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HomeMy WebLinkAboutMinutes 1989-05-31 A COUNTY SANITATION DISTRICT NO. 1 OF ORANGE COUNTY, CALIFORNIA MINUTES OF THE ADJOURNED REGULAR MEETING MAY 17, 1989 - 7:30 p.m. Garden Grove Community Center 11300 Stanford Avenue, Room A Garden Grove, California * * * * * * * * * * * * * * * * * Adjournment of meeting by Secretary This 17th day of May, 1989, at due to lack of quorum 7:30 p.m. , being the time and place for the Adjourned Regular Meeting of County Sanitation District No. 1 of Orange County, California, and there not being a quorum of said Board present, the meeting of District No. 1 • was thereupon adjourned by the Secretary to 5:30 p.m. , Thursday, June 1, 1989, to consider modifications to the District's supplemental user fee program. Secretary of t e .Board of Directors County Sanitation District No. 1 of Orange County, California I certify that the minutes of the adjourned regular meeting of County Sanitation District No. 1 of Orange County, California, on May 17, 1989, reporting the actions of said District, are a true and correct report of said minutes. Chairman Board of Directors of County Sanitation District No. 1 of Orange County, California Secretary, Board of Directors of County Sanitation District No. 1 of Orange County, California COUNTY SANITATION DISTRICT NO. 13 OF ORANGE COUNTY, CALIFORNIA MINUTES OF THE ADJOURNED REGULAR MEETING MAY 17, 1989 - 7:30 p.m. Garden Grove Community Center 11300 Stanford Avenue, Room A Garden Grove, California * * * * * * * * * * * * * * * * * . Adjournment of meeting by Secretary This 17th day of May, 1989, at due to lack of quorum 7:30 p.m. , being the time and place for the Adjourned Regular Meeting of County Sanitation District No. 13 of Orange County, California, and there not being a quorum of said Board present, the meeting of District No. 13 was thereupon adjourned by the Secretary. Secretary of Yhe Board of Directors County Sanitation District No. 13 of Orange County, California I certify that the minutes of the adjourned regular meeting of County Sanitation District No. 13 of Orange County, California, on May 17, 1989, reporting the actions of said District, are a true and correct report of said minutes. Li t IJJJk4 Ch i man Board of Direeors of County Sanitation Diict No. 13 of Orange County, California Secretary, Board of Directors of County Sanitation District No. 13 of Orange County, California COUNTY SANITATION DISTRICT NO. 6 OF ORANGE COUNTY, CALIFORNIA MINUTES OF ADJOURNED REGULAR MEETING . May 31, 1989 - 4:00 p.m. 10844 Ellis Avenue Fountain Valley, California Pursuant to adjournment of the adjourned regular meeting of May 17, 1989, the Board of Directors of County Sanitation District No. 6 of Orange County, California, met in an adjourned regular meeting at the above hour and date. The Chairman called the meeting to order at 4:12 p.m. The roll was called and the Secretary reported a quorum present. DIRECTORS PRESENT: James A. Wahner, Chairman, Ruthelyn Plummer, Don R. Roth 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 , Steven Wolff, Alan D. Aronson and Michael Goodman Actions re appeal of Norlyn Builders regarding District connection fees charged for property located at 1455 Superior Avenue, Newport Beach Receive and file appeal submitted Moved, seconded and duly carried: by Rosenfeld, Lindsey & Wolff on behalf of Norlyn Builders That the notice of appeal submitted by Rosenfeld, Lindsey & Wolff, dated May 4, 1989, on behalf of Norlyn Builders, regarding connection fees charged pursuant to Ordinance No. 612 for property located at 1455 Superior Avenue, Newport Beach, be, and is hereby, received and ordered filed. Report of General Counsel The District' s General Counsel reported on the appeal of Norlyn Builders which included their letter dated May 4, 1989, and attachments consisting of several letters between Norlyn, the City of Newport Beach and the Sanitation District. He reported that Norlyn Builders was assessed a $219,000 connection fee for the 146-unit senior citizens residence inn, based on the connection charge of $1,500 per unit, in accordance with District' s Ordinance No. 612. Mr. Woodruff stated that Norlyn Builders contend that they should have been Al assessed as a commercial property, like a hotel , rather than as a residential building. The District contends that Norlyn was correctly assessed as residential property similar to that of any other building with individual living quarters is assessed, for each individual unit. -1- k,; m 5/31/89 DISTRICT 6 The General Counsel briefly reviewed the arguments and conclusion contained in his Memorandum of May 24, 1989, making comparisons between the definitions and uses of a "hotel " versus a "residence". He stated that there is no merit to Norlyn' s contention that it is a "hotel " facility rather than a O y , Y for the""residential facility purposes of connection fees.P P The facility' s use of the sewage system is at least as intensive as that of an apartment house which is required to pay a residential connection fee for each unit. t, ,{ Receive and file General Counsel 's Moved, seconded and duly carried: Memorandum dated May 24, 1989 That the General Counsel ' s Memorandum dated May 24, 1989, regarding said appeal , be, and is hereby, received and ordered filed. Presentation by Norlyn Builders The Chairman recognized Mr. Steven Wolff, of Rosenfeld, Lindsey & Wolff, attorneys representing Norlyn Builders.Y P 9 Y Mr. Wolff stated that the facility located at 1455 Superior Avenue, Newport Beach, is licensed and regulated by the State Department of Social Services. He advised that the development is in an area zoned for commercial buildings. Mr. Wolff contended that the project has unique requirements that do not generally 1114 apply to typical residential units. Because of construction obligations, they paid the connection fees under protest in order to proceed with the project. Mr. Wolff further commented on conversations with the District and Al correspondence included in their appeal submittal between Norlyn, the 11 District and the City regarding the connects Y 9 on fee 9 assessment. O Mr. Wolff stated that this facility is an interim, assisted-care facility for the aged, and the owners will be providing many of the same services as a convalescent home. He also commented on the parking requirements for ' !, commercial versus residential developments, indicating that their one-quarter A,, a space per unit more closely met the commercial requirements rather than the s x residential requirements. Mr. Wolff also contended that the absence of a complete kitchen in each unit would preclude them from being classified as "dwelling units" as defined by the District's ordinance. He questioned the criteria used in the General ry i 'Counsels Memorandum relative� to the residents permanent address which would be used for their mail , voter registration, etc. .� He reiterated that their facility more closely resembles a convalescent a hospital which is classified as a commercial establishment. g Mr. Wolff also noted that if said facility was determined to be a hotel by the City of Newport Beach, they were prepared to pay whatever hotel tax was a assessed them. Mr. Goodman, one of the owners of the facility, also addressed the Board. He reiterated that the State Department of Social Services regulates this type of facility and they do not consider it as an apartment-type unit. He also advised that when the project was originally conceived, the land was zoned for administrative, professional and commercial . } -2- 'f Q z 5/31/89 DISTRICT 6 Response by General Counsel and The District's General Counsel staff responded to what he indicated were some rather gross inconsistencies in the statements and documents of Norlyn Builders. Norlyn stated that if the hotel bed tax was appropriate, they would be prepared to pay the annual tax of $236,520. However, they also stated to the Sanitation District that they had not planned on, nor were prepared to pay, the one-time District connection charge of $219,000. He also pointed out that the original set of plans submitted to the City of Newport Beach contained the term retirement "home" while the set of plans given to the Sanitation District had been changed to read retirement "hotel ". Mr. Woodruff refuted Mr. Wolff's comment regarding parking and stated that if this facility was classified as a hotel , the parking requirement would be greater than for residences, not less. He added that the high density land use of the 146-unit complex on 8/10 of an acre places a tremendous load on the Sanitation District's facilities. Director Plummer expressed concern that perhaps this type of development did not fit into either category--commercial or residential , but that a separate category should be established to address this type of user as there are several more establishments of this type planned for the future. It was pointed out that the issue before the Board that evening was whether this is a residential unit or a commercial building based on use of the building and the impact on the sewer system. Denying appeal of Norlyn Builders It was moved, seconded and duly carried: That the appeal of Norlyn Builders, dated May 4, 1989, regarding the connection fee charges pursuant to District Ordinance No. 612 for property located at 1455 Superior Avenue, Newport Beach, be, and is hereby, denied. Director Ruthelyn Plummer requested that her abstention from voting on the motion be made a matter of record. Status Report on District' s sewer The Director of Engineering reviewed the rehabilitation program and Master status of the District's rehabilitation Plan of facilities program and the master-planned facilities included in the new Collection, Treatment and Disposal Facilities Master Plan currently being considered by the Directors as part of the Joint Districts' 30-year "Action Plan" program. The District has embarked on a major rehabilitation and construction program relative to trunk sewers that will serve approximately two-thirds of the City of Costa Mesa. District 6 will participate in a portion of the Baker-Gisler Interceptor, between Fairview Road and Treatment Plant No. 2, along with Districts 7 and 14. District 6 will also have to build a parallel trunk sewer in Fairview Road to relieve the existing line. Districts Nos. 5 and 6 have completed rehabilitation of the Coast Highway Force Main. He added that District 6 also has a gravity sewer in Coast Highway that needs to be replaced but because of the District' s financial condition, staff will try to postpone that work for as long as possible. -3- U } ' 5/31/86 a , DISTRICT 6 Mr. Dawes also advised that the trunk sewer in Newport Boulevard, which serves 4 the development around Hoag Hospital , needs to be supplemented with a parallel ;'. line. The sewer system improvements which will be needed over the next 10-year period total $10 million Mr. Dawes noted that this was a little higher than previously anticipated because of projected higher density land uses. Update on long-range financial The General Manager reported that in G program and consideration of 1983 the Board modified their long-range amendments to existing sanitary financial program and implemented a k f ! sewer service charges supplemental user fee to make up the 4' :I shortfall of ad valorem tax revenues and provide the additional financing necessary for both operations and maintenance costs as well as major facilities" rehabilitation. User fees are charged to all properties connected to the sewer. Funds for facilities' es expansion are currently provided from connection fees on new development paid by the developer. 1 In 1986 the Board also considered the issuance of Certificates of Participation (COP's) to partially finance their share of the joint works construction at the treatment plants but the District 6 Board decided against this proposal . The Acting Director of Finance then reviewed the District's financial projections r !` ' for the next ten years. Based upon the Facilities' Master Plan and the Financial Plan recommendations contained in the 30-year "Action Plan" now under consideration by the Joint Boards, District No. 6 will exhaust its capital funds as soon as 1990-91. The . "Action Plan" recommends that the District' s share of the treatment plant construction and the trunk sewer construction be financed by a combination of borrowing (i .e. , COP's) and increased connection fees. Debt 0 retirement and escalating operating and maintenance costs would be paid by annually increasing the supplemental user fees. He noted that the user fee is projected to escalate at an accelerated pace to maintain the District's financial integrity. However, there are several unknowns that may have a major impact on the District' s funding requirements. Staff reported that a considerable portion of the District's major funding shortfalls are for capital financing. Staff' s projections assume that all it Iconstruction projects proceed on schedule. Thus, the estimates can be considered "worst case" scenarios. However, the Districts continue to experience delays in T. major projects because of SCAQMD requirements. Further delays in these projects ' 1 would also delay, or at least spread out, the need for capital funds. It was also pointed out that, conversely, as the Directors were aware, if the secondary treatment waiver is not renewed in 1990, the Districts' capital needs will increase substantially. All t y projections currently being submitted to the Directors assume the renewal of the Districts' 301(h) waiver permit. Mr. Streed then reviewed the current fee schedules of the District, as follows: Single-Family Multi-Family Commercia/Industrial/ ,i Fee Type Residential Residential Governmental/Other One-time Connection $1,500 per $1,500 per $300 per 1,000 sq. Fee dwelling unit dwelling unit ft. of building JJ V'!k0 i Annual User Fee $34.85 per $20.92 per $24.95 per 1,000 sq. Ktr, dwelling unit dwelling unit ft. of building -4- 'i j� v - 5/31/89 DISTRICT 6 The Acting Director of Finance explained the District's cash flow projections were based on several assumptions. Scenario 2 of the "Action Plan", which recommends continuation of the current treatment levels under the 301(h) waiver, is the staff's preliminary preferred alternative recommendation. It represents the minimum probable level of construction, operation and maintenance costs. For the first five years of the planning period, the differences between Scenarios 2 and 3 (full secondary treatment) would not be significant. Additional flow and sewer connection assumptions are also consistent with the Master Plan. With regard to connection fees, the Master Plan Financial Plan recommends a change in the method of determining connection fees. The recommended change, which Mr. Streed indicated was incorporated in the cash flow projections, is to include the cost of future facilities on a per-unit basis. The reason for including these costs is that the Districts currently operate near capacity and any new flow will require new additional facilities. He noted that once the Boards determine the appropriate wastewater management program under the "Action Plan", a change would be reflected when the residential connection fee is projected to be $2,260 under Scenario 2. Mr. Streed reported further that over the next 10 years COP-type borrowing totaling $29 million is projected to be needed to meet joint works treatment and District sewer capital requirements, the first issue probably in 1990. He indicated that a more detailed analysis would be performed and presented to the Directors before any debt is issued. The cash flow projections are for several small issues on the theory of borrowing as little as possible and only when absolutely necessary. All issues are assumed to be at a fixed rate of 8% for 20 years. • It was pointed out that the Health and Safety Code permits the user fees to repay debt; and as the only controllable source of revenue for the District, they are projected for use to repay the necessary new debt. The Directors then entered into a discussion of the District's financial condition and alternative means of funding the needs, particularly the possible issuance of debt certificates. The General Manager reiterated that the decision as to whether or not to issue debt was not before the Directors at this time. He noted that the purpose of this meeting was just to consider adjusting the user fees for next year. Before a decision is required relative to incurring debt, staff will provide a more detailed analysis of the District's needs and the Board will make a decision at that time. If the Board should decide against borrowing, the near-term user fees would probably need to be double what they would otherwise be. The General Manager then reviewed the draft ordinance included with the agenda material which increases the supplemental user fees, as follows: Single-Family Multi-Family Commercia/Industrial/ Fee Type Residential Residential Governmental/Other Annual User Fee $49.00 per $29.00 per $35.00 per 1,000 sq. dwelling unit dwelling unit ft. of building Staff added that no change in the connection fee schedule was recommended at this time. After a final decision is made by the Boards regarding the NPDES Permit renewal , they would be presenting their recommendations to the Board relative to increasing the connection fees. -5- 5/31/89 DISTRICT 6 It III Actions re proposed Ordinance No. 613 f, i it G 6 a' First reading of proposed Moved, seconded and duly carried: , ! Ordinance No. 613 '"', = That proposed Ordinance No. 613, An 'l;'' Ordinance of the Board of Directors of County Sanitation District No. 6 of 1' Orange County, California, Amending Ordinance No. 609 Establishing Sanitary Sewer Service Charges, and Repealing Ordinance No. 612, be read by title only; and, FURTHER MOVED: That reading of said ordinance in its entirety be, and is _ hereby, waived. Following the reading of Ordinance No. 613 by title only, it was moved, '`'' ', seconded and duly carried: That Ordinance No. 613, An Ordinance of the Board of Directors of County Sanitation District No. 6 of Orange County, California, Amending Ordinance No. 609 Establishing Sanitary Sewer Service Charges, and Repealing Ordinance No. 612, be introduced and passed to second reading on June 14, 1989, at 7:30 p.m. , at the Districts' administrative office. Making finding that adoption of Following a verbal .report by the i Ordinance No. 613 is categorically General Counsel it was moved, k�4 exempt per CEQA Guidelines seconded and duly carried: That the Board of Directors hereby finds that adoption of Ordinance No. 613 is categorically exempt per California Environmental Quality Act (CEQA) Guidelines Section 15273, in that the Ordinance establishes fees for operation and maintenance expenses of the District. Adjournment Moved, seconded and duly carried: '', ' That this meeting of the Board of Directors of County Sanitation District No. 6 " > be adjourned. The Chairman then declared the meeting so adjourned at 5:34 p.m. , May 31, 1989. w ff 4 F Siv a, p k il'i k 19 Secretary, Board of Directors gip' County Sanitation District No. 6 of wC," Orange County, California l f,I -6- - a� 6 t I certify that the minutes of the adjourned regular meeting of County Sanitation District No. 6 of Orange County, California, on May 31, 1989, reporting the actions of said District, are a true and correct report of said minutes. t Directors of County on District No. 6 e County, California Secretary, Boarb of Directors of County Sanitation District No. 6 of Orange County, California 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. (p held on 3 , 19_a was duly posted for public inspection at the main lobby of the District ' s offices on Q 4 , 19D. 14 IN WITNESS WHEREOF, I have hereunto set my hand this &('04-L day of 19--". 7R Rita J. Brown, Secretary of the Board of Directors of County Sanitation District No. 6 of Orange County, California