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Minutes - Board - 2006-07-24 avid COSTA MESA SANITARY DISTRICT MINUTES OF BOARD OF DIRECTORS SPECIAL MEETING JULY 24, 2006 Call to Order The Board of Directors of the Costa Mesa Sanitary District met in special session on July 24, 2006, at 6:00 p.m. at 1845 Park Avenue, Costa Mesa. President Ferryman called the meeting to order at 6:00 p.m. Pledge of Allegiance Director Perry led the Pledge of Allegiance. Invocation Director Woodside gave the Invocation. Roll Call Directors Present: James Ferryman, Greg Woodside, Art Perry, Arlene Schafer, Dan Worthington Directors Absent: None Staff Present: Robin B. Hamers, Manager/District Engineer; Alan Burns, Legal Counsel; Tom Fauth, Assistant Manager; Joan Revak, Board Secretary/Program Manager/Clerk of the District; Wendy Davis, Treasurer; Sherry Kallab, Accountant; Denise Gilbert, Permit Processing Specialist; Ron Shef, Ordinance Enforcement Officer Others Present: Shirlee A. McDaniels 2046 Anaheim Avenue, Costa Mesa Public Hearing - Consideration of Annual Trash Collection Charges to be Collected with the General Taxes Mr. Hamers reported on the negotiations and new agreement between the District and CR&R (on behalf of Costa Mesa Disposal and CR Transfer.) The new agreement includes provisions to stabilize the trash collection rate paid by residents served by the District and to institute a variable rate structure. For the fiscal year 2006-2007, the Costa Mesa Sanitary District Minutes of Board of Directors Special Meeting r July 24, 2006 o Page 2 trash collection rate will be frozen at the 2005-2006 level of $239.41 per residence per year unless a residence has more than two trash containers. Residents will be charged $8 per month for each container beyond the first two. Subsequent provisions will be implemented when the volume of the two containers exceeds 120 gallons of capacity. The agreement was finalized after the notification postcards were mailed to all the property owners. Therefore, the potential increase of the trash collection rate by 8% as shown on the postcard does not apply. Mr. Burns gave a brief overview outlining the process for consideration of annual trash collection charges, explaining Proposition 218 procedural rules will be followed for the proposed increase. Mr. Burns read the requirements necessary to increase the trash rate: Revenues derived from the fee or charge must not exceed the funds required to provide the property related service. Revenue from the fee or charge must not be used for any purpose other than that for which the fee or charge is imposed. The amount of a fee or charge imposed upon any parcel or person as an incident of property ownership must not exceed the proportional cost of the service attributable to the parcel. The fee or charge may not be imposed for service unless the service is actually used by, or immediately available to, the owner of the property in question. Fees or charges based on potential or future use of a service are not permitted. Standby charges must be classified as assessments and must not be imposed without compliance with the proportionality requirement for assessments. No fee or charge may be imposed for general governmental services such as police, fire, ambulance, or libraries, where the service is available to the public in substantially the same manner as it is to property owners. The Manager shall be presenting a report for each charge in which he will document how each of these tests have been met. This report has been made available to the public for their review. Once that report has been presented, you should ask any questions of staff that you might have, then ask the Clerk to provide the status report on whether any protests have been received. The Clerk has provided notice by mail to all parcels subject to the charges. The law provides that if written protests are presented by a majority of the owners of the parcels, the charges may not be ® imposed. Since only written protests can be considered, staff has developed forms for the use of the protesting owners so that any person wishing to protest tonight can have their vote counted. There are over 17,755 parcels that are subject to the Costa Mesa Sanitary District Minutes of Board of Directors Special Meeting r July 24, 2006 Page 3 charges being considered tonight. If there is not a sufficient protest, the Board may consider whether or not to impose the charge and adopt the proposed resolution. Presentation of Report Mr. Fauth presented a report stating trash collection charges for 2006-07 are $239.41 per dwelling unit per year. The charge meets the substantive requirements of Proposition 218 as follows: 1. Revenues derived from the fee or charge do not exceed the funds required to provide the trash collection service. The charges are calculated by adding together the cost of components necessary to provide the service and then apportioning this to those receiving trash collection services. No components other than those directly related to providing service are used to establish rates. The components include trash collection, recycling, education and special programs, and administration. 2. Revenue from the fee or charge is not used for any purpose other than for which the fee or charge is imposed. The revenue is to be used only for the components of providing trash collection service as outlined in Paragraph 1 above and as identified in the District's yearly budget. 3. The amount of a fee or charge imposed upon any parcel or person as an incident of property ownership does not exceed the proportional cost of the service attributable to the parcel. The amount of the yearly charge is determined by dividing the cost of all the components of providing service by the number of parcels receiving service, as the vast majority of parcels produce an approximately equal amount of solid waste and all parcels enjoy the benefits of the public education and have an opportunity to participate in the special programs. The District will consider implementing a variable charge program based on the number of trash containers at each residence as part of this hearing. 4. The fee or charge is not imposed for service unless the service is actually used by, or immediately available to, the owner of the property in question. Properties not receiving trash collection service or that receive service from other entities providing trash collection, are not charged. 5. No fee or charge is imposed for general governmental services such as police, fire, ambulance, or libraries, but is only imposed for trash services. The District provides only trash collection and sewer service and all fees collected for trash collection are used only for that purpose. President Ferryman verified from Joan Revak, Clerk of the District, that all required notices were duly published. • Costa Mesa Sanitary District Minutes of Board of Directors Special Meeting July 24, 2006 Page 4 Ms. Revak reported the District received 1 protest to date from a total of 17,755 parcels notified. Open Public Hearing President Ferryman opened the public hearing, requesting each speaker to limit their comments to three minutes and advising participants that, by law, only a written protest will count. The following protests were received: A written protest dated June 16, 2006 was received from Y. Lorman, 1641 Indus Street, Santa Ana Heights, CA 92707. Ms. Lorman stated her belief that the trash rates are unfair to single family residents as there are several "recovery houses" that are businesses for the people operating them; and every week three and four trash barrels are put out. Most other residences have only one or two. Ms. Shirlee A. McDaniels, 2046 Anaheim Avenue, Costa Mesa was present at the hearing and attended the meeting not to protest rates but to enlist the District to encourage residents to consider taking their recyclables to Orange Coast College or other recycling sites. Ms. McDaniels is aware of the materials recovery facility where residential trash is taken for sorting out recyclables before being taken to the landfill and she has taken one of the tours offered by the CMSD. Mr. Hamers assured Ms. McDaniels that the District always promotes recycling and will be placing an emphasis on "source reduction" as a means to lower the amount of trash being landfilled. Close Public Hearing President Ferryman closed the public hearing. Determination Regarding Protests President Ferryman directed Ms. Revak, Clerk of the District, to tally the number of protests. Ms. Revak determined there was 1 protest filed from a total of 17,755 parcels. President Ferryman determined the protest failed. C Costa Mesa Sanitary District Minutes of Board of Directors Special Meeting V. July 24, 2006 • Page 5 Adopt Resolution No. 2006-725 Confirming and Adopting the Report and Direct Clerk to File with County Auditor Director Schafer motioned to adopt Resolution No. 2006-725, A RESOLUTION OF THE BOARD OF DIRECTORS OF THE COSTA MESA SANITARY DISTRICT OF ORANGE COUNTY, CALIFORNIA, DETERMINING THAT A MAJORITY PROTEST DID NOT OCCUR WITH RESPECT TO THE PROPOSED CHARGES FOR TRASH COLLECTION, ADOPTING THE REPORT ON FILE WITH THE CLERK OF THE DISTRICT AND DIRECTING THE CLERK TO FILE THE REPORT WITH THE AUDITOR. Director Woodside seconded. Motion carried 5-0. Public Hearing - Consideration of Annual Liquid Waste Charges to be Collected with the General Taxes Mr. Burns gave a brief overview outlining the process for consideration of annual liquid waste charges. Mr. Burns explained the substantive requirements of Proposition 218 will be met. Mr. Burns read the requirements of Proposition 218: 1. Revenues derived from the fee or charge must not exceed the funds required to provide the property related service. 2. Revenue from the fee or charge must not be used for any purpose other than that for which the fee or charge is imposed. 3. The amount of a fee or charge imposed upon any parcel or person as an incident of property ownership must not exceed the proportional cost of the service attributable to the parcel. 4. The fee or charge must not be imposed for service unless the service is actually used by, or immediately available to, the owner of the property in question. Fees or charges based on potential of future use of a service are not permitted. Standby charges must be classified as assessments and must not be imposed without compliance with the proportionality requirement for assessments. 5. No fee or charge can be imposed for general governmental services such as police, fire, ambulance, or libraries, where the service is available to the public in substantially the same manner as it is to property owners. C Costa Mesa Sanitary District 40 _ Minutes of Board of Directors Special Meeting r • July 24, 2006 Page 6 Presentation of Report Mr. Fauth presented a report on the liquid waste disposal charges for 2006-07 showing his review of the proposed rate per category, the rates being the total of the base charge plus the fats, oils and grease (FOG) control program recovery fee as shown below: Single family residence per year $37.64 + $2.77 Multi-family residence per year $28.99 + $2.77 Commercial w/o food service per year $21.90/1000 sf + $2.77 Commercial w/cold food service per year $21.90/1000 sf + $72.00 Commercial w/hot food service per year $21.90/1000 sf + $180.00 Industrial per year $64.51/1000 sf + $2.77 Other per year $19.40/1000 sf + $2.77 The proposed charges are an increase over the previous fiscal year. Additional funds are also necessary to operate and maintain the sewer system in conformance with the Regional Water Quality Control Board's Waste Discharge Requirements (WDR). Mr. Fauth outlined how the charges for liquid waste disposal meet the substantive requirements of Proposition 218 as follows: 1. Revenues derived from the annual sewer fee charges do not exceed the funds required to provide the sewer service. The base sewer charges are calculated by adding together the costs of all the components of providing the service and then apportioning the required funds to each of the properties connected to the system. The components of providing the service include the yearly capital replacement projects, the maintenance and operation costs of maintaining the system and administration costs. A variable level charge was added to each of the property categories to recover a portion of the costs of the comprehensive fats, oils and grease control program that is required under the WDR. These charges are also shown in the Engineer's Report. 2. Revenues from the charge are not used for any purpose other than for which the fee or charge is imposed. No funds collected from the charges are used for expansion or augmentation to the sewer system, only the purposes as designated in the applicable statutes. Similarly, no funds derived from the charges are used for solid waste collection, recycling or administration thereof. 3. The amount of a fee or charge imposed upon any parcel or person as an incident of property ownership does not exceed the proportional cost of the service attributable to the parcel. Each parcel connected to the system falls into a property category type, which has a related estimated maximum sewer flow. The maximum estimated sewer flow is based on actual flow metering tests along with flow rates calculated and established by sewer engineers and adopted by other sewer agencies. Costa Mesa Sanitary District Minutes of Board of Directors Special Meeting July 24, 2006 • Page 7 The total estimated maximum sewer flows and acres of property developed are used to determine the funding contribution from each property category type. Each individual parcel, based on the actual number of residential units or commercial/industrial/other square footage, is assigned its proportional share of the required funds of each property category type. In addition to the base sewer charges, a variable level charge was added to recover a portion of the costs of the new grease control program. The variable rate considers the respective burdens placed on the system by the different users. Therefore, each property contributes its proportional share. 4. The fee or charge is not imposed for service unless the service is actually used by, or immediately available to, the owner of the property in question. Properties are only charged if they are physically connected to the sewer system. Vacant land or properties with storage or other buildings not receiving sewer service are not charged. 5. No fee or charge is imposed for general governmental services such as police, fire, ambulance, or libraries, but is only imposed for sewer services. The District provides only trash collection and sewer service and all fees collected as sewer charges are used only for related expenses. President Ferryman verified from Joan Revak, Clerk of the District, that all required notices were duly published. Ms. Revak reported the District received 1 protest to date from a total of 24,995 parcels notified. Ms. Revak reported the protest was received from Y. Lorman, 1641 Indus Street, Santa Ana Heights stating in setting rates consideration should be given to multi-resident (recovery houses) that generate more sewage. Open Public Hearing President Ferryman opened the public hearing, requesting each speaker to limit their comments to three minutes and advising participants that, by law, only a written protest will count. Close Public Hearing President Ferryman closed the public hearing. Determination Regarding Protests President Ferryman directed Ms. Revak, Clerk of the District, to tally the number of protests. Ms. Revak, noting that by law only written protests may be counted, determined there was one protest filed from a total of 24,995 parcels. Costa Mesa Sanitary District • Minutes of Board of Directors Special Meeting July 24, 2006 E Ery Page 8 President Ferryman determined the protest failed. Adopt Resolution No. 2006-26 Confirming and Adopting the Report and Directing the Clerk to File with the County Auditor Director Woodside motioned to adopt Resolution No. 2006-726, A RESOLUTION OF THE BOARD OF DIRECTORS OF THE COSTA MESA SANITARY DISTRICT OF ORANGE COUNTY, CALIFORNIA, DETERMINING THAT A MAJORITY PROTEST DID NOT OCCUR WITH RESPECT TO THE PROPOSED USER FEE FOR LIQUID WASTE DISPOSAL AND ADOPTING THE REPORT ON FILE WITH THE CLERK OF THE DISTRICT AND DIRECTING THE CLERK TO FILE THE REPORT WITH THE AUDITOR. Director Perry seconded. Motion carried 5-0. ORAL COMMUNICATIONS President Ferryman expressed his appreciation to District Staff for their diligent efforts in the rate setting process and in negotiating the Agreement with CR&R. ADJOURNMENT At 6:30 p.m., President Ferryman adjourned the meeting. • r Secretary President • 0