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Home My WebLink About03.e. Set public hearings re Budgets, Sewer Service Charge, etc.Central Contra Costa Sanitary District 3-e. BOARD OF DIRECTORS POSITION PAPER Board Meeting Date: May 5, 2011 Subject: SET PUBLIC HEARINGS ON JUNE 2, 2011 TO: (1) ADOPT THE FISCAL YEAR 2011 -2012 OPERATIONS AND MAINTENANCE, DEBT SERVICE FUND AND THE SELF - INSURANCE FUND BUDGETS; (2) ESTABLISH SEWER SERVICE CHARGE RATES FOR FISCAL YEARS 2011 -2012 AND 2012 -2013; AND (3) COLLECT FISCAL YEAR 2011 -2012 SEWER SERVICE CHARGES BY PLACING THEM ON THE COUNTY TAX ROLL Submitted By: Initiating Dept. /Div.: Debbie Ratcliff, Controller Administrative / Finance & Accounting REVIEWED AND RECOMMENDED FOR BOARD A TIO D. Ratcliff M�soraves K. Alm oz� �n' ames M. Kelly, General Manager ISSUE: The District Code and State of California law require holding a public hearing for placing the Fiscal Year 2011 -2012 Sewer Service Charges on the County tax roll for collection. A public hearing is also being scheduled to receive comment on the amount of Sewer Service Charges to be imposed for Fiscal Years 2011 -2012 and 2012 -2013, and to receive public comment on the Fiscal Year 2011 -2012 Operations and Maintenance, Debt Service and Self- Insurance Fund Budgets. RECOMMENDATION: Authorize a public notice to set a public hearing on June 2, 2011 to: (1) adopt the Fiscal Year 2011 -2012 Operations and Maintenance, Debt Service and Self- Insurance Fund Budgets, (2) establish the Sewer Service Charge rates to be imposed for Fiscal Years 2011 -2012 and 2012 -2013; and (3) collect Fiscal Year 2011 -2012 Sewer Service Charges on the County tax roll. FINANCIAL IMPACTS: At the June 2, 2011 public hearing, the Board will be asked to consider a Sewer Service Charge rate increase of up to $30 for Fiscal Year 2011 -2012 and up to $30 for Fiscal Year 2012 -2013. Total additional revenues for Fiscal Year 2011 -2012 would be approximately $4.9 million if the staff proposed budget rate increase of $30 is implemented. ALTERNATIVES /CONSIDERATIONS: The Board could choose not to increase the Sewer Service Charge for Fiscal Year 2011 -2012 and the following year or an alternative amount other than the $30. In regard to the collection of Sewer Service Charges, the Sewer Service Charge could be collected through direct billings by the District. However, this would require additional labor and benefit costs. The Sewer Service Charge has been collected on the County tax roll since the inception of the service charge in 1976. Staff believes that collection on the tax roll provides the most economical and efficient means for the District to collect these charges. N:\ADMINSUP\ADMIN \POSPAPER \Set Public Hearing 05- 05- 2011.doc Page 1 of 3 POSITION PAPER Board Meeting Date: May 5, 2011 subject: SET PUBLIC HEARINGS ON JUNE 2, 2011 TO: (1) ADOPT THE FISCAL YEAR 2011 -2012 OPERATIONS AND MAINTENANCE, DEBT SERVICE FUND AND THE SELF - INSURANCE FUND BUDGETS; (2) ESTABLISH SEWER SERVICE CHARGE RATES FOR FISCAL YEARS 2011 -2012 AND 2012 -2013; AND (3) COLLECT FISCAL YEAR 2011 -2012 SEWER SERVICE CHARGES BY PLACING THEM ON THE COUNTY TAX ROLL BACKGROUND: At the Board Financial Planning and Policy Workshop in March, and subsequent Board Meetings, staff reviewed the financial prudence of imposing a Sewer Service Charge rate increase of $30 for a total charge of $341 annually to partially offset the lack of Sewer Service Charge increases over the past two years, increases in retirement expense, an increase in the GASB 45 Annual Required Contribution (which is $2.3 million higher than the amount included in the ten -year plan), increases in salaries and health insurance premiums, and to provide significant additional revenue for the Fiscal Year 2011 -2012 Capital Budget for repair and rehabilitation of the sewer system, renovation and upgrade of the treatment plant and to meet new air and water quality regulations. The Operations and Maintenance Budget, which will be submitted for initial review by the Board of Directors on May 19, 2011, has allocated $2 of the Sewer Service Charge increase to Operations and Maintenance expenses for Fiscal Year 2011 -2012 and the remaining $28 of the Sewer Service Charge increase to the Capital Improvement Budget. The Board approved a Proposition 218 Notice amount of up to $30 each for Fiscal Year 2011 -2012 and Fiscal Year 2012 -2013. A public hearing is required to receive public comments on collecting Sewer Service Charges on the County tax roll. A hearing is also being set to receive comment on selecting the Sewer Service Charge rate to be imposed for Fiscal Year 2011 -2012 and Fiscal Year 2012 -2013. The Board will review and consider the District's proposed budget in the Spring of 2012 to determine whether the Board approved increase for Fiscal Year 2012 -2013 will continue to be necessary. These hearings are typically held during the Board Meeting at which the Operations and Maintenance Budget is presented for approval. Adoption of the Fiscal Year 2011 -2012 Operations and Maintenance Budget, Debt Service Fund Budget and Self- Insurance Fund Budget is scheduled for the Board meeting on June 2, 2011. RECOMMENDED BOARD ACTION: Set June 2, 2011 at 2:00 p.m. as the date and time for a public hearing to consider: (1) adopting the Fiscal Year 2011 -2012 Operations and Maintenance Budget, Debt Service Fund Budget and Self- Insurance Fund Budget, (2) establishing the Sewer Service Charge rates to be imposed for Fiscal Years 2011 -2012 and 2012 -2013, and (3) collecting the Fiscal Year 2011 -2012 Sewer Service Charges by placing them on the County tax roll. N:\ADMINSUPWDMIN \POSPAPER \Set Public Hearing 05- 05- 2011.doc Page 2 of 3 NOTICE OF PUBLIC HEARINGS ON THE FISCAL YEAR 2011 -2012 OPERATIONS AND MAINTENANCE BUDGET, DEBT SERVICE FUND BUDGET, AND THE SELF - INSURANCE FUND BUDGET; TO CONSIDER CHANGES TO SEWER SERVICE CHARGE RATES; AND INTENT TO COLLECT FISCAL YEAR 2011 -2012 SEWER SERVICE CHARGES ON COUNTY TAX ROLL AND THE FILING OF REPORT UNDER SECTIONS 5470 - 5475.10 OF THE HEALTH AND SAFETY CODE NOTICE IS HEREBY GIVEN THAT: The Board of Directors of the Central Contra Costa Sanitary District (District) at its regular meeting at 2 p.m. on June 2, 2011, in the Meeting Room of the District Office, 5019 Imhoff Place, Martinez, California, will hold a public hearing to consider the following matters: Adopting the Fiscal Year 2011 -2012 Operations and Maintenance Budget, Debt Service Fund Budget, and Self- Insurance Fund Budget; 2. Establishing a proposed Sewer Service Charge increase of up to $30 for Fiscal Year 2011 -2012 for a total charge of up to $341 and an additional $30 for Fiscal Year 2012 -2013 for a total charge of up to $371; and 3. Placing the Fiscal Year 2011 -2012 Sewer Service Charges on the County tax roll for collection. State and Federal governments require that Operations and Maintenance expenses of the District be collected through a direct charge to the users. The District has designated this charge as a "Sewer Service Charge." A draft Ordinance providing for these charges and the draft Resolution directing collection of the charges on the County tax rolls are on file at the District offices. Elaine R. Boehme Secretary of the District Central Contra Costa Sanitary District Contra Costa County, California N:\ADMINSUP\ADMIN \POSPAPER \Set Public Hearing 05- 05- 2011.doc Page 3 of 3