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Home My WebLink About08.a. Connection Fee Deferral Program - expire or extendCentral Contra Costa Sanitary District ' BOARD OF DIRECTORS 8-a- miii� POSITIO PAPER Board Meeting Date: March 21, 2013 Subject: DETERMINE WHETHER THE CONNECTION FEE DEFERRAL PROGRAM SHOULD BE ALLOWED TO EXPIRE ON JUNE 30,2013; IF THE PROGRAM IS TO BE CONTINUED SET APRIL 18, 2013 AT 2:00 P.M. AS THE DATE AND TIME FOR A PUBLIC HEARING TO CONSIDER THE EXTENSION OF THE CONNECTION FEE DEFERRAL PROGRAM Submitted By: Initiating Dept. /Div.: Thomas Brightbill, Senior Engineer Engineering /Environmental Services REVIEWED AND RECOMMENDED FOR BOARD ACTION: D. Gemmell — Environmental Services Division Manager K. Alm C. Swanson Counsel for the District Provisional General Manager ISSUE: On June 16, 2011 the Board adopted Resolution 2011 -023 (ATTACHMENT A), extending the Connection Fee Deferral Program June 30, 2013. If the Program is to be extended, District Code requires that a public hearing be set. RECOMMENDATION: Staff recommends that the program be allowed to expire on June 30, 2013 due to low participation. The Connection Fee Deferral Program was discussed at the February 19, 2013 Budget and Finance Committee meeting and the recommendation of the Committee was to extend the program for an additional two years. Determine if there is interest in continuing the Connection Fee Deferral Program. If yes, establish April 18, 2013 at 2:00 p.m. as the date and time for a public hearing to consider extending the Connection Fee Deferral Program. FINANCIAL IMPACTS: Extending the Connection Fee Deferral Program could result in certain connection fee revenue being deferred and staff time to administer the program. The exact dollar amount would depend on the number of projects that would participate in the program as well as the total number of Residential Unit Equivalents (RUES) in the projects. ALTERNATIVES /CONSIDERATIONS: The Board of Directors could elect not to schedule a public hearing and allow the Connection Fee Deferral Program to expire on June 30, 2013. BACKGROUND: In the spring 2009, the homebuilding community contacted counties, cities and special districts, including Central Contra Costa Sanitary District, requesting that each agency consider allowing deferred payment of impact and utility connection fees at the close of escrow as allowed by recent legislation rather than continuing the current practice of collecting these fees when a building permit is issued or utility C: \Users \danderson \Desktop \FINAL PP to Set PH for Conn Fee Def 3 -21 -13 (4).doc Page 1 of 2 POSITION PAPER Board Meeting Date: March 21, 2013 Subject: DETERMINE WHETHER THE CONNECTION FEE DEFERRAL PROGRAM SHOULD BE ALLOWED TO EXPIRE ON JUNE 30,2013; IF THE PROGRAM IS TO BE CONTINUED SET APRIL 18, 2013 AT 2:00 P.M. AS THE DATE AND TIME FOR A PUBLIC HEARING TO CONSIDER THE EXTENSION OF THE CONNECTION FEE DEFERRAL PROGRAM service connections are made. The District Board of Directors considered the homebuilders' request and at its June 4, 2009 regular meeting approved a one -year pilot program for deferred payment of connection fees. This program was subsequently extended on June 3, 2010 for one year. On June 16, 2011 the program was again extended for two more years, with the provision that it was only for new connections in subdivisions, as they are relatively straightforward to administer. Since inception, fees for over 300 residential units built by five builders have been deferred. Currently, the District has approximately $720,000 in deferred fees outstanding for about 120 residential units, for the one developer currently utilizing the program. There have been no new participants since September 2011. If the Board wishes to extend the Connection Fee Deferral Program, staff recommends that the current administration fees outlined below to recover staff costs be amended as part of the annual review of Environmental and Development - Related Rates and Charges: • 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 4.5 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 of setting up the program, lost interest, and staff labor to enter and monitor deferral and subsequent payment of fees in the permit counter data system. RECOMMENDED BOARD ACTION: Determine if there is interest in continuing the Connection Fee Deferral Program. If yes, establish April 18, 2013 at 2:00 p.m. as the date and time for a public hearing to consider extending the Connection Fee Deferral Program. If no, the program will expire on June 30, 2013 without further Board action. Attached Supporting Document: 1. Attachment A - Resolution 2011 -023 C: \Users \danderson \Desktop \FINAL PP to Set PH for Conn Fee Def 3 -21 -13 (4).doc Page 2 of 2 ATTACHMENT A 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: McGill, Nejedly, Williams, Hockett NOES: Members: None ABSENT: Members: Menesini � �%Vx Ji 1 _.' Barbara D. Hockett President of the Board of Directors Central Contra Costa Sanitary District County of Contra Costa, State of California �CC1U�ITERSIGNED: =Elaine'R. B6ehme, CIVIC ;Secretary• of the District Cent`ral*G_ntra Costa Sanitary District <<f:rQuntjrof "Contra Costa, State of California ,."..: t Approved as to form: Kenton L. Alm, Esq. Counsel for the District