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Home My WebLink About1987-05-20/lfA COUNTY SANITATION DISTRICTS OF ORANGE COUNTY, CALIFORNIA P.O. BOX 8127, FOUNTAIN VALLEY. CALIFORNIA 92728-8127 10844 ELLIS. FOUNTAIN VALLEY, CALIFORNIA 92708-7018 (714)962-2411 . May 14, 1987 NOTICE OF ADJOURNED REGULAR MEETING DISTRICT NO. 3 WEDNESDAYJ MAY 20J 1987 -7:30 P.M. 10844 Ellis Avenue Fountain ValleyJ California Pursuant to adjournment of the regular meeting of May 13, 1987, the Board of Directors of County Sanitation District No. 3 will meet in an adjourned regular meeting at the above hour and date to review the status of the District's Master Plan of Trunk Sewers and rehabilitation projects, and to consider revisions to the District's long-range financial program. II BOARDS OF DIRECTORS County Sanitation Districts Post Office Box 8127 of Orange County, California 10844 Ellis Avenue Fountain Valley, Calif., 92708 Telephones: DISTRICT No. 3 Area Code 714 540-2910 962-2411 AGENDA Cl) Roll call ADJOURNED REGULAR MEETING WEDNESDAYJ MAY 20J 1987 -7:30 P.M. (2) Verbal status report on the District's sewer rehabilitation program and Master Plan of Trunk Sewers (3) Consideration of items re long-range financial program: (a) Staff report on long-range financial projections re: Cl> Capital requirements (2) Operations and maintenance requirements (b) Discussion re alternative means of funding District's long-range financia~ needs (c) Consideration of action(s) directing staff to proceed with planning for implementation of selected long-range financial program ~ Other business and communication~, if any ~rnfA--,..,.....~~ (5) Consideration of motion to adjourn q:o7 ~ COUNTY SANITATION DISTRICTS OF ORANGE COUNTY, CALIFORNIA P.O. BOX 8127, FOUNTAIN VALLEY, CALIFORNIA 92728-8127 10844 ELLIS, FOUNTAIN VALLEY, CALIFORNIA 92708-701~ (714) 962-2411 May 14, 1987 NOTICE OF ADJOURNED REGULAR MEETING DISTRICT NO. 3 WEDNESDAYJ MAY 20J 1987 -7:30 P.M. 10844 Ellis Avenue Fountain ValleyJ California Pursuant to adjournment of the regular meeting of May 13, 1987, the Board of Directors of County Sanitation District No. 3 will meet in an adjourned regular meeting at the above hour and date to review the status of the District's Master Plan of Trunk Sewers and rehabilitation projects, and to consider revisions to the District's long-range financial program. 1 II BOARDS OF DIRECTORS County Sanitation Districts Post Office Box 8 12 7 of Orange County, California 10844 Ell is Avenue Fountain Volley, Calif., 92708 Te lephones: DISTRICT No. ·Area Code 714 540-2910 962-2411 3 AGENDA Cl} Roll call ADJ OU RN ED REGUL AR MEETING WEDNE SDA YJ MAY 20 J 1987 -7:3 0 P.M. (2) Verbal status report on the District's sewer rehabilitation program and Master Plan of Trunk Sewers (3) Consideration of items re long-range financial program: (a} Staff report on long-range financial projections re : (1) Capital requirements (2) Operations and maintenance requireme nts Cb} Discussion re alternative means of funding District's long-range financia~ needs (c} Consideration of action(s} directing staff to proceed with planning for implementation of selected long-range financial program (4) Other business and communications, if any 7 ·,oY' (5) Consideration of motion to adjourn ( . !.. ( , (,A.( rz, z.., -- II MANAGER'S AGENDA REPORT County Sanitation Districts of Orange County, California DISTRICT NO. ~3- MANAGER'S REPORI' 'IQ DISTRICl' NO. 3 DI~RS MEm'ING DATE: MAY 20, 1987 Post Office Box 8127 10844 Ellis Avenue Fountain Volley, Calif., 92708 Telept-cnes: Areo Code 71 4 540-2910 962-2411 Item No. 2: Status Report on District's Sewer Rehabilitation Program and Master Plan of Trunk Sewers Attached is a brief summary of the status of major rehabilitation \'X)rk on the Miller-Holder Trunk Sewer System, and the Master Plan for facilities to serve territory in the District or tributary to its system. Staff will elal:x:>rate on the plans at the meeting on Wednesday. Item No. 3: Staff Report on District's Long-Range Financial Requirements and Alternative Financing Plans Background Last year the staff reported to the Board that the District \'X)uld have to develop additional revenue sources to meet the District's long-term funding requirements for sewerage facilities improvements and expansion, and ongoing operations and maintenance costs. The costs of providing service continue to rise to meet the requirements of the federal and state regulatory agencies for advanced treatment and to provide necessary capacity to meet the growth demands on the sewage system. The Board took an interim step to provide partial capital financing by issuing long-term debt securities {see discussion below) in the arrount of $48,000,000 million and directed staff to develop a financing plan to meet the District's long-term funding needs for consideration this year by the Directors. The following is a sumnary of the proposed long-range financial program. Financing Capital Facilities Requirements Last spring the Board directed staff to engage financial and legal consultants to assist the Board in evaluating the potential benefits and costs associated with issuance of long-term debt financing to take advantage of then favorable tax law provisions and low, tax-exempt municipal bond interest rates prior to an anticipated change in federal tax law which became effective on September 1, 1986. The primary reasons for considering use of long-term debt securities such as certificates of participation {())P's) for capital construction financing at that time were to: 05/20/87 -Provide a partial source of capital financing to meet Joint works and trunk sewer system facilities construction requirements and necessary capital replacement reserves totaling an additional $133 million over the next. ten years. -Allow the District to continue to invest its existing capital reserves in the County carmingled investment p::>0l managed by the County Treasurer and benefit fran the favorable spread between investment returns and the potentially lower rate of interest paid for the securities. -Take advantage of then favorable tax laws and low capital market interest rates that would be financially beneficial to the Districts. -Preserve existing capital reserves for potential long-term construction requirements such as construction of full secondary treatment at Plant No. 2 (estimated cost: $285 million (District No. 3's share $88.9 million) if constructed between 1990 and 1995) in the event the Districts' existing NPDE'S permit is not extended by EPA in 1990. In addition to the funds raised fran the COP sale last sunmer, the County of Orange and each of the cities served by District No. 3 collect one-time connection fees fran developers and remit 95% of the fees collected to the District (5% is retained by each agency to defray administrative costs). These fees are used to finance the planning, design and construction of the expanded facilities necessary to accanrrodate the flow generated by the new developnent. District No. 3's current one-time connection fees are presented below: Single/Multi-Family Dwelling Units $250 per dwelling Carmercial/Industrial/ Governmental/Other $50 per 1,000 sq. ft. The existing connection fees in other Districts are outlined in the following table: Single/Multi-Family Carmercial/Industrial/ District/Zone Dwelling Units Governmental/Other 1 $1,500 per dwelling $ 300 per 1,000 sq. ft. 2 $ 220 per dwelling $ 45 per 1,000 sq. ft . 5: zone 1 $ 500 per dwelling $ 260 per 1,000 sq. ft. zone 2 $1,100 per dwelling $ 570 per 1,000 sq. ft. Zone 3 $1,500 per dwelling $2,400 per 1,000 sq. ft . 6 $1,500 per dwelling $ 300 per 1,000 sq. ft. 7: zone 1 $ 250 per dwelling $ 50 per 1,000 sq. ft . zone 2 $ 250 per dwelling $ 180 per 1,000 sq. ft . 11 $1,250 per dwelling $ 250 per 1,000 sq. f t. 13: zone A -variable (fees to be the same as when annexed - see District No. 2 fees) zone B $1,250 per dwelling $ 250 per 1,000 sq. ft . zone c $1,500 per dwelling $ 300 per 1,000 sq. ft. -2- -------·--··----.. ·-·-------- - 05/20/87 Schedule A, State of Projected cash Flow, presents the District's anticipated financial position over the next ten years assuming no changes in the District's existing fee structure. Line 17 identifies the expected revenue to be generated from C'Onnection fees over the next ten years (10 Year Total: $6,025,000). Schedule B presents the District's anticipated financial position over the next ten years if the Directors consider increasing the C'Onnection fee to the following proposed levels (consistent with similar levels of C'Onnection fees in many of the other Districts that have found it necessary to also implement user fees): Single/Multi-Family Dwelling Units $1,500 per dwelling Catmercial/Industrial/ Goverrunental/Other $300 per 1,000 sq. ft. Implementation of these proposed fees ~uld generate an additional $27,000,000 in connection fees (Line 17, Schedule B, 10-Year Total: $33,025,000) as well as an additional $2,516,000 in interest incane (Line 20, Interest and Miscellaneous Incane: Schedule A, 10-Year Total= $17,855,000; Schedule B, 10-Year Total= $20,371,000). These ~dditional revenues C'Ould then be employed to partially finance b::>th the District's share of the cost of construction of the expanded collection and treatment facilities (Line 24, Share of Joint Works Treatment Plant, and Line 25, District Collection System) and its ongoing payments for retirement of the Certificates of Participation (Line 27, Other Expenditures) issued last summer. Financing 0perating Requirements Last spring the staff also briefed the Boa.rd on the District's need to C'Onsider supplemental user fees in the next C'Ouple of years to avoid a projected deficit beginning as soon as 1989 in the District's operating fund. Schedule A, Statement of Projected Cash Flow, reflects this anticipated deficit on line 14, Fund Balance or (Deficit). The anticipated deficit ~uld reach as much as $49 million by 1995-96 unless additional revenue sources are generated. Schedule C, excerpted from the Revenue Program adopted by the Boards in April 1979, identifies various alternative revenue sources available to finance a shortfall in a District's operating fund when ad valorem tax revenues are insufficient to pay the District's operations, maintenance and replacement (a.1 & R} costs. The m:Jst C'OSt-effective method (and the method already adopted by Districts 1, 5, 6 and 13 which have implemented supplemental user fees in previous years} is to place a supplemental user fee as a special assessment on the County of Orange property tax bill issued annually to all property owners in the County. Schedule B, Statement of Projected Cash Flow, identifies the cash position of District No . 3's operating funds should the Directors chcose to implement the following supplemental user fee schedule: Class of User Single-Family Dwellings/Condominiums Basis of Charge Charge per Dwelling Unit -3- 1988-89 Annual Rate* $26.40 05/20/87 Multi-Family Dwellings/Apartments/ Mobile Hanes Ccmnercial/ Industrial/Other (government buildings, utilities, non-profit organizations, etc.) Charge per Dwelling Unit Charge per 1,000 Sq. Ft. of Building 15.85 18.90 * Identical to Districts 1 and 5. District 6 adopted this rate in 1983 but has found it necessary to increase by 20%. District 13, which receives no ad valorem taxes, is $70/year. The District's operating fund would have a positive fund balance of $8.l million by 1995-96 (line 14) should the Board choose to adopt this fee schedule effective in fiscal year 1988-89. This balance would serve as a contingency fund and/or a portion ~uld be allcx::ated to the capital fund to offset projected shortfalls. Rea:::mnendations Staff recanmends that the Board consider taking the following actions relative to the District's long-range financial plan. 1. Direct staff to proceed with planning for implementation of a supplemental user fee to be collected on the property tax bill beginning in 1988-89. 2. Draft ordinance amending connection fee schedule for consideration at the June 10th Board meeting to becane effective July, 1987. Many econanic factors could affect the District's funding requirements over the next several years. The staff evaluates the District's financial position each year to determine the impact of changing conditions and briefs the Board to seek direction regarding m::xiifications to the District's long-range financial plan. The impact of any of the proposed recanmendations adopted by the Board will continue to be reviewed and presented to the Board annually prior to consideration of the District's budgets. Staff will review the financial projections and the proposed supplemental user fees, and the proposed increase in connection fees in greater detail with the Board at the meeting. -4- May 12; 1987 STAFF REPORT MASTER PLAN FACILITIES Rehabilitation of Mi11er~Ho1der Vaults COUNTY SANITATION DISTRICTS of ORANGE COUNTY, CALIFORNIA 10844 ews AVENUE P.O. BOX 8127 FOUNTAIN VALLEY. CALIFORNIA 92728-8127 (714) 962-2411 County Sanitation District No. 3 (CSD #3) in April awarded the third contract for rehabilitation of vaults on the Miller~Holder Trunk Sewer. The Directors will recall that this sewer; constructed in 1959 with a polyvinyl chloride liner did not include a liner in the vaults (manholes). The new contract; at $4;321;000 includes rehabilitation of 73 vaults; some of which are located in the busiest intersections in western Orange County. The work will take about two years. In addition; also included are six manholes owned by the City of Cypress which will be repaired under a cooperative agreement. This is the third contract in a series of rehabilitation contract. Twenty vaults have been rehabilitated under ·the first two contracts. In total~ there are some 250 vaults and manholes on the Miller-Holder Trunk Sewer. Funds are included in the budget forecasts over the .next few years to complete the work. The remaining work should be less costly than the work already budgeted since the structures which have suffered the highest degree of deterioration were undertaken first. Master Plan Update In the next fiscal year; the District plans a master plan update for the Joint Works and.the collection system for Sanitation District No. 3. In that master plan work; new land use plans based on information which will be obtained from each of the cities and the County will be developed. The Directors are aware that land use plans are changing·throughout the Districts' service area; and it is expected that the report will recommend schemes to meet the demands. In 1983 a study was completed which indicated several interceptors would be required; but most have not yet been constructed. Land use changes in the last few years have been dramatic and staff now recommends delay of any further improvements until such time as the new studies are completed. The 1983 report also reconnnended that CSD #3 sell capacity in the Knott Interceptor to CSD #2. CSD #2 has restudied its drainage areas and as a part of that study; reconnnendations were made for a new interceptor line in Euclid Avenue which deleted the need for capacity in the Knott Interceptor. This change from the 1983 Plan was adopted because it was felt the available capacity within the Knott Interceptor would be needed by CSD #3 in the future. \...,) Staff Report May 12; 1987 Page Two Repair Work Two repairs on CSD #3 facilities are needed. The first is on the Los Alamitos Subtrunk Sewer line in Los Alamitos Boulevard where the pipe is cracked south of Orangewood Avenue. The second is on the Westside Relief Interceptor Sewer on Moody Street south of Crescent Avenue where the line is cracked underneath a railroad crossing. Plans for the work were approved by the Directors at the regular meeting in May. The estimate~ cost is $150;ooo. CSD #3/#11 Service Area Exchanges There are two areas for which exchanges should be considered. The first is an area within CSD #11 served by CSD #3 facilities. It includes approximately 850 acres west of the Santa Ana River and generally south of Hamilton Avenue. The second area; within CSD #3 and served by CSD #11; includes approximately 1;060 acres; 850 of which are served by the Slater Pump Station. This area; large portions of which are undeveloped; is bounded by Garfield Avenue on the south; Beach Boulevard on the east and Central Park on the north. The Directors of CSD #11 have requested that staff study ways to accommodate these service areas which could include a collector trunk capacity purchase/sale in the serving District's facilities; creation of special zones to balance connection fees; or annexation/de-annexation so that District boundaries more closely resemble service areas. In order to complete the study; staff will have to calculate operation and maintenance charges; deter~ mine existing and expected tax revenue; and overall project economics. Staff will report on this at the meeting. ( COUNTY SANITATION DISTRICT NO.l 5/13/87 ( •1. SCHEDULE Of DISTRICT COLLECTION SYSTEH PROJECTS 1\ PROJECT TOTAL C. l.P. 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 -------------------------------------------------------------------------------------------------------------- Radio Linked Tele1etry (a) 25,000 25,000 Haster Plan/EIR Update (a) 125,000 75,000 50,000 Rei1burse Other CSD' s for Seal Beach Blvd. P/S Equity (a) 85,000 85,000 Hiller Holder Hanhole Vault Replaceaent (1) (a) 8,783,000 1,283,000 2,500,000 2,000,000 1,000,000 1,000,000 1,000,000 Hiscellanecus Projects (a) 700,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 --------------------------------------------------------------------------------------------------- Sub-total ACO fund 9,718,000 1,283,000 2, 785,000 2, 150,000 1,100,000 1,100,000 1,100,000 100,000 100,000 -------------------------------------------------------------------------------------·------------- Artesia Branch Sub-Trunk Relief (3) (a) 300,000 300,000 Hiller Holder Relief (3) (a) 2,000,000 1,500,000 500,000 Imperial Relief Interceptor (3) (a) 500,000 500,000 Orange-Western Sub-trunk Relief ' Sem 3-25 (2) (a) 529,000 29,000 500,000 Parallel Laapson Branch Hoover-Western (3) (a) 200,000 200,000 Hoover-Western Sub-trunk Relief on Trask (3) (a) 400,000 400,000 Laapson Interceptor Sewer 3-24-2 (2) (a) 377,000 27,000 350,000 Hagnolia Relief Sewer (3) (a) 800.000 800,000 Los Ala1itos Sub-trunk Relief (3) (a) 3,200,000 3,200,000 La Habra Purchase Relief (3) (a) 2,000,000 2,000,000 Hiscellanecus Projects (a) 700,000 100,000 100,000 100,000 100,000 100,000 100,000 100.000 --------------------------------------------------------------------------------------------------- Sub-total FR fund 11,006,000 56,000 100,000 100,!>00 3,450,000 2,000,000 4,800,000 100,000 400,000 -----------__ ,. ________ -------·-------------------------·---------------------------------------·--- GRAND TOTAL 20, 724,000 1,339,000 2,885,000 2,250,000 4,550,000 3,100,000 5,900,000 200,000 500,000 --------------------------··--·----.. ------. -------------·--------··-·····--· ···--------------------------------------------------------------· ... ·------------······ ---------·· -----······ ........... (a) fully funded 1. "aster-planned facilities presently under construction (b) Partially funded 2. Hasler-planned facilities presently under design ( c) Hot funded 3. Hasler-planned facilities scheduled for future design/construction LINE 2 3 9 10 11 OPERATING FUND Reserves & Car ry-Ove r F ro1 Las t Year REVENUE Share of I\ Ta x Allocation Fees( Industrial Waste) Interest & "iscellaneous lnco 1e Other Revenue(Supple1ental User fees) TOTAL REVENUE TOTAL AVAILABLE FU NDI NG EXPENDITURES Share of Joint Works H & O Collection Syste1 " & O and Other Oper . Other Expenditures TOTAL EXPENDITURES 12 Reserves & Carry-Over to Next Year 13 Net Year's Ory Period Fundi ng Require1ents 14 Fund 8alance or (Deficit) CAPITAL FUHO(S) IS Re serves & Car ry-over fro• Las t Year 16 11 18 19 20 21 22 23 24 25 26 27 28 REVENUE Cons truction Grants Fees: Connec t io n Other Sale of Capacity Rights Interest & "i scellan eou s I nco1 e 0 the r 1 nco1e TO TAL REVENUE TOTAL AVAILABLE FUNDING EXPENDITURES Share of Joint Narks Trea t 1en t Plant District Collection Syste1 Inter-Fund Tr ans fer Other Expend i ture s TOTAL EXPEN D I TURES 29 Reserves & Car ry -over to Ne xt Year COUNTY SANITA TIO N DISTR ICT HO. 3 STATEm T OF PROJEC TED CASH FLO M f!SCAL YEARS 1986-87 THROUGH 1995-96 1986-87 7 '247 ,000 8,401,000 834,000 684 ,0 00 1987-88 7 ,809' 000 9,602,000 1, 162 ,000 533,000 1988-89 7,215,000 10 ,822,000 1,232,000 471,000 1989-90 6 '065 '000 12,m,000 1,306,000 364 '000 199o-91 4 '206 '000 13, 746,000 1,385,000 201,000 9, 919,000 11 ,297 ,00 0 12 ,525,000 13,867 ,00 0 15 ,332 ,000 17,166,000 19,106 ,0 00 19,740,000 19,932,000 19 ,538 ,000 8,438,000 919,000 10, 713,000 1,178 ,000 12,320,000 1,355,000 14,168,000 1,558,000 16,293,000 1, 792,000 9,357 ,000 11,891,000 13,675,0 00 15, 726,000 18,085 ,000 7,809,000 4,679,000 7 ,215,000 5, 94 6,000 6,065,000 6,838,00 0 4. 206,000 7 ,863,000 1,453,000 9,043,00 0 3,130 ,000 1,269 ,000 (773,000) (3,657 ,000) (7 ,590,000) ::::::::::: ::::::::::: ::::::::::: ::::::::::: ::::::::::: 50, 754 ,000 84, 175,000 67 ,868,000 37,846,000 11,8 46,000 0 625 ,000 347 ,000 107,000 3,934,000 42,476,000 2,28 4,000 600,000 364 '000 1,260,000 5' 588 ' 000 47 ,48 9,000 10 ,096,000 499 ,000 600, 000 382,000 73 ,000 3,887 ,000 5,441,000 2' 995' 000 600 ,000 401, 000 73,000 3,991,000 8 ' 060 '000 2, 995,000 600,000 421,000 3,595,000 455,000 8' 066 '000 98,243,000 94,271,000 73 ,309,000 45 ,906,000 19,912,000 9,523,000 283,000 500,000 3, 762 ,000 17 '990 ,000 2 ,885,000 5, S28,000 28,626,000 2' 250,000 4 ,587 ,000 24 '960 ,000 4,550,000 4 '550 '000 11,887 ,000 3.100 ,000 4' 506 '000 14 ,068,000 26,403,000 35 ,463 .000 34,060 ,000 19,493,000 84 , 175 ,000 67 ,868 ,000 37 ,846,000 11,846,000 419 ,000 ::::::::::: ------------------------------------------------------------------::::::::::: 5-Year Total ) '247 ,000 54,768,000 5,919,000 2,253,000 0 62,9 40 ,000 70 , 187,000 61, 932,000 6,802,000 0 68,73 4,000 1,453 ,000 9' 043' 000 () '590 '000) ::::::::: :: 50,75 4,000 8,773,000 3,025,000 1,91 5,000 5,108,000 17,855,000 42,476,000 79,152 ,000 129' 906 '000 92 '986,000 13,068,000 500 '000 22 , 933,000 129,487,000 419,000 ::::::::::: SCHED UL E A 5/13/87 1991-92/ 1995 -96 1,45 3,000 99 ,808,000 8,289,000 0 108,097 ,000 109,5 50,000 126 ,44 0,000 13,897 ,000 140 ' 337 '000 (30 ,787 ,000) 18,209,000 ( 48 , 996,000) :::::::::::: 419,00 0 494 . 000 3,00 0,000 3,453,000 5,002,000 0 11,949,000 12' 368. 000 20.465 ,000 6,600,000 21, 925,000 48. 990' 000 (36,622 ,000) :::::::::::: 10-Year Tota l LIHE 7,2 47 ,000 154 ,576,000 14 ,208,000 2,253,000 0 171 , 037 '000 178 ,284 ,000 188,372,000 20 ,699 ,000 0 209' 071, 000 (30, 787,000) 18,209,000 (48 ,996 ,000) :::::::::::: 50, 754,000 9' 267 ,000 6,025,000 5,368,000 IO, 110,000 17,855,000 42' 4 76. 000 91 , 101,000 141 , 855 '000 113,451,000 19,668,000 500' 000 44,858,000 178,477 ,000 (36 ,622 ,000) 8 9 10 I I 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 SCHEDULE A """} COUNTY SAHITAIJOH DISTRICT HO. 3 Page 2 STATEMENT OF PROJECTED CASH FLOM 5/13/87 FISCAL YEARS 19B6·B7 THROUG H 1995-96 1991-92 / LIHE 19B6-B7 19B7-BB 19BB-89 19BMO 1990 -91 5-Ye ar Total 1995-96 10 -Year Total LINE ------------------------------------- BOHO FUND( S) ------------ 30 Reserves & Carry-Over fro1 Last Year 14 0,000 91,000 101,000 66,000 34 '000 140 ,000 0 140 ,000 30 ------------------------------·--...................... --------------------------------------·------- REVENUE 31 Tax Levy 550' 000 501,000 1,051,000 1,051,000 31 32 Interest & Miscellaneous lnco1e B,000 7 ,000 6,000 4 ,000 1,000 26 '000 26,000 32 33 Inter -fund Transfer 500' 000 500' 000 500' 000 33 34 Other Inco 1e 0 0 34 ---------------------------------------------------------------------------------------·-- 35 TOTAL REVENUE SOB' 000 557 ,000 507 I 000 4 ,000 1,000 1,577 ,000 1,577 ,000 35 ------------------------------------------------------------------------------------------ 36 TOTAL AVAILABLE FUNDING 64B' 000 64B,OOO 60B '000 70' 000 JS , 000 l, 717 ,000 1,717,000 36 -----------------------------------------------·------------------------------------------ EXPENDIT URES .......................... 37 Bond Principal & Interest 557 '000 547,000 542,000 36, 000 35 '000 1,717,000 1, 717 ,000 37 3B Other Expenditures 0 0 3B ------------------------------------------------------------------------------------------ 39 IOTAL EXPENDITURES 557,000 547,000 542 '000 36' 000 35,000 1, 717 ,000 1, 717 ,000 39 ------------------------------------------------------------------------------------------ 40 Reserves & Carry-Over to Next Year 91,000 101,000 66,000 34 ,000 0 40 41 Next Year's Ory Period funding Require1ents 91,000 101,000 66 '000 34' 000 0 41 ----------------------------------------------------·------------------------------------- 42 fund Balance or (Deficit) 0 42 :::::::::::: :::::::::::: :::::::::::: :::::::::::: :::::::::::: -----------:::::::::::: :::::::::::: ----------- SUMHARY (Adjust ed for Inter-fund Trans I ers) 43 Reserves & Carry -Over fro• Last Year SB, 141,000 92 ,075,000 75,1B4,000 43, 977 ,000 16,0B6,000 SB,141,000 1,872,000 5B,14 1,000 43 44 TOTAL REVENUE 57 ,416,000 21, 950' 000 lB,473,000 21,931,000 23' 399' 000 143 ,669,000 120,046 ,000 263' 715 ' 000 44 ----·-----------------------------------------·--------..................... ----------------------·- 45 TOTAL AVAILABLE FUNDING 115' 557 '000 114 ,025,000 93,657 ,00 0 65, 90B,OOO 39' 4B5 '000 201,810,000 121, 91B,O OO 321,B56,000 45 46 TOTAL EXPENDITURES 23' 4B2' 000 3B,B41,000 49,6BO,OOO 49,822,00 0 37 ,613,000 199 ' 93B '000 1B9,327 ,000 JB9 '265 '000 46 -----------------------------·----------------·------------------------------------------- 47 Reser ves & Carry-Over to Next Year 92,075,000 75,1B4,000 43, 977 ,000 16,0B6,000 l,B72,000 l ,B72,000 (67,409,000) (67 ,409,000) 47 4B Hext Year's Ory Period fundin g Requi re1ents 4,770,000 6,047 ,000 6, 904,000 7 ,B97 ,000 9 ,043,00 0 9. 043' 000 lB ,209,000 lB,2 09,000 4B ·----------.............. ____ ----·---------------·-...................... ----------------------------------- 49 FUND BALANCE OR (DEFICIT) B7 ,305,000 69, 137 ,000 37 ,073,000 B,1B9,000 (7' 171,000) (7' 171,000) (B5,61B,OOO) (85,618,000) 49 -----------::::::::::: ::::::::::: ::::::::::: -----------::::::::::: ---------------------------------------------------------------------- ( l!HE 8 9 10 II OPERA TIH G FUN D Res er ves & Carry -Over fr o• Last Year REVEHU E Share of It Tax All ocation fe es(Indust r i al Waste ) Interes t & Hi s cel la neous Inco1e Ot her Reve nu e(Supple1en t al User fe es) TOTAL REVENUE TOTAL AVAIL ABLE fUNDIH G EXPENDITURES Share of Joint Works H & O Collection Sys te1 H & 0 and Other Oper. Ot her Expenditures TOTAL EXPEH DIT URES 12 Reserves & Carry -Over to Nex t Year 13 Het Year 's Dry Per io d fundi ng Require1en ts 14 f und Ba l ance or (Defici t ) CAPITAL fUND (S) IS Res erves & Carr y-ov er f ro• La s t Yea r 16 17 18 19 20 21 22 23 24 25 26 27 28 REVENUE Const ruc t io n Gr ants fees : Connection Oth er Sale of Capa city Rights Interest & Miscellaneous Inco1e Other In co1e TOTAL RE VENUE TOTAL AVAILAB LE fUHDI NG EX PEHOI TU RES Shar e of J oin t Works Trea t1ent Plant Dis t ric t Coll ec ti on Syste1 Inter -fund Tran s fer Othe r Expenditur es TOTAL EXPEN DITURES 29 Rese rves & Ca rry-ove r to Nex t Year COU NTY SA NI TA TI ON DISTRICT HO . 3 STATEHEH T Of PROJECTED CASH FLOW FISCAL YEARS 1986 -87 THROUGH 1995-96 1986-87 7,247,000 8,401 ,000 834. 000 6B 4. 000 1987-BB 7 '809' 000 9 ,602 ,000 1,162,0 00 533 . 000 I 98B -89 1989-90 1990-91 7,215 ,00 0 12,022,000 16 ,624,0 00 IO,B22,000 1,2 32 ,000 682. 000 s, 746,0 00 12 , 197 ,00 0 l , 306,000 1,015 ,00 0 5,810,00 0 13 , 746 ,000 1,385 ,000 1,329' 000 5,873 ,000 9,919,000 11 ,297,000 18 ,4B2 ,000 20,328 ,000 22 ,333,00 0 17, 166,000 19 , 106,000 25 ,697 ,000 32,350 ,000 3B, 957,000 8 . 438. 000 919,000 10, 713 ,000 l, 178,0 00 12,320,0 00 I, 355 , 000 14,168,000 1,558,000 16,29 3,000 I, 792 ,00 0 9,357 ,000 11 ,891,000 13 ,675 ,000 15 ,726,000 18 ,085 ,000 7' 809' 00 0 4,679,000 3, 130,000 ---------------------- 7,2 15 ,00 0 5, 946,000 1,269,000 ::::::::::: 12,022,00 0 6,838,000 16' 62 4 '000 7 '863 ' 00 0 20 ,872,000 9 ,043' 000 5, 18 4,000 8,76 1,000 11,829 ,000 ::::::::::: ::::::::::: ::::::::::: 50,754 ,000 84,175 ,000 70 ,982 ,00 0 44 ,310,000 21,310,000 0 625,000 347 ,000 107,000 3,934,000 42,476 ,000 2,28 4,000 3,600,000 36 4. 000 I , 260 , 00 0 5, 702 ,000 47 ,489,000 13 ,210 ,000 499 ,000 3,600,000 382 ,000 73 '000 4,237,000 2, 995,000 3,600 ,000 401,000 73 ,000 3, 99 1,000 2,995,000 3,600,0 00 421,0 00 3 ,595 ,000 1,287 ,0 00 8, 79 1,00 0 11 ,060 ,000 11 ,898 ,000 98,243 ,000 97 ,385 ,000 79, 773 ,000 55 ,370,000 33,208 ,000 9,5 23,000 283 ' 000 500 '000 3, 762 ,000 17 '990 ,000 2. 8BS ' 000 5,52B ,OOO 28 ,626,0 00 2' 25 0' 000 4,58 7,000 24 ,960,000 4,550,000 • '550 '000 11,887 ,000 3 ,100 ,000 4, 506 , ODO 14,06 8,000 26 ,403,000 35,463,000 34,060 ,000 19,493 ,000 84,175,000 70 ,982 ,000 44 ,310,0 00 21 ,310,00 0 13,715,000 ::::::::::: ::::::::::: ::::::::::: -------------------------------------------- 5-Year Total 7,247 ,000 54,768 ,000 5,9 19,0 00 4 '2 43' 000 17 ,429 ,000 82 ,359. 000 89,60 6,000 61, 932,000 6,802,000 0 68 , 734 ,00 0 20 ,872 ,000 9,043,0 00 11 ,829 ,00 0 ::::::::::: 50 , 75 4,000 8, 773,000 15,025 ,000 1, 915,000 5, 108,000 19,151 ,000 42 ,476,000 92 ,44 B,OO O 143,202 ,000 92 '986,000 13. 06B. 00 0 500 ' 000 22,933 ,000 129 ,487,000 13, 715 ,000 ---------------------- SC HEDULE B 5/13/87 1991-92 / 199 5-9 6 20,872,000 99 ,808 ,00 0 8, 2B9 '000 7,315,000 30 ,315,000 145, 727 ,000 16 6, 599' 000 126 ,440 ,000 13,897 ,000 14 0,337 ,000 26,262 ,000 IB, 209 ,000 B,053 ,000 :::::::::::: 13, 715,000 494 '000 18 ,000,0 00 3 ,453,0 00 5' 002 ' 000 1,22 0,000 28 ,169,000 41 ,884,000 20,m ,0 00 6 . 600' 00 0 21, 925,000 48 , 990 ,000 (7,1 06 ,000) :::::::::::: ID -Year Total LINE 7,247,000 154 ,576 ,00 0 14,20 8,000 II ,55B,00 0 47 . 744 ,000 228 ' 086' 000 235 ' 333 '000 188 ,372 ,000 20,699 ,000 0 209 ' 071 . 000 26 ' 262 ' 000 IB ,209,000 8 ' 053 '000 :::::::::::: 50 , 754,000 9' 267 ,000 33 ,02 5,000 5 ,368,00 0 10 ,110,000 20 ,371 ,000 42 ,476 ,000 120,617 ,00 0 171 , 371 '000 113 ,451 ,000 19 ,668 ,000 500. 000 44 ,8 58,000 178,477 ,00 0 (7,10 6,000 ) :::::::::::: 8 9 10 11 12 13 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 ..... I SCHEDULE B COUNTY SANITATION DISTRICT NO. 3 Page 2 STATEm T Of PRO JECIEO CASH FL OW 5/13/87 f ISCAL YEARS l 9B6-B7 THROU GH 1995-96 1991-92/ LIHE l 9B6-B7 19B7-BB 19BB-B9 19B9-90 1990-91 5-Year Total 1995-96 10-Year Tota l LINE ------------------------------------- BOHO FUND( S) ------------ 30 Rese rves & Carry -Over fro • las t Year 140,000 91,000 101,000 66,000 H,000 140,000 0 140,000 30 ---------------------------------------------------------·-------------------------·------ REVENUE 31 Tax levy 0 550' 000 50 1,000 1,051,000 1,051,000 31 32 Interest & Miscellaneous Jnc o1e B,000 7 ,000 6,000 4,000 1,000 26,000 26, 000 32 33 Inter-fund Transfer 500,000 500,000 500,000 33 l4 Ot her lnco1e 0 0 34 ··-------------------------------------------·-------------------------------------·------ 35 IOTAL REVENUE 50B,OOO 557,000 507 I 000 4 ,000 1,000 1,577,000 0 1,577 ,000 35 ----------------------.......................... ........................ .. .................... .. .................... ------------.. ....................... 36 TOTAL AVAILABLE FUNDING 64B I 000 64B ,OOO 60B,OOO 70' 000 35 ' 000 l, 711 ,000 0 1,717,000 36 ---------------------------------·--------------------------------------------........................ EXPEN DITURES ------------ 37 Bond Pr i ncipal & Interes t 557 ,000 541,000 542' 000 36 ,000 35,000 1, 717,000 1,717,000 37 3B Other Ex pend i tures 0 0 3B ----------------------·--------------------· --------------·---------·---------·----------- 39 TOTAL EXPENDITURES 55 7,000 547,000 542' 000 36,000 35,000 I, 717 ,000 l , 717,000 39 ---------·· -------------·--·---·--·------------------------------------------------------- 40 Reserves l Carry-Over to Next Yea r 91,000 101,000 66,000 34 I 000 0 40 41 Next Year's Ory Period funding Require1ents 91,000 101,000 66,000 34 I 000 0 41 -------------------------------------------· ------·-------------·-----·------------------· 42 fund Balance or (Deficit) 0 0 0 0 0 0 42 :::::::::::: :::::::::::: :::::::::::: ::::::::: ::: :::::::::::: ::::::::::: :::::::::::: :::::::::::: SUHHARY (Adjusted for Inter-fu nd Tra nsfers ) 43 Rese rves & Car ry-Over Fro1 last Year 5B, 141 ,000 92 ,075 ,000 7B , 29B' 000 56,39B,OOO 37, 96B,OOO 5B,1 41 ,000 34, 5B7 I 000 5B,141,000 43 44 TOTAL REVENUE 57,41 6,000 25,0 64,000 27, 7BO,OOO 31,392 ,000 34,232,000 176 ,3B4 ,000 173 o B96 I 000 350. 2BO' 000 44 ------------------------------------------------------------------------------------------ 45 TO TA L AVA ILABLE FUNDI NG 11 5,557 ,000 117, 139,000 106,078,000 B7 I 790 ,000 72, 200,00 0 234 , 525. 000 20B' 4B3 '000 40B,42 1,000 45 46 TOTAL EXPENDITURES 23, 4B2. 000 3B,B 4 l ,OOO 49,6BO,OOO 49,B22 ,000 37 ,61 3,000 19 9, 93B ,OOO 1B9' 327, 000 3B9,265,000 46 ---------·-----------------------......................... ---------------------------------------------- 47 Reserves & Ca r ry-Over to Next Year 92 ,075,000 7B' 29B ' 000 56,39B,OOO 37, 96B,000 34, 5B7 I 000 34. 587. 000 19,156,000 19,156,000 47 48 Next Year's Ory Period funding Require1en t s 4, 770,000 6,047,000 6, 90 4 ,000 7,897,000 9,043,000 9, 043. 000 l B,209,000 lB,209 ,000 4B --------------------------------------------.............................. ----------------------------------- 49 FUND BALANCE OR (DEFICIT) B7,J05,000 72,251,000 49,494 ,000 30,071,000 25,544,000 25,544,000 947 ,000 947 ,000 49 ::::::::::: ::::::::::: ::::::::::: ::::::::::: ::::::::::: -----------------------....... -------------------------------------------- Dilling Alternative l. Separate charge as a sp~cial assessment on the property tax bill. 2. Separate charge collected. on water purveyor's utility hi 11 ing. TABLE II 1-1 SCHEDULE c( ALTERNATIVE Pl.ANS FOR USf:R CllARGP.S Wlll!N AV TAXES ARE INSUPFICIENT TO PAY OM&R COSTS Probable Calculation Hethod 1. Subdivide user classes into sub- classes such as single fnmlly and multi-family dwellings, office bulldings, small commercial estab- lishments, etc., and calculate flat rates attendant to each based on average discharges anti system loading from representative s~mpllngs. 2. Base charge on water volume Other Major Relevant Issues 1. (a) Current Statutory authority exists (b) Requires a publ le hearing nnJ s e parate notice of said hearing to all prope rty owners. (c) Utilizes existing assessor file as dat a base and tax bill as billing mechanis m. l101~ever , data base would require sub - stantial annual update at Districts' expense and conversion to a computer tape input by Districts to assess charge on tax bill. (d) Inaccuracy of Assessor's data base may result 111 high percent of billing errors and. require a customer service f unc t l on. (e) Unsewered properties could be reflected in rate structure once identified and/ or separate provisions made for rebate. (f) Maximum charge for tax collector's service is established at SS/acc ount or 1\ of q>llections, whichever ls greater. (g) l.011 delinquency factor. (h) Cush flow is not spread evenly . (i) \~ould sntlsfy notificutlon requirements 2 . (a) Current statutory authorit)' exists . ltowever, it is permissive, not mamlat- ory for the water utility. (b) Would not require a public hearin~. (c) Would require contractual arrangeme nts and sysfem modifications with approx- i mately 150 water purveyors. (Continued) ttilling Alternative 2. (Cont'd .) 3 . ))i rect billing by CSOOC TAllLE III-1 (Cont'd) Probable Calculation ~lethod 3. Same as l . above utilizing assessor's files as the data base source. SCHEDULE C Page 2 Other Major Relevant Issues (d) \fo11ld require a minimum of data hasc maintenance by the Districts as this would be autom;itically clone hy the wnter utility. llowevcr, separate arrangements may have to be made with the utility to reflect loadings of small commercial establishments. (e) Charge more directly as~o c iated 1~ilh actual use (nssu111in1! use is related to water consumption). (f) Unsewerecl properties would have lo be illentified and a system exception or rebate provision made. (c) lligh delinquency. (h) Cost of service by utility is unknown and would have to be negotiated or ~ established by code amendments. (1) Cash flow would be more unifo1 . (j) lfould satisfy notification require- ments. 3. (a) Current statutory authoritr exists. (b) lfould require instnllation of expen- sive computcrizeJ billing system anJ associated personnel and administra- tive costs or contracting with an outsiJe bureau. (c) Host costly methoJ. (cl) llequires extensive data base main- maintcnancc . (e) Inaccuracy of tlatn base source may result in high percent of billing cri·ors. (ContinucJ) , . Billing Alternative J . (Cont'd .) 4 . Impose a Separate AV Tax Levy TA8U! 111-1 (Cont'd) Probable Calculation ~1 e thod 4 . Based on property value SCHEDULE C Pag e 3 Other Major Relevant Issues .. (f) Unsewered properties could be reflected in rate structure once identified and/ or separate provision made for rebate . (g) Expected delinquency factor would be highest. (h) Cash flow impact would be based on determination of billing frequency . (i) Would satisfy notification r e quirements. 4 . (a) Require s 2/3 voter approval (b) Unsewered property issue would .ve to be resolved (c) Low delinquency factor (d) Most cost effective method (e) Cash flow not spread evenly (f) Would satisfy notification requir ements (g) Least equitable May 21, 1987 MEMORANDUM TO: ALL DISTRicr NO. 3 DIREX:'l'ORS COUNTY SANITATION DISTRICTS of ORANGE COUNTY, CALIFORNIA 10844 ELLIS AVENUE P.O. BOX 8127 FOUNTAIN VALLEY. CALIFORNIA 92728-8127 (7141 962-241 , At the conclusion of the Adjourned District No. 3 Board Meeting on Wednesday, May 20, 1987, the Directors asked that they be provided the language in the notion directing staff to prepare a long-range financial plan and implementation schedule for consideration by the Board. '!he following is the Board's action: ••••• it was roved, seconded ••••••• and duly carried: That the staff be, and is hereby, directed to draft a tentative financial plan and implementation schedule for addressing the District's long-range financial requirements, for subsequent consideration by the Board, utilizing the following fee and implementation guidelines: Implementation of a SUpplenental User Fee Program Class of User Single-Family DY.ellings/Condaniniums Basis of Charge Charge per Dwelling Unit 1988-89 1990-91 Annual Rate Annual Rate $24.00 $30.00 Revisions to Existing Connection Fee Program Basis of Charge 1987-88 1989-90 Single/Multi-Family Dwelling Units Charge per Dwelling Unit $1,000.00 $1,500.00 cannercial/Industrial/ Governmental/Other Charge per 1,000 sq. ft. $ 300.00 $ 500.00 FORTHER MJVED: That staff be, and is hereby, granted discretion to modify the guideline fee am::>unts and proposed implementation dates in drafting said long-range financial plan for consideration by the Board. ~~ Rita J. Brown Board Secretary l... .. BOARDS OF DIRECTORS County Sanitation Districts of Orange County, California Post Office Box 8127 10844 Ellis Avenue Fountain Valley, Calif., 92708 Telephones: T II DISTRICT 'No. 3 SUPPLEMENTAL AGENDA ITEMS WEDNESDAYJ MAY 20J 198 7 -7:30 P.M. Area Code 714 540-2910 962-2411 AGENDA (4) Supplemental Agenda items to be considered under Regular Meeting Agenda Item No. 4: The following items are hereby submitted to the Board of Directors for discussion and action at the regular meeting date and time set forth above. The need to take the recommended action arose subsequent to the agenda being posted on May 14, 1987. In order for action to be taken on these items, the Board of Directors shall first determine by a two-thirds vote of the Board members, or if less than two thirds of the members are present, a unanimous vote of those members present, that the need to take this action arose subsequent to the aqenda beinq oosted. (a) ml? Roll call vote authorizing consideration of the following items which have not been posted 72 hours prior to this Board Meeting date: ~ ~ Consideration of motion to receive and file "~~~ Staff Report dated May 20, 1987, re failure of~-~ ~-.. >~,La Habra Purchase \Lines"~'.' .~957ilili'. C See attached ~-report) ~---:~~ ( 2 ) Consideration of motion authorizing staff to procure necessary materials, supplies and services for Emergency Repairs to La Habra Purchase Line "W" Sewer and Site Restoration (Contract No. 3-32R) for a total amount not to exceed $100,000.00 May 20, 1987 STAFF REPORT Break in La Habra Purchase Line "W" COUNTY SANITATION DISTRICTS of ORANGE COUNTY, CALIFORNIA 10844 ELLIS AVENUE P.O. BOX 8127 FOUNTAIN VALLEY. CALIFORNIA 92728-8127 1714J 962.2411 County Sanitation District No. 3 of Orange County, California Last week District Maintenance crews, while attempting to clean the La Habra Purchase Line "W" sewer discovered a break in the line at a location approximately half-way between Rosecrans Avenue and Imperial Highway on the west side of Beach Boulevard. In this vicinity, the District operates three lines; line "W", located approximately 300 feet westerly of Beach Boulevard within oil fields and adjacent to Coyote Creek Flood Control Channel; and two lines within Beach Boulevard, line "E" and the Miller-Bolder Trunk Sewer. Line "W" is a shallow 12-inch line installed in 1951 and purchased by the District fran the City of La Habra. District Engineering staff inmediately engaged private contractors, and together with the maintenance division, began repair procedures. '!he line was found to be plugged at a manhole southerly and downstream of the break. District crews utilized flush trucks in an attempt to free the plug. It was later detennined that vandals had placed rocks and other debris into the sewer which caused the backup. Contractors were brought in to construct an access road to the break area, excavate and make the repair. At the location of the break, repair, the line consists of old, short sections of clay pipe with mortar packed joints. It appears that the high pressure caused by the blockage cracked the pipe at this location, and may have caused additional leakage through the joints at other locations. After the repair was made, District staff proceeded with cleaning the line. Apparently, the break occurred sanetime ago, and water has found its way fran the sewer to a sunp area nearby, approximately 700 feet long by 5 feet wide. Staff has engaged a contractor to excavate the saturated, extremely unstable soil to allow it to dry. Safety fencing has been installed around the site to preclude the curious fran walking into the danger area. Excavation has revealed that the material was highly odorous and a decision was made to begin trucking it to a sanitary landfill. After the material is evacuated, crews will bring surplus dirt fran another District construction job, the Fullerton-Brea Interceptor Sewer, to refill the exqavation. Staff has contacted the landowner, Chevron Oil Co. in La Habra, and discussed the repairs. As of this writing, the extent of damage to the line has not been totally assessed. However, while cleaning the line with the high pressure water jets, staff noticed that water refills the sump area. 'lherefore it appears that the line is leaking at additional locations, possibly at the joints where the mortar seal has been forced out by high pressure resulting fran the original stoppage. Staff Report May 20, 1987 Page '!WO Staff has engaged a finn to TV the line to detennine the extent of the damage1 early field observations indicate the line is in extremely poor condition. However, until the TV survey is canpleted, exact repairs and cost estimates cannot be detennined. However, based on preliminary infonnation to date, it is estimated that the emergency repair work will include the following: 1. Pioneering a road to the manholes and repair of the line $ 20,000 2. Replacement of 12 manhole covers with bolt-down locking manhole covers 18,000 3. 'IV-ing of the.line 5,000 4. Removal of excavated muck fran sump area and disposal at a sanitary landfill 30,000 5. Placement of fill in sump 8,000 6. Installation and removal of temporary fencing 2,000 7. SUrveys, engineering necessary for making final recarmendations 15,000 Total Estimated Costs $ 98,000 Staff requests authority to proceed with emergency repairs outlined in the manner described above, in an amount not to exceed $100,000. At the conclusion of the repairs, staff will report to the Directors on the extent of the damage and the repairs required. 'IMD:jt \._,/ DISTRICT NO. 3 MAY 20., 1987 HISTORICALLY COUNTY SANITATION DISTRICT No. 3 HAS FINANCED ITS OPERATING AND CAPITAL NEEDS THROUGH A VARIETY OF REVENUE SOURCES. OPERATING NEEDS HAVE BEEN FUNDED SOLELY BY AD VALOREM TAXES CAPITAL .REQUIREMENTS HAVE BEEN FUNDED BY -BONDED DEBT '51 & '58 -Ao VALOREM TAXES -CONNECTION FEES -FEDERAL AND STATE GRANTS -P11orost11on UNTIL LAST YEAR THE IMPACTS OF PROPOSITION 13 ON COUNTY SANITATION DISTRICT No. 3 HAVE BEEN RELATIVELY MINOR WHEREAS IN THE PAST AD VALOREM TAXES WERE USED BY THE DISTRICTS FOR BOTH OPERATING AND CAPITAL NEEDS -OVER THE PAST SEVERAL YEARS AD VALOREM TAX REVENUE HAS BEEN APPROPRIATED EXCLUSIVELY TO OPERATING COSTS PROPOSITION 13 HAS VIRTUALLY PRECLUDED THE ABILITY TO ISSUE 6() BONDS FOR CAPITAL FACILITIES HOWEVER., AS YOU KNOW., LAST YEAR THE BOARD DECIDED TO TAKE ADVANTAGE OF THEN FAVORABLE TAX LAWS AND MARKET CONDITIONS AND ISSUED $ ~~lti,AA... IN COP's TO PARTIALLY FUND CAPITAL REQUIREMENTS OVER THE NEXT 3 YEARS FOR MANY YEARS IT HAS BEEN OUR PRACTICE TO PLAN FOR BOTH OUR OPERATING AND FACILITIES EXPANSION ON A 5-YEAR BASIS THIS YEAR WE ARE MODIFYING OUR PROCEDURES AND WE WILL NOW BE USING 10-YEAR PLANS ONE OF THE MAIN REASONS FOR THE 5 ._f 10 YEAR PLANNING PERIODi: IS TO PROJECT OUR FUNDING NEEDS IN ORDER TO ANTICIPATE THE REVENUE SHORTFALLS WELL IN ADVANCE SO THAT THE BOARD CAN PROPERLY ADDRESS THE ISSUES OUR PRACTICE IS TO MAKE OUR PROJECTIONS ON A CONSERVATIVE BASIS SO THAT WHAT YOU SEE IS WORST CASE WE WOULD MUCH RATHER BE ABLE TO TELL YOU AS THE EVENTS UNFOLD THAT YOU ARE IN BETTER CONDITION THAN TO HAVE YOU SURPRISED AND FIND OUT THAT CONDITIONS ARE WORSE THAN EXPECTED BASED ON OUR CURRENT PROJECTIONS., DISTRICT 3 CAN EXPECT TO BEGIN EXPERIENCING FUNDING SHORTFALLS AS SOON AS 1989 IN THE OPERATING FUND '...._,/THE PRIMARY SOURCE OF ADDITIONAL OPERATING REVENUE WOULD BE IMPLEMENTATION OF A SUPPLEMENT.s:i'J USER FEE TO MAKE UP THE REVENUE SHORTFALL ~L -1- \..,/ \.,.,! THE CAPITAL FUNDING SHORTFALL WILL START TO OCCUR A FEW YEARS LATER BUT IT IS NECESSARY TO ACCUMULATE THE FUNDS IN ADVANCE FOR THE MAJOR CONSTRUCTION ACTIVITIES THAT WILL TAKE PLACE THE PRIMARY SOURCE OF ADDITIONAL CAPITAL REVENUE IS CONNECTION FEES THE REPORT INCLUDED WITH YOUR AGENDA MATERIAL SUMMARIZES THE APPROACH THAT OTHER DISTRICTS HAVE FOLLOWED IN PLANNING FOR THEIR LONG-RANGE FINANCIAL NEEDS -2- MEETING DATE May 20, 1987 DISTRICT l TIME 7: 30 p.m. DISTRICTS 3 ~~~~~~~~~- (EDGAR) •••••••• HOESTEREY ••• _____ _ (CRANK). ••••••• HANSON •••••• _____ _ (YOUNG) •••••••• GRISET •••••• _____ _ (ROTH). •••••••• STANTON ••••• _____ _ DISTRICT 2 (NORBY) •••••••• CATLIN •••••• _____ _ (WEDEL). ••••••• MAHONEY •••• ·--___ _ (PICKLER) •••••• BAY ••••••••• _____ _ (FRIED) •••••••• BIGONGER •••• _____ _ (YOUNG) •••••••• GRISET •••••• _____ _ (NELSON) ••••••• LEYTON •••••• _____ _ (SCOTT) •••••••• NEAL •••••••• _____ _ (DOWNEY) ••••••• NEWTON ••••• ·--___ _ (CUL VER). •••••• PERRY •••••• ·--___ _ (FASBENDER) •••• SILZEL. ••••• _____ _ (PEREZ) •••••••• SMITH ••••••• _____ _ (ROTH) ••••••••• STANTON ••••• _____ _ DISTRICT 3 (HERMAN) ••••••• POLIS •••••• --1tl!C ___ _ (WEISHAUPT) •••• SAPIEN ••••• -~--__ (PICKLER) •••••• BAY •••••••• ·-~-___ _ (NORBY) •••••••• MTLIU •••.•• ~ __ (RISNER) ••••••• CLIFT ••••••• _____ _ (PERRY) •••••••• CUL VER ••••• ·~--__ (MC CUNE) •••••• GRIFFIN •••• ·~--__ (YOUNG) •••••••• GRISET •••••• JiI" __ (CORONADO) ••••• KANEL. • • • • • • ___ _ (WINCHELL> ••••• KELLY •••••• ·--___ _ (WEDEL) •••••••• ~Y ••••• ~ ___ _ (SCOTT) •••••••• NEAL ••••••• -~--__ (SUTTON) ••••••• NELSON ••••• ·-~-___ _ (WILES) •••••••• S IEFEN •••••• ~ ___ _ (ROTH) ••••••••• STANTON ••••• ~ (BERNAL) ••••••• SYLVIA •••••• ~:::: DISTRICT 5 (COX) •••••••••• HART •••••••• _____ _ (PLUMMER) •••••• COX ••••••••• _____ _ (STANTON) •••••• ROTH •••••••• _· ____ _ DISTRICT 6 (JOHNSON) •••••• WAHNER •••••• (PLUMMER) •••••• MAURER •••••• :::::::::::: (STANTON) •••••• ROTH •••••••• _____ _ DISTRICT 7 (KENNEDY) •••••• EDGAR ••••••• (AGRAN) •••••••• MILLER, S ••• ------ (PLUMMER) •••••• COX ••••••••• ------ (YOUNG) •••••••• GRISET •••••• ------ (STANTON) •••••• ROTH •••••••• ------ (PEREZ) •••••••• SMITH ••••••• ------ (GREEN, H) ••••• WAHNER •••••• :::::::::::: DISTRICT 11 (WINCHELL) ••••• KELLY ••••••• (GREEN, p). •••• MAYS •••••••• ------ (ROTH) ••••••••• STANTON ••••• :::::::::::: DISTRICT 13 (NELSON) ••••••• SUTTON •••••• ( BIGONGER) ••••• MURPHY •••••• ------ (PICKLER) •••••• BAY ••••••••• ------ (STANTON) •••••• ROTH •••••••• ------ (PEREZ) •••••••• SMITH ••••••• :::::::::::: DISTRICT 14 (AGRAN) •••••••• MILLER, S ••• (MILLER, D) •••• SWAN •••••••• ------ (EDGAR) •••••••• KENNEDY ••••• ------ (STANTON) •••••• ROTH •••••••• ------ (PEREZ) •••••••• SMITH ••••••• :::::::::::: 05113/87 JO INT BOARDS (PICKLER) •••••••••• BAY ••••••••• (FRIED). ••••••••••• BIGONGER •••• ---- (NORBY) •••••••••••• CATLIN •••••• ---- (RISNER) ••••••••••• CLIFT ••••••• ---- (PLUMMER) •••••••••• COX ••••••••• ---- (PERRY) •••••••••••• CULVER •••••• ---- (KENNEDY) •••••••••• EDGAR ••••••• ---- (MC CUNE). ••••••••• GRIFFIN ••••• ---- (YOUNG) •••••••••••• GRISET •••••• ---- (CRANK) •••••••••••• HANSON •••••• ---- (COX) •••••••••••••• HART •••••••• ---- (EDGAR). ••••••••••• HOESTEREY ••• ---- (CORONADO) ••••••••• KANEL •••• · ••• ---- (WINCHELL) ••••••••• KELLY ••••••• ---- (EDGAR) •••••••••••• KENNEDY ••••• :::::::: (NELSON) ••••••••••• LEYTON •••••• (WEDEL) ••••••.•••••• MAHONEY ••••• ---- (PLUMMER). ••••••••• MAURER •••••• ---- (GREEN, P) ••••••••• MAYS •••••••• :::::::: (AGRAN) •••••••••••• MILLER, S ••• (BIGONGER) ••••••••• MURPHY •••••• ---- (SCOTT) •••••••••••• NEAL •••••••• ---- (SUTTON) ••••••••••• NELSON •••••• :::::::: (DOWNEY) ••••••••••• NEWTON •••••• ___ _ (CULVER) ••••••••••• PERRY ••••••• ___ _ (HERMAN) ••••••••••• POLIS ••••••• ___ _ (STANTON) •••••••••• ROTH •••••••• ___ _ (WEISHAUPT) •••••••• SAPIEN •••••• ___ _ (WILES) •••••••••••• SIEFEN •••••• (FASBENDER) •••••••• SILZEL •••••• :::::::: (PEREZ) •••••••••••• SMITH ••••••• (ROTH) •••••••••••• •STANTON ••••• ---- (NELSON) ••••••••••• SUTTON •••••• ---- (MILLER, D) •••••••• SWAN •••••••• ---- (BERNAL) ••••••••••• SYLVIA •••••• ---- (GREEN,H/JOHNSON) •• WAHNER •••••• :::: :::: STAFF: OTHERS: SYLVESTER ••• ~ CLARKE •••••• __ DAWES ••••••• __....- ANDERSON •••• BUTLER •••••• ~ BROWN ••••••• ~ BAKER ••••••• KYLE •••••••• __ VON LANGEN WINSOR •••••• :::: STREED •••••• __ CLAWSON ••••• __ OOTEN ••••••• __ LINDER •••••• DEBLIEUX •••• __ TALEBI. ••••• HOLL •••••••• __ WOODRUFF •••• ATKINS •••••• :::: HOHENER ••••• __ HOWARD •••••• __ HUNT •••••••• __ KEITH ••••••• KNOPF ••••••• :::: LINDSTROM ••• LYNCH ••••••• YOUNG ••••••• ::: DISTRicr 3 ADJOURNED REX;UIAR MEETil'K; NarES -5/20/87, 7:30 P.M. The General Manager reported that the Districts utilize the Master Plan process to detail needs of individual corrrnunities based on land use plans that individual cities adopt and standards of the Water ·Quality Control Board and EPA. Generally, use 20-year planning and focus on 5-10 years and up'.3.ate every five years. The last District 3 plan was done in 1983. Will be caning to Board next year to up'.3.ate that plan. Tan Dawes then reiterated that the 1983 Master Plan was prepared after reviewing all land use plans in the 15 cities ih.District 3. Reviewed rrap on wall. Sane sewers have been constructed since 1983 but rrost have not yet . After 1983 plan was adopted, some of the higher density land use changes began taking place and staff felt v.B should take another look at interceptors before v.ie construct them to be sure that they were the right size. One of the recomnendations in the 1983 planwas to build capacity in the Knott Interceptor Sewer which begins at Brookhurst in Fountain Valley and goes up to Buena Park. That is one of the largest and newest sewers. It was believed there w:::iuld be additional capacity in that sewer so there was a proposal between Districts 2 and 3 to construct a line in Orangethorpe to the Knott Interceptor. Since that time District 2 has restudied its drainage areas and have recomnended construction of a new interceptor in Euclid Avenue so District 2 would not be buying capacity in the Knott Interceptor. The study indicated that this was the rrost econanical way to serve District 2 and it was believed that the capacity had vanished because land use changes required District 3 to utilize that capacity. District 3 has been rehabilitating its large Miller-Holder Trunk Sewer. It begins at the Huntington Beach plant and goes to Imperial Highway and Beach Boulevard in La Habra. Is longest Sanitation District sewer. Was constructed between 1959-68. PVC has been inserted in pipe and has paid off v.Bll. W= have been r ehabilitating rranholes on that line as they have suffered deterioration. They don't have liner. A contract for repair of 73 manholes was awarded in April for $4.3 million. $1 million in previous contracts. Traffic control is a rrajor issue in rehabiliting them. There are 250 manholes on the Miller-Holder line. The first 93 are the w:::irst. Hope to complete within the next couple years. He also rev iewed a couple other rehabilitation projects to be done. Tan then advised that District 11 had a meeting in April and the staff had alerted them that an area exchange between Districts 3 and 11 ma.y be considered in the future with regard to the area bounded by the Santa Ana River levy east of the Huntington Beach flood control channel and Hamilton Avenue. This 850 acres in District 11 is served by District 3 facilities. A second area surrounded by Beach Boulevard and Garfield which includes the Bolsa Chica area in District 3 is served by District 11 facilities. He reported that District 11 has asked the staff to study the situation to see what could be done for an equitable exchange of flows or deannexation and reannexation to the serving District. Director Kanel asked why the manholes weren't protected when the sewers were lined back in the 1960's? Tan Dav.ies explained that rrost of the manholes weren't in the intersections then; ·wc:>....re in the center of the street and w:::iuld have been a great cost. The streets have been widened and i t isn't in the traffic-way now. W= did use a new process at that time on them but it didn't w:::irk. The District also had a financial problem then. Director Siefen corrmented that he was concerned whether the swap with District 11 ~uld be a good one with the Bolsa Chica area and the number of homes in District 11. Tan Dawes replied that Bolsa Chica "M:>uld not be served through the Miller-Holder Trunk. District 11 has a pumping station on Slater and Golden West and pumps to the Knott Interceptor and Interplant Relief line. Tan added that District 11 plans to extend the Coast Trunk Sewer so "M:>n't have to use capacity in the Knott Interceptor. Sal Sapien asked why District 3 and 11 didn't become one District? The General Manager advised that the question of consolidation of some or all of the Districts has come up from time to time. The Boards have addressed it on four separate cx:::casions by forming a special ccnmittee and on each cx:::casion, the Ccmnittee recorrmended the Districts remain the same. Director Kanel asked if the various County-wide cornnittees or Grand Jury look into this? Wayne Sylvester advised that the studies in the past had caTte about because of the Grand Jury's suggestion. Director Culver stated that he was on a number of those cornnittees and the citizens of District 11 in Huntington Beach came unglued when m=rging with District 3 was considered. Huntington Beach wants only to control themselves. Don Griffin added that beach cities have different problems also like salt water intrusion, etc. and could be a liability. He also stated that it "M:>uld seem whatever ~diture to take care of the need should be done and after study takes place, an equitable arrangement "M:>uld take place. Dorothy Wedel also carmented regarding the t"M:> areas. The General Manager stated that the staff is just beginning preliminary studies regarding the feasibility of swapping those areas and will be coming back to Districts 3 & 11 with recorrmendations. There are some pluses and minuses. cne of the things the Boards did on their Master Plans for the individual Districts which was an outgrowth of the consodidation study, was to form Master Plans on a "super"-District basis-Districts 2, 3 & 11 canbined; the southern half of District 6 and District 5 combined; District 1, the northern half of District 6, and District 7 combined. #3(a) -Staff report on long-range financial projections The General Manager stated that the rrajor challenge is how do we pay for the cost of constructing the trunk sewer collection system and the District's share of construction of the joint "M:>rks at both of the treatrrent plants. District 3 pays 1/3 of the cost of the joint "M:>rks treatrrent costs. The District's operating costs are financed by the District's share of ad valorem taxes. Capital requirements have been funded by a variety of sources--issuance of bonded debt; portion of ad valorern taxes; construction grant rronies; and federal and state grants. District 3 really hasn't felt effects of Proposition 13 until now. This Board issued $48 million "M:>rth of Certificates of Participation to take advantage of tax laws. The staff went to a 10-year horizon in preparing the cash flows for the first time, but concentrated on the next five years. OJ.r practice is to be conservative. Staff "M:>uld rather tell the Board that our projections aren't as dim as we thought rather than the other way. District 3 rray begin to experience a deficit in 1989. They can implement a supplemental user fee. The ffi3.terial with the agenda and in the Manager's Report pretty well surrmarizes the strategy that other Districts have used. Mr. Sylvester then asked the Director of Finance to review the statistics for the Board. Bill Butler reviewed the Manager's Report. District 3's current connection fees are $250/dwelling unit and $50 per 1,000 sq. feet. Their connection fee is one of the lowest arrong the nine Districts. Reviewed fees of other Districts. Also reviewed Schedules A, B, and C. -2- Director CUlver asked how he established the figures re connection fees since they vary so f!U.lch? Bill stated that they are basically established in relationship to financial position of the District. In District 2 this level of fee was needed when implemented and has been all they have needed since then. For District 3 the $250 established in the 1970's has been able to carry them for rrany years but isn 't sufficient now . It i s established in relation to need rather than any engineeri ng reason . High fees are in place in those Districts that are not in good financial shape to rreet Master Plan needs and pay joint ~rks costs . Director Wedel corrmented that in District 2 there is rrore developm::nt so cost ~uld be rrore in District 3. Tom Dawes stated that District 2 has had a l ot more devel oprrent . District 3 is a l ittle bit older area . A lot of construction is new and has a hi gher A.V., such as Anaheim Hills area . District 2 does have serious problems though. Need rrore trunk sewers. They have also had sane good fortune . They are served by the Santa Ana River Interceptor which was a grant funded project so was a big benefit to District 2 . They will now build line from Orangethorpe to the Santa Ana River Interceptor for $34 million. Staff is evaluati ng District 2 's s tructure now. The General Manager added that District No . 2 had a windfall re constructi on of the Santa Ana River Interceptor as the District provided 30 mgg in the line , and the upper basin paid $18 million of the total cost of $21 million. I t has a l arge capacity ahd was a very good deal for District 2 financially . Sief en asked if Schedule B was based on figures i f new fees are in place? Distri ct is still going to run into $7 million deficit at the end of 10 years . Bill replied that we are taking a very conservative approach . We can 't seem to spend the rroney as quickly as projected for a variety of reasons so what you see is optimistic and rray not be as bad a picture as it looks . District 3 will have $8 million in the operating fund so have the choice of taking SOitE of those funds and rroving to capital funds. Both Schedul es A & B reflect continuation of conditions that exist relative to our NPDES Fermi~ and partial secondary treatrrent. If we have to go to full secondary treatrrent in 1990 -91 , nllinbers are inadequate . Sief en then asked if there was any chance of increasing these fees in stages rather than go from $250 to $1 ,500? Didn 't think it ~uld be right for old-time developers . JWS replied , yes, that certainly could be done . It is at the direction of the Board . Can phase in over a period of years . Siefen said he thought it was legitirrate to increase fee but questioned going from $250 to $1 ,500. Griff in corrmented that the District implemented the $250 and $50 fees in 1970-71 . We should be progressing along in our financial strategy. Staff should develop a financial strategy. Shouldn 't do it every year but shouldn 't wait 1 0 years . Kanel asked , what do you mean "old-time" developers? Siefen answered that there i s a lot of redeveloprrent going on . Developers cane back to the District three or four times a year . W:>uld pay $250 in December , then in January ~uld be $1 ,500 . Kanel stated that fee increases are all part of progress . 'Ihink we have to rrake a choice here and don 't thi nk you can really phase it . CUlver asked for a clarification on the salrron-colored schedule, is connection fee included in line 14? WHB said line 17 includes this fee . -3- ... Director Sapien asked since you have known for a couple years about future deficit, what cost-cutting rreasures have been done? Bill Butler anstNered that within the treatrrent plants ,' the Distri cts have done several things re energy savings and conservation projects . Have joined the Southern california Energy Coalition . Tan Dawes added that we have a coupl e lighting energy conservation projects. This study will come before the Board in June for approval of plans and specifications. Ha;.;ever , there are a large nwnber of projects we have been trying to develop for a couple years re digester gas. It has potential to be a great asset or liability . Under AQMD we rrust substantially r educe our emissions . Cost of projects ($50 million) will pay out in about 5 years and drive down operat ing cost for District 3 and other Districts . M:Jst other treatrrent plant construction projects are rrandated by increased flows . Griffin advised that the Board wi ll be receivi ng the total budget for all Districts next rronth . He stated that staff does an excellent job of documenting costs, which said costs are rrandated by EPA and r egulatory agencies. It is an i ssue which we have no control over. If we didn't have partial secondary treatrrent , ~uld cost $285 -300 mi l lion for full secondary treatrrent . Polis asked if the budget showed the reduction in energy use when the central power generation facil ities are constructed? Tan Dawes replied that right now the budgeet does not reflect those savi ngs because we don _'t have an AQ.\ID permit yet. Is expected by the end of 1987. Then cost savings ~uld show up. Operating costs ~uld drop then . Siefien asked, what is the base for .i.mplerrentation of these fees and what are your feelings as far as how accurate the base information regarding all parcels is concerned? Bill Butler replied that we contact all cities and discuss with City Planning Departrrent and Redeveloprrent Agenc i es. Siefen reiterated that he wanted to know how up to date the data base is with regard to areas that are being redeveloped and going from 6 families to 24 units, etc . Bill answered that the data base that we use i s from the County Assessor 's records off the current tax rolls . We can tell how rrany single or double units . We cannot verify their records . Director Neal said he assurred eventuall y fees are going to have to catch up as costs are going up . Asked what Directors tNere expected to do that night? He was told they need to appr ove program in concept only. He then stated that he was only 1/5 of a five-rran council and he ~uld like to discuss it with them prior to voting. Wedel questioned equitability of user fee for single-family home vs. condo or rrobile home and apartrrents. Felt it should be based on rretered flow . Bill replied that we have done flow rretering studi~ around the Districts and field data has shown that apartrrents have 60% of the f l ow per unit rrore than singl~family homes. Cha i rman Pol is then stated that the Board needed to decide (1) whether they should go ahead wi th increase in fee structure and, if so , direct staff to prepare this and corre back to Board ; and (2) how do we want to do it-all in one lump or phased in? Director Siefen then MJVED to establish a $24.00 user fee in 1988 -89 and $30 .00 in 1990-91 . He FURI'HER M)VED to establ ish a $1 ,000 connecti on fee in 1987-88 , increasing to $1 ,500 in 1989 -90 with the stipulation that these financial values are to be revi ewed in 1988-89 and 1989 -90 wi th respect to whether they should increase or decrease. With regard to corrmercial , suggested $300 per 1,000 sq. ft. in 1987-88 and $500 in 1989 -90 with a study r e whether this is equitable and adequate. Culver SEX:ONDED the rrotion and added that he wanted to get the staff started but needed to talk this over with his Board . . ·~ Stanton asked if that notion was tentative? Polis replied that the staff was to use this as a guideline and bring final figures back to the Board. Siefen added that connection fees should be implerrented irrm=diately -1987-88. Polis said District is not at a financial problem point right now so don't have to do anything irrmediately. Could be first implerrented July 1, 1988. JWS stated that July 1st isn't a magic date. If Boatd agrees with concept, they should direct staff to take concept and develop a formal plan that rolls in the fees that have been suggested and the Boa.rd could then consider that plan and m::xlify it if they see fit. Director Clift suggested that the District 3 Boa.rd meet again after the Directors have had an opportunity to sound out their colleagues. Siefen said that August 10th was the deadline for user fees but no date for connection fees . JWS suggested that the Boa.rd meet again in 30-60 days. called for the question. Sapien asked if the notion could be tabled until he discussed this with his council. It was explained that they were just giving staff direction now and no I vote was being taken. Neal added that he was not sure he wanted to formally vote on anything that was going to raise fees until his council could see something. It was pointed out that Schedule B ~uld be passed on to the City Councils in the near future, based on the specific guidelines given to staff. Staff will corre back in 30-60 days with specific set of figures. Stanton asked maker of notion if he ~uld REVISE IDI'ION to read "direct staff to prepare for subsequent consideration a tentative plan, as follows:". Siefen agreed to amend notion accordingly. Stanton also asked if Siefen ~uld AMEND MJI'ION FUR1'HER to add "or other f iqures and dates, at the discretion of staff ,(OR as appropriate, per Stanton) to be considered by the Board". Siefen again agreed with revision. CALLED FOR THE QUESTION. VOICE VOTE. IDI'ION CARRIED. -5- May 21, 1987 MEMORANDUM TO: ALL DISTRicr NO. 3 DIREX:TORS COUNTY SANITATION DISTRICTS of ORANGE COUNTY. CALIFORNIA 10844 ELLIS AVENUE P.O. BOX 9127 FOUNTAIN VALLEY. CALIFORNIA 92728-8127 (714) 962-2411 At the conclusion of the Adjourned District No. 3 Boa.rd Meeting on wa:inesday, May 20, 1987, the Directors asked that they be provided the language in the notion directing staff to prepare a long-range financial plan and implementation schedule for consideration by the Board. '!he following is the Board's action: ••••• it was noved, seconded ••••••• and duly carried: That the staff be, and is hereby, directed to draft a tentative financial plan and implementation schedule for addressing the District's long-range financial requirements, for subsequent consideration by the Board, utilizing the following fee and implerentation guidelines: Implerentation of a SUpplemental User Fee Program Class of User Single-Family Dwellings/Condaniniums Basis of Charge Charge per IM3lling Unit 1988-89 1990-91 Annual Rate Annual Rate $24.00 $30.00 Revisions to Existing Connection Fee Program Basis of Charge 1987-88 1989-90 Single/Multi-Family Dwelling Units Charge per Dwelling Unit $1,000.00 $1,500.00 CcmnercialLindustrial/ Governmental/Other Cl'la.rge per 1,000 sq. ft. $ 300.00 $ 500.00 FORl'HER MJVED: 'Ihat staff be, and is hereby, granted discretion to m:xiify the guideline fee arcounts and proposed implenentation dates in drafting said long-range financial plan for consideration by the Board. ~~ Rita J. Brown Board Secretary COUNTY SANITATION DISTRicr NO. 3 OF ~ COUNTY, CALIEORNIA MINOTFS OF AllJOURNED RmULAR MEE!'!~ May 20, 1987 -7:30 p.rn. 10844 Ellis Avenue Fountain Valley, califomia Pursuant to adjournment of the regular meeting of May 13, 1987, the Board of Directors of County Sanitation District No. 3 of Orange County, califomia, met in an adjourned regular meeting at the above hour and date. 'The Chainnan called the meeting to order at 7:30 p.rn. The roll was called and the Secretary reported a quorum present. DIROC'IDRS ABSENT: arHERS PRESENT: Richard Polis·, Chairman, Frank Clift·, Noman E. CUlver, Don R. Griffin, Dan Griset, John Kane!, James Neal, Chris Norby, Sal Sapien, J.R. "Bob" Siefen, Roger R. Stanton, Charles Sylvia and Dorothy Wedel Ben Bay, Jack Kelly and Carrey Nelson J. wa.yne Sylvester, General Manager, Rita J. Brown, Secretary, William H. Butler and Thanas M. Dawes Joe Ha.rtge and Bruce J3a.anan * * * * * * * * * * * * * * * * * * Review of Master Plan of Trunk Ebllowing a briefing by the General Sewers to serve the District Manager on the nester planning utilized by the District to assure that the sewerage facilities needed to serve the cannunities within the District and canply with applicable regulatory requirements are properly planned for and constructed, the Director of Engineering reviewed the current Master Plan of Trunk Sewers adopted in 1983, and the status of the District's rehabilitation program. In the next fiscal year an update of the Master Plan for the Joint W::>rks and each of the individual Districts including District 3's collection system is planned. New land use plans will be developed based on inf omation which will be obtained fran each.of the cities and the County. In 1983 a study was canpleted which identified several new interceptor sewers that would be required, but m::>St of them have not yet been constructed. Iand use changes in the last few years have been dramatic in the cannunities served by the District and the revised general plans of the cities reflect additional developnent and much higher densities. Staff has therefore recomnended delaying construction of new facilities until such time as the nester plan update is canpleted. The 1983 report also reccmnended that County Sanitation District No. 3 sell capacity in the Knott Interceptor to County Sanitation District No. 2. At that time it was believed that the Knott Interceptor would· have sufficient capacity District 3 05/20/87 for District No. 2's use. Ha.-tever, because of the aforementioned land use changes taking place, District No. 2 has restudied its drainage areas and has determined that it will build a new sewer line in Euclid Avenue which eliminates the need for capacity in the Knott Interceptor. This change fran the 1983 Plan U was approved because it was felt that the available capacity in the Knott Interceptor would be needed by District No. 3 in the future. In April of this year the District awarded the third contract for rehabilitation of vaults on the Miller-Holder Trunk Sewer. The sewer was built in 1959 with polyvinyl chloride (PV'C) liner but the PVC was not placed in the manhole vaults. The $4.3 million contract includes rehabilitation of 73 vaults, sane of which are located in the busiest street intersections in western Orange County, that will be refurbished and lined. There are 250 vaults and manholes on the Miller-Holder Trunk Sewer. Twenty vaults were rehabilitated under the two previous contracts. The remainillg work will be less costly on a unit cost basis since the structures which had suffered the highest degree of deterioration were undertaken first. Mr. Dawes reviewed further rehabilitation work needed on the Ios Alamitos Subtrunk Sewer in Ios Alamitos Boulevard where the pipe is cracked south of Orangewood Avenue1 and on the Westside Relief Interceptor ·Sewer in Moody Street south of Crescent Avenue where the line is cracked beneath a railroad crossing. Plans for the work were approved by the Directors at the May 13th Board Meeting. The estimated cost is $150,000. The Director of Engineering then reported that there are two areas in Districts Nos. 3 and 11 for which service area exchanges should be considered. The first area, within District No. 11 and served by District No. 3 facilities, includes approximately 850 acres west of the Santa Ana River and generally south of Hamilton Avenue. The second area, within District No. 3 and served by District No. 11 facilities, includes approximately 1,060 acres, 850 of which are served by the Slater Pump Station. This area, large portions of which are undeveloped, is bounded by Garfield Avenue on the south, Beach Boulevard on the east and Central Park on the north. · Mr. Dawes reported that staff is studying alternative ways to accarmodate these service areas which could include a collector trunk capacity purchase/sale in the serving-District's facilities; creation of special zones to balance connection fees; or annexation/deannexation in order that District boundaries more closely resemble service areas. The staff is just beginning preliminary studies and will be reporting back to the Boards of Districts 3 and 11 at future meetings. The Board then entered into a general discussion of the master planning, the rehabilitation work and the issue of service areas between Districts during which staff answered several questions that were posed by the Directors. Review of long-range financial projections re capital and operating requirements The General Manager provided an overview of the District No. 3 financing programs. The capital costs of constructing the trunk sewer collection system and the share (approximately one-third) of the joint works treabnent plant costs have historically been f inanCed by a variety of sources including issuance of long-tenn debt securities1 portions of the ad valorem taxJ construction grant ioonies; and connection fees. Operating costs are currently financed by the -2- . ·. ··-··-.. ·--.... ---· --._,, ~ . ·-' --.. ,. --·-··-· --~. --' .. ·-·---··-· --. --·--·--·--·-· --·--·--...... ,--·-----··-...... --·. ,.-.,,_ .. ·----·----·· .. -. •, District 3 \t 05/20/87 District's share of the ad valorem taxes. Mr. Sylvester stated that the effects of Proposition 13 are beginning to impact the District's ability to finance the rising costs of sewage service brought about by certain inflationary trends and stricter requirements of federal and state regulatory agencies for advanced treabnent. Ad valorem taxes are no longer available to allocate to capital costs and are now totally appropriated to cover operating costs. Mr. Sylvester also provided an overview of the District's practices for projecting short and long-term funding requirements and the financing strategies utilized by other Districts in the Joint Administrative Organization that have found it necessary to implement additional sources of revenue to assure the financial integrity of those Districts. The Director of Finance then reviewed the long-range financial projection schedules and provided an overview of the District's financial position for the next ten years based on existing fee structures and several alternative new and/or escalating fee structures. He reported that" without a program of - systerratic fee adjustments over the next several years, the District will experience revenue shortfalls in the capital and operating funds and the District's financial integrity will be jeopardized. Mr. Butler reviewed fee schedules in effect in other Districts and advised the Directors that the Board should consider adjustments to the District's connection fee program, whereby developers pay a one-time connection fee to finance the planning, design and construction of expanding the facilities necessary to accannodate the flow generated by the new developnent, which presently has in effect the following fee schedule: Single/Multi-Family Dwelling Units $250 per dwelling Carmercial/Industrial Governmental/Other $50 per 1,000 sq. ft. The Director of Finance further reported on the District's need to consider additional funding sources such as a supplemental user fee program in the next few years to avoid a projected deficit beginning as soon as 1989 in the District's operating fund. The anticipated deficit could reach as much as $49 million by 1995-96 unless additional revenue sources are generated. He also reviewed various ways o~ collecting alternative revenue sources to finance shortfalls in the District's operating fund when ad valorem tax revenues are insufficent to pay the District's operations, maintenance and replacement costs. The xoost cost-effective method (and the method already adopted by Districts 1, 5, 6 and 13) is to place a supplemental user fee as a special assessment on the County of Orange property tax bill issued annually to all property owners in the County. Mr. Butler further reviewed the District's cash position should the Directors choose to implement the following proposed supplemental user fee schedule which is similar to the fees adopted by the other Districts that have found it necessary to implement user fees to make up funding shortfalls: -3- District 3 05/20/87 Class of User Single-Family Dwellings/Condaniniums Multi-Family Dwellings/Apartments/ Mobile Hanes Ccmnercial/Industrial/ Other (governmental buildings, utilities, non-profit organizations, etc.) Basis of Charge Charge per Dwelling Unit Charge per Dwelling Unit Charge per 1,000 sq. ft. of building 1988-89 Annual Rate* $26.40 15.85 18.90 *Identical to Districts 1 and 5. District 6 adopted this rate in 1983 but has found it necessary to increase by 20%. District 13, which receives no ad valorem taxes, is $70/year. The Board then entered into a lengthy discussion relative to various events that have imp:lcted the District's financial position in the past and events that nay imp:lct it in the future including state and federal regulatory requirements and develoi;m:mt within the District; and how IOOdifications to the Districts long-range financial plans might be made and implemented. Al.so reviewed were oost-cutting measures that have been implemented by the Districts to keep expenses dCMn. It was then roved and seconded: That the Board establish a supplemental user fee of $24.00 per dwelling unit effective in 1988-89 and increase it to $30.00 per dwelling unit in 1990-91, and that the existing connection fees be increased to $1,000 per dwelling unit in 1987-88 for single/nn.llti-family dwelling units and $300 per 1,000 sq. ft. of camnercial/industrial/governmental buildings, and that said fees be increased to $1,500 and $500, respectively, in 1989-90, following an annual review of the District's revenue requirements. After further discussions, the following amended motion was offered, seconded and duly carried: \ That the staff be, and is hereby, directed to draft a tentative financial plan and implementation schedule for addressing the District's long-range financial requirements, for subsequent consideration by the Board, utilizing the following fee and implementation guidelines: -4- u v ·-:, District 3 .... 05/20/87 Implementation of a Supplemental User Fee Program Class of User Single-Family Dwellings/Condaniniums Basis of Charge Charge per Dwelling Unit 1988-89 1990-91 Annual Rate Annual Rate $24.00 $30.00 Revisions to Existing Connection Fee Program Basis of Charge 1987-88 1989-90 Si!!9:le/Multi-Family Charge per Dwelling Units Dwelling Unit $1,000.00 $1,500.00 CarmercialLindustrial/ Charge per Governmental/Other 1,000 sq. ft. $ 300.00 $ 500.00 FURTHER MOVED: '!hat staff be, and is hereby, granted discretion to roodify the guideline fee anounts and proposed implementation dates in drafting said long-range financial plan for consideration by the Board. Approving Emergency Repairs to Miller-Holder Trunk Sewer, La Habra Purchase Section, Lines "E" & "W'' (Contract No. 3-32R) Following a report by the Director of Engi.rieering it was IOOved, seconded and duly carried: That the Staff Report dated May 20, 1987, relative to the failure of the Miller-Holder Trunk Sewer, La Habra Purchase Section, Lines "E" & 11 W11 ,· be, and is hereby, received and ordered filed; and, FURl'HER MOVED: That the staff be, and is hereby, authorized to procure necessary materials, supplies and services for Energency Repairs to Miller-Holder Trunk Sewer, Ia Habra Purchase Section, Lines "E" & "W" (Contract No. 3-32R) for a total anount not to exceed $100,000.00. Adjournment Moved, seconded and duly carried: That this meeting of the Board of Directors of County Sanitation District No. 3 be adjourned. The Chairman then declared the meeting so adjourned at 9:07 p.m., May 20, 1987 :- -s- STATE OF CALIFORNIA) ) SS. COUNTY OF ORANGE ) Pursuant to California Government Code Section 54954.2, I hereby certify that the Agenda for the Adjourned Regular Board Meeting of District No. _3_ held on ~ ~a , 1987 was duly posted for public inspection'at the main lobby of the District's offices on ~ l'f ' 1987. IN WITNESS WHEREOF, I have hereunto set my hand this \~~ day of ~ .. ' 1987. Rita J:BrOwn; Secretary of the Board of Directors of County Sanitation District No • .:S of Orange County, California