HomeMy WebLinkAboutCC AG PKT 2005-08-08 #Q r
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AGENDA REPORT 6j
DATE: August 8, 2005
TO: Honorable Mayor and City Council
THRU: John B. Bahorski, City Manager
FROM: Mark K. Vukojevic, P.E., Director of Public Works /City Engineer
SUBJECT: SEWER SYSTEM MASTER PLAN UPDATE AND RATE
ADJUSTMENT
SUMMARY OF REQUEST: /
The proposed City Council action will adopt resolution approving the City's 2005 Sewer
System Master Plan Update (SSMP) and provide staff direction for the sewer enterprise fund
capital rate increase and scheduling of a Public Hearing.
BACKGROUND:
The 2005 Sewer System Master Plan Update (SSMP) provides critical update information for the
decision making process in the operation of a Sewer System Enterprise. The previous 1999
Sewer System Master Plan (SSMP) was the first comprehensive sewer system document for the
City's system and was the basis for the collection of the Sewer Capital Charge, beginning in
2001. The Sewer Capital Charge provides funding for the rehabilitation of the sewer system
components such as pump stations and pipelines. The updated SSMP details the improvements
made in the system over the past five years, new information regarding the requirements of the
State Regional Water Quality Control Board, recent video inspection of the system, identification
of capacity deficient segments and a financial analysis of the Sewer Enterprise Fund. In
summary, the report identifies an aged system needing rehabilitation and improvement, relatively
few rate payers in the system, and approximately $15 million in capital improvements over the
next 10 years with the recommendation that sewer capital rates be adjusted to provide adequate
service.
The City's sewer system currently contains approximately 32 miles of pipe varying from 6 to 24-
inches in diameter, 730 manholes and 7 sewer pump stations (previously 9 pump stations) and is
maintained on a daily basis by Public Works Staff. The system was primarily built in the 1920's,
1950's, 1960's and recent improvements during the last five years. As detailed in the SSMP,
there are seven major wastewater drainage areas within the City's service area including all of
Old Town, Aquatic Park, the Hill, College Park East, Old Ranch Towne Center, the Naval
Weapon Station and the recent Centex Homes tract. All of the sewage generated from these
areas is ultimately conveyed to the Orange County Sanitation District (OCSD) pump station
located at Seal Beach Blvd. and Westminster Ave. and pumped to OCSD Plant No. 2 in
Agenda Item 61
Huntington Beach for treatment and disposal. Within the City's boundary limits but not served
by the City's system are the communities of Leisure World, College Park West, Rossmoor
Shopping Center and Surfside. There are approximately 5,000 sewer service users in the City's
system.
In 1999, the SSMP revealed approximately $10 million in needed sewer capital improvements
and replacements over the next ten years and until 2001, a dedicated revenue source did not exist
for replacing sewer infrastucture. Orange County Sanitation District was expected to provide
approximately $2 million in matching grant funds. In April of 2000, a public hearing was
conducted and City Council established the City's first Sewer Capital Fund service charge which
was $5.83 for a typical household. City Council issued a Certificate of Participation (COP)
Bond and received approximately $4 million in funding to begin projects. At that time, since the
funding did not include the entire Capital Program, it was discussed that Council would review
and adjust the fees in the future. Council also established connection fees for new developments
connecting to the sewer system.
In 2000/2001, the Public Works Department began a comprehensive sewer capital improvement
program and have completed the following improvement projects:
• Replacement of the Boeing Sewer Pump Station
• Replacement of the Adolfo Lopez Pump Station
• Station 35 Sewer Pump Station Electrical Rehabilitation phase 1 (planned)
• Rehabilitation of the Aquatic Park Pump Station No. 2; new force main for Aquatic
Park to Huntington Beach; removal of Aquatic Park Pump Station No. 1
• Removal of Marina Community Center Pump Station by rerouting the sewer on
Marina Dr.
• Sewer replacement in Main St. Alley
• Sewer replacement in 13 14th, & 1 St. alleys north of Electric Ave.
• Sewer replacement in 13 and 14 St. alleys south of Electric Ave.
• Conducted video inspection and condition assessment of the entire gravity system
The allocated funding provided approximately $4 million; sewer connection fees from new
developments provided approximately $500,000; OCSD grants provided approximately
$500,000. OCSD has discontinued their grant program and the City only received a quarter of
the expected funds. In total approximately $5 million worth of significant improvement projects
were funded and completed. However, the remaining portions of the 1999 SSMP remain
unfunded.
In April 2002, the Regional Water Quality Control Board (RWQCB), Santa Ana Region, issued
Order No. R8- 2002 -0014, General Waste Discharge Requirements (WDR) for all Sewage
Collection Agencies in Orange County within the Santa Ana Region. This order places
requirements on all wastewater agencies in an attempt to stem the rising trend of beach closures
and impacts of ocean water quality that sewage spills and leaks can cause. These are called
Sanitary Sewer System Overflows (SSO). If these discharges of sewage from any sewage spill or
SSO are not fully contained and cleaned up, and there is a discharge of sewage to surface waters
of the State, or the SSO causes a nuisance, it is a violation of this order, Sections 13260 and
Agenda Item /tt
13376 of the California Water Code, and Section 301 of the Clean Water Act. RWQCB can
impose penalties for failure to follow the requirements of this order.
The Order prohibits the discharge of untreated sewage to any surface water stream, natural or
man made, or to any drainage system intended to convey storm water runoff to surface water
streams. The Order includes numerous provisions, including:
• Properly fund, manage, operate, and maintain all parts of the collection system
• Limit fats, oils, greases, and other debris that may cause blockages in the sewage collection
system, and prepare a Grease Control Program by December 30, 2004
• Provide adequate capacity to convey base flows and peak flows, including wet weather
flows, and document it in a System Evaluation and Capacity Assurance Plan by July 30,
2005
• Identify and prioritize structural deficiencies in the entire system, with short term and long
term rehabilitation actions, and document it in a Sewer System Rehabilitation Plan by
September 30, 2005
• Prepare a Sewer System Management Plan (SSMP) to address all requirements of the Order
by September 30, 2005
The Regional Board enacted Order No. R8- 2002 -0014 under the authority of the Porter - Cologne
Water Quality Control Act ( "Porter - Cologne Act ") which appears at Water Code sections 13020
et. seq. The Porter - Cologne Act authorizes administrative enforcement remedies, including
monetary civil penalties, against any agency that violates an order issued pursuant to the Act.
Failing to submit an SSMP or submitting an SSMP that fails to demonstrate that the agency is
adequately funding, managing, operating and maintaining its system, as the Order requires, is a
violation of the Order.
The Regional Board can administratively issue cease and desist orders and /or impose fines up to
$10,000 per day for each day of violation or petition the Superior Court to impose up to $25,000
per day for each day of violation. [Water Code section 13385] Additionally, since the Order
states that the Regional Board will consider the adequacy of the SSMP in any enforcement action
(Provision 12 at Page 8), an inadequate SSMP, including inadequate financing, can subject an
agency to more severe monetary civil penalties for sewer spills. The Porter - Cologne Act
empowers the Regional Board to seek fines of up to $25 per gallon of sewage not cleaned up
[Water Code section 13385] and issue abatement orders which carry up to $15,000 per day fines
for non - compliance. [Water Code section 13350]. Further, federal law empowers the Regional
Board to seek up to $32,500 in penalties for each spill which violates the Clean Water Act. [33
U.S.C. §1319] An inadequate SSMP could be grounds for the Regional Board seeking the upper
limit of allowable penalties in any one of these enforcement actions. In addition, third parties
may bring civil lawsuits against agencies for sewer spills.
The Public Works Department has continued to maintain a very low amount of SSO's since the
inception of the Sewer Capital Improvement Program and the Waste Discharge Requirements
Agenda Item cQ
(WDR). The City has been complying with the many deadlines and requirements of the WDR.
The next step is to adopt an updated SSMP and implement the recommendations of the SSMP.
The SSMP update contains the detailed list of improvements made in the system over the past
five years, new detailed information regarding the requirements of the State Regional Water
Quality Control Board, recent video inspection of the system, identification of capacity deficient
segments and a financial analysis of the Sewer Enterprise Fund. Over the past five years, half of
the City's sewer pump stations have been re- constructed, rehabilitated or removed and several
segments of sewer pipe have been re- constructed.
The SSMP update identifies the remaining sewer pump stations to be replaced or rehabilitated. It
also identifies new sewer pipeline improvements based upon new video inspection information
and capacity analysis. The video inspections have provided detailed information regarding the
condition of the pipe including cracks, fractures, offsets, holes, deposits, roots, grease, taps, and
any structural damage which could result in SSO's. This information as described in Section 7
of the SSMP is ranked based on severity and included in the Capital Improvement Program.
The capacity analysis as described in Section 5 of the SSMP includes detailed hydraulic
modeling, visual observations, field measurements, and flow monitoring with specialized
equipment. In basic terms, this section analyzes pipes that are flowing near full levels. This
analysis and plan includes a new set of projects to be implemented to improve the system's
capacity to the meet the City's capacity criteria. In some cases further monitoring is needed over
the next few years to verify capacities. These projects are estimated to cost approximately $15
million phased of the next 10 years. An approved financial plan to fund these improvements will
be the final element of the System Rehabilitation, Evaluation, and Capacity Assurance Plan.
Chapter 9 of the SSMP update explains the current fiscal analysis of the Sewer Enterprise Fund.
Review of the revenues and expenditures of the Maintenance and Operations (M/O) Fund and
the Capital Improvement Fund shows that the existing rate structure cannot generate sufficient
revenue to implement the recommended capital improvements. Sewer facilities last for several
generations and consideration should be given as to how the needed facilities are to be funded.
To overcome the revenue shortfall, two different financing alternatives were formulated and
evaluated. The first is a pay -as- you -go- alternative, whereas the second proposes the issuance of
additional bonded indebtedness to construct the needed capital improvements. Both alternatives
implement the recommended capital improvement program. However, the second alternative,
which uses bond financing, is recommended because bond financing is cost effective when
compared to construction inflation costs. Rate increases are also more gradually spread over a
longer time period. Under this alternative, it is proposed that the rate be raised 20% over the
next three years, 15% over the next following three years, and 12 %, 10 %, and 5 % in the
following next three years respectively. The typical residential monthly rate annually increases
approximately $1 to $2 dollars per month for the next five years.
The City of Seal Beach provides water and wastewater service to the Sunset Aquatic Park,
owned by the County of Orange. The 63 -acre park was acquired by the County from the US
Navy in 1963 and has 276 boat slips, boat ramps, and picnic areas and is operated by a leased
contractor. However, the Park is infrequently used by residents of Seal Beach because of its
Agenda Item 0
location. The sewer system, in particular, is expensive to operate and maintain. Although the
City charges the County a fee for providing sewer service, it is grossly inadequate when
compared to the operation and maintenance costs incurred annually by the City. The cost burden
has therefore fallen upon the ratepayers of Seal Beach, who derive little benefit from the Park. A
site - specific rate study was conducted and determined that the Seal Beach rate - payers are
subsidizing the park at an annual cost of $69,900. It is recommended that the City raise the
services rates for this specific area and recover this cost from the park operator.
The sewer system is operated as an "enterprise" system. This means the City's sewer utility must
be self - supporting from charges made by the City for sewer furnished to customers and all
services rendered in connection with its operation. It also means that money collected from the
service provided can only be used for sewer related purposes and can not be used for other city
programs such as public safety or parks.
As part of the Council adopted Budget and Fiscal Policies, " the City will set fees and rates at
levels which fully cover the total direct and indirect costs - including operations, capital outlay,
and debt service..." Council established the first ever Sewer Capital Fund rate in 2000. The
legal authority for adjusting sewer rates can be found in Section 9.30.20 of the Code of the City
of Seal Beach. That section provides for the establishment of sewer rates by resolution of the
City Council. Although the City must obtain voter approval of some other fees and charges, the
California Constitution expressly exempts adjustments of water rates. Cal. Const. art. XIII D, §
6(c).
In addition, these proposed rates are applicable to sewer users, rather than property owners. The
rates are imposed only as a condition of initiating or extending service upon the request of a
• customer, and not upon real property or as an incident of property ownership. The City proposes
to mail notices to all affected sewer users at least 45 days prior to scheduled hearing to provide
users with ample notice of an opportunity to be heard on the proposed increases. Pending City
Council direction, the public hearing containing detailed information would be scheduled for
October 10, 2005.
FISCAL IMPACT:
The compliance with the Regional Board Order and the SSMP update has been budgeted under
the existing Sewer Operations Fund as previously approved by City Council. Mailing of notices
would require the expenditure of additional funds under this account as well. Future decisions
by City Council may result in the increase of Sewer Capital rates for sewer utility users.
RECOMMENDATION:
It is recommended that City Council adopt resolution approving the City's 2005 Sewer
System Master Plan Update (SSMP) and provide staff direction for the sewer enterprise fund
capital rate increase and scheduling of a Public Hearing.
Agenda Item
Prepared By:
Mark K. Vukojevic, P.E.
Director of Public Works /City Engineer
N• r, D APP' I ED:
I Ai ; 4 / ( ,
Jo , f: . Bahorski
C1 Manager
i ,
Attachment: Resolution No. adopting the Sewer System Master Plan Update, 2005
Sewer System Master Plan Update, 2005
Agenda Item CZ
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF SEAL BEACH APPROVING THE CITY'S
SEWER SYSTEM MASTER PLAN UPDATE , AUGUST 2005
WHEREAS, The City of Seal Beach maintains a municipal sewer system for the furnishing of
sewer service to sewer users in the City of Seal Beach; and
WHEREAS, The Public Works Department of the City of Seal Beach has presented to the City
Council a certain publication which is desired by the Public Works Department to
be used in master planning of sewer facilities within the City of Seal Beach; and
WHEREAS, Said publication is the Sewer System Master Plan Update, August 2005; and
WHEREAS, The City Council desires to approve said publication as the minimum standard to
be followed for sewer facilities within the City of Seal Beach; and to authorize the
Director of Public Works /City Engineer to make changes to said publication as
required by new regulations, for updates and improvements to the sewer
infrastructure, and for the protection of public health and safety;
WHEREAS, Said publication is also required by the State Regional Board Order No. R8 -2002-
0014 by September 30, 2005;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SEAL BEACH DOES
HEREBY RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:
SECTION 1. Adoption. Adopts said publication for the sewer system with the City of
Seal Beach.
SECTION 2. Authorization. Authorizes the Director of Public Works /City Engineer to
make changes to said publication as required by new regulations, for updates and improvements
to the sewer infrastructure, and for the protection of public health and safety.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Seal Beach at a
meeting thereof held on the day of , 2005 by the
following vote:
AYES: Councilmembers
NOES: Councilmembers
ABSENT: Councilmembers
Mayor
ATTEST:
City Clerk
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) SS
CITY OF SEAL BEACH )
I, Linda Devine, City Clerk of the City of Seal Beach, California, do hereby certify that the
foregoing resolution is an original copy of Resolution Number on file in the Office of
the City Clerk, passed, approved and adopted by the City Council of the City of Seal Beach at a
meeting thereof held on the day of , 2005.
City Clerk