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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