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Home My WebLink About12.c.2) PUBLIC HEARING: Ordinance re Schedule of Capacity Fees, Rates and ChargesCentral Contra Costa Sanitary District •C• ' BOARD OF DIRECTORS POSITION PAPER Board Meeting Date: June 4, 2015 Subject. CONDUCT A PUBLIC HEARING TO RECEIVE COMMENT AND CONSIDER AN UNCODIFIED ORDINANCE TO REPLACE THE "SCHEDULE OF CAPACITY FEES, RATES, AND CHARGES" ADOPTED PURSUANT TO ORDINANCE 281 IN ACCORDANCE WITH DISTRICT CODE CHAPTER 6.12 Submitted By: Thomas Brightbill, Senior Engineer Initiating Dept. /Div.: Engineering & Technical Services/ Planning & Development Services REVIEWED AND RECOMMENDED FOR BOARD ACTION: D. Gemmell — Planning & Development Services Mgr. JM. Petit — Director of Engineering & Technical Services ,r,'' K. Alm Roger S. Bailey Counsel for the Distri General Manager ISSUE: State Law and District Code require that a public hearinb.be held prior to the Board of Directors' consideration of an ordinance to adopt an uncodified "Schedule of Capacity Fees, Rates and Charges ". RECOMMENDATION: Conduct the public hearing. Adopt an ordinance replacing the uncodified "Schedule of Environmental and Development - Related Rates and Charges" adopted pursuant to Ordinance 281 in accordance with District Code Chapter 6.12. FINANCIAL IMPACTS: If the recommended fees are adopted, staff estimates that approximately $34,210 in additional capacity fee revenue would be generated by the fee increases in fiscal year 2015 -16, based on a projected 1,000 residential units. BACKGROUND: The District charges a Capacity Fee when properties first connect to our public sewer or when there is an expansion or change of use for non - residential properties. Each year this fee is updated based on changes to the value of our assets and the number of customers in the district. California Senate Bill 1760, enacted in September 1998, defines Capacity Charges for water and sewer agencies in Section 66013 of the California Government Code. The equity buy -in method used by the District conforms to the requirements contained in Section 66013. The capacity fee methodology and update calculation were reviewed as part of the recent Cost of Service Study. A copy of the draft Capacity Fee Update Report and an invitation to attend an informational meeting on May 28, 2015 was mailed to developers, contractors, engineers, and permitted industrial users. C: \Users \danderson\AppData \Local \Microsoft \Windows \Temporary Internet Files \Content.Outlook \DVCG8C5G \PP to Conduct PH Cap Fees 6 -4 -15 Final.doc Page 1 of 3 POSITION PAPER Board Meeting Date: June 4, 2015 Subject., CONDUCT A PUBLIC HEARING TO RECEIVE COMMENT AND CONSIDER AN UNCODIFIED ORDINANCE TO REPLACE THE "SCHEDULE OF CAPACITY FEES, RATES, AND CHARGES" ADOPTED PURSUANT TO ORDINANCE 281 IN ACCORDANCE WITH DISTRICT CODE CHAPTER 6.12 A recommended ordinance to establish the following proposed Capacity Fees is attached: Fee Category Current Proposed % Change Gravity Zone Fee $5,995 per RUE $6,005 per RUE 0.2% Pumped Zone Fee $7,580 per RUE $7,655 per RUE 1.0% COMMITTEE RECOMMENDATION: The Finance Committee reviewed the proposal at its May 13, 2015 meeting and recommended approval. RECOMMENDED BOARD ACTION: Conduct a public hearing to receive comment and consider adopting a proposed ordinance to establish a new uncodified "Schedule of Capacity Fees, Rates, and Charges." Upon conclusion of the public hearing, adopt the attached proposed uncodified ordinance, which includes the following findings: 1. The District has made a substantial investment in assets that will benefit new users. 2. The purpose of the Capacity Fee Program is to equalize the investment in District assets among current and new users, thus ensuring that new users pay their fair share for facilities and other assets. 3. There is a strong and reasonable relationship between the actual added burden imposed by new users and the proposed Capacity Fee. 4. The current Sewer Construction Fund balance and future Capacity Fee revenue will be allocated to: • Life -cycle replacement, renovation, upgrading and improvements to maintain existing capacity in District facilities; • Addition to and expansion of facilities when needed or required to meet legal and regulatory requirements; • Equitable adjustment of contributions among current, new and contractual users; • New users' buy -in to all assets of the District including facilities and the balances in the: - Sewer Construction Fund - Running Expense Fund - Debt Service Fund N:\ADMINSUP\ADMIN \DIST- SEC \Position Papers\2015 \PP to Conduct PH Cap Fees 6-4 -15 Final.doc Page 2 of 3 POSITION PAPER Board Meeting Date: June 4, 2015 subject. CONDUCT A PUBLIC HEARING TO RECEIVE COMMENT AND CONSIDER AN UNCODIFIED ORDINANCE TO REPLACE THE "SCHEDULE OF CAPACITY FEES, RATES, AND CHARGES" ADOPTED PURSUANT TO ORDINANCE 281 IN ACCORDANCE WITH DISTRICT CODE CHAPTER 6.12 - Self Insurance Fund 5. For the District to continue an adequate level of service to all users, maintenance of existing facilities capacity and construction of additional facilities capacity in the future is required. 6. The proposed fees, rates and charges are exempt from the California Environmental Quality Act (CEQA) per section 6.12.020 of the District Code. (Four affirmative votes are required for adoption.) Attached Supporting Documents: 1. Proposed Ordinance, including redlined Exhibit A: Schedule of Capacity Fees, Rates, and Charges (Uncodified) 2. Report Regarding the Capacity Fee Update N:WDMINSUPWDMIN \DIST- SEC \Position Papers\2015 \PP to Conduct PH Cap Fees 6 -4 -15 Final.doc Page 3 of 3 ATTACHMENT 1 ORDINANCE NO. 2$8 AN ORDINANCE OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT ADOPTING AN UNCODIFIED SCHEDULE OF CAPACITY FEES, RATES AND CHARGES IN ACCORDANCE WITH DISTRICT CODE CHAPTER 6.12 WHEREAS, the Board of Directors (Board) of the Central Contra Costa Sanitary District (District) finds that substantial study has been conducted regarding the impacts of planned future development within the District's service area on existing District services and facilities, along with an analysis of new, improved, or expanded District facilities and services required or appropriate to serve new users and current users who change the use of their connected buildings and facilities, and said studies have set forth the relationship between the added burden imposed by such users, and the need for an estimated cost of District services and facilities occasioned by this added burden; and WHEREAS, these studies were undertaken by District staff and culminated in documents that are part of the public record, to wit: the draft Fiscal Years 2015 -16 Capital Improvement Budget and Capital Improvement Plan, and the Staff Report on Proposed Capacity Fee Program dated May 14, 2015; and WHEREAS, it is reasonable and necessary that all users of the District's wastewater and household hazardous waste collection, treatment, recycling, reuse and disposal services and facilities, including those temporary users served under Special Discharge Permits, contribute their appropriate portion of the funding for such District services and facilities; and WHEREAS, a properly noticed public hearing regarding the proposed Capacity Fee Program revisions was held on June 4, 2015, and proper notice was also given of the availability of the documents noted above for public inspection and review prior to said public hearing; and WHEREAS, Chapter 6.12 of the District Code provides the enabling authority for the District to implement the proposed uncodified Schedule of Capacity Fees, Rates and Charges; and WHEREAS, the Board finds as follows: 1. The District has made a substantial investment in assets that will benefit new users. 2. For the District to continue an adequate level of service to all users, maintenance of existing facilities capacity and construction of additional facilities capacity in the future is required. 3. The purpose of the Capacity Fee Program is to equalize the investment in District assets among current and new users, thus ensuring that new users pay their fair share for facilities capacity and services. Ordinance No. 283 Page 2 of 3 Central Contra Costa Sanitary District 4. The current Sewer Construction Fund balance and future Capacity Fee revenue will be allocated to: • Life -cycle replacement, renovation, upgrading and improvements to maintain existing capacity in District facilities; • Addition to and expansion of facilities where needed or required to meet legal and regulatory requirements; • Equitable adjustment of contributions among current, new and contractual users; • New users' buy -in -to -all- assets of the District including facilities and the balances in the: - Sewer Construction Fund - Running Expense Fund - Debt Service Fund - Self Insurance Fund 5. There is a strong and reasonable relationship between the actual added burden imposed by new users and the proposed Capacity Fees, Rates and Charges. 6. The proposed fees, rates and charges are exempt from the California Environmental Quality Act (CEQA) per section 6.12.020 of the District Code. NOW, THEREFORE, the Board of Directors of the Central Contra Costa Sanitary District does ordain as follows: Section 1 (To be Uncodified) The "Schedule of Capacity Fees, Rates and Charges" as set forth in full in Exhibit "A" to this Ordinance, which exhibit is incorporated in full herein by this reference, is hereby adopted in uncodified form pursuant to the provisions of District Code Section 6.12.020. As of the effective .date of this Ordinance, Capacity Fees shall be charged at such rates and for such categories of users as set forth in said Schedule, and shall remain in effect until amended or replaced by Ordinance. Section 2 All ordinances and parts of ordinances in conflict with the provisions of this Ordinance are repealed. The provisions of this ordinance, insofar as they are substantially the same as existing provisions relating to the same subject matter shall be construed as restatements and continuations thereof and not as new enactments. To the extent this ordinance or any portion or section of this ordinance is determined invalid or unconstitutional, such portions of Ordinance No. 281 shall remain in effect and such rates and charges due thereunder for any categories of users shall remain due and payable as if those portions of Ordinance No. 281 had not been repealed. With respect, however, to violations, rights accrued, liabilities accrued, or appeals taken, prior to the effective date of this Ordinance, under any chapter, ordinance, or part of an ordinance, such chapter, ordinance or part of an ordinance shall be deemed to remain Ordinance No. it Vs Page 3of3 Central Contra Costa Sanitary District in full force for the purpose of sustaining any proper suit, action, or other proceedings, with respect to any such violation, right, liability or appeal. Section 3 This Ordinance shall be a general regulation of the District and shall be published once in the Contra Costa Times, a newspaper of general circulation within the District, and shall be effective on July 1, 2015. PASSED AND ADOPTED this 4th day of June 2015, by the Board of Directors of the Central Contra Costa Sanitary District by the following vote: AYES: Members: NOES: Members: ABSENT: Members: Michael R. McGill, P.E. 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 EXHIBIT "A" SCHEDULE OF CAPACITY FEES, RATES, AND CHARGES (Uncodified) The Capacity Fees, Rates, and Charges listed below were established by Central Contra Costa Sanitary District Ordinance No. ?8$adopted du,,o 5, 21 G4 June 4, 2015. These fees, rates, and charges shall be applied to all new connections or added burdens for which fees become due and payable on or after July 1, 2044 2015 in accordance with the provisions of District Code Chapter 6.12. Gravity Capacity Fee $5,995 = $6,005 / RUE* Pumping Capacity Fee $1,585 Fee $1,650 / RUE *A residential unit equivalent (RUE) is a measure of sewage volume and strength equivalent to a typical residential household. Gravit Zone Fee Zone 1 = Gravity Capacity Fee Pumped Zone Fee Zone 2 = Gravity Capacity Pumping Fee + Pumping Capacity Fee Residential Unit Equivalence (RUE) Factors(l) Number of RUE = Unit of Measure Count Multiplied by the RUE Factor Eligible for Gravity Pumping Capacity Capacity Capacity Use Charge Use Unit of Fee RUE Fee RUE Program Code User Group Measure(', 2) Factor Factor * =Yes LU Single-family residences Dwelling Unit 1.000 1.000 LA Multiple - family :1.000 i.090 residences, apartments Dwelling Unit 0.847 0.847 LD Duplex Dwelling Unit 0.847 0.847 LM Mobile homes Dwelling Unit i.000 i.000 0.847 0.847 LT Condominium Dwelling Unit 0.847 0.847 LS Second residential unit Dwelling Unit 0.847 0.847 (on same parcel with Single-family residence LC Common areas 1,000 sq. ft. 0.200 0.200 AB Auto body /painting 1,000 sq. ft. 0.432 0.467 0.484 AD Auto dealerships 1,000 sq. ft. 0.432 0.467 0.484 AL Aircraft services 1,000 sq. ft. 0.432 0.467 0.484 AR Auto repair /maintenance 1,000 sq. ft. 0.432 0.467 0.484 AS Service stations 1,000 sq. ft. 0.432 0.467 0.484 BT Transportation services 1,000 s . ft. 0.432 0.467 N: \EnvrSRV \Fees & Charges - Capacity, Environmental & Development\2015 Review \Capacity Fees \ORD xx Exh A Capacity Fees Ord REDLINE 2015- 06- 04.doc Page 1 of 5 AC Car washes 1,000 sq. ft. 21.127 22.829 Gravity Capacity Fee RUE Factor :recyCar AW washes with cling 1.000 sq. ft. 3.522 3.805 0.725 (1) Fees for multi -use buildings shall be determined by considering each use separately. (2) "Unit -of- measure" shall mean the basic unit that quantifies the degree of use of a particular parcel (e.g. dwelling unit, square footage). Square footage of an improvement shall be based upon the gross exterior dimensions of the structure. SCHEDULE OF CAPACITY FEES, RATES AND CHARGES - CONTINUED Residential Unit Equivalence (RUE) Factors(') Number of RUE = Unit of Measure Count Multiplied by the RUE Factor Use Code User Group Unit of Measure(2) Gravity Capacity Fee RUE Factor Pumping Capacity Fee RUE Factor Eligible for Capacity Use Charge Program (* =Yes BB Barbers /beauty salons / pet grooming 1,000 sq. ft. 0.725 0.783 BC Dry cleaners, no laundry 1,000 sq. ft. 0.259 0.279 BR Retail sales 1,000 sq. ft. 0.259 0.279 BE Equipment repair / repair services 1,000 sq. ft. 0.228 0.247 BK Contractors / business services 1,000 sq. ft. 0.228 0.247 BN Nurseries / lumberyards 1,000 sq. ft. 0.228 0.247 IL Light industrial 1,000 sq. ft. 0.228 0.247 BH Meeting halls / studios 1,000 sq. ft. 0.290 0.313 EA Auditoriums / theaters 1,000 sq. ft. 0.290 0.313 EC Cinemas 1,000 sq. ft. 0.290 0.313 EM Entertainment 1,000 sq. ft. 0.290 0.313 EB Bowling alleys 1,000 sq. ft. 0.311 0.336 BZ Miscellaneous commercial 1,000 sq. ft. 0.510 0.551 EG Golf courses / country clubs 1,000 sq. ft. 1.166 1.391 EH Health clubs / spas 1,000 sq. ft. 1.166 1.391 ET Tennis clubs 1,000 s . ft. 1.166 1.391 IW Warehouses 1,000 sq. ft. 0.136 0.147 BM Markets 1,000 sq. ft. 0.556 0.601 BS Supermarkets 1,000 sq. ft. A.556 0.880 0.601 BX Shopping centers 1,000 sq. ft. 1.057 1.142 OB Business offices 1,000 sq. ft. 0.295 0.319 OF Financial institutions / banks 1,000 sq. ft. 0.295 0.319 OG Government offices 1,000 sq. ft. 0.295 0.319 OS Fraternal / service offices 1,000 sq. ft. 0.295 0.319 OM Medical offices 1,000 sq. ft. 0.637 0.688 OV Veterinary clinics 1,000 sq. ft. 0.637 0.688 RD Delicatessens 1,000 sq. ft. 1.166 1.294 RN Bars 1,000 sq. ft. 1.166 1.294 RI Ice cream parlors 1,000 sq. ft. 1.166 1.294 RY Yogurt shops 1,000 sq. ft. 1.166 1.294 RS Restaurants dine -in 1,000 sq. ft. 4.010 2.738 RT Restaurants take -out 1,000 sq. ft. 4.010 2.738 Banquet facilities / patio N: \EnvrSRV \Fees & Charges - Capacity, Environmental & Development \2015 Review \Capacity Fees \ORD xx Exh A Capacity Fees Ord REDLINE 2015- 06- 04.doc Page 2 of 5 RC seating 1,000 s . ft. 1.166 0.825 RB Bakeries retail 1,000 s . ft. 4.061 2.178 BL Laundromats 1,000 s . ft. 13.506 14.594 (1) Fees for multi -use buildings shall be determined by considering each use separately. (2) "Unit -of- measure" shall mean the basic unit that quantifies the degree of use of a particular parcel (e.g. dwelling unit, square footage). Square footage of an improvement shall be based upon the gross exterior dimensions of the structure. SCHEDULE OF CAPACITY FEES, RATES AND CHARGES - CONTINUED Residential Unit Equivalence (RUE) Factors(i) Number of RUE = Unit of Measure Count Multiplied by the RUE Factor Eligible for Gravity Pumping Capacity Capacity Capacity Use Charge Use Unit of Fee RUE Fee RUE Program Code User Group Measure (2) Factor Factor * =Yes SF Skilled nursing facilities 1,000 s . ft. 2.216 2.347 " Residential care facilities FE for the elderly 1,000 s . ft. 0.932 0.987 HP Hospitals 1,000 s . ft. 2.891 3.124 LH Hotels / motels 1,000 sq. ft. 1 .666 1.272 1.926 CH Churches 1,000 s . ft. 0.242 0.261 Private and Public Schools Use codes SD, SE, SH, SI, SU Schools with cafeteria and gym / showers Classroom 0.860 1.000 Schools with gym / showers and no cafeteria Classroom 0.774 0.900 Schools with cafeteria and no gym / showers Classroom 0.516 0.600 Schools without cafeteria or gym / showers Classroom 0.430 0.500 (1) Fees for multi -use buildings shall be determined by considering each use separately. (2) "Unit -of- measure" shall mean the basic unit that quantifies the degree of use of a particular parcel (e.g. dwelling unit, square footage). Square footage of an improvement shall be based upon the gross exterior dimensions of the structure. N: \EnvrSRV \Fees & Charges - Capacity, Environmental & Development\2015 Review \Capacity Fees \ORD xx Exh A Capacity Fees Ord REDLINE 2015- 06- 04.doc Page 3 of 5 SCHEDULE OF CAPACITY FEES, RATES AND CHARGES — CONTINUED Special Studies The fees for Special Studies shall be as established in the Schedule of Environmental and Development - Related Fees, Rates, and Charges pursuant to the provisions of Chapter 6.30 of the District Code. The following user groups require a special study to determine the appropriate capacity fees. Administrative fees to conduct special studies for these user groups shall be waived. Use Code User Group BP Parking lots CM Cemeteries MO Mortuaries with embalming or cremation facilities EP Parks / playgrounds ES Swimming pools EF Large fitness / athletic clubs LR Residence hotels IE Electronic industries IH Heavy industries IP Permitted industries IR Laboratories / research facilities -- Improvements with garbage disposals -- Public facilities -- Special billings -- Utilities Values for use in the RUE formula in Section 6.12.050(D)(2) shall be: FLORU = 200 gpd BODRU = 200 m /I TSSRU = 215 m /i A = 0.69 B = 0.14 C = 0.17 N: \EnvrSRV \Fees & Charges - Capacity, Environmental & Development\2015 Review \Capacity Fees \ORD xx Exh A Capacity Fees Ord REDLINE 2015- 06- 04.doc Page 4 of 5 SCHEDULE OF CAPACITY FEES, RATES AND CHARGES — CONTINUED Capacity Use Charge Program The minimum "initial payment" threshold gravity capacity fee RUE factor shall be 1.166 RUE /per one thousand square feet. The annual interest rate for calculation of capacity use charges shall be as established in the Schedule of Environmental and Development - Related Fees, Rates, and Charges pursuant to the Provisions of Chapter 6.30 of the District Code. N: \EnvrSRV \Fees & Charges - Capacity, Environmental & Development\2015 Review \Capacity Fees \ORD xx Exh A Capacity Fees Ord REDLINE 2015- 06- 04.doc Page 5 of 5 Capacity Charge Capacity Use "Initial Pa ment" Charge Rates Pumping Gravity Capacity Current Year Capacity Fee Fee RUE ($ /Month RUE Factor Factor 1,000 Sq. Ft.) Use (RUE /1,000 (RUE /1,000 Annual Code User Group S . Ft. ) S . Ft.) $ /HCF AC Car washes 1.166 22.829 $1,026.76 $-5.53 $1,028.48 $ 5.54 AW Car washes with recycling 1.166 3.805 $ 121.19 $ 3.92 $ 121.39 BL Laundromats 1.166 14.594 $- 634.75 $-5.35 $ 635.81 $ 5.36 HP Hospitals 1.166 3.124 $ --33.73 $-349 $ 88.88 $ 3.50 RB Bakeries (retail) 1.166 2.178 $ -148.91 $ --8.44 $ 149.16 $ 8.42 RS Restaurants (dine -in) 1.166 2.738 $ W- 146.29 $-6.57 $ 146.54 $ 6.58 RT Restaurants (paper 1.166 2.738 $- 6.57 service / no dishwashers ) $ 146.54 $ 6.58 SF Skilled nursing facilities 1.166 2.347 $ 54.01 $-Z?77 $ 2.78 The annual interest rate for calculation of capacity use charges shall be as established in the Schedule of Environmental and Development - Related Fees, Rates, and Charges pursuant to the Provisions of Chapter 6.30 of the District Code. N: \EnvrSRV \Fees & Charges - Capacity, Environmental & Development\2015 Review \Capacity Fees \ORD xx Exh A Capacity Fees Ord REDLINE 2015- 06- 04.doc Page 5 of 5 CENTRAL CONTRA COSTA SANITARY DISTRICT Report Regarding the Capacity Fee Update May 14, 2015 INTRODUCTION ATTACHMENT 2 Central Contra Costa Sanitary District (CCCSD) charges a Capacity Fee when properties first connect to our public sewer or when there is an expansion or change of use for non - residential properties. Each year this fee is updated based on changes to the value of our assets and the number of customers in the district. This memo summarizes the basis for the Capacity Fee and presents the calculations for the updated fee. BACKGROUND The total value of CCCSD's existing assets (approximately $1.7 billion) is much greater than the value of any future facilities expansion needed to accommodate future customers. While CCCSD's draft FY 2015 -16 Capital Improvement Plan lists over $400 million in projects over the next ten years, most of these projects are for renovation, regulatory compliance, replacement or upgrading of facilities to maintain capacity for both current and prospective customers. CCCSD believes that our facilities generally have adequate capacity to serve both existing and future customers. The Water Environment Federation's (WEF) Manual of Practice 27, Financing and Charges for Wastewater Systems defines several methods for calculating System Development Charges such as CCCSD's Capacity Fee. CCCSD uses the Equity Buy -in method and has used this methodology since 2001. Under this approach, new customers are charged at the same equity position as existing customers which is appropriate based on the level of assets, expansion, and capacity described above. California Senate Bill 1760, enacted in September 1998, defines Capacity Charges for water and sewer agencies in Section 66013 of the California Government Code. The equity buy -in method defined by WEF and used by CCCSD conforms to the requirements contained in Section 66013. CALCULATION APPROACH The Capacity Fee is adjusted each year to reflect the changes in the value of CCCCD's assets. It is calculated using the equity buy -in approach which divides the value of CCCSD's assets by the current number of RUEs to determine the fee. The calculated value of CCCSD assets are determined as follows: • Land: The current value of investments in real property is estimated based on the opportunity value of like cash investments deposited in CCCSD's temporary investments at the time of each purchase and held at interest to the present, rather than by attempting to determine actual market value. Capacity Fee Update Report Page 2 May 14, 2015 • Facilities: The current value of investments in physical facilities is estimated by escalating each year's facilities expenditures based on the change in the Engineering News Record Construction Cost Index for the San Francisco Bay Area (ENR CCI -SF) and then applying straight -line depreciation using the life cycles in Table 3 with no salvage value. Note that a category for "Mains (Renovation Program)" has been included this year in the current value of facilities for determination of Capacity Fees. This category accounts for CCCSD's significant investment since 1988 in life -cycle replacement and renovation of sewers 10- inches in diameter and smaller. This work renews capacity in these smaller sewers for the benefit of both existing and new connectors and reduces future maintenance costs. For this update, the life cycle for renovated mains was reviewed. Since the pipe included in the renovation program calculation begins in 1988 and is primarily PVC, the life of the renovated mains was increased from 75 years to 100 years. • Fund Balances: Prior fiscal year ending balances for the Sewer Construction, Running Expense, Debt Service and Self Insurance Funds are used. The Sewer Construction Fund Balance is reduced by the principal value of CCCSD's outstanding debt. Contributed assets are generally not included in the calculation in order to avoid double recovery of costs, as described in the WEF manual. This year, adjustments were made to the total value of the treatment plant to reflect State and Federal grant funding received in the 1970s. After estimating the current value for an asset category, the component of the Capacity Fee attributable to that category is calculated by dividing current value by the current number of customers as shown below. The number of customers is determines by calculating the number of Residential Unit Equivalents (RUEs). Equity Buy -in Fee = Value of Assets Number of Customers (RUEs) MULTIFAMILY RESIDENTIAL PARCELS The recently completed Cost of Service study recommended changes to the assumed base flow rates for single family and multi - family residential properties. This change resulted in a recommendation to slightly reduce the annual sewer charge for multi- family parcels. When the updated base flow rates are applied to the calculation for Capacity Fee RUE factors, the resulting updated multi - family capacity fee factors are: Capacity Fee Update Report Page 3 May 14, 2015 Gravity Zone Factor Pumped Zone Factor RECOMMENDED CAPACITY FEE 0.847 RUEs per unit 0.847 RUEs per unit Staff recommends that the Board adopt Capacity Fees for the 2015 -16 fiscal year by applying the valuation approach and facilities life cycles described above. The updated fees are: Fee Category Current Proposed % Change Gravity Service $5,995 per RUE $6,005 per RUE 0.2% Pumping Service $7,580 per RUE $7,655 per RUE 1.0% The calculation of the proposed fees is shown in Table 1. If the recommended Capacity Fees are adopted by the Board of Directors, staff estimates that approximately $34,210 in additional revenue will be generated in fiscal year 2015 -16, based on the projections below. The recommended fee calculation approach is a rational, practical, equitable and defensible method to determine the financial burden of new connections. A comparison of the proposed Capacity Fees to the fees charged by neighboring agencies is presented in Table 2. UNITS RUEs DIFFERENCE TOTAL Gravity SFR 405 405.0 $10 $ 4,050 Gravity MFR 195 165.2 10 1,652 Pumped SFR 270 270.0 75 20,250 Pumped MFR 130 110.1 75 8,258 TOTAL 1,000 950.3 $34,210 The recommended fee calculation approach is a rational, practical, equitable and defensible method to determine the financial burden of new connections. A comparison of the proposed Capacity Fees to the fees charged by neighboring agencies is presented in Table 2. CENTRAL CONTRA COSTA SANITARY DISTRICT Report Regarding Capacity Fee Update Table 1 - Capacity Fees Calculation - FY 2015 -16 (Buy -in to all assets. Values through 06/30/2014) Asset Category Land Facilities Treatment Plant/Outfall (45% @ 100 yrs + 20% @ 75 yrs + 35% @ 30 yrs) Recycled Water Facilities (75% @ 50 yrs + 25% @ 30 yrs) Collection System Trunks and Interceptors (30% @ 150 yrs + 70% @ 100 yrs) Contributed Mains (100% @ 75 yrs) District Renovated Mains (100% @ 100 yrs) Pumping Stations (45% @ 100 yrs + 20% @ 75 yrs + 35% @ 30 yrs) General Improvements (Buildings, Equipment, etc.) (50% @ 50 yrs + 35% @ 25 yrs + 15% @ 10 yrs) Major Repairs (100% @ 10 yrs) Sewer Construction Fund Balance (net of outstanding debt) Running Expense Fund & Debt Service Fund Balances Self Insurance Fund Balance TOTAL VALUE: Capacity Fee - Gravity Service Capacity Fee - Pumped Service Value per FY 2014 -15 Asset Value' RUE Value per Change Change ($ /RUE) RUE ($) (%) $49,329,428 $296 $297 ($1) -0.3% $327,771,830 $1,968 $2,260 ($292) - 12.9% $17,338,997 $104 $92 $12 13.0% $315,629,672 $1,895 $1,785 $110 6.2% $658,442,000 not included $173,842,550 $1,044 $907 $137 15.1% $79,954,249 $1,6503 $1,585 $65 4.1% $62,308,833 $374 $344 $30 8.7% $7,790,380 $47 $54 ($7) -13.0% $31,298,769 $188 $158 $30 19.0% $11,299,959 $68 $76 ($8) -10.5% $3,478,531 $21 $22 ($1) -4.5% $1,738,485,197 $1,000,088,948 $6,005 $5,995 $10 0.2% $1,080,043,197 $7,6554 $7,580 $75 1.0% 166,572 Total Residential Unit Equivalents (RUEs) 48,446 Pumped Zone RUEs Notes: 1. Original cost escalated to current dollars less depreciation except land which is original cost escated by opportunity cost 2. Asset value divided by total RUEs unless otherwise noted 3. Pumped component equals asset value divided by pumped zone RUEs 4. Gravity Service Capacity Fee plus pumped component 5/14/2015 CENTRAL CONTRA COSTA SANITARY DISTRICT Report Regarding the Capacity Fee Update Table 2 — Comparison of Capacity Fees AGENCY CAPACITY FEE Dublin San Ramon Services District $16,656 Mountain View Sanitary District $9,182 Proposed CCCSD Pumped Zone $7,665 Current CCCSD Pumped Zone $7,580 Antioch (Delta Diablo Sanitation District for Treatment) $7,314 Pittsburg (Delta Diablo Sanitation District for Treatment) $6,767 Proposed CCCSD Gravity Zone $6,005 Current CCCSD Gravity Zone $5,995 Concord $5,043 Bay Point (Delta Diablo Sanitation District for Treatment) $3,940 West County Wastewater District $2,993 CENTRAL CONTRA COSTA SANITARY DISTRICT Report Regarding the Capacity Fee Update Table 3 - Average Useful Service Life Gravity Sewers Interceptors 150 years Trunks 100 years Mains (Renovated by District) 100 years Treatment Plant & Pumping Station Facilities Tanks /Foundations 100 years Buildings 75 years Mechanical, Electrical & Control Equipment 30 years Recycled Water Facilities Pipelines 50 years Mechanical, Electrical & Control Equipment 30 years General Improvements Buildings 50 years Mechanical /Electrical Equipment and Furnishings 25 years Vehicles and other Equipment 10 years Major Repairs /Replacements 10 years