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HomeMy WebLinkAbout2008-04 MINUTES OF STEERING COMMITTEE MEETING Orange County Sanitation District Wednesday, April 23, 2008, at 5:30 p.m. A meeting of the Steering Committee of the Orange County Sanitation District was held on Wednesday, April 23, 2008, at 5:30 p.m., in the District's Administrative Office. (1) A quorum was declared present, as follows: STEERING COMMITTEE MEMBERS: DIRECTORS PRESENT: STAFF PRESENT: Doug Davert, Vice Chair Jim Ruth, General Manager Mark Waldman, Administration Committee Bob Ghirelli, Assistant General Manager Chair Nick Arhontes, Director of Operations and Larry Crandall, Operations Committee Chair Maintenance Don Bankhead Jim Herberg, Director of Engineering Phil Luebben Ed Torres, Director of Technical Services Ken Parker Lorenzo Tyner, Director of Finance and Administrative Services DIRECTORS ABSENT Michael Gold, Legislative Affairs Liaison Jim Ferryman, Chair Penny Kyle, Clerk of the Board OTHERS PRESENT: qq�� Bradley R. Hogin, General Counsel FILED IN aRVf,%ENRTK?,F TTTHEO U BTRICT Toby Weissert (2) PUBLIC COMMENTS MAY 28 2000 There were no public comments. gy. /L (3) REPORT OF THE COMMITTEE CHAIR Vice Chair Davert advised that Chair Ferryman was attending the CASA conference at Squaw Creek. He also reported that the Orange County League of Conservation Voters will be presenting an award to OCSD and OCWD for environmental excellence for the GWRS. Report of Ad Hoc Committee re Memoriam Directors Larry Crandall and Ken Parker reported the Ad Hoc Committee was recommending the resolution be modified to include recognizing people who make a significant contribution to the Sanitation District, and had several alternatives for naming conventions. It was determined this Rem would be continued at the May meeting for further discussion and information. Minutes of the Steering Committee April 23, 2008 Page 2 (4) REPORT OF GENERAL MANAGER Jim Ruth briefly reviewed his monthly report to the Board of Directors. Assistant General Manager Bob Ghirelli provided an update on the consolidation of agreements with SAWPA into one agreement, and advised the agreement would take an additional 30 to 60 days before the agreement would be finalized. (5) REPORT OF GENERAL COUNSEL There was no report. (6) ACTION ITEMS A. MOVED, SECONDED AND DULY CARRIED: Approve minutes of the March 26. 2008 Steering Committee meeting. B. Lorenzo Tyner, Director of Administrative Services, provided a brief overview of the local sewer services. He also reported that the rates reflected in the report need to be increased to include an escalation factor. The increased rates are $199, $204, $208, $212 and $216. MOVED, SECONDED AND DULY CARRIED: Direct staff to proceed with the modified rates of$199, $204, $208, $212 and $216 to be included with the proper notification of a new local sewer service fee beginning July 1, 2008 to property owners receiving local sewer services from the District in areas located in the City of Tustin and in unincorporated areas north of the City of Tustn in accordance with Proposition 218 requirements. Director Davert opposed. (7) INFORMATIONAL ITEMS A. Legislative Affairs Report: Michael Gold gave an update on Federal and State activities including OCSD's appropriation requests and authorizations through WRDA 2008. The good news is that the entire delegation has demonstrated strong support for OCSD's requests, particularly funding for SARI relocation and secondary treatment. Decisions about possible funding, however, will not be known until later in the year. On the State side, Michael reported he has been meeting with the entire state delegation to discuss possible property tax takeaways with Orange County Water District. By May all the meetings will be complete. While the meetings have been positive, the overall mood is still grim ahead of the May revised and projected $20 billion budget deficit. Finally, Michael discussed a trip to Sacramento with a few board members in early June. B. SAWPA: This item was discussed under the report of General Manager. Minutes of the Steering Committee April 23, 2008 Page 3 (8) CLOSED SESSION The Steering Committee convened at 5:58 p.m. in Closed Session, pursuant to Government Code Section 54956.9(a)to discuss one matter. 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 Clerk of the Board in the Official Book of Confidential Minutes of Board and Committee Closed Meetings. At 6:12 p.m., the Steering Committee reconvened in regular session. (9) OTHER BUSINESS, COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY There were none. (10) ADJOURNMENT The next Steering Committee meeting is scheduled for Wednesday, May 28, 2008. The Chair declared the meeting adjourned at 6:13 p.m. Submitted by: Penny M. Kyle Clerk of the Board H:\dephagenda\Steering Committee\2008\0508\04.042308 Steering Minutes.doa STATE OF CALIFORNIA ) )SS. COUNTY OF ORANGE } Pursuant to California Government Code Section 54954.2, 1 hereby certify that the Notice and the Agenda for the Steering Committee meeting held on 6!Ly --z 3 2008,was duly posted for public Inspection In the main lobby of the District's offices on 2008. IN WITNESS WHEREOF, I have hereunto set my hand this / th day of a .2008. Penny Kyle, Clerk the Boas Orange County Sanitation District Distributed at 01 3/Od' Steering Committee meeting. P Facts about Sacramento's Proposal to take OCSD's Property Taxes Opposing a State-imposed tax increase O A f y.� M P }ry EN Understanding the issue • The State of California faces a budget deficit over$16 billion dollars and some in Sacramento are proposing to take money from OCSD and other water/wastewater districts to fill the gap. • If Sacramento takes OCSD's property taxes to solve the problem they created, OCSD will be forced to raise taxes on all Its customers. • One proposal suggests taking $35 million away from OCSD to cover the State's deficit. Taking $35 million from OCSD means Sacramento would be Imposing a 15 percent rate increase on OCSD's customers. Why a property tax grab from OCSD is wrong • A property tax grab from Sacramento would force an increase in rates of at least 15 percent. OCSD just raised rates 10 percent to cover State and Federal mandates and important capital improvements. Orange Countys tax payers cannot afford a combined 25 percent rate increase in one year. • OCSD's board of directors did their part to minimize rate Thera they go again increases by slashing over$500 million from the CIP, trimming the bureaucracy, imposing a hiring freeze and Since 1992, Sacramento finding nearly$20 million in cost savings and efficiencies in has taken over S120 the past two years. We did our part to make prudent fiscal million in property taxes decisions, why can?Sacramento do the same? from OCSD. The state continues to take OCSD's • The budget deficit is a problem caused by Sacramento property taxes each year politicians and their unwillingness to make the tough and have shifted$8 decisions. Over the past several years, we've all known million this year. Next there is structural deficit problem but Sacramento has been year it will be more. unwilling face the challenge and come up with real solutions. Why should Orange Countys taxpayers once Why should OCSD pay for Sacramento's mistakes and lack again bailout of leadership? Sacramento's fiscal mismanagement • In 2004 an overwhelming majority of California voters passed Proposition 1A sending Sacramento the message that local property taxes must stay local. Taking property taxes from OCSD to solve Sacramento's problem is a slap in the face to the voters who thought Prop. 1A would protect their local dollars. • OCSD's property taxes are funding important capital improvements. Orange County is growing and its infrastructure is ageing; moreover the State and Federal government continue to mandate new air and water regulations and OCSD must improve and upgrade its facilities to meet these challenges. Local property taxes are paying for these improvements. Just the facts: the myths about the effects of Sacramento property tax steal OCSD doesn't need property taxes because they can raise fees to cover costs ` 0 t 6L While this is true, it is a double-hit to the tax payer. Orange County's tax CS) 1'/` payers are paying fees and taxes for their sewer services and if this ` money is taken, it means local property tax dollars are paying for Sacramento's mismanagement while fees would have to be raised to Jcover the loss. Property taxes should stay local and not be used as a state bailout. 1l' A one-time property tax shift won't hurt because OCSD has huge Tal reserves Unlike Sacramento, OCSD has prudently managed its finances to build a reserve for needed capital improvements and its insurance liability pool to keep rates as low as possible. Why should OCSD and Orange County's tax payers be punished for Sacramento's mistakes? OCSD would have to raise fees to cover any property tax take because we're using this money for mandated programs and needed improvements. One proposal calling for$35 million to be taken means tax payers would see a 15 percent increase in their sewer rates. . This is all smoke and mirrors because Proposition 'IA protects against a take When California's voters passed Proposition 1A in 2004 message to Sacramento was clear: stop taking local property taxes! Loopholes in Prop 1A allow property taxes to be "borrowed" although there is no penalty for not repaying and 1A allows property taxes to be shifted within the County. One proposal shifts a state responsibility of supervising parolees to county governments then asks water and wastewater agencies to pay for using property taxes. This preposterous scheme is like your neighbor taking your paycheck to pay their credit card bill. This is a Statewide problem and everyone should be part of the solution About OCSD There will probably be a lot of rhetoric about everyone contributing to OCSD serves 2.5 million the solution. OCSD has already lost $36 million to Sacramento to residents-a population pay for past deficits and Sacramento caused this problem so they greater than 18 states- should solve it. When the average tax payer loses a job or faces and is governed by a 25 rising mortgages and gas prices we can't do the Sacramento shuffle member board of and take money from our neighbor. IsnY it time that Sacramento directors. OCSD serves learns to live within it means? 23 cities and the County of Orange Staff Contact Michael Gold, Government Affairs Manager Orange County Sanitation District Phone: (714) 593-7529/E-mail: mgold@ocsd.com Distributed at ,O4 3 D RESOLUTION NO. OCSD 08-( Steering Committee meeting. ESTABLISHING A MONUMENT AND MEMORIAL FULIUY A RESOLUTION OF THE BOARD OF DIRECTORS OF ORANGE COUNTY SANITATION DISTRICT ESTABLISHING A POLICY FOR NAMING F.A.01-TIFS AND THE PLACEMENT OF MONUMENTS AND OTHER MEMORIALS #################### WHEREAS, the Orange County Sanitation District wishes to recognize individuals that have provided meaningful and important service to the Sanitation District; WHEREAS, the District recognizes the need for guidance in the naming of facilities and placing of monuments and other memorials; NOW THEREFORE, the Board of Directors of the Orange County Sanitation District DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1: The naming of District facilities or the placement of monuments and other memorials will be a rare event designed to memorialize an individual who has made distinct and significant contributions to the District. Section 2: To be recognized by the District, the individual must have demonstrated or preformed the following: • Have a long standing affiliation with the Orange County Sanitation District; • Enhanced the quality of operations and/or leadership directly contributing to the well-being of the District and people served by the District; • Made an exceptional contribution to the community through their leadership, involvement or substantial commitment of time or improvement of the quality of life; and, Section 3: By a majority vote of the 8ear9-ef BirectersSteerinc Committee, an individual may be memorialized by the nam ng Gf a GOMPORBRt, thFeugh the placement of plaques, markers, or other memorials. Section 4: . .All - to aguesPlaquas, markers, or other memorials will be permanent. PASSED AND ADOPTED at a regular meeting held April 23, 2008. Chair ATTEST: Clerk of the Board m ORANGE COUNTY SANITATION DISTRICT April 16, 2008 p m,. :tel Hf2 1411 1u4 ,tal!3°a1:15C rmr.m.C.mtn Fp Bm 138:i b.mlxm Valve, Ir B22H Bit) .heat.itrw.: F mmnM" NOTICE OF MEETING V70H )Otb STEERING COMMITTEE r.e,b.n pceno.. em.. a a"e:n ORANGE COUNTY SANITATION DISTRICT 1"0 ILxm., Pen aan axe WEDNESDAY, APRIL 23, 2008 — 5:30 P.M. HiN11iIJLpI 1ry51:,', DISTRICT'S ADMINISTRATIVE OFFICES I a t«fJv., l e nelnw 10844 ELLIS AVENUE FOUNTAIN VALLEY, CALIFORNIA 92708 !Jn"rxNf Ham:l Ilnxae W W W.00SD.COM Nmyxnu 6vn[s Fns Sane HaG Yt 9x,nnn Tuwr. Nlk Pe,* A regular meeting of the Steering Committee of the Orange County Sanitation District will be held at the above location, date °e.... and time. £anitery Ol.:rlvt. 1}tM.•Misr. MI Lnrt I>n W.G� Oletrlttt I.mx N.vmn .a ne,r.a,v "oNaslass leeversnis:n wss:ewa[e.-enC wa[er resource menege,nen[. eORANGE COUNTY SANITATION DISTRICT April 16, 2008 11d19Ec EV 11 h, 1,1913FA(MIS isle,aamasa: Hm H1';) xnrei Valley L4 * SZ:2AB52J .iron.tl muisi Icd'ie°N,ll, I NOTICE OF MEETING 9270H JO,H STEERING COMMITTEE Member Agencies Cities Ansheen ORANGE COUNTY SANITATION DISTRICT M,y,. aunlm Puri (.yi,.T9G n.owFug»enu; WE DN ES DAY, APRIL 23, 2008 — 5:30 P.M. harden limn ks,tJryye, Maa;n ,a nv,"e DISTRICT'S ADMINISTRATIVE OFFICES Matra 1. Panne 10844 ELLIS AVENUE l era "Ian"°" FOUNTAIN VALLEY, CALIFORNIA 92708 Nngpnn Mbeeb Ihvnryls W W W.00SD.COM Pia nmis 9aee Ana M Meech fkanhu, Tu tin "'a Pa,* A regular meeting of the Steering Committee of the Orange Yivari L1v°° County Sanitation District will be held at the above location, date a...tt m 0,.... and time. 9WW1, Di..Nai a o., Mase water Mat'let. I,vina Han,N, To maintain world-class lesdarship in wastewater and wafer resource management. x, 5 g b � C'J + STEERING COMMITTEE AND BOARD MEETING DATES April 23, 2008 May 28, 2008 June 25, 2008 July 23, 2008 August 27, 2008 *September 17, 2008 October 22,2008 `November 19, 2008 *December 17, 2008 January 28, 2009 February 25, 2009 March 25, 2009 -Meetings being held the third Wednesday of the month. STEERING COMMITTEE (1) Roll Call: Meeting Date: April 23, 2008 Meeting Time: 5:30 p.m. Committee Members Jim Fenyman, Board Chair................................................. ........... Doug Davert, Vice Chair..................................................... ........... Mark Waldman, Administration Committee Chair................ ........... Larry Crandall, Operations Committee Chair....................... ........... PhilLuebben....................................................................... ..........._ DonBankhead.................................................................... ........... KenParker.......................................................................... ..........._ Others Brad Hogin, General Counsel............................................. .......... Staff Jim Ruth, General Manager...................................................._ Bob Ghirelli, Assistant General Manager.................................. ._ Nick Arhontes, Director of Operations& Maintenance................. ._ Jim Herberg, Director of Engineering....................................... ._ Ed Torres, Director of Technical Services..................................— Lorenzo Tyner, Director of Finance &Administrative Services........ Michael Gold, Legislative Affairs Liaison.................................... Penny Kyle, Clerk of the Board........................................... ._ Other Staff Present AGENDA REGULAR MEETING OF THE STEERING COMMITTEE ORANGE COUNTY SANITATION DISTRICT WEDNESDAY, APRIL 23, 2008 AT 5:30 P.M. ADMINISTRATIVE OFFICE 10844 Ellis Avenue Fountain Valley, California www.ocsd.com 1. Declaration of Quorum and appointment of Chair Pro Tem, if necessary 2. Public Comments 3. Report of Committee Chair a. Report of Ad Hoc Committee re Memoriam 4. Report of General Manager 5. Report of General Counsel 6. Action Items A. Approve minutes of the March 26, 2008 Steering Committee meeting. (Book Page 4) B. Direct staff to proceed with the proper notification of a new local sewer service fee beginning July 1, 2008 to property owners receiving local sewer services from the District in areas located in the City of Tustin and in unincorporated areas north of the City of Tustin in accordance with Proposition 218 requirements. (Book Page 7) 7. Information Items A. Legislative Affairs Report—Gold (Book Page 25) B. SAWPA- Ghirelli (Book Page 30) Book Page I April 23, 2008 8. 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, if necessary CONFERENCE WITH LEGAL COUNSEL RE. INITIATION OF LITIGATION (Government Code Section 54956.9(c)) Number of Potential Cases: 1 B. Reconvene in regular session C. Consideration of action, if any, on matters considered in closed session. 9. Other business and communications or supplemental agenda items, if any 10. Adjournment to May 28, 2008, at 5:30 p.m. Book Page 2 April 23, 2008 Agenda Posting: 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 offices 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 Clerk of the Board. Items Not Posted: In the event any matter not listed on this agenda is proposed to be submitted to the Committee for discussion and/or action, it will be done in compliance with Section 54954.2(b) as an emergency Rem or because there is a need to take immediate action,which need came to the attention of the Committee subsequent to the posting of agenda, or as set forth on a supplemental agenda posted in the manner as above, not less than 72 hours prior to the meeting date. Public Comments: Any member of the public may address the Steering Committee on specific agenda items or matters of general interest. As determined by the Chair, speakers may be deferred until the specific item is taken for discussion and remarks may be limited to three minutes. Matters of interest addressed by a member of the public and not listed on this agenda cannot have action taken by the Committee except as authorized by Section 54954.2(b). Consent Calendar: All matters placed on the consent calendar are considered as not requiring discussion or further explanation, and unless a particular item is requested to be removed from the consent calendar by a Director of staff member, there will be no separate discussion of these Items. All items on the consent calendar will be enacted by one action approving all motions, and casting a unanimous ballot for resolutions included on the consent calendar. All items removed from the consent calendar shall be considered in the regular order of business. The Committee Chair will determine if any items are to be deleted from the consent calendar. Items Continued: Items may be continued from this meeting without further notice to a Committee meeting held vrithin five(5)days of this meeting per Government Code Section 54954.2(b)(3). Meeting Adjournment: This meeting may be adjourned to a later time and items of business from this agenda may be considered at the later meeting by Order of Adjournment and Notice in accordance with Government Code Section 54955(posted within 24 hours). Accommodations for the Disabled: The Board of Directors Meeting Room is wheelchair accessible. If you require any special disability related accommodations, please contact the Orange County Sanitation District Clerk of the Board's office at(714)593-7130 at least 72 hours prior to the scheduled meeting. Requests must specify the nature of the disability and the type of accommodation requested. Notice to Committee Members: For any questions on the agenda or to place any items on the agenda, Committee members should contact the Committee Chair or Clerk of the Board ten days in advance of the Committee meeting. Committee Chair: Jim Ferryman (714)28335910 ext. 123 General Manager: James D. Ruth (714)593-7110 General Counsel: Brad Hogin (714)415-1006 Clerk of the Board: Penny Kyle (714)593-7130 E-mail: pkylerdocsd.com Book Page 3 MINUTES OF STEERI G COMMITTEE M FTIlIC Orange County Sanitation District Wednesday, March 26, 2008, at 5:30 p.m. A meeting of the Steering Committee of the Orange County Sanitation District was held on Wednesday, March 26, 2008, at 5:30 p.m., in the District's Administrative Office. (1) A quorum was declared present, as follows: STEERING COMMITTEE MEMBERS, DIRECTORS PRESENT: STAFF PRESENT: Jim Ferryman, Chair Jim Ruth, General Manager Doug Davert, Vice Chair Bob Ghirelli, Assistant General Manager Mark Waldman,Administration Committee Nick Arhontes, Director of Operations and Chair Maintenance Larry Crandall, Operations Committee Chair Jim Herberg, Director of Engineering Don Bankhead Ed Torres, Director of Technical Services Phil Luebben Lorenzo Tyner, Director of Finance and Ken Parker Administrative Services Michael Gold, Legislative Affairs Liaison DIRECTORS ABSENT Penny Kyle, Clerk of the Board OTHERS PRESENT: Bradley R. Hogin, General Counsel Heather Dion (2) PUBLIC COMMENTS There were no public comments. (3) REPORT OF THE COMMITTEE CHAIR Chair Jim Ferryman advised the next CASA conference would be held April 24-26, 2008 in Squaw Valley. (4) REPORT OF GENERAL MANAGER General Manager Jim Ruth reported there had been progress made on condensing multiple agreements into one with SAWPA, and will be submitted to the Board for approval in the near future. He noted that the EIR for improvements to the SARI line was released to the public on March 1e. He also reported: 08/09 and 09/10 budget would be reviewed by the committees in May; industrial rates would be reviewed by the Administration Committee in April; and an agency Speakers' Bureau is available to provide more educational outreaches. Lorenzo Tyner provided a report on the proposed rate increases for the local sewer service areas in the Tustin area and the required Prop 218 notifications. Jim Herberg reported on a request by the Republic of(South) Korea Environmental Management Corporation to send two Book Page 4 Minutes of the Steering Committee March 26, 2008 Page 2 OCSD employees to engage in discussion and sharing of information on advanced wastewater issues and technology at their facility, and the corporation would absorb all of the expenses. Mr. Ruth also discussed ideas to update the lobby area with interactive kiosks and displays that would assist in public education. Staff was requested to come back with a proposal for consideration by the committee. (5) REPORT OF GENERAL COUNSEL There was no report. (6) ACTION ITEMS A. MOVED, SECONDED AND DULY CARRIED: Approve minutes of the February 27, 2008 Steering Committee meeting. B. MOVED, SECONDED AND DULY CARRIED: Recommend to the Board of Directors to adopt Resolution No. OCSDOB-XX, Establishing a Policy for Naming Facilities and Placing of Monuments and Other Memorials. (7) INFORMATIONAL ITEMS A. Legislative Affairs Report: Heather Dion and Chris Townsend from Townsend Public Affairs gave an update on State legislation and the political climate in Sacramento. In addition, Michael Gold gave an up update of State and Federal legislative activities, including the possibility of the State taking property taxes away from special districts. Steering Committee members requested they be provided talking points on a property tax takeaway and Its impact to OCSD. B. Proposed transfer of OCSD local sewers to Costa Mesa Sanitary District: Nick Arhontes, Director of Operations 8 Maintenance, provided a brief overview and noted that OCSD has transferred local sewers in the past with other agencies. (8) CLOSED SESSION The Steering Committee convened at 6:24 p.m. in Closed Session, pursuant to Government Code Section 54956.9(a)to discuss one matter. 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 Clerk of the Board in the Official Book of Confidential Minutes of Board and Committee Closed Meetings. At 6:26 p.m., the Steering Committee reconvened in regular session. (9) OTHER BUSINESS COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS IF ANY There were none. Book Page 5 Minutes of the Steering Committee March 26, 2008 Page 3 (10) ADJOURNMENT The next Steering Committee meeting is scheduled for Wednesday, April 23, 2008. The Chair declared the meeting adjourned at 6:28 p.m. Submitted by: Penny M. K Clerk of the Board X�WBaMeK�M�V CM1nmNee�lWNIIUTDII)OB.SIwM1MMIMM.CK Book Page 6 STEERING COMMITTEE MeeOng Date To ad.or Dir. 4/23/08 N/A AGENDA REPORT Ism Numbs Rem Numbs+ 6(u Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: ESTABLISH LOCAL SEWER SERVICE USER FEE PROGRAM FOR SERVICE PROVIDED IN AREAS LOCATED IN THE CITY OF TUSTIN AND UNINCORPORATED AREAS NORTH OF THE CITY OF TUSTIN GENERAL MANAGER'S RECOMMENDATION Direct staff to proceed with the proper notification of a new local sewer service fee beginning July 1, 2008 to property owners receiving local sewer services from the District in areas located in the City of Tustin and in unincorporated areas north of the City of Tustin in accordance with Proposition 218 requirements. SUMMARY The District currently provides regional sewage collection, treatment, and disposal services in central and northwest Orange County, and maintains local sewers on approximately 18,000 parcels located in Revenue Area 7. All other wastewater is collected from residential, commercial, and industrial properties through local sewer lines that are owned and maintained by local cities and special districts located within the District's overall service area. Each of these local cities and special districts charge a fee to the property owners they serve for the maintenance of these local sewers. Since the District does not collect a local sewer user fee to recover the costs to operate, maintain, and replace the local collection system in Revenue Area 7, revenues from the regional user fee have had to subsidize these costs. At the direction of the Board, staff contracted with Carollo Engineers to complete a five- year rate study to determine a fair and equitable local sewer user fee that will support the cost of operating, maintaining, and replacing the local sewers in Revenue Area 7. The findings of the study indicate that the local sewer service in Revenue Area 7 is currently underfunded and that the dedicated ad valorem taxes of$230,000 are not sufficient alone to fund the estimated $6.5 million annual revenue needs. Absent the implementation of a local sewer fee, the remaining deficiency would continue to be funded using regional sewer treatment user fees. Based on the rate study results, it is recommended that the District adopt an equitable local sewer user fee that will allow the local sewers to be self-supporting. This fee should be increased annually commensurate with the schedule shown below. Book Page 7 PROPOSED ANNUAL LOCAL SEWER SERVICE FEE SCHEDULE FY 2007-08 FY 2008-09 FY 2009-10 FY 2010-11 FY 2011-12 $199 $199 $199 1 $199 $199 Sewer service user fees are specifically exempted from some of the requirements of Proposition 218. Most notably, they are exempt from the election requirements, but not the requirement that fees cannot exceed the reasonable cost of service. A notice of the proposed new fee will be mailed to every property owner in the OCSD local sewer service area. The rates will be adopted through the ordinance process, and that requires two Board meetings and a public hearing. Proposition 218 Notices notify the property owners of the public hearing that coincides with the second reading of the ordinance. Notices must be mailed to property owners 45 days before the public hearing. Based upon these requirements, the adoption schedule is as follows: Local Sewer Service User Fee Adoption Schedule 08-09 Description Date -Recommend Approval of 5-Year Rate Schedule to the Steering Committee 4/23/2008 -Prop 218 45-day notice mailed 5/9/2008 -Board 1st reading of rate Ordinance 5/28/2008 -Board 2nd reading & adoption of Ordinance 6/25/2008 -Fiscal year begins 7/1/2008 -Fees per parcel sent to Auditor/Controller 8/11/2008 Staff will work with all parties involved to ensure that notices are printed correctly and mailed to over 18,000 property owners so that the legal requirements are met. Additional temporary staff is needed to answer phone calls from customers. Historically, three OCSD staff and two temporary staff answer phone calls for a minimum of four weeks for Regional fee notices. A similar situation is expected for the local sewer service fee Prop 218 notice. All comments received by telephone, and all written comments received by letter or e-mail will recorded and made available to all Directors prior to the public hearing. PRIOR COMMITTEE/BOARD ACTIONS September 2007 - Board directed staff to perform a comprehensive rate study for local sewers, establish a local sewer user fee structure, and initiate the appropriate Proposition 218 notifications and actions. Book Page 8 July 18, 2007 - FY 2006-07 Steering Committee Considered Strategic initiatives — Local Sewer Service Staff Report October 25, 2006 - Board Approved compliance with new Statewide WDR Order for Sanitary Sewers. ADDITIONAL INFORMATION Below is a comparison of local sewer service fee from the other local cities and special districts providing this service within the District's overall service area. It should be noted that most if these other agencies have not included full capital replacement costs or meet the new sanitary sewers service requirements now required by the California State Water Discharge Requirements Order in their rate model. Annual Anaheim $55.44- $83.51 Brea $83.64-$127.20 Buena Park $106.92 CMSD $33.68 Cypress $14.40 Fountain Valley $48.00 GGSD $73.80 Huntington Beach $85.32 Fullerton $66.12 IRWD $117.60 La Habra $61.20 La Palma $303.84 MCSD $87.00 Newport Beach $75.00-$89.88 Orange $6.72 Placentia $35.88 Rossmoor/Los Alamitos $0.00 Santa Ana $24.36 Seal Beach $84.00 Stanton $28.25 SSBSD $148.76 Villa Park $193.80 Yorba Linda $19.47 Yorba Linda Water District $42.00 Average $81.46 OCSD $199.00 ATTACHMENTS 1. Local Sewer Service Fee Rate Report prepared by Carollo Engineers. JDR:LT:MW:AB Book Page 9 Orange County Sanitation District Local Sewer Fee Analysis FINAL April 2008 'CcIft Enginee —Wor WNtvMere WRh Wafer' Book Page 10 ORANGE COUNTY SANITATION DISTRICT Local Sewer Fee Analysis FINAL Report TABLE OF CONTENTS 1.0 INTRODUCTION......................---.................------....--""...........................................1 1.1 Background.....................................................................................................1 2.0 METHODOLOGY......................................................................................................1 2.1 Introduction..................................................................................................... 1 2.2 Assumptions....................................................................................................2 3.0 FEE CALCULATION.................................................................................................4 3.1 Introduction.....................................................................................................4 3.2 Annual Revenue Requirement........................................................................4 3.3 Fee Calculation...............................................................................................5 3.4 User Rate Categories......................................................................................6 4.0 RECOMMENDATIONS.............................................................................................6 i i it April 15, 2008 GWq"-U10CSOOtl�a&kc10C5D1m F®Tan Al ft Book Page 11 ORANGE COUNTY SANITATION DISTRICT LOCAL SEWER FEE ANALYSIS 1.0 INTRODUCTION 1.1 Background The Orange County Sanitation District (OCSD)is a publicly owned regional wastewater treatment agency providing regional sewage collection,treatment, and disposal services in central and northwest Orange County. Local cities and special districts in the OCSD service area collect wastewater from residential, commercial, and industrial properties through local sewer lines. These local sewers are a system of connecting pipes that discharge into OCSD regional interceptors, pumping facilities and trunk lines. Each city or special district establishes its own local sewer user fee depending on its site-specific costs to own, manage, operate, and maintain its local wastewater collection system. The current service area of OCSD is organized into nine"Revenue Areas" representing distinct geographic regions in Orange County. The focus of this study is Revenue Area 7, which includes unincorporated areas of Orange County and a portion of the city of Tustin. Since the mid-1960's OCSD has provided regional sewer services and maintained the local sewers to approximately 18,000 parcels located in Revenue Area 7. OCSD charges an annual regional sewer user fee to its customers, which appears as a special assessment on the annual property tax bill. However, OCSD does not currently bill its customers in Revenue Area 7 for the local sewer services it provides. Key Issues Currently, dedicated ad valorem taxes are insufficient to meet the total expenditure needs to maintain the local collection system in Revenue Area 7. Consequently, the District's regional user fee revenues have been used to meet this shortfall. The purpose of this study is to determine a fair and equitable local sewer user fee that will support the cost of operating and maintaining the local sewers in Revenue Area 7. 2.0 METHODOLOGY 2.1 Introduction The first part of the study is a revenue requirement analysis, which calculates an annual target that must be met with local sewer user fee revenues. The target accounts for annual operating and maintenance expenditures, capital projects costs, and other revenue sources that may be used to offset the revenue requirement from user fees. April 15, 2008 1 GWgats-G10C500eIre WOML¢el5 F®Te Wmo Book Page 12 2.2 Assumptions Study Period Local sewer user fees were forecasted from FY 2008/09 through 2029/30. Operations and Maintenance (O&M) Expenses Total O&M expenses for the first five years of the study, from FY 2008/09 through FY 2012/13, were provided by the District. Thereafter, O&M expenditures were subject to general cost inflation. The general cost inflation escalator was assumed to be 4 percent per year. Offsetting Revenues In servicing the local sewers, OCSD currently receives a share of the basic one percent ad valorem tax levy apportionment. However, this ad valorem tax revenue is insufficient to meet all of the operating and capital costs associated with maintaining these local sewers. Irvine Ranch Water District (IRWD) provides local sewer service to part of Revenue Area 7. As a result, OCSD remits a portion of the Revenue Area 7 local property tax revenue to IRWD relative to the portion of the system served. The remaining property tax revenues collected for local sewer service are available to offset costs incurred by the District to provide local sewer service. The net difference is then assumed to be recovered through a local sewer fee. The property tax available for the District to maintain local sewer lines totals approximately $230,000 in FY 2007/08.As a conservative assumption, this amount was not escalated in future years. Capital Replacement GHD Management, Engineering and Environmental Consultants conducted a condition assessment study on the local sewers and prepared a report for OCSD in September 2007 titled "Local Sewer Service Study: Cost Projection of Rehabilitation and Replacement over 100 years."This report contains a detailed projection of annual capital projects from 2009- 2107 that will be required to maintain the local sewer system in Revenue Area 7. The capital cost projections in the report are volatile; for example, in the course of the study period (2009-2030), capital costs range from no annual need up to $77 million in a given year. This largely reflects a roughly 50 year replacement cycle for these assets. To encourage a fiscally proactive approach to capital funding and to avoid undue burden on user fees, we recommend that OCSD implement a "sinking fund"type capital replacement approach to plan for future capital projects. The sinking fund is a technique in which OCSD sets aside a specific dollar amount each year to a reserve, which is then drawn down to fund annual capital expenditures. Ideally, April 15, 2008 2 cwy v:-aro�10=L�s Fn r�n ft Book Page 13 funds will accumulate in years of smaller capital expenditures so that existing reserves could support larger capital expenditures in future years. This proactive capital funding strategy minimizes impacts to user fees. If there is a capital funding shortfall, it is assumed that the District would fund it as part of its District wide-capital funding program, and would then be reimbursed with future sinking fund contributions. Debt Service Any debt service obligations specifically attributable to OCSD owned local sewers in Revenue Area 7 would be included in the analysis. However, there are no outstanding debt issues to be considered. In addition, it is assumed that the local users will contribute to the sinking fund through payment of the user fee. OCSD will fund any spikes in capital costs from existing regional sewer reserves and be reimbursed through future local sewer service fees. Customer Base Customer base growth projections were calculated on a per-parcel and per-Equivalent Dwelling Unit(EDU) basis. Parcels Current parcels: the current parcel list was obtained from the OCSD customer database • Parcels at beginning of FY 2008109 = 18,030 parcels EDUs The calculation of EDUs was a multi-step process: Parcel List—A list of all parcels in Revenue Area 7 was obtained from OCSD. This data contained square footage measurements for each commercial parcel. • Parcels in Revenue Area 7 were then grouped into customer Gasses based on billing information provided by OCSD. Flow Factors—OCSD provided documentation of flows (in 1,000 gallons per day)for each of their customer classes. • Flow factors were developed for the customer classes based on the flows in gallons per day for each class relative to the single family customer flow. Loading Factors—OCSD provided documentation of Biochemical Oxygen Demand (BODS) and Total Suspended Solids (TSS) (in pounds)for each commercial customer Gass. • Loading factors were developed for the customer classes based on the pounds of BOD,and TSS produced per 1,000 square feet for each class relative to the single family customer. April15,2008 3 Glegeus-GWCS�NAra&�ww�0050l�SwaFw i¢1,Abw.Eec Book Page 14 The square footage in each customer class was then multiplied by the flow factor of the class to determine EDUs. This methodology is consistent with the District-wide EDU factor calculations. For the purposes of the local sewer fee, 90 percent of the total annual costs are assumed to be attributable to flow, and 6 percent and 4 percent attributable to BOD, and TSS, respectively. Total current EDUs at the beginning of 2008/09 =32,719 EDUs. It is recommended that local sewer will be charged on an EDU basis. As part of this analysis, a rate per parcel was also evaluated. However, a parcel based rates does not recognize the differing loads paced on the system based on the size and type of property. Customer Growth To calculate the local sewer user fee in future years, it is assumed that the population growth in Revenue Area 7 is commensurate with OCSD-wide growth: 1. OCSD-wide annual growth rate—Based on population projection. a. The following populations were provided by the District: 1) 2005=2,243,540 2) 2010 =2,362,654 3) 2015=2,424,156 4) 2020=2,500.188 b. A smoothed growth rate was extrapolated from the data above: 1) 2007-2020 = 0.652% per year growth 3.0 FEE CALCULATION 3.1 Introduction The calculation of the local sewer user fee was comprised of two steps:first, the annual revenue requirement was calculated. As discussed above, the revenue requirement includes annual O&M expenditures attributable to Revenue Area 7, capital replacement expenses, and any offsetting revenue sources. The annual revenue requirement was then divided by the customer base in each year of the study period. Summaries of each component of the calculation are provided below. 3.2 Annual Revenue Requirement A summary of the annual revenue requirement for the first seven years of the study period is provided below: April 15, 2008 4 Gyk� -fAl005fl10elua�Ms�OGN lrcal Se�xrFm Tef.M1bro.6x Book Page 15 Table 1 Revenue Requirement Analysis Revenue Program and Rate Update Orange County Sanitation District FY 2008 FY 2009 FY2010 FY 2011 FY 201 FFY 2013 FY 2014 Year 2009 2010 2011 2012 2013 2014 2015 08M Expenses $2,130,019 $2,172,497 $2.215.253 $2,258,288 $2,301,603 $2,413.517 $2,510,058 capital Raplwc ,rt $4,611,094 $4,611,094 54,611,094 $4,611,094 $4,611,094 $4.611,094 $I,611,094 Total Debtservke 1A $o $0 $0 $0 to so Expenses: $6,741,113 $6,753,592 $6,826.348 $6,869.382 $6,912.697 $7,024,612 $7,121.152 Less: Offsetting Tax Revenues ($230,021) ($230,021) ($230,021) ($230,021) 1$230,027 Revenue I ($230.021) ($230,021) ullz r8 $6,511,092 $6,553,571 $6,596.327 $6,639.361 $6.682,676 $6,794,591 $6,891,131 The total annual revenue requirement ranges from$6.51 million to$6.89 million from FY 2008/09 to FY 20013/14. The capital replacement expense is the largest portion of the annual revenue requirement, making up 67 percent to 71 percent of the total in each year. This is an expected outcome considering the significant costs contained in the capital projects schedule provided by GHD. 3.3 Fee Calculation As discussed in the "Methodology"section, customer growth projections were calculated for parcels and EDUs in Revenue Area 7. For the purposes of this study, the recommended local sewer user fee schedule has been prepared on a per-EDU basis. A summary of the projected fee in the first seven years of the study period is provided below: Table 2 Annual Local Sewer Fees Revenue Program and Rate Update Orange County Sanitation District FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Year 2009 2010 2011 2012 2013 2014 2015 Revenue Requirement $6,511,092 $6.553,571 $6,596.327 $6,639,361 $6,682,676 $6.794,591 $6.891,131 EDUs 32,719 32,933 33,147 33,364 33.581 33.800 34.021 Annual Fee per EDU $199.00 $199.00 $199.00 $199.00 $199.00 $201.02 $202.56 Monthly Equivalent Role $16.58 $16.58 $16.58 $16.58 $16.58 $16.75 $16.88 The user fee was calculated by dividing the total annual revenue requirement by the number of EDUs served. Based on this calculation, the District's local sewer fee per EDU equates to $199 per year in FY 2008/09. April 15, 2008 5 G Wga1a-GWC9TAIw�6n0050l¢dSw F®Tei,xbno.E¢ Book Page 16 3.4 User Rate Categories As with the regional sewer service fee program, users will be billed a flat wastewater service charge based on the property use classification maintained by the County Assessor.The District maintains a listing of average flow and wastewater strength discharges for each property type, which will be used to develop the user rates.The single- family residential (SFR)user rate will be based on typical flow and loadings for an average 3-bedroom home and will serve as the base rate to calculate rates for other users. Multi- family residential users will be charged 70 percent per unit of the SFR rate. Commercial users will be charged a percentage of the SFR rate as specified in Appendix B of this memorandum. These use factors are based on the average flow and strength characteristics for the type of property, charged on a 1,000 square-foot basis. See Appendix B for a complete listing of user rate categories. 4.0 RECOMMENDATIONS The findings of the study indicate that the local sewer service in Revenue Area 7 is currently underfunded. Moreover, the dedicated ad valorem taxes of$230,000 (annually) are not sufficient alone to fund the estimated $6.5 million annual revenue needs. Absent the implementation of a local sewer fee, the remaining deficiency would continue to be funded using regional sewer treatment user fees. Based on the study results, it is recommended that OCSD adopt an equitable local sewer userfee that will allow the local sewers to be sell-supporting. This fee should be increased annually commensurate with the schedule outlined in the table provided above. it is also recommended that OCSD establish a sinking fund to ensure that capital projects are sufficiently funded through user fees and that adequate planning is undertaken for the repair and replacement of the system. April 15, 2008 6 G Wgeas L¢ l Sexy Fee Te Atrro.C¢ Book Page 17 Appendix A CALCULATIONS April 15, 2008 GVMx -MIOLSaVblwrtlM DMDI ISena Poe Ts Mem .. Book Page 18 :, IUUT ANALT.JID SEWER FEE ANALYSIS FYE 2009 FYE 2010 FYE 2011 FYE 2012 FYE 2013 FYE 2014 FYE 2015 FYE $ 1,367,505 $ 1,422,206 $ 1,479,094 $ 1,538,258 $ 1,599,788 $ 1,663.779 $ 1,730,331 $ 1 $ 762,514 $ 750,292 $ 736,159 $ 720,030 $ 701,815 $ 749.738 $ 779,728 $ 1 4,611,094 4,611,094 4,611,094 4,611,094 4,611.094 4,611,094 4,611,094 $ 4 6,741,113 6,783,592 6,826,348 6,869,382 6,912,697 7,024,612 7,121,152 $ 7 ;5 (230,021) (230,021) (230,021) (230,021) (230,021) (230,021) (230,021) (230,021) (230,021) (230,021) (230,021) (230,021) (230,021) (230,021) $ 6,511,092 6.553,571 6,596,327 6,639,361 6,682,676 6,794,591 6,891,131 $ 6 w F 32,719 32,933 33,147 33,364 33,581 33,800 34,021 v $199.00 $199.00 $199.00 $199.00 $199.00 $201.02 $202.56 $16,58 $16.58 $16.58 $16.58 $16.58 $16.75 $16.88 ORANGE COUNTY SANITATION DISTRICT RATE STUDY ANALYSIS LOCAL SEWER FEE ANALYSIS Escalation 5,00% Year Rehab Replace Total Escalated 21308 2009 S 492229 S 492.229 $ 516.840 2010 S 2.280.765 S 2.280.765 $ 2.514.543 2011 $ 911 $ 911 $ 1.055 2012 S - $ - $ - 2013 S 1,391 S 37,657 $ 39.048 $ 49,836 2014 S - $ - $ - 2015 S - s - $ - 2016 $ 369.794 $ 369,794 $ 546,354 2017 $ 77,641.797 $ 20,914 $ 77,662,711 $ 120,480,355 2018 S 19,139.350 S 19.139,350 S 31,175,984 2019 S 275.154 S 62.389 $ 337,553 $ 577.330 2020 S 404.955 $ 404.955 $ 727.241 2021 S 311.136 $ 311.136 S 586.693 2022 S 31.253 $ 31,253 $ 61,879 2023 S 56.994 $ 56.994 $ 118,486 2024 S 45.130 $ 45.130 $ 98.513 2025 $ 99.784 $ 99,784 $ 228.707 2026 S 21.315 $ 21.315 $ 51.297 2027 S 15A65 $ 15.465 $ 39.079 2028 S 13,960 $ 13.960 $ 37,040 2029 S 12.805 $ 12,805 $ 35,674 2030 S 25.199 $ 25.199 $ 73.714 Total: S 101,360,357 $ 157,920,622 Annual Average: $ 4,607.289 $ 7.178,210 Annual Sinksag Fund Payment: $ 2,959,602 $ 4.611,094 Interest Eamings 4% A-2 Book Page 20 Appendix B USER RATE CATEGORIES Apri115. 2008 cis- S�rm T�Wmma Book Page 21 ORANGE COUNTY SANITATION DISTRICT RATE STUDY ANALYSIS USER RATE CATAGORIES EDU Annual Rate $199.00 Percentage of SFR Use Codes Deseription Per 1,000 SF or Unit User Rates 5 COMMON AREA PARCEL 0% $0.00 6 "HOLD"PARCEL 0% $0.00 8 EOUIV TO VACANT 0% $0.00 121 PARCEL OF MINIMAL OR NO VALUE 0% 50.00 122 SUBSURFACE PARCELS 0% $0.00 124 OILIMINERAL RIGHTS 0% S0.00 125 MINERAL RIGHTS EQUIPMENT 0% S0.00 126 VACANT COMMON AREA-IMP ALLOC 0% $0.00 201 HOME OWNERS EXEMPTION ADD'N 0% $0.00 666 UNASSIGNED VACANT 0% $0.00 112 STEEL BUILDING 5% $9.10 113 MINI-WAREHOUSE 5% $9.10 58 NURSERIES(PLANTS) 9% $18.39 100 DRIVE-IN THEATER 9% $18.39 110 WAREHOUSE-SINGLE TENANT 11% $22.68 111 WAREHOUSE-MULTI TENANT 11% $22.68 115 RECREATIONAL VEHICLE STORAGE 11% $22.68 116 TRUCK TERMINAL 11% $22.68 44 LUMBERICONSTR MATL YARD 18% $35.33 71 PARKING GARAGE 18% $35.49 72 PAVED PARKING LOT 18% $35.49 33 CHURCH BUILDINGS 20% $39.50 94 DEPARTMENT STORE 22% $43.68 95 DISCOUNT STORE 22% S43.68 96 UNATTACHED SINGLE STORE 22% $43.68 97 STRIP STORE 22% S43.68 74 RECREATION VEHICLE PARK 23% S45.48 225 UNITED STATES POST OFFICE 28% $54.93 107 LIGHT INDUSTRIAL-SINGLE TENANT 30% $60.55 108 LIGHT INDUSTRIAL-MULTI TENANT 30% $60.55 109 RESEARCH AND DEVELOPMENT 30% $60.55 114 INDUSTRIAL PARK 30% $60.55 40 HEALTH CLUB 33% $65.04 88 CONVENIENCE SHOPPING CENTER 36% $71.76 36 FINANCIAL BUILDINGS 39% $77.39 68 HIGH RISE OFFICE 39% $78.35 21 AUTOMOBILE DEALERSHIP 39% $78.60 22 AUTO REPAIR SHOP 39% $78.60 23 AUTOMOTIVE SERVICE 39% $78.60 24 USED CAR LOT 39% $78.60 39 GOLF COURSE 39% $78.60 57 MOTORCYCLE/SMALL VEHICLE BLDG 39% $78.60 83 AUTOMOTIVE SERVICE STATION 39% $78.60 84 MARINE SERVICE STATION 39% $78.60 86 COMBINSERVICE STWCONVIENCE MKT 39% $78.60 65 SINGLE OFFICE SLOGS TO 3 STORIES 40% $79.27 66 SMALL OFFICE CENTER 40% $79.27 B-1 Book Page 22 a " ORANGE COUNTY SANITATION DISTRICT RATE STUDY ANALYSIS USER RATE CATAGORIES 1 mo 2M 7-1 s . EDU Annual Rate $199.00 Percentage of SFR Use Codes Description Per 1,000 SF or Unit User Rates 67 OFFICE COMPLEX 40% $79.27 69 CONVERTED RESIDENCE TO OFFICE 40% $79.27 85 COMBIN:SERV STN/RESTAURANT 42% $83.66 48 CONVENIENCE MARKET 44% $88.04 37 FRATERNAL BUILDINGS 49% $98.25 101 UNATTACHED THEATER 49% $98.26 7 MOBILEHOME 50% $99.88 55 MOBILE HOME PARK 52% $102.59 26 AIRPORT AND RELATED 56% $110.56 45 MARINAS 56% $110.56 32 CEMETERY&RELATED 56% $110.70 38 FUNERAL HOME 56% $110.70 3 TWO OR MORE SFR 70% $139.22 10 DUPLEX ONLY 70% $139.22 11 TRIPLEX ONLY 70% $139.22 12 04-UNITS ONLY 70% $139.22 13 5TO 16 UNITS 70% $139.22 14 17 TO 25 UNITS 70% $139.22 15 2640 UNITS ONLY 70% $139.22 16 41-99 UNITS ONLY 70% $139.22 17 100 OR MORE UNITS 70% $139.22 18 A MIX OF FORMS 70% $139.22 19 SFR WITH 1 OR RENTALS 71% $140.38 28 BOWLING ALLEYS 71% $141.27 92 SKATING RINKS 71% $141.27 4 MISC IMPROVEMENT 71% $141.53 118 GOVERNMENTAL USE 79% $157.02 81 PRE-SCHOOLS,NURSERY OR CARE 80% $158.22 82 PRIVATE SCHOOLS 80% $158.22 98 STORE WITH OFFICES OR LIV OTR 80% $158.22 99 STORE W/OFFICE UPSTAIRS 80% $158.22 47 SUPERMARKET 84% $166.22 89 NEIGHBORHOOD SHOPPING CENTER 92% $182.28 61 CONVALESCENT HOSPITALS 99% $196.63 34 DORMITORY 99% $197.36 42 HOSPITAL 100% $198.77 2 ONE RESIDENCE 100% $199.00 103 CHEMICAL TANK AND BULK STORAGE 100% $199.00 104 FOOD PROCESSING PLANT 100% $199.00 105 COLD STORAGE PLANT 100% $199.00 106 FACTORY 100% $199.00 B-2 Book Page 23 ORANGE COUNTY SANITATION DISTRICT RATE STUDY ANALYSIS USER RATE CATAGORIES fY 20W2009 EDU Annual Rate $199.00 Percentage of SFR Use Codes Description Per 1,000 SF or Unit User Rates 119 PUBLIC UTILITY 100% $199.00 120 WATER MUTUAL OR COMPANY 100% $199.00 888 CONVERSION-COMPOSITE PROP 100% $199.00 60 NURSING HOME 103% $205.74 62 CONVERTED RES USED AS NURSING 103% $205.74 63 LOW RISE RETIREMENT BUILDING 108% $214.85 64 HIGH RISE RETIREMENT BUILDING 108% $214.85 43 HOTEL 109% $216.58 56 MOTELS AND MOTOR HOTELS 109% $216.58 50 SINGLE MEDICAL BLDGS TO 3 STORIES 118% $235.70 51 SMALL MEDICAL CENTER 118% $235.70 52 MEDICAL CENTER COMPLEX 118% $235.70 53 HIGH RISE MEDICAL 118% $235.70 54 CONVERTED RESIDENCE TO MEDICAL 118% $235.70 20 AMUSEMENT PARKS 138% $275.17 35 ENTERTAINMENT CENTER 138% $275.17 73 RECREATION 138% $275.17 224 NIGHTCLUB 146% $290.62 90 COMMUNITY SHOPPING CENTER 149% $296.22 76 RESTAURANT-TAKE OUT 212% $422.12 30 COIN OPERATED CAR WASH 252% $501.09 77 RESTAURANT-COFFEE SHOP 424% $844.24 78 RESTAURANT-DINNER HOUSE 424% $844.24 79 RESTAURANT-CONVERSION FROM SFR 424% $844.24 29 CONVENTIONAL CAR WASH 1425% $2,834.84 223 LAUNDROMAT 1563% $3,111.33 0-3 Book Page 24 STEERING COMMITTEE NeenRg care TO Bd.or Dr. oa173/2o0a AGENDA REPORT Rmn Number Item Number 7(a) Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Michael Gold, Government Affairs SUBJECT: Legislative, Policy and Political Update GENERAL MANAGER'S RECOMMENDATION Information Only SUMMARY This report is the monthly update from Washington, D.C. and Sacramento highlighting lobbyists' activities, OCSD legislative priorities and other information of interest to the Steering Committee. PRIOR COMMITTEE/BOARD ACTIONS None ADDITIONAL INFORMATION Federal Legislative Report Eric Sapirstein, ENS Resources and John Freshman, Troutman Sanders General Political Climate Congress is spending most of its time on the two parts of the sub-prime issue mortgage issues —consolidation and additions to regulation of the securities industry and relief packages for homeowners and the housing industry. However, partisan bickering continues with a major focus on the supplemental spending on Iraq, general war spending and continued focus on the Democratic Presidential primaries. Yet, little attention is being focused on what are the most interesting Senate races in years. There are twenty-two Republican seats and as many as eleven Democratic seals up for grabs from either retiring members or competitive races. As a result of the current political climate, it is likely that the Democrats could pick-up anywhere from four to seven seats in states like Virginia, New Mexico, Colorado and New Hampshire. Despite the huge issues being considered by the Congress this year and upcoming elections, the appropriations committee staff in both houses are trying mightily to complete their work so funding requests, such as those submitted by OCSD, will be considered diligently when all the dust settles and Congress decides to enact a budget Monthly Activities The positive news is that the District is receiving broad support for its secondary treatment funding requests from both Loretta Sanchez and Gary Miller. In addition, Ken Calvert, who now sits on the Appropriations Committee in the House, has also expressed support for OCSD's requests. This excellent development demonstrates the bipartisan support for the District's legislative agenda. In the near future, we will be drafting a letter from Sanchez(and perhaps Calvert)to Senator Feinstein asking her help with this important appropriation. Fom No.M 1021 Igm PM.vI-8C RWW 011 7 Page 1 Book Page 25 Some issues regarding the SARI line and whether it is a local or federal responsibility have risen between OCSD and the County of Orange, mostly coming from the County's trepidation about receiving enough funds to complete Prado Dam; however it will be several months before any funding matters are resolved and the Legislative Team recommends waiting to see how everything in Washington, D.C. plays out before jumping to any conclusions. Support for all of OCSD's requests remains solid, especially with Congressmen Miller and Calvert, particularly on the SARI issue with a common desire to complete the project quickly. Staff has also been working with Air Products on seeking funding for a hydrogen fuel cell generator using digester gas. We are making a request to Congressman Rohrabacher to ask the Department of Energy for increased funding. Air Products approached OCSD with this request because the demonstration project would be built here. State Legislative Report Chris Townsend and Heather Dion, Townsend Public Affairs Political Highlights The Legislature has been moving rapidly to hear legislation on more than 2000 bills over the last several weeks, including appropriations and budget issues brought forth from the Legislative Analyst's Office (LAO). Specifically, the Assembly Budget Subcommittee#4 held a hearing to discuss the LAO proposal to permanently shift supervision of 70,000 low level parolees to county government and take property taxes from water and wastewater agencies to pay the cost. The proposal was met with heavy opposition from public safety and the special districts associations (ACWA and CSDA). Subsequently, legislative leadership announced that there will be no additional budget hearings or deliberations until mid-May when the Governor releases the May revise and tax revenues have been calculated. In the meantime, the Governor has been holding town hall style meetings around California to discuss the problem and potential solutions. With the State budget deficit now looming around $17 billion most legislators are admitting that all solutions to deal with the issue on the table. Many are also admitting (including the Governor)that the administration's proposal to cut ten percent off all departments will not go far enough to close the gap, so some are discussing raising taxes and fees or closing tax loopholes. It is very important to point out that specific recommendations are unlikely anytime soon and will not appear under normal legislative business via an actual bill. It is more likely that the legislature, along with the Governor's office, will craft solutions to close the gap in the very late hours as the budget deadline looms. Monthly Activities • TPA assisted OCSD staff in setting up district meetings with state legislators' staff. These briefings were held in conjunction with OCWD and focused primarily on enterprise special district property tax take-aways. In April, we held meetings with the offices of Senators Ackerman and Harman and Assembly Members DeVore, Huff, Silva, and Spitzer. The meetings will be completed in May. • Running parallel to our education and advocacy efforts within the District, TPA is also working on coordinating a lobbying day for-OCSD Board Members in Sacramento. We are currently working with staff on potential dates. • TPA continues to monitor critical legislation for the District, including bills held over from the 2007 session and new legislation moving forward. F..No.M 1011 fpe,W A.p -SC PMaM'.011 7 Page 2 Book Page 26 • TPA has been working with the Department of Water Resources and other interested stakeholders in supporting the inclusion of$350 million in this years budget for the Integrated Regional Water Management Program. This work is in conjunction with our efforts in supporting Assembly Member Huffman's AB 1654 creating new IRWMP guidelines to include wastewater as an eligible activity. Attached to this report are talking points on the proposal to shift property taxes away from OCSD. These can be used in meetings and briefings with constituents and legislators. ATTACHMENTS Property Tax Talking Points Fmm No.D IW-i A .Hepen-Sc PmmM:01N Page 3 Book Page 27 N1V SAXlrq fl O� I Facts about Sacramento's Proposal to take OCSD's Property Taxes Opposing a State-imposed tax increase o i �C�NC iM: A1J�PX Understanding the issue • The State of California faces a budget deficit over$16 billion dollars and some in Sacramento are proposing to take money from OCSD and other watedwastewater districts to fill the gap. • If Sacramento takes OCSD's property taxes to solve the problem they created, OCSD will be forced to raise taxes on all its customers. • One proposal suggests taking $35 million away from OCSD to cover the State's deficit. Taking $35 million from OCSD means Sacramento would be imposing a 15 percent rate increase on OCSD's customers. Why a property tax grab from OCSD is wrong • A property tax grab from Sacramento would force an increase in rates of at least 15 percent. OCSD just raised rates 10 percent to cover State and Federal mandates and important capital improvements. Orange County's tax payers cannot afford a combined 25 percent rate increase in one year. • OCSD's board of directors did their part to minimize rate There they go again increases by slashing over$500 million from the CIP, trimming the bureaucracy, imposing a hiring freeze and finding nearly $20 Since 1992, Sacramento million in cost savings and efficiencies in the past two years. has taken over$120 We did our part to make prudent fiscal decisions, why can't million in property taxes Sacramento do the same? from OCSD. The state continues to take OCSD's • The budget deficit is a problem caused by Sacramento property taxes each year politicians and their unwillingness to make the tough decisions. and have shifted $8 Over the past several years, we've all known there is structural million this year. Next deficit problem but Sacramento has been unwilling face the year it will be more. challenge and come up with real solutions. Why should OCSD Why should Orange pay for Sacramento's mistakes and lack of leadership? County s taxpayers once again bailout Sacramento's fiscal • In 2004 an overwhelming majority of California voters passed mismanagement Proposition 1A sending Sacramento the message that local property taxes must stay local. Taking property taxes from OCSD to solve Sacramento's problem is a slap in the face to the voters who thought Prop. l A would protect their local dollars. • OCSD's property taxes are funding important capital improvements. Orange County is growing and its infrastructure is ageing; moreover the State and Federal government continue to mandate new air and water regulations and OCSD must improve and upgrade its facilities to meet these challenges. Local property taxes are paying for these improvements. Just the facts: the myths about the effects of Sacramento property tax steal Book Paee 28 OCSD doesn't need property taxes because they can raise fees to cover costs While this is true, it is a double-hit to the taxpayer. Orange County's tax payers are paying fees and taxes for their sewer services and it this CSC.G yq 9 money is taken, it means local property tax dollars are paying for Sacramento's mismanagement while fees would have to be raised to cover y the loss. Property taxes should stay local and not be used as a state bailout. A one-time property tax shift won't hurt because OCSD has huge TRIP reserves Unlike Sacramento, OCSD has prudently managed its finances to build a reserve for needed capital improvements and its insurance liability pool to keep rates as low as possible. Why should OCSD and Orange County's tax payers be punished for Sacramento's mistakes? OCSD would have to raise fees to cover any property tax take because we're using this money for mandated programs and needed improvements. One proposal calling for$35 million to be taken means tax payers would see a 15 percent increase in their sewer rates. . This is all smoke and mirrors because Proposition 1A protects against a take When California's voters passed Proposition 1A in 2004 message to Sacramento was clear: stop taking local property taxes! Loopholes in Prop 1A allow property taxes to be"borrowed" although there is no penalty for not repaying and 1A allows property taxes to be shifted within the County. One proposal shifts a state responsibility of supervising parolees to county governments then asks water and wastewater agencies to pay for using property taxes. This preposterous scheme is like your neighbor taking your paycheck to pay their credit card bill. This is a Statewide problem and everyone should be part of the solution About OCSD There will probably be a lot of rhetoric about everyone contributing to OCSD serves 2.5 million the solution. OCSD has already lost$36 million to Sacramento to pay residents-a population for past deficits and Sacramento caused this problem so they should greater than 18 states- solve it. When the average tax payer loses a job or faces rising and is governed by a 25 mortgages and gas prices we can't do the Sacramento shuffle and take member board of money from our neighbor. Isn't it time that Sacramento learns to live directors. OCSD serves within it means? 23 cities and the County of Orange Staff Contact Michael Gold, Government Affairs Manager Orange County Sanitation District Phone: (714)593-7529/E-mail: mgold@ocsd.com Book Page 29 STEERING COMMITTEE Mee n Dale To Bd.of Dlr. av/z3/os AGENDA REPORT Iban Numbe Iem Numbe 7(ur Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Bob Ghirelli, Assistant General Manager SUBJECT: SANTA ANA WATERSHED PROJECT AUTHORITY (SAWPA) GENERAL MANAGER'S RECOMMENDATION Information Only SUMMARY • SAWPA and OCSD signed agreements dating back to 1972 covering the purchase by SAWPA of rapacity in the Santa Ana River Interceptor(SARI line) and the purchase of treatment and disposal capacity in the treatment plants. • SAWPA and OCSD management staff are meeting to update and consolidate the agreements. • The Steering Committee will be briefed on the status of that effort and the major deal points covered in a new draft agreement between the two agencies. • In the coming months, staff will present the revised agreement to the Operations and Administration committees and board of directors for review and approval. PRIOR COMMITTEE/BOARD ACTIONS NA ADDITIONAL INFORMATION NA Form No.ow-roar A,nd.ao.-Sc a«.—d.ormvm Page 1 Book Page 30 ORANGE COUNTY SANITATION DISTRICT (714) 962-2411 www.ocsd.com Mailing Address: P.O. Box 8127 Fountain Valley, California 92728-8127 Street Address: 10844 Ellis Avenue Fountain Valley, California 92708-7018