HomeMy WebLinkAbout04.e. Adopt resolution confirming denial of appeal re Caffe Classico, with findings . e
RESOLUTION NO. 2016-ADg
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE CENTRAL CONTRA COSTA
SANITARY DISTRICT DENYING THE APPEAL OF MR. TOM HEFFERNAN, OWNER OF
THE PROPERTY LOCATED AT 2500 ANNALISA DRIVE IN CONCORD, CALIFORNIA,
AND AFFIRMING THE STAFF DETERMINATION THAT THE AMOUNT OF $114,970.47
WAS LEGALLY OWED AND DELINQUENT FOR UNPAID CAPACITY FEES.
WHEREAS, the Central Contra Costa Sanitary District ("District") provides wastewater
collection and treatment services for residential and non-residential customers in Central
Contra Costa County; and
WHEREAS, under the District's Capacity Fee Program, codified in Chapter 6.12 of the
District Code, users of the sewer system are charged a capacity fee at the time of initial
connection to the system, or upon subsequent creation of an added burden on District
services and facilities, in order to provide for an equitable sharing of capital investment
costs between existing and new users; and
WHEREAS, on August 3, 1983, sewer capacity fees were paid for the partial buildout of a
new building located on the subject property. Based on District Code provisions in effect
at that time, the fees were calculated on the basis of the number of plumbing fixtures
proposed for the use of 3,000 square feet of office space and 3,000 square feet of
electrical manufacturing space within the building; and
WHEREAS, Mr. Tom Heffernan purchased the property in 2000 and constructed additional
tenant improvements without obtaining a required building permit from Contra Costa
County. He then moved his gelato and sorbet manufacturing business, Caffe Classico,
into the building. Under normal District rules and procedures, the County would have
routed tenant improvement plans to the District so that an additional capacity fee could be
collected on the basis of the added burden imposed on the sewer system by this change of
use. This fee would have been due and payable at the time the added burden was
created due to the expansion of activities and the change to food manufacturing use.
However, the District was not notified of the change of use at that time; and
WHEREAS, Mr. Heffernan sold the Caffe Classico business in 2007 but retained
ownership of the underlying property; and
WHEREAS, in September 2011, the District determined that an added burden had been
created without payment of required additional capacity fees because waste strength had
been understated and due to the unpermitted expansion of the scope of operations within
the building beyond the activities upon which the calculations for the initial sewer capacity
fee were based; and
WHEREAS, by letter dated December 26, 2012, the District informed Mr. Heffernan that
additional capacity fees were owed and provided a preliminary estimate of the fees based
on historical wastewater flow and strength data. The District Code had been amended to
utilize a Residential Unit Equivalence (RUE) factor as the basis for calculating the added
Central Contra Costa Sanitary District
Resolution 2016-00$
Page 2 of 3
burden placed on the sewer system by a nonresidential user, taking into consideration
both the volume of flow and wastewater strength. The District offered to consider allowing
payment of the capacity fees over time under its Capacity Use Charge Program; and
WHEREAS, in a meeting on February 1, 2013 and subsequent communications, the
District informed Mr. Heffernan that the total capacity fee for the building, based on
accurate wastewater strength data, would be $866,264. The capacity fee attributable to
the net increase in burden on the sewer system was $566,231. However, the District
indicated that the property owner could elect to participate in the Capacity Use Charge
Program by making an initial down payment of$102,974 and paying off the remaining
balance over 15 years. The down payment was calculated on the basis of the assumed
total building square footage of 12,946 square feet per County Assessor records. The
Caffe Classico manufacturing operation elected to cease discharging wastewater into the
sewer system, instead hauling the wastewater to an alternate system for treatment. The
District informed Mr. Heffernan that if he paid the down payment, no additional charges
would be due as long as Caffe Classico continued to follow zero discharge of
manufacturing wastewater into the sewer system. However, the down payment was not
made; and subsequent negotiations did not result in a mutually acceptable compromise of
the amount due; and
WHEREAS, the District Board of Directors conducted a duly noticed hearing on August 6,
2015, at which time the delinquent and unpaid capacity fees were approved for collection
via the property tax roll. The total amount placed as a lien against the property was
$114,970.47, consisting of the unpaid capacity fee down payment of$102,974.00 plus
penalties and interest; and
WHEREAS, the District Board of Directors conducted a duly noticed hearing on February
4, 2016 on an administrative appeal filed by Mr. Heffernan from the District staff
determination that the amount of$114,970.47 was legally owed and delinquent for unpaid
capacity fees; and
WHEREAS, at the hearing District staff presented information that the actual size of the
subject building is approximately 14,332, consisting of the 12,946 square feet shown in the
County Assessor's records plus an estimated 1,386 square foot freezer room added onto
the building in 2000; and
WHEREAS, at the conclusion of the hearing the Board voted to deny the appeal and affirm
the staff determination that the amount of $114,970.47 was legally owed and delinquent for
unpaid capacity fees. The Board further directed that a resolution be prepared with
appropriate findings for consideration and approval at a subsequent meeting.
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Central Contra
Costa Sanitary District, as follows:
1. The foregoing recitals are true and correct.
Central Contra Costa Sanitary District
Resolution 2016-009
Page 3 of 3
2. Mr. Heffernan unlawfully constructed tenant improvements and changed the use of the
subject property without applying for required permits or otherwise notifying the District of
the added burden placed on its sewer system by these actions.
3. Capacity fees attributable to the added burden on the sewer system should have been
paid in full at the time the added burden was created. Because Mr. Heffernan failed to
comply with his legal obligations to notify the District of the added burden and to pay the
capacity fees in a timely fashion, his property received the inequitable benefit of a
substantial increase in the use of the District's sewer system capacity from the time the
improvements were constructed until the Caffe Classico operations were converted to zero
discharge in 2013.
4. The capacity fee down payment in the amount of$102,974.00 was correctly calculated
under the District's Capacity Use Charge Program, as more fully set forth in the
correspondence sent to Mr. Heffernan and in the testimony and evidence provided by
District staff at the public hearing.
5. The amount of$114,970.47 was correctly charged to the subject property for the
delinquent capacity fees, plus penalties and interest.
PASSED AND ADOPTED this 3rd day of March, 2016, by the Board of Directors of the
District by the following vote:
AYES: Members:
NOES: Members:
ABSENT: Members:
Tad J. Pilecki
President of the Board of Directors
Central Contra Costa Sanitary District
County of Contra Costa, State of California
COUNTERSIGNED:
Elaine R. Boehme, CMC
Secretary of the District
Central Contra Costa Sanitary District
County of Contra Costa, State of California
Approved as to form:
Craig Labadie, Esq.
Independent Counsel to the Board