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HomeMy WebLinkAboutMinutes 1989-05-31 BCOUNTY SANITATION DISTRICT NO.5 OF ORANGE COUNTY,CALIFORNIA MINUTES OF ADJOURNED REGULAR MEETING May 31,1989 -5:30 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.5 of Orange County,California,met in an adjourned regular meeting at the above hour and date. The Chairman called the meeting to order at 5:35 p.m.The roll was called and the Secretary reported a quorum present. DIRECTORS PRESENT:John C.Cox,Jr.,Chairman,Evelyn Hart, 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 ************************** 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.There have been multiple contracts completed over the past eight or nine years and the Districts 5 and 6 dual force main in Pacific Coast Highway has been completely rehabilitated.The new Master Plan has identified additional future deficiencies with regard to the gravity sewer built in 1936 in Pacific Coast Highway but replacement of the sewer is not planned for several years depending on the District’s financial resources. Other upcoming major projects proposed in the Master Plan are improvements to the Bay Bridge Pump Station and the Bayside Drive Trunk Sewer.Staff also noted that it will be necessary to replace the sewer line beneath Big Canyon Golf Course in approximately 10 years. With regard to the downcoast area,Mr.Dawes reported that it will be necessary to build a sewer and a pump station in accordance with the agreement previously entered into with the Irvine Ranch Water District.They have prepaid the required connection fees and the agreement provides for payment of 100%of the cost for all of the facilities south of the existing City of Newport Beach limit. The cost for the facilities will total approximately $4.5 million but this will be borne entirely by Irvine Ranch Water District. Several of the projects will be required In the late 1990’s and Mr.Dawes reported that sewer system improvements over the next 10—year period would total over $17 million. —1— C 5/31/89 DISTRICT 5 Update on long—range financial The General Manager reported that p~~ram and consideration of In 1981 DistrIct 5 was the first of the amendments to existing sanitary Districts to Implement a supplemental sewer service charges user fee program to make up the shortfall of ad valorem tax revenues and provide needed additional financing for operations and major rehabilitation work on the sewer system0 New development pays a separate connection fee for sewage system capacity0 He further advised that when the program was originally presented to the public and adopted by the Board,It was anticipated that it would be necessary to increase the fees by approximately 77%beginning with the second year to finance the rehabilitation work on the trunk sewer system0 The District has been able to delay any increase in the supplemental user fees originally adopted in 1981 due to a significant decline in inflation rates,receipt of favorable bids on various District and joint works construction and rehabilitation projects,and delays in various major plant projects,all of which have reduced District expenditures and cash flow requirements well below originally anticipated levels0 In response to a State Water Resources Control Board ruling,the Directors ordered a change in the supplemental user fee program from a water-meter—size basis to a flat fee for single and multi—family residences,and fees for other facilities based on square footage of improvements.This change was effective for the 1987—88 fiscal year0 In 1986 the Board considered and rejected the Issuance of Certificates of Participation (COP’S)In concert with other Districts to partially finance the District’s share of joint treatment works construction0 The Acting Director of Finance then reviewed the District’s financial projections for the next ten years0 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 No0 5 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 trunk sewer construction be financed by a combination of borrowing (i.e.,COP’S)and increased connectionfees.Debt 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 will have a major impact on the District’s cash flow requirements. Staff reported that a considerable portion of the District’s major funding shortfalls are for capital financing.Staff’s projections assume that all construction projects proceed on schedule.Thus,the estimates can be considered “worst case”scenarios.However,the Districts continue to experience delays in major projects because of SCAQMD requirements.Further delays in these projects would also delay,or at least spread out,the need for capital funds. ~i~i ~i _____ ~~~~ii~~~ti!J~i a 0 C It was also pointed out that, secondary treatment waiver is will increase substantially. Directors assume the renewal conversely,as the Directors were aware,if the not renewed in 1990,the Districts’capital needs All projections currently being submitted to the of the Districts’301(h)waiver permit. —2— S ~5/31/89 DISTRICT 5 Mr.Streed then reviewed the current fee schedules of the District,as follows: Single—Family Multi—Family Comercia/Industrial / 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 Annual User Fee $26.40 per $15.85 per $18.90 per 1,000 sq. dwelling unit dwelling unit ft.of building The Acting Director of Finance explained the District’s cash flow projections were based on several assumptions.Scenario 2 of the “Action Plan”,which recomends continuation of the current treatment levels under the 301(h)waiver, is the staff’s preliminary preferred alternative reconinendation.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 recomends a change in the method of determining connection fees.The recorririended 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 additional facilities.He reported that no change in the connection fee schedule was reconlnended at this time.After a final decision is made by the Boards regarding the NPDES Permit renewal,staff would be presenting their reconuiendatlons to the Board relative to increasing the connection fees,probably to take effect October 1,1989,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 $42 million Is projected to be needed to meet joint works treatment and District sewer capital requirements.The first Issue is projected for 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 pemits 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 Board then entered into a discussion of the possible increases in user fees based on different assumptions,including Scenario 3 requiring full secondary treatment,and the financing alternatives.Staff indicated that the biggest increase under a full secondary treatment scenario would be required around the turn of the century and again when the treatment facilities would first come on line in the year 2005.At this time,it is estimated that the user fees would increase by an additional $50—75 per year. -3- —._____ -~—.~J..--.-. 0. 5/31/89 DISTRICT 5 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 Contmercia/Industrial/ Fee Type Residential Residential Governmental/Other Annual User Fee $45.00 per $27.00 per $32.00 per 1,000 sq. dwelling unit dwelling unit ft.of building Actions re proposed Ordinance No.519 First reading of Proposed Moved,seconded and duly carried: Ordinance No.519 That proposed Ordinance No.519,An Ordinance of the Board of Directors of County Sanitation District No.5 of Orange County,California,Amending Ordinance No.516 EstablIshing Sanitary Sewer Service Charges,be read by title only;and, FURTHER MOVED:That reading of said ordinance in its entirety be,and Is hereby,waived0 Following the reading of Ordinance No.519 by title only,it was moved, seconded and duly carried: That Ordinance No.519,An Ordinance of the Board of Directors of County Sanitation District No,5 of Orange County,California,Amending Ordinance No.516 Establishing Sanitary Sewer Service Charges,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 Ordinance No.519 is categorically~General Counsel,it was moved, exempt per CEQA Guidelines seconded and duly carried: That the Board of Directors hereby finds that adoption of Ordinance No,519 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.5 be adjourned.The Chairman then declared the meeting so adjourned at 6:08 p.m., May 31,1989. Secretary,Boar of Directors County Sanitation District No.5 of Orange County,California -4- I certify that the minutes of the adjourned regular meeting of County Sanitation District No.5 of Orange County,California,on May 31,1989, reporting the actions of said District,are a true and correct report of said minutes. Secretary,Board of Directors of County Sanitation District No.5 of Orange County,California Directors of Coui ict No.5 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.~held on _______________,19fl was duly posted for public inspection at the main lobby of the District’s offices on _______________, 19j1. IN WITNESS WHEREOF,I have hereunto set my hand this _____ day of ~19S1. ~ Board of Directors of County Sanitation District No.j~ of Orange County,California