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HomeMy WebLinkAbout1992-06-09 - AGENDA REPORTS - SANITATION DIST STUDY (2)AGENDA REPORT City Manager Approval Item to be presented by: UNFINISHED BUSINESS Ren Pulskamp DATE: June 9, 1992 SUBJECT: SANITATION DISTRICT ORGANIZATION STUDY DEPARTMENT: City Manager On November 12, 1991, the Council considered testimony regarding a Sanitation District Organization Study prepared by Hughes, Heise and Associates (HHA). The Council reviewed the study and determined that additional information was necessary to support the findings that the City could provide administrative/operational service to the twoSanitationDistricts at the same or a lesser cost. You directed staff to investigate specific cost and procedural concerns brought up by Sanitation District staff. Attached is a detailed analysis prepared by Hughes, Heiss & Associates which addresses each of these cost concerns and still concludes that the City, can provide administrative/operational service to Districts 26 and 32 more economically. The HHA analysis focused on specific questions and cost areas concluding the following: • Staff Salaries/Benefits: There is no basis to assume that all staff hired by the City would be at top step, i.e., maximum salary in the job classification. • Chemicals: The City can join with other agencies/cities to buy in bulk and receive the same discounts currently realized by the Sanitation District. • Contracts and Services: The District assumes the City would not be able to take advantage of cost savings when a contract or service, which has a fixed cost, is shared by several districts. For example, the cost to develop a safety program could be shared by any number of districts. Most cities and agencies are happy to share the expertise, experience and contracts that are of mutual benefit, and we find no basis to include this added cost factor. • One -Time Vehicle Purchase: The District did provide a list of additional vehicles which were included in the updated analysis but did not change the final outcome regarding cost savings. • City Administrative Staff Associates Costs: The District determined that $1.5 million was necessary to provide administration, i.e., finance, personnel, legal, etc., services for the two City Districts. HHA concluded that these costs are $305,000, which correctly mirror the administrative costs of similar type districts. SANITATION DISTRICT ORGANIZATION STUDY Page 2 The District's cost assumptions are based on a worst-case basis and .ignores the fact that the City could reduce costs even further through partnerships with other similar agencies and using contract services when this can be shown to be cost-effective. The HHA reanalysis still correctly concludes that the City can provide administrative/operational services to the Districts at the same or a lesser cost. The District also brought up issues relating to construction management on plant expansions, training and safety programs, laboratory services, an industrial waste program, and grants and loans. These are all important factors relating to sanitation district operations and administration, but are accomplished by hundreds of other independent, districts throughout the state with at least reasonable success: There is no reason to believe the City could not provide a similar level of efficient services. A final issue was a surcharge levied by some cities on district fees to support other programs. This is clearly a policy issue and does not reflect on the cost savings that the City would realize by discharging sanitation responsibilities by providing City administrative services. The updated cost analysis,' administrative and policy issues have been considered, and there is significant justification for the City to provide contract administrative services to the Sanitation Districts. As indicated in the original study and subsequent memorandum, HHA has concluded that a District reorganization is not a practical solution -to a City takeover of District responsibility, given the fact that the City's sphere of influence does not include all of the area included in Districts 26 and 32. They have suggested that the City could provide these services for the District through a contractual arrangement. As indicated in the original study, personnel, equipment and administration of all of the Sanitation Districts are owned and managed by a subsidiary district known as the Joint Administrative Organization (JPO). The JPO has an agreementwiththe two Districts 26 and 32, which serve the City to provide these services. This agreement may be cancelled within a 60 -day withdrawal period. If the respective District boards approve this proposed contractual arrangement between the City and Districts 26.and 32, then the City could perform the function of the JPO. RECOMMENDATION 1. Request Engineer of Districts 26 and 32 to place this item on the next Board's agenda in July to consider operations and administrative services by the City, to commence January 2, 1993. 2. Direct staff to establish immediate contact between the City and District employees to schedule a workshop to discuss and receive input from district employees to explain the process as it relates to the proposal. ATTACHMENT Letter dated March 17, 1992 for HHA Sanitation District Organization Study hds:643 Hughes, Heiss & Associates 675 Mariners Island Blvd./Suite 108 201 W Fourth Street/Suite 205 MANAGEMENT CONSULTANTS San Mateo, California 94404 Claremont, CA 91711 415/570-6111 FAX 415/570-5320 714/626-2014 FAX 714/626-5450 Mr. Kenneth Pulskamp Assistant City Manager City of Santa Clarita 23920 Valencia Boulevard Santa Clarita, CA 91351 Dear Mr. Pulskamp: S- S 7v—& March 17, 1992 fdECE:1VE_D MAR 2 0 1992 OFFICL- Cl7Y P= F+I.nz Rxxr24 The purpose of this letter is to respond to Joint Sanitation District com- ments and criticisms of our Sanitation District Oreanization Study of October 30, 1991. Our response is based on comments made and materials provided at the March 6, 1992 meeting with Joint Sanitation Districts staff. The chart, which follows this page, shows aur estimate of annual operating costs for the two districts if the City assumed responsibility for operations, as presented in our report of October 30, 1991. The chart also shows modifications made in those estimates by the Joint Sanitation Districts staff. As can be seen from review of the information shown on the chart, Joint Sanitation Districts staff indicated they believed that our estimates of first year costs were too low by about $1.9 million. They estimated potentially higher costs in two major categories as follows: They indicated that our estimate of direct operating and capital costs was low by $751,882 with differences involving staffing costs; chemical costs; contracts and services costs; and initial fleet pur- chase. 60% or $1.15 million of the $1.9 million involved their estimate of the cost to the City (administrative and support) of assuming respon- sibility for the two sanitation districts. The letter which follows (on page 3) responds to each of the criticisms presented by the Joint Sanitation Districts staff with the first section addressing direct operating and capital costs. CHARTI HUGHES, HEISS & ASSOCIATES' ESTIMATE COMPARED TO JOINT SANITATION DISTRICTS STAFF REVIEW Item HHA Projected Cost Joint Sanita- tion Districts Staff Estimate Personnel Costs Staff Salaries and Benefits $1,946,219 $2,236,219 OperatingExpense Utilities 1,364,052 1,364,052 Chemicals 834,200 968,400 Materials and Supplies 374,100 No Change Laboratory Tests 147,558 No Change Contracts and Services 251,400 465,600 Customer Billing 64,200 No Change Insurance 2,600 No Change Sub -Total Operating Expense $3,068,110 $3,386,510 Capital Costs Reserve for Vehicle Replacement $96,950 No Change Plant.Renewal 3,548,000 3,481,000 Purchase of Fleet - One -Time Start-up Cost 867,264 1,077,746 Sub -Total Capital $4,512,214 $4,655,696 Contingency $1,000,000 No Change TOTAL DIRECT OPERATING AND CAPITAL $10,526,543 $11,278,425 Incremental City Administrative Staffing and Associated Costs $303,513 $1,468,800 TOTAL ANNUAL COST FIRST YEAR $10,830,056 $12,747,225 2 The table which follows shows the differences in direct operating and capital costs, and summarizes reasons advanced by the Joint Sanitation Districts staff for their higher cost estimate. 3 Joint Sanitation District Compared Item to HHA Reason 1. Staff Salaries/Benefits +$290,000 HHA estimated staffing costs at mid - step. Joint Sanitation staff noted most current District employees at higher salary range than mid -step. Extra $290,000 reflects estimated cost impact if employees of the Districts at higher step if City assumed operations. 2. Chemicals +$134,200 Joint Sanitation staff indicated Districts 26/32 benefit from quantity discounts because Joint Sanitation purchases in large amounts for numerous districts - quantity discounts which would be unavailable if the City assumed res- ponsibility for operations. 3. Contracts and Services +$184,200 Difference related to costs of developing control and sampling program in res- ponse to AB 2588. Apparently involves Joint Sanitation District's staff estimate of what it would have cost to develop a program if the two districts had been required to develop and implement a procedure on their own. The incremental $184,200 reflects their estimate of $194,200, less the $10,000 actually charged to the Districts as their share of the procedures developed for all LA County districts by/through the Joint Sanitation Districts. Also indicated a one-time $40,000 risk assessment study was excluded from our cost estimate, but is unclear if added to cost increase. 3 Item Joint Sanitation District Compared to HHA Reason 4. One -Time Vehicle +$210,482 Joint Sanitation Districts provided a list Purchase of additional equipment items which would need to be acquired to support sep- arate District 26/32 operations. List pro- vided as an attachment to this letter. Our response to these comments. about underestimated costs is addressed on an item -by -item basis below: Staff SalariesBenefits: The staffing plan provided in our report indicates a total of 41 positions would be required to operate the two districts if the City assumed control of operations. This involves 22 more staff than those currently directly assigned to Districts 26 and 32. These additional 22 positions represent staff estimated as necessary to replace services provided by regional personnel as well as other Joint Sanitation Districts staff not directly assigned to Districts 26 or 32. We selected mid -step salaries as the basis for estimating costs based on the following assumptions: Assumed District 26 and 32 employees (about 19 people) would need to be retained and would be compensated at top -step to reflect tenure and to ensure retention. Assumed that 22 new employees would need to be hired to provide capabilities currently provided by regional and other Joint staff. As new hires, we assumed 50% would be compensated between entry level and mid -step (generally skilled employees) and 50% of entry level (generally unskilled and semi -skilled labor). We felt it was unrealistic to assume that all new hires would enter at top step since this is not a representative public sector personnel practice. These assumptions result in an average mid -step salary cost for the entire work force. As a result, we believe the extra $290,000 in staffing costs proposed by the Joint Districts staff is based on an invalid assumption and as a result, overstates cost. Chemicals: During the c jurisdictions to determine i access to quantity discounts operations. We found that formed consortia to jointly 0 ourse of the study, we contacted other f there would be opportunities to have if the City assumed control of District a number of other jurisdictions have purchase chemicals and that the City would have the opportunity to participate in consortia and would as a result, have access to quantity discounts related to chemical purchases. While the exact cost would be dependent on specific bid/purchase arrangements, we believe our cost estimate is repre- sentative of likely costs the City would experience if it assumed operations of the two districts and that the Joint Districts staff con- tention that the City would lose access to quantity discounts is invalid. Contracts and Services: Our estimate for contract and service costs of $281,400 includes the following assumptions: Replicated the $167,200 provided as projected costs for contracts and services in the District 26 and 32 preliminary budgets for FY 1991-92 available to our project team at the time the study was conducted. Added the $40,000 risk assessment study which was appar- ently not included in those estimates, but mentioned to us dur- ing data collection. Allowed $74,200 to cover air quality related contract services based on estimates provided by private sector consulting engin- eers. This includes procedures development and first year testing/sampling. Thus, we took into account the issues raised by the Joint staff. I am unable to comment on their incremental cost estimate since they provided no detail of what the extra $184,2Q0 would cover during the March 6th meeting.z Capital Eauipment Purchase: The Joint staff provided a list of additional vehicles and related equipment which they felt would need to be purchased if Joint District resources, especially equipment shared on a regional basis, were no longer available to support oper- ations. Our estimate was based on: (1) review of items currently used by the District; and (2) survey of other jurisdictions which operate their own plants and collection systems. Based on a review of the additional capital items noted as required if the City operated the Districts, we feel from $90,000 to $110,000 represents items which would be required and were omitted from our initial estimates. In total then, we believe it is valid to increase our projection of total direct operating and capital costs from $10,526,543 to $10,636,543 to reflect vehicle cost adjustments noted above. It should be noted, however, that both our estimates, the existing. District budgets, and the Joint staff comments provide for a $1,000,000 contingency allowance as noted on the chart. It is reasonable to expect that this contingency could account for/absorb a 1% deviation which is what.the additional vehicle cost of $110,000 represents. It should also be noted that we outline several 5 options for covering vehicle costs in the report intended to avoid a one-time bulge in rates which would occur if vehicle and equipment purchase costs were fully paid for based on a one-year cost impact. The extra $110,000 noted above would add an additional 350 to the annual service charge per sewage unit if vehicle purchases were funded over 10 years as described in the report. Our report includes our estimate of the additional administrative and support staff which would be required to provide administrative support to the Districts if the City assumed operating responsibility. These estimates were developed in consultation with the City department heads, managers, and technical staff who would be impacted by the Districts, and were confirmed by reviewing and documenting the experience of other cities with their own in- house, comparable sanitation plant and collection system operations. We are confident that our estimates are reasonable projections of the actual, incremental staff which would be required to support the Districts. The Joint District staff indicated that incremental administrative costs would be $1.533 million compared to the $303,513 in incremental administrative costs noted in our report. Their estimates, on a department -by -department basis, are listed below: City Council City Manager Legal Personnel Administration City Clerk Computer Services Finance Engineering General Services TOTAL Joint District Staff Estimate of Incremental Costs Related to Sanitation District ()oeratinns 1533 ENO Based on the results of the March 6th meeting,it appears that these estimates were based on comparing the combined budgets of District 26 and 32 to the total current City budget; calculating the resulting percentage; and then applying that percentage to the budgets of the departments listed above to portray their estimate of incremental administrative cost of $1.5 million. We firmly believe this approach and the resulting estimates are clearly invalid and overstate admin- istrative costs by a geometric amount. Consider the following: L $1.5 million represents approximately 29 staff positions assuming a mix of managerial, technical, and clerical employees. There is absolutely no indication that 29 additional administrative staff would be required to support a combined district operating staff of 41. The estimate ignores the type of workload which would be generated by the combined districts and the real impact of that workload on incremental administrative and support staffing requirements -- the basis upon which our estimates were made. For example, would two to three additional full-time Personnel staff be required to support the recruiting, selection, and subsequent support of 41 staff in the two districts? Cities with 200-300 employees typically operate with a total of two to three staff in their Personnel units. Comparable distortions relate to each departmental estimate. Given the above, we stand by our estimate of the need for six administrative support positions with an estimated incremental cost in the $300,0004305,000 range, as described in some detail in our October report, During the meeting of March 6th, Joint Sanitation Districts staff alluded to a comment in our report which stated that all our cost estimates excluded any overhead or administrative charge the City might levy against sanitation oper- ations. This statement was apparently taken to mean that we ignored incre- mental overhead costs which they addressed with their $1.5 million admin- istrative charge estimate. To avoid confusion as the Council reviews Joint Sanitation Districts staff comments and our response, let me add the following clarification: Many cities which have in-house sanitation operations which are enterprise funded levy two kinds of charges which are intended to supplement and add to General Fund revenues. These -charges include: An overhead charge, usually levied against the enterprise fund on a percent of annual operating cost basis. The rage of overhead charges varies widely (from 3/4% to 9/10%); are usually not linked to the direct, incremental costs of supporting enterprise funded activities (costs which are usually charged directly to enterprise funds in addition to general overhead charges); and are usually intended to supplement the General Fund rather than capture variable, incremental costs stimulated by enterprise funded operations support requirements. An in -lieu of property tax charge, intended to capture revenues for the General Fund to recognize that assets (generally land and improvements) devoted to enterprise fund operations, are removed from the tax base and, as a result, reduce revenues which would have been generated had the same property been developed for private use subject to property tax. Such charges are clearly policy decisions; have nothing to do with the actual direct or indirect cost of an enterprise fund operation; and as a result, were excepted from our analysis of the. real cost of City assumption of control of sanitation operations. Because our responsibility was to estimate the cost impact (to the City and to users) of the City assuming direct control of Sanitation District operations, these optional charges were excluded from our analysis. This reflects the assumption that the City would be unlikely to levy charges against sanitation operations which would increase con- sumer costs, solely to generate additional General Fund revenues. Given the above, we feel that our original cost and related user charge cost and impact. estimates are valid. It should be clearly noted that we are not indi- cating that the City could certainly reduce sanitation service costs if it chooses to replace the Joint Sanitation Districts as the manager of sanitary services. Instead, we believe the analysis; subsequent critique by Joint Sanitation Districts staff; and the response provided by this letter indicate that: All data indicate that the City could -provide. management of oper- ations without increasing service charges if capital start-up costs are financed over a multi-year period. Given liberal estimates of the number of staff required to handle direct operations (plant operations; system maintenance; etc.), we believe there is clearly a "safety margin' in our cost, revenue, and service charge estimates. Given the information presented in this letter; the scope and content of the Joint Sanitation Districts staff comments; and the original analysis contained in our October report; we believe the chart which follows this page shows the comparative cost and servicecharge impact of the City assuming control of sanitation operations. The spread between current and projected user charges should be viewed as: "Float" to cover unanticipated costs. • • Potential cost reductions for users. • Potential for additional General Fund revenues to enhance other City services and programs, depending on actual experience and the decision of the City Council. If the City Council, George, or you require additional clarification or infor- mation, please do not hesitate to contact me at (415) 570-6111. Sincerely 11yours, W John W. Heiss HUGHES, HEISS & ASSOCIATES Principal San Mateo R7 CHART H COMPARATIVE OPERATING BUDGETS, CAPITAL REQUIREMENTS, CASH FLOW NEEDS, AND SERVICE CHARGES -- CURRENT VERSUS PROJECTED CITY CONTROLLED SANITATION OPERATIONS Current Qpmbong City Contract 111 111 Operations & Maintenance $3,352 $2,460 $5,812 $5,415 Capital - Plant 7,865 5,743 13,608 13,608 Capital - Vehicles 1,172 - - 132(2) Contingency 600 LIQ x,000 1.000 Sub -Total $11-817 $8.603 $20-420 $20-155 Cash Flow Requirement $3,229 $3,312 $6,541 $6,541 (7/1 through 12(31) TOTAL BUDGET REQUIREMENTS $15,046 $11,915 $26,961 $26,696 Estimated Cash and Revenue: Cash on Hand $4,965 $4,449 $9,414 $9,414 Transfer from CIP 5,891 4,236 10,127 10,127 Taxes 1,172 1,035 2,207 2,207 Industrial Waste 54 59 113 113 Interest & Other 663 543 1-206 1-206 TOTAL REVENUE BEFORE SERVICE CHARGE $12,745 $10,322 $23,067 $23,067 Service Charge Revenue Required $2,301 $1,593 $3,894 $3,629 Sewage Units 24,740 17,124 41,864 41,864 Charge Per Unit $93 $93 $93 $87 (1)Preliminary FY 1992-1993 operating and capital budgets and cash flow requirements for Districts 26 and 32 (2)Assumes vehicle purchase would be funded over 10 years and financed by certificates of participation at 7% ATTACHMENT JOINT SANITATION DISTRICT STAFF NOTES ON ADDITIONAL EOUIPMENT REQUIRED N:WBBFKJNSW WNENI.OUr ADDITIONAL VEHICLES/EQUIPMENT COST 1. Sewer Line Cleaning Trucks (2): $18,135 each (Vector can't clean large sewers) Additional equip, per truck (winch, arrow board) $ 20,000 each 2. Sewer Cleaning Blower $ 5,000 3. Rodding Machine = $ 50,000 4. Skip Loader =_ $ 60,000 5. Forklift $ 13,212 6. Additional Traffic Arrow Board $ 6,000 TOTAL $205,482 N:WBBFKJNSW WNENI.OUr Mill 5#0 01 pica I have read carefully several times the Sanitation District Organization Study prepared by Hughes, Heiss & Associates. The estimates of annual operating costs between the consultants and the Sanitation District amount to almost $2 million. This fact alone demands a more detailed analysis of this proposal since that figure represents an issue that is paramount to the city. Can the City of Santa Clarita operate Districts 26 and 32 as efficiently or more efficiently than the present administration? I would like to address some of my concerns in this report. Item 2 on chemicals cannot be resolved simply by assuming that purchases by the city through a consortia alone would provide access to competitive pricing. The present sanitation district ' is able to purchase in quantities notavailable to smaller districts as claimed. Y The one time start up cost of equipment at $867,264 not only is costly but also contains a $96,950 annual reserve for vehicle replacement but cannot duplicate the vehicle resources presently available. Of particular concern to me is the wide disparity in administrative costs of over ;1,000,000. The recruitment and hiring of six additional supervisorial/managaement employees only covers the first year. With one plant presently operating over capacity and the second plant rapidly approaching maximum operation, it is logical to assume that the city will have to face not -only the expansion issue but also additional personnel, both administrative and line. Since personnel related costs are the major portion of any operation, I will have to opt in favor of a cost analysis based on the higher projection. Included In these personnel costs are annual arbitration on wages and working conditions, recruitment and hiring programs and potential workmens compensation claims that could have a dramatic financial impact. 1 also have doubts that we can absorb 41 new employees the first year without impacting the additional record keeping responsibilities, office space, private parking needs, and additional vehicle storage facilities. Assuming, however, that the city could. operate. these facilities as effectively as the present sanitation district, the large overall budget increase will be a liability that must be figured In all forthcoming budgets. At a time when the city of Santa Clarita is.facing severe budget cuts and at a time when we are facing critical shortages in our ability to provide necessary assistance to our senior citizens, cutting our economic development program almost in half, eliminating basic environmental programs, completing essential streets, roads and bridges and approaching a decisive battle with the City and County of Los Angeles over Elsmere, it seems that the timing of this proposal could not have been considered at a worse time. I oppose this measure at this time, preferring.to follow closesly our options in the next year or two when several ongoing Issues have either been renolvcd or are more clearly defined. Possibly hidden in this report is a statement on page ten that states that 'bringing the existing districts under the City's administrative umbrella, the City would be able to exert greater . control over regional planning and service delivery in the Santa Clarita Valley.' In my opinion, this statement may contain the primary motivation for this move -- political -power. Although there is nothing wrong with placing the city in a position of influence on these matters, the additional financial and administrative responsibilities involved may bear too great a burden at this time. i am urging.delay and an open and comprehensive review of this proposal including the imput of our citizens. The purpose of a metropolitan sanitation district is to provide these essential services at an affordable cost. This consortia that represents 27 districts has been doing this for a long time. _ The dedicated employees who work districts 26 and 32, our neighbors and local citizens, have been quietly doing their job for many years. Not once have I heard complaints about the level of service we are receiving at this time. There are some things that can be done better through the combined expertise of several. agencies working together for the common good of all. I oppose spending money we dont have to spend and I oppose biting off more than we can chew. I propose that we move slowly and deliberately in this matter, making certain that the decision will be made when a thorough and detailed analysis of the Impacts of this move are clearer. ,/ < FROM: Jo Anne Darcy SUGGESTED REASONS TO OPPOSE OR DELAY TRANSFER OF DISTRICTS 26.& 32 TO THE CITY * To vote to place the Sanitation District issue before Sanitation Districts 26 & 32 Board seems unnecessary to me. We already have control over those Boards with two City Council members now and can pull or control any development issue we choose. * The LAC Sanitation District is one of the best operated and efficient in the state. It's well financed and has exceptional technical staff that would be almost impossible to replace on the short term. * I don't believe the Hughes Heiss & Assoc. report gives i full disclosure of the true impacts or quality of service provided by the LAC Sanitation Districts. I believe there are many undisclosed costs the city will have to bear that are not itemized and will later cause increase to the taxpayers. (Ex. added staff, engineering, report preparation, EIRs, EPA, CEQA, lab testing and analysis�(�� * Grant and loan preparation and finance operations will require hiring of additional professionals not covered in the.report. At present the County hass assimilated all of these costs.C�,�� v�vJrc4� * The consultant report indicates that most of the present staff will transfer to the city. This has not been proven. This could cost the users more for job searches and the continuity of operations could be jeopardized. * Present user fees have remained low to SCV because of the efficient operation of County Services, this could change considerably if costs and variables are not fully explored. * It seems likely there will be problems with sludge control. Presently all sludge goes to District 32, will they have enough capacity for the city? * It has been rumored that the city wishes to take over Districts 26 and 32 for control of development and possibly use the Sanitation Districts vehicle as a means to raise funds for the city's General Fund. If this is intended, full disclosure should be made to city residents. THE NEWHALL LAND AND FARMING COMPANY WRITER'S DIRECT DIAL NUMBER (805) 255-4045 June 9, 1992 Mayor Jill Klajic City of Santa Clarita 23920 Valencia Boulevard, Suite 300 Santa Clarita, California 91355 Subject: SANITATION DISTRICTS 26 AND 32 Dear Mayor Klajic, Pott Office Box 55000 Valencia, California 91383 (805) 255-4000 There are only two major sanitation systems in L.A. County— the Los Angeles County Districts, and the L.A. City System. Virtually all of the 82 cities in the County are operated and administered by one or the other of these organizations. It is clear, therefore, that cities have not chosen to operate independent municipal sewer systems. It is simply too expensive, technical and risky to do so. Within the L.A. City sewer system, the costs to the property owner are 40% to 50% higher than in the County system. We recently learned that several cities— including Culver City, El Segundo and Santa Monica, and perhaps others— are extremely unhappy with L.A. City's system, apparently to the point of legal action. Those with suitable geography are considering joining the County Sanitation Districts. These facts alone are a strong argument against the City of Santa Clarita's proposed course of action. It's also hard to understand how the City can make a multi-million dollar decision on the basis of what appears to be a $10,000 conceptual study. We have analyzed, to the extent possible, the reports prepared by Hughes, Heiss as well as the County Sanitation Districts' comments. I'm including detailed written comments on these as part of my testimony. According to the Hughes, Heiss report, there was a "detailed profile of the Districts", sent by. separate cover to the City, which was not included in the information available to the public. If this is a more detailed financial analysis, it must' be released. 23823 Valencia Boulevard. 'Valencia. California 91355 Major Jill Klajic June 9, 1992 Page 2 There is simply not enough information available to understand how the City can operate the Districts at a lower or even an equal cost. The City proposes to add 28 new employees and to purchase a fleet of vehicles and equipment costing in excess of $1 million dollars. Hughes Heiss initially did not include in the budget any City administration or overhead costs for items such as additional City Council meetings; City Manager, City Attorney and City Clerk time; computer services; finance; engineering; personnel and office space. They later estimated these overhead items at only $300,000, compared to the County Sanitation Districts' estimate of nearly $1.5 million dollars. Liability and vehicle insurance would add up to $110,000 to this. Having thoroughly reviewed all of the reports, we do not understand what cost savings would exist to balance the additional expenditures just discussed. Let me summarize by saying that we believe the City would be making a serious mistake by taking on this monumental responsibility. The Districts already provide excellent service at a reasonable cost. At best, homeowners would save $5. a year, but if the City's consultants are wrong, it would cost each homeowner from $30. to $60. a year more. In addition, we believe that this is an issue which may further divide this community and worsen relationships with the County. Very truly yours, GLORIA GLENN Vice President, Planning Issue: The appropriateness of the City's proposed plan to administrate and operate Sanitation Districts 26 and 32. Purpose: $265,000 in cost: savings which translates into approximately $5.00 in service charge savings. Problems: Current Rates $92.95 Proposed Rates $87.69/$108.54 1. Risk: $265,000 in proposed savings is only 2.4% of the disputed $10,830,056 operating budget. The budget includes a $1,000,000 contingency (or 9.2%), the need for which is undisputed and reflects the variability which characterizes District operations. The County's review has highlighted the need for an additional $746,900 in direct operating and capital costs. These. additional expenditures equate to 6.9% of the City's proposed budget. If the disputed expenditures are, in fact, valid, the City would be left with only $253,100 in contingency as compared to the $1,000,000 which is budgeted. The aforementioned does not reflect $1.1 million in disputed administrative staffing costs. 2. Insufficient Information: a. Payroll: The City has used projections to arrive at the personnel costs required for a staff of 41, rather than representing the known costs of the existing 19 employees and projecting the remaining 22. Disputed costs - $291,000. b. Chemicals: The City represents that it is reasonable to assume quantity discounts will be available by joining consortia of other small districts. It is reasonable to require the City to identify specific opportunities and documents available . discounts. Disputed costs -$134,200. C. Comparative Financial Information: The consultant's report references a separate analysis of District 26 and 32 which has not been made available to the public. Without such comparative information it is impossible to identify the specific source of the proposed $265,000 savings. 3. Apparent Inconsistencies: a. Contracts .& Services: The consultant's original study differs from their follow-up report in the explanation supporting $281,400 in expected expenditures. Specifically: The original study excluded $40,000 for a risk assessment Study (p. 19). The follow-up report claims it was included. ii. The methodology outline in the original report implies the County's original baseline budget was $241,400. The description provided in the follow-up report states the baseline budget was $167,200. iii. The original budget incorporated $80,000 for air quality analysis ($50,000) and research ($30,000). The follow-up report allows for $74,200. The County believes an additional $142,000 is required for analysis alone. Disputed Cost: $142,000. b. Payroll: The mid -point salary assumption is valid if all 41 employees are in the same salary range (19 top step, 6 mid step, 16 entry step.) However, by the consultants own admission, not all employees are within the same salary range. If, in fact, the 19 County employees are "skilled" and at higher salary levels they will more than offset the mid-level and entry-level salary levels of the skilled/unskilled new hires. Conclusion: it is invalid to assume mid -step salaries for all 41 employees. ABL.SD.23&32 Observations: 1. The County's review appears unbiased and even-handed in its conclusions. While it called out the need for an additional $746,900 in operating and capital costs, it also identified $180,000 of previously neglected revenue sources. 2. The issues surrounding the incremental cost to the City for overhead are significant and difficult to quantify. At the very least this issue is worthy of further study. In the interim, however, a review of the consultants assumptions raises obvious questions. a. The Plan calls for 6 additional Staff members: 1 Engineer 1 Industrial Wastewater Inspector 1 Wastewater clerk 1 Financial Analyst 1 Computer Programmer 1 Personnel Analyst b. The proposal calls for the City to utilize consultants and contract services to supplement City Staff in the following areas: engineering, inspection, lab testing and environmental analysis. C. Six additional Staff members and contract services will require only $303,513 under the proposed operating plan. This amount includes a 30% benefit level for the new employees and $50,000 for environmental analysis alone. No dollars are budgeted for liability and vehicle insurance or for office space and equipment for the additional employees. d. The proposal has not addressed the impact on existing City Staff who will take on additional responsibility (e.g. City Manager, City Attorney, City Clerk, Personnel, Finance, etc.). Conclusion: While it is difficult to quantify the exact costs associated with City oversight, it is clear that the proposal is insufficient and further study is warranted. ABL.SD.23&32 3 3. The consultant's study clearly states that all analysis has been exclusive of additional overhead allocations which can be implemented at the City's discretion if the City chooses to operate the Districts as an "enterprise." Any such allocation would impose additional charges on users and result in a windfall for the General Fund. It is also unclear whether the City could impose additional charges on homes and businesses in the unincorporated area in order to supplement the City's General Fund. 4. In the consultant's follow-up report to the County's review an additional $110,000 was included to cover the cost of vehicle replacement. With only $265,000 in savings remaining, future adjustments will undoubtedly nullify the stated benefits of abandoning the County system. 5. While the proposed service charge under the City's plan would fall to $87.73 (representing a potential savings of $5.12), if* the County's estimates are correct, service charges could rise as high as $151.07. The following table summarizes the potential impact on service charges given the available information. ABLSW3&32 4 ANALYSIS OF POTENTIAL SERVICE CHARGES Sanitation Districts 26 and 32 COMPARATIVE ANALYSIS City Proposal vs. County Analysis CITY PROPOSAL, revised Operations Fleet TOTAL RESOURCES REQUIRED Annual Operating Cost $9,659,339 $867,204 $10,526,543 FUNDING SOURCE Industrial Waste Taxes Interest/Contracts Drawdown of Reserves Service Charges TOTAL FUNDING 0 0 2,207,000 2,207,000 1,206,000 1,206,000 2,873,000 2,873,000 3,373,339 867,204 4,240,543 $9,659,339 $867,204 $10,526,543 Service Charge per Sewage Unit $80.58 $20.71 $101.29 41,864 sewage units INCREMENTAL CITY ADMINISTRATIVE OVERHEAD EXPENSES $303,513 $303,513 Additional Service Charge $7.25 $7.25 TOTAL SERVICE CHARGE ABL/June 9, 1992 COUNTY ANALYSIS Operations Fleet TOTAL $10,200,679 $1,072,764 $11,273,443 113,000 113,000 2,207,000 2,207,000 1,206,000 1,206,000 2,873,000 2,873,008 3.801,67:9]F-1-,-07-2.-76-4-] 4,874,443 $10,200,679 $1,072,764 $11,273,443 $90.8:1]$25.62 $116.44 $1,450,000 $34.64 PROFORMA OPERATING BUDGET Sanitation Districts 26 and 32 COMPARATIVE ANALYSIS City Proposal vs. County Analysis CAPITAL COSTS Reserve for Vehicle Replacement ANNUAL COSTS Item City Proposal County Analysis PERSONNELCOSTS Purchase of Fleet 867,264 Staff Salaries and Fringe Benefits $1,946,219 $2,236,219 OPERATING EXPENSES CONTINGENCY 1,000,000 Utilities 1,364,052 1,364,052 Chemicals 834,200 968,400 Materials and Supplies 374,100 374,100 Laboratory Tests 147,558 147,558 Contracts and Services 281,400 465,600 Customer Billing 64,200 64,200 Insurance 2,600 2,600 Sub -Total 3,068,110 3,386,510 CAPITAL COSTS Reserve for Vehicle Replacement 96,950 96,950 Plant Renewal 3,548,000 3,481,000 Purchase of Fleet 867,264 1,072,764 Sub -Total 4,512,214 4,650,714 CONTINGENCY 1,000,000 1,000,000 TOTAL DIRECT OPERATIONS AND CAPITAL 10,526,543 11,273,443 INCREMENTAL CITY ADMINISTRATIVE STAFFING 303,513 1,450,000 TOTAL ANNUAL FIRST YEAR $10,830,056 $12,723,443 ABL/June 9, 1992 VARIANCE $290,000 0 134,200 0 0 184,200 0 0 318,400 0 (67,000) 205,500 138,500 0 746,900 1,146,487 $1,893 38T; June 9, 1992 City of Santa Clarita Council Members Dear Council Members, I am very distressed that the city is planning on taking over the operation and administration of Sanitation Districts 1 26 and 32. As a citizen of this valley who is well informed in this area, as I am the Operations superintendent for Sanitation Districts 1 14, 20, 26, and 32, I feel that and can demonstrate from the Sanitation Districts many awards for these plants specifically the plant of the year award for the Saugus WRP (district f26) that this system is operated, maintained, and administrated excellently. I have a few points and questions that you as a council need to consider and to respond to: 1. The majority of the existing employees of the Sanitation Districts will stay with the Districts. This includes all of the top level highly certified,- management and supervisory personnel along with the operators and maintenance personnel. These .plants are very difficult and complicated to operate. If there is a problem in the treatment plants the fines can be as high as $25,000/day. How do you plan on meeting all of the stringent requirements? 2. I do not believe that the City can budget to a $5/house/year margin on the new surcharge rates. With the approximately $1,500,000 of indirect and overhead .costs that were missing on your commissioned report, where will the city absorb this? This will certainly raise the existing rate of $93/house/year, which will increase the overall cost to the citizens of this valley. This City is already running a deficit, why would you take a chance on incurring higher costs? City's of similar size like Glendale and Burbank who operate their own systems pay approximately $200/house/year. A large.city such as Los Angeles has rates of $248/house/year. This is a graphic demonstration of how well the Districts operates and maintains it's systems. 3. We the citizens of this valley voted down the slow growth (Caring) ballot proposition in April. I am not in favor of rampant growth in this valley, but the city has a -General plan that should work if we give it time to do so. Why do you as a council feel that you must gain control of growth in this devious manner? 4. The State of California has proposed to transfer the ad valorem taxes to schools. This will increase the cost to each household by approximately $63/year. What has the City done to prevent this increase in our local taxes from occurring? 5. What does the City plan on doing for liability insurance, if you vote in favor of this measure? 6. If there is a major problem with the sewer system (as there was in February 1992 when the sewer line across the Valencia Blvd. bridge sheared), is the .City prepared to respond as efficiently as the Districts does? As you know, the Districts were able to draw from our vast resources and bring materials, pumps, repair parts, and most importantly employees with a wide variety of knowledge to limit the environmental impact. 7. The existing board of directors of the Sanitation Districts 26 and 32 is composed of Mayor Klajic, Councilperson Heidt, and L.A. County Supervisor Dana. You already have a majority on this board. I know that, if any board member asks a question, that the Districts responds truthfully and fully to.that question. Why would the truth be any different if you received it from City staff or were getting it from the .existing Districts staff that have proven themselves to run an efficient operation? In conclusion, I implore you to vote against this measure. I would also like you to respond to my questions which are highlighted. Tuesday, June 9, 1992 Council Members: As a citizen of the community I feel that the Sanitation Districts are doing a perfectly good job and that there is no real reason why the City of Santa Clarita should take them over: I feel that the costs involved in the initial .transfer are totally unnecessary and that the potential costs to :. the taxpayer are uncalled for. As an employee of the Sanitation Districts I feel that the Council members are not aware of the potential costs involved in maintaining these plants. This ' concerns me as a taxpayer because I am most certain that our sewer rates will increase. Other cities that have taken over sanitation are paying a much higher rate than we presently pay. It is not logical to think that the City can offer a lower rate or maintain the current rate when the County District's offer one of the lowest rates in Southern California. would also like to address the expenditures needed to make the transfer. Why should the city put out $867,000 for needed equipment? When you add the City's projected extra expen- ditrues of $305,000 per year you have yourself over $1,000,000 of unnecesary city money being spent foolishly. Aren't there better areas to address this kind of money? And these projections are from your city report. The county project even higher expenditures. Ms. Klajic stated that the city could provide BETTER SERVICE. How can flushing your toilet improve? Currently, you have CONTROL of the board governing these two distircts. What more control are you looking for? Any project that involves these two districts has to be approved by Klajic and Heidt. If they feel they do not understand the implications that these projects have on the city, then maybe they are not reading the reports well enough. All information is provided for them. On Friday we had an unofficial visit by one of your field supervisors and he brought us over a packet showing your salary structure and benefits. I would like to know how we fit into this and from little information we got, you are lacking in several areas. How do you anticipate handling this? If you give us what we currently make; wages, benefits, retirement - then you will have a problem with the people who are currently working for you and not receiving these same benefits or wages. How do you intend to handle this situation? These three minutes are really not sufficient time to address the complex issues at hand. Since the Council has chosen NOT to hold the Public Hearings theyvoted to hold on this issue lastfall, I would appreciate some comment by the Council, right now, regarding my questions. Thank you. _ Questions addressed -to Council members: Benefits l Wages•. :... Better services? Example: How can the city make flushing better? Submitted by Jim Mastrobuono, Saugus resident and employee of Districts Council Meeting, June 9,1992 Last fall, on November 12, this Council voted to hold public hearings with regard to the City controlling the two sanitation districts. As of this date, no public hearing has been given and tonight the council is taking action. The action is not stated as a "take-over" yet what are the actual intentions? What does the council propose to do when the district says, "NO" to their proposed contract? Since no public hearing has been given I will address only a couple of points out of the many that need addressing: First and foremost the public needs to know that the County Sanitation District's ARE NOT a county entity. They are a special district of the county and I feel that the typical county stereo- type can not be applied here. As a tax payer it greatly concerns me that the city is subjecting all of us to higher taxes. The reports deny this but the District's are pointing our other expenditures. Even the inital outlay to obtain management is costly WHEN IT DOES NOT NEED TO EVEN HAPPEN. Why is the City subjecting itself to potential lawsuits. Do you realize what liability Is associated with operating these facilities? Since we already have a facility responsible for such liabilities, why subject the city to it? Control is an issue stated for a benefit to the city. You already have total control when it comes to these two distrits. What more control do you need? If slow -growth is the issue here, in which Jill Klajic has stated it is, isn't the city subjecting itself to more lawsuits when they refuse to give sewer hook-ups to new developers? And are you Council. members representing the people who you were voted to represent. Not if this is a slow -growth measure because just recently the people of this valley voted that measure down. The slow -growth aspect of this concerns me when council members are telling some that IT IS NOT a slow growth issue, then turning around and telling others that it is. Why aren't you concerned with the $1.5 million descrepancy in the running of these facilities that the Districts have tried pointing out? It seems thattheywould be MORE aware of the actual costs than a consulting firm hired by the city to paint a rosy picture. Since the City already has control of the two districts with their seats on the board, and the facilities are functioning perfectly well, why are we spending so much city money to proceed with this? Why has so much money been spent on the reports (I know the first one cost $30,000, what have the others cost). This all seems such a waste of needed CITY money. The people of this community have a right to KNOW the potential cost to the city and to them. It will be reflected in their tax bills and they have the right to know BEFORE a decision is made by five council members. My maln'questlon to this council Is WHY? Why take on these costs when you already have the controlling vote over the two districts. Why subject this valley to unnecesarry expenditures? And WHY was there NO public hearing as voted for last November? Submitted by Becky Mastrobuono 296-0525 N CITY OF SANTA CLARITA 24519 Bre.ckpnridge Place Newh%14*•CS� „r,�,IM%E June 9, 1992 Mayor Jill Klajic and City Council Members Santa Clarita City Hall Valencia, CA Dear Mayor and City Council Members: I am writing on behalf of the S.C.V. Canyons Preservation Committee and other concerned citizens regarding the allotment in the Budget for Elsmere Can yon . It is my understanding that a good portion of last year's allocation for the fight against a dump in Elsmere Canyon was not spent. I would like to know if it is intended to return that portion -to the general fund. If that is the case we would strongly protest. I understand that the allocation in the new budget is for 8150,000.00. While this amount is smaller than we think is necessary, it can be sufficient only if the monies not spent last year are added to the 8150,000.00. LWe are adamantly opposed to returning last --year's left -over monies into the general fund and than only allotting $150,000.00 from the new budget That is like punishing frugality. We are all volunteers giving of our time and money to fight a. dump in Elsmere Canyon. We are working extremely hard with no pay and no reimbursement for our efforts. We would hate.to see all of our efforts go for naught by not being able to match the efforts of BKK and the City and County of Los Angeles. We also feel we are fighting the lobbying efforts of the Santa Monica Mountains Conservancy and the Trust for Public Lands. We hope to continue working with the City of Santa Clarita, and would urce the City Council to keep last year's monies in the "Elsmere Fund" and to allocate the additional $150,000.00. It is imperative to have the money alloc ed in advance so that when it becomes necessary to draw from the Elsmere Fund the money is immediately available. Sincerely, w Marsha McLean, President S.C.V. Canyons Preservation Committee 1 June 9, 1992 n C x <:1 a Mayor Jill Klajic. + City of Santa Clarita 23920 Valencia Blvd., 3rd Floor ; ca Santa Clarita, CA 91355 ^' SUBJECT: Item #21. City of Santa Clarita Civic Center Dear Jill: The Santa Clarita Valley Chamber of Commerce urges you to look carefully at the City's priorities when debating the merits of entering into an agreement for architectural services for the City of Santa Clarita Civic Center. While we certainly. understand staff's concerns about following through on the ground work started for the Civic Center, we strongly believe. -that there are more pressing concerns vying for the City's attention than the plans for City Hall. Road improvements and economic development are two of the key issues of importance in our City. From a perception. standpoint, spending money on a future City Hall project in this fiscal year does not seem wise. Sincoely, Lauffer, President Clarita Valley Chamber of Commerce T. Clur)Gi N --IG Santa Chlrita Valley Cilamhc>< of Commerce n 23920 Valencia Blvd., Suitt 125 • Santn Clnrittl. Crililorriia91355-2175 805. 259-4787 • FAX 805 - 259-8628 �6cr of Cam CITY COUNCIL MEETING TUESDAY, JUNE 9, 1992 SUBJECT: Item #S, County Sanitation Districts 26 & 32 The Santa Clarita Valley Chamber of Commerce is in opposition to the City's proposed takeover of the County Sanitation Districts 26 & 32. when reviewing this proposal, the old adage "if it ain't broke, don't fix it", came immediately to mind. A transfer of control from the County to the City is bound to cost local residents more in.fee increases. Even with the City's projectional the one—time cost of over $860,000 is unjustified. At a time when the headlines in the local newspapers highlight businesses going under, unemployment rising, lack of money for roads, parks, etc., we find it surprising that the City .would consider a takeover. Furthermore, we question whether the City can operate the Sanitation Districts at a competitive cost. Issues, such as employee compensation, retirement benefits, legal and maintenance, need to be addressed. We just finished the Measure A campaign. The people of this community rejected the no-growth proposal handily. The Sanitation District is not the place to control growth. Land use agencies make those important decisions regarding development. If the City is unhappy with the policies and procedures of the County Sanitation District, there are other methods to solve these issues. There are too many questions regarding the. City operation of the Sanitation District. The City should not rush into a long-term, expensive decision. Perhaps some day it would make sense for the City to operate this particular utility. Now, however, is absolutely not the right time. (2) Clarity Santa Clarity Valley Chamber of Commerce c 4� 23920Valencia Blvd., Suite 125- Santa Clarita, California 91355-2175 805.259-4787 • FAX 805.259-8628 Ger of Co June 9, 1992 CHAMBER PROGRAMS TO.PROMOTE LOCAL BUSINESS/SHOP LOCALLY THEME BUSINESS EXPO - Annual exhibition of local companies, their products and services. REFERRAL PROGRAM - Referring merchants to new residents and business people ongoing program). DISCOUNT PROGRAM - Promoting local businesses who offer a discounted service or product (ongoing program). ANNUAL DIRECTORY - Free listings of local companies to inform residents, other business people and outside requests for information on businesses or the community (25;000 distributed annually). RIBBON-CUTTING/GRAND OPENING events for new -companies or those celebrating anniversaries, etc. BUSINESS AFTER HOURS - 300 to 600 business people gather ata business facility to "network" and, promote their businesses (monthly). GET ACQUAINTED BREAKFASTS for member: and non-member firms to get acquainted with each other as well as with the Chamber and the community. WORKSHOPS - 6 to 10 a year to assist small business in complying with regulations; learning about new laws and generally dealing with government. CHAMBER CONNECTION- Monthly breakfast meetings with a presentation relative to business issues with networking and table topics attended by 50 to 100 local business people. BUSINESS SPOTLIGHT - Monthly newsletter with a distribution of 1500 promoting business members, their products/services and individual promotions. (1) GCCREOREO I INDUSTRIAL ROSTER - Free listings of local industrial firms with key information about each one distributed in reply to information requests for purposes of doing business with them, learning about their products and employment prospects. . FILM DIRECTORY - Listings of local "companies who can act as vendors to film production companies. Distribution - 5,000 annually. ENVIRONMENTAL AWARENESS COMMITTEE - New activity assisting local companies in their efforts to identify and comply with environmental regulations affecting their businesses. (2) Cialura D r Santa Clarity Valley Chamber of Commerce ? J 23920 Valencia Blvd., Suite 125- SantaClarita,California913552175 y 04 805.259-4787 - FAX 805.259-8628 Ger of Cod June 9, 1992 CHAMBER PROJECTS TO PROMOTE THE CITY OF SANTA CLARITA SHOWBIZ EXPO - Annual trade show booth run.by the Film Committee to promote filming in the City of Santa Clarita and the Santa Clarita Valley to -the outside public(s). LEADERSHIP 192 - A new project consisting of a series of workshops on strategic planning, budgeting and government to encourage localresidents and business people to seek public office by enhancing their personal leadership qualities. GOVERNMENT REVIEW - Meeting prior to City Council meetings to encourage business people to take part in government and better understand City issues. CAMPAIGN TO DEFEAT MEASURE "A" - Financed a study to analyze the impact of slow growth on the.City and encourage voters to support the General Plan and managed growth as offered by the City. Total Chamber involvement played a big role in Measure A's defeat. LEGISLATIVE COMMITTEE - Monthly meetings review City issues and business people become familiar with City legislation and take part in their support. ECONOMIC DEVELOPMENT COMMITTEE - Monthly meetings with business people educating them on development and its' impact on the community. City staff ,gives presentations on progress of projects and issues dealing with City activities. Committee assists in surveys and research. DISTRIBUTION OF FILM & CHAMBER DIRECTORIES - A minimum of 100 requests are filled monthly with information mailed to outside areas across the state and country informing people. about the City and the area. CHAMBER OFFICE - Staff handles dissemination of materials about the area such as maps, economic profiles and videos; walk-ins requesting area information are handled; of the approximate 250 phone calls received in the Chamber office daily at least 508 deal with City questions. PLACERITA CANYON PROPERTY OWNERS' ASSOCIATION P. 0. B=245 Ncahall, CA 91322 May 26, 1992 Mayor Jill Klajic and Members of City Council City of Santa Clarita 23920 W. Valencia Blvd. Valencia, CA 91355 Dear Mayor Klajic and Council: During your recent consideration of the Lyons Avenue extension/Placerita Canyon bypass route, you asked us to go back to our membership and get a consensus of neighborhood opinion on the topic. We did so at our May 14 meeting, which was attended by more than 120 Placerita Canyon property owners. (That's quite a large attendance for us, thanks primarily to the door-to-door efforts of those who oppose the extension who were attempting to get out the negative vote.) The proposed extension was discussed at length for over an hour, giving ample time for both proponents and opponents to present their viewpoints and answer questions. Tony Nisish, the new City Engineer, was present to answer questions from a neutral point of view. At the end of this time, the following votes were taken: (The issue of the eastern alignment into the canyon was separated from the western alignment as far as Dockweiler since there seemed to be a more widely divergent opinion on the eastern end.) MOVED: That the Association accept the proposed alignment of Lyons Avenue at the western end of the canyon to the point where it joins Dockweiler. AYES: 47; NAY: 21. MOVED: That the Association accept the remainder of the alignment from Dockweiler into Placerita Canyon. AYES: 30; NAY: 31. MOVED: That the Association accept the alignment continuing down Dockweiler to Sierra Highway. AYE: 34; NAY: 9. Please note that these votes represent households, not individuals, hence the count is smaller than the actual number of people that each vote represents. These votes clearly show that, in an open forum where all views are aired, a clear majority of the Placerita Canyon property owners support the western alignment from the present Lyons Avenue to its connection with Dockweiler. This would support the staff recommendation presented at your recent City Council meeting, which would:. * Approve the western portion of the alignment * Direct staff to stop requiring dedication of right-of-way along Placerita Canyon Road and * Seek public input on design of the Lyons/Arch connection. The deadlocked vote on the eastern end of the alignment into the canyon should give the City's engineering staff and City Council some flexibility in determining which alignment -best meets the traffic needs of both the valley and the canyon, since their is no clear-cut canyon opinion at this time. The third motion was simply a reiteration by opponents of the eastern canyon route, clarifying where Lyons Avenue extension traffic will go once it reaches Dockweiler. The relatively low number of total votes on that issue probably reflects its source --from those who oppose the canyon route. Hopefully this meeting also will answer some charges that the Placerita Canyon Property Owners Association does not truly represent the canyon. This was our Annual Meeting, at which two of our seven director posts were up for election. Notice was sent to all of the more than 360 homes in the canyon, and the turnout of 120 -plus people is a good representation. Election results showed one present director re-elected and one new director elected from the challenging faction of property owners. We welcome this new representation on the board. Hopefully, having "their own" board member will help them feel more truly represented, although I can assure you that every member's voice has always been welcomed by the board. It is my understanding that the group which opposes the Lyons Avenue extension continues to circulate their "survey" regardless of the outcome of the recent meeting. The route's supporters undoubtedly could circulate its own document as well, and I have no doubt that we could get as many or more signatures favoring -the route. The point is simply that we feel that a decision taken in open meeting, when all points of view have been aired, is a far more accurate reflection of public opinion that a "survey" conducted door-to-door with only one point of view expressed. You have asked for consensus from the canyon. I am convinced that we have that. We may not have unanimity, but how many of your decisions provide you with that luxury? You will have to decide how to weigh the input of a public vote versus a "survey" conducted by people who admittedly have their own point of view Jill, I would like to briefly address your concern for the Valencia Villa condominium owners who live along Dockweiler: That road was there in its four -lane format long before they bought their homes. It's inclusion in the valley circulation system was part of Palmer's approval for developing the project. The Lyons Avenue extension simply makes a logical connection to that road; it doesn't widen it or otherwise increase the design capacity. In fact, it is far less onerous than the 100 -foot -wide Rio Vista alignment that you have already approved through that development as part of the General Plan. I would hope that this answers some of your concerns about the proposed Lyons Avenue extension and that you will now feel comfortable in adopting the staff recommendations as they were presented at your recent meeting. If I can provide further information, please contact me at 259- 3845. Sincerely, ,, Wt) c00 Pat Willett, President Placerita Canyon Property Owners Association cc: George Carvalho, City Manager Tony Nisish, City Engineer