HomeMy WebLinkAboutMinutes 1973-03-15COUNTY SANITATION
DISTRICT NO.3
MINUTES OF THE ADJOURNED REGULAR MEETING
March 15,1973 —7:30 p.m
10811k Ellis Avenue
Fountain Valley,California
Pursuant to adjournment of the regular meeting held March 1k,
1973,the Board of Directors of County Sanitation District No.3,
of Orange County,California,met in an adjourned regular meeting
at the above hour and date,in the District offices.
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:Norman E.Culver (Chairman),
Robert Battin,Jesse Davis,
Donald Fox,Jack Green,Otto
Lacayo,Alicita Lewis,Charles
Long,Derek McWhinney,Robert
-Root,Frank Sales,George Scott,
Mark Stephenson,Charles Stevens,Jr.
and Cor Vanderwaal
DIRECTORS ABSENT:.Wade Herrin
STAFF MEMBERS PRESENT:Fred A.Harper,General Manager,
J.Wayne Sylvester,Secretary,
Ray E.Lewis,W.N.Clarke,
Robert Webber,and Rita Brown
OTHERS PRESENT:C.Arthur Nisson,Don E.Smith,
Ernest Bodnar,and Will Lindsay
Authorizing execution of Ray Lewis,District’Chief Engineer,
agreement with Flood reported that because of delays
Control District re experienced in obtaining approval
Contract 3—is Westminster of the alignment for the Knott
Channel crossing Interceptor,Reach 1~,Contract
No.3—18,scheduling of the inter
ceptor’s crossing of the Westminster Flood Control Channel
would not now be possible by the successful bidder until after
the Flood Control District finishes planned improvements to
the channel.District No.3 could effect substantial cost
savings if the Flood Control District is authorized to incor
porate into their improvement contract,installation of that
portion of the interceptor which crosses the channel.This
would avoid the necessity of tunneling under the channel at
a later date.It was then moved,seconded and duly carried:
That the Board of Directors adopt Resolution No.73—27—3,
authorizing execution of an agreement with Orange County Flood
Control District to install a portion of the Knott Interceptor,
C,Reach LI,Contract No.3—18,in conjunction with their construction
of the Westminster Flood Control Channel,for a total amount not
to exceed $140,000.00.Certified copy of this resolution is
attached hereto and made a part of these minutes.
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3/15/73
Continuation of public 9~en Public Hearing —Continuation
hearing re Prqposed of the public hearing on Proposed
Sewer Connection Sewer Connection Ordinance No.303,
Ordinance No.303 an ordinance amending Uniform
Connection and Use Ordinance No.302,
was declared open.
~port of Financing Consultant —Mr.Ernest Bodnar of Stone &
Yourigberg,Municipal Financing Consul1~ants,Inc.reviewed the
report prepared by his firm on Financing Major Sewerage
Improvements for County Sanitation District No.3,and suimnarized
the findings and recommendations as follows:
1.To meet its existing and anticipated future needs,
District No.3 initiated a seven—year trunk sewer
improvement program which is estimated to cost more
than $29 million over the period 1971/72 through
1977/78.In conjunction with six other Orange
County sanitation districts,the District Is In the
process of upgrading jointly owned sewage treatment
wo-rksto meet State water quality contro’].standards.
The estimated cost of upgrading jointly owned
primary treatment facilities is approximately
$21.2 million.The consulting engineers estimate
the cost of activated sludge secondary treatment
which eventually will be required b~Federal and
State standards at approximately $100.8 million.
2.On the basis of the consulting engineers’cost
estimates and construction schedules,the Director
of Finance has projected funding needs of District
No.3 to implement the master plan trunk sewer
program;meet its share of estimated capital costs
of the proposed joint treatment works Improvement
program;provide for the District’s share of projected
operations and maintenance costs;and debt s•ervice
costs on District bonds.Projected cash flow deficits
range from approximately $11.85 million to $12.5 million
dependent upon the level of secondary treatment
required of the District to meet Federal and State
standards.
3.General obligation bond financing is the most practical
and feasible financing alternative available to
District No.3 to implement the master plan trunk
sewer and joint treatment works Improvement program
as scheduled.It Is recommended that the District seek
authorization of $13 million of general obligation
bonds since the consulting engineers are of the
opinion that Federal and State standards will eventually
require secondary treatment equivalent to activated
sludge.
11.Authorization of $13,000,000 of general obligation
bonds does not mean that the full amount will be
Issued.Should Federal and State standards provide
•for seco~idary treatment at an equivalent less than
activated sludge for total District flow,facilities
could be financed with the issuance of that portion
of the authorization needed to complete the program.
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3/15/73
5.Recent development trends within the area served
by the District have indicated the following:
a.A trend toward increased higher density
residential types of development in the
District.
b.The potential property tax base provided
by single family unit land uses tends to
to be significantly greater than the
potential property tax base provided by a
multiple family unit.
c.Engineering data indicate average daily
flows per dwelling unit in single family
residential land uses average about
385 gallons per unit.In high density
residential land uses,flows averaged
about 256 gallongs per day per unit,or
approximately 2/3 that of lower de~sity
single family land uses.
d.Within cities served by District No.3,
there are significant differences in present
users of the District’s sewerage facilj.tles.
Nedian value of owner occupied housing units
ranges from $22,800 to $314,700.Population
per owner occupied housing units ranges
from 2.1 to 14.0.
e.Land values within the District have increased
(significantly in recent years.Land suitable
for low density residential development has
increased from approximately $10,000 —$12,000
per acre in 1960 to current levels of
$28,000 —$30,000.Land suitable for high
density residential development is now valued
at approximately $50,000 per acre.Land
suitable for commercial development is now
valued at approximately $100,000 per acre.
f.The District’s property tax base of $l.259
billion consists of land having an assessed
valuation of $480 million (38 percent of total
tax base)and improvements on land which is
owned and occupied by present property owners
having an assessed valuation of $778 million
(62 percent of total tax base).
6.Demands for sewerage services are created by two
broad classifications:(1)present users,and
(2)potential users (owners of improved or unimproved
land not connected to the system but adjacent to it).
A system of assessing and recovering the costs of
these benefits must consider the following:
1)a.Equ’ity among present users.
b.Equity among potential users.
c.Equity between present and potential users.
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The distribution of costs in relation to complete
equity in all cases is highly unlikely.What must
be attempted is the achievement of optimum equity
in relation to the degree of benefits received by
broad categories of present users and potential
users within the constraints posed by statutory
provisions and practical administrative procedures.
On the basis of the analyses,evaluations,and
considerations to optimize equity among users and
potential users of the District’s sewerage system,
it Is recoxnmendedthat the Board consider the use
of a sewer connection fee as a new source of revenue.
The purpose of the connection fee would be to
recover costs of providing facilities in the near
future which will have sufficient built—in capacity
to serve future users.It is also recommended that
the connection fee be made applicable to connections
made to a District owned facility or to any local
collector sewer which discharges into the District’s
sewerage system.
As the basis for formulating connection charges,
unit costs of providing trunk sewer and sewage
treatment—disposal capacity are suggested.The
unit costs of providing such facilities is
estimated at approximately $6145,000 per million
gallons.
As the basis for computing connection charge fees,
It Is recommended that the Board consider using
average anticipated sewage flows from residential
land uses which have served as the basis to design
master plan trunk sewer facilities in District No.
Based on the estimated capital cost of providing
sewerage facilities,projected flows from residential
land uses,and current land use developments within
the District,it is recomniended that consideration
be given to the establishment of a residential unit
connection charge of $250.
Commercial and industrial uses were considered in
the same manner as residential uses.It Is
anticipated these users will provide an average
flow of 3555 gallons per day per acre.At a unit
capital cost of $65.for providing 100 gallons of
sewerage capacity,the charge would be approximately
$2,300 per acre.On a square footage basis,the
capital cost for sewerage facilities would be
approximately $500 per 10,000 square feet of the
facility.This rate is suggested as a general guide
in recognition of the wide variation in types of
industrial and commercial uses.It is suggested
the charge for major types of Industrial and commercial
facilities be administered on the basis of a close
study of the capacity requirements,type of discharge,
number of employees,and other related factors.
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3/15/73
7.
0
8.
9.
10.
0
3.
11.
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0
a ~
Mr.Bodnar then answered several questions posed by the
Directors concerning the conclusionsand reconiniendations
contained in his report.During the discussio;which followed,
several Directors stated that although they agreed with the
connection fee concept,they felt additional study should be
given to the determination of the actual fee,particularly
with regard to the recommended guidelines for industrial
az~d commercial connection charges.It was then moved,seconded
and duly carried:
That the report on Financing Major Sewerage Improvements for
Orange County Sanitation District No.3,dated March 9,1973,
submitted by Stone &Youngberg,Municipal Financing Consultants,
Inc.,be received and ordered filed.
Evaluation of current District needs and Master Plan sewer
construction scheduling —Mr.Conrad Hohener 01’Boyle Engineering,
District’s consulting engineers,reviewed the District’s Master
Plan Program for needed trunk sewers.During recent rain
storms several of the existing trunks were flowing in a sur
charged condition,and a recently completed flow survey of the
current demands placed on the District’s trunk facilities has
confirmed that the present system is approaching capacity.He
stated the recommended Master Plan construction schedule must
be maintained to avoid potential overflows in the District.
Declaring intent to implement Financing Consultant’s recommenda
tions for connection charges and general obligation bond Issue —
The Board then entered into a lengthy discussion concerning the
impact of the recently adopted 1972 Federal Water Pollution
Control Act Amendments on t~he District’s financial requirements.
If the Districts’plan approved by the State Water Resources
Control Board,to construct a ~6 mgd activated sludge facility
at Treatment Plant No.1 is acceptable under the intent of the
new Federal legislation,the District’s maximum cash flow deficit
will be approximately $5 million.If,however,the District is
required to construct advanced treatment facilities to meet
standards as presently proposed by the,Environmental Protection
Agency,the maximum cash flow deficit would be approximately
$13 million.rfr.Bodnar of Stone &Youngberg stated that his
firm’s recommendation for authorization of a $13 million general
obligation bond Issue was based upon the assumption that Federal
standards for advanced treatment would require activated sludge
facilities to treat the total Districts’flow.Should standards
be established at a level allowing alternative plans to total
secondary treatment,the full amount of authorized bonds would
need not be sold.
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12.Revenue from connection charges under rates
suggested in the study could provide as much
as $2.4 million on the basis of the December 1972
study of near—term development patterns In the
District.
13.Based on the estimated bond service costs for
the $13,000,000 of proposed general obligation
bonds,estimated connection charge revenues would
be more than sufficient to’service the bonds.
Connection fee revenues in excess of actual bond
service requirements could be held in reserve
to meet future capital needs,thereby making It
possible for the District to reduce the property
tax rate levied for the accumulation of capital
reserves.
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The Directors then deliberated the propriety of establishing
a general obligation bond issue amount until such time as
the requirements to be imposed by the Environmental Protection
Agency are determined.Following a discussion concerning
alternative methods of financing in the event a general
ob1igat~on bond election failed to pass,it was moved and
seconded:
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That the Board of ~D1rectors hereby declares its Intent to
implement.the financial consultant’s recommendations to
establish,connection charges and issuance of general obligation
bonds to finance the District’s major sewerage improvements;and,
FURTHER MOVED:That the amount of connection charges for
commercial and industrial establishments and the matter of
determining the amount of the proposed general obligation
bond issue be referred.to a special committee for further
study and recommendation back to the Board.
The General Counsel then advised the Board that°actual
Implementation of connection charges will require adoption of
an ordinance by a two—thirds.affirmative vote of the Board.
Following a restatement of the motion,the question was called
for and the motion carried by the following roll call vote:
AYES:Directors Robert Battin,Jesse Davis,
Jack Green,.Otto Lacayo,.Alicita Lewis,
Derek McWhlnney,Robert Root,Mark
Stephenson,and Cor Vanderwaal
NOES:Directors Norman E.Culver (Chairman),
Donald Fox,Charles Long,Frank Sales,
George Scott,and Charles Stevens,Jr.
ABSENT:Director Wade 1-lerrin
Chairman Culver then appointed Directors Root (Chairman),
Fox,Green,Scott and Stevens to a Special Committee to
Recommend Financing to Implement District No.3 Construction
Program.
Continuation of public hearing to April 11,1973 —It was then
moved,seconded and duly carried:
ThaV the hearing on Proposed Sewer Connection Ordinance No.303,
an ordinance amending Uniform Connection and Use Ordinance No.302,
be continued to the regular meeting of the Boards of Directors
on April 11,1973,at 7:30 p.m.
Authorizing additional Following a brief discussion,it
services of financial was moved,seconded and duly carried:
consultant Stone &
Youngberg That the firm of Storie&Youngberg,
Municipal Financing Consultants,Inc.
be employed to provide consulting services to the Special
Committee to Rec~ommend Financing to Implement District No.3
Construction Program,on a per diem fee basis of $250 per day
for a maximum amount not to exceed $2,000.00.
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3~l5/73
Adjournment Moved,seconded and duly carried:
That this meeting of the Board of Directors of County
Sanitation District No.3 be adjourned.The Chairman
then declared the meeting so adjourned at 9:~3 p.m.,
March 15,1973.
Chairman
Board of Directors
County Sanitation District No.3
ATTEST:
C’
Secretary,Board of Directors
County Sanitation District No.3
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