HomeMy WebLinkAboutMinutes 1985-07-18COUNTY SANITATION DISTRICT NO.1
OF ORANGE COUNTY,CALIFORNIA
MINUTES OF ADJOURNED REGULAR MEETING
July 18,1985 —7:30 P.M.
Santa Ma City Hall —Council Chambers
20 Civic Center Plaza
Santa Ana,California
Pursuant to the adjournment of the regular meeting of July 10,1985,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 in the Santa Ana City Hall
Council Chambers.
The Chairman called the meeting to order at 8:00 p.m.The roll was called and the
Secretary reported a quorum present.
DIRECTORS PRESENT:Robert Hanson,Chairman,Dan Griset,Ronald
B.Hoesterey
DIRECTORS ABSENT:Roger Stanton
STAFF MEMBERS PRESENT:J.Wayne Sylvester,General Manager,Rita
J.Brown,Secretary,Blake Anderson,
William H.Butler,Gary Streed,Corinne
Clawson,Soraya Pitrelli
OTHERS:Thomas L.Woodruff,General Counsel,Don
Griffin,George Estrada,Edward Gunn,Miles
Leach,Greg K.Ohannesian,Merrell Kent,
Ralph Perez
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DISTRICT 1
Public hearing on proposal to
collect adopted annual sewer
service charges on the property tax
bills and Sewer Service Charge
Report beginning 1985—86
Open Public Hearing The Chairman declared the hearing
open at 8:00 p.m.
The Chairman then announced that the sole purpose of the public hearing was
to consider and select the best method by which the District’s previously
adopted annual sewer service charge shall be collected.
Staff report on proposed use of the The General Manager stated that the
County of Orange property tax bill County Sanitation District is
for collection of the annual sewer responsible for transporting,
service charge treating and disposing of •sewage in
a safe manner in accordance with
strict federal and state laws to protect the public health and safety.He
noted that some of the citizens attending the hearing had not had an
opportunity to acquaint themselves with the role that the District plays in
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IL.
Water Meter Size
5/8”—3/4”(Residences)
1”—1½”
2”
3”
4”
6”
Annual User Fee
$26.40
52.50
105.00
210.00
420.00
840.00
The large commercial or industrial dischargers are also subject to a
surcharge under a separate industrial waste ordinance that has been in
effect since 1976.The General Manager reiterated that the purpose of
hearing is to receive public commentary on the District’s proposal to
collect the annual service charge,based on water meter size,on the
property tax bill.Re then introduced William Butler,the District’s
Director of Finance,and asked him to review the alternative methods
available for collecting the annual service charge.
The Director of Finance then reviewed the following three billing and
collection alternatives identified and evaluated by the staff:
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handling the sewage.He then introduced Mr.Blake Anderson,the District’s
Director of Operations,who gave a thirty minute slide presentation on the
Districts’activities and explained the District’s relationship to the
city’s local sewer system.
The General Manager then reported that the Orange County Sanitation
Districts cost of providing sewerage service tothe community has been
escalating rapidly because of the increasingly stringent federal and state
laws and regulations requiring advanced treatment of wastewater to remove
toxic materials and other pollutants from the sewage to’assure protection of
the public health and safety and the environment.To cämply with the new,
stricter requirements,the Joint Sanitation Districts have recently
constructed new sophisticated treatment facilities at a cost of more than
$124,000,000.
In fiscal years 1983—84 and 1984—85 property tax revenues were insufficient
to meet the District’s operating costs,and funds had to be transferred from
the District’s capital reserves.To address this crisis,after considerable
study of the District’s long range funding requirements,the Board adopted a
financial program to avoid projected revenue shortfalls and provide the
necessary income required to finance the District’s rising operating
expenses,as well as major capital expenditures for con~truction of
master—planned treatment facilities.This program includes a one—time
connection fee of $500 per dwelling unit for residential property and $100
per 1,000 square feet for commercial,industrial and governmental property.
The connection fee is used to pay for expansion of facilities to serve new
development.
As the second part of the long—range financial program,to pay for costs of
operating,maintaining and rehabilitating the sewerage system,the Board
adopted an annual sewer service fee.The fees are based on water meter size
which reflects the use of the system,as follows:
0
the
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—Direct Billing and Collection by District
This approach would require the SanItation District to send a direct
bill on a monthly or bimonthly basis to every property owner of the
36,288 pieces of property within the District.The one—time setup cost
for this method is estimated at $22,000 plus an annual cost of $188,000
making the total cost for the first year $210,000.The projected
five—year cost for the direct billing alternative would be $962,000.
—Placement of User Fee on City of Santa Ana and Mesa Consolidated
Water District Utility Bills for Collection and Remittance to District
Under this method the sewer service charge would be included as a
separate line item on the utility bills from the City of Santa Ana and
the Mesa Consolidated Water District who serve the properties within
District No.1.The City’s bills now include five other charges
including water and refuse and the City’s local sewer service charge.
The setup cost for this alternative would be $20,000 plus an annual cost
of $94,000,for a total cost for the first year of $114,000.The
estimated five—year cost of performing this billing service is $490,000.
—Placement of User Fee on County of Orange Property Tax Bill for
Collection and Remittance to District
Under this alternative the sewer service charge would be included as a
separate line item on the property tax bills for all properties within
District No.1.There are some major computer software modifications
that must be made to the County tax roll system to implement this
alternative.Therefore,the setup cost of $75,000 is higher.However,
the annual cost of billing under this method is only $10,000.The total
first—year cost would be $85,000 and the five—year cost is estimated to
be $125,000.
Staff recommended this alternative as it is clearly the most
cost—effective billing and collection method available,and results in
lower costs to each property owner.District 5,6 and 13 have already
adopted this method for billing their user fees,and it has proven quite
effective in keeping the administrative costs for billing and collecting
fees under control in these three Districts.
The Director of Finance reported that the rising costs to operate the
District were due to higher mandated levels of treatment and increased energy
costs.The long—range financial program was adopted by the District because
the District’s revenues and reserves were decreasing and soon the District
would not have been able to meet its operational requirements and provide the
services necessary to protect the public health and the environment.
The General Manager then advised that official notice of the hearing was
mailed on July 5,1985,to 36,288 property owners of record on the last
equalized assessment roll of the County of Orange,in accordance with the
provisions of Section 5473.1 of the California Health and Safety Code.
As prescribed by law,a legal notice of the hearing was published in the
Orange County Register on July 1,1985 and again on July 8,1985.The
hearing notice included the District’s telephone number for citizens to call
with questions or for more information.During a two—week period,the staff
received approximately 125 calls.The questions raised dealt primarily with:
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—Proposition 13 and the issue of tax vs.fee
—The relationship of the local street sewer system provided by
the City of Santa Ma to the regional system of Sanitation
District No.1 0
—Other possible methods of billing and collection such as the
City water bill,Many inquirers thought that the charge
on the City water bill paid for all sewer services.
Several property owners also indicated that their properties were not
connected or they were unsure whether their properties were connected to
the local sewer system,or felt that their fee should be modified,or
advised of a change in ownership.
The General Manager observed that although many of the issues posed were
not really relevant to the specific purpose of the hearing,he
recognized that the citizens had a genuine interest in the activities of
the Sanitation Districts and that he would,therefore,like to take a
few minutes and summarize responses to those questions.He then
addressed each of the issues raised.He explained the role of the
District as an operating utility providing an essential service
necessary for the protection of the public health and safety,and
indicated that the District was established solely to provide wastewater
collection,treatment and disposal services to the community.
Mr.Sylvester further explained that while the District has always had
the statutory authority to levy a sewer service fee,it had historically
financed its operations,maintenance and rehabilitation activities from
the property tax.The reduction in tax revenues resulting from the
passage of Proposition 13 and its implementing legislation,combined 0
with the higher energy costs,theeffects of high inflation over the
past several years,and more stringent treatment requirements mandated
by federal and state regulatory agencies,have resulted in operating
deficits for the District.
The adopted sewer service charge is based upon use,whereas property
taxes are based on the value of the property and have no direct
relationship to use.Mr.Sylvester reiterated that the reason for the
proposal to collect this fee on the tax bill is because it is the most
cost—effective method.
The General Manager highlighted the appeal process available to allow
for an adjustment of fee in the event of a demonstrated inequity.
Appeals relative to inaccurate billings or properties that are not
connected to local sewers will be handled on a case—by—case basis.
Receive and file written comments The General Manager reported that
two written communications had been
received regarding the sewer service fee and proposed method of collection
and summarized the comments,whereupon,
It was then moved,seconded and duly carried:
That the written communications received from the following property owners
be,and are hereby,received and ordered filed:
—Jeanette McCoy,2311 N.Hesperian Street
—Virgil J.Wynn,821 N.Louise Street
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Oral public comment The Chair then recognized the
following persons who addressed the
Board regarding the proposed method for billing and collection of the annual
sewer service charge:
George Estrada
Edward Gunn
Miles Leach
Greg K.Ohannesian
Merrell Kent
Ralph Perez
Each addressed the Board,and expressed opposition to the fee rather than
addressing the issue of the proposed method of collection of the charge,
expressing their opinion that it is a tax rather than a fee,and questioning
its relationship to ad valorem taxes that the District receives.
Staff clarified that since the passage of Proposition 13,the Districts only
receive 3%of the 1%property tax allocation allowed.This is used to help
finance the District’s operating and maintenance costs.However,the revenue
received from the District’s portion of the property taxes has not been
sufficient to meet the District’s needs and,therefore,it was necessary to
adopt the additional sewer service charge based on the water meter size.The
sewer use fee is separate and distinct from the property tax that the
District receives and is over and above that amount.
Mr.Ohannesian asked that his opposition to the method of notification
relative to adoption of the annual sewer service charge be made a matter of
record.The General Counsel then explained the State statutes that govern
the procedures that the District must follow relative to adoption of
ordinances and fees and the type of notification that must be given.
Board response to oral comments Members of the Board of Directors
responded to the issues raised by
the public.It was explained that the Board’s decision to adopt the
long—range financial plan and sewer service fee was a result of the federal
and state regulations mandating higher standards for effluent discharged and
increased operating costs over which the District has no control.After
considerable study and deliberation,the Board adopted the fee schedule set
forth,which they believe to be fair and equitable to all users.The
Directors added that it is also the Board’s responsibility to determine the
most cost—effective method of collecting these fees.The long—range
financial program was adopted only after due consideration of alternatives
and the Board’s responsibility to maintain the financial integrity of the
District,with full recognition of state legislation concerning taxes and
fees.It was the consensus that the alternative of collecting the annual
service fee on the property tax bill is in the best interests of the District
and the property owners.
Close hearing .The Chairman declared the hearing
closed at 9:14 p.m.
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________________..1..~.~.~.~i_..L!.i.~J.~.~.~.......~..~.L
p~nq a findiflg that the
~jority of property owners have
not protested relative to
collecting annual sewer service
charges on the ~ro~ertv tax bills
Receive,file and adopt Sewer
Service Charge Report for Fiscal
Year 1985—86 That the County Sanitation District
No.1 Sewer Service Charge Report for
Fiscal Year 1985—86 be,and is hereby,received,ordered filed and adopted.
Directing the County Auditor—
Controller to include sewer service
charges on pr~perty tax bills
beginning in 1985—86
________________________
That the Board of Directors hereby
adopts Resolution No.85—129—1,
directing the County Auditor—Controller
to include sewer service charges on property tax bills beginning in.fiscal year
1985—86 for collection,pursuant to Ordinance No.106 of County Sanitation
District No.1 of Orange County,as amended.A certified copy of this resolution
is attached hereto and made a part of these minutes.
~journment Moved,seconded and duly carried:
That this meeting of
be adjourned to 7:30
so adjourned at 9:20
the Board of Directors of County Sanitation District No.1
p.m.,July 24,1985.The Chairman then declared the meeting
p.m..,July 18,1985.0
Secretary,Boar~’of Dir~ectors
County Sanitation District No.1 of
Orange County,California
0
Moved,seconded and duly carried:
___________________________________That the Board of Directors does hereby
_______________________________
find that a majority of the owners of
_________________________________
the property,which is the subject of
the Sewer Service Charge Report for
Fiscal Year 1985—86,have not protested the proposed collection of annual sewer
service charges on the property tax bills.
0
Moved,seconded and duly carried:
Moved,seconded and duly carried:
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