HomeMy WebLinkAbout06.a.3) Report on possible installment payments of past due connection fees6.a.3)
Central Contra Costa Sanitary District
December 8, 2011
TO: BUDGET AND FINANCE COMMITTEE
VIA: JAMES M. KELLY, GENERAL MANAGER
ANN E. FARRELL, DEPUTY GENERAL MANA R
JARRED MIYAMOTO- MILLS, PROVISIONAL DIVISI N MANAGERQ(k
FROM: EARLENE MILLIER, ENGINEERING ASSISTANT III �
SUBJECT: INSTALLMENT PAYMENT OF PAST DUE CONNECTION FEES
The Board has approved a variety of programs to assist property owners with payment
of connection fees by allowing for deferred or installment payment of the fees. These
programs include:
• Deferral of capacity and annexation fees for lots in new subdivisions to the time
of occupancy or sale of the property;
• Installment payment of capacity fees for properties converting from septic tank to
public sewer service;
• Installment payment of capacity fees for properties in Alhambra Valley
Assessment Districts; and
• The Capacity Use Charge Program that provides businesses with the highest
capacity fees (e.g., restaurants and bakeries) to pay in installments over fifteen
years.
From time to time, the Board has also approved installment payment agreements for
business owners or homeowners who request special relief from payment of fees when
the property is first connected to the public sewer, or when past due fees are identified
by staff. Two recent examples of this type of agreement are: 1) conversion of a deli to
the Senro Sushi Restaurant in San Ramon; and 2) discovery of past due connection
fees owed for the Monsoon Masala Restaurant in Pleasant Hill.
Staff has been pursuing past due connection fees related to open permit applications
and where properties have been connected to the public sewer without payment of fees.
Typically, past due fees are discovered during a routine review of District records. In
several cases, ongoing construction has been noted by District inspectors and collection
of fees has been pursued. When contacted, some property owners pay the fees upon
receipt of a District invoice. In other instances, the property owner either does not
respond to staff's attempts to contact them (and the fees are eventually handled under
delinquency proceedings), or the property owner proposes an installment payment
arrangement. When a proposed installment payment plan will result in payment of the
Memo to the Budget and Finance Committee
Regarding Installment Payment of Past Due Connection Fees
December 8, 2011
Page 2 of 3
full amount due before the end of the fiscal year, staff accepts the installment payments
rather than processing the past due amount for placement on the County tax roll.
There are instances, however, where the availability of an installment payment option
with a longer payment period might facilitate collection of recently identified past due
fees owed by property owners who did not pay at the time of connection. While not the
best example, a current request illustrates this situation.
BACKGROUND: The owner of the property at 66 Alberta Terrace in Walnut Creek, Mr.
Christopher Scelfo, built a second living unit on his property without obtaining a sewer
connection permit or paying connection fees. In 2011, staff discovered that the fees
had not been paid during a routine review of permit applications and contacted Mr.
Scelfo regarding payment of approximately $5,600 that is past due.
Mr. Scelfo has stated that he wants to honor his obligation to the District and wants to
keep the property, but he is unable to borrow money to pay the District's invoice. Mr.
Scelfo has proposed paying the fees over a ten -year period, with the annual installment
being placed on his property tax bill each year.
The arrangement proposed by Mr. Scelfo would be similar to the capacity fee
installment payment program for septic tank conversions, established by the Board last
year.
FINANCIAL IMPACTS: If this type of program were available to property owners where
capacity fees are past due, it might facilitate the District's collection of the fees, and
would be advantageous to the District since the fees would be assessed at current rates
and the District would be compensated for its lost opportunity cost (interest on
investment in LAIF) by charging an appropriate interest rate.
Collection of the fees over an extended period would be secured by a promissory note
and a memorandum of agreement, which would be recorded against the property.
Payment in full of the remaining amount due under the promissory note would be due
upon sale or transfer of the property.
ALTERNATIVES /CONSIDERATIONS: Offering an installment payment option to
homeowners or businesses where fees were not paid at time of connection could be
considered inequitable, since most property owners do pay the fees when first due. The
current property owner who is ultimately responsible for past due fees, however, is not
always the party that failed to pay those fees when due. Providing an installment
payment option could give staff an additional tool to facilitate collection of unpaid fees.
An alternative to establishing an installment payment option for past due fees would be
to continue the District's current practice of placing delinquent fees on the County
property tax roll for collection.
INPUT NEEDED: Since the District Code does not provide staff authority to enter into
installment payment agreements that extend beyond the current fiscal year, each
property owner's request for a special installment payment agreement must be brought
to the Board for individual consideration. The example cited above is one of those
cases.
Memo to the Budget and Finance Committee
Regarding Installment Payment of Past Due Connection Fees
December 8, 2011
Page 3 of 3
Staff asks that the committee provide its input regarding the advisability of staff
developing a code revision for the Board's consideration that would provide additional
staff authority to collect past due fees using installment payment agreements.
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