HomeMy WebLinkAboutMinutes 1991-04-18COUNTY SANITATION DISTRICT NO.7
OF ORANGE COUNTY,CALIFORNIA
MINUTES OF ADJOURNED REGULAR MEETING
April 18,1991 —7:30 p.m
Tustin Presbyterian Church
225 West Main Street
Tustin,California
Pursuant to adjournment of the regular meeting of April 10,1991,the Board of
Directors of County Sanitation District No.7 of Orange County,California,met in
an adjourned regular meeting at the above hour and date.
The Chairman called the meeting to order at 7:50 p.m.The roll was called and the
Deputy Board Secretary reported that the Board lacked a quorum.
DIRECTORS PRESENT:Richard B.Edgar,Chairman,John C.Cox,Jr.,Robert
Richardson (arrived at 8:27 p.m.),James A.Wahner
DIRECTORS ABSENT:Fred Barrera,Don R.Roth,Sally Anne Sheridan
STAFF MEMBERS PRESENT:J.Wayne Sylvester,General Manager,Thomas M.Dawes,
Gary G.Streed,Penny Kyle,Corinne Clawson,Jeff
Esber,Dan Dillon,Bob Geggie,Judy Lee
OTHERS PRESENT:Thomas L.Woodruff,General Counsel,Franklin D.
Cole,Frank Costantino,Edward P.Stamford,Ben
Lovelace,Bing Ng,Mr.and Mrs.Robert G.William,
Dr.and Mrs.Sylvan Katz,Al Baker,Hilary Baker,
M.A.Marcheso,Evelyn Edna Dalby,Frances P.Morrow,
Walter T.Sullens,E.Rhoades,Dave Bryant
Video Presentation on Districts The Chaiman stated that a Board quorum
Wastewater Management Program was expected shortly.He observed that
since many of the citizens in attendance
had not had an opportunity to acquaint themselves with the activities of the
Sanitation District,while awaiting a quorum he would open the meeting by
showing a video on the District’s wastewater management program.
Declaring a Quorum Present Upon the arrival of Director Richardson
at 8:27 p.m.the Chairman declared a
quorum present.
Public Hearing on proposal to
collect adopted annual sewer
service charges on the property tax
bills and on the Sewer Service
Charge Report for 1991—92
Open Public Hearing The Chairman declared the hearing open
at 8:27 p.m.
He.then announced that the purpose of the public hearing was to consider
a written report pertaining to the providing of sewer service for all
properties within the District,and the proposal to collect the adopted
sewer use fee on the property tax roll beginning with the 1991-92 fiscal
year.
DISTRICT 7
4/18/91
Staff Report on proposed use of the The General Manager stated that the
County of Orange property tax bill County Sanitation District Is
for collection of the annual sewer responsible for transporting,treating
service charge and disposing of sewage in a safe manner
in accordance with strict federal and
state laws to protect the public health and safety and the environment.
In order to do so it had been necessary for the Board to implement a user
fee to provide adequate funding for District’s activities because of tax
revenue limitations.He observed that the purpose of this hearing was
not to consider any new fee or any change of an existing fee,but,rather,
the method of collecting the already adopted sewer use fee that will take
effect on July 1,1991.
He then Introduced Gary Streed,the Director of Finance,who reviewed the
staff’s reports on District No.7’s financial plan,summarized as
follows:
The Orange County Sanitation Districts’cost of providing sewerage
service to the community has been escalating rapidly because of the
increasingly stringent federal and state laws and regulations requiring
advanced treatment of wastewater to remove toxic materials and other
pollutants from the sewage to assure protection of the public health and
safety and the environment,To comply with the new stricter
requirements,the Joint Sanitation Districts have constructed
sophisticated treatment facilities at a cost of hundreds of millions of
dollars over the past few years.
In fiscal year 1992-93,without appropriate measures to protect the
District’s financial integrity,property tax revenues and other existing
revenues were projected to be insufficient to meet the District’s funding
requirements.Due to insufficient tax revenues,by the end of 1992-93
the projected shortfall to meet the District’s operating expenses and
maintain the solvency of the fund would have reached $2.9 million,
increasing to $21.6 million by the year 2000.
Therefore,after considerable study of the District’s long—range funding
requirements,the Board adopted a financial program to avoid projected
revenue shortfalls and provide the necessary income required to finance
the District’s rising operating expenses,as well as major capital
expenditures for construction of master-planned sewerage facilities,
The Board’s adopted financial program includes a one-time connection fee
of $2,350 per dwelling unit for residential property and a $470 per
1,000 sq.ft.charge for commercial,industrial and governmental
property.The connection fee is used to pay for expansion of capital
facilities to serve new development.
As the second element of the long-range financial program,to pay for
costs of operating,maintaining and rehabilitating the sewerage system,
the Board adopted annual sewer service fees,as follows:
Type of Property Annual Fee
-Single—family Residence $40.00
—Multi—family Residence/Mobile Home 24.00
—Commercial/Industrial/Other 28.60/1,000 sq.ft.
(government buildings,utilities,
non-profit organizations,etc.)
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DISTRICT 7
4/18/91
The Director of Finance noted that the large comercial or industrial
dischargers that place an inordinant demand on the District’s system are
also subject to an additional surcharge under a separate industrial waste
ordinance that has been In effect since 1976.Some large industrial
Industrial dlschargers pay as much as $122,056 per year under this
program.
The Director of Finance,utilizing a slide presentation,sumarized the
District’s organizational make—up and their wastewater managemen.t
program.He also reviewed the following three billing and collection
alternatives that had been identified and evaluated by the staff:
—Direct Billing and Collection by District
This approach would require the Sanitation District to send a direct
bill on a periodic basis to every property owner within the
District.The one—time setup cost for this method is estimated at
$157,100 plus an annual cost of $92,100,making the total cost for the
first year $249,200.The projected five—year cost for the direct billing
alternative would be $617,600.
—Placement of User Fee on Local Water Service Bills for Collection
and Remittance to District
Under this method the sewer service charge would be included as a
separate line item on the bill of the several water utilities that
serve the properties within District No.7.He noted that a major
problem of this method is that with the numerous water purveyors
involved it would be difficult to establish a uniform system,which
adds significantly to the cost;and the reluctance of the water
utilities to become the billing agent.The setup cost for this
alternative would be $157,100 plus an annual cost of $232,500,for a
total cost for the first year of $389,600.The estimated five—year
cost of performing this billing service is $1,319,600.
-Placement of User Fee on County of Orange Property Tax Bill for
Collection and Remittance to District
Under this alternative the sewer service charge would be included as
a separate line Item on the property tax bills for all properties
within District No.7.The setup cost would be $142,600.The annual
cost of billing under this method is only $11,700.The total
first—year cost would be $154,300 and the five—year cost is estimated
to be $201,100.
Mr.Streed observed that this method would save the property owner
both directly because of significantly lower costs to the District,
and indirectly because the cost of making periodic payments by the
property owner would be reduced.
Staff reconrnended this alternative as It is clearly the most
cost—effective billing and collection method available.
Districts 1,2,3,5,6,11 and 13 have already adopted this method
for billing their user fees,and it has proven quite effective in
keeping the administrative costs for billing and collecting fees
under control in these seven Districts.
—3-
DISTRICT 7
4/18/91
The Director of Finance reiterated that the rising costs to operate the
District are due to higher mandated levels of treatment and increased
energy costs0 The long-range financial program was adopted by the
District because the District’s revenues and reserves were decreasing and
soon the District would not have been able to meet its operational
requirements without an additional revenue source0
Mr0 Streed then observed that although many of the issues posed by the
public were not really relevant to the specific purpose of the hearing,
he recognized that the citizens have a genuine interest in the activities
of the Sanitation Districts and he,therefore,summarized responses to
those questions that had been raised thus far in the workshop held by the
Districts’staff and in telephone inquiries0 He explained the role of
the District as an operating utility providing an essential service
necessary for the protection of the public health and safety,and
indicated that the District was established solely to provide wastewater
collection,treatment and disposal services to the community0
The Director of Finance further explained that while the District has
always had the statutory authority to levy a sewer service fee,it had
historically financed its operations,maintenance and rehabilitation
activities from the property tax0 The adopted sewer service charge is
based upon use,thus,he reported,it is not a tax and is not subject to
Proposition 13 and 62 provisions0 Property taxes are based on the value
of the property and have no direct relationship to use0 Mr0 Streed
reiterated that the reason for the proposal to collect this fee on the
tax bill is because it is the most cost—effective method,and has no
bearing on whether it is defined as a tax or a fee0
Mr0 Streed also reiterated the impact of evolving federal and state
regulatory requirements on the District’s activities and costs,the cost
reduction measures implemented by the Districts,the basis of the fee
structure for various purposes and for the various classes of users and
the statutory provisions under which the fees were adopted,and then
reviewed cash flow projections0 The reduction in tax revenues resulting
from the passage of PropositIon 13 and Its implementing legislation,
combined with the higher energy costs,the effects of Inflation over the
past several years,and more stringent treatment requirements mandated by
federal,state and local regulatory agencies,would result In depleting
reserves and projected operating deficits for the District without the
new fees0
The Director of Finance then highlighted the appeal process available to
allow for an adjustment of fees in the event of a demonstrated inequity0
Appeals relative to inaccurate billings or properties that are not
connected to local sewers are handled on a case—by—case basis0
The General Manager then reiterated that the purpose of the hearing was
to receive public commentary on the District’s proposal to collect the
annual service charge on the property tax bill0 He also advised that
official notice of the hearing was mailed during the latter part of
February and early March to 41,165 property owners of record on the last
equalized assessment roll of the County of Orange,in accordance with the
provisions of Section 5473~1 of the California Health and Safety Code0
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DISTRICT 7
04/18/91
As prescribed by law,a legal notice of the hearing was published in the
Orange County Register on April 1,1991 and again on April 8,1991.The
hearing notice Included the District’s telephone number for citizens to
call with questions or for more Information.The staff received
approximately 39 calls.Staff also conducted a workshop to answer
questions about the proposal and the District’s operations.The workshop
was held at 7:30 p.m.on Thursday,March 21,at the Tustin Presbyterian
Church,and ten people attended.
Receive and file Sewer Service Moved,seconded and duly carried:
Charge Report for Fiscal Year 1991-92
That the County SanitationDistrict
No.7 Sewer Service Charge Report for Fiscal Year 1991-92 be,and is
hereby,received and ordered filed.
Receive and file written corrinents The General Manager reported that
34 written conniunications had been
received regarding the sewer service fee and proposed method of
collection and sunniarized the conruents;whereupon,
It was moved,seconded and duly carried:
That the written comunications received from the property owners listed
on “Attachment 1”to these minutes,be,and are hereby.,received and
ordered filed.
Oral Public Conilients Chairman Edgar recognized the
following persons who addressed the
Board regarding the proposed method for billing and collection of the
annual sewer service charge:’
-Lorane Katz,12202 Redhill Avenue,Santa Ana
Ms.Katz questioned the basis for computing the single—family dwelling
charge.She Indicated that she had heard it may be based on front
footage or square footage.
In response,the Chairman advised that the charges for residential
dwellings were a per—dwelling unit charge.Charges for coimiercial and
Industrial property are based on square footage.
Ms.Katz also requested Information on how sewer services were financed
in District 13;and the difference between projected fees and actual
fees In District 7.
The Director of Finance reviewed the fee and tax structure of
District 13 and the data used to calculate projected and actual user
fees in District 7.
-Frank Costantino,534 N.Thomas Street,Orange
Mr.Costantino asked whether a private engineering firm had inspected
the Districts’facilities and determined the need for new facilities
which led to the District implementing the sewer service fees to payforthesefacilites.He questioned whether these fees couldn’t be
delayed for several years.He also asked for information on the code
section(s)that allow implementation of the fees.
-5—
DISTRICT 7
4/18/91
In response,the Chairman reported that need for new facilities is due
to the District’s increased demand for wastewater treatment service,as
well as the more stringent requirements for higher levels of treatment
mandated by the state and federal regulatory agencies0 He noted that
the Districts’facilities were extremely sophisticated and cost
efficient,and,In fact,are master planned based on studies by
consulting engineering firms.The District’s portion of the tax
revenue received will not meet the financial needs of the District in
order to operate the facilities0
Staff also responded to his question regarding the exact code section
which allows the Districts to establish these fees0 Section 5473.1 of
the Health and Safety Code empowers the District to establish user
charges and Section 5471 provides for the method of collecting the
charge on the property tax bill0
-Major Edward Stamford,1002 Tropic Lane,Santa Ana
Major Stamford requested Information regarding the total annual dollar
amount that would be raised by each type of charge and the breakdown of
the District’s expenses and the equitability of the fee0
Staff responded that the total amount expected to be collected from
user fees in the first year was $3.6 million0 The total operating
requirements for this year are projected to be $8.3 million.A
breakdown by category of user was not available but staff indicated it
would be mailed to Major Stamford.Staff also reviewed how various
types of properties are charged to achieve equity and the procedures
for fee adjustments if actual sewer use is less than the property use
might otherwise indicate.
Major Stamford also expressed his view that these charges were actually
taxes and should not be allowed according to Proposition 62.
It was pointed out that the user fees are based on the actual cost to
treat the wastewater and those costs are being apportioned to the
appropriate user.It Is not a tax and was established In accordance
with provisions of the Health and Safety Code and under the strict
definitions of Proposition 13.
—Evelyn Edna Dalby,525 W.Main Street,Tustin
Ms.Dalby questioned the equity of the fee structure because of
different household occupancies.She objected to being charged the
same for her residence with only one person as another residence with a
family and several children.
Chairman Edgar and Mr.Streed reiterated the basics of calculating fees
to attempt to achieve equity.
—Frances P.Morrow,Space 9,692 N.Adele Lane,Orange
Ms.Morrow also questioned the equity of the fee structure.She stated
her belief that the developers of new residential property should be
responsible for paying these fees.She also questioned whether
environmental impact reports completed for new construction addressed
the proposed user fees.
In response,the Chairman advised that developers pay a separate,
additional fee for sewage facilities to serve new development and that
environmental impact reports would acknowledge whether sewage treatment
facilites were in place.
-6—
DISTRICT
4/18/91
7
—Franklin D.Cole,#3 Hutton Centre Drive,Suite 900,Santa Ana
Mr.Cole stated that he was representing C.J.Segerstrom Sons and Far
West Management.He read a letter relative to five different
properties and projects.Mr.Cole expressed concern relative to these
charges being collected by the County on the tax bill.He also
comented that the cheapest way is not necessarily the best way.It
was suggested that the direct billing method should be used instead of
placing this charge on the tax bills.Mr.Cole submitted letters to
the Secretary as part of the record.
—Dave Bryant,1331 Bryan Avenue,Tustin
Mr.Bryant questioned whether the other Sanitation Districts used the
same method to collect their user fees and why District 7 was the last
District to implement these charges.
In response,the Chairman and staff pointed out that all of the other
Districts also use the property tax bill to collect their sewer service
charges.District 7 has not had to implement these charges until now
because they have had more development in recent years since
Proposition 13 passed,which resulted in higher assessed valuations as
the new property developed which,therefore,increased the amount of
revenue received from property taxes.Also,some of the other
Districts have higher operating costs due to the necessity to pump
their wastewater from lower areas,such as Newport Beach and Costa
Mesa.Several factors have allowed District 7 to delay implementation
of the user fee until now.
—Walter 1.Sullens,1712 La Lorna Drive,Santa Ana
Mr.Sullens expressed his concern that other agencies would also be
implementing user fees or service fees,such as the police and fire
departments.He cautioned the District’s Board to be aware of
increased government spending and urged them to try to develop ideas to
control costs and prevent implementation of additional charges being
placed on the taxpayers by other governmental agencies.
There being no further public
coniiients,the Chairman then
Moved,seconded and duly carried:
Adoption of Sewer Service Charge
Report for Fiscal Year 1991-92
Moved,seconded and duly carried:
That the County Sanitation District
No.7 Sewer Service Charge Report for Fiscal year 1991-92 be,and is hereby,
adopted.
Close hearing
declared the hearing closed at 9:07 p.m.
Adopting a finding that the
majority of property owners have
not protested relative to
collecting annual sewer service
charges on the QroPertv tax bills
___________________________________
That the Board of Directors does hereby
________________________________
find that a majority of the owners of
-the property,which is the subject of
the Sewer Service Charge Report for
Fiscal Year 1991—92,have not protested the proposed collection of annual
sewer service charges on the property tax bills.
-7-
Directing~the county Auditor—Controller to Include sewer service
~ginning in 1991—92 That the Board of Directors herebyadoptsResolutionNo,91—64—7,directing the County Auditor_ControiiertoincludesewerservicechargesonPropertytaxbillsbeginninginfiscalyear1991—92 for collection,pursuant to Ordinance No,725 of CountySanitationDistrictNo,7 of Orange County.Said resolution by referencehereto,is hereby made a part of these minutes.
Moved,Seconded and duly carried:
Directors of County Sanitation Districtthendeclaredthemeetingsoadjournedat
it
H I
DISTRICT 7
4/18/91
‘it
‘I
Moved,seconded and duly carried:
~4jpurnment
That this meeting of
No.7 be adjourned,
9:08 p.m.,April 18,
the Board of
The Chairman
1991.
0
a
0
County Sanitation District No.7 ofOrangeCounty,California
-8-
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COUNTY SANITATION DISTRICTS
of ORANGE COUNTY.CALIFORNIA
DISTRICT 7 P1~JPOSAL ¶10 COLlECT USER FEE
ON PROPERTY TPiC B]IL
10844 ELLIS AVENUE
P.O.BOX 8127
FOUNTAIN VALLEY.CALIFORNIA 92728-8127
1714)962-2411
Suu~nary of Written Ca~ents Received Through April 10,1991
I.Should Not be on Property Tax Bill:
John Rau
2017 Centella P1.
Newport Beach,CA 92660
II.Properties Not Connected to Sewer:
IRVI~
Jane Vaughn
2052 La Cuesta Dr.
Santa ~na
Bernard C.Mallard
1432 Caneo Dr.
Tustin
Quentin P.Johnson TR
1762 1 Fiesta Way
Tustin
Floyd E.Curl
1411 Lance Dr.
Tustin
T~JSTIN
Tharas L.Gunkel,II
11242 La Vereda Dr.
Santa ~na
W.Donald B~nan
1681 Mitchell Ave.
Tustin
Junior L.Jaites
150 S.Pacific St.
Tusthi
Robert N.Phillips
17662 Westbury In.
Tustin
Wanda O’Dell
17341 IvkFadden
Tusthi
Patricia M.Ri e
14031 Woodlawn Ave.
Thsth~
UNIN~ORPOR~TED P~E~
Western Hare Financing Corp
10530 Brier Ln.
Santa Ana
Albert J.Stefan
10472 Broadview P1,.
Santa Ana
Richard L.Crawford
14172 Clarissa Ln.
Santa Ana
Matropolitan Waste
16381 Construction w Cr.
Irvine
“1
Page 2
110 Properties not Connected to Sewer (Cont’d
tJNINCOPPOR1~JTED AREPJS (Cont ‘d.,
Daniel J..Hamines Jack M0 Hollander TR
13772 N0 Deodar St..13531 Malena Dr.,
Santa Ma Tustin
Thanas E0 King TR Gregorio .Aguirre,Jr0
13871 Deodar St0 13812 Pasadena Ave..
Santa Ma Santa Ana
Eugene B0 Erbentraut Belford L.Phillips
13911 N..Deodar St.12652 Prospect Ave..
Santa Ma Santa Ana
Alvin R0 Pauck TR Wiley C0 Raulston TR
13922 N..Deodar St0 1762 Sierra Alta Dr0
Santa Ma Santa Ma
Robert F.Cole Dayton 0.Dargatz
12952 Elizabeth Way 19102 E0 Siniley Dr.
Tustin Orange
Ralph C0 Anderson Ray M0 Hall
19131 E..Equestrian In..1031 Smoke Tree Ln..
Orange Santa Aria
Dan W..Tcswnley Victor B.Bertagna TR
12451 Everiingside Dr..1112 St0 John P1..
Santa Aria Santa Ma
Louis F..Lyon TR Rollo S.Pickford
18231 E.Fairhaven Ave0 1111 St.Vincent P1.
Santa Aria Santa Ma
Ronald P.Fialcowitz E.W0 Hamlin
10391 Greenbrier Rd.1221 Triun~ha1 Way
Santa Aria Santa Ma
Robert E..Casey TR
3 La Raina Dr..
Santa Aria
REE’:2 /Dist7 ..Lst
0
I certify that the minutes of the adjourned regular meeting of County
Sanitation District No.7 of Orange County,California,on April 18,1991,
reporting the actions of said District,are a true and correct report of said
minutes.
4Lj~
Chai rman
Board of Directors of County
Sanitation District No.7
of Orange County,California
Secretary,Board of Directors of
County Sanitation District No.7
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 ~\~,19~J was
duly posted for public inspection at the main lobby of the
Districtis offices on ~%,
IN WITNESS WHEREOF,I have hereunto set my hand this t I ~
day of
___________________
,19
~~
~
Board of Directors of County
Sanitation District No.‘
of Orange County,California