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Home My WebLink About1988-02-18 Y COUNTY SANITATION DISTRICTS OF ORANGE COUNTY, CALIFORNIA P.O. BOX 8127. FOUNTAIN VALLEY, CALIFORNIA 927211-8127 10844 ELLIS, FOUNTAIN VALLEY,CALIFORNIA 92708.7018 (714)962-2411 February 11, 1988 NOTICE OF ADJOURNED REGULAR MEETING DISTRICT NO. 11 THURSDAY, FEBRUARY 18, 1988 - 7:30 P.M. HUNTINGTON BEACH CITY HALL - COUNCIL CHAMBERS 2000 Main Street Huntington Beach, California Pursuant to adjournment of the regular meeting of February 10, 1988, the Board of Directors of County Sanitation District No. 11 will meet in an adjourned regular meeting at the above hour and date for a public hearing on the Sewer Service Report for 1988-89 and on the proposal to collect the annual sewer service charges on the 1988-89 property tax bills. Secretary BOARDS OF DIRECTORS County Sanitation Districts rest ore. cox 8127 OF Orange County, California 10844 Ellis Avenue Fountain Valley, Calif., 92708 Tale: Me Code 714 DISTRICT No. 11 9540-2910 62-2411 AGENDA ADJOURNED REGULAR MEETING THURSDAY, FEBRUARY 18, 1988 - 7:30 P.M. HUNTINGTON BEACH CITY HALL - COUNCIL CHAMBERS (1) Roll call (2) Public Comments: all persons wishing to address the Boards on specific agenda items or matters of general interest should do so at this time. As determined by the Chairman, speakers may be deferred until the specific item is taken for discussion and remarks may be limited to five minutes. ( 3 ) Public Hearing on proposal to collect adopted annual sewer service charges on the property tax bills and on the Sewer Service Charge Report for 1988-89, pursuant to Ordinance No. 1108: (a) Open hearing (b) Staff report on proposed use of the County of Orange property tax bill for collection of the annual sewer service charge (c) Consideration of motion to receive and file written comments received, if any (d) Oral public comment (a) Staff/Board response to oral comments (f) Close hearing (4) Consideration of motion to adopt a finding that a majority of the owners of property have/have not protested I (5) Consideration of motion to receive, file and consider adoption of County Sanitation District No. 11 Sewer Service Charge Report for Fiscal Year 1988-89 (Copy enclosed with Directors'agenda material) (6) Consideration of Resolution No. 88-22-11, directing the County Auditor-Controller to include sewer service charges on the property tax bills, pursuant to Ordinance No. 1108 of County Sanitation District No. 11 of Orange County, commencing with the 1988-89 fiscal year. See page "A" (7) Other business and communications, if any (8) Consideration of motion to adjourn -2- RESOLUTION NO. 88-22-11 DIRECTING COUNTY AUDITOR-CONTROLLER TO COLLECT SEWER SERVICE CHARGES ON 1988-89 PROPERTY—TAX BILLS A RESOLUTION OF THE BOARD OF DIRECTORS OF COUNTY SANITATION DISTRICT NO. 11 OF ORANGE COUNTY, CALIFORNIA, DIRECTING THE COUNTY AUDITOR-CONTROLLER TO INCLUDE SEWER SERVICE CHARGES ON THE PROPERTY TAX BILLS WHEREAS, the Board of Directors of County Sanitation District No. 11 has heretofore adopted Ordinance No. 1108, An Ordinance of the Board of Directors of County Sanitation District No. 11 Establishing Sanitary Sewer Service Charges; and, WHEREAS, California Health & Safety Code Section 5473 provides that such charges, as adopted by District Ordinances, may be collected on the County tax roll in the same manner, by the same persons, and at the same time as, together with and not separate from, its general taxes. NOW, THEREFORE, the Board of Directors of County Sanitation District No. 11 of Orange County, California. DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1. That pursuant to California Health & Safety Code Section 5473, the County Auditor-Controller is hereby ordered and directed to include sewer service charges, as established by Ordinance No. 1108, on the 1988-89 property tax bills in the same manner, by the same persons, and at the same time as, together with and not separate from, the general taxes; and that such sewer service charges be included in the annual property tax bills for each year thereafter, for so long as the rates do not change and this resolution remains in effect; and, "A-1" AGENDA ITEM #6 "A-1" Section 2. That pursuant to California Health 8 Safety Code Section 5473, v this resolution shall remain in full force and effect until amended or repealed or until such time as the rate of sewer service charges, as established by Ordinance No. 1108, is changed; and, Section 3. That the General Manager be, and is hereby, authorized and directed to execute any necessary documents or agreements to effect the order set forth in Section 1 herein. PASSED AND ADOPTED at an adjourned regular meeting held February 18, 1988. "A-2" AGENDA ITEM #6 "A-2" BOARDS OF DIRECTORS County Sanitation Districts past Office Box 8127 of Orange County, California 10844 Ellis Avenue .... Fountain Valley, Calif., 92708 Telaphenes: Am Code 714 DISTRICT No. 11 9622411 AGENDA . ADJOURNED REGULAR MEETING THURSDAY, FEBRUARY 18, 1988 - 7 :30 P.M. HUNTINGTON BEACH CITY HALL - COUNCIL CHAMBERS (1 ) Roll call (2) Public Comments: All persons wishing to address the Boards on specific agenda items or matters of general interest should do so at this time. As determined by the Chairman, speakers may be deferred until the specific item is taken for discussion and remarks may be limited to five minutes. ( 3 ) Public Hearing on proposal to collect adopted annual sewer service charges on the property tax bills and on the Sewer Service Charge Report for 1988-89, pursuant to Ordinance No. 1108: (a Open hearing 7155 - (b) Staff report on proposed use of the County of Orange property tax bill for collection of the annual sewer MM / service charge ;I1IJ(c) Consideration of motion to receive and file written comments received, if any (d Oral public comment (a) Staff/Board response to oral comments (f) Close hearing gIC(p M S (4) Consideration of motion to ado finding that a majority of the owners of property ave protested , f (5) Consideration of motion to receive, file and consider adoption 1J of County Sanitation District No. 11 Sewer Service Charge Report for Fiscal Year 1988-89 (Copy enclosed with Directors' agenda material) (6) Consideration of Resolution No. 88-22-11, directing the County Auditor-Controller to include sewer service charges on the property tax bills, pursuant to Ordinance No. 1108 of County Sanitation District No. 11 of Orange County, commencing with the 1988-89 fiscal year. See page "A" (7) Other business and communications, if any (8) Consideration of motion to adjourn q��5 -2- RESOLUTION NO. 88-22-11 DIRECTING COUNTY AUDITOR-CONTROLLER TO LLECT SEWER SERVICE CHARGES ON 1988-89 ' PR PERTY TAX BILLS A RESOLUTION OF THE BOARD OF DIRECTORS OF COUNTY SANITATION DISTRICT NO. 11 OF ORANGE COUNTY, CALIFORNIA, DIRECTING THE COUNTY AUDITOR-CONTROLLER TO INCLUDE SEWER SERVICE CHARGES ON THE PROPERTY TAX BILLS WHEREAS, the Board of Directors of County Sanitation District No. 11 has heretofore adopted Ordinance No. 1108, An Ordinance of the Board of Directors of County Sanitation District No. 11 Establishing Sanitary Sewer Service Charges; and, WHEREAS, California Health 8 Safety Code Section 5473 provides that such charges, as adapted by District Ordinances, may be collected on the County tax roll in the same manner, by the same persons, and at the same time as, together with and not separate from, its general taxes. NOW, THEREFORE, the Board of Directors of County Sanitation District No. 11 of Orange County, California. DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1. That pursuant to California Health 8 Safety Code Section 5473, the County Auditor-Controller is hereby ordered and directed to include sewer service charges, as established by Ordinance No. 1108, on the 1988-89 property tax bills in the same manner, by the same persons, and at the same time as, together with and not separate from, the general taxes; and that such sewer service charges be included in the annual property tax bills for each year thereafter, for so long as the rates do not change and this resolution remains in effect; and, "A-1" AGENDA ITEM #6 "A-I" Section 2. That pursuant to California Health & Safety Code Section 5473, this resolution shall remain in full force and effect until amended or repealed or until such time as the rate of sewer service charges, as established by Ordinance No. 1108, is changed; and, Section 3. That the General Manager be, and is hereby, authorized and directed to execute any necessary documents or agreements to effect the order set forth in Section 1 herein. PASSED AND ADOPTED at an adjourned regular meeting held February 18, 1988. "A-2" AGENDA ITEM #6 "A-2" MANAGER'S AGENDA REPORT County Sanitation Districts Post owics tsar 9127 of Orange County, California0844 Ellis Avenueie Fountain Volley, Calif., 92708 Tweak.. Aron Cab 714 540-2910 DISTRICT NO. 962-24111 February 11, 1988 MANAGER'S REPORT TO DISTRICT NO. 11 DIRECTORS MEETING DATE: FEBRUARY 18 1988 - 7:30 P.M. (Huntington each My Ha - ounc Chambers) Public Hearin on r0 osal to collect the ado tad annual sewer service char es on the aunt o Oran a ro art tax bs s an 9 - 9 ewer ery ce har e Report. The District's cost of providing sewerage service to the community has been escalating rapidly because of increasingly stringent federal and state laws and ._. regulations requiring advanced treatment of wastewater to remove pollutants from the sewage to assure protection of the environment and the public's health and safety. To comply with the new, stricter requirements the Joint Sanitation Districts have constructed and are now operating sophisticated treatment facilities at a cost of more than $124,000,000. In fiscal year 1988-89, property tax revenues will be insufficient to meet the District's operating costs, and the Board will be required to authorize a transfer of $786,000 in capital reserves from the District's Accumulated Capital Outlay (ACO) Fund to the Operating Fund to pay the full costs of operating and maintaining the District collection system and its proportionate share of the O&M costs of the Joint Treatment Works. By 1991-92 the District will require additional revenues in the amount of $6.0 million to meet the District's operating expenses and maintain the solvency of the fund due to insufficient tax revenues, and capital reserves will have been long exhausted. In 1987, after considerable study of the District's long-range funding requirements, the Board adopted a long-range financial program to avoid projected revenue shortfalls and provide the necessary income required to finance the District's rising operating expenses, as well as major capital expenditures for construction of master-planned treatment facilities. The following fee schedules have been adopted by the Board to fund the District's requirements. V 2/11/88 FEE TYPE AMOUNT Capital Facilities Costs One-time Connection Fee: Residential Property $1,500/Dwelling Unit Commerical, Industrial & $ 300/1,000 Sq. Ft. Governmental Property 0 & M Costs Annual User Fee: - Single-Family Residence $ 26.40 - Multi-Family Residence/Mobile Home 15.85 - Commercial 18.90/1.000 Sq. Ft. - Industrial 18.90/1,000 Sq. Ft. - Governmental 18.90/1,000 Sq. Ft. (Copies of the staff reports considered by the Board in amending its long-range financial program last year are enclosed herewith for background reference material for the Directors). The one-time connection fee, paid by developers and used to pay for facilities expansion to serve new development, is collected for the District by the cities when building permits are issued, and the cities retain 5% for their services. v The staff has identified and evaluated the following three methods of billing and collection of the annual user fee to be used to pay for 0 & M: - direct billing and collection by the District - placement of the user fee as a separate line item on the City of Huntington Beach utility bill and remittance of the fees collected by the City to the District - placement of the supplemental fee as a separate line item on the County of Orange property tax bill and remittance of the fees collected by the County to the District. Placement of the user fee as a separate line item on the County of Orange property tax bill is significantly less expensive than the other two available methods as indicated in the following table: Annual Billing/ Total Total Billing & One-Time Processing First-Year Five-Year Collection Method Setup Costs Collection Costs Costs Costs 1. District billing/ collection method $22,000 $188,000 $210,000 $962,000 2. City utility bill method 20,000 94,000 114,000 490,000 3. County property tax bill method 35,000 10,000 45,000 85,000 2/11/88 L Alternative No. 3, use of the County of Orange property tax bill method, is clearly the most cost-effective of the three methods. Districts Nos. 1, 5, 6 and 13 have already adopted this method for billing their user fees, and it has proven to be quite effective in keeping administrative costs for billing and collecting fees under control in these three Districts. California Health and Safety Code Section 5473.1 requires that a District considering collection of its annual sewer service charges on the property tax bills must hold a public hearing to consider any objections or protests to the proposed collection method. It is not a public hearing on the fee itself, as that has previously been fixed by Ordinance No. 1108 adopted on December 9, 1987, but is one of the final steps to be taken by District No. 11 to implement its long-range financing program to fund ongoing operations and maintenance costs. On January 4th, 34,897 notices of the hearing (copy attached) were sent to property owners. We have received approximately 100 phone calls from property owners since the notice was mailed. On February 4th, a workshop on the proposal was conducted by staff, and ten citizens attended and asked questions. Staff will elaborate on the comments of these residents at the hearing. Although the purpose of the hearing is to receive public commentary on the proposal to collect the annual user fee on the tax bill , not the fee itself, we expect that many citizens attending the hearing will wish to comment on the user fee. Staff will, therefore, present an oral report at the hearing briefly describing the District's activities and outlining the background and financial position of the District, as well as addressing the reasons for the proposed billing and collection method. The items appearing on the agenda are the actions required to commence collecting the District's annual user fee on the property tax bill beginning in 1988-89. December 21, 1987 SEWERAGE SERVICE PROVIDED BY COUNTY SANITATION DISTRICT NO. 11 County Sanitation District No. 11 provides sewage collection, treatment and disposal services to your property. Your residence or business is connected to a city sewer in the street. District No. 11 collects your wastewater from the local street sewer system and transports it through its large interceptor sewers to the treatment plants in Fountain Valley and Huntington Beach where the sewage is treated and disposed of in accordance with strict state and federal laws. Federal and state law makers and environmental agencies, including the U.S. Congress and the United States Environmental Protection Agency at the federal level ; and the State Legislature, State and Regional Water Resources Control Boards at the state level , have adopted increasingly stringent laws and regulations to protect our environment. To comply with the new, more stringent requirements, the County Sanitation Districts have constructed $124,000,000 of new advanced sewage treatment facilities. District No. 11 has also established a sewer service fee for its services of treating and disposing of your sewage. The District sewer service fee is $2.20 per month ($26.40/year) for residences, and $18.90 per 1,000/sq. ft. per year for commercial and industrial customers with larger discharges. The District's sewer service fee helps defray the higher costs of operating and maintaining these treatment and disposal facilities which remove the toxic materials and other pollutants from the sewage and dispose of the treated wastewater in a safe manner to protect the public health and safety and the environment. PROPOSED BILLING AND COLLECTION METHOD County Sanitation District No. 11 is proposing to collect its sewer service fee on the annual property tax bill . Use of this more cost-effective alternative method would allow the Districts and its customers to save the costs of producing, mailing and handling separate utility bills for direct payments. Every property owner within the District receives an annual property tax bill from the County Tax Collector. California Health and Safety Code Section 5473 allows the District to place our sewer use fee on this bill as a separate line item, and allows the convenience of including payment for District No. 11 sewerage services with property tax payments. Therefore, effective with the billing year beginning July 1, 1988, the Board of Directors of District No. 11 is proposing to use this billing method to help keep the cost of service down. The public hearing noticed on the reverse side is to consider the proposal to use the property tax to collect the annual sewer user fee instead of a direct separate and more costly billing method. PUBLIC WORKSHOP County Sanitation District No. 11 of Orange County California is holding a public workshop in the Council Chambers at Huntington Beach City Hall at 7:30 p.m. on Thursday, February 4, 1988 to present an overview of the District's proposal to use the County of Orange property tax roll for billing of District sewer service charges for sewer collection, treatment and disposal services, and to receive comments from its customers on this proposal . �.,,✓ FURTHER INFORMATION If you have questions or wish further information, please call the Sanitation Districts' office at (714) 962-2411, Extension S. NOTICE OF PUBLIC HEARING Notice is hereby given pursuant to California Health and Safety Code Section 5473.1 of a public hearing to be held by County Sanitation District No. 11 of Orange County, California at 7130 p.m. on Thursday, February 18, 1988, in the Council Chambers at Huntington Beach City v Hall , 2000 Main Street, Huntington Beach, California. Said hearing is to be held for the purpose of reviewing written reports pertaining to the providing of sewer service for all properties within County Sanitation District No. 11, and to consider public comments regarding use of the County of Orange property tax roll for billing of District sewer service charges for sewer collection, treatment and disposal services for the fiscal year commencing July 1, 1988. County Sanitation District First Class No. 11 U.S. Postage Paid P. 0. Box 8127 Pre-Sorted Fountain Valley, CA. Huntington Beach, CA 92728-8127 Permit No. John Q. Property Owner 123 A Street Huntington Beach, CA 12345 COUNTY SANITATION DISTRICTS 0 ORANGE COUNTY. CALIFORNIA 1�EWS AVENUE Pa Box 81V WUWAIN VN .W APAAWnMI 27 8/17/87 o+a esza.n STAFF REPORT ON DISTRICT'S LONG-RANGE FINANCIAL REQUIREMENTS AND ALTERNATIVE FINANCING PLANS BACKGROUND For many years the Districts, as part of the annual budgetary process, have forecast revenues and expenditures on a five-year basis and last year commenced forecasting on a ten-year horizon. The purpose of this long-range financial planning is to assure adequate funding to carry out the Districts' wastewater management program for the benefit of the communities and the two million citizens which the Districts serve in metropolitan Orange County. A major benefit of the long-range cash flow projections is that they enable us to determine in advance when revenue shortfalls will begin to occur so that the Board of Directors will have adequate time to consider alternative funding sources and take the necessary corrective action to ensure each District's financial integrity. For some time, our projections have indicated that funding shortfalls in District No. 11 would begin to occur as soon as 1989 and that the District would have to consider additional revenue sources to meet the District's long-term funding requirements for sewerage facilities improvements and expansion, and ongoing operations and maintenance costs. Property taxes have historically been the major source of local financing of the District's activities. However, the costs of providing service continue to rise beyond the ability of the property tax apportionments to keep pace with the needed funding brought about by stringent requirements of the federal and state regulatory agencies for advanced treatment, and the need to provide additional capacity to meet the increasing demands on the sewerage system. The District's ability to finance O&M costs has also been impacted by tax revenue diversions resulting from the tax increment financing employed by the City of Huntington Beach Redevelopment Agency to generate revenue for the City's four existing redevelopment projects. Redevelopment projects typically result in increased density of development within a project area, and higher flows into a District's collection facilities. Thus, redevelopment activities increase District operating costs while simultaneously freezing the District's historical revenue base, forcing the District to establish supplemental user fees sooner than might otherwise be necessary were a pass-through of tax revenues to be granted to the District by the redevelopment agency. This, in effect, results in other properties within the Sanitation District underwriting a portion of the cost of sewering the properties within the redevelopment project areas. Ift./ Page Two 8/17/87 The District has the following major options available to finance its facilities improvements and expansion activities and ongoing operations and maintenance (0&M) costs: Funding Requirement Source of Funds Ongoing collection system and - Allocated share of 1% ad valorem joint treatment/disposal property tax levy facility operations and - Supplemental user fees: non-industrial maintenance dischargers - User fees: industrial dischargers Capital facilities improvements - Annexation fees on new territory annexing and expansion projects to the District - Connection fees on new development - Capital reserve funds (existing) - Debt financing (bonds/certificates of participation) - Capital replacement/improvement fees: non-industrial dischargers - Capital replacement/improvement fees: industrial dischargers FINANCING OPERATING REQUIREMENTS Back round: During budget deliberations over the past two years and at a recent a 3ourne meeting held on April 15, 1987, the staff briefed the Board on the need to consider supplemental user fees in the near future to avoid a projected deficit beginning as soon as fiscal year 1988/89 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 would reach as much as $24.3 million by 1996-97 unless additional revenue is generated. Assumptions: Schedule A presents the District's projected long-range financial posy on under the following conditions: - Supplemental user fees are not established - The Bolsa Chica area does not annex to District 11 (see discussion beginning on page four). Alternative Revenue Sources/Billing Methods: Schedule B, excerpted from the Revenue rogram a opte by t e Boards in April 1979, identifies various alternative revenue sources available to finance projected shortfalls in a District's operating fund when ad valorem tax revenues are insufficient to pay the District's operations, maintenance and replacement (OM & R) costs. The most cost-effective method (and the method adopted by Districts 1, 5, 6 and 13 which have already implemented supplemental user fees) is to place a supplemental user fee as a special assessment on the County of Orange property tax bill and collect it from all property owners in the District. District No. 3 is also proposing to use this method. Page Three 8/17/87 u FINANCING CAPITAL FACILITIES REQUIREMENTS Background; Last spring the Board engaged financial and legal consultants to assist Directors 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 for capital construction financing at that time were to: - 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 $32.3 million over the next ten years. - Allow participating Districts to continue to invest their existing capital reserves in the County commingled investment pool managed by the County Treasurer and benefit from 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. - Help preserve existing capital reserves for master-planned sewerage facilities construction projects. District 11's Board considered issuing $10.9 million in CDP's but ultimately chose not to participate in this long-range capital financing program with Districts Nos. 1, 2 and 3. Assumptions: Schedule A presents the District's projected long-range financial position under the following conditions: - Connection fees remain at existing levels - The Bolsa Chica area does not annex to District No. 11 (see discussion beginning on page four). Exhibit 1, Schedule of District Collection System Projects, identifies the anticipated collection system projects required to be constructed if the Bolsa Chica annexation does not occur. Schedule A, Line 25, District Collection System, reflects the cost of these project requirements over the next ten years. Connection Fee Capital Financing: The District's primary ongoing source of capital funds is from a one-time connection fee on new development. These fees are used to finance the planning, Page Four 8/17/87 design and construction of the expanded facilities necessary to accommodate the flow generated by the new development. District No. 11's current one-time connection fees are presented below: Single/Multi-Family Coimnercial/Industrial/ Dwelling Units Governmental/Other $1,250 per Dwelling $250 per 1,000 Sq. Ft. The existing connection fees in other Districts are outlined in the attached Schedule C. Schedule A, Statement 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 connection fees over the next ten years to be $6,000,000. The District will experience a deficit in its capital funds by 1989-90 (see Line 29, Reserves and Carry-over to Next Year) of $3,887,000 unless additional capital revenues are generated. IMPACT OF PROPOSED BOLSA CHICA ANNEXATION Additional flows from the 5,700 dwelling units anticipated for construction in the proposed Bolsa Chica annexation will result in increased O&M and capital costs for both the District 11 collection system and its share of the joint treatment and disposal facilities . Based on recent discussions with both the City of Huntington Beach and the developer, only limited data is available at this time on proposed development phasing and associated flows from the dwellings to be constructed in the area, although initial flows are not expected from the annexing territory until at least 1991-92. Schedule A, Statement of Projected Cash Flow, presented earlier in this report, does not include any O&M or capital cost or revenue projections associated with the proposed Bolsa Chica annexation. Schedule D, Statement of Projected Cash Flow, presents the District's long-range financial position in the event the proposed Bolsa Chica annexation is approved. The following assumptions are incorporated into the projections in Schedule D: - The Bolsa Chica annexation is approved/completed in fiscal year 1987-88 - A tax exchange providing the District with its historical allocation (approximately 3% of tax allocation) of the ad valorem tax revenue in the annexing area to pay for a portion of the increased O&M costs associated with serving the areas scheduled for development within the proposed annexation (the resulting tax revenues are reflected on line 2, Schedule D, Share of 1% Tax Allocation). - Annexation fee revenues of $2,926,000 from 657.29 acres within the Bolsa Chica ($4,451 per acre assuming that the District receives a tax exchange/share of the future ad valorem tax revenue from the annexed �./ territory). Signal Landmark is requesting that the District defer annexation of an additional 900 acres in the Bolsa Chica area as this acreage is presently proposed as wetlands and is not expected to be developed. Page Five 8/17/87 Schedule D, does not reflect any revisions to the Districts long-range financial plan (i.e., implementation of supplemental user fees or increases in connection fees) however, Line 21, entitled Other Income, does reflect additional capital revenues for the next five years from developers to finance District planning, design and construction of facilities to service the major developments. The above capital fees associated with the Bolsa Chica annexation are summarized as follows: Revenue Source 1987-88 1988-89 1989-90 1990-91 5/10 Yr Totals Annexation $2,926,000 $ -- $ -- $ -- $ 2,926,000 Fees Developer Advances in Aid of Construction 700,000 5,400,000 7,150,000 2,000,000 15,250,000 Line 21 Totals $3,626,000 $5,400,000 $7,150,000 $2,000,000 $18,176,000 Exhibit 2, Schedule of District Collection System Projects, includes the collection system construction projects which must be completed in order for ... District 11 to serve the annexing area. Even if the District began to receive a portion of the 1% ad valorem tax allocation from the proposed annexation, the District's operating fund would experience a 10-year deficit of $24.3 million (Schedule D, Line 14, Fund Balance or (Deficit)). Schedule D also projects connection fee revenues based upon the District's existing connection fees. As Schedule D reflects, although the 10-year estimates still project a capital financing deficit, the above described financing anticipated as a result of the Bolsa Chica annexation will reduce the deficit from $10.7 million (Schedule A, Line 29) to $5.2 million (Schedule D, Line 29). PROPOSED REVISIONS TO LONG-TERM FINANCIAL PLAN Proposed User Fee Program To provide the necessary revenues for District operating costs (including capital replacement), staff recommends that a supplemental user fee program be implemented as follows: Page Six 8/17/87 Recommended Supplemental User Fee Program Annual Charge Effective Class of User Basis of Charge July, 1988 Sin lele-Famil Annual Charge $26.40 Dwel il 'ngs/Condominiums per Dwelling Unit Multi-FamilyAnnual Charge $15.85 e ings partments/ per Dwelling Mobile Homes Unit Commercial/Industrial/ Annual Charge per $18.90 Uther 1,000 Sq. Ft. of Building This program is identical to that in effect in Districts 1, 5 and 6. District No. 3 is proposing to implement the same program in 1989. District 6 initially adopted the same fee schedule, but has found it necessary to increase the rates 10% each of the past two years. District 13, which receives no ad valorem tax appropriations, has a charge of $70/year. � . Schedule E, Statement of Projected Cash Flow, identifies the cash position of District No. 11's operating fund if the above recommended supplemental user fee program is implemented. Based on a July, 1988 implementation date, the District's operating fund would remain solvent through 1991-92 with the initial rates in place, although the contingency reserve would be reduced below an acceptable level . The Board will need to evaluate the fees on an annual basis because the cash flow projections for the 1992/93-1996/97 period indicate further shortfalls. Thus, once implemented, the user fee amounts should be evaluated annually to make sure that the program provides adequate revenues to meet the District's funding needs. Based on current estimates, the user fee may have to be increased to $45.00/single family residence by 1992-93. It should be noted, however, that District 11's financial position, in the final analysis, will be significantly affected by the amount of ad valorem tax revenue apportioned to the District from the proposed Bolsa Chica Annexation. Attached Schedule F, Preliminary Implementation Schedule: District No. 11-Long- Range Financial Plan, reflects the procedures and schedule necessary to implement a supplemental user fee program to be collected on the annual property tax bill beginning in July, 1988. Page Seven 8/17/87 Proposed Connection Fee Changes Staff recommends that the Board consider increasing its connection fee as follows: Effective November Basis of Charge Existing 1987 Sin le/Multii-Famil Charge per $1,250 $1,500 e inll Dwelling Unit 0rcial/Industrial/ Charge per $ 250 $ 300 rnmental/ they $1,000 Sq. Ft. Schedule E presents the District's anticipated financial position over the next ten years based on implementation of the above recommended connection fee increases. These proposed fees would generate an additional $1,160,000 in connection fees (Line 17, Schedule E, 10-Year Total : $7,160,000) as well as an additional $105,000 in interest income (Line 20, Interest and Miscellaneous Income: Schedule E, 10-Year Total - $1,673,000) over the next 10 years. These additional revenues could then be employed to.partially finance 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). This will reduce the projected deficit from $5.2 million (Schedule D. Line 29) to $3.9 million (Schedule E, Line 29). It is recommended that connection fees be evaluated annually and fixed in an amount which assures that new development pays the current capital cost of providing sewerage services. This practice would further reduce the projected capital financing deficits. However, the Board may have to reconsider debt financing for capital projects in the future. Schedule G, Statement of Projected Cash Flow, presents the District's financial position if the proposed financial program is approved and implemented but the proposed Bolsa Chica annexation is not approved and implemented. The Directors are aware that the projected capital requirements assume that the Districts' 301(h) NPDES Discharge Permit will be renewed by EPA and the RWQCB in 1990. If it is not, treatment plant construction requests will increase by $285 million (District No. 11's share - $20 million) for the 1991/1996 period. RECOMMENDED BOARD ACTIONS Staff recommends 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 in accordance with the enclosed implementation schedule. Page Eight 8/17/87 2. Draft an ordinance increasing connection fees from $1,250/dwelling unit and $250/1,000 sq. ft. to $1,500/dwelling unit and $300/1,000 sq. ft. for first reading at the September 9th Board meeting, to become effective in November, 1987. Many economic factors could affect the District's funding requirements over the next several years. The staff will continue to evaluate the District's financial position each year to determine the impact of changing conditions and brief the Board to seek direction regarding modifications to the District's long-range financial plan, as needed. tOUXIY SNIIAI LOX OISIAICI A0. II SCHEDULE A� SIAIENENI DF NNEC1O CASH FEOY //14/87 FISCAL YEARS 1987-66 THROUGH 199d-97 pOB0 1 99T-9S/ LINE ....... ....... 1989.O 19N•91 101... S•ymer total 1996.97 WENT, Iota- -LIKE --- OPERATING FUND f Reserves 1 Carry-Ova, Fro.Last Year 2.348.000 1,611,000 TRIM 106.00) 11,130,000) 1 2.349.00 13,570,0001 2,348,000 1 ........... ........... ........... ........... ........... . ........... ........... ........... REVENUE 2 Share of 1S lax Allocation 2.091.000 2.356.000 2,656.000 2.991,000 3.375,00 13,172,000 21,511,000 37,9e3,000 2 • 3 Fees 100.000 105.400 110.000 116.006 122,000 SS3,000 704,000 1,2O,0O 3 t Interest 6 Misullan ous Jocose 143.000 $8.000 WON 0 0 245.000 0 2/3.000 1 5 Other Ronne 0 0 5 ........... ........... ........... ........... ........... ........... ........... ........... e IOIAI REVENUE 2.331.000 2.549,000 2.710.000 31110.000 3.497,006 14,270.00 25.217,N0 39.417,000 6 ........... ........... ........... ........... ........... ........... ........... ........... I IOTA: AVAILABLE FUNDING 4.612.000 /,237,000 3,574.000 2,724,000 1.6671001 161616,000 21,6//,000 II,Y5,000 7 ........... ........... ........... ........... .._....... ) ---------- ------- ---------- EXPINDITNES 1 Mare of Joint parts A 1 0 2,/91,000 2,165,011 3,295,100 3,719,000 I,357,017 ) 16,797,000 33,122,000 $0.619.000 1 9 Collection System N 6 0 and Other Opel. 503,000 578,000 665,000 765.0D 00.00 ( 3,01,00 6,10,00 10,217,00 9 10 Other Expenditures 0 0 10 ........... ........... ........... ........... ........... 1 ........... ........... ........... 11 TOTAL EXPENDITMEE 21191,040 3,443,000 3,960,000 4.554,000 5,237,000 20.10,000 10,611,000 0.10,00 Il ........... ........... ........... ........... ........... ........... ........... ........... 12 Reserves 6 CarryOesr to not Year 1,60,006 794,000 (306,00) (11030,0O) (11576,00) ( (3,570,N0) (19,NI,NO) (19,O1,ON) 12 13 Next Year's Cry Period Funding Requirements 1,497,000 1.722,00 1,90,00 2,277.00 2,619.00 ) 2,619,00 5,273,0O 5,273,ON I3 ........... ........... ........... ........... ........... ) ---------- ..._.._.. ........... 11 fund Helene Or (Deficit) 191,N0 (910,0101 12.366,000) (1,107,000) (6.10,00) i (6,119,00) (2/.21/,00) (24.274,00) 11 CAPITAL FUND($) IS Reserves 6 Carryemer from Last Year 9,430,000 7,014,01E 1,197,0E (3,N7,001) (I,S71,N0) 1 9.130,101) (/,651,N0) 9,430,00 IS ........... ........... ........... ........... ........... 1 ............ ----_----- ........... REVENUE 16 construction Grant, 511,000 113,000 678.000 678,000 678,01 1 2,O1,000 IIS,0O 2,717,000 16 17 fees: E0nOction 60.00 600,N0 60.000 6O,000 00,0E 3,000.00 3,000,000 6,000,000 Il 1B Other 30,000 32,000 34,000 36.00 O.00 1 170.000 220,000 390,00E 16 19 we of Capacity Rights 306,O0 57.040 927.000 164.000 30,000 1 2,194.000 136,000 2,420,000 19 20 Interest 1 Xisnllan aus lest" 5O,000 294,001 0 0 0 1 110,00 0 880.000 20 21 Other Insole 0 0 21 ........... ........... ........... ........... ........... I ........... I---------- ........... 22 TOTAL REVENUE 2,039.00 1,096,0110 2,239,000 2,171,00 1,316,0E 1 8,/O,0O 3,469,000 12,367,000 22 ........... ........... ........... ........... ........... ........... ........... ........... 23 TOTAL AVAILABLE FUNDING 11,O9,114,0 I,190,000 3,136,000 11.70,000) (3,221,0011 1 11,30,00 11,182,000) 21,157,000 23 ........... .......7... ........... ........... ........... 1 ........... I---------- ----------- EXPENDITURES 2/ Shore of Joint Yorks Treatment Plant 4,071,000 6,471.000 5,611,000 2,691.000 1.340,000 20,235,O0 3,20,00 23,518,000 21 25 District Cellntion System I0,N0 50,O11) 1,675,00 I75.000 75,000 2.6O1ON 6,2O,000 1.030.010 25 26 Aei.0unement Agreement Payments 0 0 26 27 Other Expenditures 114,000 i 111,00 111,00 21 ........... ........... ........... ........... 1 ........... _------_- ........... 21 TOTAL EXPENDITURES 1,375.0O 61993,040 7.323,000 21I01000 1,423.00 22.979,000 1,1O,004 32.462,00 21 ........... ........... ... ........... ........... -------- ....I...... 29 Reserves 6 tirry-onr to Next Year 7.04.00 1.197.000 13,867,000) (1,31/,00) (1,631,000) i (I,O1,040) (II,W,0001 (10,6O,050) 29 C C C SCIMD .E A COUNTY SMIIRIION 0151RItI XO. 11 8/11/87 51R1ENEH7 a PP4][Clip CASH FLM ?ago 2 FISCAL YEARS 1997-88 TKFUM 1996.97 1192.931 LINE 1987-98 1488.69 1989.90 1990-91 1991-92 5-Yur Total IM-9I 10-Yur Total LIRE .... ....... ....... ....... ....... ....... { ............ ........... .......------ ...- 90ND FUND($) 30 Reserves B Carry-Over From last Year 57.400 47.000 33.000 51,u0 14,000 57.000 19,000 S7,000 M ........... ........... ........... ........... ........... i .....-..... ........... ........... REVENUE SI lax Levy 55,000 50,000 45.000 35,000 25.000 210,OM 25,000. 235,010 31 32 Interest 6 Xiuellansus Income 4,000 3.000 31000 4.000 61000 20,000 4.400 24,000 32 33 Other Income 0 33 ........... ........... ........... ........... ........... ........... ........... ........... 34 TOTAL REVENUE M,OM 53.000 41.00 59,M0 SI,OM 230,M0 29,000 28,000 34 _......... ........... ........... ........... .......... -------_-. .......... ........... 35 TOTAL AVAILABLE FUXOIXO 114,000 100.000 11,000 %.000 105.000 247.000 111,000 316.000 SS ........... ........... ........... ........... ....._._. ..-.-....-. ._.-.-.... .....-..... EXPENDITURES IS Band principal 6 interest 61.000 47.000 30,000 16,NO 16.001 1".000 M,MO 267.000 36 37 Other Expenditurse 37 ........... ........... ........... ........... ........... ........... ........... ........... 38 TOTAL EXPENDITURES 69,000 67,OM 30.000 16,M0 16,000 118,040 M,MO 217,OM 31 ........... ........... ........... ........... ........... ........... .......... ........... 39 Reserves 6 Carry-Over UP Next Year 47,000 33,OM $1,00 ' 74.400 89,001 19,000 29,000 29.000 39 40 Next Year's Dry Pedal funding Realraents 47,000 33,400 11'"0 14,000 89,000 { 89,0M ".BOB ",BOB 10 ........... ........... ........... ----------- ........... ........... ........._ _......... 41 fund Balance or (Deficit) 0 0 0 0 0 i 0 0 0 41 .z.......... .:.......... ............ ..........xz z:zx....zzs xzzz:x::::e xx:::::zzxx .......:::x SMART (Adjusted for IntsrFud Transfers) 42 Reserves 6 Carry-Over free Last Year I1,835.000 1,829,000 2,024,000 (4,222,000) (6,330,000) i 11,935,000 (81132,000) 11.835,000 42 43 TOTAL REVENUE 4,432.004 3,691.00 5,067,000 5,327.000 4,874,000 { 23.391,4 0 28,/13,000 52,113.0" 43 ........... ........... ........... ........... ........... { ...-.-..... ........... ........... 44 TOTAL AVAILABLE FUNDING 16.267.000 12.527,000 7.091,000 I.IOS,000 (1,456,010) 35.233,000 20.583,000 63,948,000 44 as TOTAL EXPENDITURES 7,438,M0 10.503,000 11,313.000 7,435,400 6.676.000 43.365.000 S01220,000 93,SM,00 45 ........... ........... ..._...... ........... ........... { ----------- .--------.. ..--------. 46 Reserves 6 Carry-Over to Next Tar 1,129,1100 2,024,000 (4,222,000) (6,330,001) (9,132,000) { (1,132,00) (29,617,000) (29,637,0111) N 47 Next Year's Dry Period funding Requirements 1,544,000 1,755,000 2.031.00 1,311,000 2,7011,000 2,701,000 5,302,040 S,302,000 47 ........... ........... ........... ........... ..._...... i ...-.-..... ........... ........... 48 FUND BALANCE OR (DEFICIT) 7,2M,000 269,00 (6,253,00)) (6,611.000) (10,140,4411) { (10.840.000) (34,931,00) (34,939,0M) a8 ALTERNATIVE: PLANS POR CHARCRS WHEN SCHEDULE B AV TAXES ARE INSUPPICIEN1 , PAY OHCIt COSTS Page 1 Bi 11 Ing Alternative Probable Calculation Hethod Other Major Relevant Issues 1. Separate charge as a 1. Subdivide user classes Into sub- 1. (a) Current Statutory authority exists special assessment on classes such as single family and tl,e property tax bill, multi-family dwellings, office (b) Requires a, public hearing and seen ruic buildings, small commercial estab- notice of Bald bearing to all pngicity lishments, etc. , and calculate flat owners. rates attendant to each based on (c) Utilites existing assessor file as Jai ; average discharges and system loading - • base and tax bill as billing mechanism. from representative samplings. However, data base would rmpilie snb- stantlal 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 datu base may result lu high percent of billing errors and, require a customer service function. (a) Uusewered properties could be reflected In rate structure once Identified and/ or separate provisions made for rebate. (f) Maximum charge for tax collectorns service Is established at )5/account or 1% of collections, whichever Is greater. (g) Lou 'delinquency factor. (IQ Cush flow Is not spread evenly. (I) Would satisfy notification requlremenls 2. Separate charge collected. 2. 0ase charge on water volume 2. (a) Current statutory authority exists. Oil water purveyor's utility However, It Is permissive, not mandat- billing. ory for the water utility. (b) Would not require a public hearing. (c) Would require contractual arrangements acid system modifications with approx- imately 150 water purveyors. (Cont iuucd) ( ` SCHEDULE B TABLE 111-1 (Contud) Page 2 Hilling Alternative Probable Calculation Method Other Major Relevant Issues - 2. (Cant-d.) - (d) Would require a minimum of data base maintenance by the Districts as this would be nutanatically dam by the water utility. However, separate arrangements may have to be made with the utility to reflect loadings of small commercial establishments. (a) Charge more directly associated with actual Ilse (assuming Ilse Is related to water consumption). (f) Unsewered properties would have to be Identified and a system exception or rebate provision made. (g) High delinquency. _ (h) Cost of service by utility is unknown and would have to be negotiated or established by code amendments. (i) Cash flow would be more unifot . (j) Would satisfy notification require- ments. 3. Direct billing by CSDOC 3. Same as 1. above utilizing 3. (a) Current statutory authority exists. assessor's files as the data (b) Would require installation of expen. base source. sive computerized billing system and associated personnel and administra- tive costs or contracting with an outside bureau. (c) 110st costly method. (d) Requires extensive dnta base main- maintenance. (a) Inaccuracy of data base source may result in high percent of billing errors. (Continued) ( SCHEDULE B TABLE 111-1 (Cont'd) Page 3 Billing Alternative Probable Calculation Method Other Major Relevant Issues 3. (ConC'd.) (f) Unsewered properties could be reflected In rate structure once identified slid/ or separate provision made for rebate. (g) Expected delinquency factor would be highest. (b) Cosh flow Impact would be based on determination of billing frequency. (1) Would satisfy notification requirements. 4. Impose a Separate 4. Based on property value 4. (a) Requires 2/3 'voter approval AV Tax Levy (b) Unsewered properly Issue would ' .ve to be resolved (c) Low delinquency factor (d) Most cost effective method (a) Cash flow not spread evenly (f) Would satisfy notification requirements (g) Least equitable COUNTY SANITATION DIST( .,0.11 ERNIIIT 1 SCHEDULE OF DISTRICT COLLECTION SYSTEM PROJECTS 8114187 (WITHOUT PROPOSED ROLSA CHITA ANNEXATION) PROJECT TOTAL 1 C.I.P. 1987-08 1908-09 1989-90 1990-91 1991-92 1992.93 1993-94 ........... ----------- i ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Radio Linked Telemetry (a) 15,000 15.000 Master Plan1E1R Update (a) 40,000 25,000 15,000 Slater Ave. Pump Station Rehab. (a) 1,900,000 25,000 175.000 1,600,000 100.000 Ocean Avenue Trunk Rehab. (a) 314,000 16,000 50,000 250,000 Miscellaneous Projects (a) 175.000 ! 2S,000 25,000 25,000 25,000 25.000 25,000 25,000 ----------- - ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Sub-total ACT Fund 2,666,000 16,000 140.000 465,000 1.625,000 125.000 25.000 25,000 25,000 Edwards Trunk (3) (bl 3,400,000 3.400.000 McFadden Relief Trunk (3) TO 750,000 750,000 Edinger Interceptor (3) (c) 7S0,000 i 750,000 i Neil Relief Sewer (1) (c) 750,000 ) 750,000 Edinger Sewer Parallel (3) (c) 400,000 ! 400,000 Miscellaneous Projects (al 350,000 1 50,000 50,000 S0,000 50.000 50,000 50,000 50,000 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Sub-total FR Fund 6,400.000 0 50.000 501000 50,0" 50,000 50,000 50.000 61100,000 ------..... . ........... ........... ........... ........... ........... ........... ........... ---------- GRAND TOTAL 8,844.000 14,000 190.000 515,000 1,675,000 175,000 75.000 75,000 6,12S,000 lal Fully Funded 1. Master-planned facilities presently under construction Ib1 Partially Funded 2. Master-planned facilities presently money design ;cl Not Funded J. Naster-planned facilities scheduled for future design/construction SCHEDULE C 8/6/87 CSOOC EXISTING CONNECTION FEES Single/Multi-Family Commercial/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. 3 (Effective $ 500 per dwelling $ 100 per 1,000 sq. ft. 10/87) 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. 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. COUNTY SRRIIATION DISTRICT NO. 11 SCHEDULE IT8/17/87 lk I SIATRENI ON PRO)ECTED CAM FIE. FISCAL YEARS 1%7-88 IRROUGK 1996-9' Yage 1992-MI LIRE 1931.8E 19ES-69 1989-9E Iwo-91 1991-W 5-Year Total 1996-17 10-Year total LIKE .._. ....... ....... ....... ....... ....... . ............ ........... ............. ---- OPERATING FWD . Reserves 6 tarry-Over Fro. last rear C. 48,ON 1.698.050 Fin.AGO Ilse.ONI 0,W.H0) 2.NB,ON (3.5)0.0001 2.318.00E 1 ........... ........... ........... ........... ........... ........... ........... ........... REVENUE --Share of IT lax Allaotlon L091.LN 2,356.OD6 2.656.000 :.AN 3.4O.NO 13,517.DN . 2S.9N.EN 39,183.0N 2 iees 100.00E 105.0N 110.000 1!d.NO 122.ON i M3,N0 706,00E I.:59,000 3 1 Interest G niscellanews I.na.E 143.000 88.00E 1<.000 0 0 215,040 0 245.000 1 Other Revenue 0 0 5 ........... ........... ........... ........... ........... ........... ........... ........... b IOIAI AFYENUE F,3N,000 3,569,0N 2,1AO.N0 S,!!O,000 3,H2,ON 1 11,315.00E 26.6n.M 10,987.ON 6 .... ........... ........... ........... 1 ----------- ----------- ----------- I IOIRL RVAI'OLE INDIRA 1,682,ON 4.237.00E 3.S14.M 2.721.11411, 1,112,0110 i 16,663,0/0 23.102,00E 43.335.M 7 ........... ........... ........... ........... ........... ........... ........... ----------- EXPENDITURES 6 Share of Joint.ores N L 0 2,491,000 2.965.o00 3.295.00E 3.709.000 1,395.OD0 16,83$,ON 35,NI.NO S1,1hei'm 1 9 Collection State.N 6 0 AM Other Oder. 503,00E 578,00E 665,ON 765,00E 887,40E 3,3M'OOO 7,079.000 I0,e71,000 9 10 Otter Expenditures 0 0 10 ........... ........... ........... ........... ........... ........... ........... ........... 11 TOTAL EXPENDITURES 2.94,ON 3,113,00 3,9W.m 4.551,001) 5.382,EEE N,233.000 42,140,N0 62,1/3,010 11 ........... ........... ........... ........... ........... ........... ........... ----------- IF Reserves 6 Carry-Orer to Next Year 1.688,0,1E 794,000 (396.000) 11.630,000) 13,570,ON) i (3,570,000) (19,036,M) (19,038,0N) 12 13 Next Year's Dry Period Fording Recptrnenls 1,497,N0 1,722,00E 1,980,0N 2.271.00E 2.641,040 i 2,N1,000 5,273,0111) 5,273,ON 13 ........... ........ . ........... ........... ........... ----------- ----------- -------_.. IC Face But.... or (Deficit) 191'm (928,000) 12,366.000) 11,107,000) 16,2I1,ON) (6,211,ON) (24,3I1,ON) 124,311,N0) 14 ........... ........... ........... ........... ........... ........... ........... ........... CAPITAL FURDISI 15 Reserves 6 Carry-over Free Last Year 9,430,000 10.127.000 4,634.000 I,NS,ON BSS,NO i 9,1N,ON U0.000 9,430.000 IS ........... ........... ........... ........... ........... ............ ........... ........... REVEKUE 16 Construction grants 517,00E 113.00E 670.000 618,00E 678,000 2,664,014) 113.000 2,777.00 16 17 Fees: Connection 6N,ON 600.000 60D.N0 6N,000 600,011E I 3,ON,NO 3,N0.000 6,0N,ON 17 18 Otter 30.000 32.00C 34,000 36,000 N,NO 1 110,00E 220.000 394,ON 18 19 Sale of Capacity Rights SN,ON 51.000 127.000 B64,000 34,04101 1 2,186,00E 136,00 2,320,000 19 20 Interest 6 0iscellaP.eous INa.e 693.00E 523.001w 213.000 73.000 60,N0 1 I,SU,00E 0 1,568,010 20 21 Other Income 3,626.000 5,400.000 7,15D,NO 2,000.00 I9.I/6,OW 18.176.000 21 ........... ........... ........... ------I.... ........... ----------- ----------- ----------- 22 TOTAL REVENUE 5,712,00E 6,725,000 9,602,01)) 1,251,00E 1.406,000 27,7U,000 1,469,041, 31,231,000 22 ........... ........... ....... ... ........... ........... . ........... ........... ........... 23 TOTAL AVAILOH FUNDING 15,202,0N 16,852,00E 11,216,00E 5.620,000 2,261,000 37,192,001) I,N7,ON 10,NI,ON 23 ........... .......I... _...... --- ----------- ___.._...__ ----------- ----------- ------__--- EXPENDITURES ------------ 24 Share of Joint Vans Tmteeol Pilot 4,071,00E 6.478,00 5.641.OEE 2,690.E00 I'Sal N M.235.ON 3,m.N0 23,518,000 24 25 district Collection SYRIAN 89QON 5,740.0% 1,225,00 2,015,00E 1S,ON 1 16,005.0N 6,20,N0 22,005.ON 25 26 Anchor...Net Agra me Pay.ents 0 0 26 27 Other E.01MIDWreS III,NO II1,0M 114,000 21 ........... -----I----- ....I------ ........... ----------- , ----------- ---_------ ----_.---- 28 TOTAL EXPENDITURES 5.075.M 12,218.00 12,813,000 4,765,E00 1.423,0 3 1 36,354,I10 9,43,ON 45,831,000 28 _......... ........... ------- --- ----------- i ----------- ----_----- ---------- .9 R+Nrees B Carmover to Next Lear 10.127.0N 4.611.000 1,363,004 SSS,ON 838.0N 818,0,1E 15.176.ON1 (S.176.ON) 29 SCHEDULE D CDL91Y SAWATIDH DISTRICT ND. 1i 8/I7/87 ME BEAT Of PROJECTED CASH FLOW PAR. 2 FISCAL YEARS 198T Be THROUGH 199u 9' . 996--911- IO... .. P86 . . . 199....... . ..... .. . .. Y92 YYelr ----- ---- - aeu Intel LINE BOND fUND(51 ,C Reserves I prrY'Orer Fro, Last sear S7.000 0.000 MOOD $1,000 74,000 ; 57.000 89,D00 STAY) 30 ........... ........... ........... ........... ........... ........... ........... ........... REVENUE Tax to,, $5.000 50.000 45.000 35.000 25,000 210.000 25.000 2351000 31 Interest I nisaell,nenus Inoc.e 4,000 3,000 3.000 ,.000 6,000 20.000 4,000 21,000 32 .. Other Invo.e 0 33 ........... ........... ........... ........I.. ........... -----..-.-- -------- -- .---------- So TOTAL REVENUE $9.000 53.000 40.000 391000 31.000 230,000 29,000 259.000 34 ........... ........... ........... ........... ........... ........... ........... ........... 35 TOTAL AVAILABLE FUNDEM 116,000 100,000 81,000 90,000 105'"0 287.000 118,000 316,000 35 ........... ........... ........... ........... ........... ........... ........... ........... EXPENDITURES ------------ R Bond Principal I Interest 69,000 61,000 30,000 16,000 16,000 ; 198,000 09,000 287,000 36 37 Other Expenditures JI ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 32 TOTAL EXPEADITURES 69,000 61,000 30,000 16.000 16,000 I9E,D00 89'"0 287,000 36 ........... ........... ........... ........... ........... ........... ........... ........... 39 Reserves 6 Carry-Over to Neat Year 41,000 33,000 51,000 74,000 89,000 09,000 29.000 MOOD 39 ID Neat Tell's Dry Period Funding Require Heats 47,000 33.000 S1.000 11,000 89.000 89.000 29.000 21.000 10 ........... ........... ........... ........... ........... ........... ........... ........... 11 Tied Balance or (Deficit) 0 0 0 0 0 0 0 0 el SUMAAY (Adjusted for Inter-fund lranslers) 12 Reserves I Carry-Over Fro. lasl Year 11.835.000 11.862,000 5.465.000 I.O20.000 (901,000) ; 11,035.000 (2,643,000) I1835,000 12 43 TOTAL REVENUE 8,165,"0 9,327.000 12.430,000 7,406.000 4.979,000 ; 42,307,000 30,170.000 72,111,000 0 ........... ........... ........... ........... ........... ........... ........... ........... la TOTAL AVAILABLE FUNDING 20.000,000 21.189.000 17,891.000 0.431,000 4,076,000 ; 54.142.000 27.521.000 04.312.000 11 15 TOTAL EXPENDITURES 8,138,000 15.726.000 16.863.000 9,335.000 6,121,000 $6,705.000 SI,T12,000 100.497.000 4S ........... ........... ........... ........... ........... ........... ........ .. ----------- ad Reserves I Cwy-Over LO Next Year 11.862,000 S,e61,000 1,020.000 (901.000) (2.643.m ; (2,643,000) (24.105.000) (2I,185.000) 66 17 Next Year's Dry Period funding Reduir...sts 1.514.000 1,755.000 2,031.000 2.351.000 2,130,000 2,730,000 5,302,000 5.302,000 al ........... ........... ........... ........... ........... ........... ........... ........... 40 FUND BALANCE OR (DEFICIT) 10.338,000 3,706.000 (1,003.0001 (3,252.000) (5.313,000) ; (5,313,000) (29AB1,000) (29.487.000) 48 / COUNTY SARITAI TRICT 90.11 EXHIBIT 2 ' l SCHEDULE OF DISTRICT CD .JR SYSTEM PROJECTS 6/17/87 PROJECT TOTAL 1 C.I.A. 1917.18 1989-89 1999-90 1990.91 1991.92 1992.93 1993-94 ........... ........... I ----------- ----------- ----------- --- ------- ----------- -------_.- ---_------ ........... Radio Linked 181emetly (a) 15.00 15,000 r NUNr Plme/FIR.UpOale (a) 10,000 25.000 I5,000 Slater Ave. pump Station Rehab. (al 25,000 1 25,000 Ocun Avenue Trunk Rehab. (A) 314,00 14,000 50,000 2SO,000 Aiscel Lneous projects (A) 175.000 1 25.000 25,000 25,000 25,000 25,W0 25,000 25.000 ........... I ----------- ------- --- ----------- ----------- ----------- ----------- ----------- ----------- Sub-total ACD Fund 569,"0 14,000 1/0,000 290,000 25,000 25,0a0 15.00 25,000 25.000 ........... I ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Edeards trunk (3) (b) 31100,000 ; 3,400,000 McFadden WENT Trunk (3) (e) 150,400 ' 750,000 Edinger Into rceplor (31 (a) 750,000 i 150.000 Rail Relief Sever (3) (c) 150,000 i 750,000 Edinger Seer Parallel (3) (a) 400.090 I 400,000 Coast Irunl Sarver (c), 7,400,000 ; $001000 2,900,000 3,500,000 500,000 Slater Relief Line (3) (c)e 1,750.000 i 100,000 swoon 1.150.000 Coast Pump Station and Farce Hain IJI Icl, 1,100,000 ; 100.000 2,000,000 2,000,000 Xi scelhneauf projects,(,) 350,000 ; 501000 511000 50,000 50.000 50,000 SQ00o 50,000 ........... I ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- fub-loW IR fund 19.650.000 i 0 750,000 S,LS0,000 6,100,000 $50.000 k,000 50.000 6,100,000 Sub-ialal District Construction 20.219,000 i 1/,000 890,000 5.740,000 6,725,000 575,000 75,000 15.000 6,125,000 ----------- - ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Garfield Trunk Sever (3) (,)1' 2.000.000 i 500,000 1.500.000 ........... I ........... ........... ........... ........... ........... ........... ........... ........... Sub-lotal Developer Construction 2,o0Q00o i 0 0 0 Hoopla 11500.000 0 0 0 ........... . ........... ........... ........... ........... ........... ........... ........... .......... GRARO TOTAL 22,219,000 i 14,000 @",coo 5,740,000 7,225,000 2,075,000 15,000 75.000 6,125,001) (,I Tully Funded 1. MW.vplanned facilities prnenlly under construction (b) partially Funded 2. eiscePPlloaed facilities Presently under design I'l Mat funded 3. Muter-planned facilities scheduled for future deign/construction 1 project to be financed by develater under See Or Service Reimbursement Agreement u project la be fully financed or developer SCHEDULE E ( COUNTY SANITATION DISTRICT NO. 11 ( 8/17/87 STATEMENT OF IRDIECIED CASM FEDk 8/I1/81 Page 1 FISCAL YEARS 1967-88 THROUGH 1916-91 1992-951 LINE 1967-88 1988.99 1989 90 1190-91 1591-92 5-Yur Total 1196-97 10-Yeir total LINE .... ....... ....... ....... ....... ....... ------------ ........... ............. --- OPERATING FUND -------------- 1 Reserves 6 Carry-Over fro. LOT Year :,318,000 1.688.000 2.222.000 2,11L000 2.9340DO 2,349.000 2,090,000 2,348.000 1 ........... ........... ........... ........... ........... .......... ........... ........... REVENUE 2 Share of 13 Tax Allouuon 2.091.000 2.356.000 2.656,000 2,994,000 3,420.000 L3,517,000 25,966.000 39.483.000 2 3 Fees !MOOD 105,000 110,000 116,000 122,000 553.000 706.000 1,259,000 a Interest a MICellAreDue 11C016 143.000 141.000 177.000 200.000 207,000 068.000 0 668,000 a 5 Other RA,,ANe (User Fees l 1.135.000 1,666,000 i.169,000 1.485.000 5,837.000 1,293,000 13.0C.000 s ........... ........... ........... ........... ........... ........... ........... ........... e TOTAL REVENUE 2.334,000 4,031,000 4.391.000 4.779.000 S.36,000 20,775,000 33,965,000 54,740.000 6 ........... ........... ........... ........... ........... ........... ........... ........... 1 TOTAL MIME FUNDING 4,682.000 5.725.000 6.673.000 7.692,000 1.172,000 23,123.000 36,055,000 $7,088.000 7 ........... ........... ........... ........... ........... ........... ........... ........... EXPENDITURES B Share of Joint works N a 0 L491,000 2,865,000 3.215.000 3,789,000 4,395,000 16,835,000 35.061,000 51,816.000 8 9 "UNCTION Syslo N 1 O and May CAN, 503,000 510.000 665.000 765,000 $87,000 I 3,390.000 7,019,000 10,477.000 9 10 OEM, Expenditures 0 0 10 11 TOTAL EXPENDITURES 2,994.000 3,143,000 3.960.000 4,554,000 5,282,000 20,234,000 42,140,000 62,373.000 II 12 Reserves 6 Carry-Over to Next fear 1.688,000 2,282,000 2,113.000 2.939.000 2,890,OD0 2,890.000 (5,205.000) 15.285,000) 12 13 Next Year's Dry Period Funding Rewi,owts 1.497,000 1,722,000 1,980,000 2,211.000 2,641.000 2,641,000 S,273,000 5,273,000 13 ........... ........... ........... ........... ........... ........... ........... ........... le Fund Balance or Del Laid 191,000 560,"0 733,000 661,000 249,000 249.ORD 110,558,000) (10155B4O00) le CAPITAL FUNDIS) IS Reserves A Carry-aver From Last Year 9,430,000 10,210,000 4,840,000 1.717,000 1,359,000 9,430,000 1.503,000 9,430,000 15 ........... ........... ........... ........... ........... ............ ........... ........... REVENUE 16 Construction Grants 517.000 113,000 670.000 678,000 678.000 2,664.000 113,000 2.771.000 16 17 Fees: COnneuipn 600,000 720,000 120.000 720.000 720.000 3,560,000 3,600,000 7.160,000 17 IB other 30.000 32,000 34,000 36,000 38.000 110,000 220,000 390.000 IB 19 We 01 Capacity Fight$ !06,000 51,000 927.DO0 661,000 30,00E 2.184,000 136.000 2,320,000 19 20 Interest a Miscellaneous latest 696,000 S14,000 233.000 109,000 101,000 1,613,000 0 1,673,000 20 21 Other meows 3,626,000 5.400.000 1,150,000 2,000,000 16.116,000 18,176,000 21 ........... ........... ........... ........... ........... ........... ........... ........... 22 TOTAL REVENUE 5.855.000 6.556.000 9.742.000 6,407.000 1,567.000 28,121,000 4,069,000 32,496.000 22 ........... ........... ........... ........... ........... ........... ........... ........... 23 TOTAL AVAILABLE FUNDING 15.225.000 17,066,000 14,590.000 6.124.000 2.926.000 37,857.000 5.512,000 41.926,000 23 ........... ........... ........... ........... ........... ........... ........... ----------- EXPENDITURES 24 Share of Joint Yorks lrelaenl Plant 4.071,000 6,618,000 5,640,000 2,690,000 1.348,000 20,235.000 3,283,000 23,518.000 24 25 District Collectipn Systn 090.000 5,740,000 71225,000 2,075,000 75,000 16,005,000 61200,000 22,205,000 25 26 ReisMrsuml Agreewt Paysents 0 0 26 27 Other Expenditures II4,000 116,DDD 114,000 21 ........... ........... ........... ........... ........... ........... ........... ........... 28 TOTAL EXPENDITURES 5.075.000 12.218.000 12.873.000 4,765,000 1,423,000 36,354.000 9,403,000 45,037.000 25 ----------- ----------- ----------- -----—---- ........... .--. ----- ----------- ----------- 29 Reserves 6 Urrp ovu Ip Next Yu, 10,210,000 6,80,000 1.117.000 1,359.000 1.503,000 1.503,000 ISML,0001 (3,911,000) 29 SCHEDULE E COUNTY SANITATION DISTRICT 10. 11 8f17/B7 UATEMINT Of PROJECTED CASH FLOW Page 2 FISCAL YEARS IM-08 THROUGH 1996-97 1992.931 L7+E 1907.88 1988.89 19B.-90 1990.91 1991.92 5-year Total 1996.97 10iur Total LINE .... ....... ....... ....... ....... ....... ------------ ----------- ------------- .... BOND FUXDISI 70 Reserves 1 Carry-Over Free Lest Year 57.000 11,000 33.000 51.000 19,000 57,000 09.000 57,000 30 ........... ........... ........... ........... ........... ........... ........... ........... REVENUE 31 I" levy $5.000 50,000 45.000 35.000 25,000 210.000 25.000 235,000 31 3: Interest B Miscellaneous Incoe6 4,000 3,000 31000 41000 6,000 20.000 4,000 24,000 32 33 Other Inceee 0 33 ........... ........... ........... ........... ........... ........... ........... ........... 31 IDEAL REVENUE 59,000 53,000 68,000 39,000 31,000 ; 210.000 29,000 259,"0 36 ........... ........... ........... ........... ........... ........... ........ .. ........... 35 TOTAL AVAILABLE FUNDING 116,000 100.000 81,000 "rose 105,000 ; 287,000 118,000 116,000 35 ........... ........... ........... ........... ........... i ----------- ----------- ----------- EXPENDITURES ------------ 36 gone Principal 1 interest 69,000 67,000 30,000 16,000 16,000 ; 198,000 19,00p 2011 000 36 37 Other Expenditures 37 ........... ........... ........... ........... ........... : ... .. . ...... 3B TOTAL EXPENDITURES 69,000 61.000 30.000 Is.000 16,000 ; INS.core 89,M 217,000 Be ........... ........... ........... ........... ........... r ----------- -------- -- ----------- 19 Reserves B Carry-Over to Next Year 67,000 33,000 51,000 14,000 89,000 ; 89,000 21,000 29,000 39 10 Next Year's Dry Period funding Requirements 11,000 33,000 $1.000 14,000 29,000 ; 89,000 29.000 29,00e 60 ........... ........... ........... ........... ........... . ........... .......... ........... 61 fund Memo or (Oalixit) 0 0 0 0 0 ; 0 0 0 el SUNNAAY (Adjusted for Inter-fund Transfers) 42 Reserves 1 Carry-Over Free Last year 11,035,000 11,94S."O 7,163,000 4,481.00 4,371,000 ; 11,835,000 4,602.000 11,835,000 62 45 TOTAL REVENUE 8,248,000 10,946,000 14.161,000 9.225.000 6,832.000 ; 49.432.000 30,063.000 47,495,000 43 ........... ........... ........... ........... ........... . ........... ........ .. ........... as TOTAL AVAILABLE FUNDING 20,603.000 22,991,000 21.346,000 13,706,000 11,203,000 ; 61,267,000 42,545,000 99,330,000 64 65 TOTAL EXPENDITUREE 8.138,000 15,729.000 16,663,000 9,335.000 6,121,000 ; $6.785.00 51,712,000 106,497,Oe0 65 ........... ........... ........... ........... ........... . ........... ........... ........... h Reserves L Carry-Ovu to Meet Year 11,915,000 7,163,000 11481.000 4,311,000 4,482,000 ; 4,482.000 19.167,000) (9,167,000) 46 O Next Year's Dry Period Funding Repair eeenls I,S4e,000 1,15S.OA0 2.031.000 2.3511000 2,730,000 ; 2.730.000 5,302,000 5,302,VON 61 ........... ... ....... ........... ........... ........... ........... ........... ........... e6 FUND BALANCE OR (DEFICtlI 10,401,00D 5,408,000 2,150,000 2,020,000 1.152,000 ; 1,752,000 (11,469,000) (Ie,669,000) 40 C PRELIMINARY IMPLEMENTATION SCHEDULE SCHEDULE F DISTRICT NO. 11 LONG-RANGE FINANCIAL PLAN 816/87 JAN-JUL 87 AUG 87 SEP 87 OCT 87 NOV 87 AdjournedMeeting o ev ew o y ong- FirstReading o secondea ng n ro uce r nance Review District's Range Financial Plan Proposed Connection Adoption of Connectio Establishing User Long-range Financing for User Fee/Connec- Fee Ordinance - 9 9 8 Fee Ordinance-30 14 8 Fee for 1988-89 0 ttons - 4 15/87 tion Fee Recommends- z tions - 8 20 87 Approve 1; Budgets - 7/8/87 a 0 0 w N o Review 1987-80 Budge Update Data on repare Dratt Future Cash Flow MFR/Commercial/Indus- Budget/Future Cash ¢ Requirements/Draft trial/Government Flaw Requirements/ w Revision to Long-Rang Facilities in CSD tlll Implement Board Financial Plan Direction to Estab- EDP Processing to fish Proposed User Extract Data/Evaluate Fee/Connection Fee 1988-89 Fee Revenues Levels C PRELIMINARY IMPLE14ENTATION SCHEDULE SCHEDULE F DISTRICT NO. It LONG-RANGE FINANCIAL PLAN Page 2 8/6/87 DEC 87 JAN-FEB 88 MAR-APR 88 MAY-JUN 88 JUL-AUG 88 Review Updated Conduct Public Hearin Long-range Financial on Proposed Billing Plan and Collection Method User Fee Report zsecond Reading an Adopt Ordinance/Set Receive/File User ee €; Fee Schedule Report Describing a Property 8 Fee to be x Public Hearing Levied Date for Proposed Billing and Collectio Adopt Resolution liethod User Fee Re or Approving Billing and Collection Method/Use Fee Report zEDP Processing to Notice f ce an on uc a orwar Adopted - ver - User Generate Notices to Public Workshops to User Rates to County Fee Billing Tape to . aall Property O�mers Discuss Proposed Sewe Assessor County Auditor- re Proposed Sewer Use Use Fee Billing and Controller for Place- d Fee Billing and Collection Method ment on 1988-89 N Collection Method DP Process ng to Produce 98 - 9 ser •ee Property Tax Bill for Placement on 1988-89 Property Tax Bill Prepare 1988-89 User County Assessor Fee Report for Review and Discussion with Board of Directors ( OUn TY SANITAIIOX DISTRICT NO. 11 ( SCHEDULE STATEXfNA Of PROJECTED CASH fl0 1/1]ye] ` FISCAL YEARS 1907.89 IWROUDN 1996.97 Page 1 1992-93/ LINE 1961-18 1911.89 1919-94 1990-91 1"1-92 5-yur Total 1996-97 10-Vur loal LINE .._. ------- ------- ------- ------- ------- ------------ ----------- ------------- _.-. OPERAIIXA FUND -------------- ' I Reserves 1 Larry-Over from Last Year 2.340.00 1,611,000 2.282,00 2,713.00 2.930,00 2,348,00 2.170.00 2.348.000 1 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- REVENUE - 2 --Share of 1l lax Allocation 2.091,000 2.356.00 2,656.00 2,191.00 3,375.A0 13,472,000 24.511.000 37,983,000 2 Fees 100,00 105.000 • lie.D0 116.000 122.001 $53.000 706.000 1.259.000 3 a Interest a Aiscelleuous Income MIMI 111.00 171.00 200.00 206.00 SIL ON 0 01,00 a 5 Other Revenue 1.435,000 1,111.000 1,161.000 1,111,00 5,811.000 1.221,00 13,015.000 5 ........... ........... ........... ........... ........... ........... ........... ........... 6 TOTAL REVENUE 2,311,00 4.037,00 /,3%,00 4,111.00 5,177.OW i 0.110.01 32,1/1,00 S3,1S1.000 6 ........... ........... ........... ........... ........... , ----------- ----------. ---------.. 7 TOTAL AVAILAIIE TURING /.M M &.125.m GRIM 7,111,ANN 1.107,W0 i 23,058.M 35,314,00 55,502,000 1 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- EXPENDITURES 1 Share of loans Works X 1 0 2,491.00 2,05.m 3,215,000 3.7W.OW 1,357.00 16,797,000 33,122,01 50,619,00 1 9 Colluttas System A 1 0 and Other (Ask, $03,000 $74,04 665,000 765,00 00.00 ) S,Soli'm 6,026,00 10.212,00 9 10 Other INPudlluns 0 0 10 ----------- ----------- ----------- ----------- ----------- ---------1. ----------. ........... 11 Total EXPENDITINES 2,99/,00 3,//3,00 3.9W.00 /,SM,00 5,237,00 20,IW,WO 40.648,00 60,136,00 11 ----------- ----------- ----------- ----------- ----------- ----------- ...-...---- ----------- 12 Reserves 1 Carry-Ovar to Next Year 1,6W,00 2,282,000 2,713.000 2,/W,00 2,970,000 2,170,011 (3.331,00) (5.331,00) 12 13 Next Year's Dry Period Funding Requirements 1,497,00 1,722,00 1,910,00 2,211.00 2.619,00 i 2,619,00 5.273.00 S,273,00 Is ----------- ----------- ----------- ----------- ----------- - ----------- ----------- ........... 14 Fond Man, or (Deficit) 191,00 Md,Oo 133,00 653.00 251,00 i 2S1,00 (II,W1,00) (10,607.00) 11 CAPITAL fWDIS) IS Reserves 1 Carry-over I'm ass Yee, 9,430,000 7,177,001 1,110,00 (31551,00) (/1121,00) i 9./30.00 (/,071,000) 9.430.00 IS ----------- ----------- ----------- ----------- ----------- - ------------ ----------- ----------- REVENUE 16 Construe tier,Greats 517.000 113.00 618.00 b78.000 670,000 2,661,00 IIJ,00 2.777,00 16 Il fees: Connection 680.000 720,00 70.00 120.000 720,000 1,M0,00 5,6W,00 7,160,000 17 Is Other 30.00 32,00 3/.00 36.000 31,000 170,000 220.00 390,00 to 19 Sale of Capacity Rights 306.000 57,00 921,00 664,000 30.000 2,104,000 I36,00 71320.00 19 20 Interest 1 Niuellueous lame $89.000 30,00 0 0 0 893.00 0 193,000 20 71 Other lateee 0 0 21 ........... ........... ........... ........... , ----------- ----------- ----------- 22 TOTAL REVENGE 2,1n.m 1.226,00 2.359.00 2,291,00 I,I66.00 1 9,471,00 1,09,OW 13,540,00 22 ........... ........... ........... ........... ........... . ........... ........... ........... 21 TOTAL AVAILAIIE fONDIRG 11,5S2,00 1,103,010 3,169,00 (1,256,000) (2,655,001 i 18.1111,0111 (9,00) 22,970,00 25 ........... ........... ........... ........... ........... . ........... ........... ----------- EXPENDITURES 21 Shan of Joial Works Treatment Pleat 4.071,000 61118,00 5.611,0W 2,60,00 1,349,00 ' 20,235,00 3,263,00 23,S11,00 21 25 District Collection syntax 190,000 515,00 11675,00 115,000 75,00 2,6J0,00 6,200,00 1,13o,00 25 26 Rei.awseunt Allotment Parents 0 0 26 27 Other lnenditures 111,00 111,00 114,00 27 ........... ........... ........... ........... ---'------- , ..--------- ----....... ........... 28 TOTAL EXPENDITURES 1,375.00 6.993,00 1,325,00 2,05.00 1,123,00 i 22.919,00 9,/13,00 32,162,00 21 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 29 Re-ervee 1 Carryover to Next Year 7.111.00 1.610.00 ❑,554.001 (1.121.001 (/,071.0001 1 (4,078.000) (91192.000) (1,192,000) 29 sCN7/87 C town san:naN asu¢1 Mo. a 1/1 Ne7 SIAIEN[Ml OF i30JE[iE0 CASH FLOW page 2 FISCAL YEARS IS+-58 INROwN 1956.97 1992.131 LINE 1927-00 1981.89 1989.90 1990-91 TITHE S-Yea, Total 1996.97 10-14.1 Total LIME .... ....... ....... ....... ....... ....... ------------ ----------- ------------- ---- BOW. FURD1S) 30 Reserves B hny-Ovlt Fro Last east 57.m 11.000 33,000 $1.010 74.M ; 51.m 19.LOT $7.000 30 ........... ........... ........... ........... ........... . ........... ........... ........... REVENUE 31 In levy 55,000 50.000 45.000 35,000 25,000 ; 210.M 25,00 235,000 31 32 Interest B M55ceiI'Wos locus 4,000 3,000 3,000 4.000 6.000 20.00 4,w0 24.000 32 33 Other lamas 0 33 ........... ........... ........... ........... ........... ........... ........... ........... 31 TOTAL REVENUE WORD 53,000 61.000 39,000 11,000 230,000 29,000 259,o0 36 ........... ........... ........... ........... ........... . ........... ........... ........... 35 TOTAL AVAILABLE INDIAN II6,M I40,Oq 11,000 90,Oo 10s,o0 ; 211,000 Iii'm 316,000 35 ........... ........... ........... ........... ........... . ........... ........... ----------- EXPENDITURES To BOND Prioipal 1 let mst 69,m 67.000 30,m I6,000 16,000 ( 198,000 19.no 281.000 36 37 Other INPIMit.rlf 37 ........... ........... ........... ........... ........... : ........... ........... ----------- TO TOTAL EXPENDITURES 69,000 61,o0 Sc'm 16,000 I6.000 l 198,000 89.000 287,000 31 ........... ........... ........... ........... ........... . ........... ........... ........... 39 Reserves 1 Cury-Dyer to Nert year 61,000 3S.WdL 51.001 16,000 11,000 esew 29,000 29,001 39 60 Neel leer's Dry Period funding Reaairesms 47.M 33,0E 51.001 11,00E 19,00E ; "'m 29,0E 29,00E 10 ........... ........... ........... ........... ........... . ........... ........... .... ..... 41 Food BAlmn or (Daliait) 0 0 0 0 0 I 0 0 0 el SwNARY (Adjusted tar Inter Poad Transferal 12 Reserves 6 Cury-Over Fro test Year II,13S,000 8,912,000 3,725,000 1790.000) (11117,M) 11,135,000 (1,119,000) II,R35,000 62 43 TOTAL REVENUE 1,515,00E 5.316,OW 6,198,0E 1.109.000 6,676,01E ; 30,411,000 36,542,000 66,9SS,OOA 63 ........... ........... ........... ........... ........... 1 ----------- ........... ..--------- 11 THAT AVAILABLE FwDIMD 16,350.00E 11,228.00E 10,523.00E 6.318.000 5,567,10E ; 42,246,000 35,423,000 76.789,000 11 15 TOTAL EXPENDITURES 1.131,00E 10,503.000 11,313.00E 1,655,00E 6,676,00E 63,365.000 50.220,00E 93,585,00E 15 ........... ........... ........... ........... ........... ........... .......... ........... 16 Reserver A Grr1-Owr to Nat Year 1,912,00E 31725.000 (790,000) (1.111100) (1,119,M) 11,119,0001 111.197,0001 (11,191,000) 16 el Hart Year's Dry Period Funding ReoireeeNts 1,566,000 1.755,000 2,031.00E 2,351,OW 2.701,000 ; 2,701,000 5.302.000 5,302,0E 67 ........... ........... ........... ........... ........... ........... ........... ........... 48 FUND BALANCE 01 (DEFICIT) 1,368,00E 1,970,000 12,021,000) (3,161.000) 13,127,000) ; (l,It1,000) 120,099,000) (20.099,000) 41 COUNTY SAWATION DISTRICTS .1 ORANGE COON". CALIFORNIA 1p EWSAVENUE aa.Box 8127 11/17/87 MNTAiNVA Y.cs MABz7z 127 `� n1n 9Sz-zan STAFF REPORT ON IMPLEMENTATION OF LONG-RANGE FINANCIAL PROGRAM BACKGROUND For many years the Districts, as part of the annual budgetary process, have forecast revenues and expenditures on a five-year basis and last year commenced forecasting on a ten-year horizon. The purpose of this long-range financial planning is to assure adequate funding to carry out the Districts' wastewater management program for the benefit of the communities and the two million citizens which the Districts serve in metropolitan Orange County. A major benefit of the long-range cash flaw projections is that they enable us to determine well in advance when revenue shortfalls will begin to occur so that the Board of Directors will have adequate time to consider alternative funding sources and take the necessary corrective action to ensure each District's financial integrity. For some time, our projections have indicated that funding shortfalls in District No. 11 would begin to occur as soon as 1989 and that the District would have to consider additional revenue sources to meet the District's long-term funding requirements for sewerage facilities improvements and expansion, and ongoing operations and maintenance costs. Property taxes have historically been the major source of local financing along with connection fees of the District's activities. However, the costs of providing service continue to rise beyond the ability of the property tax apportionments and the past connection fee schedules to keep pace with the stringent requirements of the federal and state regulatory agencies for advanced treatment and the need to provide additional facilities to meet the increasing demands on the sewerage system. Accordingly, on August 20th, the Board modified its financial plan and took the following actions directed at maintaining the District's long-range financial integrity: 1. Directed staff to draft an ordinance increasing connection fees from $1,250/dwelling unit and $250/1,000 sq. ft. to $1,500/dwelling unit and $300/1,000 sq. ft. The Board approved the increase in connection fees at the October, 1987 meeting, and the new fees will go into effect November 13, 1987. (Connection fees are charged to new development to pay for sewage facilities to serve said development). 2. Directed staff to proceed with planning for implementation of a supplemental user fee to be collected on the property tax bill beginning in 1988-89. (User fees help pay the ongoing costs of operations, maintenance and facilities replacement). Page Two 11/17/87 PROPOSED USER FEE PROGRAM The supplemental user fee program is required to avoid a projected deficit beginning as soon as fiscal year 1988/89 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 would reach as much as $24.1 million by 1996-97 unless additional revenue is generated. Schedule A presents the District's projected long-range financial position under the following assumptions: (1) Supplemental user fees are not established, and (2) The Bolsa Chica area does not annex to District 11. To provide the necessary revenues for District operating costs (including capital replacement), the Board, on August 20th, directed staff to proceed with planning and implementation of the supplemental user fee program as set forth in Table 1. Schedule B reflects the updated timetable for the implementation plan approved by the Board. TABLE 1 Proposed Supplemental User Fee Program Annual Charge Effective Class of User Basis of Charge July, 1988 Sin 1e-Famil Annual Charge $26.40 we logs Condominiums per Dwelling Unit Multi-Family Annual Charge $15.85 we ings partments/ per Dwelling Ffobi a Homes Unit Commercial/Industrial/ Annual Charge per $18.90 t er 1,000 5q. Ft. of Building This program is identical to that in effect in Districts 1, 5 and 6. District No. 3 is proposing to implement the same program in 1989. District 6 initially adopted the same fee schedule, but has found it necessary to increase the rates 10% each of the past two years. District 13, which receives no ad valorem tax appropriation, has a charge of $70/year. Schedule C, Statement of Projected Cash Flow, identifies the cash position of District No. 11's operating fund if the above recommended supplemental user fee program is implemented based on the assumptions that: (1) Supplemental user fees are established; and (2) The Bolsa Chica area does not annex to District 11. Based on a July, 1988 implementation date, the District's operating fund would remain solvent through 1989-90 with the initial rates in place, although the contingency reserve would be reduced below an acceptable level . Page Three 11/17/87 The Board will need to periodically evaluate the fees because the cash flow projections for the 1990/91-1996/97 period indicate further shortfalls. Thus, once implemented, the user fee amounts should be evaluated annually to make sure that the program provides adequate revenues to meet the District's funding needs. Based on current estimates, the user fee may have to be increased to $45.00/single family residence by 1990-91. It should be noted, however, that District 11's financial position, in the final analysis, will be significantly affected by the amount of ad valorem tax revenue apportioned to the District from the proposed Bolsa Chica Annexation. The District needs to implement supplemental user fees to generate additional revenues for its operating fund whether or not the Bolsa Chica annexation goes forward. SUPPLEMENTAL USER FEE ORDINANCE In accordance with the implementation plan, the next step is the introduction of an Ordinance to adopt the supplemental user fees. Enclosed is a draft of Ordinance No. 1108, Establishing Sanitary Sewer Service Charges, that will be considered by the Board for introduction and first reading at the November 24th meeting. The second reading and adoption is scheduled for the regular meeting on December 9, 1987. The effective date of the Ordinance would be July 1, 1988. PUBLIC HEARING ON PROPOSED COLLECTION OF USER FEE ON PROPERTY TAX BILLS We are also required by law to notify property owners in District No. 11 of our intention to use the joint consolidated property tax bill to collect the supplemental user fee. We will do this through a public notice that will be mailed in late December or early January notifying District No. 11 of a Public Hearing to be conducted on February 18, 1988 to discuss this proposed billing and collection method. Exhibit D is a copy of the proposed notice. DATA BASE AND EDP PROCESSING COSTS Implementation of the supplemental user fee requires development and maintenance of a data base of all the parcels within the District by property type as well as EDP processing of the fees for placement on the County of Orange property tax roll each year. The County Assessor's Office maintains a comprehensive data base of all parcels within the District. The other four Districts which have implemented supplemental user fees set aside funds each year in their operating budgets to reimburse the County Assessor for the data base maintenance and EDP processing services provided to the Districts to enable them to bill their user fees via the tax roll . Initial development and testing of the data base, preparation of mailing labels for the public notices, and processing of the user fees for the 1988-89 tax roll is expected to cost between $70,000 and $75,000. Annual data base maintenance and EDP processing costs in future years are expected to range between $30,000 and $40,000. Staff recommends that the Board authorize issuance of a purchase order to the County Assessor for an amount not to exceed $75,000 to reimburse the Assessor's expenses for implementation of the District No. 11 supplemental user fee for 1988-89. Page Four 11/17/87 RECOMNENDED BOARD ACTIONS The staff recommends the following Board actions: 1. Introduce the supplemental user fee Ordinance No. 1108 for first reading at the November 24, 1987 Board meeting. 2. Direct staff to proceed with implementation of the supplemental user fee program in accordance with the revised implementation plan. 3. Authorize expenditures of up to $75,000 for the supplemental user fee program implementation and EDP processing for the 1988-89 supplemental user fee on the joint consolidated tax bill . NUM), SANIIAIWN UISIRILI MU. 11 /87 STATEMENT Of PROJECTED CASH ETON 1 Vl7 FISCAL YEARS 1907-08 THROUGH 1996- Pe I ge I 1996--93) .1 10-0LINE .... W7- 19 --- 19W- -- -- - I---- -- WI- 5-Year TOU T cal ---- -- u ---- OPERATIM6 END 1 --Reserves 1 Carry-Over fro. Last Year 2,471,000 1,820,W0 936,OW (233,W0) (1.611,000) 2,471.W0 (3,617,OW) 2,471,000 1 REVENUE 2 --Share of It Tax Allocation 2.091.00 21356.w 2,656.W1 2,996,00 3.315.00 13.412.00 28,SII,WO 37,903,OW 2 • ! Fees IOD,000 105.000 110,WO 116.00 122,W0 553,00D 7W,W0 1.259,W0 3 a Interest 6 Niscell...a mule 152,000 98,000 25,00 0 0 275,000 0 215,00 a 5 Other Revemee 0 0 5 ........... -------I--- ---------- ----------- ........... , ........... --------- ........... 6 TOTAL REVENUE 2.343.000 2,559,000 2,791,000 3.110.000 3,497,W0 14,300,000 25.217,000 39,517,0W 6 ----------- ----------- ----------- ----------- -------.... - ----------- ----------- ----------- 7 TOTAL AVAILABLE FUNDING 4,814.0W 0,319,00 3,727,W0 2,871.000 1,820,W0 16,771.00 21,800.000 /1,988,000 7 ----------- --------... ----------- ----------- ----------- - ----------- ----------- ----------- ENPENDIIURES 8 Share of Joint Norls N 6 0 2.491.w 2,WS,WO 3,295,OW 3,789,Add 6,SS7,W0 16,797.ANN 33.822.W0 $0,619.000 8 9 Collation System 8 A 0 and Other Oyer. W3,W0 519.000 665,OW 765,W0 8W,W0 3,391,000 6,8M,000 10,217,000 9 10 Other Expenditures 0 0 10 ........... ........... ........... ........... ........... . ........... ........... ----------- 11 TOTAL EXPENDITURES 2,994,W0 3,463,000 3,960,00D 4,554,OW 5.237,0041 20,16B4OW 60,64B,W0 60,836,000 11 ----------- ----------- ----------- ---........ ----------- - ----------- ----------- ----------- 12 Reserves 6 Carry-Over to Next Year 1,8N.00 936,W0 (233,0110) (1,677,000) (3,417,000) (3,417,000) (18.849.CAP) (18,8a8,000) 12 13 Next Year's Dry Period funding Repirs.ents 1,497,00 1,722,OW 1,980,W0 2,271,W0 2,619,000 2,619,OW 5,213,W0 5,273,000 13 ---------- ----------- ----------- _.--._.- ---.-.--- , ----------- ----------- ........... le fund Relance or (Deficit) 323,W0 I766,014) (2,213,00) (3,954,040) (6,636,OW) ( (6,W6,MR) (24.121,W E (26.121,OW) It CAPITAL FWD(f) IS Reserves 1 Carry-over from last Year 9,601,OW 7,360,0411 I,01,000 (J,lS/,OW) (3,928,00) ) 9,0I,000 (3,881,000) 9,601,000 IS ........... ........... ........... ...... .. ........... . ............ .........— ----------- REVENUE 16 Construction grants 517,W0 113,000 678,000 678,000 678,000 2,666,00 II3,000 2,777,000 16 17 fees: Connection WO,WO 720.000 720,000 720.000 720,000 3,S0,004 3,609,0011 7,160.000 17 IB Other 30,W0 32.000 34,000 36.000 38,000 I70,W0 220,000 3W,OW IB 19 Sale of Capacity Rights lW,WO 57,000 927,000 864,000 30,000 2.184.AND 136,W0 2,320,000 19 W let...at 6 NLsullunws I.e.. 601.00 318,DAN D 0 0 ) 919,OW 0 919,W0 20 21 Other Income 0 0 21 ........... ........... ........... ........... ........... . ........... ----------- .._...----- 22 TOTAL REVENUE 2,134,000 1,240,DDO 2.359,000 2,298,000 1,466,010 9,497,000 4.069,000 13,566.M 22 ........... ........... ........... ........... ........... i ----------- ----------- .---------- 23 TOTAL AVAILABLE F011DIN6 11,735.00 8,60,00 3.966,000 (1,059.00) (21681OW) 19,WB.WO I88,000 23.167,000 23 ___________ ___________ ___________ ___________ i ----------- ----------- ._....----- EXPENDITURES 24 Share of Joint Morns Treatment Plant 4.071,000 6,478,000 51648,000 2,690.000 1,348,000 20.23S,000 3,283.M 2315181W0 24 25 District Collection System 190,000 515,00 1,675.00 175,000 75,000 2.M 000 6,2W,W0 8,330.00 25 26 Reimbursement Agreement Payments 0 0 26 27 Other Expenditures 114,000 114,000 II6,00 27 ........... ........... ........... ....... i ----------- ----------- .._...----- 28 TOTAL EXPENDITURES 4,375,001) 6,993,000 7,323.00 2.165,000 LATE.OW 22.979,00 9,413,OW 32,462,000 28 ........... ........... ........... ........... ........... i -._------- ----------- -------.--- 29 Reserves 6 Urry-orer to Next Ymer Y,JW.000 1.607.OW (3,357,OW) (3,926,OW) (3,4I,OW) ) (3,881,W0) (9.295,000) (9,295,100) 29 Schedule A COUNTY SANITATION DISTRICT NO. 11 11/17/87 STATEMENT OF PROJECTED CASH FLOW Page 2 FISCAL YEARS 1911.88 THROUGH 19%-97 1992-931 LINE 1987-88 1918-19 1989.90 1910-91 I%1.92 $-Year Total 1996-97 10•Year Total LINE .... ....... ....... ....... ....... ....... .........-. ------------- .... BOND FUND(S) ------------ 30 Reserves A Carry-Over From Last Year 58.000 68,000 34,000 $2,000 76,000 51.000 91,000 56,000 30 ........... ........... ........... ........... ........... . ......... ........... ........... REVENUE 31 tax Los, 55,000 50,000 45,000 35,0AR 25,000 210,000 25,0OU 235.000 31 32 Interest a Miscellaneous incooa 4,000 3,000 3,000 5,000 6,000 21,000 4,000 25.000 32 33 Other Income 0 33 ........... ........... ........... ........... ........... . ........... ........... ........... 3N TOTAL REVENUE 59,000 $3,000 41,0OU 40.000 $1,RAD 231,(AN 29,0OU 260,0OU 36 ........... ........... ........... ........... ........... . ........... ........... ........... 35 TOTAL AVAILABLE FUNDING 117.000 101,000 12,000 92,OU0 107,000 289,000 120.000 318,000 35 ........... ........... ........... ........... ........... i .......-... ----------- ----------- EXPENDITURES 36 land Art Kipal I Interest 69.000 67,000 30,000 16.000 16,000 198,000 go.Now; 287.000 36 37 Other Expenditures 37 ........... ........... ........... ........... ........... . ........... ........... ........... SO TOTAL EXPENDITURES 69,000 67,000 30,000 16,000 16,000 I 190.000 89.000 287,000 38 ........... ........... ........... ........... ........... . ........... ........... ........... 39 Reserves a Carry-Over t0 Next Year 68,000 34,000 52.000 76,000 91.000 ; 91.000 SI'm 31.000 39 CO Next Year's Dry Period Funding Requireeants e8,000 34,0OU 52.000 76,OU0 91,000 ; it,0OU 31,OU0 31,0OU 10 ........... ........... ........... ........... ........... . ...... .... ........... ........... WI Fund Balance or (Deficit) 0 0 0 0 0 0 0 0 CI SUMMARY (Adjusted for Intar-FuPO Transfers) 62 Reserves I Carry-Owe, From Last Year 12.130.000 9,226,000 2.577,000 13,538,000) (5,525.0001 1 L2.130.000 (71207.0001 12,130,000 42 43 TOTAL REVENUE 4.536,000 3,152,000 5,198,000 5,448.000 4,994.M I 24.021.000 29,315,000 53,343,POU 63 ........... ........... ........... ........... ........... ) ........... ........... ........... CC TOTAL AVAILABLE FUNDING 16,666,000 13,080,000 1,175,000 1,910,000 1531,OU0) ) 36,158,000 22.101,000 65,673,OU0 CC 45 TOTAL EXPEND17URES 7.436,000 10.503.000 11,313,000 7,435,000 6,676.000 ) 43,365,000 50.220,000 93,SB5.000 45 ........... ........... ........... ........... ........... ........... ........... ........... A6 Reserves I Carry-Over to Next Year 9,228,000 2,577,000 (3,538.0001 (5,525,0001 17.207,000) i (7,207.0001 129,112.0001 12a,112,000) 16 61 Next Year's Dry Period Funding Requirements 1.545,OU0 1.756.000 21032,000 2.353.000 2,710,00 2,710,0% S.301,000 5.304,000 el ........... ........... ........... ........... ........... ........... ........... ........... N8 FUND BALANCE OR (DEFICIT) 7,603,000 021.000 (5,570,0001 (7,878.000) 19.911,000) i (9,917,000) (33.416,0001 133,616,0OU1 48 - PROPOSED DISTRICT 11 USER FEE/CONNECTION FEE IMPLEMENTATION SCHEDULE Schedule B Page 1 / 11/10/87 JAN-JUL 87 AUG 87 SEP 87 1 OCT-NOV 87 DEC 87 Adjourned Meeting to Review/Modify/Approve First Reading of Second Reading/ Second Reading and Review District's Long-range Financial Proposed Connection Adoption of Connectio Adopt Ordinance/Set Long-range Financing Plan and User Fee/ Fee Ordinance - 9/9/8 Fee Ordinance-10/14/8 Fee Schedule - 12/9/8 Option - 4/15/87 Connection Fee Recomm endations - 8120/87 1 1 Adjourned Meeting to pprove 9 Review Status of Bud ets - 7/e/87 District's Long-Range Financial Program - 11/24 87 Introduce Ordinance Establishing User Fees for 1988-89/ Approve Revised Implementation Schedule and Budget - 11/24/87 Adjourned Meeting Review 1987-68 Budget Request Data on Dist Order Mailing Labels Update Future Lash Implement Board Future Cash Flow 11 Parcels by Prop- to Test Out Modified Flow Re uirements Direction Establishin Requirements/Draft erty Type (SFR/MFR/ Mailing Label Progra User Fees Revision to Long-Rang IND, etc.) and Pre- Deliver to County Impl ement Board Financial Plan - pare Revenue Esti- Assessor for Testing/ Direction Raising mates - 8/10/87 Production Runs - Connection Fee Levels 9130187 10/14/87 Notify CountyAssess- or/Formally Request Update Data on R/ Support for Implemen- MFR/Commercial/Indus- tation of District it trial/Government Supplemental User Fee Facilities in CSD ill 8/20/87 9/30 87 EDP Processing to Extract Data/Evaluate 1988-89 Fee Revenues 9/30/87 PROPOSED DISTRICT 11 USER FEE/CONNECTION FEE IMPLEMENTATION SCHEDULE Schedule B Page 2 ( ( 11/10/87 JAW BB FEB 88 MAR-APR 88 MAY-JUN 88 JUL-AUG 88 Fix Public Hearing Conduct Public Hearin Date for Proposed on Proposed Billing Billing and Collectio and Collection Method Method/User Fee Reporq User Fee Report - 1/13/88 Baird Meetin 2/18/87 Adjourned Meeting Approve Funds to Incorporate Modified Receive/File User Fee EDP Programs into Report Describing County Assessor's New Property 8 Fee to be Computer-based Assessi Levied - 2/18/87 ment System to Preparel Adjourned Meetin Tax Roll - 1/13/88 Adopt Resolution Approving Billing and Collection Method/Use Fee Report - 2118/87 Adjourned Meeting D rocessing/ Prepare 1986-89 User EDP Processing to Produce 1 - 9 User Fee eview utput rom Printing to Generate Fee Report for Review for Placement on 1988-89 Property Tax Bill Tax Roll Processing/ Labels/Notices to all and Discussion with Count Assessor - 2 19/88-8/30 BB Research and Correct Property Owners re Board of Directors Exceptions/Turn in Proposed Sewer Use Feq Final Fee Package - Billing and Collectiol Conduct Public Work- August 5-26 1988 Method shop to Discuss Proposed Sewer Use Fe Billing and Collection Method 2/4/88: Proposed Workshop Date ' r opted - 9 User Rates to County Assessor - 2/I,/88 COUNTY SANITATION DISTRICT No. 11 Schedule C 91PIFXEXT OF PROJECTED CASH FLOW 11/17/97 FISCAL YEARS 198/-11 TXRW6N 1996-91 Page 1 1992-93/ LINE 1987-99 1918.89 1901-90 1990-91 1991-92 5-Ymar Total 1996-91 10-Year Total LIKE .... ....... ....... ....... ....... ....... . ............ ------I---- ------------- ---- GUERAIIXI FUND I Reserves I Carry-over Fore LAST Vear 2,471,000 1,820,000 2,131,000 2.259.000 2,150.000 2.471.000 1,110,000 2,471,000 1 ........... ........... ........... ........ . ........... . ........... ........... ........... REVENUE 2 Share Of It Ns Allocation 2.091,000 21356.000 21656.000 2,994.000 1,315,000 13,472.000 24,511,000 31,983.000 2 _ 3 Fees 100,000 105,000 110,000 116,000 122,000 553.000 706,000 1,259.000 3 A Interest 1 Miscellaneous Income 152.000 140,0" 156,000 156,000 138.000 742,000 0 162,000 C 5 Other Shows (Boost oeelist User Fees) 1,153,000 1,166.000 1.179.000 1,192,000 4,690.000 6,155,000 10,645,000 5 ........... ........... ........... ........... ........... . ........... .......... ........... 6 TOTAL REVENUE 2,343,000 3,754.000 4.080.000 4,445,000 4,027,000 I 19,457.Ras 11,372,00 50,929,000 6 ........... ........... ........... ........... ........... ........... -----I.---- ----------- i TOTAL AVAILABLE FUNDING 4.014,000 5,514.000 6.211,000 6,706,000 6,977,000 21,928,000 33,112,000 53,300,000 i ........... ........... ........... ........... ........... ........... ........... ----------- EXPENDITURES B Share of Joint Work, A 1 0 2,191,000 2,865,000 3,295,000 3,789,000 e,3S1,000 16,797.000 33,822,000 50.619,000 8 9 Collection System A A 0 and Other Doer. 503,000 518,000 66S,000 765,000 880,000 3,391,000 6,826,000 10,217,D0G 9 10 Other Expenditures 0 0 10 .. .. . .. . ........... . . 11 TOTAL EXPEKDITURES 2,996,000 3,613,000 3,960,000 4,554,000 5,237,000 20,108.000 40,640,000 60,836.000 11 ........... ........... ........... ........... ........... ( -1-----I--- ---_ ..... ------_.._. 12 Reserves B Carry-Over to Next yell 1,820,000 2,131,000 2,239,000 2.150,000 1,740,400 1.740.000 (7,536,000) (7,536,000) 12 I3 Next Vast's Dry Period Funding Annul reesets 1,491,000 1,722,000 I,gB0,OD0 2.271.000 2.619,000 2,611,000 5,273.000 5,273,000 Is ........... ........... ........... ........... ........... ........... ........... ........... 11 fund Balance or (Deficit) 323.000 409,000 279,000 (121,0001 (079.000) (679,000) (12,909,000) (12.809,000) IC CAPITAL FUNDS) - 15 Reserves C Carry-over from last Year 9,601,000 7,360,000 1,607,000 (3,S57,000( (3,924,000) 9,601.000 (3,BB1,000) 9.601,000 15 ........... ........... ........... ........... ........... ( ------------ ........... ----------- REVINUE 16 Construction Grants 517.000 113,000 678.000 678,000 676,000 2,664,000 113,SAY 2,171,000 16 17 Fees: Connection 680,000 120,000 720,000 720.000 720.000 3,560,000 3,600,000 7.160.000 17 IB Other 30,do0 32,000 36,000 36,000 38,000 ( 170,000 220,000 690,000 IB I9 Sale of Capacity Rights 306,000 57,000 927,000 064,000 30,000 2,184,000 136,000 2,320,000 19 20 Interest a Xiscetlaneous Income 601,000 318,000 0 0 0 ( 919.000 0 919,000 20 21 Other Tncoae 0 0 21 ........... ....I...... ........... ..._....... ........... ( ----------- ----------- ----------- 22 70TAL REVENUE 2,134,000 1,240,000 2,359.000 2,291.000 1,666,000 ( 1.497,000 4,069,000 13,566,000 22 ........... ........... ........... ........... ........... ( ----------- ----------- ------_---- 23 TOTAL AVAILABLE FUNDING 11,735,0" 8,600,000 3.166,000 (1,059,000) (2,458,000) ( 19,098,000 IBB,006 23,167,000 23 ........... ........... ........... ........... ........... ........... ........... ----------- EXPENDITURES 26 Share Of Joint Works Treatment Plant 4.071,000 6,179.000 5.646,000 2,690,000 1.340,000 20,235,000 3,2B3,000 23,518,000 24 25 District Collection System 190,000 $15,000 11675.000 175,000 75,000 21630.000 6,200,000 S,BJ0,000 25 26 Reimbursuent Agreement Pay eenta 0 0 26 27 Other Expenditures 114,000 114,000 114,000 21 .. . . . .. . ..... .. 28 TOTAL EXPENDITURES 4.375,000 6.993,000 7,323,000 2,865,000 1.423,000 ( 22,979.000 9,483.000 32.462,000 28 ........... ........... ........... ........... ( ----------- ----------- ------....- 29 Reserves G Carry-over to Next Year 7,360.000 1.607,000 (3,357,000) (3,924,000) (3,881,000) (3,681.000) (9,295,000) (9,295.00) 29 COUNTY SAMITATTU DISTRICT 10. 11 Schedule C SEAIEMFNI 0f PROJECTED CASK PLOY Page 217 J ISCAL YEARS 1987-88 TAINGN 1996.91 Page 2 1992-93J LIKE 1987.88 ilia-fit 1989.90 1990-91 1991-92 5-loar Total 1996-97 10-T.at TOUT LINE BOND FWD(S) 9 leurvrs a Carry-Or.r fro. Lafl liar %,000 48'"0 31.000 52,000 76,000 i 58.000 91,000 %,0% 3o ........... ........... ........... ........... ........... . ........... ........... ---------- REVENUE 31 Tax levy $5.000 $0.000 45,000 35,000 25,000 ! 210.001 25.000 235,M 31 32 Irgresl 1 Aiscellareouf loco.. 4.000 I'm S,M 5,000 I'm 21.000 4,000 25.000 32 IT Clear laom 0 33 ........... ........... ........... ........... ........... 1 ----------- ._-------- ----------- 31 TOTAL REVENUE S9,000 53,ON 18,000 40,000 3I,000 i 231.004 29,ON 20,000 34 ........... ........... ........... ........... ........... . ........... ....... ... ----------- is TOTAL AVAILAILE FUNCTION 111,000 101.000 82,000 92,000 IOI,000 289.004 120.00 318,000 35 ........... ........... ........... ........... ........... . ........... ........... ........... EXPENDITURES % Bom Prixlpal A leter.st 69,000 61,000 N,000 16,ON 16,ON i 1".006 19,000 211,010 38 37 Or", Espendilures 37 ........... ........... ........... ........... ........... ( ........... ........... ........... 38 NATAL EXPENDITURES 69,000 67,000 %,OOD 16,N0 Ifi'm ( 191,001 ".000 281,N0 31 ........... ........... ........... ........... ........... . ........... ........... ........... 39 A....... a Curt-Over to Nest Year 48,000 34,000 $2.000 76.ON 91.00 91,000 $1,000 31.000 39 40 Nest Yer's Try Period Fording ReOuirounb 48.000 34,000 52,000 16,000 91,ON i 9I,000 31,0% 31,ON CO ........... ........... ........... ........... ........... . ........... ........... .._...---- NI Fund Belexe or (Deficit) 0 0 0 0 0 ( 0 1 0 EI SUMMARY (Adjusted for l.ter-fund lraefl.rs) 42 Reserves A Carry-Ovar fro Last Year 12,130,000 9,221,00 3,772.000 (1,066,000) (1,698,000) 1 12,130.000 (2,050,000) 12,1%,Dm 42 43 TOTAL REVENUE 4,536,000 5,047,ON 6,695,000 6,713,000 6,324,000 29,185,00111 35,470,000 64,655,ON 43 ........... ........... ........... ........... ........... 1 ----------- ........... ........... CC TOTAL MELANIE FUNDING 16.666,000 14,215,000 10,267,000 5.737,000 4,626,000 11,315,000 33,420,000 76;785,000 CC 45 TOTAL EXPENDITURES 7.438.000 10.503.000 11,313,000 7,435.000 6,676,000 1 03,365,001 50,220,000 93,585,00 ES ........... ........... ........... ........... ........... ........... ........... ........... 66 A...rves i hrry-Over to Nest Yeu 9.228,000 3.772,60 (1,046.000) (1,691,000) (2,050,000) (2,050,010) 116,%g000) (16,600,000) 46 47 Next Year's Try Perim fuming ReOuituants 1,545,0N 1,7%,Om 2,032,000 2.353.000 2,110,000 i 2,710,001 5,304.000 5.304.000 et ........... ........... ........... ........... ........... ........... ........... ........... 6a FUND WASTE 01 (DEFICIT) 7,613,000 2,016,000 (3,071.0001 (4,051,000) (4,7 0,000) i (6,160,000) (22,101,000) (22,101,N0) 41 February 1, 1988 NOTICE OF PUBLIC HEARING Notice is hereby given pursuant to California Health and Safety Code Section 5473.1 of a public hearing to be held by County Sanitation District No. 11 of Orange County, California at 7:30 p.m. on Thursday, February 18, 1988, in the Council Chambers at Huntington Beach City Hall, 2000 Main Street, Huntington Beach, California. Said hearing is to be held for the purpose of reviewing written reports pertaining to the providing of sewer service for all properties within County Sanitation District No. 11, and to consider public comments regarding use of the County of Orange property tax roll for billing of District sewer service charges for sewer collection, treatment and disposal services for the fiscal year commencing July 1, 1988. County Sanitation District No. 11 provides sewage collection, treatment and disposal services to your property. Your residence or business is connected to a city sewer in the street and you pay the city a sewer service fee to collect the sewage from your property and deliver it to the County Sanitation District's sewerage system. District No. 11 collects your wastewater from the local street sewer system and transports it through its large interceptor sewers to the treatment plants in Fountain Valley and Huntington Beach where the sewage is treated and disposed of in accordance with strict state and federal laws. District No. 11 has also established a sewer service fee for its services of treating and disposing of your sewage. The District sewer service fee is $2.20 per month ($26.40/year) for residences, and $18.90 per 1,000/sq. ft. per year for commercial and industrial customers with larger discharges. Federal and state law makers and environmental agencies, including the U.S. Congress and the United States Environmental Protection Agency at the federal level; and the State Legislature, State and Regional Water Resources Control Boards at the state level, have adopted increasingly stringent laws and regulations to protect our environment. To comply with the new, more stringent requirements, the County Sanitation Districts have constructed $124,000,000 of new advanced sewage treatment facilities. The District's sewer service fee helps defray the higher costs of operating and maintaining these treatment and disposal facilities which remove the toxic materials and other pollutants from the sewage and dispose of the treated wastewater in a safe manner to protect the public health and safety and the environment. PROPOSED BILLING AND COLLECTION METHOD County Sanitation District No. 11 is proposing to collect its sewer service fee on the annual property tax bill. Use of this more cost-effective alternative method would allow the Districts and its customers to save the costs of producing, mailing and handling separate utility bills for direct payments. Every property owner within the District receives an annual property tax bill from the County Tax Collector. California Health and Safety Code Section 5473 allows the District to place our sewer use fee on this bill as a separate line item, and allows the convenience of including payment for District No. 11 sewerage services with property tax payments. Therefore, effective with the billing year beginning July 1, 1988, the Board of Directors of District No. 11 is proposing to use this billing method to help keep the cost of service down. The above noticed public hearing is to consider the proposal to use the property tax to collect the annual sewer user fee instead of a direct separate and more costly billing method. FURTHER INFOR14ATION If you have questions or wish further information, please call the Sanitation Districts' office at (714) 962-2411, Extension 5. RE: AGENDA ITEM NO. 5 COUNTY SANITATION DISTRICTS February 11, 1988 A ORANGE COUNTY. CAUFORNIA +OSuft SAv a va aoz a,n rwn+xrah vnuer,uuranw znaw+n ti-eOUNTY SANITATION DISTRICT NO. 11 SEWER SERVICE CHARGE REPORT FOR FISCAL YEAR 1988-89 This report is prepared pursuant to the requirements of California Health and Safety Code Section 5473. County Sanitation District No. 11 is responsible for the collection, treatment and disposal of wastewater generated within its boundaries. These services are essential to the protection of the health and safety of the public served by the system. District No. 11 revenues from ad valorem taxes on real property decreased significantly after passage of Proposition 13 in 1978. Future tax revenue, estimated in reports on file in the office of the Secretary of the District, will be -insufficient to provide the funding necessary to operate, maintain and rehabilitate the system. Therefore, a long-range financial program, including a sewer service charge, has been adopted by ordinance of the District to supplement the District's revenue sources in the upcoming fiscal years. The Board of Directors of County Sanitation District No. 11 proposes consideration of a resolution authorizing billing and collection of its annual sewer service charges as set forth in Table A of Ordinance No. 1108, An Ordinance of the Board of Directors of County Sanitation District No. 11 of Orange County, California on the 1988-89 County of Orange property tax bills. The purpose of this charge is to pay for sanitary sewer services provided by the District to be charged to the respective parcels of improved property within the territorial jurisdiction of the District. This report contains a description 1 each parcel of real property that will receive the services of the District and have \.. Iccess to utilization of the facilities, said parcels of real property being described by reference to maps prepared in accordance with Section 327 of the California Revenue and Taxation Code and on file in the office of the County Assessor, which maps are hereby incorporated herein by reference. The ordinance established the annual fee to provide revenues that shall be used only for the acquisition, construction, reconstruction, maintenance, operation and rehabilitation of sanitary sewer facilities, and shall not be used for the acquisition, construction or maintenance of new local street sewers or laterals as distinguished from main trunk, interceptor and outfall sewers provided by the District. The approved sewer service charge for fiscal year 1988-89 to be assessed against each user of the District's sewerage system based on the user's public property type is set forth in Table A attached hereto. Said table also sets forth exception provisions. The 1988-89 charge for each parcel based on the last equalized assessment roll is on file in the office of the Secretary of the District. If the proposed resolution is adopted, the Board of Directors will direct the County Auditor-Controller to have such charges for the forthcoming fiscal year collected on the tax roll in the same manner, by the same persons, and at the same time as, together with and not separately from, the general taxes of the District and the County of Orange. At the time and place stated in the notice setting the public hearing on this report, the governing Board of Directors shall hear and consider all objections or protests, if any, to said report referred to in said notice, and may continue the hearing from time to William H. Butler, Director of Finance 2/11/88 TABLE A Class of Basis of 1988-89 User Charge Annual Rate Single-Family Charge per S 26.40 Dwellings/ dwelling unit Condominiums Multi-Family Charge per 15.85 Dwellings/Mobile dwelling unit Homes/Apartments Commercial/ Charge per 1000 18.90 Industrial/Other square feet of (government building buildings, utilities, non-profit organizations, etc.) In recognition that certain legal parcels of real property exist within the District which are not connected to the District system and that other properties acquire considerably greater potable water than is ultimately discharged to the District's system it is the intent of the District that said parcels be exempt totally or in part from the payment of charges as prescribed herein. Any property owner may appeal the assessment of the charges and submit a clair for rebate to the District on the forms prescribed and provided by the Distril, within one hundred twenty (120) days after the annual property tax bills are mailed by the Orange County Tax Collector. All applications for rebate of an assessment will be determined by the General Manager of the District, or the Finance Director of the District as his designee, who may grant a partial or full rebate or adjustment of the charge based on receiving satisfactory proof that an inequity exists between the amount or assessment and the amount of wastewater discharged to the District's system. Such inequities may include, but are not limited to: a) no service connection to the District system exists from the parcel assessed b) principal water use is agricultural c) any other use wherein the amount of wastewater discharged to the District's system is significantly less on a regular basis than the amount of potable water received as measured by the meter on the property. Pursuant to the authority granted by California Health and Safety Code Section 5473, all charges established herein shall be collected on the County Tax Roll in the same manner, by the same persons and at the same time as, together with and not separately from, its general taxes. In the event District determines that errors or inequities exist in the amount of charges to be collected by the County Tax Collector, District may submit a bill for any difference directly to the property owner. Said invoiced amoun shall be due and payable within thirty (30) days of invoice date. A credit shall be allowed to all dischargers permitted pursuant to Article 3 of Ordinance No. 1106 for the annual sanitary sewer service charge established by this Ordinance in the same manner as credit is allowed for ad valorem taxes pursuant to Section 302.6, 303.6 and 304.5(B)(4) of Ordinance No. 1106. COUNTY SANITATION DISTRICTS of ORANGE COUNTY, CALIFORNIA IOW ELLIS AVENUE O.O.BOX 8127 FOUNTAIN VALLEY,CALIFORNIA 92728-8127 714I B8b2A11 February 1, 1988 M E M O R A N D U M TO: Chairman Tom Mays Director John Erskine Supervisor Roger R. Stanton RE: DISTRICT 11 ADJOURNED REGULAR MEETING - 2/18/88 at 7 : 30 p.m. This is a reminder for your calendars. Please note that the v District No. 11 Board will adjourn from the Regular February Joint Board Meeting on February 10, 1988, to 7 : 30 p.m. , Thursday, February 18th, at Huntington Beach City Hall, to conduct a public hearing on the proposal to collect the previously-adopted sewer service charges, which will become effective July 1, 1988, on the 1988-89 property tax bills . A regular meeting notice of the adjourned meeting and agenda material will be mailed to you prior to the February 18th meeting date. (� Rita J. Brown Board Secretary rjb cc: Don E. Smith, Joint Chairman Peter Green, Alternate Director, CSD #11 Grace Winchell, Alternate Director, CSD #11 Don R. Roth, Alternate Director, CSD #11 ROBERT P. WINKS 715 APRIL DR. HUNTINGTON BEACH,CALIFORNIA 92648 January 9, 1988 County Sanitation District 411 PO Box 8127 Fountain Valley, CA 92728-8127 Subject: Public Workshop on 4 Feb. , 1988 Public Hearing on 18 Feb. , 1988, regarding Annual Service Billing for Sewer Collection (714) 962-2411, Ext. 5 Sirs: You are proposing to add the entire annual sewer charges for each real property to that property' s annual tax bill upon the single basis that it would save the cost of monthly collections. You did not give an estimate of those savings per property; how- ever, I assume that the rates of $2,20 per month for residences and $18.90/sq. ft. for commercial and in- dustrial customers included the cost of monthly collection. Therefore, are you proposing that the amount saved would be returned to the customers as a reduction to the above established rates, if annual billing were to be allowed? I presume this program required the employment of additional people? - Please respond to this question during your WORKSHOP of 4 February, and again during the PUBLIC HEARING of 18 February, 1988. Thank you( Sincerely, j�� it R. P. Winks Jan . 10, 1988 County Sanitation District, Number 11 P.O. BOX 8127 Fountain Valley, CA 92728-8127 Dear Sir: Your communication dated December 21 , 1987, stated that you provide sewer services to my residence. This is not true . OUR RESIDENCE, LOCATED AT 5451 OLD PIRATE LANE, HUNTINGTON BEACH, CA 92649 DOES NOT RECEIVE SEWER SERVICES AS WE ARE ON A CEPTIC TANK, AND HAVE BEEN FOR OVER 30 YEARS. Sincerely, Robert D. Runyard 5451 Old Pirate Ln. Huntington Beach , CA 92649 b k- 1 Dennis Foster 10418 Rainbow Cis . Fountain Valley, California 92708 January 12 , 1988 COUNTY SANITATION DISTRICT Number 11 P.O. Box 8127 Fountain Valley, CA 92728-8127 ATTENTION: Jeff Esber - Principal Administrator Assistant REFERENCE: Method of Additional Sewer Fee Collection Dear Sir, I am in receipt of the December 12 , 1987 letter from the District related to the referenced item. I have no objection to the legitimate charge of additional fees when required but feel that these should be billed separately on an annual basis or monthly along with other water and sewer charges . The strong feeling I have against incorporat- ing these fees into a property tax bill is that it sets a prece- dent for placing unrelated charges on that bill ad infinitum. Thanks for considering my opinion. Sincerely, Dennis Foster DF/dal R.A.SCOTT Ml r,Gen"Sewwa Aganry UN TY O F ROBERT G. LOVE Direcmr gi Facauws a Raai ProoarN JOHN R.SHADDY 4 .I Manager. Real ftaie Dwe.g 5 3 RA N G E GENERAL SERVICES AGENCY REAL ESTATE DIVISION 14 Cwm Canwr Plua,l ird Fbm G-7800 P.D.em 4106 Sanw M .Caldomia Q7W (714)9a]'SgIX1 January 28, 1988 C05-4a50 East Garden Grove-Wintersburg Channel County Sanitation District Number 11 P. 0. Box 8127 Fountain Valley, CA 92728-8127 Reference: A. Assessor Parcel 142-253-23 B. Your Notice of Public Hearing dated December 21, 1987 Please delete parcel 142-253-23 from property subject to assessment. Reference B erroneously implies the property enjoys sewage collection services provided by your district when in fact it does not. The property is vacant and lies within the right of way of the East Garden Grove - Wintersburg Flood . Control Channel . It should not be subject to sewer collection assessments. If there are questions, contact me at 567-5166. i arles R. Tennant Real Property Technician CRT:cv:sf CR18-81-1 1-28-88 MEETING DATE Feb. 18, 1988 TIME 7:30 p.RI.DISTRICTS 11 - H.B. City H811 a DISTRICT 1 JOINT BOARDS (EDGAR)........HOESTEREY..._ _ _ (DAVIS)............ARNOLD...... (CRANK)........HANSON...... _ _ (PICKLER)..........DAY......... (YOUNG)........GRISET...... (MURPHY)...........BIGONGER...._ (ROTH).........STANTON....._ (NORBY)............CATLIN...... (PLUMMER)..........COX......... _ DISTRICT 2 (PERRY)............CULVER...... _ (KENNEDY)..........EDGAR....... (NORBY)........CATLIN......_ _ _ (WINCHELL).........ERSKINE..... (FLORA)........MAHONEY..... _ _ (MC CUNE)..........GRIFFIN..... (PICKLER)......DAY........._ (YOUNG)............GRISET...... (MURPHY).......BIGONGER...._ _ _ (CRANK)............HANSON...... (YOUNG)........GRISET...... _ _ (COX)..............HART........ _ (NELSON).......LEYTON...... _ _ (EDGAR)............HOESTEREY..._ (SCOTT)........NEAL........_ _ _ (EDGAR)............KENNEDY..... (TYNES)........NEWTON...... _ _ (NELSON)...........LEYTON...... (CULVER).......PERRY....... _ (FLORA)............MAHONEY..... (FASBENDER)....SILZEL...... _ _ (PLUMMER)..........MAURER...... (PEREZ)........SMITH....... _ _ (GREEN. P).........MAYS........ (ROT,).........STANTON....._ _ _ (ABRAM)............MILLER. S.— (BIGONGER).........MURPHY...... DISTRICT 3 (SCOTT)............NEAL........ _ (SUTTON)...........NELSON...... _ (HERMAN).......POLIS ...... (TYNES)............NEWTON...... (WEISHAUPT)....SAPIEN......_ _ _ (CULVER)...........PERRY....... (DAVIS)........ARNOLD...... _ (HERMAN)...........POLIS....... (PICHLER)......BAY......... _ _ (STANTON)..........ROTH........ (NORBY)........CATLIN...... _ (WEISHAUPT)........SAPIEN...... (PERRY)........CULVER...... _ _ (WILES)............SIEFEN...... (WINCHELL).....ERSKINE..... _ _ (FASSENDER)........SILZEL...... (MC CURE)......GRIFFIN..... (PEREZ)............SMITH....... (YOUNG)........GRISET......_ _ __ _ _ (ROTH).............STANTON..... (FLORA)........MAHONEY..... _ _ (NELSON)...........SUTTON...... (SCOTT)........NEAL........ _ _ (MILLER. D)........SWAN........ (SUTTON).......NELSON...... _ _ (BERNAL)........ SYLVIA...... (WILES).....-...SIEFEN...... _ _ (GREEN.H/JOHNSON)..WAHNER......_ (ROTH).........STANTON..... _ _ (CLIFT)............WILSON...... (BERNAL).......SYLVIA...... (CLIFT)........WILSON......_ _ _ DISTRICT 5 SYLVESTER... ✓ ` BROWN....... (COX)..........HART........ _ _ ANDERSON...._ (PLUMMER)......COX........._ _ _ BUTLER....... (STANTON)......ROTH........_ CLARKE...... CLAWSON..... DISTRICT 6 DAWES.......� DEBLIEUX...._ (JOHNSON)......WANNER......_ _ _ HODGES...... (PLUMMER)......MAURER...... _ _ ROLL........ (STANTON)......ROTH........ _ _ KYLE........ DISTRICT 7 OOTEN....... STAGED......Jme� (KENNEDY)......EDGAR......._ _ _ TALEBI...... (AGRAN)........MILLER. S..._ _ _ VON GEN (PLUMMER)......COX........._ _ _ INSOR . (YOUNG)........GRISET...... altk&— = (STANTON)......ROTH........_ _ _ ( EN)........ ......— _ _ (GREEN. H)..... KAMMER...... —_ OTHERS: WOODRUFF....IDE.........J! DISTRICT 11 HO ....._ HUNT.WARD......._ (GREEN. P).....MAYS..... _� HUNT........._ (WINCH.........STANTON.. ... KNOPF....... _ (ROTH).........STANTON..... LINDST......_ LINCH......._ DISTflICT 13 LYNCH....... STONE....... (BIOONGER......BMURPHY AY........._ _ _ YOUNG....... (STANTON)......BAY........._ _ _ n (PEREZ)........ROTHSMITH ......._ _ _ dY k- (PEREZ .....SMITH......._ _ _ (� Q. . Lo'Q.��- (NELSON).......SUTTON......_ DISTRICT 14 � ( ........MILLER, 5..._(MILLER, D.....SWAN........_ (STANTON)......KENNEDY ROTH........_ __ (STANTON) SMITH......._ (PEREZI........SMITH......._ _ _ 01/13/88 DISTRICT NO. 11 MEETING - FEBRUARY 18, 1988 HUNTINGTON BEACH CITY HALL PLEASE SIGN IN NAME COMPANY/AGENCY DISTRICT( . 11 PUBLIC HEARING — FEBRUARY 18, 1988 ,1 REQUEST TO PRESENT ORAL COMMENTS PURPOSE OF HEARING: RECEIVE PUBLIC COMMENTS REGARDING PROPOSED USE OF THE COUNTY OF ORANGE PROPERTY TAX ROLL FOR BILLING AND COLLLLECTIONN OF ADOPTED 1988-89 SEWER USE FEES NAME: /O /g c/ /—OG�E / ,— HOME ADDRESS: 3 %L� v NUMBER CITY PROPERTY ADDRESS: Z;�X's-4 +� NUMBER TREET T DISTRICT 1.... 11 PUBLIC HEARING - FEBRUARY 18, 1988 ` P REQUEST TO PRESENT ORAL COMMENTS PURPOSE OF HEARING: RECEIVE PUBLIC COMMENTS REGARDING PROPOSED USE OF THE COUNTY OF ORANGE PROPERTY TAX ROLL FOR BILLING AND COLLECTION OF ADOPTED 1988-89 SEWER USE FEES NAME: HOME ADDRESS: /STREET PROPERTY ADDRESS: NUMBER/STREET CITY DISTRICT 11 PUBLIC HEARING - FEBRUARY 18, 1988 ` \v REQUEST TO PRESENT ORAL COMMENTS PURPOSE OF HEARING: RECEIVE PUBLIC COMMENTS REGARDING PROPOSED USE OF THE COUNTY OF ORANGE PROPERTY TAX ROLL FOR BILLING AND COLLECTION NOOFADOPTED 1988-89 SEWER USE FEES NAME: !'c70',j 41Ec_G ' HOME ADDRESS: /6 b0/ =w479)< Al. �NUMBER/STREET /3 _ ITY PROPERTY ADDRESS: G NUMBER/STREET CITY DISTRICT 11 ADJOURNED MTG. NOTES - FEBRUARY 18, 1988 83(b) Staff report SEE ATTACHED REPORT OF GENERAL MANAGER He then called upon the Director of Finance who addressed the Board. Mr. Butler reiterated that the purpose of the hearing was to receive comments regarding use of County tax roll for collecting the adopted annual sewer service charges for 1988-89. He noted that he would be explaining why use of the property tax bills vs, other methods of collection was chosen. Explained that this was not a tax but a fee. Reviewed Proposition 13 issue. The Districts receive only their historical share of the 1% basic property tax levy which is approximately 3%. For example, on a $100,000 home, $1,000 goes to County of Orange and $30 goes to District 11. He advised that the Districts have suffered financially since Prop. 13. We have had some reserves and have been able to live for 10 years without instituting a sewer use fee but the District has now reached a point where it needs additional revenues to operate. The Health and Safety Code states that this is, in fact, a fee based on use of the sewer system, not based on property value. If property is not connected to the system, it pays nothing. The fee is legislated under the Health and Safety Code. Other issues raised at the public workshop included changes in ownership that have occurred and adjusting bills if inaccurate. Mr. Butler reviewed the following possible methods that were considered for collection of the fees: (1) Direct billing. Would send out bills monthly of bimonthly. The Sanitation District is a public utility. It has the statutory authority to bill customers directly. We considered going to direct billing for 35,000-36,000 parcels in District 11. (2) City of Huntington Beach utility bill (3) County of Orange property tax roll He then reviewed costs associated with each method: Method Set-up Cast Annual Cost 1st-Year Cost 5-Year Cost (1) $22,000 $188,000 $210,000 $962,000 (2) 20,000 94,000 114,000 490,000 (3) 35,000 10,000 45,000 85,000 The County tax roll was chosen because it is the most cost-effective method. No additional postage or check writing by customers. Can pay property tax in two equal installments or all at once. District will avoid adding more staff. District will avoid cost of envelopes, postage and computer processing. The Director of Finance added that the tax revenues do not cover the rising cost of mandated treatment and high energy costs of over $5 million a year. The District would need to transfer reserves that are used to build facilities to pay operating costs in 1988-89 and that is not a fiscally-sound strategy over the long term. Also, further plant improvements require additional revenues. We need to protect the public health and safety. The user fee is to operate, maintain and rehabilitate the sewer system. There is a separate connection fee for new development. In no way will this sewer use fee support new development. .�. He also reviewed an average homeowner's monthly utility bill in Huntington Beach and compared the various fees: Electricity $ 47.54 Cable 31.45 Gas 27.92 Water 14.40 Telephone 10.70 Sewer Service Fee 2.20 (1.6% of bill) 134.27 With regard to the billing adjustment procedure, the staff can adjust the bill or cancel it if it is inaccurate or if the property is not receiving water service, or is not developed nor connected to the sewer system. There are also appeal procedures. Just contact staff and they will act very promptly. N3(d) - Oral Public Comments Chairman Mays then gave an opening statement. SEE ATTACHED. John Locke, 6392 Sligo Circle, H.B. then addressed the Board. He stated that he had previously addressed the City Council. Prior to receiving the December 21st notice, he didn't know there was a Sanitation District. Said they are doing a hell of a job. He stated he did not want this on the tax bill . Once it gets on a.� the tax form, Citron calls it a tax. Seems $26.40 could be a one-time yearly fee. Not paid monthly. He said people he asked at the City didn't know who the Sanitation District is. They said it is a separate entity. He asked if the District is privatized? Asked if fee was affected by the large drop in the stockmarket? Mr. Locke advised that he had written a letter to the Attorney General and asked for his opinion as to whether the fee is legal and if it so, is it legal to put on the tax bill? Said he wrote letter prior to receiving the letter from Tom Dawes. He said he had been here for 26 years and was on a limited income. Once you add this to tax roll , it becomes a tax and the District is going to get 3% of 1% of that. Asked if that can be deducted on internal revenue tax form? Director Winchell advised that the 3% of the 1% is already on the tax bill and that won't change. This is a new user fee. It will be separate from all other fees. The only time it would change is if this Board changes it. Then only if it was absolutely necessary. Asked staff to answer question re privatization and whether they had considered a one-time charge per year. She also wondered how many agencies would be allowed to charge a user fee. Police and fire are covered by the City General Fund and they can't be separated out as this District can. The General Manager responsed re privatization, the Sanitation Districts receive their authority through the Sanitation District Act which is a provision in the California Health and Safety Code. They are a governmental agency, a special district in California. He also advised that the impact of the October stockmarket crash had no baring whatsoever on this fee. It was determined to be necessary over a period of two years and, in fact, the process of adopting it was initiated prior to the stockmarket activity. -2- With regard to the one-time user fee, he asked the Director of Finance to comment on that. Bill Butler reported that the direct cost associated with billing would be $22,000 to modify the computer system. We would still incur some postage costs. Would need to add 1/2 person also. Off the top of his �,. head, he estimated the annual cost to be $40,000; the first year cost to be $62,000; and the 5-year cost to be $222,000. Still is not as cheap as going to property tax roll. Also, the direct costs do not cover the District's ability to collect that bill . There would be many people who receive the bill that say why did I receive this. Would be lucky to collect 60-70% of the bills. The collection effort requires much staff time. Of $21,000 billed could be $14,000 not paid. The collection rate on the property tax bill is 97-98% or they place a lien on your property. So collection potential on the tax bill is much greater. It provides District with interest income also. The General Manager added that certainly, the ability to place the charge on the property tax bill enhances our ability to collect the fee. One of the things keyed to that issue is that the utility companies have the ability to turn off your service if you do not pay your monthly utilitiy bill. The sewer system is not connected directly to trunk sewer system but goes through city sewer system, and we do not have the ability to turn off sewer service. Re legality of the fee, the General Counsel reported that the Health and Safety Code provides for this method as an alternative to collecting fees. This method has been used by other Districts for many years. This District only started to use it this year. It has always been held to be a valid method of collecting user fees. Chairman Mays asked if the other Districts with user fees collect them on the tax bills? The General Manager replied yes, since 1981 we have had that statutory authority ever since the Health and Safety Code provision was initially adopted. Ron Weller, 16601 Edgewater Lane, H.B. , then addressed the Board. He stated hated made a number of points at the public workshop pertaining to his point of view. Said the General Manager has alluded to a number of them which he appreciated him doing. He said he is basically against the use of the County tax collector in this set of circumstances. Thought he was being placed in a position where the public can read in a certain amount of abuse of power. Said they have a special assessment already on their tax bills. They are being subjected to double taxation. The public at large are not aware of this. Said nothing he says is meant to denigrate what the Sanitation Districts have done. It appears that they have done an excellent job over the years in developing the District and relating to its needs. He added that the Director of Finance spent considerable time re costs. Outwardly, no one can deny it is the cheapest, most convenient way to collect the fee but I am against it. The Sanitation District is looking for as much muscle as they can to collect the fee. Perhaps it is rational but think the County Tax Collector probably isn't very enthusiatic about doing this. Think there is an open-endedness to this. While $2.20 is nominal , it seems it could quadruple or increase 10-20 times as much. No one want to pay for their own pollution and are looking around for a scapegoat. Have found one in the County taxpayer. Said there is a certain victim-type philosophy. We are victims of the State Health and Safety Boards. Why doesn't leadership fight power? Council members and absent Supervisor. Tax money should come from state and federal level . Also commented that this was not in keeping with the spirit of Proposition 13 and Proposition 62. Thanked Board for their kind attention. -3- Margaret Wilson, 16841 Green Street, H.B. , also addressed the Board. She said she agreed with a lot of things that both speakers had said. Asked if the District's outfall was for District 11's use only and why weren't other Districts having to pay for it? It was explained to her that all nine Districts �..i pay their share of the costs. Four of the other Districts have implemented sewer use fees because their reserves do not adequately cover their costs. Eventually, all nine Districts will have to implement this fee. District 5 in Newport Beach implemented the fee in 1981. District 11 has been able to get by on their reserves until now. Mrs. Wilson then asked, how do you divide this up? The General Manager explained that each of the nine Districts is a separate entity. They are joined through a Joint Powers Agreement and jointly own and operate the treatment works. Each District has its own collection system. They share in the costs in proportion to their contribution to the flow. Some Districts are larger than others and they pay their share. She also stated that the off-shore oil wells were polluting the water and asked what they pay? Tom Dawes advised that some rigs are within the 3-mile limit but those past that are in federal waters. The District does not receive any water from the land-based wells nor the platforms. She asked what the people who live on boats would pay and Bill Butler replied that they are under Coast Guard regulation. If they have to empty their holding tanks, we have a facility in Fountain Valley and they have to pay a direct fee to the Districts of $.01 per gallon or if they empty into a toilet facility, that facility will pay us a user fee. Mrs. Wilson said she was representing some fourplex owners. They either didn't get their notices regarding the user fees or they threw them away because the notice wasn't in an envelope. She said they wouldn't like paying monthly, but didn't see why it couldn't be put on the City water bill . The Director of Finance explained that they had had some discussion with the City of Huntington Beach. They really weren't interested in doing that. It really is more expensive to go with city or other water companies also. They don't want to turn your water service off if you don't pay for sewer service. They are uncomfortable in doing this and prefer not to. She then asked, when added to the tax bill , will it all be under one item? Will it be two lines or one? The General Manager advised that the supplemental user fee will be a separate line item on the tax bill. The part of the ad valorem tax that the Districts get is part of the line re the basic tax levy so can't be identified. She commented that the total tax bill is raised every year; will this be automatically increased also? She was told no, any increase int the supplemental user fee would only take place if the Board decides to raise the fee. The only other thing that shows on tax bill right now is a bond redemption item. They will be paid off in a few years and will disappear. Asked again if the $26.40 would be added into the total tax bill and the tax collector would raise the whole thing? The General Manager said no, there is no relationship between the two charges. Also asked, will they ever come off? Mr. Sylvester said that clearly, the cost of treating and disposing of wastewater is going to continue to rise because the environmental standards are becoming more and more stringent, so he would say that it is a fair assumption that this fee will be necessary in the foreseeable future. Mrs. Wilson asked why all Districts didn't go to user fees at the same time? The General Manager advised that the financial condition of each of the 1.01 Districts is somewhat different. Those that haven't had to consider supplemental user fees continue to have adequate reserves they are using. When the reserves become low, they will have to implement a user fee. She stated she still didn't like it on the tax bill. -4- Director Winchell reiterated that each District has its awn budget. Some Districts had a little more in reserve. Each year each District reviews their budget and they pay their fair share of the combined outfall costs. Some Districts somehow had more money in the bank than others; maybe had more .� property taxes or generated more revenues. Each budget is carefully done in each District and all costs are allocated. The General Manager added that the coastal Districts' costs of transporting wastewater to the treatment facilities is higher than the other Districts and, therefore, they had to go to user fees earlier. Inland Districts flow by gravity and coastal communities have to pump their wastewater and that increases the cost of operation and maintenance. #6 - Resolution directing County Auditor-Controller include fee on tax bills Director Winchell commented that she hoped that through the presentation that night and through the comments, that the public understood that this is a user fee and the County tax roll is being used because it is the most efficient method. It will not automatically raise 1% each year. Said she knew there was some concern but as a Director of the District, felt this is the most cost- effective way to do this and saves the District from being a collection agency. Said she was in favor of the proposal. Chairman Mays also commented on the user fee. Said he grew up in Manhattan Beach and several years ago toured the Hyperion plant there. Since he left that city, the City Council of L.A. has essentially not used their responsibility to upgrade their facilities. They have a major problem because the council and Board of Supervisors have not pumped in the money that was required to upgrade the facilities. In the meantime it has gotten so old and there is more and more sewage coming in and overflowing into the streets and ocean. Over the past 12 months, that beach has been closed most of the time. Said if he still lived there, he would propose a recall. He thought they had shirked their responsibilities in not enacting user fees or whatever it took. He added he didn't want that to happen down here. Over the last ten years the State Legislature has passed more and more stringent regulations and we are required to upgrade these facilities. Several Initiatives have passed also. We will have serious problems if we don't continue to upgrade these facilties. The Huntington Beach sewer system is 30-40 years old and has to be replaced. Pump stations don't last that long. If you are locked into a certain tax rate, it just gets to a point that maintenance costs and capital improvement costs are so great that it takes a new influx of revenue somewhere. The State has given local government the responsibility to raise user fees to meet the requirements they have passed on to us. They tell us at the local level to take care of it. He said he also thought they should give us the money and he has told the Legislature how he feels about it. It takes a lot more people to get involved and write letters to the Legislature though. Regulations are fine but need money to along with it. Said we have been working on this for a long time. It was a tough decision to vote in sewer use fees but after looking at the District's financial condition and looking at projected needs of millions of dollars, they had no choice. In five years the District would have a $10 million deficit. With regard to the way we are collecting the user fee, agreed that he didn't like having it on the tax roll because some people think it is another tax. But from an economical sense, it is $85,000 versus $962,000 over five years. Mould probably have to increase user fees if another collection method was implemented. Economically, this is the only way we can go at this point. Director Winchell then moved and Mays seconded motion to adopt Resolution No. 88-22-11. Motion carried. Thanked public for attending. G m ,2 t&,.M 2-18-88 COUNTY SANITATION DISTRICT NO. 11 PUBLIC HEARING TO COLLECT USER FEE ON PROPERTY TAX BILL PUBLIC HEARING ON PROPOSED COLLECTION OF SANITARY SEWER SERVICE CHARGES FOR CSD NO. 11 ON THE PROPERTY TAX BILL FOR 1985-86 STAFF REPORT ON PROPOSED USER FEE - CHAIRMAN MAYS, MEMBERS OF THE BOARD, THIS IS THE TIME AND PLACE NOTICED FOR THE PURPOSE OF RECEIVING A WRITTEN REPORT PERTAINING TO THE PROVIDING OF SEWER SERVICE FOR ALL PROPERTIES WITHIN THE DISTRICT AND THE PROPOSAL TO COLLECT THE ADOPTED SEWER USE FEE ON THE PROPERTY TAX ROLL BEGINNING WITH THE 1988-89 FISCAL YEAR. - THE BOARD WILL NOT BE CONSIDERING THIS EVENING ANY NEW FEE OR ANY CHANGE OF AN EXISTING FEE, BUT RATHER, THE METHOD OF COLLECTING THE ALREADY ADOPTED SEWER USE FEE THAT WILL TAKE EFFECT ON JULY 1ST. - COUNTY SANITATION DISTRICT NO. 11 IS RESPONSIBLE FOR TRANSPORTING, TREATING AND DISPOSING OF SEWAGE IN A SAFE MANNER IN ACCORDANCE WITH STRICT FEDERAL AND STATE LAWS TO PROTECT THE PUBLIC HEALTH AND SAFETY AND THE ENVIRONMENT. dr/ _1_ - RECOGNIZING, MR. CHAIRMAN, THAT SOME OF THE CITIZENS ATTENDING THE HEARING TONIGHT HAVE NOT YET HAD THE OPPORTUNITY TO ACQUAINT THEMSELVES WITH THE ROLE THAT THE SANITATION DISTRICT PLAYS IN HANDLING THE SEWAGE THAT COMES FROM THEIR HOMES AND BUSINESSES, WE WOULD LIKE TO TAKE A FEW MINUTES TO SHOW A VIDEO PRESENTATION ON THE V� DISTRICTS' ACTIVITIES . - MR. CHAIRMAN, IN ORDER TO COMPLY WITH THE NEW STRICTER FEDERAL AND STATE REQUIREMENTS, THE SANITATION DISTRICTS HAVE RECENTLY CONSTRUCTED SOPHISTICATED TREATMENT FACILITIES AT A COST OF MORE THAN $124,000,000. - AS A RESULT, THE COSTS OF PROVIDING SEWERAGE SERVICE TO THE COMMUNITY HAVE BEEN ESCALATING RAPIDLY BECAUSE OF THE INCREASINGLY STRINGENT FEDERAL AND STATE LAWS AND REGULATIONS REQUIRING ADVANCED TREATMENT OF WASTEWATER TO REMOVE TOXIC MATERIALS AND OTHER POLLUTANTS FROM THE SEWAGE TO ASSURE PROTECTION OF THE PUBLIC HEALTH AND SAFETY AND THE ENVIRONMENT, AND MOST PARTICULARLY OUR PRECIOUS OCEAN WATERS. - FOR SEVERAL YEARS PROPERTY TAX REVENUES HAVE BEEN INSUFFICIENT TO MEET THE DISTRICTS OPERATING COSTS, AND IT HAS BEEN NECESSARY FOR THE DISTRICT TO DRAW DOWN ITS RESERVES . - IN FISCAL YEAR 1988-89, WITHOUT APPROPRIATE MEASURES TO PROTECT THE DISTRICTS FINANCIAL INTEGRITY, IT WOULD HAVE -2- BEEN NECESSARY FOR THE BOARD TO AUTHORIZE A TRANSFER OF $786,000 IN CAPITAL RESERVES FROM THE DISTRICT 'S ACCUMULATED CAPITAL OUTLAY FUND TO THE OPERATING FUND TO PAY THE FULL COSTS OF OPERATING AND MAINTAINING THE DISTRICT COLLECTION SYSTEM AND ITS PROPORTIONATE SHARE OF THE O&M COSTS OF THE JOINT TREATMENT WORKS. - BY 1991-92 THE DISTRICT WILL REQUIRE ADDITIONAL REVENUES IN THE AMOUNT OF $6.0 MILLION TO MEET THE DISTRICTS OPERATING EXPENSES AND MAINTAIN THE SOLVENCY OF THE FUND DUE TO INSUFFICIENT TAX REVENUES, AND CAPITAL RESERVES WILL HAVE LONG BEEN EXHAUSTED. - TO ADDRESS THIS FISCAL CRISIS, IN 1987, AFTER CONSIDERABLE STUDY OF THE DISTRICTS LONG-RANGE FUNDING REQUIREMENTS, THE BOARD ADOPTED A FINANCIAL PROGRAM TO AVOID PROJECTED REVENUE SHORTFALLS AND PROVIDE THE NECESSARY INCOME REQUIRED TO FINANCE THE DISTRICTS RISING OPERATING EXPENSES, AS WELL AS MAJOR CAPITAL EXPENDITURES FOR CONSTRUCTION OF MASTER-PLANNED TREATMENT FACILITIES . - THE BOARDS ' ADOPTED FINANCIAL PROGRAM INCLUDES : A ONE-TIME CONNECTION FEE OF RESIDENTIAL PROPERTY $1,500IDWELLING UNIT COMMERCIAL, INDUSTRIAL $ 300/1,000 SQ. FT. AND GOVERNMENTAL PROPERTY - THE ONE-TIME CONNECTION FEE, IS USED TO PAY FOR FACILITIES EXPANSION TO SERVE NEW DEVELOPMENT, AND IS COLLECTED FOR -3- THE DISTRICT BY THE CITY WHEN BUILDING PERMITS ARE ISSUED FOR THE NEW DEVELOPMENT. - THE CITY WILL CONTINUE TO COLLECT THE CONNECTION FEE AND THEREFORE THE MEANS OF COLLECTING IT IS NOT AN ISSUE OF THIS HEARING. - AS THE SECOND PART OF THE LONG-RANGE FINANCIAL PROGRAM, TO PAY FOR COSTS OF OPERATING, MAINTAINING AND REHABILITATING THE SEWERAGE SYSTEM, THE BOARD HAS ADOPTED AN ANNUAL SEWER USE FEE: Tke, S -,,ANNUAL USER FEEA - SINGLE-FAMILY RESIDENCE $26.40 - MULTI -FAMILY RESIDENCE/MOBILE HOME 15.85 - COMMERCIAL 18.90/1,000 SQ. FT. - INDUSTRIAL �18.90/1,000 S0. FT. - GOVERNMENTAL (18.90/1,000 SD. FT. I MIGHT ADD PARENTHETICALLY THAT LARGE COMMERCIAL OR INDUSTRIAL DISCHARGERS THAT PLACE AN INORDINANT DEMAND ON OUR SYSTEM ARE SUBJECT TO A SURCHARGE UNDER A SEPARATE INDUSTRIAL WASTE ORDINANCE THAT HAS BEEN IN EFFECT SINCE 1976. SOME INDUSTRIAL DISCHARGERS NOW PAY AS MUCH AS $167,000 FOR SEWER SERVICE PER YEAR UNDER THAT PROGRAM. I�CoAr rl � - /ITHE PURPOSE OF THIS HEARING IS TO RECEIVE PUBLIC COMMENTARY ON THE DISTRICTS ' PROPOSAL TO COLLECT THE ANNUAL USER FEE ON THE PROPERTY TAX BILL . -4- - OFFICIAL NOTICE OF THE HEARING WAS MAILED ON JANUARY 4TH TO 34,897 PROPERTY OWNERS OF RECORD ON THE LAST EQUALIZED \� ASSESSMENT ROLL OF THE COUNTY OF ORANGE, IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5473.1 OF THE CALIFORNIA HEALTH AND SAFETY CODE. - AS PRESCRIBED BY LAW, A LEGAL NOTICE OF THE HEARING WAS PUBLISHED IN THE ORANGE COAST DAILY PILOT ON JANUARY 11TH AND JANUARY 18TH. - THE HEARING NOTICE INCLUDED THE DISTRICTS TELEPHONE NUMBER FOR CITIZENS TO CALL WITH QUESTIONS, OR FOR MORE INFORMATION, - THE STAFF HAS FIELDED APPROXIMATELY 1OOaCALCALLS . lu annin oti ? wmuc 4tl'G ou Tam We.mr WkS ,.1L'Lo a+ r-ee'u 'l �{h iti 'mod+ S Clht M.IL cN P+nM1Fn.i!^N el'Lr l mU�.w$. THE QUESTIONS RAISED AT THE WORKSHOP AND IN THE TELEPHONE CALLS HAVE DEALT PRIMARILY WITH ; - PROPOSITIONS 13 AND EZ THE ISSUE OF TAX VS . FEE - THE EQUITABILITY OF THE SYSTEM OF CHARGES - EFFICIENCY OF THE DISTRICTS OPERATION - WHETHER OR NOT THE PROPOSED FEES WOULD BE USED TO PAY FOR SEWERS TO ACCOMMODATE GROWTH — Vv ltH 'r knp(l cSscT� �MCU c'�L W M`' OV CwpNI"'Q f'"� 5'N460I - THE RELATIONSHIP OF THE LOCAL STREET SEWER SYSTEM PROVIDED BY THE CITY TO THE REGIONAL SYSTEM OF SANITATION DISTRICT NO. 11 -5- - PL 92-500/301(H) WAIVER SCENARIO - THERE ARE MANY FACTORS IN THE RISING COST OF SEWERAGE SERVICE, BUT THE CRUX OF THE MATTER IS THE DEMAND FOR / MORE AND MORE ENVIRONMENTAL PROTECTION MEASURES . - THE COUNTY SANITATION DISTRICTS OF ORANGE COUNTY ARE A REGULATED AGENCY. THEY ARE REGULATED BY THE CALIFORNIA REGIONAL WATER QUALITY CONTROL BOARD, THE STATE WATER RESOURCES CONTROL BOARD, THE STATE DEPARTMENT OF HEALTH SERVICES, THE SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT, THE CALIFORNIA AIR RESOURCES BOARD, AND THE U.S. ENVIRONMENTAL PROTECTION AGENCY . - THESE REGULATORS>WITH THE DIRECTION FROM STATE AND FEDERAL LEGISLATIVE BODIES, CONTINUE TO IMPOSE INCREASINGLY HIGHER ENVIRONMENTAL STANDARDS WHICH THE DISTRICTS MUST COMPLY WITH. THEY ARE NOT OPTIONAL, THE DISTRICTS HAVE NO CHOICE BUT TO DO SO AND THE COST IS HIGH. - THE COST OF CONSTRUCTING NEW FACILITIES TO COMPLY WITH HIGHER AND HIGHER STANDARDS AND THE COST OF OPERATING AND MAINTAINING THOSE FACILITIES MUST ALL BE BORNE BY k�7Rck oy- LAS) THE CITIZENS THAT THE DISTRICTS SERVE,--VAIL .ram . - I THINK IT'S IMPORTANT TO KEEP IN MIND, HOWEVER, THAT THE LEGISLATORS AND THE REGULATORS SHOULD NOT SHOULDER THE ENTIRE BLAME FOR THIS SITUATION. IN A REPRESENTATIVE FORM OF GOVERNMENT THEY RESPOND TO THE -13- WISHES OF THEIR CONSTITUENCY. THE MESSAGE THAT ft==PM g AS CITIZENS,HAVE GIVEN THEM IS THAT WE WANT STRICTER ENVIRONMENTAL REGULATION . THEY HAVE RESPONDED WITH STRICTER ENVIRONMENTAL REGULATION, AND NOW IT'S TIME FOR US Y TO PAY THE PRICE OF THOSE STRICTER CONTROLS. - WE CANT HAVE IT BOTH WAYS. WE CANT DEMAND HIGHER STANDARDS AND AT THE SAME TIME DEMAND LOWER COSTS. - UNFORTUNATELY, THE DISTRICTS, AND MORE PARTICULARLY THE BOARD MEMBERS, ARE BETWEEN THE PROVERBIAL "ROCK AND A HARD PLACE." - THE FEDERAL AND THE STATE GOVERNMENTS,-I. - R . IMPOSE STRICTER AND STRICTER REQUIREMENTS. - AND WE, THE DISTRICTS, BECOME THE MESSENGER WITH THE BAD NEWS OF WHAT IT'S GOING TO COST )AND WHO IS GOING TO PAY FOR IT. - -I�H�ii�v^ "Fr ^oTTiiz-i�f-W-BE vem-w, PL�-kT'�1'HE—• AT THIS TIME, MR. CHAIRMAN, I WOULD LIKE TO INTRODUCE MR. WILLIAM BUTLER, THE DISTRICTS' DIRECTOR OF FINANCE, WHO WILL REVIEW THE ALTERNATIVES AND THE PROPOSED METHOD OF COLLECTING THE DISTRICTS ANNUAL USER FEE, AND n„rtic A_ BRIEFLY COMMENT ON THE DISTRICTS FINANCES. Va MR. CHAIRMAN, THAT CONCLUDES THE STAFF REPORT. -14- - AND OTHER METHODS OF COLLECTION, SUCH AS THE CITY WATER BILL IN ADDITION, SOME PEOPLE CALLED TO TELL US ; - THAT THEIR PROPERTY WAS NOT CONNECTED OR THAT THEY WERE UNSURE, OR THEY FELT THEIR FEE SHOULD BE MODIFIED - OR TO ADVISE US OF A CHANGE OF OWNERSHIP e - 5 r �tl�f�y . sg - ALTHOUGH MANY OF THE ISSUES POSED ARE NOT REALLY RELEVANT R TO THE SPECIFIC PURPOSE OF THIS HEARING, WE DO RECOGNIZE THAT THE CITIZENS HAVE A GENUINE INTEREST IN THE ACTIVITIES OF THE SANITATION DISTRICT AND WE WOULD THEREFORE LIKE TO TAKE A FEW MINUTES AND SUMMARIZE, FOR THE RECORD, THE RESPONSES TO THOSE QUESTIONS THAT WERE RAISED BEFORE THE HEARING IS OPENED UP FOR ORAL PUBLIC COMMENTARY . WITH REGARD TO PROPOSITION 13 - WE RECOGNIZE THAT PROPOSITION 13 IS AN IMPORTANT ISSUE WITH THE TAXPAYERS, THAT IT WAS A VOTE TO REDUCE THE COST OF GOVERNMENT. THERE PROBABLY ISN 'T A PERSON IN -6- THIS ROOM THAT DOESN'T AGREE--AT LEAST IN PRINCIPLE— WITH ITS CONCEPT. - BUT MANY CITIZENS HAVE TOLD US THAT WHEN THEY VOTED FOR IT THEY THOUGHT THAT THE SO-CALLED ESSENTIAL SERVICES-- THE PROPERTY-RELATED SERVICES--IF YOU WILL--POLICE, FIRE, WATER AND SEWER, WOULD BE FULLY-FUNDED AND THAT OTHER GOVERNMENTAL SERVICES WOULD SHARE IN WHAT WAS LEFT OVER FROM THE 1% LEVY . - UNFORTUNATELY FOR THE SANITATION DISTRICT, THAT DIDN 'T HAPPEN. THE STATE LEGISLATURE DECIDED THAT ALL GOVERNMENTAL AGENCIES WOULD DIVIDE THE MONEY BASED ON THEIR PREVIOUS HISTORICAL RATIO OF TAX REVENUE . - IN FACT, IN THE IMPLEMENTING LEGISLATION, SB 154, SIGNED BY THE GOVERNOR ON JUNE 24, 1978)THE LEGISLATURE WENT SO FAR AS TO DECLARE ITS INTENT TO REMOVE ANY SPECIAL DISTRICT WITH THE STATUTORY AUTHORITY TO LEVY USER CHARGES'�y CC �Y�Y CV�--FROM THE TAX ROLL ENTIRELY. - FORTUNATELY, THAT HAS NOT COME TO PASS, OR WE WOULD ALL BE PAYING HIGHER TAXES. - SIMILAR QUESTIONS HAVE BEEN RAISED WITH RESPECT TO PROPOSITION 62. - THE SANITATION DISTRICT IS AN OPERATING UTILITY--JUST THE SAME AS THE GAS COMPANY AND THE EDISON COMPANY--THE -7- ONLY DIFFERENCE IS THAT WE OPERATE UNDER A DIFFERENT ISECTION OF THE LAW. — OUR SOLE FUNCTION IS THE COLLECTION, TREATMENT AND DISPOSAL OF SEWAGE . — WE PERFORM NO OTHER SERVICES . — WE DO NOT HAVE THE PROBLEM OF CONVINCING ANYONE THAT WE HAVE A SERVICE TO OFFER THAT THEY, IN FACT, NEED. — THE DISTRICTS' ROLE, AS WE SAID EARLIER, IS TO PROTECT THE PUBLIC HEALTH AND SAFETY AND THE ENVIRONMENT. — WITH HIGHER ENERGY COSTS, THE EFFECTS OF LONG—TERM INFLATION AND MORE STRINGENT TREATMENT REQUIREMENTS MANDATED BY FEDERAL AND STATE REGULATORY AGENCIES, WE SIMPLY CANNOT PROVIDE THAT PROTECTION, FACED WITH "CM d—:BE,� T4 9 FICIT1% 1. A kb)AUV5' "6 WITH REGARD TO WHETHER THE USER CHARGE IS A TAX OR A FEE, IT IS CLEARLY A FEE . — THE PROPOSED FEES ARE BASED UPON USE, WHEREAS PROPERTY TAXES ARE BASED ON THE VALUE OF THE PROPERTY AND HAVE NO DIRECT RELATIONSHIP TO USE. — FURTHER, THE DISTRICTS HAVE HAD STATUTORY AUTHORITY SINCE THEIR ENABLING LEGISLATION--LONG BEFORE PROPOSITION 13 OR PROPOSITION 62--TO ADOPT USER FEES AND TO COLLECT THEM ON THE PROPERTY TAX BILL . — THE REASON WE PROPOSE TO COLLECT THE FEE ON THE TAX BILL IS THAT IT IS THE MOST COST—EFFECTIVE METHOD. -8- THE PROPERTY TAX BILL IS A MECHANISM THAT IS ALREADY IN PLACE AND IS THEREFORE THE MOST CONVENIENT AND LEAST \� COSTLY METHOD. ANY OTHER METHOD WOULD BE CONSIDERABLY MORE EXPENSIVE, THE COST OF WHICH WOULD HAVE TO BE ADDED TO THE USE FEE AND, THUS, INCREASE IT. WITH REGARD TO THE EQUITY ISSUE, IT IS THE INTENT OF THE PROGRAM THAT EVERYONE PAY THEIR FAIR SHARE; HOWEVER, THERE IS NO USE FEE SYSTEM FOR SEWER SERVICES THAT IS TOTALLY EQUITABLE - THIS IS THE REASON THE FEE ORDINANCE ADOPTED BY THE BOARD PROVIDES AN APPEAL PROCESS TO ENABLE AN ADJUSTMENT OF FEES WHERE A GROSS INEQUITY IS DEMONSTRATED. - WE HAVE DEVELOPED OUR PROPOSED CHARGES FROM STUDIES THAT HAVE DETERMINED THE AVERAGE USES FR NF RR-"�^TV - AGAIN, I- LARGE COMMERCIAL OR INDUSTRIAL DISCHARGERS THAT PLACE AN INORDINANT DEMAND ON OUR SYSTEM ARE SUBJECT TO A SURCHARGE UNDER A SEPARATE INDUSTRIAL WASTE ORDINANCE THAT HAS BEEN IN EFFECT SINCE 1976. - AS I SAID BEFORE, SOME INDUSTRIAL DISCHARGERS NOW PAY AS MUCH AS $167,000 PER YEAR UNDER THAT PROGRAM. - SOME HAVE SUGGESTED THAT WE INSTALL METERS AND MEASURE THE ACTUAL SEWAGE DISCHARGE . -9- - FIRST, THERE IS NO RELIABLE SEWAGE METERING DEVICE THAT MEASURES FLOW FROM HOUSEHOLD AND OTHER SMALL CONNECTIONS . EVEN IF THERE WERE, I WOULD NOT HAZARD A GUESS AT THE � COST TO PURCHASE 3j,DO0 METERS, DIG 39,000 HOLES IN THE STREET AND THE FRONT YARDS OF PROPERTY OWNERS TO INSTALL THEM AND THEN ASK THE CITIZENS TO PAY THE ADDED AND THE ONGOING EXPENSE OF MAINTAINING THE METERS. - OTHERS HAVE SUGGESTED THAT WE BASE THE CHARGE ON THE ACTUAL WATER USAGE . THIS METHOD IS WROUGHT WITH PROBLEMS ALSO. - FIRST, THERE ARE INHERENT INEQUITIES BECAUSE ALL OF THE WATER THAT IS USED A DOES NOT END UP IN THE SEWER. - AN EVEN BIGGER PROBLEM IS THE FACT THERE ARE FOHR- SEPARATE WATER PURVEYORS IN THE DISTRICTS. - EACH WITH ITS OWN SEPARATE SYSTEM, SOME OF WHICH ARE NOT VOLUME BASED BUT, RATHER, USE A FLAT RATE, NONE OF WHICH ARE CURRENTLY COMPATIBLE WITH OUR SYSTEMS . - IT WOULD BE MOST DIFFICULT AND EXPENSIVE TO DESIGN A BILLING SYSTEM THAT WOULD BE COMPATIBLE FOR ALL OF THESE SEPARATE AGENCIES, EITHER TO TRANSFER TO THE PROPERTY TAX BILL OR TO INSTITUTE A SEPARATE BILLING SYSTEM, AND IT WOULD SUBSTANTIALLY INCREASE THE COSTS OF ADMINISTERING THE SYSTEM, ADDING 15% TO 20% T.9-a:6F_ -10- FOR THOSE WHO SUGGESTED THAT THE FEE BE COLLECTED ON THE WATER BILL, OUR EXPERIENCE IS THAT THE WATER \� AGENCIES ARE NOT RECEPTIVE TO ASSUMING THE HEADACHES ASSOCIATED WITH COLLECTING OUR SEWER SERVICE CHARGE VIA THEIR WATER BILL. I WOULD SIMPLY STATE THAT THERE ARE MANY PROBLEMS WITH DOING THAT. THAT IS WHY WE FEEL--ALL FACTORS CONSIDERED--THE PROPOSED SYSTEM IS THE BEST ONE AVAILABLE AT THIS TIME, THAT IT ACHIEVES REASONABLE EQUITY WITHOUT INCURRING HIGH COSTS OF ADMINISTRATION . WITH RESPECT TO BASING THE CHARGE ON ACTUAL MEASURED VOLUMES, I WOULD HAVE TO SAY THAT BECAUSE THE FEE WILL BE COLLECTED ON THE PROPERTY TAX BILL, TO BASE IT ON ACTUAL USE WOULD REQUIRE A CONSIDERABLY GREATER EFFORT TO OBTAIN THE ACTUAL WATER VOLUME FOR EACH PROPERTY, CALCULATE A CHARGE AND TRANSFER THE INFORMATION TO THE COUNTY'S PROPERTY BILLING FILE. I WOULD REITERATE HOWEVER, THE PROPOSED PROCEDURES DO PROVIDE A MECHANISM WHEREIN GROSS INEQUITIES CAN BE CORRECTED ON A CASE-BY-CASE BASIS. ON THE ISSUE OF EFFICIENCY OF OPERATIONS, LET ME JUST TOUCH ON SOME OF THE THINGS THAT THE DISTRICT DOES TO KEEP COSTS DOWN -11- - ALTHOUGH THERE ARE NINE SANITATION DISTRICTS, THERE IS BUT ONE STAFF TO ADMINISTER THE BUSINESS OF ALL NINE. COSTS ARE CHARGED TO EACH DISTRICT AS SERVICES ARE PERFORMED FOR IT THROUGH A SOPHISTICATED COST ACCOUNTING SYSTEM. ASSd-F-1-GA-TJ-ON"H+G4+-REf4A4 N', - THE DISTRICTS CONTRACT MANY SERVICES WITH PRIVATE FIRMS RATHER THAN HIRE FULL-TIME PROFESSIONAL STAFF MEMBERS . DTK,-(L of- out c°UTINU'W(e C-FFIV S -eGewa E TO IMPLEMENT OPERATING EFFICIENCIES '• - DIGESTER GAS UTILIZATION/CENTRAL POWER GENERATION - $6 MM/YR - J YR PAYBACK - INTERIM COGENERATION AT PLANT NO. 2 - $185,000/YR - LIGHTING/ENERGY CONSERVATION - $2 MM OVER 20 YRS - IE ET FaK �Otwk iub s�M n�� q4 SS _w - OLD CENTRIFUGES AREPLACED WITH BELT PRESSES-SUBSTANTIAL ENERGY SAVINGS OF APPROXIMATELY $ /a"U,JITu PER YEAR. - PHYS/CHEM ADVANCED PRIMARY TREATMENT '(j�_' 0'q a'ta , Y?L k -AMEMBERY OF THE SOUTHERN CALIFORNIA ENERGY COALITION s.levm N b FOR SI}$$EMG PEAK ELECTRICITY LOADS DURING HIGH COMMUNITY DEMAND PERIODS FROM WHICH WE RECEIVE APPROXIMATELY $ II01" PER YEAR. -12- Flw(L WE HAVE RECEIVED T-PW WRITTEN COMMUNICATIONS.COPIES OF WHICH ARE IN YOUR MEETING FOLDERS . - ROBERT P. WINKS, 715 APRIL DRIVE - REQUESTED INFORMATION ON HOW COST SAVINGS FROM UTILIZING THE PROPERTY TAX BILL AFFECTS THE USER FEE RATE. - THE QUESTION WAS RAISED AND ANSWERED AT THE WORKSHOP (AND AGAIN THIS EVENING) . - DENNIS FOSTER, 10418 RAINBOW CIRCLE, FOUNTAIN VALLEY OBJECTED TO USING THE PROPERTY TAX BILL AS A BILLING MECHANISM. - ROBERT D. RUNYARD, 5451 OLD PIRATE LANE - ADVISED THAT HIS PROPERTY IS NOT CONNECTED TO THE SEWER SYSTEM. - COUNTY OF ORANGE, GSA, REAL ESTATE DIVISION ADVISED THAT PROPERTY IS VACANT MR. CHAIRMAN, IT IS IN ORDER FOR THE BOARD TO CONSIDER A FORMAL MOTION TO RECEIVE AND FILE THE FOUR COMMUNICATIONS AS PART OF THE OFFICIAL RECORD. '! CW oN `lout A@E- J)A FOR 04 -15- - MR. CHAIRMAN, AT THE FEBRUARY 4TH WORKSHOP, MR. JOHN LOCKE, 6392 SLIGO CIRCLE, STATED THAT HE HAD POSED SEVERAL QUESTIONS REGARDING THE PROPOSAL AT A CITY COUNCIL MEETING ON FEBRUARY 1ST AND REQUESTED A WRITTEN RESPONSE . - UNFORTUNATELY, MR. LOCKE DID NOT PROVIDE THE SANITATION DISTRICTS WITH A COPY OF HIS QUESTIONS AND, TO THE BEST OF OUR KNOWLEDGE>HE DID NOT SUBMIT THE QUESTIONS TO THE CITY IN WRITING. - NONETHELESS, OUR STAFF WAS ABLE TO TRACK MR. LOCKE DOWN EARLIER THIS WEEK AND DISCUSS HIS CONCERNS IN A TELEPHONE CONVERSATION. - WE HAND DELIVERED A WRITTEN RESPONSE TO MR. LOCKE ON FEBRUARY 16TH, A COPY OF WHICH IS ALSO INCLUDED IN YOUR FOLDERS TONIGHT. Ckd.A CV*M I7 is 16 kj'"6e6WTL 7-0 oPI:N 'nk%E He" W(e Gv4 Pu h��c 2uuN car' FORMS HAVE BEEN PROVIDED FOR ANYONE WISHING TO PRESENT ORAL COMMENTARY. -16- �' i' 2-ice ff� -- _ -. _ __ � �� _ � �� i`- // _ n l _.. _ _ __. li � IJL,S_ — �P�-S�I�L__� A�SoV __ it-.._ 1A�1•l� e� a�-c�c I� L � ,�i I � ,�� ;. I�� - - - - �I' �; �.� ��I . ;�I ,�� Z_,a sF III I� 2 -11,K GsLG rPA II -41 I --- r - - � - _ -- I - - �f/r9l-hi: s 3 Z, 330 95 o �Hr✓/ta �� US/� /� 7� V/ o U,vio.✓ 6rL /�/� to/d 4J �.J 2-18-BB CHAIRMAN' S STATEMENT TO OPEN THE FLOOR FOR ORAL PUBLIC COMMENT u (AGENDA ITEM NO. 3D) LADIES AND GENTLEMEN, I TRUST AND HOPE THAT YOU HAVE FOUND THE PRESENTATION BY THE DISTRICTS' STAFF TO BE TRULY INFORMATIVE. IT HAS BEEN OUR EXPERIENCE THAT MOST RESIDENTS OF THE COUNTY DO NOT HAVE INFORMATION OR KNOWLEDGE CONCERNING THE IMPORTANCE OF THE ROLE THAT THE COUNTY SANITATION DISTRICTS PLAY IN THE LIVES OF ALL OF THE TWO MILLION RESIDENTS OF ORANGE COUNTY. IN ORDER TO GUARANTEE THE PROTECTION OF OUR ENVIRONMENT, PARTICULARLY THE OCEAN WATERS, YOU HAVE SEEN EARLIER THIS EVENING THE VERY ELABORATE AND COMPLEX AND COSTLY PROCEDURES THAT MUST BE UNDERTAKEN TO PROVIDE THE SEWAGE TREATMENT SERVICE FOR THE COUNTY RESIDENTS. AS WAS INDICATED AT THE OUTSET OF THE HEARING THIS EVENING, THE PURPOSE HERE TONIGHT IS NOT FOR OUR BOARD TO CONSIDER THE ADOPTION OF A SEWER USE CHARGE, OR TO CONSIDER INCREASING AN EXISTING USE CHARGE. OUR SOLE PURPOSE IS TO SELECT THE METHOD BY WHICH THE CHARGE WHICH WAS ADOPTED BY THIS BOARD LAST YEAR IS TO BE COLLECTED. AGAIN, I EMPHASIZE THAT THE CHARGES WERE ADOPTED LAST DECEMBER AT A PUBLIC MEETING HELD FOR PURPOSES OF DETERMINING THE RATES TO BE ESTABLISHED. 1 OF 2 THIS WAS DONE AFTER TWO YEARS OF STUDY AND DISCUSSIONS AT FIVE SEPARATE PUBLIC MEETINGS. u IT NOW BECOMES IMPORTANT TO FIND THE MOST COST EFFECTIVE WAY OF COLLECTING THIS REVENUE, WHICH IS NECESSARY TO PAY FOR THIS DISTRICT' S SHARE IN THE OPERATION AND MAINTENANCE OF THE JOINT TREATMENT AND DISPOSAL FACILITIES. I KNOW SOME PERSONS ARE CONCERNED ABOUT THE ADOPTION OF FEES, CHARGES AND TAXES, BUT I AGAIN MUST INDICATE THAT THAT IS NOT THE SCOPE OF THE HEARING TONIGHT, AND I WOULD KINDLY ASK THAT ANY TESTIMONY OR STATEMENTS WHICH ARE TO BE GIVEN TONIGHT BE ADDRESSED SOLELY TO THE COLLECTION METHOD, AND NOT AS TO WHETHER YOU LIKE OR DISLIKE THE USER CHARGE. IF YOU HAVE SOME SPECIFIC CONCERN WITH THE CHARGE, WE WOULD INVITE YOU TO LEAVE YOUR NAME AND ADDRESS, AND THE STAFF CAN CONTACT YOU, OR IF YOU WISH TO WRITE THE DISTRICT, WE, AS MEMBERS OF YOUR BOARDS OF DIRECTORS, WILL GIVE IT DUE CONSIDERATION AND RESPOND TO YOU AT A LATER DATE. THANK YOU. WE WILL NOW HEAR FROM THOSE PERSONS WHO HAVE INDICATED A DESIRE TO ADDRESS THE BOARD. SUBMI WILL NOW EC OFF T_HE NAMES OF HOSE PEOPLE WHO BAK 2 OF 2 COUNTY SANITATION DISTRICT NO. 11 OF ORANGE COUNTY, CALIFORNIA `J MINUTES OF ADJOURNED REGULAR MEETING February 18, 1988 - 7:30 p.m. Huntington Beach City Hall - Council Chambers 2000 Main Street Huntington Beach, California Pursuant to adjournment of the regular meeting of February 10, 1988, the Board of Directors of County Sanitation District No. 11 of Orange County, California, met in an adjourned regular meeting at the above hour and date at the Huntington Beach City Hall Council Chambers. The Chairman called the meeting to order at 7:30 p.m. The roll was called and the Secretary reported a quorum present. DIRECTORS PRESENT: Tom Mays, Chairman, and Grace Winchell DIRECTORS ABSENT: Roger R. Stanton STAFF MEMBERS PRESENT: J. Wayne Sylvester, General Manager, Rita J. Brown, Secretary, William H. Butler, Thomas M. Dawes, Gary Streed, and Dan Dillon OTHERS PRESENT: Thomas L. Woodruff, General Counsel , Clark Ide, John Locke, J. A. Wilson, Margaret Wilson and Ron Weller x x x x x x x x x x x x x x x x x x Public Hearin on ro osal to collect ado ted annua sewer service Charges On the property tax bills and on the Sewer Service Charge Report for 1988-89 Open Public Hearing The Chairman declared the hearing open at 7:35 p.m. He then announced that the purpose of the public hearing was to consider and select the best method by which the District's previously adopted annual sewer service charge shall be collected. a 02/18/88 DISTRICT 11 Staff Re ort on ro osed use of the The General Manager stated that the CouH,.) County of range property tax bill Sanitation District is responsible for fo�lection of the annual sewer transporting, treating and disposing of - service charge - sewage in a safe manner in accordance with strict federal and state laws to protect the public health and safety and the environment. He noted that some of the citizens attending the hearing had not had an opportunity to acquaint themselves with the role that the District plays in handling the sewage and, therefore, a video presentation was given on the Districts' activities. The General Manager then reported that the Orange County Sanitation Districts' cost of providing sewerage service to the community has been escalating rapidly because of the increasingly stringent federal and state laws and regulations requiring advanced treatment of wastewater to remove toxic materials and other pollutants from the sewage to assure protection of the public health and safety and the environment. To comply with the new stricter requirements, the Joint Sanitation Districts have recently constructed sophisticated treatment facilities at a cost of more than $124,000,000. For several years property tax revenues have been insufficient to meet the District' s operating costs, and it has been necessary for the District to draw down its reserves. In fiscal year 1988-89, without appropriate measures to protect the District' s financial integrity, it would have been necessary for the Board to authorize a transfer of $786,000 in capital reserves from the District's Accumulated Capital Outlay Fund to the Operating Fund to pay the full costs of operating and maintaining the District collection system and its proportionate share of the operating and maintenance costs of the Joint Treatment Works. By 1991-92 the District will require additional revenues in the amount of $6 million to meet its operating expenses and maintain the solvency of the fund due to insufficient tax revenues, and capital reserves will have long been exhausted. To address this fiscal crisis, in 1987, after considerable study of the District's long-range funding requirements, the Board adopted a financial program to avoid projected revenue shortfalls and provide the necessary income required to finance the District's rising operating expenses, as well as major capital expenditures for construction of master-planned treatment facilities. The Board' s adopted financial program includes a one-time connection fee of $1,500 per dwelling unit for residential property and a $300 per 1,000 square feet charge for commercial , industrial and governmental property. The connection fee is used to pay for expansion of facilities to serve new development. As the second part of the long-range financial program, to pay for costs of operating, maintaining and rehabilitating the sewerage system, the Board adopted annual sewer service fees, as follows: -2- \,.d 02/18/88 DISTRICT 11 Type of Property Annual Fee - Single-family residence $26.40 - Multi-family residence/mobile home 15.85 - Commercial 18.90/1,000 sq. ft. - Industrial 18.90/1,000 sq. ft. - Governmental 18.90/1,000 sq. ft. The large commercial or industrial dischargers that place an inordinant demand on the District's system are also subject to an additional surcharge under a separate industrial waste ordinance that has been in effect since 1976. The General Manager then reiterated that the purpose of the hearing was to receive public commentary on the District's proposal to collect the annual service charge on the property tax bill . He also advised that official notice of the hearing was mailed on January 4, 1988, to 34,897 property owners of record on the last equalized assessment roll of the County of Orange, in accordance with the provisions of Section 5473.1 of the California Health and Safety Code. As prescribed by law, a legal notice of the hearing was published in �..,✓ the Orange Coast Daily Pilot on January 11, 1988 and again on January 18, 1988. The hearing notice included the District' s telephone number for citizens to call with questions or for more information. The staff received approximately 100 calls. The General Manager summarized the types of questions raised at the workshop held February 4th and in the telephone calls received by the District, which dealt primarily with: - Propositions 13 and 62, the issue of tax vs. fee - The equitability of the system of charges - Efficiency of the District's operation - Whether or not the proposed fees would be used to pay for sewers to accommodate growth - The relationship of the local street sewer system provided by the City to the regional system of Sanitation District No. 11 - Other methods of collection, such as the City water bill Several property owners also indicated that their properties were not connected or they were unsure whether their properties were connected to the local sewer system, or felt that their fee should be modified, or advised of a change in ownership. -3- 02/18/88 DISTRICT 11 Mr. Sylvester then introduced William Butler, the District's Director of Finance, and asked him to review the alternative methods available �l for collecting the annual service charge. The Director of Finance reviewed the following three billing and collection alternatives identified and evaluated by the staff: - Direct Billing and Collection by District This approach would require the Sanitation District to send a direct bill on a monthly or bimonthly basis to every property owner of the approximately 34,897 pieces of property within the District. The one-time setup cost for this method is estimated at $22,000 plus an annual cost of $188,000 making the total cost for the first year $210,000. The projected five-year cast for the direct billing alternative would be $962,000. - Placement of User Fee on City of Huntington Beach Utility Bills for Collection and Remittance to District Under this method the sewer service charge would be included as a separate line item on the utility bill from the City of Huntington Beach who serves the properties within District No. 11. The setup cost for this alternative would be $20,000 plus an annual cost of $94,000, for a total cost for the first year of $114,000. The estimated five-year cost of performing this billing service is $490,000. - Placement of User Fee on County of Orange Property Tax Bill for ollection an Remittance to District Under this alternative the sewer service charge would be included as a separate line item on the property tax bills for all properties within District No. 11. Because there are some major computer software modifications that must be made to the County tax roll system to implement this alternative, the setup cost of $35,000 is a little higher. However, the annual cost of billing under this method is only $10,000. The total first-year cost would be $45,000 and the five-year cost is estimated to be $85,000. Staff recommended this alternative as it is clearly the most cost-effective billing and collection method available, and results in lower costs to each property owner. District 1, 5, 6 and 13 have already adopted this method for billing their user fees, and it has proven quite effective in keeping the administrative costs for billing and collecting fees under control in these four Districts. The Director of Finance reiterated that the rising costs to operate the District are due to higher mandated levels of treatment and increased energy costs. The long-range financial program was adopted by the District because the District's revenues and reserves were decreasing and soon the District would not have been able to meet its operational requirements and provide the services necessary to protect the public health and the environment. -4- 02/18/88 DISTRICT 11 �...' Mr. Butler then observed that although many of the issues posed were not really relevant to the specific purpose of the hearing, he recognized that the citizens have a genuine interest in the activities of the Sanitation Districts and he, therefore, summarized responses to those questions that had been raised thus far. He explained the role of the District as an operating utility providing an essential service necessary for the protection of the public health and safety, and Indicated that the District was established solely to provide wastewater collection, treatment and disposal services to the community. The Director of Finance further explained that while the District has always had the statutory authority to levy a sewer service fee, it had historically financed its operations, maintenance and rehabilitation activities from the property tax. The reduction in tax revenues resulting from the passage of Proposition 13 and Its implementing legislation, combined with the higher energy costs, the effects of high inflation over the past several years, and more stringent treatment requirements mandated by federal and state regulatory agencies, will result In the projected operating deficits for the District. The adopted sewer service charge is based upon use; it is not a tax. Property taxes are based on the value of the property and have no direct relationship to use. Mr. Butler reiterated that the reason for the proposal to collect this fee on the tax bill Is because it is the most cost-effective method. The Director of Finance highlighted the appeal process available to allow for an adjustment of fees in the event of a demonstrated inequity. Appeals relative to inaccurate billings or properties that are not connected to local sewers will be handled on a case-by-case basis. Receive and file written comments The General Manager reported that four written communications had been received regarding the sewer service fee and proposed method of collection and summarized the comments; whereupon, It was then moved, seconded and duly carried: That the written communications received from the following property owners be, and are hereby, received and ordered filed: Dated - Robert P. Winks, 715 April Drive, H.B. January 09, 1988 - Robert D. Runyard, 5451 Old Pirate Lane, H.B. January 10, 1988 - Dennis Foster, 10418 Rainbow Circle, F.V. January 12, 1988 - County of Orange, General Services Agency, January 28, 1988 Real Estate Division, S.A. -5- 02/18/88 DISTRICT 11 Oral Public Comnents �..✓ Chairman Mays reported that it has been the Board's experience that most residents of the County do not have the information nor knowledge concerning the importance of the role that the County Sanitation Districts play in the lives of all of the two million residents of Orange County. In order to guarantee the protection of our environment, particularly the ocean waters, as seen earlier in the meeting, very elaborate and complex and costly procedures must be undertaken to provide the sewage treatment service for the County residents. The Chairman reiterated that the purpose of the meeting was not for the Board to consider the adoption of a sewer use charge or to consider increasing an existing use charge. Their sole purpose was to select the method by which the charge, which was adopted by the Board last year, is to be collected. He again emphasized that the charges were adopted last December at a public meeting held for purposes of determining the rates to be established. This was done after two years of study and discussions at five separate public meetings. It is now important to find the most cost-effective way of collecting this revenue, which 1s necessary to pay for District 11's share in the operation and maintenance of the joint treatment and disposal facilities. Mr. Mays acknowledged that some persons were concerned about the adoption of fees, charges and taxes, but again stressed that this is not the scope of this hearing. He asked that any testimony or statements given address solely the collection method, and not as to whether they �✓ like or dislike the user charge. The Chairman invited anyone with some specific concerns regarding the charge to leave their name and address and the staff would contact them. He added that if they wished to write the District, the Board would give them due consideration and would respond to them at a later date. The Chair then recognized the following persons who addressed the Board regarding the proposed method for billing and collection of the annual sewer service charge: - John Locke, 6392 Sligo Circle, H.B. - Ron Weller, 16601 Edgewater Lane, H.B. - Margaret Wilson, 16841 Green Street, H.B. Mr. Locke expressed his opposition to the sewer service fee, as well as to the proposed method of collection of the charge. He also questioned the legality of said fee, which in his view is a tax, and the collection method. Mr. Locke suggested that this charge be collected by direct billing on an annual basis rather than monthly. He also inquired as to the Sanitation Districts' governing authority, and asked if the District was "privatized" and questioned the impact Of the recent stockmarket drop. Mr. Locke also inquired as to the relationship between the user fee and the allocation received by the District from the basic property tax levy. .✓ -6- 02/18/88 DISTRICT 11 �..' Mr. Weller then addressed the Board and stated that he was opposed to using the County Tax Collector to collect this fee. He stated his view was that the user fee was a tax and his tax bill already included a special assessment. Therefore, he believed this to be double taxation. He indicated that he felt that all state and federal mandated treatment requirements should also provide for funding and that those costs should not be passed on to the local taxpayer. Mrs. Margaret Wilson reiterated the statements of Mr. Locke and Mr. Weller. She stated that she would prefer the billing to be on the City of Huntington Beach utility bill. She also expressed concern that if this charge is placed on the County tax bill , it will automatically Increase along with any annual tax increases. Mrs. Wilson asked for an explanation regarding .how District 11's share of the joint treatment costs was determined and about the District's operating and fee relationships to the other Sanitation Districts. She also inquired as to how boat owners and offshore operations are assessed. Director/Staff/Counsel response to oral comments In response to the public commentary, it was pointed out that the first year cost to separately bill all the property owners annually would be approximately $62,000 with an estimated five-year cost of $222,000 which is still considerably higher than the five-year cost of $85,000 to collect the charge on the County tax bills. It was also clarified that the District is a governmental agency operating pursuant to the State of California Health and Safety Code; it Is not a private organization, and it was not affected by the recent stockmarket drop. It was also pointed out that the user fee is in addition to the portion of the basic property tax levy allocated to the District and that one did not affect the other. The General Counsel responded relative to the legality of the charge and proposed collection method. He stated that the Health and Safety Code provides for this method as an alternative for collecting user fees. It has been used by other Districts for many years. With regard to double taxation, it was pointed out that the special assessment currently on the tax bill was for bond redemption. These bonds are due to be paid off in a few years and this item will then disappear from the tax bill . Use of the utility bill method of collection was addressed and staff advised that the cost for this method would also be higher. Further, it has been the Districts' experience that water agencies are not receptive to assuming the responsibilities associated with collecting the Districts' sewer service charge on their water bill and staff reviewed some of the reasons therefor. -7- 02/18/88 DISTRICT 11 Also addressed was the inquiry re District 11's share of the Joint treatment costs. It was explained that each District, under the terms of a Joint powers agreement, pays its proportionate share of the Joint treatment costs in accordance with their contribution to the total flow. Each District' s cost to transport their wastewater varies greatly. The Inland Districts' trunk sewers flow by gravity while the coastal areas, such as District No. 11, must pump their flows which increases the cost of operation and maintenance. Because of this and different levels of reserve funds in the various Districts, individual District's supplemental fee programs varied as well as their respective implementation dates. It was also pointed out that the sewer service charge, although expected to increase in the future to keep pace with rising costs of providing sewerage service, will not automatically increase each year. The fee cannot change until the Board of Directors adopts a new ordinance revising the charge. Close hearing Chairman Mays and Director Winchell commented further regarding the Board' s responsibilities for maintaining the District's financial Integrity, providing the high level of sewerage service that the community had come to expect, and protecting the public health and safety and the environment. They stated that in view of the District's financial condition, the method of collecting the sewer service charge on the County tax bills was the most prudent because it is the most cost-effective method. The Chairman then declared the hearing closed at 9:06 p.m. Adopting a finding that the Moved, seconded and duly carried: majority Of property Owners have not protested relative to That the Board of Directors does hereby collecting annual sewer service find that a majority of the owners of charges on the property tax bills the property, which is the subject of the Sewer Service Charge Report for Fiscal Year 1988-89, have not protested the proposed collection of annual sewer service charges on the property tax bills. Receive file and ado t Sewer Moved, seconded and duly carried: Service harge Report for Fiscal Year 19 8-89 That the County Sanitation District No. 11 Sewer Service Charge Report for Fiscal Year 1988-89 be, and is hereby, received, ordered filed and adopted. Directing the County Auditor- Moved, seconded and duly carried: Controller to include sewer service charges on property tax bills That the Board of Directors hereby beginning in 1988-89 adopts Resolution No. 88-22-11, directing the County Auditor-Controller to include sewer service charges on property tax bills beginning in fiscal year 1988-89 for collection, pursuant to Ordinance No. 1108 of County Sanitation District No. 11 of Orange County. A certified copy of this resolution is attached hereto and made a part of these minutes. -8- 02/18/88 DISTRICT 11 Adjournment Moved, seconded and duly carried: That this meeting of the Board of Directors of County Sanitation District No. 11 be adjourned. The Chairman then declared the meeting so adjourned at 9:15 p.m. , February 18, 1988. Secreted of Directors County Sanitation District No. 11 of Orange County, California \� STATE OF CALIFORNIA) ) SS. COUNTY OF ORANGE ) 4 Pursuant to California Government Code Section 54954. 2, I hereby certify that the Agenda for the Adjourned Regular Board Meeting Of District No. l_ held On 4A�j 19ek was duly posted for public inspection at the main lobby of the District' s offices on \% , 191e . IN WITNESS WHEREOF, I have hereunto set my hand this day of -JrALI.►s% 191L. Rita J. Brown, Secr° ary or Board of Directors of County Sanitation District No. of Orange County, California