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HomeMy WebLinkAboutBOARD MINUTES 04-13-72 53 MINUTES OF AN ADJOURNED REGULAR MEETING OF THE DISTRICT BOARD CONTRA COSTA SANITARY DISTRICT HELD APRIL 13, 1972 CENTRAL The District Board of Central Contra Costa Sanitary District convened in an Adjourned Regular Session in Room 215, Las Lomas High School, 1460 South Main Street, Walnut Creek, California, on April 13,1972, at 8:00 o'clock P.M. The meeting was called to order by President Allan. I. ROLL CALL PRESENT: Members: Boneysteele, Gibbs, Mitchell, Rustigian and Allan ABSENT: Members: None II. APPROVAL OF MINUTES None. III. APPROVAL OF EXPENDITURES None. IV. HEARINGS DISTRICT REVENUE PROGRAM President Allan welcomed members of the audience to the public hearing to consider the District's Revenue Program. He then introduced the Members of the Board of Directors and staff personnel of the District. After explaining the format for audience participation, President Allan declared the hearing open and then introduced Mr. Horstkotte, General Manager- Chief Engineer, moderator for the staff's presentation on the District's pro- posed revenue program. Mr. Horstkotte, General Manager-Chief Engineer, utilizing charts, ex- plained to the audience that waste water discharge requirements for the Bay Area and for the Sanitary District in particular, are imposed by regulatory agencies of the Federal and State Government. In order to qualify for Federal and State grant funds, it is necessary that the District have a viable revenue program and that its proposed waste water treatment facilities project meet Federal guidelines for design, operation and maintenance. Mr. Dalton, Administrative Engineer, presented a summarized Eport on Contra Costa County's Water Quality Study which is a subregional approach for the treatment of waste water within the County. Mr. Dalton explained the reasons for and scope of the study. Further, he outlined the major factors and criteria that governed the preparation of the study and briefly reviewed the alternative waste water plans examined, including their esti- mated capital and operating costs. Mr. Dalton stated that the District's proposed waste water treatment expansion and water reclamation project basically conforms with all of the alternative plans studied. Moæimport- ant, however, the District's project is almost identical to that recommended in the County's study. Mr. Niles, Superintendent of Plant Operations, presented a brief report on the Disinfection Criteria and Design Guidelines as published by the En- vironmental Protection Agency. Mr. Niles explained that, in order to qualify for Federal funds, all proposed waste water treatment facilities must meet prescribed design and maintenance standards and be capable of removal of a minimum of 85 per cent of the biochemical oxygen demand. 04 13 72 54 Mr. Horstkotte, General Manager-Chief Engineer, commented that, as a result of the Clean Water Act of 1965, the District and Contra Costa County Water District had initiated a water renovation project which was a two-year pilot plant operation jointly financed by the District, the Water District and the Federal Government. In conjunction with this pilot plant operation, a one-year virus removal study was made and toxicity parameters were established. Mr. Horstkotte then explained that, as a result of the pilot study, the Sanitary District financed the con- struction of an Advance Treatment Test Facility to verify pilot data and to facilitate expanded treatment and water reclamation plant design. Mr. Niles, Superintendent of Plant Operations, presented a brief technical report on the District's Advanced Treatment Test Facility. Then, with the use of a flow chart, he explained in detail the design and flow processes for the District's proposed expanded waste water and water reclamation plant and how the District proposes to reclaim waste water for industrial use. Mr. Horstkotte, General Manager-Chief Engineer, utilizing a chart, in- dicated that the Federal Grant Program provides for 80 per cent funding for viable treatment projects. The District's project is estimated to cost $38,400,000.00 of which $7,680,000.00 would be a responsibility of the Sani- tary District. Mr. Horstkotte stated that without inclusion of the water re- clamation project, only 33 per cent Federal funding would be available to the District. He further commented that sale of reclaimed water to industry could reduce the District's outlay of $7,680,000.00 by $2,600,000.00. Mr. Horstkotte then explained the current status of pending Federal legislation which would have impact upon District funding of projects for which Federal grants have been established. Because of the direction of Federal and State legislation, it was the conclusion of the staff to recommend establishment of an Environ- mental Quality Charge. Mr. McCoy, Engineering Associate, made a brief presentation on the proposed Environmental Quality Charge. He explained that, in order to qualify for Federal Grant funds, the District's revenue program must have approval by the State Water Resources Control Board. In his explanation of the Environmental Quality Charge, Mr. McCoy stated the charge imposed for industrial users is based upon quantity and quality of waste water discharged; the charge for residential property is based upon parcels or living units per parcel of property and that the charge for undeveloped parcels would be $6.00 per year. Mr. Dalton, Administrative Engineer, with the use of a graphic aid, presented a summarized report on the District's financial plan through the year 1980-1981. Mr. Dalton commented on projected revenues, the sources of revenue, on operating costs, depreciation, the capital expenditures projected by the District, and that the format for the District financial plan was a basic requirement of both State and Federal Governments. In response to Member Boneysteele, Mr. Horstkotte commented on the Porter-Cologne Act, and its impact upon the District's project and the penalties that could be imposed upon the District if standards for waste water treatment were not met. President Allan asked for comments or questions from the members of the audience. A gentleman from the audience posed several questions to members of the staff and Board of Directors regarding the District's current treatment facilities, its proposed expansion program and costs related thereto. Mr. Horstkotte explained while it was prudent to anticipate future requirements, expansion of facilities was mandatory when the operating capacity of the treatment plant approached 80 per cent. President Allan noted that, as quality discharge standards are raised, the cost for treatment of waste water is greatly increased and that the District was attempting to offset some of this increased cost by developing and selling a byproduct, namely reclaimed water. Member Mitchell commented that the present expansion program of $38,400,000.00 represented only one third of the ultimate requirement as projected for the District and that it was the financial policy of the District that new construction be charged its fair share without capital cost burden to present users. Mr. Dalton stated the determination of a $2.00 Environ- mental Quality Charge was predicated upon a certain tax rate and the amount of revenue required to finance the expansion program. Member Mitchell commented on the method adopted by staff to determine the $2.00 rate and explained the 04 Ii) 72 .J.J rationale for applying an Environmental Quality Charge to undeveloped land. Mr. Horstkotte noted that, presently, disposal of sludge from the treatment plant is by contract but that with the expanded facilities, it has been de- termined by District consultants that it will be necessary to resort to in- cineration. Member Boneysteele reported that the District has formed a Citizens Advisory Committee for solid waste recycling, commented on its progress, and indicated that one of the alternatives being considered is integrating the disposal of sludge with the regional program recommended in the SPUR report. Member Mitchell stated that the design of the expanded treatment plant incorporates provision for a road to link the plant with the Acme Fill disposal site in the event an alternative to incineration of sludge becomes desirable. If incineration is the only practical manner for disposal, there are several processes that could be used such as pyrolysis to generate energy requirements. He further commented that it is anticipated that only the minimum of incineration units would be acquired at this time. Mr. Dalton commented on the cost for servicing the District's outstanding long term debt and its relationship to the District's financial plan. Member Gibbs noted that the need for short term borrowing presented in the financial plan was for the purpose of financing the construction phase of the expanded plant until receipt of government grant funds. Mr. M. K. Carter, resident of Walnut Creek, California, addressed the Board. In his remarks, Mr. Carter commended the District for its fine ser- vice to the community and in particular for establishment of a declining tax rate for the past six years. However, while he appreciated the staff's pre- sentation, Mr. Carter was of the opinion that the public should have greater opportunity to familiarize itself with the details of the District's proposed revenue program. Mr. Carter noted that establishment of a $2.00 Environ- mental Quality Charge for single residential parcels would not be tax deductible and would increase sewer service costs to him approximately 80 percent. Mr. Carter inquired as to the cost for construction and operation of the water reclamation facilities, and what revenue was projected from salecr re- claimed water. Mr. Horstkotte, General Manager-Chief Engineer, responded that a District committee was currently negotiating with Contra Costa County Water District for a contract for sale of reclaimed water and, depending upon terms of that contract, the District might expect $3.50 or $8.50 per acre foot. Member Gibbs, Chairman of the District's Negotiating Committee, explained that the District in cooperation with the Water District was moving toward a program for reuse of water. Further, that the District's financial goal for this program of water reclamation was to obtain sufficient revenue to recover costs for operation, maintenance and depreciation, and still give the District a 6 percent return on its investment. In response to inquiry by Mr. Carter, Member Gibbs and Mr. Horstkotte ~ndicated that, of the pro- posed $38,400,000.00 expansion program, approximately $2,600,000.00 would be spent on water reclamation facilities. The remaining $35,800,000.00 would have to be spent regardless of costs for water reclamation in order to meet higher quality waste water discharge requirements. Member Mitchell commented that grant funds were limited, in great demand and, in order to qualify for these funds, the District was obligated to meet a May 1, 1972, deadline. While the Board of Directors would have preferred having the problem of resale of reclaimed water to the Water District resolved prior to consideration of the revenue program, the severe deadline imposed by the State precluded this from being reality. President Allan responded that while the Board of Directors need not make a decision on the revenue program at this meeting, a decision would be necessary prior to May 1. In a general discussion, comments were made by Board Members regarding the Environmental Quality Charge as being a possible tax deductible item and that the District proposed to collect the charge by use of the tax roll. Mr. Dalton commented that other revenue available to the District, such as the District's contract with the City of Concord, had impact on the size of the proposed Environmental Quality Charge and the projected tax rate. Presi- dent Allan commented on the possible effect passage of the Watson Amendment might have on Special Districts such as the Sanitary District and that such passage might necessitate establishment of an Environmental Quality Charge. Member Mitchell stated that he was confident that it was the consensus of the Board that the District does not intend to resort to a billing procedure 04 13 72 56 to collect the Environmental Quality Charge from the more than 50,000 accounts, but that collection would be made by use of the tax roll. Mr. Carter requested the Board Members to carefully consider the alternatives available to the District prior to making a decision and that the public be given another opportunity to familiarize itself with the facts on the matter. Mr. James Disney, an attorney and resident of the District, addressed the Board. Mr. Disney stated that it was his impression that the District's pro- posed expansion program resembled a "hurry up job"; that the District was plan- ning to construct a very large plant at considerable cost; that it appeared that a decision would be made this evening; and that, if the public had been made aware of the proposed $2.00 a month Environmental Quality Charge, more of the public would be in attendance at the hearing. He further commented that he was in agreement with Mr. Carter and that under the circumstances, without a current viable contract for sale of reclaimed water, he thought the expansion program represented speculative action by the District. Mr. Disney noted that while it was commendatory for Central San to be obviously further ahead in its program than seventeen other local sanitary districts, he personally would prefer to "take his chances" with the latter. He stated that availability of water was not a local problem; that he suspected that the Water District could purchase water cheaper than the reclaimed water offered by the District; and that the type of project proposed by the District was more suitable to an area like Southern California. Unless the Board Members have already reached a decision, Mr. Disney thought a deadline of May 1, 1972, was too short to permit public consideration of the project, assuming the Board Members were interested in the views of the public. Mr. Horstkotte, General Manager-Chief Engineer, commented on the sparsity of the attendance (twenty persons in the audience) suggesting that this was caused more by lack of interest on the part of the public rather than a lack of communications, especially since progress on the District's project had been reported frequently in the local press and notice of the hearing duly published by the District. Member Mitchell stated it was the responsibility of the Board Members to determine if the District's expansion program was constructed. The pur- pose of the public hearing was to determine how to allocate the costs in- volved in building and operating the expanded treatment plant facilities. Member Mitchell commented that the point raised by Mr. Carter, namely use of an Environmental Quality Charge as opposed to ad valorem taxes, was a valid issue and a matter of concern to the Board. Member Mitchell commented on an apparent trend by the Federal Government requiring substitution of service charges to replace ad valorem taxes. While it has always been the policy of the Board not to place undue burden on the District's taxpayers, as evidenced by the District's record of declining tax rate and operations at minimum cost, the circumstances today have changed. The public wants and the regulatory agencies are demanding, that requirements for discharge of waste water into the San Francisco Bay be raised. As an example of the more stringent require- ments being imposed, Member Mitchell cited the areas of Lake Tahoe and the Livermore Valley. In response to Mr. Disney's comment that perhaps the public's interest in ecology was approaching the extreme, Member Gibbs emphasized that the District would have spent 95 percent of the $38,400,000.00 regardless of water reclamation and sale of water just to meet the rigid requirements for discharge in San Francisco Bay. The purpose for inclusion of the water reclamation project is two-fold. The Board considers water reclamation as a positive long term eco- nomic benefit for the area and, secondly, with this project included in the total expansion program, the District can qualify for 80 percent grant funding. In response to inquiry by Mr. Disney, President Allan stated that all other local Sanitary Districts, including East Bay Municipal Utility District, have to meet the same rigid requirements for discharge in the Bay as does Central San. Because their programs are not as advanced, their costs will be much higher, assuming they can build the necessary facilities to meet the rigid standards and the time schedule imposed by the regulatory agencies. For certain local entities, an alternative to advance treatment is connection to Central San facilities which regional and state, regulatory agencies may require if discharge standards and requirements cannot be met. Member Gibbs commented that this situation presently exists with the City of Concord but emphasized initiative for such action does not reside with the Sanitary Dis trict. 04 13 72 ':)1 Member Mitchell commented on the Delta Bay plan which envisaged expendi- ture of approximately $200,000,000.00 to construct a large pipeline to trans- port effluent from Central Contra Costa County to the City of Richmond. Mem- ber Mitchell stated the District wished to avoid this use of pipelines, pre- ferring instead a subregional approach for treatment of waste water. Presi- dent Allan and Member Boneysteele commented on the impact that high density areas can have on the District's sewage collection system. In response to Mr. Disney's comment as to the large amount of money now required, Member Mitchell stated the District had delayed its expansion plans until there was certainty that any treatment facilities constructed by the District would be entirely compatible with any regional plan to be adopted for the Bay Area. During the interval of this delay, the District functioned at a minimum of cost so that now the cost for the proposed facilities appears relatively high. Member Mitchell noted that the staff in its proposed revenue program was recommending a declining tax rate with a $2.00 Environmental Quality Charge. The Board Members at one time had under consideration a level tax rate of 43 cents. Member Mitchell suggested the Board Members may wish to consider this alternative and, in this conjunction, requested that the staff make a determina- tion as to how high the Environmental Quality Charge would have to be using a level 43 cent tax rate. Member Boneysteele stated he shared the concern of Member Mitchell and Mr. Carter concerning effect on the tax rate. He then suggested that as another alternative, the District maintain the 43 cent tax rate and the proposed $2.00 Environmental Quality Charge with the excess monies being used to reduce the District's short term borrowing requirements. After this need has been met, the Environmental Quality Charge or the tax rate could be reduced as appropriate. Mr. Dalton commented that the amount of ~ort term borrowing required has not been firmly established. He agreed with Member Boneysteele's analysis that maintaining the 43 cent tax rate and the proposed Environmental Quality Charge would permit reduction in short term financing. Mr. Dalton noted that, in order to qualify for grant funds, the District needed a guaranteed revenue program and suggested that adjustment of tax rate would be administratively an easier task than adjusting the Environ- mental Quality Charge, especially at the beginning of the next fiscal year when more information on revenue and operational cost requirements would be available. Member Mitchell commented that perhaps the Board Members may de- sire to maintain the current tax rate and drop the Environmental Quality Charge to $1.50 per month. Brief discussion followed. Mr. Robert Grinstead addressed the Board Members. In his remarks, Mr. Grinstead commended the Board Members for adopting an enlightened approach toward the treatment of waste water. He then commented that, based upon his analysis of other District's financial plan, the cost to him as an in- dividual would approximate $4.00 per month which was comparable to what he paid to receive water service. In Mr. Grinstead's opinion, this appeared to be a reasonable cost, which he was willing to pay, especially when it should be recognized that the effluent has to be treated for discharge in- to the Bay. In response to Mr. Grinstead's question regarding water recla- mation, President Allan stated that by inclusion of this project, the District could qualify for up to 80 percent grant funds. Without the project, the District's expansion program could qualify for 33 percent grant funds. Mr. Johnson, a resident of Lafayette, addressed the Board Members. Mr. Johnson posed several questions to which staff and Board Members responded. Mr. Horstkotte, General Manager-Chief Engineer, stated that, if no buyer existed for the District's reclaimed water, there would be no grant funds and, therefore, no project. President Allan stated inclusion of the water reclamation facilities was recommended by the District's consultants. Member Gibbs noted that the proposed plant design is not experimental nor innovative. Rather it is designed on proven and well established technology. The only matters that may be unique are the treatment quality and the econo- mics in achieving this quality. Member Mitchell stated he was confident the District's consultant, Brown and Caldwell, would have recommended the current plant design, which is basically secondary treatment, regardless of whether the District had a market for its reclaimed water. Furthermore, nutrient removal was still a key problem for discharge into the Bay. 04 13 72 58 To clarify the scope of the problem with which the District must cope, Member Gibbs stated that current treatment facilities remove only 40 percent of the solids from the effluent prior to discharge into the Bay. Secondary treatment of effluent will remove virtually all of the bacteriological matter after which there would be nutrient removal. Member Gibbs noted that second- ary treatment of effluent resulted in clear clean water which could be con- sidered approaching potable quality. However, to discharge into the Bay, this was not adequate and that further treatment for nutrient removal was necessary. Member Gibbs emphasized that the District has no choice in the matter and that it must be done soon. Member Gibbs commented that not only its own consultants but those consultants and scientists working with Federal and State regulatory authorities have been of great assistance in helping the District to solve the problems it faces today. Member Mitchell stated that heretofore, the District, with its outfall line to Suisun Bay, has been uti- lizing the Bay as basically a part of the District's treatment facility. This procedure has had, up to now, the complete approval of regulatory authorities because the Bay had the capacity to absorb a certain amount of biological oxygen demand, solids or organic matter. However, this situ- ation has changed. We no longer can rely on use of the Bay to assimilate these wastes; we must remove them. In fact, the Federal Government is con- templating imposing a requirement for zero pollution by 1985. Because of the tremendous impact this would have on industry and all municipalities, obviously it has to be controversial and would be most expensive. Mr. Dean LaField, Executive Vice President of the Homebuilders Assoc- iation for Contra Costa and Solano Counties, addressed the Board Members. Mr. LaField recognized the major problem facing the District in developing a revenue program to finance its proposed expansion treatment plant facilities. However, Mr. LaField was deeply concerned over the proposed schedule of fees, fixture and connection charges. He indicated that these charges were being increased over 50 percent, and, acting as agent for the absentee home buyer, he considered the proposed charges excessive, emphasizing that his Associa- tion, as a representative of the industry, had a mandate to provide suitable housing for the public. Mr. LaField commented that the proposed schedule of charges does not recognize people. Citing several examples from the pro- posed schedule of charges, Mr. LaField illustrated that costs for the future home buyer could increase as much as 350 percent. He noted that fue proposed schedule of charges is regressive in form and asked that the Board Members consider the impact such a schedule would have on the people. Mr. LaField suggested that District policy should be oriented toward encouraging good planning for land development in order to foster the optimum in open space. Member Mitchell commented that the District was concerned with the density factor. He then cited an example, because of higher density, costs for treatment of effluent rises in dramatic proportion to the quality of treat- ment as it is increased. He then acknowledged that it was possible to have a low density factor for a multi-storied building with the proper al- location of open space. In response to Member Boneysteele, Mr. IBlton pre- sented the staff's rationale on fixture charges for multi-storied buildings. While the District had limited experience in this area, Mr. Dalton explained that higher density did cause special sewage problems due to increased volume of effluent and peak load factors. Board Members and staff discussed various aspects of the proposed fixture charges and its impact upon multi-storied buildings after which President Allan suggested that perhaps the matter re- quired further study by staff. Mr. Norman Alumbaugh, President of the Homebuilders Association for Contra Costa and Solano Counties, addressed the Board Members. Mr. Alumbaugh supported the remarks of Mr. LaField regarding what he considers excessive increase in charges as proposed by staff. Mr. Alumbaugh then commented on the matter of land intensity vs. land density using an illustrative example single family detached units as opposed to a planned unit development to in- dicate the impact the proposed schedule of charges with the application of the density multiplier would have on each on a per capita basis. Because the District's proposed schedule of charges is not predicated on a per capita basis, Mr. Alumbaugh suggested the schedule of charges should be adjusted to permit greater equity. Such action would facilitate the building industry in meeting the requirements of low cost housing. In response to inquiry by Member Gibbs, Mr. Alumbaugh stated that, currently, the average occupancy for apartment units was two persons and that over the next ten years, he thought this average would decline. Mr. Alumbaugh noted that there has been a dramatic change today in the planning of land use intensity and in providing 04 13 72 59 more open space for housing developments. He stated he had an appreciation of the problems facing the District today and suggested meeting with the District staff to review the matter of land use intensity so that cost on a per capita basis for similar service would be more equitable. Member Mitchell commented that it was his understanding that staff had taken into consideration the relationship of land use and the number of people per unit. Perhaps the dilemma was agreement on how many people represented an average family for single residential units and for condominium units. Mr. Dalton responded that staff was familiar with land use intensity and that District planning in this area was based on projections as established by the cities and the county. Furthermore, in determining the long term financial requirements which would be equitable to both present and future residents, the District must employ broad based land use techniques and population projections for projection of revenue. Member Mitchell commented that District connection charges have historically been based upon number of fixtures which will be connected as they relate directly to usage of the sewage system. He suggested that perhaps Mr. Alumbaugh may wish to~epare some facts and figures for evaluation by staff prior to presentation to the Board. Member Boneysteele reported on a conversation he had had with Mr. Felix Insinger regarding his concern over special service charges for community pools and irrigation of large areas. Mr. Dalton stated he had conversed with Mr. Insinger regarding the special service charge and that based upon the proposed water usage schedule, it was not anticipated that the charge would exceed $24.00 per year. Member Mitchell suggested that staff prepare a comparative revenue program utilizing a fixed tax rate of 43 cents and that it explore the feasibility of establishing a declining minimum fixture fee as the multiple density factor increases. Also, the staff should study the desirability of applying the multi-storied charges to residential vs. commercial structures will staff report to the Board Members to follow. After brief discussion by staff and Board Members, President Allan indicated that further review of the proposed revenue program by staff and Board Members would have to be completed prior to May 1, 1972. President Allan thereafter continued the hearing to the next meeting date. V. BIDS None. V1. OLD BUSINESS None. VII. NEW BUSINESS RESOLUTION NO. 72-17. A RESOLUTION CHANGING THE NEXT REGULAR MEETING TO FRIDAY. APRIL 21. 1972 It was moved by Member Boneysteele, seconded by Member Gibbs, that Resolution No. 72-17 be adopted. Carried by the following vote: AYES: NOES: ABSENT: Members: Members: Members: Boneysteele, Gibbs, Mitchell, Rustigian and Allan None None VIII. REPORTS None. 04 13 72 60 IX. ADJOURNMENT President Allan expressed the appreciation of the Board Members to those persons in the audience for attending the hearing on the District's proposed revenue program. At 10:42 o'clock P.M., President Allan adjourned the regular meeting to Friday, April 21, 1972. . £~Þd~ preiident of the District Board of the Central Contra Costa Sanitary Districtcr Contra Costa County, State of California COUNTERSIGNED: .-. i(" ~. Ie cU~f'-~ Secretary of the District Board of the Central Contra Costa Sanitary District of Contra Costa County, State of California 0 /'1 - -':t;. 13 r~__.. 2- ;1 ~ .t " -