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
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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.
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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.
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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.
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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.
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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
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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
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day of ~19S1.
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Board of Directors of County
Sanitation District No.j~
of Orange County,California