FROM: Robert Thompson, General Manager
Originator: Wally Ritchie, Director of Finance
SUBJECT:
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AGREEMENT WITH IRVINE RANCH WATER DISTRICT FOR THE COLLECTION OF REGIONAL TREATMENT FEES FOR FISCAL YEAR 2026-27
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GENERAL MANAGER'S RECOMMENDATION
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RECOMMENDATION:
Approve and authorize the General Manager to execute the Implementation Agreement between Orange County Sanitation District and Irvine Ranch Water District, in a form approved by General Counsel.
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BACKGROUND
In November 2025, the Board of Directors approved the Flow Exchange Agreement between Orange County Sanitation District (OC San) and Irvine Ranch Water District (IRWD). This agreement simplified existing arrangements under the guiding principle for wastewater to flow by gravity to existing facilities for treatment.
OC San has two revenue areas - Consolidated Revenue Area (CRA) and Revenue Area 14 (RA14). The Flow Exchange Agreement updated the revenue area boundary so that customers whose wastewater flows by gravity to OC San are in the CRA and customers whose wastewater flows by gravity to IRWD are in RA14. This boundary change goes into effect on July 1, 2026, and customers in each revenue area will continue to pay regional transmission and wastewater treatment fees to the associated agency thereafter.
Those customers that shifted to CRA were not part of OC San's previous Proposition 218 process; therefore, OC San cannot assess its current service fees to these customers until a new Proposition 218 process is complete and adopted with a planned effective date of July 1, 2027.
RELEVANT STANDARDS
* Maintain collaborative and cooperative relationships with regulators, stakeholders, and neighboring communities
* Maintain a culture of improving efficiency to reduce the cost to provide the current service level or standard
PROBLEM
Customers that transferred from RA14 to CRA of OC San cannot be assessed its sewer service fees by OC San until a new rate...
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