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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 ************* 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 —1— 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: 7/18/85 _______—.____.L.. ______ 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 —2— 0 II~ 7/18/85 ,‘ —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: —3— 7/18/85 —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 —4— IA l~1 L~L41 7/18/85 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. —5— 7/18/85 ________________..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: —6—