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HomeMy WebLinkAbout1986-06-04 COUNTY SANITATION DISTRICTS OF ORANGE COUNTY, CALIFORNIA P.O. BOX 8127, FOUNTAIN VALLEY.CALIFORNIA 9272"127 q 10844 ELLIS.FOUNTAIN VALLEY, CALIFORNIA 92708-7018 (714)962-2411 May 29, 1986 NOTICE OF ADJOURNED REGULAR MEETING DISTRICT NO. 1 WEDNESDAY, JUNE 4, 1986 - 5:00 P.M. 10844 Ellis Avenue Fountain Valley, California There not being a quorum present at the Adjourned Regular Meeting of County Sanitation District No. 1 at 4:00 p.m. on Wednesday, .May 28, 1986 , I thereupon adjourned the meeting to the above hour and date. secretary BOARDS OF DIRECTORS County Sanitation Districts Post Office B. e127 of Orange County, California 10844 Ellis Avenue Fountain Valley, Calif., 92708 Telephones: e Mo Cade 714 DISTRICT No. 1 9540-2910 622411 AGENDA ADJOURNED REGULAR MEETING WEDNESDAY, JUNE 4, 1986 - 5: 00 P.M. (1) Roll Call (2) Consideration of items re long-range financial program: (a) Staff report on long-range financial projections and status of program implementation. (b) Discussion ( 3) Consideration of action on items relative to proposed Ordinance No. 108, An Ordinance of the Board of Directors of County Sanitation District No. 1 of Orange County, California, Amending Ordinance No. 104 Establishing Sewer Connection Charges for Use of District Sewerage Facilities, and Repealing Ordinance No. 105 . (a) Report of General Counsel re proposed ordinance. (b) Consideration of motion to read Ordinance No. 108 , An Ordinance of the Board of Directors of County Sanitation District No. 1 of Orange County, California, Amending Ordinance No. 104 Establishing Sewer Connection Charges for Use of District Sewerage Facilities, and Repealing Ordinance No. 105, by title only, and waive reading of said entire ordinance (must be adopted by unanimous vote of Directors present) . (c) Consideration of motion to introduce Ordinance No. 108 , An Ordinance of the Board of Directors of County Sanitation District No. 1 of Orange County, California, Amending Ordinance No. 104 Establishing Sewer Connection Charges for Use of District Sewerage Facilities, and Repealing Ordinance No. 105, and pass �; to second reading on June 11, 1986 . ( 4) Consideration. of action on items relative to proposed Ordinance No. 109 , An Ordinance of the Board of Directors of County Sanitation District No. 1 of Orange County, California, Amending Ordinance No, 106 Establishing Sanitary Sewer Service Charges, and Repealing Ordinance No. 107. (a) Report of General Counsel re proposed ordinance. (b) Consideration of motion to read Ordinance No. 109, An Ordinance of the Board of Directors of County Sanitation District No. 1 of Orange County, California, Amending Ordinance No. 106 Establishing Sanitary Sewer Service Charges, and Repealing Ordinance No. 107, by title only, and waive reading of entire ordinance (must be adopted by unanimous vote of Directors present) . (c) Consideration of motion to introduce Ordinance No. 109 , An Ordinance of the Board of Directors of County Sanitation District No. 1 of Orange County, California, Amending Ordinance No. 106 Establishing Sanitary Sewer Service Charges, and Repealing Ordinance No. 107, and pass to sedond reading on June 11, 1986 . (5) Other business and communications , if any ( 6) Consideration of motion to adjourn -2- MANAGER'S AGENDA REPORT County Sanitation Districts Vow Office Box em 10844 Ellis Avenue of Orange County, California Fountain Volley, Calif., 92708 TeIeOFmes: A. Code 714 540-290 DISTRICT NO. 1 962-24111 MANAGER'S REPORT TO DISTRICT NO. 1 DIRECTORS MEETING DATE: June 4, 1986 Update on long-range financial program and consideration of amendments to existing sewer connection charges and sanitary sewer service charges. BACKGROUND Last year, the Board authorized implementation of a long-range financial plan and approved the following fee schedules to fund the District's requirements: Connection Fees Effective 1/1/85 Single-Family Multi-Family Colmsercial/Ind/ Fee Type Residential Residential Governmental/Other One-time Connection $500/Dwelling $500/Dwelling $100/1,000 Sq. Ft. Fee Unit Unit of Building User Fees Effective 7/1/85 Water Meter Size Annual Fee 5/8e + 3/4e $26.40 1e + lye 52.50 2e 105.00 3e 210.00 4e 420.00 6e 840.00 This long-range financial program of connection fees to finance facilities expansion and supplemental user fees to make up the shortfall of ad valorem tax revenues was established to provide the additional financing necessary for District operations, maintenance, rehabilitation and expansion activities. The program was adopted after considerable study to avoid a projected long-range funding shortfall in revenues required Page Two June 4, 1986 to finance the District's operating expenses, which were escalating due to the rising cost of advanced treatment as well as construction of master-planned treatment facilities improvements. STATUS OF DISTRICT'S LONG-RANGE FINANCIAL PROGRAM Schedule A (attached) provides an overview of the District's financial position for the next five years based on the existing fee structure. Although the District could continue to operate through fiscal year 1986-87 and remain in a positive cash position at the end of the year (refer to line 51, Fund Balance: $4,009,000 in 1986-87) , in the following year the District will end up in a deficit position by year-end (line 51: ($249,000) in 1987-88) if no increases are made in the current fee structure. At the end of the five-year period presented on Schedule A, the District would face a deficit of approximately $18.75 million. Although the recent formation of new District 14 has resulted in the District receiving approximately $3,970,000 from the new district's purchase of capacity in the joint treatment and disposal facilities and reduced District 1's proportionate share of future capital expansion of the joint facilities, the positive financial impacts of District 14's formation are offset by the Joint Boards' concurrent shift to a 100% flow-based method of allocating ownership share of joint treatment works which increased District 1's required equity. The reason for this increase is District 1's lower proportionate tax base which was previously a factor in calculating its joint works equity prior to th change to a method that uses only flow. Based on current projections, the District will have to more than double its rate structure war the next five years to generate additional revenues to ensure its financial integrity. Adoption of a systematic plan and schedule to do so will provide for a stabilized long-range financial plan with annual rate increases sufficient to meet its funding requirements. Immediate implementation of a revised fee structure will result in smaller annual increases than if the increases are delayed. Many economic factors could affect the rate structure requirements over the next several years. However, the staff evaluates the District's financial position each year to determine the impact of changing conditions and thus, modifications or delays in fee increases in future years could be accommodated if appropriate. The following recommendation is presented as a starting point for consideration of fee increases for 1986-87. CONNECTION FEES Staff is recommending that the Board consider raising the District's one-time connection fees as presented in the following table: Single/Multi-Family Commercial/Industrial Dwelling Units Governmental/Other Existing Fee $500/Dwelling Unit $100/1,000 Sq. Ft. of Building Recommended Fee $1,000/Dwelling Unit $200/1,000 Sq. Ft. of Building Page Three jt 4, 1986 The proposed increase will generate an additional $600,000, including fees and interest income. These funds will be used to help finance the construction projects identified on the enclosed Schedule of District Collection System Projects (Schedule B) , as well as the District's share of the master-planned expansion of the joint treatment facilities. Proposed Ordinance No. 108 includes the recommended fee increases. SUPPLEMENTAL USER FEES Schedule C presents the District's financial position should the Board adopt the increase in the connection fee as well as a schedule 20% annual increase in the District's supplemental user fees. If the Board chooses to increase the supplemental user fees by 20% per year for the next five years, the additional fees and interest income over the five years will total approximately $3.9 million. Fee Schedule (20% Annual Increase) Meter Size 1985-86• 1986-87 1987-88 1988-89 1989-90 1990-91 5/8" s 3/4" 26.40 31.68 36.96 42.24 47.52 52.80 1" 52.50 63.00 73.50 84.00 94.50 105.00 2" 105.00 126.00 147.00 168.00 189.00 210.00 3" 210.00 252.00 294.00 336.00 378.00 420.00 4" 420.00 504.00 588.00 672.00 756.00 840.00 6" 840.00 1,008.00 1,176.00 1,344.00 1,512.00 1,680.00 • Existing Fee Schedule Annual Supplemental User Fee Revenues 961,000 1,154,000 1,385,000 1,662,000 1,995,000 2,394,000 Staff will review the financial projections and financial plan alternatives with the Board at the meeting. In the event the Board wishes to initiate an ordinance raising user fees beginning in fiscal year 1986-87, staff has agendized Ordinance No. 109 (Agenda Item No. 4) . Staff will review the proposed connection fee increase and supplemental user fee alternatives and the accompanying cash flow projections in greater detail with the Board at the meeting. additional floor area contained within such new construction, provided such new construction shall contain additional plumbing fixture units. Section 2. This Ordinance shall be effective July 1, 1986. Section 3. Ordinance No. 105 is hereby repealed on the effective date hereof, as it is inconsistent with the provisions of this Ordinance. Section 4. The Secretary of the Board is directed to certify to the adoption of this Ordinance and cause it to be published in a newspaper of general circulation within the County. PASSED AND ADOPTED BY THE Board of Directors of County Sanitation District No. 1 of orange County, California, at a regular meeting held Chairman of the Board of Directors, County Sanitation District No. 1 of Orange County, California ATTEST: Secretary, Board of Directors of County Sanitation District No. 1 of orange County, California -3- RE: AGENDA ITEM NO. 4 ORDINANCE NO. 109 AN ORDINANCE OF THE BOARD OF DIRECTORS OF COUNTY SANITATION DISTRICT NO. 1 OF ORANGE COUNTY, CALIFORNIA, AMENDING *../ ORDINANCE NO. 106 ESTABLISHING SANITARY SEWER SERVICE CHARGES, AND REPEALING ORDINANCE NO. 107 The Board of Directors of County Sanitation District No. 1 of Orange County, California, does hereby ORDAIN that Ordinance No. 106 is hereby amended to read, as follows: "Section 1: Purpose. The purpose of this Ordinance is to establish a system of sanitary sewer service charges required to be paid by property owners for the services and facilities furnished by the District in connection with its sanitation treatment corks and sewage collection system. 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 and provisions for necessary reserves. Section 2: Annual Sanitary Sewer Service Charge. Cannencing July 1, 1986, each parcel of real property located within the District which is improved with structures designed for residential, commercial or industrial use and connected to the District's system, shall pay a sanitary sewer service charge based on the average volume of wastewater discharged by a class of users in the sum or sums as set forth in Table A of this Ordinance. Section 3: Application of Ordinance. The provisions of this Ordinance shall be in addition to Ordinance No. 104 and 105, as amended, of the District establishing regulations for use of District's sewage facilities, including provisions for payment of charges or fees related thereto. -1- Section 4: Exceptions. Except as expressly provided in Section 5 hereof, the provisions of this Ordinance shall apply to all properties in the District, and no exception shall be provided for properties otherwise deemed exempt from payment of taxes or assessments by provisions of the State Constitution or statute, including properties awned by other public agencies or tax exempt organizations. Section 5: Exertions and Appeals. In recognition that certain legal parcels of real property exist within the District which are not connected to the District system and that other properties acquire considerably greater potable water than is ultimately discharged to the District's system, it is the intent of the District that said parcels be exempt totally or in part from the payment of charges as prescribed herein. Any property owner may appeal the assessment of the charges and 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 bill is mailed. All applications for rebate of the annual sewer service charge will be determined by the General Manager of the District, or his designee, who may grant a partial or full rebate or adjustment of the charge based on receiving satisfactory proof that an inequity exists between the amount and the amount of wastewater discharged to the District's systems. Such inequities may include, but are not limited to the following instances: (a) the use of the parcel differs from the use indicated by the charge; (b) no service connection to the District system exists from the parcel charged; (c) the principal water use is agricultural; (d) any other use wherein the amount of wastewater discharged to the District's system is significantly less on a regular basis than the -2- amount that would normally be expected to be discharged by the class of property in question. Section 6: Annual Charge Based of Fiscal Year. The sanitary sewer service charge established by this Ordinance shall remain in effect until such time as the rates adopted by the District ordinance are changed, and there shall be no proration of such charges. Section 7: Method of Collection. Pursuant to the authority granted by California Health and Safety Code Section 5473, all charges 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. In the event District determines that errors or inequities exist in the amount of charges to be collected by the County Tax Collector, District may submit a bill for any difference directly to the property owner. Said invoiced amount shall be due and payable within thirty (30) days of invoice date. Section 8: Credit for Industrial Permittees. A credit shall be allowed to all discharges permitted pursuant to Article 3 of Ordinance No. 104 in an amount equal to the annual sanitary sewer service charge established by Section 2 of this Ordinance. Said credit shall be made in the same manner as credit is allowed for ad valorem taxes pursuant to Section 302.6, 303.6 and 304.5(B) (4) of Ordinance No. 104. Section 9: Severability. If any provision 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 other circumstances shall not be affected. -3- Section 10: Effective Date. This Ordinance shall become effective July 1, 1986. .� Section 11. Ordinance No. 107 is hereby repealed on the effective date hereof, as it is inconsistent with the provisions of this Ordinance. Section 12: 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." PASSED AND ADOPTED by the Board of Directors of County Sanitation District No. 1 of Orange County, California, at a regular meeting held Chairmen of the Board of Directors, County Sanitation District No. 1 of Orange County, California Secretary, Board of Directors of County Sanitation District No. 1 of Orange County, California -4- TABLE 'A' SINGLE UNIT PARCELS CONNECTED METER SIZE 1986-87 ANNUAL FEE 5/8" and 3/4" $ 1" and ld" 2" 3" 4" 6" If a parcel contains more than one water meter, then the charge applicable to each meter shall be added together and the sum levied against the parcel. -5- MEETING DATE June 4Y 1986 TIME S:OO IJ.RI.DISTRICT$ 1 DISTRICT 1 JOINT BOARDS (SALTARELLI)...MOESTEREY...t (MANDIC).........BAILEY...... (CRANK)........HANSON...... (MURPHY).........BEVERAGE...._ (LUXEMBOURGER).GRISET...... (ZIEGLER)........BUCK........ (WIEDER).......STANTON..... (NORBY)........:.CATLIN...... _ (PERRY)..........CULVER...... DISTRICT 2 (SALTARELLI)'.....EDGAR....... �Y (REESE)..........GRIFFIN..... (NORBY)........CATLIN......_ _ . (LUXEMBOURGER)...GRISET...... (ZIEGLER)......BUCK........� _ � (CRANK)..........HANSON...... (LUXENBOURGER).GRISET......_ - - (COX)............HART........ (SILZEL).......KANANAMI...._ (SALTARELLI).....HOESTEREY..._ (MEDEL)........MAHONEY..... (SILZEL).........KAMANAMI....� (BEVERAGE).....MURPHY...... _ (SALTAAELLI).....KENNEDY..... (SCOTT)........HEAL........ _ _ (MEDEL)..........MAHONEY..... (CULVER).......PERRY....... (COX)............MAURER......� (OVERHOLT).....ROTH........ _ (BAKER)..........MILLER...... (BEYER)........SMITH....... (BEVERAGE).......MURPHY...... (MIEDER).......STANTON..... _ (SCOTT)..........NEAL........ (NELSON).......SUTTON......� I BUTTON).........NELSON...... (LACAYO).........PARTIN...... DISTRICT 3 (CULVER).........PERRY....... (COX)............PLUMMER..... (LACAYO).......PARTIN......- _ - (NELSON).........POLLS....... (NELSON).......POLIS ......- _ - (MIEDER).........RILEY....... (MANDIC).......BAILEY...... _ (BROWNELL).......RISHER...... (NORSY)........CATLIN...... _ (OVERHOLT).......ROTH... . .... (PERRY)........CULVER...... _ _ (PACE)...........SAPIEN...... (REESE)........GRIFFIN..... _ (WILES)..........SIEFEN...... (LUXEMBOURGER).GRISET......� _ (BEYER)..........SMITH....... (MEDEL)........MAHONEY.....� (WIEDER).........STANTON.....� (SCOTT)........NEAL........� _ _ (NELSON).........SUTTON...... (SUTTON).......NELSON...... _ _ (MILLER).........SWAN........ (BROWNELL).....RISHER......� _ _ (SELVAGGI).......SYLVIA...... (OVERHOLT).....ROTH........� (FINLEY).........THOMAS......� (PACE).........SAPIE....... (GALLACHER/GREEN)YANNER......� (WILES)........S IEFEN......� (MIEDER).......STAHTON.:...- (SELVAGGU.....SYLVIA......- _ _ STAFF: DISTRICT 5 SYLVESTER...✓ CLARKE...... (COX)..........HART........_ _ _ DAWES....... �V (COX)..........MAURER......_ _ _ ANDERSON...• (WIEDER).......STANTON....._ - - BUTLER...... BROWN........ DISTRICT 6 BAKER....... KYLE........ (GALLACHER)....MANNER......_ _ . VON LANGEN (COX)..........PLUMMER....._ _ _ MI NSOR......_ (VIEDERI.......STANTON....._ _ - STREED......_�� CLAWSON..... DISTRICT 7 00 TEN....... LINDER...... (SALTARELLI)...EDGAR......._ (BAKER)........MILLER...... (LUXEMBOURGER).GRISET......_ _ _ (COX)..........WIURER......_ _ OTHERS: WOODRUFF.... (BEYER)........SMITH......._ _ _ ATKINS......� (MIEDERI.......STANTON....._ _ _ HOMENER.....� (GREEN)........KANNER......- - _ HOWARD...... HUNT........ DISTRICT 11 KEITH....... KNOPF....... _ (MANDIC).......BAILEY...... _ LE BLANC...._ (MIEDER).......STANTON..... LINDSTROM..._ (FINLEY).......THOMAS......� _ LYNCH......._ MARTINSON..._ r DISTRICT 13 PEARCE...... MASON....... (NELSON).......SUTTON......_ _ _ YOUNG....... (MURPHY).......BEVERAGE...._ (OVERHOLT).....ROTH........_ (BEYER)........SMITH......._ (WIEDER).......STANTON....._ DISTRICT if AKER)........MILLER......_ MILLER).......SWAN........_ (SALTARELLI)...KENNEDY....._ (WIEDER).......RILEY......._ (MIEDER).......STANTO......_ 05/15/86 COUNTY SANITATION DISTRICT NO. 1 OF ORANGE COUNTY, CALIFORNIA MINUTES OF ADJOURNED MEETING June 4, 1986 - 5:00 P.M. 10844 Ellie Avenue Fountain Valley, California Pursuant to the adjournment of the adjourned regular meeting of May 28, 1986, the Board of Directors of County Sanitation District No. 1 of Orange County, California met in an adjourned meeting at the above hour and date in the District's Administrative Office. The Chairman called the meeting to order at 5:25 p.m. The roll was called and the Secretary reported a quorum present. DIRECTORS PRESENT: Ron Hoesterey, Chairman, Robert Hanson, Dan Griset DIRECTORS ABSENT: Roger Stanton STAFF MEMBERS PRESENT: J. Wayne Sylvester, General Manager, Rita J. Brown, Secretary, William H. Butler, Gary Streed OTHERS PRESENT: Thomas L. Woodruff, General Counsel + • � r t � r. � * w r � t Staff report on long-range The staff reviewed the long-range financial projections and statue of financial plan that had been program implementation implemented iri 1984-85 which included the following fee schedule to fund the District's requirements: Connection Fees Effective 1/01/85 Single-Family Multi-Family Commercial/Ind/ Fee Type Residential Residential Governmental/Other One-time Connection $500/Dwelling $500/Dwelling $100/1,000 sq.ft. Fee Unit Unit of building User Fees Effective 7/01/85 Water Meter Size Annual Fee 5/8" and 3/4" $26.40 1" and 1}" 52.50 2" 105.00 3" 210.00 4" 420.00 �.,/ 6" 840.00 06/04/86 This long-range financial program of connection fees to finance facilities expansion and supplemental user fees to make up the shortfall of ad valorem tax revenues was established to provide the additional financing required for both operations, maintenance, rehabilitation and major facilities rehabilitation work. The program was adopted after considerable study to avoid a projected long-range funding shortfall in revenues required to finance the District's operating expenses, which were escalating due to the rising cost of advanced treatment as well as construction of master-planned treatment facilities improvements. At the time the program was adopted it was understood that rates would have to be progressively increased to meet the long-term needs. The staff reviewed the updated projections which still reflect funding shortfalls based on the current rate structure. Although the recent formation of new District 14 has resulted in the District receiving some capital funds for its share of the new District's purchase of capacity in the joint treatment and disposal facilities and reduced District 1's proportionate share of future capital expansion of the joint facilities, the positive financial impacts of District 14's formation are offset by the Joint Boards' concurrent shift to a 1002 flow-based method of allocating ownership share of joint treatment works which increased District 1's required equity. The reason for this increase is District 1's lower proportionate tax base which was previously a factor in calculating its joint works equity prior to the change to a method that uses only flow. Based on current projections, the District will have to increase its rate structure over the next five years to generate additional revenues to ensure its financial integrity. Staff pointed out many economic factors could affect the rate structure requirements over the next several years. However, the staff evaluates the District's financial position each year to determine the impact of changing conditions and thus, modifications or delays in fee increases in future years could be accommodated if appropriate. Following further discussion of the financing alternatives, it was moved, seconded and duly carried: That the connection fee schedule be increased as follows: Single/Multi-Family Commercial/Industrial Dwelling Unite Governmental/Other $1,000/Dwelling Unit $200/1,000 Sq. Ft. of Building FURTHER MOVED: That the existing user fee schedule be retained in effect for the next fiscal year. Staff was directed to evaluate the long-term financial projections again prior to consideration of the rate structures for 1987-88 and report back to the Board at that time. -2- 06/04/86 First reading of proposed It was moved, seconded and unanimously Ordinance No. 108 carried: That Ordinance No. 108, An Ordinance of the Board of Directors of County `/ Sanitation District No. 1 of Orange County, California, Amending Ordinance No. 104 Establishing Sewer Connection Charges for Use of District Sewerage Facilities, and Repealing Ordinance No. 105, be read by title only; and, FURTHER MOVED: That reading of said entire ordinance be, and is hereby, waived. Following the reading of Ordinance No. 108 by title only, it was then moved, seconded and duly carried: That Ordinance No. 108, An Ordinance of the Board of Directors of County Sanitation District No. 1 of Orange County, California, Amending Ordinance No. 104 Establishing Sever Connection Charges for Use of District Sewerage Facilities, and Repealing Ordinance No. 105, be introduced and passed to the second reading on June 11, 1986 at 7:30 p.m., at the District's administrative office. Adjournment Moved, seconded and duly carried: That this meeting of the Board of Directors of County Sanitation District No. 1 be adjourned. The Chairman then declared the meeting so adjourned at 5:50 p.m., June 4, 1986. Secretary, Board of Directors County Sanitation District No. I of Orange County, California -3- �.r C0UNrY SANI=ON DISTRICT NO. 1 OF aW4GE ODUYN, CALIFORNIA MINUTES OF THE ADJQIMM REGULAR MEETING MAY 28, 1986 - 4:00 P.M. 10844 Ellis Avenue Fountain Valley, California r r r r r r r r r r r r Adjournment of meeting This 28th day of May, 1986, at by Secretary 4:00 p.m., being the time and place for the Adjourned Regular Meeting of County Sanitation District No. 1 of Orange County, California, and these not being a quorum of said Board present, the meeting of District No. 1 was `.✓ thereupon adjourned by the Secretary to 5:00 p.m., Wednesday, June 4, 1986, at the Districts' Administrative Office to consider revisions to the District's long-range financial program. Secretary of tte Board of Directors County Sanitation District No. 1 of Orange County, California COO= SANITATION DISTRICT NO. 1 OF OE=GE 0ORM, CALIFORNIA MINUTES OF THE AWOMUM RIDaILAR MEEPING MAY 28, 1986 - 4:00 P.M. 10844 Ellis Avenue Fountain Valley, California Adjournment of meeting This 28th day of May, 1986, at by Secretary 4:00 p.m., being the time and place for the Adjourned Regular Meeting of County Sanitation District No. 1 of Orange County, California, and there `d not being a quorum of said Board present, the meeting of District No. 1 was thereupon adjourned by the Secretary to 5:00 p.m., Wednesday, June 4, 1986, at the Districts' Administrative Office to consider revisions to the District's long-range financial program. Secretary of ttre Board of Directors County Sanitation District No. 1 of orange County, California MEETING DATE May 28, 1986 TIME 4 : 00 Pm DISTRICT; 1 DISTRICT 1 — — ]MINT SHERDS — — (SALTKRELLI.. ..HOESTEREY... ✓ �'"H'^g (MUNOIC).... .....BAILEY...... (CRENM)........HENSON...... ✓ (MURPHY))........BECK RAGE...._ I^ (WIEDEROURGER..STAiET TON. . ... $ � (NORSY c..... .....BUCK. .. . m (a'IE DER).......STANTON. ... . (NORBY).... . .....CULIER. .. ... _ (PERRYILLI).. . ..EDGAR.... .. . : DI$iRIC7,2 (REESE)...U.....EDGER.... .. . \� (REESE)... .... ...GR13ET...... _ (HERBY).)......CATLBUCK IN...... (CRANK)..........HANSON......_ (LIEGLER)......BUCV........_ (CRANK)..........HART ON......_ (LUXEMBO URGER).GRISET.. . ..._ (COX)............HART..... .. . (SILIEU.......MAHONEY..... (SILIEL)........ .KENNEDY!...._ (BEVERAGE).... .MURPHY NEAL...... .. (SALTER.. .. . .....MENNEEY. ... . (CULVER)..... ..NEAR...... .._ _ _ (CEDE.. .. .. .... ..MAURER....... .... (BEYER)........ROTH MIT ..... .. (BEVER)GE ).......MILLER. ..... (WIEDER........SMITH... . ..._ (BEVERAGE).... . ..MURPHY NEAL........ (MESON).......STANTON (SUTTON). ........NEAR........_ (NELSON)).......SU TTON......_ (SUTTON).........NELSON...... (LULVER).........PERT.. ... . .. DISTRICT 3 (COX)ER).........PERRY MMER. . ..._ _ (COLS)...........POLLS.... ... (NELSON).......PERTSN.... .. (NELSON).... .....RILIS... . ..._ (NELSON).......POLLS ... ... (WIEDER).. . ......RISNER... .... _ (MANDIC).......BAILEY IN......_ (OVERHOLT).......RITH.... .... (HERBY)........CULVER...... (PACE)...).......ROTH........ (REESE)........GRIFFIN... .. (PALE)...........SAPIEN....... _ (REESE)... ... ..GRIFFT.... .._ _ _ (WINES)..........SIEFEN (LUXEMSOURG....GRISET MAHONEY..... (LAYER)..........SMITH....... (MEDAL)........NEAL.... .. .. _ _ (NELSON).........STANTON UTTON...... _ (SUTTON).......NELSON.. .. .._ (NELSON).........SUIT ON......_ _ (BROWNE L).....NELSON...... _ _ (HILLER).........SWAN........ (OVERHOLT).....ROTH........_ _ _ (FINLEY).........SYLVIA THOMAS...... (PACE) L T I.....ROTH........_ _ _ (FINLEY). ........THOMES...... _ (PACE).........SAPIEN...... _ _ (GAIIACNER/GREEN)WAHNER...... _ (WILDS)........SIEFENTANTO ....._ (YIEDER).......STAN TON..... (SAL VEGGI).....SYIVIA.....,_ STAFF: DISTRICT 5 SYLVESTER..._ CLARKE...... ICOX)..........HART..... ..._ DACES....... \� (COX)..........MAURER...... _ _ ANDERSON...._ (WIEDER).......STANTON....._ _ _ BUTLER...... BROWN....... DISTRICT 6 BAKER....... KYLE........ (GALLACHER)....MAHNER......_ _ _ VON LANGEN (COX)..........PLUMMER....._ _ _ WINSOR.... .. (WIEDER).......STANTON....._ _ _ STREED...... CLAWSON..... DISTRICT 7 OOTEN....... LINDER...... (SALTARELLI)...EDGAR......._ (BAKER)........MILLER......_ (LUXEMBOURGER).GRISET......_ _ _ (COX)..........MAURER.. .... OTHERS: YOODRUFF...._ (BEYER)........SMITH... .... ATKINS...... (WIEDER).......STANTON. ...._ _ _ HOHENER..... (GREEN)........WARNER. ....._ _ _ HOWARD...... HUNT........ DISTRICT 11 KEITH....... KNOPF.... ... (MANDIC).......BAILEY......_ _ _ LE BLANC— _ (NIEDER).......STANTON....._ _ _ LINDSTROM..._ (FINLEY).......THOMAS...... LYNCH......._ MARTINSON..._ DISTRICT 13 PEARCE...... MASON....... (NELSON).......SUTTON......_ _ _ YOUNG....... (MURPHY).......BEVERAGE... ._ (OVERHOLT).....ROTH........_ (BEYER)........SMITH......._ (MIEDER).......STANTON....._ DISTRICT 16 (BAKER)...:....MILLER..... ._ _ _ (MILLER).......SWAN........_ _ _ (SALTARELLII...KENNEDY... .. _ (WIEDER)..... ..RILEY..... .. (WIEDER).......STANTON..... 05/15/86 Q6111A.- COUNTY SANITATION DISTRICTS � '" OF ORANGE COUNTY, CALIFORNIA P.O. BOX 8127, FOUNTAIN VALLEY,CALIFORNIA 82728-8127 o9�.a. ,e 10844 ELLIS,FOUNTAIN VALLEY,CALIFORNIA 02708-7018 )714)882-2411 May 21 , 1986 NOTICE OF ADJOURNED REGULAR MEETING DISTRICT NO. 1 WEDNESDAY, MAY 28, 1986 - 4: 00 P.M. 10844 Ellis Avenue Fountain Valley, California Pursuant to adjournment of the regular meeting of May 14, 1986 , the Board of Directors of County Sanitation District No. 1 will meet in an adjourned regular meeting at the above hour and date to consider revisions to the District' s long-range financial program. Secretary BOARDS OF DIRECTORS County Sanitation Districts Post Office sox 8127 Of Orange County, California 10844 Ellis Avenue Fountain Valley, Calif., 92708 Talephe Area Code 714 DISTRICT No. 1 9540-291 62-2411 AGENDA ADJOURNED REGULAR MEETING WEDNESDAY, MAY 28, 1986 — 4: 00 P.M. (1) Roll Call ( 2) Consideration of items re long-range financial program: (a) Staff report on long-range financial projections and status of program implementation. (b) Discussion (3) Consideration of action on items relative to proposed Ordinance No. 108, An Ordinance of the Board of Directors of County Sanitation District No. 1 of Orange County, California, Amending Ordinance No. 104 Establishing Sewer Connection Charges for Use of District Sewerage Facilities, and Repealing Ordinance No. 105 . (a) Report of General Counsel re proposed ordinance. (b) Consideration of motion to read Ordinance No. 108 , An Ordinance of the Board of Directors of County Sanitation District No. 1 of Orange County, California, Amending Ordinance No. 104 Establishing Sewer Connection Charges for Use of District Sewerage Facilities, and Repealing Ordinance No. 105, by title only, and waive reading of said entire ordinance (must be adopted by unanimous vote of Directors present) . (c) Consideration of motion to introduce Ordinance No. 108, An Ordinance of the Board of Directors of County Sanitation District No. 1 of Orange County, California, Amending Ordinance No. 104 Establishing Sewer Connection Charges for Use of District Sewerage Facilities, and Repealing Ordinance No. 105, and pass to second reading on June 11, 1986 . ( 4) Consideration of action on items relative to proposed Ordinance No. 109, An Ordinance of the Board of Directors of County Sanitation District No. 1 of Orange County, California, Amending Ordinance No. 106 Establishing Sanitary Sewer Service Charges, and Repealing Ordinance No. 107. (a) Report of General Counsel re proposed ordinance. (b) Consideration of motion to read Ordinance No. 109, An Ordinance of the Board of Directors of County Sanitation District No. 1 of Orange County, California, Amending Ordinance No. 106 Establishing Sanitary Sewer Service Charges, and Repealing Ordinance No. 107, by title only, and waive reading of entire ordinance (must be adopted by unanimous vote of Directors present) . (c) Consideration of motion to introduce Ordinance No. 109, An Ordinance of the Board of Directors of County Sanitation District No. 1 of Orange County, California, Amending Ordinance No. 106 Establishing Sanitary Sewer Service Charges, and Repealing Ordinance No. 107, and pass to second reading on June 11, 1986 . (5) Other business and communications, if any (6) Consideration of motion to adjourn `.✓ -2- MANAGER'S AGENDA REPORT County Sanitation Distdcb vo.t Offs a Box 8127 10844 Ellis Avenue of Orange County, California Fountain Valley, Calif., 92708 T.1.,F• ws Area Code 714 DISTRICT NO. 1 962244111 MANAGER'S REPORT TO DISTRICT NO. 1 DIRECTORS MEETING DATE: MAY 28, 1986 Update on long-range financial program and consideration of amendments to existing sewer connection charges and sanitary sewer service charges. BACKGROUND Last year, the Board authorized implementation of a long-range financial plan and approved the following fee schedules to fund the District's requirements: Connection Fees Effective 1/l/85 Single-Family Multi-Family Cofmnercial/Ind/ Fee Type Residential Residential Governmental/Other One-time Connection $500/Dwelling $500/Dwelling $100/1,000 Sq. Ft. Fee Unit Unit of Building User Fees Effective 7/1/85 Water Meter Size Annual Fee 5/8e + 3/4e $26.40 1" + 1h. 52.50 2e 105.00 3" 210.00 4" 420.00 6" 840.00 This long-range financial program of connection fees to finance facilities expansion and supplemental user fees to make up the shortfall of ad valorem tax revenues was established to provide the additional financing necessary for District operations, maintenance, rehabilitation and expansion activities. The program was adopted after considerable study to avoid a projected long-range funding shortfall in revenues required Page Two May 28, 1986 _ to finance the District's operating expenses, which were escalating due to the rising cost of advanced treatment as well as construction of master-planned treatment facilities improvements. STATUS OF DISTRICT'S LONG-RANGE FINANCIAL PROGRAM Schedule A (attached) provides an overview of the District's financial position for the next five years based on the existing fee structure. Although the District could continue to operate through fiscal year 1986-87 and remain in a positive cash position at the end of the year (refer to line 51, Fund Balance: $4,009,000 in 1986-87) , in the following year the District will end up in a deficit position by year-end (line 51: ($249,000) in 1987-88) if no increases are made in the current fee structure. At the end of the five-year period presented on Schedule A, the District would face a deficit of approximately $18.75 million. Although the recent formation of new District 14 has resulted in the District receiving approximately $3,970,000 from the new district's purchase of capacity in the joint treatment and disposal facilities and reduced District l's proportionate share of future capital expansion of the joint facilities, the positive financial impacts of District 14's formation are offset by the Joint Boards' concurrent shift to a 100% flow-based method of allocating ownership share of joint treatment works which increased District l's required equity. The reason for this increase is District 1's lower proportionate tax base which was previously a factor in calculating its joint works equity prior to the change to a method that uses only flow. Based on current projections, the District will have to more than double its rate structure over the next five years to generate additional revenues to ensure its financial integrity. Adoption of a systematic plan and schedule to do so will provide for a stabilized long-range financial plan with annual rate increases sufficient to meet its funding requirements. Immediate implementation of a revised fee structure will result in smaller annual increases than if the increases are delayed. Many economic factors could affect the rate structure requirements over the next several years. However, the staff evaluates the District's financial position each year to determine the impact of changing conditions and thus, modifications or delays in fee increases in future years could be accommodated if appropriate. The following recommendation is presented as a starting point for consideration of fee increases for 1986-87. CONNECTION FEES Staff is recommending that the Board consider raising the District's one-time connection fees as presented in the following table: Single/Multi-Family Commercial/Industrial Dwelling Units Governmental/Other Existing Fee $500/Dwelling Unit $100/1,000 Sq. Ft. of Building Recommended Fee $1,000/Dwelling unit $200/1,000 Sq. Ft. of v Building Page Three May 28, 1986 The proposed increase will generate an additional $600,000, including fees and interest income. These funds will be used to help finance the construction projects identified on the enclosed Schedule of District Collection System Projects (Schedule B) , as well as the District's share of the master-planned expansion of the joint treatment facilities. Proposed Ordinance No. 108 includes the recommended fee increases. SUPPLEMENTAL USER FEES Schedule C presents the District's financial position should the Board adopt the increase in the connection fee as well as a schedule 20% annual increase in the District's supplemental user fees. If the Board chooses to increase the supplemental user fees by 20% per year for the next five years, the additional fees and interest income over the five years will total approximately $3.9 million. Fee Schedule (20% Annual Increase) Meter Size 1985-86* 1986-87 1987-88 1988-89 1989-90 1990-91 5/8" 6 3/4" 26.40 31.68 36.96 42.24 47.52 52.80 1" a lh" 52.50 63.00 73.50 84.00 94.50 105.00 2" 105.00 126.00 147.00 168.00 189.00 210.00 3" 210.00 252.00 294.00 336.00 378.00 420.00 4" 420.00 504.00 588.00 672.00 756.00 840.00 6" 840.00 1,008.00 1,176.00 1,344.00 1,512.00 1,680.00 + Existing Fee Schedule Annual Supplemental User Fee Revenues 961,000 1,154,000 1,385,000 1,662,000 1,995,000 2,394,000 Staff will review the financial projections and financial plan alternatives with the Board at the meeting. In the event the Board wishes to initiate an ordinance raising user fees beginning in fiscal year 1986-87, staff has agendized Ordinance No. 109 (Agenda Item No. 4) . Staff will review the proposed connection fee increase and supplemental user fee alternatives and the accompanying cash flow projections in greater detail with the Board at the meeting. CCU SWSAffi1 R.�1D. 1 9/E/B6 SCSEDVLE B �8 C!�'C[fI1d.TS19@ID9 PRIG \�Rv ecC 'Atal CI.P. 1986 1987-0 198689 1989-90 1990-n 1991-92 199M3 Stnta Ne 01vik See[ ]00.000 Lpr000 M,000 ]00.000 ]W,000 ]00.000 900,000 im,000 LI0.000 1p1,000 �y {p�Iy�7p�I'�yIDRJ. 810.000 310.000 ]00.000 L10.000 L10.000 ]p0,000 llp.000 70p,000 fG tte FINeI� RE : AGENDA ITEM NO , 3 ORDINANCE NO. 108 AN ORDINANCE OF THE BOARD OF DIRECTORS OF COUNTY SANITATION DISTRICT NO. 1 OF ORANGE COUNTY, CALIFORNIA AMENDING ... ORDINANCE No. 104 ESTABLISHING SEWER CONNECTION CHARGES FOR USE OF DISTRICT SEWERAGE FACILITIES, AND REPEALING ORDINANCE NO. 105 The Board of Directors of County Sanitation District No. 1 of Orange County, California, does hereby ORDAIN as follows: Section 1. Section 702 of Ordinance No. 104 is hereby amended to read: 702 DISTRICT NO. 1 CONNECTION CHARGES 1. District Connection Charges No application for a permit for a connection to a District sewerage facility or to any sewerage facility which discharges into a District sewerage facility shall be considered until a District connection charge is paid by the applicant. No connection permit shall be issued unless there is an established use of the property to be served or a valid building permit issued which established the use of said property. The following District connection charges are hereby established comiencing July 1, 1986, and shall be paid to the District or to an agency designated by the District: (a) Connection charge for new construction, dwelling buildings: For each new dwelling unit constructed, the connection charge shall be $1,000 per dwelling unit. (b) Connection charge for existing dwelling buildings: For the connection of each existing dwelling building, the connection charge shall be $1,000 per dwelling unit. (c) Connection charge for new construction and existing -1- structures, other than dwelling buildings: For all other new construction, including, but not limited to, commercial and industrial buildings, hotels and motels and public buildings, the connection charge shall be $200 per 1,000 square feet of floor area contained within such construction, provided that the minimum connection charge for such new construction shall be $1,000. (d) Connection charge for repla�t buildings: For new construction replacing formes buildings, the connection charge shall be calculated on the same basis as provided in paragraphs (a) and (c) above. If such replacement construction is commenced within two years after demolition or destruction of the former building, a credit against such charge shall be allowed and shall be the equivalent connection charge for the building being demolished or destroyed, calculated on the basis of current charges for new construction. In no case shall such credit exceed the connection charges. (e) Connection charges for additions or alterations of existing buildings: In the case of structures where further new construction or alteration is made to increase the occupancy of family dwelling buildings or the area of buildings to be used for other than family dwelling buildings, the connection charge shall be $1,000 for each dwelling unit added or created, and, in the case of new construction other than family dwelling buildings, it shall be $200 per 1,000 square feet of -2- additional floor area contained within such new construction, provided such new construction shall contain additional plumbing fixture units. Section 2. This Ordinance shall be effective July 1, 1986. Section 3. Ordinance No. 105 is hereby repealed on the effective date hereof, as it is inconsistent with the provisions of this Ordinance. section 4. The Secretary of the Board is directed to certify to the adoption of this Ordinance and cause it to be published in a newspaper of general circulation within the County. PASSED AND ADOPTED BY THE Board of Directors of County Sanitation District No. 1 of Orange County, California, at a regular meeting held Chairman of the Board of Directors, County Sanitation District No. 1 of Orange County, California ATTEST: Secretary, Board of Directors of County Sanitation District No. 1 of Orange County, California -3- ;,-.RE: AGENDA ITEM No. 4 ORDINANCE NO. 109 AN ORDINANCE OF THE HOARD OF DIRECTORS OF COUNTY SANITATION DISTRICT NO. 1 OF ORANGE all M, CALIM1NIA, FN7 Mrw. 1n/ ORDINANCE NO. 106 ESTABLISHING SANITARY SEWER SERVICE CHARGES, AND REPEALING ORDINANCE NO. 107 The Board of Directors of County Sanitation District No. 1 of Orange County, California, does hereby ORDAIN that Ordinance No. 106 is hereby amended to read, as follows: "Section 1: Purpose. The purpose of this Ordinance is to establish a system of sanitary sewer service charges required to be paid by property owners for the services and facilities furnished by the District in connection with its sanitation treatment corks and sewage collection system. Revenues derived under the provisions of this Ordinance shall be used for the acquisition, construction, reconstruction, aaintenance and operation of the sewage collection facilities and wastewater treatmrent and disposal facilities of as the District, together with costs of admdnistration and provisions for necessary reserves. Section 2: Annual Sanitary Sewer Service Charge. Cam:encing July 1, 1986, each parcel of real property located within the District which is iirproved with structures designed for residential, camiercial or industrial use and connected to the District's system, shall pay a sanitary sewer service charge based on the average volume of wastewater discharged by a class of users in the sum or sums as set forth in Table A of this Ordinance. Section 3: Application of Ordinance. The provisions of this Ordinance shall be in addition to Ordinance No. 104 and 105, as amended, of the District establishing regulations for use of District's sewage facilities, including provisions for payment of charges or fees related thereto. -1- Section 4: Exceptions. Except as expressly provided in Section 5 hereof, the provisions of this Ordinance shall apply to all properties in the District, and no exception shall be provided for properties otherwise deemed exempt from �.r payment of taxes or assessments by provisions of the State Constitution or statute, including properties caned by other public agencies or tax exalt organizations. Section 5: Exemption and Appeals. In recognition that certain legal parcels of real property exist within the District which are not connected to the District system and that other properties acquire considerably greater potable water than is ultimately discharged to the District's system, it is the intent of the District that said parcels be exempt totally or in part from the payment of charges as prescribed herein. Any property owner may appeal the assessment of the charges and 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 bill is mailed. All applications for rebate of the annual sewer service charge will be determined by the General Manager of the District, or his designee, who may grant a partial or full rebate or adjustment of the charge based on receiving satisfactory proof that an inequity exists between the amount and the amount of wastewater discharged to the District's systems. Such inequities may include, but are not limited to the following instances: (a) the use of the parcel differs from the use indicated by the charge; (b) no service connection to the District system exists from the parcel charged; (c) the principal water use is agricultural; (d) any other use wherein the amount of wastewater discharged to the District's system is significantly less on a regular basis than the -2- amount that would normally be expected to be discharged by the class of property in question. Section 6: Annual Charge Based on Fiscal Year. The sanitary sewer service `.r charge established by this Ordinance shall remain in effect until such time as the rates adopted by the District ordinance are changed, and there shall be no proration of such charges. Section 7: Method of Collection. Pursuant to the authority granted by California Health and Safety Cade Section 5473, all charges 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. In the event District determines that errors or inequities exist in the amount of charges to be collected by the County Tax Collector, District may submit a bill for any difference directly to the property owner. Said invoiced amount shall be due and payable within thirty (30) days of invoice date. Section 8: Credit for Industrial Permittees. A credit shall be allowed to all discharges permitted pursuant to Article 3 of Ordinance No. 104 in an amount equal to the annual sanitary sewer service charge established by Section 2 of this Ordinance. Said credit shall be made in the same manner as credit is allowed for ad valorem taxes pursuant to Section 302.6, 303.6 and 304.5(B) (4) of Ordinance No. 104. Section 9: Severability. If any provision 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 other circumstances shall not be affected. -3- Section 10: Effective Date. This Ordinance shall became effective July 1, 1986. Section 11: Ordinance No. 107 is hereby repealed on the effective date .... hereof, as it is inconsistent with the provisions of this Ordinance. Section 12: 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." PASSED AMID ADOPTED by the Board of Directors of County Sanitation District No. 1 of Orange County, California, at a regular meeting held Chairman of the Board of Directors, County Sanitation District No. 1 of Orange County, California Secretary, Board of Directors of County Sanitation District No. 1 of Orange County, California -4- Y' TABLE 'A' SIN3LE UNIT PARCELS CONNECTED PETER SIZE 1986-87 ANNUAL FEE 5/8" aril 3/4" $ 1" and 1}" 2" 3" 4" 6" If a Parcel contains more than one water meter, then the charge applicable to each meter shall be added together and the scan levied against the parcel. -5-