his motion anyway. Want to adopt Alternative IA - no flat rate. Want to ask everybody here tonight to help us lobby to reject that portion of *40, SB 154 that tells us that we are not a District that can get a portion of the 1%. Also asked everybody for movement to get State and Federal government to impose no new requirements on us and provide waivers for existing requirements. Someone from public stated that the previous motion was bypassed and asked that it be brought forth. Saltarelli advised again that Directors cannot make motions until public hearing closed. Motions are out of order. Saltarelli asked how many people wanted to get on with the voting and how many people want to keep on with testimony. Hand vote. Majority wanted to go on with public comment. Required at a public hearing to hear all people who want give testimony. Saltarelli asked that without calling names as they came up on blue forms, all those people who still wished to give more testimony should come forth. (See list of names) Moved to close public hearing. Motion seconded. Voice vote. Motion carried. Hearing closed at 9:44 p.m. Saltarelli thanked people for their comment. Vardoulis then moved to adopt Alternative IA with no implementation for future fiscal years; that we live within the 1% of Proposition 13 and, further, seek help from the people to lobby and reject that portion of SB 154 that refuses us our portion of the 1%. Further, that we support a movement that State and Federal govenment impose no new requirements on us and to provide for waivers for existing requirements. *Moe Stanton asked if flat user fee still appeared in that motin for IA? Was answered, no. Stanton then made substitute motion. That Districts' funds may be diverted from capital accounts to operating accounts, as required during 1978-79 to fund operation and that staff of District is hereby directed to develop equitable user plan that may be placed before voters next year pending results of waiver on mandated requirements. Olson seconded motion. Discussion re substitute motion. Stanton restated that we would operate this coming year using the contingencies that are set aside for construction and there will be no user fee established this year. Are directing are staff to develop an equitable user fee plan. The point of saying equitable fee is it is not a flat user fee. The plan may be placed before the voters next year pending the results of our efforts for waiver of State and Federal mandated requirements. Could place on the ballot or go before public for review in public hearing. Could do either. Would like to see it prepared for ballot form. Bailey spoke against substitute motion. Said she really felt it is too complicated a motion and should vote on one issue at a time. Should determine for this year only. Would prefer that we use our $90 million reserve and what we are getting from Jarvis and see how the District does. Svalstad moved amendment to motion that we have no user fee this year. Saltarelli stated that his motion was .out of order. His motion was basically the original motion. He said it was not the original motion which was within certain confines at the present time. Svalstad's motion was just no fees this year. Don't know what will be next year. Siebert stated he was against substitute motion and for the original motion. If we can't pay the bills, let State and Federal government sue the people. Stanton said that his motion specifically excluded any fee for this year. Use the funds that we have now for this year. The second sentence is intended to avoid the kind of situation that we have this year where there is a proposal before us %F/ that has no equity. Trying to avoid that next year. Directing staff to take one year to develop something public can consider, possibly at ballot box next year. Olson asked, in the original motion are we assuming that we are going to have • a moratorium on capital expansion for this year? Saltarelli said may have to curtail some expenses but can get through this for one year. If there are changes in legislation, possibly will not be a need for user charge. We can for one year handle our obligations. Called for the question on substitute motion. Roll call vote. Motion failed. Vardoulis restated his motion again. Moved Alternative IA with the elimination of the second paragraph and with elimination of the estimated 78-79 flat rate, and that there be no user charge, and that we live within the constraints of Proposition 13 which is our portion of the 1%, and that everybody here tonight help us lobby the State to reject that portion of SB 154 that denies us a portion of the 1%, and further, that everybody here tonight and all that they can gather support a movement to get State and Federal government to impose no new requirements on us and provide waivers or the money for existing excessive requirements already placed on us. Motion seconded again. Roll call vote. Motion carried. -2- PUBLIC HEARING JULY 19, 1978 - 6 :00 P.M. SUBSTITUTE ALTERNATIVES MOVED AND SECONDED FOR ROLL CALL VOTE MOTION MADE BY ROGER STANTON: "THAT APPROXIMATELY $10. 2 MILLION IN DISTRICTS ' FUNDS RESERVED FOR CONSTRUCTION WILL BE DIVERTED FROM CAPITAL ACCOUNTS TO OPERATING ACCOUNTS AS REQUIRED DURING 1978-79 TO FUND OPERATIONS. FURTHER- MORE, THAT THE STAFF OF THE DISTRICT IS HEREBY DIRECTED TO DEVELOP AN EQUITABLE USER FEE PLAN WHICH MAY BE PLACED BEFORE THE VOTERS NEXT YEAR PENDING THE RESULTS OF EFFORTS TO WAIVE STATE AND FEDERAL MANDATED REQUIREMENTS. " MOTION MADE BY BILL VARDOULIS: "THAT ALTERNATIVE IA, WITH THE ELIMINATION OF THE SECOND PARAGRAPH, AND WITH THE ELIMINATION OF THE ESTIMATED 79-80 FLAT *me RATE, AND THAT THERE BE NO USER CHARGE, THAT WE LIVE WITHIN THE CONSTRAINTS OF PROPOSITION THIRTEEN WHICH IS OUR PORTION OF THE 1%. ALSO THAT EVERYBODY HERE TONIGHT AND ELSEWHERE HELP US TO LOBBY THE STATE TO REJECT THAT PORTION OF SB 154 THAT DENIES US A PORTION OF THE 1%. FURTHER THAT EVERYBODY HERE TONIGHT AND ALL THAT THEY CAN GATHER SUPPORT A MOVEMENT TO GET THE STATE AND FEDERAL GOVERNMENT TO IMPOSE NO NEW REQUIREMENTS ON US AND PROVIDE WAIVERS OR THE MONEY FOR EXISTING EXCESSIVE REQUIREMENTS ALREADY PLACED ON US. " r ' JULY 19, 1978 - PUBLIC HEARING RE PROPOSED FLAT RATE SPECIAL ASSESSMENT All Districts Saltarelli: Before we get started, there have been some questions regarding how you will be able to give testimony this evening. If you received one of the little slips for giving testimony, you should sign that slip a deliver it to the side of the building, where there is a table and we will take those comments and call each person's name to give testimony. Would it be better if I stood up for the people in the back? Ladies and Gentlemen, my name is Don Saltarelli, I'm Joint Chairman of the Sanitation Districts. The purpose of this meeting tonight is to receive public testimony on the proposals of the Districts to establish the flat rate special assessment for the seven Sanitation Districts to be collected on this year's county tax roll. Before we start the public hearing I would like to introduce the members sitting at the table with me. on my right, your left is Mr. Tom Woodruff, the Districts' General Counsel; on my left is Fred Harper, General Manager of the Sanitation Districts. Sitting directly in front of me at the tables the various members of the Boards of Directors. First, I would like to set a tone, if you will, for this meeting as I realize that the public notice of the hearing has created concern by some that the Sanitation Districts intend to ignore the mandate of the Jarvis/Gann Initiative , prominently known as Proposition 13. Tonight is going to be a learning process for us, the Directors of the Districts, and I believe it's going to be a learning process for those of you who are here also. I can assure you for the Directors of the Sanitation Districts that it is not our purpose to circumvent Proposition 13, as we understand that the people want the fat cut out of Government. We understand that the property tax payer is sick and tired of rising costs for no apparent benefit. While we are very much aware of the importance of the Jarvis-Gann amendment, we also recognize that people want clean water because they approved on the same ballot as Proposition 13 . . . I request that you please be courtious for the people who came here to hear the hearing and I think we'll all get along a lot better and learn something. Thank you. The people passed the State Clean Water Bond Act of 1978 on the same ballot as Proposition 13 The Sanitation Districts are regulated by many agencies -- the County and State Health Departments, the State Water Resources Control Board, *41I the United States Environmental Protection Agency -- just to name a few. The Sanitation Districts operate the third largest wastewater treatment facility on the West Coast. Capital costs for present day facilities are $229,000,000. Additional construction required during the next eight years will double this figure. The Districts collect, treat and dispose of wastewater from 408,000 residential, commercial and industrial connections which serve one and one half million people in the 23 cities in Orange County. The Districts' revenues come from connection fees, annexation fees, industrial user fees, Federal and State construction grants and in the past from ad valorem special assessments on the j County tax bills. It has now been determined that we can no longer have ad val ero m tax assessments; however, the Sanitation Districts have statutory authority under the State Health and Safety Code to establish user fees. We also have authority under the same code to collect those fees on the County tax bill subject to the procedures which we are following tonight. I would like to comment briefly on the activities of the Districts because we are being required to expand our operations rather than curtail them. In 1972 an $18 billion construction grant program was initiated under Public Law 92-500. This law provided for Federal assistance of 75% of the cost for all municipalities throughout the country.to obtain a level of wastewater treatment known as secondary treatment. Since then the Sanitation Districts have been engaged in meeting the secondary treatment requirement. We have just completed a $32 million project here in Fountain Valley to bring this 50 MGD plant up to the Federal requirements. In addition,_ the- _, Districts have let contracts totaling $50 million at Plant No. 2 in Huntington Beach to construct secondary treatment facilities for 75 MGD of secondary treat- ment. Currently, this 135 million gallon facility has only primary treatment. In addition, to the $50 million project, we expect to let a contract of 12.4 million dollars later this year for the required sludge handling facilities. That's the messy part. During the past six years the Districts have not been permited to add any additional capacity at the treatment facilities by the State and Federal agencies, even though there is a continuing growth in area. As the new facilities come on line, we are required to operate them and if we fail to operate these facilities and we do not comply with the State and Federal permit -- -- requirements fines are imposed upon the Districts. As I statad earlier we expect to construct another $200 million in treatment plant facilities during the next eight years. We are hopeful that we can avoid half of this construction by not completing allof the secondary treatment. This agency, along with many other agencies in the United States, has been pressing Congress to avoid needless expenditures of money and energy supplies by constructing facilities for treatment sake alone. We demonstrated to Congress that secondary treatment, which is rightly �./ required for discharge into fresh water, is not required for deep ocean discharge such as we have here on the W—esY-Coast. In December of 1977, the Congress passed a bill which provides for waiver of secondary treatment at the discretion of the -2- Environmental Protection Agency Administrator, if the discharger can prove that a degree of treatment less than secondary treatment will not be detrimental to the marine environment. The California State Water Resources Control Board supported this amendment to the Federal Act and we are now in the process of applying for a waiver. However, the requirements established by the EPA implementing this waiver provision appear to be extremely-_ stringent _and we-have know-way of knowing whether the Districts will receive this waiver. But if we do, we will_-. save $100 million in construction costs and the accompanying -$7_million per year in operating costs that it will take to_oper4te-that facility_. Our application must be in Washington, D.C. by September 24, 1978 of this year. EPA could take as long as 18 additional months to decide our fate on that issue. The Districts have had a long-range planning and budget program and have attempted to maintain a stable situation for the-taxpayers- without surprises. We have continually reduced the tax rate and this year in light of the Jarvis-Gann have reduced the property owners' burden by $2-,2 million. Since the mailing of the notice, we have received thousands of phone calls and we are fully aware of the taxpayers' concerns. About 70% of. . . . .we pay taxes too. . . .About 70% of us here tonight. . . . .I'm going to ask that a few people be removed so that the majority r/ can hear if that's necessary. . . . . . .About 70% of us here, statistically, voted for Proposition 13. I think that what we were saying when we voted for Proposition 13 was that we were willing to pay 1% tax on our property and that's all you get. Since we said that, give us the essential services that we want with our taxes, such as police and fire, sewer and water and do the best with the rest you have. Unfortunately, a-few days _after Proposition 13 was passed, the State Legislation passed a new law, Senate Bill 154, which in-effect, says we must go to a system of user charges after fiscal year 78-79 and we will not get any share of that property tax bill. Our Board of Supervisors have also advised us that we may not get any of that share this year. It is frustrating for us to see this controversy arise when we know that our monthly charge for sewer services ranges from $3.25 a month on the low side to $4.99 a month in the most expensive Districts , while several of our neighboring Districts charge as high as $9 60 per month. We spent three years trying to convince Congress that the ad valorem tax was the most equitable method to charge. They finally agreed and yet now we are being forced to go to a user charge. We realize _ there are many inequities, such as the regressive nature of a user charge where �► it's more costly to the lower income person or to the person who has a lower assessment of their property. We also are aware that there are people who ------- ------ -- - — have several parcels that we require no sewage service at all and we developed -3- a system whereby those parcels will not have to pay a sewer service charge on those parcels. Before we take public testimony there are a couple of quick points that should be made. 1) The legal aspects of our proposed action of establishing £he£Lat rate special assessment ; and 2) The concern of the amount of funds presently held by the Districts. I will ask our General Counsel, Mr. Woodruff, to review the statutory authority by which the District can impose user charges and the relationship to the recently passed Propositon 13. Following this presentation the infamous Wayne Sylvester will comment on the funds that are presently held by the Districts and their relationship to our requirements. Again, I suggest that we are not here as advosaries, but here to get the facts and I'll now turn it over to Mr. Woodruff. Thank you. Woodruff: Mr. Chairman and Directors of the District, Ladies and Gentlemen, I've been asked by the Chairman to give a brief outline of the procedures, not only as they govern this meeting, but with particular reference to the applicable state laws by which this District operates and under which it's anticipating the need to meet its budget requirements by the adoption of a user service charge for the forthcoming fiscal year. The Directors have been provided previously during the course of the last couple of months with a couple of legal opinions from my office pertaining to the method by which the Sanitation Districts have, over the past thirty years, have funded their operations. Specifically, over this period of time there has been a rate levie4 against all real property and improvements and that's been based on an assessment using the ad valorem tax rolls. I well appreciate, and I've talked to many of you people previous to this meeting tonight and_I_know there is some concern relative to the destinction between an assessment and a tax but the fact is, not for me to pass judgment or even these Directors, that the fact is that in the State of California there is a clear legal distinction betweien_an-.assessment and a tax. I won't. . . . . . . the fact remains, that that- is the law by which we must operate, whether we like it or�not.-- If the District had been able to proceed as they had in the past thirty years, we would have continued to use the ad valorem rolls and levied a charge based thereon and there would have been no particular need for a public hearing. We have, however, reviewed this matter with the legal authorities both in Sacramento through the State offices . My own office, that of the County Government at the County Counsel's office and have concluded that while we do provide a singular social benefit; namely the treatment of wastewater only, and no governmental �./ services, that we are entitled to proceed on an assessment. However, as the Joint Chairman pointed out a moment ago, the State Legislatten was directed in Proposition 13 to adopt certain necessary implementing laws and that they have -4- done by the adoption of Senate Bill 154 and a cleanup measure which followed a few days later. In doing that, they have provided in there certain contraints as were enacted by Jarvis that say the County and its auditor shall levy only a rate of $4 per hundred and that levy is what this Districts is going to be bound by. s a result, the District will in my opinion, and I have so advised these Directors that we will, in fact, be able now and we have the concurrence of the Orange County Counsel's that we will share in the to or $4 per hundred levy�w is "is the maximum allowed by Jarvis. As a result, I think you're going here from the . . . .well, before you boo, I think that's going to turn out to be a considerable benefit to every person in the audience tonight. The hearing procedure which we are here for tonight is being conducted pursuant to they provisions of .the State Health and Safety Code and that code says that every Sanitation or Sanitary District in this State has not only the authority, but the obligatton to establish charges, or rates or tolls,or whatever you choose to call it, in order to pay for its cost for operation and maintenance and that is what we are here to do tonight. Secondly, that State law provides that. for the convenience that we can utilize the systems and the facilities of the county tax colll_ector's office --- there's two optional provisions in which these Districts can proceed in which to collect the revenues. They could go through an invoicing basis to all of the 408,000 plus or minus, property owners in the County or within the Districts and attempt to collect them on an invoice basis. That would cost - the Districts hundreds of thousands of dollars to do-so_- In lieu of that there is optional statutory provision which is being-recommended for .use--by_-the nlstx cts that they simply turn the invoice, in effect, and the assessment over._xn_the._... County Tax Collector and utilize those facilies at a cost reduction._ The charge tfiat is being considered for adoption tonight is, in fact, just a charge in — direct response to use of the service and the system in an effort to balance.the cos in oing t at. The Finance Director is going to comment upon the particular financial aspects but the right of the Districts to proceed 'and receive some portion of the necessary revenues through an individual parcel assessment, whether �L - /� it be flat rate or variable, is granted pursuant to the state law and has not (�(1f been-affected by Jarvis. Mr. Chairman, I think that's it as far as the outline. Saltarelli: I'll now ask Mr. Sylvester to give a very brief rundown of the financial matters. Sy' ster: We know your interested in getting on with the hearing, so we will keep this brief. %wel I would like to refer you to the yellow page in the package that you received and we hope you all received. We ran enough copies for the attendance we expected here. -5- Sylvester: That yellow page summarizes,and I bring to your attention that it's in the millions of dollars,summarizes the anticipated requirements of the Districts over the next ,ftd five years and the primary influence on our funding and on our expenditures, as was mentioned before is a requirement by the Federal and State agencies for us to go to a higher degree of treatment. The first item on there shows carry-over of $88 million -- this figure. . . . . .I'd like to point out to you that as you've read in some of the news media, that carry-over figure, as you have noted, is $90 million and I apologize for the error in the register to that extent. I'd like to point out to you that $60 million of this is presently commited to treatment plant construction projects that are either under construction now or under design, $10 million of it is commited for construction projects of trunk sewers which are either under construction now out in the Districts or under design. The next line shows the assessment and that's the reason you're here tonight and I won't comment further on that -- it shows $17 million, the assessment for this year. The next line shows $14 on the 1978-79 fiscal year -- that is the amount of construction grants that we received to assist in the payment of the obligations for the treatment plant expansion. The next item is $1 million loan -- that refers to one District -- there are a lot of questions that we've had in the last week both in writing and over the telephone with regard to industry and the charges *400 for industrial firms -- I believe that there's some misunderstanding -- that we do, in fact, surcharge industry for their actual use. The charge to them will not be the flat rate alone, but they do get charged for the actual discharge into the system. We recognize $4 million a year for that type of income. The remaining item is miscellaneous income and interest. Under expenditures, the first line item over the next five years we will have to spend $30 million for trunk sewer construction. We'll have to spend $192 million for treatment plant construction primarilly that which is required by the Federal Government. We will have to spend in the neighborhood of $79 million to maintain and operate those advanced treat- ment facilities and trunk sewer maintenance will cost another $15 million during the next five-year period. Saltarelli: Thank you. Now, I'd like to turn it over to Mr. Fred Harper, who will explain the options that the Boards of Directors have this evening to vote in regard to the assessment, as well as,a few general comments. Harper: Thank you, Mr. Chairman. Included in the same handout package for tonight is e./ the goldenrod sheet and immediately behind it is a pink sheet and essentially what the proposal is tonight as a result of the legislation that was passed in Sacramento, are the two options which are on the pink sheet. These are really -6- the options that it boils down to at this point. S;4tarelli: You want us to go over those options with you again? Harper: The first -- On the pink sheet the -Option IA is no proposed flat rate for this year -- no proposed flat rate charge. The District would take the estimated supossedly $7 million which we would receive from the 1% pro rate share of the property tax levy; however, the following year there would be some type of user charge because we will no longer be on the tax roll. The proposal IIA on the second page of the pink sheet shows for the proposed user charge with the 78-79 year is a reduction from the figure that was on the notice that was mailed to you. This take into account the funds that the Districts expect to receive from their pro rata share of the tax levy. In addition, to the proposal there would be a system of rebates and exclusions for those properties that should not be charged. We have a full rebate proposal and also a two-thirds rebate proposal depending on the situation. Saltarelli: Thank you. Now the Chair would now entertain a motion from the Board to enter into the record all the written comments that have been submitted or will be submitted this evening. Is there a motion to that effect? Have a motion and seconded. Any discusion? All those in favor say aye. . . .opposed. . . . .motion carried. Alright, it is now time to take public comments. We have a list of people who have filled out the blue sheets and we would ask that as I call out the names --- I'll call out about 10 names and if you could come in some sequence to that order to the podium to give us the comments you wish to make -- I would ask you, because of the number of people we have to speak -- we're willing to stay here just as late as you want to r- but we know that it's not necessarily a good hour for everyone -- to keep your comments as brief as possible and try not to be repetitious of what someone else might have said before you. The first speakers would be Ward Millhouse, Laura Laberdette, Loreen Gray, Harriett Weider, Dave McAf£ey, W. L. Chambers, Harry Appling, Virginia Elkins, Marvin Went, T. B. Barren and we'll comments from these people first and then we'll call some additional names. Thank you. Chairman Don Saltarelli July 19th Public Hearing - 1./ LADIES AND GENTLEMEN : PAY NAME IS DON SALTARELLI, JOINT CHAIRMAN OF THE SANITATION DISTRICTS, THE PURPOSE OF THIS MEETING TONIGHT IS TO GET PUBLIC TESTIMONY ON PROPOSALS OF THE DISTRICTS TO ESTABLISH FLAT RATE SPECIAL ASSESSMENTS FOR THE 7 SANITATION DISTRICTS, TO BE COLLECTED ON THIS YEAR S COUNTY TAX ROLL, BEFORE WE START THE PUBLIC HEARING, I WISH TO INTRODUCE THE MEMBERS SITTING AT THE TABLE WITH ME , ON MY RIGHT IS THOMAS WOODRUFF, THE DISTRICTS' GENERAL COUNSEL; ON MY LEFT IS VICE JOINT CHAIRMAN . DON FOX, COUNCILMAN FROM THE CITY OF BREA , NEXT TO MR , FOX IS FRED HARPER, GENERAL MANAGER OF THE DISTRICTS , �.r SITTING AT THE TABLES IMMEDIATELY IN FRONT ARE THE MEMBERS OF THE BOARDS OF DIRECTORS , FIRST, I WOULD LIKE TO SET A TONE, IF YOU WILL, FOR THIS MEETING AS I REALIZE THAT THE PUBLIC NOTICE OF THIS HEARING HAS CREATED CONCERN BY SOME THAT THE SANITATION DISTRICTS INTEND TO IGNORE THE MANDATE OF THE JARVIS/GANN INITIATIVE (PROPOSITION 13) , TONIGHT IS GOING TO BE A LEARNING PROCESS FOR US, THE DIRECTORS OF THE SANITATION DISTRICTS, AND I BELIEVE IT IS GOING TO BE A LEARNING PROCESS FOR THOSE OF YOU WHO ARE HERE , I CAN ASSURE YOU, FOR THE DIRECTORS OF THE SANITATION DISTRICTS, THAT IT IS NOT OUR PURPOSE TO CIRCUMVENT THE INTENT OF PROPOSITION 13 AS WE UNDERSTAND THAT PEOPLE WANT THE FAT CUT OUT OF GOVERNMENT , WE UNDERSTAND THAT THE PROPERTY TAXPAYER IS SICK AND TIRED OF RISING COSTS FOR NO APPARENT BENEFITS , WHILE WE ARE VERY MUCH AWARE OF THE IMPORTANCE OF THE JARVIS/ J GANN AMENDMENT, WE ALSO RECOGNIZE THAT PEOPLE WANT CLEAN WATER i BECAUSE THEY APPROVED, ON THE SAME BALLOT AS PROPOSITION 13, THE {1i STATE .CLEAN WATER BOND ACT. OF- 19170', THE SANITATION DISTRICTS ARE REGULATED BY MANY AGENCIES: THE COUNTY AND STATE HEALTH DEPART- ., MENTS, STATE WATER RESOURCES CONTROL BOARD, AND THE UNITED STATES ENVIRONMENTAL.. PROTECTION AGENCY.. THE SANITATION DISTRICTS OPERATE ii THE THIRD LARGEST WASTEWATER TREATMENT SYSTEM ON THE WEST COAST, CAPITAL COSTS FOR PRESENT DAY FACILITIES ARE $229 MILLION; ADDI- ;[_ TIONAL CONSTRUCTION REQUIRED DURING THE NEXT 8 YEARS WILL DOUBLE THIS FIGURE. THE DISTRICTS COLLECT, TREAT AND DISPOSE OF WASTEWATER FROM 408,000 RESIDENTIAL, COMMERCIAL, AND INDUSTRIAL CONNECTIONS WHICH SERVE 1.5 MIi-LION PEOPLE IN THE 23 CITIES IN THE ORANGE COUNTY METROPOLITAN AREA . THE DISTRICTS' REVENUES COME FROM CONNECTION FEES, ANNEXATION FEES, INDUSTRIAL USER FEES, FEDERAL AND STATE . CONSTRUCTION GRANTS AND, IN THE PAST, FROM AD VALOREM SPECIAL ASSESSMENTS ON THE COUNTY TAX BILLS . NOW IT HAS BEEN DETERMINED THAT WE NO LONGER CAN HAVE AD VALOREM SPECIAL ASSESSMENTS. HOWEVER, THE SANITATION DISTRICTS HAVE STATUTORY AUTHORITY UNDER THE STATE HEALTH AND SAFETY CODE TO ESTABLISH USER FEES . WE ALSO HAVE AUTHORITY UNDER THE SAME CODE TO COLLECT THOSE FEES ON THE COUNTY TAX BILLS SUBJECT TO THE PROCEDURES WE ARE FOLLOW ING TONIGHT. I WOULD LIKE TO COMMENT BRIEFLY ON THE ACTIVITIES OF THE SANI- TATION DISTRICTS BECAUSE WE ARE BEING REQUIRED TO EXPAND OUR ' OPERATIONS, RATHER THAN CURTAIL THEM, IN 1972, 'AN $18 BILLION MUNICIPAL CONSTRUCTION GRANT PROGRAM WAS INITIATED UNDER PUBLIC -2- LAW 92-500, THIS ACT PROVIDED FOR FEDERAL ASSISTANCE OF 75% OF - � THE COSTS FOR ALL MUNICIPALITIES THROUGHOUT THE COUNTRY TO ATTAIN A LEVEL OF WASTEWATER TREATMENT KNOWN AS SECONDARY TREATMENT, SINCE THEN, THE SANITATION DISTRICTS HAVE BEEN ENGAGED IN MEETING THE SECONDARY TREATMENT REQUIREMENT, WE HAVE JUST COMPLETED A $32 MILLION PROJECT IN FOUNTAIN VALLEY TO BRING THIS 50 MILLION GALLON PER DAY PLANT UP TO FEDERAL REQUIREMENTS , IN ADDITION, THE DISTRICTS HAVE LET CONTRACTS TOTALING $50 MILLION AT PLANT 2 IN HUNTINGTON BEACH TO CONSTRUCT SECONDARY TREATMENT FACILITIES FOR 75 MGD OF SECONDARY TREATMENT, CURRENTLY, THIS 135 MGD FACILITY HAS ONLY PRIMARY TREATMENT , IN ADDITION TO THE $50 MILLION PROJECT, WE EXPECT TO LET A CONTRACT OF $12,4 MILLION LATER THIS YEAR FOR THE REQUIRED SLUDGE HANDLING FACILITIES , DURING THE PAST SIX YEARS, THE DISTRICTS HAVE NOT BEEN PERMITTED TO ADD ANY ADDITIONAL CAPACITY AT THE TREATMENT FACILITIES BY THE STATE AND FEDERAL AGENCIES, EVEN THOUGH THERE IS CONTINUING GROWTH IN THE AREA, AS THE NEW FACILITIES COM,, ON LINE, WE ARE REQUIRED TO OPERATE THEM AND IF WE FAIL TO OPERATE THESE FACILITIES AND DO NOT COMPLY WITH THE STATE AND FEDERAL PERMIT REQUIREMENTS, STRINGENT FINES CAN BE IMPOSED UPON THE DISTRICTS , s� z f6e. 2c�7� l �sr�<c�sF .C?LC.e✓ �Id4t.0 ech cs� `� �e �1pp J V O tC ttG <C�,CQ.[.C<�'' er7l�..GUC Q.G4. /J.1 � C y r4eo .Lrkcs✓�(,Lw% .«C�CC� •�- p�..Grf�j �y2000�1-�[ GY,;i�.cuae-llu rx�c�.�t*.cG .�-(iG , /.s- A / , w 6... 1 "`c. �C� /3 .IGXCs .4l[ilat� c-� C.dr�G�,CarGs�CCiP /� accl'a�e .mac-ccr f Q p a ".t7P/S'f%iGCNILtrS+� 1211c C t�/,CC•¢Lv .-C.�.lr r%i'Zr cL?<6' �<9_ Y/� �r_,ram J�J p/ �1 L//fG'..G�e✓'e��.r2..P.(� ��i ` (�Ut�J�t/�e't:t-te{�rfy/PJ'<�C/�G�GG�C/�[e-C+ �cc.Ut 2Ce4„. cf.+�-GtGUQJ Iece""-i %t�J! -eve -of✓P eteK- iCGies`. .{/�Clif_I. 11 c ti.R.LC ' --yyam� Cp1v /�'��iv C'i�'XCefy, �leG_.C-C. �G✓�i.6'ZL C4G R'-�itC1U^� -G_LQ.R/' Cl.�".� '/��Kl:�.li �YC.C.g1� �. ��C�� ,Z�.!^Clit'l., -'11A��'�. �, tz � 'S( 1'.t<✓ 7c3� �'.cn-cctl.J^f'1Q C'.CGCW.P�JC. %tru/ d�S!GO,ncL �r..a,-e..:al.-�. ��i �a •�'`..v. .eac O L . d. .lam_-G•cu� {�-C.ti.�4'.Q �' �.G/� 2(.%— f•=G� l-J«i(� F I _/ �.tt,.�l GviJ .Gdi �..C-&�CLtctr .(tm-G�Gc,t-, CC�O-dam y�e:[/�',,'�9/P 1'''•_l/' ^�IY�A�trG.� �"Q'A'�-Ctrs �(.t-ct�� 2tp A 4, Y 1 K7GHTLY REQUIRED FOR DISCHARGE TO FRESH WATER IS NOT REQUIRED FOR DEEP OCEAN DISCHARGE, IN DECEMBER '77, THE CONGRESS PASSED A BILL WHICH PROVIDES FOR A WAIVER OF SECONDARY TREATMENT AT THE DISCRETION OF THE ENVIRONMENTAL PROTECTION AGENCY ADMINISTRATOR IF THE DISCHARGER CAN PROVE THAT A DEGREE OF TREATMENT LESS THAN SECONDARY TREATMENT WILL NOT BE DETRIMENTAL TO THE MARINE ENVIRONMENT, THE CALIFORNIA STATE WATER RESOURCES CONTROL BOARD SUPPORTED THIS AMENDMENT .TO THE FEDERAL ACT AND WE ARE NOW IN THE PROCESS OF APPLYING FOR A WAIVER . HOWEVER, THE REQUIREMENTS ESTABLISHED BY THE EPA IMPLEMENTING THIS WAIVER PROVISION APPEAR TO BE EX- TREMELY STRINGENT AND WE HAVE NO WAY OF KNOWING WHETHER OR NOT THE DISTRICTS WILL RECEIVE THIS WAIVER, BUT IF WE DO, WE WILL NOW SAVE $100 MILLION IN CONSTRUCTION COSTS AND THE ACCOMPANYING $7 MILLION PER YEAR IN OPERATING COSTS , OUR APPLICATION MUST BE IN WASHINGTON BY SEPTEMBER 24 OF THIS YEAR . EPA COULD TAKE AS LONG AS 18 MONTHS TO DECIDE OUR FATE. THE DISTRICTS HAVE HAD A LONG-RANGE PLANNING AND BUDGET PROGRAM AND WE HAVE ATTEMPTED TO MAINTAIN A STABLE SITUATION FOR THE TAXPAYER WITHOUT SURPRISES . WE HAVE CONTINUALLY REDUCED THE TAX RATE AND THIS YEAR THE DIRECTORS, IN LIGHT OF THE JARVIS/GANN _-HAVE REDUCED YOU, THE PROPERTYOWNERS ' BURDEN BY $2. 2 MILLION . BEFORE WE TAKE PUBLIC TESTIMONY, THERE ARE A COUPLE OF POINTS THAT MUST BE MADE , ONE, THE LEGAL ASPECTS OF OUR PROPOSED ACTION OF ESTABLISHING FLAT RATE SPECIAL ASSESSMENTS AND (2), THE CONCERN OF THE AMOUNT OF FUNDS PRESENTLY HELD BY THE SANITATION DISTRICTS , I V&UtD ASK OUR GENERAL COUNSEL, MR . WOODRUFF, TO REVIEW THE STATUTORY AUTHORITY BY WHICH THE DISTRICTS CAN IMPOSE USER CHARGES -4- AND THE RELATIONSHIP TO THE RECENTLY-PASSED PROPOSITION 13 , FOLLOWING THIS PRESENTATION, OUR DIRECTOR OF FINANCE, WAYNE SYLVESTER, WILL COMMENT ON THE FUNDS THAT ARE PRESENTLY HELD BY THE DISTRICTS AND THEIR RELATIONSHIP TO OUR REQUIREMENTS , AGAIN, I SUGGEST THAT WE ARE NOT HERE AS ADVERSARIES, BUT HERE TO GET THE FACTS , -5-