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HomeMy WebLinkAbout1989-05-31 District 5 1 COUNTY SANITATION DISTRICTS " OF ORANGE COUNTY, CALJFORNIA P.O.BOX 9127,FOUNTAIN VALLEY.CALIFORNIA 9272041V 109N ELLIS.FOUNTAIN VALLEY.CALIFORNIA 92108-7019 (1141 9 62-2411 NGF CW FAX(711)9 82-0359 May 24, 1989 NOTICE OF ADJOURNED REGULAR MEETING DISTRICT NO. 5 WEDNESDAY, MAY 31, 1989 - 5:30 P.M. 10844 Ellis Avenue Fountain Valley, California Pursuant to adjournment of the adjourned regular meeting of May 17 , 1989 , the Board of Directors of County Sanitation District No. s will meet in an adjourned meeting at the above hour and date to consider modifications to the District's supplemental user fee program. Sec etary BOARDS OF DIRECTORS County Sanitation Districts P.O.Box 8127.10844 Ellis Avenue of Orange County,California Fountain Valley,CA 92728.8127 `..� Telephone: (714) 962-2411 DISTRICT NO. 5 AGENDA ADJOURNED REGULAR MEETING WEDNESDAY, MAY 31, 1989 - 5 :30 P .M. (1) Roll call (2) Public Comments: All persons wishing to address the Board 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 ) verbal status report on the District's sewer rehabilitation program and Master Plan of facilities to serve the District (4) Consideration of items re long-range financial program: (a) Staff report on financial projections (b) Discussion (5) Consideration of the following actions relative to proposed Ordinance No. 519, An Ordinance of the Board of Directors of County Sanitation District No. 5 of Orange County, California, Amending Ordinance No. 516 Establishing Sanitary Sewer Service Charges: See page "A" (a) Report of the General Counsel re proposed Ordinance No. 519 (b) Consideration of motion to read said Ordinance No. 519 by title only, and waive reading of entire ordinance (must be adopted by unanimous vote of Directors present) (c) Consideration of motion to introduce said Ordinance No. 519 and pass to second reading on June 14, 1989 ( 6 ) Other business and communications, if any (7) Consideration of motion to adjourn ORDINANCE NO. 519 AN ORDINANCE OF THE BOARD OF DIRECTORS OF COUNTY SANITATION DISTRICT NO. 5 OF ORANGE COUNTY, CALIFORNIA AMENDING ORDINANCE NO. 516 ESTABLISHING SANITARY SEWER SERVICE CHARGES The Board of Directors of County Sanitation District No. 5 of Orange County, California, does hereby FIND: A. That a financial and engineering report has been prepared setting forth the financial projections for providing sewer service to properties within the District; and, B. That the financial and engineering reports have been made available to the public in accordance with the provisions of Government Code Section 54992; and, C. That the new sewer use fees established by this Ordinance do not exceed the estimated amount required to provide the sewer service for which the fee is levied, as provided in Government Code Sections 54991 and 54992. The Board of Directors of County Sanitation District No. 5 of Orange County, California, does hereby ORDAIN: Section 1: Table A, as adopted by Section 2 of Ordinance No. 516, is hereby amended to read as set forth in Table A of this Ordinance. Section 2: This Ordinance shall became effective July 1, 1989. Section 3: The Secretary of the Board shall certify to the adoption of this Ordinance and shall cause the same to be published in a newspaper of general circulation in the District as required by law. `.J "A-1" AGENDA ITEM NO, 5 "A-1" PASSED AND ADOPTED by the Board of Directors of County Sanitation District No. 5 of Orange County, California, at a regular meeting held Chairman of the Board of Dfrectors County Sanitation District No. 5 of Orange County, California ATTEST: Secretary of the Board of Directors County Sanitation District No. 5 of Orange County, California `► -p- "A-2" AGENDA ITEM NO. 5 "A-2" `r TABLE A ORDINANCE NO. 519 Basis of Minimum Annual Charge Annual Rate Charge Per Unit Single-Family Charge per $45.00 $45.00 Dwellings dwelling unit Multi-Family Charge per 27.00 27.00 Dwellings/Mobile dwelling unit Homes Commercial/ Charge per 1,000 32.00 32.00 Industrial/Other square feet of (government building buildings, utilities, non-profit organizations, etc.) u "A-3" AGENDA ITEM NO. 5 ,.A-3" MANAGER'S AGENDA REPORT County Sanitation Districts P.O. Box 8127. 10844 Ellis Avenue of Orange County, California Fountain Valley,CA 92728-8127 Telephone: (714) 962-2411 --� DISTRICT NO. 9 MANAGER'S REPORT TO DISTRICT NO. 5 DIRECTORS MEETING DATE: May 31, 1989 - 5:30 p.m. Item No. 4(a): Update on long-range financial program and consideration of amendments to existing sanitary sewer service charges. BACKGROUND In 1981, the Board adopted a supplemental user fee program to make up the shortfall of ad valorem tax revenues and provide needed additional financing for operations and major rehabilitation work on the sewer system. New development pays a separate connection fee for sewage system capacity. When the program was originally presented to the public and adopted by the Board, it was anticipated that it would be necessary to increase the fees by approximately 77% beginning with the second year to finance the rehabilitation work on the trunk sewer system. The District has been able to delay any increase in the supplemental user fees originally adopted in 1981 due to a significant decline in inflation rates, receipt of favorable bids on various District and joint works construction and rehabilitation projects, and delays In various major plant projects, all of which have reduced District expenditures and cash flow requirements well below budgeted levels. In response to a State Water Resources Control Board ruling the Directors ordered a change in the supplemental user fee program from a water meter size basis to a flat fee for single and multi-family residences and fees based on square footage of improvements for other facilities. This change was effective for the 1987-88 fiscal year. The current fee schedule is as follows: Single-Family Multi-Family Commercial/Ind/ Fee Type Residential Residential Governmental/Other One-time Connection $1,500 per $1,500 per $300 per 1,000 sq. Fee dwelling unit dwelling unit ft. of building Annual User Fee $26.40 per $15.85 per $18.90 per 1,000 dwelling unit dwelling unit sq. ft. of building In 1986, the Board considered and rejected the issuance of Certificates of Participation (COP's) in concert with other Districts to partially finance District 5's share of ,joint treatment works construction. -1- e - . May 31, 1989 FUTURE FINANCIAL PROJECTIONS \../ Based upon the Facilities Master Plan and the Financial Plan recommendations contained in the 30-year Action Plan now under consideration by the Board, District No. 1 will exhaust its capital funds as soon as 1990-91. The Action Plan recommends that the District's share of the treatment plant construction and the trunk sewer construction be financed by a combination of borrowing (ie COP's) and increased connection fees. Debt retirement and escalating operating and maintenance costs would be paid by increasing the annual supplemental use fees. Staff has prepared a Statement of Projected Cash Flow based on the following assumptions: 1. Scenario 2 of the Action Plan Which Recommends Continuation of Current Treatment Levels 301 h Waiver This scenario is used in the cash flows as the staff's preliminary preferred alternative recommendation. It represents the minimum probable level of construction and operations and maintenance costs. For the first five years of the planning period the differences between Scenarios 2 and 3 (full secondary treatment) are not significant. Additional flow and sewer connection assumptions are also consistent with the Master Plan. 2. Connection Fees The Master Plan Financial Plan recommends a change in the method of determining connection fees. The recommended change, which is incorporated in the cash flow, is to include the cost of future facilities on a per unit basis. The reason to include these costs is that we currently operate at capacity and any new flow will require new, additional capacity. The first change is anticipated to be effective October 1, 1989 when the residential connection fee is projected to be $2260 under Scenario 2. Beginning July 1, 1990, and annually thereafter, connection fees are projected to increase to reflect changes in the Engineering News Record - LA construction cost index, assumed to be 5% per year. 3. Debt Over the next 10 years COP-type debt totaling $42 million is projected to be Issued to meet Joint Works Treatment and District sewer capital requirements in 1990-91 and 1993-94. A more detailed needs analysis will be performed and returned to the Directors before any debt is issued. The cash flow projections are for several small issues on the theory of borrowing as little as possible and only when absolutely necessary. All issues are treated as fixed rate at 8% for 20 years. The Health and Safety Code permits the use of user fees to repay debt, and as the only controllable source of revenue for the District, they are projected for use to repay the necessary new debt. Existing debt continues to be repaid from capital funds. -2- May 31, 1989 RECOMMENDATIONS It is clear that the user fee rates will have to continue to escalate - and at an accelerated pace - to maintain the District's financial integrity. However, there are several unknowns that will have a major impact on the District's cash flow requirements. A considerable portion of the District's major funding shortfalls are for capital financing. The projections herein assume that all construction projects proceed on schedule. Thus, the estimates can be considered "worst case" scenarios. However, we continue to experience delays in major projects because of SCApMO requirements. Further delays in these projects would also delay, or at least spread out, the need for capital funds. Conversely, as the Directors are aware, if the secondary treatment waiver is not renewed in 1990, the Districts' capital needs will increase substantially. All the projections assume the renewal of the Districts' 301(h) permit. Ordinance No. 519 (attached to the agenda) incorporates the following proposed fee schedule and is presented for consideration by the Directors. Single-Family Multi-Family Commercial/Indust. Fee Type Residential Residential Governmental/Other Annual User Fee $45.00 $27.00 $32.00/1,000 sq. ft. ..s No change In the connection fee schedule is recommended at this time. After a final decision is made by the Boards regarding the NPDES Permit renewal , staff will return with a connection fee recommendation. Staff will review the attached cash flow projections, the proposed supplemental user fee increase and the proposed Ordinance with the Directors in greater detail at the meeting. -3- COUNTY STATEMENT NT OF DISTRICT CAS NO. FL 5 Pap I9 STATEMFMT Of PROJECTED CASH FLOW page 1 � FISCAL YEARS 1989-90 TXROU44 1998-99 LINE 1989-90 1990.91 1991.92 1992.93 1993.94 5-Year Total 1994-99 10-Year Total LIKE .._. ....... ....... ....... ....... ....... ------------ ----------- ------------- _... OPERATING FUND j I Reserves 6 Carry-Over From Last Year 3.426,000 4.568,000 4.801,000 4,171,000 4.570,000 ; 3,426,000 5,835.000 3,426.000 1 ........... ........... ........... ........... ........... j ._...._.. ----------- ----------- REVENUE 2 Share of It Tax Allocation 2,32S,000 2,520,000 2,730,000 2,958,000 3,205,000 ; 13,739,000 20,514.000 36,252,000 2 3 Fees: Industrial Waste IOI,aO 111,000 122,000 136,ISO 147,000 I 615,000 735.000 1,350.000 3 i' 6 Supplemental User 1,149,000 1,489,000 1,963,000 2.050,000 3,921,000 ; 11,380.000 28,092,000 40,272,000 6 5 Interest 6 Miscellaneous Income 283,000 332,000 318,aO 310,000 361,000 ; 1,584,000 2,130.000 3,714,000 5 6 Other Revenue j 0 0 6 ........... ........... ........... ........... ........... ........... ........... ........... 7 TOTAL REVENUE 3,858.000 4,452,000 5,133,000 6,260,000 7,614,000 j 27,317,000 52,271.000 79,508,000 7 ___________ ___________ ___________ ___________ ___________ i ----------- ----------- -___--.---- 8 TOTAL AVAILABLE FUNDING 7.284,000 9,020,000 9,934,000 10,431,000 12,192,000 30,743,000 57,306,000 83,014,Oa 8 1 ........... ........... ........... ........... ........... . ........... ..........' EXPENDITURES t 9 Share of Joint Works N G 0 2.026.000 2.309,000 2,631.000 2,697.000 3,075.000 ( 12,738,000 23,199,000 35,937,000 9 10 Collection System M 6 0 and Other Door. 690.000 710.000 752,000 756.000 782.000 j 3,610,000 4,409,000 0,079,000 10 11 Other Expenditures 1,200,000 2,400,000 2,400,000 3,300,000 9,300,000 21,000,000 30,300,Oa 11 ----------- ----------- ----------- ----------- ----------- j ----------- ----------- --------- 12 TOTAL EXPENDI7URES 2,716.000 4.219,000 5,763,000 5,833.000 7,1S7,000 25.708,000 48.608,000 74,316,000 12 ___________ ___________ ___________ ___________ ___________ j ----------- ----------- .---------_ j 13 Reserves a Carry-Over to Next Year 4.568,000 4.601.000 4.171,000 4,578,000 5,055,000 ( 5,035,000 8,698,000 8,690,000 13 i 14 Next Yenr's Dry Period Funding Requirements 1,356,000 2.110,000 2,602,000 2,927,000 3,579,000 3,579,000 5.547,000 S,961,000 l6 ! 1S Fund Balance or (Deficit) 3.210.000 2,691,000 1.289,000 1.651,000 1,436.000 ; 1,656,000 3,151,a0 3.151,000 15 Single Family Resident User Fee 145 ISO 176 8110 $150 $255 Number of Emuivalent Dxelling Units 25.518 25,672 25,826 25,980 26.136 26,906 COUNTY SANITATION DISTRICT NO. 5 5/25/89 STATEMENT OF PROJECTED CASH FLOW Page 2 FISCAL YEARS 1989-90 THROUGH 1990-99 LINE 1909-90 1990-91 1991.92 1992-93 1993-94 5-Year Total 1994-99 10-rear Total LINE ..-- ....... ....... ....... ....... ....... ------------ ----------- ------------- ---- CAPITAL FUND(S) 16 Reserves 6 Carry-over Fro, last Year 5,039.000 2,666,000 11.074,000 2,076,000 (471,000) 5,039,000 11,296,000 5,039,000 16 ........... ........... ........... ........... ........... i ------------ ----------- ----------- REVENUE 17 Construction Grants 141,000 141,000 141,000 17 18 Fees: Cosmetics 606,000 719,000 754,000 190,000 830,000 ; 3,779,000 4,820,000 8,599,000 IB 19 Industrial Waste 15,000 17,000 19,000 21,000 23,000 95,000 115,000 210,000 19 20 Supplemental User 0 0 20 21 Sale Of Capacity Rights 240,000 118,000 21,000 832,000 233,000 1,444,000 275,000 1,719,000 21 22 Interest 6 Miscellaneous Income 273,000 487.000 466.000 57,000 384,000 ; 1,667,000 2,120.000 3,787,000 22 23 Other Income 3,757.000 24,000,000 18,000,000 1 45,757,040 45,757,000 23 ----------- ----------- ----------- ----------- ----------- i ........... ----------- ----------- 24 TOTAL REVENUE 'S,112,000 25,341,000 1,260,000 1,700,000 19,470,000 ( $2,083,000 7,330,000 60,213,000 24 ........... ........... ........... ........... ........... i ----------- ----------- ----------. 25 TOTAL AVAILABLE FUNDING 10,151,000 28,007,000 12,334,000 3,776,000 18,999,000 $7,922.000 18.626,000 65,252,000 25 ----------- ----------- ----------- ----------- ----------- - ----------- ----------- ----------- EXPENDITURES 26 Share Of Joint Works Treatment Plant 5.260,000 7,300.OUR 6,3/3,000 . 3,972,000 2,829,000 25.751,000 12,803,000 36.554,000 26 27 District Collection System 2,225.000 5.625.000 3,875,000 275,000 1,875,000 13,075,000 3,475,000 11,SSO,000 27 28 Rei,6ursement Agreement Payments 0 0 20 29 Other Expenditures 4,000,000 3,000.000 7,000,000 71000,000 29 ----------- ......._.. ----------- ........... ........... ----------. --------'-- --------..- 30 TOTAL EXPENDITURES 7,485.000 16,933,000 10,259,000 4,247,000 7,703.000 46.626,000 16,278,000 62,9D4,000 30 ........... ........... ........... ........... ........... . ........... ........... ........... 31 Reserves 6 Carry-over to Next Year 2,666,000 11.074,000 2,076,000 (471,000) 11,296,000 11,296.000 2.345.000 2,348,000 31 Single FaailY Resident Connection Fee $2,260 $2,340 $2,490 $2,610 82,740 $3,500 COUNTY SANITATION DISTRICT NO, 5 5/25/89 STATEMENT Of PROJECTED CASH FLOW Page 3 FISCAL YEARS 1989-10 THROUGH 1998.99 LINE 1989.90 1990-91 1991.92 I992.93 1993.14 5-Year Total L914.99 10-Year Total LINE ____ ....... BOND FUND(3) j _-_--______ , 32 Reserves 6 Carry-over From last Year 28,000 25,000 0 0 0 24,000 0 28,000 32 ........... ........... ........... ........... ........... i ........... ----------- --------... REVENUE 33 Tax Levy 21,000 i 21,000 21,000 33 34 Interest 6 miscellaneous Income 2,000 1,000 0 0 0 3,000 0 3,000 34 35 Other Income ) 0 35 ........... ........... ......._.. ........... ........... i ........... ----------- . ........... 36 TOTAL REVENUE 23.000 1,000 0 0 0 24,000 0 24,000 36 ........... ........... ........... ........... ........... i ........... ----------- ......----- 37 TOTAL AVAILABLE FUNDING 51,000 26,000 0 0 0 { 52,000 0 52,000 37 ........... ........... ........... ........... ........... ( ........... -------- ........... EXPENDITURES r _--___--_- , 7B Bond Principal 6 Interest 26,000 26,000 i 32,000 52,000 38 39 Other Expenditures 39 ........... ........... ----------- ........... ........... ( ........... ----------- ......----- 40 TOTAL EXPENDITURES 26.000 26,000 0 0 0 52,000 0 52,000 40 ........... ........... ........... ........... ........... i ----------- ........... ----------- 41 Reserves 6 Carry-Over to Next Year 25,000 0 0 0 0 0 0 0 41 42 Next Year's Dry Period Funding Requirements 25.m 0 0 0 0 i 0 0 0 42 ........... ........... ........... ........... ........... ( ----------- ........... ----------- 43 Fund Balance or (Deficit) 0 0 0 0 0 0 0 0 43 SUMNARY (Adjusted for Inter-Fund Transfers) , 4/ Reserves 6 Carry-01e1 From Last Year 8,493.000 7.259,000 15.375,000 6,247,000 4,107,000 8,493,000 16,331,000 8,493,000 44 45 TOTAL REVENUE 1.913,000 29,794.000 6,393,000 7,960,000 27,084,000 80,224,000 59,601,000 139,825,000 45 ........... ........... ........... ........... ........... i ........... ----------- ........... 46 TOTAL AVAILABLE FUNDING 17,486,000 37,053,000 22,266,000 14.207,000 31,191.000 ( 80.717.000 75,932,000 140,318,000 46 47 TOTAL EXPENDITURES 10,227,000 21,178,000 16,021,000 10.100,000 14,860,000 ( 72,306,000 64,086,000 137,272,000 47 -'......... ........... ........... ........... ........... ........... ----------- 48 Reserves 4 Carry-Over to Next Year 7,259.000 15,875.000 6,247,000 4,107,000 16,331.000 ; 16,331,000 11,046,000 11,046.000 IB 49 Next Years Dry Period funding Requirements 1.383,000 2.I10,000 2,BB2,000 2 927,000 3,579,000 ) 3,579,000 5.547,000 5,347,000 49 ........... ........... ........... ........... ........... i ........... ----------- ........... 50 FUND BALANCE OR (DEFICIT) 5,876,000 13.765,000 3.365,000 1,180,000 12.752.000 12,7S2.000 5,499,0e0 5.4991000 50 COUNTY SANITATION DISTRICT NO.5 5/25189 SCHEDULE OF DISTRICT COLLECTION SISTER PROJECTS PROJECT TOTAL i C.I.P. 1989-90 1990-91 1"1-92 1992-93 1993-94 ; 5-Year Total 1994-99 10-Year Total .-........- ----------- i ----------- ----------- ----------- ----------- ----------- ----------- ------------ ----------- ------------- Coast Trunk Force Mains Bitter Point Pump Station to Newport Blvd., 5-31 (3) ( )v 150,000 ; 150,000 IS0,000 150,000 Bitter Point and Rocky Point Pump Station Improvements, 5-32 (1) ( )v 250.000 250,000 250,000 250.000 'A' St., lath St., and Lido Pump Station Improvements (2) ( ) 400,000 0 /00,000 400,000 Rehabilitate Balboa Peninsula Trunk, Lido Pump to 'A' Street, 5-27-1 (3) ( ) 50,000 ; 50.000 50,000 50,000 Improvements to Bay Bridge Pump Station, 5-33 (3) ( 1 1,600,000 800,000 000,000 I 1,600,000 1,600.000 Niscellane0us Projects 1 ) 500,000 50,000 50,000 50,000 50,000 50,000 250,000 250.000 500,000 ----------- - ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Sub-total ACO Fund 2,950,000 0 1,050,OOD 1,100,000 50,000 50,000 50,000 ; 2,300,000 650,000 2,950,000 ----------- i ----------- ----------- ----------- ----------- ----------- ----------- i ----------- ----------- ----------- Improvements to Bayside Drive Trunk Sever, 5-34-1,2,3 (3) 1 4,800,000 500,000 2,000,000 2,300,000 4.800.000 4,800,000 Nest Coast Highmay Gravity Trunk Rehabilitation ( ) 3,200,000 200,000 1,800.000 2,000,000 1.200,000 3,200,000 Big Canyon Trunk Rehabilitation ( ) 1,500,000 0 1,500,000 1.500,000 South Coast Trunk Sever, Corona Del Bar P.S. to Crystal Cove P.S., 5-35 ( )va 3,600,000 600,000 2,000,000 1,000,000 3,600,000 3.600.000 Crystal Cove Pump Station, 5-36 (3) ( )vv 1,050,000 50,000 500,000 500,000 ; 1,050,000 1,050,000 Miscellaneous Projects (a) 250,000 25,000 25,000 25.000 25,000 25,000 ; 125,000 125,000 250,000 ----------- - ----------- ----------- ----------- ----------- ----------- ----------- --------- ----------- ----------- Subtotal FR Fund 14,400,000 ; 0 1,175.000 4.525,000 3,825,000 225,000 1,825,000 ; 11,575,000 2,025,000 14,400,000 ----------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- GRAND TOTAL 11,350,000 0 2,225.000 5,625,000 3,875,000 275,000 1,875.000 13.375,000 3,475.000 17,350,000 MEETING DATE MaY 31, 1989 TIME 5:30 PM DISTRICTS 5 DISTRICT I JOINT BOARDS (CRANK)........HA14SON...... (VERELLEN).........ALLEN....... (YOUNG)........ORI5ET.... .. (ERSKINE)........ ..BANNISTER..._ (KENNEDY)......HOESTEREY..._ _ _ (WEDAA).......... ..BI CONGER.... _ (ROTH)....•....STANTON....._ (NORBYI............CA7LIN......_ _ _ _ (HART).............COX......... DISTRICT 2 (PERRY)............CULVER...... (KENNEDY)..........EDGAR....... _ (NONBV)........CAfLIN......_ _ (CHESSEN)..........GRIFFIN..... _(GRAHAM).......MAHONEY....._ _ _ (YOUNG)............GRISET...... (WEDAA)........BIGONGER.... (CRANK)............HANSON...... (YOUNG)........GRISET...... _ _ (KENNEDY)..........NO TEREY..._ _ (NELSON).......ISLES....... (NELSON)...........ISLES....... _ (SCOTT)........NEAL........_ _ _ ( )............KAREL......._ _ (DOWNEY).......NEWTON......_ _ _ (EDGAR)............KENNEDY..... (CULVER).......PERRY....... (GRAHAM)...........MAHONEY..... _ (HUNTER).......PICKLER....._ (SILVA)............MAYS........ (FASBENDER I....5 ILIEL......_ _ _ (SCOTT)............NEAL........ _ (BARRERA)......SMITH......._ _ _ (WEDIN)............NEL S ON...... (ROTH).........STANTON....._ _ _ (DOWNEY)...........NEWTON...... (CULVER)...........PERRY....... DISTRICT 3 (HUNTER)......... ..PICKLER..... _ (HART).............PLUMMER..... _ (DUKE).........POLIS ...... (DUKE).............POLIS....... (WEDIN)........NELSON......_ (STANTON)..........ROTH........ (VERELLEN).....ALLEN....... (AGRAN)............SHERIDAN.... (ERSKINE)......BANNISTER..._ (WILES)............SIEFEN...... _ (NONBY)........CATLIN...... (FASBENDER)........SILIEL...... (PERRY)........CULVER......_ _ _ (BARRERA)..........SMITH....... (CHESSEN)......GRIFFIN..... (ROTH)............ .STANTON..... (YOUNG)........GRISET...... (HART/COX)........ .STRAUSS..... ( )........KANEL....... (MILLER)...........SWAN........ (GRAHAM).......MAHONEY....._ (WAHLSTROM)........SYLVIA...... (SCOTT)........NEAL........_ _ _ (GREEN)............WANNER...... (HUNTER).......PICKLER....._ _ _ (BIGONGER).........WEDAA....... (WILES)........SIEFEN...... (ISLES)......... ...WEDIN....... (ROTH).........STANTO...... (HUNT).............WILSON.... .. (WAHLSTROM)....SYLVIA...... (BANNISTER)........WINCXELL...._ (HUNT).........WILSON...... DISTRICT 5 STAFF: BROWNER....... (HART)......... 4400"......A� BROWN......._ (STANTON)......ROTH.9......� _ _ CLARKE ON...._ (STANTON)......ROiX.. .....J�_ CLAWSO ..... CLAW SON..... DISTRICT 6 DAWES......._ - - HODGES IA...._ (GAEEN)........WAHPLUMMERER ....._ KYLE........ (HART).........ROTH........_ KYLE........ (STANi0N)......ROTH........_ CINDER...... OOTEN....... DISTRICT 7 VON VON LARGER (BARRERA)......SMITH......._ _ _ WINSOR...... (KENNEDY;......EDGAR.......- (YOUNG)........GRISET...... _ (STANTON)......ROTH........ (AGRAN)........SHERIDAN...._ (COX)..........STRAUSS....._ _ (GREEN)........WANNER......_ _ _ OTHERS: WDOORUFF....✓ D15iRICr 11 I ......... ANWANWAH....... (511-YA)........MAYS........_ _ _ DEMIR....... (BANK IS FER)....WINCHELL...._ FLEMING..... (ROTH).........STANTON....._ _ _ HOHENER..... HOUGH....... DISTRICT 13 HOWARD...... HUNT........ (BIGONGER).....WEDAA....... KNOPF....... (HUNTER).......PICKLER..... LINDSTROM..._ (STANTON)......ROTH........ LYNCH....... (BARRERA)......SMITH......._ _ _ STONE....... I I SLES)........WEDIN....... WASON....... YOUNG....... ;J DISTRICT 14 (MILLER).......SWAN........_ (EDGAR)........KENNEDY....._ _ _ (STANTON)......ROTH........ (AGRAN)........SHERIDAN.... (BARRERA)......SMITH......._ _ 05/11/89 COUNTY SANITATION DISTRICT NO. 5 F ORANGE COUNTY, CALIFORNIA MINUTES OF ADJOURNED REGULAR MEETING May 31, 1989 - 5:30 p.m. 10844 Ellis Avenue Fountain Valley, California Pursuant to adjournment of the adjourned regular meeting of May 17, 1989, the Board of Directors of County Sanitation District No. 5 of Orange County, California, met in an adjourned regular meeting at the above hour and date. The Chairman called the meeting to order at 5:35 p.m. The roll was called and the Secretary reported a quorum present. DIRECTORS PRESENT: John C. Cox, Jr. , Chairman, Evelyn Hart, Don R. Roth DIRECTORS ABSENT: None STAFF MEMBERS PRESENT: J. Wayne Sylvester, General Manager, Rita J. Brown, Secretary, Thomas M. Dawes and Gary G. Streed OTHERS PRESENT: Thomas L. Woodruff, General Counsel Status Re ort on Dtst ri ct's sewer The Director of Engineering reviewed the rehabil tation program and Master status of the District's rehabilitation Plan of facilities program and the master-planned facilities included in the new Collection, Treatment and Disposal Facilities Master Plan currently being considered by the Directors as part of the Joint Districts' 30-year "Action Plan" program. There have been multiple contracts completed over the past eight or nine years and the Districts 5 and 6 dual force main in Pacific Coast Highway has been completely rehabilitated. The new Master Plan has identified additional future deficiencies with regard to the gravity sewer built in 1936 in Pacific Coast Highway but replacement of the sewer is not planned for several years depending on the District's financial resources. Other upcoming major projects proposed in the Master Plan are improvements to the Bay Bridge Pump Station and the Bayside Drive Trunk Sewer. Staff also noted that it will be necessary to replace the sewer line beneath Big Canyon Golf Course in approximately 10 years. With regard to the downcoast area, Mr. Dawes reported that it will be necessary to build a sewer and a pump station in accordance with the agreement previously entered into with the Irvine Ranch Water District. They have prepaid the required connection fees and the agreement provides for payment of 100% of the cost for all of the facilities south of the existing City of Newport Beach limit. The cost for the facilities will total approximately $4.5 million but this will be borne entirely by Irvine Ranch Water District. Several of the projects will be required in the late 1990' s and Mr. Dawes reported that sewer system improvements over the next 10-year period would total over $17 million. -1- 5/31/89 DISTRICT 5 Update on long-range financial The General Manager reported that program and consideration of in 1981 District 5 was the first of the amendments to existing sanitary Districts to implement a supplemental sewer service charges user fee program to make up the shortfall of ad valorem tax revenues and provide needed additional financing for operations and major rehabilitation work on the sewer system. New development pays a separate connection fee for sewage system capacity. He further advised that when the program was originally presented to the public and adopted by the Board, it was anticipated that it would be necessary to increase the fees by approximately 77% beginning with the second year to finance the rehabilitation work on the trunk sewer system. The District has been able to delay any increase in the supplemental user fees originally adopted in 1981 due to a significant decline in inflation rates, receipt of favorable bids on various District and joint works construction and rehabilitation projects, and delays in various major plant projects, all of which have reduced District expenditures and cash flow requirements well below originally anticipated levels. In response to a State Water Resources Control Board ruling, the Directors ordered a change in the supplemental user fee program from a water-meter-size basis to a flat fee for single and multi-family residences, and fees for other facilities based on square footage of improvements. This change was effective for the 1987-88 fiscal year. In 1986 the Board considered and rejected the issuance of Certificates of Participation (COP's) In concert with other Districts to partially finance the District's share of joint treatment works construction. The Acting Director of Finance then reviewed the District's financial projections for the next ten years. Based upon the Facilities' Master Plan and the Financial Plan recommendations contained in the 30-year "Action Plan" now under consideration by the Joint Boards, District No. 5 will exhaust its capital funds as soon as 1990-91. The "Action Plan" recommends that the District's share of the treatment plant construction and trunk sewer construction be financed by a combination of borrowing (i .e. , COP's) and increased connection fees. Debt retirement and escalating operating and maintenance costs would be paid by annually increasing the supplemental user fees. He noted that the user fee is projected to escalate at an accelerated pace to maintain the District's financial integrity. However, there are several unknowns that will have a major impact on the District' s cash flow requirements. Staff reported that a considerable portion of the District' s major funding shortfalls are for capital financing. Staff' s projections assume that all construction projects proceed on schedule. Thus, the estimates can be considered "worst case" scenarios. However, the Districts continue to experience delays in major projects because of SCAQMD requirements. Further delays in these projects would also delay, or at least spread out, the need for capital funds. It was also pointed out that, conversely, as the Directors were aware, if the secondary treatment waiver is not renewed in 1990, the Districts' capital needs will increase substantially. All projections currently being submitted to the Directors assume the renewal of the Districts' 301(h) waiver permit. -2- 5/31/89 DISTRICT 5 Mr. Streed then reviewed the current fee schedules of the District, as follows: Single-Family Multi-Family Commercia/Industrial/ Fee Type Residential Residential Governmental/Other One-time Connection $1,500 per $1,500 per $300 per 1,000 sq. Fee dwelling unit dwelling unit ft. of building Annual User Fee $26.40 per $15.85 per $18.90 per 1,000 sq. dwelling unit dwelling unit ft. of building The Acting Director of Finance explained the District' s cash flow projections were based on several assumptions. Scenario 2 of the "Action Plan", which recommends continuation of the current treatment levels under the 301(h) waiver, is the staff's preliminary preferred alternative recommendation. It represents the minimum probable level of construction, operation and maintenance costs. For the first five years of the planning period, the differences between Scenarios 2 and 3 (full secondary treatment) would not be significant. Additional flow and sewer connection assumptions are also consistent with the Master Plan. With regard to connection fees, the Master Plan Financial Plan recommends a change in the method of determining connection fees. The recommended change, which Mr. Streed indicated was incorporated in the cash flow projections, is to include the cost of future facilities on a per-unit basis. The reason for including these costs is that the Districts currently operate near capacity and any new flaw will require additional facilities. He reported that no change in the connection fee schedule was recommended at this time. After a final decision is made by the Boards regarding the NPDES Permit renewal , staff would be presenting their recommendations to the Board relative to increasing the connection fees, probably to take effect October 1, 1989, when the residential connection fee is projected to be $2,260 under Scenario 2. Mr. Streed reported further that over the next 10 years COP-type borrowing totaling $42 million is projected to be needed to meet joint works treatment and District sewer capital requirements. The first issue is projected for 1990. He indicated that a more detailed analysis would be performed and presented to the Directors before any debt is issued. The cash flaw projections are for several small issues on the theory of borrowing as little as possible and only when absolutely necessary. All issues are assumed to be at a fixed rate of 8% for 20 years. It was pointed out that the Health and Safety Code permits user fees to repay debt; and as the only controllable source of revenue for the District, they are projected for use to repay the necessary new debt. The Board then entered into a discussion of the possible increases in user fees based on different assumptions, including Scenario 3 requiring full secondary treatment, and the financing alternatives. Staff indicated that the biggest increase under a full secondary treatment scenario would be required around the turn of the century and again when the treatment facilities would first come on line in the year 2005. At this time, it is estimated that the user fees would increase by an additional $50-75 per year. -3- 5/31189 DISTRICT 5 The General Manager then reviewed the draft ordinance included with the agenda material which increases the supplemental user fees, as follows: Single-Family Multi-Family Comnercia/Industrial/ Fee Type Residential Residential Governmental/Other Annual User Fee $45.00 per $27.00 per $32.00 per 1,000 sq. dwelling unit dwelling unit ft. of building Actions re proposed Ordinance No. 51 First readin of proposed Moved, seconded and duly carried: rdinan ce No. 519 That proposed Ordinance No. 519, An Ordinance of the Board of Directors of County Sanitation District No. 5 of Orange County, California, Amending Ordinance No. 516 Establishing Sanitary Sewer Service Charges, be read by title only; and, FURTHER MOVED: That reading of said ordinance in its entirety be, and is hereby, waived. Following the reading of Ordinance No. 519 by title only, it was moved, seconded and duly carried: That Ordinance No. 519, An Ordinance of the Board of Directors of County Sanitation District No. 5 of Orange County, California, Amending Ordinance No. 516 Establishing Sanitary Sewer Service Charges, be introduced and passed to second reading on June 14, 1989, at 7:30 p.m. , at the Districts' �../ administrative office. Makin PNip that adoption of Following a verbal report by the Ordinance No. 519 s categorically General Counsel , it was moved, exempt per CEQA Guidelines seconded and duly carried: That the Board of Directors hereby finds that adoption of Ordinance No. 519 is categorically exempt per California Environmental Quality Act (CEQA) Guidelines Section 15273, in that the Ordinance establishes fees for operation and maintenance expenses of the District. Adjournment Moved, seconded and duly carried: That this meeting of the Board of Directors of County Sanitation District No. 5 be adjourned. The Chairman then declared the meeting so adjourned at 6:08 p.m. , May 31, 1989. . Secretary, boary of Directors County Sanitation District No. 5 of Orange County, California -4- STATE OF CALIFORNIA) ) SS. COUNTY OF ORANGE ) Pursuant to California Government Code Section 54954. 2, I hereby certify that the Agenda for the Adjourned Regular Board Meeting of District No. s held on a \ 19_" was duly posted for public inspection at the main lobby of the District' s offices on 19e9. IN WITTNNE��.SS""" WHEREOF, I have hereunto set my hand this e1le� day of 19fl. Rita J. Brown, Secretary of the Board of Directors of County Sanitation District NO. S of Orange County, California