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HomeMy WebLinkAboutMinutes 1989-01-26COUNTY SANITATION DISTRICT NO.3 OF ORANGE COUNTY,CALIFORNIA MINUTES OF ADJOURNED REGULAR MEETING January 26,1989 —7:30 p.m 10844 Ellis Avenue Fountain Valley,California Pursuant to adjournment of the regular meeting of January 11,1989,the Board of Directors of County Sanitation District No.3 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:Richard T.Polls,Chairman,Edward L. Allen,Norman E.Culver,William Davis,Don R.Griffin,Dan Griset, William Mahoney,James Neal,Carrey J. Nelson,Irv Pickler,Bob Siefen, Roger R.Stanton,Charles E.Sylvia and Edna Wilson DIRECTORS ABSENT:A.B.“Buck”Catlin and John Erskine STAFF MEMBERS PRESENT:J.Wayne Sylvester,General Manager, Rita J.Brown,Secretary,Thomas M. Dawes,Gary G.Streed and Jeff Esber OTHERS PRESENT:Thomas L.Woodruff,General Counsel, Paul Carver and Bob Vilker Review of Master Plan of Trunk The Director of Engineering reviewed Sewers the status of the District’s sewer rehabilitation program and previewed the new Master Plan of Trunk Sewers which staff and consultants have been working on for the past two years as part of the Districts’comprehensive “Action Plan”.The draft “Action Plan”,which includes a facilities master plan and ErR,will soon be completed by the consultants and submitted to the Board for consideration.Mr.Dawes pointed out that District No.3 comprises 65,000 acres basically west of Euclid and encompasses all or portions of 15 cities and unincorporated portions of the County of Orange. Almost all of the District is tributary to the Huntington Beach treatment plant.Land use plans and population projections were used in determining the projected trunk sewer needs of the District.The General Plans of the variouscities within the District and the County of Orange have been thoroughly reviewedand incorporated into the District’s Master Plan. Mr.Dawes indicated that several sewers were projected to be deficient because of significant land use changes taking place.There are currently 13 miles of anticipated deficient sewers in District 3 plus 5½miles that may be marginally deficient.Costs to correct these deficiencies total approximately $63 million over the next 30 years.A major portion of this total is for the Bushard Street Trunk ($28 million)which will beupgraded from a 54—inch line to a 102—inch line.He also reported on the condition of several other sewer lines and reviewed the proposed schedule for their correction. 1/26/89 District 3 Update on long—range financial The General Manager reported that for plan and approving implementation years staff has been providing the of supplemental user fee program Directors with 5—10 year budget projections to determine when funding shortfalls might occur in time for the Bo’ard to consider and act on alternative revenue sources0 For some time projections have indicated shortfalls in 1989—90.This Is a result of the rising cost of higher treatment standards imposed by the state and federal government0 The property tax,the historical revenue source used to finance the Districts’ activities,Is insufficient to cover the advanced treatment costs0 In 1986 and 1987,after several meetings,the District 3 Board modified its long—range financial plan and took the following actions: 1.Issued $48,000,000 in Certificates of Participation for partial capital financing 2.Raised the connection fee schedule from $250 per dwelling unit to $500 per dwelling unit for residential property,and from $50 per square foot to $300 per square foot for comercial property to fund capital facilities for new development 3.Declared their intent to implement a supplemental user fee program for operation,maintenance and capital replacement costs effective July 1,1989 The supplemental user fee would be collected on the annual property tax bill as It Is the most cost—effective method of collection0 This is similar to actions previously taken by Districts Nos.1,5,6 and 110 Mr0 Sylvester then reviewed staff estimates which show a projected deficit of $3,338,000 in the District’s Operating Fund in 1989-90,accumulating to a deficit of approximately $103 million by 1998 if additional revenues are not forthcoming. It was pointed out that in 1987,when the Board last considered this plan, the minimum supplemental user fee in other Districts that had implemented them was $26.40 per year.However,it is now expected that the other Districts’will increase their minimum fee this year to $30.36 per year, and staff recommended that District 3 implement that same fee ($30.36)on July 1,1989.The General Manager advised that if the $30.36 fee is implemented and increased approximately 10%per year,the District’s Operating Fund is projected to remain solvent through the next 10 years.He then reviewed the necessary steps to be taken in order to implement this fee and the proposed timetable for these actions,-The user fee ordinance would ~:be~1ntroduced at the February 8th Board meeting and pass to second reading and adoption at the March 8th Board meeting. Following adoption of a user fee ordinance,notices would be sent to all property owners in the District,pursuant to statute,advising them of the -2- ___________~~~J~ r 1/26/89 District 3 Board’s Intent to collect the user fee on the tax bill.Three workshops are proposed to be conducted by staff to explain the proposal to collect the fee on the tax bill,as follows: ________ Location Hunt Branch Library Gallery Room 201 S.Basque Fullerton 2.Wednesday,March 29,1989 7:30 p.m.Districts’Board Room 10844 Ellis Avenue Fountain Valley 3.Thursday,April 6,1989 7:30 p.m.Stanton City Hall 10660 Western Avenue Stanton On April 27,1989 the Board would conduct a hearing (tentatively at the Garden Grove City Hall)and consider utilizing the annual tax bill to collect the user fee. scheduled property This is the same procedure followed by Districts 1 and 11,the last two Districts to implement user fees,with one exception in the procedure.The user fee ordinance would be published between introduction on February 8th and adoption on March 8th,for reasons described by the General Counsel in his Memorandum dated January 17,1989,included in the Staff Report mailed with the Directors’agenda material.The General Manager also reviewed alternative procedures which were used by Districts 5 and 6,the first two Districts to implement supplemental user fees. The General Manager also conii~ented on the impact of the pending “Action Plan”on District 3’s long—range financial requirements.This plan is a comprehensive update of the Districts’wastewater management plan for the next 30—year period.The financial impact could be significant and will depend on the level of treatment required by state and federal regulatory authorities.Mr.Sylvester noted that under any scenario,it will be necessary to implement a supplemental user fee of at least $30.36 for operation and maintenance connection fees will also will have to be employed connection fees and debt Plan”proceedings. Following a discussion relative to the proposed fee structure for various types of properties.,the relationship of user fees to connection fees,the procedures for adopting the user fee program and future revisions to the fee structure,and the method of collecting the fees on the annual property tax bill,it was then MOVED,SECONDED AND DULY CARRIED: That the Staff Report on Long-Range Financial Plan and Implementation of Supplemental User Fee Program dated January 18,1989,be,and is hereby, received,ordered filed and approved;and, Date 1.Tuesday,March 28,1989 Time 7:30 p.m. costs.He further advised that in the future the have to be increased and additional debt financing for capital financing.Proposed revisions to the financing will be addressed during the “Action -3— .~—.. 1/26/89 District 3 FURTHER MOVED:That staff be,and Ordinance No,309,An Ordinance of Sanitation District No.3 of Orange Sanitary Sewer Service Charges,for is hereby,directed to agendize proposed the Board of Directors of County County,California,Establishing introduction on February 8,1989. Review of policy re local agency The General Manager reported that theexemptionfromconnectionfeesnewdevelopmentpaysconnectionfees for sewage system capacity capitalcostsforboththeDistrict’s trunk sewers and its share of the jointtreatmentplantfacilities,However,local agencies,such as cities,special districts and the County of Orange,are exempt from connection fees,State and federal agencies are not exempt. Last June the Executive Committee reviewed the issue of local agencyexemptionsattherequestofDistrictNo.13.District 13 had just revisedtheirpolicytoeliminatetheexemptionforlocalagenciesbecauseoftheir concern that large regional public facilities could place an undue financialburdenontheDistrict,The Executive Committee did not recommend anychangeinthecurrentoverallDistrictpolicyatthattime,The CommitteedidnotethatconnectionfeeordinancesdoalloweachDistricttoamenditsordinancetoremovetheexemptionforlocalagenciesiftheydeterminethatlocalgovernmentfacilitiesplaceaninordinatedemandontheDistrict’s system and does not equitably distribute the financial burden of sewerageserviceforthatDistrict.Accordingly,they directed the staff to submitthismattertoeachDistrictthenexttimetheyconsideredtheirrespectivefinancialplans. The Board then entered into a discussion of the issue.In response to aninquiryrelativetothepossibilityofconsideringtheseexemptionsonacase—by—case basis,the General Counsel pointed out that this may be viewed as discriminatory.He stressed that all fees imposed must be fair •andequitableandcannotexceedtheactualcostofservice.Following furtherdiscussion,it was the consensus of the Board that no changes be made to thecurrentconnectionfeeordinancerelativetolocalagencyexemptions. Moved,seconded and duly carried: Directors of County Sanitation District then declared the meeting so adjourned c~c~ Secretary,Bo~’r~of Directors County Sanitation District No.3 of Orange County,California FURTHER MOVED:That the staff be directed to proceed with implementation ofthesupplementaluserfeeprogrameffectiveJuly1,1989,in accordance with the revised implementation plan;and, 0 0 Adjournment That this meeting of the Board of No.3 be adjourned.The Chairman at 8:23 p.m.,January 26,1989. 0 -4- I certify that the minutes of the adjourned regular meeting of County Sanitation District No.3 of Orange County,California,on January 26,1989, reporting the actions of said District,are a true and correct report of said minutes. Cha ~ Board of Directors of County Sanitation District No.3 of Orange County,California Secretary,Board of Directors of County Sanitation District No.3 of Orange County,California .