Loading...
HomeMy WebLinkAbout2003-08 DRAFT MINUTES OF STEERING COMMITTEE MEETING Wednesday, August 27, 2003 A meeting of the Steering Committee of the Orange County Sanitation District was held on Wednesday, August 27, 2003 at 5 p.m., in the District's Administrative Office. (1) The roll was called and a quorum declared present, as follows: STEERING COMMITTEE MEMBERS: OTHERS PRESENT: Directors Present: Thomas L. Woodruff, General Counsel Shirley McCracken, Chair Don Hughes Steve Anderson, Vice Chair Sonja Wassgren Jim Ferryman, Chairman, OMTS Committee Jennifer Cabral Brian Brady, Chairman, FAHR Committee Ryal Wheeler Jim Silva, County Supervisor Randy Fuhrman Gerhard Van Dries Directors Absent: Brian Donahue, Chairman, PDC Committee STAFF PRESENT: Norm Eckenrode, Past Board Chair Blake Anderson, General Manager Bob Ghirelli, Director of Technical Services Gary Streed, Director of Finance/Treasurer Carol Beekman, Communications Services Manager Jim Herberg, Engineering Manager Jean Tappan, Committee Secretary FILED (2) APPOINTMENT OF CHAIR PRO TEM IN THE OFFICE OF THE SECRETARY ORANGE n^""!r SAN^"nnN DISTRICT No appointment was necessary. SEPQ2 4 2003 (3) PUBLIC COMMENTS ',Y -- Randy Fuhrman spoke on Agenda Item B.A. and asked that the directors recommend the deferred payment plan for a 10-year period. He also stated that there were no studies or presentations made to the Board on the septic tank problem. (4) RECEIVE. FILE AND APPROVE MINUTES OF PREVIOUS MEETING The minutes of the July 23, 2003 Steering Committee meeting were approved as drafted. Chair McCracken abstained. (5) REPORT OF THE COMMITTEE CHAIR Minutes of the Steering Committee Page 2 August 27, 2003 A. Legislative Advocacy Update Chair McCracken reported on activities of the Legislative Advocacy Ad Hoc Committee. Four issues are being discussed: federal funding support for secondary treatment;ACA 10, Proposition 53; AB 1427-Biosolids; and AS 496- Santa Ana River Conservancy. B. Approval and compensation for Directors' meeting attendance Chair McCracken stated that Ordinance No. OCSD-14,which establishes Board of Directors compensation, is silent on several issues that need to be clarified. She provided the members with a memo outlining the issues. She suggested forming an ad hoc committee to review the ordinance and discuss the issues and return to the Steering Committee with suggestions and recommendations. Directors Steve Anderson and Brian Brady volunteered to serve on this Ad Hoc Committee. C. The next Steering Committee meeting will begin at 4 p.m.to allow adequate time to discuss in Closed Session the general manager's performance and consider compensation. (6) REPORT OF THE G EN ERAL MANAGER General Manager Blake Anderson reported on changes to the low-flow toilet water conservation program. This item is on tonight's Board agenda for consideration. Jim Herberg described the program and why participation by the District is important. The proposed changes do not require any increase in authorized total contribution for the 5-year program. The program has reduced our flows by an estimated 4.7 mgd so far. The program runs out in June of next year. Staff will re-evaluate it at that time and return to the Steering Committee with a recommendation. (7) REPORT OF GENERAL COUNSEL General Counsel Tom Woodruff reported that the District has received from the contractor's insurance company most of the money we spent on the lawsuit filed by property owners over damages sustained during the construction of the below-grade pump station in Newport Beach. He also reported that the bill exempting public agencies from paying fees imposed by other public agencies has been reworked and should be out of committee this week. There should be no impact on the District as we already collect these fees. In response to an inquiry from Director Ferryman, the problem with the homeowners encroaching on the District's easement along the 405 freeway in Costa Mesa was discussed. Mr. Woodruff stated that all of the title reports have been received and a full report will be made to the Steering Committee next month. ' Minutes of the Steering Committee Page 3 August 27, 2003 (8) DISCUSSION ITEMS (Items A-C) A. Consider recommending a loan policy for properties within the District that abandon septic tanks and connect to sanitary sewers. The general manager reported that this item has been before the Steering Committee on several occasions. A request for a waiver of Capital Facilities Capacity Charges (CFCC)from the City of Brea was made in 1999. Because of the fair-share policy establlshed by the Board, this is not recommended; however, a deferred payment for the CFCC's due could be used, together with placing a lien on properties that abandon septic systems and connect to the sewer. The payment plan would Include a low-interest rate and would be due and payable in ten years or upon property transfer, whichever is sooner. If, at the end of the ten-year period,the property had not been transferred, the lien could either be extended or a payment demand could be made. Dr. Robert Ghirelli, Director of Technical Services, stated that there are studies that show a connection between septic system failures and groundwater contamination. Moved,seconded and duly carried: Recommend that the FAHR Committee consider a loan policy for properties within the District that abandon septic tanks and connect to sanitary sewers and make recommendations to the Board. B. The Agenda Items scheduled to be reviewed by the Board's working committees in September were reviewed. C. The agenda items scheduled to be presented to the Board at tonight's meeting were reviewed. A discussion on the proposed location for the Ellis Avenue Pump Station followed. Staff will provide Director Silva with all the Information that has been provided to the homeowners and received from other sources. It is anticipated that many of the people who attended Mondays scoping meeting will also attend the Board meeting. Chair McCracken said that she will limit public comments to 30 minutes because this item is not on the agenda. (9) OTHER BUSINESS,COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY There were none. (10) MATTERS WHICH A DIRECTOR WOULD LIKE STAFF TO REPORT ON AT A SUBSEQUENT MEETING There were none. ' Minutes of the Steering Committee Page 4 Augus127, 2003 (11) MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND/OR STAFF REPORT There were none. (12) CONSIDERATION OF UPCOMING MEETINGS The next Steering Committee meeting is scheduled for Wednesday, September 24, 2003 at The next Board Meeting is scheduled for Wednesday, September 24, 2003 at 7 p.m. (13) CLOSED SESSION The Committee convened at 6:16 p.m. in Closed Session to discuss agenda Item 13.A.1 to potential litigation pursuant to Government Code Section 54956.9(b), and consideration of the General Manager's Annual Performance Evaluation and Compensation pursuant to Government Code Section 54957.6. Minutes of the Closed Session are on file with the Board Secretary. Confidential Minutes of the Closed Session held by the Steering Committee have been prepared in accordance with Government Code Section 54957.2, and are maintained by the Board Secretary in the Official Book of Confidential Minutes of Board and Committee Closed Meetings. A report of the recommended actions will be publicly reported at the time the approved actions become final. At 6:55 p.m., the Committee reconvened in regular session. (14) ADJOURNMENT The Chair declared the meeting adjourned at 6:55 p.m. Submitted by: r i9grappan S ring Committee Secretary c:i g.m.rge deg WW Cwnml 0&WVUG=7W sc Mm,dcrdoc ORANGE COUNTY SANITATION DISTRICT Bh.m: - 914)962-2411 ba Q1419621 56 w.w.oetl.mn �Illnp.fare..: Po. Vox8127 NOTICE OF MEETING F.lat:9la valley.rn 92729-8127 OF THE .n..t am.: STEERING COMMITTEE 10B44 Ems Avenue Falntein Valley.CA 92708-701B ORANGE COUNTY SANITATION DISTRICT •.ve.r WEDNESDAY, AUGUST 27, 2003 - 5 P.M. • MI.. A a°elm ewe DISTRICT'S ADMINISTRATIVE OFFICE Buena Far" 10844 ELLIS AVENUE to,n vane�PfCS, FOUNTAIN VALLEY, CALIFORNIA 92708 an Gran an Gro e n Peecn c ca Nabeoro L. palm° A regular meeting of the Steering Committee of the Board of Directors of as Alamitos Pasch Orange County Sanitation District will be held at the above location, date and time. I: A.cimanto. Ana seal Storm, enton Tmoul VIA, va P. i , e Linde C..sq or or.... B. ' Ol.trl.t. Costs Mass M'dwsy Cry w.ur al.trim rime Panch To maintain worldalssa leadership in wastewater and water resource management. STEERING COMMITTEE AND BOARD MEETING DATES FOR THE NEXT TWELVE MONTHS Wednesday, August 27, 2003 Wednesday, September 24, 2003 Wednesday, October 22, 2003 Wednesday, November 19, 2003' Wednesday, December 17, 2003' Wednesday, January 28,2004 Wednesday, February 25, 2004 Wednesday, March 24, 2004 Wednesday, April 28, 2004 Wednesday, May 26, 2004 Wednesday, June 23, 2004 Wednesday, July 28,2004 `Tentatively rescheduled from regular fourth Wednesday. STEERING COMMITTEE (t) Roll Call: Meeting Date: August 27.2003 Meeting Time: 5 p.m. Meeting Adjourned: Committee Members Shirley McCracken, Board Chair Steve Anderson, Board Vice Chair Brian Donahue, Chair, PDC Committee Jim Ferryman, Chair, OMTS Committee Brian Brady, Chair, FAHR Committee Jim Silva, Supervisor Norm Eckenrode, Past Board Chair Others Thomas L.Woodruff, General Counsel _ Don Hughes Staff Present Blake P.Anderson, General Manager................................ Bob Ghirelli, Director of Technical Services....................... David Ludwin, Director of Engineering............................... Patrick Miles, Director of Information Technology.............., Robert Ooten, Director of Operations & Maintenance........_ Gary Streed, Director of Finance(Treasurer....................... Lisa Tomko, Director of Human Resources........................ Greg Mathews, Administrative Services Manager............. Carol Beekman, Communication Services Manager......... JeanTappan, Secretary..................................................... c: Lenora Crane AGENDA REGULAR MEETING OF THE STEERING COMMITTEE ORANGE COUNTY SANITATION DISTRICT WEDNESDAY, AUGUST 27, 2003 AT 5 P.M. ADMINISTRATIVE OFFICE 10844 Ellis Avenue Fountain Valley, California In accordance with the requirements of California Government Code Section 54954.2, this agenda has been posted in the main lobby of the District's Administrative Office not less than 72 hours prior to the meeting date and time above. All written materials relating to each agenda item are available for public inspection in the office of the Board Secretary. In the event any matter not listed on this agenda is proposed to be submitted to the Steering Committee for discussion and/or action, it will be done in compliance with Section 54954.2(b)as an emergency item or that there is a need to take immediate action which need came to the attention of the District subsequent to the posting of the agenda, or as set forth on a supplemental agenda posted not less than 72 hours prior to the meeting date. In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the Board Secretary's office at(714) 593-7130 at least 48 hours prior to the meeting to allow the District to make reasonable arrangements to ensure accessibility to this meeting. All current agendas and meeting minutes are also available via OCSD's Internet site located at www.ocsd.com. Upon entering OCSD's web site, please navigate to the Board of Directors section. (1) ROLL CALL (2) APPOINTMENT OF CHAIR PRO TEM, IF NECESSARY (3) PUBLIC COMMENTS All persons wishing to address the Steering Committee on specific agenda items or matters of general interest should do so at this time. As determined by the Chairman, speakers may be deferred until the specific item is taken for discussion and remarks may be limited to three minutes. Book Page I -2- August 27, 2003 Agenda Matters of interest addressed by a member of the public and not listed on this agenda cannot action taken by the Committee except as authorized by Section 54954.2(b). (4) APPROVE MINUTES OF PREVIOUS MEETING Approve draft minutes of the July 23, 2003 Steering Committee meeting. (5) REPORT OF COMMITTEE CHAIR A. Legislative Advocacy Update B. Approval and compensation for Directors' meeting attendance (6) REPORT OF GENERAL MANAGER A. Changes to the Low-flow Toilet Water Conservation Program (7) REPORT OF GENERAL COUNSEL (8) DISCUSSION ITEMS (Items A-D) A. Consider recommending a loan policy for properties within the District that abandon septic tanks and connect to sanitary sewers (Streed) B. Review Agenda Items scheduled to be presented to Committees in September (Information item only) C. Review and consideration of Agenda Items for Board of Directors Meeting of August 27, 2003 (9) OTHER BUSINESS. COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS IF ANY (10) MATTERS WHICH A DIRECTOR WOULD LIKE STAFF TO REPORT ON AT A SUBSEQUENT MEETING (11) MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND STAFF REPORT (12) FUTURE MEETING DATES The next Steering Committee Meeting is scheduled for 5 p.m., Wednesday, August 27, 2003. The next Board Meeting is scheduled for 7 p.m., Wednesday, August 27, 2003. Book Page 2 -3- August 27, 2003 Agenda (13) CLOSED SESSION During the course of conducting the business set forth on this agenda as a regular meeting of the Steering Committee, the Chair may convene the Committee in closed session to consider matters of pending real estate negotiations, pending or potential litigation, or personnel matters, pursuant to Government Code Sections 54956.8, 54956.9, 54957 or 54957.6, as noted. Reports relating to (a) purchase and sale of real property; (b) matters of pending or potential litigation; (c) employment actions or negotiations with employee representatives; or which are exempt from public disclosure under the California Public Records Act, may be reviewed by the Directors during a permitted closed session and are not available for public inspection. At such time as final actions are taken by the Board on any of these subjects,the minutes will reflect all required disclosures of information. A. Convene in closed session to: 1. Convene in closed session to confer with General Counsel - Potential Litigation (SAWPA Term Sheet). Significant exposure to litigation pursuant to Government Code Section 54956.9(b) 2. Consider General Manager's Annual Performance Evaluation and Compensation (Government Code Section 54957.6). B. Reconvene in regular session C. Consideration of action, if any, on matters considered in closed session. (14) ADJOURNMENT A G:1WP.DTAWGENUAvnE RING COMMITTEEW9AU(vMM AGENONDOC Notice to Committee Members: For any questions on the agenda or to place items on the agenda,Committee members should contact the Committee Chair or the Secretary ten days in advance of the Committee Meeting. Committee Chair: Shirley McCracken (714)765-5247(Anaheim City Hall) Committee Staff Contact: Blake P.Anderson (714)593-7110 General Counsel: Thomas L.Woodmff (714)564-2605 Secretary: Jean Tappan (714)593-7101 (714)962-0356 (Fax) E-mail: jtappanOmsd.com Book Page 3 DRAFT MINUTES OF STEERING COMMITTEE MEETING Wednesday, July 23, 2003 A meeting of the Steering Committee of the Orange County Sanitation District was held on Wednesday, July 23. 2003 at 5 p.m., in the Districts Administrative Office. (1) The roll was called and a quorum declared present, as follows: STEERING COMMITTEE MEMBERS: OTHERS PRESENT: Directors Present: Thomas L. Woodruff, General Counsel Steve Anderson, Vice Chair Don Hughes Jim Ferryman, Chairman, OMITS Committee Gerhard Van Dries Brian Donahue, Chairman, PDC Committee Randy Fuhrman Brian Brady, Chairman, FAHR Committee Jim Silva, County Supervisor STAFF PRESENT: Blake Anderson, General Manager Directors Absent: Bob Ghirelli, Director of Technical Services Shirley McCracken, Chair David Ludwin, Director of Engineering Norm Eckenrode, Past Board Chair Carol Beekman, Communications Services Manager Wendy Sevenandt, Associate Engineer Jim Herberg, Engineering Manager William Cassidy, Project Manager Jean Tappan, Committee Secretary (2) APPOINTMENT OF CHAIR PRO TEM Vice Chair Steve Anderson chaired the meeting in Chair Shirley McCracken's absence. (3) PUBLIC COMMENTS Randy Fuhrman spoke on Item 13.A.6, the general manager's evaluation and compensation. He said that he had written a letter to the EPA and the CA governor recommending the District be considered for an award and in it he detailed the leadership that Mr.Anderson had provided over the past year on the very significant issues that have been before the agency. (4) RECEIVE. FILE AND APPROVE MINUTES OF PREVIOUS MEETING The minutes of the June 25, 2003 Steering Committee meeting were approved as drafted. Book Page 4 Minutes of the Steering Committee Page 2 July 23, 2003 (5) REPORT OF THE COMMITTEE CHAIR Committee Vice Chair Steve Anderson announced that Chair Shirley McCracken would not be at the meetings because of the death of her husband. He asked Blake to report on activities of the Legislative Advocacy Ad Hoc Committee. Chair McCracken had requested that the Committee discuss the policy on authorization and reimbursement for meeting attendance by directors. This will be moved to next month. Another OCSD/OCW D Board workshop to provide a GW RS Update was discussed. Staff was directed to coordinate this for sometime in October in the evening with the Water District. (6) REPORT OF THE GENERAL MANAGER General Manager Blake Anderson reported on legislative issues including federal funding support for secondary treatment; AB 1427, Biosolids;AB 496, Santa Ana River Conservancy; and ACA 10, Stormwater Fee Exemption from 218 Requirements. The discussion of the OCSD/SAW PA mediation on SARI issues was moved to Closed Session. Mr. Anderson reported that staff will begin salary discussions with the unrepresented groups of employees, including managers, confidential and executive management employees. They have not received an increase for FY 2001.02 and 2002-03. This was done because the meet and confer process with the organized groups was underway. Local 501 rejected the agreement last week by 4 votes. Staff would now like to close out last year with the unrepresented group. This will be discussed with the FAHR Committee at its August 13,2003 meeting. Mr. Anderson also discussed the proposed Orange County Leadership Symposium's third retreat, Arrowhead III. The planning group is seeking input from various past attendees to ensure that the event is structured to meet the goals. A new facilitator has been identified. The budget has been reduced by one-third and sponsorships are being sought to help defray the costs. The Committee members discussed the political sensitivity and seemed comfortable with the proposed direction. (7) REPORT OF GENERAL COUNSEL General Counsel Tom Woodruff reported on Assembly Bill (AB) 1051 that was proposed by major water, sewre and utility,cities and Districts to clarify and strengthen their ability to levy both capital and service charges on all public educational institutions. The State University system had temporarily obtained amendments that were very damaging to the levying agencies. Through the efforts of CASA, ACWA and the cities of San Francisco and Los Angeles,the bill has been salvaged and will probably be passed in the next few days in a form acceptable to the agencies. (8) DISCUSSION ITEMS (Items A-C) A. Authorize General Manager to approve Addendum No. 2 to the funding _ agreement re US Bureau of Reclamation Southern California Water Recycling Projects Initiative Book Page 5 Minutes of the Steering Committee Page 3 July 23, 2003 Jim Herberg explained that this agreement covers the fourth of five years for a program that through the 13 participating agencies is identifying water recycling opportunities. As a direct result of the initiative, the District has received grant money for the Ellis Avenue Pump Station and GWRS. Motion: Moved, seconded and duly carried to authorize the General Manager to approve Addendum No.2 to the funding agreement re US Bureau of Reclamation Southern California Water Recycling Projects Initiative. B. The Agenda Items scheduled to be reviewed by the Board's working committees in August were reviewed. The OMTS Committee will be dark in August. C. The agenda items scheduled to be presented to the Board at tonight's meeting were reviewed. (9) OTHER BUSINESS, COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY There was no other business discussed. (10) MATTERS WHICH A DIRECTOR WOULD LIKE STAFF TO REPORT ON AT A SUBSEQUENT MEETING There were none. (11) MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND/OR STAFF REPORT There were none. (12) CONSIDERATION OF UPCOMING MEETINGS The next Steering Committee meeting is scheduled for Wednesday, August 27, 2003 at 5 P.M. The next Board Meeting is scheduled for Wednesday,August 27, 2003 at 7 p.m. (13) CLOSED SESSION The Committee convened at 5:38 p.m. in Closed Session to discuss two items of significant exposure to litigation (pursuant to Government Code Sections 54956.9(b);one item re initiation of litigation pursuant to Government Code Section 54956.9(c);three items re real property purchase pursuant to Government Code Section 54956.8; and consideration of the General Manager's Annual Performance Evaluation and Compensation pursuant to Government Code Section 54957.6. Minutes of the Closed Session are on file with the Board Secretary. Confidential Minutes of the Closed Session held by the Steering Committee have been prepared in accordance with Government Code Section 54957.2, and are maintained by the Board Book Page 6 Minutes of the Steering Committee Page 4 July 23. 2003 Secretary in the Official Book of Confidential Minutes of Board and Committee Closed Meetings. A report of the recommended actions will be publicly reported at the time the approved actions become final. At 6:50 p.m., the Committee reconvened in regular session. (14) ADJOURNMENT The Chair declared the meeting adjourned at 6:50 p.m. S itted by: J Tappan St ring Committee Secretary awm.rwm.w..mc camewwuutenaoascw,u..ex Book Page 7 ORDINANCE NO. 00SD-14 AN ORDINANCE OF THE BOARD OF DIRECTORS OF ORANGE COUNTY SANITATION DISTRICT ESTABLISHING BOARD OF DIRECTORS COMPENSATION WHEREAS, Members of the Board of Directors are entitled, by the provisions of State law, to receive compensation for attendance at meetings, or for each day's service rendered as a Member of the Board; and WHEREAS, the last adjustment in the per diem compensation for Directors was effective in 1987; and WHEREAS, the State Legislature, during the regular Session of Year 2000, adopted legislation (Senate Bill 1559), Chaptered into law (Ch. 86, Stats. 2000), effective January 1, 2001, authorizing the adoption of an Ordinance pursuant to California Water Code Sections 2000 through 2007, including an increase of the per diem compensation in an amount not to exceed five (5%) percent for each calendar year following the operative date of the last adjustment; and WHEREAS, the Board of Directors determines that the proposed increase is reflective of increases in the cost of living related to the performance of service. NOW, THEREFORE, the Board of Directors of Orange County Sanitation District does hereby ORDAIN: Section 1: That each Director shall receive the sum of One Hundred Seventy ($170.00) Dollars for attendance at each meeting of the Board of Directors, or for each day's service rendered as a Member of the Board, by request of the Board; provided that each Director, other than the Chair of the Board, shall receive compensation for not more than a total of six (6) meetings or six (6) days' service per month. Section 2: The Chair of the Board shall receive compensation for not more than a total of ten (10) meetings, or ten (10) days' service per month. Section 3: Each days service rendered as a Member of the District's Board of Directors, shall be deemed to include, but not be limited to: A. Attendance as a Member of any Committee established by the District and appointed by the Chair of the District. 1 Book Page 8 B. Attendance at any Committee Meeting when expressly invited to attend said Committee Meeting by the Chair of the District. C. Attendance at conferences with State and/or Federal Legislators regarding District business, when approved by action of the Board of Directors. D. Attendance at a meeting, hearing, or conference for business of the District, when approved by action of the Board of Directors, or when designated by the General Manager, with the concurrence of the Chair, when deemed to be in the best interests of the District. Section 4: Each Director shall be reimbursed at the rate per mile established by the United States Internal Revenue Service as allowable for mileage expense deduction for use of a personal vehicle or business of the District. As said allowable rate established by the Internal Revenue Service is periodically changed, said changes in the reimbursement rate shall become effective on the first day of the month following the month in which the change is announced by the Internal Revenue Service. Section 5: When traveling on the business of the District, the Director shall be entitled to reimbursement of expenses necessarily incurred in the course of said travel, in accordance with the following schedule: A. Commercial Transportation — Per actual invoice. B. Hotel — Room rate per actual statement for occupancy. C. Registration—Actual cost of conference or meeting registration fee. D. Ground Transportation—Asitemized. E. Teleohone Service—As itemized. F. Meals. Gratuities. and Incidentals - $40.00 per day. In those cases where the actual cost of the Director's personal meals and incidentals required during the course of the conference or meeting exceeds the per diem, reimbursement will be based upon actual expenditures. Section 6: No Director shall receive pay for attendance at any meeting, such as Committee Meetings, which is scheduled immediately preceding, immediately succeeding, or concurrent with, a regularly-scheduled District Board Meeting. 2 Book Page 9 Section 7: If any provision of this Ordinance is adjudged by a Court of proper jurisdiction to be invalid, or unenforceable, it is the intention of the governing body adopting this Ordinance, that all other provisions shall be valid and enforceable. Section 8: Resolution No. 98-3 is hereby repealed. Section 9: This Ordinance shall be effective sixty (60) days after adoption. PASSED AND ADOPTED at a regular meeting of the Board of Directors held the 24th day of January, 2001. Chair, Board of Directors Orange County Sanitation District ATTEST: Secretary of the Board of Directors Orange County Sanitation District Thomas L. Woodruff, General Counsel 3 Book Page 10 STEERING COMMITTEE Meebng Date I To Bd.of Dir. 6/27/03 AGENDA REPORT Item Number Item Number B.A. Orange County Sanitation District FROM: Blake P. Anderson, General Manager SUBJECT: CONSIDER RECOMMENDING A LOAN POLICY FOR PROPERTIES THAT ABANDON SEPTIC TANKS AND CONNECT TO SANITARY SEWERS WITHIN THE DISTRICT GENERAL MANAGER'S RECOMMENDATION Recommend to the FAHR Committee that they consider adopting a policy that acknowledges the environmental and social benefits to the community from an abandoned septic tank. This policy would allow the property owner to defer the Capital Facilities Capacity Charges until the property was sold or for 10 years, whichever occurred first, and would apply only in cases where properties were developed, occupied and served by septic tank prior to July 1, 2003. Proof that the septic tank was abandoned properly would be required. SUMMARY Currently our records show there are about 1,500 properties within the Sanitation District service area on septic tanks rather than sanitary sewers. A smaller number is estimated to exist within the County but not currently annexed to our service area. These septic tanks can be shown to contribute to the bacterial contamination of urban runoff. This could be a result of failing systems or of contamination leaching through the soil and emerging to be carried away as urban runoff. The Directors have discussed methods of encouraging property owners to abandon their septic tanks and to connect to the sanitary sewers. General Counsel has consistently advised that our existing Ordinance does not allow fees to be waived or set aside. The Directors could, however amend the Ordinance or adopt a revised one to include findings that would allow an offset or credit to the Capital Facilities Capacity Charge. (A new Ordinance will be proposed within the next four months to revise the fees in any case.) There are many steps required of a property owner who wishes to move from an on-site septic tank to the regional sanitary sewer system. If not in the service area, the property must be annexed to a local sewering agency as well as to the Sanitation District. A lateral must be constructed from the building on the property to the local sewer and a local and OCSD "connection fee" must be paid. If a local sewer is not available, then that sewer must be constructed. The septic tank must be emptied and then properly abandoned by a licensed contractor. Of course the total cost for these services varies by property and proximity to a local sewer, but it is always substantial. District staff has Book Page I I estimated the cost to abandon a septic tank and to build a 100-foot vitrified clay pipe connection to an existing local sewer to be between $12,000 and $15,000. PROJECT/CONTRACT COST SUMMARY Cost to the District is expected to be minimal in any single year, but we have no records indicating how many septic tanks are abandoned each year. The proposed program would insure that the CFCCs are collected within 10 years in accordance with statute. The benchmark CFCC, for a 3-bedroom single-family residence, is currently$1,820. If the 1,500 septic tank estimate is correct, then the total CFCCs deferred could amount to as much as $2,730,000 over some lengthy period of time. Some of these properties will never connect because no local sewer can be provided economically and many will take some time to connect while local sewers are being constructed. Limited staff time and services of General Counsel would be necessary to prepare the paper work and procedures needed once the policy is implemented. BUDGETIMPACT ❑ This item has been budgeted. (Line Rem: ) ❑ This item has been budgeted, but there are insufficient funds. X This item has not been budgeted. ❑ Not applicable (information item) ADDITIONAL INFORMATION In March 2000, the Steering Committee directed staff to proceed with negotiations with the City of Brea to include installment payment agreements or liens for the connection fees related to homeowners converting from septic tanks to sewer connections. The County and LAFCO began working together to have all of the County-islands annexed to the appropriate cities. As a part of this effort, the County would like any properties currently on septic tanks to connect to available local sewers. The County has informally asked the District to waive these connection fees. General Counsel has consistently advised that the existing Ordinance does not permit the Directors to waive these fees. At their May 2002 meeting, the Steering Committee members expressed their support for continuing the current and past practices. They also expressed interest in enacting some method to lessen the financial burden for these property owners while retaining a fair-share principle. At the November 7, 2002 Special Steering Committee meeting, Vice Chair Anderson asked that the Committee consider the possibility and/or advisability of the Sanitation District helping property-owners convert from septic tanks to sewer systems. He reported that the City of La Habra provides funding for a low-cost loan program and wondered R the District could implement a similar program. The goal of a District program would be to encourage sewer connections as a way to reduce the bacterial contamination in urban runoff that may be - attributed to septic tanks. The City of La Habra program is discussed later in this report. G:lp Aa�6aVSleennp Cpmnitt`OT4M`aB2AI M septic cV rvB�Ycn tlaamC Ae„apa: arzao, Page 2 Book Page 12 In December 2002, the Steering Committee considered reinstating the 1989 three-payment plan discussed below, but rejected the plan as it was considered to be too restrictive as it did not provide sufficient time or other incentives to encourage property owners to abandon their septic tanks. The Committee expressed a desire to consider more options, to Increase the Incentive, to improve groundwater quality and to reduce urban runoff contamination by having septic tanks properly abandoned. In March 2003, staff returned to the Steering Committee with a proposal to waive the CFCC for any property that abandoned a septic tank and connected to the local sanitary sewer. The proposal required the Board to determine that the environmental and societal benefits of abandoning septic tanks offset the fees that the District would not receive. The Steering Committee rejected this proposal In large part because It was seen as unfair to property owners who had been required to pay the fees. In June and July 2003, Brea city staff asked the District's general manager to review the correspondence between the city and District that occurred in 1999 and 2000. They asked that the District consider adopting a policy that will provide a financial incentive for septic tank owners to connect to the sewer. While an outright waiver of connection fees is impossible from a Proposition 218 and lair share' perspective, placing a ten-year lien on the property would be In keeping with the principle of fair share while delaying the homeowner's having to pay all of the up front costs. Time Payment Plans There is precedence for a time-payment plan, but success has been quite limited. In 1989,the Board of District 7 authorized a 3-year, 3-payment, Interest-free program for homes that were occupied prior to a"connection fee" increase from$250 to$1,500. Fewer than 25 property owners took advantage of this offer. The Board authorized a similar agreement in 1999 for the owner of a 15-unit apartment complex whose septic tank had failed. This was during the enactment of a lower per unit connection fee and ultimately the property owner was able to delay the connection until the lower fees were enacted and they were paid in a lump sum. Additionally, in 2000 the Steering Committee authorized a loan program for a small area that would be annexed to the City of Brea. This area contained 17 homes and a commercial nursery, all on septic tanks. While the City requested the fees to be waived,the Steering Committee suggested a loan program. The proposed loan was limited to$3,000 per property, was to be a"low interest loan,"and was to be secured by a lien on the property. In fact, it is the pending connection of some of these properties that has added a sense of some urgency to this proposal as a few properties are now ready to connect. Unfortunately the property owners were told that OCSD would waive the fee while we had offered only to consider a loan if there would be any takers. The loan policy was never submitted to the Board as we did not hear back from the City. City of La Habra Program In November 2002,the City of La Habra introduced an Ordinance authorizing levying annual assessments for sanitary sewer system connections at the request of the property owner. The purpose of the program was to provide property owners an alternative means of financing the costs required to convert from a septic tank to the local sewer system. This program is a local a:wm.emaaene.mwnno co,�.neewroa a,aem�=�"one on p a�eoc vmiwe MGM, Page 3 Book Page 13 solution to a local problem that other local agencies could adopt. It provides incentives to the property owner but does not require any subsidies. The program allows payment of costs over a 10-year period and requires the property owner to authorize the City to collect the repayment as a separate line item on the property tax bill. The costs can include the property's share of the local sewer construction cost,the lateral construction cost, the septic tank abandonment cost, the OCSD capital facilities capacity charge and interest at the rate of 3%per year. The loans are expected to be around$15,000 per single-family homeowner. The process has several steps. It requires a separate petition from each property owner for each loan, authorization from each property owner to place the assessment on the tax bill, a report from the Director of Public Works, consideration by the City Council, a Resolution by the City Council and alien against the property. Once the Resolution is adopted, City staff notifies the County Auditor/Controller to place the assessment on the tax bill. The amount of the assessment changes each year in order to allow for prepayments with no penalty. Staff keeps track of each loan and notifies the County of the appropriate assessment each year. When the total loan and interest have been collected, City staff must complete and record a notice that the assessment lien has been released. The City program includes a cap on the total amount of loans outstanding at any time. Once that cap of$500,000 has been reached, no additional loans can be authorized until there is room under the cap from repayments. Recommendation After considering the Directors' previous discussions and actions,the La Habra program and several other alternatives as shown below, staff has developed a compromise recommendation. Staff believes there is a nexus between septic tanks and groundwater pollution and contaminated urban runoff. The District has long been a regional watershed environmental steward and now has the legislative authority to provide solutions to urban runoff problems. Staff recommends a policy that allows certain property owners to defer the District Capital Facilities Capacity Charge up to 10 years or until the property is sold, whichever comes first. Only properties currently using on-site septic tanks would qualify. All properties currently on a septic tank would quality, whether they are currently within the District or need to annex. If a property needs to annex,the annexation fees could also be deferred. Loans would need to be secured by a lien on the property. The maximum loan amount would be the CFCC plus the annexation fee, if any. The current maximum CFCC is $2,530 for a five-bedroom SFR and the average annexation fee is$4,200 per acre. Staff recommends that these loans be interest-free as the District's incentive to connect to the sewer. The lost interest over a 10-year period for the typical 3-bedroom SFR would be about $600 using the La Habra agreement rate of 30/6. Of course the Directors could require interest on these loans at any rate up to 100%which is the statutory limit. 6: dvmgaadays,aenag comet eeMAUG 2703 M mpnc meeemw pen.ex Page 4 Book Page 14 ALTERNATIVES 1) Make no changes to the current program. Do not provide any incentives to abandon existing septic tanks because that Is not our responsibility and the cost of any incentive will be passed on to all users. 2) Provide clean water incentive grants. These grants could be a part of the District's cooperative projects program and made directly to Cities that encourage connections to the sewer system in place of existing septic tanks. This program may be more costly to administer, but would also increase the public incentive by requiring the City and County to participate in funding the program. Limited City and County funds may make this program difficult to implement. A cost-sharing formula, setting limits for the District's participation and perhaps setting minimum amounts of participation by co-funding agencies would have to be developed by District staff for consideration by District Directors. 3) Adopt a finding that the benefits to society and the environment from abandoning septic tanks offset the CFCC and thus no CFCC would be assessed. 4) Encourage the other member agencies to adopt the La Habra plan which provides a loan to property owners that would include local costs and construction costs in addition to the District CFCC. Currently member agencies retain 50/6 of the CFCC. This percentage could be increased if the CFCC were immediately paid to the District. An alterative could be to allow the member agency to pay the fee in installments as it was collected. The District would not charge the member agency any interest and the interest that they charge could be retained by them. CEQA FINDINGS N/A ATTACHMENTS None GGS:g c:.�.asuceaammn.o cm..nwwiwicmezroa sn..a �..Nm wenaz Parsee �aq, Page 5 Book Page 15 -- - ---- - - ------ - Z014 014 Aa \ aAAa mAm at� � � 4 LgLIFL PNIp City of Brea August 17, 1999 Mr,Donald McIntyre,General Manager. VIA FACSIMME Grange County Sanitation District 108"Ellis Avenue Fountain Valley,CA 92708 _ Dcar Mr.McIntyre. Thank you for mewing with me this week to duCuss issues relating to the City of Brea's proposed annexation of the Bexley Neighborhood located off ofPuente Street near the terminus of Whittier Blvd.— .. . As you know,this neighborhood of 17 households,which is served by septic systems and is completely surrounded by developed properties connected to the sanitary sewer system,continua to be a problem, with reports of sewage flowing from some of the septic tanks into the Brea storm drain system during tunes of heavy rain,as well as failed septics that carmot be replaced. 4 I'm pleased that the Sanitation District sees the construction of a sewer line in this neighborhood as an � important improvement. As we discussed,both the County of Orange and the City of Brea have agreed to contribute toward the construction cost of this needed improvement The County of Orange has agreed , to contribute$50,000 to the cost of the project and the City ofBma will be contributing$195,000 over 15 years,a total of$13,000 per year. Even with these contributions,however,the annual assessment per property owner,is over$600 per yea for 15 years. A one-time contnbution from the Sanitation District of$50,000 would drop thus assessment to approximately$300 per year. We would also request that,at the time of abandoffirent of the existing septic system and connection to the main sewer line,that each reaident'�COImIy Sanitation District connection fees be waived. Each resident will still he responsible for the aema construction cost of the sewer which may be as much as$2,000 to$$,000 per heuse- In recognition of the Sanitation District's desire to improve public health by the elimination of this island of septic systems,and to light of the fact that many of the residents of the Bexley Neighborhood have paid an annual assessment to Orange County Sanitation District#7 since Fiscal Year 1991-1992,we believe that participation in this project is warranted. I appteeiate your consideration of this proposal and look i forward to discussing it with you fnather.I can be coached at(714)990.7710. mcerely,`i� i Beres[ City Manager co: Brea City Council Todd Spipoer,Supervisor—Third District FB/kh City Council Marty Sirmonoff .Bev Perry Lynn Daurlier Roy Moore Steve Vargas Mayor Mayor Pm Trnt Councilmtmber Cnrmcilmemler Councilmember Civic&Culnrral Center • 1 Civic Center Cite • Brea,California 92821-5732 • 714/990.7600 • FAX 7141990-2256 Book Page 16 Aam From-0050 MAICE. T142623964 T-Sea 1,-02/02 Fi66 CIRANGE COUNTY SANITATIMOMIRI.CT-.. ' April 25, 2M VIAFACSIMILE 5; ten, fib, e� 'Tim O'Donnell, Interim City Manager ¢9ae,zr City of Brea yuev,rw T Civic Center Circle .P27Ae•E,V. Brea, CA 92821-5732 o+a..t} • ..,�°tlA SUBJECT: Be)dey Neighborhood _ _. uPa n i�rwtis�C{ a+e •%st.+`' - 1 am pleased to hear that the City is proposing to increase its contribution to this �•_ project to$17,000 per year. The Sanitation District Steering Committee proposed a loan to the property owners to offset the 'connection fee"and to possibly help defray some of the associated costs. The Committee was Willing to defer any repayment of the loan I; r until the properties were sold,and proposed a lien to effect this transaction. a I believe the Steering Committee can be shown sufficient reasons for them to r„paun waive the "connection f e' in this unique instance. It is unlikely, though,that they can be convinced to gEnt additional funds. ey are very concerned about the --..,eta inconsistency of this grant proposal versus the treatment other former septic tank `B users have received. i§i.yt Pelr,s ,. Director Daucher s argument about a loan rather than grant was most persuasive ,�rS+ to our Steering Committee and I think we need to stand 9 pat on that point. r.,,Bems Am irym!�Beaon igpndon As you know, my last presentation to the Steering Committee is this Wednesday, • April 28. Please let me know if you want me to go forward with a proposal to u�pe waive the'connection fee'and to provide a fiened loan up to$3,000. An '^ alternative would be to proceed only with the-connection fee'waiver. 4 Donald F �Molna • General Manager DFM:GGS:lc +vaaomna�a,+woaman+xrmvana,u�+.Mcrsuooamo.aoc �� c: Director Lynn Daucher r�§2••r. ._+r.:.• : Chair Jan Depay T'•t `y' TO Racer me Pwhe ff eft mw G,o . ,rr.,,•. . / LaMrormene m,vogpEsad'eneem,+9mrem•8/6femc- Book Page 17 Minutes of the Steering Commitlee Page 2 March 22,2000 qq _ (5) REPORT OF THE COMMITTEE CHAIR The Committee Chair welcomed Director Ferryman to the meeting. (6) REPORT OF THE GENERAL MANAGER General Manager Don McIntyre reported that there was a correction necessary to Board Agenda Item 15.(c), which he would announce at the Board meeting. There is a need to address a personnel matter at both the Steering Committee and Board meetings that surfaced after the agenda was prepared. Mr. McIntyre also congratulated David Ludwin, Director of Engineering, for receiving the Orange County Engineering Council's Distinguished Engineering Achievement Award. Andre loan, Engineering Department Project Manager, provided a recap on the issues pertaining to the continued integrity of the Santa Ana River Interceptor. About five miles of this line are considered at risk and staff is looking at five alternatives to protect or relocate this trunkline. The Draft EIR is being finalized and will be distributed. Construction is scheduled to begin in 2004, however, mitigation measures will be significant and could be costly. (T) REPORT OF GENERAL COUNSEL General Counsel did not make a report. (8) DISCUSSION ITEMS (Items A-D) A. Request for Contribution for Sewer Line Construction to Serve Bexley Neighborhood Annexation to the City of Brea Director Lynn Daucher discussed the issue of financial assistance to homeowners for sewer connections from the City of Brea's standpoint, and Bill Mahoney,County CAO's representative, expressed the concems of Orange County Supervisor Smith. There are two public policy issues that should be considered: 1) getting rid of county islands within the service area, and 2) protecting the groundwater supply. District-wide,there are about 3,000 properties that are still on septic systems. Director Swan expressed concern about equity for those property owners that bought into the system. Director Saltarelli mentioned that a connection to a sewer increases the value of the property, and suggested that a lien be placed on those annexing parcels that would be paid when the property sold. Mr. McIntyre will meet with the Brea City Manager to obtain the formula that was used to develop each agency's portion of the annexation costs. Staff was directed to proceed with negotiations to include installment payment agreements or liens. B. Development of Five-year Staffing Plan Greg Mathews described the approach staff will be taking in developing the new report, which will be presented to the Directors in the fall. He indicated that the reductions experienced in the last five years were relatively easy and further reductions will come with more difficuhy. The Committee requested that a bi-monthly progress report be _ made to the FAHR Committee during the development phase. Book Page 18 Minutes of 0,e steering committee Page 2 April 26.2000-44-- (6) REPORT OF THE GENERAL MANAGER General Manager Don McIntyre reported on the negotiations with the City of Brea on connection fee waivers for Bexley Neighborhood properties currently on septic tanks. Director Daucher has now sumac Bested a compromise of a loan or lien against the properly in the amount of$3�. Staff will prepare severaTalte�rr atwes for terms and condltlons for the'�ans or presentaaon to the FAHR Committee. Supervisor Silva asked that some type of interest be assessed. General Counsel Tom Woodruff indicated that a loan program is allowed by the Special District Act. Mr. McIntyre will notify Brea and the County that this will be presented to our Directors for consideration. Agenda Item (9)A.will be removed from the agenda. Senator Polanco has pulled his bill from consideration; however, he has committed to reintroduce the bill next session after the state-wide EIR has been adopted. Jim Herberg discussed the most recent meeting with the City of Huntington Beach and the State Fish and Game Department regarding landscaping at Plant 2. A go-ahead was given to begin design with an advisory committee formed to review it. Mr. McIntyre indicated that an item would be added to the Board agenda, requesting approval of the MOU with the County of Orange on urban runoff, which outlines the District's responsibilities and fair share of costs. (7) REPORT OF THE ASSISTANT GENERAL MANAGER Blake Anderson reported on the activities of the Little Hoover Commission, which is currently looking at special districts' governance, public authority, reserves and revenues. A report is due this week and staff will analyze the findings and report to the Directors. The Rebuild America program is also working with public agencies, but is looking at the longer view of infrastructure needs. One may balance the other. (8) REPORT OF GENERAL COUNSEL General Counsel Tom Woodruff indicated that the Court has denied a writ filed by an employee. He updated the members on the activities regarding the Kern County biosolids lawsuit. The State's office of Planning and Research has determined that Kem County shall be the lead agency for the CEQA documentation related to Yakima's Class A biosolids processing facilities. However, he also mentioned that Yakima has withdrawn its application for the facilities for a number of reasons. Emilio Ariston, an employee who is challenging a problem solving decision, may address the Board. Blake Anderson met with him, and indicated that he is free to address the Board, but that there is no administrative recourse at this point in the process. (9) DISCUSSION ITEMS (Items A-F) A. Resolution in Support of Senate Bill 1956 (Polanco). This item was pulled from the agenda. B. Urban Runoff/Coastal Remediation Action Plan. Robert Ghirelli reported that this - item is on the Board agenda. A request for an additional $160,000 of funding for Book Page 19 Minutes of the Steering Committee Page 2 December 18, 2002 It - (4) RECEIVE. FILE AND APPROVE MINUTES OF PREVIOUS MEETING The minutes of the November 20, 2002 Steering Committee meeting were approved as drafted. (5) REPORT OF THE COMMITTEE CHAIR Committee Chair Shirley McCracken reported on the CASA and Orange County Leadership Symposium events scheduled for January. (6) REPORT OF THE GENERAL MANAGER General Manager Blake Anderson reported on: A. Achieving 30/30 Secondary Treatment Standards Mr. Anderson reported that we are close to reaching optimum numbers with the optimizing of existing secondary facilities. B. Biosolids Mr. Anderson reported that staff continues to use three alternatives for biosolids disposal. The ban on Class B biosolids takes effect in Kern County in January and in Kings County in February. It is our intent to keep all options available as long and as economically as possible. C. Disinfection Operational objectives are being met and we are getting extraordinary results, well under the AB 411 standards at the ouffall, which means we are also achieving the standards at the state's 3-mile limit and with certainty in the surf at Huntington Beach and Newport Beach. However, Station 9N, near the AES Power Plant, is still experiencing elevated bacterial counts. Shore and offshore studies continue. There will be a special discussion on this issue at the February 19 Special Board Workshop. (7) REPORT OF GENERAL COUNSEL The SAWPA update will be discussed in Closed Session because of information received from the Regional Board. General Counsel Tom Woodruff reported that his firm is one of six being considered for providing legal services to the Orange County Water District. The directors discussed the potential for a conflict of interest. Chair McCracken indicated that there did not seem to be a conflict, and should one occur, it would be handled appropriately at that time. (8) DISCUSSION ITEMS(Items A-E) A. Low Interest Loans for Converting Residences from Septic Tanks to Sewer Connections This item is on the agenda at the request of Director Steve Anderson as a result of the septic tank retirement program in La Habra. He asked about providing loans to assist with sewer connections. Gary Sfreed reported on the program that had been offered in the past and stated that Book Page 20 Minutes of the Steering Committee Page 3 December 18, 2002 there was very little interest. The details of the proposed program were discussed. Because there is no conclusive information on how many residences are still on septic tanks, it is difficult to determine how extensive to make the program. Director Anderson suggested that the policy be considered as part of the urban runoff initiative as septic systems could very well be a major contributor to urban runoff. Staff was directed to continue work on this issue and a search will be undertaken for a model that might meet our needs. B. Directors Handbook Greg Mathews reviewed the draft handbook and asked the committee members to e- mail suggested questions for the Frequently Asked Questions section. C. Sacramento Outreach Efforts during 2003 Blake Anderson introduced Scott Baugh, who reported on our successes during the 2002 legislative session and the impacts of the budget deficit on the year ahead. He spoke to the two initiatives that were successfully put forward on behalf of the District and issues that are anticipated for 2003 and beyond. He expects that much time will be required protecting our revenues through defensive maneuvering. Bob Ghirelf provided a draft staff report on the history of legislative advocacy at OCSD and the issues staff will be working on with our state and federal representatives. The final strategy plan will be returned to the committee in January with more details. The directors were asked to review the report to ensure the strategies staff is undertaking are appropriate and no changes were recommended. Mr. Anderson asked the directors for any speck comments and for direction on the initiafives and the approach staff is taking to pursue them. None were provided. D. The Agenda Items scheduled to be reviewed by the FAHR Committee in January were reviewed. The other working committees will be dark. E. The agenda items scheduled to be presented to the Board at tonight's meeting were reviewed. There were no questions posed to staff. (9) OTHER BUSINESS. COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS. IF ANY There was no other business discussed. (10) MATTERS WHICH A DIRECTOR WOULD LIKE STAFF TO REPORT ON AT A SUBSEQUENT MEETING There were none. (11) MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND/OR STAFF REPORT There were none. - Back Page 21 Minutes of the Steering Committee Page 3 March 26, 2003 <5 � G. New Feature at Board Meetings In an effort to help the Board become more familiar with some of the things that staff is involved with, there will be a series of presentations at the Board meetings on 'interesting things that are happening at the District'These will be presented from time to time. (7) REPORT OF GENERAL COUNSEL Counsel Tom Nixon did not make a report. (8) DISCUSSION ITEMS (Items A-D) A. Status of NPDES Permit Renewal and Negotiation Process Dr. Robert Ghirelli updated the Steering Committee on staff activities now that the CIP validation report has been completed and what can be expected in the next few months. When the schedule is approved by the Directors in April, staff will begin negotiations with the regulators on the compliance agreement along with General Counsel as lead. There will be multiple opportunities for public input during the review process. Dr. Ghirelli announced that on April 14 staff members from the Washington delegation will be at the District for a tour and a briefing on our program. Chair McCracken asked when Phase 2 of GW RS would begin and the potential for impacting our program to reach secondary treatment standards. Mr. Ludwin stated that the earliest we could provide water for Phase 2 would be in 2012. And it GW RS Phase 3 was constructed, it would require that water would have to be brought up from Plant 2. It was stated that there is no commitment to Phase 2 or 3 at this time. B. Consider recommending a policy for properties that abandon septic tanks and connect to sanitary sewers within the District that offsets the Capital Facilities Capacity Charge against the environmental and social benefits to the service area Gary Streed reported on the proposed policy and sought direction from the Committee on whether to move forward with the program. The Committee decided to table the issue because of the man oli an a cial issues that need to be more hl evaluated. C. The Agen a ems sc eduled to be reviewed by the Board's working committees in April were reviewed. D. The agenda items scheduled to be presented to the Board at tonight's meeting were reviewed. (9) OTHER BUSINESS COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY There was no other business discussed. (10) MATTERS WHICH A DIRECTOR WOULD LIKE STAFF TO REPORT ON AT A SUBSEQUENT MEETING There were none. Book Page 22 STEERING COMMITTEE M312o6/03ozre Toaa.ao . /2 AGENDA REPORT "M" " W 10d "a b° s.a Orange County Sanitation District FROM: Blake P. Anderson, General Manager SUBJECT: CONSIDER RECOMMENDING A POLICY FOR PROPERTIES THAT ABANDON SEPTIC TANKS AND CONNECT TO SANITARY SEWERS WITHIN THE DISTRICT THAT OFFSETS THE CAPITAL FACILITIES CAPACITY CHARGE AGAINST THE ENVIRONMENTAL AND SOCIAL BENEFITS TO THE SERVICE AREA GENERAL MANAGER'S RECOMMENDATION Recommend to the FAHR Committee that they consider adopting a policy that establishes the environmental and social benefits to the community from an abandoned septic tank as being equal to the connection fees (Capital Facilities Capacity Charges) that would otherwise be due to the District. This policy would apply only in cases where properties were developed, occupied and served by septic tank prior to March 31, 2003. Proof that the septic tank was abandoned property would be required. SUMMARY Currently our records show there are about 1,500 properties within the Sanitation District service area on septic tanks rather than sanitary sewers. A smaller number is estimated to exist within the County but outside of our service area. Many believe that these septic tanks contribute to the bacterial contamination of urban runoff. This could be a result of failing systems or of contamination leaching through the soil and emerging to be carried away. The Directors have discussed methods of encouraging property owners to abandon their septic tanks and to connect to the sanitary sewers. General Counsel has advised that our existing Ordinance does not allow fees to be waived or set aside. The Directors could, however amend the Ordinance or adopt a revised one to include findings that would allow an offset or credit to the Capital Facilities Capacity Charge. There are many steps required of a property owner who wishes to move from an on-site septic tank to the regional sanitary sewer system. If not in the service area, the property must be annexed to a local sewering agency as well as to the Sanitation District. A lateral must be constructed from the building on the property to the local sewer and a local and OCSD connection fee must be paid. If a local sewer is not available, then that sewer must be constructed. The septic tank must be emptied and then properly abandoned by a licensed contractor. Of course the total cost for these services varies - by property and proximity to a local sewer, but it is always substantial. District staff has Book Page 23 estimated the cost to abandon a septic tank and to build a 100-foot vitrified clay pipe connection to an existing local sewer to be between $12,000 and $15,000. PROJECT/CONTRACT COST SUMMARY Cost to the District would be minimal in any single year. The benchmark CFCC, for a 3- bedroom single-family residence, is currently $1,820. If the 1,500 septic tank estimate is correct, then the total CFCCs not collected would amount to $2,730,000 over some period of time. Some of these properties will never connect because no local sewer can be provided and many will take some time to connect while local sewers are being constructed. Limited staff time and services of General Counsel would be necessary to prepare a new Ordinance, and once the policy is implemented there would be minor staff costs to monitor the septic tank abandonment process. BUDGETIMPACT ❑ This item has been budgeted. (Line item: ) ❑ This item has been budgeted, but there are insufficient funds. X This item has not been budgeted. ❑ Not applicable (information item) ADDITIONAL INFORMATION At the November 7, 2002 Special Steering Committee meeting, Vice Chair Anderson asked that the Committee consider the possibility and/or advisability of the Sanitation District helping property-owners convert from septic tanks to sewer systems. He reported that the City of La Habra provides funding for a low-cost loan program and wondered if the District could implement a similar program. The goal of a District program would be to encourage sewer connections as a way to reduce the bacterial contamination in urban runoff that may be attributed to septic tanks. The City of La Habra program is discussed later in this report. The County and LAFCO are working together to have all of the County-islands annexed to the appropriate cities. As a part of this effort, the County would like any properties currently on septic tanks to connect to available local sewers. The County has informally asked the District to waive these connection fees. General Counsel has consistently advised that the existing Ordinance does not permit the Directors to waive these fees. The Directors have not waived connection fees in the past, while focusing on their responsibilities to collect, treat and dispose of sewage. Today the agency has adopted more regionally-based mission and vision statements and expanded its official concerns to include groundwater protection, urban runoff and other sources of beach pollution. At their May 2002 meeting, the Steering Committee members expressed their support for continuing the current and past practices. They also expressed interest in enacting G:MNeapmgal9 W AM CwmYMB'99M�a`O]tBOD M elwry eegk Wx].Ex WWI Page 2 Book Page 24 some method to lessen the financial burden for these property owners while retaining a fair-share principle. In December 2002, the Steering Committee reviewed a time-payment plan that was intended to satisfy the members' concerns. There is precedence for a time-payment plan, but success has been quite limited. In 1989, the Board of District 7 authorized a 3-year, 3-payment, interest free program for homes that were occupied prior to the authorization and prior to a fee increase from $250 to$1,500. In 1999, the Board authorized a similar agreement for the owner of a 15-unit apartment complex whose septic tank had failed. This was during the enactment of a lower per unit connection fee and ultimately the property owner was able to delay the connection until the lower fees were enacted and they were paid in a lump sum. Additionally, in 2000 the Steering Committee authorized a loan program for a small area that would be annexed to the City of Brea. This area contained 17 homes and a commercial nursery, all on septic tanks. While the City requested the fees to be waived, the Steering Committee suggested a loan program. The proposed loan was limited to $3,000 per property, was to be a "low interest loan," and was to be secured by a lien on the property. This program was submitted to the property owners by the City, but no loans have been made to date. The Steering Committee rejected the December time-payment plan as it was deemed too restrictive and did not provide sufficient incentive to encourage property owners to abandon their septic tanks. Staff was directed to consider more options and to increase the incentive. The Committee expressed a desire to improve groundwater quality and to reduce urban runoff contamination by having septic tanks properly abandoned. City of La Habra Program In November 2002, the City of La Habra introduced an Ordinance authorizing levying annual assessments for sanitary sewer system connections at the request of the property owner. The purpose of the program was to provide property owners an alternative means of financing the costs required to convert from a septic tank to the local sewer system. The program allows payment of costs over a 10-year period and requires the property owner to authorize the City to collect the repayment as a separate line item on the property tax bill. The costs can include the properlys share of the local sewer construction cost, the lateral construction cost, the septic tank abandonment cost, the OCSD capital facilities capacity charge and interest at the rate of 3% per year. The costs are expected to be around $15,000 per single-family homeowner. The process has several steps. It requires a separate petition from each property owner for each loan, authorization from each property owner to place the assessment on the tax bill, a report from the Director of Public Works, consideration by the City Council, a Resolution by the City Council and a lien against the property. Once the Resolution is adopted, City staff notifies the County Auditor/Controller to place the GirveCue W^N�4wnM Commnee`ANAM W]t66t u 9wnn0�c qma Es R... WWI Page 3 Book Page 25 assessment on the tax bill. The amount of the assessment changes each year in order to allow for prepayments with no penalty. Staff keeps track of each loan and notifies the County of the appropriate assessment each year. When the total loan and interest have been collected, City staff must complete and record a notice that the assessment lien has been released. The City program includes a cap on the total amount of loans outstanding at any time. Once that cap of$500,000 has been reached, no additional loans can be authorized until there is room under the cap. Recommendation After considering the La Habra program and several other alternatives as shown below, staff has developed a compromise recommendation. Staff believes there is a nexus between septic tanks and groundwater pollution and contaminated urban runoff. The District has long been a regional watershed environmental steward and now has the legislative authority to provide solutions to urban runoff problems. Staff estimates that the long-term costs to society from this type of contamination are greater than the District's capital facilities capacity charge. Therefore, staff recommends that the CFCC be offset by, or considered "paid" by or equivalent to, these societal and environmental costs for properties that are currently using a septic tank whenever they connect to a local sewer, resulting in no CFCC becoming due with the issuance of a building permit. ALTERNATIVES 1) Make no changes to the current program. Do not provide any incentives to abandon existing septic tanks because that is not our responsibility and the cost of any incentive will be passed on to all users. 2) Provide some sort of a payment plan, similar to the proposal rejected by the Steering Committee in December. This option incurs a range of administrative costs depending upon the plan. The only incentive of such a plan is reduced interest payments and that is probably not sufficient to change behavior since our CFCC is approximately $2,000 for a typical single-family residence. 3) Provide clean water incentive grants. These grants could be a part of the District's cooperative projects program and made directly to Cities that encourage connections to the sewer system in place of existing septic tanks. This program may be more costly to administer, but would also increase the public incentive by requiring the City and County to participate in funding the program. Limited City and County funds may make this program difficult to implement. A cost-sharing formula, setting limits for the District's participation and perhaps setting minimum amounts of participation by co-funding agencies would have to be developed by District staff for consideration by District directors. O",ftU aIANMB CmrnitlsPA9MR 2MMsl9 n0 WMI pW].E a."Wa: Boma, Page 4 Book Page 26 CEQA FINDINGS N/A ATTACHMENTS None GGS:g a:Ar ft�ganeaWlmrino CmmtlnN`a8 W32609 M MadV Zq cPro?.dm aww: vma, Page 5 Book Page 27 STEERING COMMITTEE me812 Dace TO Btl.o Dir. 9/27/03 AGENDA REPORT emN i r Item Number Orange County Sanitation District FROM: Blake P. Anderson, General Manager Originator: Jean Tappan, Committee Secretary SUBJECT: September Agenda Items for Consideration by Working Committees GENERAL MANAGER'S RECOMMENDATION Review with staff the agenda items tentatively scheduled for review by the Working Committees in September. SUMMARY Staff routinely prepares for the Steering Committee a list of items scheduled for presentation to the Working Committees and the Board at their next monthly meetings. This allows the Steering Committee the opportunity to review these items early enough to make reassignments in the review or approval process. The following items are scheduled to be considered by the Committees in September: OMTS Committee: 1. Consider report on Regional Trunk Sewer Siphon Corrosion Inspection 2. Receive and file Corrosion Assessment Report PDC Committee: 1. Ratify Change Order No. 2 to Area Classification Study Implementation Plan at Plants Nos. 1 and 2, Job No. J-35-2 2. Ratify Change Orders Nos. 2 and 3 and approve Closeout Agreement and Notice of Completion for Covey Lane Pump Station Abandonment, Contract No. 7-14-4 3. Award construction contract for Abandonment of Airbase Trunk Sewer—Watson, Contract No. 6-13-1; and College Avenue Pump Station Parallel Force Main, Contract 7-23-1 4. Ratify Change Order No. 4 to Standby Power and Reliability Improvements, Job No. J-33-1A 5. Approve Addendum No. 5 to PSA, Peak Flow Management, Job No. J-67 6. Approve Addendum No. 5 to PSA for Effluent Pump Station Annex, Job No. J-77 7. Approve Addendum No. 2 to PSA for Warner Avenue Relief Sewer, Contract No. 11-22 8. Approve Amendment to O&M Agreement for Groundwater Replenishment System, Job No. J-36 Book Page 28 9. Approve PSA for Plant No. 1 Plant Water VFD, SP-94 10. Approve new project re Cooperative Projects Program, Job No. J-73 11. Approve Addendum No. 1 to PSA for Big Canyon Trunk Sewer Replacement Contract No. 5-43-2 12. Approve Addendum No. 2 to PSA for Gas Compressor Addition at Plant No. 2, Job No. J-79 13. Approve Addendum No. 2 to PSA for Replacement of Bitter Point Pump Station, Contract No. 5-49; Replacement of the Rocky Point Pump Station, Contract No. 5-50; Rehabilitation of the 10 Street Pump Station, Contract No. 5-51; and Rehabilitation of the 'A' Street Pump Station, Contract No. 5-52 14. Report on Long-range Biosolids Management Plant, Job No. J-40.7 FAHR Committee: 1. Consider Safety Policy revisions 2. Consider internal auditing firm 3. Consider General Manager's Approved Purchases 4. Meet and confer status (if needed) PROJECT/CONTRACT COST SUMMARY N/A BUDGET IMPACT ❑ This item has been budgeted. (Line item: ❑ This item has been budgeted, but there are insufficient funds. ❑ This item has not been budgeted. ® Not applicable (information item) ADDITIONAL INFORMATION NA ALTERNATIVES NA GA .&aN de4lY ng ComXi,eeVTgi Ga 7W U-ofN WSe Idw FwlseE'WWO Page 2 Book Page 29 CEQA FINDINGS Not a project. ATTACHMENTS NA jt Obq.Nlelyee�WeV4beA�p CmmeGOPaNUa�➢B!]0.9 WId PRelw Bep+rdx PONeoE: M0.98 Page 3 Book Page 30 STEERING COMMITTEE Meeting Dar¢AGENDA REPORT Toatl.ofir.. ggN9 Orange County Sa FROM: Blake P. Anderson, General Manager Originator: Jean Tappan, Committee Secretary SUBJECT: August Agenda Items for Consideration by the Board GENERAL MANAGER'S RECOMMENDATION Review with staff the agenda items tentatively scheduled for consideration by the Board at its August 27, 2003 meeting. SUMMARY Staff routinely prepares for the Steering Committee lists of items Scheduled for presentation to the Working Committees and the Board at their next monthly meetings. This allows the Steering Committee the opportunity to review these items early enough to make reassignments in the review or approval process. The following items are scheduled to be considered by the Board at the August 27, 2003 meeting: 9. Consideration of motion to approve all agenda items appearing on the Consent Calendar not specifically removed from same, as follows: a. Approve the five-year lease agreement, beginning August 2003,with Carl Karcher Enterprises, Inc (CKE)., a California Corporation, to allow paving, striping, parking, and related improvements by CKE within District's 4-foot wide utility corridor located at 21532 South Brookhurst Street, Huntington Beach. b. (1) Approve Amendment No.2 to the Letter Agreement dated September 22, 1999, with Municipal Water District of Orange County for a multi-agency Water Use Efficiency Program, removing Orange County Water District as a funding partner, in a form approved by General Counsel; and, (2) Authorize an increase in the District annual funding of$788,858 for year five of the program, increasing the annual amount for year five to$1,655,108, with no change to the total project amount of$4,275,863. C. Adopt Resolution No. OCSD 03-19, Authorizing a Property Tax Exchange between Orange County Sanitation District and Orange County Vector Control District(OCVCD), for two Tax Rate Areas that were inadvertently excluded from the original annexation of the City of Fullerton into the OCVCD in the 1970s. d. (1) Approve the Orange County Sanitation District's participation in the Lower Santa Ana River Watershed study as the local non-Federal project sponsor; and, (2) Authorize the General Manager to execute an agreement with the Department of the Army (U.S.Army Corps of Engineers)for an amount not to exceed $6,800,000 with the Department of the Army (U.S. Army Corps of Book Page 31 Engineers) and the District paying equal shares of$3,400,000, and in a form approved by General Counsel with the District's obligation being met through ongoing permit-required ocean monitoring and past Huntington Beach Shoreline Contamination Investigation, Phase III expenditures. END OF CONSENT CALENDAR to. Consideration of items deleted from Consent Calendar, if any. NON-CONSENT CALENDAR if. STEERING COMMITTEE Consent Calendar a. Order draft Steering Committee Minutes for the meeting held on July 23, 2003 to be filed. Non-Consent Calendar b. Review and consideration of agenda items considered by the Steering Committee re the August 27, 2003 meeting. C. Consideration of items deleted from Steering Committee Consent Calendar, if any. 12. PLANNING DESIGN AND CONSTRUCTION COMMITTEE (PDC) PDC Consent Calendar a. Order draft Planning, Design and Construction Committee Minutes for the meeting held on June 5, 2003 to be filed. b. Ratify Change Order No. 8 to Primary Clarifiers 16-31 and Related Facilities, Job No. P1-37, with Margate Construction, authorizing an addition of$5,363, increasing the total contract amount to$70,954,641. a. Approve Addendum No. 5 to the Professional Services Agreement with Black & Veatch Corporation for Facilities Modifications for Odor Control, Job No. J-71-3, providing for modifications to the Scope of Work for an additional amount of $41,005, increasing the total amount not to exceed$613,873 d. (1) Approve a budget amendment of$180,000 for the Trunk Sewer Mapping Project, Contract No. 1-98,for a total project budget of$2,193,000; and, (2) Approve Addendum No. 3 to the Professional Services Agreement with Brown and Caldwell for the Trunk Sewer Mapping Project, Contract No. 1-98, providing for additional services for an additional amount of$361,824, increasing the total amount not to exceed $1,715,215. G Yxp.EiaNOwtl W,e^M emmpw`aJ W IGNli]0.t 11P d ARt b M Boutrvmc AM.b.arzose Page 2 Book Page 32 e. (1)Approve an increase for the City of La Habra Cooperative Projects, Contract No. CP-0106, in the amount of$13,600,for a revised contract amount of $107,350, and Contract No. CP-0108, in the amount of$60,000, for a revised contract amount not to exceed $100,000, Increasing the total approved contracts under the Cooperative Projects Program from$17,394,388 to$17,467,988; (2)Approve time extensions of 18 months to Cooperative Projects Program contracts as follows: Brea (CP-0101), Cypress (CP-0001, CP-0103, and CP-0123), Fountain Valley (CP-0002 and CP-0104), Garden Grove(CP-0003 and CP-0119), La Habra (CP-0106, CP-0126 and CP-0127), Midway City SD (CP-0128), Orange (CP-0011), Santa Ana (CP-0016), Seal Beach (CP-0110) and Villa Park (CP-0113 and CP-0114); and, (3) Approve a revision of the Cooperative Projects Program amendment template language to increase time extensions from 6 months to 18 months. I. Approve Addendum No. 5 to the Professional Services Agreement with SPEC Services, Inc. for Standby Power and Reliability Improvements to Treatment Plant Nos. 1 and 2, Job No. J33-1, providing for additional engineering services for an additional amount of$214,500, increasing the total amount not to exceed $2,983,763. g. Approve an amount of$30,000 for reimbursing the Santa Ana Watershed Project Authority for the preparation of an Emergency Response Plan to comply with the Regional Water Quality Control Board tentative Cease and Desist Order. PDC Non-Consent Calendar h. Approve Addendum No. 2 to the Professional Services Agreement with CH2M Hill, Inc., for additional engineering services for Long Range Biosolids Management Plan, Job No. J-40-7,for an additional amount of$785,079.78, increasing the total amount not to exceed $1,433,934.95 13. FINANCE ADMINISTRATION AND HUMAN RESOURCES COMMITTEE (FAHR) FAHR Consent Calendar a. Order draft Finance, Administration and Human Resources Committee Minutes for the meeting held on July 9, 2003 to be filed. b. Receive and file Treasurer's Report for the month of June 2003. C. Adopt Resolution No. OCSD 03-20, Amending Resolution No. OCSD 98-33, Amending Human Resources and Policies Procedures Manual. d. Receive and file the Quarterly Investment Management Program Report for the period April 1, 2003 through June 30, 2003. e. Approve an Interest Rate Exchange Agreement Policy relating to long-term debt financing. _ comNlle¢NJMUONUM U11 a Ms m,Pup 0.+u4e,.Ex Page 3 Book Page 33 I. Approve a Revised Debt Policy relating to short-and long-term borrowing by the District, providing for the limitation on debt issuance be restricted to all capital improvements that cannot be financed from current revenue. FAHR Non-Consent Calendar g. Consideration of items deleted from FAHR Consent Calendar, if any. 15. JOINT GROUNDWATER REPLENISHMENT SYSTEM COOPERATIVE COMMITTEE (JCC) JCC Consent Calendar a. Order Joint Groundwater Replenishment System Cooperative Committee Minutes for the meeting held on July 14, 2003 to be filed. b. Authorize award of a construction contract by the Orange County Water District (OCWD)to Ken Thompson, Inc.,for construction of Groundwater Replenishment System (GW RS) Unit III Pipeline Project., Contract No. GWRS-2003-2,for an amount not to exceed $16,989,000, with OCW D and Orange County Sanitation District paying equal shares of$8,494,500. JCC Non-Consent Calendar C. Consideration of items deleted from JCC Consent Calendar, If any. 16. (1)Approve plans and specifications for Gas Compressor Building Upgrades at Plant No. 2, Job No. P2-79-1 (Rebid), on file at the office of the Board Secretary; (2) Approve Addendum No. 1 to the plans and specifications; (3) Receive and file bid tabulation and recommendation; and (4) Award a Construction Contract to Adams/Mallory Construction Company, Inc.,for Gas Compressor Building Upgrades at Plant No. 2, Job No. P2-79-1 (Rebid),for an amount not to exceed$463,941. 17. CLOSED SESSION: During the course of conducting the business set forth on this agenda as a regular meeting of the Board,the Chair may convene the Board in closed session to consider matters of pending real estate negotiations, pending or potential litigation, or personnel matters, pursuant to Government Code Sections 54956.8. 54956.9, 54957 or 54957.6, as noted. Reports relating to (a) purchase and sale of real property; (b) matters of pending or potential litigation; (c) employment actions or negotiations with employee representatives; or which are exempt from public disclosure under the California Public Records Act, may be reviewed by the Board during a permitted closed session and are not available for public inspection. At such time as the Board takes final action on any of these subjects, the minutes will reflect all required disclosures _ of information. a.Mcme ayswwroc m,nv«utww�mzrm uu a. WA,aowv.aoe Page 4 Book Page 34 a. Convene in closed session, if necessary 1. Confer with Lisa Tomko, Human Resources Director, re International Union of Operating Engineers, Local 501 (Government Code Section 54957.6). 2. Confer with Lisa Tomko, Human Resources Director, re Unrepresented Groups' compensation and benefits(Government Code Section 54957.6). b. Reconvene in regular session C. Consideration of action, 4 any, on matters considered in closed session PROJECT/CONTRACT COST SUMMARY N/A BUDGETIMPACT ❑ This item has been budgeted. (Line item: ) ❑ This item has been budgeted, but there are insufficient funds. ❑ This item has not been budgeted. ® Not applicable (information item) ADDITIONAL INFORMATION NA ALTERNATIVES NA CEOA FINDINGS Not a project. ATTACHMENTS NA jt G:MN MeL W^m�InMO LamYnee`YNUG`1Mt)6t IItl d Nb W hg�eNer.W c Page 5 Book Page 35 ORANGE COUNTY SANITATION DISTRICT (714)962-2411 Mailing Address: P.O. Box 8127 Fountain Valley, California 92728-8127 Street Address: 10844 Ellis Avenue Fountain Valley, California 92708-7018 OCSD 2/13/03 KEEPING THE PUBLIC TRUST A Presentation by CASA President John Coleman pµ quGusr Is , 20O1 Q SA" 016Go Well, 2003 has been a wild year in the State of California so far, hasn't it?We've seen high unemployment, a huge state budget deficit, and the governor's recall qualify for the ballot. It's enough to really shake the public's trust in government. And while the high unemployment might have helped some of us in recent recruitment efforts, the state budget deficit is shrinking the resources we need for critical infrastructure projects and causing rapid increases in fees and charges for permits and other state regulatory services. Of course, the governor's recall has diverted the legislature's attention from pressing public policy issues that affect wastewater service agencies as well. All in all, the public mood is increasingly skeptical about the trustworthiness of public officials. And it's not just public officials at the state level. Most of you know that The Sacramento Bee has been running a series of articles about fscal improprieties by special districts. And when these improper activities by elected officials and employees of local government agencies were brought to light, one of the questions the Bee raised was just how widespread these kinds of wrongdoings were among special districts. The newspaper has, in essence, been reminding California citizens that they should be actively questioning how their public agencies use their resources and how responsibly they handle the public's trust. As Board members and staff of public agencies, I think it's important for each of us to ask ourselves these same questions. Let me take just a few minutes to re-tell the stories that have been running in the Bee. Last year, after the Northridge and Arcade Water Districts merged and became the Sacramento Suburban Water District, an employee reviewing the records of the pre- merger agencies questioned some uses of district-issued credit cards and undocumented reimbursements in the thousands of dollars. She reported these findings, was fired, and subsequently went public with her story. fie Bee investigated and reported allegations that some Sac Suburban officials had failed to report to the IRS more than $1 million in income that had been doled out in various ways. There were travel expenses that weren't backed up by receipts — including a $2,600 round trip airline ticket to Washington D.C. There were $150 rounds of golf at Spanish Bay in Monterey, and there were tens of thousands of hours of unauthorized overtime. As the story unfolded, some of The Bee headlines were scathing. The newspaper promoted the series heavily, with front-page teasers such as "...Life inside California's hidden governments: water districts." Public records requests were used to gather information on the practices of more water districts in Sacramento, Placer, and El Dorado Counties, of the League of California Cities, and of the Association of California Water Agencies. In response to the Sac Suburban revelations, State Senator Deborah Ortiz, who represents part of the Sacramento region, introduced SB 456. The bill would have required biannual audits of the agency's books, capped board member compensation at $1,000 a year, and prohibited travel advances. The Senate Local Government analysis of the bill, written by long-time senior policy staff analyst Peter Detweiler said, "No one trusts a government that can't manage the public's money." Senator Ortiz's said, "We're looking at something pretty significant in capping compensation,"she said. "It is egregious, and I don't know why there was not any internal policing by board members." While she eventually dropped that bill, she announced plans to introduce legislation in January 2004 to address improprieties in ALL special districts, significantly broadening her approach. While some people in our industry have called the Bee's special district editorials a "hatchet job," I personally know the writer who did the series, and he is a well- respected reporter. He saw an abuse of the public trust and he reported it to the public. fie Bee isn't the only paper uncovering these types of activities by public officials. Recently, the Los Angeles Times reported the arrest of the West Basin Municipal Water District president on charges of extorting kickbacks from contractors doing business with the agency. A second West Basin board member was indicted by a Grand Jury for allegedly extorting $25,000 from an investment banker who was seeking to handle the refinancing of$140 million in West Basin debt. A follow-up LA Times story asserted that there is little oversight of"obscure local agencies" and included more examples of questionable activities by both water and wastewater officials. The media coverage continues to declare that not only is outright corruption abhorrent, but also that billing the public for limousine rides, for four-star hotel rooms, for golf game fees and for expensive meals is improper. The media has called both CASA Executive Director Mike Dillon and ACWA Executive Director Steve Hall for comments. They have responded by saying, "These types of abuses by trusted officials, whether directors or staff, give us all a black eye." Corruption, if that's the proper term to use here, is certainly not limited to special districts. Cities, counties, and even the Legislature occasionally abuse the public's trust. In fact, the July issue of the Ca/ifomiaJouma/reported that the cities of Southgate, Compton, Lynnwood, and Carson all have had mayors or city council members indicted for extortion, misusing public funds, and other charges. As some of you might know, some of these elected officials have been recalled in recent elections. I'm sure every one here knows a story about some impropriety that involved a public official. Of course, the private sector has its problems too. Looking back at the Enron scandal and other situations where hundreds of thousands of people lost jobs and retirement benefits, the public sector overall isn't doing a bad job. But as elected officials we have a special responsibility to"keep the public trust." We need to make sure our own agencies are dedicated to the highest ideals of honor • and integrity in all public and personal relationships, so that we merit the respect and confidence of our peers, our staffs and of the public. I'm not suggesting that I have all the answers. And it is difficult for me as one public official to give advice to other public officials. But, if we look at the media stories, the Little Hoover Commission report and the various Grand Jury reports alleging abuse of the public trust, there are recurring themes about proper controls and open public processes. —�- First, proper controls must be in place and the policies and procedures that explain those controls should be reviewed and discussed by the Board regularly. • Every agency must have proper accounting controls. An external auditor should review them regularly. • Every agency should have clear descriptions of what types of expenses are reimbursable. Charging golfing fees is probably illegal and charging very expensive restaurant meals to our agencies is questionable behavior. • Every agency should have clear rules for what constitutes a meeting that merits per diem charges. One small agency was having six meetings a month, compared to an average of two meetings per month for other agencies in the same county. The Grand Jury was especially critical of meetings this small agency called to"design new letterhead." gyp- Second, every agency should have open and public processes for discussing its business. • We should regularly review and carefully follow the Brown Act requirements. • We should be visible in our communities and communicate regularly with the public through meetings, community involvement, newsletters, web sites and other opportunities. • We should avoid even the appearance of conflicts of interest, protect"whistle blowers", and safeguard confidential information. In short, I believe that every action we take must show that we are responsible and trustworthy public officials. As our professional association, CASA can offer some important guidance to help each of our agencies and us, and CASA can work with our fellow associations to develop consistent information and recommendations for public officials. Recently, an ACWA taskforce drafted guidelines to assist their member agencies in establishing sound policies for general conduct, expense, travel and related policies and processes. Since the East Bay Municipal Utility District also is a member of ACWA, I will be working with ACWA President Bette Boatmun, Mike Dillon and Steve Hall to see how ACWA's work may be helpful to CASA. I also am asking Kamil Azoury and the Program Committee to put a panel together for the January Conference to give us some guidance on ethical practices and related subjects such as the Brown Act. 3 While I am confident that the majority of our members have good practices in place that set appropriate guidelines on travel, expense reimbursements and other activities, we all can benefit from a refresher, especially in these are sensitive times. It's hard work to keep the public trust, but its the most important job we do. Having the public's trust helps ensure our industry is able to get a fair share of limited resources and funding that is available in these tight fiscal times. The media coverage of Sacramento Suburban, Carson, and other agencies is a good wake-up call. Let's not minimize the improprieties or deny that the public trust has been violated. Let's work harder to show that these are exceptions to the rule. We are leaders in the wastewater industry for a reason. We earn the privilege every day. 4 August 27, 2003 v MEMORANDUM TO: Members of the Steering Committee C FROM: Shirley McCracken Chair, Board of Directors SUBJECT: Meeting Attendance and Compensation From time to time the Board of Directors has evaluated directors'compensation and the procedures used to appropriately manage the compensation. In January 2001, the Board adopted an ordinance establishing compensation rates and providing some guidance to how compensation would be managed. The major attributes of the ordinance: 1. Established a daily compensation rate of$170.00 for service rendered as a Member of the Board, by request of the Board 2. Set a monthly limit of six meetings or days service per month for all Directors 3. Set a monthly limit of ten meetings or days service per month for the Chair 4. Established a"day's service rendered as a Member of the Board"to include, but not limited to: • Attendance as a member of any Committee established by the District and appointed by the Chair • Attendance at any Committee Meeting when expressly invited to attend by the Chair • Attendance at conferences with State or Federal Legislators regarding District business,when approved by action of the Board • Attendance at a meeting, hearing or conference for business of the District when approved by action of the Board or when designated by the GM with concurrence of the Chair, when deemed to be in the best Interests of the District 5. Established reimbursement for associated expenses Including transportation, hotel, registration, ground transportation, and meals, gratuities and Incidentals. These expenses must be itemized or an invoice provided. However, meals, gratuities and incidentals need to be justified by invoices only if the daily limit of $40 per day is exceeded. 6. Established that no Director shall receive pay for attendance at any meeting, such as a Committee Meeting, which is scheduled immediately adjacent to a regularly-scheduled District Board Meeting. The existing ordinance does not provide guidance in a number of areas. Specific questions about administering the policy are left unanswered by the ordinance. This has caused some degree of inconsistency and confusion about how to administer directors' compensation. Often this falls to staff to reconcile. However, without specific direction from the Board, staff is placed in the awkward position of telling directors what is allowable and not allowable. For this reason, the Board itself, beginning with the leadership of the Steering Committee,should establish additional guidance for the Chair, the General Manager and staff to administer directors' compensation. fAyy 1 For instance, the following questions arise from time to time: • What procedure should a Director use for receiving prior approval to attend a meeting that conforms to the ordinance's requirement of"action of the Board"or"designated by the GM with the concurrence of the Chair"? • What constitutes"a meeting"? Is there a minimum time that a Director must devote to a meeting to be compensated for It? Is a scheduled conference call a meeting? Is a telephone call a meeting? Does it matter who initiates the telephone call? • How much substantive District business is required of a Director to quality for compensation? Is there a de minimus level under which compensation is not earned? • When a Director is attending a meeting and is wearing"two hats"--one on behalf of the District and one on behalf of another public entity—how,should compensation be administered? When on travel in Sacramento or DC,for instance, and a Director is advocating for the interests of the District and another public entity, how should compensation be administered? • To receive compensation or reimbursement, what reporting or justification should the Director provide regarding the District business conducted at the meeting? • Should there be a budgeted maximum number of events per individual and the Board as a whole for which compensation and reimbursement can be received? These questions and others are examples of what staff routinely faces during a typical year. The question for the Steering Committee is to what degree specific guidance should be created to answer these questions. SM:BPA:jt eaw.auma+mma•a.a a,•mnmve a�rmamazms a.acw"n.aaw"neiw„n anam,ami eee