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Home My WebLink About07.b. Authorize agreement with Pizza My Way for installment payment of capacity feesCentral Contra Costa Sanitary District ' BOARD OF DIRECTORS . 6. POSITION PAPER Board Meeting Date: September 6, 2012 Subject: AUTHORIZE THE GENERAL MANAGER TO EXECUTE A MEMORANDUM OF AGREEMENT FOR INSTALLMENT PAYMENT OF CAPACITY FEES; AND /OR AUTHORIZE THE GENERAL MANAGER TO EXECUTE A CAPACITY USE AGREEMENT FOR A TERM LESS THAN FIFTEEN YEARS FOR PIZZA MY WAY AT 1300 CONTRA COSTA BOULEVARD IN PLEASANT HILL Submitted by: Initiating Dept. /Div.: Earlene Millier, Engineering Assistant III Engineering /Environmental. Services REVIEWED AND RECOMMENDED FOR BOARD ACTION: E. Millier T. Brightbill J. M moto -Mills V"'� L k- lm ale An E. Fa II General Manager ISSUE: District Code states that capacity fees shall be due and paid at the time the District reviews building plans related to a change in use where a property is already connected to the public sewer. Board approval is required for the General Manager to execute a memorandum of agreement for installment payment of capacity fees. District Code states that a user participating in the Capacity Use Charge Program shall be assessed an annual capacity use charge for a fifteen year period. Board approval is required for the General Manager to execute a Capacity Use Agreement for a period less than fifteen years. RECOMMENDATION: Authorize the General Manager to execute a memorandum of agreement for installment payment of capacity fees; and /or authorize the General Manager to execute a Capacity Use Agreement for Pizza My Way at 1300 Contra Costa Boulevard in Pleasant Hill for a term less than fifteen years. FINANCIAL IMPACTS: None. In lieu of collecting capacity fees in a single payment, the District would collect either: 1) monthly installment payments totaling the amount of the capacity fees plus interest, or 2) an annual.charge based on the actual water consumption of the business. The annual charge would be placed on the Contra Costa County property tax roll. ALTERNATIVES /CONSIDERATIONS: The Board may decline either or both alternatives. If both alternatives are declined, it is possible that the business owners would either pay capacity fees in a single payment or decide not to open at this location. BACKGROUND: Mr. Tareq Mashal and Mr. Shaker Abukishk intend to open a new restaurant, Pizza My Way, at 1300 Contra Costa Boulevard, Suite 20, in Pleasant Hill. The owners have signed a lease and undertaken an interior remodel of the space, N:\ENVRSEC \Position Papers\Millier\2012 \9- 6 -12 \PP - Cap Use Agreement 9 -6 -12 FINAL3.doc Page 1 of 2 POSITION PAPER Board Meeting Date: September 6, 2012 subject. AUTHORIZE THE GENERAL MANAGER TO EXECUTE A MEMORANDUM OF AGREEMENT FOR INSTALLMENT PAYMENT OF CAPACITY FEES; AND /OR AUTHORIZE THE GENERAL MANAGER TO EXECUTE A CAPACITY USE AGREEMENT FOR A TERM LESS THAN FIFTEEN YEARS FOR PIZZA MY WAY AT 1300 CONTRA COSTA BOULEVARD IN PLEASANT HILL which formerly housed a yogurt shop. Additional capacity fees totaling approximately $16,000 are due for the change in use from yogurt shop to restaurant. The business owners state that they are unable to pay the capacity fees in a single payment at this time and have requested an installment payment plan. A copy of the letter received from the business owners follows this position paper. Staff does not have the authority under District Code to execute an installment payment agreement. If the Board authorizes the General Manager to execute an installment payment agreement, staff will work with the business owners to arrive at terms that are acceptable to both the business owners and the District. The terms will include monthly payments on the amount of the capacity fees owed plus interest. The agreement would not be secured and the charges would not be placed on the property tax roll for collection. The Capacity Use Charge Program was established by the Board to mitigate the potential restraint of capacity fees on business formation within the District. District Code Section 6.12.050 H specifies that users participating in the program shall pay an annual capacity use charge for a period of fifteen years in lieu of paying capacity fees at the time of the change in use. A Capacity Use Agreement requires the signature of the property owner, who has indicated his unwillingness to sign a fifteen year agreement. The property owner may be willing to sign an agreement for a shorter period. Board approval is required for the General Manager to execute a Capacity Use Agreement for a period other than fifteen years. If Board approval is granted, staff will work with the business and the property owners to find a term that is acceptable to all parties. RECOMMENDED BOARD ACTION: Authorize the General Manager to execute a memorandum of agreement for installment payment of capacity fees; and /or authorize the General Manager to execute a Capacity Use Agreement for Pizza My Way at 1300 Contra Costa Boulevard in Pleasant Hill for a term less than fifteen years. WENVRSEC \Position Papers\Mi11ier\2012 \9- 6 -12 \PP - Cap Use Agreement 9 -6 -12 FINAL3.doc Dear Board of Directors of the Central Contra Costa Sanitary District, I would like to start this letter with thanking you for giving us this opportunity to express the hardship that has been applied on us. First, we would like to introduce our selves; we are the owners of a family business by the name of Pizza My Way that will be located in 1300 Contra Costa Blvd # 20 Pleasant Hill, CA 94523. The reason we are writing to you today is because of the big amount of $16,000.00 that was requested from us as a Capacity /Sewer Service Fee. The problem started when the health department forced us to install type one hood that we actually do not need as we have one other restaurant serving the same menu that has Conveyer Ovens under type two hood that is working just fine with no hazard what so ever to the environment or community and has been operating for over 11 years. This request by the health department (type one hood) is the main reason for our Capacity /Sewer Service Fee being raised that much. Type one hood will cost us approximately $15,000 over our budget to install. Then the capacity /sewer fee service came along with $16,000 that we also did not know about even though we have been going back and forth to the Sanitary District since the beginning of June, 2012 but unfortunately no one informed us about this issue until August 15th, 2012 when I came to finalize my process and obtain permits. Ms. Earlene Miller (Engineering Assistant) was nice enough to understand and feel our pain as again we are a family business and an amount like this especially after the huge increase on the hood cost that we have to burden and the high remodeling cost that we have to spend in this location would make or break us. Ms. Miller informed me of the Capacity Use Charge Program that will split the payment over 15 years, but unfortunately the property owner refused to be involved in this program. So we are asking from you to sympathize with us as our goal is to start this new restaurant and produce good, healthy and a high quality food for our customers and hire and train individuals to help and do our part in trying to improve the economy. We are suggesting the following and we are looking forward for your approval as this will be for the best interest for all of us; we would like to split the amount required over seven years ($16000/7 =$2286 a year = $190.5 a month). We are willing to provide any reasonable guaranties to your good self to insure that we will pay the amount on time and without any delay. I thank you again for your time and understanding also would like to inform you that we will be available at your disposal at the time of the board meeting on September 6th, 2012 to answer any questions that you may have for us. Sincerely, Tareq Mashal Shaker Abukishk Pizza My Way (831) 402 6696 RECEIVED AUG 2 3 2012 ENVIRONMENTAL SERVICES