HomeMy WebLinkAbout03.d. Suspend application of "Demand Charge" from Schedule of Sewer Service ChargesCentral Contra Costa Sanitary District 3
' BOARD OF DIRECTORS
POSITION PAPER
Board Meeting Date: October 20, 2011
subject: ADOPT RESOLUTION 2011 -059 SUSPENDING APPLICATION OF THE
"DEMAND CHARGE" FROM THE SCHEDULE OF SEWER SERVICE CHARGES
ADOPTED UNDER ORDINANCE NO. 266, IN ACCORDANCE WITH DISTRICT
CODE SECTION 1.24.020
Submitted By: Initiating Dept./Div.:
Jarred Miyamoto -Mills Engineering / Environmental Services
Provisional Division Manager
REVIEWED AND RECOMMENDED FOR BOARD ACTION:
J. Miyamoto -Mills A. Farrell f . Alm James . Kelly
GenerarManager
ISSUE: District Code Section 1.24.020 allows the Board to provide relief from a
charge, ordinance or regulation if it finds that the charge, ordinance or regulation is
unjust or inequitable because of special circumstances.
RECOMMENDATION: Adopt Resolution 2011 -059 suspending the "Demand Charge"
included in the Schedule of Sewer Service Charges adopted under Ordinance No. 266,
in accordance with District Code Section 1.24.020.
FINANCIAL IMPACTS: None by this action. Until application of this charge was
suspended in 2008 -09, annual revenue was approximately $45,000.
ALTERNATIVES /CONSIDERATIONS: Since staff has been unable to demonstrate a
"nexus" (that is, a connection, tie or link) between the actual costs of services being
provided and the Demand Charge, it is appropriate for the Board to formally suspend
application of the charge by resolution.
BACKGROUND: Historically, the Schedule of Sewer Service Charge Rates has
included a rate for industrial customers called "Demand." Until three years ago, this
rate was routinely applied to customers regulated under Class I or Class II Wastewater
Discharge Permits or Special Discharge Permits. At that time, staff assigned to
administer the Sewer Service Charge (SSC) program questioned the purpose of the
charge and the proper procedure for its application. Since each rate, fee or charge
applied by the District to its customers must have a nexus between the actual costs of
services provided, staff searched the District's Revenue Program documents, Code,
ordinances, specifications and other regulations for a protocol, application procedure or
definition for the "demand charge." No information pertaining to the charge could be
found.
WENVRSEC \Position Papers\ Miyamoto- Mills\2011 \10- 20 -11 \PP Reso to suspend SSC Demand Charge FINAL 10- 20- 11.doc Page 1 of 2
POSITION PAPER
Board Meeting Date: October 20, 2011
subject. ADOPT RESOLUTION 2011 -059 SUSPENDING APPLICATION OF THE
"DEMAND CHARGE" FROM THE SCHEDULE OF SEWER SERVICE CHARGES
ADOPTED UNDER ORDINANCE NO. 266, IN ACCORDANCE WITH DISTRICT
CODE SECTION 1.24.020
Other sewering agencies have used "Demand Charges" to recoup extraordinary costs
associated with standby facilities and /or staffing needed to accommodate significant
seasonal discharge variations, such as those from canneries or resorts. This may have
been the rationale for initially establishing a demand rate in the District's SSC program.
The four major hospitals in the service area, the Contra Costa Newspapers'
Shadelands facility, a water treatment company, and an instrument manufacturer are
the businesses that would be most impacted by resuming demand charges in the
manner used in the past. Staff has determined that none of these businesses exhibit a
significant seasonal variation in its discharge volume.
The District's capital and O &M costs to serve these businesses are recovered through
connection and discharge permit fees, and the SSC rates for flow, biochemical oxygen
demand (BOD) and suspended solids (TSS). For this reason, staff recommends that
the demand charge not be resumed for permit dischargers, and that it be deleted from
the current Schedule of Sewer Service Charge Rates.
This issue was reviewed by Budget and Finance Committee.
RECOMMENDED BOARD ACTION: Adopt Resolution 2011 -059 suspending the
"Demand Charge" included in the Schedule of Sewer Service Charges adopted under
Ordinance No. 266, in accordance with District Code Section 1.24.020.
NIENVRSEC \Position Papers\ Miyamoto- Mills\2011 \10- 20 -11 \PP Reso to suspend SSC Demand Charge FINAL 10- 20- 11.doc Page 2 of 2
RESOLUTION NO. 2011 -059
A RESOLUTION OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT
FINDING THAT SPECIAL CIRCUMSTANCES REQUIRE SUSPENSION, AND RELIEF
FROM APPLICATION OF THE "DEMAND CHARGE" IN THE SCHEDULE OF SEWER
SERVICE CHARGES ADOPTED UNDER ORDINANCE NO. 266
WHEREAS, the District Board of Directors finds that application of Demand Charges
included in the Schedule of Sewer Service Charges adopted under Ordinance No. 266
would be inequitable to those customers to which it applies, i.e., customers regulated
under Class I or Class II Wastewater Discharge Permits and Special Discharge Permits
because of special circumstances; and
WHEREAS, District Code Section 1.24.020 provides that where the Board finds that a
charge or application of an ordinance is inequitable because of special circumstances, it
may fix a fair and equitable charge or offer some other form of relief as it deems
appropriate.
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the District as
follows:
THAT the Demand Charge included in the Schedule of Sewer Service Charges adopted
under Ordinance No. 266 is hereby suspended; and
THAT staff is directed to suspend application of the Demand Charge to all those
customers to which it would otherwise apply, i.e., customers regulated under Class I or
Class II Wastewater Discharge Permits and Special Discharge Permits; and
THAT the suspension of said Demand Charge shall continue for the period that the
Schedule of Sewer Service Charges adopted under Ordinance No. 266 is in effect.
PASSED AND ADOPTED this 20th day of October 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
RESOLUTION NO. 2011 -059
Suspend SSC Demand Charge
Page 2 of 2
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