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Home My WebLink About07.a. Authorize public notice (Prop 218) of proposed Sewer Service Charge increasesCentral Contra Costa Sanitary District 7,a. ' BOARD OF DIRECTORS. POSITION PAPER Board Meeting Date: February 21, 2013 Subject: AUTHORIZE THE SECRETARY OF THE DISTRICT TO PROVIDE PUBLIC NOTICE OF PROPOSED SEWER SERVICE CHARGE RATE INCREASES Submitted By: Initiating Dept. /Div.: Thea Vassallo, CPA, CMA Finance Manager Administrative / Finance & Accounting REVIEWED AND RECOMMENDED FOR BOARD ACTION: M. Scahill, Communication Manager �k$ A. Antkowiak, Capital Projects Division Manager K. Alm C. Swanson T. Vassallo, Finance Manager Counsel for the District Provisional General Manager ISSUE: To comply with Proposition 218 public notice requirements, the District must provide 45 days written notice to ratepayers prior to considering a proposed Sewer Service Charge rate increase at a public hearing. RECOMMENDATION: Authorize mailing a public notice of proposed Sewer Service Charge rate increases of up to $34 for Fiscal Year 2013 -2014, for a total of up to $405 per year effective July 1, 2013, and up to an additional $34 for Fiscal Year 2014 -2015, for a total of up to $439 per year effective July 1, 2014. FINANCIAL IMPACTS: The total cost of printing and mailing the public notice to District ratepayers is estimated to be approximately $50,000. ALTERNATIVES /CONSIDERATIONS: Forego a public notice and do not propose a Sewer Service Charge increase or notice an amount less than $34 per year. BACKGROUND: Proposition 218 requires written public notice of Sewer Service Charge increases, and the scheduled public hearing in addition to a required legal notice published in the newspapers. Compliance with Proposition 218 requires the District to provide at least a 45 -day notice to all rate paying property owners for a Sewer Service Charge rate increase. For.such notice to be given before the proposed June 6, 2013 Public Hearing, mailing preparations must begin by March 22, 2013 or the noticing will cost an additional $10,000. As discussed with the Board at the January 24, 2013 Financial Planning and Policy Workshop, based on the operations, maintenance, capital needs, mandated regulatory compliance, and prudent reserve levels, a Sewer Service Charge rate increase of up to $34 for each of the next two years was recommended by staff. The notice must specify the maximum amount of the increase and includes language indicating an amount of up to $34 per year for Fiscal Years 2013 -2014 and 2014 -2015. C: \Documents and Settings\cgee \Local Settings \Temporary Internet Files \Content.Outlook \4VS9801A\Sewer Service Charge Public Hearing 2 -21 -13 (3).doc Page 1 of 2 POSITION PAPER Board Meeting Date: February 21, 2013 Subject: AUTHORIZE THE SECRETARY OF THE DISTRICT TO PROVIDE PUBLIC NOTICE OF PROPOSED SEWER SERVICE CHARGE RATE INCREASES The $34 increase each year for two years would be used for capital projects, higher energy costs, regulatory compliance, salary and benefit cost increases, and paydown of unfunded liabilities. A copy of the proposed public notice is attached for the Board's consideration. If the notice is authorized, the Board would consider setting the Sewer Service Charge rate at the Public Hearing on June 6, 2013. In order to comply with the Proposition 218 timeline and provide the 45 -day ratepayer notice, Board comments are requested on the proposed public notice and authorization is requested for mailing the public notice to residential and nonresidential customers. RECOMMENDED BOARD ACTION: Authorize the Secretary of the District to mail a public notice of proposed Sewer Service Charge rate increases of up to $34 for Fiscal Year 2013 -2014, for a total of up to $405 per year effective July 1, 2013, and up to an additional $34 for Fiscal Year 2014 -2015, for a total of up to $439 per year effective July 1, 2015. CADocuments and Settings \cgee \Local Settings \Temporary Internet Files \Content.Outlook \4VS9801A \Sewer Service Charge Public Hearing 2 -21 -13 (3).doc Il Central Contra Costa Sanitary District NOTICE OF A PUBLIC HEARING /COMPLIANCE WITH PROPOSITION 218 A proposed increase in your Annual Sewer Service Charge will be considered at a Public Hearing at 2 p.m. on June 6, 2013 at the Central Contra Costa Sanitary District Board Room, 5019 Imhoff Place, Martinez, CA 94553. Dear Property Owner and /or Customer: The Central Contra Costa Sanitary District (CCCSD) provides sanitary sewage collection and treatment, household hazardous waste disposal, and recycled water services in its central Contra Costa County service area. The District operates within an annual budget of approximately $100 million. CCCSD collects an annual Sewer Service Charge from each property connected to the sewer system. The current residential rate of $371 per year per single family unit is billed as a line item labeled "CCCSD SEWER CHG" on your Contra Costa County property tax bill. CCCSD also receives approximately $73 per residence each year from the County's property tax allocation which is used for operations, maintenance, and capital improvements. New State and Federal regulations involving water and air quality, additional testing, and treatment processes have financially impacted CCCSD and increased Operations and Maintenance costs. The CCCSD Board must therefore consider an increase in the annual Sewer Service Charge of up to $34 (9 cents per day) for Fiscal Year (FY) 2013 -2014 for a total of up to $405 per year effective July 1, 2013, and up to an additional $34 increase for FY 2014 -2015, effective July 1, 2014, for a total of up to $439 per year. FOR RESIDENTIAL CUSTOMERS, whether a single - family home, mobile home, townhouse, condominium, apartment, or other multi - family home, this would mean an increase in the Sewer Service Charge of up to 9.2% in the first year and up to 8.4% in the second year. FOR NONRESIDENTIAL CUSTOMERS, the service charge rates are calculated for each customer group based on the cost to provide service, considering both the quantity of sewage discharged and other sewage characteristics affecting the cost for treatment. The service charge increases being considered for this category are shown on the reverse side of this notice. The District operates under a 10 -Year Business Plan (Plan), developed by staff and updated annually. The Plan documents CCCSD operations, maintenance, facility needs, their associated costs, and the needed revenue for the District to meet its regulatory requirements and fiscal responsibilities. A failure to meet the regulatory requirements could impact CCCSD's mission to protect public health and the environment and result in fines imposed by state and federal regulators that could run into the millions of dollars. In the next decade, the District faces expenditures of approximately $422 million in Capital Projects for rehabilitation and replacement of CCCSD's 1,500 -mile sewer system, mandatory upgrades to the treatment plant, general improvements to buildings and vehicles, and continuation of the recycled water program. The remaining operations and maintenance expenditures include normal costs and reductions in the unfunded liability of retirement and healthcare costs. Based on the results of the Plan, the proposed increases would allow CCCSD to meet its current regulatory and financial requirements. NOTICE IS HEREBY GIVEN that the Board of Directors of the Central Contra Costa Sanitary District will hold a PUBLIC HEARING on this matter in the CCCSD Board Room, 5019 Imhoff Place, Martinez, California, on Thursday, June 6, 2013 at 2:00 p.m., at which time and place interested persons may appear and be heard. Only written and signed protests of property owners or customers that include the writer's address are to be counted to determine whether a majority protest to the proposed rate increases exists. Property owners or tenants can mail their protests to the Secretary of the District at 5019 Imhoff Place, Martinez, CA 94553; hand - deliver them to the Reception Desk at 4849 Imhoff Place; fax them to (925) 676 -7211; or e -mail a written, signed protest in PDF format to eboehme @centralsan.org. Protests must be received before the Public Hearing ends. A copy of the CCCSD Board Policy on filing a protest can be found on the CCCSD website at www.centralsan.org. Questions about the proposed Sewer Service Charges can be directed to CCCSD's Information Line by calling (925) 335 -7702 or by e- mailing rates@ cent ralsan.org. Notice mailed by April 22, 2013 CURRENT & PROPOSED SEWER SERVICE CHARGE RATES FOR NONRESIDENTIAL CUSTOMERS USER GROUP CURRENT RATE MAXIMUM PROPOSED RATE. EFFECTIVE JULY 1, 2013 MAXIMUM PROPOSED RATE EFFECTIVE JULY 1, 2014 Commercial and Other Non - Industrial Customers (per Hundred Cubic Feet (HCF)) Bakeries $9.48 $10.35 $11.22 Supermarkets with garbage disposals $7.16 $7.82 $8.47 Mortuaries $6.75 $7.37 $7.99 Restaurants $7.03 $7.67 $8.32 Others $3.44 $3.76 $4.07 Minimum Annual Charge $385.00 $420.00 $456.00 Industrial Customers Flow (per HCF) $1.42 $1.55 $1.68 Biochemical Oxygen Demand (per thousand pounds) $789.00 $861.00 $934.00 Suspended Solids (per thousand pounds) $564.00 $616.00 $667.00 Demand (per HCF in peak month) $170.08 $185.67 $201.25 Minimum Annual Charge $385.00 $420.00 $456.00 Determined Determined Determined Special Discharge Permits and Contracts individually individually individually Notes: A nonresidential customer's annual sewer service charge is determined by multiplying the appropriate user group rate times the annual wastewater discharge volume measured in HCF (Hundred Cubic Feet), usually estimated from the property's water use. For example, a bakery discharging 250 HCF per year would pay an annual sewer service charge at the July 1, 2013 proposed rate calculated as follows: ($10.35 per HCF) x (250 HCF per year) _ $2,587.50 Alternatively, for 2013 -14 you can estimate your annual sewer service charge by multiplying the amount listed beside "CCCSD SEWER CHG" on your 2012 -13 property tax bill by 1.09. If you are billed directly, multiply the amount on the 2010 -11 invoice by 1.09. For a 2012 -13 estimate, multiply by 1.18. If you have questions regarding the Sewer Service Charge program, or would like us to calculate a property - specific estimate of the sewer service charge for 2013 -2014 and 2014 -2015, please send an e-mail request including your name, Assessor's Parcel Number, address and phone number to rates(cDcentralsan.org, or call the District's Environmental Services Division at (925) 335 -7739. Additional information is available on the District's website: www.centralsan.org.