HomeMy WebLinkAbout1983-06-15; Municipal Water District; MinutesMINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS OF COSTA REAL MUNl CIPAL WATER DISTRICT, HELD ON JUNE 15, 1983, AT 2:OO P.M., AT 5950 EL CAMIF\ REAL, CARLSBAD, CALIFORNIA 92008:
The meeting was called to order at 2:Ol P.M. by President Almack with Direc Bonas, MacLeod, Kelly, Maerkle and Almack answering roll call. A1 so preser were General Manager Meadows , Control 1 er Brammell , Superintendent of Opera1 Musser, Legal Ccunsel Swirsky, Djstrict Engineer Kubota and Executive Secrc Mayor Mary Casler, City Manager Aleshire, Roger Greer, Edwin Wells, Dick 05 Lena El rod, Ruth Honnold, Wilda Simpson, Jack Henthorn (Agatep Corp. ) , Mark Nordquist (Russel 1 Grosse Dev. ) , Doug Ledsam (Standard Pacific) , James Hurt (Huntington Beach Co. ) , Robert Ladwig (Rick Engineering) and Wi 11 iam Savage
attended. I
Approval of Minutes: Upon motion of Director Bonas , seconc by Director MacLeod and carried, wit! Director Maerkle abstaining, the minutes of the regular meeting of June 1, were approved as mailed.
Public Hearing: Major Water Facil- President Almack announced that this ities Financing Program (continued) the time and place fixed by the Boar( Directors of the Costa Real Municipa: Water District for a continuation of the public hearing at which intereste persons may present evidence for consideration by the Board in considering an adjustment of water rates and the establishment of a major facilities c for the Costa Real Municipal Water District. (The original transcript of hearing will be attached and a part of the official minutes of this meetin
The public hearing ended and the regular meeting resumed at 3:05 P.M.
Oral Communi cations from the Audience:
Progress Report: Squires Dam Dick Osburn reported on the status o Caretaker's Residence the construction and advised that th
. house should be ready to move into b, July 15. Director Kelly made a motion to accept Mr. Osburn's report, seco by Director MacLeod and unanimously carried. Legal Counsel Swirsky advise that some of Mr. Osburn's recommendations require Board action and suggest the following motion: (1) approve the recommendation of the project manag as to the particle board and the concrete porch; (2) authorize a change of wood garage doors to rolling metal doors with remote control not to exceed $1500; (3) authorize installation of indoorjoutdoor carpeting on the stair between the garage and the foyer; (4) authorize addition of rain gutters a
cost of $374; and (5) approve elimination of the installation of the butan tank by the contractor. Director Maerkl e made the motion, seconded by Di r MacLeod and unanimously carried.
Organizational Reports:
San Diego County Water Authority: Director Maerkle reported briefly or last meeting, giving water flow and nancial statistics. He advised that on Friday, June 17 at 1:OO P.M., the Authority will have a Celebrity Award Ceremony at the Del Mar Fairground.
Association of Water Reclamation No report. Agencies of North County:
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I Committee Reports:
Personnel Committee (Closed Session): Upon General Manager Meadows recommc dation, Director Bonas made a motior at 4:05 P.M. to go into c1,osed sess' seconded by Director MacLeod and unanimously carried.
Legal Counsel Swirsky advised that upon motion of Director MacLeod, seconc
by Director Maerkle and unanimously carried, the Board went out of closed session and returned to regular sessjon at 4:50 P.M. with all Board membej present.
General Manager:
Operations and Maintenance:
Surpl us Meters General Manager Meadows requested Boa) action to declare the following water meters surplus: 2" Neptune Crests #1172862, #16136732, #17171897, #1776687! and #17766876; 2" Hersey Compound #4492299; 2" Neptune Trident #18342497; 2" Precision #E604128; 2" Rockwell S.R. Disc #29118462; 1" Neptune #19419:
and 4" Rockwell Eureka IB' #24178365. Director Maerkle made the motion, sec I onded by Director MacLeod and unanimously carried.
Finance and Administration:
Ratification of Investments: General Manager Meadows requested Boa1 action ratifying the list of investmel
total ing $3,121,338 (see agenda packet). Director Maerkle made the motion, seconded by Director Kelly and unanimously carried.
Purchase Orders:
P.O. 62-3195 - Rockwell The General Manager requested Board a]
International proval of P.O. 62-3195 to.Rockwel1 In. national for twelve 3/4" water meters for stock for a total of $655.59 plus freight. Director Maerkle made the m approving the purchase order, seconded by Director Bonas and unanimously ca
District Engineer:
CMWD 82-401 - Pacesetter Homes, District Engineer Kubota distributed Inc., CT 81-30 on this project (see agenda packet fo memo and maps). He reviewed the deve operls proposals and made the following recommendations requiring Board act (1) approve engineering construction drawings for agreements 1 and 2; (2) prove the three agreements, one of which is a reimbursement agreement; and (3) authorize the chairman and secretary to sign the quitclaim deed to reli quish the old easements. Director MacLeod made the motion, seconded by Dir Maerkle and unanimously carried.
The District Engineer recommended a further action accepting the new easernf and authorizing the chairman and secretary to sign for the District. Direc Maerkle made the motion, seconded by Director MacLeod and unanimously carri
CMWD 83-207 - Graham Inter- District Engineer Kubota displayed tl- national P1 aza - CT 73-49 construction drawing for this project reviewed the developer's proposal. t recommended Board approval of the plans for. the pub1 ic water system. Direc MacLeod made the motion, seconded by Director Maerkle and unanimously carri
CMWD 83-211 - Bank of San Diego The District Engineer recommended Bo; approval of CUP 227 for this project
agenda packet). Director Maerkle made the motion, seconded by Director Mac and unanimously carried.
Legal Counsel :
Proposed Water Rate Increase: Legal Counsel Swirsky referred to thl for further committee meetings so thl resolution can be prepared covering the water rate increase on July 1. Af discussion, Mr. Swirsky said he would make the necessary arrangements.
Ratification of Checks: Upon motion of Director Maerkl e, secl by Director MacLeod and unanimously I the Board ratified the issuance of accounts payable checks No. 8574, 8575 I 10823 through 10871, for the period from May 26 through June 14, 1983, in sum of $229,392.34, and payroll checks No. 777 and 1423 through 1437 , date1 June 3, 1983, in the sum of $8,592.14.
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Adjournment: Upon motion of Director Maerkle, seci by Director MacLeod and unanimously
-2- June 15, 1983
carried, this meeting of June 15, 1983, was duly adjourned to June 29, 198: at 2:OO P.M. This portion of the meeting was adjourned at 5:10 P.M.
Respectfully submitted,
/fi//,/i ' A,&f?z4QL (
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m president of the Board of Directors
I '/ q&-J ?$e
Secretary of th
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d of irectors
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- 3- June 15, 1983
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I DECLARATION OF POSTING
I, the' undersigned, say:
That I am a citizen of the United States, over
eighteen (18) years of age, and a resident of the County of
San Diego, State of California, in which the within-mentioned
posting occurred, and not a party to the subject cause of
proceedings.
I posted a copy of the attached NOTICE OF AD-
JOURNMENT on the bulletin board of COSTA REAL MUNICIPAL WATER
DISTRICT, within twenty-four hours of the adjournment of the
regular meeting of the Board of Directors of COSTA REAL
MUNICIPAL WATER DISTRICT on June 15, 1983.
I declare , under penalty of perjury, that the .
foregoing is true and correct.
Executed on June 16, 1983, at Carlsbad, California.
z&244.d-A%
Florence M. Woodward v
Y
I- NOTICE OF ADJOURNMENT
Notice is hereby given that the regular meeting
of the Board of Directors of COSTA REAL MUNICIPAL WATER
DISTRICT on June 15, 1983, has been adjourned to June 29,
1983, at 2:OO P.M. in the Board room, COSTA REAL MUNICIPAL
WATER DISTRICT, 5950 El Camino Real, Carlsbad, California.
DATED: June 16, 1983.
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< *&/&&kg, \. ',
FRED W. MAERKLgl Secretar-y of COSTA REAL WNI~IPAL WATER DISTRI~ and of the Board of Directors the'
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, . -..---... ..-.. . . __ . -..". - . ..~. - . . ., .- "..,_ . COST^ REAL MUNICIPAL WATER DISTRICrr
REPORTER IS T-SCIPT OF CONTINUED PUBLIC HEAR1'JG
RE
K9JOR WATER FACILITIES FINANCING PROGRAM
CARLSBAD, CALIFQRNIA
JUNE 15, 1983
PRESENT:
Norman Almack, President
Margaret J. Bonas
Allan 0. Kelly
Donald A. Macleod
Fred Maerkle
Paul S. Swirsky, Esq., Attorney for the District
William C. Meadows, General Manager
Jack Y. Kubota, District Engineer
Tom 3rammel1, Finance Director
REPORTED BY:
MARTHA L. DIX, CSR NO. 86, CP, CM, RPR
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MARTHA 1. DIX, CSR, No. 84, CP,CM, RPR
Son Diego County's First State Champion
CERTlFlEO SHORTHAND REPORTING SERVICE
OAN DIEGO OFFICE NORTH COUNTY OFF
1409 SIXTH AVENUE 1600 BUENA VISTA %
SAN DIEGO. CALIFORNIA 92101 CARLSBAD. CALIFOR
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(714) 234-7272
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CARLSBAD, CALIFORNIA, WEDNESDAY, JUNE 15, 1983, 2:OO P. M
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THE PRESIDENT: This is the time and place fixed by the
Board of Directors of Coasta Real Municipal
Water District for a public hearing for any
interested person to present evidence for th
consideration of board of the Coasta Real
Municipal Water District in considering an
adjustment in water rates and the establishm
of major facilities charge of the Costa Real
Municipal Water District.
This is a continuation of the public
hearing considering the adjustment of the wa
rates and the establishment of major facilit
charges for Costa Real Municipal Water
District.
The following procedure will be utiliz
in conducting the remainder of the hearing:
We will have testimony by the legal
counsel, testimony by the district General
Manager, testimony of Mr. Wells, testimony o
any interested person or persons on the issu
in question, and after all interested partie
have testified, the public hearing will be
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closed.
The board will then take under submisz
all of the information and will thereafter
render a decision of the matter.
At this time, it is estimated that the
decision on this matter will be made at the
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board meeting on June 29th, 1983, with any
Adjustments or any new charges becoming
effective July 1, 1983.
I now request the legal counsel, Mr.
Swirsky, to proceed.
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MR. SWIRSKY: Thank you, Mr. Chairman.
As part of the public record, I would
like to set forth certain items that had bee
received in reference to the public hearing,
which had not been specified in detail last
time, and those items that were received sir
then.
There were newspaper articles in
reference to this public hearing in the "Biz
Tribune, I' Oceanside "Blade Tribune, I' on May
31, 1083: San Diego "Tribune," on May 26th,
1983, and the "San Diego Union, 'I on June 1,
1983.
There was also a letter of May 18, --
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a letter dated June 14, 1983, executed by 12
Southern Division of the Koll Company, K-0-1 11
signed by Bernard E. Fipp, F-i-p-p, Presiden 10
the District: A letter dated June 13, 1983, 9
Since the hearing on June 1, 1983, the 7
Ladwig, of Rick Engineering Company, Carlsbz 5
letter dated June 1, 1983, from Robert C. 4
the Downey Savings and Loan Association; anc 3
D-o-d-d, Design Construction, administrator 2
dated May 18, 1983, from Philip E. Dodd,
6 California.
8 following correspondence has been received k
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counsel, I would just like to briefly amplify 18
MR. MEADOWS: Yes, sir, somewhat along the lines of legal 17
Mr. Meadows, to continue. 16
THE PRESIDENT: I want to ask our District General Manage] 15
Carlsbad, California. Thank you. 14
Robert C. Ladwig of Rick Engineering Company
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various items that have occurred in the publi 22
the public notification procedures and the 21
for the purpose of better describing, I think 20
on a little bit of the history of this proces
23 domain, such as newspapers, the public
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Minutes, and so on, from the inception of the
project until the present.
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The minutes of June 9, 1982, reflect tk
staff's recommendation for a reevaluation of
the district's rates and charges.
At the meeting of June 16, 1982,
representatives of the City of Carlsbad
attended to present their position that such
analysis be undertaken, and the board at thai
meeting discussed the retention of an outsidc
consultant to perform this work.
At the board meeting of July 7th of 19
Mayor Casler read a prepared statement which
included a reiteration of the City's request
that the District engage a rate expert to
conduct an in-depth review of the Di.strict
water rates and other revenues and come up w
an equitable method of allocating costs and
benefits.
On September 15th, 1982, a copy of WOJ
for the financial study was approved by the
Board. This scope of work included an anal]
of major facility financing.
The board subsequently awarded a cont:
to Bartle Wells Associates on October 20th,
1982, and at that time, The District had
Officially commenced the process whereby fu.
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recommendations would be forthcoming regardil
new methods of major facility financing.
On April 6th, 1983, the preliminary
Bartle Wells report was presented to the Boa
with subsequent publicity of that meeting an
of those events.
Staff was directed on April 6th, to
develop major facilities charge procledures.
On April 20th, the Board approved a
schedule, which outlined activities leading
the establishment of 1983- '84 rates and
charges.
At the meeting of May 4th, 198:3, a pub
hearing was called for June lst, 1983.
On May llth, notices of the hecaring we:
published and mailed, and about this time, a
news release was also issued which was the
Genesis of the articles that legal counsel
entered into the record, and, finally, on Ju
lst, 1983, a public hearing was conducted by
the board, and that public hearing has been
continued to today, and that concludes my
remarks, Mr. Chairman.
THE PRESIDENT: Are there any questions from the audience :
our General Manager?
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If not, we'll call on Mr. wells for hi
testimony.
MR. WELLS: Thank you, Mr Chairman.
I understand that my preliminary repor
has been entered into the public record here
and that copies of it have been made availak
to those who are interested in it.
After discussing with your sta.ff what
information might be useful at this hearing,
they suggested that I discuss several aspect
of the -- of our findings:
First of all, I think I should. make a
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comment on the sources of cost which. we used
the basis for the financial projecti.ons that
are incorporated in the report.
The capital costs, which are t.he basis
which we make recommendations for certain ki
of new charges were furnished to us by the
District Engineer based upon area catpital
improvement plans that have been previously
studied by the staff, the Board and the
engineer.
Table 4, I believe it is, in the repor
shows a summary of the major capital.
improvement items anticipated as necessary I:
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the engineer.
That table is on page 10.
The current cost -- estimated cost,
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including one additional item that we were
advised about by the engineer subsequent to
printing of the preliminary draft, would bri
the total costs of facilities required in th
next five years to about sixteen million
dollars.
We understand that the master plan for
the entire District over a much longer term
estimated capital costs of forty-five to six
million dollars, but those figures have not
been incorporated in a full master plan.
Nonetheless, these are the facilities
evidenced as the most necessary on the prior
basis to maintain the ability to serve the
District during the next five years..
We have forecast those costs ahead, bz
upon an escalation of ten percent per year :
construction costs, and we've found that tht
was a severe cash flow deficit to meet thost
costs on a cash basis, and that from existi]
District funds that there would be a cash f:
deficit if we used only the sources of fund:
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that are presently available.
Coupled with these capital costs, we m
certain financial projections of District
expenses based upon their current operating
policies and the scope of services which the
provide. This is incorporated in table
7, together with those projections.
We saw that there would be a substanti
increase in the cost of water generally, and
that with that increase in water cost, it wc
be furthermore difficult to continue to rais
the capital program entirely from existing
sources of revenue, consisting mainly of wat
revenues and property taxes.
Second item that I'd like to discuss t
is the anticipated source of funds for capit
improvements.
The financial analysis, which is show1
for those of you who would like to review il
in table 8 on page 19, based upon projected
Moderate growth in the District, shows all
sources of revenue available, and I think rl
a new charge, which would -- a new source o
revenue which we labeled major facilities
connection charges.
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The major facilities charge, together
with revenue from water sales and property
taxes, was set at levels which would, with
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reasonable but minimum growth, present a
balanced budget for your capital program.
While I've just stated that the
anticipated current cost in 1983 dollars fol
the capital program is about sixteen milliol
dollars, we found that with long-term borro\
to finance some of the projects that the
capital requirement in the first five years
would amount to about five to seven million
dollars.
On this basis, we then set a major
facilities charge of which, with a growth il
the range of two to five hundred connection:
per year, would produce sufficient revenue,
together with existing sources, so that it
would meet that capital improvement budget.
For example, in the next five years,
sources of revenue to pay for new capital
improvements, coming from three sources wou:
Range about as follows:
i In a minimum growth of two hundred
customers a year, the major facilities char!
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would produce about twenty percent of the
revenue. The water revenue capital outlay
component would produce about two million
dollars, and the property taxes and interest
earnings on reserves could produce another t
million dollars, so that at a growth level (
two hundred connections a year, you would r
five million dollars approximately. The
connection charge revenue would have produc
about twenty percent of that amount.
At a growth rate of about five hundrc
connections a year, which was not incorporz
in this report, but which was used in our (
test runs, the combined sources of those -'
combined revenue from those three sources
produce about seven million dollars, of wk
the connection charge revenue would amount
about three million dollars or forty percc
The water revenues would produce about twc
million dollars, and, again, property tax1
about two million dollars.
Those ratios and the sources of rev
can be broken out if you want to work on
further by an analysis on Table 8,
At that point, we then took a look
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makeup of the major facilities charge and h(
to select a level for that charge, so the t'
item I would like to discuss briefly before
questions from the -- on the subject, is to
discuss the major facilities charge in and
itself.
The major facilities charge as entitl
here is a one-time connection charge impose
upon new development.
That's a type of charge that's been
widely used in this state for more than twe
years to help finance the cost of facilitie
principally water and sewer facilities,
although it is being used for other purpose
I'm sure.
Typically, this charge is a charge
that -- as I say, it's a one-time charge, b
it's levied on the basis of a unit. That u
is frequently - and we recommend it be adop
here - referred to as equivalent dwelling
unit. Equivalent dwelling unit, in princip
is the equivalency to one detached single
family residence.
We recommended a major facilities uni
charge of eight hundred dollars in this cur
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fiscal year and eight hundred eighty dollar
for equivalent dwelling unit in the next fi
year.
It soon became evident that the Distr
would not be able to enact this charge duri
this fiscal year, so, in effect, our
recommendations now are that beginning July
you adopt a major facilities charge of eigh
hundred eighty dollars per equivalent dwell
unit.
This charge, as I say, would be asses
against new development on a unit basis. T:
charge would have an escalating feature tha
would keep the charge relatively equivalent
the amount of capacity or relationship to
construction cost that it has, so typically
the final building ordinance, our recommend
tions would be further expanded upon to inc.
a provision for escalation on an annual bas.
Usually, that escalation is tied to
the engineering news record construction co;
index, and is usually also limited to a min.
escalation.
in addition to the major facilities
charge - and I'll discuss the application tc
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other types of properties in a minute - we
recognize that in new developments, over an'
above that charge, subdivision developments
for example, contribute in-tract facilities
which are not paid for by the public agency
we suggest that in addition to that charge
Where properties front on lines that they c8
tie into directly and are not required to
contribute any other facilities to expand t'
system beyond their major facilities charge
that the District have an additional charge
which we've called a direct connection char
Again we've suggested a level of five
hundred dollars for that with an escalation
ten percent, making the recommendation
effective July 1 five hundred and fifty
dollars.
The same charges would apply in
redevelopment areas where a -- where proper.
are being upgraded from a lesser number of
existing connected units.
For example, if two single family lot
are brought together and a fourplex built 0:
that property, then the intent would be to
charge two additional units after giving cri
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for the two existing units on the property,
so that we have ample background information
put all of these recommendations in precise
language for your further consideration, but,
in philosophy, that's what the basic major
facilities charge looks like.
The charge, in its equivalency, goes
through some translations when you try to
equate four flat rate charges. This is othe
types of property uses. Those -- the charge
then is extended to commercial and industria
properties pretty much on an area basis, eit
the area of the buildings, or the area of tk:
land area being considered, and I understand
that the City has already had substantial
experience with these types of charges, and
that they have examples of precise definitic
of how these charges are to be applied.
In our report, then, we looked at the
at the possible levels of this charge and
selected as a beginning point eight hundred
eighty dollars, for the charge beginning tl.
current fiscal year.
We found that substantially higher 1c
of charge we have were not necessary to prc
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a balanced capital budget.
We were well aware, in selecting a fig1
for our recommendation, of the sub -- that m;
communities have substantially larger charge:
and I believe that the staff has available
a summary of nearby local charges that are
equivalent to the major facilities charge th;
we have.
Our aim was to make a recommendation,
which, in the final analysis, comes down to
Judgment on an amount which is fair to the
development community and which, in turn --
which also will have a reasonable contributi
toward the development of new facilities, sc
as I say, we looked at potentially higher
levels for that charge.
Certainly, we were well aware that son
communities have -- as compared to the eight
hundred and eighty, they have charges for WE
connection fees in excess of two thousand
dollars.
We looked at some of these and decidec
would be counterproductive to have charges
initiated at such a high level, so, while wc
been told that our report does not contain i
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precise definition of how we arrived at the
eight hundred and eighty dollars per unit, I
would simply say that we did look at a range
possible charges, that we selected one on tk
lower side as a place for this Board to
initiate such a charge.
With that, then, I feel I can conclude
testimony to the extent to say that this reF
will be revised next week, and, under the te
of our agreement with the District, we are t
allow the engineer to review the cost figure
that we used.
The engineer has done that. We are tc
incorporate in this revised budget figures
based upon current budget analysis by the
District. We'll be furnished with those, we
understand, by the end of this week.
The finance staffs of the City and the
District will have concluded their discussio
about the allocation of costs under your
memorandum agreement with the City, and we
expect that we will be furnished with
sufficient information -- new information by
Monday to turn the report around and give yo
revised report by the end of the week.
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At that point, we think that you will
have had our best recommendations, and we fe
pretty certain on the basis of the informati
presently available that it will not have ar
effect on the recommendations with respect t
the major faclities charge. Thank you.
THE PRESIDENT: Thank you, Ed.
Any party at all in the audience who
wishes to make a statement at this time or a
questions?
Rise and give your name, please.
MR. LADWIG: Thank you, Mr. Chairman, my name is Bob Ladw
I submitted some correspondence. I'm with R
Engineering here in Carlsbad at 3088 Pi0 Pic
I appreciate the opportunity to come
before you and I did ask you to continue you
meeting last time and was unable to attend,
thanks for the opportunity to work with your
staff .
I have worked with them a number of
times. I have some concerns I passed on to
in writing. I would like to go over some of I
those with you very briefly because I know
there are other people here, who would like '
testify.
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I think we all agree that development
to pay its own way and nobody is going to a]
that point. It's just there are some areas,
think, that need to be clarified, need to bt
brought to your attention and possibly some
additional work done by your staff.
We were concerned that there were no
figures in there to -- as to how the eight
hundred eighty dollars per unit was arrived
Ed just talked about that. I think il
would be helpful to see maybe some projectic
on growth based on the City's projections 01
the local planning agencies that could be US
to divide out and come up with a figure that
you do need to build up this capital fund fc
these improvements.
Also, I think there is a concern that
some areas, people may be paying for facilit
that other people are going to benefit withi
the District, and I understand that it is hz
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with a water system, because you do balance
from one zone to another, and it may be hara
demonstrate that, but if it can be demonstra
or shown that certain facilities will benefi
certain area, I think that would be importan
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to be able to show that.
Also, there are a lot of projects that
have been approved in the -- within the
District service area. There are master pla
that have been approved. I think your map o
the wall shows that pretty well.
There are tentative maps that have bee
approved and final maps that have not been
constructed.
In essence, the District at the time c
those approvals, told the City that the
District could provide service.
Now, you're asking for more money to
provide that service, so I think there shou:
be some credit or maybe rather than a credil
i some time given to the people that are in tl I
l7 I pipeline to come to the District and pull -I3
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I permits prior to any fee increase going intc
effect.
Possibly six months would be a
consideration.
I think you can' t go on forever. I
understand you have to draw a line some pla
but I think it would be a good idea to cons
some kind of a grace period until the Distr
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changes it's present fee structure.
I think also an important part of the
program would be not to only identify your
five-year program, what you are going to nee
really in the immediate future, but also go
beyond that, and I understand your District
engineer is preparing a master plan.
I think a specific date ought to be gj
to the engineer for that to be completed. I
he needs help from other agencies for his
information, that obviously would have to be
plugged into the date that should be
established, but I think that's a key to an1
developer in town is if we agree to this fee
what's it going to be next year, the year
after.
I think they need to have some idea
where the District is going based on projecl
growth by the planning agency and what
facilities you plan to build.
I think on the computation of the
equivalent dwelling unit figures that were
used, you used the city's basis of one unit
Eighteen hundred square feet of buildings.
I think that needs to be looked at fol
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Non-residential areas.
Conceivably, you could have a very la
warehouse with minimal demand for water and
would pay a large fee. I think that should
addressed closer to fixture units or some o
formula I think your staff could come up wi
very easily. I would be interested - I don
know if you're going to read Bernie Fipp's
letter. I did not see it, but I did talk tl
Mr. Fipp, and he indicated he did a rough
projection on his park and for full develop]
on his project across the street, he would 1
to pay an additional 2.6 million dollars thz
he did not budget for initially.
I think that's probably pretty accural
so I think for the computation of this
equivalent dwelling unit fee, I think that
needs to be looked at where you don't have
residential units or large warehousing or
limited office space that may not demand the
type of service that you're anticipating wit
the fee as you have it structured.
He did some calculations on the Chrysl
building over here, which was about a
twenty-five dollar square foot building. Th
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new fee charges would represent an additiona:
thirty-five cemts per square foot, which is
about a two precent charge.
When he looks at what the city is
collecting for the two precent fee and what
they are going to build, compared to what th
District identified for their facilities, it
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seems to be out of proportion just at a firs
look.
If you look at twelve dollar and fiftJ
l1 I cent square foot tilt-up building, the fee 5
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from two precent equivalent to four percent
That seems to be a high fee for a ver]
inexpensive building, so with those things,
have submitted those in writing to you. I
would be happy to sit down with your staff
they would like me to and maybe we can work
some of these together.
That's all I have, and I would be hap
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Any questions by the staff? 22
THE PRESIDENT: Thank you, Bob. 21
to answer any questions.
23
specific suggestions as to formulas that w( 25
meeting earlier this week, if you have any 24
MR. MEADOWS: I might ask Mr. Ladwig, as we discussed ai
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be better, I would certainly like to see the1
MR. LADWIG: I think on the non-residential areas, I thin:
you ought to look at fixture units rather th,
square footage, because you can have a very
large building with hardly any facilities
necessary and I think that would probably be
little more realistic, so you would have a
fee -- the fee collected would really relate
more to the benefit of the fee, and I think
it's fixture units or some other formula, I
think we could look at it.
MR. MEADOWS: I might ask you to address the question of
fire flow as a determining factor in sizing
your water facilities, in addition to, you
know, fixtures, and give some thought to
that, and I'd like to have your thinking on
that.
MR. LADWIG: Okay, the park across the street, the flow
for -- the demand for the domestic use is ve
small. The major size of the water lines is
determined by the fire flow requirement, so
maybe what you do in industrial areas, you F
a certain fee for storage requirements or mc
in a direct relationship to what they benefi
I would be happy to offer my time to w
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with your staff on that.
THE PRESIDENT: Mr. wells.
MR. WELLS: I want to say I've seen discussions on the
subject, of course, many times and the eigh.
hundred square feet unit incorporated in thl
present City definition of equivalent dwell
unit is not unusual at all.
It relates in industrial and commerci,
property, not so much to the instantaneous
water use in none -- except in the processi
industries where water is a factor, but it
relates more to the amount of distance arou
the property that major -- that is the
periminal area, the length of lines that ar
brought around the property as compared to
equivalent number of lines that have to be
brought around residential property, for
example, and to the very significantly high
fire flow and storage requirements to obtai.
reasonable insurance on those commercial anl
industrial properties, so I can say that th,
always strive in arriving at numbers like t
and, of course, it becomes a matter of poli
in the final analysis in attempting to iden
that commercial and industrial property has
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areawide concept, so many units per land are
as compared with so many other units per lar
area, and that there is a higher fire flow
demand which public agencies usually try to
incorporate within their facilities that doe
result in significant charges, even for
warehousing, where the facility does not
apparently have a high water demand, other
than, say, for a small office staff.
That's the basis on which I've seen it
presented.
MR. LADWIG: Partially in answer to that, too, the origin;
developer does put in the larger size water
lines to handle the fire flows that are
necessary, so really it maybe boils down to
more storage than line size or capacity.
MR. MAERKLE: Bob, may I ask a question? You're talking
about that, but for instance, over here at tE
Koll tract, when the water lines were
formulated we put in there, a certain figure
was figured. Now, they want to put a
seven-story building in and that changes your
water fire flows altogether.
MR. LADWIG: Okay, if they want to do something that is a
change to the plan, then they should pay for
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that change. I don't think anybody is argui
with that, but the basic design was based or
what the City master plan approved, what the
anticipated at that time, so if there is an
increase to a specific area, that increase h
to be paid for, there's no argument.
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THE PRESIDENT: Thank you, Bob.
MR. LADWIG: Sure.
THE PRESIDENT: In answer to your suggestion, I think if
will get together then with Bill as Bill
suggested and iron it out between the two of
you as soon as possible, we'd appreciate thz
Are there any other people in the
audience?
Yes, your name, please?
MR. HARTER: My name is Jim Harter. I'm Vice-president c
operations for the Huntington Beach Company.
We own a hundred and ten acres of industrial
land on Palomar Airport Road at the western
of the airport.
I'd like to thank you for continuing 1
hearing from two weeks ago so we could stud1
the Bartle Wells report and address you as t
our concerns on it.
After reviewing the proposed major
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facilities charge, as described in the Wells
report, the Huntington Beach Company feels t
the proposed fees should be reconsidered and
recommend that they not be adopted as propos
Our recommendation is based upon 6:OO
major factors.
No. 1, no attempt is made to equitably
allocate future capital costs to actual
beneficiaries of water services to be provide
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fees. Costs should be estimated at today's
values and fees adjusted in the future for
better estimates.
No. 4, the fees are calculated to bali
an annual cash flow rather than relating the
to water usage or benefits received.
No. 5, the equivalent dwelling unit
structure was chosen to be consistent with
Carlsbad City Code, which, I believe, is bas
upon sewage usage not water usage.
The number of E.D.U.'s should be based
upon water services arrived or used. Other
than a cursory explanation, no substantial
facts are presented to demonstrate the
desirability, necessity, and economic
feasibility of the projected capital program
Perhaps a longer term forecast of futu:
water needs, along with costs and estimated
users, would provide a more equitable
distribution of costs.
I hope that you will take into
consideration these six items along with our
recommendation, as we at the Huntington BeacE
Company feel they are relevant issues in that
they significantly affect the size of the fee
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charged as well as the costs and economics o
all projects throughout the Carlsbad area.
Recent land buyers have purchased land
values in the thirty to forty thousand dolla
per acre range. The eight hundred eighty
dollar fee and equivalent dwelling unit
structure is equivalent to over ten thousane
dollars per acre for industrial zoned land c
fifty percent of square foot of building.
For our company alone, that represent;
almost seven hundred thousand dollars.
We feel that the fees, as proposed, w:
seriously impact the economics of projects
within the Carlsbad area and will have an
impact on the competitiveness of the Carlsbi
area in attracting industry to the area.
Again, I'd like to thank you for the
opportunity to address you and to express o
concern toward the proposed fee structure.
THE PRESIDENT: Thank you, Mr Harter.
Does staff care to answer that questi
Fine.
Are there any others?
Your name, please.
MR. HINTHORNE: My name is Jack Hinthorne and I'm from t
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Agatep Corporation. We represent several
property owners in the old Occidental holdin
at Poinsettia and Interstate 5 as well as
several property owners within areas outside
your District, but who are concerned about t:
fee increase and the pending merger between
your District and the District to the north.
We have reviewed the record entitled
major water facilities financing plan and rad
studies prepared by Bartle Wells and the rep'
has been discussed with all of our clients sc
as to inform them as to what was intended to
presented here this afternoon.
As developers, our clients all recognir
the necessity of carrying their own weight ir
the communities. This has become a fact of
life in the development business, so, to thal
end, we understand what you are attempting tc
do here this afternoon through this study.
However, our clients have several areas
of concern.
The first is with the amount of the
proposed increase. The development industry
just beginning to come out of -- to reestabli
itself after a period of inactivity.
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A number of developers with final maps
are within a few weeks or a few days in some
instances of starting projects that have bee
shelved for years due to the economic
situation.
They had been assured by the District
that facilities were adequate to serve them.
Now, with the fee increase, there's ar
indication that that is not so, and that
additional costs must be incurred in order t
assure service availability.
The amount of the fee increase is
significant and we ask that you might consic
either a grace period as outlined by Mr.
Ladwig, or some sort of a phase-in in any
increase in fees that you might entertain.
We would suggest that if you consider
Phased approach to increased fees, that that
time period be somewhere between twelve and
eighteen months, so that the development
industry might be able to take -- to make it
abilities to pay move with the strengthening
market.
In addition, we'd like to also enumera
the following concerns:
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The financing plan before you, we feel
should be considered after the long-range
master water supply plan is complete.
This will allow the Board to view the
comprehensive approach to meeting system nee
to accomodate new development rather than
simply looking at the shorter term five-year
I program as presented in the report.
We also feel that the proposed fee
requires additional explanation and
justification.
Why is it set at the level it is, sinc
it appears to fall short of generating the
requested capital -- or the required capital
fund the projects identified in the study?
The term major facilities, we also fee
needs to be defined. We don't see any
limitation on the types of facilities for WE
these funds could be used.
The definition of this term should end
that already depreciated facilities will no1
double funded.
What will happen to the fee upon a me1
with the City Water District? Our clients .
the north are concerned that the City Distr:
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users would be subject to the same level of j
increase.
What facilities demands would be place(
upon the District by its merger with the cit!
District? In other words, would a portion 0:
the connection fees be used to support the
District to the north?
We feel also that benefit areas need ti
be be established to ensure that fees assess
carry some benefit for the area from which t
were derived.
In addition, we feel that a more
realistic escalation factor should be applie
The ten percent flat minimum we do not
feel is equitable. The "Los Angeles
Engineering News Record," we do not feel
reflects accurately the cost increases incur
in North County.
We would suggest that you possibly loc
to some other index as a method of adjustins
future costs and fees. We also feel that tl
non-residential fee needs to be --
non-residential equivalent dwelling unit
calculation needs to be reviewed more close:
or that an optional method of determination
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needs to be made.
We share some of the same concerns Mr.
Ladwig had in this regard.
Any reduction in the District's costs t
water as outlined in the report that could bl
expected as a result of facility constructio
should be passed through to the consumers or
used to support facility construction progra
thereby possibly reducing fee requirement.
We feel that the Board of the District
should review the fee annually to determine
what revenue levels are being generated and
whether or not the fee could be reduced or
facility construction schedule increased.
In short, we have several concerns and
urge the Board not to take any action on thi
item at this time, but rather to await the
completion of the study currently underway a
to establish a committee to look into it wit
your staff in order to come forward with a IT
supportable recommendation.
Thank you.
THE PRESIDENT: Thank you, Mr Hinthorne.
Are there any questions of Mr. Hinthor
from the staff?
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MR. MEADOWS: I might offer one comment.
Obviously, Mr. Chairman, several of h
remarks were said previously. I don't want
try to get into a detailed explanation or
answer right now, because, as we indicated,
we're going to take some more time and POSS:
come back. I would like to comment on one :
though, which has to do with the functional I I I consolidation with the water District and tl I
city water department.
The existing service area-water servic
agreement between the District and the City
quite explicit in a division of
responsibilities, so that we will not have 1
agencies doing any one function, and within
agreement, there is a provision for the
establishment of a capital development fund. 1 I
In fact we had a lengthy meeting this
week with the city manager, members of his
staff, Mr. Wells, our controller, myself, ir
which we discussed how the capital fund woul
be established with respect to terms and
conditions, definitions for the fund,
limitations upon it, and various types of le
guarantees that will prevent moneys contribu
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to the fund from being used for other than
capital purposes, and the -- as far as the
definition of the capital expenditures, I th:
they will also be very explicit, starting wi'
the list on table 4, I believe, which is -- 1
been updated by one project and will be upda.
a little bit further, so that we will have -. i
~
we will have a very definite list of project
that will be approved, projects on master
plans, and will be capital projects as oppos
to operational projects and which I can be
quite certain in saying will not duplicate w'
the city might be doing, and I think this wa
the intent of the new water service agreemen
with the City, and I believe that that is an
issue which should really not be of any conc
l7 I for those reasons.
I
18 THE PRESIDENT: Thank you, Jack.
19 Do we have any other question from the
20 audience? I
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Yes, sir, the name?
MR. NORDQUIST: My name is Mark Nordquist. I'm from Russ
Grosse Development.
We have some concerns about the fee.
Rusty and I are attempting very seriously tc
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build some apartments here in Carlsbad and P
a fee is suggested at eight hundred eighty
dollars a unit per dwelling unit when we hay
an apartment project of any kind that does I
pay its way if you throw in the ground free,
and you add a fee that will inc.rease the cot
per -- if you take the construction cost of
approximately eighteen thousand dollars per
apartment unit, and you add a fee of eight
hundred and eight dollars per unit, you've
increased the cost of that individual
apartment by about five percent.
If you add up all of the fees that yo1
already pay on that dwelling unit and
apartment, it's approximately twenty-six
percent of the cost of construction.
We're talking about something that's
incredibly sensitive. We know Carlsbad neec
apartments. We want to build apartments, bt
with the addition of a fee of this type, it'
just another nail in the coffin.
THE PRESIDENT: Thank you, Mr Nordquist.
Do we have any other? Your name, plei
MR. LEDSAM: My name is Doug Ledsam with Standard Pacific
I think very often it's important to 1
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an overview.
I'm not an engineer and I'm not a
subcontractor, so I don't often actually bui:
these facilities and look at them, but when :
review costs, I have to compare them with otl
areas and see if they make sense.
Specifically, I've had experts in the
field of both sewer and water utilities
tell me the water utilities are substantiall,
I cheaper to build currently countywide.
Typically, your master facilities fees
run anywhere eight hundred or a thousand
dollars. I would equate that just as to tak
ten steps backwards and look at the eight
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hundred eighty dollar cost, that would be wa
too high, and I would see a number more in t
four or five hundred dollar range as being TI
logical, just based upon the types of cost
approach that I often use.
Additionally, the ten percent increase
per annum that was discussed by many other
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people and was found objectionable by them,
Find also to be unsubstantiated.
I don't see that anybody nowdays can
justify a ten percent cost increase per yea]
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When our subcontractors come to us with a te
percent cost increase, they go away without
job.
We've currently seen prices go down an
many of our contracts - I'm speaking not of
just the building of our house, but of publi
utility contracts to our sewer and water
contractor and other public works contractor
so I think that number is completely out of
whack and needs to be reviewed and I think
something more in the line of four or five
percent per annum reviewed annually is
something that should be looked at and I'd 1
the Board to take serious consideration of
that.
I think also additionally grandfatheri:
of certain projects is very important for
reasons mentioned before, and I won't belabo:
that point.
I think something of the twelve to
eighteen months type of grandfathering would
appropriate and I'd like to support that
position.
I think, additionally, I don't know if
it's been mentioned in the report, but I thir
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it's important that if a development oversiz
its lines or in some way provides facilities
not directly related to needs of those
residents, that a credit should be allowed f
For example, if you install an oversiz
pipe, you should get the credit for the
oversizing.
I think to ignore that is to build in
Inequity in the system to recover the cost,
because you already charge the guy the eight
eighty or the fee you charge for that facili
and to burden him additionally for oversizir
is to get him twice for the same facility, s
would like to see that there be credits for
facilities.
Thank you very much.
MR. MAERKLE: Pardon me just a minute.
Did you know we always -- if a pipe iE
oversized. We've always --
MR. LEDSAM: In the past, I know you have done that. I
don't think this --
MR. MAERKLE: It's been a rule.
MR. LEDSAM: You intend to continue that rule?
MR. MAERKLE: That's right.
MR. LEDSAM: Thank you very much then.
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THE PRESIDENT: Thank you very much, Mr. Ledsam.
Do we have any others?
You're name, sir?
MR. SAVAGE: William Savage.
THE PRESIDENT: Yes.
MR. SAVAGE: I made a few comments last
time. I'd like to offer a couple of others,
if I may.
The burden -- I harken to what Doug jl
said. I'm not an engineer and cannot speak
from that viewpoint, but, as a developer,
things that are terribly important to the --
not only the development industry, but also
purchaser of units as to the proportion and
whether or not this is a disproportionate
figure, I would begin by saying as you layol
your finances, your costs, pay your points,
figure on a large project maybe a five-year
buildout, we find that whatever figure it's
going to be rises fifty percent, so eight
hundred dollars becomes twelve hundred doll;
that the people have to pay, but let's just
talk about eight hundred.
In the -- I think the area that this
would fall under is off-site improvements 0:
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land development costs.
I'm going to read off of this so we ca
all gain a feel for what the development
industry goes through. These are categories
expense that we have.
Architectural and engineering, soils
engineering, civil engineering, storm drain,
desilting basin, grading, widening of existi
streets, side streets, utilities of all mann
and form, fees of all specie, landscaping,
lakes, recreation package. We find that a
eight hundred and eighty dollar water fee wi
come to nine percent of that total. Sounds
terribly disproportionate.
That's not to say anything about the c
that apparently we're going to have to bear
bring the water from where it now is to our
property in additional capacity for fire, sc
we're probably looking at, I don't know, a
twelve to fourteen percent of our total off
sites for one area of additional water, tho[
we now have a water pipe going right througl
the property.
All by way of saying I would very mucl
hope that we can review this, and it was
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suggested last time. Maybe in light of a
long-term look, we'll find that this may be
little bit excessive, maybe quite a bit
excessive.
I hear Mr. Wells say that the fees arc
based on the -- somewhere in the neighborhoc
of two hundred to five hundred hookups a yea
I would ask that that figure be reviewed for
its reality.
I know the gentleman is far more astut
than I am and has probably looked at a lot m
figures than I have, but I know of an awful
of developments that are coming out of the
ground very soon and I would say within the
next eighteen months, you are going to have
connections considerably surpassing the high
side of this, if what I -- unless the econom
goes totally south. The people are there
wanting to do it, and the projects developin1
and I would - that's just in my Southwest pa:
of Carlsbad, to say nothing of the rest of tl
District - I would guess that maybe that fig1
is way low, and hence that would be
encouragement to all.
You can have the moneys you need maybe
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based on a larger number of units to be a
smaller fee per unit.
I would wonder also about the possibil
of a graduated scale for size. This was hin
at last time.
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I think it maybe bears merit that ther
are certain economies normally achieved in
sizeable developments, many hundreds of unit
Maybe should have a different fee than
twenty, forty, fifty unit projects.
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I would hope that a formula could be
developed that would take into consideration
not only the size of the project but the cos
that a project must bear to the construction
the supply pipe. Maybe there is a credit to
realized if you are bringing added facilitie:
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directly into an area. Perhaps that should 1
a credit against these fees that I understanc
are more general in their application to the
facilities for the whole District instead of
having to pay one on top of the other.
I would hope also that the formula cou:
bear a resemblance, as some of the other peoE
have suggested here, that the relationship tc
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This is a pretty large District and I
think Mr. Kubota made a very good case last
time that there is some interplay between th
facilities of one part of the District to
another, but I would hope that we could
acknowledge the fact that expenses in one ar
are going to be primarily to -- should suppl
the facilities in that area.
Thank you very much.
THE PRESIDENT: Thank you, Mr Savage.
Do we have any other --
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MAYOR CASLER: Chairman Almack and board members, I 'm May1
Casler, Mayor of the City of Carlsbad.
Carlsbad City Council has a policy tha
new development pays its way and does not
create a burden on existing city taxpayers.
The Council has adopted a long-range public
facility management system. This program
identifies the costs of future public
facilities and the revenues needed to build t
facilities.
Altogether, the City will spend one
hundred and sixty-six million dollars to
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provide the buildings, parks, streets, and
sewers needed to serve our future population.
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The revenues to construct these
facilities will come primarily from develope
fees.
For each new dwelling unit in the city
we collect a one thousand dollar sewer fee,
seven hundred dollar park fee, and a two
precent fee based on building valuation. Th
fees will raise the one hundred sixty-six
million dollars for future facilities.
I have distributed to you copies of th
pamphlet "Why Plan Ahead," which explains th
City's program.
During the last three years, the City
Council has studied the water needs of the
city. We have become convinced that Carlsbai
needs a long-range capital improvement progr
to provide the facilities needed to serve ou:
growing population.
The Council retained Glenn Ryder in 19(
to give us recommendations on what was needec
The Ryder report estimated that about forty-!
million dollars would be needed to build
transmission and storage facilities to serve
the city.
The report also noted that neither the
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city nor Costa Real had a financing plan to
provide those water facilities. Mr. Ryder
recommended that we consider connection fees
developer charges, annexation fees, water rc
increases and other measures in order to crc
a capital improvement fund.
We are pleased to see that this board
now moving ahead to begin this vital progran
The city has reviewed the work of your
consultant, Mr. Wells, and believes that his
recommendations are generally sound. The wz
service agreement between the city and the
District will modify some of the Wells
recommendations, but will not change the
obvious need for capital funds.
The city supports Mr. Wells'
recommendations that a developer charge of
eight hundred eighty dollars be levied agair
new construction.
Our city attorney has prepared an
agreement which could be entered into betwee
the city and the District which would provid
for the collection of this fee at the time z
building permit is taken out.
If your board requests the City to
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collect the fee, I feel confident the City
Council would approve it.
I realize that it is difficult to rais
fees on new development.
No one wants to do that, but I feel it
essential for public agencies to identify tk
costs of needed services and wherever possik
to charge the beneficiary, especially when j
concerns new development, which might othera
create a burden on existing taxpayers.
Since Proposition 13, user fees, and
development fees have become necessary and
widespread in local government.
In summary, I would say that I
support what this board is proposing to do 2
I would pledge to you that the City will
cooperate with you in carrying out our capit
improvement program.
THE PRESIDENT: Thank you, Mayor.
Do we have any questions from the floc
of Mayor Casler?
Do we have amy other desires by the
audience to offer further input into this
meeting?
If there is none, I declare the public
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public hearing closed.
The evidence presented will be taken
under submission by the board and a decisior
will be rendered at a later date, hopefully
June 29th, 1983.
I wish to thank all of you for your
testimony and assistance and cooperation in
conduct of this meeting.
I declare a recess
(Whereupon the hearing was concluded z
3:07 P. M.)
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STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO )
: ss.
I, MARTHA L. DIX, Certified Shorthand Report
a Notary Public in and for the County of San Diego, State
California, do hereby certify:
That the foregoing proceedings were reported
me at the time and place therein set forth;
That the foregoing transcript is a true recc
of the testimony given and all proceedings held at the ti
of the hearing.
IN WITNESS WHEREOF, I have hereunto set my
hand and affixed my notarial seal, this 24th day of June,
1982. J -l.i
".._ . ..____. -;J , " ?_. '2' /,,< flj \ d__U-* ~"c
MART&<.)DI X, CSR% .I 86/, ($7;- CM , %
/ Notary Public
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