HomeMy WebLinkAboutMinutes 1973-05-23COUNTY SANITATION
DISTRICT NO.2
MINUTES OF ADJOURNED REGULAR MEETING
May 23,1973 —5:00 p.m
1O8~I1~Ellis Avenue
Fountain Valley,California
Pursuant to adjournment of the regular meeting held May 9,
1973,the Board of Directors of County Sanitation District No.2,
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 5:15 p.m.The
roll was called,and the Secretary reported a quorum present.
DIRECTORS PRESENT:Robert Nevil (Chairman),Ralph
Clark,Norman Culver,Dale Chaput,
Robert Finnell,Donald Fox,Edward
Just,Jerry Patterson,Robert Root,
Don Smith,Mark Stephenson,and
Donald Winn
DIRECTORS ABSENT:None
STAFF MEMBERS PRESENT:Fred A.Harper,General Manager,
3.Wayne Sylvester,Secretary,
Ray Lewis,Robert Webber,Jim
•Benzie,.and Rita Brown
OTHERS PRESENT:Lawson Mead,Ernest Bodnar,Royce
Cahn,Milo Keith,Jack Kenney,
Donald Martinson,Jim Barisic,
Walt Bressel,Fred Clodt,Gary
Frye,Jack Gulso,E.V.Kadow,
Kerry Lawler,Bob Main,Don Seitz,
Ralph Shook,and D.E.Wilkins
Report of Engineer~re Mr.Donald Martinson of Lowry &
Santa Ana River Inter Associates,District’s consulting
ceptor,Contract 2—1~4—2 engineer,reviewed the scheduling
of the Santa Ana River Interceptor
from Katella Avei~ue to La Palma Avenue,Cbntracl.No.2—l~4—2.
The project is being reviewed by the State Water Resources
Control Board and if approval is forthcoming,the following
tentative schedule has been established:
June 13,1973 Consideration of Plans and
Specifications by the Board of
Directors
July 10,1973 Receive bids
July 11,1973 Award contract
September 10,1973 Commence construction
October,1971~Complete project
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Mr.Martinson stated that when the $5.2 million project is
tied into Contract No.2—l~—l in October.of 197l~,the Santa
Ana River Interceptor will then be complete and in service
from Treatment Plant No.1 to La Palma Avenue.
Recess The Chairman declared a five minute
recess at 5:30 p.m.
Reconvene The Board reconvened at 5:35 p.m.
Public Hearing re proposed Open Public Hearing —The public
Sewer Connection Ordinance hearing on proposed Sewer Connection
No.203 Ordinance No.203,amending Uniform
Connection and Use Ordinance No.202,
was declared open by the Chairman.
Discussipn re effective date of proposed Ordinance —Chairman
Nevil reported to the Directors that August 1,1973,had been
suggested as an effective date in the event proposed Ordinance
No.203 is adopted and advised that the matter would be further
discussed under the item for consideration of Ordinance No.203.
Statement re notices of public hearing —The Secretary reported
that the following notices had been mailed to all cities,
sanitary districts,and permittees within the Distriàt,the
County of Orange,those interested parties from whom communi
cations had been received with regard to the proposed conne~tion
charges,and District Directors and Alternates:
February 23,1973 Notice of further consideration
of Ordinance No.203
Apr11 17,1973 Notice of public hearing re Sewer
Connection Ordinance No.203,
with draft of proposed ordinance
April 27,1973 Copies of the Summary and Conclusions
of the report “Financing Major
Sewerage Improvements —Orange
County Sanitation District No.2”
prepared by Stone &Youngberg
May 8,1973 Second notice of public hearing re
Sewer Connection Ordinance No.203,
with copies of proposed ordinance
May 17,1973 Public Notice of hearing was
published in Santa Ana Register
Report of financing consultant —Mr.Ernest Bodnar of Stone &
Youngberg,Municipal Financing Consultants,Inc.,reviewed the
report prepared by his firm on Financing Major Sewerage
Improvements fr County Sanitation District No.2 and summar
ized the findings and recommendations as follows:
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1.To meet its existing and anticipated future needs,
District Mo.2 Initiated a five—year sewerage improve
ment program which Is estimated to cost more than
$19 million.In conjunction with six other Orange
County sanitation districts,the District is in the
process.of upgrading jointly—owned sewage treatment
works to meet State water quality control 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 by 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 Mo.2 to
implement its 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 service costs
on District bonds.Projected cash flow deficits range
from approximately $1.73 million in 1973/7~4 to $7.62
million in 1975/76 dependent upon the level of secondary
treatment required to meet Federal and State standards.
3.In the absence of new ~ubstantIal sources o~f revenue,
general obligation bond financing is the most practical
and feasible financing alternative available to
District No.2.to implement its improvement program
as scheduled.
IL 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 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 gallons per day per unit,
or approximately two—thirds that of lower
density single family land uses.
d.Within cities served by District No.2 there
are significant differences in present users of
the District’s sewerage facilities.Median
value of owner—occupied housing units ranges
from $23,900 to $32,300.Population per owner—
occupied housing units ranges from 3.5 to 14.0.
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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 to $12,000 per acre
in 1960 to current levels of $28,000 to $30,000’.
Land suitable for high density residential develop
ment is now valued at approximately $50,000.per
acre.Land suitable for commercial development is
now valued at approximately ~l0O,0O0 per acre.
f.The District’s property tax baseof $l.085 billion
consists of land having an assessed valuation of
$1~21 million (.39 percent of total tax base)and
improvements on land which is owned and occupied
by present property owners having an assessed
valuation of $6611 million (61 percent of total
tax base).
5.Demands for sewerage services are created by two broad
classifications:(1)present users,and (2)potential
users,(owners of imp.roved 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:
a.Equity among present users.
b.Equity among potential users.
a.Equity between present and potential iXsers..
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 provisionsand practical administrative
procedures.
6.On the basis of the analyses,evaluations,and consideration
to optimize equity among users and potential users of the
District’s sewerage system,it is recommended that the
governing 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 sew~erage system.
7.As the basis for formulating connection charges,unit
costs of providing trunk sewer and sewage treatment—.
disposal capacity are.suggested.The unit cost of
providing such facilities is approximately $557,500 per
million gallons.
8.As the basis for computing connection charge fees,it Is
recommenc’.ed 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.2.
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10.Commercial and industrial uses were considered in the
same manner as residential uses.It Is anticipated
these uses will provide an average flow of 3,555 gallons
per day per acre.At a unit capital cost of $55.75 for
providing 100 gallons of sewerage capacity,the charge
would be approximately $2,000 per acre.On a square
footage basis,the capital cost for sewerage facilities
would be approximately $145 per 1,000 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
coordinated with the administration of the excess
capacity connection fees of the Districts’Uniform
Industrial Use Ordinance,on the basis of a close study
of the capacity requirements,type of discharge,number
of employees,and other related factors.
11.Annual revenue from connection charges under rates
suggested in this study could provide as much as $1.3
million on the basis of near—term development patterns
anticipated in the District.
12.Based on the estimated revenue which may be derived
annually from the suggested connection fees,the District
could nearly meet its minimum cash deficit of $1.73
million in 1973/714,assuming Federal and State standards
will necessitate only 116 mgd of secondary treatment
capacity,equivalent to activated sludge,forall
Districts?flows.
13.Should full secondary treatment equivalent to activated
sludge be required by Federal and State standards,antici
pated connection fee revenue would only partly offset
the estimated maximum cash flow deficit of $~.62 million
anticipated in 1975/76.
ill.In view of the uncertainty of treatment level requirements
and revenue realized from connection fees,it is
recommended that consideration of the possible use of
general obligation bond financing be deferred until
additional information is made available relative to
treatment level requirements.
15.The.recommended level of connection charges for District
No.2 is approximately 12 percent lower than the level of
charges recently adopted by District No.3.:This
differential appears to result from the differences
in topography of the Districts,their respective needs
for pumping stations and force mains,and miles of sewer
mains contained In each District’s trunk sewer system.
16.District No.2 master plan facilities are designed to
serve areas presently outside the District’s boundaries.
If a connection fee policy is adopted by the Board,it
is recommended that the rationale for computation of
annexation fees be revised.A suggested rationale Is to
maintain the existing charge at Its present level and
escalate it annually.The suggested amount of annual es
calation In the annexation fee would be equivalent
to the estimated property taxes paid to the District by
the owner .of an acre of raw land.
9.Based on the estimated capital
sewerage facilities,projected
land uses,and current land use
the District,it Is recommended
given to the establishment of a
connection charge of $220.
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cost of providing
flows from residential
developments within
that consideration be
residential unit
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Written communications —The Secretary reported that no
written communications in connection with proposed Ordinance
No.203 had been received.
Oral statements —The Chair recognized Mr.Donald Seitz
representing Anaheim Hills,Inc.,Mr.Royce Cahn representing
the Building Industry Association,Mr.Gary Frye representing
the William.Lyon Company,and Mr.Robert Main and Mr.Walt
Bressel representing the Garden Grove Sanitary District,each
of whom addressed the Board in connection with the proposed
ordinance and/or asked questions of the financing consultant
concerning the District’s funding requirements.
In response to a question regarding the District’s eligibility
for federal revenue sharing funds,Director Finnell,Chairman
of the Joint Administrative Organization,reported that when
revenue sharing funds were first announced,the Joint Districts
were advised by the Environmental Protection Agency that If
they were receiving federal construction grant funds,revenue
sharing funds could not be used to offset the local share of
costs.
Close public hearing —It was moved,seconded and duly
carried that the public hearing on proposed Sewer Connection
Ordinance No.203 be closed.The Chairman then declared the
hearing closed at 6:19 p.m.,May 23,1973.
Consideration of Proposed The Board entered Into a lengthy
Sewer Connection discussion concerning proposed
Ordinance No.203 Sewer Connection Ordinance No.203,
during which the comments of
Directors and members of the public who had addressed the
Board concerning the ordinance were t~onsidered at great length.
The following actions were then taken:
Clarification of Article 2(A)(3 —Following a brief dis
cussion regarding Article 2,Section A,Subsection 3,the
Chairman directed.that the word “permit”be striken from
the last sentence and replaced by the word “connection”.
Establishing effective date of ordinance —Moved,seconded
and duly carried by roll call vote:-
That October 1,1973,be established as the effective date
for proposed Sewer Connection Ordinance No.203,and that
said date be so incorporated Into the proposed ordinance.
Establishing waiver period re fees for developed properties —
Moved,seconded and duly carried by roll call vote:
That connection fees for property which is currently developed
but not discharging to a sewer be waived until August 1,19714,
and that said date be so incorporated into the proposed
ordinance.
Adoption of In response to a question posed by
Ordinance No.203 Directors,the General Manager
reiterated that he antic ipated the
necessity of major changes to the District’s Uniform Connection
and Use Ordinance In the near future as a result of the new
Federal Water Quality Control Act of 1972,whIch requires that
sewering agencies adopt a system of charges to ensure that
each user pays his equitable share of the cost of operating
the system.
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Director Fox of the City of Brea then read the following
statement concerning fees into the record:
“The City of Brea has reviewed this subject and the
supporting financial consultant’s report with Mr.Harper
and his staff.We feel that the following recommendations
should be accomplished,based upon the information received
from the report and from the District staff,and based upon
the fact that both the proposed ordinance and the existing
fee structure will be required by the Federal Government
to be superseded some time in October,1973.This will
need to be done in order to meet the Federal requirements.
of a user’s fee schedule.Therefore,after joint study
and deliberation of all the facts presented in the proposed
ordinance,we would recommend that this Board take the
following action:
1.That we go on record as not supporting the
adoption of the suggested fee schedule at this
time,since my information indicates that our
fees will have to be modified in the near
‘future anyway.It should also be noted that the
financial consultant’s report contemplates a tax
reduction as a result of implementing the recom
mended fee structure.
2.I would further recommend that we go on record
as favoring the cOntinuance of our present tax
rate which will enable us to consider a reduced
fee structure.
These recommendations will obviously be influenced by our
meetings with the Federal Government:However,in view
of these same meetings,we feel all the more strongly that
this recommended approach is the most appropriate and
cautious method of procedure to follow.”
It was then moved and seconded that Ordinance No.203,an
ordinance amending Uniform Connection and Use Ordinance
No.202,be adopted.
Director Winn requested that It be made a matter of record
that he was not opposed to the philosophy of a connection
charge,but that he did not agree with the fee schedule
incorporated into the ordinance.
The ordinance then passed by the following roll call vote:
AYES:.Directors Nevil,Clark,Chaput,
Finnell,Fox,Just,Patterson,
Root,Smith and Stephenson
NOES:Directors Culver and Winn
ABSENT:None
Adjournment It was moved,seconded and duly
carried:
That this meeting of the Board of Directors of County
Sanitation District No.2 be adjourned.The ChaIrman then
declared the meeting so adjourned at 6:52 p.m.,May 23,1973.
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Chairman
Board of Directors
County Sanitation District No.2
ATTEST:
Secretary,Board of Directors
County Sanitation District No.2
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