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Home My WebLink About1986-07-30 District 6 COUNTY SANITATION DISTRICTS I1 OF ORANGE COUNTY, CALIFORNIA 1�1111 P.O.BOX 8127.FOUNTAIN VALLEY,CALIFORNIA 92728-8127 10844 ELLIS.FOUNTAIN VALLEY, CALIFORNIA 92708-7018 (714)98&2411 July 23 , 1986 NOTICE OF SPECIAL MEETING DISTRICT NO. 6 WEDNESDAY, JULY 30, 1986 - 4:30 P.M. 10844 Ellis Avenue Fountain Valley, California I am calling a special meeting of the Board of Directors of County Sanitation District No. 6 of Orange County, California, at the above hour and date. The purpose of the meeting is to consider revisions to the District's long-range financial program. /s/ James A. Wahner Chairman BOARDS OF DIRECTORS County Sanitation Districts Post Office Box 8127 of Orange County, California 70844 Ellis Avenue Fountain Valley, Calif., 92708 Telephone.: DisrRicr No. 6 Area 5400 9e1014 962-2411 AGENDA SPECIAL MEETING WEDNESDAY, JULY 30, 1986 - 4: 30 P.M. (1) Roll call ( 2) Consideration of items re long-range financial program: (a) Staff report on capital financing program projections (b1 Discussion (3 ) Consideration of actions relative to Ordinance No. 610, An Ordinance of the Board of Directors of County Sanitation District No. 6 of Orange County, California, Amending Ordinance No. 606 Pertaining to Sewer Connection Charges: (Copy enclosed with Directors' agenda material) (a) Report of General Counsel re proposed ordinance. (b) Consideration of motion to read Ordinance No. 610, An Ordinance of the Board of Directors of County Sanitation District No. 6 of Orange County, California, Amending Ordinance No. 606 Pertaining to Sewer Connection Charges, 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. 610, An Ordinance of the Board of Directors of County Sanitation District No. 6 of Orange County, California, Amending Ordinance No. 606 Pertaining to Sewer Connection Charges, and pass to second reading on August 13, 1986 . (4) Other business and communications, if any (5) Consideration of motion to adjourn MANAGER'S AGENDA REPORT County Sanitation Districts Post Office Box 8127 of Orange County, California 10844 Ellis AvenueFountain Valley, Calif., 92708 Tele96mes: Area Coda 714 40.29 DISTRICT NO. 6 962-24701 : MANAGER'S REPORT TO DISTRICT NO. 6 DIRECTORS MEETING DATE: JULY 30, 1986 - 4:30 P.M. At the May 21, 1986 adjourned meeting, the Board of Directors of District No. 6 modified its Long-range financial program to enable the District to provide additional revenues to help meet the District's financial obligations over the next five years. The Board approved the following ordinances and fee schedules for 1986-87 at the meeting: Ordinance No./ Single-Family Multi-Family Commercial/Ind/ Effective Fee Type Residential Residential Governmental Date 608-One-Time $1,000/Dwelling $1,000/Dwelling $200/1,000 Sq. July 1, 1986 Connection Fee Unit Unit Ft. 609-Annual User $29.04 per $17.04 per $20.79 per 1,000 July 1, 1986 Fee dwelling unit dwelling unit sq. ft. of building This long-range financial program was adopted after considerable study to avoid a then-projected $1.4 million shortfall in revenues required to finance the District's operating and capital expenses, which are escalating due to rising costs of new advanced treatment facilities and more stringent EPA/AQMD regulations as well as construction of master-planned facilities improvements. The one-time connection fee is collected for the District by the Costa Mesa Sanitary District, City of Newport Beach and the County of Orange when building permits are issued, and these agencies retain 58 for their services. The annual user fee is collected on the property tax bill as this is the most cost-effective method of collection. The District has also reviewed use of long-term debt financing alternatives to provide additional capital revenues needed beyond the 1990/91 planning ????7??. District 6, along with Districts 1,2,3,5 and 14, directed the staff to evaluate sale of certificates of participation to raise sufficient capital to pay for its joint works capital construction requirements for the next three years as allowed under existing Federal tax laws. Based upon the financial data presented to the Board, on July 9th the Directors of District 6 elected not to participate in the long-term debt financing program. During the Board's deliberations and evaluation of participation in the long-term debt financing program, the Board considered the alternatives of immediate implementation of fee increases to raise additional capital and avoid the projected shortfall in the 1990's. The Chairman directed the staff to evaluate the impact of a 50% increase in connection fees in 1986-87 and report back to the Board as soon as possible. Page Two July 30, 1986 Schedule A, Statement of Projected Cash Flow, reflects the impact of a 50% increase in connection fees on the District's financial position over the next five years. Immediate implementation of the increased fees is expected to result in approximately $1.2 million in additional revenues from both the increased fees and higher interest earnings over the next five years. Schedule B reflects the District's financial position without the increase. A 50% increase in the connection fee schedule would increase District's one-time connection fees as presented in the following table: Single/Multi-Family Commeccial/Industrial Dwelling Units Governmental/Other Existing Fee $1,000 per dwelling $200 per 1,000 sq. ft. unit of building Proposed Fee $1,500 per dwelling $300 per 1,000 sq. ft. unit of building The additional funds will be used to finance master-planned District 6 projects and its share of joint works construction projects. Proposed Ordinance No. 610 includes the proposed fee increases. Staff will review the proposed connection fee increases and the cash flow projections ink greater detail with the Board at the meeting. ` a ORDINANCE NO. 610 AN ORDINANCE OF THE BOARD OF DIRECTORS OF COUNTY SANITATION DISTRICT NO. 6 OF �—. ORANGE COUNTY, CAIIFORNIA AMENDING ORDINANCE NO. 606 PERTAINING TO SEWER CONNECTION CHARGES The Board of Directors of County Sanitation District No. 6 of Orange County, California, does hereby ORDAIN as follows: Section 1. Section 702 of Ordinance No. 606 is hereby amended to read: 11702 DISTRICT NO. 6 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 convening September 12, 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 $1,500 per dwelling unit. (b) connection charge for existing dwelling buildings: For the connection of each existing dwelling building, the connection charge shall be $1,500 per dwelling unit. (c) Connection charge for new construction and existing structures, other than dwelling buildings: For all other new construction, including, but not limited -1- to, caunercial and industrial buildings, hotels and motels and public buildings, the connection charge shall be $300 per 1,000 square feet of floor area contained within such construction, provided that the minimum connection charge for such new construction shall be $1,500. (d) Connection charge for replacement buildings: For new construction replacing former 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 v 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 $1,500 for each dwelling unit added or created, and, in the case of new construction other than family dwelling buildings, it shall be $300 per 1,000 square feet of additional floor area contained within such new construction shall contain additional plumbing fixture units." -2- Section 2. Fees established by Section 702 shall be effective September 12, 1986. Section 3. 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 and said Ordinance shall be effective thirty (30) days after its adoption by the Board of Directors. PASSED AND ADOPTED BY THE Board of Directors of County Sanitation District No. 6 of Orange County, California, at a regular meeting held Chairman of the Board of Directors, County Sanitation District No. 6 of Orange County, California �./ ATTEST: Secretary, Board of Directors of County Sanitation District No. 6 of Orange County, California -3- MEETING DATA July 30, 1986 TIME 4:30 pm DISTRitis 6 - Special DISTRICT 1 JOINT BOARDS (SALTARELLI)...HOESTEAfY..._ (MANOIC).........BAILEY...... (CRANK)........HANSON......_ (MURPHY).........BEVERAGE...._ (LUXENSOUROER).GRISET......� (ZIEGLER)........BUCK........ (WEEDER).......STANTON.....� (NORSY)..........CATLIN...... (RISNER).........CLIFT.......� DISTRICT 2 (PERRY)..........CULVER...... (SALTARELLX).....EDGAR.......� (MOREY)........CATLIN......� (REESE)..........GRIFFIN..... (ZIEGLER)......BUCK........ (LUXEMSOURGER)...GRISET...... (LUXEMSOURGER).GRISET......� _ _ (CRANK)..........HANSON...... (SILZEL).......KAWAKAMI....� (COX)............MART........ (WEEEL)........MAHONEY.... (SALTARELLI).....HOESTEREY..._ (BEVERAGE).....MURPHY......� (SILZEL).........KAXANANI...._ (SCOTT)........NEAL........� (SALTARELLI).....KENNEDY..... (CULVER).......PERRY.......— — — (WEDEL)..........MAHONEY..... (OVERHOLT).....ROTH........� (COX)............MAURER...... (BEYER)........SMITH...... (BAKER)..........MILLER...... (WEEDER).......STANTON......— _ — (BEVERAGE).......MURPHY...... (NELSON).......SUTTON......� (SCOTT)..........NEAL........� (SUTTON).........NELSON...... DISTRICT 3 (LACAYO).........PARTIN......� (CULVER)..... PERRY....... (LACAYO).......PARTIN......— _ _ COX)............ PLUMMER..... (NELSON).......POLIS ...... _ _ (NELSON).........POLIS....... (MANDIC).......BAILEY......_ (OVERHOLT).......ROTH........� (HORSY)........CATLIN......� (PACE)...........SAPIEN...... (RISNER).......CLIFT......._ (WILES)..........SIEFEN...... (PERRY)........CULVER......� (BEYER)..........SMITH....... (REESE)........GRIFFIN..... (WEEDER).........STANTON.....� (LUXEMBOURGER).CRISET......� (NELSON).........SUTTON......� (WEDEL)....:...MAHONEY.....� (MILLER).........SWAN........ (SCOTT)........NEAL........— _ _ (SELVAGGI).......SYLVIA...... (SUTTON).......NELSON...... (FINLEY).........THOMAS...... (OVERHOLT).....ROTH........ _ _ (GREEN)..........KAMMER......� (PACE).........SAPIEN....... . (WILES)........SIEFEN......— WIDER).......STANTON.....— — (SELVAGGI).....SYLVIA......_ DISTRICT 5 STAFF. SYLVESTER... ✓ `►/ CLARKE...... (COX)..........HART........— — — DAWES.......:rd-7 (COX)..........MAURER......— — _ ANDERSON.... (WIEDER).......STANTON...... . _ BUTLER......Z BROWN.......JC DISTRICT 6 BAKER....... KYLE........ ( )....WANNER...... ✓ VON LANGEN (COX)..........PLUNHER.....� — — WINSOR...... (WIEDER).......STANTON..... STAGED........ CLAWSON..... DISTRICT 7 OOTEN....... LENDER...... (SALTARELLI)...EDGAR......._ _ _ OEGLIEUX...._ (BAKER)...... MILLER...... (LUXEMBOURGER).GRISET......_ (COX)..........MAURER......_ (BEYER)........SMITH........ (WEEDER).......STANTON....._ _ (GREEN)........WANNER......— — DISTRICT L1 (MANDIC).......BAILEY......_ _ — L� (WIEDER).......STANTON.....— — _ (FINLEY).......THOMAS....... . DISTRICT L3 OTHERS: 'WOOORUFF.... ✓ ATKINS...... (NELSON).......SUTTON...... _ MOHENER.....� (MURPHY).......aEVERAOE...._ HOWARD...... (OVERHOLT).....ROTH........— _ _ HUNT........ (BEYER)........SMITH....... KEITH......._ (WEEDER).......STANTON..... KNOPF......._ LE BLANC....� DISTRICT 14 LINDSTROM..._ \.wo, LYNCH....... (BAKER)........MILLER......— _ _ MARTINSON...� (MILLER).......SWAN......... . _ PEARCE......� (SALTARELLI)...KENNEDY....._ _ _ WASON....... (BEYER)........SMITH........ . . YOUNG....... (VIEDER).......STANTON....._ 07/10/86 DISTRICT NO. 6 SPECIAL MMTING NOTES - JOLY 30, 1986 @ 4:30 p.m. #2 - Staff report & discussion The General Manager briefly reviewed the recent actions of the District leading up to proposing adoption of a new ordinance increasing the District's connection fees. In June the staff had reported that the District should increase their use fee 10% annually. Subsequently, the Board of District 6 elected not to proceed with debt financing. Following that action, they directed the staff to prepare updated financial projections based on a 50% increase in the existing connection fee schedule to serve as a revenue source in lieu of the long-term debt financing. That has been done and was included in the agenda package. The Director of Finance reviewed of those proposed changes on the District's financial situation. He compared the total revenue and fund balances over the next five years indicated on Schedules A and B with and without the 50% increase in connection fees (from $1,000 to $1,500). The District would receive approximately $300,000 in additional interest income also. Bottom line shows $670,000 versus $1,800,000—approximately a $1.2 million improvement. Director Plummer asked how the staff figures out how many connection fees there will be in the next five years? Bill Butler advised that he actually goes to the City of Newport Beach and the Sanitary District and uses their proposed figures. Ruthelyn Plumper also commented regarding the Banning Ranch area to be developed. She indicated that the property owners were coning to the City within the next few weeks to present their development plan for the first 75 acres to be developed within the next five years. Tom Dawes indicated on a �./ map where this territory is located and confirmed that most of it is within District 6's boundaries. Ruthelyn further commented that the area along 15th Street will be having a considerable amount of development also. Thought the timing for increasing the connection fee was good in light of the upcoming developments. The Dir6ctors were also advised that one of the main reasons that the District finds itself in worse financial condition than last year was because of the loss of tax revenue from Hoag Hospital who won their appeal re being exert from , these taxes. -� MMM & SECONDED to introduce Ordinance No. 610 and pass to second reading on August 13, 1986. Motion carried. COUNTY SANITATION DISTRICT NO. 6 OF ORANGE COUNTY, CALIFORNIA MINUTES OF SPECIAL MEETING July 30, 1986 - 4:30 p.m. 10844 Ellis Avenue �..✓ Fountain Valley, California Pursuant to the call of the Chairman, the Board of Directors of County Sanitation District No. 6 of Orange County, California met in a special meeting at the above hour and date at the Districts' administrative office. The Chairman called the meeting to order at 4:30 p.m. The roll was called and the Secretary reported a quorum present. DIRECTORS PRESENT: James Wahner, Chairman, Ruthelyn Plummer DIRECTORS ABSENT: Roger Stanton STAFF MEMBERS PRESENT: J. Wayne Sylvester, General Manager, Rita J. Brown, Secretary, William H. Butler, Thomas M. Dawes, Gary Streed OTHERS PRESENT: Thomas L. Woodruff, General Counsel, Joint Chairman Don R. Griffin Staff report on capital financing- The staff reviewed recent actions program projections considered by Board to help fund the District's financial needs during the next five years. In May and June, 1986 the Board modified its long-range financial program to enable the District to provide additional revenues to help meet the District's financial obligations and adopted Ordinance No. 608 increasing the connection fee and Ordinance No. 609 increasing the annual use fee effective July 1, 1986. Concurrently, the Board had been considering issuance of long-term debt securities to partially finance the District's share of master planned joint works facilities. However, at a special meeting on July 9, 1986, after thoroughly evaluating the financing alternatives, the District elected not to proceed with long-term debt financing and directed the staff to prepare updated financial projections, increasing the existing connection fee schedule in lieu of long-term debt financing to finance District's capital requirements. The Director of Finance reviewed cash flow schedules comparing projected revenues and expenses over the next five years. Immediate implementation of a 50% increase in connection fees would result in approximately $1.2 million in additional revenues to the District from both the increased fee and higher interest earnings over the next five years. Following a discussion of the District's long-term financing alternatives and the ,.,,/ anticipated development within the District that would generate connection fee revenue, the Board declared its intent to amend the one-time connection fee schedule, as follows: -I- District 6 07/30/86 Single/Multi-Family Commercial/Industrial/ Dwelling Units Governmental/Other Existing Fee $1,000 per dwelling $200 per 1,000 sq. ft. unit of building Proposed Fee $1,500 per dwelling $300 per 1,000 sq. ft. unit of building The additional funds would be used to finance master-planned District 6 projects and its share of joint works construction projects. First reading of proposed It was moved, seconded and unanimously Ordinance No. 610 carried: That Ordinance No. 610, An Ordinance of the Board of Directors of County Sanitation District No. 6 of Orange County, California, Amending Ordinance No. 606 Pertaining to Sewer Connection Charges, 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. 608 by title only, it was then moved, seconded and duly carried: That Ordinance No. 610, An Ordinance of the Board of Directors of County Sanitation District No. 6 of Orange County, California, Amending Ordinance No. 606 Pertaining to Sewer Connection Charges, be introduced and passed to the second reading on August 13, 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. 6 be adjourned. The Chairman then declared the meeting so adjourned at 4:56 p.m. , July 30, 1986. Secretary, Board of Directors County Sanitation District No. 6 of Orange County, California -2-