Executive Committee Meeting Agenda

Transcription

1 Executive Committee Meeting Agenda Meeting Date: Monday, March 18, 2019 Meeting Place: 1010 Chadbourne Road Fairfield, California (Executive Conference Room) Executive Committee Rick Vaccaro, President Lori Wilson, Vice President Chuck Timm Michael Segala Meeting Time: 4:30 p.m. 1. Roll Call 2. Public Comments 3. General Manager Report 4. Discussion Items Page (a) Consider General Manager Review Process...2 (b) Review AB530 (Aguiar-Curry), Legislation to Amend the Fairfield-Suisun Sewer District Act...3 (c) Receive Report on State Legislation...29 (d) Authorize General Manager to Execute Joint Community Facilities Agreement between City of Fairfield and Fairfield-Suisun Sewer District...30 (e) Receive Report on City of Fairfield s Proposal Increase City Sewer Funding...36 (f) Review Draft FY 19/20 and FY 20/21 Budget Action Items (a) Approve the January 28, 2019 Board of Directors Agenda Information Items (a) Monthly Operating Summary...80 (b) Connection Fee Chart...81 (c) Potential Presentations for Board of Director Meetings...82 (d) Board Calendar End of Agenda-- The Fairfield-Suisun Sewer District will provide reasonable disability-related modification or accommodation to a person with a disability who requires a modification or accommodation in order to participate in the meeting of the Board of Directors. Please contact the District at (707) at least 48 hours before the meeting if you require such modification or accommodation. Documents that are disclosable public records required to be made available under California Government Code Section (b) (1) and (2) are available to the public for inspection at no charge during business hours at our administrative offices located at the above address. Members of the public may speak on any matter within the jurisdiction of the Fairfield-Suisun Sewer District by filling out a speaker s request card, and submitting the card to the Board Secretary. Comments not listed on the agenda will be taken under Public Comments. Comments on matters appearing on the agenda will be taken during consideration of the item.

2 March 14, 2019 MEMORANDUM TO: FROM: SUBJECT: Executive Committee Greg Baatrup, General Manager General Manager Performance Evaluation Process Recommendation: Discuss and recommend the process for evaluating the General Manager. Discussion: As part of the July 2018 General Manager Evaluation and the September 2018 Board Workshop, some of the Directors expressed interest in changing the process of evaluating the General Manager s performance. Specifically, whether the process would be more effective using a consultant. To provide perspective on the costs to retain a consultant, in May 2016 the Executive Committee discussed options for changing the process. The Executive Committee asked staff to obtain a proposal from the City of Fairfield s consultant to facilitate the General Manager evaluation. The scope included meetings with each Director and the General Manager, preparation of a draft evaluation and performance goals, follow-up meetings to review and agree on goals, objectives and compensation criteria, and a final evaluation/performance plan. The proposed cost was $3,400. Additional interviews with the District s Management Team and Counsel increased the proposal to $3,900. 2

3 March 14, 2019 MEMORANDUM TO: FROM: Executive Committee Greg Baatrup, General Manager SUBJECT: AB 530 (Aguiar-Curry) to Amend the Fairfield-Suisun Sewer District Act Recommendation: The staff recommends the Executive Committee review and comment on the following documents which are intended to be presented to the full Board on March 25, ) Receive Report on AB ) Consider changes proposed by the Orderly Growth Committee. 3) Consider whether the District should be named as the bill sponsor. Discussion: In February 2018, the Board of Directors adopted Resolution (see Attachment 1) to amend the Fairfield-Suisun Sewer District Act (Act) with the goal of having the language incorporated into a bill for consideration by the State Legislator. The deadlines for 2018 legislative year passed before the language could be picked up. In the 2019 legislative year, Assemblywoman Aguiar-Curry picked up the language from the District s resolution and on February 14, 2019 Assembly Bill 530 was introduced. Staff and District Counsel have been working with the author and other stakeholders who have raised concerns on the bill. The two concerns relate to the process of approving service to Middle Green Valley (MGV) and the desire to expand the Organics definition language so to limit services outside District boundaries. Process to Approve Service to Middle Green Valley In drafting AB 530 (see Attachment 2), the author added the language that would require Solano County LAFCO to approve the service under Government Code Section Staff and District Counsel worked with the author to revise bill language to provide clarity for the process that LAFCO would use. Amended language has not yet been provided. 3

4 March 14, 2019 Memo - AB 530 to Amend the Fairfield-Suisun Sewer District Act Page 2 of 2 Expanding Organics definition Language Representatives of the Orderly Growth Committee have asked the author to modify language in the Act to limit the service the District could provide. In their to the author, the Orderly Growth representatives ask for additional restrictions to limit growth in the unincorporated Solano County. The Assemblywoman Aguilar-Curry s staff has asked District staff to work with Orderly Growth representatives to see if issues can be worked out. Staff met with Orderly Growth representatives and is working on possible changes. Consideration on Whether the District should be named as the bill Sponsor The author has asked the District to be the Bill Sponsor. In considering the changes to the Act, the Board did not act on whether to be the bill sponsor. The definition of a bill sponsor according the State of California is The legislator, private individual, or group who developed a piece of legislation and advocates its passage. It seems logical that the Fairfield-Suisun Sewer District be designated as the sponsor and participate in legislative committee hearings as the bill progresses. Attachments: Attachment 1 Resolution Attachment 2 Assembly Bill AB 530 Attachment 3 Proposed Language by Orderly Growth representatives 4

5 - Attachment #1 FAIRFIELD-SUISUN SEWER DISTRICT RESOLUTION NO A RESOLUTION SUPPORTING AMENDMENTS TO THE FMRFIELD-SUISUN SEWER DISTRICT ACT WHEREAS, the fairfield-suisun Sewer District (District) was established pursuant to the Fairfield-Suisun Sewer District Act, Chapter 303, Statutes of 1951 (the Enabling Act) to provide collection, treatment, and disposal for sewage to the cities of Fairfield and Suisun City; and, WHEREAS, the District has evolved since the adoption of Enabling Act in 1951 and through legislation in 1959, 1963, 1985, 1992, 1997, 2001, and 2002 has modified sections of the Enabling Act to incorporate organizational and other changes; and, WHEREAS, property owners in Middle Green Valley Specific Plan area of unincorporated area of Solano County have sought legislative changes to the Enabling Act to allow this area to receive sewer services from the District; and, WHEREAS, Enabling Act references certain roles that were fulfilled by the City of Fairfield in an ex officio capacity that are no longer applicable; and, WHEREAS, Enabling Act established certain processes that are no longer efficient or effective; NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE FAIRFIELD-SUISUThJ SEWER DISTRICT: 1. Supports the changes to the Enabling Act set forth in attachment hereto and incorporated herein. 2. The General Manager is hereby authorized and directed to do all things necessary and proper to implement this resolution. PASSED AND ADOPTED THIS 19th day of February 2018, by the following vote: AYES: Directors Hudson, Sanchez, Timm, Vaccaro, Wilson and Segala NOES: Directors Bertani, Day, Moy, and Price ABSENT: Directors None ATTEST: President e Districi Clerk 5

6 CHAPTER 303 State of California Statutes of 1951 The Fairfield-Suisun Sewer District Act, as last amended September 2002 An act relating to the financing, construction, maintenance and operation of sanitary sewerage and storm drainage systems for the Cities of Fairfield and Suisun City, creating the Fairfield Suisun Sewer District and prescribing its boundaries, change of boundaries, organization, operation, management, financing and powers, declaring the urgency thereof to take effect immediately. [Approved by Governor May 5, 1951 filed with Secretary of State May ] The people ofthe State of California do enact asfollows: Article 1. General Provisions SECTION 1. The Fairfield-Suisun Sewer District is hereby created to consist of the territory in Solano County now contained within the Cities of Fairfield and Suisun City. Any territory hereafter annexed to either city shall be a part of the district upon annexation. No property shall become a part of the district unless it is a part of either the City of Fairfield or the City of Suisun City. Sec. 2. This act shall be known and may be cited as Fairfield-Suisun Sewer District Act. Sec. 3. If any provision of this act, or the application thereof to any person or circumstance, is held invalid, the remainder of this act, or the application of such provision to other persons or circumstances, shall not be affected thereby. Article 2. Definitions Sec. 10. Unless the context otherwise requires, the provisions of this article shall govern the construction of this act. Sec. 11. Sec. 12. Sec. 13. Sec. 14. Sec. 15. Sec. 16. Sec. 17. District means the Fairfield-Suisun Sewer District. Board means the board of directors of the district. Cities refers to the Cities of Fairfield and Suisun City. Charges includes fees, tolls, rates and rentals. County means the County of Solano. Board of supervisors means the Board of Supervisors of the County of Solano. Clerk means the clerk of the district. 6

7 Sec. 1$. In the application to the district of laws, the procedure of which is made applicable to proceedings of the district, the terms used in those laws shall have the following meanings: (a) City council, council, and legislative body mean the board b) City, municipality and local agency mean the district, (ca) Clerk and city cleric menn the cleric of the district. (b) (c) (d) Middle Green Valley Specific Plan means all property included within the Middle Green Valley Specific Plan adopted by the Board of Su.peisors in August Superintendent of streets, street superintendent, and city engineer mean the engineer of the district or any other person appointed to perfon those duties. The person performing those duties shall be called the district engineer. Tax collector means either the county tax collector or anotherthe person designated as the tax collector by the board. fe) Treasurer and city treasurer means either the County Treasurer of the County ef Solano or another person designated as the treasurer by the board. (gf) Auditor and city auditor means either the County Auditor of the County of Solano or another person or entity designated as the auditor by the board. (hg) Organic materials means material that is organic in nature, such as plant material, food and beverage waste, and paper products, which can be recycled using treatment processes such as composting, digestion or other processes to decompose the organic matter. Gas produced from the process can be captured and used for generating electricity and heat. Article 3. General Administrative Provisions Sec. 25. The district shall be governed by a board of directors of 10 members who shall be cx officio, all members of the city councils of the Ceities. Sec. 26. A quorum for the transaction of business shall consist of any six members of the board. No action shall be taken without the affirmative vote of at least six members. 7

8 Sec. 27. At its first meeting, and thereafter at the first meeting following such election of councilmen for the cities, Ihe board shall choose one of its members as president and elect other officers in accordance with Board policy. Sec. 2$. At its first meeting, or as soon thereafter as may be practicable, the board shall appoint a clerk, who may be a city clerk. He shall serve at the pleasure of the board and his compensation shall be fixed by it. Sec. 29. All contracts, deeds, warrants, releases, receipts, and documents shall be signed in the name of the district by the president and countersigned by the cle-rkin accordance with Board policy. Sec. 30. (a) Subject to subdivision (b), each board member shall receive one hundred dollars ($100) for each day of his or her actual attendance of the meetings of the board and of committees of the board, and for each day s service otherwise rendered as a board member by request of the board, not exceeding a total of six days in any calendar month. (b) The board may, by ordinance, increase the compensation received by board members above one hundred dollars ($100) a day, provided that the increase shall not exceed an amount equal to 5 percent of the compensation which is received when the ordinance is adopted, for each calendar year following the operative date of the last increase. Sec. 31. Each board member shall be reimbursed for actual expenses incurred in the conduct of district business. Sec. 32. The board may, in its discretion, establish a district treasury and appoint a district treasurer to serve at the pleasure of the district board. Sec. 33. All district elections other than bond elections shall be conducted in accordance with the election laws applicable to general law cities. Sec. 34. The board may require any employee or officer to be bonded. The district shall pay cost of the bonds.ah county officers shall be liable upon their several official bonds for the faithful discharge of the duties imposed upon them by this act. Article 4. Powers Sec.40. The district may adopt and use a seal which shall be alterable at the pleasure of the board. Sec. 41. The district may sue and be sued. Sec. 42. The district may acquire, construct, reconstruct, alter, enlarge, lay, repair, renew, replace, replace, maintain, and operate such sewers, drains, septic tanks, and sewage collection, outfall, treatment works, and other sanitary disposal systems, and storm water, storm water collection, outfall, and disposal systems, and water reclamation and distribution systems, within or without the district, as in the judgment of the board shall be necessary and proper. 8

9 Sec. 43. The district may take, acquire, hold, use and dispose of property of every kind within or without the district necessary, expedient, or advantageous to the full exercise and economic enjoyment of its purposes and powers. Sec. 44. The district may exercise the right of eminent domain to acquire any property necessary to carry out any of the objects or purposes of the district. Sec. 45. The district may make and accept contracts, deeds, releases and documents that, in the judgment of the board, are necessary or proper in the exercise of any of the powers of the district. Sec. 46. The district may cooperate and contract with the United States, or any agency thereof, with the State, or any political subdivision thereof, or with either of the cities for the joint acquisition, construction or use or aid in the construction of any facilities which the district may be empowered to construct under this act, including assignment to the district of any subventions of either of the cities. Sec. 47. All existing contracts of either of the cities relating to the collection and disposal of sewage may be assumed by the district. Sec 4$. (a) Except as otherwise provided in subdivisions (b), a4 (c). and (d), the district may not accept or contract for the disposal of any sewage emanating from outside the district except sewage from y public buildings or buildings of a public utility subject to regulation by the Public Utilities Commission. (b) Upon request of a landowner, tthe district may shall, upon request, is hereby authorized to accept and contract for the disposal of sewage emanating from buildings outside the district if those buildings are connected to the district s sewage treatment system on March 1, 2002 or from any building within the County Service AreaMiddle Green Valley Specific Plan. (c) Except as provided in subdivision (b) above. Pursuant to Section of the Government Code, Thhe district may. pursuant to Section of the Government Code, contract with Solano County or another public entity for the disposal of sewage emanating from buildings outside the district if the board of the district determines that the contract furthers the protection of public health and safety and is in the best interests of the district. (d) Every user that is connected to the district s sewage treatment system is subject to the district s ordinances, resolutions, and other laws. (e) The district may accept organic materials originating from within or outside the district, as in the judgment of the board is in the best interests of the district. Sec. 49. The district may borrow money and provide for its repayment without regard to any limitation by reason of any budget law or otherwise. Sec. 50. The district may guarantee the performance of any of its transactions, including the payment of local improvement bonds issued pursuant to any general law, without regard to any limitation by reason of any budget law or otherwise. 9

10 Sec. 51. The district may refund or retire any public indebtedness or lien that may exist or be created against the district or any property therein which shall have arisen out of the transaction of the affairs of the district. Sec. 52. The district may incur indebtedness and issue bonds in the manner herein provided. Sec. 53. The district may issue warrants in payment of district obligations. When not paid for want of funds, the warrants shall be registerable as provided in the Government Code for registration of city warrants when not paid for want of funds. Claims for money or damages against the district are governed by Part 3 (commencing with Section 900) and Part 4 (commencing with Section 940) of Division 3.6 of Title 1 of the Government Code, except as provided therein. Claims not governed by those statutes, other statutes, ordinances, or regulations, and expressly applicable to those claims, shall be prepared and presented to the governing body, and all claims shall be audited and paid, in the same manner and with the same effect as are similar claims against a general law city. All claims shall be free of the limitation of any budget law. Sec. 54. The district may cause special assessments to be levied and collected on the basis of benefit to the properties assessed for the purpose of financing the acquisition and construction of local improvements. If all or any portion of such assessment remains unpaid, the district may issue bonds, not in excess of the amount of the assessment remaining unpaid, secured by the assessment. Sec. 55. The district may appoint, employ, and fix the compensation of such engineers, attorneys, assistants and other employees as it deems proper. Sec. 56. The district may e-l4 contract for the purchase and/or sale of any effluent resulting from the operation of any sewage treatment plant as in the judgment of the board shall be necessary proper and is in the best interests of the districtconstructed by or for the district. Sections and of the Health and Safety code are applicable to the district. Sec. 57. The district may obtain insurance in such form and in such amounts as the board may deem necessary for the adequate protection of the district s property, officers, employees and interests. Sec. 59. The district may adopt all necessary and proper regulations for all sanitary purposes not in conflict with the laws of this State. Any person who violates any regulation of the district is guilty of a misdemeanor. A regulation of the board shall be adopted by ordinance and shall be posted for one week in three public places in each of the citiespublished pursuant to Section 6061 of the Government Code in a newspaper of geneml circulation and shall take effect upon expiration of the week of such pe.s%i+gptibljjjp. A subsequent finding of the board, entered in its minutes, that posting publication has been made is conclusive evidence that the posting publication has been properly made. Sec. 60. The district may compel all residents and property owners in the district to connect their houses and habitations and structures requiring sewage or drainage disposal service with the sewer and storm drains in streets. Sec. 61. The district may prescribe, revise and collect charges for services and furnished by it. facilities 10

11 Sec. 62. The district may contract for the collection of charges for any sewer enterprise or service together with and not separately from the charges for any other utility service rendered by the cities, and that all charges shall be billed upon the same bill and collected as one item. If all or any part of the bill is not paid, the district or either of the cities may discontinue its utility service until the said bill is paid. Such contract shall provide for the payment of a reasonable collection charge to the city involved. Sec. 63. The district may require that its charges be payable in advance. In case any charges remain unpaid at the time specified for fixing the tax rate of the district, if the property is owned, controlled, or in the possession of the same person who owned, controlled, or was in possession of it during the time the charges were incurred, or if the only transfers were made of the property since the date the charges were incurred, have been transfers by gift, descent, bequest, or devise, the amount due to the charges may be collected at the same time and in the same manner as annual taxes levied against the land served by the district facilities. The charges shall constitute a lien on the land. If the taxes are divided and made payable in two installments, the unpaid charges may be added to, arid become a part of, the first installment. The board shall include in the statement of tax rate transmitted to the county auditor the amount of the charges to be levied against the land served, and the county auditor shall include the charges in the tax bills, Alternatively, charges, tor any services and facilities which the district is authorized to provide and for which it is authorized to collect charges, may be collected in the manner provided by Section 5473 of the Health and Safety Code in accordance with the procedures set forth in other applicable provisions of Article 4 (commencing with Section 5470) of Chapter 6 of Division 5 of the Health and Safety Code. Sec. 64. The district, directly or through a representative, may attend the Legislature and any committees thereof and present information to aid the passage of legislation which the board deems beneficial or to prevent the passage of legislation which the board deems detrimental to the district. Expenses incident thereto are proper charges against the district. Sec. 65. The district may enter in associations. Through a representative of the associations, it may also attend the Legislature to accomplish the purposes outlined in the next preceding section. Sec. 66. All contracts for the construction of any unit of work shall be governed by Sections to 22039, inclusive, contained in Article 3 (commencing with Section 21200) of Chapter 2 of Part 3 of Division 2 of the Public Contract Code. Article 5. General Obligation Bonds Sec. 80. Sec. 81. this act. The district may issue bonds as provided in this article. The district may issue bonds for any of the purposes stated in Sections 42 and 51 of Sec. 82. When in its judgment it is advisable, the board may, and, upon a petition of 10 percent of the registered voters residing in the district shall, adopt a resolution calling an election to submit to the voters of the district the question whether bonds shall be issued. 11

12 Sec. 83. The resolution calling the election may submit as one proposal the question of issuing bonds to make all of the outlays or so many of them as may be selected, or the resolution may submit at the election as separate questions the issuance of bonds for any of the outlays singly or in combination. Sec. 84. Notice of bond elections shall be given by posting notices, signed by the clerk of the board, in three public places in the district, not less than 20 days before the election, and by publishing the notice not less than once a week for three successive weeks before the election in a newspaper printed and published in the district, if there is one, and if not, in a newspaper printed and published in the county. Sec. $5. The notice shall contain: (a) (b) (c) (d) (e) Time and place of holding the election. The names of the officers of election appointed to conduct it. The hours during the day in which the polls will be open. A statement of the purpose for which the election is held. The amount and denomination of the proposed bonds, the rate of interest and the number of years, the whole or any of the bonds are to run. Sec. $6. of ballot. The vote shall be by ballot, without reference to the general law in regard to the form The ballot shall contain the words Bonds Yes and Bonds No, and the person voting at the election shall put a cross (-0 upon his ballot after the Yes or No, to indicate whether he has voted for or against the bonds. Sec. $7. After the votes have been announced the ballots shall be sealed and delivered to the clerk or president of the board, which board shall on the seventh day after the election, at $ o clock p.m., meet and canvass them and enter the returns in its minutes. The entry is conclusive evidence of the fact and regularity all prior proceedings and of the facts stated in the entry. No informality shall affect the validity of said bonds. Sec.$8. Except as herein provided, the election shall be conducted as nearly as practicable in accordance with laws relating to general elections. Sec. 89. If, at the election, a majority of the votes cast are in favor of the issuance of bonds, the board may issue and dispose of the bonds as proposed in the resolution calling the election. Sec. 90. Bonds issued by the district under this article shall be in the denominations determined by the board. 12

13 Sec. 91. The bonds shall be payable in lawful money of the United States at the office of the treasurer and bear interest at the rate determined by the board but not to exceed the amount specified in Section of the Government Code. Sec. 92. No bonds shall be payable in installments, but each shall be payable in full on the date specified therein by the board. The board may provide that all bonds issued by the district may be subject to retirement at any time prior to maturity. Sec. 93. Each bond shall be signed by the president and countersigned by the clerk. Sec. 94. The bonds shall be numbered consecutively, beginning with number one, and shall have coupons attached referring to the number of the bond. Sec. 95. The bonds shall be disposed of by the board in such manner and in such quantities as may be determined by it in its discretion. No bond may be disposed of for less than its face value. Sec. 96. The term of bonds issued shall not exceed 40 years. Sec. 97. The board may in its discretion, before issuance commence in the superior court of the county, a special proceeding to determine its right to issue the bonds and their validity, similar to the proceeding in relation to irrigation district bonds, provided for by Division 11 of the Water Code, and its provisions apply to and govern the proceedings to be commenced by the board, so far as applicable. The judgment has the same effect as a judgment in relation to irrigation district bonds under the provisions of Division 11 of the Water Code. The board may use the same procedure to validate the creation of the district and any annexations thereto. Sec. 98. An issue of bonds is hereby defined to be the aggregate principal amount of all of the bonds authorized to be issued in accordance with a proposal submitted to and approved by the electors of the district, but no indebtedness will be deemed to have been contracted until bonds shall have been sold and delivered and then only to the extent of the principal amount of bonds so sold and delivered. Sec. 99. The board may, in its discretion, divide the aggregate principal amount of such issue into two or more divisions or series and fix different dates for the bonds of each separate division or series. In the event any authorized issue is divided into two or more divisions or series, the bonds of each division or series may be made payable at such time or times as may be fixed by the board separate and distinct from the time or times of payment of bonds of any other division or series of the same issue. Article 6. Revenue Bonds Sec Proceedings for the authorization, issuance, sale, security, and payment of revenue bonds of the district shall be conducted in substantial accordance with and with like legal effect as is now or hereafter provided in the Sanitation, Sewer and Water Revenue Bond Law of

14 Sec The board shall have and exercise for the district the powers and duties of local agencies under the said law, and the bondholders shall have the rights and remedies therein provided. Sec The board may guarantee the payment of any part of the principal and interest of said bonds which are not paid for want of sufficient revenues of the enterprise. For that purpose it may pledge all revenues of the district, including tax revenues. Article 7. Assessment Bonds Sec The Municipal Improvement Act of 1913, the Improvement Act of 1911, the Street Opening Act of 1903 and the Improvement Bond Act of 1915 are applicable to the district. Sec In its resolution of intention adopted pursuant to any of the acts mentioned in Section 110, the board may determine and declare that bonds will be issued and paid, and the assessments therefor levied, collected and augmented in accordance with the applicable provisions of Sections 14, 15, , 20, 21, 22, 24, 25, 26, 27, and 2$ of the Refunding Assessment Bond Act of 1935, as now or hereafter provided, in which case the applicable provisions of said act are incorporated herein and made a part hereof by reference. Appropriate changes shall be made in the form of the bond to show that it is for a public improvement or acquisition under this act. The list of unpaid assessments shall be filed, noticed, heard, and the bonds ordered issued, interest shall accrue from the date, the assessments thereafter paid before maturity, bonds called, premium paid, and illegal assessments and bonds reassessed, all as provided in the Improvement Bond Act of The bond shall be entitled Improvement Bond. The provisions for payment of the bond before maturity, as contained in the bond form in the Improvement Bond Act of 1915, shall be inserted in the place of the similar provision in said refunding bond form. There shall also be inserted in the bond form after the title of the refunding act the words as modified in the Fairfield-S uisun Sewer District Act. Sec The improvements authorized to be constructed or acquired by this article are restricted to those permitted to be constructed or acquired by the district under Article 4 of this act. Sec Notwithstanding the provisions of any act to the contrary, it shall not be necessary to obtain the consent of either of the cities to conduct assessment proceedings. It shall only be necessary to record the assessment in the office of the district engineer and in the office of the county surveyor or county engineer of the county. No assessment or bond hereafter levied or issued shall become a lien and no person shall be deemed to have notice thereof until a certified copy of said assessment and the diagram thereto attached shall be recorded in the office of the district engineer and in the office of the county surveyor or county engineer of the county. Sec Division 4 of the Streets and Highways Code shall not apply to proceedings under this act. Article 8. Finances and Taxation 14

15 Sec The lien for taxes for the first fiscal year after the district is formed shall attach on the first Monday in March or on the date the district is created, whichever is later. Sec Annually, at least 15 days before the first day of the month in which the board of supervisors is required by law to levy the amount of taxes required by law for county purposes, the board shall furnish to the board of supervisors a written statement of the following: 1. The amount necessary to pay the interest on bonds for that year, and the portion of the principal that is to become due before the time for making the next general tax levy. 2. The amount necessary to maintain, operate, extend, or repair any work or improvements of the district, and to defray all other expenses incidental to the exercise of any of the district powers or to pay any existing obligations of the district. Sec The board of supervisors shall at the time and in the manner of levying other county taxes, levy and cause to be collected a tax upon the taxable property in the district, based upon the last equalized assessment roll of the county, sufficient to pay the amounts set forth in the statement of the board. Sec If the board fails to furnish the written statement, the board of supervisors shall ascertain the amount necessary to pay the interest on the bonds for that year and the portion of the principal mat is to become due before the proceeds of the next general tax levy shall become available, and shall levy and cause to be collected the amount. Sec The tax shall be collected at the same time and in the same manner as the general tax levy for county purposes, and when collected shall be paid into the county treasury of Solano County to the credit of the proper district fund, as provided in Article 9 hereof. The board shall control and order its expenditure. Sec The tax is a lien on all property within the district and of the same force and effect as other liens for taxes, and its collection may be enforced by the same means as provided for the enforcement of liens for state and county taxes. Sec The principal and interest on district bonds shall be paid by the treasurer in the manner now or hereafter provided by law for the payment of principal and interest on the bonds of the county. Sec Compensation to the county for the performance of services described in this article is hereby fixed at one-half of 1 percent of all money collected for the district. Sec. 12$. Sections to 54903, inclusive, of the Government Code shall not apply to the district. Article 9. Funds 15

16 Sec There is created in the treasury of either of the cities, or of the district, as determined by the board, a fund entitled the Fairfield-Suisun Sewer District General Fund. Sec The proceeds of the sale of revenue bonds or general obligation bonds or proceeds of special assessments levied by the board shall be deposited with the treasurer and shall be by him placed in the fund to be called the Fairfield-Suisun Sewer District Construction Fund No._. (inserting number) Sec The money in any construction fund shall be used for the purpose indicated in the resolution calling the election upon the question of the issuance of bonds, or for the purpose described in the resolution of intention in the assessment proceedings, or for repayment of money borrowed for the purpose of financing the improvement for which bonds were subsequently issued, or the assessment levied, and for no other purpose, except that any money in the construction fund determined by resolution of the board to be in excess of the amounts required for completion of the improvement authorized may, by the resolution so determining, be transferred to any other fund of the district and be used for any lawful purpose. Sec There is created, at the discretion of the board, in the district treasury or in the treasury of either citya fund called the Fairfield-Suisun Sewer District Bond Fund, Series (inserting series number) in which the treasurer shall keep money levied by the board for that fund. Sec No part of the money in the bond fund may be transferred to any other fund or be used for any purpose other than the payment of principal and interest of the bonds of the district, or for repayment of money borrowed for the purpose of paying the principal and interest of the bonds of the district, until said bonds are fully paid, at which time it may be transferred to any other fund. Sec The budget laws do not apply to the district. Sec The district treasurer or any other person authorized by the district board to fulfill the treasurer s duties shall give bonds to the district conditioned for performance of their duties, fixed and approved by the governing body and that premium paid by the district. Sec Any investments made by the fairfield-suisun Sewer District shall be performed pursuant to Article 1 (commencing with Section 53600) of Chapter 4 of Part I of Division 2 of Title 5 of the Government Code. Article 10. Urgency Sec The purpose of this act is to form. the Fairfield-Suisun Sewer District in order that the area benefited may be served with sewer and storm drain facilities; special facts and circumstances, applicable to the area in which the district lies and not generally, makes the accomplishment of this purpose impossible under existing general laws, and therefore special legislation is necessary. The special facts are as follows: (a) The area has no facilities for the treatment and disposal of sewage and is consequently contaminating and polluting the waters of Suisun Bay. 16

17 (b) (c) Recent increases have resulted in a population disproportionate to the assessed valuation of taxable property in the area, and construction of adequate facilities cannot therefore be financed within the framework of existing general laws. The area is of strategic importance during times of war or threatened war because of the proximity of the Travis Air Force Base, formerly known as the Fairfield-Suisun Army Air Base, center of military air operations on the Pacific Coast. Influx of military men and their families has greatly aggravated the problem of sewage disposal in the area. Sec This act is an urgency measure necessary for the immediate preservation of the public peace, health or safety within the meaning of Article IV of the Constitution and shall take effect immediately. The facts constituting such necessity are: Water pollution and contamination are critical problems in the proposed district. State and local health authorities are agreed on the urgent need for immediate sewage treatment facilities in the area if a serious health condition is to be avoided. Inadequacy of existing law makes it necessary that this legislation take immediate effect so that necessary facilities may be provided. 17

18 Attachment #2 california legislature regular session ASSEMBLY BILL No. 530 Introduced by Assembly Member Aguiar-Curry (Coauthor: Senator Dodd) February 13, 2019 An act to amend Sections 18, 27, 29, 46, 48, 56, 59, 150, and 153 of, to repeal Section 28 of, and repeal and add Section 34 of, the Fairfield-Suisun Sewer District Act (Chapter 303 of the Statutes of 1951), relating to the Fairfield-Suisun Sewer District. legislative counsel s digest AB 530, as introduced, Aguiar-Curry. The Fairfield-Suisun Sewer District. The existing Fairfield-Suisun Sewer District Act creates the Fairfield-Suisun Sewer District and grants to the district various powers relating to the treatment and disposal of sewage. The existing act provides for the election of a board of directors for the district and administrative procedures for the operation of the district. Violation of regulations adopted by the board is a misdemeanor. This bill would make various administrative changes to the act, including removing the requirement that the district appoint a clerk and changing the posting requirements for regulations. Existing law requires all county officers to be liable upon their several official bonds for the faithful discharge of the duties imposed by the act. This bill would instead authorize the board of the district to require any of its employees or officers to be bonded. The bill would require the district to pay the cost of the bonds

19 AB Existing law prohibits the district from accepting or contracting for the disposal of sewage emanating from outside the district, except sewage from a public building or buildings of a public utility. Existing law authorizes the district to accept and contract for the disposal of sewage emanating from outside the district if those buildings are connected to the district s sewage treatment system on March 1, This bill would authorize the district to accept and contract for the disposal of sewage emanating from outside the district if those buildings are connected to the district s sewage treatment system on March 1, 2002, upon request of the landowner. This bill would remove the authorization to accept sewage from buildings of a public utility. The bill would authorize the district, upon the request of a landowner, to accept and contract for the disposal of sewage emanating from any building within the Middle Green Valley Specific Plan, if approved as specified. The bill would also authorize the district to accept organic materials, as defined, originating from within or outside the district as the board determines to be in the best interests of the district. This bill would make legislative findings and declarations as to the necessity of a special statute for the Fairfield-Suisun Sewer District. Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no. The people of the State of California do enact as follows: line 1 SECTION 1. Section 18 of the Fairfield-Suisun Sewer District line 2 Act (Chapter 303 of the Statutes of 1951), as amended by Section line 3 31 of Chapter 985 of the Statutes of 1985, is amended to read: line 4 Sec. 18. In the application to the district of laws, the procedure line 5 of which is made applicable to proceedings of the district, the terms line 6 used in those laws shall have the following meanings: line 7 (a) City council, council, and legislative body mean the line 8 board. line 9 (b) City, municipality and local agency mean the district. line 10 (a) Auditor means the person or entity designated as the line 11 auditor by the board. line 12 (c) line 13 (b) Clerk and city clerk mean means the clerk of the district. line 14 (d) Superintendent of streets, street superintendent, and line 15 city engineer mean the engineer of the district or any other person 99 19

20 3 AB 530 line 1 appointed to perform those duties. The person performing those line 2 duties shall be called the district engineer. line 3 (c) Middle Green Valley Specific Plan means the type, line 4 location, density, and extent of development, conditioned by line 5 conservation easements, as planned in the version of the Middle line 6 Green Valley Specific Plan adopted by the board of supervisors line 7 on August 8, line 8 (d) Organic materials means material that is organic in line 9 nature, including, but not limited to, plant material, food and line 10 beverage waste, and paper products, that can be recycled using line 11 treatment processes like composting, digestion, and other processes line 12 that decompose organic matter. The gas produced from the process line 13 may be captured and used to generate electricity and heat. line 14 (e) Tax collector means either the county tax collector or line 15 another the person designated as the tax collector by the board. line 16 (f) Treasurer and city treasurer means either the County line 17 Treasurer of the County of Solano or another means the person line 18 designated as the treasurer by the board. line 19 (g) Auditor and city auditor means either the County line 20 Auditor of the County of Solano or another person designated as line 21 the auditor by the board. line 22 SEC. 2. Section 27 of the Fairfield-Suisun Sewer District Act line 23 (Chapter 303 of the Statutes of 1951) is amended to read: line 24 Sec. 27. At its first meeting, and thereafter at the first meeting line 25 following such election of councilmen for the cities, the The board line 26 shall choose one of its members as president. president and elect line 27 other officers in accordance with board policy. line 28 SEC. 3. Section 28 of the Fairfield-Suisun Sewer District Act line 29 (Chapter 303 of the Statutes of 1951) is repealed. line 30 Sec. 28. At its first meeting, or as soon thereafter as may be line 31 practicable, the board shall appoint a clerk, who may be a city line 32 clerk. He shall serve at the pleasure of the board and his line 33 compensation shall be fixed by it. line 34 SEC. 4. Section 29 of the Fairfield-Suisun Sewer District Act line 35 (Chapter 303 of the Statutes of 1951) is amended to read: line 36 Sec. 29. All contracts, deeds, warrants, releases, receipts, and line 37 documents shall be signed in the name of the district by the line 38 president and countersigned by the clerk. in accordance with board line 39 policy

21 AB line 1 SEC. 5. Section 34 of the Fairfield-Suisun Sewer District Act line 2 (Chapter 303 of the Statutes of 1951) is repealed. line 3 Sec. 34. All county officers shall be liable upon their several line 4 official bonds for the faithful discharge of the duties imposed upon line 5 them by this act. line 6 SEC. 6. Section 34 is added to the Fairfield-Suisun Sewer line 7 District Act (Chapter 303 of the Statutes of 1951), to read: line 8 Sec. 34. The board may require an employee or officer to be line 9 bonded. The district shall pay the cost of the bonds. line 10 SEC. 7. Section 46 of the Fairfield-Suisun Sewer District Act line 11 (Chapter 303 of the Statutes of 1951) is amended to read: line 12 Sec. 46. The district may cooperate and contract with the United line 13 States, States or any agency thereof, with the State, State or any line 14 political subdivision thereof, or with either of the cities for the line 15 joint acquisition, construction construction, or use use, or aid in line 16 the construction construction, of any facilities which a facility that line 17 the district may be is empowered to construct under this act, line 18 including assignment to the district of any subventions of either line 19 of the cities. line 20 SEC. 8. Section 48 of the Fairfield-Suisun Sewer District Act line 21 (Chapter 303 of the Statutes of 1951), as amended by Section 1 of line 22 Chapter 426 of the Statutes of 2002, is amended to read: line 23 Sec. 48. (a) Except as otherwise provided in subdivisions (b) line 24 and (b), (c), and (d), the district may not accept or contract for the line 25 disposal of any sewage emanating from outside the district except line 26 sewage from a public buildings or buildings of a public utility line 27 subject to regulation by the Public Utilities Commission. building. line 28 (b) The district may may, upon request of a landowner, accept line 29 and contract for the disposal of sewage emanating from buildings line 30 outside the district if those buildings are connected to the district s line 31 sewage treatment system on March 1, line 32 (c) The district may, upon request of a landowner, accept and line 33 contract for the disposal of sewage emanating from buildings line 34 within the Middle Green Valley Specific Plan if approved pursuant line 35 to subdivision (d) of Section of the Government Code. line 36 (c) line 37 (d) Pursuant to Section of the Government Code, the line 38 Except as provided in subdivision (b), the district may contract line 39 contract, pursuant to Section of the Government Code, with line 40 Solano County or another public entity for the disposal of sewage 99 21

22 5 AB 530 line 1 emanating from buildings outside the district if the board of the line 2 district determines that the contract furthers the protection of public line 3 health and safety and is in the best interests of the district. line 4 (d) line 5 (e) Every user that is connected to the district s sewage treatment line 6 system is subject to the district s ordinances, resolutions, and other line 7 laws. line 8 (f) The district may accept organic material originating from line 9 within or outside the district as the board determines is in the line 10 district s best interest. line 11 SEC. 9. Section 56 of the Fairfield-Suisun Sewer District Act line 12 (Chapter 303 of the Statutes of 1951), as amended by Section 14 line 13 of Chapter 18 of the Statutes of 1992, is amended to read: line 14 Sec. 56. The district may sell contract for the purchase or sale line 15 of any effluent resulting from the operation of any sewage treatment line 16 plant constructed by or for the district. as the board determines is line 17 necessary and in the district s best interest. Sections and line of the Health and Safety Code are applicable to the district. line 19 SEC. 10. Section 59 of the Fairfield-Suisun Sewer District Act line 20 (Chapter 303 of the Statutes of 1951) is amended to read: line 21 Sec. 59. The district may adopt all necessary and proper line 22 regulations for all sanitary purposes not in conflict with the laws line 23 of this State. Any A person who violates any a regulation of the line 24 district is guilty of a misdemeanor. A regulation of the board shall line 25 be adopted by ordinance and ordinance, shall be posted for one line 26 week in three public places in each of the cities published pursuant line 27 to Section 6061 of the Government Code, and shall take effect line 28 upon expiration of the week of such posting. publication. A line 29 subsequent finding of the board, entered in its minutes, that posting line 30 publication has been made is conclusive evidence that the posting line 31 has been publication was properly made. line 32 SEC. 11. Section 150 of the Fairfield-Suisun Sewer District line 33 Act (Chapter 303 of the Statutes of 1951), as amended by Section line of Chapter 489 of the Statutes of 1997, is amended to read: line 35 Sec There is created in the treasury of either of the cities, line 36 or of the district, as determined by the board, of the district a fund line 37 entitled the Fairfield-Suisun Sewer District General Fund. line 38 SEC. 12. Section 153 of the Fairfield-Suisun Sewer District line 39 Act (Chapter 303 of the Statutes of 1951), as amended by Section line of Chapter 489 of the Statutes of 1997, is amended to read: 99 22

23 AB line 1 Sec There is created, at the discretion of the board, in the line 2 district treasury or in the treasury of either city, treasury, a fund line 3 called the Fairfield-Suisun Sewer District Bond Fund, Series line 4, (inserting series number) in which the treasurer shall keep line 5 money levied by the board for that fund. line 6 SEC. 13. The Legislature finds and declares that a special line 7 statute is necessary and that a general statute cannot be made line 8 applicable within the meaning of Section 16 of Article IV of the line 9 California Constitution because of the special circumstances facing line 10 the Fairfield-Suisun Sewer District and the need for acceptance line 11 and disposal of sewage in the Middle Green Valley Specific Plan line 12 area. O 99 23

24 Attachment #3 Greg Baatrup From: Sent: To: Cc: Subject: Attachments: Duane Kromm Monday, March 4, :52 AM 'MacDonald, Jimmy' Greg Baatrup; 'Bernadette S. Curry'; Joseph Green-Heffern RE: Fairfield-Suisun Sewer District legislation Recommended amendments to draft AB530 v docx Jimmy Attached are our recommended amendments to AB530. As I mentioned below, our primary concern has to do with making sure this legislation does not inadvertently open up areas of rural Solano County to suburban/urban levels of development. Solano County has a long standing land use policy of What is urban shall be municipal. The Orderly Growth Committee has worked for 35 years, through 3 county wide land use elections to ensure that this policy remains firmly in place. We see our recommended amendments as consistent with this long standing land use policy. Please let us know if you would like another meeting, or a further discussion. We are quite willing to meet or chat at your convenience. I have included the Fairfield Suisun Sewer District staff on this message so they will see exactly what we are requesting. Thanks for your willingness to work with us Jimmy. Duane From: Duane Kromm <dkkromm@gmail.com> Sent: Friday, March 1, :26 AM To: 'MacDonald, Jimmy' <James.MacDonald@asm.ca.gov> Cc: michaelzeiss@hotmail.com; 'Carol & Bob Berman' <bob@nicholsberman.com>; Joseph Green Heffern <jm.greenheffern@gmail.com>; mjfarley01@gmail.com; 'Jack & Leslie Batson' <jsbatson@prodigy.net>; 'Osborn Sannie' <sannie@aol.com> Subject: RE: Fairfield Suisun Sewer District legislation Jimmy Thanks for reaching out. First, I am cc ing other OG folks here so nobody is left out of the loop. As you have probably heard we have met with FSSD staff and spoken out at Fairfield and Suisun City Council meetings, along with the Board of Supervisors this week. We are a bit perplexed that the three local governments passed resolutions supporting the FSSD request for legislation, but have not voted on AB530, in spite of our pointing out that the bill has been introduced. The substance of dealing with bio solids in particular still troubles us. We plan to develop our best shot at proposed language amendments this weekend. The essence of our concerns are that the language in the bill seems to make it possible for FSSD to receive materials from package and alternative sewage treatment processes which could be built in unincorporated Solano County to support development densities greater than allowed under current County standards. We already know the Woodcreek 66, or 60, project is waiting in the wings. This is the project approved by the County but rejected by the courts in 2017, and that was then included in the first pass for FSSD legislation revisions, but rejected by the FSSD Board after a contentious public process. We believe other property owners are watching and waiting to try and get sewage service via this one off process. 1 24

25 We support FSSD s advanced technology for treating organics and bio solids to a higher standard for agricultural fertilizer. But we fear that the technology that improves fertilizer quality for local farms could also open the door for more farmlands to be developed. Our discussion with FSSD was a stalemate. They insisted they do not do land use and they do not want restrictions on what they can bring in for treatment. The land use argument is patently untrue as FSSD did engage in land use when their staff recommended providing connections to multiple parcels in Suisun Valley at Rockville Corners. Neither the County nor any other agency had made land use recommendations for these parcels, except for Woodcreek 66. The other parcels are examples of who could send bio solids to FSSD if this bill is passed as written. We are open to any thoughts you might have. Our goal is to keep agricultural and open space lands in their productive and natural states. Our attorney at Shute, Mihaly and Weinberger has suggested language that we will evaluate this weekend. We are trying to work with cooperatively and hope to not oppose the bill. Duane From: MacDonald, Jimmy <James.MacDonald@asm.ca.gov> Sent: Friday, March 1, :22 AM To: Duane Kromm <dkkromm@gmail.com> Subject: RE: Fairfield Suisun Sewer District legislation Hi Duane, Hope all is well. I wanted to quickly follow up with you on your discussions with the sewer district and your remaining concerns with the bill. It has been a while since our discussion on this issue. Could you please go over your remaining concerns again with the language in AB 530 and the reasons for those concerns? Essentially, why do you have concerns with the district having the authority to purchase effluent and accept organic matter? I want to make sure I continue to articulate your concerns correctly to my boss as best as possible. Thanks again, Jimmy Jimmy MacDonald Consultant Assembly Local Government Committee (916) (916) (fax) From: Duane Kromm <dkkromm@gmail.com> Sent: Monday, February 18, :48 PM To: 'Lori Wilson' <lwilson@suisun.com>; hprice@fairfield.ca.gov; pbertani@fairfield.ca.gov; cct707@aol.com; cmoy@fairfield.ca.gov; rvaccaro@fairfield.ca.gov; msegala@suisun.com; aadams@suisun.com; jday@suisun.com; 2 25

26 Cc: 'David White' 'Carol & Bob Berman' Joseph Green Heffern 'Greg Baatrup' MacDonald, Jimmy 'Bernadette S. Curry' Subject: Fairfield Suisun Sewer District legislation Dear Mayors and Council members Attached are a letter from the Solano County Orderly Growth Committee and a copy of AB530. We are asking your Councils to defer taking a position on this legislation for one meeting. Please see our letter for an explanation. One of our members will be at your meetings. For Suisun, I did not know who on staff to copy with this information, could one of you please forward it to the appropriate staff person. Duane Kromm cell Never give up, Never give in! 3 26

27 Recommended amendments to draft AB 530 from Solano County Orderly Growth Committee version 1 March 2019 Section and subsection numbers, and current wording, refer to the 2/14/2019 text posted at: Section 1 (d) Organic materials means material that is organic in nature, including, but not limited to, plant material, food and beverage waste, and paper products, that can be recycled using treatment processes like composting, digestion, and other processes that decompose organic matter. The gas produced from the process may be captured and used to generate electricity and heat. Organic Materials does not include sewage from residential units or effluent resulting from the operation of any sewage treatment plant. [ Note: the recommended amendment narrowly excludes sewage from residential units rather than broadly excluding sewage because FSSD expressed concern that food and beverage waste would almost always include some sewage from the toilets located within the food / beverage plant. ] Section 8 Sec. 48 (f) The district may accept organic materials originating from within or outside the district as the board determines is in the district s best interest. [Note: the missing s here is probably a typo; the word should be materials to match the definition of organic materials within Section 1 ] Section 9 Option 1 for Section 9: Sec. 56. The district may contract for the purchase or sale of any effluent resulting from the operation of any sewage treatment plant as the board determines is necessary and in the district s best interest. Sections i and ii of the Health and Safety Code are applicable to the district. Notwithstanding the foregoing, the district shall not purchase or accept effluent or treated wastewater from membrane bioreactor wastewater treatment plants, or other onsite wastewater treatment systems, designed to serve buildings outside the district, except where district sewage disposal services are authorized pursuant to Section

28 Option 2 for Section 9: Sec. 56. The district may contract for the purchase or sale of any effluent resulting from the operation of any sewage treatment plant that primarily serves only incorporated cities within Solano County, or any sewage treatment plant that provides service in counties other than Solano, as the board determines is necessary and in the district s best interest. Sections ii and iii of the Health and Safety Code are applicable to the district. [Note: Option 2 is intended to allow FSSD to continue its existing contracts outside of Solano while simultaneously preventing future contracts with unincorporated areas within Solano.] References for cited code sections: i ii HSC It [the sanitary district] may sell, or otherwise dispose of, any water, sewage effluent, fertilizer, or other byproduct resulting from the operation of a sewerage system, sewage disposal plant, refuse disposal plant or process, or treatment plant, and construct, maintain, and operate such pipelines and other works as may be necessary for that purpose. HSC It [the sanitary district] may construct, maintain, and operate such pipelines or other works as may be necessary to conserve and put to beneficial use any water or recycled effluent recovered from the operation of the wastewater system, plant, or works, by sale or disposition for agricultural or industrial purposes, or by discharging or spreading the water or recycled effluent in such a manner as to percolate into the underground gravels and replenish the natural water resources. 2 28

29 March 14, 2019 MEMORANDUM TO: FROM: SUBJECT: Executive Committee Greg Baatrup, General Manager Report on State Legislation Recommendation: 1. Receive Report and File 2. Discuss authorizing the General Manager to send position letters Discussion: A number of bills impacting the wastewater industry have been introduced this year. The CASA State Legislative Committee will be meeting on March 15, 2019 to review and take positions. Staff will provide a summary of the most significant bills to the Executive Committee. In addition, the Board has not established a policy about positions on legislation. Historically, the District has relied on CASA positions to represent District position. CASA s State Legislation Committee will likely ask its member agencies to provide position letters on several bills this session. Without a policy, the default procedure is to bring requests to the Board of Directors. This default position may not allow timely responses and the Executive Committee should discuss authorizing the General Manager to send position letters on the District s behalf. 29

30 March 14, 2019 MEMORANDUM TO: FROM: Executive Committee Greg Baatrup, General Manager SUBJECT: Approve Joint Community Facilities Agreement between the City of Fairfield and Fairfield-Suisun Sewer District Recommendation Board of Directors authorize the General Manager to execute the Joint Community Facilities Agreement. Discussion The City of Fairfield is forming a Community Facilities District (CFD) under the Mello-Roos Community Facilities Act of 1982 (Mello-Roos Act) for the purpose of financing public infrastructure required for the One Lake development. Under Section of the Mello- Roos Act, the City must enter into a Joint Community Facilities Agreement (JCFA) with any other public agency that will own or operate some of the public infrastructure financed by the CFD. Some of the sewer improvements to be financed by the CFD will be owned and operated by the Fairfield-Suisun Sewer District (District). The City of Fairfield staff requests the agreement be executed, following the approval of the District s governing body, prior to the City Council s public hearing on the CFD, which is expected to occur on May 7. The primary purposes of the JCFA are (1) to meet the requirement of Section of the Mello-Roos Act for an agreement and (2) to document the District s agreement to comply with the federal tax law rules that govern facilities financed by tax-exempt bonds. District Counsel Curry has reviewed the agreement, taking no exceptions. Attachments: Attachment 1 Joint Community Facilities Agreement 30

31 Attachment # Jones Hall Draft JOINT COMMUNITY FACILITIES AGREEMENT For City of Fairfield Community Facilities District No (One Lake) THIS JOINT COMMUNITY FACILITIES AGREEMENT (this Agreement ), dated as of, 2019, is by and between the City of Fairfield (the City ) and the Fairfield- Suisun Sewer District (the Sewer District ) BACKGROUND A. The City is conducting proceedings for the establishment of a community facilities district, which the parties expect to be named City of Fairfield Community Facilities District No (One Lake) (the CFD ), under the Mello-Roos Community Facilities Act of 1982, as amended, Part 1 (commencing with Section 53311) of Division 2 of Title 5 of the California Government Code (the Act ); B. The CFD is proposed to be established for the purpose of financing certain public capital facilities (the Facilities ) and public services, as more completely described in Exhibit A to Resolution No. of the City, which was adopted by the City Council on, 20 (the Resolution of Intention ). C. A portion of the Facilities will be owned and operated by the Sewer District (the Sewer District Facilities ). The Sewer District Facilities are described on Exhibit A to this Agreement, which exhibit is incorporated herein. D. The City anticipates issuing, for and on behalf of the CFD, one or more series of bonds or incur other form(s) of indebtedness (collectively, the Bonds ) secured by special taxes to be levvied on non-exempt property located within the boundaries of the CFD for the purpose of financing the Facilities. Pursuant to Section of the Act, the City may finance through the CFD the Sewer District Facilities only pursuant to a joint community facilities agreement between the City and the Sewer District. E. The City and the Sewer District have determined that it would be of benefit to the residents of each of their respective jurisdictions to enter into this Agreement to provide for the financing of the Sewer District Facilities by the City through the CFD. AGREEMENTS In consideration of the mutual promises and covenants set forth herein, and for other valuable consideration, the sufficiency of which is hereby acknowledged, the City and the Sewer District agree as follows: 31

32 1. Agreement. This Agreement constitutes a joint community facilities agreement, within the meaning of Section of the Act pursuant to which the CFD will be authorized to finance the acquisition and construction of the Sewer District Facilities. 2. Bonds. If the CFD is formed, the City Council of the City, acting as the legislative body of the CFD, may, in its sole discretion, authorize the issuance of Bonds. The Sewer District has no right to compel the formation of the CFD or the issuance of the Bonds. 3. Construction of Sewer District Facilities. The City and the District expect the Sewer District Facilities to be constructed by the developer of the property in the CFD. Payment of the purchase price of the Sewer District Facilities by the City will be governed by that certain Acquisition Agreement, dated as of, by and between the City and Canon Station LLC, a California limited liability company (together with any successors and assigns, the Developer ). The Sewer District acknowledges that, under the Acquisition Agreement, the Developer is responsible for coordinating with the Sewer District with respect to plan approval and inspections of the Sewer District Facilities by the Sewer District, and that the Developer and the Sewer District must notify the Public Works Director of the City that the Sewer District has taken final action to accept dedication of or transfer of title to the Sewer District Facilities to the Sewer District. 4. Federal Tax Matters. The Sewer District hereby makes the following covenants regarding its proposed use of the Sewer District Facilities: a. Expenditure of Allocated Bonds Proceeds. To assist the City in complying with federal tax law matters in connection with the issuance of any Bonds, the Sewer District agrees that, at or before the issuance of a Series of Bonds that will finance Sewer District Facilities, the Sewer District will execute and deliver such certifications and covenants as may be reasonably required for the City s bond counsel to conclude that interest on such Bonds will be excluded from gross income for federal income tax purposes. b. Private Business Tests; Private Loan Financing Test. The Sewer District shall assure that the Sewer District Facilities are not used so as to cause the Bonds to satisfy the private business tests of section 141(b) of the Internal Revenue Code of 1986, as amended (the Code ), or the private loan financing test of section 141(c) of the Code. c. Ongoing Reporting. The Sewer District agrees to allow the City to inspect the records relating to the use of the Sewer District Facilities at any reasonable time upon reasonable notice. 5. Ongoing Operation and Maintenance. The City and the Sewer District agree that the Sewer District shall be solely responsible for the maintenance and operation of the Sewer District Facilities. 6. Indemnification. a. Indemnification by the City. The City shall assume the defense of, indemnify and save harmless, the Sewer District, its officers, employees and agents, and each and every one of them, from and against all actions, damages, claims, losses or expenses of every type and description to which they may be subjected or put, by -2-32

33 reason of, or resulting from, any act or omission of the City with respect to this Agreement; provided, however, that the City shall not be required to indemnify any person or entity as to damages resulting from negligence or willful misconduct of such person or entity or their officers, agents or employees. b. Indemnification by the Sewer District. The Sewer District shall assume the defense of, indemnify and save harmless, the City, its officers, employees and agents, and each and every one of them, from and against all actions, damages, claims, losses or expenses of every type and description to which they may be subjected or put, by reason of, or resulting from, any act or omission of the Sewer District with respect to this Agreement, and the design, engineering, construction, operation and maintenance of the Sewer District Facilities. 7. Severability. If any part of this Agreement is held to be illegal or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall be given effect to the fullest extent reasonably possible. 8. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto. This Agreement may not be assigned by either of the parties thereto. 9. Waiver. Failure by a party to insist upon the strict performance of any of the provisions of this Agreement by the other party, or the failure by a party to exercise its rights upon the default of the other party, shall not constitute a waiver of such party s right to insist and demand strict compliance by the other party with the terms of this Agreement thereafter. 10. Amendments. Amendments to this Agreement shall be made only by written instrument executed by each of the parties hereto. 11. Notices. Under this Agreement, notices shall be sent by first class mail or messenger as follows: To the City: Finance Director City of Fairfield 1000 Webster Street Fairfield CA To the Sewer District: [to come] 12. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original. 13. Governing Law. This Agreement be governed and construed in accordance with the laws of the State of California

34 IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first-above written. CITY OF FAIRFIELD By: Its: FAIRFIELD-SUISUN SEWER DISTRICT By: Its: -4-34

35 APPENDIX A SEWER DISTRICT FACILITIES A-1 35

36 March 14, 2019 MEMORANDUM TO: FROM: Executive Committee Greg Baatrup, General Manager SUBJECT: Report on City of Fairfield s Proposal to Increase Sewer Funding Recommendation: Receive Report and File Discussion: At its Annual Workplan Workshop on February 23, 2019, the Fairfield City Council received a presentation on the adequacy of the funding for its sewer collection system. The presentation from the City Public Works staff showed the City is in the midst of a multi-year rehabilitation and repair program for parts of their Sewer Collection System. The City has identified a funding shortfall for the sewer rehabilitation and replacement projects and the need to increase funding to complete the planned work. At the workshop, City staff identified five potential funding options, two of which impact the District. A copy of the Workshop document for this item is included as Attachment 1. The two options impacting the District suggested by City staff to the City Council include 1) Amend the Agreement (aka 1965 Agreement) between the District and the City to fund City needs and 2) Have the District pursue a rate adjustment in 2019 to fund City needs. Option 1 proposes the District provide the increased funding within the current rate structure, effectively allocating District reserve funds, plus have the District pursue future rate increases for future City replacement needs. Option 2 proposes the District impose a rate increase for 2019 to fund City replacement needs. Based on rough estimates, the District would need to increase sewer service charges for 2019 from $40.40 per month to around $44.40 or about 10% more than the currently planned 3.6% increase. The District s Proposition 218 Notice allows only a 3.6% increase for FY2019/2020, FY 2020/21, and FY 2021/22. City staff identified three other options, including; allocate funds from the City General Fund, pursue a City-sponsored rate dedicated to sewer replacement, and maintain Status Quo. 36

37 March 14, 2019 Memo - Report on City of Fairfield s Proposal to Increase Sewer Funding Page 2 of 2 On March 19, the Fairfield City Council will be asked to approve Sanitary Sewer Funding as one of several priority items for the City. The page that addresses Sanitary Sewer Funding from the March 19 th agenda item is included as Attachment 2. This issue is complicated and, as noted in the March 19 Council Goals document, will require research on the funding gaps and the implications of Proposition 218 before a recommendation is brought forward. In addition, the District s Sewer Service Charge is a single charge that funds both the Fairfield and Suisun City sewer operation and maintenance budgets. Staff recommends continuing to work with both the Fairfield and Suisun City staff on this issue to: Identify the needs and potential solutions. To have solutions adequately researched, including compliance with State rate-setting laws such as Proposition 218. Understand implication to all three agency budgets. Attachments: Attachment 1 - February 23, 2019 Memo to Mayor and City Council from City staff on Sanitary Sewer Collection System Attachment 2 - Excerpt from March 19, 2019 City Council Agenda showing the City s workplan for Sanitary Sewer Funding. 37

38 Attachment #1 38

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44 Attachment #2 44

45 March 14, 2019 FI-160 MEMORANDUM TO: FROM: Executive Committee Greg Baatrup, General Manager Helen Gaumann, Director of Administrative Services SUBJECT: Fiscal Years 2019/20 & 2020/21 Budget and Long-Term Financial Plan Recommendation Staff recommends the Executive Committee review and comment on the following documents which are intended to be presented to the full Board on March 25, ) Draft FY 2019/20 & FY 2020/21 Budget and Long-Term Financial Plan 2) Draft Resolution No , Approving the Budget 3) Draft Ordinance No , Annual Storm Drain Maintenance Service Charges 4) Draft Ordinance No , Sewer Service Charges and Capacity Fees for FY 2019/20 & FY 2020/21 Summary The Long-Term Financial Plan (Financial Plan) has been a tool to review historical revenue and expenses and to project future revenue and expenses. The Financial Plan model projects many years out to minimize possible impacts to rates as revenue and expenses projections change. The Financial Plan presents revenue and expenses through FY 2027/28 and shows the District s programs are adequately funded. The proposed budget includes: 1. No increase in Storm Drainage Maintenance Service Charges 2. A $1.35 per month increase (3.6% increase over FY 2018/19 rates) for Residential Customers for FY 2019/20 and $1.40 per month increase (3.6% increase over FY 2019/20 rates) for FY 2020/211, and 3.6% for each year for the other customer classes as shown in the draft Ordinance. 3. Payments to reduce Pension and Other Post Employment Benefit Unfunded Liability The proposed budget does not include modifying the City Sewer Line Maintenance shown on Schedule 2, Line 11 for sewer collection system operations. This issue was raised by City of 45

46 March 14, 2019 Proposed FY2019/20 & FY2020/21 Budget Page 2 of 3 Fairfield staff to the Fairfield City Council at their February 23, 2019 City Council Annual Workplan Workshop but has not been considered by the District Board of Directors. In 2005, the Rate Study and Long-Term Financial Plans identified a need to increase residential rates at 5.2% per year and similar increases for other customer classes. The District generally implemented those increases since 2005 according to that plan. The 2017 Rate Study and Long- Term Financial Plan forecasts residential rate increases for the next 5 years at approximately 3.6% per year. These increases will ensure the District has adequate revenue to meet its debt repayment obligation, rebuild and rehabilitate aging infrastructure, and rebuild reserves. Discussion As has been past practice, the Budget presents the estimated revenue and expense for the Operations Fund, Capital Fund, and the Drainage Maintenance Fund. The Budget continues to use a multi-year fiscal model to project and present revenue, expense, and reserves. The Financial Plan presents a long-range view of District finances through FY 2027/28. The Long- Term Financial Plan shows programs are adequately funded. The Operations Fund receives revenue from Sewer Service Charges and covers the expense of operating and maintaining the treatment, conveyance, collection and disposal assets. The Financial Plan shows the Operations Fund to be adequately funded and a rebuilding of the Major Maintenance reserve is on track for the next ten fiscal years. The Capital Fund receives revenue from Connection Fees and covers the expense of expanding facilities to accommodate the growth in the service area. With the slow economic conditions, new connections have dropped significantly and Connection Fee revenue has been less than projected. Capital Reserves are the lowest they have been in more than 25 years. With the improvement in the economy and retirement of connection fee debt service in 2016, the Capital Fund reserves are projected to improve and cover the expenses. The Drainage Maintenance Fund does not adequately fund for the drainage maintenance services. The amount the District remits to the cities for local maintenance is not keeping up with the aging infrastructure and new storm water regulations. Even though rates are not keeping up, the process to change rates is onerous, expensive and unlikely to be approved. Proposition 218 requires an election of the residents/property owners to increase rates. The success rate around the state for getting voter approval is very low. Two-year Budget In March 2013, the Board approved a change from annual to biennial budget process which was both effective and efficient, yielding lower costs for the budget preparation. The proposed twoyear budget doesn t lock the Board into a single outcome for two years. If circumstances require a budget adjustment, the Board can take actions if necessary. 46

47 March 14, 2019 Proposed FY2019/20 & FY2020/21 Budget Page 3 of 3 Rate Increase and Proposition 218 Notice The District mailed a Proposition 218 notice to all District customers in February 2017 presenting the maximum sewer services charge for FY2017/18 through FY 2021/22. The rates presented in draft Ordinance reflect a 3.6% increase in each year of the two fiscal years and are consistent with the February 2017 notice. Attachments: Draft FY 2019/20 & FY 2020/21 Budget and Long-Term Financial Plan 47

48 Attachment #1 Budget and Long-Term Financial Plan Fiscal Years 19/20 and 20/21 Fairfield-Suisun Sewer District Fairfield, CA 48

49 Budget and Long-Term Financial Plan Fiscal Years 2019/20 and 2020/21 Fairfield-Suisun Sewer District Fairfield-Suisun Sewer District protects public health and the environment for the communities we serve in an efficient, responsible, and sustainable manner. 49

50 2019/20 & 2020/21 Budget and Long-Term Financial Plan 2019 Board of Directors Rick Vaccaro, President Lori Wilson, Vice President Anthony Adams Pam Bertani Jane Day Catherine Moy Harry Price Michael Segala Chuck Timm Wanda Williams Management Team Greg Baatrup, General Manager Talyon Sortor, Assistant General Manager Helen Gaumann, Director of Administrative Services Jordan Damerel, Director of Engineering District Counsel Bernadette Curry 50

51 2019/20 & 2020/21 Budget and Long-Term Financial Plan Table of Contents Page Memorandum to the Board of Directors: Summary Goals...3 Summary of Actual and Projected Revenues and Expenses Budget...8 Long-Term Financial Plan Storm Drain Ordinance No Budget Resolution No Sewer Capacity and Service Charge Ordinance Ordinance No /20 Budget and Long-Term Financial Plan Schedules: Schedule 1A /18 Actual Compared to Budget...20 Schedule 1B /19 Projected Actual Compared to Budget...21 Schedule 2 - Wastewater Operations Fund Forecast...22 Schedule 3 - Wastewater Capital Fund Forecast...23 Schedule 4A - Capacity Fee Funded Capital Improvement Plan...24 Schedule 4B SSC Funded Capital Improvement Plan...25 Schedule 5 - Reserves Forecast...26 Schedule 6 - Drainage Maintenance Fund Forecast...27 Schedule 7 - Wastewater Forecast Assumptions

52 2019/20 & 2020/21 Budget and Long-Term Financial Plan Page 2 MEMORANDUM DATE: March 25, 2019 TO: FROM: Board of Directors Gregory G. Baatrup General Manager Helen Gaumann Director of Administrative Services SUBJECT: FY 2019/20 & 2020/21 Budget and Long-Term Financial Plan SUMMARY We are pleased to submit a two-year budget for Fiscal Years 2019/20 and 2020/21, along with the Long-Term Financial Plan, for Board adoption. The Long-Term Financial Plan has proven to be a reliable tool for more than 25 years to predict revenue and expenses and build reserves. The Board has relied on a long-term capital and financial planning to guide their decisions on budgets, thereby avoiding rate spikes that can come from short-term planning. Through prudent management, the District keeps costs to its ratepayers low and has one of the lowest sewer service charges in the San Francisco Bay Area. The District operates cost-efficient, award-winning wastewater and stormwater utility that protects public health and the environment. For approximately $1.35 per day, the District collects, conveys, treats and safely disposes an average of 230 gallons of sewage per day from each residential customer in the community. Prior Budgets and Long-Term Financial Plans forecasted increased expenses and a need for increased revenue. This budget includes planned rate increases for residential customers of $1.35 per month in FY2019/20 and $1.40 per month in FY2020/21. The rate for all customer classes will increase as planned and noticed in the February 2017 Proposition 218 notice. The Long-Term Financial Plan shows that all three of the District s programs (Operations, Capital and Drainage Maintenance) are adequately funded and legal debt covenants are met. The Operations fund revenue source comes, primarily, from the sewer service charge, which supports expenses and initiatives in the District s facilities. The Capital Fund accounts revenue source comes, primarily, from connection fee, and pays for expenses to accommodate growth in the District s service area. The Drainage Maintenance primary revenue source is a fee charged to each property in the service area and pays expenses related to storm drain facilities. As District assets age, the District will need to plan and save funds for the replacement of these assets. The replacement value of the plant assets at the end of FY 2017/18 was approximately $651 million, which includes the treatment plant and collection system. While the FY 17/18 year end balance in the Major Maintenance Reserve was approximately $27.8 million, 4.3% of the replacement value of the plant assets. This Major Maintenance Reserve is intented to rise each year to continue the rebuilding trend over the next ten years. Schedule 4A shows the proposed 10-year capital improvement plan 52

53 2019/20 & 2020/21 Budget and Long-Term Financial Plan Page 3 brought about by anticipated growth in the District s service area. Accumulating sufficient Major Maintenance Reserve is critical for funding major repairs of the treatment plant facilities, upgrades to infrastructure to meet ever-changing regulatory requirements, and eventual treatment plant replacement. At the end this ten-year forecast the treatment plant and sewer system will have an estimated replacement value of $964 million with a projected Major Maintenance Reserve of $90.4 million or 9.4% of its replacement value. As the treatment plant ages higher replacement and upgrade costs are anticipated, as illustrated in Schedule 4B. Some future replacement needs can not be planned or scoped out at this stage. The Capital Program is funded from Connection Fees. With the economic rebuilding and recovery, housing development in Fairfield has returned resulting in a positive cashflow in the Capital Program. This welcomed trend is projected to continue based on the City of Fairfield s growth projections (Schedule 7, Line 29). This positive cashflow allows the Capital Program to rebuild its reserve fund and repay the Operations Fund for the interfund borrowing needed during the economic downturn and when Capital Program Reserves were exhausted. Total interfund loans were $2.2 million with a fiveyear repayment plan at a rate of 1.3%. Repayment started in fiscal year 16/17 and is expected to be fully paid by fiscal year 20/21. Additionally, the Capital Program is obligated to repay 25%, proportionate to growth-related portion, of the State Revolving Fund loan with the State Water Resources Board (State Board) State Revolving Fund (SRF) program to finance the Blower Rehabilitation project. Total cost of the Blower Rehabilitation Project is estimated at $10.6 million. The State Board granted the District up to $4 million grant in the form of loan forgiveness, so the District will only repay $6.5 million. Of the project cost, 25% is growth-related and will be repaid with connection fee revenue, while the remaining 75% will be re-paid from the Major Maintenance Reserve. Capital reserve is projected at $8.2 million at the end of fiscal year 18/19, and it is projected that this reserve will be in re-building trend in the next ten years (Schedule 5, Line 12). GOALS Under the Board of Directors guidance, District management set the following long-term goals: 1) Maintain the lowest residential sewer service rate in Solano County and amongst other neighboring agencies 2) Maintain operating cash reserves of at least three months of operating expenses to ensure smooth cash flow. 3) Maintain minimum debt service coverage ratio as legally mandated. 4) Pay system expansion capital improvement plan from capacity fees. 5) Manage long-term employment-related liabilities to a sustainable level. 6) Build up major maintenance/replacement reserves to ensure a source of funds for major maintenance and repairs, upgrades and eventual replacement of the treatment plant and sewer system. 7) Minimize debt and long-term borrowing. 53

54 2019/20 & 2020/21 Budget and Long-Term Financial Plan Page 4 SUMMARY OF ACTUAL AND PROJECTED REVENUES AND EXPENSES Revenue Sewer Service Charges The largest source of District revenue is derived from residential, commercial, and industrial customers. Residential, single and multi family customers, are billed a flat monthly fee, while commercial customers are billed based on water consumption. Industrial, commercial customers, including Travis Air Force Base (TAFB), Jelly Belly, Producers Dairy, and Anheuser-Busch, represent approximately 15% of total sewer service charges, while single and multi family customers represent 85%. This budget includes slightly increasing rates consistent with the most recent Cost of Service and Rate Study and subsequent Proposition 218 Notice. The proposed rate increase of 3.6% is necessary to pay for increasing regulatory cost, labor, keep up with inflation, and meet the goal of building up reserves for the future replacement of the treatment plant and sewers. The following table illustrates the sewer service revenue trend for all customer classes in the last 10 fiscal years: Fiscal Year Ended June 30, Revenues: Service charges $ 26,046 $ 25,904 $ 23,351 $ 23,067 $ 20,881 $ 19,445 $ 19,115 $ 18,895 $ 18,014 $ 16,960 Drainage fees 1,598 1,580 1,552 1,545 1,501 1,491 1,486 1,455 1,468 1,462 Interest income Other Capacity fees 2,079 2,478 2,835 3,157 2,647 2,472 1,405 1, Total revenues 30,436 30,444 28,046 28,049 25,675 23,636 22,306 21,742 20,945 20,029 Capacity Fees Capacity fees are one-time fees charged to new connections or to existing connections where a change in use will result in increased discharge to the treatment plant facilities. Sewer capacity charges are designed to help recover the costs of infrastructure and assets benefiting new development. The capacity forecast is updated annually and is based on the City of Fairfield s growth development forecast. Drainage Maintenance Fees On March 1, 1988 the District entered into a "Drainage Maintenance Agreement" with Fairfield and Suisun City. This agreement provided a mechanism for funding the maintenance of the "Fairfield Streams" federal flood control project which serves both cities. Although the District does not own any storm drainage facilities, it is authorized by statute to provide storm drainage services. The District created a storm drainage maintenance enterprise fund and established fees for users of the system which are collected on the county tax roll each year. Revenues are shared by the cities and the District for flood control activities. Currently, the District assists the cities by overseeing the Urban Runoff Management Program and operating and maintaining city-owned stormwater pumping stations. Annual rates remained unchanged at $20.23 per residence. Total annual revenues collected for the Drainage Maintenance Fund is approximately $1.6 million each year. 54

55 2019/20 & 2020/21 Budget and Long-Term Financial Plan Page 5 Interest Income Interest income earned on investment of District s available cash is projected at 2% of total revenues. Available cash is invested primarily with the Local Agency Investment Fund (LAIF), an investment pool, created by statute as an investment alternative for local governments and special districts. Participation in LAIF is voluntary. Additionally, the District also works with the California Asset Management Program (CAMP), a California Joint Powers Authority, providing professional investment services to California public agencies. Both LAIF and CAMP are permitted investment for local agencies under California Government Code Section Other Income The District receives a combination of miscellaneous and/or nonrecurring revenues such as cell tower and other property leases, as well as insurance dividends. This miscellaneous income is typically immaterial and is not a major source of District s revenue. Figure 1 illustrates revenue trend by source over the past ten fiscal years: REVENUE TREND BY SOURCE Sewer Service Charges Capacity Fees Interest Earnings Miscellaneous Drainage Fees Other Source $30 Millions $25 $20 $15 $10 $5 $0 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 Figure 1 55

56 2019/20 & 2020/21 Budget and Long-Term Financial Plan Page 6 Expenses Expenses in the Operating Fund or Fund 1 are grouped into Operating expenses (Schedule 2, Lines 8 through 16) and Major Maintenance expenses (Schedule 5, Line 21). The projected operating expenses for FY19/20 (excluding pension unfunded liability paydown) is relatively unchanged compared to FY17/18. This was a net result of increasing contractual costs such as billing, local sewer maintenance, and higher labor cost, offset by savings in biosolids processing cost and an unfilled position in the laboratory department. Fiscal Year Ended June 30, Expenses: Business operations 14,941 15,863 11,389 12,677 12,354 11,500 12,685 12,068 12,351 11,603 Sewer line maintenance 3,355 3,058 2,644 2,836 2,890 2,797 2,780 2,663 2,384 2,503 General and administrative 1,976 1,483 1,871 1,904 1,872 2,038 2,592 1,711 1,821 1,985 Billing and collection Interest expense Total expenses 21,104 21,287 16,857 18,434 18,153 17,434 19,186 17,304 17,769 17,400 In previous fiscal years the District has put major maintenance rehabilitation on hold to accommodate the economic downturn and low funds in the Major Maintenance Reserve. As the economy recovers and funds increase the District is now undertaking a comprehensive evaluation of its major maintenance needs and prioritizing projects accordingly. Those major maintenance expenses are included in Business Operations above. Future major maintenance requirements can be found in Schedule 5, Line 22. The Board-supported philosophy of building the Major Maintenance Reserve allows the District to keep up with upgrades to its aging capital assets without spiking sewer service charge rates. Figure 2 presents the annual Operating, Major Maintenance and Pass-through expenses. Pass-thru expenses are those contractual obligations to the cities for Utility Billing and Sewer Collection. The District collects and remits these amounts as part of Sewer Service Fees for the City of Fairfield and Suisun City. Likewise, the figure shows these expenses increased at a rate equal to cost-of-living increases. OPERATIONS FUND EXPENSES FSSD Operations Major Maintenance Fairfield and Suisun City Millions $25 $20 $15 $10 $5 $0 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 Figure 2 56

57 2019/20 & 2020/21 Budget and Long-Term Financial Plan Page 7 As indicated in Figure 2, Major Maintenance expenses vary year-to-year depending on rehabilitation/replacement needs and available resources. Funding for Major Maintenance projects comes from Operating revenue and from Major Maintenance Reserves. Using Major Maintenance Reserves reduces the rate impact as these expenses will vary significantly from year-to-year. BUDGET FYs 19/20 and 20/21 Revenues and Expenses Figure 3 and Figure 4 show the estimated revenues and expenses by type for fiscal years 19/20 and 20/21. Revenue forecasts are based on the City of Fairfield s growth projections. In general, forecasts assume slow but steady growth (Schedule 7, Lines 2 through 4). Sewer service revenues for 19/20 and 20/21 are projected at $27.8 and $29.1 million, respectively, a 4.7% increase year-over-year. Capacity fee revenues for the same period are projected at $3.2 and $3.7 million. Drainage maintenance revenues remained unchanged at $1.6 million, due to limitations of Proposition 13. Total revenues for fiscal year 19/20 includes loan proceeds from the State Revolving Fund of $6 million, while fiscal year 20/21 includes loan reimbursement of $4 million, classified as Other Funding Source. PROPOSED REVENUES AND OTHER FUNDING SOURCE FY 19/20 $37.4M FY 20/21 $35.2M Mllions $35 $30 $25 $20 $15 $10 $5 $0 Sewer Service Charges Capacity Fees Drainage Fees Other Funding Source Interest Figure 3 57

58 2019/20 & 2020/21 Budget and Long-Term Financial Plan Page 8 $12 PROPOSED EXPENSES AND CAPITAL IMPROVEMENT FY 19/20 $32.8M FY 20/21 $34.1M $10 Millions $8 $6 $4 $2 $0 Major Maint. & CIP Treatment O&M Debt Service Reg., Billing & Admin Sewer Line Maint. Drainage Maint. Figure 4 Total expenses, debt service, drainage maintenance, and capital improvement projects (CIP) were projected at $32.7 million in fiscal year 19/20 and $34.2 million in fiscal year 20/21. The increase in Major Maintenance & CIP is due primarily to the Blower Rehabilitation Project, and other projects as illustrated in Schedules 4A and 4B. There is no attempt to match expenses to revenues in any single year. Rather, the District relies on long-term financial planning where reserves are periodically built up to fund major projects in future years. This philosophy is instrumental in keeping sewer service rates levelized and the lowest in Solano County and amongst other agencies nearby. LONG-TERM FINANCIAL PLAN The Long-Term Financial Plan projects revenues and expenses for the three District funds. Figure 5 highlights the flow of funds and utilization of the District s Operations (Fund 1), Capital (Fund 2) and Drainage Maintenance (Fund 4) funds. Schedules 2 to 6 provide a comprehensive 10-year look at each revenue, expense and reserve amount. 58

59 2019/20 & 2020/21 Budget and Long-Term Financial Plan Page 9 Figure 5 59

60 2019/20 & 2020/21 Budget and Long-Term Financial Plan Page 10 Schedule 2 Wastewater Operations Fund Forecast The Operations Fund pays for all treatment plant and sewer system operating expenses, including collection, treatment, maintenance, major repairs, upgrades to facilities and eventual replacement, billing, regulatory activities, and administration. It receives revenue from user fees and related interest income. The Operations Fund receives no property tax revenues. Operating reserves is maintained at 25% of total operating expenses (Schedule 2, Line 17) and is intended to fund operational expenses in case of emergencies. Net revenue (revenues less expenses) is allocated to various funds for debt payment, operating reserves, and major maintenance reserves funding, if available. A portion of the net revenue is transferred to the Capital Fund to pay debt service and project costs attributable to the existing system only (not expansion costs), based on the most recent capacity study and master plan. Any net revenues at year-end are transferred to the Major Maintenance/Replacement Reserve. Contributions to the Major Maintenance/Replacement Reserve are made pursuant to the 2005 Board Policy, and are projected to average 1% of plant replacement cost over the 10-year period. These contributions help the District accumulate sufficient reserves for infrastructure maintenance and replacement. Assuming positive economic conditions continue, it is projected that the reserves will be replenished and will be in the build-up trend over the next 10-year period to fund future capital improvements. Schedule 3 Wastewater Capital Fund Forecast The Capital Fund receives revenues from capacity fees and related interest income. The Capital Fund receives no property tax revenues. Capacity fee revenues are based on growth forecasts for Fairfield and Suisun City. This fund pays for debt service and growth-related construction projects. Excess revenue is transferred to the Capital Reserve to fund future projects and to meet future debt service when capital revenue sources are diminished. In order to meet debt service payment and obligations the District made an interfund loan from its Major Maitenance Fund to Capital Fund during the economic downturn when capacity fee revenues were at its lowest. Repayment of the interfund loan to Major Maintenance started in fiscal year 16/17 and is expected to be paid off in fiscal year 20/21. Schedule 4A Capacity Fee Funded Capital Improvement Plan This represents the District s projects funded by capacity fee. Total identified projects during the 10-year period is approximately $13.6 million. Project costs reflect effects of inflation over time to avoid underestimating cost. 60

61 2019/20 & 2020/21 Budget and Long-Term Financial Plan Page 11 In order to minimize debt, funding is provided by capacity fees to the extent possible. Schedule 4B Sewer Service Charge Funded Capital Improvement Plan The portion of capital projects identified as correcting existing deficiencies (not expansion) is funded from Operations revenues. Total identified major maintenance projects as forecasted is approximately $54.6 million. Schedule 5 Reserves Debt Service Reserve In compliance with the State Revolving Fund (SRF) loan agreement, the District established a debt service reserve account of $737 thousand in November This reserve requirement is equivalent to one year of loan repayment. This reserve amount will increase when repayment for the Blower Project begins in fiscal year 20/21. This reserve is funded out of Major Maintenance Fund and is not available to the District until the loan is paid in full. Capital Reserve This reserve accumulates annual net revenues for two purposes: making cash contributions to capital projects and making debt service payments if capacity fee shortages are experienced. Figure 6 shows the life cycle of the Capital and Major Maintenance Reserves. Significant balances are periodically built up, then subsequently drawn down to pay for sewer and treatment plant expansion projects. Major Maintenance Reserve This reserve plays a key role, as it is a source of funds for major maintenance and repairs, upgrades and eventual replacement of the treatment plant and sewer system. In 2005, the Board adopted a policy on contributions to the Major Maintenance and Replacement Reserve which calls for a minimum of 1.0% of plant replacement cost to be contributed to the reserve each year that net income allows. Figure 7 compares the replacement cost of the treatment plant to the Major Maintenance and Replacement Reserve. In fiscal year 17/18 the replacement cost of the treatment plant is $651 million and estimated to be around $964 million at the end of this 10-year budget forecast. With the addition of new facilities and the compounding effect of inflation, in 50 years the replacement cost of the entire system will be over $3 billion. The Major Maintenance Reserve allows funding for future replacement and rehabilitation projects that have not yet been specifically scoped and planned. 61

62 2019/20 & 2020/21 Budget and Long-Term Financial Plan Page 12 This analysis points out the significant investment the District has in its treatment plant system and the need to continue prudent policies for funding future maintenance and replacement. By contributing to this reserve and using the reserve for rehabilitations and replacements, the District will avoid the expensive costs of debt to replace facilities and equipment at the end of the useful life of facility components. $90 STATUS OF RESERVES 25-Year Trend Capital Major Maintenance $80 $70 Millions $60 $50 $40 $30 $20 $10 $0 03/04 06/07 09/10 12/13 15/16 18/19 21/22 24/25 27/28 Figure 6 Mllions $1,000 $900 $800 $700 $600 $500 $400 $300 $200 $100 $0 COST OF TREATMENT PLANT VS. RESERVES Replacement Cost Major Maintenance/Replacement Reserve 16/17 18/19 20/21 22/23 24/25 26/27 Figure 7 62

63 2019/20 & 2020/21 Budget and Long-Term Financial Plan Page 13 Schedule 6 Drainage Maintenance Proposed expenses for FY 19/20 and 20/21 is consistent at $1.4 million; Figure 8 illustrates the breakdown of expenses by classification. Rates as illustrated on page 14, Ordinance 19-01, remained unchanged since fiscal year 2001/02. DRAINAGE MAINTENANCE PROPOSED EXPENSES FY 19/20 $1.4M FY 20/21 $1.4M $1,200 $1,000 Thousands $800 $600 $400 $200 $0 Local Facility Maintenance Regulatory Program Regional Maintenance Administration Figure 8 CONCLUSION The Board s continued support of long-range fiscal planning has produced a stable financial structure to meet the District s current and future needs given a range of possible community growth rates. The combination of prudent cost management and the District philosophy of building up reserves have served the District well and were instrumental in weathering the last recession and the long slow recovery that followed. Both Major Maintenance and Capital Reserves were at its lowest in the last few years; however, economic conditions are continuing to improve and District management are optimistic in rebuilding those much needed reserves. Of course, economic slowdown is inevitable, but with discipline and commitment to the philosophy of saving for the rainy days, the right decisions now will ensure a better financial position in the foreseeable future. ACKNOWLEDGMENT We thank the Board for its guidance and continued support of developing a sustainable budget and long-term financial plan. Special appreciation is given to department managers and District staff who assisted in the preparation of this budget. 63

64 2019/20 & 2020/21 Budget and Long-Term Financial Plan Page 14 FAIRFIELD-SUISUN SEWER DISTRICT ORDINANCE NO AN ORDINANCE AMENDING ORDINANCE NO AND ADOPTING WITHOUT INCREASE THE FAIRFIELD-SUISUN SEWER DISTRICT ANNUAL STORM DRAIN MAINTENANCE SERVICE CHARGES 1. THE BOARD OF DIRECTORS OF THE FAIRFIELD-SUISUN SEWER DISTRICT DOES HEREBY AMEND PARAGRAPH 2 OF SECTION 1 OF ORDINANCE NO AS FOLLOWS: 2. Schedule of Charges. The storm drain maintenance charges continue unchanged for fiscal years 2019/20 and 2020/21 at the same rates as 2018/19, and such charges are assigned to lots or parcels of land as follows: CATEGORY RATE A. Residential: Single-family to Four-plex (Improved property in County Assessor Codes 1000, 1011, 1012, 1013, 1019, 1200, 1500, units or less) B. Multiple Family and Institutional (Improved property in County Assessor Codes 2100 and 2190 greater than 4 units, 2700, 8100, 8200, 8300, 8500, 8700) C. Commercial and Industrial (Improved property in County Assessor codes 3100, 3200, , 3500, 3510, 3520, 3530, 3540, 3550, 3560, 3570, 3580, 3585, 3590, 3800, 4400, 4442, 4443, 4444, 4449) D. Undeveloped (Unimproved property greater than 0.1 acres in all above County Assessor Code Categories, plus all property in County Assessor Codes 1100, 1113, 1116, 1117, 1118, 2000, 3000, 4000, 5000, 5051, 5052, 5053, 5054, 5059, 6100, 6400, 6462, 6463, 6464, 8400, 9000, 9500, 9600, and 9999) $20.23 per lot or parcel $ per acre $ per acre $1.06 per acre or portion thereof 2. This Ordinance shall be posted for one week in three public places in the City of Fairfield and three public places in the City of Suisun City and shall take effect upon expiration of the week of such posting. PASSED AND ADOPTED this 25th day of March 2019, by the following vote: AYES: NOES: ABSENT: Directors Directors Directors ATTEST: President District Clerk 64

65 2019/20 & 2020/21 Budget and Long-Term Financial Plan Page 15 FAIRFIELD-SUISUN SEWER DISTRICT RESOLUTION NO A RESOLUTION APPROVING REVISED FISCAL YEAR 2018/19 AND FISCAL YEARS 2019/20 AND 2020/21 REVENUE AND EXPENSE PROJECTIONS AND LONG-TERM FINANCIAL PLAN BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE FAIRFIELD-SUISUN SEWER DISTRICT: 1. The District hereby adopts the estimated revenues, expenses and interfund transfers for all funds and reserves for the fiscal years 2017/18 and 2018/19, which are attached hereto and made a part thereof. 2. The District hereby adopts the Proposed Budget for Fiscal Years 2019/20 and 2020/21 and Long-Term Financial Plan, attached hereto and made a part hereof, as an operating guideline for the scheduling and financing of future capital projects and debt issuance; provided that all projects and debts are subject to subsequent Board approval. 3. The General Manager is hereby authorized and directed to allocate net operations revenue, if realized, to the Major Maintenance/Replacement Reserve Fund in accordance with the major maintenance reserve contribution policy, and net capital revenue, if realized, to the Capital Reserve Fund. 4. The General Manager is hereby authorized and directed to take all steps necessary and proper to implement this resolution in accordance with District policies and procedures. 5. The District finds that the activities authorized herein are statutorily or categorically exempt under one or more of the following CEQA Guidelines: (The activity is not a project as defined in Section 15378); 15061(b)(3) (It can be seen with certainty that there is no possibility that this activity may have a significant effect on the environment); 15378(b)(4) (Government fiscal activities which do not involve any commitment to any specific project); (Feasibility and Planning Studies); and (Information Collection). Staff is hereby authorized to file a Notice of Exemption under CEQA Guidelines PASSED AND ADOPTED this 25th day of March 2019, by the following vote: AYES: NOES: ABSENT: Directors Directors Directors President ATTEST: District Clerk 65

66 2019/20 & 2020/21 Budget and Long-Term Financial Plan Page 16 FAIRFIELD-SUISUN SEWER DISTRICT ORDINANCE NO ESTABLISHING SEWER CAPACITY AND SERVICE CHARGE ORDINANCE FOR FISCAL YEARS 2019/20 & 2020/21, AMENDING ORDINANCE NO THE BOARD OF DIRECTORS OF THE FAIRFIELD-SUISUN SEWER DISTRICT DOES ORDAIN AS FOLLOWS: I. Intent. This Ordinance No is intended to: a. Amend Article II, Section 6 and Section 6.1 of Ordinance No relating to Sewer Service Charges: and, b. Amend Article VII, Section 34 of Ordinance No relating to Sewer Capacity Charges. Those portions of Ordinance that have not been changed by this Ordinance No shall remain in effect unchanged. II. Severability. The Board hereby declares that if any provision of this ordinance or the application thereof to any person or circumstance is held invalid by court order, the remainder of this ordinance, or the application of any provision held invalid to other persons or circumstances shall not be affected. III. Authority. The Board finds that the imposition of fees and charges that have been adopted pursuant to this Ordinance No have been authorized by the Fairfield-Suisun Sewer District Act as amended and by all applicable state and federal laws. IV. Amendment of Ordinance Section 6 and Section 6.1 of Article II of Ordinance are hereby amended to read as follows: 6. Sewer Service Charges 6.01 Effective July 1, 2019, sewer service charges are hereby established as follows: Customer Class Sewer Service Charge A. RESIDENTIAL Single-family dwelling, $40.40 per month multiple-family dwelling, per dwelling unit trailer courts, mobile home utilizing sewer service parks B. COMMERCIAL/INDUSTRIAL 1. Regular Strength Offices, retail, stores, hotels, $3.22 per hundred cubic motels, schools, churches, feet of water used during hospitals, nursing homes, each billing period laundromats, dry cleaning establishments, bars without dining facilities, car washes without auto steam cleaning facilities, other commercial or industrial customers not included 66

67 2019/20 & 2020/21 Budget and Long-Term Financial Plan Page 17 in subparagraphs 2 (Special Strength) or 3 (Case-by-Case). 2. Special Strength Commercial laundries, $5.31 per hundred cubic restaurants and bars with dining feet of water used during facilities, service stations with each billing period holding tank dumping facilities, car washes with auto steam cleaning facilities, bakeries and food processing, other commercial or industrial customers with concentrations greater than 200 milligrams per liter BOD or 265 milligrams per liter SS, but less than the concentrations of BOD and SS specified in subparagraph 3 (Case-by-Case). 3. Case-by-Case All commercial or industrial $2, per customers other than those specified in million gallons flow paragraphs 6.01 (C) or 6.01 (D) PLUS $ per with flows greater than MGD, thousand pounds BOD or with concentrations greater than PLUS $ per 650 milligrams per liter BOD or thousand pounds SS 1,000 milligrams per liter SS; discharged per billing all intermittent customers; and any period. commercial or industrial customer requesting and paying the full cost of metering and testing. C. TRAVIS AIR FORCE BASE $2.48 per hundred cubic Feet of flow discharged per billing period Effective July 1, 2020, sewer service charges are hereby established as follows: Customer Class Sewer Service Charge A. RESIDENTIAL Single-family dwelling, $41.85 per month multiple-family dwelling, per dwelling unit trailer courts, mobile home utilizing sewer service parks B. COMMERCIAL/INDUSTRIAL 1. Regular Strength Offices, retail, stores, hotels, $3.34 per hundred cubic motels, schools, churches, feet of water used during hospitals, nursing homes, each billing period 67

68 2019/20 & 2020/21 Budget and Long-Term Financial Plan Page 18 laundromats, dry cleaning establishments, bars without dining facilities, car washes without auto steam cleaning facilities, other commercial or industrial customers not included in subparagraphs 2 (Special Strength) or 3 (Case-by-Case). 2. Special Strength Commercial laundries, $5.47 per hundred cubic restaurants and bars with dining feet of water used during facilities, service stations with each billing period holding tank dumping facilities, car washes with auto steam cleaning facilities, bakeries and food processing, other commercial or industrial customers with concentrations greater than 200 milligrams per liter BOD or 265 milligrams per liter SS, but less than the concentrations of BOD and SS specified in subparagraph 3 (Case-by-Case). 3. Case-by-Case All commercial or industrial $ 2, per customers other than those specified million gallons flow in paragraphs 6.02 (C) or 6.02 (D) PLUS $ per with flows greater than MGD, thousand pounds BOD or with concentrations greater than PLUS $ per 650 milligrams per liter BOD or thousand pounds SS 1,000 milligrams per liter SS; discharged per billing all intermittent customers; and any period. commercial or industrial customer requesting and paying the full cost of metering and testing. C. TRAVIS AIR FORCE BASE $2.59 per hundred cubic feet of flow discharged per billing period. Unless the Board of Directors of the District shall determine prior to July 1 of any year that the increase shall be modified or deferred. The decision to defer shall be based upon a projection of revenues and expenses for the next ten (10) years, demonstrating that the current service charge is sufficient to generate the required revenues for the District to pay all identified operational and appropriate capital projects, maintain the legally-required debt service coverage ratio, maintain major maintenance reserves and maintain adequate operating cash reserves. 68

69 2019/20 & 2020/21 Budget and Long-Term Financial Plan Page 19 V. Posting of Ordinance. This Ordinance shall be posted for one week in three public places in the City of Fairfield and three public places in the City of Suisun City and shall take effect upon expiration of the week of such posting. PASSED AND ADOPTED this 25 th day of March 2019, by the following vote: AYES: NOES: ABSENT: Directors Directors Directors President ATTEST: District Clerk 69

70 2019/20 & 2020/21 Budget and Long-Term Financial Plan Page 20 SCHEDULE 1A 2017/18 BUDGET TO ACTUAL (Dollars in 000s) 2017/ /18 Dollar Percent Budget Actual Variance Variance 1 REVENUES AND OTHER FUNDING SOURCES 2 Sewer Service Charges Sched 2, line 2 $26,155 $26,048 ($107) 0% 3 Capacity Fees Sched 3, lines 2-3 3,124 2,079 (1,045) -33% 4 Drainage Maintenance Fees Sched 6, line 2 1,552 1, % 5 SRF Loan - Blower Project Sched 3, line 4 and Sched 5, line 15 7, (6,350) -91% 6 Interest Income All Schedules % 7 Other Income Sched 2, lines (51) -21% 8 Total Revenues $38,351 $31,088 ($7,263) -19% 9 EXPENSES: 10 Treatment Plant O&M Sched 2, line 8-9 $9,930 $9,296 ($634) -6% 11 Regulatory Sched 2, line 16 1,594 1,455 (139) -9% 12 Billing & Administration Sched 2, lines ,525 2, % 13 City Sewer Line Maint. Sched 2, line 11 2,445 2, % 14 Major Maintenance Projects Sched 2, lines 10 and17, Sched 4 line 22 5,552 3,404 (2,149) -39% 15 Construction Projects Sched 4, line 14 7, (6,868) -95% 16 Debt Service Sched 2, line 20 and Sched. 3, line 12 1,203 1, % 17 Drainage Maintenance Sched 6, lines 10, 21, 25, 26, 31, 36 1,446 1,421 (25) -2% 18 Total Expenses $31,914 $22,351 ($9,563) -30% CASH BALANCES AT YEAR-END (Dollars in 000s) 2017/18 Actual 19 Capital Reserve $5, Major Maint. Reserve $27, Operating Reserve $4, Debt Service $ Drainage Maintenance $2,078 70

71 2019/20 & 2020/21 Budget and Long-Term Financial Plan Page 21 SCHEDULE 1B 2018/19 PROJECTED ACTUAL COMPARED TO BUDGET (Dollars in 000s) Schedule Reference 1 REVENUES & REVENUE SOURCES: 2018/ /19 Dollar Percent Budget Projected Actual Variance Variance 2 Sewer Service Charges Sched 2, line 2 $27,126 $26,500 ($626) -2% 3 Capacity Fees Sched 3, lines 2-3 4,227 4,000 (227) -5% 4 Drainage Maintenance FeSched 6, line 2 1,552 1, % 5 SRF Loan - Blower Proje Sched 3, line 4 and Sched 5, line 15 3,600 6,000 2,400 67% 6 Interest Income All Schedules % 7 Other Income Sched 2, lines 4 and (104) -41% 8 Total Revenues $37,190 $38,914 $1,724 5% 9 EXPENSES: 10 Treatment Plant O&M Sched 2, lines 8-9 $10,403 $8,774 ($1,629) -16% 11 Regulatory Sched 2, line 16 1,674 1,625 (50) -3% 12 Billing & Administration Sched 2, lines ,642 4,960 2,318 88% 13 City Sewer Line Maint. Sched 2, line 11 2,545 2,460 (85) -3% 14 SSC Funded CIP Sched 2, line 17 5,321 5,140 (181) -3% 15 Capacity Fee Funded CIPSched 4, lines 14 & 22 5,648 2,018 (3,630) -64% 16 Debt Service Sched 2, line 20 and Sched. 3, line 12 1,203 1,203 (0) 0% 17 Drainage Maintenance Sched 6, lines 10, 21, 25, 26, 31, 36 1,256 1, % 18 Total Expenses $30,692 $27,531 ($3,161) -10% RESERVE BALANCES AT YEAR-END 2018/19 Projected 19 Capital Reserve Schedule 5, line 11 $8, Major Maint. Reserve Schedule 5, line 20 $35, Operating Reserve Schedule 2, line 25 $4, Debt Service Schedule 5, line 5 $ Drainage Maintenance Schedule 6, lines 17, 22, 27, 32, 37 $2,355 71

72 2019/20 & 2020/21 Budget and Long-Term Financial Plan Page 22 SCHEDULE 2 WASTEWATER OPERATIONS FUND FORECAST (Dollars in 000s) Actual Projected Actual FORECAST 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 1 REVENUES: ` 2 Sewer Service Charges $26,048 $26,500 $27,831 $29,102 $30,431 $31,770 $33,170 $34,489 $35,772 $37,104 $38,487 3 Interest Income Biosolids Host & Facility Charge Other Income Total Revenues 26,473 26,825 28,144 29,426 30,778 32,174 33,587 34,918 36,216 37,565 38,964 7 EXPENSES: 8 Treatment Plant O&M 7,870 7,204 7,564 7,942 8,339 8,756 9,194 9,657 10,140 10,648 11,181 9 Electricity and Chemicals 1,426 1,570 1,623 1,677 1,733 1,791 1,852 1,914 1,979 2,046 2, District Sewer Line Maintenance City Sewer Line Maintenance (1) 2,503 2,460 2,661 2,770 2,884 3,002 3,125 3,253 3,387 3,525 3, Admin, Legal, Board 1,392 3,580 3,685 3,787 2,907 2,941 2,535 2,640 2,761 2,871 2, Utility Billing Fees - Fairfield Utility Billing Fees - Suisun Financial & Personnel Services ,030 1,081 1,136 1, Regulatory Programs (2) 1,455 1,625 1,791 2,007 1,897 1,992 2,091 2,196 2,306 2,421 2, Total Expenses 16,632 18,496 19,460 20,359 20,018 20,826 21,279 22,184 23,192 24,231 25, Net Revenue before debt payment 9,841 8,329 8,684 9,067 10,760 11,348 12,308 12,734 13,025 13,334 13, Debt Service Pymt - SRF (737) (737) (737) (1,078) (1,078) (1,078) (1,078) (1,078) (1,078) (1,078) (1,078) 20 Transfer Out-Major Maint. Rsv. (3) (9,052) (7,126) (7,706) (7,764) (9,767) (10,068) (11,116) (11,430) (11,695) (11,996) (12,296) 21 Is Major Maintenance Policy Met? Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes 22 Major Maintenance Contribution % 1.91% 1.43% 1.48% 1.42% 1.72% 1.70% 1.81% 1.79% 1.83% 1.88% 1.93% 23 Operating Reserves, beginning 4,106 4,158 4,624 4,865 5,090 5,005 5,206 5,320 5,546 5,798 6, Operating Reserves, ending (4) $4,158 $4,624 $4,865 $5,090 $5,005 $5,206 $5,320 $5,546 $5,798 $6,058 $6,330 Note 1 - Note 2 - Note 3 - Note 4 - This is maintenance for under-12" sewers owned by the cities and includes tv inspection of city sewer lines performed by the District. Trunk sewer maintenance is funded from the Major Maintenance Reserve. Regulatory Programs include Air Quality Compliance, Regional Monitoring Program fees, Hazardous Materials fees, NPDES permit studies and fees, Laboratory costs, Source Control (Industrial Monitoring and Pollution Prevention programs mandated by RWQCB) and $45,000 participation in Fairfield-Suisun household hazardous waste programs. Major Maintenance/Replacement Reserve contribution goal set at 1% of current facility replacement cost, subject to availability of net operating income, per Board policy (2005). Operations Fund retains operations reserves of three months' operating expenses; remaining available funds transferred to Major Maintenance/Replacement Reserve. 72

73 2019/20 & 2020/21 Budget and Long-Term Financial Plan Page 23 SCHEDULE 3 WASTEWATER CAPITAL FUND FORECAST (Dollars in 000s) 1 REVENUES & OTHER FUNDING SOURCES: Actual Projected Actual FORECAST 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 2 Fairfield Capacity Fees $2,040 $4,000 $3,181 $3,669 $3,533 $4,520 $3,590 $2,561 $2,934 $2,971 $3,060 3 Suisun City Capacity Fees SRF Loan - Blower Project 650 6,000 3, Total Revenues 2,728 10,000 7,131 3,701 3,564 4,553 3,656 2,630 3,004 3,042 3,133 6 EXPENSES & DEBT SERVICE 7 Project Planning & Administration Connection Fee Study Total Expenses Interfund Loan Repayment - M/M SRF Loan Repayment - Blower Proj Total Debt Service Total Expenses and Debt Service Rev. & Other Funding Sources less Exp. 2,158 9,433 6,591 3,044 3,340 4,354 3,454 2,424 2,794 2,796 2, Transfer Out- Capital Reserve (1) -2,158-9,433-6,591-3,044-3,340-4,354-3,454-2,424-2,794-2,796-2, Transfer In-Capital Reserve (2) Beginning Cash Balance Ending Available Cash Balance (3) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Note 1 - Note 2 - Note 3 - Contributions to Capital Reserve for future construction projects. If capital revenues are insufficient to meet debt service, the Capital Reserve is used to make up the difference. No fund balance maintained; all net revenues transferred to Capital Reserve for use in funding plant expansion, or in making up future capital/debt service funding shortfalls. 73

74 2019/20 & 2020/21 Budget and Long-Term Financial Plan Page 24 SCHEDULE 4A CAPACITY FEE FUNDED CAPITAL IMPROVEMENT PLAN (Dollars in 000s) Actual Projected Actual FORECAST 16/ 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 Forecast 1 Cordelia Pump Station $0 $0 $0 $0 $750 $0 $0 $0 $0 $0 $0 $750 2 Northeast Fairfield P.S ,800 3 Peabody Walters S-245A , ,500 4 Blower Replacement (25%) 118 1, New Dev't Rev/Inspection Collection System Master Plan Digester Reliability Improvement (25%) ,214 9 Digester Feedback/Biogas Master Plan Biogas Utilization Improvements ,000 3, , Wetland Nutrient Treatment Eval (25%) Total 12 Total Capacity Fee Funded $352 $2,018 $2,049 $2,136 $3,014 $53 $3,056 $3,059 $62 $65 $68 $13,561 74

75 2019/20 & 2020/21 Budget and Long-Term Financial Plan Page 25 SCHEDULE 4B SEWER SERVICE CHARGE (SSC) FUNDED CAPITAL IMPROVEMENT PLAN (Dollars in 000s) Projected Actual Actual FORECAST Total 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 Forecast 1 Blower Replacement (75%) $118 $1,975 $1,035 $0 $0 $0 $0 $0 $0 $0 $0 $1,035 2 Force Main Condition Assessment Gravity Sewer Line Rehab ,231 4 Digester Reliability Improvement (75%) , ,639 5 Digester Cleaning Rehab Electrical Replacement - Phase I 0 0 2,470 1, ,070 7 Electrical Replacement - Phase II , ,300 8 Electrical Replacement - 12kV Distributio ,000 3, ,500 9 SCADA System Evaluation & Upgrade Primary Clarifier Rehab , Treatment Plant Pavement Rehab , PS Pavement Rehab Cathodic Protection Rehabilitation Coatings & Pipe Linings , HVAC Rehabilitation Roof Rehabilitation LED Retrofit - Phase II (street lights) LED Retrofit - Phase III (PS) Wetland Nutrient Treatment Eval (75%) Admin Bldg ADA Upgrades Phone System Upgrade Blower Building Bathroom Rehab Strucutural Rehab Potable Water Line Repair PS Wet Well Rehab Primary Clarifier Safety Improvements Secondary Clarifier Drive Overhauls Secondary Utility Water Piping Filter Feed SCADA Reprogramming Backwash Storage Gate Replacement Seismic Evaluation MM Upgrades & Replacements 2,626 3,165 2,351 2,843 3,106 2,104 2,644 2,065 1,960 2,226 1,393 20, Total SSC Funded CIP $2,744 $5,140 $8,680 $8,589 $6,745 $8,152 $4,851 $6,783 $5,389 $2,967 $2,396 $54,552 75

76 2019/20 & 2020/21 Budget and Long-Term Financial Plan Page 26 SCHEDULE 5 WASTEWATER RESERVE FORECAST (Dollars in 000s) 1 DEBT SERVICE RESERVE (1): Actual Projected Actual FORECAST 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 2 Beginning Cash Balance $737 $737 $737 $737 $1,078 $1,078 $1,078 $1,078 $1,078 $1,078 $1,078 3 Trans Out-Capital/Debt Service Fund Trans In-Major Maintenance Reserve Ending Cash Balance $737 $737 $737 $1,078 $1,078 $1,078 $1,078 $1,078 $1,078 $1,078 $1,078 6 CAPITAL RESERVE (2): 7 Beginning Cash Balance $3,892 $5,250 $8,249 $9,952 $11,034 $11,553 $16,085 $16,965 $16,839 $20,076 $23,410 8 Transfer In - Capital Fund 2,158 9,433 6,591 3,044 3,340 4,354 3,454 2,424 2,794 2,796 2,913 9 Interest Income Transfer Out Capital/Debt Svc Transfer to Major Maint. - 75% of SRF Rei (488) (4,500) (2,963) Capacity Fee Funded CIP (Sch 4A) (352) (2,018) (2,049) (2,136) (3,014) (53) (3,056) (3,059) (62) (65) (68) 13 Ending Cash Balance $5,250 $8,249 $9,952 $11,034 $11,553 $16,085 $16,965 $16,839 $20,076 $23,410 $26, MAJOR MAINT/REPLACE RSV (3): 15 Beginning Balance $20,238 $27,753 $35,155 $38,224 $38,193 $41,979 $45,155 $52,775 $59,004 $67,080 $78, Transfer In-Operations 9,052 7,126 7,706 7,764 9,767 10,068 11,116 11,430 11,695 11,996 12, Transfer In - SRF Loan 488 4,500 2, Transfer Out - SRF Reserve Blower Proj (341) Interfund Loan Repayment - Capital Interest Income ,259 1,355 1,583 1,770 2,012 2, SSC Funded CIP (Sch 4B) (2,744) (5,140) (8,680) (8,589) (6,745) (8,152) (4,851) (6,783) (5,389) (2,967) (2,396) 22 Ending Cash Balance $27,753 $35,155 $38,224 $38,193 $41,979 $45,155 $52,775 $59,004 $67,080 $78,121 $90, % of Plant+Sewer Replace Cost 4.3% 5.2% 5.4% 5.2% 5.4% 5.6% 6.3% 6.8% 7.4% 8.4% 9.4% 24 TOTAL REPLACEMENT COST OF 25 TREATMENT PLANT AND SEWERS: 26 Beginning Replacement Cost $629,263 $651,236 $677,931 $708,998 $740,993 $772,982 $804,376 $836,414 $871,349 $902,940 $933, Inflationary Increases 18,878 19,537 20,338 21,270 22,230 23,189 24,131 25,092 26,140 27,088 27, Plant/Sewer Additions 3,095 7,158 10,729 10,725 9,758 8,205 7,907 9,842 5,451 3,032 2, Ending Replacement Cost $651,236 $677,931 $708,998 $740,993 $772,982 $804,376 $836,414 $871,349 $902,940 $933,061 $963,516 Note 1 - These funds are restricted cash held by trustee and/or District for debt service reserves until bond issues and other debt obligations are paid off, and are not available for other purposes. Note 2 -Capital Reserve provides funding for debt service if there is a shortfall in debt/capital revenues, and net revenue is contributed to Capital Fund for projects. Note 3 -Major Maintenance/Replacement Reserve funds projects to repair and upgrade existing treatment facilities and trunk sewers and pays for replacement when they reach the end of their useful lives. The treatment plant facility value in 2018 dollars is $651 million. 76

77 2019/20 & 2020/21 Budget and Long-Term Financial Plan Page 27 SCHEDULE 6 DRAINAGE MAINTENANCE FUND FORECAST (Dollars in 000s) Actual Projected Actual FORECAST 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 1 REVENUES: 2 Drainage Maintenance Fees $1,598 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,608 $1,616 $1,624 3 Interest Income Total Revenues 1,610 1,630 1,630 1,639 1,643 1,647 1,676 1,682 1,695 1,709 1,721 5 EXPENSES: 6 Local Facility Maintenance Regional Facility Maintenance Admin, Billing, Capital Outlay Stormwater Regulatory Program (1) Total Expenses 1,391 1,352 1,378 1,399 1,417 1,436 1,455 1,476 1,497 1,519 1, Revenues less Expenses Tfr In/(Out)-Desilting Reserve (30) (31) (30) (31) (30) (31) (31) (30) (30) (30) (30) 13 Tfr In/(Out)-Major Maint. Reserve (200) (150) (150) (150) (150) (150) (150) (150) (150) (150) (150) 14 Tfr In/(Out)-Operations Reserve (200) (150) (150) (150) (150) Tfr In/(Out)-Capital Reserve Beginning Cash Balance Ending Available Cash Balance $420 $367 $289 $198 $93 $123 $163 $189 $208 $218 $ OPERATIONS RESERVE: (2) 19 Beginning Cash Balance $350 $550 $700 $850 $1,000 $1,150 $1,150 $1,150 $1,150 $1,150 $1, Transfer In/(Out) Expenses Ending Cash Balance $550 $700 $850 $1,000 $1,150 $1,150 $1,150 $1,150 $1,150 $1,150 $1, DESILTING RESERVE: 24 Beginning Cash Balance $277 $307 $338 $368 $399 $246 $277 $308 $338 $368 $ Transfer In/(Out) Expenses (183) (30) (30) 27 Ending Cash Balance $307 $338 $368 $399 $246 $277 $308 $338 $368 $368 $ CAPITAL RESERVE: (3) 29 Beginning Cash Balance $80 $80 $80 $80 $80 $80 $80 $80 $80 $80 $80 30 Transfer In/(Out) Expenses Ending Cash Balance $80 $80 $80 $80 $80 $80 $80 $80 $80 $80 $80 33 MAJOR MAINT. RESERVE: (4) 34 Beginning Cash Balance $520 $720 $870 $920 $970 $892 $1,042 $1,192 $1,342 $1,492 $1, Transfer In/(Out) Expenses 0 0 (100) (100) (228) Ending Cash Balance $720 $870 $920 $970 $892 $1,042 $1,192 $1,342 $1,492 $1,642 $1,792 Note 1 - This is a federally-mandated regulatory program. Note 2 - Reserve accumulated for unexpected operations expense. Note 3 - Reserve accumulated for capital projects to the extent there is available revenue. Note 4 - Reserve for unanticipated cost increases in maintenance projects. 77

78 2019/20 & 2020/21 Budget and Long-Term Financial Plan Page 28 SCHEDULE 7 WASTEWATER FORECAST ASSUMPTIONS 1 GROWTH RATE: (Dollars in 000s) Actual Projected Actual FORECAST 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 2 Residential 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 0.50% 0.20% 0.20% 0.20% 3 Commercial/Industrial 0.20% 0.20% 0.20% 0.20% 0.20% 0.20% 0.20% 0.10% 0.04% 0.04% 0.04% 4 Commercial Special Strength 0.20% 0.20% 0.20% 0.20% 0.20% 0.20% 0.20% 0.10% 0.04% 0.04% 0.04% 5 Travis Air Force Base 0.00% 0.00% -2.50% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 6 Anheuser-Busch 0.00% 0.00% -3.50% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 7 SEWER RATE (per HCF, except Residential): 8 Residential (Flat Rate per Month) $37.65 $39.00 $40.40 $41.85 $43.35 $44.91 $46.53 $48.20 $49.94 $51.74 $ Commercial - Regular Strength $3.00 $3.11 $3.22 $3.34 $3.46 $3.58 $3.71 $3.85 $3.99 $4.13 $ Industrial - Regular Strength $2.99 $3.07 $3.16 $3.25 $3.35 $3.44 $3.54 $3.65 $3.75 $3.86 $ Commercial - Special Strength $5.02 $5.16 $5.31 $5.47 $5.62 $5.88 $6.15 $6.43 $6.73 $7.04 $ Industrial - Special Strength $4.94 $5.17 $5.41 $5.66 $5.92 $6.19 $6.48 $6.78 $7.09 $7.42 $ Anheuser-Busch $4.94 $5.17 $5.41 $5.66 $5.92 $6.19 $6.48 $6.78 $7.09 $7.42 $ Travis Air Force Base $2.27 $2.37 $2.48 $2.59 $2.71 $2.83 $2.96 $3.09 $3.23 $3.38 $ SEWER REVENUES: $26,048 $26,694 $27,831 $29,102 $30,431 $31,770 $33,170 $34,489 $35,772 $37,104 $38, Residential (Fairfield) 16,068 17,073 17,865 18,693 19,559 20,464 21,410 22,288 23,134 24,012 24, Residential (Suisun) 4,417 4,427 4,632 4,847 5,072 5,306 5,551 5,779 5,999 6,226 6, Commercial - Regular Strength 1,890 1,800 1,869 1,940 2,014 2,091 2,171 2,252 2,335 2,421 2, Industrial - Regular Strength Commercial - Special Strength Industrial - Special Strength Anheuser-Busch ,001 1,047 1,090 1,134 1,181 1,229 1,279 1, Travis Air Force Base 1, ,020 1,066 1,114 1,165 1,218 1, Consumer Price Index 2.00% 2.00% 2.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 25 Interest Earnings Rate 1.25% 1.50% 1.75% 1.75% 2.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 26 Bond Interest Rate 1.50% 1.50% 1.50% 2.00% 2.00% 2.25% 2.50% 3.00% 3.00% 3.00% 3.00% 27 Construction Cost Index 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 28 Project Inflationary Cost Factor New Residential Units - Fairfield New Residential Units - Suisun Total New Residential Units Total DUs in District (year-end) 43,916 44,258 44,724 45,242 45,758 46,409 46,899 47,265 47,675 48,364 49, Capacity Fee Annual Increase 3.0% 0.0% 0.0% 0.0% 0.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 34 Capacity Fee Per EDU $6,281 $6,281 $6,281 $6,281 $6,281 $6,469 $6,664 $6,863 $7,069 $7,281 $7, New Commercial EDU DEBT SERVICE COVENANT 37 Avg Debt Service Ratio (1.15 min.)

79 Fairfield-Suisun Sewer District 1010 Chadbourne Road Fairfield, California (707) Gregory G. Baatrup, General Manager Board of Directors Meeting Agenda Meeting Date: Monday, March 25, 2019 Meeting Place: Meeting Time: 1010 Chadbourne Road Fairfield, California 6:00 p.m. 1. Roll Call 2. Pledge of Allegiance 3. Public Comments 4. Director Comments 5. General Manager Report Teleconference Notice: Director Jane Day will be participating from a teleconference location at 301 Morgan Street, Suisun City, CA Board of Directors Rick Vaccaro, President Lori Wilson, Vice President Anthony Adams Pam Bertani Jane Day Catherine Moy Harry Price Michael Segala Chuck Timm Wanda Williams 6. Consent Calendar Page (a) Approve Minutes of Meeting of January 28, (b) Adopt Resolution 2019-xx, Authorizing the General Manager to Execute Joint Community Facilities Agreement between City of Fairfield and Fairfield-Suisun Sewer District... # 7. Discussion Item (a) Receive Report on City of Fairfield s Proposal Increase City Sewer Funding... ## (b) Receive Report on State Legislation... ## 8. Action Items: (a) Adopt Resolution 2019-xx, Sponsoring AB ## (b) Budget Action Items: 1. Adopt Resolution , Approving Fiscal Year 2019/20 and Fiscal Year 2020/21 Revenue and Expense Projections and Long-Term Financial Plan 2. Adopt Ordinance , Amending Ordinance No.88-2 and Adopting Increase in Annual Storm Drain Maintenance Service Charges 3. Adopt Ordinance , Establishing Sewer Capacity and Service Charge Ordinance for Fiscal Year 2019/20 and Fiscal Year 2020/21 9. Information Items (a) Board Calendar... ## -- End of Agenda -- The Fairfield-Suisun Sewer District will provide reasonable disability-related modification or accommodation to a person with a disability who requires a modification or accommodation in order to participate in the meeting of the Board of Directors. Please contact us at (707) at least 48 hours before the meeting if you require such modification or accommodation. Documents that are disclosable public records required to be made available under California Government Code Section (b) (1) and (2) are available to the public for inspection at no charge during business hours at our administrative offices located at the above address. Members of the public may speak on any matter within the jurisdiction of the Fairfield-Suisun Sewer District by filling out a speaker s request card, available on the table adjacent to the entrance to the board meeting room, and submitting the card to the District Clerk. Comments not listed on the agenda will be taken under Public Comments. Comments on matters appearing on the agenda will be taken during consideration of the item. 79