The URL can be used to link to this page

Home My WebLink AboutMinutes 1987-04-21COUNTY SANITATION DISTRICI~NO.1 OF ORANGE COUNTY,CALIFORNIA MINUTES OF ADJOURNED RDGULPJR MEETING April 21,1987 —5:30 p.m. 10844 Ellis Avenue Fountain Valley,California Pursuant to adjournment of the regular meeting of April 8,1987,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 District’s Administrative Office. The Chairman called the meeting to order at 5:30 p.m.The roll was called and the Secretary reported a quorum present. DIRE~ORS PRESENT:Ronald B.Hoesterey,Chairman, Robert Hanson,Dan Griset Roger R.Stanton DIR~1OPS ABSENT:None STAFF ME~BERS PRESENT:J.Wayne Sylvester,General Manager, Rita J.Brown,Secretary,William H. Butler,Gary Streed, (YTHERS PRESENT:Suzanne Atkins,Assistant General Counsel, Don R.Griffin,Joint Chairman, ****************** Review of long-range financial The Director of Finance reported that projections re capital and the District had adopted a long—range operating requirements financial program in 1984 and revised said plan in 1986.This plan,which established one—time connection fees to finance facilities expansion as well as ongoing user fees to make up a shortfall in ad valorem tax revenues,was developed to fund the District’s long-range capital and operating requirements. The financial plan was adopted after considerable study to avoid a projected long—range funding shortfall in revenues required to finance the District’s operating and capital expenses,which were escalating due to the rising cost of advanced treatment,and to provide funds for construction of master-planned treatment facilities expansion and improvements as well as replacement/rehabilitation of older facilities. The key elements of the revised long—range financial plan adopted last year included: —Issuance of $117,000,000 of Certificates of Participation (along with Districts Nos.2 and 3)to finance District l’s share of joint treatment works construction for the next three years and to purchase additional equity in the joint treatment works to reflect the new flow—based joint works equity formula. —1— District 1 04/21/87 —An increase in the one—time sewer connection fee from $500/dwelling unit to $1,000/dwelling unit.The connection fees pay for construction of additional collection,treatment and disposal facilities to accommodate projected growth in the District’s service area. District 1 elected to participate in issuance of the Certificates of Participation last sunmer to take advantage of then existing Federal tax legislation and low interest rates prevalent in the tax-exempt municipal bond market prior to imp1~ntation of the new tax reform laws. Mr.Butler then reviewed the long-range financial projection schedules and provided an overview of the District’s financial position for the next ten years based on the existing fee structures and several alternative escalating fee structures,as directed by the Board during the 1986—87 budget deve1o~r~nt process.Without a program of systematic fee adjustments over the next several years,the District will experience revenue shortfalls and the District’s financial integrity will be j~pardized. The Director of Finance reviewed the following supplemental user fee schedule, currently in effect in the District: Supplemental User Fees:Effective July 1,1985 Estimated Annual Water ~ter Size Annual Fee Revenues 5/8”+3/4”$26.40 $614,000 1”+li”52.50 183,000 2”105 00 84,000 3”210.00 31,500 4”420.00 31,500 6”840.00 17,000 Total Estimated Revenues $961,000 He further reported that during the past year he and the General Counsel met with the California State Water Resources Control Board’s Revenue Program Specialist to review the status of the Districts’Revenue Program,the long—range financial plan adopted by the Joint Boards in 1’~pril 1979 to comply with federal and state construction grant program regulations.The State Board representative has indicated that the water-meter-based fee used by District No.1 for supplemental user fees is not acceptable to the State Board.The State prefers a fee basis which establishes flat fees for single and multi—family residences and fees based upon square footage of improvements for connercial,industrial,governmental and other facilities. Staff then recommended that the Board consider changing the existing water-meter-based fee structure to a flat fee and square footage—based fee as follows: —2— District 1 *04V21/87 1987—88 Class of User Basis of Charge Annual Rate Single—Family Charge per Dwelling $26.40 Dwellings Unit Multi—Family Charge per Dwelling 15.85 Dwellings/Mobile Unit Hates Caiinercial/charge per 1,000 18.90 Industrial/Other Sq.Ft.of Building (government buildings, utilities, non—profit organizations, etc.) It is projected that this will generate approximately $600,000 more in user fee revenues in 1987-88 than the existing water-meter-based fee schedule,and will also enable the District’s operating fund to maintain a positive cash position over the next five years assuming the fees are increased 20%per year carmencing in 1988—89. Staff then reviewed connection fees which are levied against new developeents to pay for the cost of planning,designing,financing and constructing expanded collection system and joint works treatment facilities to acccxrinodate the additional flow generated by the new developeents. Projections indicate that the District’s capital funds will experience a shortfall by 199 0—91 unless additional capital revenues are generated.Staff recarmended that the Board consider raising the District’s one—time connection fee,as follows: Single/Multi—Family Carmercial/Industrial Dwelling Units Governmental/Other Existing Fee $1,000/Dwelling Unit $200/l,000 Sq.Ft.of Building Recarmended Fee $1,500/Dwelling Unit $300/l,000 Sq.Ft.of Building The proposed increase will generate an additional $1,200,000,including fees and interest incane,over the next ten years. The Director of Finance then reviewed the canbined financial impact of adopting the reccimtended changes.It was pointed out that many econcniic factors could affect the District’s rate structure requirements over the next several years. The staff evaluates the District’s financial position each year to determine the impact of changing conditions and briefs the Board to seek direction regarding modifications to the District’s long-range financial plan.The impact of any of the proposed recamiendations adopted by the Board will continue to be reviewed and presented to the Board annually prior to consideration of the District’s budgets. —3— ——...—.———~——_..__~.—.~_.__IJ —._..~s._._~_..&.~ District 1 04/21/87 First reading of proposed Following a general discussion,it was Ordinance No.109 moved,seconded and duly carried: That Ordinance No.109,An Ordinance of the Board of Directors of County Sanitation District No.1 of Orange County,California,Amending Ordinance No.106 Establishing Sanitary Sewer Service Charges,and Repealing Ordinance No.107,be read by title only;and, FURTHER MOVED:That reading of said entire ordinance be,and is hereby,waived. Following the reading of Ordinance No.109 by title only,it was then moved, seconded and duly carried: That Ordinance No.109,An Ordinance of the Board of Directors of County Sanitation District No,1 of Orange County,California,Amending Ordinance No.106 Establishing Sanitary Sewer Service Charges,and Repealing Ordinance No.107,be introduced and passed to the second reading on May 13,1987,at 7:30 p.m.,at the District’s administrative office. First reading of proposed It was moved,seconded and duly Ordinance No.110 carried: That Ordinance No.110,An Ordinance of the Board of Directors of County Sanitation District No.1 of Orange County,California,Amending Ordinance No.104 Establishing Sewer Connection Charges for Use of District Sewerage Facilities,and Repealing Ordinance No.108,be read by title only;and, FURTHER MOVED:That reading of said entire ordinance be,and is hereby,waived. Following the reading of Ordinance No.110 by title only,it was then moved, seconded and duly carried: That Ordinance No.110,An Ordinance of the Board of Directors of County Sanitation District No.1 of Orange County,California,Amending Ordinance No.104 Establishing Sewer Connection Charges for Use of District Sewerage Facilities,and Repealing Ordinance No.108,be introduced and passed to the second reading on May 13,1987,at 7:30 p.m.,at the District’s administrative office. Adjournment Moved,seconded and duly carried: That this meeting of the Board of Directors of County Sanitation District No.1 be adjourned.The Chairman then declared the meeting so adjourned at 6:30 p.m., April 21,1987. Secretary,d of Directors County Sanitation District No.1 of Orange County,California 0 —4-- S ~~ STATE OF CALIFORNIA) SS. COUNTY OF ORANGE ) Pursuant to California Government Code Section 54954.2, I hereby certify that the Agenda for the Adjourned Regular Board Meeting of District No.~held on ~,1987 was duly posted for public inspection at the main lobby of the District’s offices on ~S~,1987. IN WITNESS WHEREOF,I have hereunto set my hand this _____ day of Oç~Z..L ,1987. Rita J.Brown,secretary of the Board of Directors of County Sanitation District No. ____ of Orange County,California