HomeMy WebLinkAbout1989-06-01 COUNTY SANITATION DISTRICTS
OF ORANGE COUNTY, CALIFORNIA
P.O.BOX 8127.FOUNTAIN VALLEY,CALIFORNIA 92728-8127
_ 10844 ELLIs,FOUNTAIN VALLEY.CAUFORNIA 9270E-7018
(714)962-2411
FAX(714)882-0WIi
May 2S , 1989
NOTICE OF ADJOURNED REGULAR MEETING
DISTRICT NO. 1
THURSDAY, JUNE 1, 1989 - 5:30 P.M.
10844 Ellis Avenue
Fountain Valley, California
Pursuant to adjournment by the Secretary of the adjourned
regular meeting of May 17, 1989, the Board of Directors of
county sanitation District No. 1 will meet in an adjourned
meeting at the above hour and date to consider modifications
to the District's supplemental user fee program.
Secretary
4° 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. 1
AGENDA
ADJOURNED REGULAR MEETING
THURSDAY, JUNE 1, 1989 - 5:30 P.M.
(1 ) Roll call
(2) Public comments: All persons wishing to address the Board
on spec is 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) Consideration of items re long-range financial program:
\„J (a) Staff report on long-range financial plan
(b) Discussion
(4) Consideration of the following actions on items relative to
proposed Ordinance No. 112, An Ordinance of the Board of
Directors of County Sanitation District No. 1 of Orange County,
California, Amending Ordinance No. 109 Establishing Sanitary
Sewer Service Charges and Repealing Ordinance No. 111 :
See page "A"
(a) Report of the General Counsel re proposed Ordinance
No. 112
(b) Consideration of motion to read said Ordinance No. 112
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. 112 and pass to second reading on June 14, 1989
(5) other business and communications, if any
(6 ) Consideration of motion to adjourn
Y ,
�..d ORDINANCE NO. 112
AN ORDINANCE OF THE BOARD OF DIRECTORS
OF COUNTY SANITATION DISTRICT NO. 1 OF
ORANGE COUNTY, CALIFORNIA AMENDING
ORDINANCE NO. 109 ESTABLISHING SANITARY
SEWER SERVICE CHARGES, AND REPEALING
ORDINANCE NO. 111
The Board of Directors of County Sanitation District No. 1 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. 1 of Orange County,
California, does hereby ORDAIN:
Section 1: Table A, as adopted by Section 2 of Ordinance No. 109, is hereby
amended to read as set forth in Table A of this Ordinance.
Section 2: This Ordinance shall become 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.
"A-1" AGENDA ITEM NO. 4 "A-1"
s
PASSED AND ADOPTED by the Board of Directors of County Sanitation District
No. 1 of Orange County, California, at a regular meeting held
Chairman of the Board of Directors
County Sanitation District No. 1
of Orange County, California
ATTEST:
Secretary of the Board of Directors
County Sanitation District No. 1
of Orange County, California
J -2-
"A-2" AGENDA ITEM NO. 4 "A-2"
TABLE A
ORDINANCE NO. 112
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
.J buildings,
utilities,
non-profit
organizations,
etc.)
"A-Y AGENDA ITEM NO. 4 "A-3"
II 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. 1
MANAGER'S REPORT TO DISTRICT NO. 1 DIRECTORS
MEETING DATE: June 1, 1989 - 5:30 p.m.
Item No. 3(a): Update on long-range financial program and consideration of
amendments to existing sanitary sewer service charges.
BACKGROUND
In 1984 District No. 1 modified its long-range financial plan. This plan
established one-time sewer connection fees for new development to finance
facilities expansion, and a supplemental user fee to make up a shortfall in ad
valorem tax revenues and provide the additional financing necessary for both
operations and maintenance as well as major facilities rehabilitation. The
financial plan was adopted after considerable study to avoid projected short and
long-range funding shortfalls in revenues required to finance the District's
operating and capital expenses, which are escalating due to the rising cost of
meeting environmental and public health standards established by state and
federal regulatory agencies.
The plan has since been modified and 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 $34.32 per $20.60 per $24.57 per 1,000
dwelling unit dwelling unit sq. ft. of building
In 1986, the Board also elected to issue $24,700,000 in Certificates of
Participation (COP' s) in concert with Districts Nos. 2 and 3 to partially
finance District 1's share of joint treatment works construction and to purchase
additional equity in the joint treatment works to reflect the new flow-based
joint works equity formula.
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
-1-
June 1, 1989
(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 $80 million is projected to be
issued to meet Joint Works Treatment and District sewer capital requirements
in 1990-91, 1993-94 and 1995-99. 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.
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.
-2-
June 1, 1989
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 SCAQMD 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. 112 (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.
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
,.i at the meeting.
-3-
COUNTY SANITATION DISTRICT N0.1 5/25189
STATEMENT OF PROJECTED CASH FLOW Page 1
FISCAL YEARS 1989-90 THROUGH 1998-99
LINE 1989-90 1990-71 1"I_" 1992-95 1993-94 $-Year Total 1994-99 10-Year Total LINE
-___ ------- ------- ------ ___ ------- i -_--------- ----------- ------------- ----
OPERATING FUND
1 Reserves 6 Carry-Over From Last Year 5,213,000 4,522,000 4,776,000 4.024,000 5,104,000 3,213,000 6.437,000 3,213,000 l
___________ ___________ ......._.. ___________ ( ----------- ----------- _____-_____
REVENUE
2 Share of lW In AllecatioA 1.924.000 2,059,ODO 2,205.000 2,362,000 2,532,000 11,082,000 16.639,000 27,720,000 2
3 Fees: Industrial Waste 508,000 559,000 615,RON 677.TOO 745,000 3,104.000 5,005,000 8.109,000 3
4 Supplemental User 3,M,000 4,167,000 5,512.000 7.M.000 9,609,000 29,812,000 66,591,000 96,403,000 4
5 Interest 6 Miscellaneous Intake 276,000 332,000 312,M 324,000 409,000 1,653,000 2,785,000 4,438.000 5
6 Other Revenue 0 0 6
___________ ___________ ___________ ----------- ----------- ----------- -----------
I TOTAL REVENUE 5.910,000 7,117,M 8,644.000 10,69$.M 13,295.000 ; 45.651,000 91,019.000 136,670.she 7
___________ _--------- ___-__-----
8 TOTAL AVAILABLE FUNDING 9.123,000 11,699,000 13,420,000 14,709,000 18,399,400 i 48,B64,ANN 97,456.000 139,M,000 8
-- --------__ __------_ ----------- ----------- , ----------- ___________
EXPENDITURES
9 Share of Joint Works M 4 0 4,092,000 4,691.000 5.378,000 5.547,000 6,360,000 26,D60,000 48,867,000 74,935,000 9
10 Collection System N 6 0 and Other Doer. 449,000 482,000 SIB,000 558,000 602.000 2,609.000 3,835,000 6,444,000 l0
It Other toenditures 1,750,400 3,500,000 3,500.000 5,000,000 i 13.750,000 33,250.00R 47,OM,000 11
___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________
12 TOTAL EXPENDITURES 4,541,M 6.923,000 9,396,000 9,605.000 11,962,000 42,427,000 95,952,000 120,379,000 12
___________ ___________ ___________ ___________ ___________ __________ _--------- -----------
13 Reserves 6 Carry-Over to Next Year 4.582,M 4,776,000 4.024,000 5,104,000 6.437.000 6,437,000 11,504,000 11,504.000 13
14 Next Year's Dry Period Funding Reovirements 2,271.000 3.462,000 4,698,000 4.803,000 5,981,000 5,"1,000 10.382.000 10,382.000 14
___________ ___________ __....... ----------- ----------- ----------- ----------- -__ ......
15 Fund Balance or (Deficit) 2.311,ROD 1.314,000 (674,000) 301,000 456,000 ; 456,000 1.122,000 1,122,NOR 15
Single family Resident User Fee $45 251 176 $Eto 1130 BM
Number of E9uivalsnt Daellin9 Units 71,148 71.819 12,5M 13,221 73.912 77.367
COUNTY SANITATION DISTRICT NO.L S/25189
STATEMENT OF PROJECTED CASH FLOW Page 2
FISCAL YEARS 1909-90 THROUGH 199E-99
LINE 1989-90 1990-91 1991-92 1912-93 1993-94 5-Year Total 1994.99 10-Tur TOUT LINE
____ _______ _______ _______ ------- ------- { ------------ -------___ _—____„___ ----
CAPITAL FUMDISI
---------------
16 Reserves 6 Carry-over Free Last Year 13,991,000 3,942,000 19,481,000 6,934,000 225,000 13.991,400 21.434,000 13'"1'000 16
REVENUE
17 Construction Grants 2a7,000 287,000 287,000 17
IB Fees: Connection 11561,000 1,635.000 1,714,DOD 1,793,000 1,887,000 0,590,000 10,966.000 19,5S6,000 IB
19 Industrial Waste 143,000 157,000 173,000 190.000 209,000 872,000 1,404,000 2,276.000 19
20 Supplemental User 0 0 20
21 Sale of Capacity Rights 489,000 240,000 44,000 1,696,000 47S,000 2,944,000 560.000 3,SO4,000 21
22 Interest 6 Miscellaneous Income 636.000 830,000 936.000 2S4,000 768,000 3,424,000 5,585,000 9,009,000 22
23 Other Income 35,000,000 30.000,000 ; 65,000,000 1S,000,000 80,000,000 23 1
___________ ___________ ___________ ___________ ___________ __-------- ----------- ___________
24 TOTAL REVENUE 3.116.000 37,862,OOD 2.867.000 3,933.000 34,539.000 81.117.DRT 33,515,000 114,632.000 24
___________ ___________ ___________ ___________ ___________ { ___________ ----------- _________,_
25 TOTAL AVAILABLE FUNDING 17.107.060 41,804,000 22,348,000 10,867,000 33.564.000 95,108,000 54.949,000 128,623,000 25
___________ ___________ _--------- ----------- ___________ ----------- ----------- _____._____
EXPENDITURES
26 Share of Joint Works Treatment Plant 10,724.000 14.901,000 13,015,000 8,099,000 5,768,000 52,507,000 26,107,000 78,614,000 26
21 District Collection System 140,000 100.000 100.000 260,000 100.000 660,000 1,040.000 1,700,00. 27
2B COP Payaents 2,341,000 2,522,000 2,299,000 2,283,000 2.262,000 11.507,000 10,993,000 22,500,000 28 i
29 ' Other Expenditures 5,000.000 4,000,000' 7 9,000,000 2,250,000 11,250,000 29
__________ ___________ ___________ ___________ ___________ l ----------- ----------- _______-___ i
30 TOTAL EXPENDITURES 13.165.W 22,323,000 15.414,000 10,642,000 12.130,000 73,674,000 40,390,000 114,064,000 30
__________ ___________ _--------- ........... ----------- { ----------- ----------- -----------
31 Reserves 6 Carry-over to Next Year 3.942.u0 19,481.000 6.934.000 225,000 21,131,000 ; 21,434,000 14,559.000 14,559,000 31
{
Single family Resident Connection Fee 12,260 R2,370 R2,/10 12,610 02,110 }],500 i
{
Number of New Equivalent Dwelling Units 691 691 691 691 691 691 _
COUNTY SANITATION DISTRICT NO.1 5/25189
STATEMENT OF PROJECTED CASH PION Page 3
FISCAL YEARS 1909-90 THROUGH 1993-99
LINE 1989-90 1990-91 1991-92 1992-93 199kw ) 5-Twr Total 1994-99 10-Year Total LINE
....... ....... ....... ....... ....... ( ...._._.__.. ----------- ------------- ----
BOND FUND(S)
------------
32 Reserves 6 Carry-Over From Last Year 52,000 0 0 0 0 ( 52,000 0 $2,000 32
........... ........... ........... ........... ........... ( .__.._._. ----------- -_________-
REVENUE
33 Tax Levy 19.000 ( 1/,4N 19.000 33
34 Interest 1 Miscellaneous Income 0 0 0 0 0 0 0 0 36
35 Other Income 0 0 35
36 TOTAL REVENUE 19,000 0 0 0 0 ( 19,000 0 19,000 36
........... ........... ........... ........... ........... . ........... ........... ...........
37 TOTAL AVAILABLE FUNDING 71,000 0 0 0 0 7I,000 0 71,000 37
........... ........... ........... ........... _._----- i ----------- ----------- -----------
EXPENDITURES )
38 Bond Principal 6 Interest 71.000 71,000 71,000 38
39 Other EXPOMILUIDS 39
........... ........... ........... ........... ...__.... --___.-._ _ ----------- -----------
40 TOTAL EXPENDITURES 71,000 0 1 1 0 ( IT.M 0 71.000 60
........... ........... ---------- ........... ........... ) ----------- ----------- -•-•---•-_-
al Reserves a Carry-Over to Next Year 0 0 1 0 0 0 0 0 el
42 Next Year's Dry Period Funding Requirements 0 0 0 0 0 0 0 0 12
........... ........... ........... ........... ........... i ----------- ----------- -----------
43 Fund Balance or (Deficit) 0 0 6 0 0 ( 0 0 0 63
GUARANTY
le Reserves 6 Carry-Over Free Last Year 17,256.000 8,524.M 24,257.000 10,151,000 3,329,CAT ( 11,2S6,000 27,871,000 17,2$6.000 se
45 TOTAL REVENUE 9,645.000 46,979,000 11,511,000 14,618,000 46.634,000 126,187.000 124,534.000 251.321,000 65
........... ........... ........... ........... ........... 1 ._.-------- ----------- .. ........
46 TOTAL AVAILABLE FUNDING 26,301.000 53,503,000 35,768,000 25,576,000 51,963,000 ( 144,043,000 152,405,000 268,577,000 06
47 TOTAL EXPENDITURES 17,777,000 29,246,000 24,810,000 20.247,000 24.092,000 116.172,000 126,342,000 242.514,000 17
_____ ___________ ___________ ___________ __________• i ----------- ----------- __.-_-____.
48 Reserves A Carry-Over to Next Year 8,524,000 24.257,000 10,950,000 5,329.000 27,871,000 27.871,000 26.063,000 26,063,000 48
49 Next Year's Dry Period Funding Requirements 2,271.M 3,462.000 4,698,000 4,803,000 5,981.000 5.981.000 10,382,000 10,382,000 49
........... ........... ........... ........... ........... ----------- ----------- ------._.__
50 FUND BALANCE 09 (DEFICIT) 6.253,000 20.795,000 6,260.000 S26,000 21,890,000 21,890,000 15,681,000 15,681,000 50
COUMTY SANITATION DISTRICT NO.1 5/25189
SCHEDULE OF DISTRICT COLLECTION SYSTEM PROJECTS
PROJECT TOTAL C.I.P. 1989-90 1990-91 1991-92 1992-93 1993.94 5-Year Total 1994-99 10-Year Total
----------- .......... i ----------- ----------- ----------- ----------- ----------- ---------- ------------ ----------- -------------
Dyer Road Manhole Rehabilitation 160,000 ; 160.000 160,000 160,000
M2iA-Dyer Manhole Rehabilitation 160,000 ; 0 160.000 160,000
Graenville-Sullivan Manhole Rehabilitation 170,000 0 170,000 170,000
Raitt Street Manhole Rehabilitation 210,000 0 210,000 210.000
Miscellaneous (1) 1,000,000 100,000 100,000 100.000 100,000 100.000 ; 500,000 500,000 1,000.000
---------- ----------- ---------- ----------- ----------- ----------- ---------- i ........... ----------- -----.-.---
TOTAL 1,700,000 0 100,000 100.000 100,000 260,000 100,000 660.000 1,040,000 1,700.000
.......... ........... .......... ........... ........... ........... .......... . ........... ........... ...........
.......... ........... ......... ........... ........... ........... .......... . ........... ........... ...........
MEETING DATE June 1, 1989 TIME 5:30 p.m.Dismicri 1
DISTRICT 1 JOINT 80ARDS
(CRANK)........HANSON......_�_ (VERELLEN).........ALLEN....... _
(YOUNG)........GRISET......JG_ (ERSKINE)..........BANK ISTER..._
`✓ (KENNEDY)......HOESTEREY...JC_ _ (WEDAA)............BIGONGER...._
(ROTH).........STANTON...... (NORGY)............CA%IN......_
(HART).............COX........._ _
DISTRICT 2 (PERRY)............CULVER......
KENNEDY ..........GRIFFI......_
(GRAHAM).......MATLIN HONEY....._ _ <CHESSE............GRIFFI......_
(GRAHAM).......MANONEY....._ _ _ (CRAYOUNK)............GRISET
(YOUNG)........BIGONG......_ _ _ (CRANK)............HANSON......_
((YOUNG)........GRISE......._ _ _ (KENNEDY)..........HOESTEREYISLES.......
NEWTON).......ISLES........_ _ _ (NELSON)...........ISLES......._
(SHONE)........NEAT........_ ( )............KANEL
(DOWNER).......NEWTON...... _ _ (GRAHA )...........MAHONEY....._
(HUNTER).......PERRY......._ (GRAHAM)...........MAYS........
(HUNTER).......PICKLE...... _ _ (SCOTT)........ ....MAYS........
(BARBERA)......SILZEL MITH....... (SCOET)............NEAT........
(BATHER.)......SMITH......._ (WEDIN)............NELSON......
(ROTH).........STANTON..... (DOWNER)...........NEWTON......
(HUNTER)...........PERRY.......
DISTRICT 3 (HUNTER)...........PER.....
(HART)
..
T).............PLUMMLUMMET....._ _
(DUKE).........POLIS ...... )DUKE).............POLIS
(WEDIN)........NELSON......— — — (ST.NTON)..........ROTH........
(ERSKINE)......BANNISTERALLEN ..._ (WILES)............SHERID......_
(ERSKIN........CATLIN TER..._ _ _ (WINE))............5IEFEN......
(PERRY)........CULVER......_ _ _ (FASBENDE..........SILZ£N......_
(PE.RY)........CULVER......_ (ROTH).............SMITH.......
(YOUNG)........GRIFFI......_ (ROTH)...... .......STANTON RAUSS.....
_
(YOUNG)........GRISE....... _ _ (HART/COX..........SERA........_
( ))........MANEL HONEY....._ _ _ (MILLER)...........SWAN........ _
SYLVIA
(GRAHAM) NEAL........_ _ _ (GREEN)............KANNER......_
(HUNTER).......NEAT........_ _ _ (GREEN)............MANNER......
(HUNTER).......PICKLE......_ _ _ (ISLES)............WEDAA.......
(WILE))........SIEFEN TANTON....._ _ _ (ISLES)............WEDIN.......
(WAHLST........SYLVIA......_ _ _ (RUNT).............NILSON......
(HUNT).........WILSON.... .._ _ (BANNISTER)........WINCHELL...._
(HUNT).........WILSON......_
DISTRICT 5 STAFF:
-- SYL VESi£R...�C
(HART).........COX......... BROWN........ ,�
(HART).........STRAUSS..... ANDERSON—._
(STANTON)......ROTH....... . CLARKE......
CLAWSON....._
DISTRICT 6 OAWE;.......JC
---- FILECCIA....
(GREEN)........WANNER... ..._ _ _ HODGES......
(HART).........PLUMMER....._ _ _ KYLE........
(STANTON)......ROTH........_ _ _ LINDER......
OOTEN... ....
DISTRICT 7 STREED........
-- VON LANGEN
(BARRERA)......SMITH......._ _ _ WINSOR.... ..
(KENNEDY)......EDGAR......._ _
(YOUNG)........GRISET......_ _
(STANTON)......ROTH........_
(AGRAN)........SHERIDAN...._ _
(COX)..........STRAUSS....._
(GREEN)........WANNER......_
OTHERS: WOODRUFF... .1,1�
DISTRICT 11 TOE.... ....._
ANWAR.......
(SILVA)........MAYS........_ _ _ DEMIR.......
(BANNISTER)....:IINCHELL....� FLEMING.....
(ROTH).........STANTON..... HOHENER.....
HOUGH.......
DISTRICT 13 HOWARD......
-- HUNT........
(BIGONGE R).....WEDAA......._ _ _ KNOPF.......
(HUNTER).......PICKLER....._ _ _ LINDSTROM..._
(STANTON)......ROTH........ LYNCH.......
(SARRERAI......SMITH....... STONE.......
(ISLES)........'IEDIN......._ _ _ WASON.......
DISTRICT IA YOUNG.......
(MILLER).......SWAN........_
(EDGAR)........KENNEDY....._
(STANTON)......ROTH........_ _ _
(AGRAN)........SHERIDAN...._ _
(BARBERA)......SMITH.......
05/11/89
COUNTY SANITATION DISTRICT NO. 1
OF ORANGE COUNTY, CALIF RNIA
MINUTES OF ADJOURNED REGULAR MEETING
June 1, 1989 - 5:30 p.m.
10844 Ellis Avenue
Fountain Valley, California
Pursuant to adjournment by the Secretary of the adjourned regular meeting of May 17,
1989, the Board of Directors of County Sanitation District No. 1 of Orange County,
California, met in an adjourned regular meeting at the above hour and date.
The Chairman called the meeting to order at 5:49 p.m. The roll was called and the
Secretary reported a quorum present.
DIRECTORS PRESENT: Robert Hanson, Chairman, Dan Griset and
Ronald B. Hoesterey
DIRECTORS ABSENT: Roger R. Stanton
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
�.: Update on long-range financial The General Manager reported that in
program and consideration of 1984 District 1 modified its long-range
amendments to existing sanitary financial plan. This plan established
sewer service charges one-time sewer connection fees for new
development to finance facilities
expansion, and a supplemental user fee to make up a shortfall in ad valorem tax
revenues and provide the additional financing necessary for both operations and
maintenance as well as major facilities rehabilitation. The financial plan was
adopted after considerable study to avoid projected short and long-range funding
shortfalls in revenues required to finance the Dlstrict's operating and capital
expenses, which are escalating due to the rising cost of meeting environmental
and public health standards established by state and federal regulatory agencies.
Mr. Sylvester 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 $34.32 per $20.60 per $24.57 per 1,000 sq.
dwelling unit dwelling unit ft. of building
-1-
6/01/89
DISTRICT 1
He further reported that the Districts all have a separate industrial user fee
billed annually by the Districts for users that place a higher demand on the
Districts' sewerage system.
In 1986 the Board also elected to issue $24,700,000 in Certificates of
Participation (COP's) in concert with Districts Nos. 2 and 3 to partially finance
District 1's share of joint treatment works construction and to purchase
additional equity in the joint treatment works to reflect the new flow-based
joint works equity formula.
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. 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 trunk sewer construction be financed by
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 in 1988-89 the District had increased the user fees by 30% to
finance District activities. Staff's recommendation for 1989-90 is for another
30% increase. However, in the next few years the user fees may have to escalate
at an accelerated pace to maintain the District' s financial integrity. However,
there are several unknowns that may 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.
Mr. Streed 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 flow will require new facilities. He noted that a determination would be
made by the Board after a decision is made on the permit renewal application and
any revised connection fees would probably be effective October 1, 1989, when the
residential connection fee is projected to be $2,260 under Scenario 2.
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DISTRICT 1
He further reported that over the next 10 years COP-type borrowing totaling
$80 million is projected to be needed to meet joint works treatment and District
�..: sewer capital requirements. He indicated that a more detailed analysis would be
performed and presented 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 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. Existing debt continues to be
repaid from capital funds.
The Board then entered into a general discussion of the District's financial
situation and the alternatives for funding the District's needs. Directors
questioned whether any of the other Sanitation Districts were in a position to
loan money to District 1 rather than issue debt certificates. Staff reported
that based on recommendations included in the Financial Plan of the new Master
Plan, all of the Districts will have to go into the debt market. A desire to
minimize. borrowing and to build District reserves by other means was also
expressed.
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
Staff 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 NPOES
Permit renewal , staff will present their recommendations to the Board relative to
increasing the connection fees. The Directors commented that they would prefer
to increase the connection fees gradually and build a reserve for their future
facilities' requirements. Mr. Sylvester reiterated that the recommended change
in the policy for computing connection fees would increase the fee from $1,500 to
$2,260. Thereafter, the connection fee would probably increase 5% annually based
an the construction cost index. He added that those projections are based on the
assumption of Scenario 2, continuing with the current level of treatment. If the
Boards choose to go to Scenario 3, full secondary treatment, the current fee
would increase to $2,500. Staff assured Directors that the connection fees would
be escalated annually to keep pace with Inflation.
Actions re proposed Ordinance
No. 112
First readin of Proposed Moved, seconded and duly tarried:
Ord No. 11
That proposed Ordinance No. 112, An
Ordinance of the Board of Directors of County Sanitation District No. 1 of
Orange County, California, Amending Ordinance No. 109 Establishing Sanitary
Sewer Service Charges and Repealing Ordinance No. 111, 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. 112 by title only, it was moved,
seconded and duly carried:
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6/01/89
DISTRICT 1
That Ordinance No. 112, An Ordinance of the Board of Directors of County
Sanitation District No. 1 of Orange County, California, Amending Ordinance
No. 109 Establishing Sanitary Sewer Service Charges and Repealing Ordinance
No. 111, be introduced and passed to second reading on June 14, 1989, at
7:30 p.m., at the Districts' administrative office.
Makin findin that adoption of Following a verbal report by the
rdinance No. 112 1s cote oricall General Counsel , it was moved,
elines exempt per CEQA Gui seconded and duly carried:
That the Board of Directors hereby finds that adoption of Ordinance No. 112
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. 1
be adjourned. The Chairman then declared the meeting so adjourned at 6:14 p.m. ,
June 1, 1989.
Secretary, Bp rd of Directors
County Sanitation District No. 1 of
Orange County, California
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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. % held on k , 19 P'J was
duly posted for public inspection at the main lobby of the
District's offices on Q.CD , 1911.
IN WITNESS WHEREOF, I have hereunto set my hand this au0�
day of 19
Rita J. Brown, Secretary of the
Board of Directors of County
Sanitation District No. I
of Orange County, California