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HomeMy WebLinkAboutMinutes 1989-06-07~,.~COUNTY SANITATION DISTRICT NO.11 OF ORANGE COUNTY,CALIFORNIA MINUTES OF ADJOURNED REGULAR MEETING June 7,1989 —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.11 of Orange County,California,met in an adjourned regular meeting at the above hour and date. The Chairman called the meeting to order at 5:40 p.m.The roll was called and the Secretary reported a quorum present. DIRECTORS PRESENT:Tom Mays,Chairman,Grace Winchell DIRECTORS ABSENT:Roger R.Stanton STAFF MEMBERS PRESENT:J.Wayne Sylvester,General Manager, Rita J.Brown,Secretary,William N. Clarke,Thomas M.Dawes and Gary G.Streed OTHERS PRESENT:Thomas L.Woodruff,General Counsel ,Conrad Hohener ************************** Update on long—range financial The General Manager reported that in program and consideration of 1987 the Board modified their long-range amendments to existing sanitary financial program and implemented a sewer service charges supplemental user fee to make up the 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’expansion are currently provided from connection fees on new development paid by the developer. 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 11 Board decided against this proposal. Mr.Sylvester then reviewed the current fee schedules of the District,as follows: Single—Family Multi-Family Commercia/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 $15.83 per $18.90 per 1,000 sq. dwelling unit dwelling unit ft.of building —1— ,~.-.... 6/07/89 DISTRICT 11 He further reported that the Districts all have a separate industrial user fee billed annually by the Districts for users that place a higher demand on the Districts’sewerage system. The Acting Director of Finance then reviewed the District’s financial projections 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.11 will exhaust its capital funds as soon as 1990.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 connection fees.Debt retirement and escalating operating and maintenance costs would be paid by annually increasing the supplemental user fees..He noted that in the next few years the user fees may have 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 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. 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 projections currently being submitted to the Directors assume the renewal of the Districts’301(h)waiver permit. Mr.Streed 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 facilities.He noted that a determination would be made by the Board after a decision is made on the permit renewal application and any revised connection fees would probably be effective October 1,1989,when the residential connection fee is projected to be $2,260 under Scenario 2. He further reported that over the next 10 years COP-type borrowing totaling $54 million is projected to be needed to meet joint works treatment and District sewer capital requirements.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. -2- • 6/07/89 DISTRICT 11 It was pointed out that the Health and Safety Code permits 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. Staff reported that the projections assume that the Bolsa Chica will annex to the District and that annexation fees in the amount of $3,020,000 will be received in 1989—90.However,if the annexation fees are not received in 1989—90,District No.11 will probably have to accelerate its issuance of $30,000,000 in COP’s from 1990—91 to 1989—90.Sufficient information is not available to the District at this time on the projected development of the Bolsa Chica to enable an estimate of connection fee revenues from this area.Any connection fees received would partially reduce the projected $54,000,000 estimated COP’s over the next 10—year period. The Board then entered into a léñgthy discussion of the District’s financial condition and estimated fee schedules for the future.Considerable time was devoted to alternatives relative to financing the capital facilities requirements and a review of connection fees and the proposed development within the District’s existing boundaries,as well as the anticipated annexation of the Bolsa Chica,and a fee structure that provides that new development pays the appropriate amount for sewerage system capacity.Staff reiterated that the current annexation fee and the proposed connection fee formula recomended by the Master Plan financial consultant assures that new development pays its fair share of existing and needed future facilities. 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 Coninercia/Industrial/ Fee Type Residential Residential Governmental/Other Annual User Fee $40.00 per $24.00 per $29.00 per 1,000 sq. dwelling unit dwelling unit ft.of building Staff reiterated 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,staff will present their recommendations to the Board relative to increasing the connection fees.Mr.Sylvester also reiterated that the reconiT~ended change in the policy for computing connection fees would increase the fee from $1,500 to $2,260.Thereafter,the connection fee would probably increase 5%annually based on the construction cost index.He added that those projections are based on the assumption of Scenario 2,continuing with the current level of treatment.If the Boards choose to go to Scenario 3,full secondary treatment,the current fee would increase to $2,500. Actions re proposed Ordinance No.1109 First reading of Proposed Moved,seconded and duly carried: Ordinance No.1109 That proposed Ordinance No.1109,An Ordinance of the Board of Directors of County Sanitation District No.11 of Orange County,California,Amending Ordinance No.1108 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,waived. —3- LL 6/07/89 DISTRICT 11 Following the reading of Ordinance No.1109 by title only,it was moved, seconded and duly carried: That Ordinance No.1109,An Ordinance of the Board of Directors of County Sanitation District No.11 of Orange •County,California,Amending Ordinance No.1108 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.1109 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.1109 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. Approving Professional Services Agreement with John Carollo Engineers for preparation of Phase I Preliminary Project Report for Slater Avenue Pump Station Sewage System Improvements, Contract No.11—17 Verbal report of staff The Director of Engineering reported that the new sewerage facilities Master ~ Plan report prepared for the Joint Districts as part of the “Action Plan” effort includes both the joint treatment and disposal facilities,as well as the sewer conveyance systems for each of the sanitation districts.In District 11 the consultants have found that Slater Avenue Pump Station and certain trunk sewer facilities will be deficient for meeting future short—term and long—term capacity requirements;the most notable deficiency being the Slater Avenue Pump Station. The long—term solution had been identified in previous master plan reports as the extension of the Coast Trunk Sewer from its present terminus at Golden West Street in Orange Avenue northwesterly through the Bolsa Chica area to Edwards Street at Slater Avenue.Under this plan a line extending easterly in Slater Avenue would relieve the Slater Avenue Pump Station,while a line extended north in Edwards Street would relieve the Springdale Street sewer collection facilities,all at an estimated cost of $21.9 million. The new master planning team reviewed this and other alternate ways to provide the needed sewer improvements.The alternatives included diverting a portion of the area tributary to the Slater Avenue Pump Station easterly to the Knott Interceptor,thereby reducing the quantity of flow through the Slater Avenue Pump Station at an estimated cost of $16.6 million;and rebuilding the Slater Avenue Pump Station at an estimated cost of $14.2 million.The latter is the most economical method. The Slater Avenue Pump Station is currently operating at or near capacity. With continuing development taking place within the drainage area served by (fl~ the pump station,a project to correct the projected deficiencies is urgent1y(~.~ needed. -4- ‘~‘‘6/07/89 DISTRICT 11 The pending Master Plan reconii~ends that the Slater Avenue Pump Station be rebuilt at essentially the same location.It appears that the station could best be built adjacent to the existing station on lands now owned by General Telephone (GTE). Three phases of work for Slater Avenue Pump Station Sewage System Improvements,Contract No.11—17,are envisioned: Phase I includes preparation of a project report detailing the size and construction requirements of the pump station elevations and the trunk sewer improvements tributary to the station.The engineering documents will also provide the necessary data for acquisition of a site from GTE. Phase II will include preparation of detailed construction plans and specifications,and an addendum to the professional services agreement will be negotiated and presented to the Directors for consideration at a later date. Phase III will be the actual construction of the facilities. In February,staff reconniended that the Board proceed with the Phase I work for preliminary engineering work in advance of the “Action Plan”completion and certification in order to ensure that District 11 can continue to provide adequate sewer service.The Board authorized solicitation of proposals for the Phase I work. Mr.Dawes reviewed the proposals received from John Carollo Engineers,Boyle Engineering Corporation and Brown and Caldwell Consulting Engineers,and recon~ended approval of a professional services agreement with John Carollo Engineers for preparation of Phase I Preliminary Project Report for Slater Avenue Pump Station Sewage System Improvements,Contract No.11-17,on an hourly—rate basis including labor plus overhead,and fixed profit,for an amount not to exceed $44,738.00. Mr.Dawes also noted that it is anticipated that engineering services for Phase II and Phase III will be negotiated upon completion of Phase I.This portion of the contract will be negotiated separately and presented to the Board for approval at that time. Receive and file Staff Report Moved,seconded and duly carried: dated May 31,1989 the Staff Report dated May 31, for preparation of Phase I Pump Station Sewage System hereby,received and ordered Approving Professional Services Agreement with John Carollo Engineers re Contract No.11—17 That the Board of Directors hereby adopts Resolution No.89-50-11, approving Professional Services Agreement with John Carollo Engineers for preparation of Phase I Preliminary Project Report for Slater Avenue Pump Station Sewage System Improvements,Contract No.11-17,on an hourly-rate basis for labor plus overhead,plus fixed profit,for a total amount not to exceed $44,738.00.A certified copy of this resolution is attached hereto and made a part of these minutes. That 1989 re selection of engineering consultant Preliminary Project Report for Slater Avenue Improvements,Contract No.11—17,be,and is filed. Moved,seconded and duly carried: —5- if’ 6/07/89 DISTRICT 11 Adjournment Moved,seconded and duly carried: That this meeting of the Board of Directors of County Sanitation District No.11 be adjourned.The Chairman then declared the meeting so adjourned at 6:44 p.m., June 7,1989. c~s~~ Secretary,Boar of Directors County Sanitation District No.11 of ~0range County,California S 0 I certify that the minutes of the adjourned regular meeting of County Sanitation District No.11 of Orange County,California,on June 7,1989, reporting the actions of said District,are a true and correct report of said minutes. Secretary,Board of Directors of County Sanitation District No.11 of Orange County,California ~ai rman Board of Directors of County Sanitation District No.11 of Orange County,California STATE OF CALIFORNIA) SS. COUNTY OF ORANGE Pursuant to California Government Code Section 54954.2, I hereby certify that the Agenda for the Adjourned Regular Board Meeting of District No.~,held on ~ni ,19~was duly posted for public inspection at the main lobby of the District’s offices on ~~,19~j. IN WITNESS WHEREOF,I have hereunto set my hand this day of __________________,19 ~. ~~ ~ Board of Directors of County Sanitation District No.$t of Orange County,California