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Item 6.b.
I
Central Contra Costa Sanitary District
January 23, 2018
TO: FINANCE COMMITTEE
FROM: DANEA S. GEMMELL, PLANNING & DEVELOPMENT SERVICES DIVISION
MANAGER
REVIEWED BY: JEAN-MARC PETIT, DIRECTOR OF ENGINEERING & TECHNICAL
SERVICES
ROGER S. BAILEY, GENERAL MANAGER
SUBJECT: PROPOSED CHANGES TO THE CAPACITY USE CHARGE PROGRAM
Please see attached presentation.
ATTACHMENTS:
1. Capacity Fee Installment Payment Program Presentation
January 23, 2018 Special FINANCE Committee Meeting Agenda Packet- Page 111 of 124
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I
CAPACITY FEE INSTALLMENT
PAYMFN r PROGRAM
r 0
JANUARY 23, 2018
i FINANCE COMMITTEE MEETING
Danea Gemmell , PE
= -
7—: Planning and Development Services
Division Manager
January 2 IN CE -
CAPACITY FEES
CURRENT
PumpedFY* 2017-18 FY 2017-18
L Property Type Gravity Zone Gravity +
C Fee Zone Fee
Single-Family Residence Unit $6,300 $7,939
Multi-Family Residence Unit $5,336 $6,724
Retail (per 1,000 SF**) $1,632 $2,089
Office (per 1,000 SF) $1,859 $2,381
Shopping Center (per 1,000 SF) $6,659 $8,531
Deli/Bar/Coffee Shop (per 1,000 SF) $7,346 $9,467
Hotel (per 1,000 SF) $12,134 $14,219
Restaurant (per 1,000 SF) $25,263 $29,751
* Fiscal Year (FY)
** Square Feet (SF) `
DISTRICT CODE ALLOWS FINANCING OF
CAPACITY FEES UNDER CERTAIN
CONDITIONS
"The Board of Directors finds that the capacity fee
program may impose a constraint on business
formation within the District for certain
nonresidential user groups. To mitigate this
potential constraint, a capacity fee installment
payment program was established to allow for
time payment of capacity fees. "
'January 23, 2018 Special FINANCE Committeej�tann onPnrin Pneknt_ Pana 114 nr 194
EXISTING FINANCING PROr., PtMS
Residential Capacity Fee Installment
Payment Program
Septic conversions
Capacity Use Charge Program
Non-residential users with high capacity fees
Contractual & Alhambra Valley Assessment
Districts
Finances sewer neighborhood sewer construction
costs
Participants can finance Capacity Fees through
Residential Capacity Fee Installment Payment
program _ �
COMPARISON OF EXISTING
CAPACITY FEE PROGRAMS
Septic Conversion •
16
• • • •
gram
What can be financed Gravity and Pumped Gravity Zone fee only
Zone Fees
Terms 10 years, 6% interest 15 years, 6% interest
Down Payment None 1.166 RU Es* per 1,000 SF
Annual Payment Fixed Varies with water
consumption
Method of Collection Annual charge on Annual charge on
property tax bill property tax bill
*Residential Unit Equivalent (RUE)
ISSUES WITH EXISTING
CAPACITY USE CHARGE PROGRAM
For tenants, requires the cooperation of the
property owner
Variable annual charge adds complexity and
uncertainty
If a participating restaurant has low water use,
Central San would need to collect a capacity fee
from the next restaurant in the same space
1
PROPOSED CHANGES SIMPLIFY PROGRAM
AND EXPAND USERS
Capacity Use Charge Program
Installment Payment Program
Capacity fee greater than 1.166
Who can participate RUES per 1,000 SF (generally, Net Capacity Fee owed greater
than 1.0 RUE
restaurants only)
What can be financed Gravity Zone fee only Gravity and Pumped Zone fee
Terms 15 years, 6% interest _ years, 6% interest
Down Payment 1.166 RUES per 1,000 SF 30% of net Capacity Fee
Annual Payment Varies with water consumption Fixed
Method of Collection Annual charge on property tax Annual charge on property tax
bill bill
SPECIAL STUDIES ADDRESS APPLICANTS WHO
DO NOT FIT NEATLY IN STANDARD CATEGORIES
Determines appropriate Capacity Fee
Currently in District Code
Used to categorize widely varying data
for wastewater flow and strength
Monitoring by staff for up to five years
No adjustment to fee if within 10% of
initial assumed flow or strength
Fee Fee
Installment Installment
greement
Only greement
Special
Special Study
Study Only
EXAMPLE I RFSTAURANT
1 ,832 SF
Space initially entitled as retail
Actual Capacity Use Charge Program participant
No Financing1w Proposed Program Existing Program
dM
Initial Payment* $27,370 $8,211 $6,618
Annual Payment $2,603 $2,137 estimate
(for 10 years) (for 15 years)
(actual annual
charges varied
between $4,444
and $9,053 over
last five years)
Entitlement (RUEs) 7.34 7.34 Varies based on
water consumption
* based on 2003 capacity fee rate of $3,983 per RUE in effect when this agreement began I
EXAMPLE 2 - RESTAURANT
WITH CURRENT CAPACITY FEE
1 , 832 SF
Space initially entitled as retail
No Financing Proposed Program Existing Program
Initial Payment" $43,293 $12,988 $10,468
Annual Payment $4,117 $3,380 estimate
(for 10 years) (for 15 years)
Entitlement (RUEs) 7.34 7.34 Varies based on
water consumption
** using current capacity fee rate of $6,300 per RUE
EXAMPLE 3 = MICROBREWERY
41800 SF
Space initially entitled as Light Industrial
No Financing�'� Proposed �W . Program
ProgramProgram
-Jokh- Special Study
Initial Payment $28,365 $8,510 $8,510 (not eligible)
Annual Payment $2,698 $2,698 to start; (not eligible)
adjusted within
five years based
on actual data
Entitlement 5.597 5.597 As determined by (would vary
(RUEs) Special Study based on water
monitoring consumption)
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QUESTIONS
;.'January 23, 2018 emal ommitte - Pnnin 9A r)f 194