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HomeMy WebLinkAbout1991-02-26 - AGENDA REPORTS - WASTE WATER TREAT COLLECTION S (2)CONSENT CALENDAR DATE: February 26, 1991 SUBJECT: Waste Water Tree DEPARTMENT: City Manager Z l/ BACKGROUND AGENDA REPORT City Manager Approval Item to be presented by: Ken Pulskamn and Collection Service Study In September 1989, the City Council directed staff to conduct a study as to the potential for the City of Santa Clarita to directly provide waste water treatment and collection services. As you are aware, such services are now provided through the Los Angeles County Sanitation District. In order to prepare to conduct this study, the City sent a number of Requests for Proposals (RFPs) to qualified firms. As a result of the RFP process, the firm of Hughes, Heiss and Associates was selected to perform the study. Initially, this project was put on hold; however, as a result of recent discussions, it has been determined that it is now an opportune time to begin the study. Hughes, Heiss and Associates will perform the following scope of services in order to assess the City's providing waste water treatment and collection services: 1) Develop a detailed understanding of the organization, operations and financing of the current system (legal organization, financial structure, service boundaries). 2) Determine how services are currently provided, organized and managed. 3) Determine how services are financed through fee structure and taxes (connection fee structure). 4) Document current plans for expansion and for infrastructure renewal and level of financial reserves currently available. 5) Develop a detailed understanding of the City of Santa Clarita's objectives in considering assumption of responsibility for -waste water treatment and. collection services. 6) Identify operating requirements impacting withdrawal from the Sanitation District (financial implications). 7) Clearly define costs and benefits associated.with withdrawal. APPROVED Agenda Item: 9 Page 2 8) Assess the impact of assuming responsibility on City administration and support organization and staffing needs. 9) Determine potential of achieving Santa Clarita objectives without total withdrawal from Sanitation District. It is anticipated that this study will take approximately six weeks to complete at a fixed cost of $30,000. That the City Council authorize staff to contract with Hughes, Heiss and Associates at a cost of $30,000 to perform study. In addition, transfer $30,000 from contingency account 01-4101-290 to 01-6000-230 to cover all costs associated with.this study. ATTACHMENTS 1) Scope of Work 2) Representation of Contingency Account Status TMM/sk 2161 Hughes, Heiss & Associates MANAGEMENT CONSULTANTS Mr. Ken Pulskamp Assistant City Manager City of Santa Clarita 23920 Valencia Boulevard Santa Clarita, CA 91351 Dear Mr. Pulskamp: 675 Mariners Island Blvd./Suite 108 35 S. Raymond Ave./Suite 220 San Mateo. California 94404 Pasadena. California 91105 415/570-6111 818/584-1111 February 12; 1991 Based on our meeting with George and you last week, I have given some thought as to how Hughes, Heiss & Associates could assist Santa Clarita in evaluating the advantages ad disadvantages of taking control of wastewater treatment and collection services from the Los Angeles County Sanitation District (s) currently involved in providing these services. Our proposal, which follows, is based on information gained during our meeting last week and our previous experience in conducting a comparable project for the Northern California cities of Dublin and San Ramon involving potential dissolution of a special services district which provided sewerage collection and treatment services to both cities. Santa Clarita currently receives services as part of the Los Angeles County Sanitation District. This.includes: Treatment and trunk line maintenance services provided by Sanitation Districts 26 and 32, each of which operate a treatment plant. Santa Clarita falls within the service boundaries of these subordinate districts, but the service responsibilities of District 32 include unincorporated territory external to the City's boundaries. Districts 26 and 32 are in turn part of the larger Los Angeles County Sanitation District which provides umbrella management; accomplishes capacity planning and capacity allocation; handles financial management related to sanitation/sewage treatment services; and the like. Services are - fee supported through taxes, user billings, and by connection fees which are levied by the District and are employed to " rra 1 ., 1991 WOO 111=11 �.T N CF SAB iA GLARiTA Hughes, Heiss & Associates MANAGEMENT CONSULTANTS Mr. Ken Pulskamp Assistant City Manager City of Santa Clarita 23920 Valencia Boulevard Santa Clarita, CA 91351 Dear Mr. Pulskamp: 675 Mariners Island Blvd./Suite 108 35 S. Raymond Ave./Suite 220 San Mateo. California 94404 Pasadena. California 91105 415/570-6111 818/584-1111 February 12; 1991 Based on our meeting with George and you last week, I have given some thought as to how Hughes, Heiss & Associates could assist Santa Clarita in evaluating the advantages ad disadvantages of taking control of wastewater treatment and collection services from the Los Angeles County Sanitation District (s) currently involved in providing these services. Our proposal, which follows, is based on information gained during our meeting last week and our previous experience in conducting a comparable project for the Northern California cities of Dublin and San Ramon involving potential dissolution of a special services district which provided sewerage collection and treatment services to both cities. Santa Clarita currently receives services as part of the Los Angeles County Sanitation District. This.includes: Treatment and trunk line maintenance services provided by Sanitation Districts 26 and 32, each of which operate a treatment plant. Santa Clarita falls within the service boundaries of these subordinate districts, but the service responsibilities of District 32 include unincorporated territory external to the City's boundaries. Districts 26 and 32 are in turn part of the larger Los Angeles County Sanitation District which provides umbrella management; accomplishes capacity planning and capacity allocation; handles financial management related to sanitation/sewage treatment services; and the like. Services are - fee supported through taxes, user billings, and by connection fees which are levied by the District and are employed to • L support capacity expansion and provide resources for major infrastructure renewal. • Based on current operations the City has no direct control over or input to : sanitation related planning and decisionswhich can have major impact on community growth through capacity planning; allocation of permits; fee levels; and the like. The absence of this control and direct input is the principal factor triggering the Council's interest related. to the City assuming organizational control of the sewerage collection and treatment system. Described below are the basic work steps we would accomplish to evaluate options open to the City. This would include determining the - How Santa Clarita "fits" into the Los Angeles County Sanitation District from the perspective of: • • Legal organization including how Districts 26, 32 and the County Sanitation districts are . related including governing board relationships; service responsibilities; and financial structure. • • Service boundaries including relationship with Santa Clarita's city limits and !ilk sphere of influence. - How services are currently provided, organized, managed, and staffed including, but not limited to: • • Plant operations • • Collection system maintenance • • Capacity planning • • Connection permit processing and approval, including determining how capacity is allocated to developments and the role of the County and Districts .26 and 32 in the development review process in Santa Clarita. - How services are currently financed including: • • Service fee structure which impacts Santa Clarita. 2 C] 0 0 • • How taxes are levied to support services and allocated to District operations. • • Connection fee structure. • • How service and connection fee revenues are employed in terms of reserve for plant expansion and/or infrastructure renewal; support of operations and maintenance; and the like. This would include determining how revenues are accounted for and reserves maintained by the County Sanitation District. For example, are revenues collected, spent, and reserved by the County in distinct "cost centers" which relate directly to service delivery operations in the Santa Clarita area? Determine plans to expand plant capacity in terms of: • • Any needs to upgrade plants to meet EPA or DWQ requirements. If necessary, determine timing, cost and scope of improvements required. • • Current utilization versus capacity. • • Plans and costs related to expansion of capacity to keep pace with community growth. Level of deferred maintenance, if any, related to the collection system covering such issues as: • • Any short term replacement requirements including timing, cost, etc. • • Life span for system including programmed replacement timing and expected costs. Determine level of financial reserves currently maintained by the County Sanitation District dedicated to plant expansion or renewal and/or replacement. Determine extent to which available reserves exceed/equal/fall short of capital needs. Additionally, determine if District accounting practices isolate/clearly identify reserves allocated to systems and services in the Santa Clarita area. and services are profil issues raised by the we would also clarify in more detail, specific )uncil and City management which have 3 C' C triggered interest in assumption of services. This would include interviews with the Council, management staff, key staff from the Public Works Department, and other staff as appropriate. first three steps as district operations following: well as review of California statutes covering special and local government organization, determine the Identify specific services, work activities, and operating capabilities which would be impacted by withdrawal. Define the above in terms of- Staffing fStaffing involved in operations and maintenance services at the District 26 and 32 level. • • Equipment requirements associated with plant operations and collection system maintenance. • • Capabilities and services provided by the Los Angeles County Sanitation District which would need to be provided if Santa Clarita assumed responsibility for operations. This includes such services as capacity planning; engineering services; user billing and collections; and accounting services. What are the financial implications of withdrawal? This includes: • • Santa Clarita's access to reserves maintained by the District and how the City's share could be -calculated if withdrawal proceedings are pursued. • • Comparison between financial reserves available to the City upon withdrawal . and liabilities involving plant upgrading/expansion and collection system renewal. Would sufficient reserves be available to meet documented needs or would the City assume unfunded liabilities which would need to be covered by increased fees or charges? • • What access would the City have to maintenance and operations equipment necessary for collection system maintenance through asset transfer upon withdrawal? Are there additional complicating factors which could impact City options such as: • • Existence of on-going capital improvement projects involving the plants or collection system which involve contracts to 4 C� • which the County Sanitation District is a partner which would need to be transferred to the City and could such a transfer be effected? • • Does long range planning provide for continued local disposal of effluent by discharge into the Santa Clarita River, or are there potentially needs to export effluent from the Valley? Identify in detail basic legal steps which must be taken to withdraw and identify potential issues related to the factors listed above, including how services could be organized -- e.g. city division/department; independent special district; subordinate special district; etc. Develop a detailed plan showing how the treatment and collection system could be operated as an entity under City control. This would include: • • Plant operations and maintenance staffing plan. • • Collections system maintenance staffing plan. • • , Equipment requirements to support plant and field maintenance. • • Pro -forma operating budget related to the above. Identify capital improvements likely to be required in the next five to ten years. Estimate their costs and compare them to the value of any reserves claimable by the City upon withdrawal, and note gaps. Combine the results of the above to identify annual revenue requirements required to support operations and capital needs. Compare costs and revenues and assess the extent to which existing fees would have to be adjusted to meet operating cost and capital improvement requirements. Assess impact of assuming responsibility on City administrative and support organization and staffing needs including: • • Public Works -- maintenance. operations management and capacity planning and allocation. • • Finance -- Sewer fund administration/management and sewer fee billing and collection. 5 • • Potential to offset a portion of City overhead costs through cost allocation to sewer funds. • • Any other "hidden" costs related to annexation and/or sanitation district reorganization. Identify and evaluate transition issues including transfer/retention of certificated plant operations. staff to ensure operations would be continued consistent with Federal and State operating requirements. Outline potential benefits to the City of withdrawal and assumption of control. operations. Includes: • • Impact of control of capacity planning and allocation on growth .management. • • Potential positive financial impact on city operations, now and in future years. Determine basic steps and transition timing required if the city moves to withdraw from the District. Identify legal and/or political barriers potentially associated with withdrawal and transition steps. Total Withdrawal From the County Sanitation District. Project analysis would also include evaluating all the information collected in completing the worksteps described above and identifying alternatives short of total withdrawal which could completely or significantly address the City's concerns, especially in regard to those Sanitation district operations which are directly related to capacity planing and allocation, and as a result, community growth management. The results of the project would be documented in a final report which would be reviewed with you in draft, and then presented to the City Council when in final form. As with the Fire Study, I would suggest we meet with the council members on an individual basis to give them a progress briefing during the course of the study, once the potential issues surrounding withdrawal from the Sanitation District have been clarified. I would have lead responsibility for conducting the project. My experience includes: Evaluating the feasibility of dissolving the Dublin -San Ramon Services District and transfer of responsibility of control of sanitation services (waste water treatment and collection. and solid waste collection) to the cities of Dublin and San Ramon which were incorporated a number of years after the District was formed; C developing an organizational staffing and operating plan for a multi jurisdiction sewerage treatment plant on the San Francisco peninsula (Belmont, San Carlos, Redwood City, and the Menlo Park Sanitation District); and evaluating treatment plant staffing needs for several Northern California sanitation management audits of public works agencies, most recently for Pasadena. I would be assisted by Marcus Allen of our staff who has previously worked with Santa Clarita on the Civic Center planning study. He would primarily be responsible for assisting me in documenting current operations and finances associated with District 26 and 32 operations. Listed below are my estimates of the level of staff effort necessary to complete the work plan outlined earlier in this letter. Person Activity Days Kickoff meeting with County and City Staff. Includes Council interviews. 2 Data collection/profile treatment plant and collection system maintenance impacting Santa Clarita. 4 Document plant and collection system capital 3 improvement needs. Collect financial data -- reserves/revenue trends/fee structure/annual revenue budgets. Write profile of data collected - identify/evaluate issues/follow-up to fill data "holes" as necessary. 4 Interview city staff - collect appropriate information to estimate staffing/operating impact of assuming control of sanitation operations. 2 Developrow forma operating cost and capital budget. 4 Evaluate asset and reserve transfer/project revenue. budgettevaluate fee impact. 4 Evaluate/identify legal steps related to withdrawal -- interview LAFCO, etc. 3 Conduct mid -study briefing of Council members. 0 Person Activity Days Write final report. 5 Presentation/meetings -- draft and final reports. 2 TOTAL 39 While this reflects a relatively significant level of effort, my previous experience suggests the individual work step person day estimates are quite tight and leave little room for error if we encounter information availability problems at the County Sanitation District. At an average hourly rate of $85 per hour, costs would be: 39 days ® $680 $26,520 Travel/Subsistence/car rental 2,500 Report production including clerical 1,000 TOTAL $30,020 We would be pleased to enter into a fixed price contract for $30,000 to conduct the project as described above. * * * I hope this provides the information you need. Pil be in touch to see if you have any questions or require additional information. John W. Heiss Principal 1"IM OM 0 & ASSOCIATES • Date of Council Action (Requested) July 1, 1990 August 14, 1990 August 28, 1990 September 11, 1990 September 11, 1990 August 14, 1990 October 9, 1990 October 30, 1990 November 27, 1990 November 27, 1990 January 8, 1991 January 8, 1991 February 26,1991 0 Representation of 1990-91 Contingency Account Item Amount Description Contingency Appropriation $1,500,000 Antelope Fwy (15,650) P.A.R.E.T. Unit (6,000) Newhall Pool Recon. (167,000) SCV Historical Book (13,850) Special P.W. Supplies (3,000) Bus Advertisement (1,500) AS 939 Requirements (84,607) Purchase Fleet Vehicle (93,000) Development Impact Fee Running Total $1,500,000 1,484,330 1,474,350 1,311,350 1,297,500 1,294,500 1,293,000 1,208,393 1,115,393 Study (60,000) 1,055,393 Fire Safety Program (10,000) 1,045,393 Magic Mtn. Pky/San Fernando Rd.(86,000) 959,393 Waste Water services (30,000) 929,393 TOTAL REMAINING IN CONTINGENCY 2/26/91 TM/tn-1777 S 929.393