Loading...
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. I #3 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. —2— #3 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. —3— 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. #3 3/15/73 7. 0 8. 9. 10. 0 3. 11. — 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. #3 3/15/73 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. C~ —5— #3 3/15/73 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: - 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. —6— 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 I -7- . .