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HomeMy WebLinkAbout05.b. Connection Fee Deferral Program5. 6. CENTRAL CONTRA COSTA SANITARY DISTRICT — PUBLIC HEARING TO CONSIDER ADOPTING A RESOLUTION EXTENDING THE CONNECTION FEE DEFERRAL PROGRAM FOR TWO YEARS AND AN UNCODIFIED ORDINANCE REINSTATING PROGRAM PARTICIPATION FEES IN THE SCHEDULE OF ENVIRONMENTAL AND DEVELOPMENT - RELATED RATES AND CHARGES ESTABLISHED BY ORDINANCE 264, IN ACCORDANCE WITH DISTRICT CODE CHAPTER 6.30 SUGGESTED AGENDA June 16, 2011 1. Request staff report 2. Hearing: a. Open hearing b. Receive comments, if any C. Close hearing 3. Discussion 4. Recommended Actions: Conduct a public hearing to receive comments and consider adopting a resolution extending the Connection Fee Deferral Program for two years, and an uncodified ordinance reinstating program participation fees in the Schedule of Environmental and Development - Related Rates and Charges, established by Ordinance 264, in accordance with District Code Chapter 6.30. If the Board elects to extend the program, staff recommends that it be available only for new connections in subdivisions, since during the last two years, a number of costly monitoring and administrative activities have been required when individual infill parcels participated in the program. M ENVRSEMPosition Papers \Miyamoto- Mills\2011 \6 -16 -11 \Deferred Fee Program 6- 16- 11\FINAL Agenda for Deferred Fees Fee Hearing 6 -16 -11 jm2.doc Central Contra Costa Sanitary District ' BOARD OF DIRECTORS POSITION PAPER Board Meeting Date: June 16, 2011 Subject: CONDUCT A PUBLIC HEARING TO RECEIVE COMMENTS AND CONSIDER ADOPTING A RESOLUTION EXTENDING THE CONNECTION FEE DEFERRAL PROGRAM FOR TWO YEARS, AND AN UNCODIFIED ORDINANCE REINSTATING PROGRAM PARTICIPATION FEES IN THE SCHEDULE OF ENVIRONMENTAL AND DEVELOPMENT - RELATED RATES AND CHARGES, ESTABLISHED BY ORDINANCE 264, IN ACCORDANCE WITH DISTRICT CODE CHAPTER 6.30 Submitted By: Initiating Dept. /Div.: Jarred Miyamoto - Mills, Principal Engineer Engineering /Environmental Services REVIEWED AND RECOMMENDED FOR BOARD ACTION: Vt P "" 34 A - &Z-6tn4 P jl�?A T iyamoto -Mills C. Swanson A. Farrell K. Alm James M. elly, General Manager ISSUE: At its May 19, 2011 regular meeting, the Board of Directors set June 16, 2011 as the date for a public hearing to receive comments on a proposal to extend the Connection Fee Deferral Program for subdivisions and reinstate program participation fees. RECOMMENDATION: Conduct a public hearing to receive comments and consider adopting a resolution extending the Connection Fee Deferral Program for two years, and an ordinance reinstating program participation fees. FINANCIAL IMPACTS: There will be no financial impacts from extension of the Connection Fee Deferral Program since revenue from participation fees will cover program costs if developers choose to participate. ALTERNATIVES /CONSIDERATIONS: The Board may decline to extend the Connection Fee Deferral Program, in which case the program will expire on June 30, 2011. BACKGROUND: In the spring of 2009, the homebuilding community contacted counties, cities and special districts including CCCSD, requesting that each agency consider allowing deferred payment of impact and utility connection fees at the close of escrow for new homes as allowed by recent legislation, rather than continuing the current practice of collecting these fees when a building permit is issued or utility service connections are made. The homebuilders believed that the then - prevailing economic recession, specifically the credit and cash flow crisis, had resulted in an inequitable and unjust situation for builders. N: \ENVRSEC \Position Papers \Miyamoto- Mills\2011 \6 -16 -11 \Deferred Fee Program 6 -16 -11 \FINAL PP Conduct PH re Resolution to Extend and Ordinance to Reinstate Fees 06 -16 -2011 jm2.doc POSITION PAPER Board Meeting Date: June 16, 2011 subject: CONDUCT A PUBLIC HEARING TO RECEIVE COMMENTS AND CONSIDER ADOPTING A RESOLUTION EXTENDING THE CONNECTION FEE DEFERRAL PROGRAM FOR TWO YEARS, AND AN UNCODIFIED ORDINANCE REINSTATING PROGRAM PARTICIPATION FEES IN THE SCHEDULE OF ENVIRONMENTAL AND DEVELOPMENT - RELATED RATES AND CHARGES, ESTABLISHED BY ORDINANCE 264, IN ACCORDANCE WITH DISTRICT CODE CHAPTER 6.30. The Board considered the homebuilders' request, and at its June 4, 2009 regular meeting, approved a one -year pilot program for deferred payment of connection fees, finding that the situation constituted a "special circumstance" requiring suspension, modification and relief from application of District Code provisions pertaining to the time for payment of fees. The approved program allowed builders the option of signing a promissory note and recordable agreement calling for payment of fees either upon close of escrow, first occupancy, or after expiration of a two -year period from the issuance of the Connection Permit, whichever event occurs first. During the first year of the program, two developers (Shapell Homes and Brookfield Homes) and three owners of individual lots opted to defer fees and charges under the pilot program. Amounts that were deferred and paid to date are as follows: Number of Amount Amount Amount Owner Units Deferred Paid Outstanding Shapell Homes 180 $1,078,670 Brookfield Homes 34 239,066 Gallegos 1 5,298 Bragg 1 5,298 Maggi 4 21,192 TOTALS: 220 units $1,349,524 * Final payment is due by December 2011. $1,078,670 239,066 5,298 5,298 10,956 $1,333,783 $ 0 0 0 0 10,956* $ 10,956 In the spring of 2010, the Building Industries Association requested that the program be continued, and the Board adopted Resolution 2010 -033 on June 3, 2010, extending the program for a one year. On July 1, 2010, the Board adopted Ordinance 260 establishing fees to recover the District's costs for administering the program. While Brookfield Homes and the three owners of very small projects initially made use of the program in the summer of 2009, only two owners (Shapell Homes and Maggi) have used the program since that time and no one has opted to use the program since fees to recover costs were established. N: \ENVRSEC \Position Papers \Miyamoto- Mills\2011 \6 -16 -11 \Deferred Fee Program 6 -16 -11 \FINAL PP Conduct PH re Resolution to Extend and Ordinance to Reinstate Fees 06 -16 -2011 jm2.doc Page 2 of 4 POSITION PAPER Board Meeting Date: June 16, 2011 Subject. CONDUCT A PUBLIC HEARING TO RECEIVE COMMENTS AND CONSIDER ADOPTING A RESOLUTION EXTENDING THE CONNECTION FEE DEFERRAL PROGRAM FOR TWO YEARS, AND AN UNCODIFIED ORDINANCE REINSTATING PROGRAM PARTICIPATION FEES IN THE SCHEDULE OF ENVIRONMENTAL AND DEVELOPMENT - RELATED RATES AND CHARGES, ESTABLISHED BY ORDINANCE 264, IN ACCORDANCE WITH DISTRICT CODE CHAPTER 6.30. At the Board's regular meeting on May 19, 2011, staff reported that the Building Industries Association of the Bay Area favors continuation of the fee deferral program; however, staff recommended that the program be allowed to expire due to low usage. After deliberation, the Board set June 16, 2011 as the date for a public hearing to receive comments on and consider a two -year extension of the Connection Fee Deferral Program and reinstatement of program participation fees. While administration of the program for new subdivisions has been relatively straight- forward, tracking occupancy for the three individual infill lots that participated required regular drive -bys by District Inspectors and collection of monies due by extraordinary efforts. In one case, the property owner was unresponsive to staff attempts to establish contact, the fees owed were eventually declared delinquent and subsequently, the Board placed the fees, delinquency charge and penalties on the 2010 -11 property tax roll for collection. For these reasons, staff recommends that if the program is extended, it be available only for new connections in subdivisions. Staff has prepared the attached draft resolution to extend the program, and the attached draft ordinance to amend (in uncodified form) the Schedule of Environmental and Development - Related Rates and Charges established by Ordinance 264 to include the following two fees: • A processing fee of $460 for each separate "Memorandum of Agreement" prepared and recorded by staff. This fee would recover the cost of staff labor and overhead for the approximately 4'/2 hours required for preparation of agreements, releases and related correspondence and for recording; and • A participation fee of $115 for each separate property (parcel) for which fees are deferred. The participation fee would be in addition to the agreement processing fee and would recover the cost setting up the program, lost interest and of staff labor to enter and monitor deferral and subsequent payment of fees in the permit counter data system. Legal notices for the public hearing were published in the Contra Costa Times and the San Ramon Valley Times, and were posted on the notice board at the District Headquarters Office Building. In addition, representatives of Shapell Homes and the Building Industries Association of the Bay Area were separately notified. N: \ENVRSEC \Position Papers \Miyamoto- Milis\2011 \6 -16 -11 \Deferred Fee Program 6 -16 -11 \FINAL PP Conduct PH re Resolution to Extend and Ordinance to Reinstate Fees 06 -16 -2011 jm2.doc Page 3 of 4 POSITION PAPER Board Meeting Date: June 16, 2011 subject: CONDUCT A PUBLIC HEARING TO RECEIVE COMMENTS AND CONSIDER ADOPTING A RESOLUTION EXTENDING THE CONNECTION FEE DEFERRAL PROGRAM FOR TWO YEARS, AND AN UNCODIFIED ORDINANCE REINSTATING PROGRAM PARTICIPATION FEES IN THE SCHEDULE OF ENVIRONMENTAL AND DEVELOPMENT - RELATED RATES AND CHARGES, ESTABLISHED BY ORDINANCE 264, IN ACCORDANCE WITH DISTRICT CODE CHAPTER 6.30. RECOMMENDED BOARD ACTION: Conduct a public hearing to receive comments and consider adopting a resolution finding that special circumstances require suspension, modification and relief from application of District Code Section 6.08.040 and Subsection 6.12.030D, pertaining to the time for payment of connection fees and extending the Connection Fee Deferral Program for two years, and an uncodified ordinance reinstating program participation fees in the Schedule of Environmental and Development - Related Rates and Charges established by Ordinance 264, in accordance with District Code Chapter 6.30. If the Board elects to extend the program, staff recommends that it be available only for new connections in subdivisions, since during the last two years, a number of costly monitoring and administrative activities have been required when individual infill parcels participated in the program. N: \ENVRSEC \Position Pape rs \Miyamoto- Mills\2011 \6 -16 -11 \Deferred Fee Program 6 -16 -11 \FINAL PP Conduct PH re Resolution to Extend and Ordinance to Reinstate Fees 06 -16 -2011 jm2.doc Page 4 of 4 RESOLUTION 2011 -023 A RESOLUTION OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT FINDING THAT SPECIAL CIRCUMSTANCES REQUIRE CONTINUING MODIFICATION, SUSPENSION, AND RELIEF FROM APPLICATION OF DISTRICT CODE PROVISIONS PERTAINING TO THE TIME FOR PAYMENT OF CONNECTION FEES; AND APPROVING A TWO -YEAR EXTENSION OF THE PROGRAM ALLOWING DEFERRED PAYMENT OF CERTAIN CONNECTION FEES AS FIRST ESTABLISHED BY RESOLUTION 2009 -034, AND SUBSEQUENTLY EXTENDED BY RESOLUTION NO. 2010 -033 WHEREAS, representatives of the homebuilding community have requested that the Central Contra Costa Sanitary District (District) extend its program for deferred payment of certain connection fees first established by Resolution 2009 -034, and subsequently extended by Resolution 2010 -033, and as allowed by California Government Code Section 66007; and WHEREAS, the District Board of Directors finds that the continuing economic recession has resulted in a continuing inequitable and unjust situation for builders, which constitutes a special circumstance requiring continued suspension, modification and relief from application of District Code Section 6.08.040 and Subsection 6.12.030D, pertaining to the time for payment of connection fees. NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Central Contra Costa Sanitary District as follows: THAT the program for deferred payment of annexation and capacity fees first established by Resolution 2009 -034, and subsequently extended by Resolution 2010- 033, is hereby extended for two years; and THAT the extended program shall be available only for new connections from vacant lots in subdivisions; and THAT unless extended by the Board of Directors, the extended pilot program will terminate on June 30, 2013; and THAT, having determined that it is an appropriate staff function to sign and record agreements and promissory note releases associated with the program, the General Resolution 2011 -023 Page 2 of 2 Manager and /or his designee shall be authorized to record said agreements and promissory note releases with the Recorder of Contra Costa County. PASSED AND ADOPTED this 16th day of June 2011, by the Board of Directors of the Central Contra Costa Sanitary District by the following vote: AYES: Members: NOES: Members: ABSENT: Members: Barbara D. Hockett President of the Board of Directors Central Contra Costa Sanitary District County of Contra Costa, State of California COUNTERSIGNED: Elaine R. Boehme, CIVIC Secretary of the District Central Contra Costa Sanitary District County of Contra Costa, State of California Approved as to form: Kenton L. Alm, Esq. Counsel for the District ORDINANCE NO. 267 AN UNCODIFIED ORDINANCE OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT REINSTATING PARTICIPATION FEES FOR THE CONNECTION FEE DEFERRAL PROGRAM IN THE SCHEDULE OF ENVIRONMENTAL AND DEVELOPMENT - RELATED RATES AND CHARGES ESTABLISHED BY ORDINANCE 264, IN ACCORDANCE WITH DISTRICT CODE CHAPTER 6.30 WHEREAS, the Board of Directors (Board) of the Central Contra Costa Sanitary District (CCCSD) finds that CCCSD has incurred and will incur substantial costs to administer the Connection Fee Deferral Program established by Resolution 2009 -034, extended to June 30, 2011 by Resolution 2010 -033 and further extended to June 30, 2013 by Resolution 2011 -023; and WHEREAS, the Board finds that program participation fees are necessary to recover the reasonable costs of the program; and WHEREAS, CCCSD staff has analyzed the actual administration costs for the program including direct costs, staff labor, overhead and interest revenue lost; and WHEREAS, the Board finds that the fees to be added to the Schedule of Environmental and Development - Related Rates and Charges, as set forth below in Section 1 of this Ordinance, reasonably represent the actual costs for administration of the program; and WHEREAS, the CCCSD Board of Directors finds that this action is categorically exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15273 (a)(1) and (3) of the State CEQA Guidelines, in that the fees proposed will merely reimburse CCCSD for staff costs and expenses. THEREFORE, the Board of Directors of the Central Contra Costa Sanitary District does hereby ordain as follows: Section 1 (To be uncodified) That an uncodified amendment to include fees for participation in the Connection Fee Deferral Program in Item (E) Miscellaneous, of the Schedule of Environmental and Development - Related Rates and Charges established by Ordinance 264, is hereby adopted. Said amended Item (E) shall read as set forth in full in Exhibit A, attached hereto and by this reference made a part hereof, pursuant to the provisions of District Code Chapter 6.30. Ordinance No. 267 Page 2 of 2 Section 2 This Ordinance shall be a general regulation of the District and shall be published in the Contra Costa Times, a newspaper of general circulation, published and circulated within the District and shall be effective July 5, 2011. Said fees shall expire on June 30, 2013, unless the Connection Fee Deferral Program is extended by the District Board of Directors, in which case the fees shall remain in effect until the program expires, or until amended by Ordinance. PASSED AND ADOPTED by the Board of Directors of the Central Contra Costa Sanitary District on the 16th day of June 2011, by the following vote: AYES: Members: NOES: Members: ABSENT: Members: Barbara D. Hockett President of the Board of Directors Central Contra Costa Sanitary District County of Contra Costa, State of California COUNTERSIGNED: Elaine R. Boehme, CIVIC Secretary of the District Central Contra Costa Sanitary District County of Contra Costa, State of California Approved as to form: Kenton L. Alm, Esq. Counsel for the District 1659698.1 EXHIBIT A CENTRAL CONTRA COSTA SANITARY DISTRICT SCHEDULE OF ENVIRONMENTAL AND DEVELOPMENT - RELATED RATES & CHARGES (Uncodified) Item (E) Miscellaneous, of the Schedule of Environmental and Development - Related Rates and Charges established by Central Contra Sanitary District Ordinance No. 264, adopted May 5, 2011 was amended by Central Contra Costa Sanitary District Ordinance No. 267, adopted on June 16, 2011, to read as follows: Fee Category Amount (E) MISCELLANEOUS District services provided for private sewer projects. (E -1) Engineering - private sewer projects Actual Expense (E -2) Soil evaluation - private sewer projects Actual Expense (E -3) Surveying Actual Expense (E-4) Minimum annual interest rate for CADs and Capacity Use Program 6.00% Document / Plan Copying Fees (E -5) 8 1/2" x 11 "; 8 1/2" x 14 "; 11" x 17" (per sheet) $0.15 24" x 36" Plan (per sheet) $3.00 CCCSD Standard Specifications $20.00 Multiplier to be applied to Alhambra Valley Assessment District (AVAD) 2010 -2011 (E -6) Parcel Assessment Amounts listed in Ordinance 262 - Exhibit B to determine AVAD 1.01651 Reimbursement Fee amounts applicable to connections in 2011 -12. Connection Fee Deferral Program (Resolutions 2009 -034, 2010 -033 & 2011- E-7 ( ) 023) Processing fee for each separate "Memorandum of Agreement" for $460 subdivisions only (program and fees expire on June 30, 2013, unless program is extended ) Ordinances 260 &267 Connection Fee Deferral Program (Resolutions 2009 -034, 2010 -033 & 2011 - (E -8) 023) In addition to Fee E -7 above, participation fee for each separate property $115 (program and fees expire on June 30, 2013, unless program is extended) Ordinances 260 & 267 Page 1