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HomeMy WebLinkAboutMinutes 1978-07-19COUNTY SANITATION DISTRiCTS NOSS 1,2,3,5,6,7 gil OF ORANGE COUNTY,CALIFORNIA MINUTES OF THE ADJOURNED REGULAR MEETING ON JULY 19,1978 ADMINISTRATIVE OFFICES 108414 ELLIS AVENUE FOUNTAIN VALLEY,CALIFORNIA L ft — ROLL CALL Pursuant to adjournment of the regular meeting held July 12,1978,the Boards of Directors of County Sanitation Districts Nos.1,2,3,5,6,7 and 11.of Orange County,California,met in an adjourned regular meeting on July 19,1978,at 6:00 p.m.,in the Districts Administrative Offices.Following the Pledge of Allegiance and invocation,the roll was called and the Secretary reported a quorum present for Districts Nos.1,2,3,5,6,7 and 11 as follows: ACTIVE DIRECTORS ALTERNATE DIRECTORS District No.1: District No.2: District No.3 District No.5: District No.6: District No.7: District No.11 X Kerm Rirna,Chairman X James Sharp,Chairman pro tern X Philip Anthony X Vernon Evans ~k X Henry Wedaa,Chairman v X Donald Holt,Chairman pro tern ____Ralph Clark ____Donald Fox X Beth Graham X Bernard Houston X I)avid Ortiz ____Bob Perry ____John Seymour v X Don Smith X Roger Stanton X Louis Velasquez XBernie Svalstad,Chairman 2~X Don Griffin,chairman pro tern Norman Culver ‘~X Sal Gambina X Donald Hudson ~X Frank Laszlo X 1-larry Miller X Richard Olson X David Ortiz ____Alan Priest ____Earl Roget X Laurence Schrnit John Seymour XRichard Siebert ‘~X Charles Sylvia XDuane Winters •X Paul Ryckoff,Chairman ‘c X Thomas Riley,Chairman pro tern Donald Strauss X Don Mclnnis,Chairrnan~ X Kerm Rima,Chairman pro tern X Philip Anthony X Bill Vardoulis,Chairman X Don Smith,Chairman pro tern ____Ralph Clark X Vernon Evans X Francis Glockner Y X Donald Saltarelli X Ray Williams Ron Sh enkman,Chairman X Don MacAl.lister X 1,aiirence Schmit Orma Crank ____Ralph Welsh ____Thomas Riley ____David Ortiz _____Irwin Fried William Rashford X Thomas Riley X Sam Cooper ____Earl Roget James Wells Vernon Evans Norman Culver X Donald Roth ____Robert Hoyt ____Marvin Adler Duane Winters ____Marvin Adler ____Stanley Meyer _____Bob Perry Sam Cooper ____Otto Lacayo _____Harold Seitz ____Martha Weishaupt Bruce Finlayson Vernon Evans ____Ronald Nyborg ____Robin Young ____Thomas Riley X Donald Roth Ron Shenkman Kenneth Zomrnick Louis Velasquez Paul Huminel ____Philip Anthony ____Paul Ryckoff ____Paul Ryckoff Orma Crank ____Thomas Riley ____Mary Ann Gaido ____Robert Hoyt X Thomas Riley ____Davi.d Ortiz Elvin 1-lutchison _____Ralph Welsh _____Paul Ryckoff X Ruth Bailey Ron Shcnkman Thomas Riley I)istri.cts 1,2,3,5,6,7 ~11 July 19,1978 Fred Harper,General Manager,J.Wayne Sylvester,Secretary,Ray E.Lewis,William Clarke,Rita Brown,Hilary Baker,Janet Conatser,Wilber Eads,Jean Mosher,Slier Schroeder,Debbie Taylor,Thomas L.Woodruff and other staff members OTHER PRESENT:See attached Exhibit “A”and written state ments submitted and on file in the office of the Secretary. ************* Receive and file excerpt Moved,seconded and duly carried: re Board appointment That the minute excerpt from the City of Huntington Beach,be,and is hereby,received and ordered filed seating Don MacAllister as active Director for District No.11 for the July 19, 1978,meeting only. Public Hearing re proposed The Joint Chairman announced that this was flat rate special assessment the time and place set for a public hearing to be collected on the tax on the proposed flat rate special assessment roll for funding 1978-79 for sewer service and immediate availability budgetary requirements to be collected on the property tax roll by the County Tax Collector,and declared the hearing open at 6:10 p.m. Report on proposed flat rate The Chairman reviewed the Joint Sanitation charge to be collected on Districts’responsibilities of providing the tax roll sewage collection,treatment and disposal services for approximately 1.5 million residents of metropolitan Orange County and the impact on Districts’current and projected capital and operating costs of the 1972 Federal Water Pollution Control Act that requires the construction of new facilities to upgrade the degree of wastewater treatment to a secondary level.In compliance with the new law the Districts have completed a $32 million 50 MGD project at Plant No.1 in Fountain Valley and will have to spend an additional $200 million at Plant No.2 in Huntington Beach over the next eight years.As the new facilities are placed into service the Districts must operate them in compliance with Federal and State permit requirements or be subject to stringent fines.The Districts are,therefore,in the awkward position of being forced by Federal and State regulatory bodies to increase expenditures for construction and operation of advanced treatment facilities on the one hand;yet,on the other hand,being directed by the voters to curtail expenditures by virtue of adoption of Proposition 13. The Joint Chairman assured those in attendance that it was not the purpose of the proposed flat rate to circumvent the intent of Proposition 13 and observed that while Californians voted to cut government costs by passing Proposition 13,the electorate had also endorsed the upgrading of sewage treatment processes by adopting the State Clean Water Bond Act (Proposition No.2)on the same ballot and,further,that the public consensus appeared to support full funding of such essential services as sanitation. ADMINISTRATIVE STAFF MEMBERS PRESENT:. S . —3- Districts 1,2,3,5,6,7 and 11 July 19,1978 With regard to potential savings he pointed out that,largely through the efforts of the District 1)irectors and staff,Congress recentl.y amended the Federal Water Pollution Control Act to allow a waiver of full secondary treatment requirements for deep water ocean dischargers,provided certain criteria are satisfied.The Districts are applying for such a waiver but may not have a ruling for as long as eighteen months.If a waiver is forthcoming,the Districts will recogi-iize substantial savings amounting to approximately $100 million in capital costs and $7 million i.n annual operationg costs.Through past long-range financial planning and a stabilized fiscal program the Districts have been able to continually reduce their respective tax rates over the years,yet accumulate reserve funds to provide for construction of the master planned sewerage systems and mandated treatment facilities without going into debt.The proposed flat rate charge includes a further reduction of $2.2 million for the property owners for 1978-79. The dilemma the Districts now face,within the conflicting context of Federal and State treatment requirements versus Proposition 13 and its implementing legislation restricting tax revenue,is to develop a system of charges to provide sufficient revenues necessary to operate the Districtst sewerage system.The proposal before the Boards is to levy an interim fla.t rate charge per parcel for 1978-79 as authorized by existing state statutes while a fully-equitable system is developed for subsequent years.It has now been ruled that any variable assessment based on property value is within the purview of the Jarvis-Gann 1%property tax limitation.Further, the State Legislature,in adopting SB 154,has declared its intent to require agencies such as the Sanitation Districts to rely on user charges after 1978-79 and has encouraged such a transition during the~1978-79 fiscal year.Based on this declaration the Districts would not receive any pro rata share of the 1%maximum tax levy allowed under Jarvis-Gann in the future and there presently remains a question as to whether any such funds will be allocated to the Sanitation Districts by the County in 1978-79.The proposed flat rate,which is substantially lower then what neighboring communities pay for sewerage service,will enable the Districts to fully fund operations without diminishing accumulated construction reserves.Collecting it on the tax bill is the most cost-effective means of administering the charge. The General Counsel then reviewed his legal opinions relative to the proposed flat rate service charge to be collected on the tax bill,the legal distinction between a tax and an assessment and the recent County Counsel’s ruling regarding the applicability of Jarvis-Gann’s restrictions to the Districts.In his opinion,the County Counsel’s ruling qualifies the Districts for their share of the 1%maximum tax levy under Proposition 13.he also reiterated the statutory authority in the State Health and Safety Code which enables the Districts to establish user charges and collect said charges on the tax roll and observed that every Sanitary or Sanitation District in the State has not only the authority,but the obligation to establish charges,rates or tolls in order to pay for its cost of operation and maintenance.Such legal authority has not been affected by the passage of the Jarvis-Gann tax limitation initiative. The Director of Finance then briefly reviewed the Districts’fiscal position pointing out that $70 million of the Districts $88.6 i.n accumu lated construction reserves are presently committed for treatment plant Districts 1,2,3,5,6,7 and 11 July 19,1978 and master planned trunk sewer projects currently under construction or in the design phase and/or necessary dry period funding.The major impact on financing is from Federal and State mandates for a higher level of treatment which affect both capital and ongoing operating costs to operate the advanced treatment facilities.He also pointed out that under the proposed flat rate charge industrial dischargers would continue to pay costs based on their actual use of the sewerage system. The General Manager then referred Directors and the public to the handout material contàiñing the original listing of available alternatives for funding 1978-79 operating/capital funding requirements,and two proposed supplemental alternative funding methods based on the Proposition 13 implementing legislation adopted by the State Legislature and the County Counsel’s recent ruling that the Districts’ad valorem special assessment is subject to Jarvis-Gann tax limitation. Alternative Proposal IA assumes that the Districts will receive their pro rata share of the 1%tax allocation provided under the Jarvis-Gann Amendment for the 1978-79 fiscal year and defers the implementation of a flat rate user fee to the 1979-80 fiscal year.Approximately $10.2 million in District funds reserved for construction would be diverted from capital accounts to operating accounts as required during 1978-79 to fund operations. ALTERNATIVE IA 0 Proposed 78-79 Estimated 79-80 District No.Flat Rate Flat Rate 1 NONE $46.04 2 NONE 45.18 3 NONE 49.62 S NONE 67.14 6 NONE 46.11 7 NONE 41.60 11 NONE 64.24 Alternative Proposal hA also assumes the anticipated share of the 1%property tax allocation for 1978-79,but implements the originally proposed user charge per parcel in 1978-79 reduced by the amount of the expected share of the 1%tax allocation.This proposal,which incorporates a flat rate fee and ad valorem taxes,provides a substantial degree of equity. —...--~-.-—.-..—--~~-———-_-:~: Districts 1,2,3,5,6,7 and 11 July 19,1978 ALTERNATIVE hA Proposed 78-79 flat rate reduced by estimated 1%Estimated 79-80 District No.tax allocation Flat Rate i $24.98 $39.79 2 22.70 39.50 3 26.79 42.92 5 29.75 59.70 6 24.77 39.92 7 13.93 38.12 11 36.82 55.03 Neither alternative proposal anticipates receiving any of the 1%property tax allocation after the current year. Under proposal hA the staff reconunended that rebates and/or exceptions be provided for properties that are considered unsewerable and properties not receiving sewer services as follows: Full Rebate or Exclusion -Properties that are improved but do not receive sewer service,such as parcels that contain only carports,greenbelts,drainage channels and incidental or adjoining undevelopable parcels should be exempt from a flat rate charge. Two-Thirds Rebate or Exclusion -Improved and unimproved proper ties that are not currently receiving sanitary sewer service should have a 2/3 exemption from the Districts’charges.Capital improvements have been and are continuing to be made for their benefit at the treatment plants. Enter written statements It was moved,seconded and duly carried: into hearing record That all written statements submitted on or before July 19,1978,in connection with the proposed flat rate special assessment for sewer service and immediate availability to be collected on the tax roll be,and are hereby,entered into the record.of this public hearing. Oral Comments The Chair then recognized the persons whose names are set forth on Exhibit “A”,attached hereto and by reference made a part of these minutes,who presented oral comments in opposition to the proposed flat rate special assessment for sewer service and immediate availability to be collected on the tax roll,or suggested that modifications be made thereto. During the course of the public comment the Boards considered the propri ety of introducing a motion in consideration of the proposed,or amended, flat rate special assessment.It was the consensus that any such action should be considered only after all those in attendance had been afforded the opportunity of being heard. -6- Districts 1,2,3,5,6,7 and 11 July 19,1978 Close Public ilearing Following receipt of the oral comments it was moved,seconded and duly carried: That the public hearing on the proposed fiat rate special assessment for sewer service and immediate availability to be collected on the tax roll be closed.Whereupon,the Chairman declared said hearing closed at 9:44 p.m. Rejecting proposed flat rate It was then moved and secoilded: special assessment to be col— lected on tax roil,declaring That proposed Alternative IA (amended to intent to lobby for continued eliminate a user fee program effective share of tax allocation under July 1,1979,and the estimated 1979-80 Proposition 13 and waiver flat rate)that there be no user charge, and/or exemptions from Federal be adopted,and that the Districts live r~~1irements within the contraints of Proposition 13 which is their portion of the 1%(Proposition 13 maximum allowable tax levy);and, FIJRTFIER MOVED:That everybody here tonight and elsewhere help the Districts to lobby the State to reject that portion of SB 154 that denies the Districts a portion of the 1%(property tax 1ev)’in the future);and, FURTHER MOVED:That everybody here tonight,and all that they can gather, support a movement to get the State and Federal Government to impose no new requirements on the Districts and provide waivers or the money for existing excessive requirements already placed on the Districts. A substitute motion was then offered and seconded: That approximately $10..2 million in Districts’funds reserved for construc tion be diverted from capital.accounts to operating accounts as required during 1978-79 to fund operations;and, FURTHER MOVED:That the staff of the Districts be directed to dev~elop an equitable user fee plan which may be placed before the voters next year pending the results of efforts to obtain a waiver of State and Federal mandated requirements. The Boards then entered into a discussion of the motions on the floor during which it was clarified that it was the intent of the substitute motion that no flat rate charge would be imposed in 1978-79. Following a call for the question on the substitute motion the vote was polled by roll call and the Chairman declared that the substitute motion had failed to pass. The vote was then polled by roil call on the original motion following which the Chairman declared that said motion approving Alternative IA (amended to eliminate any declaration of intent to institute a user fee program effective July 1,1979,and the estimated 1979-80 fiat rate) that there be no user charge and that the Districts live within the constraints of Proposition 13,which is their ~portion of the 1%(Proposition 13 maximum allowable tax levy);and th~t everybody here tonight and else where help the Districts to lobby the State to reject that portion of —7— Districts 1,2,3,5,6,7 and 11 ~July 19,l978~ SB 154 that denies the Districts a portion of the 1%(property tax levy in the future);and that everybody here tonight,and all that they can gather,support a movement to get the State and Federal Government to impose no new requirements on the Districts and provide waivers or the money for existing excessive requirements already placed on the Districts, had passed. Adj ournment Moved,seconded and duly carried: That this meeting of the Boards of Directors of County Sanitation Districts Nos.1,2,3,5,6,7 and 11 be adjourned.The Chairman then declared the meeting so adjourned at 10:00 p.m.,July 19,1978. of Directors Districts Nos.1,2, 11 -8- EXHIBIT ttA”to Minutes of Adjourned Meeting on July 19,1978 Persons Presenting Oral Comments at Public Hearing on Pro posed Flat Rate Special Assessments for Sewer Service and Immediate Availability to be Collected on the Tax Roll NAME CITY NAME CITY 1)Ward Milihouse Santa Ana 32)Stephen Bedrossian Anaheim 2)Lura B.Labourdette Los Alamitos 33)Clarence Cornell Garden Grove 3)Lorraine Gray Santa Ana 34)Leo Lesnick Santa Ana 4)Dave McHaffie Anaheim 35)Glen B.Jackson Orange 5)Harry J.Appling .Fountain Valley 36)Duane Laible Yorba Linda 6)Harriett Wieder Huntington Beach 37)Lu Manning County of Orange 7)W.L.Chambers Orange 38)Walter Nollac Placentia • 8)1.B.Barron Garden Grove 39)Lauren Duvall Santa Ana 9)Virgil Elkins Santa Ana 40)L.J.Post Costa Mesa PlO)Marvin A.Wendt Anaheim 41)Walter Wise Fullerton 11)Stan H.Sabin Huntington Beach 42)Elizabeth Sharon District 2 12)Charleen Wiersma Cypress 43)Bill Weatherill La Palma 13)Paul Holder Fullerton 44)George Maverne Fountain:Valley 14)A.M.Gilmore .Anaheim 45)Ed Wise Yorha Linda 15)Dr.Andrew Erdely Cypress 46)Kenneth G.Hahn Fullerton 16)James C.Harp Buena Park 47)Miles Leach Santa Ana 17)Al Morgan Santa Ana 48)Dave Smith Costa ?~1esa 18)Clarence Herbert Newport Beach 49)Dick Longshore Santa Ana 19)Bob Dinsen Garden Grove 50)Maurice DeMong Tustin 20)Wilbur L.Cassidy Garden Grove 51)William Romo District 11 21)Don Moonier Cypress 52)Adin Dancer Westminster 22)Frank Beskiss Fountain Valley 53)Jay Scannell Westminster 23)Joe Hardcastle Cypress 54)Did Not Give Name 24)Dave Atkinson .Huntington Beach 55)Vance Vote District 1 25)Bill Snelling Anaheim 56)Richard Barrett Santa Ana 26)David Baker Garden Grove 57)Donald Freedland Fullerton 27)Bob Romaris Garden Grove 58)Ken Shank .Did Not State C~ 28)John Allen Placentia -~59)Vivian Kirkpatrick Westminster 29)Kay McCloud Huntington Beach 60)Glen Hanson Costa Mesa 30)Fred Woodworth Newport Beach 61)Betty Scott Huntington Beach 31)Arthur Womer Fountain Valley 62)Jack Tubbs Santa Aria -9-