HomeMy WebLinkAbout07.a. Review draft Proposition 218 Notice and authorize mailing of public notice of proposed Sewer Service Charge rate increases �..o Central San 7.a.
BOARD OF DIRECTORS
rI J
POSITION PAPER
Board Meeting Date: February 18, 2017
Subject: REVIEW DRAFT PROPOSITION 218 NOTICE AND AUTHORIZE
MAILING of PUBLIC NOTICE of PROPOSED SEWER SERVICE
CHARGE RATE INCREASES
Submitted By: Initiating Dept./Div.:
Thea Vassallo, CPA, CMA Administrative/Finance &Accounting
Finance Manager
REVIEWED WED AND RECOMMENDED FOR BOARD ACTION.-
E.
CTION:E. Barnett, Communication and Gov't Relations Mgr P. Leber, Director of Finance and Administration Kenton L.Alm R4---L�-ogper& Bailey
D. Gemmell, Planning & Development Svcs Div Mgr Counsel for the District General Manage
E. Lopez, Capital Projects Division Manager
ISSUE: To comply with Proposition 218 public notice requirements, Central San must
provide 45 days' written notice to property owners prior to considering proposed Sewer
Service Charge (SSC) and Recycled Water Charge rate increases at a public hearing.
BACKGROUND: over the past year, the Board has held a series of workshops related
to the 10-Year Capital Improvement Program and rate setting. Four drivers were
presented that impact investments required:
1) Aging infrastructure to maintain performance and reliability;
2) Capacity of existing facilities to accommodate planned growth for the
communities served;
3) Impact of future regulations to protect human health and the environment; and
4) Sustainability of infrastructure through optimization resiliency, resource recovery
and energy projects.
In addition to the workshops, other planning documents have outlined the goals,
objectives, metrics and overall services provided by Central San, as well as the level of
resources needed to provide such services. These documents include the staffing plan,
cost of service study, and Fiscal Year (FY) 2018-18 Strategic Plan. The FY 2017-18
budget process, commencing now, will also specify in detail the resources needed for
the upcoming fiscal year, and demonstrate the need for rate adjustments specified in
the Proposition 218 Notices.
Discussion at the workshops included use of funds toward unfunded liabilities, bond
financing and revenue requirements. The Board reviewed the 10-year financial and rate
projections and directed staff to proceed with preparing the Proposition 218 Notices
based on the following financial planning assumptions:
Page 1 of 3
POSITION PAPER
Board Meeting Date: February 16, 2017
subject: REVIEW DRAFT PROPOSITION 218 NOTICE AND AUTHORIZE MAILING
OF PUBLIC NOTICE OF PROPOSED SEWER SERVICE CHARGE RATE
INCREASES
1) General provisions for Capital Project financing:
o A combination of bond and cash financing for large (less frequent and non-
recurring) infrastructure projects
O Pay-as-you-go funding for pipeline replacement projects;
2) Additional annual payments of$2.5 million toward unfunded liabilities in each of
the next 10 years;
3) Capital Improvement Program spending totaling $83.5 million for the next two
years (an annual spending level comparable to the FY 2016-17 Budget);
4) Adopt rates for FY 2017-18 and 2018-19; and
5) Sewer Service Charge: A 7 percent annual increase in each of the next two
fiscal years.
The Board also directed staff to move the 2017 rate hearing from June to April.
SCHEDULE: In order to meet the 45-day notice requirements of Proposition 218 and
hold the public hearing on April 20, 2017, the notice must be mailed to property owners
no later than March 6, 2017. Printing of the sewer service notice will require delivery to
the printing vendor to handle the large volume by February 17. The Recycled Water
Charge Proposition 218 Notice, which will be processed in house, will be brought to the
Board for review on March 2, 2017.
ALTERNATIVES/CONSIDERATIONS: The Board could direct staff to make certain
revisions to the SSC Proposition 218 Notice prior to submitting it for printing. However,
changes to the SSC Notice must be finalized on February 16 to meet the March 5
mailing deadline.
The Board could also direct staff to make significant revisions to the SSC Proposition
218 Notice or to bring a revised notice back to the Board at a future meeting. Note that
this would require rescheduling the public hearing to a later date.
FINANCIAL IMPACTS: The cost (internal staff time including overhead, and
incremental external costs) to prepare and distribute the SSC Proposition 218 Notice is
estimated to be approximately $59,000:
$44,000 Postage
15,000 Printing
10,000' Internal/External Labor Costs
$69,000 Total
In order pay for increased operations and maintenance costs, fund critical infrastructure
projects and ensure an emergency reserve, Central San proposes a 7 percent SSC rate
Page 2 of 3
POSITION PAPER
Board Meeting Date: February 16, 2017
subject: REVIEW DRAFT PROPOSITION 218 NOTICE AND AUTHORIZE MAILING
OF PUBLIC NOTICE OF PROPOSED SEWER SERVICE CHARGE RATE
INCREASES
increase each year (this will mean an increase of approximately $3 dollars per month for
a residential customer) for the next two years as shown in the table below:
FY 2017-18 FY 2018-19
Increase Annual SSC Increase Annual SSC
Single Family Residences $35 $538 $38 $576
Multi-Family Residences $34 $521 $37 $558
Effective Date July 1, 2017 July 1, 2018
(Residential rates shown in dollars per residential unit.)
COMMITTEE RECOMMENDATION: This matter was not reviewed by a Board
Committee.
RECOMMENDED BOARD ACTION: Review draft SSC Proposition 218 Notice and
authorize mailing of public notice of proposed Sewer Service Charge rate increases for
Fiscal Years 2017-18 and 2018-19.
Attached Supporting Document:
1. Draft Proposition 218 Notice- Sewer Service Charge
Page 3 of 3
DRAFT ATTACHMENT 'I
Central Contra Costa E 4�F I AL c
Sanitary District
HealthProtecting Public ,the Environment
70 YEARS AND BEYOND PROTECTING OUR COMMUNITY AND THE ENVIRONMENT
very day at Central Contra Costa -�
Sanitary District(Central San),we strive
to fulfill our mission ofrotectin public
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health and the environment in a way that is
bothefficient and effective while providing 1 -
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exceptional service for our customers. ,
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Ago
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TIM
Since 1946, our dedicated and highly-trained
staff has been providing safe and reliable
wastewater treatment for residents in central
Contra Costa County.Today,we serve over -¢-_
481,600 residents and 3,000 businesses. Our
customers count on us for vital services 24 hours
--- - a day, each and every day. Sewer service may not be something you think about often, but whatever goes
- down your toilets and into the drains,travels through our vast sewer collection system to our treatment
plant in Martinez.The Plant cleans an average of 32 million gallons of wastewater every day,which is safely
released into Suisun Bay.Additionally,we produce 1-2 million gallons of recycled water each day for landscape
irrigation, industrial use, and for our own treatment plant processes.We also operate a Household Hazardous
Waste Collection Facility and sponsor 13 pharmaceutical collection sites within the communities we serve.
Central San proactively maintains its infrastructure,which has extended the lifespan of many facilities and
- - ; equipment beyond its expected useful life.Although we have invested heavily over the last 10 years in replacing
parts of our large and complex infrastructure,we need additional investments to maintain its reliability.Through
an extensive, long-term planning process,Central San has determined what will be needed to keep our system
working properly in the future as well as a timeline for accomplishing such projects.All of these developments
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are driven by four major factors to address including the following: replacing aging infrastructure, preparing for
- - future growth in our community and associated capacity increases, meeting emerging regulatory requirements
P`'... and ensuring economic stability and sustainability for our operations.
- Our team has identified several ke infrastructure ro ects over the next two ears for both the treatment
plant and the collection system to ensure they continue to function properly now and into the future.These
y projects include over 14 miles of sewer pipe replacement work and upgrades to five critical pump stations
within our service area. In addition, major renovations at our treatment plant will include: replacement
and upgrades of solids handling facilities,odor control equipment,energy generation and security
-- improvements. Please see inside for a map of project locations.
In order to fund these critical improvements and cover operations and maintenance costs to keep
our system and facilities working well,we are proposing to increase customer rates by 7 percent
:., each year for the next two years(this will mean an increase of approximately 3 dollars per
month for a residential customer). Please see inside for further details about this proposal.
As we work hard to complete these necessary upgrades to our collection system and
our treatment plant,we remain committed to our customers with these promises:
1.To make fiscally-sound investments to upgrade infrastructure that has
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exceeded its useful lifespan and ensure operational reliability.
2. To ensure our system and facilities will continue to comply with all
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�N z„ environmental and regulatory requirements.
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3.To maintain ongoing community outreach and transparency
--
about progress on projects.
a 71
RATE INCREASES NEEDED To FUND CRITICAL PROJECTS
Central San has developed a Comprehensive Wastewater Master Plan to determine
the long-term needs for our wastewater treatment recycled water and collection
system. These planning efforts have provided a clear direction for priorities and
- `
pro ects to be included in our 10-Year Capital Improvement Plan. Proposition 218
requires that public agencies, like Central San that provide a public utility service
must clearly base their charges on the cost of providing those services. In order
to pay for increased operations and maintenance costs, fund critical infrastructure
projects and ensure an emergency reserve, Central San proposes a 7 percent rate increase each year(an increase of
approximately 3 dollars a month for a residential customer) for the next two years as shown in the table below.
RATE HEARING PROCESS
Central San's Board of Directors will consider the proposed rate increases at a public hearing on:April XX, 2017 at X:00 x.m.
Central Contra Costa Sanitary District Office, Board Room,5019 Imhoff Place, Martinez, CA 94553.
Public comments and written protests will be accepted at the public hearing.Written protests may be mailed or hand-delivered
to Central San prior to the public hearing to the Secretary of the Board at the address listed above.Written protests must
include the property's address or Assessor Parcel Number and must be signed by the property owner or tenant. Scanned copies
of signed protest letters may be submitted by fax(925-269-2327)or email (eboehme@centralsan.org-Subject: Prop 218 Protest).
All written protests must be received prior to the close of the Public Hearing.Additional information about filing a protest can
be found on the Central San's website(www.centralsan.org).
CURRENT & PROPOSED ANNUAL SEWER SERVICE CHARGE RATES
PROPOSEDF_
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USER GROUP FJ CURRENT RATE RATE EFFECTIVE RATE EFFECTIVE
Lm�� I JULY 1,2017 JULY 1,2018
Residential Customers(rate per living unit)
Single Family Homes $503.00 $538.00 $576.00
Apartments,Condominimums,Duplexes,Second Living Units,Mobile Homes $487.00 $521.00 $558.00
Commercial and Other Non-Industrial Customers(per Hundred Cubic Feet(HCF))
Standard Commercial Rate for Users Not Listed Below $4.98 $5.33 $5.70
Automotive $5.73 $6.13 $6.56
Bakeries $13.22 $14.14 $15.14
Hotels/Motels $8.64 $9.24 $9.89
Supermarkets $9.34 $9.99 $10.70
Mortuaries $11.47 $12.27 $13.13
Restaurants $9.34 $9.99 $10.70
Minimum Annual Charge $504.00 $538.00 1 $575.00
Industrial Customers
Flow(per HCF) $3.67 $3.93 $4.20
Biochemical Oxygen Demand(per thousand pounds) $1,216.00 $1,301.00 $1,392.00
Fs Solids(per thousand pounds) $567.00 $606.00 $649.00
Minimum Annual Charge $504.00 $538.00 $575.00
Special Discharge Permits and Contracts Determined individually Determined individually Determined individually
(see calculation below) (see calculation below)
A nonresidential customer's annual sewer service charge is determined by 2016-17 property tax bill by 1.07.If you are billed directly,multiply the amount on
multiplying the appropriate user group rate times the annual wastewater discharge the 2016-17 invoice by 1.07.For a 2018-19 estimate,multiply by 1.145.
volume measured in HCF (Hundred Cubic Feet), usually estimated from the If you have questions regarding the Sewer Service Charge program,or would like
property's water use. For example,a bakery discharging 250 HCF per year would us to calculate a property-specific estimate of the sewer service charge for 2017-18
pay an annual sewer service charge at the July 1,2017 proposed rate calculated as and 2018-19,please send an e-mail request including your name,Assessor's Parcel
follows:($14.14 per HCF)x(250 HCF per year)=$3,535.00 Number,address and phone number to rates@centralsan.org,or call the District's
Alternatively, for 2017-18 you can estimate your annual sewer service charge Community Information Line at(925)335-7702. Additional information is available
by multiplying the amount listed beside "CCCSD SEWER CHG" on your on the District's website:www.centralsan.org.
YOUR DOLLARS AT WORK:
OCUS ON RITICAL NFRASTRUCTURE
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_Ir TREATMENT PLANT
O PUMP STATIONS �.
1 2017-2019:Upgrades
at the treatment plant -
_ will include renovations
of the solids handling `.
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�'_ ` s � �' � '�as ,a Vy" 4• f Y��'a�}�•CRrQ' 1 facilities and odor controlY
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equipment,improved °
energy efficiency, s _,
enhanced security,and
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STREET PIPE
2017-2019:Central San will upgrade five of our 19 pump , ,
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stations,which are critical for conveying wastewater to REPLACEMENT
the treatment plant from areas where the terrain requires
it to be pumped over hills,sometimes at a rate as high as '
33,000 gallons per minute.The five pump stations set for
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replacement and renovation are nearly 50 years or older. -.PLEASANT HILL CoNcoRn
They will be upgraded with new-technology equipment 4
that is more reliable and reduces energy costs,such as
sophisticated variable-frequency drives to more efficiently rr
match the power demand to the flow.
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2017-2019:Central San will replace 14 miles
of sewer pipe in Walnut Creek,Lafayette,
Martinez,and Orinda to maintain collection
,
system reliability.
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CENTRAL SAN
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WASTEWATER COLLECTION& ,� .;_. � �^ SAN RA_MON `
TREATMENT AND HOUSEHOLD
HAZARDOUS WASTE(HHW)SERVICES
PROVIDED ,
■WASTEWATER TREATMENT AND HHW =
SERVICES BY CONTRACT # `�
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HHW SERVICES ONLY "' y
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• CENTRAL SAN HEADQUARTERS PAST PROJECTS
BUILDING,TREATMENT PLANT&HHW '
`.. Danville Martinez Pleasant Hill
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FACILITY �. 2014-2016:Central San ► •
has performed work and ►Diablo Moraga •San Ramon
® COLLECTION SYSTEMS OPERATIONS : has ongoing projects in the
FACILITY d followin communities: •Lafayette Orinda •Walnut Creek
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Zakrjentrall Contra Costa 5019 Imhoff Place
Sanitary District Martinez, CA 94553
Protecting Pub
NOTICE OF
PROPOSED RATE
INCREASES AND
PUBLIC HEARING
ON APRIL XXI 2017
WHAT YOU NEED TO KNOW
_i
1. Our planning efforts have identified large-scale
projects to address aging infrastructure at the _
treatment plant and in the collection system.
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2. We have identified newer technology/upgrades
to meet emerging regulations and capacity issues.
3. Our extensive pipe replacement program will - =
maintain and improve service levels.
4.We value our customers and strive to provide
you with exceptional service at responsible rates.
to. We will continue to protect public health •
and the environment, building on our 70 years
y.
of experience. _
For more information:vvww.centralsan.org. Printed with soy-based inks on Recycled Paper