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Home My WebLink About05.b. Public hearing re Connection Fee Deferral ProgramS.4 0 CENTRAL CONTRA COSTA SANITARY DISTRICT PUBLIC HEARING TO CONSIDER ADOPTING A RESOLUTION EXTENDING THE CONNECTION FEE DEFERRAL PROGRAM FOR TWO YEARS SUGGESTED AGENDA APRIL 18, 2013 Request staff report 2. Hearing: a. Open hearing b. Receive comments, if any C. Close hearing 3. Discussion 4. Recommended Actions: Conduct a public hearing to receive comments and consider adopting a resolution extending the Connection Fee Deferral Program for two years. C:\ Users\ danderson \AppData \LocalWlicrosoft \Windows \Temporary Internet Files\ Content.Outlook \DVCG8C5G\Agenda PH Fee Deferral Program 4 -18 -13 Final.doc Central Contra Costa Sanitary District ' BOARD OF DIRECTORS POSITION PAPER Board Meeting Date: April 18, 2013 Subject. CONDUCT A PUBLIC HEARING TO RECEIVE COMMENTS AND CONSIDER ADOPTING A RESOLUTION EXTENDING THE CONNECTION FEE DEFERRAL PROGRAM FOR TWO YEARS Submitted By. Initiating Dept. /Div.: Earlene Millier, Engineering Assistant III Engineering /Environmental Services REVIEWED AND RECOMMENDED FOR BOARD ACTION: T. Brightbill — Senior Engineer D. Gemmell — Environmental Services Manager K. Alm C. Swanson Counsel for the District Provisional General Manager ISSUE: At its March 21, 2013 regular meeting, the Board of Directors set April 18, 2013 as the date for a public hearing to receive comments on whether or not to extend the Connection Fee Deferral Program for new connections in subdivisions. RECOMMENDATION: Conduct a public hearing to receive comments and consider whether or not to extend the program. If the program is to be extended, adopt a resolution extending the Connection Fee Deferral Program for two years and continuing the participation fees. FINANCIAL IMPACTS: There will be no financial impacts from extension of the Connection Fee Deferral Program since revenue from participation fees will cover program costs if developers choose to participate. ALTERNATIVES /CONSIDERATIONS: The Board could decide not to extend the Fee Deferral Program, in which case it will expire on June 30, 2013. BACKGROUND: In the spring of 2009, the homebuilding community contacted counties, cities and special districts including CCCSD, requesting that each agency consider allowing deferred payment of impact and utility connection fees at the close of escrow for new homes as allowed by recent legislation, rather than continuing the current practice of collecting these fees when a building permit is issued or utility service connections are made. The homebuilders believed that the then - prevailing economic recession, specifically the credit and cash flow crisis, had resulted in an inequitable and unjust situation for builders. The Board considered the homebuilders' request, and at its June 4, 2009 regular meeting, approved a one -year pilot program for deferred payment of connection fees, finding that the situation constituted a "special circumstance" requiring suspension, modification and relief from application of District Code provisions pertaining to the time for payment of fees. The approved program allowed builders the option of signing a promissory note and recordable agreement calling for payment of fees either upon C:\ Users \danderson\AppData \local \Microsoft \Windows \Temporary Internet Files \Content.Outlook \DVCG8C5G \PP Conduct PH re Fee Deferral Program 4 -18 -13 Final.doc Page 1 of 3 POSITION PAPER Board Meeting Date: April 18, 2013 subject: CONDUCT A PUBLIC HEARING TO RECEIVE COMMENTS AND CONSIDER ADOPTING A RESOLUTION EXTENDING THE CONNECTION FEE DEFERRAL PROGRAM FOR TWO YEARS close of escrow, first occupancy, or after expiration of a two -year period from the issuance of the Connection Permit, whichever event occurs first. In the spring of 2010, the Building Industries Association requested that the program be continued, and the Board adopted Resolution 2010 -033 on June 3, 2010, extending the program for one year. On July 1, 2010, the Board adopted Ordinance 260 establishing fees to recover the District's costs for administering the program. The fees include a processing fee of $460 for each separate "Memorandum of Agreement" prepared and recorded by staff, and a participation fee of $115 for each separate property (parcel) for which fees are deferred. Only one owner (Shapell Homes) has used the program since fees to recover costs were established. At the Board's regular meeting on May 19, 2011, staff reported that the Building Industries Association of the Bay Area favored continuation of the fee deferral program; however, staff recommended that the program be allowed to expire due to low usage. After deliberation, the Board set June 16, 2011 as the date for a public hearing to receive comments on and consider a two -year extension of the Connection Fee Deferral Program and continuation of program participation fees. At the June 16, 2011 meeting, the program was extended for two years for new connections in subdivisions only. Amounts that have been deferred and paid to date are as follows: Owner Number of Units Amount Deferred Amount Paid Amount Outstanding Shapell Homes 180 $1,078,670 $1,078,670 $ 0 Brookfield Homes 34 239,066 239,066 0 Gallegos 1 5,298 5,298 0 Bragg 1 5,298 5,298 0 Maggi 4 21,192 10,956 0 Shapell Homes 120 695,640 0 695,640* TOTALS: 340 units $2,045,164 $1,349,524 $695,640 * Final payment is due by September 2013. C:\ Users \danderson\AppData \Local \Microsoft \Windows \Temporary Internet Files \Content.Outlook \DVCG8C5G \PP Conduct PH re Fee Deferral Program 4 -18 -13 Final (2).doc Page 2 of 3 POSITION PAPER Board Meeting Date: April 18, 2013 Subject: CONDUCT A PUBLIC HEARING TO RECEIVE COMMENTS AND CONSIDER ADOPTING A RESOLUTION EXTENDING THE CONNECTION FEE DEFERRAL PROGRAM FOR TWO YEARS At the Budget and Finance Committee meeting of February 19, 2013, the Committee recommended a two -year extension of the program for new subdivisions, and continuation of the participation fees. Staff has prepared the draft resolution (Attachment A) to extend the program for two years, until June 30, 2015, at which time the program and fees will expire unless further Board action is taken. Letters have been sent to local contractors and developers regarding this program and other environmental and development - related fees and capacity fees, inviting them to comment at an informational meeting on April 16 or at the public hearing. Legal notices for the public hearing were published in the Contra Costa Times and the San Ramon Valley Times, and were posted on the notice board at the District Headquarters Office Building. In addition, representatives of Shapell Homes and the Building Industries Association of the Bay Area were separately notified. RECOMMENDED BOARD ACTION: Conduct a public hearing to receive comments and take one of the following actions: 1. Adopt Resolution 2013 -XX, extending the program for two years, and continuing the participation fees, finding that special circumstances require suspension from the application of District Code Section 6.08.040 and Subsection 6.12.030D; or 2. Take no action, allowing the program to terminate on June 30, 2013; or 3. Provide other instructions to staff. Attached Supportinq Documents: 1. Proposed Resolution C:\ Users \danderson\AppData \Local \Microsoft \Windows \Temporary Internet Files \Content.Outlook \DVCG8C5G \PP Conduct PH re Fee Deferral Program 4 -18 -13 Final (2).doc Page 3 of 3 RESOLUTION 2013 -M 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 AND RESOLUTION NO. 2011 -023 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 Resolution 2011 -023, 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 and Resolution 2011 -023, 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, 2015; 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 Manager and /or his designee shall be authorized to record said agreements and promissory note releases with the Recorder of Contra Costa County. Resolution 2013 - Page 2 of 2 PASSED AND ADOPTED this 18th day of April 2013, by the Board of Directors of the Central Contra Costa Sanitary District by the following vote: AYES: Members: NOES: Members: ABSENT: Members: James A. Nejedly President of the Board of Directors Central Contra Costa Sanitary District County of Contra Costa, State of California 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