HomeMy WebLinkAboutMinutes 1988-04-25 COUNTY SANITATION DISTRICT NO. 13
OF ORANGE COUNTY, CALIFORNIA
MINUTES OF ADJOURNED REGULAR MEETING
April 25, 1988 - 7:30 p.m.
Yorba Linda City Hall - Council Chambers
4845 Casa Loma Avenue
Yorba Linda, California
Pursuant to adjournment of the regular meeting of April 13, 1988, the Board of
Directors of County Sanitation District No. 13 of Orange County, California,
met in an adjourned regular meeting at the above hour and date.
The Chairman called the meeting to order at 7:30 p.m. The roll was called and the
Secretary reported a quorum present.
DIRECTORS PRESENT: Todd Murphy, Chairman, Ben Bay, Don R.
Roth, Don E. Smith and John Sutton
DIRECTORS ABSENT: None
STAFF MEMBERS PRESENT: J. Wayne Sylvester, General Manager,
Rita J. Brown, Secretary, Thomas M.
Dawes and Gary G. Streed
OTHERS PRESENT: Thomas L. Woodruff, General Counsel
Review of master-planned sewerage The staff briefly reviewed the current
facilities to serve District No. 13 and proposed master-planned sewerage
facilities' capacity needs of the
District, as well as development projections for the District. It was pointed
out that District No. 13 does not own any sewerage facilities itself. The
District must buy capacity in other Districts' sewerage facilities to transport
the wastewater to the treatment plants in Fountain Valley or Huntington Beach.
It also purchases a share of the joint works for treatment and diposal of
wastewater. Purchasing capacity in other Districts' lines is a very economical
method for District 13 to transport their wastewater.
The Directors discussed proposed development projects within their respective
cities and pointed out that more commercial development was occurring than
originally envisioned within District No. 13. Staff advised that they work
closely with the various city Planning Departments to develop their projections
and use the most current general plan information in preparing the master plan
of sewerage facilities.
1
4/25/88
District 13
Update on long-range financial The General Manager reported that during
program and consideration of the tax exchange negotiations with the
amendments to existing connection County of Orange, which ultimately led
charge and sanitary sewer service to the formation of District 13 in 1985,
charge programs an agreement was executed providing that
District 13 would not receive any share
of the ad valorem property tax allocation allowed under Proposition 13.
Accordingly, the Directors set the annual user fee at $70 per building, higher
than the fee in other Districts since no property tax revenue would be received
by the District. At the same time, connection fees were established in three
zones: $220 for properties which had paid annexation fees (to annex territory to
Districts 2 or 7 which were later included in District No. 13 as part of the
formation proceedings) $1,250 for properties in District No. 13 which could be
served by gravity and $1,500 for properties requiring pump stations for sewerage
service.
Mr. Sylvester pointed out that although the costs of operating and maintaining
the joint treatment facilities have increased each year because of more stringent
water quality regulations by the EPA and the state, and increasing costs of
materials, supplies and sludge disposal , the user fee in District 13 has not
changed. The budgeted Joint Operating cost per million gallons has increased
from $277 in 1984-85 when the District was formed to $370 in the 1987-88 budget.
This trend is expected to continue as expanded and more complex facilities are
placed into service to meet state and federal requirements. •
It was further noted that all of District 13's capital funds have come from
annexation fees transferred during formation and connection fees received since.
These capital funds pay for the District' s share of joint treatment works
construction, the purchase of additional equity/capacity_ in the existing joint
treatment facilities as flows increase and purchase of capacity rights in the
collection facilities of Districts 1,2,3,6 and 7, as needed, to serve District
No. 13. As future projections for the construction of joint treatment facilities
include several rehabilitation/reconstruction and advanced treatment projects
which benefit all users, not only new development, he advised that it would now
be appropriate to include a capital charge in the user fee to help fund these
projects that benefit all users. This practice is followed by other Districts
and assures that new development pays its appropriate cost for sewerage system
capacity to serve the development and that all users pay their fair share of
costs for operating, maintaining and rehabilitating the facilities used to
provide them sewerage service.
Gary Streed, the Acting Director of Finance, then reviewed three alternative
10-year financial projections. Each financial scenerio was based on different
assumptions. The first reflected the results of maintaining the existing user
fee program for the next ten years. This schedule showed a small operating
deficit as early as 1990-91 which continues through the ten-year period totaling
$2.0 million by 1996-97. Capital funds are sufficient for the first five years,
but there is a $7.6 million deficit by the end of ten years.
Mr. Streed further reported on a second alternative and reviewed the effects of
increasing the user fee 12% each year and raising the connection fee to $1,500
for those properties which did not pay annexation fees. User fees would not be
-2-
4/25/88
District 13
allocated to the capital funds under this alternative. He advised that a 12%
annual increase was sufficient to pay the escalating costs of sewerage service
and maintain a positive fund balance in the operating fund for both the five and
ten-year planning periods. However, a capital fund deficit of $6.2 million would
still be experienced during the second five-year period.
Another alternative was reviewed which provided for a 20% increase in the user
fee each year while raising the connection fee to $1,500. User fees available
after budgeting a 20% contingency reserve fund balance in the operating fund
would be .allocated to the capital funds for construction/reconstruction of
facilities benefiting all users. Staff projected a reduced capital deficit in
1996-97 of $4.0 million under this plan.
It was pointed out that all three scenarios reflect a capital funding deficit at
the end of the ten-year period based on a connection fee of $1,500 per dwelling
unit. However, it is expected that the connection fee will continue to increase
to pay the cost of sewerage system capacity to serve new development. Staff
anticipated that they would be submitting a recommendation for new connection fee
rates beyond the $1,500 amount to the Boards of all Districts next year upon
completion of the new facilities' Master Plan now underway which will determine
such new costs. Staff further commented that the estimates can be considered
"worst case" scenarios because there are several unknowns that will have a major
impact on the District' s cash flow requirements. Accordingly, staff reiterated
that the District's financial condition will be evaluated annually and
appropriate recommendations submitted for the Board's consideration.
Staff then reviewed existing and recommended fee schedules for 1988-89 for
consideration by the Board.
The Directors then entered into a lengthy discussion of the various options
available to them to provide the necessary funding to meet the District' s future
needs, and the alternatives and relationship of fees for capital versus
operating, maintenance and rehabilitation in the District' s financial program.
Several Directors expressed their concern over the provision in the Districts'
uniform "Regulations for Use of District Sewerage Facilities" that exempts local
governing agencies from connection fees for sewerage system capacity. (Federal
and state agencies are charged the connection fee. Governmental agencies are not
exempt from annual user fees which pay the cost of operating, maintaining and
rehabilitating the sewerage system.) The concern expressed was that by exempting
local public facilities, particularly large ones, from paying the capital costs,
the burden was unfairly shifted to the residents and private businesses of the
District, thus increasing the fees that they would have to pay. After
considerable discussion of possible alternatives for resolving this issue,
including revising the connection fee ordinance to provide some sort of
equitable payment schedule for governmental agencies, it was the concensus of
the Board members that the matter of local agency connection fee exemptions
should be referred to the Executive Committee for review at their next meeting
on May 4, 1988.
-3-
4/25/88
District 13
With the understanding that a revised ordinance could be considered at a later
date, the Board indicated their desire to proceed with the first reading of the
proposed user fee and connection fee ordinances, as follows:
Existing Proposed
1987-88 1988-89
Fee Fee
ANNUAL USER FEE
Single-Family Dwellings/Condominiums $70.00/building $78.40/dwelling unit
Multi-Family Dwellings/Apartments $70.00/building $47.04/dwelling unit
Commercial/Industrial/Other (government $70.00/building $56.12/1,000 sq. ft.
buildings, utilities, nonprofit
organizations, etc.)
ONE-TIME CONNECTION FEE
Zone A
Residential $ 220 $ 220
Commercial/Industrial/Governmental/Other $ 45/1,000 sq.ft. $45/1,000 sq.ft.
Zone B
Residential $1,250 $1,500
Commercial/Industrial/Governmental/Other $250/1,000 sq.ft. $300/1,000 sq.ft.
Zone C
Residential $1,500 $1,500
Commercial/Industrial/Governmental/Other $300/1,000 sq.ft. $300/1,000 sq.ft.
First reading of proposed It was moved, seconded and duly carried:
Ordinance No. 1302
That Ordinance No. 1302, An Ordinance of the Board of Directors of County
Sanitation District No. 13 of Orange County, California, Amending Ordinance
No. 1301 Establishing Regulations for Use of District Sewerage Facilities, 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. 1302 by title only, it was then moved,
seconded and duly carried:
That Ordinance No. 1302, An Ordinance of the Board of Directors of County
Sanitation District No. 13 of Orange County, California, Amending Ordinance
No. 1301 Establishing Regulations for Use of District Sewerage Facilities, be
introduced, and passed to the second reading on May 4, 1988, at 7:30 p.m. , at
the District's administrative office.
-4-
4/25/88
District 13
First reading of proposed It was moved, seconded and duly carried:
Ordinance No. 1303
That Ordinance No. 1303, An Ordinance of the Board of Directors of County
Sanitation District No. 13 of Orange County, California, Establishing Sanitary
Sewer Service Charges and Repealing Sections 703, 704, 705 and 706 of
Ordinance No. 1301, 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. 1303 by title only, it was then moved,
seconded and duly carried:
That Ordinance No. 1302, An Ordinance of the Board of Directors of County
Sanitation District No. 13 of Orange County, California, Amending Ordinance
No. 1301 Establishing Sanitary Sewer Service Charges and Repealing Sections
703, 704, 705 and 706 of Ordinance No. 1301, be introduced, and passed to the
second reading on May 4, 1988, 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. 13 be adjourned. The Chairman then declared the meeting so adjourned at
8:28 p.m. , April 25, 1988.
Secretary, Boarld of Directors
County Sanitation District No. 13 of
Orange County, California
-5-
I certify that the minutes of the adjourned regular meeting of County
Sanitation District No. 13 of Orange County, California, on April 25, 1988
reporting the actions of said District, are a true and correct report of said
minutes. 1
Chairman
Board of Direc ors of County
Sanitation District No. 13
of Orange County, California
Secretary, Board of Directors of
County Sanitation District No. 13
of Orange County, California
r
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. -L-3 held on e15 19 88 was
duly posted for public inspection at the main lobby of the
District' s offices on 198
IN WITNESS WHEREOF, I have hereunto set my hand this
day of 190.
Rita J. Brown, Secretary of the
Board of Directors of County
Sanitation District No. 13
of Orange County, California