Call, Notice, and Agenda SPECIAL MEETING BOARD OF DIRECTORS SANTA CLARITA VALLEY SANITATION DISTRICT

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1 Call, Notice, and Agenda SPECIAL MEETING BOARD OF DIRECTORS SANTA CLARITA VALLEY SANITATION DISTRICT To be held at the OFFICE OF THE DISTRICT 1955 Workman Mill Road, Whittier, California WEDNESDAY June 22, 2016 At 12:00 P.M. Governing Body Director Alternate SANTA CLARITA KELLAR BOYDSTON SANTA CLARITA WESTE BOYDSTON LOS ANGELES COUNTY SOLIS ANTONOVICH (Chairperson) At the call of the Chairperson, a special meeting of the Board of Directors of Santa Clarita Valley Sanitation District of Los Angeles County will be held at the above time and place for the purpose of: 1. Approve Minutes of Adjourned Regular Meeting Held June 6, Approve Estimated May 2016 Expenses in Total Amount of $2,834, Summary: Local District expenses represent costs incurred for operations, maintenance, and capital projects that are the sole responsibility of the individual District. The District s share of allocated expenses represent their proportionate share of expenses made by District No. 2, the administrative District, on behalf of the individual districts that participate in either the Joint Administration Agreement or the Joint Outfall Agreement. These Agreements provide for the management of the operations, maintenance, and capital costs associated with all of the shared facilities along with the methodology for determining the proportionate costs for each participating district. Local District Expenses: Operations & Maintenance (O & M) $1,634, Capital 537, Santa Clarita Valley Sanitation District s Share of Allocated Expenses for O & M and Capital: Joint Administration 201, Technical Support 460, Total Expenses $2,834, Re: Wastewater Budget Matters for Fiscal Year (a) Establish by Resolution Appropriations Limit of $28,536,818 as Required by California Government Code Section 7910 Utilizing the Population Change within the District (b) Adopt Operating Fund Budget (c) Adopt Resolution Requesting Tax Levy of $6,402,000 (d) Authorize Appropriations per Budget Summary: A letter discussing fiscal year budget matters accompanies the agenda. 4. Re: Affordable Clean Water Alliance v. Santa Clarita Valley Sanitation District, Los Angeles County Superior Court Case No. BS Summary: Conference with legal counsel existing litigation Affordable Clean Water Alliance v. Santa Clarita Valley Sanitation District, Los Angeles Superior Court Case No. BS , pursuant to California Government Code Section (d)(1) - one case. The Chief Engineer and General Manager and District Counsel will discuss this matter in closed session. Adjourn NOTE: Prior to or during the regular meeting session, the Chief Engineer and General Manager may update the Directors on various matters concerning the Districts that may be of current interest to the Directors. Members of the public may address the Board of Directors on any item shown on the agenda or matter under the Board s authority. A Request to Address Board of Directors form is available in the foyer. In compliance with the Americans with Disabilities Act, if you require special assistance to participate in this meeting, please contact the Secretary to the Boards Office (562) , extension Notification 48 hours prior to the meeting will enable staff to make reasonable arrangements to ensure accessibility to this meeting. (28CFR et seq. ADA Title II). Agendas and supporting documents or other writings that will be distributed to Board members in connection with matters subject to discussion or consideration at this meeting that are not exempt from disclosure under the Public Records Act are available for inspection following the posting of this agenda at the office of the Secretary to the Boards of Directors located at the Districts' Joint Administration Building, 1955 Workman Mill Road, Whittier, California, or at the time of the meeting at the address posted on this agenda. SCV-S JUNE 22, 2016 DOCUMENT NUMBER:

2 COUNTY SANITATION DISTRICTS OF LOS ANGELES COUNTY Workman Mill Road, Wh ittier, CA Mailing Address: P.O. Box 4998, Whitt ier, CA Telephone: (562) , FAX: (562) rg GRAC E ROBINSON HYDE Chief Engineer and General Manager June 15,2016 Board ofdirectors Santa Clarita Valley Sanitation District of Los Angeles County Dear Directors: Wastewater Budget Matters for Fiscal Year The agenda for the Board meeting on June 22, 2016, contains an item relating to wastewater budget matters for fiscal year (FY) These matters include establishing an appropriations limit on the proceeds of taxes, adopting the sewerage system final budget, requesting the tax levy, and authorizing appropriations per the sewerage system budget. Appropriations Limit The Constitution of the State of California places a limit on the authorization to expend the proceeds of taxes levied by state and local governments in California. In addition, the Government Code requires the governing body for each local jurisdiction to establish, by resolution, an appropriations limit for each fiscal year. The appropriations limit for FY has been determined by adjusting the previous limit for FY based upon population change factors for the District and the change in the California Personal Per Capita Income. All ofthis is in accordance with the procedures outlined in Article X lim of the Constitution and Section 7910 of the Government Code. The proposed appropriations limit and anticipated tax revenue are shown in Exhibit No. 1. This information has been available to the public at the Districts' Joint Administration Office in conformance with the requirement that the documentation used in the determination of the appropriations limit be available fifteen days prior to its establishment by the Board of Directors. Service Charge Rates Background The State, pursuant to state and federal law, is requiring the District to comply with strict chloride (salt) discharge limits into the Santa Clara River. The original schedule, as promulgated by the State, would have required the District to be in full compliance by May 2015, an impossible task that would have resulted in substantial fines being levied. The State was willing to extend the compliance deadline if the District showed good faith efforts by adopting rates that would fully fund a chloride compliance project. Because the District hopes to use State Revolving Fund (SRF) loans to allow the cost of the chloride compliance project to be spread over a greater number of years, this meant that the District had to adopt rates that were sufficient to provide for the continued operation and maintenance of existing facilities and to pay for the debt service associated with the loans. Doc ft Recycled Paper t..l

3 Board of Directors -2- June 15, 2016 Repayment of SRF loans does not commence until one year after construction is complete, providing a six year window in which to ramp up the rates. As such, on July 7, 2014, the Board adopted service charge rates for six FY s ( through ). Prior to service charge rates being adopted two years ago, the District engaged the community in extensive outreach that consisted of: individual notices mailed to every property owner in the District connected to the sewerage system, three full page ads in the Santa Clarita Valley Signal newspaper, six information meetings throughout the Valley, three tours of the Valencia Water Reclamation Plant (WRP), six meetings with business and industry groups, two meetings with town council/advisory committees, and a public hearing. Based on that action, the compliance deadline was deferred until July I, The service charge rate for , as previously adopted by the Board, is $25.58 per month ($307 per year), an increase of $1.67 per month over the rate. Multi-family residential units will pay 60% of the adopted single-family home rate and condominiums will pay 75% of the adopted singlefamily home rate. Likewise, commercial and industrial dischargers will pay in proportion to their use of the regional wastewater management system compared to a single-family home. Dischargers with verified low water usage (particularly seniors and retirees) may also qualify for a reduced charge. Prior to setting rates in July 2014, the District applied for and received a $2.5 million Proposition 84 grant for the Saugus Water Reclamation Plant (WRP) ultraviolet (UV) Disinfection Facilities. District staff subsequently obtained an additional $5 million Proposition 84 grant for the Valencia WRP UV Disinfection Facilities. Staff is also evaluating opportunities to secure grant funding through other State appropriations, as well as SRF loan principal forgiveness provisions under the State's Green Project Reserve Program. Significant Capital Expenditures In order to meet the chloride compliance deadline of July I, 2019, the District must meet milestones and stay on a tight schedule over the next several years. A recent court ruling prevents further work on the chloride compliance project until such time as requirements of the court are met. Accordingly, in the forthcoming year, efforts will focus on complying with the court's direction regarding CEQA documentation. Other projects must be undertaken to ensure the continued cost-effective operation of the District's treatment system. These include the construction of a retaining wall along the edge of the Valencia WRP to prevent further erosion by the Santa Clara River and to help stabilize the property from ground movement. For FY , $7.5 million has been budgeted toward the design and construction of this retaining wall. Additional capital expenditures for FY include $1.8 million for completion of the improvements to the Valencia WRP process air system and $1.2 million for upgrades to the Valencia WRP power distribution system. Final Budget for Fiscal Year Enclosed for your review is the proposed final budget for FY , a list of proposed capital projects, and information on the funds set aside in reserves. The reserves, which are shown in the rate stabilization fund, are used for a number of purposes: (I) smoothing out the service charge rates from year to year and avoiding spikes in any given year as expenditures fluctuate, (2) accumulating funds to pay for large capital projects that could have a major impact on rates, and (3) meeting unforeseen emergencies that might arise during the year. Each District has an informal target of establishing reserves equal to six months of Operations and Maintenance (O&M) expenditures plus one year of debt service. In addition, each District has cash on hand that is used for meeting expenditures from the start of the fiscal year until property taxes and service charges are received in late December. Doc

4 Board of Directors -3- June 15, 2016 The proposed final budget provides a comparison with the current FY budget and a breakdown of the items included in the budget. ln preparing the final budget, it is projected that the general revenue sources available to the District for meeting expenses during the coming fiscal year include capital improvement fund monies, a pro rata share of the ad valorem (property) taxes, grants, state low-interest loans, an internal loan from the capital improvement fund, industrial wastewater surcharge, interest income, contract revenue, and reserves. The supplemental revenue required to meet expenses will be collected through service charges. In addition to the expenses directly incurred by each District for faci lities it owns, the final budget also includes the District's proportionate share of the costs associated with facilities and services jointly shared with other Districts. In accordance with the Joint Administration Agreement, joint costs are allocated to each signatory District according to the ratio of the number of sewage units in a District to the total number of sewage units in all the Districts signatory to the agreement. A sewage unit represents the average daily sewage flow and strength (measured in terms of chemical oxygen demand and suspended solids) from a single-family home. This method of allocating costs considers flow as well as the strength of sewage from all types of users and is the most equitable way to distribute Joint Administration costs. Summary of Required Actions At the June 22, 2016 Board meeting, it will be recommended that the Board of Directors adopt a resolution establishing the appropriations limit on the proceeds of taxes, adopt the budget for FY , adopt a resolution requesting the tax levy, and authorize appropriations in the sewerage system budget, all as shown on the agenda. Very truly yours, GRH:ew Enclosures Grace Robinson Hyde Doc

5 I SUMMARY OF APPROPRIATIONS LIMIT FOR EACH SANITATION DISTRICT I co:tjimait:u APPRO. LMT. POPULATION APPRO. LMT. APPRO. LMT APPRO. LMT. AD VALOREM DISTRICT EXCLUDING CHANGE CHANGE EXCLUDING MANDATED INCLUDING TAX OISTRJCT D COSTS FACTOR FACTOR MANDATED COSTS COSTS MANDATED COSTS REVENUES 1 $ 15,458, $ 16,426,728 $ 1,657,881 $ 18,084,608 $ 2,787,000J ,577, ,243,126 2,514,192 30,757,318 5,626, ,708,238 _ , ,404, ,554, ,554, ,00(f ,111, ,562,469 3,126,122 44,688,590 10,267, ,323, ,782, ,132 8,472,783 1,805, , ,000, ,000,179 80, ,462, ,185,988 13,395,265 59,581, , ,445, ,412,841 2,181,833 18,594,675 6,437, ,729, ,401,785 1,323,567 12,725,353 4,322,000 1' 17 1,508, ,503, ,044 1,775, ,645, ,374,894 1,407,634 13,782,529i- 3,213,000 L ,558, ,844, ,976 5,280, 20 35,169, ,373,137 12,714,598 50,067, , ,405, ,187,532 1,771,273 46,958,805 3,887, ,321, ,967,691 1,458,511 12,424,202 2,633, ,046, ,528,499 37,146 5,565, , o ''I , ,623 54, , , , ,535 68, ,007 68, I SBC 20,467, ,771, ,849 _22,351,978 4,699,000 SBC scv ,976,818 9,560,000 28,536,818 6,402,000 scv 34 I I N/A.. 34 NR I I I I I I N/A**I I NR * This col umn represents the net d1c:nge res.dting from the percent dlalge in population a"ld the percent chc::nge in Per ~ita Income of 5.37<'/o, rod for iii ustrctive purposes is rounded to the fourth significa-rt digit. "" This District is not SJbject to a1 ;:ppropriations limit as it does not re::eivealy proceeds of taxes. Exhibit No. 1

6 SANTA CLARITA VALLEY SANITATION DISTRICT OF LOS ANGELES COUNTY SEWERAGE SYSTEM FINAL BUDGET FOR REQUIREMENTS FOR FISCAL YEAR APPROPRIATION: O&M - Joint Administration $ 1,683,000 $ 1,707,000 O&M- Technical SeiVices 2,456,000 2,707,000 O&M - Local District Sewers 646, ,000 O&M- Treatment Facilities 16,823,000 17,247,000 Capital - Joint Administration 247,000 87,000 Capital - Local Capital 2,810,000 11,036,000 Capital- Chloride Compliance 8,650,000 2,500,000 Bond Repayment 3,321,000 3,318,000 Loan Repayment 3,282,000 3,282,000 Capital Improvement Fund Loan Repayment 736, ,000 Contingency for Emergency 1,000,000 1,000,000 $ 41,654,000 $ 44,275,000 CASH FLOW REQUIREMENT (for period JULY 1 THROUGH DECEMBER 31) 16,768,000 17,758,000 TOTAL BUDGET: $ 58,422,000 $ 62,033,000 ESTIMATED CASH AND REVENUE: Cash on Hand July 1 $ 16,812,000 $ 17,768,000 Transfer from Capital Improvement Fund 4,792,000 4,790,000 Taxes 6,276,000 6,402,000 SeiVice Charge 26,648,000 29,244,000 Industrial Waste 453, ,000 Interest and Contracts 1,960,000 2,122,000 Transfer from Rate Stabilization Fund 1,481,000 1,238,000 TOTAL RESOURCES: $ 58,422,000 $ 62,033,000 SERVICE CHARGE CALCULATION Number of Sewage Units 92,849 95,256 Charge Per Sewage Unit $ $

7 SANTA CLARITA VALLEY SANITATION DISTRICT OF LOS ANGELES COUNTY JULY 1, 2016 THROUGH JUNE 30, 2017 PROPOSED CAPITAL PROJECTS JOINT ADMINISTRATION: $ 87,000 LOCAL: 1. Valencia WRP Retaining Wall $ 7,500, Valencia WRP North Process Air System Improvements 1,800, Valencia WRP Power Distribution System Modifications 1,200, Saugus WRP Mixed Liquor Emulsion Polymer Station 150, Bailey Conversion 100, Miscellaneous Capital Projects 286,000 $ 11,036,000 CHLORIDE COMPLIANCE : $ 2,500,000 TOTAL PROPOSED CAPITAL PROJECTS: $ 13,623,000

8 SANTA CLARITA VALLEY SANITATION DISTRICT OF LOS ANGELES COUNTY JULY 1, 2016 THROUGH JUNE 30, 2017 Rate Stabilization Fund Beginning Balance Expenses Interest Ending Balance Fiscal Year $ 18,456,000 (1,238,000) 120,000 $ 17,338,000